This document summarizes a presentation on responsibilities under the Maritime Labour Convention. It discusses key aspects of financial security provisions including abandonment triggers, who is responsible for financial security, what it covers, and the period of coverage. It provides an overview of proposed amendments regarding piracy, the IG Club mechanism for handling abandonment claims, statistics on cases handled, and a case study of an abandonment involving an abandoned ship with crew from India and Ukraine. The presentation concludes that the MLC provides benefits for seafarers and that clubs are generally responding proactively while amendments provide needed clarity.

1. CMMI event on “Responsibility of Stake Holders
under MLC ”
- Amol R. Deshmukh, Master Mariner, Advocate, LLM(Maritime law)
26th May 2018
Mumbai

2. Introduction
 Master Mariner – 12 years at sea including command on
oil & chemical tankers
 LLB – Mumbai university
 LLM (Maritime law) – University of Southampton
 Scorpio – Previously headed shipping claims team
 Advocate
 P&I correspondents
 Voluntary delegate to IMO legal sub-committee
 Branch secretary – Nautical Institute India (West)

3. Overview
i) Abandonment under MLC – Trigger ?
ii) Financial Security provisions:
a. Key features
b. Who is responsible ?
c. What does it cover ?
d. Period of cover ?
iii) Proposed Amendments(Piracy & armed robbery against ships)
dated 23rd August 2017
iv) IG Club mechanism
v) IG Club statistics
vi) Case Study

4. i) Abandonment under MLC -
Trigger?
 A 2.5.2 : A seafarer shall be “abandoned” when the
shipowner:
 Fails to cover the cost of the seafarer’s repatriation;
 Has left the seafarer without the necessary maintenance
and support; or
 Has otherwise unilaterally severed their ties with the
seafarer including failure to pay contractual wages for a
period of at least 2 months.

5. ii )Financial Security Provisions
 Reg 2.5.2 – Abandonment
 Reg 4.2.1 - Contractual Claims ( Death, Disability, Injury,
illness )

6. ii) Financial security provisions:
a) Key features
Reg 2.5.2 - Financial Security System provides:
 Abandoned Seafarer or Next of Kin (Reg 2.5.2 (4) :
 Direct Access to FS provider
 Sufficient coverage
 Expedited financial assistance
 Subrogation of rights (Reg 2.5.2 (12) :
 To the insurance/financial security provider
 Up to the amount it has paid
 Subrogated rights = seafarer’s rights. What about local laws ?
 Financial security to continue till validity of certificate. Unless : 30 days
notification is given to the flag state. (Reg 2.5.2 (11)
 Documentary Evidence + Posted in a conspicuous place (Reg 2.5.2 (6)
 English language

7. ii) Financial security provisions:
a) Key features
Reg 2.5.2 - Financial Security System shall provide
 Right of recourse against third parties. (Reg 2.5.2 (13)
 Reg 2.5.2 (14)
 Does not prejudice other rights/remedies of seafarers
 Payments under MLC Can be offset against other provisions
Reg 4.2.1 (b) – Financial security for contractual claims
 Financial Security under Reg. 4.2.1 is also provided by the means
of a certificate
 National laws ensure that :
 Seafarers receive prior notification if - shipowner’s financial
security - cancelled/terminated. Reg 4.2.1 (9)
 Flag State - notified by the financial security provider if -
shipowner’s financial security is cancelled or terminated. (Reg
4.2.1 (10)

8.  Member (Flag State) – Reg 2.5.2(3)
Duties of the Flag States :
 Ensure financial security system is in place for all the
ships flying its flag - Reg 2.5.1 (1)
 Mechanism : Delegated responsibility of Financial
security through - Reg 2.5.1 (3)
 National Fund ; or
 Insurance ; or
 A social security scheme ; or
 Other similar arrangements ;
ii) Financial security provisions:
b. Who is responsible?

9. Financial security - sufficient to cover the following: Reg 2.5.2(9)
a) Outstanding wages + other entitlements due under SEA/ CBA/ National
law for maximum of 4 months.
b) All expenses reasonably incurred by the seafarer, including the cost of
repatriation.
c) The essential needs of the seafarer such as:
1. Adequate food;
2. Clothing (where necessary);
3. Accommodation;
4. Drinking water supplies;
5. Essential fuel for survival;
6. Necessary medical care; and
7. Any other reasonable costs or charges arising from abandonment
ii) Financial security provisions:
c. What does it cover ?

10. ii) Financial security provisions:
d. Period of cover -Reg 2.5.2 (9)(c)
Abandonment Home

11. iii)Proposed Amendments (Piracy &
armed robbery against ships) 23 Aug
2017-submitted for approval : 28 May-8
June 2018
Background:
 Loss of income during period of hijacked vessel
 Grey area concerning completion of contract during
hijacking
 Shipowners/employers do provide for the families of
captured seafarers. However Guidelines have not been
adhered to in all cases.

12. iii)Proposed Amendments (Piracy &
armed robbery against ships)
Insert para (Reg 2.1)
 Definitions of piracy and armed robbery (includes the
kidnapping of seafarers for ransom)
 Employment agreement to not expire/terminate during
captivity
Insert para (Reg 2.2)
 Remittance of allotments to continue :
 The seafarer is released & duly repatriated or
 Death while in captivity.
 Financial security to be in place for above (similar
principles)

13. iv) IG Club mechanism
Background:
 P&I Club pays first USD 10 million of an abandonment
claim
 Followed by Ring-fenced IG MLC reinsurance for claims
arising under 2.5.2
 Club retention USD 10 million
 IG reinsurance USD 200 million
 Total per abandonment event USD 210 million

14. v) IG Club statistics (April 2018)
 12 - 15 months since entry into force
 Total Cases handled - 19 reported in total
10 in 2017, 9 in 2018
 198 seafarers repatriated
 USD 1.9 million wages paid

15. vi) Case Study of abandonment
 Chemical Tanker
 Flag : Marshall Island
 BBC/Operator : Indian RPSL Holder
 Nationality : Indians (20) + Ukraine (2)
 Location: Philippines
 Vessel detained by flag state regulations due to unpaid
wages for 5-6 months, no food, water, fuel & other safety
parameters.

16. iv) Case Study

17. iv) Challenges
 Dead ship
 Deteriorating weather (2-3 miles off shore)
 Limited access ashore
 Limited communication
 Medical emergency
 No food , water, fuel & other safety essentials
 Groupism – challenging Master’s authority
 Mental breakdown / Physical assault
 Ukrainian Crewing agents “guarantees”
 Local suppliers unwilling to provide supplies without cash upfront
 Delays in repatriation due to demands for replacement crew by port authorities
 Delays due to BBC – registered owner relationship
 Negotiations with Owners’ lawyers
 Guarantees by Owners to Club
 Quantifying claims
 Mistrust to receive payment by bank transfer – Some crew insisting on cash
 Onboard accounts settlement
Eventually: Total time from our Power of Attorney to returning home :
20 days

18. Conclusion:
 Extremely beneficial for seafarers
 Clubs responding proactively
 Piracy amendments provide clarity
 Prone to misuse

19. Thank you !
Amol R. Deshmukh – Head of Marine Claims & Insurance
Email : adeshmukh@aeghiscorp.com
Tel : +91-98331 22343 / 91-22-49744035
Web : www.aeghiscorp.com