Maritime Labour Convention 2006
The Maritime Labour Convention 2006 (“MLC”) entered into force on 20 August 2013, following ratification by thirty states representing at least 33% of the world’s gross tonnage. This webpage is intended to provide Members with information on the Convention and how the Club is supporting them in complying with its requirements.
Often referred to as the “fourth pillar” of the maritime industry’s regulatory framework, MLC was first adopted by the International Labour Organisation (“ILO”) in February 2006. It aims to establish minimum living and working standards for all seafarers on ships flying the flag of a ratifying state. The text of the Convention in English can be found in Maritime Labour Covention 2006 English text and in other languages on the ILO’s website.
The ILO’s fuller description of the Convention and its aims can be found on their webpage “MLC, 2006: What it is and what it does”. A practical overview of MLC’s applicability and requirements were also set out in the Club’s Notice to Members No. 28 2012/2013.
Additional information on the Convention and its requirements can be found in the "Other resources" section below. A list of the States which have ratified it can be found here.
Existing certification requirements
Since the Convention entered into force in 2013 shipowners have been required to provide evidence of financial security for the repatriation of seafarers (Standard A2.5) and shipowners' liability for sickness, injury and death (Regulation 4.2). With regard to repatriation all International Group (IG) Clubs amended their rules to embrace the full scope repatriation liabilities envisaged under Standard A2.5. Liability for seafarers' sickness, injury and death already form part of normal P&I cover.
In light of this States have been content to accept an IG Club's Certificate of Entry as satisfactory evidence of financial responsibility in respect of these liabilities. Further details can be found in Notice to Members No.9 2013/2014.
The Special Tripartite Committee established to oversee the workings of the Convention decided in 2014 to implement certain amendments which will enter into force on 18 January 2017. After this date ships subject to the Convention will be required to display in a prominent place on board certificates confirming that insurance or other satisfactory financial security is in place to meet the costs of:
- Crew repatriation as well as up to four months contractually entitled arrears of wages and entitlements following abandonment (MLC Regulation 2.5.2, as amended), and
- Liabilities for contractual claims arising from seafarer personal injury, disability or death (MLC Standard A4.2, as amended)
Club cover does not extend to crew wages. However, all IG Club Boards decided that in order to provide the most cost efficient solution for shipowners Clubs would issue the necessary certification and indemnify seafarers directly if required, but on the basis that wage entitlements do not form part of normal Poolable cover and that the Club has a right of indemnity to recover those liabilities which fall outside of cover from the Member. Cover will be provided on the basis of the MLC Extension Clause 2016, the text of which can be found in Maritime Labour Convention Extension Clause 2016. The IG Clubs will also participate in a separate reinsurance programme. Details can be found in Notice to Members No.13 2016/2017 and No.17 2016/2017.
Members requiring certificates must complete an application form and should note that by signing this form they agree, inter alia, to bind themselves and all other Members, Joint Members and Co-Assureds to the terms of the MLC Extension Clause 2016.
Those Members who place cover for crew liabilities elsewhere or which are covered by local insurers will be required to also complete separate indemnities in favour of the Club by which those other insurers agree to reimburse the Club for liabilities which it is obliged to meet in the first instance but which form part of the other insurers' cover.
Further details of the application process can be found in Notice to Members No. 19 2016/2017.