Abandonment Insurance as a new source of corruption and unjust income


Category :- MLC 2006 and ITF

Author :- Editorial

Posted on April 18, 2014, 3:24 am

Maritime insurance broker Seacurus has called for new Maritime Labour Convention (MLC) seafarer abandonment regulations to be implemented as quickly as possible.
Under the new agreement, states party to the Maritime Labour Convention would have to ensure that all vessels flying their flag maintained a financial safety net to reimburse crew and their families in the event of abandonment, illness, injury or death. The measures, which were agreed upon at the MLC’s Special Tripartite Committee last week, will now have to be submitted to the International Labour Conference in June. If member states do not register disagreement during the following six months, the provisions will come into force.
“It is in everybody’s interest to press ahead without delay,” Seacurus managing director Thomas Brown stated. “Any attempt at unreasonable delay in implementing the MLC amendments should be strongly resisted.
“The requirement for cover will be mandatory on all shipowners, thereby eliminating any uncertainty. Moreover, such cover already exists in the form of the CrewSEACURE policy created last year by Seacurus which provides indemnification in the event of the financial default of seafarers’ employers, and offers recompense in respect of unpaid crew wages. The policy will enable all employers of seafarers to meet their regulatory obligations under MLC 2006. The cover is available now, and it is affordable.”
The amendments now need to be approved at the June meeting of the International Labour Conference. If approved they will require member states to ensure ships sailing under their flags maintain a financial security system to cover contingencies such as personal injury or death, long-term disability or abandonment. Vessels will be required to carry on board a certificate proving their coverage, in the form of either insurance, a national fund, social security scheme or similar arrangements.

Let’s make some calculations. Last year Seacurus mentioned the cost of its’ insurance – some $50 dollars annum per person. Let’s assume 1,2 million seafarers are covered by MLC-2006. 1,2 mil x $50 = 60,000,000 dollars per year. Seacurus is very worried about the fate of the abandoned seafarers. I’d definitely lose my sleep, too, if there’s $60 mil on stake, too. Anyone would, I guess. Now, let’s calculate something else. They say (WLO, ITF), that 159 vessels were abandoned during last 8 years. Figure is highly doubtful, they’ve been presenting other figures, but I guess, found them no so frightening. Never mind, let’s agree 160 vessel were abandoned in 8-year period, to make the figure round. Let’s assume the average crew is 20. Let’s assume the cost of repatriation is $10,000 per person, though it’s less than that. It gives us 400 abandoned seafarers annually, $4 mil fund required for the repatriation. Now compare $4 mil and $60 mil.
But Seacurus insurance is at least transparent and I think, the cost is minimal. They’re talking about national funds, or social security schemes, or things like that. Each flag State has to decide for itself. New funds and social security schemes mean new agencies, new bureaucrats, new sources of corruption and fraud. The actual cost of insurance will be much more than $60 mil minimum required by Seacurus insurance cover.
The cover of the abandonment may be done in much cheaper and transparent way, but alas, it doesn’t suit WLO, ITF and involved States bureaucracy. What’ we’ll get in result, will be a new source of unjustified income, new sources of corruption and vile.
Voytenko Mikhail