All ships over 1,000 GT registered in a State Party to the Bunkers Convention or entering or leaving a port in the territory of a State Party to the Convention shall be required to have a Bunkers Convention certificate of insurance.

The outline of the Bunkers Convention is as follows:

1. Liability of the shipowner
   • The shipowner, including the registered owner, bareboat charterer, manager and operator of the ship, shall be liable for pollution damage caused by any bunker oil on board or originating from the ship.
   • The registered shipowner has strict liability for pollution damage. This means that he is liable even in the absence of fault on his part. He is exempt from liability only if he proves that:
     1. the damage resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or
     2. the damage was wholly caused by an act or omission done with the intent to cause damage by a third party, or
     3. the damage was wholly caused by the negligence or other wrongful act of any Government or other authority responsible for the maintenance of lights or other navigational aids, in the exercise of that function.
   • The Bunkers Convention shall not affect the right of the shipowner to limit liability under any applicable national or international regime, such as the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.
2. Scope of application
   • The Bunkers Convention shall apply exclusively to pollution damage caused in the territory, including the territorial sea, of a State Party, and in the exclusive economic zone of a State Party.
3. Compulsory insurance or financial security
   • Registered owners of ships over 1,000 GT registered in a State Party to the Bunkers Convention or entering or leaving a port in the territory of a State Party to the Convention shall be required to maintain insurance or other financial security to cover the liability for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime, not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended. A certificate issued by a State Party attesting that insurance or other financial security is in force shall be carried on board the ship.
   • Before issuing a State certificate, the State will require a blue card issued by an insurer evidencing that insurance meeting the liability requirements of the Bunkers Convention is in place. Insurance cover for liabilities arising from the Convention, and the Bunkers Convention blue card, are provided by the International Group of P&I Clubs, including the Japan P&I Club.
   • Any claim for compensation for pollution damage may be brought directly against the insurer or other person providing financial security for the registered owner’s liability for pollution damage.

All ships over 300 GT registered in a State Party to the Wreck Removal Convention or entering or leaving a port in the territory of a State Party to the Convention shall be required to have a Wreck Removal Convention certificate of insurance.

The outline of the Wreck Removal Convention is as follows:

1. Liability of the shipowner
   • The registered owner shall be liable for the costs of locating, marking and removing a wreck which constitutes a hazard which poses a danger to navigation or may reasonably be expected to have major harmful consequences for the marine environment or damage to the coastline or related interests. Whether a wreck is a hazard for the purposes of the Convention is determined by reference to a list of 15 criteria.
   • The Wreck Removal Convention lists a number of criteria which must be considered in determining whether a wreck constitutes a hazard which requires removal, and the measures taken by States must be proportionate to the hazard posed.
   • The registered shipowner has strict liability for costs arising under the Wreck Removal Convention. This means that he is liable even in the absence of fault on his part. He is exempt from liability only if he proves that the maritime casualty that caused the wreck:
     1. resulted from act of war, hostilities, civil war, insurrection, or a natural phenomenon of an exceptional, inevitable and irresistible character;
     2. was wholly caused by an act or omission done with intent to cause damage by a third party; or
     3. was wholly caused by the negligence or other wrongful act of any Government or other authority responsible for the maintenance of lights or other navigational aids in the exercise of that function.
   • The Wreck Removal Convention shall not affect the right of the shipowner to limit liability under any applicable national or international regime, such as the Convention on Limitation of Liability for Maritime Claims, 1976, as amended.
2. Scope of Application
   • The Convention applies to wrecks in exclusive economic zone of a State Party. A State Party may extend the application to wrecks located within its territory, including the territorial sea.
3. Compulsory insurance or financial security
   • Registered owners of ships over 300 GT registered in a State Party to the Wreck Removal Convention or entering or leaving a port in the territory of a State Party to the Convention shall be required to maintain insurance or other financial security to cover the liability under the Convention in an amount equal to the limits of liability under the applicable national or international limitation regime, not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended. A certificate issued by a State Party attesting that insurance or other financial security is in force shall be carried on board the ship.
   • Before issuing a State certificate, the State will require a blue card issued by an insurer evidencing that insurance meeting the liability requirements of the Wreck Removal Convention is in place. Insurance cover for liabilities arising from the Convention, and the Wreck Removal Convention blue card, are provided by the International Group of P&I Clubs, including the Japan P&I Club.
   • Any claim for costs arising under the Convention may be brought directly against the insurer or other person providing financial security for the registered owner’s liability.

The 2002 Protocol applies to any international trade if;

• the ship is registered in a State Party
• the contract of carriage was made in a State Party
• the place of departure or destination, according to the contract of carriage, is in a State Party.

The 2002 Protocol substantially raises the carrier’s limits of liability for damage suffered by a passenger resulting from death, personal injury or damage to luggage. Ships covered by the 2002 Protocol are required to maintain insurance which meets the requirements of the 2002 Protocol and will need to obtain a certificate issued by a State Party attesting that such insurance is in force.

The liabilities in the 2002 Protocol is in general terms already covered under existing Club Rules, so shipowners do not need to arrange for additional insurance cover. However, the International Group of P&I Clubs (IG) are not able to issue War Blue Cards covered by the Group’s Pooling and reinsurance programme. Shipowners must therefore obtain War Blue Cards from another insurer or provider of financial security who will in effect guarantee the shipowners’ liability to passengers for injury and death arising out of acts of war and terrorism. Information on getting War Blue Cards can be obtained from the Club.

EU Passenger Liability Regulation

EU Passenger Liability Regulation No.329/2009 (PLR) applies to any trade if;

• the ship is registered in a EU/EEA Member State
• the contract of carriage was made in a EU/EEA Member State
• the place of departure or destination, according to the contract of carriage, is in a EU/EEA Member State.

The PLR provides a liability, compensation and compulsory insurance system for death of and personal injury to passengers and loss of or damage to luggage and vehicles. Ships covered by the PLR are required to maintain insurance which meets the requirements of the PLR and will need to obtain a certificate issued by an EU/EEA Member State attesting that such insurance is in force.

The Clubs in the IG agreed to issue the required Non War Blue Cards to enable shipowners to apply to an EU/EEA Member State for their PLR certificates. However, the IG Clubs are not able to issue War Blue Cards covered by the Group’s Pooling and reinsurance programme. Therefore, shipowners have to obtain War Blue Cards which will be issued by an insurer or other provider of financial security who will in effect guarantee the shipowners’ liability to passengers for injury and death arising out of acts of war and terrorism. Information on getting War Blue Cards can be obtained from the Club.

The MLC provides, amongst other things that Member States shall ensure that seafarers on vessels flying their flag are entitled to:

1. repatriation, including repatriation in case of a shipowner’s insolvency (effectively abandonment) and for which financial security must be in place;
2. unemployment compensation resulting from a ship’s loss or foundering, limited to two months wages, for each day the seafarer remains unemployed; and
3. compensation in the event of death or long term disability due to an occupational injury, illness or hazard as set out in national law, the seafarer’s employment agreement or collective agreement and for which the shipowner must provide financial security.

All ships which are subject to the MLC (i.e. 500 GT or over flagged by a ratifying state and engaged in international voyages) are required to carry and display on board two certificates issued by an insurer or other financial security provider confirming that insurance or other financial security is in place for liabilities in respect of

• outstanding wages and repatriation of seafarers together with incidental costs and expenses in accordance with MLC Regulation 2.5, Standard A2.5.2 and Guideline B2.5 and
• compensation for death or long-term disability in accordance with Regulation 4.2, Standard A4.2 and Guideline B4.2

All International Group Clubs provide the above certificates.

FAQs on MLC can be found here:

The Convention allows shipowners to limit their liability for claims for loss of life or personal injury, and property claims (such as damage to other ships, property or harbour works), according to ship’s tonnage.

Under the amendments to the 1996 Protocol, the limits are raised as follows:

The limit of liability for claims for loss of life or personal injury on ships not exceeding 2,000 gross tonnage is 3.02 million SDR.

For larger ships, the following additional amounts are used in calculating the limitation amount:

• For each ton from 2,001 to 30,000 tons, 1,208 SDR
• For each ton from 30,001 to 70,000 tons, 906 SDR
• For each ton in excess of 70,000, 604 SDR.

The limit of liability for property claims for ships not exceeding 2,000 gross tonnage is 1.51 million SDR (up from 1 million SDR).

For larger ships, the following additional amounts are used in calculating the limitation amount:

• For each ton from 2,001 to 30,000 tons, 604 SDR
• For each ton from 30,001 to 70,000 tons, 453 SDR
• For each ton in excess of 70,000 tons, 302 SDR.

The daily conversion rates for Special Drawing Rights (SDRs) can be found on the International Monetary Fund IMF website.
https://www.imf.org/external/np/fin/data/rms_sdrv.aspx