Tel: +44 (0)20 7488 0911 Fax: +44 (0)20 7480 5806 info@shipowners.co.uk www.shipownersclub.com Registered in England No 2067444 at the above address

The Shipowners’ Protection Limited St Clare House, 30-33 Minories London EC3N 1BP Managers of The Shipowners’ Mutual Protection and Indemnity Association (Luxembourg)

The Shipowners’ Protection Limited St Clare House, 30-33 Minories London EC3N 1BP Managers of The Shipowners’ Mutual Protection and Indemnity Association (Luxembourg)

TO ALL MEMBERS November 2010 THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1 995, AS AMENDED BY REPUBLIC ACT NO. 10022 We refer Members and brokers to the previous Circulars issued in June and September of 2010 on the amendments to the Filipino Migrant Workers Act of 1995 (the Amended Migrant Workers Act – (AMWA) ). Members and brokers are justifiably concerned about the recent changes in Philippine legislation and whether these changes impact and/or restrict Members’ ability to employ Filipino crew. It is also important that brokers and Members understand the impact that these changes in legislation have on their P&I cover. The Club is constantly monitoring the situation and the International Group (IG) continues in its discussions with the Philippine authorities. All further developments will be reported as more information becomes available. In the meantime we have put together some interim ‘questions and answers’ that will hopefully be useful for Members and brokers. The amended legislation comes into effect on the following basis:

(1) The POEA Governing Board resolution No. 8 requiring compulsory insurance coverage under the AMWA and which was issued on 4th October 2010 became effective from the 6th of November 2010.

(2) The POEA Memorandum Circular No. 9 which requires the issuance of an Overseas

Employment Certificate (OEC) was issued on the 21st of October and is effective from the 7th of November 2010.

The new legislation requires that all Migrant Seafarers who are employed after the 7th of November 2010 must comply with certain requirements. This means that their manning agencies must submit either a Certificate of Cover (COC) or other proof of cover, signed by their principal or an insurance cover from a duly authorised insurance company to the POEA. The POEA will then be in a position to issue an Overseas Employment Certificate (OEC) allowing a seafarer to be deployed on an international vessel. Members, in close liaison with their associated manning agents, will need to consider obtaining additional insurance to comply with the AMWA. It must be noted that the POEA is aware that these Certificates of Cover have not been approved by the IG and that no assumptions should be drawn from the wording of the COC in relation to the scope of Club cover.

Tel: +44 (0)20 7488 0911 Fax: +44 (0)20 7480 5806 info@shipowners.co.uk www.shipownersclub.com Registered in England No 2067444 at the above address

FREQUENTLY ASKED QUESTIONS AND IMPLICATIONS OF THE AMWA FOR MEMBERS (A) Does the P&I cover provided by the Club includ e all of the benefits contained in the AMWA? The unfortunate answer is no. The AMWA defines those liabilities and responsibilities that maritime employers previously faced and continue to face, however it is also extended to include certain new liabilities and elements of claim that may not be covered. Manning agents must ensure that all Overseas Filipino Workers (OFW) must have compulsory insurance in place before they can be deployed internationally and P&I cover will not respond to all liabilities in the AMWA because:

• P& I is not direct insurance to individual crew members. • P&I cover is limited to its Members’ liabilities which are defined in the Club Rules of Entry. • Coverage is subject to the application of certain deductibles and the indemnity principle

applies to the reimbursement of claims. (B) What liabilities under the AMWA are recoverable from the Club and what elements of the claim are not covered? The benefits due to crew under the Act are defined and contained in section 37-A. Most are covered by the Club but it is very important that Members’ and brokers’ attention is drawn to those liabilities that are not recoverable from the Club.

(1) Sub clauses (a) to (c) relate specifically to death and disability payments. The Club will normally respond to these types of risks but it does not provide cover for Members’ liabilities if the death or disability is due to their criminal actions or if the death or disability arises as a consequence of an act of war or terrorism.

(2) Sub clause (d) defines the obligations owed to crew when Members are required to repatriate them for various reasons. Again the Club will cover its Members in most instances but where repatriation is not as a consequence of an injury, illness or death then the costs may not be covered.

(3) Sub clause (e) this is a new liability which requires employers to provide subsistence allowances of at least US$100 per month for a maximum of six months for a migrant worker involved in a case or litigation for the protection of his/her rights in the “receiving country”. The Club will probably not be able to respond to claims of this nature because it is thought that such liabilities may not be in connection with the operations of the vessel.

(4) Sub clause (f) is in relation to money claims arising from the employer’s liability which may be awarded or given to a worker in a judgement or settlement of his or her case in the National Labor Relations Commission (NLRC). The insurance coverage for money claims shall be equivalent to at least three months for every year of the migrant worker’s employment contract. The Club may cover these types of claim provided they arise as a result of a covered risk such as illness, injury and death claims.

(5) Sub clause (g) this is a new liability incorporated into the Act and it allows migrant workers to have a compassionate visit from a family member or a requested individual if they have been hospitalised and have been confined for at least seven consecutive days. The clause says that the insurance company will pay for the transportation cost of the individual to the major airport closest to the place of hospitalisation of the worker. It is, however, the responsibility of the family members or requested individual to meet all visa and travel document requirements. Although not strictly covered this is an area where the discretionary powers of the Club will probably come into play and each individual case can be decided on its merits.

Tel: +44 (0)20 7488 0911 Fax: +44 (0)20 7480 5806 info@shipowners.co.uk www.shipownersclub.com Registered in England No 2067444 at the above address

(C) Who can provide the Overseas Filipino Workers w ith the compulsory insurances required under the Act? The Club recommends that Members contact their manning agents to obtain the required insurance through accredited insurance providers in the Philippines. Our correspondents advise that several companies are accredited by the Insurance Commission to provide local insurance cover:

• Paramount Life & General Insurance Corporation – www.paramount.com.ph • Philippine Charter Insurance Corporation – www.philcharter.com.ph • United Coconut Planters’ Life Assurance Corporation – www.cocolife.com

The Club is unable to offer any recommendations regarding these local insurances. Members can approach their manning agents for advice in this context. (D) Can Members complete Certificates of Cover (COC ) in relation to P&I cover by signing these documents themselves and not be exposed to un covered claims? The POEA has said that evidence of insurance is required under the Act before they will provide manning agents with an Overseas Employment Certificate (OEC). The POEA has advised that it will accept evidence from manning agents that Members have a P&I entry with a P&I Club. However, Members must be aware that the IG has raised objections to this procedure because of the possibility for misrepresentation of the terms of the cover. In the circumstances, Members and their manning agents are not advised to complete and sign Certificates of Cover in relation to P&I risks without taking out additional cover as mentioned in (C) because to do so could leave Members exposed to potential uncovered claims as listed previously in items (1) – (5) above. (E) What problems do Members potentially face if th ey do sign a Certificate of Cover without any additional insurance taken out and what uninsur ed exposures possibly exist in these circumstances? Owners will potentially be faced with those uninsured claims which have been discussed in (A) (1)-(5) above. (F) If a Member makes a payment in accordance with a liability under the Act does this impact upon any benefits that may be due to crew me mbers from their contract of employment? If a Member has a contractual obligation to compensate a crew member under the terms of the POEA Standard Employment Contract (SEC) or his/her Collective Bargaining agreement, compensation can be reduced by those payments already made under the provisions of the AMWA. This is in keeping with the Omnibus Implementing Rules and Regulations (IRR) and the new POEA SEC.

Tel: +44 (0)20 7488 0911 Fax: +44 (0)20 7480 5806 info@shipowners.co.uk www.shipownersclub.com Registered in England No 2067444 at the above address

The International Group view is that it is not appropriate for Clubs to approve issuance of the Certificate of Cover. Instead, Members, in close liaison with their associated manning agents, will need to consider obtaining further insurance to comply with all aspects of the AMWA. The POEA is aware that Certificates of Cover have not been approved by the IG and that no assumptions should be drawn from the wording of Certificates of Cover in relation to the scope of Club cover. The obligation to obtain insurance cover for each migrant worker or to certify that such cover is in place, meeting the requirements of the amended AMWA, rests solely with the manning and recruitment agencies. As the impact of these legislative changes becomes clearer, the Club will continue to be available to discuss any concerns that Members and brokers may have regarding their insurance cover. The Club will also provide further updates as circumstances evolve. For local support, the Club’s Manila correspondent is available to address the concerns of Members and brokers: Pandiman Philippines Inc 3rd Floor, PVB Building General Luna Street Cnr Sta Potenciana Street Intramuros PO Box 1418 Manila 1054 Telephone (2) 5277831 to 40 Fax (2) 5272167/5272171 Email: mis@pandiman.com www.pandiman.com THE SHIPOWNERS' PROTECTION LIMITED