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SHIPPING
firms are against the government’s move toward mandatory
coverage from international protection and indemnity
(P&I) clubs.
The
Maritime Industry Authority (Marina), however, is
offering several options with which the shippers may
comply.
Primo
Rivera, Marina deputy administrator for operations, said
shipping firms seem more amenable to setting up a local
P&I club.
The
Philippines does not have a local protection and
indemnity club that usually consists of shipping firms
that pool their money to cover damages in a sea mishap.
Rivera
said Marina itself has recommended the option for a
Philippine P&I club as an alternative for local
shipowners.
A
membership to an international P&I club costs about $10
per gross tonnage. Sulpicio Lines’ MV Princess of the
Stars, which weighs 23,824 gross tons, would have to pay
a membership fee of $238,240.
“At that
rate, many of the shipping firms cannot afford to pay
the membership,” Rivera said.
Marina held
public consultations in Manila, Cebu and Davao for an
industry overview on the draft order that would require
cargo-carrying vessels to have coverage under
international P&I clubs.
According to the draft circular, cargo vessels above 500
gross tons would have to be a P&I club member.
The
government adopted the policy in the aftermath of the
sinking of MV Princess of the Stars, which carried more
than 800 passengers and 80 tons of the toxic chemical
endosulfan.
Also
onboard the ill-fated ship were crude, agrochemicals,
asphalt, paints and electric transformers. Sulpicio has
contracted a salvor to retrieve these from the MV
Princess of the Stars. It has been estimated the task
would cost about $7.5 million.
Only
tanker operators are currently required to have P&I
coverage on top of a membership with the International
Oil Pollution Fund.
Marina
is requiring other shipper like Oceanic Container Lines
Inc., which owns the sunken freighter MV Ocean Papa, to
be a member of a P&I club by next year, or its
operations would be suspended.
According to data from Marina, about 96 vessels would be
affected once the new order takes effect.
The idea
of a P&I club was borne in the mid-19th century as
shipowners facing liabilities that traditional hull
underwriters, such as Lloyds, were unable or unwilling
to cover.
Shipowners then formed mutual associations and agreed to
share each other’s claims. These early organizations
have evolved into 13 mutual insurance associations, P&I
clubs that among them ensure the liabilities of some 95
percent of the world’s ocean-going tonnage. |
