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Not all shipowners abide by protection and indemnity insurance policy – UFS

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By Raymund Antonio

While maritime disasters continue to happen, a number of shipping companies have yet to acquire pertinent protection and indemnity (P&I) insurance despite a memorandum circular being implemented by the Maritime Industry Authority (MARINA).

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This was revealed by the United Filipino Seafarers (UFS), a seamen’s group with 57,000 members, as it underscored the need for shipowners to provide insurance that will cover legal liabilities in case of sea tragedies.

P&I refers to a form of marine insurance to cover a shipowner’s and/or operator’s liability to others and generally excludes damage to the own property of the insured.

Engineer Nelson Ramirez, UFS president, said it is crucial for domestic vessels to get insured since “some shipping companies are prone to experience capsizing ships.”

“What if a big passenger vessel sinks at the entrance of North Harbor? Can it be towed to a shipyard for safety immediately?” Ramirez asked.

“Even the old jeepneys are covered by third party liability. All vessels plying the domestic waters must be covered with P&I,” he said.

The UFS leader cited the Philippine Span Asia, which was previously named Sulpicio Lines Inc., as an example of shipping company that has no P&I insurer due to its long list of disaster since its operation.

The company’s vessels were involved in five tragedies that claimed more than 5,000 lives from 1987 to 2013. These were the sinking of “M/V Doña Paz,” “M/V Princess of the Stars,” “M/V Princess of the Orient,” “M/V St. Thomas Aquinas,” and “M/V Doña Marilyn.”

Ramirez recalled that the retrieval for the MV Princess of the Stars had a cost of P500 million, a reason that he claimed why some shipowners were not interested to get insurance.

He also mentioned the defunct Sulpicio Lines was again slapped a P16-million fine after its M/V Cotabato Princess rammed the Fort San Pedro construction project in Iloilo City.

Ramirez said MARINA should check if domestic shipping companies comply with its circular.

MARINA Circular 01 Series of 2009 clearly directs all concerned domestic shipowners/operators of ships plying domestic trade and port state to have a “Mandatory Marine Insurance to Cover Legal Liabilities Arising out of Any Maritime Related Accidents.”

This is pursuant to Presidential Decree No. 474 and Executive Order No. 125 as amended, and Republic Act No. 9295 and its Implementing Rules and Regulations (Sections 1 & 2, Rule IX).

It orders domestic shipowners/operators of ships plying domestic trade and port state to ensure that they will be able to meet their financial responsibility for any legal liability arising out of any maritime related accidents; ensure that adequate marine insurance coverage against legal liabilities and expenses are secured to answer for claims for damage or compensation to risks not covered under existing regulations.

“A healthy maritime industry should have at least less maritime accidents. But unfortunately, these accidents keep on happening in our vast waters,” he said.

The problem, Ramirez explained, is in the implementation of the maritime regulations for domestic shipping, describing it as “toothless” compared to Nippon Kaiji Kyokai of Japan, American Bureau of Shipping in the United States, and the Bureau of Veritas of Belgium, among others.

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