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Web alert: refugees and migrants at sea – expenses and other costs covered by the club

21 May 2015

The magnitude and urgency of the humanitarian crisis unfolding in the Mediterranean is undisputed.  Thousands of people are leaving their countries of origin to travel in unseaworthy vessels in the hope of finding better conditions of living. The continuous movement of refugees, coupled with the obligation to assist distressed people at sea, has led to many questions concerning the expenses and costs that are covered under a member’s P&I cover.
The most significant concern for a member instructed to complete a search and rescue (SAR) mission will likely be the cost and expense of the diversion of the ship in order to rescue, and thereafter land, the refugees. It is important to note that, before seeking reimbursement from the club, the member should first consider seeking reimbursement from the competent authority instructing the member to take part in the SAR, or alternatively from the ship’s flag state.
Rule 3.4 of The Standard Club P&I rules states: Port and other charges solely incurred for the purpose of landing stowaways or refugees, or others saved at sea, or landing or securing the necessary treatment for an injured or sick person, other than crew, including the net loss to the member in respect of fuel, insurance, wages, stores and provisions incurred for such purpose.
This rule guides that the club will cover the cost and expense of a diversion, if the diversion is solely incurred as a consequence of the ship having persons saved at sea on board. Whether the cost and expense are ‘solely incurred’ will be assessed on the merits, and particular facts, of each case. If an entered ship is asked to perform a SAR operation it is crucial for the member, as soon as it is reasonably practical to do so, to immediately contact the club in order to obtain the necessary advice and guidance.

The diversion is deemed to commence as soon as the ship changes course, in order to engage in the SAR operation, and it is completed when the ship has reasonably returned back on course - to her original, intended, destination. The diversion costs which can be reimbursed include: extra costs of fuel, insurance, crew overtime, stores, provisions and port charges. The member will be asked to supply a breakdown of these expenses, with supporting documentation, in order for the club to establish the compensation properly due. Furthermore, a bunker calculation should be supplied together with a bunker invoice. Therefore, it is essential the member keeps an accurate record of the entire SAR operation.

Additionally, the club will cover the cost of maintaining refugees and migrants on board the ship. This will include the cost in providing: maintenance, food, medicines, etc.

A member’s liability may not necessarily cease once the ship reaches port, because the port or immigration authority may require the member to pay expenses incurred due to watch and custody, as well as immigration and repatriation procedures. These costs would also fall within the scope of P&I cover.

Lastly, the diversion could lead to substantial time being lost for the owner member. It is important to note that compensation will not be payable for hire lost during the SAR operation, as this is an excluded loss under the club’s rules. Therefore, it is more important than ever that members now give careful thought to making express, clear, provision within their commercial contracts as to who (principally owner or charterer) will be liable for hire payable during a SAR operation. 

Members would be well advised to notify the club as soon as they encounter any distressed people at sea, or as soon as they are called upon by a competent maritime authority to take part in SAR operations. The member should also alert the ship agents in the port where the refugees are to be landed, or appoint an agent there to take care of the formalities. In such circumstances the club will also instruct the local correspondent to assist the local agents, in taking all the necessary precautions to ensure the smooth disembarkation of the refugees. Such precautions taken before the ship’s arrival will better ensure that the member meets all of his obligations and it will also, hopefully, expedite the procedure and minimize any delay to the ship.
The club will continue to keep members informed of developments to this issue in the Mediterranean, through the issuance of regular publications, all of which can be found on the club’s website here. The Standard Club is always on hand to assist. If a member has any queries in relation to this issue, they should not hesitate to call their usual club contact, or the authors of this article.