Implementation of Section 11 and 11A of the Merchant Shipping (Liability and Compensation for Oil and Bunker Oil Pollution ) Act 1994 : Developing Tools for Recognising P&I Cover and Financial Security Providers

Following Malaysia; ratification of the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (Bunkers Convention), the Merchant Shipping (Oil Pollution) (Amendment) Act 2011. The new section 11A of the Act requires compulsory insurance against liability for bunker oil pollution for every ship exceeding 1000GT at any port or place including terminal installation areas in Malaysia. The Director General of Marine Malaysia is empowered under the Act to issue Bunkers Convention Certificates (BCC) to those ships as a certification of the compliance with the new requirement. BCCs are issued to ships that produce Blue Cards or insurance policies proving that that they have obtained adequate and reliable P&I cover. Thus, the Marine Department has to approve companies providing the P&I cover to ensure their reliability and ability to provide prompt and adequate compensation. This study develops a set of procedures for the approval of applications for recognition by such companies in the form of, among others, criteria and mechanism for the use of the Committee for the Consideration and Recognition of Companies Providing P&I Cover in Malaysia.