The American P&I Club and Sustainable Shipping
While principles of sustainability have only been brought to the forefront of businesses strategy across the globe in recent years, such principles have always formed the core purpose of mutual International Group P&I Clubs, as they underpin the very viability of global sea commerce. In fact, while the birth of P&I Clubs may have arisen from a gap in market insurance availability, when carefully examined and taken a step further, the gap arose from society’s demand for accountability through reliable security for increasing liabilities that the commercial market was unwilling and unable to insure.
Where can one begin in terms of describing the purpose and functionality of a P&I Club without refer- ring to an environmental, social or governance (“ESG”) consideration? Every aspect of its existence is derived from such principles. Indeed, I am not even sure that there is a UN sustainable development goal that P&I Clubs don’t incorporate in some form through the various functions. Its main purpose to secure liabilities relating to loss of life and personal injury to crew, passenger and other third parties onboard, damage and loss to cargo carried, pollution both by oil and other hazardous substances, wreck removal, damage to property by collision and other contact. However, the rules are designed
to adapt and absorb developing liabilities in a constantly changing world, where deemed necessary by the board. For example, as a result of humanitarian concerns for abandoned seafarers, P&I Clubs have agreed to play a leading facilitator role in assisting repatriation and compensation. In addition to this, P&I Clubs offer services, expertise, guidance and training, while forging partnerships and initia- tives with other major stakeholders.
International Group P&I Club cover, like that of the American Club, in its modern-day form, provides what can essentially be described not only as a “ticket to global trade” for operators, but more impor- tantly, assures peace of mind to ports, nations, authorities, seafarers, private interests, contracting parties and all other stakeholders in the shipping chain on a global level. This is because the rein- surance structure is so strong and trusted that mere presentation of a certificate of entry evidenc- ing cover from one the Group P&I Clubs ensures financial reliability and accountability for the ship everywhere and anywhere it goes.
* Deputy Chief Operating Officer SCB, Inc., Managers of The American P&I Club
The answer was provided for NAFS magazine issue 143 in its special report “WOMEN in SHEPPING”