The coronavirus reveals the power of industry and holes in regulation.
By TANYA SNYDER
03/11/2020 07:19 PM EDT
Updated: 03/11/2020 07:23 PM EDT
The nightmare of coronavirus outbreaks on cruise ships has revealed an industry that's skirted oversight for years and used powerful allies in Washington to keep the government out of its business.
In 2013, an engine fire aboard the "Carnival Triumph" left 4,000 people adrift with no running water or power and scarce food. Just a year later, Royal Caribbean International earned the dubious distinction of breaking the record for the largest amount of people sick from a norovirus infestation — nearly 700 people. The press wrote stories, policymakers gnashed their teeth — and nothing changed because the U.S. government is largely powerless to intervene.
In essence, cruise ships are a regulatory black hole. The cruise industry is insulated by ship registrations in foreign countries and shielded by a powerful lobby with sway in tourism-dependent U.S. states like Florida.
The cruise industry disproportionately counts Americans as customers but operates primarily in international waters and avoids tough scrutiny by registering ships mostly in small Caribbean countries with little incentive to enforce international treaties. That has led to a hodgepodge of loosely enforced standards, which regulators in the U.S. won't be able to change quickly.
And when lawmakers have tried to get tougher, such as creating more requirements for cruise ships to dock at U.S. ports, the well-heeled industry pushes back hard.
Rep. Doris Matsui (D-Calif.), who has for years pressed for greater regulations on cruise ships, said the industry fought against her last bill on the issue, which was enacted in 2010. It set some new safety and security requirements for cruise ships.
“They’re very strong,” she said. “I had the most difficult time passing that first bill.“ She said the only reason she was able to get it passed is that a constituent who had been raped on a cruise ship and other cruise ship crime victims were willing to tell their stories.
After initially insisting that no restrictions were needed, in recent days the cruise industry has presented a plan to the White House to bar the elderly from cruising over coronavirus risks. But that hasn't stopped some sales managers from using dubious sales tactics — including Norwegian Cruise Lines, which reportedly encouraged sales reps to lie to potential customers with fantastical pitch lines.
"The Coronavirus can only survive in cold temperatures, so the Caribbean is a fantastic choice for your next cruise," according to a list of talking points put together by sales managers in the Miami office, according to the Miami New TImes. Norwegian did not respond to a request for comment.
Amitai Bin-Nun said that Carnival Cruise Line recently called him with a sales pitch, where the marketer tried to suggest that Carnival — whose Princess Cruises line has had at least two serious coronavirus outbreaks — hasn’t had any problems with the coronavirus.
“I said, ‘That's not true; there were two Carnival cruises with serious Covid spread, including the Royal Princess,’” Bin-Nun told POLITICO. “And she said, ‘Oh, that's international — that doesn't impact Carnival, which is domestic,' and kept saying they're taking precautions and it's all OK. It was fairly aggressive.”
Chris Chiames, chief communications officer for Carnival Cruise Line, underscored that Carnival Cruise Line and “other brands under the Carnival Corporation banner that have had guests and or crew diagnosed with COVID-19“ are “separate operations,” but that Bin-Nun “didn’t like our sales rep trying to make a nuanced case“ and that the sales rep "should have left well enough alone.”
'Flags of convenience'
Cruise lines typically register ships under so-called “flags of convenience,” in Panama, the Bahamas and other countries chosen for their low wages, cheap fees and lax regulations. The International Maritime Organization makes the international rules that govern shipping, including cruising, but it has no enforcement power. That falls to the countries where the ships are registered, to which cruise customers provide needed tourism dollars. Some popular flags of convenience, like the Bahamas, have just one person in charge of inspecting ships that dock there.
Of the industry's $45 billion impact, $24 billion was spent directly inside the United States in 2018, generating more than 172,000 jobs, according to a report by the Florida-Caribbean Cruise Association. And cruise lines spend more than $3 million a year on lobbying.
Concern about the relative lack of laws and regulations that seek to enforce order on board cruise ships crops up sporadically in Congress, usually after a high-profile disaster strikes — former Sen. John Rockefeller (D-W.Va.), then chairman of the Senate committee that oversees transportation, held several bruising hearings on problems within the cruise industry and used his bully pulpit to attempt to force changes. But once he left office, nobody with such a high profile took up the cause, and those efforts have largely lost traction.
Behind the scenes, industry lobbyists have been talking to lawmakers, including those from Florida, a state that's dependent on tourism dollars. Cruise lines and port directors met with the Florida House delegation Wednesday evening.
So far, Florida lawmakers with ports in their districts say the cruise industry has mostly been asking for information or for help getting into ports. They haven’t yet asked for any kind of financial support — but that may be next.
Rep. Frederica Wilson (D-Fla.) said she expects that the House Transportation and Infrastructure Committee, which she serves on, will put together some sort of bailout package for the cruise lines and other parts of the travel industry.
“They’re losing money hand over fist,” Wilson told POLITICO. “So we’ll be trying to find out how we can help. I’m sure they have tons of suggestions.“
But Peter DeFazio (D-Ore.), chairman of the Transportation Committee, said Tuesday that he’s not interested in bailing out the cruise industry.
“They aren't American,” he said. “They don't pay taxes in the United States of America. If they want to re-flag their ships ... and pay U.S. wages and pay U.S. taxes, then maybe."
Rep. Donna Shalala (D-Fla.), who represents the Port of Miami, said cruise lines have “absolutely not” asked for a bailout, but noted: “There are 150,000 jobs at stake.” The former HHS secretary also praised the cruise industry for its long-standing work with the public health community on infectious diseases and noted that “they’re stepping up even those” protocols.
Republican Rep. Bill Posey, who represents Port Canaveral, Fla., said the cruise lines’ concerns “are the same as everybody else.”
“Obviously they’re concerned about revenue, but they’ve all expressed that they’re concerned about their customers too,” he said. The congressman said they’ve been calling his office asking for nothing but information. “First couple messages I got from them I thought, ‘OK …’ but they just said, ‘What’s the latest, can you keep us posted?’ I said sure.”
He would be the wrong tree to bark up for government support anyway: “I don’t do bailouts.”
'Cruise lines exploit ports'
Ross Klein, interim dean and professor in the School of Social Work at St. John's College in Newfoundland, Canada, said the IMO "sets international regulations that have no standing and no enforceability. The U.S. chooses not to pass laws. They don’t want to ruffle the flags of the cruise industry.”
"Cruise lines exploit ports," said Klein, who has written several books about the cruise line industry and tracks disasters at sea on his website.
The Cruise Lines International Association, the trade group for cruising, resists the notion that regulations have no teeth.
“There are three robust layers of inspection and enforcement of international law and other requirements, including multiple and frequent scheduled and unannounced inspections in the interest of protecting passengers, crew and the environment,” said a CLIA spokesperson, noting that ships at sea are subject to IMO and International Labour Organization standards, as well as enforcement and inspection from the countries of registration. And for ships entering and departing U.S. ports, the U.S. Coast Guard, CDC and EPA set standards.
“Reporting is required across all areas of environment, safety, sanitation, etc.,” the spokesperson said. “No other form of travel provides such a high level of transparency in reporting.“
Countries where the ships dock do have some sway, giving the United States what amounts to its only point of leverage. Once a cruise ship is in a country’s territorial waters within 12 nautical miles of a port, that country has jurisdiction.
“Even if they fly under foreign flags, there’s still a way to reach them in terms of insisting on basic medical care,” said Sen. Richard Blumenthal (D-Conn.), sponsor of a bill, S. 3124 (116), aiming to prevent and address crime on cruise ships, the Senate companion to Matsui’s bill. “If they promote or advertise or do business here, the holding companies can be held responsible.”
Blumenthal and Matsui’s bills have been introduced repeatedly since 2013 but have never advanced to the Senate floor. They include some provisions to ensure adequate medical personnel on board a cruise ship, but don't deal with other issues that have emerged during the coronavirus outbreak, like disinfection regimes or quarantine protocols.
Both Blumenthal and Matsui say they want to add language to their bills to address communicable diseases.
“That’s the next step,” Matsui told POLITICO. “I believe what I’ll do now is just get into the whole thing about how they have to check for hygiene and cleanliness and have a protocol.”
“They really have to get their act together and get experts on board and have people who understand how a virus works,” she added. “They need to professionalize this whole thing.”
A Japanese infectious diseases expert who was allowed onto the Diamond Princess, where more than 600 passengers were infected with the coronavirus, released a video on YouTube blasting the “chaotic” process to try to control the spread of the disease onboard the ship, conducted by people with no background in infection control.
New research in the Journal of Travel Medicine has shown that quarantining passengers on board the ship may have caused the number of infections to balloon and that had passengers been allowed to evacuate, nearly 90 percent of the coronavirus cases could have been avoided.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.