Cruise Law News : Maritime Lawyer & Attorney : James M. Walker : Walker & O'Neill Law Firm : Admiralty Law, Cruise Ship Accidents & Injuries

The fire on the Carnival Triumph cruise ship is being investigated by the Bahamas because Carnival elected to register the Triumph in that country to avoid U.S. taxes, labor and safety laws. As the "flag state" for the Triumph, the Bahamas is charged with the responsibility of investigating fires, casualties and crimes on that ship. The Bahamas requested the involvement of the U.S. Coast Guard as well as the National Transportation Safety Board (NTSB).

The questions arise will the Bahamas really conduct an objective and honest investigation? Will it ever release a copy of the final report into the investigation into the fire?  And if so, when?

In considering these questions, remember that in the last disabling fire on a Carnival cruise ship several years ago, the public has still not seen the report of the flag state. In November 2010, the Carnival Splendor caught on fire and was disabled.  Because Carnival flagged the Splendor in Panama, Panama was responsible for the official investigation. Panama called upon the U.S. Coast Guard to assist it. The Coast Guard finished its reports to the officials in Panama long ago.

The Coast Guard quickly sent out "marine safety alerts" about the design defects and construction and maintenance shortcomings in the Splendor engine room.  Remarkably, the Coast Guard did not even identify the Splendor in its alerts.

It's now going on two and one-half years later but Panama still has not released a report.

Will Panama ever release the report?  Not if Carnival doesn't want it to.

Who has authority to force Panama or the Bahamas to release a report or punish them if they refuseto do so?  No one. There is no U.S. federal oversight organization. The International Maritime Organization (IMO) is toothless.  A former NTSB chairman called the IMO a "paper tiger."  This is exactly how the cruise lines want the system to work.

Two years ago, Disney youth counselor Rebecca Coriam disappeared from the Disney Wonder cruise ship.  The Bahamas was responsible for investigating the disappearance because Disney registered the Wonder in Nassau to avoid U.S. taxes, labor and safety laws.  

The Bahamas sent a lone policeman to Los Angeles to meet the cruise ship when it returned to port. He conducted a short visit on the ship and concluded his report long ago. But the Bahamas refuses to send Rebecca's mother and father a copy of the report.  

After the Triumph was towed to Mobile, a newspaper article appeared in a Bahamian newspaper that the Bahamas was sending detectives to the U.S. to investigate a sexual assault on the Triumph. The Bahamas denied that the ship where the rape was alleged was the Triumph. It disclosed only that a Bahamian flagged ship was involved. The Bahamas promised to provide information once its detectives returned from the U.S. Of course, it has released nothing.    

If your child vanishes on the high seas, or you are raped during a cruise, or your family flounders for a week on a stinky fire-stricken ship, flag states like the Bahamas and Panama don't believe that they have any obligation to release any information to you.  Their alliances are with the cruise lines which fly their flags. Companies like Carnival and Disney hide behind the foreign flags and are complicit in the conspiracy to deceive the public.

It's a dishonest, secretive, rotten system.  Its a system designed to conceal the truth and to avoid the foreign flagged cruise lines from embarrassment.  

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This week the United States Coast Guard rescued two cruise passengers - one ill young man from the NCL Gem cruise ship sailing off the coast of North Carolina and a second young woman from the Explorer cruise ship who was suffering from an appendicitis attack near Key West Florida. 

When we report on these type of rescues, we sometimes hear from readers of Cruise Law News complaining that the cost of the medical evacuations should be borne by the sick passengers themselves. 

We especially hear these complaints when a passenger inadvertently goes overboard.  Was the passenger acting negligently or was he or she under the influence of alcohol (a major money maker for the cruise lines).  If so, many people protest loudly and angrily that the cruise passenger should bear the extra fuel expenses and other costs incurred by the cruise ship and the Coast Guard searching for the missing passenger.   

Federal agencies are prohibited by law from seeking reimbursement of the costs associated with search and rescue of this type. 

So who bears the expense when the cruise lines act irresponsibly and the cruise goes terribly wrong?

Consider the fire last year aboard the Carnival Splendor which caused the cruise ship to lose power off of the coast of Mexico.  The Carnival ship was disabled due to the negligent design of the cruise ship itself which risked the lives of 4,500 passengers and crew.  As we reported before, the U.S. Coast Guard blasted Carnival for its defective engines and poorly designed safety instructions which caused several thousands of passengers to find themselves helplessly adrift at sea without lighting, air conditioning or hot water on the high seas. 

Carnival quickly considered legal claims against the companies which designed and manufactured the engines which failed.  Carnival did not hesitate making a claim against these companies for the revenues lost while the Splendor sat in dry dock being repaired.

But who paid for the enormous costs associated with the U.S. Navy and U.S. Coast Guard responding to the emergency?  

You will recall that the U.S. Navy sent an aircraft carrier, the U.S.S. Ronald Reagan, to the scene as the mostly U.S. passengers bobbed around on the high seas.  The Navy utilized four aircraft and helicopters to assist the stricken Carnival ship.  The Navy made twenty-four airlifts of food and provisions which its aircrew skilfully dropped onto the Carnival cruise ship to feed the passengers.  

How much did this cost and who was paying for it? 

I inquired around and the only knowledgeable source was the International Cruise Victims ("ICV") organization whose President, Ken Carver, had requested information from the U.S. Navy and the U.S. Coast Guard pursuant to a Freedom of Information Act ("FOIA") request.

The U.S. Navy timely responded to Mr. Carver's FOIA request.  The Navy disclosed that it delivered 60 pallets, weighing over 37,000 pounds, of "bread, luncheon meat, pop tarts, canned crab, water and paper plates." 

Considering the cost of positioning an aircraft carrier, dispatching multiple aircraft and helicopters, and delivering tons of food and water to be dropped onto the cruise ship, the Navy stated that it spent $1,884,376.75 responding to the fire aboard the Carnival Splendor cruise ship.  

This figure does not include the costs incurred by the U.S. Coast Guard in responding to the crisis. Unfortunately, the Coast Guard has not yet provided any information in response to Mr. Carver's FOIA request dating back to earlier this year.

The Coast Guard's costs were undoubtedly another $2,000,000 or so in personnel and fuel costs for their vessels and helicopters.

There is a certain irony that cruise lines, which structure their businesses to avoid U.S. taxes and U.S. safety regulations, are dependent on the generosity of our Federal agencies in responding to emergencies when they get themselves into a jam.  

Cruise lines incorporate in foreign countries like Liberia and Panama and register their cruise ships in foreign countries like the Bahamas in order to avoid U.S. laws and all U.S. income taxes. The cruise industry collects over $35,000,000,000 (billion) a year in income from mostly income-tax-paying-Americans, yet it avoids U.S. corporate income tax by incorporating itself and registering its ship abroad.

But when the cruise ships catch on fire and are adrift on the high seas, cruise lines like Carnival are the first to make a distress call to the United States and ask for favors from the U.S. Navy and U.S. Coast Guard. 

When cruise passengers were thinking of suing Carnival last year for the inconvenience caused by the cruise fire aboard the Splendor, I was the first one to say don't do it.  Many of the major news networks and newspapers picked up on the my don't-sue-Carnival message, like the Wall Street Journal, USA Today, Fox News,  ABA Journal, Gadling, and the U.K's Mirror.

At the end of the day, it was not the cruise passengers who filed suit.  It was Carnival who made legal claims against the companies which designed and manufactured its engines.  Carnival made millions in the process.

Did Carnival, the only one suing, repay the U.S. government?  

Not a penny.

So who paid for all of the millions of dollars in emergency services expended by our U.S. Navy and Coast Guard arising from the negligence of the tax-avoiding, foreign flagged and incorporated cruise line which stranded thousands of tax-paying Americans on the high seas?

You, the American taxpayers.    

For additional information about the Carnival Splendor fire and cruise ship fires in general, consider reading:

Carnival Splendor CO2 Firefighting System: "A Recipe for Failure"

"Coast Guard Blasts Carnival Splendor for Fire Negligence"

Ten Years of Cruise Ship Fires - Has the Cruise Industry Learned Anything? 

Photo credit:  bottom photo / U.S.S. Ronald Reagan - providencefox.com

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Every so often we receive an email or telephone call from someone asking why cruise ships can't sail from one U.S. port to another. 

The reason is because there is a Federal law which prohibits foreign flagged ships from coastwise trade between U.S. ports.  Only U.S. flagged ship can do that.  The thought at one time was that such a law would promote U.S. shipping by providing preferential treatment of US vessels over "foreign" vessels.

The law in question is the Merchant Marine Act of 1920.  This is a U.S. Federal statute which regulates maritime commerce in U.S. waters and between U.S. ports.  Section 27, known as the Jones Act, deals with the concept of "cabotage" (coastal shipping).  The law requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens. 

This is why you don't see a cruise ship sailing from New Orleans to Galveston and letting off passengers (for example).   The reality today of course is that virtually all cruise ships are foreign flagged in order to avoid US taxes and occupational laws. So the entire US based cruise fleet can't sail from one US port to another.

Critics of the law argue that the law increases the costs of shipping good between U.S. ports.  U.S. shipbuilders are also substantially higher than vessels constructed overseas.  As a result, U.S. shipyards now build only 1 percent of the world's large commercial vessels.

There is now a bill which has been introduced  to amend the law to allow foreign-flag cruise ships to operate in the coastwise trade of the United States.  It was introduced by Representative Blake Farenthold (R-TX) and co-sponsored by Ron Paul.  Representative Farenhold believes that opening up coastal trade to all cruise ships will result in more cruise ships sailing from one US port to another and the US and Texas would benefit economically.

However, U.S. shipbuilders and companies engaged in coastwise trade are opposed to amending the law.  A recent controversy regarding shipping crude oil from the Strategic Petroleum Reserve reveals that the new bills will face strong opposition.

The Boston Herald published an article discussing the Obama administration's decision to waive the requirements of the Jones Act against foreign flagged ships regarding the transportation of oil from one U.S. port to another.  The Jones Act cabotage requirements prohibit shipments from reserve holdings on the Louisiana and Texas coasts to East Coast refineries.

Buyers of the oil wanted to use large tankers to transport the 30 million barrels being sold, because they are larger and cheaper than most U.S. coastwise vessels and barges.  However, there are only nine large tankers flying the U.S. flag, all of which sail from Alaska to California.  The administration let the buyers use foreign ships for 46 out of 47 shipments.

This caused American shipping companies to become "understandably furious," according to the Boston Herald which calls from the repeal of the Jones Act.  "The Jones Act is a smelly piece of protectionism that should have been repealed 50 years ago," says the Herald.

My prediction is that the bill will not make it out of committee. 

Even changing the Jones Act will not significantly affect the cruise industry, which will continue to buy foreign ships, fly foreign flags, and hire foreign employees to save money.   

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The LA Times has an interesting article this morning revealing how drilling companies skirt U.S. laws by registering their oil rigs in countries like the Marshall Islands, described by the Times as a "tiny, impoverished nation in the Pacific Ocean." 

Drilling rigs are considered to be "vessels" under maritime law.  This permits their owners and operators to register them wherever they want in the world.  Like cruise lines which register their ships in Liberia, Panama, and the Bahamas, oil and gas companies and drilling contractors register their rigs outside the U.S. to avoid American safety laws and taxes.   

Congress will be conducting a hearing on the safety of these foreign flagged drilling rigs this Thursday.  The Times quotes James L. Oberstar (D-Minn.), chairman of the House Transportation Committee, as stating:  "Today, these oil rigs can operate under different, very minimal standards of inspection established by international maritime treaties."

Representative Oberstar is a friend of cruise passengers and crew members, having taken a leading role in passing the Cruise Vessel Safety and Security Act in the House of Representatives last year.  This law protects cruise passengers on foreign flagged cruise ships.  Take a minute and read: " Congressional All Stars Pass Cruise Crime Law By Vote of 416 to 4."

For additional information on the Marshall Islands vessel registration system, consider reading: "Growth Of The Marshall Islands Flag and American Bureau of Shipping."

Have a comment?  Leave your thoughts in the comment section below. 

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Earlier this month, I announced that I will be awarding the "Worst Cruise Line in the World" award to the cruise line demonstrating the worst in gross negligence and indifference towards passenger and crew member health and safety. This will be a monthly award. 

Over the past month, we have received many e-mails nominating a variety of cruise lines and a couple of cruise line tycoons. Mostly passengers have emailed us with a variety of stories, many are just plain sad.  Some of the stories demonstrate such callousness by the cruise lines that your blood will boil.

A few crew members contacted us  Without except they were afraid to reveal their real names in fear of retaliation.

A couple of environmental groups contacted us as well.

So far two cruise lines are vying neck to neck for the award.  After 26 years of being a maritime lawyer I thought that I had seen it all. These two companies have treated their crew members like garbage. At this point, I don't know who is most deserving of the first month's award. 

The voting for this month ends on Wednesday, September 30, 2009 at 5:00 p.m. EST. I will be announcing the winner, er loser, in October.

Feel free to tweet your nominee to me at my Twitter page @CruiseLaw

Photo credit:

Cruise Ship Tycoon         Activisim

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