Cruise Industry Off Course?

LOBBYING & LAW

ENVIRONMENTALISTS AND SOME AGGRIEVED PASSENGERS AND THEIR FAMILIES SAY CRUISE SHIPS ARE TOO LIGHTLY REGULATED.

Sat. Aug 2, 2008
by Julie Kosterlitz

The story of America’s love affair with ocean cruises can be read in the numbers: Since 1980, the number of North American cruise passengers has grown nearly 780 percent to 12.5 million last year, according to the industry.

Cruise lines have supersized their ships–carrying capacity has more than tripled over the past decade to 4,000-plus passengers and crew, and 5,000-person ships are on the drawing board. The range of destinations and diversions offered has also ballooned.

The payoff? The industry now does billions of dollars in business every year and says that customer satisfaction is at 95 percent.

But the growth has a downside. Critics say that the crush of humanity afloat is starting to make the Love Boat resemble Gotham City, and that these seafaring metropolises leave some urban-style problems, including pollution and crime, in their wake.

The cruise lines say that problems are not widespread, but their detractors contend that the industry’s statistics are often distorted and that its reporting is not subject to independent scrutiny. For at least a decade, environmentalists and some aggrieved passengers have complained that when it comes to ocean dumping and passenger security, cruise ships are too lightly regulated, and even more scantly policed, by the federal government.

Part of the problem is that the industry is governed by a jumble of laws and a confusing array of authorities, because cruise lines operate mostly foreign-flagged ships with multinational crews and passengers that sail through international and various territorial waters. Critics also say that U.S. laws have critical gaps when it comes to industry regulation and oversight.

Cruise line officials counter that a few high-profile incidents don’t reflect the industry’s overall environmental and safety records. “Our environmental practices and safety are very good,” said Eric Ruff, executive vice president of public policy and communications for the industry’s major trade group, the Cruise Lines International Association. “We have a good story to tell, and we can always get better at what we tell and who we tell it to.”

For the past decade, critics have made little headway in lobbying the federal government to step up its oversight of the industry, thanks perhaps to the anti-regulation sentiment of the Republicans at both ends of Pennsylvania Avenue, and to an industry with political clout.

That may be about to change. In mid-June, as the result of a lawsuit by environmentalists, the Environmental Protection Agency signaled its intent to begin requiring cruise vessels to seek permits for discharges of certain kinds of waste into the water, starting in October.

With Democrats apparently poised to expand their majorities on both sides of Capitol Hill, Sen. Richard Durbin, D-Ill., and Rep. Sam Farr, D-Calif., in April reintroduced sweeping companion measures that would significantly expand restrictions on ocean pollution from passenger vessels. In late June, after a Senate hearing on passenger security, Sen. John Kerry, D-Mass., and Reps. Doris Matsui, D-Calif., and Christopher Shays, R-Conn., introduced bills in both chambers aimed at improving onboard security and public reporting of shipboard crime.

Although tentative, these steps are nonetheless milestones for environmental and victims’ rights activists who have long sought novel ways to get on Washington’s radar screen–including, recently, making common cause.

Congress last passed a major piece of environmental legislation aimed at the cruise industry in 2000, close on the heels of a dumping scandal involving Royal Caribbean International. That legislation cracked down on pollution from cruise ships in Alaskan waters and established a blue-ribbon panel to recommend better safeguards against ocean pollution. But when the panel issued a raft of recommendations in 2004, Congress failed to act.

In 2003, EPA rejected a petition from 53 environmental groups requesting that the agency repeal its long-standing rule exempting most cruise-industry discharges other than sewage from the permitting requirements of the Clean Water Act.

Frustrated environmentalists then took their battle to the states and the courts, with more success. Since 2001, coastal states including Alaska, California, and Maine have passed laws restricting ocean pollution, and several others have struck voluntary agreements with the industry to do likewise. In 2005, the groups won a U.S. District Court suit to force EPA to overturn the exemption. Although the agency has appealed that decision, it is also preparing to require permits for discharging of certain pollutants before the court’s decision is scheduled to take effect in October.

In 2006, Alaska environmentalist Gershon Cohen and a handful of allies won a ballot initiative to tax and monitor the cruise industry–against fierce industry opposition, and in a notoriously laissez-faire state. The law broke new ground, because it not only expanded the state’s 2001 pollution controls but also imposed a new tax on cruise ships and required them to offer access to the state’s newly minted pollution control monitors.

On Capitol Hill, Durbin’s measure, which he has said was inspired by a 2005 think-tank study of ocean pollution, proposes to create extensive coastal zones where dumping by cruise ships would be prohibited, and to tighten standards for ships’ wastewater treatment. Like the Alaska bill, it includes an onboard observer program, which would, in this case, be run by the Coast Guard.

The industry has taken some steps to improve its environmental practices, such as installing advanced wastewater treatment systems on some ships. And Michael Crye, executive vice president for technical and regulatory affairs at CLIA, says that the legislation is “premature” because the industry is already working with EPA, the Coast Guard, and Alaskan officials to come up with recommendations–due out later this year–for controlling pollution from sewage and other wastewater.

Meanwhile, a new cruise-focused victims’ rights movement, made up of aggrieved former passengers or their family members, has begun seeking changes for industry-wide security practices. The catalyst for this effort was the disappearance of 26-year-old George Smith of Connecticut during his honeymoon cruise in 2005. Extensively covered in the media, the incident prompted Shays, whose district is home to Smith’s family, to hold hearings and introduce legislation requiring better reporting of shipboard crimes.

The measure went nowhere in Congress, but it did spur the industry to work with the FBI to improve its required reporting of serious crimes on ships going in or out of U.S. ports, and to voluntarily report serious crimes involving U.S. passengers wherever they occur.

The hearings, however, also convinced Arizona retiree Ken Carver–whose daughter Merrian disappeared from a Royal Caribbean ship on a cruise to Alaska in 2004–that the industry was whitewashing the problem. He organized an online network, the International Cruise Victims Association, to fight back.

A former New York insurance executive, Carver says he spent 14 months and more than $75,000 trying to pry information about his daughter’s disappearance from recalcitrant company officials, with limited success. “It was a cover-up, which is the way they appear to do business,” Carver said. Eleni Kalisch, Royal Caribbean’s vice president for public affairs, declined to comment for the record on Carver’s situation, but said that the company has since made numerous security improvements, including hiring a former top FBI official as director of security, and it is installing peepholes in cabin and stateroom doors.

The group that Carver founded now numbers several hundred members worldwide, he says. Members swap information, publicize their stories, and press an agenda that includes requiring cruise ships to carry victims’ advocates on board, improving video surveillance, and installing peepholes in doors. Run on a shoestring, largely by volunteers, the group recently applied for a small grant from a Justice Department program for grassroots victims’ organizations.

Carver’s activism also led to a somewhat unlikely alliance with Cohen, whom Carver called shortly after the successful ballot initiative in Alaska. Earlier this year, the two pushed a California measure to place aboard ships independent “ocean rangers”–who are certified in marine engineering and public safety–to protect against pollution, crime, and homeland security threats on cruise ships traveling in California’s waters. Backed by a coalition of environmental, victims’ rights, labor, and sheriffs’ groups, as well as AARP, the measure passed the California Senate but died in the Assembly in June.

The bill’s chief sponsor, state Sen. Joseph Simitian, says he’ll try again. “When you climb on a cruise ship, where there’s gambling, alcohol, ambiguous jurisdiction, and no law enforcement, it’s a formula for disaster,” he said. The industry’s security personnel, he said, “work for the cruise lines, not passengers or the public.”

In Congress, the cruise victims’ group has enlisted some congressional supporters after constituents reported compelling personal stories. Matsui got involved in 2007 after hearing from Sacramento resident Laurie Dishman, who alleges that she was raped on a cruise ship in February 2006. Kerry acted after his staff was approached by Carver, whose daughter was a Cambridge resident when she disappeared.

The House Coast Guard and Maritime Transportation Subcommittee, on which Matsui then sat, held two hearings on passenger security last year. At the behest of its chairman, Rep. Elijah Cummings, D-Md., the industry has held quarterly meetings since mid-2007 with passenger representatives, including Carver. However, Carver says that the talks failed to produce a concrete commitment from the industry as a whole.

Earlier this year, the House passed a Matsui amendment to the Coast Guard’s 2009 funding authorization that requires public disclosure of the number of missing persons and alleged crimes on cruise ships. The broader Matsui-Kerry bill would also require cruise ships to keep a crime log and to give law enforcement agencies electronic access to it; add security equipment and training; and offer better onboard medical help and confidential links to off-ship assistance for assault victims.

Officials at the Cruise Lines International Association say they are still reviewing the legislation but that some provisions duplicate what the industry already does and others could conflict with requirements of international treaties. But CLIA’s Crye says that the industry recognizes a need for better customer relations after an incident happens. “We haven’t been very good at guest care, counseling, making arrangements, communicating with the next of kin when a passenger dies,” he said.

The industry also realizes that it must shore up its public image. Last year, CLIA brought on Ruff, who, as the press secretary to then-Defense Secretary Donald Rumsfeld, learned a thing or two about taking, and returning, fire. The association also recently hired Washington public-affairs firm John Adams Associates, which proposed a “reputation management program” that was inadvertently leaked to the Greenwich Post in Connecticut. Among other things, the plan calls for mobilizing travel agents, industry suppliers, and possible “new allies,” including the Coast Guard and moderate environmental groups, to deliver positive messages about the industry to Congress and to local media.

The industry is also adding lobbying ballast. CLIA, which has long and deep ties to lobbying firm Alcalde & Fay, also recently hired ML Strategies, the government-relations arm of the Mintz Levin law firm. Royal Caribbean just signed with Quinn Gillespie & Associates, which lists more than a dozen lobbyists on the account, and earlier this year, Carnival Cruise Lines hired the Zell & Cox law firm.

Copyright ©2008 by National Journal Group Inc. The Watergate 600 New Hampshire Ave., NW Washington, DC 20037
202-739-8400        • fax 202-833-8069 NationalJournal.com is an Atlantic Media publication.
LOBBYING & LAW
Navigating Washington

Sat. Aug 2, 2008
by Julie Kosterlitz

If the cruise industry needs lobbying help, it never has to look far. The Cruise Lines International Association shares offices in Arlington, Va., with lobbying firm Alcalde & Fay, and the two have something of a symbiotic relationship.

The firm represented the International Council of Cruise Lines for more than two decades, and since that group’s 2006 merger with the Cruise Lines International Association, Alcalde & Fay has represented CLIA. The association and the firm “have had a very good relationship over many years,” said CLIA Executive Vice President Michael Crye, who formerly headed the ICCL.

The cruise-industry association is Alcalde & Fay’s largest client; in 2007 the trade association paid the firm nearly $1.2 million–four times as much as the next largest client. One of the firm’s partners, Cynthia Colenda, who is the daughter of name partner Hector Alcalde, ran the ICCL for five years in the 1990s and still lobbies for CLIA. She also founded and continues to head an industry-affiliated charity, the Cruise Industry Charitable Foundation.

In addition, for the past three election cycles, top executives of Carnival and Royal Caribbean, partners at Alcalde & Fay, and some of their spouses have been the sole contributors to the unaffiliated American Freedom political action committee, which doled out $80,000 to federal candidates before closing its doors earlier this year.

Alcalde & Fay did not respond to a request for a comment.

These contributions came on top of those made by industry PACs, which have doled out, on average, just under $200,000 per election cycle over the past decade (through mid-2008), according to data from the Center for Responsive Politics. Royal Caribbean Cruises Chairman and CEO Richard Fain and his wife have also made $367,700 in other political contributions from 2003 through the first quarter of this year. Micky Arison, chairman and CEO of Carnival (which owns Carnival Cruise Lines), and his wife contributed $261,600 over the same period.

The cruise industry also sought to acquire goodwill with contributions from its charity, which totaled almost $2.6 million from 2002 through 2006. The charity’s top recipients in 2006, the most recent year for which records are available, included the Congressional Black Caucus Foundation and the Congressional Hispanic Caucus Institute, which each received $35,000; and the Congressional Hispanic Leadership Institute, which got $25,000. The Coast Guard Foundation received $10,000.

Other recipients included medical charities, small local groups serving disadvantaged children, and local environmental groups; most of these groups were located in states where the industry does business.

Copyright ©2008 by National Journal Group Inc. The Watergate 600 New Hampshire Ave., NW Washington, DC 20037
202-739-8400        • fax 202-833-8069 NationalJournal.com is an Atlantic Media publication.

~ by fredfelleman on August 1, 2008.