Friday, February 15, 2013

Dirty Little Secrets Leaking Out About Cruise Industry

The nasty side of cruising that the cruise industry doesn't want anyone to see is being exposed thanks to the Triumph cruise disaster.  Other cruise lines should take notice.  With danger comes opportunity and if other cruise lines think they can escape the fallout by burying their heads in the sand they are sorely mistaken.   Among the allegations: 

  1. Cruise lines barely pay any taxes: A report from Cruise Law News found that many top U.S. cruise lines become incorporated overseas to avoid paying U.S. taxes, even though the bulk of their business comes from the United States, and they depend heavily on U.S. services, like the United States Coast Guard's protection. Here's how much — or little — they get away with: since 2006, Carnival Corporation paid only 1.1% of its cumulative profits — $11.3 billion — in any kind of taxes, including federal, state, local and foreign taxes.
  2. Ships are registered in other countries to avoid U.S. labor and safety laws: Similarly, some cruise lines choose to register their ships in other countries to avoid meeting standards for U.S. labor and safety laws. Carnival has registered ships in Panama, while Royal Caribbean uses Liberia to circumvent these important laws and exploit foreign employees.
  3. Cruises make big money for their top executives: Several of the cruise industry's top executives and owners have made the Forbes 400 list, which highlights the richest people in America. And while this USA Today article notes that some of those men have seen drops in their Forbes rankings, their fortunes are still pretty staggering. In September 2010, Micky Arison — chairman and CEO of Carnival Corporation — was named 69th on the list, accumulating a net worth of $4.1 billion. Thomas Pritzker of Royal Caribbean was worth $1.6 billion, and Leon Black,, who controls Oceania Cruises, Norwegian Cruise Line and Regent Seven Seas Cruises, was worth $3.0 billion.
This is an excellent time to take the bull by the horns as a cruise line lawyer and insist on damage control even if you don't work for Carnival.  Also important to take note if you are an attorney representing a client whose industry is under attack.  Begin an ad campaign extolling the virtues of a company's safety and maintenance record.  Make top leaders available for interviews, offer to take the media on tours of your ship- in short- separate yourself from less transparent and dubious competitors.

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