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ICC Faces New Challenges

Cynthia A. Colenda replaced John T. Estes as president of the International Council of Cruise Lines (ICCL) in early 1995. Most recently managing partner of Alcade & Fay, an Arlington, Va.-based government and public affairs firm which has represented the cruise industry and other maritime clients for more than 15 years, Ms. Colenda has already represented ICCL in Washington for many years. As a member of both the District of Columbia and Pennsylvania Bar Associations, Ms. Colenda holds a law degree from George Mason University in Arlington, and a bachelors in political science from Virginia Polytechnic Institute and State University in Blacksburg, Va.

While the 104th U.S.

Congress ushered in the faces of a new leadership, it simultaneously changed the legislative landscape for maritime issues.

In particular, we saw the elimination of the Merchant Marine and Fisheries Subcommittee, which for years maintained jurisdiction over maritime matters. Maritime issues now fall primarily within the jurisdiction of an expanded Transportation and Infrastructure Committee at its subcommittee on Coast Guard and Maritime Transportation. But the change is not merely one of form, it is one of substance as well. Just mid-way into the year, the subcommittee has offered up an agenda that includes a review of measures which would deregulate the maritime industry and modify cabotage laws.

ICCL is responding to the sweeping changes in Congress by advancing a proactive agenda. By promoting this agenda with the new congressional leadership, the administration and others, ICCL actively encourages the expanded growth of the passenger cruise industry. The ICCL's goal remains unchanged: to ensure that all proposed legislative and regulatory actions both domestically and abroad perpetuate the free flow of our international business. ICCL is monitoring a number of legislative issues in Congress this session. We are working with Congress to obtain a legislative clarification on the Customs User Fee imposed under NAFTA. This clarification would ensure that the $6.50 user fee is not assessed multiple times for cruise passengers visiting Alaskan and U.S. ports more than once in a single voyage.

We are also monitoring the progress of a provision which would correct California state restrictions on gaming between two points in the state. The "Schenk" amendment would prohibit states, including California, from regulating cruise ship gaming on voyages to another state or nation if the ship reaches the other state or nation within three days. We continue to follow the issue with interest. In regard to maritime reform efforts, ICCL is keeping tabs on the movement of legislation which provides for the continuation of the Operating Differential Subsidy (ODS) program for cargo vessels as well as new subsidies for U.S. shipbuilding interests. We are interested in ensuring that no fees are imposed on the cruise industry to help fund these ship operating or shipbuilding subsidy programs. Legislation which attempted to do just that was successfully stopped last year by Sen. Larry Pressler (R-S.D.) because of its controversial funding mechanism — the tonnage tax on commercial vessels. Sen. Pressler is now chairman of the Commerce Committee and has continued his opposition to the tonnage tax as a funding mechanism to pay for these maritime programs.

We are also monitoring congressional developments on treaty ratification for the international shipbuilding agreement at the Organization for Economic Cooperation and Development (OECD) to phase out foreign shipyard subsidies. Some U.S. shipyards now oppose this agreement and have pressured Congress to oppose treaty ratification. If the agreement is not ratified, it could stimulate another round of legislation similar to that proposed last year, which penalizes shipowners who build in foreign yards.

Another issue of interest to ICCL involves cabotage restrictions on foreign- flag passenger vessels. A number of ports are seeking repeal of the restrictions imposed by the Passenger Services Act that prohibit foreign- flag passenger vessels from operating in the coastwise trade of the U.S. The future of cabotage law is unclear at the moment. We have seen recent efforts to chip away at its foundation. Specifically, Representative Jim Oberstar (D-Minn.), a senior Democrat on the House Transportation & Infrastructure Committee, has requested hearings on this issue. He also plans to introduce legislation in the very near future. The bill could potentially open additional markets to foreignflag cruise vessels. These markets have been blocked to our vessels by cabotage laws.

As always, the ICCL is vigorously defending the passenger cruise industry from the imposition of additional taxes and user fees which are unrelated to services provided to it. ICCL generally opposes such legislation because it has a chilling effect on the growth of the cruise industry. As the trade association for the oceangoing, overnight, deep-sea passenger cruise industry, the ICCL opposes the imposition of additional unrelated taxes on American travelers who already pay hundreds of user fees and taxes totaling billions of dollars each year. In particular, in this congressional session we are monitoring legislative attempts to impose additional U.S. Coast Guard (USCG) inspection fees on our vessels as well as an Immigration & Naturalization Service (INS) user fee.

ICCL is attempting to ensure that its members are not required to pay increased USCG user fees to cover the cost of inspections conducted on another segment of the maritime industry. The amendment introduced by Congressman Billy Tauzin (D-La.) earlier this year would increase the USCG user fees paid by our vessels for the cost of inspection services provided to small U.S.-flag passenger vessels. This amendment would cost the cruise industry $4 million to pay for a program totally unrelated to any service provided to our vessels or our cruise passengers.

On a similar user fee issue, ICCL is attempting to strike a provision in a Senate immigration bill which seeks to impose a $6 per passenger fee on our industry to fund illegal immigration efforts. The proposed legislation would lift the current exemption from the $6 immigration inspection user fee for cruise passenger arrivals from Canada, Mexico and the Caribbean. The proposed INS user fee would raise over $24 million a year from cruise passengers who are vacationing outside the U.S.

International Arena In addition to concentrating on our Washington agenda, ICCL continues to make inroads to the international arena. We have augmented our staff with the recent addition of Captain Ted Thompson, a retired USCG captain. As ICCL's vice president of International Operations, he is responsible for overseeing the myriad of technical issues which challenge our industry, particularly at the International Maritime Organization (IMO).

Recent IMO industry activities include participation in the development of amendments to SOLAS (Safety of Life at Sea). The new SOLAS amendments call for unprecedented safety improvements on passenger vessels to be phased in between October 1994 and 2010.

For the first time, these amendments apply to both new and existing ships. By way of overview, the SOLAS amendments call for passenger ships to carry additional firefighting equipment and mandate improvements in the arrangements of fire doors and stairway enclosures designated as a means of escape.

The amendments also address the lighting and marking of escape routes and call for installation of smoke detectors and automatic sprinkler systems on vessels that previously were not required to have them. The cruise industry is constantly striving to improve safety procedures. Our excellent safety record attests to the importance the industry places on the safety of our passengers.

The industry continues its work in the environmental health area through its participation in the Centers for Disease Control (CDC) Vessel Sanitation Program (VSP). We are currently in the process of working with the CDC to establish uniform standards for new vessel construction, with a focus on building ships which ensure the highest health standards for our passengers Growth The number of ICCL member ships scheduled to debut in 1995 alone signifies the industry's longstanding expectation that passenger demand will meet or exceed the industry's expanded capacity. Of the six ICCL member ships to debut this year, four boast passenger capacities of over 1,700. Added to this will be another 13 member ships scheduled to debut in 1996 and 1997, as well as the addition of two ships by our newest member, Disney Cruise Lines, in 1998. The numbers reflect the industry's vision of continued expansion in this ever-growing vacation market.

Finally, the good news in growth for the industry also brings good news for the nation's economy in general. A recent Price Waterhouse study demonstrated that in 1992 alone, the cruise industry was directly responsible for creating 450,000 jobs nationwide, paying more than $14.5 billion in compensation and more than $6.3 billion in taxes to federal, state and local governments. While 20 years ago only 500,000 Americans took cruises, in 1994, 4.6 million Americans took cruise vacations. All projections indicate that this number will increase annually. So as the industry grows, so do its benefits to the nation. The ICCL will continue to promote the interests of its 21 member lines in the legislative, regulatory and international arenas. Through our work in these areas, we hope to ensure that the overnight passenger cruise industry continues to flourish so that more and more Americans can affordably enjoy the benefits of cruise vacations.




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