Costa Concordia sinks off the coast of Italy

My point exactly

Actually Apple pays income taxes in total of about 25% of their earnings. That compares to 0% for Carnival. So not a good comparison by any means.

Being based overseas isn't the same as paying no income taxes at all. In general though, being based somewhere won't allow you to escape taxes where you do business.

Certain industries just have special situations. If you were the CFO of Carnival you'd be neglecting your duty to the shareholders if you failed to take advantage of these exemptions and exceptions. I also understand Ted Arison wanting to escape estate taxes at US rates.

Cruise ship lines always make for interesting discussions, always room for spirited discourse.

I wrote the following long missive way back in 1997 in response to a move by the cruise ship industry to gut the Jones Act in an attempt to increase their immunity from American laws.

It is provided word for word and much of the data is far out of date ... the dollars are bigger and the profits even greater and the taxes even less.

"The cruise industry is a national disgrace...

Rather than grant these pirates immunity
from responsibility under the Jones Act,
the Department of Transportation must act
quickly to afford cruise passengers the same
level of security enjoyed by airline passengers. "


"If you could see me now... " Kathy Lee Gifford's exhortation may have more people looking her way than she, or her employer, Miami based Carnival Cruise Lines expected. Following close behind revelations of her holdings in Central American sweatshops, Kathy Lee is again in the limelight for her role in promoting an industry that generates handsome profits by avoiding regulations intended to protect its customers and workers.

The North American Maritime Ministry Association, a group representing port chaplains who serve many of the third-world workers onboard cruise ships, asked Kathy Lee, who has made millions of dollars from the products of central American sweatshops, to "... disassociate yourself from another industry engaged in the exploitation of foreign workers --- the cruise lines."

A rising tide of cruise ship near-disasters has brought public attention to the industry which fosters a public image based on the "Love Boat" but operates its ships more like the Minnow. (With apologies to the creators of Gilligan's Island - the Skipper, after all, shared the fate of his passengers, and Gilligan spoke fluent English.)

While the Minnow was lost due to grounding on an uncharted island in severe weather, recent cruise ship fires and groundings have resulted from a degree of carelessness, incompetence, and mismanagement that borders on callous indifference to passenger safety. Occasionally, the actions of some cruise ship operators cross that border.

Just after sunrise on February 10, 1994, the Bahamian flagged Starward with 680 passengers onboard called the Coast Guard Marine Safety Office in St. Thomas, U.S. Virgin Islands, to report a spill of hydraulic oil into the sea. A mate reported by cellular-phone that the the ship, some five miles offshore, also suffered damage to her propellers.

The Starward's captain told Coast Guard officers that his ship had struck a submerged object while drifting offshore awaiting a daylight arrival in St. Thomas. After several interviews by Coast Guard accident investigators, and even then only after passengers and shoreside witnesses came forward, did the captain admit to running his ship aground several hours before calling to report the oil spill. While the attempt to conceal the grounding demonstrates, at the very least, a complete lack of professionalism on the part of the ship's officers, the circumstances leading to the event, and its subsequent handling by United States Coast Guard authorities speak to a much larger issue.

Coast Guard accident investigators found the ship's bridge to be very well equipped. Like most modern cruise ships, no expense was spared in fitting the latest electronic navigation and radar equipment including multiple digital radars, satellite global positioning systems (GPS), and fathometers. The only component missing on the Starward's bridge that morning was discipline and professionalism.

The Starward ran aground at the base of a 150 foot cliff at the end of a half-mile long peninsula. That feat was somewhat akin to accidentally driving a car into the side of a barn in the middle of a wheat field. Vertical rock walls usually provide a distinct radar picture but, evidently, no one was watching. The last position plotted on the Starward's chart was made some 30 minutes before the grounding. No calculations were made to determine where the ship was going or how fast it was moving. No one looked at the radar or, apparently, even spared a glance out the bridge windows.

The Starward's bridge crew relied entirely on GPS for positioning. They ignored all other information available to them. A Coast Guard investigator said of the Starward grounding in Professional Mariner magazine, " Looks like pure human error; there were no equipment malfunctions or exceptional circumstances. They(cruise ships) all navigate with just GPS these days." The Starward is not anisolated case, last year the Panamanian registered Royal Majesty ran aground 10 miles off Nantucket Island because the bridge watch relied entirely on an autopilot guided by a GPS receiver that failed some hours earlier.

Even the old-line companies are realizing the real costs of their rush to so-called "flag of convenience" (FOC) registries and cut-rate crews. The government of Egypt recently seized the Cunard-owned Royal Viking Sun, and is seeking US$23 million in damages after the ship ran aground on a coral reef. Cunard is still smarting after the loss earlier this year of the Sagafjord which was destroyed by fire in the Philippines. Many of the cruise ships operating from American ports do not meet international fire-safety requirements prescribed by the Safety of Life at Sea (SOLAS) conventions which become mandatory next October. An industry newsletter reports that nearly three-quarters of the ships surveyed by a Miami cruise broker failed to meet SOLAS standards.

The American Medical Association warns that medical facilities onboard cruise ships operating from American ports are not required to meet American standards. Furthermore, responsibility for medical treatment provided onboard ships operating under flags-of-convenience is determined by the country of registry. A passenger's only redress for injuries suffered as a result of mistreatment or malpractice while on a cruise may be from a court in Liberia, the Bahamas, or Panama. Passengers sailing on foreign-flag cruise ships leave American standards of health care and hygiene astern. The Coast Guard only inspects sanitary conditions to guard against importation of communicable diseases. Sanitary conditions on many FOC ships can only be described as primitive by any standard.


American customers of American-owned (but foreign registered) cruise ships must realize that once they board a foreign-registered cruise ship, they leave American protection and familiar standards behind. Onboard the the "Loveboat" the standards of Liberia or another third-world nation apply - and the American owners of those ships do not hesitate to use the full authority of the American court system to defend their immunity.

The real horror of these incidents is not that cruise ship passengers are risking their lives sailing on these "ships of shame," but that the United
States Coast Guard can not or will not take measures to protect American citizens, paying American money, in American ports, to the American owners of these pseudo-foreign shipping companies. The Starward is registered in the Bahamas, one of the worst of the flag of convenience registries. Even though the ship operated routinely from American ports, carried, almost exclusively, American passengers and grounded on American coral, the United States Coast Guard reported they would do nothing more than forward results of their
investigation to Nassau.
* * * *

USCG Strategic Agenda:

"The coast guard must help ensure our national security by engaging
in domestic and international efforts which enhance the image of the
United States, protect our economic interests and defend United States
property and citizens."


The tragic loss of the Valujet airliner in a Florida swamp has brought renewed criticism of the Federal Aviation Administration (FAA) for its role in monitoring air carriers. The FAA is known in some quarters as a "tombstone" agency. Despite frequent calls by the National Transportation Safety Board (NTSB) for changes in practices and procedures based on accident investigations, critics say, the FAA seldom acts until a major loss of life occurs. They are accused of responding only when the number of tombstones grows too large to ignore. Do we have to wait for a major cruise ship disaster before we demand a higher level of marine oversight? Do we have to wait while the Coast Guard counts tombstones?

Despite its alleged failings, the FAA, acting under authority of the Department of Transportation (as does the Coast Guard) has the power to deny foreign carriers access to American airports when they fail to meet our extremely high standards of maintenance, training, and operation. Under the International Aviation Assessment Program (IASA) instituted in 1991, the FAA sends a team of inspectors to a carrier's country of registry to evaluate the ability of that country to administer an effective program of aviation oversight. The applicant carrier is evaluated on its ability, both financial and technical, to operate safely in American airspace.

As a result of IASA the Department of Transportation and the FAA have, literally, told the airlines of 14 countries that they are unfit to land on
American soil. The FAA also lists another 13 countries which are permitted to land at American airports only on a case-by-case basis and then only under intense scrutiny. IASA was developed partially in response to the crash of a South American airliner which ran out of fuel on approach to JFK Airport.

In an IASA background document the FAA states, "While those observations have led to the prohibition of air carriers licensed by certain CAA's (civil aviation authorities) from operating to and from the United States, they have also raised sufficient concern to prompt the FAA into addressing the issue squarely and at the source -- the regulatory authorities (CAA's)."

The FAA stated outright what the Coast Guard refuses to acknowledge - despite international agreements, some countries cannot be trusted to enforce international standards. In those cases it is incumbent upon the Department of Transportation and the Coast Guard to defend American interests and halt those operations which are found to be substandard. It is a failed policy to detain individual vessels until specific deficiencies are corrected. Ships from flag states which do not meet all United States and International standards must not be permitted to enter American waters. Now is not the time to weaken American control of American waters.

Only when flag-of-convenience ships are banned from American waters will we achieve the level of safety we demand of our own ships and all aircraft that participate in American commerce. When a flag-of-convenience cruise ship engaged in the obvious sham of "foreign" commerce runs aground in American waters the vessel, its owners, and its officers should all be held responsible in an American court. Sending investigation results to Monrovia or Nassau is, quite simply, not good enough.

The cruise industry is not forced into flag-of-convenience registries and third-world crews in order to survive in a highly competitive market. A
flag-of-convenience registry is nothing more than a legal evasion of professional and social responsibilities. It is a mail-order merchant marine.
Flag-of-convenience countries, for the most part, have no maritime heritage or domestic maritime industry. They rent their flag to anyone with enough cash and a ship to fly it from. One of the largest flag-of-convenience registries is Liberia, a shell of a nation which has little inclination to enforce maritime regulation. So long as the checks arrive from the American insurance company which "owns" the Liberian (and Marshall Islands) registry, the powers of the moment in Monrovia are content.

Flags-of-convenience exist for one purpose only, and that is to provide unscrupulous owners a convenient shield from accountability. Accountability includes the obligation to provide skilled, responsible officers with legitimate licenses. It is an obligation to provide crews trained to respond to emergencies at sea. Ship's officers and crew must be able to communicate with passengers. In nearly every cruise ship casualty passengers reported panic, incompetence, and a complete failure of the crew to communicate timely emergency information due to language barriers.

Maritime law, including certain provisions of the Jones Act - which cruise ship owners wish to nullify, is rich with precedent in declaring vessels unseaworthy when operated under the conditions found on many cruise ships. Seaworthiness means far more than the physical condition of a ship's hull and machinery. Seaworthiness is determined as much by the competence of a ships officers and crew as the strength of its keel. Seaworthiness depends on the owner's and crew's approach to safety and maintenance.

Seaworthiness depends as much on crew training as the number of lifeboats. Ships which grounded due to carelessness and incompetence were unseaworthy long before striking bottom. Vessels operated under a corporate culture of indifference to all but profit and image are unseaworthy. Cruise ships which drift, dead in the water with burned out engine rooms were probably unseaworthy long before fire finally erupted. Ships crewed by untrained, uncertified and inexperienced seafarers and officers with counterfeit licenses are unseaworthy. Passengers depending upon these seafarers, recruited from third-world villages by "crewing agencies," are sailing on unseaworthy ships.

The cruise industry is fat and growing fatter. Its growth has spawned the worst examples of corporate greed and arrogance since the 19th century railway barons. The cruise industry is helping finance efforts to roll back legislation adopted to correct the conditions which led to enormous loss of life on the Titanic, with her economies of lifeboats; the Morrow Castle, with her economies of fire prevention; and the Sultana, with her economies of skilled crew. On those 3,000 tombstones are built the laws which the cruise industry seeks to repeal.

Continued in next post

Under guise of "tort reform" the cruise industry is backing legislation which would amend the Merchant Marine Act of 1920 - the Jones Act - in order to reduce their liability for injury to passengers and crew on their vessels. They want the Act changed so that "... foreign crew members who are injured while working on foreign cruise ships could sue in their home countries, rather than in the United States." Such phenomenal arrogance and contempt for the health and well-being of passengers and the third-world laborers who make up the majority of crewmembers is precisely why the Jones Act provides for their welfare.
* * * *

"The Office of Marine Safety, Security and Environmental Protection
is committed to developing nationally and internationally recognized
standards to improve maritime safety and marine environmental
protection, and to promote an internationally competitive United States
maritime industry."

RADM A.E. "Gene" Henn
(former chief of Office of marine Safety)

* * * *

It isn't as if cruise ship operators were strapped for cash. Carnival Cruise Lines, the American owned, Miami, Florida based, $6 billion giant of the cruise industry is incorporated in Panama and registers its ships in Panama, Liberia, and the Bahamas. As a "controlled foreign corporation," Carnival paid less than two percent in income taxes last year.

On April 15th, the day many of its passengers were probably thinking of a much higher personal tax bite, Carnival reported revenues so high that even after paying $2 billion in cash for seven new ships over the next three years, it still faces the dilemma of finding somewhere to spend another $2 billion in profits. Carnival also announced the purchase of a one-third interest in the British airline, Airtours. Airtours is the second airline in Carnival's stable, joining Carnival Airlines, chairman of the board Micky Arison's in-houseairline. Carnival's airliners are not registered in Liberia... yet.

Cruises are the Kathy Lee Fashions and Nike shoes of the maritime world. They are sold at enormous profit to people who probably don't realize a cruise is the product of third-world laborers working under conditions outlawed in America for nearly a century. American owners of "foreign" cruise ships are fighting to remove the last remaining bulwark of American standards. If they succeed in destroying the the Jones Act the minimal health, safety and labor protections afforded cruise ship passengers and crew will cease to exist. If we abandon maritime control the airline industry will become the next target of these freebooters. Until that dark day, the safest part of any cruise may be a Valujet flight to meet the ship.

We have paid dearly for the maritime heritage that makes American shipping the safest in the world. But we cannot compete against companies that ignore health and safety standards, pay no taxes, and employ what is for all practical purposes - slave labor. To add insult to injury, these pirates use public port facilities to load American passengers and cargo for voyages which all too often end in Coast Guard rescue missions. If that were not sufficient insult, the cost to a passenger or shipper is not one buffalo nickel less than that charged by American-flag operators.

America's ports are rich pickings for piratical cruise ship operators. The industry plunders nearly $90 billion dollars annually in American waters through operating practices which even the worst airlines would not attempt. Cruise line owners are amply rewarded by registering their ships in flag-of-convenience countries, by claiming "foreign corporation" status, by using public facilities while paying no income taxes, and by evading the health, safety, and labor laws that make the American transportation industry the safest in the world. Unless the Department of Transportation places the same value on the life of a cruise ship passenger as it does an airline passenger the countdown to maritime disaster willcontinue. New ships on order will carry up to 2,600 passengers. Even the sea cannot hide that many tombstones.

Marmot
It is sad that a 17 year old article is still full of facts and current attitudes.
Thank you for your work 17 years ago and posting it again here.
That was good reading and still lots to think about.
Maybe a reprint mailed to all in the zoo (Washington DC) is due?
Maybe the media?

Does anyone really expect carnival to pay any taxes when Mickey Arrison doesn't even pay any rent for the Miami Heat Arena?

Must be great to run a business without paying rent...

Oh, they pay rent ... but it goes to political "landlords" not to the taxpayers who built the ports, stadiums, and other facilities that make their business so profitable.

Taxes

"Actually" Apples declared income tax was between 24.4% and 25.2% however the taxes they actually paid to the IRS was between 8.2% and 13.8%. They have a very large deferred tax liability which would be due if they brought there cash pile back into the USA.

Being an Apple shareholder for the past 22 years has me wondering when are they going to send me some of those billions but the returns I have received since I bought into them far exceed my expectations so I am quite happy to sit and wait.

In the perfect world companies based in a certain country should pay that countries taxes and as you say the company have a responsibility to the share holders to maximize there profits. I look at the overall picture and if not for the likes of Carnival making their billions those less fortunate than us would not be walking around with a Miami Heat (more profits) jersey on with a big smile on their faces. I would like to see the same smiles on the faces of the Miami Dolphins and Panthers fans but I guess their owners are Americans who pay their taxes.

If EVERYONE in the U.S. simply paid a 10% tax on everything, we'd be a lot better off both financially and hassle wise than with the current overcomplicated tax code that keeps getting added and added to with nothing removed from it. But that's a discussion for another place and time I believe.

The scrapping of CC

CC is now mooered in the SE corner of the breakwater protecting the container terminal in the very western part of the harbour. This was stated in the news as her final scrapping position.

I was wondering, because this location is the most unfavorable position in the whole area of Genua for scrapping a large, basically unstable and barely floating wreckage. The breakwater is open on both ends, therefore no access for vehicles or persons. The position is in the very short final (half a mile) of the Genua international airport, means no big crane can be arrected without hampering airtraffic. A large fleet of barges and pontons would also hamper the maneuvering of larger container vessels on the terminal. And finally, the enviroment would also be endangered, as their is a constant current in this part of the harbour, because the breakwater is open at both ends. Last but not least, this large unstable and fragile target would not be save during the typical winter storms in that area (reason for the breakwaters in front of the complete harbour).

This morning, there was a new statement from the officials in charge of the scrapping (which is supposed to last 22 month and involves more than 1000 workers). The scrapping will be devided into two parts. First part will take place until the beginning of the winter season at the present mooring position. During this phase, all loose items and man carriable pieces will be removed from the wreckage manually, loaded onto smaller barges and removed. As there is no access from land to this position, souvenir hunters and thieves will have a hard time. After this phase, CC will be relocated within the harbour and taken apart.

The Canale di Calma di Prà basin / canal just north of the container terminal seems to be her final destination. The infrastructure at this position is rather ideal for that purpose, also some local sailors or fisherman might be of different opinion. I am really interested, wheather they will scrap CC in a floating status or put her on the bottom and seal off and pump out that area.

I am really surprised, our Italian friends have a plan .

HTM- that makes a lot of sense. Keep it less accessable to get any valuables and small items off first. I'm sure there is still a lot of personal items on board from the passangers on the ship......their jewelry, things of that nature which hopefully will make it back to their rightful owners. Then once the ship is lighter and such it will make scrapping it easier.

CC at Genua

There she is at her mooring position for phase 1 of her scrapping.

Off the air

As of 2014-07-30 11:49 (local), The Costa Concordia AIS system is off the air.

Our special friend Capitano Francesco Schettino must have an absolutely indestructible Ego. This man does not feel any guilt at all.

And the following is not a bad joke:

Schettino has given a lecture at the La Sapienza University of Rome about his "superior handling" of the Costa Concordia tragedy and was invited and advertised by the University as a specialist for perfect handling of mass panic in a major emergency .

And on top of all, Schettino has become a most wanted guest on society parties for upper class people in the area.

He believes, he is a hero and the girls love him.

What am I doing wrong, not understanding all of this.

Everybody knows what he is. Now we know what the people who would hire / invite or spend their time listening to him are. A single question can now tell you all you need to know about the people you associate with. Morals mean nothing. Integrity means nothing. The only things that matter today are money and fame. Too bad the mafia has been so cracked down on or we may have already seen justice.

The university professor who invited him to speak has been suspended whilst he is investigated by the university's ethics committee for issuing the invitation.

As for why the girls love the captain? I suppose a similar question is 'why do all the ugly blokes get all the good looking women?’ If I knew the answer to either of those I could probably make a fortune!

Amen. When Capone ran Chicago, he shot and killed his right hand man and childhood friend for selling dope to a kid. Now there are officers facing rape charges and being defended by other officers. Taxpayer money being wasted to protect criminals, just because of who they work for. And they don't even have to post bond to remain free until a trial.

PBS is showing a new NOVA show about the salvage of the Costa Concordia tonight at 9est