Posted on: Monday, March 3, 2003
ISLAND VOICES
Ship deal is good for Hawai'i
By Rep. Neil Abercrombie (D-Hawai'i)
The Honolulu Advertiser has editorialized on new federal legislation reviving the interisland U.S.-flag cruise trade, suggesting that residents deserve to better understand the reasoning and intent behind the new law and why it is in the best interests of Hawai'i.
What is essential to understanding the issue is that these ships will be flying the U.S. flag.
Why this emphasis on U.S.-flag ships? The answer is simple: U.S.-flag ships must be crewed by U.S. citizens and obey all U.S. laws, including those relating to labor, health, safety, the environment and consumer protection. That means good jobs for Hawai'i residents, protection for our environment, and a safe and satisfying experience for our visitors.
The 9/11 terrorist attacks devastated Hawai'i's economy. Visitor counts plunged, hotel rooms sat empty and travel industry workers lost jobs. One high-profile casualty was Hawai'i's longest-serving U.S.-flag cruise operator, which filed for bankruptcy. That put an end to the three-ship Project America and its potential for reviving U.S.-flag interisland cruising.
The recent legislation, sponsored by Sen. Dan Inouye and supported by myself and the rest of our Hawai'i delegation, allows significant benefits of Project America to still be achieved. It offers the best available way to realize Hawai'i's potential for interisland cruising under the U.S. flag.
Last year, Norwegian Cruise Line, a company with a substantial presence and demonstrated commitment to Hawai'i, purchased the partially completed hull, equipment and related components of Project America at public auction. That opportunity was available to any cruise operator.
NCL took the initiative to finish these vessels and bring them to Hawai'i under the U.S. flag. Unlike foreign ships, they will employ U.S. workers and be subject to U.S. tax, labor, environmental and safety laws.
For Hawai'i, that means an estimated $270 million in annual wages and salaries and 10,200 new jobs for Hawai'i residents. In addition, cumulative federal tax revenues will exceed $355 million by 2007, enabling the United States to recoup far more than it lost following the default under the original government-guaranteed financing.
Some have suggested that the provision should be broadened in the name of "competition." There is plenty of competition for these three new cruise ships. They must compete against the 29 other lower-cost foreign cruise ships scheduled to call at Hawai'i ports this year, and they will also compete with hundreds of foreign cruise ship operations in the North American cruise market.
Finally, they will compete with Mainland resorts that offer excellent options to American vacationers.
While some other cruise lines expressed an interest in an expanded Hawai'i cruise trade (after it became clear NCL was actually committing to U.S.-flag), no other cruise line expressed a willingness to purchase the Project America assets or invest in the U.S.-flag trade until after the legislation was proposed. The International Council of Cruise Lines, a trade association of foreign cruise lines, has stated that it is not interested in the domestic cruise business "in light of the restrictions that would apply" (U.S.-flag, taxation, labor laws, etc.).
But perhaps the most relevant example to Hawai'i residents and workers is the M.S. Patriot. When a foreign-flag carrier took possession of that U.S.-flagged ship, it immediately reflagged the vessel under foreign registry, firing all of its U.S. seafarers.
Under our legislation, foreign-flag cruise ships may continue to sail the same itineraries they do today. If this venture with an established cruise ship operator sailing under U.S. flag is successful. perhaps others will also enter into Hawai'i under the U.S. flag. Nothing in this legislation prevents anybody from doing so.
