Høringssvar fra Carnival Corporation & plc

Consultation response from Carnival Corporation & plc on the Proposal for a law on Norwegian wages and working conditions on ships in Norwegian waters and on the Norwegian continental shelf

Introduction

On May 30, 2022, the Norwegian Ministry of Trade, Industry and Fisheries issued a "Proposal for an Act on Norwegian Wages and Working Conditions on ships in Norwegian Waters and on the continental shelf" (hereinafter, the "Proposal"), aimed at promoting a fair and decent working life in Norwegian internal and territorial waters, in the Norwegian exclusive economic zone and on the Norwegian continental shelf. The Proposal was submitted to various stakeholders accompanied by a Consultation Note summarizing the arguments of the Ministry in support of the Proposal.

Carnival Corporation & plc is a leisure travel company with a portfolio of nine of the world's leading cruise lines - Costa Cruises, AIDA Cruises, Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Seabourn, and Cunard. Together, these brands comprise the world's largest cruise company with a fleet of more than 90 ships visiting over 700 ports around the world under normal operations. Our company is the single largest cruise presence in Norway, with over 1,000 calls, sailing from February through November, to approximately 40 different Norwegian ports each year.

Carnival Corporation & plc wishes to respectfully contribute to the consultation on the Proposal, with specific reference to the proposed inclusion of international cruise activities in the scope of the new legislation.

Economic Impacts of the Proposal

Carnival Corporation & plc has requested Oslo Economics to prepare an economic analysis on the potential impacts of the Proposal on the competitive situation between domestic and foreign operators in the cruise industry, as well as the impacts on Norwegian seafarers employed in the sector.

The economic analysis – which is attached to this document – shows that the Proposal will not improve the working conditions of seafarers but will rather strengthen the competitive situation of domestic cruise lines at the expenses of foreign cruise lines, which may decide to stop operating in Norwegian waters.

The proposed legislation can therefore be expected to have a dramatic negative impact on cruise tourism in Norway, leading to a cancellation of many cruise itineraries – especially in Northern Norway. This would in turn have detrimental effects on local coastal communities and businesses in Norwegian destinations.

A large land-based tourism industry is built around international cruise in Norway. It has been estimated that the cruise industry supports around 17 000 Norwegian jobs.

Approximately one-third of all international tourists in Norway are cruise guests, with 800 000 people visiting an average of 4-5 ports on each cruise. A study by the Universities of Hamburg and Genoa together with Deloitte from 2019 showed that Costa Group alone - which is composed of our two European-based cruise lines Costa Cruises and AIDA Cruises - contributed with almost 350 million Euro in Norway, and that each of our guests contributed with an average spending of 92 Euro per day.

If the law proposal is approved in the current form, it will lead to severe negative consequences for local economies and local employment in Norway. Moreover, these negative economic consequences for Norway will be at a much higher scale that any conceivable positive effects for the working conditions of seafarers.

Legal Analysis on the cruise industry inclusion in the scope of the Proposal

With specific regard to the cruise industry, the Proposal requires cruise ships coming from or going to a foreign port to apply Norwegian wages and working conditions if more than half of the voyage, measured in time, takes place in Norwegian territorial waters.

Carnival Corporation & plc has analysed the Proposal to assess whether the Proposal, with specific focus on the cruise industry, is compatible with the international legal obligations undertaken by Norway. A legal report is attached to this document, which summarise its contents.

The report has assessed the Proposal and its compatibility with the general principles of international law, the Maritime Labour Convention of 2006 (the "MLC") and European Economic Area ("EEA") law. The assessment highlights several legal, economic issues.

Firstly, the effects of the expansion of the scope of the Proposal to cover the cruise industry has not been sufficiently considered, as the decision to include the cruise segment was done late in the preparatory process.

We believe this poses a significant risk with regards to the Proposal's compliance with Norway's international and regional legal obligations, as the cruise industry has several unique aspects (i.e., the more intrinsically international nature, and the significantly larger crew vs other vessels many of which employed in non-maritime positions) compared to other maritime segments covered by the Proposal.

Secondly, it has been noted that the Proposal may be inconsistent with the Maritime Labour Convention (MLC). The MLC – the so-called "fourth pillar of international maritime law" – provides for a comprehensive set of global standards to apply to all matters regarding seafarers' working conditions. Its purpose is to guarantee decent working conditions to all seafarers, to harmonize such working conditions at a global level as well as to set the grounds for fair competition among shipowners.

The MLC imposes two different and separate types of obligations on ratifying States. On the one hand, each State shall effectively exercise its jurisdiction and control over ships flying its own flag: it shall implement the standards of the MLC through national legislation and certify that ships flying its flag comply with the MLC requirements. On the other hand, port States shall verify that ships entering their ports do actually comply with such requirements. Flag States' and port States' obligations and powers are clearly distinguished: port States are bound to recognise and accept MLC certificates issued by the flag State, and it can therefore be argued they cannot require compliance with further or stricter conditions. Allowing port States to impose and enforce their own working conditions on foreign ships, as Norway intends with the Proposal, would frustrate the purposes of the MLC.

Thirdly, the Proposal may be inconsistent with EEA law. One of the overarching purposes of the EEA Agreement is to promote the free movement of services between Member States. Restrictions to the freedom to provide services may be justified by overriding reasons of public interest, such as, in principle, the protection of workers. Even when justified by overriding reasons of public interest, restrictions need to be proportional – i.e., appropriate, and necessary to achieve their purpose – and consistent – i.e., they have to genuinely reflect a concern to attain that objective in consistent and systematic manner.

Although the Proposal apparently intends to "promote a fair and decent working life in Norwegian waters", its actual aim seems to be to protect Norwegian domestic business. Furthermore, there is a significant risk that the Proposal does not satisfy the above criteria, as the measures which are intended to be implemented may not be appropriate, necessary nor consistent.

The fact that the Proposal turns out to protect Norwegian domestic business, and its potential inconsistency with EEA law and principles, are also demonstrated by the de-facto situation of the Norwegian economy.

Conclusions and Recommendations

Based on the legal and economic assessment provided, Carnival Corporation & plc strongly recommends that cruise activities be excluded from the scope of application of the Proposal.

The Proposal will have detrimental effects for local economies in the coastal communities due to the exclusion of Norwegian ports from future cruise itineraries, leading to a dramatic reduction of local value creation and jobs deriving from cruise tourism.

Moreover, the application of the Proposal to international cruise activities raises several legal issues which make its application to this sector particularly challenging and potentially inconsistent with international legislation.

Please make reference to the two attachments to this Consultation Response: the Oslo Economics Impact Assessment Report and the Legal Analysis.