The Buffet Doesn’t Stop Until Covid-19 Walks In: How the Hands-off Approach of Flag States Exposed Legal Nightmares Onboard Cruise Ships During a Global Pandemic and Why Changes Must be Made

Suzanne Schultz

I. INTRODUCTION

The year 2020 was supposed to be record-breaking for the cruise industry.¹ For the prior ten years, the number of people taking cruises had increased annually to make the cruise industry a $45 billion² cash cow, despite facing a litany of legal issues relating to sexual assaults, viral outbreaks, illegal dumping, and mistreatment of workers.³ Additionally, a record number of new cruise ships were scheduled to be introduced in 2020 with innovative features such as roller coasters, two-level pools, sky rides, and robot bartenders, in addition to the classic draws including top-class entertainment and lavish buffets.⁴ Another “feature” that was added unexpectedly was the Coronavirus (Covid-19) in February 2020, when the media began to report a “novel” outbreak on the Diamond Princess cruise ship that was sailing around Asia.⁵ Much of the world watched from afar in fascination as passengers quarantined in their staterooms for weeks on end with little entertainment other than tweeting reviews of the meals delivered by the crew.⁶ One such tweet stated, “[y]es, 66 new cases have been id’ed on board, and I do feel bad for those people, but because life goes on . . . here was lunch: tater salad, three bean something, and pork adobo. And Coke! No complaints here.”⁷ Unfortunately, the 712 infections and fourteen deaths onboard the MS Diamond Princess was only the beginning of the story of how Covid-19 rocked the cruise industry as well as the rest of the world.⁸

Not long after the heart-breaking disaster on the MS Diamond Princess and on other cruise ships, the cruise industry received the record-breaking and devastating news that all future sailings would be cancelled as a result of a series of no-sail orders from nations around the world.⁹ While many current and future passengers throughout the globe were simply disappointed that their vacations were cancelled, these no-sail orders were not perfectly timed to match the end of a sailing.¹⁰ These orders came out mid-cruise and left cruise lines scrambling to figure out where to dock, how to unload passengers and get them home, and what to do with crew onboard.¹¹ The fact that almost every country closed its borders, including its ports to ships, did not help, either.¹² As a result, resolving the docking and unloading issue was quite the diplomatic feat since the crew and passenger make-up on any given cruise ship is similar to a mini–United Nations with people onboard from all corners of the Earth.¹³

Since all vessels around the world are required to be registered to a state,¹⁴ many people assumed that these registering states, the “flag states,” could help with the massive undertaking of repatriating hundreds of thousands of people on cruise ships around the world.¹⁵ While that assumption might be true if cruise ships were registered where most of their corporate employees worked, such as in the United States or the United Kingdom, the majority of cruise ships are registered to Panama, The Bahamas, Bermuda, Malta, and formerly Liberia.¹⁶ Cruise ships, therefore, need to abide by the laws of those states while on the high seas and are not subject to a port state’s jurisdiction until they are close enough to territory of that state or docked in that state’s port.¹⁷ Such registrations have allowed them to fly what has been coined as “flags of convenience,” essentially a flag with very few strings attached.¹⁸ Cruise lines prefer these registrations because of the laissez-faire, hands-off approach these states take in regard to environmental regulations, taxes, and labor relations.¹⁹ While that laissez-faire approach works for the cruise industry when the global environment is relatively calm, the cruise industry’s response to the pandemic lacked coordination and exposed to society the long-standing legal and ethical issues that result when cruise ships are registered in obscure countries. The reality is that those states are often unable and unwilling to provide aid if disaster strikes.²⁰

As a result of the hands-off approach from the flag states, some at-capacity cruise ships were left sailing on the high seas with nowhere to go as borders closed.²¹ While these port closures and docking refusals around the world were arguably illegal under international law, cruise ships sailing in limbo out at sea led to horrible consequences and legal nightmares as port states were relied upon to solve many of the questions of how and where to dock.²² This limbo left the families of passengers who contracted and died of Covid-19 few modes of recovery and also essentially held captive employees on cruise ships who were neither being paid nor able to go home.²³ As such, it has become obvious that flag states and cruise lines are the only parties that benefit from the flag of convenience system.²⁴

Through the lens of the Covid-19 pandemic, this comment will argue that the flag of convenience system led to the ensuing chaos after no-sail orders were issued because the cruise industry could not respond adequately to the crisis on its own. Flag states bore little to none of their legal burdens while leaving the nightmare of docking, repatriation, and subsequent lawsuits for cruise companies and port states to solve.²⁵ Crew members and passengers were also severely impacted by the events and were left with no significant means of recourse by either the flag states or the cruise lines.²⁶ In an ideal world the flag of convenience system would be abandoned, but that is extremely unlikely given the power and influence the Cruise Lines International Association²⁷ holds and the fact that cruise ships rely on the low administrative costs and almost complete control that results from being registered to one of the traditional flag states.²⁸ Instead, this comment proposes that powerful states, especially the United States, should expand its legal jurisdiction for cruise lines headquartered in its state or work with other major states to create an international tribunal for claims stemming from cruise ships to provide stronger legal remedies for passengers and crew members.

Part II will provide an overview of the concept of the high seas, a brief history of cruise lines using flags of convenience and their benefits, a discussion of international treaties regulating cruise lines, and how the Covid-19 has impacted cruise lines. Part III will examine the legal nightmares Covid-19 created and exacerbated in the cruise industry for port states, employees, and passengers and how many of those resulting legal issues stemmed from the hands-off approach of flag states and from the cruise industry’s inability to respond in such a crisis. Finally, Part IV will propose changes to the laissez-faire environment in which cruise ships operate today. Those changes include the US taking a more active role in adjudication or the establishment of an international tribunal for private claims. Both solutions aim to provide better venues for legal recourse given that the abolishment of flags of convenience is unlikely.

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