Australia and the Cruise Industry: How to

Australia and the Cruise Industry:

How to Stay Afloat

Alexander Moore

In amongst all the pandemic news has been a story that is particularly interesting with respect to the Australian political and legal climate. Throughout April there were several cruise ships loitering off both the East and West coasts of Australia. Many of these cruise ships were doing so because they either had or suspected they had COVID-19 cases on board. They did not want to commence a long journey back to their respective ports of origin away from the Australian coastline as that would place them out of distance of medical and other aid should their passengers or crew require it.

Comparatively, the Morrison government ordered that the various cruise ships leave the coast of Australia as there was concern over the possibility that thousands of sick crew and passengers would request Australian medical care. This scenario would place extra strain on Australian healthcare resources at a time when Australians need them most.

At the time of writing, all foreign cruise ships departed Australian waters. Whilst on this occasion the Morrison government has avoided an international crisis, the government was not far away from having a Clint Eastwood-esque Mexican stand-off on its hands underpinned by a legal and moral minefield. This whole episode leaves some lingering questions about the sustainability of the cruise industry and, in particular, Australia’s relationship with it.

The Present Circumstances It is a fundamental principle of the law of the sea that vessels are entitled to innocent passage through a country’s territorial waters. That right does not extend, however, to anchoring off the coast indefinitely, as a state has sovereignty over its ports and territorial waters. Generally, exceptions to these principles only exist where a vessel issues a distress call. In these circumstances, there is a duty for nearby vessels and/ or states to assist in ameliorating the distress. This includes the practice under customary international law of allowing distressed vessels to dock in the closest port.

What constitutes valid circumstances for distress, however, is somewhat of an open question. Historically, vessels declared distress when they were physically damaged and needed to seek repairs to continue onward. More controversially, in 2001, a Norwegian vessel issued a distress call and requested to dock on Christmas Island after it had rescued 400 asylum seekers. Whilst it is not unreasonable to suggest that cruise ships might be justified in issuing a distress call where COVID-19 presented a threat to those aboard, there is no obvious precedent in this regard.

A further legal consideration in respect of the novel circumstances created by the pandemic is a cruise company’s duty of care towards its passengers and crew. This issue becomes particularly pertinent when one considers some of the legal proceedings underway as a result of COVID-19 related actions. One such example is the ongoing investigations over the highly publicised and scrutinised mishandling of the Ruby Princess cruise ship.

Additionally, in recent days it has been reported that a class action has formed against Sydney-based, cruise company, Aurora Expeditions, who departed Argentina for Antarctica four days after a global pandemic was declared. It’s alleged that the company breached its duty of care to its passengers by allowing the vessel to leave Argentina as there was a heightened risk of infection on cruise ships. As a result, 128 people on board became infected with COVID-19.

“What constitutes valid circumstances for distress, however, is somewhat of an open question.

The point at which each of these competing legal issues converge is highly complex. For cruise companies, times of crisis such as the current circumstances have the potential to create a decision between compliance with sovereign states, such as Australia, and the upholding of their duty of care to their passengers. The balancing act here, whether appropriately or not, is often underpinned by present and future commercial interests.

For the government, the cruise industry represents somewhat more of an Achilles heel. Their decision in times of crisis is conceivably one teetering between the economic interests of their constituents, the health and safety of their constituents, the health and safety of those aboard the cruise ship and their economic relationship with the cruise industry. This particularly delicate balancing act exists alongside the ever-present threat of a tactical misstep causing a diplomatic row.

Australia and the Cruise Industry The aforementioned precarious legal position that threatens to exist in times of crisis becomes even more concerning when the prominence of the cruise industry as part of the Australian economy is put into context. Globally, revenue from the cruise industry has grown from approximately 15.7 billion in 2010 to a prepandemic estimate of 31.5 billion in 2020. Since Australia is well positioned to take advantage of this growth, it has invested heavily in its cruise industry appeal. Sydney alone has invested millions in taxpayer funds into its cruise facilities, with the White Bay Cruise Terminal opening in 2013 and several sets of upgrades completed on the Overseas Passenger Terminal between 2012 and 2019. This targeting appears to have been a success with the Australian Cruise Association estimating that in 2017-18 the cruise industry contributed $4.8 billion (AUD) in direct and indirect economic output to the Australian economy. Put simply, the cruise industry is massively important to Australian industry.

Survival in the Future By no means is the cruise industry posing an existential threat to Australia that requires large scale government intervention. That acknowledged, the circumstances created by the pandemic have the potential to create a number of problems for Australia if replicated in the future. The situation created by the pandemic must be interpreted as a warning and Australia must act proactively.

Small scale changes may significantly affect Australia’s ability to manage the positive effects of a dynamic cruise industry with the negatives. For instance, it may be appropriate to create policies and procedures to pre-emptively manage expectations regarding responses in future scenarios. Similarly, Australian cruise terminals will inevitably have stricter protocols as a result of the Ruby Princess incident alone.

Alternatively, it may be appropriate for Australia to somehow regulate the number of particular kinds of cruise ships it allows into its waters. This might allow them to manage the risk presented by cruise companies who bring thousands of people to Australia on a single vessel (and might expect our assistance in a range of scenarios) but are registered as businesses in small tax-haven states thousands of kilometres away. In a number of examples, these vessels would carry passenger numbers larger than the equivalent resource capabilities of their home port.

Moving forward, Australia needs to continue to maximise its commercial interests in the cruise industry but do so in a way which limits the multitude of problems that could be brought by unforeseen circumstances.