Beyond what is legally required for our onboard personnel, you must take into consideration what is practically required. It is practical, and good business sense, to provide onboard personnel a rewarding work experience. We are proud, Mr. Chairman, of the working conditions, arrangements, and opportunities that are available to our crew members -- foreign and domestic, onboard and onshore. We will be happy to provide your Subcommittee with additional information on employment nationality, labor organizations, and flag state hiring restrictions, if you desire.

B. H.R. 1126 ignores unique characteristics of foreign cruise vessels. The FLSA and the NLRA are two bodies of law written specifically to apply to the American maritime industry and do not consider operational realities that exist in the international maritime industry. For example, with regard to union organizing activities, the NLRA requires employers to provide unions with information regarding port and vacation schedules in addition to employees' addresses and telephone numbers, and to allow union organizers to board vessels if attempts to contact crew members onshore are unsuccessful. Two points need to be stressed. First, foreign crew members do not normally maintain residences in the United States. Therefore, addresses and telephone numbers would probably not be available. Secondly, cruise vessels are carefully orchestrated, turnaround operations. The ships are typically in port for very brief periods, usually only about eight hours, during which time the entire passenger complement is disembarked, the vessel cleaned, reprovisioned, and new passengers embarked. If union organizers are permitted access for virtually the entire period a vessel is in a U.S. port, schedule disruptions could occur that

would jeopardize all cruise operations in port. Clearly, one could not operate a cruise line in a U.S. port under such conditions.

Another consideration which has not been taken into account relates to union hiring halls. In union organizing efforts, it is common union practice to require employers to hire seamen only through union hiring halls. While these halls also register non-union seamen, those seamen are required to pay union dues once they are placed on a ship. H.R 1126 is unclear as to how the foreign seamen, typically hired by foreign cruise vessel operators in foreign union hiring halls, would obtain access to union hiring halls in the United States. Again, this legislation unleashes a mischievous opportunity for full scale disruption of cruise ship operations out of U.S ports.

C. H.R. 1126 has the potential to undermine domestic advantages currently provided by the foreign-flag passenger cruise industry. The wide-scale disruption of cruise operations likely to occur as a result of enactment of H.R. 1126 will spread to other businesses associated with cruising. The passenger cruise industry is a major employer in key port cities in the United States. A 1988 study conducted in the State of Florida revealed that the cruise industry directly employs more than 3,100 people and was responsible for a payroll of over $69 million. Beyond employment directly attributable to the industry, there are jobs and businesses throughout the travel and tourism network that benefit from a healthy cruise industry. For example, the study found that hotels and food service purchases account for $200 million annually. The study further revealed that hotels realize $68 million in expenditures and over one million room nights per year, and that the cruise industry is directly responsible for $853 million in annual purchases ($620 million by the cruise lines

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and $233 million by passengers). On a national scale ninety percent of cruises are booked through travel agents, the majority of whom are small business entrepreneurs. Airline ticket sales are over $400 million annually. Car rentals, tour operations, and restaurants can account for similar benefits. And here is a very important fact: service and repair contracts in U.S. shipyards are in excess of $220 million annually.

Again, let me qualify these numbers applicable to Florida by stating they are from a 1988 study. At this time, we have underway an updated, broader economic impact study being conducted by a national accounting firm, which will look at the industry as a whole. The study will be available in January 1993.

It is obvious, Mr. Chairman, that because of the unique operations of cruise vessels, the uncertainty of applying U.S. labor laws to foreign-flag vessels, as called for in H.R. 1126, has the potential to create wide-scale disruptions in cruise operations overall. Further, it threatens the domestic economic stability and employment advantages the cruise industry brings to the United States and to the extended network of travel and tourism related businesses.

Conclusion

H.R. 1126 should be rejected in its entirety. From the international perspective there are sound, practical, and well established reasons for utilizing foreign-flags. There are equally sound reasons for not attempting to interfere with the concept of the sovereignty of the flag state. From a domestic perspective, wide-scale disruptions that would result in attempting to apply the NLRA and the FLSA to foreign-flag vessels would threaten existing vessel operations and

unravel the domestic economic and employment framework that has developed around the North

American cruise market.

We appreciate the opportunity to express our views before this Subcommittee and would be

pleased to answer your questions.

STATEMENT OF THOMAS J. SCHNEIDER

Mr. Chairman, on behalf of the AFL-CIO Maritime Committee, I wish to thank the Committee for this opportunity to explain the workings of and the need for H.R. 1126. On October 24 and 25, 1989, the Labor-Management Relations Subcommittee of the House Education and Labor Committee held hearings on H.R. 3283, the predecessor of H.R. 1126. On October 10, 1991, the Labor Standards Subcommittee of the Education and Labor Committee held hearings on H.R. 1126.

H.R. 1126 would extend the coverage of the National Labor Relations Act and the Fair Labor Standards Act to foreign-flag vessels regularly carrying cargo in the U.S. foreign trade if they are owned or controlled directly or indirectly by U.S. citizens or interests, to all foreign-flag cruise ships regularly carrying passengers to and from a U.S. port, to foreign-flag vessels that carry cargo from ships anchored in nearby international waters to U.S. ports or otherwise act as a shuttle, and to foreign-flag factory ships anchored offshore or docked in port.

Many sound reasons were advanced in the hearings supporting the need for this legislation, including the following: