Carnival Cruises 2008 Annual Report Download - page 24

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The International Organization for Standardization ("ISO") is an international
standard-setting body which produces worldwide industrial and commercial standards. ISO
14001 is one of the series of ISO 14000 environmental management standards that were
developed to help organizations manage their processes, products and services to minimize
environmental impacts. ISO 14001 presents a structured approach to setting environmental
objectives and targets, and provides a framework for any organization to apply these broad
conceptual tools to their own processes. During 2006, we completed our corporate-wide
implementation and received certification of our ISO 14001 Environmental Management System
at all our then existing brands. With the exception of two Ibero ships, which we acquired
in September 2007, all our ships are currently ISO 14001 certified.
Several safety related amendments to SOLAS will enter into force in July 2010 including
requirements for safety centers, emergency cabin lighting, local sounding audible alarm and
amendments to fire detection and firefighting systems. Many of these requirements have
already been incorporated into our current newbuilds. In addition, the enhanced safe return
to port requirements related to the development of survivability standards for a vessel also
enter into force for keels laid after July 1, 2010, and will require development of new
designs to meet these new requirements for future ship orders. All of our ships under
contract to be built are expected to have the keels laid before July 1, 2010.
From time to time, health, environmental, safety and security regulators consider more
stringent regulations which may affect our operations and increase our compliance costs. As
evidenced from certain of the preceding paragraphs, the cruise industry is affected by a
substantial amount of environmental rules and regulations. We believe that the impact of
cruise ships on the global environment will continue to be an area of focus by the relevant
authorities throughout the world and, accordingly, this will likely subject us to increasing
compliance costs in the future.
See Part 1, Item 1A. "Risk Factors." for additional discussion of our environmental
risks.
e. Consumer Regulations
Our ships that call on U.S. ports are regulated by the Federal Maritime Commission
("FMC"). Public Law 89-777, which is administered by the FMC, requires most cruise line
operators to establish financial responsibility for their liability to passengers for non-
performance of transportation, as well as for casualty and personal injury. The FMC's
regulations require that a cruise line demonstrate its financial responsibility for non-
performance of transportation through a guarantee, escrow arrangement, surety bond or
insurance. Currently, the amount required must equal 110% of the cruise line's highest
amount of customer deposits over a two-year period, up to a maximum coverage level of $15
million. We have an aggregate of $65 million of guarantees provided by some of our
insurers. See Part 1, Item 1. Business. B. "Cruise Operations - E. - Insurance – Other
Insurance" for additional information.
In the UK, we are currently required to obtain licenses and/or bonds, in some cases,
from various organizations in connection with the conduct of our business and our ability to
meet liability in the event of non-performance of obligations to consumers. These
organizations include Abta (formerly the Association of British Travel Agents) and the Civil
Aviation Authority. See Part 1, Item 1. Business. B. "Cruise Operations - E. - Insurance-
Other Insurance" for additional information.
We are also required by German and French law to obtain a guarantee from a reputable
insurance company to ensure that, in case of insolvency, our customers will be refunded any
monies they have paid on account of a booking and, in addition, that they will be
repatriated without additional cost if insolvency occurs after a cruise starts.
Additionally, in Australia we are a member of the Travel Compensation Fund which provides
compensation, as a last resort, to consumers who suffer losses in their dealings with travel
agents. Finally, other jurisdictions, including Argentina and Brazil, require the
establishment of financial responsibility for passengers from their jurisdictions.
We believe we have all material licenses to conduct our business. From time to time,
various other regulatory and legislative changes may be proposed or adopted that could have
an effect on the cruise industry, in general, and our business, in particular.
XVI. Financial Information
For financial information about our cruise reporting segment and geographic information
with respect to each of the three years in the period ended November 30, 2008, see Note 11,
"Segment Information" to our Consolidated Financial Statements in Exhibit 13 to this Form
10-K.