Good Morning everybody. Thank you for taking the time to join us here today.
My name is Peter Ratcliffe and I am a main Board director of Carnival Corporation. I am based in Los Angeles.
I am the CEO of the P&O Princess division of Carnival Corporation. This division is responsible for the operation of P&O Cruises here in Australia as well as Cunard Line and Princess Cruises in the United States, and P&O Cruises and Ocean Village in the United Kingdom.
This morning I wanted to take this opportunity to meet with you to discuss the steps we have taken since the tragic death of Mrs Brimble aboard the Pacific Sky in 2002.
I am conscious that some considerable time has passed since the death of Mrs Brimble and since the start of the Inquest. Whilst we have extended our sympathies to the Brimble family and explained the changes we have been making to the Company’s operations in a number of formal statements, I think the time has come for me to address you personally.
I would like to make a number of introductory remarks and will then be pleased to take your questions.
Firstly, on behalf of all of us at P&O Cruises, both directors, management and employees, I want to express our heartfelt sympathies to the children and family of Mrs Brimble.
Not only have the family had to suffer the terrible loss of a loved one, but they have also had to deal with the sometimes distressing testimony offered at the Inquest, and also the public airing of the circumstances around Mrs Brimble’s death.
No family should have to go through this sort of pain.
We deeply apologise for the contribution P&O and its employees have made to their grief.
On Monday, I met with Mr Brimble and Mr Mitchell for a few hours in Brisbane. I said how sorry we were for what had happened and talked about how the family were coping.
I explained to them that we understood the family had been through a lot and that, in my opinion, the law, which focuses on legal liability, and not on the suffering of the family, is not really adequate in recognizing their unique situation.
For our part, we feel we have a moral obligation to do what we can to ensure that the family, particularly the children, are properly provided for. I agreed with Mr Brimble and Mr Mitchell a process which puts legal issues to one side, and focuses on the needs of the family. I expressed our sincere hope that through this process we may help bring some form of closure to the family, for their tragic loss.
Turning now to the Inquest, I know that you will appreciate the need for me to continue to respect the process, and not to comment on specifics.
However, let me say the death of Mrs Brimble was a tragedy and the Inquest has been a real wake up call for the Company. P&O Page 1 22
February 2007 P&O Page 2 22 February 2007 Over the last four years, there have been many changes in P&O Cruises. The shoreside management of the hotel operations of the vessels was transferred to executives based in Los Angeles in early 2005, and the local hotel management operation here in Sydney was disbanded.
We reorganised on board management with previous management being replaced with senior management redeployed from other lines within the division.
There have also been extensive changes in Australian senior management, with the majority of senior management currently employed having been with the Company for less than four years.
Notwithstanding all these changes, as I said, the Inquest has been a real wake up call for us all.
What we’ve heard at the Inquest has really brought home to us both the need to ensure our safety and security procedures are at the highest possible standard, but also the need to accelerate the pace of cultural change both ashore and at sea.
As the Inquest has progressed, our immediate focus has been on the safety and security of our passengers.
We fully understand we are responsible for the safety of 150,000 Australians who cruise with us every year. This is particularly important, as 55% of our passengers are families travelling together.
In 2006 therefore we completely overhauled our procedures and training for the responsible service of alcohol.
We have sought the advice of the Department of Liquor, Gaming and Racing in New South Wales to ensure our procedures conform to best practice here in Australia.
We have:
stopped paying bar staff commission on sales;
stopped passengers bringing alcohol on board;
closed our bars in the early morning hours; and
strengthened our procedures for making sure under age passengers are not served alcohol.
We have also been making changes to our on board security arrangements. In recent years, we have:
made one senior officer responsible for all on board security;
created a new security department headed by the division’s Chief Security Officer who is based in Los Angeles;
appointed new Sydney based shoreside management to report to him;
introduced improved training programs dealing with crime scene preservation, response and investigation;
increased the number of on board security personnel from 10 to at least 20;
made sure our security specialists are licensed in either Australia or New Zealand; and
implemented more rigorous random drug search procedures.
P&O Page 3 22 February 2007
As the Inquest has progressed, we have also:
fitted our Australian ships with a Closed Circuit Television surveillance system, with over 300 cameras and twenty four hours recording capability;
introduced enhanced medical and security procedures for dealing with allegations of drink spiking; and
introduced sniffer dogs and random drug searches.
We have also accelerated the process of cultural change within the Company. In recent times, we have:
introduced new marketing and advertising protocols that will prevent tasteless and unacceptable advertising;
introduced a policy of zero tolerance for excessive behaviour which provides that any person involved in such behaviour is taken off the ship and flown home to Australia and reported to the police where appropriate;
introduced a new customer service training program for our onboard personnel;
stopped "Schoolies" cruises; and
improved the way we respond to complaints and have put in place a 24 hour hotline so people can contact us.
We are also focusing our attention on the proposals from the ICV advocacy organization headed in Australia by Mr Brimble. We recognize that these proposals reflect the legitimate interests of the people involved in the safety and security of passengers onboard our vessels.
When I spoke to Mr Brimble on Monday, we discussed the ICV’s proposals and agreed that suitable experts within the Company would meet with him to ensure we fully understand his perspective on the proposals.
We are also talking to the Australian Authorities in Minister Bailey’s department on these issues.
While we already had in place, or have put in place, many of the proposals of the ICV, such as:
crime scene preservation;
medical procedures; and
CCTV.
We will continue to discuss and look at putting in place any proposal that will contribute to a safe environment for our passengers, and that is effective and practical to implement.
One of the key thrusts of the ICV is jurisdictional uncertainty of cruise lines.
In Australia, we have the advantage that our ships here operate under the flag of the United Kingdom which accepts full responsibility for crime on any UK flag vessel. Additionally, the Australian Crimes at Sea Act covers crimes connected with Australia. We report to and fully cooperate with the Police when allegations of crime are made.
But, notwithstanding all these changes, let me say we all recognise P&O Cruises has a long way to go before the Australian public has full confidence in the changes we’ve made.
So, we have taken a number of further steps to lay solid foundations for our future in Australia.
Firstly, we have created an Advisory Council under the Chairmanship of Katie Lahey. P&O Page 4 22 February 2007
The main centres of operation of the P&O/Princess Division are remote from Australia. We now recognize we need a locally based group of independent minded and experienced non-executive people who can oversee and advise on all aspects of our Australian operations.
The Advisory Council’s initial focus will be on providing oversight of our enhanced safety and security procedures, and assisting with the promulgation of further cultural change, both ashore and at sea.
As I said, we appointed Katie Lahey Chairman of the newly created Advisory Council. Katie, who is also Chief Executive of the Business Council of Australia, will work with me to ensure subsequent appointments are suitably qualified.
Secondly, we are going to appoint a Managing Director of Carnival Australia to have executive authority for all of our Australian Business.
We see this as a very senior appointment within our division, and have appointed the leading search firm Spencer Stuart to find a suitable candidate.
In the meantime, the position will be filled by Dean Brown, who is here with us today. Please stand up Dean.
Dean is an executive vice president of Princess Cruises currently based in Los Angeles.
Commencing immediately he will base himself here, until the permanent appointment is made. Dean has been with our division for over 25 years and has had wide experience, including in safety and security practices, and shoreside customer service organizations. Naturally, I am going to continue to take a very hands on role.
Gavin Smith will continue with P&O Cruises, with responsibility to Dean for its marketing, sales and reservations departments.
On the operational side, later this year, P&O Cruises will be introducing a new vessel to Australia. To be named Pacific Dawn, it will be based year round here in Sydney, and will continue the growth of P&O Cruises.
We fully recognize our responsibility to provide this increased number of passengers with enjoyable holidays in a safe and secure environment.
So, to finish up let me make four points:
we fully understand our responsibility for the safety and security of our Australian passengers, and we have made significant changes particularly in the last year;
while we have progressed the cultural change process within P&O Cruises, we fully recognize the need to continue that process, both ashore and at sea, and we are absolutely committed to doing just that;
while we will do all we can to create a safe and secure environment for our passengers, we recognize that if, despite all our measures, someone does behave in an unacceptable way, we will be judged quite rightly by how we respond;
Mrs Brimble’s death, and the scrutiny of the Inquest, have changed us forever. We are doing all we can to ensure we have learned from that.
