Carnival Corporation agrees to pay $20 million Probation settlement over Princess Cruises pollution violations

With world wide emphasis on the protection of the oceans and the cruise industries continued efforts on protecting the environment it is a real shame to report on the recent development involving Carnival Corp and Princess Cruises in the USA.

Earlier this week it was announced that Carnival Corp. will pay $20 million after its subsidiary, Princess Cruises, admitted to violating the terms of its probation from a 2017 conviction for improper waste disposal. This additional fine follows the original  $40 million penalty which was the largest ever for deliberate vessel pollution.

 

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A secret pipe on the Caribbean Princess cruise ship was used to discharge waste into British waters Image: Princess Cruises

A court filing submitted on Monday said Carnival released food waste and plastic into the ocean, failed to accurately record waste disposals, created false training records, and secretly examined ships to fix environmental-compliance issues before third-party inspections without reporting its findings to the inspectors.

Monday’s settlement requires Carnival to pay $20 million within seven days, receive additional ship inspections, devote more resources to ensure compliance with its probation, reduce the number of single-use plastic items on its ships, and establish teams to improve waste management. If Carnival does not meet deadlines to revamp its compliance process, it will have to pay additional penalties of $1 million to $10 million a day.

“Carnival Corporation remains committed to environmental excellence and protecting the environment in which we live, work, and travel,” a Carnival representative said. “Our aspiration is to leave the places we touch even better than when we first arrived.”

In 2017, Princess Cruises pleaded guilty to illegally releasing oil into the ocean and deliberately hiding the practice, and it was ordered to pay $40 million. Carnival has since been on a five-year probation, during which it must allow a third-party inspector to examine its ships.

According to a report from an environmental-compliance inspector, Carnival violated environmental laws in the first year of the probation. The inspector found over 800 violations of its probation between April 2017 and April 2018, though they were accidental and disclosed by Carnival, the Miami Herald reported.

According to papers filed in court during the 2017 case, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations.  The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone.  At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.

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US Government diagram of the standing pipe method of bypassing used in 2013

Caribbean Princess used multiple methods over the course of time to pollute the seas.  Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used.  When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described.  When it was removed by Princess at the department’s request, it was found to contain black oil.

In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star PrincessGrand PrincessCoral Princess and Golden Princess.  One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor.  The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge.  This was done routinely on the Caribbean Princess in 2012 and 2013.  The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges.  This waste was pumped back into the graywater system rather than being processed as oily bilge waste.  Neither of these practices were truthfully recorded in the oil record book as required.  All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land.  As a result, discharges within U.S. waters were likely.

Additional: Announcement from the US Department of Justice: (June 2019)

Princess Cruise Lines and its Parent Company Plead Guilty to Environmental Probation Violations, Ordered to Pay $20 Million Criminal Penalty

Today, Princess Cruise Lines Ltd. (Princess) and its parent, Carnival Cruise Lines & plc (together “Carnival”) were ordered to pay a $20 million criminal penalty and will be subject to enhanced supervision after admitting to violations of probation attributable to senior Carnival management in a case in which Princess had already paid $40 million.

Princess was convicted and sentenced in April 2017, after pleading guilty to felony charges stemming from its deliberate dumping of oil-contaminated waste from one of its vessels and intentional acts to cover it up. While serving 5 years of probation, all Carnival related cruise lines vessels eligible to trade in U.S. ports were required to comply with a court approved and supervised environmental compliance plan (ECP), including audits by an independent company and oversight by a Court Appointed Monitor. Numerous violations have been identified by the company, the outside auditor, and the court’s monitor during the first two years of probation, including “major non-conformities” as defined by the ECP.

Carnival admitted it was guilty of committing six violations of probation. Two of the violations involved interfering with the court’s supervision of probation by sending undisclosed teams to ships to prepare them for the independent inspections required during probation. When this was first discovered in December 2017, U.S. District Court Judge Patricia Seitz directed that the practice cease and ordered additional inspections as a consequence. However, without seeking court approval, a second undisclosed program was started shortly thereafter. Documents filed in court showed that a purpose of the vessel visit programs was to avoid adverse findings during the inspections.

“This case demonstrates the importance of identifying and correcting compliance problems at their source. Carnival sought to avoid the discovery of problems during the audits rather than learn from them. Carnival’s deliberate deception undermined the court’s supervision of probation,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “I want to take this opportunity to thank and commend the Office of Probation and the Court Appointed Monitor for the close attention that they have devoted to this important matter post-conviction.”

Carnival’s Chairman of the Board, Chief Executive Officer and Chief Financial Officer attended the hearing pursuant to court’s order and were asked to personally pledge their commitment to correcting the company’s compliance issues and corporate culture. In addition, senior management of each operating cruise line of Carnival Corporation & plc were present for the court proceedings.

The company admitted to other violations of probation today including:

  • Failing to establish a senior corporate officer as a corporate compliance manager with responsibility and sufficient authority for implementing new environmental measures required during probation;
  • Contacting the Coast Guard seeking to re-define the definition of what constitutes a major non-conformity under the ECP without going through the required process and after the government had rejected the proposal and told the company to file a motion with the court if it wanted to pursue the issue;
  • Deliberately falsifying environmental training records aboard two cruise ships; and
  • Deliberately discharging plastic in Bahamian waters from the Carnival Elation and failing to accurately record the illegal discharges. Prosecutors advised the Court that this particular instance was an example of a more widespread problem, identified by the external audits, in failing to segregate plastic and non-food garbage from waste thrown overboard from numerous cruise ships.

Under the terms of the settlement, Carnival will do the following:

  • Pay a $20 million criminal penalty;
  • Issue a statement to all employees in which Carnival’s CEO accepts management’s responsibility for the probation violations;
  • Restructure the company’s corporate compliance efforts, including appointing a new chief Corporate Compliance Officer, creating an Executive Compliance Committee across all cruise lines, adding a new member to the Board of Directors with corporate compliance expertise, and train its Board of Directors;
  • Pay up to $10 million per day if it does not meet deadlines for submitting and implementing needed changes to its corporate structure;
  • Pay for 15 additional independent audits per year conducted by the third-party auditor and Court Appointed Monitor (on top of approximately 31 ship audits and 6 shore-side audits currently performed annually);
  • Comply with new reporting requirements, including notifying the government and court of all future violations, and specifically identifying foreign violations and the country impacted; and
  • Make major changes in how the company uses and disposes of plastic and other non-food waste to urgently address a problem on multiple vessels concerning illegal discharges of plastic mixed with other garbage.

The revised sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of three years.

Source: US Department of Justice (DOJ)

US Department of Justice (DOJ) announcement relating to the original case can be viewed here:

https://www.justice.gov/usao-sdfl/pr/princess-cruise-lines-pay-largest-ever-criminal-penalty-deliberate-vessel-pollution

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Carnival Corp is comprises of ten brands

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