Carnival Corp. and its subsidiary Princess Cruise Lines has been ordered to pay $20 million for environmental violations just two years after it paid $40 million for dumping oil-contaminated waste into the ocean, the largest penalty of its kind at the time.
The U.S. Department of Justice ordered Carnival to pay a $20 million criminal penalty for dumping plastic and other waste overboard, and said it will be subject to enhanced supervision after admitting to violations of probation attributable to senior Carnival management in a 2016 case.
“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,” the department said in a statement.
“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, including audits by an independent company and oversight by a court appointed monitor,” it said.
Carnival admitted it was guilty of committing six probation violations. Two of these violations involved the company 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,” the Department of Justice said in a statement released late Monday. “However, without seeking court approval, a second undisclosed program was started shortly thereafter.”
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The revised sentence imposed by Judge Seitz also requires that Princess Cruise Lines remain on probation for three years.
“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.
“A corporation is responsible to its shareholders and board of directors to be profitable, but not by breaking the law and destroying the very environment in which it navigates for profit,” said U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida.
“Carnival’s failure to comply with the terms of its probation and later, its attempt to drown its deceit goes against the fiber of corporate compliance,” she added. “The Office of Probation and the Court Appointed Monitor are to be commended for their attention to this matter.”
Carnival Corp. was not immediately available for comment. However, NPR reported that Carnival CEO Arnold Donald told the judge in the case, “I sincerely regret these mistakes. I do take responsibility for the problems we had. I’m extremely personally disappointed we have them. I am personally committed to achieve best in class for compliance.”
Carnival must also issue a statement to all employees in which Carnival’s CEO accepts management’s responsibility for the probation violations, appoint a new corporate compliance officer, create an executive compliance committee across all cruise lines, and pay up to $10 million per day if it does not meet deadlines for submitting and implementing needed changes to its corporate structure.
Carnival reported $18.8 billion in revenue in 2018, according to its most recent annual report.
The cruise line must also “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 Justice Department said.
Shares of Carnival are up 6% year-to-date. The Dow Jones Industrial Average is up nearly 9% during the same time period, while the S&P 500 is up 12%.