California-based Princess Cruises, part of Carnival Corporation, has pleaded guilty to a second probation violation relating to the ‘magic pipe’ environmental case that has cost the company $60 million so far.
The violation is related to a court-ordered independent internal investigative office that the company was ordered to establish, part of the company’s probation. As a result, the company agreed to a plea deal which cost them a further $1 million.
Carnival is Non-Compliant with Court Orders
In 2013 Princess Cruises used a type of ‘magic pipe’ which discharged oily waste from the vessel into the ocean. The cruise line further falsified paperwork to hide the discharge. In 2017, Princess Cruises was fined $40 million by the U.S. government for illegally dumping the oily water into the ocean off the coast of England.
The company was found non-compliant with court orders the first time two years ago, which resulted in a further $20 million fine. It has been found non-compliant again because it failed to establish and maintain an independent internal investigative office.
Princess Cruises has admitted that internal investigators have not been allowed to determine the scope of their investigations and that draft internal investigations had been impacted and delayed by management. This has resulted in a plea deal between the Justice Department and Carnival Corporation, meaning the company will need to pay $1 million.
Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division: “This case shows the importance of addressing issues of corporate culture and structure, and the root causes of environmental non-compliance. This was a serious and ongoing violation of probation that reflected Carnival’s failure to prioritize compliance with court orders. I thank the court, the Office of Probation, court appointed monitor and third-party auditor for the close attention that they have devoted to this important matter.”
The courts ordered all brands operating under the Carnival Corporation flag to file an environmental compliance plan, including audits by an outside and independent third-party auditor and oversight by a Court Appointed Monitor.
Carnival Corp Works Hard on Environmental Image
Only a few months ago, Carnival Corporation was accused of repeatedly failing to comply with the rules and regulations set out by the courts. The court-appointed monitor, in an October 2021 letter to U.S. District Court Judge Patricia A. Seitz, concluded that the continuing failure “reflects a deeper barrier: a culture that seeks to minimize or avoid information that is negative, uncomfortable, or threatening to the company, including to top leadership (i.e., the Board of Directors, C-Suite executives and Brand Presidents/CEOs).”
The announcement from the Justice Department comes at a time when Carnival Corporation has been hard at work to clean up. The company has implemented several environmental policies across the nine cruise lines sailing under the Carnival Corporation flag. It is also the frontrunner in the industry implementing a fleet of ships that operate on the low-emission LNG.
A Carnival Corporation spokesperson said to the Miami Herald: “the company is fully complying with the federal court and working in good faith through the course of probation to improve our internal investigations, which is the basis of the violation.”
Under the new plea deal, the company will need to ensure investigative office reports directly to a committee of Carnival’s Board of Directors. Carnival must give the investigative office the authority to initiate investigations independently and determine their scope.
Carnival must also conduct an assessment to ensure independent investigators have sufficient resources. The company will be restricted in removing the head of the “Incident Analysis Group” that performs internal investigations.
Failure to comply with the deadlines set out in the plea deal will result in fines of $100.000 per day for the first ten days and $500,000 per day after that initial period.