Federal prosecutors on Friday charged Norwegian Cruise Line with gross negligence almost five years after a boiler explosion in its historic ship, SS Norway, killed eight seamen and seriously injured 10 others in the Port of Miami.
The U.S. attorney's office said Norwegian agreed to plead guilty to the criminal charge, which alleges the cruise line operated the vessel on May 25, 2003, in a ``grossly negligent manner that endangered the lives, limbs and property of the persons on board.''
Norwegian is liable for at least $500,000 in criminal penalties. The cruise line also has agreed to carry out safety inspections of its vessels along with an independent consultant.
''Charges such as those today are necessary to show that companies operating and managing ships have a duty to take reasonable measures to assure the safety of all onboard -- passengers and crew -- and that they will be held accountable if they fail to meet that obligation,'' said U.S. Attorney R. Alexander Acosta.
The cruise line released a statement Friday evening that said it has cooperated with federal authorities ever since the explosion, and will continue to do so. ''The safety and security of our passengers and crew has been and always will be of the utmost importance,'' the statement said. It added that the Norwegian fleet no longer uses any high-pressure steam boilers.
The SS Norway's boiler explosion resulted in the highest loss of life in a decade onboard a U.S.-based ocean liner. The 43-year-old stream-driven SS Norway has since been sold for scrap.
The cruise line was charged in a document called an ''information'' instead of in a criminal complaint or indictment, which means Norwegian executives and prosecutors negotiated the outcome.
The criminal charge follows in the wake of a critical report on the ship's boiler systemby the National Transportation Safety Board, which concluded the ultimate failure was caused by inadequate maintenance and inspection.
The NTSB report, released in November, noted that the failed boiler system had a history of fatigue cracking, corrosion and pitting.
It said a weld on a seam of a high-pressure drum fractured, releasing almost 20 tons of high-temperature water. In turn, that water immediately flashed into steam and swept through the engine spaces and some adjacent crew berthing areas, resulting in the deaths of eight crew members and the injuries of nearly a dozen others.
No passengers were hurt.
The dead and injured seamen were mostly Filipino. They or their families sued Norwegian in federal court in Miami. The cruise line negotiated settlements with most of them after their cases were dismissed in the U.S. court and sent back to the Philippines for arbitration.
''The boiler explosion aboard the SS Norway was a preventable tragedy,'' Coast Guard Rear Admiral Robert S. Branham said in a statement. ``It is appropriate that the corporation be held accountable for their negligent maintenance procedures.
``Hopefully, this case will send a message to the maritime industry that marine safety should be the paramount consideration in maintaining their vessels.''
The SS Norway had a storied past. It was launched as the SS France in 1960. At 1,035 feet, it was the longest passenger ship afloat. It was too long and too wide for the Panama Canal.
Deemed unprofitable in 1974, the oceanliner was mothballed in France. In 1979, Norwegian Cruise Line bought it for $18 million -- its value in scrap metal -- and revamped it at a cost of $120 million.
After a ''farewell cruise'' to Europe in 2001, the SS Norway returned to Miami for seven-day cruises in the eastern Caribbean.
It has been out of commission since the boiler explosion five years ago.
Meanwhile, a trade industry official said the criminal charge brought against Norwegian on Friday signals the importance of maintaining high safety standards.
''We take safety very seriously as an industry, and we hope this gets resolved and look forward to a resolution,'' said Michael Crye, executive vice president of the Cruise Lines International Association, an industry trade group.
Norwegian's parent company, NCL Corp., has been bleeding red ink for some time, even as its industry peers, such as Carnival Corp. and Royal Caribbean Cruises Ltd., are raking in huge profits.
A big drag on profits for NCL has been its star-crossed move into inter-island Hawaiian cruises, which operate with American-flagged ships and American crews. The company has recently retreated from that venture, pulling two of its three ships out of the market.
In January, Apollo Management LP, a New York private-equity giant, completed a $1 billion investment in NCL Corp. The equity investment gave Apollo a 50-percent ownership stake and control of its board. Star Cruises Ltd., based in Hong Kong, owns the remaining 50 percent of the cruise operator.
In April, NCL laid off an undisclosed number of employees at its Miami headquarters, citing cutbacks in Hawaiian operations and reductions in its fleet size for 2008.
Despite its financial woes, NCL has been aggressively modernizing its fleet, with heavy investment in new ship orders. In April, the company laid the keel for the first of two new ships that will debut in 2010. The two 150,000-ton ships will each carry 4,200 passengers.
Herald staff writer Martha Brannigan contributed to this report.
