Carnival Corp. pleads guilty to environmental charges, has to pay $20 million in fines
During Carnival Corporation’s second year on probation, the Miami-based cruise company improved its environmental practices and initiated procedures designed to limit pollution. Still, it continued to violate environmental laws.
A report published Tuesday from the independent monitor appointed by a federal judge in Miami to oversee Carnival Corp.’s behavior while on probation found that the company continued to discharge pollutants into the ocean and air from its cruise ships from April 2018 to April 2019.
The monitor also found that the company’s employees are making an effort to better comply with environmental regulations and implementing initiatives that go beyond its environmental compliance agreement with the court. In the second year on probation Carnival Corp. has created a new internal investigations unit, hired a former federal prosecutor for environmental crimes as a compliance consultant, and conducted a survey of more than 70,000 employees.
Environmental compliance is “a top priority for everyone in the company and we have been making strong progress with the many actions underway,” said Roger Frizzell, the company’s spokesperson. Carnival Corp., the world’s largest cruise company, owns 105 ships. In fiscal year 2018, the company reported a profit of $3.2 billion.
Carnival Corp. has not repeated the environmental violations that led to its conviction in 2016. The company pleaded guilty to those charges — bypassing pollution prevention equipment to discharge oily waste and falsify related records on its Princess Cruises ships over a period of eight years — in 2017, paid a $40 million settlement, and began a probation period of five years. It was the company’s third conviction for the same crimes since 1998.
In June, Carnival Corp. CEO Arnold Donald pleaded guilty on behalf of the company to six probation violations, including falsifying training records and communicating with the U.S. Coast Guard through a back channel, and agreed to pay a $20 million fine.
The court-appointed monitor found that Carnival Corp. continued to struggle with separating plastics from food waste during its second year on probation, leading to at least two discharges of plastics into the ocean in violation of international law. Carnival Corp. has committed to the court that it will decrease its use of plastics on board its ships by 50 percent by Dec. 31, 2021, and improve its training and separation technologies.
The monitor found that Carnival Corp. ships again discharged some wastes into the ocean: untreated or partially treated sewage in violation of international law, ballast water in violation of local regulations and grey water in violation of U.S. federal regulations. (Similar violations were also reported in its first year of probation.) Some of these discharges happened close to shore, including in Alaskan waters and other protected U.S. waters such as marine sanctuaries.
Violations are self-reported by the cruise line’s employees and detailed in the monitor’s report. The monitor noted an increase in reported violations during the second year on probation, signifying more transparency from the company.
A study commissioned by Carnival Corp.’s Holland America Line, which experienced an increase in illegal discharges, found that many of them were attributable to complex regulations, high workload, and communication misunderstandings among engine room employees, according to the monitor’s report.
Carnival Corp. ships burned unfiltered heavy fuel oil in protected areas on several occasions, in violation of international law, as they did during the first year of probation. In a response to the court appointed monitor’s report, Carnival Corp. said it is working to better integrate its scrubbers, which filter dangerous sulfur out of heavy fuel oil in protected areas, into its onboard alarm systems.
Carnival Corp. and federal prosecutors will meet with U.S. District Judge Patricia Seitz in Miami Friday to review the monitor’s findings from the second year of probation and the company’s progress in complying with its obligations under the new plea agreement reached in June.
In addition to the $20 million fine, the company agreed to allow more stringent oversight by independent monitors during its third, fourth and fifth years on probation, record the location of its environmental violations, create a Chief Compliance Officer position, and increase budgetary resources for the existing Corporate Compliance Manager.