Tourism & Cruises

Carnival’s CEO Arnold Donald back in federal court to address new plea deal deadlines

Miami-based cruise company Carnival Corp. expects per share earnings for 2019 to drop due to concerns about the European economy, Cuba restrictions and mechanical problems with one of its ships.
Miami-based cruise company Carnival Corp. expects per share earnings for 2019 to drop due to concerns about the European economy, Cuba restrictions and mechanical problems with one of its ships.

Carnival Corporation CEO Arnold Donald was back in federal court in Miami Friday to explain how the company is going to avoid polluting the environment during its next three years on probation.

“I’m extremely gratified,” said U.S. District Judge Patricia Seitz about Donald’s attendance. “I debated whether or not to formally invite you. I thought, I’m going to give you an opportunity to lead. It gives me confidence.”

The company has made little progress on its commitment to improve its pollution problem since it pleaded guilty in 2017 to dumping oily waste into the ocean from its Princess Cruises ships and lying to investigators, Seitz said. While Carnival Corp.’s 105 ships have not engaged in the same criminal behavior that led to the conviction, they have continued to dump plastics, sewage, and other pollutants into the ocean and air during the first two years of probation. The company has committed to reducing single-use plastics by 50 percent by Dec. 31, 2021.

“I’m not a happy camper as to where we are,” said Seitz. “I feel we have missed two years of opportunity.”

“Just saying, ‘We leave the places where we have been better’...,” isn’t enough, Seitz said, citing Carnival Corp.’s tagline about sustainability. “When I look at some of the pollution...I really expected the investigation process and root cause analysis to be much more robust.”

Seitz told Donald to tell the company’s Chairman Micky Arison that she expects to see him at all future hearings. Miami-based Carnival Corp., the largest cruise company in the world, owns nine different cruise lines. In fiscal year 2018, Carnival Corp. reported a profit of $3.2 billion.

Carnival Corp. isn’t the only cruise company that has polluted the environment, but it is currently the most visible offender because of the ongoing court proceedings. In 1999, Royal Caribbean Cruises Ltd. paid a $18 million fine after being convicted of rigging its ships to bypass pollution control equipment and covering up dumps of oily waste water. In 2002, Norwegian Cruise Line Holdings pleaded guilty to falsifying records to cover up oil dumps and paid a $1 million fine.

In June, Arison came to court with Donald, who pleaded guilty on behalf of the company to six probation violations, including dumping plastics mixed with food waste into Bahamian waters and preparing ships prior to visits by the court-appointed monitor. The company agreed to pay a $20 million fine and adhere to more intense oversight. Under the June settlement, the company must meet specific deadlines to restructure and strengthen its internal investigations of pollution incidents.

By Aug. 1, the company is required to submit to the court its plans to better separate plastics from food waste on its ships.

“Our goal is excellence, safety, environmental protection and law of compliance,” Donald said. “I’m totally committed...One mistake is one too many.”

One of the food waste strategies is already underway, said Carnival Corp.’s Corporate Compliance Manager Chris Donald. A staff training music video called the “Food Waste Shuffle,” set to the tune of the 2007 hit “Cupid Shuffle,” demonstrates how to correctly dispose of food waste and plastics.

The video will be sent out in two weeks to ship crews, who will be encouraged to create videos of their own — similar to the ALS Ice Bucket Challenge of 2014 that drew millions of views that year.

“It brings a bit of fun to compliance,” Chris Donald said.

Seitz asked the company’s representatives how they were going to shrink the amount of other pollutants dumped into the ocean. Carnival Corp.’s chief maritime officer and retired Vice Admiral of the U.S. Navy William Burke said the company is working to sharpen its internal investigations to get to the root cause of the pollution discharges.

“Why didn’t we start this two years ago?” said Seitz.

“I don’t have a good answer for that,” said Burke.

By Aug. 14, the company must provide the court with a start date for Peter Anderson, a former federal prosecutor for environmental crimes who is leaving his Charlotte, N.C., law firm to become Carnival Corp.’s chief ethics and compliance officer.

Seitz asked Anderson to outline his strategy for the company’s next three years on probation.

“After this is over, this is a turning point so we are catching things and making corrections, not waiting for a list to be imposed on us,” he said. “In the next three years, we will be world class.”

Federal prosecutor Thomas Watts-FitzGerald called the company’s verbal commitments “cruise ship cliché hell” and said he wants to see more measurable goals from the company. U.S. District Judge Ursula Ungaro, who will take over the case when Seitz retires in September, told Watts-FitzGerald to suggest metrics to the company.

The company’s executives will be back in court in September to provide an update on its progress.

A previous version of this story incorrectly identified Mr. Burke’s previous employer. He is a retired Vice Admiral of the U.S. Navy. A previous version of this story misstated Royal Caribbean’s fine for environmental violations in 1999. It was $18 million.

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Taylor Dolven covers the tourism industry at the Miami Herald, where she aims to tell stories about the people who work in tourism and the people who enjoy it. Previously, she worked at Vice News in Brooklyn, NY, where she won a Front Page Award from the Newswomen’s Club of NY for a national investigation of police shootings.
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