MIAMI—Carnival Corp. reached a settlement on June 3 with federal prosecutors in which the world’s largest cruise line agreed to pay a $20 million penalty because its ships continued to pollute the oceans despite a previous criminal conviction aimed at curbing similar conduct.
Senior U.S. District Judge Patricia Seitz approved the agreement after Carnival CEO Arnold Donald stood up in open court and admitted the company’s responsibility for probation violations stemming from the previous environmental case.
“The company pleads guilty,” Arnold said six times in a packed courtroom that include other senior Carnival executives, including company chairman and Miami Heat owner Micky Arison.
“We acknowledge the shortcomings. I am here today to formulate a plan to fix them,” Arnold added
“The proof will be in the pudding, won’t it?” the judge replied. “If you all did not have the environment, you would have nothing to sell.”
Carnival admitted violating terms of probation from a 2016 criminal conviction for discharging oily waste from its Princess Cruise Lines ships and covering it up. Carnival paid a $40 million fine and was put on five years’ probation in that case, which affected all nine of its cruise brands that boast more than 100 ships.
Now Carnival has acknowledged that in the years since its ships have committed environmental crimes such as dumping “gray water” in prohibited places such Alaska’s Glacier Bay National Park and knowingly allowing plastic to be discharged along with food waste in the Bahamas, which poses a severe threat to marine life.
The company also admitted falsifying compliance documents and other administrative violations such as having cleanup teams visit its ships just before scheduled inspections.
Seitz at an earlier hearing threatened to bar Carnival from docking at U.S. ports because of the violations and said she might hold executives individually liable for the probation violations.
“The concern I have is that senior management has no skin in the game,” Seitz said, adding that future violations might be met with prison time and criminal fines for individuals. “My goal is to have the defendant change its behavior.”
Under the settlement, Carnival promised there will be additional audits to check for violations, a restructuring of the company’s compliance and training programs, a better system for reporting environmental violations to state and federal agencies and improved waste management practices.
The agreement also would set Sept. 13 and Oct. 9 deadlines to create an improved compliance plan and make other changes, subject to fines of $1 million per day if those deadlines are not met. If a second round of deadlines are not met, the fines could go up to $10 million a day.
Other proposed changes include a reduction by Carnival in the use of single-use plastic items across its entire fleet and creation of “tiger teams” meant to make improvements in the ships’ food and beverage systems and how waste is handled at sea.
Seitz is retiring later this year and is turning over the case to U.S. District Judge Ursula Ungaro, who jointly presided over Monday’s hearing.
Three people who claimed they were victims of Carnival’s environmental violations attended the hearing. Their attorney, Knoll Lowney, expressed skepticism that Carnival will keep its word this time.
“Time and time again, Carnival has shown its contempt of environmental laws and the rule of law,” he said. “Here we are again.”
