Princess Cruises pleads guilty to second probation violation

Investigation stemmed from dumping oil-contaminated wastes in ocean

Princess Cruise Lines has pleaded guilty to a second violation of probation imposed after a 2017 criminal conviction for deliberately dumping oil-contaminated waste from one of its vessels and intentional acts to cover up, Justice Department officials said.

Under terms of the plea agreement Princess was ordered to pay an additional $1 million criminal fine and required to take remedial measures to ensure that the remedial program proceeds. Collective fines imposed since litigation began now total $61 million.

Princess Cruises, a subsidiary of Carnival Cruise Lines, offers Alaska cruises which attract thousands of visitors to the state every year, the exception being during 2020 and 2021, when the COVID-19 pandemic resulted in numerous cruise cancellations.

Princess was convicted in April of 2017 and fined $40 million after pleading guilty to felony charges stemming from illegal dumping of oil-contaminated waste from one of its vessels, the Caribbean Princess, and intentional acts to cover up the incidents.

Justice Department officials said on Jan. 11 that this was the largest-ever criminal fine for intentional pollution from ships. During five years of probation that followed all Carnival-related cruise line vessels trading in U.S. ports were required to comply with a court approved, supervised environmental compliance plan, including audits by an independent third-party auditor and oversight by a court appointed monitor.

In 2019 Princess was convicted of six probation violations, fined an additional $20 million, and required to take more remedial measures. In this case two of the violations involved interfering with the court’s supervision of probation by sending undisclosed teams to ships to prepare them for required independent inspections. Court document showed that one purpose of the vessel visit programs was to avoid adverse findings by the independent outside auditors working on behalf of the court.

The court found that beginning with the first year of probation there were repeated incidents where the company’s internal investigation program was found to be inadequate.

In November, the Office of Probation revoked probation due to adverse findings by the court appointed monitor and the independent third-party auditor. The independent auditor and court appointed monitor conclude in their letter to U.S. District Court Judge Patricia A. Seitz this past October, in Miami, Florida, that the continuing failure to comply reflected “a deeper barrier: a culture that seeks to minimize or avoid information that is negative, uncomfortable or threatening to the company,” including the board of directors and other top leadership.

Changes required under the plea agreement to resolve probation violations include restructuring so that the cruise line’s investigative office reports directly to a committee of Carnival’s board of directors and that Carnival’s management be restricted in its ability to remove the head of the incident analysis group that performs internal investigations. Carnival must also conduct an assessment to ensure independent investigators have sufficient resources and assess the effectiveness of required changes and correct deficiencies.

Assistant Attorney General Todd Kim, with the Justice Department’s Environmental and Natural Resources Division, said the case showed the importance of addressing issues of corporate culture and structure, and the root causes of environmental non-compliance.