Royal Caribbean to Sell Azamara Brand for $201 Million Cash
Jan 19 (Reuters) – Royal Caribbean Group said it would sell its Azamara line to private equity firm Sycamore Partners for $201 million in cash, to focus more on its...
Prince Cruise Lines and its parent company Carnival Cruise Lines have been ordered to pay a $20 million criminal fine after admitting to violating the terms of its probation stemming from a previous conviction in which Princess was sentenced to pay a $40 million fine.
Princess Cruise Line was convicted and sentenced in April 2017 after pleading guilty to felony charges that it deliberately dumped of oil-contaminated waste from one of its vessels and then tried to cover it up. The guilty plea required Princess to pay a $40 million penalty – the largest-ever criminal penalty involving deliberate vessel pollution.
The charges were tied to deliberate dumping from Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia dating back to 2005.
While serving 5 years of probation, all Carnival cruise ships eligible to trade in U.S. ports were required to comply with a court approved and supervised environmental compliance plan (ECP), including audits by an independent company and oversight by a Court Appointed Monitor.
According to a Justice Department statement issued Monday, numerous violations have been identified by the company, the outside auditor, and the court’s monitor during the first two years of probation, including “major non-conformities” as defined by the ECP.
Carnival admitted it was guilty of committing six violations of probation. Two of the violations involved interfering with the court’s supervision of probation by sending undisclosed teams to ships to prepare the vessels for the independent inspections required during probation, the Justice Dept said. When this was first discovered in December 2017, U.S. District Court Judge Patricia Seitz directed that the practice be ended and ordered additional inspections. However, without first seeking court approval, shortly thereafter Carnival launched a second, undisclosed vessel-visit program with the purpose avoiding adverse findings during the inspections.
“This case demonstrates the importance of identifying and correcting compliance problems at their source. Carnival sought to avoid the discovery of problems during the audits rather than learn from them. Carnival’s deliberate deception undermined the court’s supervision of probation,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “I want to take this opportunity to thank and commend the Office of Probation and the Court Appointed Monitor for the close attention that they have devoted to this important matter post-conviction.”
The details of the settlement provided by the U.S. Department of Justice are below:
The company admitted to other violations of probation today including:
- Failing to establish a senior corporate officer as a corporate compliance manager with responsibility and sufficient authority for implementing new environmental measures required during probation;
- Contacting the Coast Guard seeking to re-define the definition of what constitutes a major non-conformity under the ECP without going through the required process and after the government had rejected the proposal and told the company to file a motion with the court if it wanted to pursue the issue;
- Deliberately falsifying environmental training records aboard two cruise ships; and
- Deliberately discharging plastic in Bahamian waters from the Carnival Elation and failing to accurately record the illegal discharges. Prosecutors advised the Court that this particular instance was an example of a more widespread problem, identified by the external audits, in failing to segregate plastic and non-food garbage from waste thrown overboard from numerous cruise ships.
Under the terms of the settlement, Carnival will do the following:
- Pay a $20 million criminal penalty;
- Issue a statement to all employees in which Carnival’s CEO accepts management’s responsibility for the probation violations;
- Restructure the company’s corporate compliance efforts, including appointing a new chief Corporate Compliance Officer, creating an Executive Compliance Committee across all cruise lines, adding a new member to the Board of Directors with corporate compliance expertise, and train its Board of Directors;
- Pay up to $10 million per day if it does not meet deadlines for submitting and implementing needed changes to its corporate structure;
- Pay for 15 additional independent audits per year conducted by the third-party auditor and Court Appointed Monitor (on top of approximately 31 ship audits and 6 shore-side audits currently performed annually);
- Comply with new reporting requirements, including notifying the government and court of all future violations, and specifically identifying foreign violations and the country impacted; and
- Make major changes in how the company uses and disposes of plastic and other non-food waste to urgently address a problem on multiple vessels concerning illegal discharges of plastic mixed with other garbage.
The revised sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of three years.
Join the 64,163 members that receive our newsletter.
Have a news tip? Let us know.