Princess Cruise Lines Pleads Guilty to Second Revocation of Probation | USAO-SDFL
Miami, Florida – Princess Cruise Lines Ltd. (Princess) pleaded guilty to a second probation violation imposed following her 2017 criminal conviction for environmental crimes because she failed to establish and maintain an independent internal investigation office. Under a plea deal, Princess was ordered to pay an additional $ 1 million criminal fine and take corrective action to ensure that she and her parent company Carnival Cruise Lines & plc establish and maintain the independent internal investigation office known as incident analysis. Group (AIG).
Princess was convicted and sentenced in April 2017 and fined $ 40 million after pleading guilty to felony charges resulting from her deliberate dumping of petroleum contaminated waste from one of her ships and intentional acts to cover it up. It was and remains the largest criminal fine ever imposed for intentional pollution from ships. While serving five years of probation, all Carnival-related cruise ships that traded in U.S. ports were required to comply with a court-approved and overseen Environmental Compliance Plan (ECP), including audits by an external independent third party auditor (TPA) and oversight by a court appointed monitor (CAM).
In 2019, Princess was convicted of six probation violations, fined an additional $ 20 million and required to take more corrective action. In that case, two of the violations involved interfering with the court’s oversight of probation by sending undisclosed teams to ships to prepare them for the independent inspections required during probation. Documents filed with the tribunal showed that one of the objectives of the ship survey programs was to avoid unfavorable findings from independent external auditors working on behalf of the tribunal.
From the first year of probation, it was repeatedly found that the Company’s internal investigation program was and is inadequate. In November 2021, the Probation Office filed a motion to revoke probation after unfavorable findings from the CAM and TPA.
In an October 2021 letter to United States District Court Judge Patricia A. Seitz, CAM and TPA concluded that the continuing failure “reflects a deeper obstacle: a culture that seeks to minimize or to avoid negative, uncomfortable or threatening information for the company. , including senior management (i.e. board of directors, C-Suite executives, and brand presidents / CEOs). “
A common factual basis for today’s guilty plea was submitted to court in which Princess and Carnival admitted the failure to establish and maintain an independent investigative office. Princess admitted that internal investigators were not allowed to determine the scope of their investigations and that internal investigation projects were affected and delayed by management.
Changes required under a plea agreement with the Department of Justice resolving the probation violation include:
- Carnival must restructure so that its investigative office reports directly to a committee of the Carnival board of directors;
- Carnival’s internal investigation office must have the power to initiate and determine the scope of investigations itself;
- Carnival management will be limited in its ability to remove the head of the “Incident Analysis Group” who conducts internal investigations;
- Carnival should conduct an assessment to ensure independent investigators have sufficient resources;
- Carnival must assess the effectiveness of the required changes and correct any deficiencies.
- Failure to meet the deadlines in the plea agreement will initially subject the defendant to fines of $ 100,000 per day and $ 500,000 per day after 10 days.
“Just like individual defendants, corporate defendants must also comply with court orders. They are not above the law, ”said South Florida District Attorney Juan Antonio Gonzalez. “The defendant company ignored the court, choosing instead to thwart the compliance plan put in place to protect our environment. As this probation violation procedure demonstrates, the government will not tolerate the blatant violation of court orders by the accused.
“This case shows the importance of addressing issues of corporate culture and structure, and the root causes of environmental non-compliance,” said Deputy Attorney General Todd Kim of the Environment and Humanitarian Division. natural resources of the Ministry of Justice. “This was a serious and continuing violation of probation that reflected Carnival’s failure to prioritize compliance with court orders. I thank the court, the probation office, the court appointed monitor and the third party auditor for the special attention they have given to this important issue.
The plea agreement and factual statement were signed by Micky Arison, chairman of the board of directors of Carnival and Arnold Donald, chief executive officer and member of the board of directors. Both attended the hearing as they have quarterly status hearings under a court order.
The case is being pursued by Assistant U.S. Attorney Thomas Watts-FitzGerald, Environmental Crimes Coordinator, Economic and Environmental Crimes Section, South Florida District, and Richard A. Udell, Senior Legal Counsel to the Environmental Crimes Section of the Ministry of Justice.