Carnival Corp. agrees to $18 million fine for illegal dumping

Posted: Sunday, April 21, 2002

MIAMI (AP) -- Carnival Corp., the world's largest cruise ship operator, pleaded guilty Friday to federal ocean pollution charges and agreed to pay $18 million in fines and restitution. The discharges didn't involve Alaska waters.

Carnival admitted that six Carnival Cruise Line ships -- Sensation, Ecstasy, Fantasy, Imagination, Paradise and Tropicale -- illegally discharged oily waste from their bilge tanks in the past five years. The dumping occurred in the Atlantic, Caribbean and Gulf of Mexico from ships that left Florida.

''They thought it was cost effective, that it would save them time and money and would in effect speed the procedure of clearing bilge tanks,'' U.S. Attorney Guy Lewis said.

Shipping lines are required to treat bilge water to reduce oil content to 15 parts per million, or else dispose of it on shore. Carnival crews fooled detection equipment into thinking the level was achieved and kept false record books on discharges, prosecutors said.

In 1999, two other cruise lines, Royal Caribbean Cruises Ltd. and Holland America Line Westours Inc., part of Carnival, were convicted of illegally polluting the Inside Passage. Holland America paid $1 million in fines and $1 million in restitution.

Miami-based Royal Caribbean paid a total of $18 million for dumping in the Caribbean and the Pacific. That came after the company paid $9 million after pleading guilty to similar charges in 1998.

In the Carnival case, the company pleaded guilty to six felony counts of making false statements about discharges to the Coast Guard.

The plea bargain did not cover ships in Carnival's six other lines, but the entire corporation was investigated. Prosecutor Lewis said violations ''were systemic in the corporation.''

Carnival will be on probation for three to five years worldwide and agreed to hire new managers and other personnel as part of an environmental compliance program that Lewis said may cost up to $10 million a year.

The company issued a statement Friday saying it accepts responsibility for its crimes and is ''committed to environmental compliance.'' The plea agreement was signed by chairman Micky Arison and vice chairman Howard Frank.

Lewis denied the penalty represents ''chump change'' to a billionaire like Arison, saying, ''It is a fine that stings the company.''

Carnival's structure insulated upper management ''from what the fellow on the ship was doing,'' and onboard training programs were ineffective, prosecutor Diane Patrick said.

Under the plea, Carnival Corp. will appoint a vice president for environmental compliance, and all ships under the company's Carnival, Holland America, Windstar, Cunard, Seabourn and Costa brands will have a full-time environmental officer.

Half of Carnival's penalty was distributed to environmental and community groups, including $2 million to an anti-terrorism task force responsible for port security and $250,000 to the Nature Conservancy, which buys sensitive land for preservation.

The cruise industry, which portrays itself as a vacation playground, is sensitive to criticism that it pollutes the exotic waters its ships travel.

Cruise ships were suspected of causing 172 pollution spills from 1991 through 2000, according to Coast Guard reports. Oil, hydraulic fluid, plastic, paint, food and other waste wound up in U.S. waterways.

Most of the cases were minor and accidental, but prosecutors have regularly pursued criminal charges against the industry from Florida to Alaska.

Under pressure from Alaska lawmakers, some leading cruise lines pledged last year to follow recycling and waste discharge guidelines set by the industry's International Council of Cruise Lines or risk losing their membership.

Several cruise lines, including Carnival subsidiaries, were fined by the state for violations of air quality standards in 2000 and 2001. The biggest penalty was paid by Holland America, which was fined $110,000 with $82,500 suspended contingent on no violations by the Veendam in 2002.

Millions of dollars has been committed by cruise companies in recent years to improving their onboard air and water pollution control.



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