The plea was related to failure to establish and maintain an independent internal investigative office, according to the US Department of Justice (DOJ).
Besides the fine, Princess will be required to undertake measures to ensure that it and Carnival Corp. & plc establish and maintain the independent internal investigative office known as the Incident Analysis Group.
Stems from 2017 conviction
Princess was convicted and sentenced in April 2017 and fined $40m after pleading guilty to felony charges stemming from its deliberate dumping of oil-contaminated waste from one of its vessels and intentional acts to cover it up. This remains the largest-ever criminal fine for intentional pollution from ships.
While serving five years of probation, all Carnival Corp. ships trading in the US were required to comply with a court-approved and supervised environmental compliance plan, including audits by an outside and independent third-party auditor and oversight by a court-appointed monitor.
2019 probation violations
In 2019, Princess was convicted of six violations of probation, fined an additional $20m,and required to undertake more remedial measures. In that case, two violations involved interfering with the court’s supervision of probation by sending undisclosed teams to ships to prepare them for the independent inspections required during probation. Documents filed in court 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.
DOJ said that beginning with the first year of probation, there have been repeated findings that the company’s internal investigation program was and is inadequate. In November 2021, the Office of Probation issued a petition to revoke probation after adverse findings by the third-party auditor and oversight by a court-appointed monitor.
Company culture faulted
In an October 2021 letter to US District Court Judge Patricia A. Seitz, the third-party auditor and oversight by a court-appointed monitor concluded that the continuing failure 'reflects a deeper barrier: a culture that seeks to minimize or avoid information that is negative, uncomfortable or threatening to the company, including to top leadership (i.e., the board of directors, C-suite executives and brand presidents/CEOs).'
A joint factual basis for the guilty plea was submitted to the court in which Princess and Carnival admitted to the failure to establish and maintain an independent investigative office. Princess admitted internal investigators had not been allowed to determine the scope of their investigations, and that draft internal investigations had been impacted and delayed by management.
The plea agreement and factual statement were signed by Carnival Corp. Chairman Micky Arison and CEO Arnold Donald, who both attended the hearing.
Changes required under a plea agreement resolving the probation violation include a restructuring so that Carnival's investigative office reports directly to a committee of Carnival’s board, its internal investigative office must be given the authority to initiate investigations on its own and to determine their scope, and management will be restricted in its ability to remove the head of the Incident Analysis Group that performs internal investigations.
In addition, Carnival must conduct an assessment to ensure independent investigators have sufficient resources and must assess the effectiveness of required changes and correct deficiencies.
A number of actions already implemented
The company in a statement said it had already implemented a number of changes, even prior to the order, to improve in the area of internal investigations. Carnival added it would 'strive for excellence in compliance, environmental protection and the health, safety and well-being of our guests, the people in the communities in which we operate and our shipboard and shoreside personnel.'