Carnival Corp pleaded guilty to violation

[ajcruiser]

To quote from the news feed: " Carnival Corp. reached a settlement Monday with federal prosecutors in which the world’s largest cruise line agreed to pay a $20 million penalty because its ships continued to pollute the oceans despite a previous criminal conviction aimed at curbing similar conduct. "

 

Despite reassurances to the contrary the Carnival Corp executives admitted that the dumping did occur and that documents were falsified.

 

Link to the article:  https://www.usatoday.com/story/travel/news/2019/06/04/carnival-cruise-lines-pleads-guilty-continued-pollution-fined-20-m/1337198001/

[*Miss G*]

Ouch.

 

Will be interesting to see how this closes.

 

[richwmn]

Most likely $20 million is much less than it would have cost in legal fees and other considerations.

Settle now and get it out of the public's eye, or fight it and have it part of the daily news for months or years. Which would you do?

 

[Sir PMP]

13 minutes ago, ajcruiser said:

To quote from the news feed: " Carnival Corp. reached a settlement Monday with federal prosecutors in which the world’s largest cruise line agreed to pay a $20 million penalty because its ships continued to pollute the oceans despite a previous criminal conviction aimed at curbing similar conduct. "

 

Despite reassurances to the contrary the Carnival Corp executives admitted that the dumping did occur and that documents were falsified.

 

Link to the article:  https://www.usatoday.com/story/travel/news/2019/06/04/carnival-cruise-lines-pleads-guilty-continued-pollution-fined-20-m/1337198001/

Unbelievable that they are getting away with this again...

[Tampa Girl]

12 minutes ago, *Miss G* said:

Ouch.

 

Will be interesting to see how this closes.

 

 

13 minutes ago, *Miss G* said:

Ouch.

 

Will be interesting to see how this closes.

 

 

If what you are suggesting is that this settlement will have any effect on the price, I doubt it.  Right now there are too many extraneous factors going on, unrelated to Carnival, hich will have more effect.

[ski ww]

You would think they would learn and pass the word to the fleet. Sounds like the word is not getting through or people are just ignoring it. They should make the fines bigger.

[drowelf]

1 hour ago, *Miss G* said:

Ouch.

 

Will be interesting to see how this closes.

 

I doubt it would have any effect. $200 Million or being banned from US ports would cause the stock to take a hit. $20M is nothing to company the size of CCL. Net Income in 2018 was ~$3.2B, so $20M is only 0.625%.

 

And the stock is at $52.04 at the moment. 

 

[chengkp75]

2 hours ago, Sir PMP said:

Unbelievable that they are getting away with this again...

What I take to heart is the potential for daily fines if the company does not meet benchmarks set by the DOJ, the judge, the court appointed monitor, the third party monitor, and "interested parties" like the USCG.  I am also heartened by the words of the judge who will take over this case in September:

 

District Judge Ursula Ungaro, who will preside over the case after Seitz retires in September, had tough words for Peter Anderson, a consultant whom Carnival Corp. is considering for the new role of chief compliance officer.

“I feel like we’re starting at square one, and this has been going on since 1993,” Ungaro said, citing Princess Cruises’ 1993 conviction for illegally dumping plastic bags filled with garbage overboard. (Carnival Corp. acquired Princess Cruises in 2003.) “This has been going on since 1993 and we’re sitting here talking about food waste mixed with plastic, it’s incredible. I hope you all appreciate that.” 

[Aquahound]

Carnival Corp's mandate to reduce food waste and reduce plastics = some very entertaining future threads, similar to the $10 extra entree fee.  Just wait..... 😉

[Krazy Kruizers]

Thank you for the information.

 

Will be interesting to see actually what will happen.

[iancal]

That fine is a drop in the bucket to Carnival Corp.  Just divide $20 mil by the 100 plus ships under the Carnival Corp or by the number of cruise lines in their family of brands.   It works out to under $200K per ship in the fleet.  Divide that again by the number of cruises each ship will do in a year.  Very small fine that appears at first blush to be large.  It is not.  The folks that Carnival  employ to lobby are earning their keep!

 

We will pay for it, not the shareholders.  Perhaps an extra ten cents on a drink or a 50 cents a day on internet rates across all lines in the fleet.

 

Does anyone really think earnings per share will suffer?  Never...executive bonuses, RSU's, and options are based on short term stock prices, revenue, and earnings per share.  That $20 mil will be lost in the haze.

Edited June 4, 2019 by iancal

[SunNFunCruzer]

 

Disgusting.

 

Dumping Grey Water in Glacier Bay ... it's like spaying the Goose that Lays the Golden Egg.

 

A corporation pays Another $20 mil And the world weeps....  😞😞😞😞😞😞😞 

[slidergirl]

15 minutes ago, SunNFunCruzer said:

 

Disgusting.

 

Dumping Grey Water in Glacier Bay ... it's like spaying the Goose that Lays the Golden Egg.

 

A corporation pays Another $20 mil And the world weeps....  😞😞😞😞😞😞😞 

Not even a slap on the wrist - more like a tap on the palm with a feather.    I was one who was hoping for some sort of ban on cruising Alaska for a year or two, with one ship of each Carnival brand having to take the ban.  And, denying access to Glacier Bay for all ships of all Carnival brands for at least 5 years...  

[DeeniEncinitas]

To me this is terrible on Carnival’s part!!!

I sure  wish it was more!!! To me it’s a slap on the hands. First of all we have enough 

pollution in our wonderful waters with oil spills pollution from other countries waste products as well as our own!! I’m very sad about this with them!

Sorry for my rant I really thought Carnival was soooo much better than this!

Denise☹️

[Paulinda]

Shame on Carnival for being such  poor stewards of our water.  I would hope that whomever is responsible at the highest level is no longer part of Carnival and that steps have been taken to prevent any future acts like this.   A $20 million fine is nothing and will no doubt be paid by us future cruisers with higher rates and not the individuals who perpetrated the dumping.  It would be justice for Carnival corporate managers to forgo all bonuses til the fine is paid.  Since 1993?  Seriously! 

[TAD2005]

Carnival's bean counters beats up on the individual ships in their fleet to cut costs.   So they cut costs by reducing the expense of gray water and oil disposal.  The fish stinks from the head.   Hopefully Carnival has learned a lesson, but with a $20 Million fine, I doubt it.  Chump change for Carnival.   

[rkacruiser]

As a long time CCL investor and one who cares about our environment, this admission of guilt by Mr. Donald disturbs me.  What are the individuals who actually operate the ships actually being told to do/not do?  Has the Company become so large that Corporate messages/directives/priorities are not being understood by the on-board personnel?  If so, why is this?  Are there so many levels of Executive V-Ps, Senior V-Ps, etc. that the messages directed by the Board of Directors and the most senior level of Management become so diluted that the on-board personnel don't know "what the H&*L" they are talking about?  It is a FACT that I have heard from more than one Captain that they are swamped by paperwork "required" by the Home Office.  (I interpret that to mean:  some "functionary" in the chain of command wants this/that/or the other to be done.)

 

I have participated in many Behind the Scenes Tours on HAL and Carnival ships visiting the areas involved with trying to protect the environment.  I have heard the concerns that those Department Heads as well as the Chief Environmental Officer aboard during those tours as well as during individual presentations during a cruise express.  What they say are heartfelt.  Or, am I being gullible?

 

My (our) cruising experience has changed because of what has been attributed to "concerns about the environment".  

 

Anyone who follows Captain Albert's blog knows that HAL (and no doubt the other operating Companies) employ roving Officers to help the individual ships meet the audit standards that are "expected".  Maybe more such personnel are required with more frequent audits would help.

 

Maybe the bigger issue in this discussion is that the U.S. is again facing monopolies.  President Theodore Roosevelt was a "trust buster".  I'm not suggesting that we now have that type of situation as the "trusts" were.  But, we experienced a "too big to fail" situation in the banking industry not so long ago.  I believe history repeats itself and we humans fail to learn from history too often.  Maybe we need another Teddy Roosevelt? 

[chengkp75]

1 hour ago, rkacruiser said:

As a long time CCL investor and one who cares about our environment, this admission of guilt by Mr. Donald disturbs me.  What are the individuals who actually operate the ships actually being told to do/not do?  Has the Company become so large that Corporate messages/directives/priorities are not being understood by the on-board personnel?  If so, why is this?  Are there so many levels of Executive V-Ps, Senior V-Ps, etc. that the messages directed by the Board of Directors and the most senior level of Management become so diluted that the on-board personnel don't know "what the H&*L" they are talking about?  It is a FACT that I have heard from more than one Captain that they are swamped by paperwork "required" by the Home Office.  (I interpret that to mean:  some "functionary" in the chain of command wants this/that/or the other to be done.)

 

I have participated in many Behind the Scenes Tours on HAL and Carnival ships visiting the areas involved with trying to protect the environment.  I have heard the concerns that those Department Heads as well as the Chief Environmental Officer aboard during those tours as well as during individual presentations during a cruise express.  What they say are heartfelt.  Or, am I being gullible?

 

My (our) cruising experience has changed because of what has been attributed to "concerns about the environment".  

 

Anyone who follows Captain Albert's blog knows that HAL (and no doubt the other operating Companies) employ roving Officers to help the individual ships meet the audit standards that are "expected".  Maybe more such personnel are required with more frequent audits would help.

 

Maybe the bigger issue in this discussion is that the U.S. is again facing monopolies.  President Theodore Roosevelt was a "trust buster".  I'm not suggesting that we now have that type of situation as the "trusts" were.  But, we experienced a "too big to fail" situation in the banking industry not so long ago.  I believe history repeats itself and we humans fail to learn from history too often.  Maybe we need another Teddy Roosevelt? 

Mr. Donald's apology was forced by the court.  It has nothing to do with reality.  Carnival's corporate culture does not care about environmental compliance, because it costs money.  And there is no message coming down from the board about environmental issues, there may be comments in the board meeting minutes making noises about compliance, but there are no directives coming from corporate.  And yes, there are sufficient layers that operations managers whose performance bonuses are based on vessel operating costs will give what one poster on another thread calls (and we call it the same thing in the industry) a "wink and a nod" to the ship:  "oh, you have a problem with a piece of environmental equipment, and need to get rid of an unusual amount of oily slops?  Well, if you ask for a barge to dispose of this stuff, we'll get you one, and the new Chief Engineer will meet the ship at the next port".

 

Even the court appointed monitor and the auditor teams state that they feel the onboard crew feel a commitment to the environment, but that it is corporate that does not care.  One of the companies that I've worked for, was placed on DOJ probation, just like Carnival, and one of the basic tenets of our Environmental Compliance Plan was that there was no limit on the environmental budget.  This is something that Carnival has not done, either since the 1993 Princess conviction, nor since being placed on probation.  Carnival did not even give the Compliance Officer any authority to go along with his responsibility to make fiscal decisions regarding compliance like purchasing equipment or training.

[rkacruiser]

33 minutes ago, chengkp75 said:

And there is no message coming down from the board about environmental issues, there may be comments in the board meeting minutes making noises about compliance, but there are no directives coming from corporate.  

 

May I ask how you know this to be the case?

[iancal]

There will probably be an internal message, written or verbal, to all employees to keep their collective mouths shut.  No doubt Carnival will hoping that this will blow over and will be eclipsed by other headlines in the news.

 

It is a shame really.  Just goes to show that profit trumps environment....at least the various Carnival Corp cruise lines.

[TAD2005]

Corporations do not give a flip about environmental issues, because it costs them money that was not anticipated to be spent.   They will hold press conferences and give glowing reports about what they do to protect the environment.  But in the real world, the unspoken word goes out to cut costs, or we will find someone who will.  If they get caught violating the rules, they tie it up in court for years, and end up paying a fine that is peanuts to the company, but it looks good in the press.   The government gets the headlines that they forced the company to pay a huge fine, so they are happy, and the company pays the fine, which is hardly noticed, like this $20 million fine.

[chengkp75]

1 hour ago, rkacruiser said:

 

May I ask how you know this to be the case?

Because of what the auditors found in their report.  The simple fact that the person who was chosen to be the officer in charge of ensuring compliance was given no authority, and this person was chosen by the CEO tells me that there is no concern for the environment at Carnival's top corporate levels.

[rkacruiser]

6 minutes ago, chengkp75 said:

Because of what the auditors found in their report.  The simple fact that the person who was chosen to be the officer in charge of ensuring compliance was given no authority

 

And, how do you know that?

[rkacruiser]

I will agree that auditors will submit their findings to a superior.  That superior will be one who, I imagine, is a lower executive in the corporate food chain who is interested in keeping his/her job and whatever "bonus" that he/she would earn.  But, does that individual really represent what the upper levels of Management expect?

 

Why would a Company--regardless of its size, cash flow, etc.--choose to pay and pay and pay fines when such could be avoided?  Even upper Management would benefit from not having to do so?  It just does not make sense to me.

[chengkp75]

1 hour ago, rkacruiser said:

I will agree that auditors will submit their findings to a superior.  That superior will be one who, I imagine, is a lower executive in the corporate food chain who is interested in keeping his/her job and whatever "bonus" that he/she would earn.  But, does that individual really represent what the upper levels of Management expect?

 

Why would a Company--regardless of its size, cash flow, etc.--choose to pay and pay and pay fines when such could be avoided?  Even upper Management would benefit from not having to do so?  It just does not make sense to me.

The auditors were a third party firm hired by the judge to audit Carnival.  The report given to the judge was a compilation of the auditor teams findings and the Court Appointed Monitor, the person in charge of overseeing compliance for the DOJ and the court.

 

Here is the report of the Court Appointed Monitor for the first year of probation:

 

https://www.dropbox.com/s/cz9pd8uwibtikar/First Annual Report of the Court Appointed Monitor - 2017-2018.pdf?dl=0

 

Now, this is a 205 page report, so you probably won't want to read all of it, though as a shareholder you probably should.  But a look on page 7 will show the CAM's findings of "Unresolved Barriers and Opportunities for Improvement", which should open some eyes.  Then comes the "history" of this case, and it traces back to 1993, when Princess was first convicted of violations, and to 2002 when Carnival was convicted as well.  I'm having a little trouble downloading the document right now, but from previous looks, I believe it is on page 65 where they get into the specifics of the company's compliance officer being given the responsibility for ensuring compliance, without any authority to make decisions or any budget to enable compliance.  As stated, this person was appointed by the CEO, and was supposed to have direct reporting to the CEO with regards to implementation of the ECP.  That doesn't look to me like there was any "message" from top management or the board that environmental compliance was a top priority.

 

Why would Carnival continue to pay fines?  Because, one, they don't believe they will get caught, and two, because they feel the fines are less cost to the bottom line than compliance would be.