Carnival Cruise Lines Hit with $20M Penalty for Environmental Crimes(npr.org)
npr.org
Carnival Cruise Lines Hit with $20M Penalty for Environmental Crimes
https://www.npr.org/2019/06/04/729622653/carnival-cruise-lines-hit-with-20-million-penalty-for-environmental-crimes
58 comments
Every time there is a discussion about climate change or environment in general on HN, any suggestion to tackle the problem by reducing consumption and industrial production is rejected on the basis that it will effect the quality of life. If cruise trip is your idea of quality of life - I don’t know what to say.
I agree completely. Cruise ship tourism is disgusting.
Bring your culture with you to insulate yourself from anything that might make you uncomfortable and pollute at an absurd scale the entire time.
Bring your culture with you to insulate yourself from anything that might make you uncomfortable and pollute at an absurd scale the entire time.
Meanwhile Carnival will not hire you to work on a ship if you have tattoos because they are afraid of the image it will portray.
Cruise lines and the people that support them with their wallets are an environmental scourge that perpetuate the worste aspects of tourism.
Cruise lines and the people that support them with their wallets are an environmental scourge that perpetuate the worste aspects of tourism.
It looks like the writer used the first name where the last name is more appropriate. He's introduced as "Carnival CEO Arnold Donald", and at the next mention, it's "'I sincerely regret these mistakes. I do take responsibility for the problems we had,' Arnold told the judge."
> "The environment needs to be a core value, and I hope and pray it becomes your daily anthem."
Strong words from the judge on a fine that's less than 1% of the company's annual profits and about 0.1% of the company's annual revenue.
These fines need to be a percentage of revenue (with a large floor). Not some random number that's a drop in the bucket for most corporations committing these crimes in the first place. As it stands, these fines are (in many instances) less expensive than correcting the issue that caused the fines in the first place.
Strong words from the judge on a fine that's less than 1% of the company's annual profits and about 0.1% of the company's annual revenue.
These fines need to be a percentage of revenue (with a large floor). Not some random number that's a drop in the bucket for most corporations committing these crimes in the first place. As it stands, these fines are (in many instances) less expensive than correcting the issue that caused the fines in the first place.
> These fines need to be a percentage of revenue (with a large floor). Not some random number that's a drop in the bucket for most corporations committing these crimes in the first place. As it stands, these fines are (in many instances) less expensive than correcting the issue that caused the fines in the first place.
Rather than fines, it is more effective to withdraw operating licenses (temporarily) and ask for corrective actions to be taken before operations resume.
Rather than fines, it is more effective to withdraw operating licenses (temporarily) and ask for corrective actions to be taken before operations resume.
The article mentioned that the judge threatened to stop Carnival from docking in US ports. That seems like it would have been pretty effective at getting companies to pay attention.
Shutting them out of the US wouldn't change much. It would stop their Alaska cruises, but everything else is mostly non-US countries. It is somewhat common to have fly to some non-US country to get on your cruise already. Those who drive to Texas or Florida to get one will be harmed, but for everyone else they are already flying so where they fly to is just a detail.
The real losses are to the US cities (in Florida, Texas, California, and Puerto Rico) that lose the tourism trade.
Now if other countries like Jamaica get on board things would change fast - but here is a case of each country acting alone loses, only by acting with others do they win. (and there is reward for cheating: if everyone else enforces this and you say you will but don't you get the tourism trade).
Of course if Carnival's customers start caring that will drive changes.
The real losses are to the US cities (in Florida, Texas, California, and Puerto Rico) that lose the tourism trade.
Now if other countries like Jamaica get on board things would change fast - but here is a case of each country acting alone loses, only by acting with others do they win. (and there is reward for cheating: if everyone else enforces this and you say you will but don't you get the tourism trade).
Of course if Carnival's customers start caring that will drive changes.
Carnival is a horrible unethical company. Our nation would be lucky to be rid of them.
Also, a corporate structure shouldn't shield you from criminal prosecution. The company pled guilty to multiple felonies... why aren't the executives facing criminal action, given that event the judge thinks they're not taking their responsibilities seriously?
i feel these "fines" should scale both with the companay's revenue and how much they saved in performing the violation. so at a minimum, the fines should be at least as much as they saved and then increased even more in line with severity of the violation and revenue.
edit: i see your edit now, which is what i am saying, but i'll leave it.
edit: i see your edit now, which is what i am saying, but i'll leave it.
The fine should be 10x the actual cost to properly dispose it, it might be a better "deal" to just get the fine than to properly do the job.
Just like how all the massive big pharma fines which consistently continue to happen every year will changes things? (this list only goes until 2013).
https://en.wikipedia.org/wiki/List_of_largest_pharmaceutical...
https://en.wikipedia.org/wiki/List_of_largest_pharmaceutical...
A $20M fine on $18B in revenue is a penalty of 0.001%. The equivalent fine for the average US household is $62.70, or a meal with a couple of drinks at an average restaurant. It won't even be noticed.
They should be required to clean the ocean of 100x the amount of waste that was dumped in addition to a $200M fine.
And thus why the GDPR has such big scary possible maximum fines.
Exhaustive list of cruise ship environmental violations and penalties (although I believe there must be another list of penalties for damages to reefs by cruise lines, because I recall multiple fines in the past for $10’s of millions, a this list is noticeably absent high dollar penalties/fines):
http://www.cruisejunkie.com/envirofines.html
http://www.cruisejunkie.com/envirofines.html
Should add "Repeated" to the title. They had already gotten in trouble in the past for dumping in the ocean, and continued to do it...
Sadly that's what happens when the "penalty" is a laughable fine in their big picture.
Yes, but surely a repeated offense demonstrates criminal responsibility (or negligence at least) on behalf of the C-suite ... which they could counter by demonstrating exactly what they had personally done to ensure preventative changes were in place (like inspected waste in person; checked training had been carried out, in person; made sure informational posters were in place onboard vessels, in person).
Don't judges give heavy punishment for third strike, to individuals? Why isn't this applicable to companies (or is it)?
In the case of environmental crimes like this, the every time the fine should be 10X the previous one, considering our planet is already fucked with climate change.
In the case of environmental crimes like this, the every time the fine should be 10X the previous one, considering our planet is already fucked with climate change.
>Why isn't this applicable to companies (or is it)?
Because companies != people, except in the cases where it is convenient for politicians.
Because companies != people, except in the cases where it is convenient for politicians.
And they will do it again, as long as they can keep getting away with it with token fines.
"Miami-based Carnival pleaded guilty Monday to six probation violations, including the dumping of plastic mixed with food waste in Bahamian waters. The company also admitted sending teams to visit ships before the inspections to fix any environmental compliance violations, falsifying training records and contacting the U.S. Coast Guard to try to redefine what would be a "major non-conformity" of their environmental compliance plan."
So not only did they knowingly dump plastic waste into the ocean, but they also actively tried to cover it up, implying they were fully aware of being guilty. And they get a paltry fine with no one going to jail for this criminal charge?
At this point the judge is just as guilty for allowing this behavior to continue.
So not only did they knowingly dump plastic waste into the ocean, but they also actively tried to cover it up, implying they were fully aware of being guilty. And they get a paltry fine with no one going to jail for this criminal charge?
At this point the judge is just as guilty for allowing this behavior to continue.
"The company also admitted sending teams to visit ships before the inspections to fix any environmental compliance violations, falsifying training records and contacting the U.S. Coast Guard to try to redefine what would be a "major non-conformity" of their environmental compliance plan."
Unreal - I couldn't imagine being on those "teams"... your task for the day/week is literally to commit fraud. Wow.
Unreal - I couldn't imagine being on those "teams"... your task for the day/week is literally to commit fraud. Wow.
Sending teams to fix problems ahead of inspectors is a strange charge, I wish they provided more detail on that. Self policing and fixing problems is exactly what corporate should have been doing.
This sounds like they only did the self policing ahead of inspection, and as soon as it passed it was business as usual, which is not how a company should behave.
This is how literally every "inspection" of everything ever works at scale.
"Oh, the X department has a review coming up, better send the X review prep team to make sure X is Xing like they should and light a fire under their ass to fix it if not".
Sure X is supposed to be ensuring compliance continuously but we all know where that falls on the priority list so hence things only ever get fixed in the pre-inspection inspection.
Edit: Yes I know they falsified records. I'm talking about the general case here.
"Oh, the X department has a review coming up, better send the X review prep team to make sure X is Xing like they should and light a fire under their ass to fix it if not".
Sure X is supposed to be ensuring compliance continuously but we all know where that falls on the priority list so hence things only ever get fixed in the pre-inspection inspection.
Edit: Yes I know they falsified records. I'm talking about the general case here.
To be fair random inspection is the only (albeit imperfect) way to work. If you give notice you are easy to game.
That said I remember teachers doing lessons specifically because an unplanned school inspection was happening. Some things can still be gamed. Perhaps the only option is find a way to measure continuously if at all possible, and make sure the risks are high enough to not be worth taking...
What else? Probably make it financially better to go above and beyond environmentally? So it's not a cost centre.
That said I remember teachers doing lessons specifically because an unplanned school inspection was happening. Some things can still be gamed. Perhaps the only option is find a way to measure continuously if at all possible, and make sure the risks are high enough to not be worth taking...
What else? Probably make it financially better to go above and beyond environmentally? So it's not a cost centre.
Except they were also falsifying training records.
No one goes to jail because we're talking about littering. It's just not a big enough deal. Given the severity of the underlying crime, a $20M fine is massive.
Have you seen the Bahamas lately?
Between the cruise ships and massive resorts they have killed the entire ecosystem.
Between the cruise ships and massive resorts they have killed the entire ecosystem.
Covering up environmental compliance violations and falsifying training records is a much bigger deal than littering. This is more akin the Volkswagen emissions scandal.
Elizabeth Warren's proposal to prosecute CEOs for corporate misconduct would be put to good use here. https://www.vox.com/policy-and-politics/2019/4/3/18294308/el...
Elizabeth Warren's proposal to prosecute CEOs for corporate misconduct would be put to good use here. https://www.vox.com/policy-and-politics/2019/4/3/18294308/el...
The falsifying seems to be isolated incidents on two cruise ships. It is relegated to a third bullet among “other conduct” in the DOJ press release: https://www.justice.gov/opa/pr/princess-cruise-lines-and-its....
So they falsified records with intent to deceive law enforcement twice? Seems pretty bad.
“They” is random employees on two ships.
Is the company not responsible for the actions of its employees? If so, are the responsible employees going to jail?
There is no evidence that the company itself knew about or encouraged that falsification. If there was, the DOJ press release would have mentioned it. The employees could be prosecuted, but federal prosecutors generally don’t go after such low level conduct.
And once again, serious crimes are committed and nobody suffers any serious consequences.
I’m also curious, what is “the company itself” other than its employees? What part of a company is capable of knowing things besides the people in it?
I’m also curious, what is “the company itself” other than its employees? What part of a company is capable of knowing things besides the people in it?
The obvious distinctions would be between management and line/staff workers, between executive management and line management, and between executive management and the board.
The typical implication of "the company" "knowing" things would be executive management (and, if the conduct actually involved executive managers, the board).
The typical implication of "the company" "knowing" things would be executive management (and, if the conduct actually involved executive managers, the board).
Probably not; the threshold you have to cross under Warren's hypothetical proposal is, while lower than the current one, still pretty high, and weirdly specific: Carnival would essentially have to already be operating under a judgement or consent decree covering this conduct, and a specific executive officer would have to do something meeting the four tests for legal negligence that either violated the judgement they were under, or otherwise resulted in harm the health or privacy of at least 3.3 million people.
Warren did not propose the "CEOs of companies we dislike can be sent to prison if anything bad happens" bill.
Warren did not propose the "CEOs of companies we dislike can be sent to prison if anything bad happens" bill.
A high bar sounds fine to me.
>Covering up environmental compliance violations and falsifying training records is a much bigger deal than littering.
So it's not the littering/pollution that's the important crime, it's daring to lie to the government that's the important crime?
Yes, littering is bad and the fine is too small for a company this size but the fact that people see failing to <cartman>"respect my authority"</cartman> as the true crime here does not sit well with me.
So it's not the littering/pollution that's the important crime, it's daring to lie to the government that's the important crime?
Yes, littering is bad and the fine is too small for a company this size but the fact that people see failing to <cartman>"respect my authority"</cartman> as the true crime here does not sit well with me.
It’s a bit more than just “littering”..
And $20M might be massive to you, but it’s a drop in the bucket for Carnival. It allows them to incorporate these practices into their business model, as long as they’re kept beneath their economic threshold.
And $20M might be massive to you, but it’s a drop in the bucket for Carnival. It allows them to incorporate these practices into their business model, as long as they’re kept beneath their economic threshold.
$20M is .106% of Carnival's 2018 revenue and .047% of their assets. It's also only 1.5yrs worth of CEO compensation.
Definitely not "massive" for Carnival's scale if their company is operating in the $billions.
A $500 littering fine for the average person making $50k/yr is 10x more of a hit than what Carnival was slapped with for dumping magnitudes greater of trash into the ocean knowingly.
Plus someone is going to have to deal with fixing Carnival's mess. All Carnival had to do was write a check and send out a memo saying "Try harder to not get caught next time guys".
Definitely not "massive" for Carnival's scale if their company is operating in the $billions.
A $500 littering fine for the average person making $50k/yr is 10x more of a hit than what Carnival was slapped with for dumping magnitudes greater of trash into the ocean knowingly.
Plus someone is going to have to deal with fixing Carnival's mess. All Carnival had to do was write a check and send out a memo saying "Try harder to not get caught next time guys".
$20m is probably less than their annual toilet-paper budget.
People need to wake up to the fact that "littering" is no longer a minor crime in the world we live in. I see it as tantamount to murder, given the environmental damage it causes.
I am shocked by none of this after reading The Outlaw Sea. Regulation of ocean-going entities like Carnival is a fig leaf, a pretense at civilization and the rule of law.
: https://books.google.com/books/about/The_Outlaw_Sea.html?id=...
: https://books.google.com/books/about/The_Outlaw_Sea.html?id=...
I'm reminded of when Walmart opened in a town near where I grew up. There was some local law they were in violation of and hadn't yet gotten around to fixing (whatever it was, I forget). They were told "We will fine you X dollars per day that you are open and in violation".
They said "Sounds good. Send us the bill each month and we'll pay it."
They were just making so much money that it was more profitable to pay the fines and leave the problem as is than it was to fix the problem.
They said "Sounds good. Send us the bill each month and we'll pay it."
They were just making so much money that it was more profitable to pay the fines and leave the problem as is than it was to fix the problem.
Sounds similar to a story I was told about Disneyland and how they just paid the fines to the city every time they ran fireworks rather than trying to get permits. No idea how accurate it is but it seems reasonable enough.
$20m penalty is like "you may go but please don't do that". Same effect (which is none).
> At the time, Princess told NPR that it chalked up the violations to "the inexcusable actions of our employees."
As long as they blame employees and not process, is there any reason to believe things will change?
As long as they blame employees and not process, is there any reason to believe things will change?
If they fire the employee who dumps the trash every time trash is dumped, then at some point they'll either have to not have the employees dump the trash or else no be able to find anyone who wants to work for them.
But it seems like that's not going to happen either.
But it seems like that's not going to happen either.
This is one of those industries where we're just externalizing costs. Cruises as a whole definitely need to be more expensive to reflect the environment costs associated with not just the boats, but the wanton consumption that happens on these trips -- at sea and and at their destinations.