© Andy Newman/Carnival Cruise Lines via Getty Images
In a scheme where a cruise line cut corners and dumped oil-contaminated water into the ocean, the Caribbean Princess was caught soiling the Queen's water.

The U.S. government has slapped Carnival Corp.-owned cruise line Princess Cruises with an unprecedented $40 million penalty for illegally dumping oily water into the ocean off the coast of England in 2013 and trying to cover up the crime. Investigators later found the discharge was likely one of several instances where the ship spewed pollution into the Atlantic, including off the shores of U.S. ports from Texas to South Florida and along the Eastern Seaboard in 2012 and 2013.

Federal prosecutors called the sum the largest-ever settlement for a case where a vessel was deliberately polluting the environment. On Thursday, Assistant Attorney General John C. Cruden told reporters in Miami that the settlement is a clarion call to the cruise industry to follow international environmental laws.

"We are sending a strong message with this case to the entire industry," he said. "The message is that lying to the U.S. Coast Guard and polluting the marine environment will be identified, investigated and prosecuted."

Prosecutors charged Princess Cruise Lines, headquartered in Santa Clarita, California, and owned by Doral-based Carnival Corp., with seven felonies after a years-long investigation that began with a single whistleblower in 2013. Pending approval in federal court, Carnival Corp. will pay a $40 million penalty — $10 million of which will be directed to community-service programs that will benefit the maritime environment — and undergo five years of court-supervised environmental compliance monitoring aboard 78 ships from its 101-ship fleet.

Cruise ships are required to abide by international standards for discharging oily water that drips from the ship engine's lubrication and fuel system. Onboard filtration systems separate oil from water, removing enough contamination to make the water legally OK to pump overboard.

That didn't happen on the Caribbean Princess.

In August 2013, an engineer on the ship documented the crime with a cellphone and reported it to authorities in the United Kingdom, triggering an international investigation. To avoid the costs of properly offloading the oily water, supervising engineers on the 3,142-passenger Caribbean Princess instructed workers to bypass the ship's filtration system.

Using an improvised workaround called the "magic pipe," about 4,200 gallons of dirty water were rerouted to a tank that eventually discharged into the water off the coast of the U.K. A newly-hired engineer took pictures of the "magic pipe" in use and then when it was removed before a mandatory inspection. He then quit when the ship reached Southampton, England, and took the evidence to the British Maritime and Coastguard Agency.

The cover-up, ordered by the ship's chief engineer and senior first engineer, included falsified records meant to appease government inspectors. The ship's monitoring system would have normally detected high oil content and prevented improper discharge. But engineers tricked the system into thinking oily water was being treated by pouring saltwater into a separator, creating readings from monitors.

"We are extremely disappointed about the inexcusable actions of our employees," Princess said in a statement. "This settlement clearly shows that we fell short on our commitment to the environment, and for this we are very sorry and we take full responsibility."

The line said that it cooperated with the U.S. Department of Justice and the U.S. Coast Guard when it became aware of the incident in August 2013. Since then, Princess has restructured its fleet operations organization with new leadership and upgraded equipment. The employees involved in the incident were fired.

The investigation determined that the practice had been happening on the Caribbean Princess since 2005 and was also found on four other Princess ships. All in all, the amount of contaminated water that was pumped into the sea is unknown.

"The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida," said U.S. Attorney Wifredo Ferrer. "Our hope is that all companies abide by regulations that are in place to to protect natural resources and prevent environmental harm."

In the late 1990s and early 2000s, Carnival and several other cruise lines came under fire for a slew of environmental violation cases. In all, Carnival Corp. lines Carnival Cruise Line and Holland America Line were fined a combined $20 million, Royal Caribbean International was fined $27 million, and Norwegian Cruise Line another $1.5 million across multiple, similar lawsuits involving illegal oil dumping during that time period.

"I see this as a continuation of the same practices that have happened in the past," said Miami-based maritime lawyer Jim Walker. "Princess just continued doing it from that time period until 2013, when this engineer blew the whistle on them."

Princess Cruises scored a "C" on Friends of the Earth's annual report card. The international organization, which is composed of a network of environmental groups from 75 countries, has generally rated all the cruise lines, save Disney Cruise Line, as average or below average for its environmental footprint. Princess has slipped from an average of a "B" over the last seven years.

Perhaps ironically, the violations come at a time when cruise lines are more focused on environmentally friendly procedures than ever before.

Carnival Corp., in fact, was the first to begin ordering ships powered by liquified natural gas, the cleanest-burning fossil fuel. Seven of its ships on order from brands AIDA Cruises, Costa Cruises, Carnival Cruise Line and P&O Cruises UK will be LNG-powered by 2022. Miami-based Royal Caribbean International's new Icon class will also feature all LNG-powered ships, which are planned for deployment in 2022 and 2024.

Cruise industry expert Stewart Chiron said the assumption that there is an "industry-wide conspiracy to pollute the oceans" is unfounded, particularly with current efforts to better care for the environment.

"[The ocean] is where they live; this is where they make their money," Chiron said. "And to not be good citizens on the oceans is just completely contradictory."


Comment: Sounds like damage control after being caught red-handed multiple times.


Changes in global environmental regulations have also pushed the lines to make changes.

For instance, the cruise lines have to abide by a regulation instated by the International Convention for the Prevention of Pollution from Ships requiring that ship fuels release no more than 0.5 percent sulfur content. The cap is set for implementation in 2020 but may be deferred until 2025. LNG allows the lines to meet the cap for their upcoming vessels.

But John Kaltenstein, senior policy analyst for Friends of the Earth, said in a statement that Princess' behavior proves the industry's "claims of environmental responsibility" can't be taken at face value.

"Systems can be avoided or deactivated so that untreated waste flows right into the sea," Kaltenstein said. "The discharge of oil into our oceans is extremely harmful to marine life and can have long-lasting environmental and economic repercussions. For years, Friends of the Earth has been saying that this sector is not as green as it claims to be."