Federal Judge considers sanctions affecting Carnival that could affect cruises

[jimbo5544]

8 minutes ago, SRQbeachgirl said:

Does anyone know how many ships in total are under the Carnival Corp umbrella vs how many and which specific ships are named for repeated violations?

 

I'm curious because--if these continued violations are the result of a top-down culture of flaunting the laws--you would think the violations would be widespread across all the lines and ships. On the other hand, if the repeated violations are limited to a couple of ships in each cruise line, it would seem to be more indicative of specific persons on specific ships saying "pfft--I'm not wasting my time doing things the hard (right) way."

 

As an executive manager in a large organization, I know that, even when we provide proper direction, there will always be people below us who are too lazy/stubborn/indifferent...that they aren't going to go out of their way to do something if it means extra work. Those people have to be weeded out, but that is not a quick process.

I believe there are 102 ships, I am

sure one of my friends will correct me of I

am Wrong.  I did not read the entire article or know if any were repeat offenders. Someone can chip in on that also.  

[greykitty]

Back in the Enron days, I know many of us figured AA's best chance was for the specific engagement executives as well as most, if not all, of the national/global management to voluntarily quit, throw the firm on the mercy of the court, and bring in management from other firms as well as accept whatever oversight the feds desired.  Basically, don't mess with the feds.  As I remember, they kind of went with the too big to fail, don't sanction the entire firm because it'll hurt so many innocent employees, etc.    And you may remember AA was often considered the leader of the Big 8, in reputation if not always in size.

 

Now, my memory may be playing tricks, so please advise if I'm wrong on the sequence.  I simply don't believe there really is any corporation that is necessarily too big to fail, especially if management thumbs their noses at federal officials.  Could be wrong, though...

[Organized Chaos]

51 minutes ago, SRQbeachgirl said:

Does anyone know how many ships in total are under the Carnival Corp umbrella vs how many and which specific ships are named for repeated violations?

 

I'm curious because--if these continued violations are the result of a top-down culture of flaunting the laws--you would think the violations would be widespread across all the lines and ships. On the other hand, if the repeated violations are limited to a couple of ships in each cruise line, it would seem to be more indicative of specific persons on specific ships saying "pfft--I'm not wasting my time doing things the hard (right) way."

 

As an executive manager in a large organization, I know that, even when we provide proper direction, there will always be people below us who are too lazy/stubborn/indifferent...that they aren't going to go out of their way to do something if it means extra work. Those people have to be weeded out, but that is not a quick process.

 

I think there's just over 100 ships sailing under Carnival Corp. I don't know how many were involved in violations while on probation, but the article the OP posted lists several of them across multiple cruise lines. Go back and read some of chengkp75's posts. He's familiar with the shipping industry and spoke a little bit about corporate accountability and how some of the execs can be held responsible. And have been held responsible in similar situations with other companies.

 

Their probation stemmed from Princess ships (I don't know how many) illegally dumping oil over a period of 8 years. That was just one cruise line. I find it hard to believe they could do that for so long without that knowledge working its way up the chain.

[jimbo5544]

3 hours ago, greykitty said:

Back in the Enron days, I know many of us figured AA's best chance was for the specific engagement executives as well as most, if not all, of the national/global management to voluntarily quit, throw the firm on the mercy of the court, and bring in management from other firms as well as accept whatever oversight the feds desired.  Basically, don't mess with the feds.  As I remember, they kind of went with the too big to fail, don't sanction the entire firm because it'll hurt so many innocent employees, etc.    And you may remember AA was often considered the leader of the Big 8, in reputation if not always in size.

 

Now, my memory may be playing tricks, so please advise if I'm wrong on the sequence.  I simply don't believe there really is any corporation that is necessarily too big to fail, especially if management thumbs their noses at federal officials.  Could be wrong, though...

Good points, not sure, but I thought the reason for the divestment was that their “processes” were found to be flawed across the enterprise and that les to

many examples of potential fraud and gross mismanagement way beyond enron.  I think I remember the verdicts being reversed and a core group becoming Accenture.  

Edited April 20, 2019 by jimbo5544

[chengkp75]

3 hours ago, SRQbeachgirl said:

Does anyone know how many ships in total are under the Carnival Corp umbrella vs how many and which specific ships are named for repeated violations?

 

I'm curious because--if these continued violations are the result of a top-down culture of flaunting the laws--you would think the violations would be widespread across all the lines and ships. On the other hand, if the repeated violations are limited to a couple of ships in each cruise line, it would seem to be more indicative of specific persons on specific ships saying "pfft--I'm not wasting my time doing things the hard (right) way."

 

As an executive manager in a large organization, I know that, even when we provide proper direction, there will always be people below us who are too lazy/stubborn/indifferent...that they aren't going to go out of their way to do something if it means extra work. Those people have to be weeded out, but that is not a quick process.

As I've said before, the shipboard people don't wake up one day and say "I'll save the company a lot of money by doing something that could get me thrown in jail, fined beyond my means, and lose my livelihood for ever.  Yep, that's what I'm going to do!"  No, what happens is that the shipboard personnel say to the corporate managers "we had a problem, and need to get rid of some waste, can you arrange for this at the next port?" and the manager says, "sure, we'll arrange to get the waste off the ship, and there will be a new Chief Engineer joining at that port as well, your services are no longer required."  In fact, doing things the right way as far as environmental issues are concerned is the easy way, if corporate culture understands the concept of environmental stewardship and personal and corporate responsibility.  You have to work at it, to do the illegal things and get away with it.

[jimbo5544]

21 minutes ago, chengkp75 said:

As I've said before, the shipboard people don't wake up one day and say "I'll save the company a lot of money by doing something that could get me thrown in jail, fined beyond my means, and lose my livelihood for ever.  Yep, that's what I'm going to do!"  No, what happens is that the shipboard personnel say to the corporate managers "we had a problem, and need to get rid of some waste, can you arrange for this at the next port?" and the manager says, "sure, we'll arrange to get the waste off the ship, and there will be a new Chief Engineer joining at that port as well, your services are no longer required."  In fact, doing things the right way as far as environmental issues are concerned is the easy way, if corporate culture understands the concept of environmental stewardship and personal and corporate responsibility.  You have to work at it, to do the illegal things and get away with it.

I would not question your knowledge or passion, but that is pretty holistic view. I cannot argue what is right but I still cannot get to willful premeditation, covering and falsifying yes, but they really are different. 

Edited April 20, 2019 by jimbo5544

[greykitty]

1 hour ago, jimbo5544 said:

Good points, not sure, but I thought the reason for the divestment was that their “processes” were found to be flawed across the enterprise and that les to

many examples of potential fraud and gross mismanagement way beyond enron.  I think I remember the verdicts being reversed and a core group becoming Accenture.  

Accenture was basically the consulting arm spinning itself off (a lot of the Big 8 did that at the time).  There had been a lot of tension between the consulting and accounting/audit and tax divisions of the firm even prior to Enron.  Most of the auditors and tax people ended up with other firms.   A judge did eventually rule that the jury instructions were too broad, but by that time too late.  

 

I don't  think there's a corporation in the world that is spotless regarding practices and procedures, but probably every accounting firm has had 'issues' with one engagement or another. The thing is most firms end up working with the regulators and survive.  Again, my feeling at the time was that AA really thought they'd be able to hold out against the feds and overplayed their hand.  It was a great shame in many respects - so many AA professionals were truly among the best of their profession.

 

And, eventually the Big 8 turned into the Big 4 - so now, in many ways, less competition.  I remain somewhat dubious if that was entirely great for the industry itself and for clients to depend on them.

 

I'm sure there are accountants on this board who can speak more intelligently to this area than I can, but that was my recollection.  Andersen was headquartered in my home town - I still remember them having the employees do a demonstration showing how many people, just regular everyday people, were affected by the ongoing litigation.  And of course some may remember the absolute 'frenzy' of companies looking for new audit/accounting/tax advisors.  

In a million years, no one would have thought AA would go down in that fashion, IMO.  That's why I think Carnival should not be arrogant or overconfident at all in their response to the court. Perhaps that's not even their plan - I hope not.

[Host Carolyn]

In allowing all this accountant type posts since in the end much relate s to Carnival scenario but steer it back a bit ok???

[lottiegreen56]

I've been reading about this on other sites. Based on their reporting (not hard to find, won't post link for fear of getting in trouble)  - it looks really bad for Carnival both from the perspective of their actions and from expected resolution of the matter. I am a little surprise the stock price hasn't taken much of a hit. 

 

Was speaking to one of my friends in management the other day and he didn't really seem to know much about it. Don't think he was feeding me any bull, maybe the employees are in the dark about it or the company doesn't think it is too serious.

Edited April 21, 2019 by lottiegreen56
posted too soon

[AAAAmerican]

Yes so many in Miami , Florida HQ do not even know about the Federal Judge and what she said and as well did so far..

[broberts]

7 hours ago, jimbo5544 said:

I would not question your knowledge or passion, but that is pretty holistic view. I cannot argue what is right but I still cannot get to willful premeditation, covering and falsifying yes, but they really are different. 

 

The way you get there is to understand the overriding pressure from on high to cut costs and increase revenue. The pressure to perform in these areas can preclude compliance with environmental regulations. Upper management would have to be willfully blind not to understand this. Willful blindness is a premeditated act.

 

[chengkp75]

11 hours ago, jimbo5544 said:

I would not question your knowledge or passion, but that is pretty holistic view. I cannot argue what is right but I still cannot get to willful premeditation, covering and falsifying yes, but they really are different. 

Each and every time the auditor visited a ship, a report of non-conformities was sent to the ship's shoreside management team, the environmental compliance department, and the CEO.  Yet, apparently, over a two year span, nothing was done about retraining crew or stiffening penalties for even minor infractions like improper record keeping, as the violations continued to happen.  This is where corporate management becomes culpable, even if they could plead ignorance of the problem prior to the settlement, afterwards they were repeatedly informed by the auditor that the problem persisted, and apparently did nothing to correct the situation.  Carnival should have made a corporate mission statement that no environmental infractions will be tolerated, and followed with policies and procedures in the company's ISM code to back this up.  I'm assuming that this was part of the plea deal, as this is standard these days with DOJ, and they have a "boiler plate" compliance package that companies are required to use.  However, when the first violation was reported during probation, they should have jumped on that ship, cleaned house as necessary, reinforced compliance training, and visited every other ship in the fleet with the compliance team to self-audit, find the problems, and correct them.

[ontheweb]

2 hours ago, chengkp75 said:

Each and every time the auditor visited a ship, a report of non-conformities was sent to the ship's shoreside management team, the environmental compliance department, and the CEO.  Yet, apparently, over a two year span, nothing was done about retraining crew or stiffening penalties for even minor infractions like improper record keeping, as the violations continued to happen.  This is where corporate management becomes culpable, even if they could plead ignorance of the problem prior to the settlement, afterwards they were repeatedly informed by the auditor that the problem persisted, and apparently did nothing to correct the situation.  Carnival should have made a corporate mission statement that no environmental infractions will be tolerated, and followed with policies and procedures in the company's ISM code to back this up.  I'm assuming that this was part of the plea deal, as this is standard these days with DOJ, and they have a "boiler plate" compliance package that companies are required to use.  However, when the first violation was reported during probation, they should have jumped on that ship, cleaned house as necessary, reinforced compliance training, and visited every other ship in the fleet with the compliance team to self-audit, find the problems, and correct them.

Well said.

I think you have previously posted that you have worked for lines that were also cited for infractions. Was this the corrective measures that they took?

[chengkp75]

1 hour ago, ontheweb said:

Well said.

I think you have previously posted that you have worked for lines that were also cited for infractions. Was this the corrective measures that they took?

Yes, and their compliance programs are now considered by DOJ as the models for a successful compliance plan.

[jimbo5544]

30 minutes ago, chengkp75 said:

Yes, and their compliance programs are now considered by DOJ as the models for a successful compliance plan.

Maybe you should apply for the job here....

[evandbob]

Dysfunctional policies start out as small aberations, but when unchecked or left unchallenged by management, slowly evolve into standard practice.  As standard practice, dysfunctional policies will devolve into progressively worse actions.

 

When management ignores or abrogates its responsibilities, the entire Corporation stinks.

[ontheweb]

2 hours ago, chengkp75 said:

Yes, and their compliance programs are now considered by DOJ as the models for a successful compliance plan.

Given that there is a model for how to do this correctly and it was ignored by the Carnival corporation, I now think there is a good chance that the judge will find a punishment that will hurt Carnival. They deserve it, and I hate to say that since I do own stock.

[jimbo5544]

1 hour ago, ontheweb said:

Given that there is a model for how to do this correctly and it was ignored by the Carnival corporation, I now think there is a good chance that the judge will find a punishment that will hurt Carnival. They deserve it, and I hate to say that since I do own stock.

Question is what will it be and how much will it hurt the corp, the line, and people cruising on the ships (potentially).  

[chengkp75]

3 hours ago, jimbo5544 said:

Maybe you should apply for the job here....

Sorry, looking at the short term to retirement.  No longer looking for these kinds of challenges.

Edited April 21, 2019 by chengkp75

[bury me at sea]

38 minutes ago, jimbo5544 said:

Question is what will it be and how much will it hurt the corp, the line, and people cruising on the ships (potentially).  

 

1.  We'll know soon.

 

2.  I hope it hurts the corporation enough to make the board and upper level management take illegal dumping seriously.

 

3.  I'm not sure how or why it might hurt any one of the lines owned by Carnival Corporation.  Most people seemed to support the ban on plastic straws, a  plan Carnival Cruise Lines touted as being environmentally friendly.  I would think most would also support plans to cease illegal dumping.  Your thoughts?

 

4.  Since all cruisers are inhabitants of Earth, any steps taken to reduce ocean pollution should have a positive impact on passengers. How do you see it potentially hurting them (us)?

[jimbo5544]

4 hours ago, bury me at sea said:

 

1.  We'll know soon.

 

2.  I hope it hurts the corporation enough to make the board and upper level management take illegal dumping seriously.

 

3.  I'm not sure how or why it might hurt any one of the lines owned by Carnival Corporation.  Most people seemed to support the ban on plastic straws, a  plan Carnival Cruise Lines touted as being environmentally friendly.  I would think most would also support plans to cease illegal dumping.  Your thoughts?

 

4.  Since all cruisers are inhabitants of Earth, any steps taken to reduce ocean pollution should have a positive impact on passengers. How do you see it potentially hurting them (us)?

In terms of support (#3), I think their customers have zero idea (CC aside) and when it really hits I am sure it it turns real in their attempt (vs the past smoke and mirrors) they will spin it well it it will fly) at least for the most part.   

 

Number 4 I have really no idea, if the penalty is as stiff as our expert says and they had the offended ships docked till they demonstrated true training and the fear of god on non compliance.  

[jimbo5544]

4 hours ago, chengkp75 said:

Sorry, looking at the short term to retirement.  No longer looking for these kinds of challenges.

I think the retired cost guard admiral thought the same thing.  Did I tell you I went to school with the just retired commandant of the  Coast Guard?  Has nothing to do with anything.  Back to the job it could be short time.... I have some contacts.  

[chengkp75]

2 minutes ago, jimbo5544 said:

I think the retired cost guard admiral thought the same thing.  Did I tell you I went to school with the just retired commandant of the  Coast Guard?  Has nothing to do with anything.  Back to the job it could be short time.... I have some contacts.  

From my experience, and both of the companies I've worked for that were under DOJ probation took onboard retired USCG personnel, the company tends to keep the compliance department long after the probation is past, as a "best practice" to continually monitor environmental performance.

[Aquahound]

4 hours ago, bury me at sea said:

Most people seemed to support the ban on plastic straws, a  plan Carnival Cruise Lines touted as being environmentally friendly.  

 

Funny thing is, most people probably don't realize Carnival took that step in accordance with the Environmental Compliance Plan that was levied on them as a term of their probation.  

[DirtyDawg]

7 hours ago, ontheweb said:

Given that there is a model for how to do this correctly and it was ignored by the Carnival corporation, I now think there is a good chance that the judge will find a punishment that will hurt Carnival. They deserve it, and I hate to say that since I do own stock.

 

So, is it time to sell the stock as a protest against this management team?