*******Judge's June 3rd Decision re Carnival Corp Sanctions*****

[Host Carolyn]

For discussion of decision by the Court on June 3 and impact on Carnival Corp.

 

Please keep this on topic and respectful!

 

Thank you!!!

Edited June 4, 2019 by Host Carolyn

[riffatsea]

Settlement has been accepted by judge and Carnival:

https://finance.yahoo.com/m/9d548747-0361-3d11-9326-5b34e4fc447f/judge-accepts-carnival%26%2339%3Bs.html?ana=yahoo&yptr=yahoo

[jimbo5544]

Thanks for posting the link.

[jimbo5544]

Looks fairly bland, would love our local expert to opine....

[chengkp75]

1 hour ago, jimbo5544 said:

Looks fairly bland, would love our local expert to opine....

I agree that it is decidedly lenient.  I believe that the feeling of the prosecutors and the judge may be that the deadlines for certain benchmark improvements to be made, with fines escalating from $1million/day to $10 million/day will force the necessary change in culture that is required.  DOJ has certainly changed in the past 15 years, and I feel that the judge went extremely leniently on the corporate officers, only making the Chairman make an apology to the employees, after her requirement that they attend today's hearing.  The major parts of the settlement address the core problem of Carnival's corporate culture of environmental laissez faire, and after the "back channel" attempt by their tame retired USCG admiral, I think the auditors, the court appointed monitor, the judge, and the "interested parties" (like the USCG and DOJ, as well as some groups who claim to be victims of the pollution) will make the actual benchmarks to avoid the daily fines to be of a nature that a real change will happen.  The daily fines are open ended, so it could be $10 million for a year if they fail to meet benchmarks and continue to "not care" about compliance.

[Organized Chaos]

I have to admit, I'm a bit disappointed that some of the executive structure didn't have to answer more sternly for this. Judge Seitz talked an awful tough game leading up to this moment. I thought she was seriously going to hold them accountable. More than just a letter from the CEO taking responsibility. In the end, we get a statement about butter pats, sugar packets, and cereal boxes. Here's to hoping the court appointed auditors and monitors tighten the leash to let them know it's finally time they take this seriously and get their act together.

[jimbo5544]

2 hours ago, chengkp75 said:

I agree that it is decidedly lenient.  I believe that the feeling of the prosecutors and the judge may be that the deadlines for certain benchmark improvements to be made, with fines escalating from $1million/day to $10 million/day will force the necessary change in culture that is required.  DOJ has certainly changed in the past 15 years, and I feel that the judge went extremely leniently on the corporate officers, only making the Chairman make an apology to the employees, after her requirement that they attend today's hearing.  The major parts of the settlement address the core problem of Carnival's corporate culture of environmental laissez faire, and after the "back channel" attempt by their tame retired USCG admiral, I think the auditors, the court appointed monitor, the judge, and the "interested parties" (like the USCG and DOJ, as well as some groups who claim to be victims of the pollution) will make the actual benchmarks to avoid the daily fines to be of a nature that a real change will happen.  The daily fines are open ended, so it could be $10 million for a year if they fail to meet benchmarks and continue to "not care" about compliance.

Well said, and thanks

 

[jbethel11]

Oh well, another big company almost getting away from their actions:

 

As scooby-doo would say, "I would have gotten away from it if it weren't for you meddling kids!"

[jimbo5544]

11 minutes ago, jbethel11 said:

Oh well, another big company almost getting away from their actions:

 

As scooby-doo would say, "I would have gotten away from it if it weren't for you meddling kids!"

Scooby-doo work for a big company?......and thought the only thing he said was Rut row....  The more I see the ruling, the more a further repeat would be extremely costly.  Maybe the oversight for that will slap them upside the head.  

Edited June 4, 2019 by jimbo5544

[ontheweb]

In the now closed thread, there was a comment that the shareholders will pay for this. I have to say as a (small) shareholder that I thought the fine was very lenient. Considering massive violations of probation led to a fine of half the original fine, I thought they got off with much less of a punishment then was expected.

 

Perhaps what chengkp75 posted about the possible fines for future non-compliance is the real lynchpin of the decision.

[elcuchio24]

I certainly hope this is a wake up call to the company to adopt better practices, and adhere to them.

 

The only issue I have with all this, and the judge, is that folks in the know for the most part knew the 'port ban' was NEVER going to happen. The stock itself never even reacted to it. So all the judge's bluster really did was to put alot of worry and stress on Joe Cruiser in the interim.

 

Obviously a tactic to wake up management, I get that, but unfortunate collateral damage for new/inexperienced cruisers.

Edited June 4, 2019 by elcuchio24

[Honolulu Blue]

I wanted to comment on this to get my thoughts down.  First, the article from the Bradenton Herald at https://www.bradenton.com/news/business/tourism/article230953753.html was the best that I saw in that it had the most information (including quotes and pictures from the hearing) and a link to the settlement.  This, of course, does not mean that other news articles have/had no value.

 

Second, chengkp75 with his harsh words for Carnival in this and the other thread has convinced me that there was an institutional problem within Carnival itself, and not just Princess, and it doesn't seem to be shared by the other major cruise lines.  It remains to be seen if this dressing down and settlement will help things.  I hope so, but we'll see.

 

Third, the announcement by Carnival through John Heald about the changes seems like mostly PR and a smokescreen.  Grouped together, it will help the environment (a little), but boy oh boy, what a cost there will be in cruiser displeasure.  I'm already starting to hear about "cutbacks" (though I think the overall savings from these actions will be minimal at best), and I'm sure I will hear a lot more.  But I think we'll see more of this on other cruise lines in the future.

 

And fourth, as a veteran of several cruises, this makes me think a little more about the environmental impact of these ships.  They each burn thousands of gallons of fuel per week.  Where does that waste go?  Mmmmm, perhaps it's best not to think about it.  What purpose does burning it serve?  Not bringing goods from place to place.  Not transportation.  Not defense.  Just me and a few thousand others on a vacation going from here to there, and then back to here.  The burned fuel is bad enough for the environment; we don't need to make it worse by intentionally doing things that aren't environmentally sound.

 

OK, back to lurk mode.

Edited June 4, 2019 by Honolulu Blue

[Aquahound]

3 hours ago, ontheweb said:

In the now closed thread, there was a comment that the shareholders will pay for this. I have to say as a (small) shareholder that I thought the fine was very lenient. Considering massive violations of probation led to a fine of half the original fine, I thought they got off with much less of a punishment then was expected.

 

In the coming years, Carnival cruisers and shareholders will be paying for this in ways they don't even realize.  How do you think they're going to reduce plastics and food waste?  Enjoy that those free burgers and the flat-fee for specialty dining now while you can.  Mark my words....changes are coming.  😉

[sw33twif3]

I've taken the "Behind the Fun" tour on two different Carnival ships. There is effort to correctly dispose of waste. I've seen the recycling plants and such. And I also applaud efforts to trim out further items that pollute and add non-biodegrable plastics to our landfills and oceans.

 

These ships do burn great amounts of fuel with each trip. The fact that the newer ships are moving to LNG is promising. I drive past the Port of New Orleans daily and see ships of all types motoring up and down the Mississippi River blowing dark smoke into the atmosphere. The cruise ships are not the worse.

[crewsweeper]

If Carnival spreads $20 million in fines across all lines not just Princess, the impact per cruiser would be negligible.  And even spread across just Princess ships, over time not that much.

 

I agree that the point needed to be made and should have hit the highest levels in the organization to make it clear.

The fallout could still occur. And the move to LNG is welcomed. 

[jimbo5544]

32 minutes ago, Aquahound said:

 

In the coming years, Carnival cruisers and shareholders will be paying for this in ways they don't even realize.  How do you think they're going to reduce plastics and food waste?  Enjoy that those free burgers and the flat-fee for specialty dining now while you can.  Mark my words....changes are coming.  😉

Certainly hard to measure as we would not know if anything that might happen would not anyways, but I would disagree.The only way I can think of to measure this is that Carnival prices change as in comparison to the competition (that could be fare or pricing for add ons).  My personal view the things announced so far are trivial (cost wise).

[chengkp75]

2 hours ago, Aquahound said:

 

In the coming years, Carnival cruisers and shareholders will be paying for this in ways they don't even realize.  How do you think they're going to reduce plastics and food waste?  Enjoy that those free burgers and the flat-fee for specialty dining now while you can.  Mark my words....changes are coming.  😉

Yes, having seen what an ECP entails, for a small shipping company, the ECP division of Carnival will need to grow far beyond the "two tiger teams" if they are to meet realistic and meaningful benchmarks in compliance.  So, there will be salaries, consultant fees, costs of training videos and seminars, as well as the hardware required (new "black boxes" for OWS, locks and tags, reporting forms and logbooks).  There is going to be cost involved, cost that should have started two years ago.  The first real test will be Aug 16th (I think is the date), when Carnival has to submit their plan for implementation with completion goals and timelines.  That will be when the first $1 million/day could start.

[ontheweb]

2 hours ago, Honolulu Blue said:

I wanted to comment on this to get my thoughts down.  First, the article from the Bradenton Herald at https://www.bradenton.com/news/business/tourism/article230953753.html was the best that I saw in that it had the most information (including quotes and pictures from the hearing) and a link to the settlement.  This, of course, does not mean that other news articles have/had no value.

 

Second, chengkp75 with his harsh words for Carnival in this and the other thread has convinced me that there was an institutional problem within Carnival itself, and not just Princess, and it doesn't seem to be shared by the other major cruise lines.  It remains to be seen if this dressing down and settlement will help things.  I hope so, but we'll see.

 

Third, the announcement by Carnival through John Heald about the changes seems like mostly PR and a smokescreen.  Grouped together, it will help the environment (a little), but boy oh boy, what a cost there will be in cruiser displeasure.  I'm already starting to hear about "cutbacks" (though I think the overall savings from these actions will be minimal at best), and I'm sure I will hear a lot more.  But I think we'll see more of this on other cruise lines in the future.

 

And fourth, as a veteran of several cruises, this makes me think a little more about the environmental impact of these ships.  They each burn thousands of gallons of fuel per week.  Where does that waste go?  Mmmmm, perhaps it's best not to think about it.  What purpose does burning it serve?  Not bringing goods from place to place.  Not transportation.  Not defense.  Just me and a few thousand others on a vacation going from here to there, and then back to here.  The burned fuel is bad enough for the environment; we don't need to make it worse by intentionally doing things that aren't environmentally sound.

 

OK, back to lurk mode.

Thank you so much for that article. As you said, it had the most information.

 

Two things that I learned from it that I did not see anywhere else---The CEO of the company will be required to take personal responsibility including potential fines, and the judge is stepping down in September.

[Shaded Lady]

2 hours ago, Honolulu Blue said:

I wanted to comment on this to get my thoughts down.  First, the article from the Bradenton Herald at https://www.bradenton.com/news/business/tourism/article230953753.html was the best that I saw in that it had the most information (including quotes and pictures from the hearing) and a link to the settlement.  This, of course, does not mean that other news articles have/had no value.

...

Third, the announcement by Carnival through John Heald about the changes seems like mostly PR and a smokescreen.  Grouped together, it will help the environment (a little), but boy oh boy, what a cost there will be in cruiser displeasure.  I'm already starting to hear about "cutbacks" (though I think the overall savings from these actions will be minimal at best), and I'm sure I will hear a lot more.  But I think we'll see more of this on other cruise lines in the future.

 

Thanks for the link- definitely a good summary of the findings.

 

As for the announcement that John Heald made, I agree with others that this is a lot of PR 'feel good' stuff, but it's also part of their agreement with the prosecutors, that they will work to resolve these smaller issues as a part of the overall settlement... so it's not all philanthropic on their part. 

[chengkp75]

While there will be some, perhaps many, disciplinary actions against shipboard employees, I am heartened by Judge Seitz' comments regarding where the blame lies:

 

"Seitz said she is convinced that lower level employees are committed to protecting the environment after reviewing the court-appointed monitors’ interviews with many of them. She asked prosecutors how she can impose a personal responsibility on Carnival Corp.’s executives.

“I am contemplating that if there is a future violation that we can attribute to them that there should be either penal or personal financial consequences,” she said."

[cruzincat50]

From the South Forida Business Journal:

 

"The probation violation stems from the Bohemian government's claims in 2017 that Carnival subsidiary Princess Cruise Lines' boats dumped 500,000 tons of treated sewage into local waters. Carnival was forced to pay $40 million and was placed on probation for five years."

 

Is Giacomo Puccini the governor of this region?  What other ships go to "Bohemia"?  hmmm 

 

I've been to The Bahamas and they didn't look Bohemian to me.

Edited June 4, 2019 by cruzincat50

[ontheweb]

43 minutes ago, chengkp75 said:

While there will be some, perhaps many, disciplinary actions against shipboard employees, I am heartened by Judge Seitz' comments regarding where the blame lies:

 

"Seitz said she is convinced that lower level employees are committed to protecting the environment after reviewing the court-appointed monitors’ interviews with many of them. She asked prosecutors how she can impose a personal responsibility on Carnival Corp.’s executives.

“I am contemplating that if there is a future violation that we can attribute to them that there should be either penal or personal financial consequences,” she said."

And hopefully the new judge who takes over (as the article plainly states that Judge Seitz is retiring in September) also feels this way and follows through on her suggestion.

[chengkp75]

1 hour ago, ontheweb said:

And hopefully the new judge who takes over (as the article plainly states that Judge Seitz is retiring in September) also feels this way and follows through on her suggestion.

From her comments to the proposed Compliance Officer:

 

"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.” 

 

I think she may be even more fed up with Carnival, and less likely to be lenient.

[ontheweb]

5 hours ago, chengkp75 said:

From her comments to the proposed Compliance Officer:

 

"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.” 

 

I think she may be even more fed up with Carnival, and less likely to be lenient.

Yes, I read that too. I did find it hopeful. But time will tell.

[Organized Chaos]

13 hours ago, Aquahound said:

 

In the coming years, Carnival cruisers and shareholders will be paying for this in ways they don't even realize.  How do you think they're going to reduce plastics and food waste?  Enjoy that those free burgers and the flat-fee for specialty dining now while you can.  Mark my words....changes are coming.  😉

 

After reading your last sentence, I couldn't help but think of the scene at the end of the movie, "Tombstone." When Wyatt Earp screams, "You tell 'em I'M coming... and hell's coming with me, you hear?!" LOL