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


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1 hour ago, Organized Chaos said:

 

If that's directed at me, I too look at this as a top down problem. I don't think any of the major violations, such as all the illegal dumping (oil waste, plastics, etc.), came from rogue employees. Their decisions to continue to violate the law before and during their probation had to have been known by higher-ups. Their decision to eliminate certain single use plastics also came from corporate. They saw it as an opportunity that would benefit them in multiple ways. It makes it easier on themselves by not having to use the manpower to separate the plastics. It more than likely saves them a lot of money, both in use of resources (manpower) and not having to buy certain products. Plus, they used it for good PR. But all I'm hearing in this most recent court appearance is more excuses. "It takes time. We need time." Well the companies that chengkp75 worked for proved that it can be done fairly quickly and done right.

 

To clarify, my comment was not directed at you or at any other poster, thus I quoted no one.  It was a statement of my opinion on the subject matter.

Edited by bury me at sea
typo
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3 hours ago, chengkp75 said:

Carnival seems to feel that they can dawdle along and do things on their own timeline.  Come December, the potential fines escalate to $1 million/day.

 

The way you put it, it seems that Carnival management simply doesn't want to know they need to act furiously. I'd expect such a huge company to have tens or hundreds of lawyers. I'd expect major shareholders (pension funds, etc) to be watching carefully. Volkswagen reserved a billion euros for possible claims after "dieselgate". Why would the top management be so easy about this? It seems so much easier to say "do the NCL thing, we can afford it", which can be explained to shareholders. Not doing so is risking their jobs. (And AINAL, risking personal persecution?)

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2 hours ago, jimbo5544 said:

I found it interesting that the Miami Herald article describes testimony (or at least conversation) that included the Concordia, which the judge brought up as a reference point and Arison openly stated his view on the topic.

However, Arison's statement that the company " lobbied the Italian government to allow the company to train its Italian mariners and invested more in training overall." is pure rubbish.  The company had no need to lobby the Italian government if they wanted to invest in better training, as the flag state licensing and documentation regulations are the minimum requirements, and any company can set higher training and competency requirements for their crews at any time, at their discretion.

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1 hour ago, AmazedByCruising said:

 

The way you put it, it seems that Carnival management simply doesn't want to know they need to act furiously. I'd expect such a huge company to have tens or hundreds of lawyers. I'd expect major shareholders (pension funds, etc) to be watching carefully. Volkswagen reserved a billion euros for possible claims after "dieselgate". Why would the top management be so easy about this? It seems so much easier to say "do the NCL thing, we can afford it", which can be explained to shareholders. Not doing so is risking their jobs. (And AINAL, risking personal persecution?)

Because given the scope of fines levied in previous cases, and previously to Carnival, are such that it is cheaper to pay the fine and shed crocodile tears than to make real changes.    Arison built this company during the times of vastly less regulation of international shipping, and he doesn't feel any need to change with the times.  All shipping companies used to do things that would make environmentalists cringe, but were legal at the time, but most have adapted to the new regulations and moved on, still making profits.

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4 minutes ago, chengkp75 said:

Because given the scope of fines levied in previous cases, and previously to Carnival, are such that it is cheaper to pay the fine and shed crocodile tears than to make real changes.    Arison built this company during the times of vastly less regulation of international shipping, and he doesn't feel any need to change with the times.  All shipping companies used to do things that would make environmentalists cringe, but were legal at the time, but most have adapted to the new regulations and moved on, still making profits.

 

 

I think generally speaking Carnival Corp is used to doing things on the cheap, at least prepared to many other cruise companies.  It doesn't surprise me they are hesitant to spend a dime and truly correct this.  So far its been just a tap on the wrist so I don't think they are taking it all that seriously.  Arison and Donald didn't even attend the first hearing.  It wasn't important enough to them.  Hopefully that mentality will change.  If it wasn't that important to them, it certainly won't have a high priority with those lower on the totem pole.  Leadership and direction start at the very top.  Company culture is a hard thing to change and it doesn't happen overnight, but in this case they really need to take legitimate action and make some substantial changes.   

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20 minutes ago, chengkp75 said:

However, Arison's statement that the company " lobbied the Italian government to allow the company to train its Italian mariners and invested more in training overall." is pure rubbish.  The company had no need to lobby the Italian government if they wanted to invest in better training, as the flag state licensing and documentation regulations are the minimum requirements, and any company can set higher training and competency requirements for their crews at any time, at their discretion.

Actually, I was referring to it being the worst day of his life.

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8 minutes ago, eroller said:

 

 

I think generally speaking Carnival Corp is used to doing things on the cheap, at least prepared to many other cruise companies.  It doesn't surprise me they are hesitant to spend a dime and truly correct this.  So far its been just a tap on the wrist so I don't think they are taking it all that seriously.  Arison and Donald didn't even attend the first hearing.  It wasn't important enough to them.  Hopefully that mentality will change.  If it wasn't that important to them, it certainly won't have a high priority with those lower on the totem pole.  Leadership and direction start at the very top.  Company culture is a hard thing to change and it doesn't happen overnight, but in this case they really need to take legitimate action and make some substantial changes.   

I am at a loss for words...

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13 minutes ago, jimbo5544 said:

I am at a loss for words...

 

 

Usually when anyone says anything negative about your precious Carnival you are never at a loss for words.  You are the first to defend their honor like it's your mother we are talking about.  A loss for words, this must be a first.  

 

Then you might want to block my posts.  I actually wish you would.  It's tedious you responding to all my Carnival posts.  

 

 

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4 hours ago, chengkp75 said:

Come December, the potential fines escalate to $1 million/day.

 

 

Well it seems money/profit loss is the only thing that will truly get their full attention, so hopefully the potential of those fines coming into play will light a fire for them to take more urgent action.  

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16 minutes ago, chengkp75 said:

Because given the scope of fines levied in previous cases, and previously to Carnival, are such that it is cheaper to pay the fine and shed crocodile tears than to make real changes.    Arison built this company during the times of vastly less regulation of international shipping, and he doesn't feel any need to change with the times.  All shipping companies used to do things that would make environmentalists cringe, but were legal at the time, but most have adapted to the new regulations and moved on, still making profits.

 

The thing that I completely missed is that Arison is not a hired CEO who works to earn a decent wage and wants to avoid problems at all costs. That makes it more understandable. 

 

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33 minutes ago, eroller said:

 

 

Usually when anyone says anything negative about your precious Carnival you are never at a loss for words.  You are the first to defend their honor like it's your mother we are talking about.  A loss for words, this must be a first.  

 

Then you might want to block my posts.  I actually wish you would.  It's tedious you responding to all my Carnival posts.  

 

 

How would it be tedious for you for me to respond to any post....LOL, that is a good one, I have never blocked anybody, maybe you have.  All this said we can discuss your post or not, you be the judge.

23 minutes ago, AmazedByCruising said:

 

The thing that I completely missed is that Arison is not a hired CEO who works to earn a decent wage and wants to avoid problems at all costs. That makes it more understandable. 

 

UMMMM, Micky is not a CEO.  We can discuss HIS job if you want and the relevance to the topic.  You do realize that Carnival is a stock company...right? 

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As someone who has working in the corporate and government environment for 2 decades, change is difficult and usually very slow.  BUT, change MUST be driven from the top down.  The amount of money they paid in fines would easily pay for the change program to become compliant.  How many people would a few million dollars be able to pay to allow better sorting of waste on ships?  or maybe a few extra compliance offers per ship?  Really what the company needs to do (if they haven't already) is hire an executive whose role is specifically to enact environmental change and compliance.  Along with that would be an attitude of giving that person both the leeway, and the budget, to do what needs to be done to enact change.  It still may not be fast, but it would at least be great progress.

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1 hour ago, ishap said:

As someone who has working in the corporate and government environment for 2 decades, change is difficult and usually very slow.  BUT, change MUST be driven from the top down.  The amount of money they paid in fines would easily pay for the change program to become compliant.  How many people would a few million dollars be able to pay to allow better sorting of waste on ships?  or maybe a few extra compliance offers per ship?  Really what the company needs to do (if they haven't already) is hire an executive whose role is specifically to enact environmental change and compliance.  Along with that would be an attitude of giving that person both the leeway, and the budget, to do what needs to be done to enact change.  It still may not be fast, but it would at least be great progress.

Unfortunately, that is exactly what Carnival did, and failed miserably at it.  They installed a compliance officer who had the responsibility to ensure compliance, but did not give that individual the authority to make changes or a budget to purchase materials needed to meet the compliance.  As for the cost, no, the amount of fines paid to date by Carnival would not support the initialization of a true, meaningful, and working compliance plan across the entire Carnival Corp fleet, nor would it support the continuing annual operating cost of the compliance program.  I know, as I've worked for companies that have worked their way out of DOJ probation through environmental compliance, and I know the cost.  This is one reason that Carnival has not made good faith efforts to comply, as they feel the fines to date are less than the cost of compliance.  This is why the judge has set deadlines for compliance benchmarks to be met or daily fines of $1 million (escalating to a possible $10 million/day), to show Carnival that continued non-compliance will eventually cost them more.

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57 minutes ago, chengkp75 said:

This is one reason that Carnival has not made good faith efforts to comply, as they feel the fines to date are less than the cost of compliance.  This is why the judge has set deadlines for compliance benchmarks to be met or daily fines of $1 million (escalating to a possible $10 million/day), to show Carnival that continued non-compliance will eventually cost them more.


 

This is my feeling exactly.  The fines were not steep enough to truly get their attention and take the necessary actions.  What is even more unfortunate is that it paints a picture of a company that really doesn’t care about the environment they sail in.  Maybe to an extent so long as it doesn’t cost them too much profitability.  Sure there is a lot of corporate speak that says otherwise, but actions speak louder than words. 

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On 10/4/2019 at 10:06 AM, chengkp75 said:

Unfortunately, that is exactly what Carnival did, and failed miserably at it.  They installed a compliance officer who had the responsibility to ensure compliance, but did not give that individual the authority to make changes or a budget to purchase materials needed to meet the compliance.  As for the cost, no, the amount of fines paid to date by Carnival would not support the initialization of a true, meaningful, and working compliance plan across the entire Carnival Corp fleet, nor would it support the continuing annual operating cost of the compliance program.  I know, as I've worked for companies that have worked their way out of DOJ probation through environmental compliance, and I know the cost.  This is one reason that Carnival has not made good faith efforts to comply, as they feel the fines to date are less than the cost of compliance.  This is why the judge has set deadlines for compliance benchmarks to be met or daily fines of $1 million (escalating to a possible $10 million/day), to show Carnival that continued non-compliance will eventually cost them more.

Interesting post, $1mill per day spread across the corp (have no idea how the accounting works) is not substantial till it adds up.  The exponential factor of increasing fines, plus potential other factors/remedies would of course get much higher attention.  Without belaboring the post, can you expand on your comment on authority to make changes?

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1 hour ago, jimbo5544 said:

Interesting post, $1mill per day spread across the corp (have no idea how the accounting works) is not substantial till it adds up.  The exponential factor of increasing fines, plus potential other factors/remedies would of course get much higher attention.  Without belaboring the post, can you expand on your comment on authority to make changes?

Here is a quote from the CAM (court appointed monitor) report from earlier this year, discussing the CCM (corporate compliance manager) position as implemented by Carnival:

 

"Consistent with the U.S. Sentencing Guidelines language noted above, the ECP requires the Company to both (1) assign the CCM “overall responsibility for implementation of this ECP,” ECP § III.A.1; and (2) give the CCM “the authority to ensure full implementation of this ECP.” ECP § III.A.2 (emphasis added). While the CCM appears to have responsibility for implementing the ECP, it is acknowledged by many in senior management that he does not have the authority to implement the ECP, as required by ECP Section III.A.2. The CCM is not in control of environmental compliance. He does not have authority over environmental capital or operating budgets, does not have authority to fully direct the operating lines’ compliance activities, and does not have authority over the Company’s development and dissemination of environmental policies and procedures. See Employee Interview Notes. During ECP Year One, the CCM had a staff of three: a paralegal, a manager, and a senior manager—all of whom are capable and hard-working. Aside from these individuals, the CCM can neither order anyone in the operating lines to do anything, nor prohibit anyone from doing anything ordered by operating line management. The following chart shows the Carnival Corp. environmental compliance organization structure: [See chart on following page.] Case 1:16-cr-20897-PAS Document 105 Entered on FLSD Docket 04/10/2019 Page 31 of 205 CONFIDENTIAL June 21, 2018 29 Carnival Corp. Environmental Compliance Organizational Chart (as of February 9, 2018). PCL_ECP00040761. The OLCMs report to the CCM via a dotted line because they have additional job titles, functions, and lines of report within their respective organizations. OLCM performance reviews currently are prepared by their group or brand supervisors and not by the CCM. See Employee Interview Notes.24"

 

Sorry, the organizational chart doesn't copy, but each operating group (HA, CCL, CUK, and Costa) has an OLCM (operating line compliance manager), who as noted report to the CCM by a "dotted line" because they are controlled by their group supervisors and not the CCM.  Note the statement above that I've bolded regarding the ability of the CCM to order each line to do or not do something with regards to meeting compliance.

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19 minutes ago, chengkp75 said:

Sorry, the organizational chart doesn't copy, but each operating group (HA, CCL, CUK, and Costa) has an OLCM (operating line compliance manager), who as noted report to the CCM by a "dotted line" because they are controlled by their group supervisors and not the CCM.  Note the statement above that I've bolded regarding the ability of the CCM to order each line to do or not do something with regards to meeting compliance.


 

Nothing like having a compliance officer with virtually no authority.  Lots of smoke and mirrors.  Time to get serious.  

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1 hour ago, chengkp75 said:

Here is a quote from the CAM (court appointed monitor) report from earlier this year, discussing the CCM (corporate compliance manager) position as implemented by Carnival:

 

"Consistent with the U.S. Sentencing Guidelines language noted above, the ECP requires the Company to both (1) assign the CCM “overall responsibility for implementation of this ECP,” ECP § III.A.1; and (2) give the CCM “the authority to ensure full implementation of this ECP.” ECP § III.A.2 (emphasis added). While the CCM appears to have responsibility for implementing the ECP, it is acknowledged by many in senior management that he does not have the authority to implement the ECP, as required by ECP Section III.A.2. The CCM is not in control of environmental compliance. He does not have authority over environmental capital or operating budgets, does not have authority to fully direct the operating lines’ compliance activities, and does not have authority over the Company’s development and dissemination of environmental policies and procedures. See Employee Interview Notes. During ECP Year One, the CCM had a staff of three: a paralegal, a manager, and a senior manager—all of whom are capable and hard-working. Aside from these individuals, the CCM can neither order anyone in the operating lines to do anything, nor prohibit anyone from doing anything ordered by operating line management. The following chart shows the Carnival Corp. environmental compliance organization structure: [See chart on following page.] Case 1:16-cr-20897-PAS Document 105 Entered on FLSD Docket 04/10/2019 Page 31 of 205 CONFIDENTIAL June 21, 2018 29 Carnival Corp. Environmental Compliance Organizational Chart (as of February 9, 2018). PCL_ECP00040761. The OLCMs report to the CCM via a dotted line because they have additional job titles, functions, and lines of report within their respective organizations. OLCM performance reviews currently are prepared by their group or brand supervisors and not by the CCM. See Employee Interview Notes.24"

 

Sorry, the organizational chart doesn't copy, but each operating group (HA, CCL, CUK, and Costa) has an OLCM (operating line compliance manager), who as noted report to the CCM by a "dotted line" because they are controlled by their group supervisors and not the CCM.  Note the statement above that I've bolded regarding the ability of the CCM to order each line to do or not do something with regards to meeting compliance.

 

Sure sounds as though it's window dressing and that management has been more committed to obfuscation than to corrective action.

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2 hours ago, chengkp75 said:

Here is a quote from the CAM (court appointed monitor) report from earlier this year, discussing the CCM (corporate compliance manager) position as implemented by Carnival:

 

"Consistent with the U.S. Sentencing Guidelines language noted above, the ECP requires the Company to both (1) assign the CCM “overall responsibility for implementation of this ECP,” ECP § III.A.1; and (2) give the CCM “the authority to ensure full implementation of this ECP.” ECP § III.A.2 (emphasis added). While the CCM appears to have responsibility for implementing the ECP, it is acknowledged by many in senior management that he does not have the authority to implement the ECP, as required by ECP Section III.A.2. The CCM is not in control of environmental compliance. He does not have authority over environmental capital or operating budgets, does not have authority to fully direct the operating lines’ compliance activities, and does not have authority over the Company’s development and dissemination of environmental policies and procedures. See Employee Interview Notes. During ECP Year One, the CCM had a staff of three: a paralegal, a manager, and a senior manager—all of whom are capable and hard-working. Aside from these individuals, the CCM can neither order anyone in the operating lines to do anything, nor prohibit anyone from doing anything ordered by operating line management. The following chart shows the Carnival Corp. environmental compliance organization structure: [See chart on following page.] Case 1:16-cr-20897-PAS Document 105 Entered on FLSD Docket 04/10/2019 Page 31 of 205 CONFIDENTIAL June 21, 2018 29 Carnival Corp. Environmental Compliance Organizational Chart (as of February 9, 2018). PCL_ECP00040761. The OLCMs report to the CCM via a dotted line because they have additional job titles, functions, and lines of report within their respective organizations. OLCM performance reviews currently are prepared by their group or brand supervisors and not by the CCM. See Employee Interview Notes.24"

 

Sorry, the organizational chart doesn't copy, but each operating group (HA, CCL, CUK, and Costa) has an OLCM (operating line compliance manager), who as noted report to the CCM by a "dotted line" because they are controlled by their group supervisors and not the CCM.  Note the statement above that I've bolded regarding the ability of the CCM to order each line to do or not do something with regards to meeting compliance.

I won’t bother you beyond this post, and thanks for the reply already.  So the team put into place (monitors?) report only as opposed to develop and implement policies and practices?  Is their problem further complicated by the different line(s), or the policies the same across lines?

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2 hours ago, jimbo5544 said:

I won’t bother you beyond this post, and thanks for the reply already.  So the team put into place (monitors?) report only as opposed to develop and implement policies and practices?  Is their problem further complicated by the different line(s), or the policies the same across lines?

I think you are mixing the "Court Appointed Monitor" who reports to the judge regarding inspections of the ships and the corporate structure by his team, as well as by the "Third Party Auditors" (TPA), which are compliance experts hired by Carnival to audit their program, with the CCM "Company Compliance Manager".  The CCM, is a Carnival employee, who, under the plea agreement is supposed to have the responsibility as well as the authority to ensure the entire corporation implements the compliance plan.  This is the "environment czar" position that should have been implemented within Carnival, and who should  have had the authority to develop and implement the compliance plan, and report directly to the corporate CEO, not to any individual group or line executives.  This compliance department needs to be outside the existing operations structure, so that they are not influenced by any one group head, or by the need for any group to make profit projections possibly at the expense of compliance.  The problem is that Carnival created this position without any authority, and without the clear mandate that compliance is outside of cruise operations, and this is the major fail of their first two years of probation.  Reading the entire 205 pages of the CAM's report gives a very damning picture of Carnival's corporate culture, and their corporate officers.

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1 hour ago, chengkp75 said:

  The problem is that Carnival created this position without any authority, and without the clear mandate that compliance is outside of cruise operations, and this is the major fail of their first two years of probation.  Reading the entire 205 pages of the CAM's report gives a very damning picture of Carnival's corporate culture, and their corporate officers.

 

 

Wow not good at all.  Sounds like a dramatic change in company culture is required and fast, at least where environmental compliance is concerned.  Unfortunately it's difficult for a complex corporation like Carnival to adapt to cultural changes, but of course it can be done.  As you mentioned in an earlier post, throw enough money at the problem and you can solve it.  Seems Carnival has been reluctant to do that, and perhaps now they don't have a choice?  I hope some good comes out of it, and that Carnival becomes a better company in the process.  Clearly they need to make some significant changes.  

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1 hour ago, chengkp75 said:

I think you are mixing the "Court Appointed Monitor" who reports to the judge regarding inspections of the ships and the corporate structure by his team, as well as by the "Third Party Auditors" (TPA), which are compliance experts hired by Carnival to audit their program, with the CCM "Company Compliance Manager".  The CCM, is a Carnival employee, who, under the plea agreement is supposed to have the responsibility as well as the authority to ensure the entire corporation implements the compliance plan.  This is the "environment czar" position that should have been implemented within Carnival, and who should  have had the authority to develop and implement the compliance plan, and report directly to the corporate CEO, not to any individual group or line executives.  This compliance department needs to be outside the existing operations structure, so that they are not influenced by any one group head, or by the need for any group to make profit projections possibly at the expense of compliance.  The problem is that Carnival created this position without any authority, and without the clear mandate that compliance is outside of cruise operations, and this is the major fail of their first two years of probation.  Reading the entire 205 pages of the CAM's report gives a very damning picture of Carnival's corporate culture, and their corporate officers.

Thanks

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11 minutes ago, eroller said:

 

 

Wow not good at all.  Sounds like a dramatic change in company culture is required and fast, at least where environmental compliance is concerned.  Unfortunately it's difficult for a complex corporation like Carnival to adapt to cultural changes, but of course it can be done.  As you mentioned in an earlier post, throw enough money at the problem and you can solve it.  Seems Carnival has been reluctant to do that, and perhaps now they don't have a choice?  I hope some good comes out of it, and that Carnival becomes a better company in the process.  Clearly they need to make some significant changes.  

Nice post!

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1 hour ago, chengkp75 said:

I think you are mixing the "Court Appointed Monitor" who reports to the judge regarding inspections of the ships and the corporate structure by his team, as well as by the "Third Party Auditors" (TPA), which are compliance experts hired by Carnival to audit their program, with the CCM "Company Compliance Manager".  The CCM, is a Carnival employee, who, under the plea agreement is supposed to have the responsibility as well as the authority to ensure the entire corporation implements the compliance plan.  This is the "environment czar" position that should have been implemented within Carnival, and who should  have had the authority to develop and implement the compliance plan, and report directly to the corporate CEO, not to any individual group or line executives.  This compliance department needs to be outside the existing operations structure, so that they are not influenced by any one group head, or by the need for any group to make profit projections possibly at the expense of compliance.  The problem is that Carnival created this position without any authority, and without the clear mandate that compliance is outside of cruise operations, and this is the major fail of their first two years of probation.  Reading the entire 205 pages of the CAM's report gives a very damning picture of Carnival's corporate culture, and their corporate officers.

I was, you are correct, thanks again.   

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1 hour ago, eroller said:

 

 

Wow not good at all.  Sounds like a dramatic change in company culture is required and fast, at least where environmental compliance is concerned.  Unfortunately it's difficult for a complex corporation like Carnival to adapt to cultural changes, but of course it can be done.  As you mentioned in an earlier post, throw enough money at the problem and you can solve it.  Seems Carnival has been reluctant to do that, and perhaps now they don't have a choice?  I hope some good comes out of it, and that Carnival becomes a better company in the process.  Clearly they need to make some significant changes.  

As I've said, I've lived through two of these probations, so I have nothing but contempt for Carnival's half hearted efforts towards compliance.  Yes, it takes a massive effort, from the boardroom to the engine room, from everyone in the company to make this work.

 

If the CAM had found that Carnival had created a compliance department that could succeed, and that had made even good faith efforts towards compliance, even if there were mistakes, the judge would have been even more lenient with them.  We had an environmental equipment failure while the CAM was aboard my ship, but since I had reported the problem to the office, and the office had worked out a remediation plan (discharge of bilge water ashore), the process was working, and there was no violation, even though a critical piece of environmental equipment had failed.  This process that the DOJ wants implemented is similar to the ISM culture on ships that I've mentioned before, which is not "blame oriented" but "process oriented" where mistakes are documented, studied, and new methods to prevent or mediate the problem are created for the future.

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