Corporate Crime

CORPORATE CRIME 7

Institutional Affiliations

Corporations can be charged with committing crimes because they arecollective entities comprising of organizational networks,hierarchies, communication networks, offices and other infrastructurethat can be used in criminal activities. When people connected with acorporation use its assets for criminal related activities with thepurpose of making profits for the company or shareholders, thecorporation is held accountable as the culprit. Corporations arerecognized by the law as subject to criminal law and given the samelegal status as that of an individual. This means that corporationshave similar rights and responsibilities to that of individuals andcan be legally punished if they fail to live up to them. This paperdiscusses the environmental crime committed by Royal Caribbean CruiseLine, a corporation that offers cruising services to differentdestinations worldwide.

Background information on Royal CaribbeanCruise Line (RCCL)

Three Norwegian companies that dealt in shipping founded royalCaribbean Cruise line in 1969 according to Royal CaribbeanInternational (2014), the company offers different types ofitineraries, and its ships take people to more than 160 destinationsworldwide. Royal Caribbean Cruises has two brands: Royal CaribbeanInternational and Celebrity Cruises and operates on a global scalealthough a greater percentage of its customers come from NorthAmerica. Despite its humble beginnings with only three ships, RoyalCaribbean Cruises has expanded significantly and currently, it is thesecond largest cruise ship company. In August 2005, the companypossessed a total of 29 cruise ships and around 60, 590 berths forpassengers. In 1971, it was the largest cruise line operating in theCaribbean by offering weekly departures from Miami lasting between 7to 14 days.

This company started its initial capital expansion program by makingfour new ships in a period of four years. The ships were the first tostart resort style category of cruises in 1988. In 1994, the companycelebrated a 5% revenue increase and a 28% increase in net income.The second significant capital expansion program saw them build sixvision ships using over 1.5 billion dollars.

In 1998, trouble began for the company when it was accused of dumpingoil and harmful chemicals in the waters around the US (CorporateCrime Reporter, 1998). It pleaded guilty to environmental pollutioncharges and obstructing justice by trying to hide its illegal actionsand paid a $9 million fine. Additional charges of environmentalpollution followed for dumping poisonous solvents in the New Yorkharbor costing the company an $18 million fine and a further $ 3.3million paid to the state of Alaska. In 2004, pressure fromenvironmental activism made the cruise line agree to change byinstalling treatment plants for wastewater on its ships. Thecompany’s net income also grew in 2004 to 474.4 million andearnings per share rose to 59% more. After overcoming itsenvironmental pollution problems, Royal Caribbean cruises hascontinued to be successful in its cruising operations.

Legal History of Royal Caribbean Cruise Line in Relation to

RCCL was fined a total of $9 million penalty for pleading guilty to afleet-wide conspiracy of polluting the ocean waters through dumpingoil and trying to cover up for the crime through lies in 1998(Department of Justice, 1998). This plea agreement was arrived atafter trials that were held in both Puerto Rico and Miami. Thecompany pleaded guilty to eight counts of felony, seven in PuertoRico where they paid $8 million fine for discharging oil into USwaters from its cruise ships and using oil record books that werefalse. The RCCL was also charged an additional $ 1 million finebefore a US district court in Miami for giving a false oil recordbook in 1993 during a pollution investigation for one of its cruiseships the “Nordic Empress.”

However, even after the RCCL had been caught polluting the Oceanwaters and had paid dearly for the act with the largest fine ever fora cruise ship, they did not amend their ways. RCCL Company continuedwith its environmental pollution habit in the waters and was back inthe courts in 1999. This time round, it was facing 21 counts offelony for dumping waste oil in the ocean and other harmful chemicalsand giving false statements. It agreed to settle with an $ 18 millioncriminal fine for its criminal activities.

According to Environmental Protection Agency Press Releases (2014),the state of Alaska received $6.5 million in criminal fine for fourfelony violations of their oil pollution act when RCCL dumped oil andother harmful waste products in their waters. Miami received a $3million criminal fine settlement for four felony violations of theirclean water act, presenting false statements and storage of harmfulwaste in an unpermitted pier facility at their port. New York statewas given a $ 3 million criminal fine settlement for a felonyviolation of the clean water act and presentation of false statementsby the company. Los Angeles got a $ 3 million settlement for threefelony counts that were committed by the company in 1999 for falseoil record books and statements presented to its coast guards. VirginIslands received a $ 1.5 million criminal fine settlement for felonyviolations of discharging pollutants knowingly in its waters andfalse statements presented by the company to its coast guard. SanJuan received a $ 1 million settlement in a criminal fine for onecount of the felony count of a false statement regarding an oilrecord book presented to the coast guards by the RCCL Company.

The investigation into the corporate crimes of the RCCL Company tookfive years and was carried out by the department of justice incollaboration with US attorneys, FBI, US coast guards among others(Wald, 1999). The Company was charged under criminal law and faced ateam two federal criminal prosecutors. It hired a team of experts inits defense including Judson Starr and Jerry Block who have bothserved as heads of the department of Justice’s Environmental Crimessection.

As the trial on the Company progressed, they tried to redeem theirimage by engaging in a big public relations campaign including hiringsome former Environmental Protection Agency (EPA) on its board ofdirectors and giving away huge sums of money to environmental groups.The RCCL’s corporate crimes in environmental pollution were welldocumented by several media outlets.

However, Royal Caribbean’s initial plea and trial for its criminalactivities showed the challenges encountered by US authorities inregulating and prosecuting the cruise sector (Wald, 1999) Thesecompanies are registered in foreign countries and thus fall outsideof the authority of the US. Royal Caribbean Company only pleadedguilty after a judge in Miami rejected its argument that the US hadno jurisdiction over its dumping. The company went to great lengthsto avoid being prosecuted. They hired former attorney generals forthe US Elliot Richardson and Benjamin Civiletti to defend itsimmunity from a prosecution in the US.

Royal Caribbean Cruise Lines after – An Analysis

In May 2004, the Royal Caribbean Company agreed to the installationof advanced and efficient wastewater treatment plants on its cruiseships. This was done to comply with the national and internationalregulations of the cruise industry concerning environmentalprotection. The company was required by the courts to operate underan environmental compliance plan that will be supervised by thecourts for the next five years due to its criminal activities and hadprimarily been directed by the courts to submit an environmentalcompliance report by December 15, 1998 (Shaun, 1999). Their Companywebsite addresses their commitment to environmental protection. Thiscommitment is expressed through a program that was launched for thispurpose called “Save the Waves Program.” The program focuses onwaste management, social responsibility, and environmentalprotection. However, it is not clear whether the company’scompliance on environmental protection similar in all the countriesit operates in (Reference for Business, 2014).

In my opinion, there was slight or no relationship between theeconomic and political and economic power of the RCCL Company and theway it was treated in the courts. This is because the company wasstill heavily fined for its crimes despite the fact that they hiredsome of the best known lawyers to represent them and its publicrelations campaign to cover up their crimes was highly disregarded.The RCCL Company engaged in pollution of the ocean waters in order tomaximize its profits by saving on installing safe waste disposalequipment and methods that they deemed expensive (Crimes Against theEnvironment, 2014). It was discovered that all the employees involvedin this scheme were usually rewarded for their cooperation, and thiswas a major influence of this corporate behavior.

References

Department of Justice. ROYAL CARIBBEAN TO PLEAD GUILTY TO CONSPIRACY,OBSTRUCTION OF JUSTICE. (1998). Retrieved November 26, 2014, fromhttp://www.justice.gov/archive/opa/pr/1998/June/248.htm.html

Environmental Protection Agency Press Releases. (2014). RetrievedNovember 26, 2014, from http://yosemite.epa.gov/opa/admpress.nsf/

Royal Caribbean International. (2014). Retrieved November 26, 2014,fromhttp://www.royalcaribbean.com/contentOurCompanyEnvironment.do?pagename=rc_and_environment

Wald, M. (1999, July 21). Cruise Line Pleads Guilty To Dumping ofChemicals. Retrieved November 26, 2014, fromhttp://www.nytimes.com/1999/07/22/us/cruise-line-pleads-guilty-to-dumping-of-chemicals.html

Reference for Business. (2014). Royal Caribbean Cruises. RetrievedNovember 26, 2014, fromhttp://www.referenceforbusiness.com/history/Ro-Sh/Royal-Caribbean-Cruises-Ltd.html

Reporter. (n.d.). Retrieved November 26, 2014, fromhttp://www.corporatecrimereporter.com/top100.html

Crimes Against the Environment. (2014). Retrieved November 26, 2014,fromhttp://www.greeniacs.com/GreeniacsArticles/Environmental-News/Crimes-Against-the-Environment.html

Shaun, G. (1999). United States v. Royal Caribbean Cruises, Ltd.: Useof Federal “False Statements Act” To Extend Jurisdiction OverPolluting Incidents Into Territorial Seas of Foreign States.Retrieved November 26, 2014, fromhttp://mainelaw.maine.edu/academics/oclj/pdf/vol07_1/vol7_oclj_167.pdf