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The Honolulu Advertiser
Posted on: Sunday, November 10, 2002

Spoiling the seas

 •  Hawai'i liners free of dumping violations
 •  Graphic: Breaking enviromental laws

By Marilyn Adams
USA Today

MIAMI — The stately cruise ship Norway, which sails to the Caribbean, evokes a gentler time. Beneath modern trappings such as an Internet cafe, the 40-year-old steamship with its grand ballrooms is reminiscent of ocean liners that crossed the Atlantic before the advent of the jet plane.

The seven cruise ships shown docked in Miami last year belong to the Royal Caribbean, Norwegian and Carnival cruise lines. In the background is Miami Beach, and the gateway to the Atlantic Ocean.

Bloomberg News Service

But the Norway, owned by Norwegian Cruise Line, long kept a secret: It illegally dumped oily waste into the ocean, and the crew filed false records to mislead the Coast Guard. Three months ago, after the cruise line's new owner cooperated with the U.S. Justice Department, Norwegian pleaded guilty to one felony and paid a $1 million fine for falsifying its records.

Now, some of the federal agents who investigated the case say the company's pollution went on for much longer and was much worse than the light fine suggests.

Environmental Protection Agency agents say — and court records support — that the Norway not only poured hundreds of thousands of gallons of oily bilge water into the ocean, it also dumped raw sewage mixed with hazardous, even cancer-causing, chemicals from dry-cleaning and photo development into the waters near Miami for many years.

"The violations at Norwegian were some of the worst we've ever seen," Rick Langlois, EPA's Florida-based special agent in charge, said in an interview. "Almost every waste they had was going overboard."

The current CEO of the cruise line, Colin Veitch, acknowledged the company's past mistakes in a recent interview with USA Today. "The presence of hazardous waste in that mix does seem to have been the case" before the late '90s, said Veitch, who took over in 2000.

Langlois and several other investigators from government agencies that probed Norwegian wanted to see the cruise line pay more than a $1 million fine, because the Norway and other ships it owned dumped so much waste for so long. For some of the same types of violations, Royal Caribbean Cruises in recent years was fined $27 million and Carnival Corp. $18 million.

But the Justice Department imposed a $1 million fine to reward the company's new owners for voluntarily reporting pollution problems and assisting the government — even though Norwegian received a tip that an EPA probe was underway before it came forward.

The outcome "may have fit the circumstances, rather than the crime," says EPA agent James Pearsall, who investigated the company.

"It's definitely troubling," says Teri Shore, an activist for Bluewater Network, a San Francisco-based environmental group. "It's like telling the industry it's OK to pollute, so long as you tell us later."

The Norwegian case is an eye-opening glimpse into the federal government's long fight against cruise ship pollution.

In a campaign to reverse decades-long dirty practices, the Justice Department has prosecuted nine cruise lines in nine years for dumping everything from plastic trash to hazardous waste and oil. It has been a sometimes frustrating battle against secretive dumping, often at night, by foreign-registered ships owned by foreign-registered companies.

By avoiding proper disposal, the cruise lines saved hundreds of thousands — possibly even millions — of dollars a year.

A lighter penalty

The Norwegian case is significant because, despite its pollution history, prosecutors imposed a lighter penalty to reward the cruise line's new owner for offering no resistance, admitting wrongdoing and taking steps to fix problems.

Knowingly dumping hazardous waste into Miami's Biscayne Bay "is a crime," says Richard Udell, a Justice Department senior trial attorney for environmental crimes. "In this case, Norwegian provided cooperation above and beyond what any cruise line had done in any prior case." The one felony to which the company pleaded guilty was representative of its violations, he said.

But this case and other recent developments, including a major cruise ship spill in Alaskan waters in August, raise questions about whether — and why — some in the cruise industry still might be circumventing pollution laws.

"I can tell you the senior management of my (cruise) lines is focused on improvements," says Michael Crye, president of the International Council of Cruise Lines, which represents the biggest cruise lines. "Gone are the days when the oceans were viewed as a dumping ground."

Others aren't convinced.

"Recent cases document continuing violations both by cruise ships and the much larger shipping industry," says prosecutor Udell.

"What we found at Norwegian surprised and angered us," says agent Langlois. "Is the message getting out? I don't know."

"We see the same practices that cruise lines have been convicted for happening over and over," says Tracy London, policy director for Oceans Blue Foundation, a Vancouver, British Columbia-based environmental group.

Among recent developments:

• In April, Carnival Corp. pleaded guilty to falsifying records to cover up oil pollution by six ships over several years. It paid a fine of $18 million, and the company is on probation. A new violation could prompt new criminal charges.

• In late September, a fired Carnival Cruise Lines executive filed a whistle-blower lawsuit alleging a host of environmental and safety violations, including toxic-chemical dumping, on ships sailed by Carnival, Holland America, Cunard and Costa to many ports around the United States. Carnival Corp. owns all those lines. The allegations have not been proved, and Carnival Corp. has not commented on them.

• On Oct. 15, Carnival Corp. disclosed in a government filing that officers from one of its Holland America ships have been subpoenaed to testify before a federal grand jury in Alaska investigating a spill of wastewater in Juneau Bay in August. The Coast Guard in Alaska estimates that 40,000 gallons went overboard.

As much waste as a city

The cruise industry represents only a fraction of the worldwide shipping fleet. The most famous ship-pollution disaster involved the Exxon Valdez oil tanker, which spilled 240,000 barrels of oil into the Gulf of Alaska after running aground in 1989.

But federal authorities have focused considerable resources on cruise ships because of the industry's rapid growth and its unique threat. Unlike a typical freighter, which might carry a dozen crewmembers, a large cruise ship typically carries at least 2,000 passengers and 1,000 crew, generating as much waste as a small city.

Cruise ships also sail through fragile ecosystems such as Florida's coral reefs, Hawai'i's waters, and Alaska's Inside Passage.

Cruise ships generate a wide range of man-made toxins, including perchloroethylene (perc) from dry-cleaning; benzene and toluene from paint and solvents; and oily waste from fuel and machine oil. Perc is linked to cancer and birth defects in humans, and even small amounts in water have been shown to be toxic to aquatic animals. Benzene is a known human carcinogen. Oil in even minute concentrations can kill fish. Consuming oil can kill birds and cause internal hemorrhaging or death in marine mammals.

Proper disposal of that waste is costly. By law, waste must be analyzed for content, packaged, documented and shipped to an authorized disposal facility. Handling of one 55-gallon drum of photo waste, for example, runs about $300, says Larry Doyle, executive vice president of Cliff Berry, a Fort Lauderdale-based environmental services firm. Anywhere from a few to a dozen such drums are taken off a typical cruise ship after each trip.

According to Royal Caribbean figures, a typical cruise generates 110 gallons of photo chemicals, five gallons of dry-cleaning waste and 10 gallons of used paint. Doyle, whose firm handles waste disposal for all Carnival Cruise Lines ships in south Florida, says the annual bill runs in the "high six figures."

Miami's the hotspot

Nowhere has the Justice Department been tougher on cruise ship pollution than in Miami, the nation's cruise capital and headquarters of Carnival, Royal Caribbean and Norwegian, three of the biggest lines.

Last year, nearly 3.4 million passengers boarded cruise ships here. In the annals of cruise ship pollution cases, the four-year Royal Caribbean case was a watershed.

Royal Caribbean admitted in court it had installed special pipes on some ships — removed before every scheduled Coast Guard inspection — to bypass pollution-control devices that prevent oily dumping. The line also pleaded guilty to dumping toxic chemicals used in dry-cleaning, photo processing and other activities.

The Coast Guard shot aerial videotape in 1994 of an oil slick trailing Royal Caribbean's 900-foot ship Sovereign of the Seas near San Juan, Puerto Rico. Royal Caribbean hired several high-powered former Justice Department lawyers to argue that the federal government lacked jurisdiction to prosecute. Royal Caribbean is incorporated in Liberia.

That case "was in a class by itself," says Udell, who helped prosecute Royal Caribbean.

After a judge ruled the government did have jurisdiction, Royal Caribbean pleaded guilty to 30 criminal charges in Miami, New York, Puerto Rico, Los Angeles, the Virgin Islands and Alaska. It paid $27 million in fines in 1998 and '99. The line has since implemented a companywide environmental compliance program.

When subpoenas arrived at Carnival Corp. a year later, the corporate response was far different. Carnival didn't question jurisdiction and instead handed over 1,200 boxes of records and began negotiating a deal. In April, the company pleaded guilty in Miami, agreed to set up a compliance program and paid an $18 million fine.

Just three months later, Justice announced Norwegian's guilty plea and $1 million fine. The government's press release said Norwegian, a Bermuda corporation, had turned itself in and lauded the company's "corporate citizenship."

In its own announcement, Norwegian said only that it had "discovered reporting irregularities" and "immediately reported these problems to the government."

But whether Norwegian technically turned itself in is a matter of debate.

In fact, a former Norway officer, who had been fired for what Norwegian says were unrelated reasons, had gone to the EPA in 1999 with piping diagrams and videotaped evidence of oil-dumping by the ship, court documents and officials say. The EPA began an investigation. Months into it, senior Norwegian officials were faxed an anonymous letter warning that the former officer had tipped off the EPA, say federal officials and court records.

Agents already had come across other disturbing information: The Norway had few of the legally required records for its wastes and had apparently routinely dumped sewage and hazardous waste into the ocean for years, government officials say.

Around the same time, Hong Kong-based Star Cruises Group bought Norwegian in a hostile takeover and brought in a new CEO, Veitch. He was an executive with Princess Cruises when that line was investigated for pollution crimes years earlier.

Veitch says he heard about the faxed tip to Norwegian and immediately began looking for problems aboard the Norway, the company's oldest ship. He hired an outside consultant who witnessed Norway crew members tampering with pollution-control equipment to cover up dumping of oily bilge water. The consultant boarded a second ship, the Majesty, and found the same thing, court records say.

Norwegian's lawyer, Norman Moscowitz, approached the EPA and Justice in the spring of 2000, saying the cruise line wanted to voluntarily disclose pollution violations and request leniency: a civil case rather than a criminal one. The government declined that request, and the probe continued.

Only weeks later, in documents handed over by the cruise line, did investigators find the faxed tip.

Veitch and lawyer Moscowitz, one of the lawyers who represented Royal Caribbean, maintain that the company didn't know it was under active investigation when it came forward. No subpoenas or search warrants had been issued.

"If we actually thought something was going on, I would have acted on it the day I arrived," Veitch says. "The decision (to self-report) was very difficult. We knew we were potentially exposed to a huge fine."

The last steamship

The Norway is believed to be the last steamship in U.S. cruise use, and it runs on 1,700 tons of black oil a week.

The vessel, as long as three football fields, was designed before modern environmental laws and had never been retrofitted.

Before Star Cruises took over, it had outdated equipment for separating water from waste oil that drops into the bilge. It also had a single 547-ton wastewater tank that held all dirty water and waste from toilets, kitchens, showers and sinks used by 3,000 passengers and crew.

Though the company had added two upper decks of cabins during the '90s, the wastewater tank had not been enlarged, Veitch says, so that it sometimes overflowed into Port of Miami waters. Dumping untreated sewage within 12 miles of the coast is illegal.

When investigators asked for Norwegian's required records of hazardous waste disposal by the ship, they say they found none kept before 1998 and incomplete records after that. Agents were told those wastes had probably gone overboard, too — as Royal Caribbean was convicted of doing.

Without waiting for the investigation's outcome, Veitch ordered new pollution-control equipment installed on all Norwegian ships. Since early 2000, Veitch says, Norwegian has invested $22 million in pollution-control equipment, training and testing.

"Their cooperation set a very high standard," says Udell, the prosecutor. "We struck a balance to reward that." The company even turned over to Justice notes from internal interviews with employees that contain what amount to criminal confessions of polluting, he said.

Today, the Norway has three tamper-proof machines that separate oil from bilge water and recycle the oil.

The wastewater tank capacity has been nearly doubled, and the company is installing a treatment system that will sanitize wastewater before it's sent overboard. Toxic wastes are packaged and offloaded.

People familiar with the case say the government is still investigating current or former Norwegian employees. But the case against the company is closed.

"We think it's a very fair outcome," Veitch says.

"Nothing in this result says that what they did wasn't serious," Udell says.

EPA agent Langlois, who wanted a stiffer penalty, has his own view of Norwegian's decision to come forward as it did.

"In light of the circumstances," he says, "it was a brilliant business decision."