Whistleblower Disclosure Leads to Largest-ever Criminal Penalty for Vessel Pollution

A whistleblower disclosure triggered a federal investigation into Princess Cruise Lines resulting in a $40 million criminal penalty, which is the largest-ever fine for deliberate vessel pollution.

Whistleblowers are the key to detection of fraud, misconduct, and critical international environmental laws, especially the illegal dumping of oil in the middle of the ocean. “These whistleblower programs must be vigorously defended and the federal government’s commitment to these programs must be increased to continue to combat fraud and corruption,” said Stephen M. Kohn, Partner at Kohn, Kohn & Colapinto, LLP who also serves as the Executive Director of the National Whistleblower Center.

On December 1, 2016, the Department of Justice imposed a $40 million fine on Princess Cruise Lines, Ltd. for deliberate ocean pollution. The prosecution is the direct result of an investigation initiated by a whistleblower.

Of the thousands of ships at sea every day, up to 15% will knowingly pollute by ignoring and bypassing regulations, according to Marine Defenders. Far away from official oversight and in international waters, the only people who can prevent this from happening are the courageous whistleblowers who report this behavior

The Princess Cruise Lines’ Caribbean Princess was approximately 23 nautical miles from the shore and within the Exclusive Economic Zone of the United Kingdom when it dumped approximately 4,227 gallons of illegally discharged oily bilge water on August 26, 2013. The whistleblower, a newly hired engineer who was on his second three-month contract with Princess, witnessed a bypass pipe (also known in the maritime industry as the “magic pipe”) being used to bypass the oil water separator and dump directly into the ocean. The whistleblower notified United Kingdom’s Maritime and Coastguard Agency (“MCA”) and provided them with video and photographic evidence depicting the magic pipe and how the rate of discharge from an oily bilge water store tank was operating faster than it could be processed in the ship’s oily water separator.

The Princess Cruise Lines plead guilty to one count of conspiracy, three counts of knowingly violating the Act to Prevent Pollution from Ships including the failure to maintain an accurate Oil Record Book, and two counts of obstruction of agency proceedings.

If approved by the court, the Princess Cruise Lines will pay $30 million in criminal fines and be apportioned as follows: $27 million for knowingly and willfully entering into a conspiracy, $2 million for violating the Act to Prevent Pollution on Ships ($1 million of which will be paid to the whistleblower), $1 million for obstructing agency proceedings, and $10 million to community service projects to benefit the maritime environment. Of the $10 million, $3 million of the community service payments will be distributed to environmental projects in South Florida and $1 million will be allocated for projects to benefit the marine environment in United Kingdom waters.

This case, like many others, would not have been prosecuted without the key evidence from the whistleblower. The largest-ever criminal penalty for deliberate vessel pollution that will be paid directly to the federal treasury and public works was made possible because of a whistleblower.

*KKC has initiated numerous foreign corruption, violations of wildlife laws and misconduct cases with the assistance of whistleblowers.