Princess Cruise Lines Ltd

In December 2016, Princess Cruise Lines Ltd pleaded guilty in the US to “seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up.  Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship… As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years.  The ECP will require independent audits by an outside entity and a court appointed monitor.”

“The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England.  The whistleblowing engineer quit his position when the ship reached Southampton, England.  The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie.”

The criminal acts are described in detail in the DOJ press release.

Princess Cruise Lines Ltd posted a statement on its website addressing this matter.  It said:

We are extremely disappointed about the inexcusable actions of our employees who violated our policies and environmental law when they bypassed our bilge water treatment system and discharged untreated bilge water into the ocean.

When we became aware of this back in August 2013, our headquarters management cooperated with the U.S. Department of Justice (DOJ), the U.S. Coast Guard (USCG) and at the same time we launched our own internal investigation to learn all that we could about what happened.

As a result of our investigation we discovered practices, on some other ships, where we were operating out of policy and in violation of environmental law.  We have reached a plea agreement with the DOJ, which was announced today.

Although we had policies and procedures in place, it became apparent they were not fully effective. We are very sorry that this happened and have taken additional steps to ensure we meet or exceed all environmental requirements.

In fact, over the past three years we have implemented a number of corrective measures to improve our oversight and accountability. For example, we completely restructured our entire fleet operations organization including new leadership. We also increased the scope and frequency of our training, and proactively invested millions of dollars to upgrade our equipment to new ship standards to ensure compliance with all environmental regulations.

The marine environment is incredibly important to us and we are using this experience to further improve our operations.  Princess Cruises stands committed to environmental practices that protect our oceans.

 

Wells Fargo

In September 2016, US Bank Wells Fargo was fined $185 million by the Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency, and the City and County of Los Angeles, for opening over two million accounts in customers’ names without permission.  This conduct was considered by the CFPB to be an “unfair, deceptive or abusive act or practice”, within the definition given at 1036(a)(1)(B) of the Consumer Financial Protection Act of 2010; the Office of the Comptroller considered it “unsafe or unsound sales practice” and the City and County of Los Angeles considered it “unlawful, unfair, and fraudulent sales and related business acts and practices in violation of California Business & Professions Code sections 17200, et seq., resulting in harm to California consumers”.

The conduct had occurred over five years, and scandalised the US public, prompting a US Senate Banking Committee examination of Wells Fargo’s CEO.

The response from Wells Fargo changed somewhat rapidly.

At first, on 13 September 2016, (now retired) CEO Stumpf denied any problem with the bank’s culture, blaming rogue employees.

Three days later, on CNBC’s ‘Mad Money’, he accepted that “we take accountability for not getting it right 100% of the time,” noting, however, that, in relation to the employees who had opened the accounts illegally, “That, I– I can’t– you know, I don’t know how to explain that. I don’t know how to explain human behavior. But I know we own it also.”  Nonetheless, he announced that the “sales targets” had been removed for staff.  It really was a mystery, though, why those naughty employees did what they did, and I suppose even $19.3M per year can’t buy that kind of expertise.

By the end of the month, the bank had adopted a more contrite position, advising on its website it had retained a firm to conduct some sort of investigation into what happened, and make recommendations, which, at the time of printing, included CEO Stumpf and ex-Head of Community Banking Tolstedt forfeiting their “outstanding unvested equity awards”.

On 12 October 2016, Mr Stumpf “decided to retire” and the bank got a new CEO.

By the end of the month, Wells Fargo had broadcast a television campaign, described here, and established a section of its website, clearly accessible from the homepage, providing information to consumers and investors.

Among the FAQs, the Bank says:

Why have Wells Fargo’s sales practices been in the news?

Recently, we reached settlements with the City Attorney of Los Angeles, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency over allegations that some of our retail banking customers received products they did not request.

We truly regret and take full responsibility for any instances where customers received products they did not request. We are fully committed to doing everything possible to fix this issue, strengthen our culture, and take the necessary actions to restore our customers’ trust.

Has Wells Fargo taken accountability for these issues? 

Yes. Our goal is to do what’s right for you, our customer, every single day. We recognize that we have fallen short of that goal, and we truly regret and take accountability for any instances where Wells Fargo customers received products that they did not request. We are fully committed to fixing this issue, reinforcing our culture and taking actions to restore your trust.

For additional information on accountability, read The Independent Board of Directors press release and other related information on this site.

 

 

 

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