Once again a company has felt the pain that comes when it is caught violating an agreement with the Department of Justice. After taking a tongue lashing from a federal judge for repeatedly violating the law, Carnival Corp. executives have until autumn to hire a chief compliance officer and begin meaningful compliance reforms at the world's largest cruise line.

And if they fail again? U.S. District Judge Patricia Seitz of the Southern District of Florida has threatened to bar Carnival from docking at U.S. ports, and she said she'd consider punishing individual executives with criminal fines and prison time.

“The concern I have is that senior management has no skin in the game,” Seitz said in the June 3 threats to the executives. “My goal is to have the defendant change its behavior.” The company chairman, CEO, chief financial officer and senior management from each operating cruise line of Carnival were in the courtroom.

Seitz had demanded that the top executives be in the hearing June 3 to hear her ultimatum. A Carnival spokesman and its general counsel, Arnaldo Perez, did not return messages seeking comment Wednesday.

In 2017 Carnival had agreed to pay a record fine of $40 million after a criminal conviction for similar pollution. It signed a probation agreement then that included a promise to name a head compliance officer. It failed to do so while violating several other parts of the deal.

The March issue of Corporate Counsel magazine looked at some dire consequences when companies ignore their own agreements with federal prosecutors. In that article, former federal prosecutor Joan Meyer, now a partner at Baker McKenzie in Washington, D.C., said, “Where there is concern about the speed in which a company is rectifying a bad internal control situation, they [prosecutors] could be more punitive.”

Seitz signed off on a new, tougher probation agreement June 3 after finding Carnival deliberately discharged plastic into Bahamian waters and failed to record the illegal discharges accurately; falsified environmental training records aboard two cruise ships, and sent secret teams to ships to prepare them for required independent inspections.

It pleaded guilty to committing six probation violations, agreed to pay another $20 million criminal penalty, and promised to institute compliance reforms.

The new, three-year probation agreement requires Carnival to:

• Restructure the company's corporate compliance efforts, including appointing a new chief corporate compliance officer.
• Create an executive compliance committee across all cruise lines.
• Add a new member to the board of directors with corporate compliance expertise, and train its board of directors.
• Pay up to $1 million per day if it does not meet a Sept. 13 deadline for some changes, and $10 million a day for not meeting an Oct. 9 deadline for other changes.
• Pay for 15 additional independent audits per year conducted by the third-party auditor and court-appointed monitor, on top of approximately 31 ship audits and six shore-side audits currently performed annually.
• Comply with new reporting requirements, including notifying the government and court of all future violations.
• Make major changes in how the company uses and disposes of plastic and other non-food waste.

U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida said in a statement, “A corporation is responsible to its shareholders and board of directors to be profitable, but not by breaking the law and destroying the very environment in which it navigates for profit. Carnival's failure to comply with the terms of its probation, and later its attempt to drown its deceit, goes against the fiber of corporate compliance.”