Princess Cruise Lines has pleaded guilty to dumping oily waste at sea and is set to be fined $40m, the largest penalty of its kind.

The agreement also requires Carnival, its UK and US-listed parent company, to submit 78 cruise ships across its brands to a five-year environmental compliance programme.

A statement from Princess Cruise Lines 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.”

Use of a ‘magic-pipe’ which diverted oily waste into the waters was first identified by an engineer on Caribbean Princess in 2013, authorities later learned that it had been discharging the oil since 2005.

According to court documents, a single illegal discharge dumped 4,227 gallons of oil-contaminated waste off the coast of England on 26 August 2013.

Documents also show illegal practices were found on four other Princess ships (Star Princess, Grand Princess, Coral Princess and Golden Princess), including use of clean ocean water to fool onboard sensors that would otherwise detect dumping of improperly contaminated bilge water.

It is believed by authorities that cost savings was the motive and that the ship’s officers and crew conspired to cover up what was going on

The Princess Cruise Lines statement continued: “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.”

Papers released in court suggest that Princess has now undertaken measures in response to the investigation and has upgraded its oily water separators and content monitors on every ship in its fleet.

Friends of the Earth gave Princess Cruises a C grade overall, with an F for transparency, in its 2016 Cruise Ship Report Card.

John Kaltenstein, senior policy analyst for Friends of the Earth, responded to the guilty plea: “Princess Cruise Lines’ offense is all too reminiscent of cases in the 1990s when the cruise industry was exposed by the US federal government for dumping oily waste and bypassing their treatment systems to save money.”

He concluded: “Deliberate pollution is completely unacceptable and we continue to call on the cruise industry to be transparent and clean up its act. The entire industry needs to be investigated, and the ships violating the law should be banned from U.S. waters for at least one year.”

“This egregious case of wrongdoing shows just how critically we need federal agency and congressional oversight of cruise industry pollution practices.”

By Alice Mason