It sounds to me like this specific issue is probably the tip of the iceberg. Although the company has clearly publically invested in deployment of a formal PM methodology, it sounds like there is no real appetite for the structure and control it provides, either "at the coalface" or with the management.
Simply put, if there is no appetite for enforcing a simple and useful procedure like regular Checkpoint Reports within the management, then you will not be able to achieve it yourself no matter how much you plead, argue or logically debate. If it has always been done this way "for years" then that is the way it is done at the company.
It would take a paradigm shift within the company management and culture in order to effect such a change. Having said that, it is possible to deploy small incremental change by stealth in such an environment but it takes a long time. You have to start with the tiniest of change, that appears to benefit someone in some way. If you can make someone's life easier with a small procedural change then they will likely adopt it (why wouldn't you opt for an easier life?) and you can build on that over time, covertly, until you entrench new ways of working. The problem you currently face is that completion of Checkpoint Reports does not make their life easier, it actually makes it harder for no benefit or gain on their part. Since no-one has ever, and no-one will ever force them to comply, they won't do it.
If there is real appetite within management for more control and structure (which is often brought about by a need to be more accurate with job estimation, delivery dates, quality issues and rework costs etc.) then the new direction must come from the top.
Sadly Project Management is probably just seen as an annoyance within the structure that pesters the workers and doesn't deliver value to the management (otherwise they would enforce better practises).
So in summary:
- If management see the benefits of structured PM (and perhaps it will take you to show them these benefits) then work with them to determine what, from the methodology, is mandatory for your organisation, what would be nice to have in your organisation and what is irrelevant to your org. Don't try and deploy every part of Prince 2 just to be Prince 2 compliant, that will waste a lot of time and money
- If management has no interest in this then determine if you are in for the long haul and work out where you need to get to procedurally and lots of little steps in between, then deploy them slowly, embedding each one properly before you move on to the next one. You probably will not want to be transparent about this plan- no-one wants to feel like they are being manipulated by stealth!
- If neither of the above are likely to work for you, then you just have to work out whether you can live with the current systems or leave
It is intensely unsatisfying, and a miserable existence to boot, for a process and detail driven Project Manager to have to manage an unstructured and uninterested chaotic process. I know, I've been there. No good ever comes of it.