This blog is authored by Nargees Basheer, a fourth-year law student pursuing BA.LLB (Hons.) from The National University of Advanced Legal Studies (NUALS), Kochi.
To begin with, the Rome Statute does not envisage the prosecution of corporations. However, corporate officers responsible for their company’s criminal conduct may be prosecuted. The question that has arisen before the international criminal law forums has been with reference to private non-state actors, and not specifically corporations and it has been held that there is nothing that prevents international criminal law from prosecuting such actors. This finding has been applied to hold corporate officials responsible, but there has been no similar jurisprudential development with respect to corporate responsibility.
The reason for not expressly including corporates within the purview of international criminal law was that, though it was initially considered, there was too little time to properly consider the proposal. Even more importantly, at the time, corporate criminal responsibility was not a concept widely accepted in domestic legal systems. Therefore, recognizing it in international criminal law might have been opposed to the principle of complementarity and led to issues with respect to the signing of the treaty. However, today many domestic systems have recognized corporate criminal liability and discussions have been undertaken by various interest groups and scholars to determine whether international criminal law needs to address this and if so, how and under what circumstances it may do so.
Why is Corporate Criminal Responsibility necessary?
The reasons that are commonly laid out to hold corporations criminally responsible may be discussed. Firstly, it is believed that collective action such as that by corporations likely result in greater harm than individual action. In fact, most crimes in the Rome Statute have acknowledged the severity of collective crimes. The four major crimes in the Statute – war crimes, crimes against humanity, genocide and aggression, all require collective action to some extent. While the first two expressly lay down this requirement for prosecution, genocide, though leaves out such a requirement, generally is a result of collective action and the fourth i.e., aggression, requires state involvement.
However, this requirement of collective action has not been relied on to hold corporates criminally responsible. It has been relied on to hold individuals responsible for the actions of other individuals. It is argued that the same notion may be applied to hold corporations liable for the actions of individuals that are unmistakably part of a larger scheme and may be attributed to the corporations. Moreover, corporations have the potential to be large economic powers. Their power may even be comparable to that of nation states in that their actions have a large impact. Similarly, this power may be put to use in numerous good ways, but also in many bad ways, as is the case with nation states. In many states, corporations assume great importance in areas that are not taken care of by the state, for instance, by active involvement in the transportations sector or telecommunication sector. It becomes increasingly important to accord corporations with responsibility for their actions in such instances wherein the corporations are immensely powerful.
Secondly, many a time the individual actions may not be sufficient to hold any of the individuals criminally responsible, whereas it is evident that a crime has been committed. It is unfair for the collective action to go scot-free in such instances when mens rea or actus reus of any individual cannot be clearly established. A sound justification that flows from the abovementioned argument is that the corporation may be deemed to have a mind of its own. This is particularly true in cases where a voting procedure is followed by the corporation and the opinions of the individuals may differ from those of the corporation which are arrived at through a democratic process. Such a scenario provides more scope for collective responsibility rather than aggregated responsibility of each individual who makes up the organization.
Thirdly, effective deterrence for such collective crimes may be better ensured through systematic punishment. This is justified on the basis that individual sanctions may not be as effective in acting as a deterrent to crimes that are committed by corporations. On the other hand, there is much to lose for corporations if they are held responsible for their actions and this is believed to help curb corporate crimes which are much bigger than the individual or their decisions, especially where the organizational structure plays an important role in the functioning and decision making of the corporate.
An argument in favour of corporate criminal responsibility would require reinstatement of the corporate ‘veil’ to hold the corporation responsible for the crimes, instead of the individuals. This notion is similar to that of holding states responsible for crimes committed by individuals, which has been an established norm in international law. However, the idea of holding individuals responsible for the crimes they committed behind the sovereign ‘veil’ was developed in International Criminal Law and its importance asserted by the Nuremberg Tribunal. Domestic law has maintained that the corporate veil has to be lifted to hold individuals responsible for their crimes. Nevertheless, there are domestic legal systems where corporations have been held criminally responsible. International criminal law has not yet drawn from these domestic systems and does not have a system to prosecute corporations.
It is argued that corporations enjoy rights and have certain obligations in general international law and that it is only fitting that they are held responsible for ‘the most egregious violations’ in international law, namely international crimes.
The New TV S.A.L decision
It is important to remember that even though the Rome Statute itself does not provide for corporate responsibility, such an interpretation is not impossible. This was stressed by the Appeals Panel in its decision in New TV S.A.L which was the first case to hold that corporates could be held criminally responsible. The truth is that international criminal law has not completely rejected the notion of corporate criminal responsibility. It had never been discussed as required until the New TV S.A.L decision. Historically, be it the International Military Tribunal at Nuremberg or the trials of German industrialists conducted by the United States, the idea of holding corporations responsible was underlying, though they were not held directly liable.
The New TV S.A.L decision was remarkable for holding that ‘corporations are not immune from accountability merely because they are a legal and not a natural person.’ However, it may be pointed out that the impact of this decision on international criminal law jurisprudence may be of limited scope. Firstly, it was by the Special Tribunal for Lebanon (STL) which has only limited jurisdiction. Further, it is an ad hoc tribunal and thereby not as universal as the ICC. The decision also pertains only to ‘contempt’ and did not deal with any of the core crimes. However, in this regard, some scholars argue that all the reasons stated by the STL were not exclusive to contempt cases and the case ought to be considered for application in a broad general context. Having accepted this argument, the practicality of corporate criminal responsibility would be the next issue that needs sorting.
When to hold a corporation liable?
Firstly, a corporation can be held vicariously liable for the acts of its employees. This has been established in many domestic systems. The second approach is to impose responsibility on the corporation only for acts of high level officials or managers of the corporation. This approach is intended to provide emphasis on the ‘brains’ of the corporation. It is necessary to define the standards of what actions can be attributed to the ‘brains’ of the corporation. This should not be a difficult task considering international criminal law has laid down standards for prosecuting persons in positions of responsibility. Similar standards may be devised. The third approach focuses on the concept that the ‘whole is greater than the sum of its parts.’ This approach emphasizes on the internal processes followed within the corporation and treats a corporation as an entity with a mind of its own. The fourth approach focuses on holding a corporation liable even though the conduct of no one person satisfies all the elements of the crime. It is argued that in instances when individuals cannot be held criminally liable the crime should not be ignored for that reason alone when the corporate can be held liable.
What can be done?
To make amends to the Rome Statute would be one of the first things that will have to be done to bring corporate criminal liability within the ambit of international criminal law. A proper distinction will have to be drawn between ‘natural persons’ and ‘juridical persons’ for the purpose of evidence and procedure. A major hassle will be to receive the approval of two-thirds of the state parties and this might be difficult as there are nations that are yet to accept corporate criminal responsibility in their domestic systems. Furthermore, States that are largely fueled by multinational corporations might be hesitant to accept such a change when it could effectively affect their economies. Another fact to be noted is that even a change in the Rome Statute will not be as effective as some major states are not yet party to the Statute and acceptance of corporate criminal responsibility in international criminal law is a task bigger than the ICC or the Statute itself. A solution suggested by scholars is to create a treaty-based multilateral tribunal on atrocity crimes with clear jurisdiction to adjudicate criminal complaints, and perhaps also civil claims, against juridical persons.