No body to punish,
no soul to condemn?
MASTER THESIS
CHRISTIANE DE NEVE
AUGUST, 2014
UNDER SUPERVISION OF
PROF.DR. HARMEN G. VAN DER WILT
Christiane de Neve 5781396Table of contents
Introduction 3 1 – History of corporate criminal liability Introduction Common law versus civil law Early development of corporate criminal liability From the Nuremberg Trials to present day thinking 5 5 5 8 9 2 – Corporate criminal liability: actus reus and mens rea Introduction Legal personality Rationale corporate criminal liability Requirements for corporate criminal liability: actus reus and mens rea What’s next? 12 12 12 13 14 16 3 – Corporate criminal liability in international and national law Corporate criminal liability on international level Corporate criminal liability on national level 17 17 19 4 ‐ Summary and conclusion Introduction Summary & Conclusion 23 23 23 Bibliography Literature Additional Jurisprudence 27 27 29 30
Introduction
“Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like.1 Or, as Milton Friedman stated, “the business of business is business.” For a long time corporations were not accountable for violations of human rights and committing international crimes. The relationship between corporations and human rights violations however is not new. Already in the 17th century the East India Company was critized for extending its power through the exploitation of resources and people in the colonized countries.2 During the last decades, multinationals, and even smaller companies, participate in a global economy and in that capacity fulfil an increasingly important role, also in human rights violations and international crimes like crimes against humanity, genocide and war crimes.3 As Weigend mentions: “It is not (only) men that commit crimes, but corporations. It is not a single individual who sells poison gas to a dictator to be used in war crimes, but a firm, organized as a legal person, that is the provider of the gas. It is not a single individual who buys and re‐sells stolen diamonds and thus lends critical financial support to a dictatorial regime, but an enterprise specialized in such lucrative deals.“4 Given this importance, it is logical that corporations receive more and more attention, particularly in international criminal law.5 In May 2008, the European University Institute in Florence, Italy, held a conference about international criminal liability for corporations.6 The attendants, among them Bert Swart7, Thomas Weigend8 and Andrew Clapham9, argued about the desirability of corporate criminal liability. The
contributions of Weigend and Clapham have since been published in the Journal of International Criminal Justice.10 Their articles triggered my interest for the subject matter and therefore function as the starting point for my master thesis. In response to the above I formulated the subsequent research question: Can (multinational) corporations be held criminally liable for committing and/or aiding and abetting of international crimes under international criminal law? I will focus on the question as to whether there exist obstacles for adjudication on the international level, and the question whether adjudication on the national level is actually a better solution. 1 Edward Thurlow, English jurist and Lord Chancellor (1731‐1806). 2 Ratner, S.R., Corporations and Human Rights: A Theory of Legal Responsibility, Yale Law Review, 2001, p. 453‐ 454. 3 Slye, R., Corporations, Veils and international Criminal Liability, Brooklyn Journal of International Law, 2008, p. 961. 4 Weigend, T., Societas Delinquere non Potest? A German Perspective, Journal of International Criminal Justice, 2008, p. 928. 5 For example: Clapham, A., Extending International Criminal Law beyond the Individual to Corporations and Armed Opposition Groups, Journal of International Criminal Justice (2008), Clough, J., Punishing the Parent: Corporate Criminal Complicity in Human Rights Abuses, Brooklyn Journal of International Law (2008),
Duruigbo, E., Corporate Accountability and Liability for International Human Rights Abuses: Recent Changes
and Recurring Challenges, Northwestern Journal of International Human Rights (2008), Kremnitzer, M., A Possible Case for Imposing Criminal Liability on Corporations in International Criminal Law, Journal of International Criminal Justice (2010), Ramasastry, A. en R.C. Thompson, Commerce, Crime and Conflict. Legal Remedies for Private Sector Liability for Grave Breaches of International Law. A Survey of Sixteen Countries. Executive Summary (2006). 6 New Vistas of International Criminal Justice Conference (Florence, Italy, 15‐17 May 2008). 7 Professor of Criminal Law, University of Amsterdam. 8 Professor of Criminal Law, University of Cologne. 9 Professor of Public International Law, Graduate Institute of International & Development studies, Geneva. 10
International Trends towards Establishing Some Form of Punishment for Corporations, Journal of International Criminal Justice, 2008, p. 947‐979.
Structure
My thesis will comprise of four parts. Chapter one will provide an overview of the way corporate criminal liability has developed in international law. In chapter two I will address several subsidiary questions in order to give an adequate answer to my research question; whether corporations have international legal personality, whether criminal liability of (multinational) corporations can be traced back to the actus reus of the specific company and how that actus reus must be seen? Are corporations morally blameworthy, do they have a guilty mind? This question concerns the mens
rea. In other words: are corporations able to act criminally and be held morally responsible for
violations of human rights and/or international crimes? In chapter three the focus will be on two routes to assess the liability of corporations for taking part in international crimes. In the last chapter I will give an answer to my research question and consider whether or not international criminal law is the most appropriate way to hold multinational corporations responsible for international crimes. Amsterdam, August 2014
1
History of corporate criminal liability
Introduction This chapter aims to provide a general overview of the way corporate criminal liability has developed in international criminal law. First I will give a brief overview of the differences between common law and civil law. Then, I will shortly pay attention to the early development of corporate criminal liability. Finally, I will focus on the modern day evolution of corporate criminal liability, putting emphasis on international crimes. I will address the Nuremberg trials, the ad‐hoc tribunals and the International Criminal Court since these tribunals are mandated to international crimes.
Common law versus civil law
There is a well‐known distinction between civil law and common law systems. This division also exists with regard to the principle of corporate criminal liability. Although criminal responsibility concerning legal persons is firmly rooted in common law systems, it is much less accepted in continental civil law countries where the legal doctrine societas delinquere non potest (legal entities cannot commit crimes) is still influential.11 This principle covers the notion that corporations do not have the capacity to act wilfully or intentionally, which is required by criminal law. Corporations also cannot be punished in a way human beings can. Common Law countries
Common law countries like the United States and England were the first to impose corporate criminal liability. However, both jurisdictions differ in their development.
England wass initially not in favour of the idea of corporate criminal liability. Corporations could not only not possess the required mens rea, but also personal appearance before the court, was seen impossible.12 And it was, according to Smith & Hogan, not legally possible to punish a company.13 Nevertheless, there was a gradual movement to corporate sanctioning. The recognition of corporate criminal liability in England started in 1842, when the Birmingham & Gloucester Railway Company was fined for failing to fulfil a statutory duty. The railway company failed to build adequate roads and bridges to alleviate interruptions caused by its construction activities.14 The English courts subsequently followed the doctrine of respondeat superior15or vicarious liability, in which the acts of a subordinate are attributed to the corporation.
11 Fauchald, O.K. & J. Stigen, Corporate Responsibility before International Institutions, The George Washington
International Law Review, 2009, p. 1040.
12 Stessens, G. Corporate Criminal Liability: A Comparative Perspective, International and Comparative Law
Quarterly, 1994, p. 495. 13 Smith, J.C. & B. Hogan, Criminal Law, London, 1992, p. 178‐179. 14 Birmingham & Gloucester Railway Co (1842) 3 QB 223. 15Respondeat Superior is Latin for ‘let the master answer’. It is the legal doctrine which states that an employer is responsible for the acts carried out by employees performed within the course of their employment. This doctrine was created in the law of torts in the 17th century in order to provide compensation for third parties, when the servant acted for the master, and caused an injury to the third party.
However, corporate entities could still only be held liable for crimes without the requirement of the necessary mens rea (this concept is further elaborated in chapter two). The rationale behind this was the fact that the mere existence of a relationship between master and servant was not sufficient enough for imputing personal fault to the master.16 But, in 1915 the House of Lords adopted the principle of attributing fault to a corporation in a case entitled Lennard's Carrying Co Ltd v Asiatic
Petroleum Co Ltd (1915 AC 705). This led to the directing mind principle which was explained by Lord
Richard Burdon Haldane.17 This alter ego theory has become a powerful method of imposing liability on a corporation and particularly effective for imposing criminal liability. However, it was only in 1944 that direct liability was imposed. In three cases18 criminal liability was imposed because it was judged that the corporations had acted themselves and not because their employees had acted. The
mens rea19 of the employees was considered to be as that of the specific companies.20 In sum, there was a gradual movement to corporate sanctioning. From corporate liability in the case of a breach of a statutory duty, via the imposition of vicarious liability where individuals could be vicariously liable as well, to direct liability imposed on corporations where the mens rea of the employees was considered as that of the company itself.
American courts were much faster in holding corporations criminally liable.21According to Coffee, also in the United States corporate criminal liability first developed “in the context of non‐feasance
by quasi‐public bodies that resulted in public nuisances”. However, already in 1850 this was extended
to all offences not requiring evidence of criminal intent.22 In 1909, in New York Central & Hudson
River Railroad Co. v. United States23 the Supreme Court adopted an approach in which a corporation could be held liable for the act of any of its agents. In the specifically developed (federal) Elkins Act the precedent was set whereby the acts and omissions of an agent within the scope of his employment and with the intent to benefit the company were considered to be those of the corporation. So, federal courts have adopted a vicarious liability approach for attributing criminal liability to corporations. Corporations are liable for the wrongful acts of their agents as they commit the crime within the scope of their employment and with the intent to benefit the company.24 16 Wagner, M., Corporate Criminal Liability : National and International Response, Commonwealth Law Bulletin, 1999, p. 601. 17 “A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and center of the personality of the corporation. It must be upon the true construction of that section in such a case as the present one that the fault or privity is the fault or privity of somebody who is not merely a servant or agent for whom the company is liable upon the footing respondeat superior, but somebody for whom the company is liable because his action is the very action of the company itself. It is not enough that the fault should be the fault of a servant in order to exonerate the owner, the fault must also be one which is not the fault of the owner, or a fault to which the owner is privy; I take the view that when anybody sets up that section to excuse himself from the normal consequences of the maxim respondeat superior the burden lies upon him to do so.” 18 Moore v. Bressler Ltd (1944) 2 All ER 515, R. v. ICR Haulage Co Ltd (1944) KB 551, D.P.P. v Kent and Sussex Contractors Ltd (1944) KB 146. 19 Mens rea is Latin for guilty mind and refers to the mental element of the offence that accompanies a guilty act. The term mens rea will be further elaborated in chapter two. 20 Stessens, supra nt. 12, p. 496. 21 Brickey, K., Corporate Criminal Liability, 1992, p. 63. 22 Coffee, J.C., Corporate Criminal Liability: An Introduction and Comparative Study, in: Eser, A., Heine, G. and B. Huber (eds), Criminal Responsibility of legal and Collective Entities, 1999, p. 13‐14. 23 New York Central & Hudson River Railroad Co. v. United States (212 US 481), 1909. 24 Kyriakakis, J., Corporate Criminal Liabilty and the ICC Statute: the Comparative Law Challenge, Netherlands International Law Review, 2009, p. 337.
According to Wells, these two conditions are interpreted broadly.25 Based on the above, it is arguable that in the United Kingdom vicarious liability equals respondeat superior, where in the United States it is sufficient that the agent has an actus reus and mens rea. It does not seem to be necessary that the agent is holding a leading position.
Civil Law countries
If corporate criminal responsibility has a relatively long history in the common law tradition, civil law countries have been more reluctant to recognize corporate criminal liability. In the 18th century sanctioning of corporations was generally accepted on the continent where civil law is predominant. However, the ideal of individualism, stemming from the French Revolution, swept this concept away.26 Weigend mentions three main reasons regarding this reluctance: corporations cannot act, corporations cannot be blamed, and corporations cannot be subject to criminal punishment.27 The consensus is that an act is a volitional movement towards an effect. According to Weigend, a corporation cannot make such a movement, nor has a will to do so. Because of the lack of a will corporations cannot be morally guilty. And as for punishment, corporations have no conscience and are therefore not able to realize that their behaviour is sanctioned or avoid violations in the future for that matter.28 Nevertheless, even in civil law nations there is development with regard to introducing (what is a prelude to) corporate criminal liability. Weigend mentions several countries which have introduced or expanded criminal punishment for corporations; for example the Netherlands,29 France30 and Switzerland31. In the 1930s, in the Netherlands the Dutch Supreme Court ruled in the Tribune‐case that the director of a printing company could be held criminally liable rather than the machine operator who actually printed the documents.32 This case is considered the first one in which so called intellectual or functional perpetratorship was assumed. However only in 1976, with the change of art. 51 of the Penal Code, a general system of corporate liability emerged, so from that moment on crimes could be committed by corporations themselves. Another example is France. This country only gave up its resistance against corporate criminal liability in 1992, by enacting a new Code Pénal which provides for the possibility of imposing criminal sanctions on corporations (see art. 121 and art. 122 Code Pénal). The French example was followed by other countries where forms of criminal liability have been adopted, for example Austria, Belgium, Denmark, Finland, Iceland, Norway, Portugal, Spain and Switzerland.33 So, there is an emerging trend in national approaches to corporate criminal liability across the civil law world; a shift from liability based on individual behavior attributed to the corporation to liability based on deficiencies by the organization itself. In that respect corporate criminal liability is not excluding individual criminal responsibility, but intended to complement this kind of responsibility.34 25 Wells, C., Corporations and Criminal Responsibility, 2001, p. 135. 26 Stessens, supra nt. 12, p. 494‐495. The French Grande Ordonnance Criminelle of 1670 (chapter XXI) already established criminal liability of corporations. This Ordonnance provided for the simultaneous criminal liability of individuals and accomplices (art. 5). 27 Weigend, supra nt. 4, p. 936. 28 Weigend, supra nt. 4, p. 937‐938, 941. 29 See art. 51 Wetboek van Strafrecht. 30 See art. 121‐122 & 131‐137 Code Pénal. 31 See art. 102 Strafgesetzbuch. 32 HR 13 march 1933, NJ 1933, 1385 (Tribune case). 33 Kyriakakis, supra nt. 24, p. 341‐342. 34 Kyriakakis, supra nt. 24, p. 342.
However, there are also still countries that do not provide for corporate criminal liability.35 Germany for example has never recognized corporate criminal liability. Instead, a system of administrative penalties was established on infractions (so called Ordnungswidrigkeiten). Under this system administrative fines can be imposed on corporations for wrongdoing committed by certain corporate officers.36Also the Italian Constitution has its limitations concerning the adoption of corporate criminal liability. According to art. 27(1) of the Constitution criminal liability is personal. In that respect a criminal charge can only attach to an individual human being and corporate criminal responsibility is therefore rejected.37 Nevertheless, it appears that in general in both common and civil law systems corporate criminal liability has evolved from individual criminal liability for wrongful acts of the corporation to recognizing criminal liability of the corporation itself.38
Early development of corporate criminal liability
As mentioned before, the relationship between corporations and human rights violations is a long standing one and one could eventually say that corporate criminal liability has its origins in ancient law. Already in the Roman Empire, there existed certain entities (so called universitates personarum or universitates rerum) with their own identity and independent rights and obligations. These entities were viewed as a fiction of law, but there are some authors who are of the view that those entities could commit a crime and could be subject of actions taken against them. In contrast with Roman law, where the universitates were seen as fictitious creations, Germanic law considered corporations to indeed be subjects of the law. According to Streteanu from the 14th until the end of the 18th century the doctrine was recognized that corporations had their own will and were therefore criminally liable. This medieval idea was based on the belief that all the corporations should be liable, both civilly and criminally, for the acts committed by their members.39 In France, there was the Grande Ordonnance Criminelle of 1670 which established liability for corporations. However, as a result of the French Revolution and its Enlightenment ideals, many continental European countries changed their views about corporate criminal liability. The emphasis was put on the idea of the autonomous will. It is for that reason that many corporations lost their power and importance, since corporations could not be held criminally liable because they were seen as a legal fiction with no independent will and lacking an own mind, making it difficult to see them as having the required mens rea.40 This idea lasted for centuries. 35
See Ramasastry, A. en R.C. Thompson, Commerce, Crime and Conflict. Legal Remedies for Private Sector Liability for Grave Breaches of International Law. A Survey of Sixteen Countries. Executive Summary, Fafo‐ report 536 , 2006, www.fafo.no/liabilities. This study tried to discover whether in existing domestic criminal (or civil) law there are processes for holding corporations accountable for involvement in grave breaches of international law.
36 A corporation can be sanctioned for wrongful conduct committed by a representative organ of the
corporation or a member of such an organ, or committed by lower level officers, provided that senior officers could have prevented such conduct through adequate surveillance (see: Kyriakakis, supra nt. 24, p. 343). 37 Kyriakakis, supra nt. 24, p. 345. 38 See Presbyterian Church of Sudan v. Talisman Energy Inc., 244 F. Supp. 2d, 2003. 39
Pop, A.I., Criminal Liability of Corporations – Comparative Jurisprudence, 2006, available at http://www.law.msu.edu/king/2006/2006_Pop.pdf, accessed 4 August 2014, p. 8‐10, citing Streteanu, F., en R. Chiriţă, Răspunderea penală a persoanei juridice, 2007, p. 4,9.
40
Metzger, M.B., Corporate Criminal Liability for Defective Products: Policies, Problems and Prospects, The Georgetown Law Journal, 1984, vol. 73, p. 47.
From the Nuremberg trials to present day thinking
According to the Nuremberg International Military Tribunal (further: IMT or the Tribunal) “crimes
against international law are committed by men, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.”41 However, the Nuremberg Charter provided: “At the trial of any individual member of any group or organization
the Tribunal may declare (…) that the group or organization of which the individual was a member was a criminal organization.”42 For that reason, the IMT was authorized to criminalize legal entities, including the Gestapo, the Sicherheitsdienst and the Schutzstaffeln (or SS).43 However, this authorization was not used. Although the IMT ruled that certain organizations could be seen as criminal organizations, mere membership of these groups was not sufficient for criminal liability.44 Although it was established that artificial persons could be guilty of international crimes), this judgment was declaratory only and the focus was on the prosecution of individuals involved in corporate crimes. The entity as such was not convicted. For example, in United States against Krupp twelve individual corporate officials were convicted for their participations in the criminal activities of their company. They were accused of having enabled the armament of the German military forces and also for having used slave laborers in their companies.45 The Tribunal did not declare the Krupp corporation itself a criminal organization as such, although the firm had played an important role in war‐time activities.46 The tribunal upheld the principle of individual criminal liability, since the defendants could only be liable if they had personally committed the charged offences.47 Nevertheless, the employment of slave labor was used to impute criminal intent on the corporation.48 In United Kingdom against Bruno Tesch, Tesch and two others were charged with a war crime in that they supplied poisoned Zyklon B gas to concentrations camps and that they had sufficient knowledge that the gas was to be used. In the end they were punished for their individual participation and not as representatives of their corporation.49 The clearest rejection of corporate criminal responsibility is found in United States of America against Carl Krauch et al (the IG Farben trial). Charges included the production of large quantities of Zyklon B and the use of slave labour. In its judgment the Court argued: “It is appropriate here to mention that the corporate defendant,
Farben, is not before the bar of this Tribunal and cannot be subjected to criminal penalties in these proceedings. We have used the term "Farben" as descriptive of the instrumentality of cohesion in the name of which the enumerated acts of spoliation were committed. But corporations act through individuals and, under the conception of personal individual guilt to which previous reference has been made, the prosecution, to discharge the burden imposed upon it in this case, must establish by competent proof beyond a reasonable doubt that an individual defendant was either a participant in the illegal act or that, being aware thereof, he authorized or approved it.”50 41 Military Tribunal for the Trial of German Major War Criminals against Göring and others, 1946, par. 42. 42
Art. 9 Charter of the International Military Tribunal – Annex to the Agreement for the prosecution and punishment of the major war criminals of the European Axis (Nuremberg Charter), issued on august 8th 1945. 43 Cassese, A., International Criminal Law, Oxford 2008, p. 138. 44 Supra nt. 41, par. 71. 45 United States against Krupp, judgement of July 13th, 1948. 46 Fauchald & Stigen, supra nt. 11, p. 1036. 47 Cassese, A., International Criminal Law, Oxford 2003, p. 139. 48 Ramasastry, A., Corporate Complicity: From Nuremberg to Ragoon: An Examination of Forced Labour Cases and their Impact on the Liability of Multinational Corporations, Berkeley Journal of International Law, 2002, p. 112. 49 United Kingdom against Bruno Tesch, British Military Court, Hamburg, March 1st‐8th 1946. 50 United States against Carl Krauch et al, judgement of July 30th 1948.
So, in the Farben trial, the court treated the corporation as a criminal instrument to frame the individual actors.51 In all of the above cases the guilty were convicted as individuals, not as agents of their companies. But although no corporations were convicted, the rulings in these cases nonetheless established that legal persons could be guilty of international crimes.
The ad hoc tribunals and the International Criminal Court (ICC)
The focus on individual criminal liability in the context of corporate involvement was upheld with the creation of the International Tribunal for Rwanda (ICTR) and the International Tribunal for the Former Yugoslavia (ICTY). The statutes of these tribunals (art. 5 ICTR and art. 6 ICTY) authorize them only to prosecute individuals and not legal entities. This was set out very clearly in the Tadic Appeals Judgment: “The basic assumption must be that in international law as much as in national systems,
the foundation of criminal responsibility is the principle of personal culpability: nobody may be held criminally responsible for acts or transactions in which he has not personally engaged or in some other way participated (nulla poena sine culpa).”52 And art. 7(1) of the Statute of the ICTY states: “A person who planned, instigated, ordered, committed or otherwise aided and abetted in the planning, preparation or execution of a crime referred to in articles 2 to 5 of the present Statute, shall be individually responsible for the crime” (emphasis added). This provision is further explained by the Report of the Secretary‐General on the establishment of the International Tribunal.53
Also the Rome Statute authorizes the International Criminal Court (further: the ICC or the Court) to prosecute only natural persons.54 Although the Rome Statute does not recognize legal personality, there have been efforts made to convince the state parties who were involved in the drafting of the statute to vest with jurisdiction over legal entities and not just natural persons. The most notable proposal came from France and stated: “The Court shall also have jurisdiction over legal persons,
with the exception of states, when the crimes committed were committed on behalf of such legal persons or by their agencies or representatives. The criminal responsibility shall not exclude the criminal responsibility of natural persons who are perpetrators or accomplices in the same crimes.”55
According to this proposal a corporation should be held criminally liable for the acts of any of its agents if an agent commits a crime within the scope of his employment and with the intent to benefit the corporation. Moreover, the proposal would have had allowed the imposition of liability of corporations besides the criminal responsibility of natural persons.56 Although the ICC would only have jurisdiction over the legal entity if the natural person acting and representing the corporation had been convicted (directing mind doctrine), the delegates failed to reach an agreement. It was argued that different approaches to corporate criminal liability among the state parties would pose a problem in light of the ICC’s complementarity scheme (art. 17 Rome Statute). 51 Ramasastry, supra nt. 48, p. 106. 52 Prosecutor v. Duško Tadić, IT‐94‐1‐A, 15 July 1999, par. 186. 53 Report of the Secretary‐General Pursuant to Paragraph 2 of Security Council Resolution 808 (1993), U.N. Doc.
S/25704, 3 May 1993, par. 53: “An important element in relation to the competence ratione personae (personal jurisdiction) of the International Tribunal is the principle of individual criminal responsibility. (…) the Security Council has reaffirmed in a number of resolutions that persons committing serious violations of international humanitarian law in the former Yugoslavia are individually responsible for such violations. 54 Art. 25 Rome Statute. 55 Draft Statute for the International Criminal Court, art. 23, UN Doc A/Conf 183/2/Add.1 (1998). 56 Clapham, A., The Question of Jurisdiction under International Criminal Law over Legal Persons: Lessons from the Rome Conference on an International Criminal Court, in Tamminga, M.T., and Saman Zia‐Zarif (eds), Liability of Multinational Corporations under International Law, 2002, p. 150‐151.
State parties that do not provide for corporate criminal liability within their domestic laws might be viewed as unable or unwilling to prosecute corporate defendants in the context of ICC admissibility determinations.57 So as a result, the Rome Statute still does not extend criminal liability to legal persons such as corporations.58
On the basis of the above it is clear that both the tribunals as well as the ICC do not adopt corporate criminal liability in the event of international crimes. Although it is beyond the scope of this thesis, a part of the solution eventually could be found in human rights law (which is further elaborated in chapter four, but is shortly set out below).
Present day thinking: United Nations Guiding Principles on Business and Human Rights
Although human rights law is beyond the scope of this thesis, it is worth mentioning something about the UN Guiding Principles on Business and Human Rights (further: the Guiding Principles) of John Ruggie. In august 1998, the United Nations established a working group which tried to create standards for corporations. In 2003 a final draft was completed: the Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with Regard to Human Rights (the Norms). Although the Norms initially were approved by the United Nations Sub‐Commission on the Promotion and Protection of Human Rights, the now‐defunct Commission on Human Rights determined in 2004 that the framework had no legal standing.59 However, the then UN Secretary General Kofi Annan appointed John Ruggie, Professor of International Affairs at the Kennedy School of Government and Affiliated Professor in International Legal Studies at Harvard Law School as the UN Special Representative for Business and Human Rights in 2005. His mandate was inter alia to
“identify and clarify standards of corporate responsibility and accountability for transnational corporations and other business enterprises with regard to human rights” and to “elaborate the role of States in effectively regulating and adjudicating the role of transnational corporations and other business enterprises with regard to human rights, including through international cooperation”.60 In 2008, Ruggie proposed a new Framework for Business and Human Rights which ultimately resulted in the Guiding Principles.61 While Ruggie’s norms are not legally binding, they nevertheless provide a basis for monitoring corporate malfeasance.62 57 Kyriakakis, supra nt. 24, p. 334. 58 However, note that former chief prosecutor of the ICC, Luis Moreno‐Ocampo, in his first public speech as chief prosecutor, linked the atrocities in the Democratic Republic of Congo to illegal business activities. He maintained that the killings will only stop when these business activities also stop and there is the intention to investigate these companies to ascertain whether or not they should brought before the ICC. see: http://www.globalpolicy.org/component/content/article/164/28445.html, accessed 4 August 2014. 59 Office of the High Commissioner for Human Rights, Responsibilities of transnational corporations and related business enterprises with regard to human rights, Human Rights Resolution 2004/116, available at: http://ap.ohchr.org/documents/E/CHR/Resolutions/E‐CN_4‐DEc‐2004‐116.doc, accessed 4 August 2014.
60 Office of High Commissioner for Human Rights, Human Rights and Transnational Corporations and other
Business Enterprises, Human Rights Resolution 2005/69, available at: http://ap.ohchr.org/documents/E/CHR/Resolutions/E‐CN_4‐REs‐2005‐69.doc, accessed 4 August 2014. 61 Ruggie, J.G., Protect, Respect and Remedy: a Framework for Business and Human Rights Report of the Special Representative of the Secretary‐General on the issue of human rights and transnational corporations and other business enterprises, A/HRC/8/5, 7 April 2008. 62 Knox, J.H., The Ruggie Rules: Applying Human Rights Law to Corporations, in Mares, R. (ed), The UN Guiding Principles on Business and Human Rights: Foundations and Implementation, Leiden, 2012, p. 52.
2
Corporate criminal liability: actus reus and mens rea
Introduction
As mentioned in the introduction of my thesis, in this chapter I will address several subsidiary questions in order to answer my research question. In doing so I first make some general remarks about legal personality and address the question as to whether corporations have legal personality on the international level, because if there is no legal personality under international law, there is no discussion at all. Second, I will discuss the why of corporate criminal liability. Third, I will put emphasis on the requirements for corporate criminal liability. What are the requirements that must be fulfilled for a corporation to be able to commit a criminal act and can be held blameworthy?
Legal personality
Initially, international law was based on rules made by states for states. By signing and ratifying treaties states can voluntarily enter in relationships with other states. States do have this possibility since the prerogative of international legal personality is attributed to states. At first, only sovereign states were considered to have international legal personality and therefore the only entities with capacity to have rights and obligations under international law. Globalization, however, resulted in developments whereby states were no longer the only players in the international arena. In the 1990s the Security Council established two international tribunals in an attempt to prosecute the war crimes that were commited during the wars in, respectively, Rwanda (ICTR) and the former Yugoslavia (ICTY). Both tribunals confirmed (what was already established in 1945): that under circumstances individuals can have legal personality under international law, resulting in the fact that they could be held accountable for international crimes such as war crimes and crimes against humanity.63 The procedure for holding individuals responsible for international crimes was also made permanent in the Rome Statute of the International Criminal Court (ICC). Besides the abovementioned, it is frequently assumed that international criminal law is exclusively addressed to crimes committed by natural persons. Corporations have not been considered as legal persons, neither in jurisprudence with regard to the tribunals, nor in the corresponding statutes. However, there is an evolving pattern towards the recognition of the corporation as a legal person capable of committing crimes and therefore be liable for breaches of international (criminal) law.64
Corporate legal personality under national law
Once a corporation has legal personality in domestic law, this means that it can be held criminally responsible for crimes both committed under domestic jurisdiction and for crimes under international law when these crimes are subject to universal jurisdiction.65
63 Art. 6 Statute of the International Criminal Tribunal for the Former Yugoslavia and art. 5 Statute of the
International Tribunal for Rwanda.
64
See generally: Amann, D.M., Capital Punishment: Corporate Criminal Liability for Gross Violations of Human Rights, Hastings International & Comparative Law Review, 2001, p. 327,332; Engle, E., Extraterritorial Corporate Criminal Liability: A Remedy for Human Rights violations?, St. John’s Legal Comment, 2006, p. 288; and Laufer, W.S., Corporate Bodies and Guilty Minds, Emroy Law Journal, 1994, p. 648, 651‐655.
Under the universality principle, it doesn’t matter where the offence had taken place since jurisdiction is not limited by territorial boundaries because the nature of the offence gives jurisdiction to all states. In other words: every state has jurisdiction over certain offences, generally recognized as of universal concern. Any state may punish these offenses, regardless of the situs of the offence and the nationalities of both the offender and the victim.66
Corporate legal personality under international law
Although corporations are not the traditional subjects of international law, companies are increasingly recognized as having legal personality. According to Jägers a corporation can be seen as a subject of international law when the corporation: a) possesses international rights, b) is capable of maintaining and enforcing such rights before international judicial bodies, and c) holds duties under international criminal law.67With regard to rights, corporations are capable of possessing international rights. Two decisions of the European Court of Human Rights show that corporations can have rights under the European Convention for the Protection of Human Rights and Fundamental Freedoms. In Editions Periscope v. France, France had violated the right of a company to a hearing within a reasonable time under art. 6/1 of the convention. In Observer v. United
Kingdom the UK had violated the rights of two newspapers to freedom of expression under art. 10 of
the ECHR.68 Regarding international duties, there are, according to Weisbrodt, international instruments that are presumed to impose human rights duties directly upon corporations.69 Enforcing rights before judicial bodies is not debated, since most international contracts provide for arbitration in case of disputes.70 In sum, there is a growing trend to recognize corporate legal
personality in international law. However, particularly in human rights law. International criminal law still does not recognize corporate legal personality. Neither the statute of the International Criminal Court, nor those of the ad hoc tribunals, provide for legal personality regarding corporate entities. Rationale corporate criminal liability Why hold corporations and not their members criminally accountable? Assuming that employees of a company can be prosecuted, what then is the benefit of prosecuting the corporation itself? First, the power of corporations is greater than the power of its members. Collective action is more likely to results in greater harm than individual action. Individuals who are acting collectively can cause greater damage than one individual alone. More accurately, according to the English writer and philosopher William Hazlitt: “Corporate bodies are more corrupt and profligate than individuals,
because they have more power to do mischief, and are less amenable to disgrace or punishment. They feel neither shame, remorse, gratitude, nor goodwill.” According to Slye, major international
crimes71 all require some form of collective action.
66
Randall, K.C., Universal Jurisdiction under International Law, Texas Law Review, 1988, p. 788.
67 Jägers, N., The Legal Status of the Multinational Corporation under International Law, in Addo M.K., (ed)
Human Rights Standards and the Responsibility of Transnational Corporations, 1999, p. 263.
68
Editions Periscope v. France (26 March 1992, no. 11760/85) and Observer v. United Kingdom (23 November 1990, no. 13585/88).
69 For a list of international instruments that eventually impose human rights duties upon corporations see
Weisbrodt, D., Business and Human Rights, University of Cincinnati Law Review, 2005, p. 60‐64.
70
Jägers, supra nt. 67, p. 266.
Crimes against humanity require a “widespread or systematic attack”72 and according to art. 8 Rome Statute, war crimes require a “plan, policy or large scale commission of such crimes.” And although genocide does not expressly require collective action, a person acting alone is unlikely to commit genocide.73 Secondly, individuals cannot hide behind the corporation and vice versa, the corporation as a whole cannot shelter behind the criminal liability of individual members. In other words, both individuals and the corporations themselves are separate actors who can cause trouble separately and therefore be held liable. Third, corporate liability allows for more effective sanctioning and more effective means of punishment. Punishing the corporation besides punishing individuals would more effectively deter wrongdoing.74A disadvantage of this rationale is that ascribing the responsibility is built on the idea that the corporation itself can act upon certain norms and choose by itself not to do so. An act can, according to Jescheck and Weigend be described as volitional movement geared toward and effect determined by the will of an actor.75 It is very clear that corporations cannot act in this sense, simply because a legal person cannot make movements, nor has a will. So, it is not the legal person, but the natural one who is acting. How about blameworthiness? One can argue that a legal person does not have a free will like natural persons do. According to Jakobs (one of Germany’s leading criminal theorists) blameworthiness presupposes a capacity to comprehend the meaning of a (moral) norm and to take position with respect to that norm. This cannot in any way be transferred to the legal person itself.76 With these remarks I have briefly set out the requirements for corporate criminal liability. Requirements for corporate criminal liability: actus reus and mens rea Mens rea and actus reus are basically concepts of common law. According to Engle, they are initially not found in civilian legal systems nor in international law.77Actus reus and mens rea are coined in English law and derived from the principle actus non facit reum nisi mens sit rea (which means: an act does not make guilty unless the mind is also guilty) by Sir Edward Coke (1552‐1634).78 The actus reus has to be accompanied by the mens rea. An actus reus without mens rea is not considered to be a crime. The actus reus is considered to be a state of affairs and not only an act, since sometimes there is an omission instead of an act. In other words a crime can be committed although there is no act in the meaning of a so called ‘willed muscular movement’. For that reason also failures to act can count as an actus reus.79 In this respect a corporation can be blamed for not acting while their employees were involved in international crimes. Mens rea is often translated as a guilty mind. However, one can have a guilty mind without feeling guilty, believing that the act is morally and legally right. According to Cassese, most legal systems tend to take the same approach to mens rea. 72 Art. 7 Rome Statute. 73 Slye, supra nt. 3, p. 961. 74 Gotzmann, N., Legal Personality of the Corporation and International Criminal law: Globalisation, Corporate Human Rights Abuses and the Rome Statute, Queensland Law Student Review, 2008, p. 43‐44. 75 Jescheck, H.‐H. and T. Weigend, Lehrbuch des Strafrechts.. Allgemeiner Teil, 1996, p. 2170‐226. 76
Jakobs, G., Strafbarkeit juristischer Personen?, in: C. Prittwitz et al. (eds) Festschrift für Klaus Lüderssen, 2002, p. 568.
77 Engle, E., Extraterritorial Corporate Criminal Liability: A Remedy for Human Rights Violations?, St. John’s
Legal Comment p. 293.
78
Coke, Sir Edward, Institutes Part III, 1797, Coke was an English barrister, judge and politician.
The general notion of mens rea common to most legal systems of the world is about: intention (both a) the awareness that certain conduct will bring about certain results and b) a will to attain that result), recklessness (the awareness that conduct carries with it an unreasonable or unjustifiable risk that harmful consequences will occur, and the decision nevertheless to take that risk), and negligence (the failure to comply with generally accepted standards of conduct thereby causing harm while the actor believes that the consequences of his action will not occur).80 In sum, crimes are the union of both actus reus and mens rea. The idea behind these elements is that it is only possible to be convicted of a crime when it is proved beyond a reasonable doubt that responsibility for that crime can only be attributed to those ‘for the existence of a certain state of affairs’, which is forbidden by criminal law, and that with ‘a defined state of mind in relation to that state of affairs’.81 Actus reus: are corporations able to act criminally?
The actus reus is the so called illegal or unlawful act. In general, an act is considered as a bodily movement. However, also the absence of an action can be seen as an act. In that respect the expression of ‘conduct’ is more satisfactory, since this expression also covers an omission. Omissions are failures to fulfill a necessary bodily movement that are normally to be expected. For conduct to constitute an actus reus, it must be engaged voluntarily. In general, it is arguable that a corporation, because it is a legal person and not a real one, can only act through its employees. According to Weigend for example, corporations themselves are not able to act criminally.
As said, both the actus reus and mens rea are necessary. So guilt requires proof of fault, culpability or blameworthiness both in behaviour and mind. According to Weigend corporations cannot act in that sense, because they neither have a will, nor can they make movements. Corporations can only act through their organs or agents. Moreover, a legal person’s identity only exists on paper and a natural person is acting on behalf of the corporation.82 Nevertheless there seems to be a shift from individual to collective actions. As Weigend describes it: “It is not a single individual who sells poison to a dictator to be used in war crimes, but it is a firm, organized as legal person, that is the provider of the gas. It is not a single individual who buys and re‐sells stolen diamonds and thus lends financial support to a dictatorial regime, but an enterprise specialized in such deals.”83 In that respect the call for extending criminal liability to legal persons is not surprising. And although corporations operate through human beings, some of these individuals have the power to impose their actus reus and mens rea on the corporation, as mentioned in Tesco Supermarkets Ltd v. Nattrass: “Then the person
who acts is not speaking or acting for the company. He is acting as the company and his mind which direct his acts is the mind of the company. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company. If it is a guilty mind than that guilt is the guilt of the company.”84That brings us to the question of mens rea of a corporation.
80 Cassese, supra nt. 43, p. 58‐59. Note that Cassese also mentions inadvertent negligence (the failure to
respect generally accepted standards of conduct without anticipating the risk that such failure may cause harmful effects). It is however arguable whether or not this form of negligence is required to assume mens rea. 81 The state of affairs is called actus reus, the state of mind mens rea. See Smith and Hogan, supra nt. 13, p. 28. 82 Weigend, supra nt. 4, p. 937. 83 Weigend, supra nt. 4, p. 927‐928. 84Tesco supermarkets v. Nattrass Ltd, 1972, AC 153.
Mens rea: Can a corporation be held morally responsible and criminally liable for a crime?
According to both Cassese (see above) as well as Smith and Hogan, there are several mental attitudes. Already mentioned are intention, recklessness, and negligence. The ordinary meaning of intent is in general ‘with the purpose of’. However, intention can also be given a wider meaning. Sometimes, people do not have the intention to cause harm, but nonetheless take an “unjustifiable
risk of causing it”. In that case one is reckless. According to Smith and Hogan, the question whether
it is legitimate to take a risk “depends on the social value of the activity involved relative to the
probability and the gravity of the harm which may be caused.”85
Every crime has its own mens rea, so the term does not have a single meaning. However, Smith and Hogan provide for the following definition of mens rea: “Intention, knowledge or recklessness with
respect to all the elements of the offence, together with any ulterior intent which the definition of the crime requires.”86
One of the main arguments to reject corporate criminal responsibility for corporations is that corporations, as legal persons, are incapable of having a mens rea, since the will of the corporation depends on that of its employees, their superiors or both. In international law the nulla poena sine
culpa principle (no punishment without guilt) is an important axiom. This principle is about
blameworthiness and a free will. It is arguable that a legal person cannot be said to have a free will in the same way a natural person has. After all, the choice to act legally or illegally is a choice that is made by individuals or organs of a corporation and not by the corporation itself. Nevertheless, the mens rea concept is entering into international practice due to its use by international criminal tribunals. Already the Nuremberg trials constituted a basis for corporate liability for violations of international law (see chapter one). This was highlighted in Church of Sudan v. Talisman Energy Inc:
“The Nuremberg precedent cited above is particularly significant not merely because it constitutes a basis for finding corporate liability for violations of international law, but because the language ascribes to the corporations involved the necessary mens rea for the commission of war crimes and crimes against humanity; the types of criminal behavior at issue in the instant case.” 87
What’s next?
After having established that although there is a growing trend to recognize corporate legal personality in international human rights law, but not in international criminal law, emphasizing the sense of corporate criminal liability and the requirements of actus reus and mens rea, I will discuss two routes to assess the liability of corporations for taking part in international crimes. Through international criminal law, as Van der Wilt proposes88, and on the national level, as Stewart advocates.89 85 Smith & Hogan, supra nt. 13, p. 53‐60. 86 Smith & Hogan, supra nt. 13, p.72. 87 Supra nt. 38.
88 Wilt, H.G. van der, Corporate Criminal Responsibility of International Crimes: Exploring the Possibilities,
Chinese Journal of International Law, 2013.
89
Stewart, J.G., The Turn to Corporate Criminal Liability for International Crimes, available at SSRN: http://ssrn.com/abstract=2354443 or http://dx.doi.org/10.2139/ssrn.2354443, p. 8 and further.
3
Corporate criminal liability in international and national law
Corporate criminal liability on the international level
As discussed in chapter one it is in principle possible to hold corporations liable for international crimes. However, the statutes of the international (ad hoc) tribunals do not provide for criminal jurisdiction against corporations, and the International Criminal Court also limits the Court’s jurisdiction to natural persons. So, in principle corporate criminal liability is possible, but the practical implementation seems to be more difficult. However, according to Van der Wilt it is fair and feasible to hold both individual business leaders as well as the legal entity criminally responsible in cases “if the assistance in those crimes is connected with the raison d’être of the corporation.”90 Complicity Both before national and international criminal courts business leaders have stood trial on charges of complicity in international crimes.91 Think of the corporate business leaders who stood trial after the Second World War on charges of complicity in war crimes and crimes against humanity. Another example is the case of the Dutch businessman Van Anraat. He stood trial on charges of complicity in genocide and war crimes before Dutch criminal courts. He was acquitted on the charges of complicity in genocide, but was convicted for complicity in war crimes.92 According to Van der Wilt, in these cases there has also been corporate involvement in international crimes. In general, he argues that “the knowledge and contributions of corporate agents which are required to incur
criminal responsibility for complicity in international crimes correspond and correlate with their position of power and control within the corporation, which is necessary to implicate the legal entity.”93 Although in the Van Anraat case, Van Anraat was convicted as a natural person, it would not have been difficult to establish criminal responsibility of Van Anraats’ corporation, of which he was creator and director, since all the requirements for corporate criminal responsibility had been met. The selling of chemicals was the core business of the daily activities of Van Anraats’ company. He knew what he was doing since he was an expert in chemistry. He also had the power to decide whether and with whom he would do business since he had a monopoly position. Another – also Dutch – case is that of Guus van Kouwenhoven, who was befriended with the former Liberian president Charles Taylor. In March 2005 Van Kouwenhoven was indicted for war crimes against the citizens of Liberia (allegedly committed in the period of 1999‐2003). He would also have financed the civil war in Sierra Leone. Van Kouwenhoven was sentenced to eight years imprisonment for the trade of arms. He was acquitted for co‐perpetration of war crimes (committed in a non‐ international armed conflict). On appeal, Van Kouwenhoven was also acquitted of arms trade, due to lack of evidence. His supply of weapons to Charles Taylor did not imply that he was complicit in war crimes, since these weapons could also be used for other (lawful) purposes.94 90 Van der Wilt, supra nt. 88, p. 66‐72. 91 Van der Wilt, supra nt. 88, p. 43. 92 LJN: AU8685, District Court of The Hague, 23 December 2005, LJN: BA4676, Court of Appeal The Hague, 9 May 2007. 93 Van der Wilt, supra nt. 88, p. 43, 48. 94 NJ 2008, 468, par. 8.18 & 9.22.
To get back to Van Anraat, according to Van der Wilt there was a strong functional connection between the crimes and the nature of the assistance of Van Anraat. He states that “the internal
power and knowledge relations mirror the external position of control.” And that is, in the opinion of
Van der Wilt “precisely the reason why the assessment of the complicity issue coincides neatly with
the determination of the criminal liability of the corporation.”95 To van der Wilt it has to be assessed
whether captains of industry or other corporate agents are guilty of complicity, and it must also be investigated whether the acts and intentions of the natural person can be attributed to the corporation. He sums up several relevant criteria (the same as proposed by the French in their attempt to include corporate liability in the Rome Statute), such as the question as to whether the crimes took place in the daily course of the activities of the company, whether the natural person has control within the corporation, whether the accomplice has acted on behalf of the corporation, and whether the activities benefited the corporation.96 The wrongful acts should serve the raison
d’être of the corporate entity. It has to be assessed whether the activities that have taken place
belong to the core business of the company. Some of those activities are prima facie not innocent. For example the selling of poisonous gas or weapons to questionable regimes. Both poisonous gas as weapons do have a limited range of application modes, and in combination with the reputation of the specific business partners, one can predict what the deliveries will be used for.97 Besides, corporations can only act through their agents if those agents both act within the scope of their employment and have enough authority to bind the corporation. So corporate agents have to act on behalf of the company and have a position of control. This is measured by the extent that the agent can command that activities are carried out and events occur.98 Also important is the question whether the corporation has benefited from the wrongful conduct.99 Those who take advantages of certain activities, should bear the losses as well. “After all, the one who enjoys the honey should not
be protected from the sting.”100
Although Van der Wilt advocates corporate criminal responsibility, he argues that liability of corporations is not a substitute for individual liability. His principal argument is that the power and knowledge of the corporate agent, which is a precondition for complicity, is mirrored in a position of control and knowledge within the corporation, which is a prerequisite for corporate liability.101 Therefore Van der Wilt is not in favor of attributing wrongful conduct of corporations to companies themselves when this means bypassing the issue of individual guilt, since both individual complicity and corporate responsibility frequently interact.102 In this Van der Wilt agrees with the aforementioned French proposal on corporate criminal liability which was presented during the drafting process of the Rome Statute. So, a natural person has to act on behalf of the corporation, or as Wells states “within the scope of his employment, with the intent to benefit the corporation.”103 95 Van der Wilt, supra nt. 88, p. 63. 96 Van der Wilt, supra nt. 88, p. 66. See also: Working paper on article 23, paras.5‐6, A/Conf.183/13, 1994. 97 Van der Wilt, supra nt. 88, p. 68. 98 Supra nt. 96. 99 Van der Wilt, supra nt. 88, p. 71. 100 Van der Wilt, supra nt. 88, p. 72. See also Kremnitzer, M. A Possible Case for Imposing Criminal Liability on Corporations in International Criminal Law, Journal of International Criminal Justice, 2010, p. 913. 101 Van der Wilt, supra nt. 88, p. 72. 102 Van der Wilt, supra nt. 88, p. 73‐74. 103 Wells, supra nt. 25, p. 118.
