It is well established that certain corporations have a propensity to engage in serious criminal activity. At various times in history they have been used by dictators, rebel armies and even terrorists to carry out their crimes. 1 Frequently denounced violations by companies include the development and use of toxic chemicals in recent armed conflicts (former Yugoslavia) 2 and “pacts of connivance” – corrupt practices – between foreign companies and local governments. 3
In South Africa, following hearings which began in November 1997 on the involvement of economic actors in the system of apartheid, 4 the Truth and Reconciliation Commission (TRC) ruled unequivocally that companies had provided material support to the institutionalised crime. The TRC held that the companies played a central role in supporting the economy which kept the South African State running under apartheid and that companies derived substantial profit from the system of racial privileges. The TRC went so far as to say that some companies, particularly in the mining sector, contributed to the development and implementation of the apartheid system. 5 A full ten years earlier, the United Nations General Assembly had already condemned apartheid’s widespread and systematic use of racial discrimination as a crime against humanity. The UN Convention of 1973 on the elimination and Repression of the Crime of Apartheid established that “organisations, institutions and individuals committing crimes of apartheid are criminal.” 6
The ability of companies to violate international humanitarian law has thus far not resulted in their criminal liability before international courts. In the aftermath of the Second World War, 7 however, national laws have increasingly recognised the principle of corporate criminal liability and numerous international conventions and regional instruments have called upon States to legislate in this direction. The 20th century has been marked by an increase in the number and size of corporations, such that social and political life now appears to be heavily influenced by their behaviour. Their increased involvement in social relations corresponds proportionally with an increased involvement in criminal activity.
Many people believe that establishing a regime under which corporations, and not only the individuals who work for or manage them, are held criminally liable, will render prosecutions and enforcement efforts more fair and efficient. 8
The difficulty or impossibility of identifying the physical person(s) personally and criminally liable, despite serious analysis of a company’s management structure, internal organisation, memos, contracts delegating powers and written mandates, has often lead to a double impasse: the corporation’s impunity, or, the sentencing of supervisors – due to their position – although no fault of their own could be demonstrated. 9 In a purely functional manner, the court has on many occasions found a company’s manager to be criminally responsible, even in situations where it was unanimously agreed that key factors in the company’s organisation, particularly with regard to multinational groupings of companies, make it impossible to monitor all of the company’s activities. 10 Thus it seems necessary to establish corporate criminal liability, without eclipsing individual criminal liability when guilt is demonstrated. In some respects, corporate criminal liability would be more “promising” that the civil liability:
- Criminal procedure offers the benefit of theoretically relieving victims of the burden of proof ;
- Criminal procedure has a greater deterrent effect against future violations, particularly if the sanction imposed on the company is not limited to fines but also includes asset forfeiture or the closure of company branches involved in the offence; and
- Some statutes of limitations are longer in criminal matters, particularly in cases involving serious violations of international humanitarian law.
On the other hand, it should not be overlooked that the required evidentiary standards are higher and it is thus more difficult to demonstrate proof in criminal cases than in civil cases. In criminal cases, defendants may be acquitted due to doubt. In addition, the slowness of some criminal procedures sometimes prevents the case from reaching completion.