Faculty of Law, Monash University Research Paper No 2009/45

Corporate Criminal Liability and the ICC Statute: The Comparative Challenge

Joanna Kyriakis

This Paper can be downloaded without charge from the Social Science Research Network electronic library at: http://ssrn.com/abstract=no.1825568

www.law.monash.edu

Electronic copy available at: http://ssrn.com/abstract=1825568

NILR 2009

333

CORPORATE CRIMINAL LIABILITY AND THE ICC STATUTE: THE COMPARATIVE LAW CHALLENGE by Joanna Kyriakakis*
1. 2. 2.1 2.2 2.2.1 2.2.2 2.3 3. 3.1 3.1.1 3.1.2 3.1.3 3.1.4 3.2 3.3 4. 5. Introduction Corporate criminal liability: a comparative review The common law traditions: US, UK, Canada and Australia The civil law traditions Germany Italy International developments Corporate criminal liability and the ICC Statute Avenues for recognition of non-criminal mechanisms under the ICC Statute Prosecutorial discretion under Article 53 Admissibility determinations under Article 17 The ne bis in idem principle under Article 20(3) Deferral by the Security Council under Article 16 Guidelines for the assessment of non-criminal mechanisms Ramifications for the proposal to include corporations within ICC jurisdiction The case of corporate defendants: Is a flexible approach best? Conclusion

LLBLP (Hons), BA (Flinders); SJD (Monash), Research Fellow, Monash University, Australia. Thanks to Professor Bernadette McSherry for insightful comments on earlier drafts. Netherlands International Law Review, LVI: 333-366, 2009 2009 T.M.C. Asser Instituut and Contributors doi:10.1017/S0165070X09003337

334

J. KYRIAKAKIS

NILR 2009

1.

INTRODUCTION

The comparative law problem of diverse national positions in relation to both the principle and form of corporate criminal liability has been a live issue in the debates around corporate criminal liability under international law.1 In some states, for example, the principle of societas delinquere non potest (a corporation cannot commit a criminal offence) still prevails. In those states that do recognise the concept of corporate criminal liability, approaches to its implementation can vary signicantly. In relation to the proposal to include legal persons in the jurisdiction of the International Criminal Court (the ICC), it was argued that different approaches to corporate criminal liability across states would pose a problem in light of the ICCs complementarity scheme.2 The concern was that those States 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, or as non-existent, if corporations were included within the jurisdiction of the ICC. Some delegations held the view that providing for only the civil or administrative responsibility/liability of legal persons could provide a middle ground to the deep divergence of views held by states on the advisability of providing for the criminal responsibility of corporations in the Rome Statute of the International Criminal Court3 (the ICC Statute).4 This article examines the proposal for a non-criminal corporate liability regime under the ICC Statute and assesses whether such an approach is appropriate in the context of the arbitration of international crimes. The debate must be recognised as having new dimensions since the Rome Conference over 10 years ago. First, the impact of the rst 10 years of the ICC Statute is in itself signicant. Unlike the ICC Statute, many states do not delineate between natural persons and legal persons for the purpose of criminal law. By introducing offences similar to those contained within the ICC Statute in order to implement the Treaty, many states have extended enforceable duties to comply with international criminal law to corporations, covering both domestic

1. See, e.g., Developments International Criminal Law, 114 Harv. L Rev. (2001) p. 1943 at p. 2031; International Commission of Jurists Expert Legal Panel on Corporate Complicity in International Crimes, Corporate Complicity and Legal Accountability, Vol. II (Geneva, International Commission of Jurists 2008) pp. 52-59. 2. See further J. Kyriakakis, Corporations and the International Criminal Court: The Complementarity Objection Stripped Bare, 19 Criminal Law Forum (2008) pp. 115-151. 3. Rome Statute of the International Criminal Court, opened for signature 17 July 1998, 2187 UNTS p. 90 (entered into force 1 July 2002). 4. Footnote to draft Art. 23, in Report of the Preparatory Committee on the Establishment of an International Criminal Court, Ofcial Records of the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court, Rome, 15 June-17 July 1998 (UN Doc. A/CONF.183/13), Vol. III, p. 31.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

335

and overseas corporate activities.5 Those states have in that sense done domestically what the Rome Conference could not agree to do with the ICC itself. Second, while the ICC Statute may have avoided the question of corporate liability for international crimes by limiting the Courts jurisdiction to natural persons,6 since 1997 there have been a number of international instruments introduced that explicitly oblige states to introduce domestic corporate liability schemes for certain crimes.7 These instruments give us guidance as to how the comparative law problem has already been addressed at regional and international levels. Finally, there is increasing scholarship that corporations have direct duties under international criminal law, notwithstanding the recent spate of domestic international crimes laws, even if there have not been forums in the past in which those duties can be asserted.8 This article speaks to the question of the appropriate form for corporate liability in relation to international crimes should codication within an international instrument be attempted in the future.9 While it is directed specically to the ICC Statute, many of the arguments would apply equally to a distinct multilateral treaty addressed specically to corporations. The article is structured in the following way. Section 2 provides an overview of various national approaches to corporate criminal liability across the common law and civil law divide. The examples of Germany and Italy are explored in particular as examples of hybrid administrative-criminal schemes of corporate liability developed as a result of those states philosophical and constitutional positions on the concept of corporate criminal liability. Approaches to corporate liability adopted in recent international and regional instruments are then set out. Section 3 outlines prevailing views on whether, and in what circumstances, extra-criminal national mechanisms for responding to international crimes can constitute a bar to ICC jurisdiction in relation to individual perpetrators

5. See A. Ramasastry and R.C. Thompson, Commerce, Crime and Conict: Legal Remedies for Private Sector Liability for Grave Breaches of International Law: A Survey of Sixteen Countries (Fafo-report no. 536, 2006), available at <www.fafo.no/pub/rapp/536/536.pdf>; J. Kyriakakis, Prosecuting Corporations for International Crimes: The Role for Domestic Courts, in L. May and Z. Hoskins, eds., International Criminal Law and Philosophy (Cambridge, Cambridge University Press 2010). 6. Art. 25 ICC Statute. 7. A. Clapham, Extending International Criminal Law beyond the Individual to Corporations and Armed Opposition Groups, 6 Journal of International Criminal Justice (JICJ) (2008) p. 899 at pp. 915-916; see also the comments of B. Swart, Discussion, 6 JICJ (2008) p. 947 at pp. 948950. 8. See, e.g., Clapham, supra n. 7; W.C. Wanless, Corporate Liability for International Crimes under Canadas Crimes against Humanity and War Crimes Act, 7 JICJ (2009) p. 201 at pp. 217219. 9. The rst Review Conference of the ICC Statute will be taking place in early 2010 in Kampala, Uganda. While there is no denite agenda at this stage, the issue of corporate persons has not been agged as a likely item: Coalition of the International Criminal Court, Review Conference of the Rome Statute, at <www.iccnow.org/?mod=review> (last visited 18 October 2009).

336

J. KYRIAKAKIS

NILR 2009

and what this would mean if the Courts jurisdiction were extended to include corporations. Drafting options are then set out in broad terms. Finally section 4 considers some arguments in favour and against the adoption of a noncriminal liability scheme at an international level in relation to international crimes. It is argued that ideally corporate actors should be subject to criminal liability both at an international and domestic level on the basis of the nature of the crimes and the expressive function of criminal law. However a second tier option is also set out based on approaches to corporate liability adopted in recent international instruments. These instruments allow for exibility as to the characterisation of the domestic liability scheme provided certain conditions are met.

2.

CORPORATE CRIMINAL LIABILITY: A COMPARATIVE REVIEW

There is a broad historical divide between common law and civil law jurisdictions on the principle of corporate criminal liability in modern criminal law. This section provides a brief overview of the different traditions in the common law and civil law jurisdictions in relation to the principle, and form, of corporate criminal liability. It then concludes with a discussion of how these national differences have been dealt with in recent international instruments that require the adoption of national corporate liability schemes in relation to certain crimes. 2.1 The common law traditions: US, UK, Canada and Australia

The major common law jurisdictions overcame legislative and judicial reluctance regarding the imposition of criminal liability on corporations much earlier than civil law jurisdictions, perhaps as a result of their earlier experiences of rapid industrialisation and its attendant effects.10 In the United States of America (the US) and England, corporate criminal liability rst developed in the context of non-feasance by quasi-public bodies that resulted in public nuisances. By the mid 19th century this had been extended to all offences not requiring evidence of criminal intent.11 The move to crimes requiring proof of a fault element such as intention or recklessness was rst recognised in the US in

10. J.C. Coffee, Corporate Criminal Liability: An Introduction and Comparative Study, in A. Eser, G. Heine and B. Huber, eds., Criminal Responsibility of Legal and Collective Entities (Freiburg im Breisgau, edition iuscrim 1999) p. 9 at p. 14. 11. Ibid., pp. 13-14. For the history of corporate criminal liability in the common law traditions of the US, UK and Canada, see also G. Stessens, Corporate Criminal Liability: A Comparative Perspective, 43 ICLQ (1994) p. 493 at pp. 495-498.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

337

190912 and in Britain in 1917.13 Despite a common heritage, the current models that have developed across common law jurisdictions differ. At a federal level, US courts have largely adopted a vicarious liability approach to attributing criminal liability to corporations for all offences, including those involving intent.14 Under this doctrine, sometimes described as the agency principle or (in the language of US tort law) the principle of respondeat superior, a corporation is liable for the wrongful acts of any of its employees provided that such an employee commits the crime within the scope of his or her employment and with intent to benet the company.15 These last two conditions have been interpreted very broadly.16 Further, the concept of aggregate or collective knowledge is used so that it is not necessary to prove that an individual employee had the requisite intent. Information that is known in part to multiple actors within the corporation is aggregated and the aggregation of that knowledge can be imputed to the corporation.17 These very broad conditions of liability are moderated by prosecutorial policies and sentencing guidelines that recognise and reward certain conduct by the offending corporation including co-operation, internal monitoring mechanisms and compliance.18 Mitigation in sentencing based on factors such as a companys internal monitoring systems19 shift the US approach closer to an organisational model, which identies corporate fault within the control systems embodied in a corporations policies and practices, rather than a purely vicarious liability model. In England and Wales the prevailing approach for attributing direct criminal liability to corporations for crimes involving a fault element is the identication or alter ego doctrine.20 Only conduct by persons who control and direct the activities of a company can be attributed to the company, on the basis that they are considered to be the embodiment of the company. Hence, [t]heir acts and states of mind are the companys acts and states of mind.21 For that reason, only criminal conduct engaged in by persons considered to embody

12. New York Central & Hudson River Railroad Co. v. United States 212 US 481 (1909). 13. Wells identies the Kings Bench decision of Mousell Bros v. London and North Western Railway in 1917 as the rst indication in English law that corporate liability might move beyond strict liability or nuisance, albeit that the implications of this decision did not eventuate until some time later: C. Wells, Corporations and Criminal Responsibility, 2nd edn. (Oxford, Oxford University Press 2001) pp. 90-93. For a description of the development of corporate criminal liability in England and Wales: ibid., ch. 5. 14. Ibid., p. 130. This approach is also endorsed in South Africa: ibid., p. 130. For a discussion of US state criminal law: ibid., pp. 131-132. 15. Ibid., pp. 130 and 134. 16. Ibid., p. 135. 17. Ibid., p. 134. 18. Ibid., pp. 135-136. 19. United States Sentencing Commission, Guidelines Manual, 3E1.1 (November 2008) ch 8. 20. The most signicant UK decision setting out the identication doctrine is the House of Lords decision of Tesco Supermarkets Ltd v. Nattrass [1972] AC 153. 21. J.C. Smith and B. Hogan, Criminal Law, 6th edn. (London, Butterworths 1988) p. 171.

338

J. KYRIAKAKIS

NILR 2009

the companys directing mind and will can form the basis of the companys criminal liability.22 The signicant question is therefore which persons are in sufcient control within the corporate management structure to satisfy this test? While the test would include senior management and other superior ofcers, such as the board of directors, managing directors and the CEO, further down a chain of delegation it becomes less clear.23 This approach has been criticised as unduly restrictive and unrepresentative of the often horizontal or de-centralised decision making structures of many of todays modern complex corporations.24 Although Canada, New Zealand and Australia have inherited the English identication approach, in each of these jurisdictions the scope of direct corporate criminal liability has been expanded. In Canada it has been held that corporations may have more than one directing mind, across geographical locations and management structures.25 This reects an acknowledgement that modern corporations can be highly de-centralised. The Courts have therefore taken a more pragmatic approach, focusing less on whether a person occupies a particular position in form and more on whether, in reality, he or she exercises autonomous control over a given area of the companys activities.26 Since reform following the Westray mining disaster in 1992, Canadian law also provides for a form of due diligence argument to support corporate criminal liability, where a senior ofcer can be shown to have failed to take all reasonable measures to stop a representative of the company from becoming a party to an offence.27 In New Zealand it has also been held that a exible approach can be taken to determining the person or persons whose actions can be attributed to the company.28 However, the method of reaching that determination is quite different from that underscoring the identication doctrine. To determine which employees are acting as the company depends on a range of factors, beginning from the purpose of the law in question and, as a matter of statutory interpretation, whose conduct should be taken to be the companys for the purpose of that law.29

22. J. Clough and C. Mulhern, The Prosecution of Corporations (South Melbourne, Oxford University Press 2002) p. 89. 23. Ibid. 24. See, e.g., S. Field and N. Jorg, Corporate Manslaughter and Liability: Should we be going Dutch?, Criminal L Rev. (1991) p. 156 at pp. 158-162. 25. See, e.g., the statements of the Supreme Court of Canada in Canadian Dredge & Dock v. R [1985] 1 SCR 662 (Can.) at p. 693. 26. Clough and Mulhern, supra n. 22, pp. 92-93; see also Wells, supra n. 13, pp. 130-131. 27. Wanless, supra n. 8, pp. 209-210. 28. The principle case is the judgment of the Privy Council in Meridian Global Funds Management Asia Ltd v. Securities Commission [1995] 2 AC 500. 29. Clough and Mulhern, supra n. 22, pp. 94-97. For criticisms of this approach: ibid., pp. 97-104.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

339

Of the common law jurisdictions, Australian federal criminal laws30 relating to corporate criminal liability for offences involving a fault element are particularly progressive. The Australian federal principles provide that the conduct of any employee [including a servant], agent or ofcer of [the corporation] acting within the actual or apparent scope of his or her employment, or within his or her apparent authority is attributed to the corporation31 provided that the corporation expressly, tacitly or impliedly authorised or permitted the commission of the offence.32 The means by which such authority or permission can be established are: The conduct was performed or tolerated (authorised or permitted) by the board of directors; The conduct was performed or tolerated (authorised or permitted) by a high managerial agent, although it is a defence when the body corporate proves that it exercised due diligence to prevent such conduct, authorisation or permission; A corporate culture (dened as an attitude, policy, rule, course of conduct or practice existing within all or the relevant part of the body corporate) existed that directed, encouraged, tolerated or led to non-compliance; or The corporation failed to create and maintain a corporate culture that required compliance.33 The rst two grounds for showing that a corporation authorised or permitted the commission of the offence reect the identication doctrine, with due diligence as a defence when the authority emanates from any less than the highest locations of corporate control. This reects the view that it is only at the top tiers of a company that individuals can be equated with the identity of the corporation. The third and fourth grounds are examples of organisational models of corporate fault. In such a model, the fault of the corporation does not lie in the decisions of a single organ or individual within the corporation, but within the policies, standing orders, regulations and institutionalised practices [of the corporation that are] authoritative, not because any individual devised them, but because they have emerged from the decision making process recognised as authoritative within the corporation.34

30. Criminal law is generally a state matter in Australia. However, as Australias international crimes have been codied under federal criminal law it is the federal rules regarding corporate criminal liability that are pertinent. 31. S. 12.2 Criminal Code (Cth) (Aus.). 32. S. 12.3(1) Criminal Code (Cth) (Aus.). 33. S. 12.3(2) Criminal Code (Cth) (Aus.). 34. Field and Jorg, supra n. 24, p. 159.

340

J. KYRIAKAKIS

NILR 2009

2.2

The civil law traditions

The civil law jurisdictions have been more reluctant to recognise the possibility of corporate criminal liability in modern criminal law. This reluctance has been based on a number of philosophical objections, including the idea that groups cannot act, be morally blameworthy or the proper subjects of criminal punishment.35 However, despite what was once considered an intractable legal culture against corporate criminal liability, there has been a rapid expansion amongst civil law nations introducing corporate criminal liability schemes since the 1970s.36 For example, France introduced corporate criminal liability into its new penal code in 1992.37 According to current judicial understanding, the French corporate criminal liability scheme predicates any nding of the criminal liability of the corporate entity upon the prior nding of individual criminal liability.38 This has led to suggestions that the French model is already outdated by failing to address the problem of diffusion of individual responsibility in modern corporations.39 The same criticism can be levelled against the nal draft provision on corporate criminal liability for the ICC Statute. The nal model proposed for the ICC Statute would have predicated corporate liability on a nding of individual criminal liability of a natural person in a position of control within the company, where that person acted on behalf of and with the explicit consent of the company.40 The parameters of corporate

35. The principle of societas delinquere non potest is commonly described as encompassing two (sometimes three) assertions contrary to the principle of corporate criminal liability. First, the notion that corporations have the capacity to act wilfully or intentionally, as required by criminal law, is rejected. Second, corporations are not viewed as the proper subjects of criminal punishment as only human beings are capable of making moral determinations in terms of what is right and wrong: see, e.g., T. Weigend, Societas Delinquere non Potest? A German Perspective, 6 JICJ (2008) pp. 927 et seq. I address these kinds of objections to corporate criminal liability elsewhere: Kyriakakis, supra n. 5. 36. Comparative works on this topic include: H. de Doelder and K. Tiedemann, eds., Criminal Liability of Corporations (The Hague, Kluwer Law International 1996); A. Eser, G. Heine and B. Huber, eds., Criminal Responsibility of Legal and Collective Entities (Freiburg im Breisgau, edition iuscrim 1999); S.S. Beale and A.G. Safwat, What Developments in Western Europe Tell Us About American Critiques of Corporate Criminal Liability, 8(1) Buffalo Criminal L Rev. (2004) p. 89; G. Heine, New Developments in Corporate Criminal Liability in Europe: Can Europeans Learn from the American Experience or Vice Versa?, Saint Louis-Warsaw Transatlantic Law Journal (1998) p. 173; A.A. Robinson, Corporate Culture as a Basis for the Criminal Liability of Corporations (February 2008), at <http://198.170.85.29/Allens-ArthurRobinson-Corporate-Culture-paper-for-Ruggie-Feb-2008.pdf> (last visited 18 October 2009); Ramasastry and Thompson, supra n. 5. 37. Art. 121-2 Nouveau Code. These provisions came into operation in 1994 and have been extended by amendments introduced in July 2003: Beale and Safwat, supra n. 36, pp. 115-122. 38. Ibid., pp. 117-120. 39. C. De Maglie, Models of Corporate Criminal Liability in Comparative Law, 4 Washington University Global Studies L Rev. (2005) p. 547 at p. 560. 40. The nal draft provision on legal persons is contained in Working Paper on Article 23, Paragraphs 5 and 6, Ofcial Records of the United Nations Diplomatic Conference of Pleni-

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

341

criminal liability under that model are therefore particularly narrow. Elsewhere, forms of corporate criminal liability have been adopted in Argentina,41 Austria (2006),42 Belgium (1999),43 China (1997),44 Denmark (1996),45 Finland (1995),46 Iceland (1993),47 Indonesia (since the 1980s),48 Japan (1932),49 the Netherlands
potentiaries on the Establishment of an International Criminal Court, Rome, 15 June-17 July 1998 (UN Doc. A/CONF.183/13), Vol. III, p. 251. For the background and development of the proposal see A. Clapham, The Question of Jurisdiction under International Criminal Law Over Legal Persons: Lessons from the Rome Conference on an International Criminal Court, in M.T. Kamminga and S. Zia-Zari, eds., Liability of Multinational Corporations Under International Law (The Hague, Kluwer Law International 2000) p. 139 at pp. 143-160. 41. Ideal (non-physical) persons can be held criminally responsible in Argentina but only under exceptional and specialised criminal legislation that has been adopted to address particular commercial crimes. Despite these laws, in Argentinas Fafo National Survey responses, the respondents report that Argentina should be characterised as a legal system where legal persons are not subject to criminal liability: Argentina: Survey Questions and Responses, Fafo National Surveys (6 September 2006), at <www.fafo.no/liabilities/CCCSurveyArgentina06Sep2006.pdf> (last visited 18 October 2009). 42. The Law on the Responsibility of Associations (Verbandsverantwortlichkeitsgesetz (VbVG)) was introduced in 2005 and came into effect on 1 January 2006: G. Stangl, Corporate Criminal Liability, 24(11) International Financial L Rev. (November 2005) p. 75. 43. Corporate criminal liability was reintroduced after it had been removed in 1934: Robinson, supra n. 36, p. 48. 44. In 1987, China introduced the rst unit crimes designating that various collective enterprises could be guilty of offences of smuggling. Since then, over 50 kinds of unit crimes have been enacted in over 20 criminal, civil, economic and administrative regulations. In 1997, the Criminal Law was amended so that the concept of unit crime is now included in the General and Special Provisions of Criminal law: Justice L. Jiachen, The Legislation and Judicial Practice of Punishment of Unit Crime in China, in Eser, et al., eds., supra n. 36, p. 71. See also Robinson, supra n. 36, pp. 51-53. 45. Denmark rst introduced corporate criminal liability for certain offences with the passage of the Butter Act in 1926. The current scheme of corporate criminal liability was introduced in 1996 and is governed by Chapter 5 of the Danish Criminal Code. In 2002 corporate criminal liability was extended from specic crimes to all offences within the general Criminal Code by section 306 of the Danish Criminal Code: Beale and Safwat, supra n. 36, pp. 111-112. See also G.T. Nielsen, Criminal Liability of Collective Entities The Danish Model, in Eser, et al., eds., supra n. 36, p. 189; Robinson, supra n. 36, pp. 53-54. 46. Beale and Safwat, supra n. 36, p. 113; Robinson, supra n. 36, pp. 39-43. 47. OECD Working Group on Bribery in International Business Transactions, Corporate Liability Rules in Civil Law Jurisdictions (2000) (DAFFE/IME/BR(2000)23), at <www.coe.int/t/ dghl/monitoring/greco/evaluations/seminar2002/HeineOLIS.pdf> (last visited 18 October 2009) p. 2; Robinson, supra n. 36, p. 54. 48. The Indonesian Penal Code does not recognise legal entities as a subject of criminal law. However, despite this continuing conceptual position, legal entities have been made criminally liable under a number of specic Indonesian statutes directed at particular crimes since the 1980s, including for certain environmental crimes, commercial crimes, corruption and terrorism: Ramasastry and Thompson, supra n. 5, p. 13; Indonesia: Survey Questions and Responses, Fafo National Surveys (6 September 2006), at <www.fafo.no/liabilities/CCCSurveyIndonesia 06Sep2006.pdf> (last visited 18 October 2009). 49. In Japan, formulas known as Ryobatsu-Kitei have been introduced to a number of different administrative statutes with penal provisions, beginning with the Act Preventing Escape of Capital to Foreign Countries (1932). The formula of Ryobatsu-Kitei differs across different

342

J. KYRIAKAKIS

NILR 2009

(1976),50 Norway (1991),51 Portugal (1983),52 South Africa,53 Spain (2003),54 and Switzerland (2003),55 albeit in some cases as exceptional to a prevailing general position that legal persons are not subject to criminal liability. Comparative scholars have identied emerging trends in national approaches to corporate criminal liability across the civil law world.56 These include: a general movement toward corporate criminal liability; a shift from liability based on imputing individual behaviour to the corporation to original liability based on organisational deciencies; where it has been introduced, corporate criminal liability is intended to complement, and not exclude, individual criminal responsibility; and, the most common sanction remains the traditional monetary ne, although increasingly broader sanctions are being introduced. Notwithstanding these trends, there remain countries that do not provide for corporate criminal liability. These include Brazil, Bulgaria, Luxemburg, the Slovak Republic, Greece, Hungary, Mexico, Sweden and the Ukraine.57 Notable for the administrative schemes that have been adopted in lieu of criminal liability are Germany and Italy, which are explored in more detail below.

statutes but it essentially allows a corporation to be ned where a relevant natural person has acted illegally. This system is translated as two-sided or bilateral punishment and it is ambivalent as to who, from a theoretical perspective, has committed the crime the enterprise or the individual: N. Kyoto, Criminal Liability of Corporations Japan, in De Doelder and Tiedemann, eds., supra n. 36, p. 275. 50. Robinson, supra n. 36, pp. 57-58; Beale and Safwat, supra n. 36, pp. 110-111. 51. Robinson, supra n. 36, pp. 59-60. 52. By Art. 11 of the new Penal Code, Portugal has recognised exceptions to the general rule that only individuals can be criminally liable. In Portuguese criminal law, a distinction is drawn between core and secondary criminal law. Corporate criminal liability is only recognised in relation to a limited number of secondary crimes: T. Serra, Establishing a Basis for Criminal Responsibility of Collective Entities, in Eser, et al., eds., supra n. 36, p. 203. 53. S. 332(1) Criminal Procedure Act (51 of 1977). See further F. van Oosten, Theoretical Bases for the Criminal Liability of Legal Persons in South Africa, in Eser, et al., eds., supra n. 36, p. 195; Robinson, supra n. 36, pp. 55-56. 54. To date only very limited corporate criminal liability provisions have been introduced in Spain in relation to specic bribery offences, if they can be properly characterised in this way. These provisions allow for sanctions to be imposed on a corporation when a relevant individual has been convicted of an offence and are described by the OECD Working Group on Bribery as involving criminal liability: Spain: Phase 2. Report on the Application of the Convention on Combating Bribery of Foreign Public Ofcials in International Business Transactions and the 1997 Recommendation on Combating Bribery in International Business Transactions, adopted by the OECD Working Group on Bribery in International Business Transactions, 24 March 2006, at <www.oecd.org/dataoecd/28/35/36392481.pdf> (last visited 18 October 2009) pp. 38-40, 43-44. But, arguing that Spain does not yet recognise corporate criminal liability, see Ramasastry and Thompson, supra n. 5, p. 13; Spain: Survey Questions and Responses, Fafo National Surveys (6 September 2006), at <www.fafo.no/liabilities/CCCSurveySpain06Sep2006.pdf> (last visited 18 October 2009). 55. Robinson, supra n. 36, pp. 34-38; Beale and Safwat, supra n. 36, pp. 113-115. 56. OECD Working Group on Bribery in International Business Transactions, supra n. 47, pp. 5-6; Beale and Safwat, supra n. 36, pp. 136-137. See also De Maglie, supra n. 39, p. 560. 57. Robinson, supra n. 36, p. 4; Ramasastry and Thompson, supra n. 5, p. 13.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

343

2.2.1

Germany

John Coffee suggests that Germany has probably the most sceptical and restrictive view on corporate criminal liability of the principal European nations.58 Apart from some distinctive exceptions, German law has never recognised corporate criminal liability,59 reecting the view that such a principle departs from fundamental tenets of criminal law as understood from the framework of inuential 19th century philosophical traditions.60 Instead, a system of administrative penalties was established in the German Law on Infractions (Ordnungswidrigkeiten)61 that empowers administrative agencies to impose administrative nes on corporations for wrongs committed by certain corporate ofcers. Under this system, a corporation may be sanctioned for wrongful conduct (either a crime or an administrative wrong) committed by either: a representative organ of the corporation or a member of such an organ (for example corporate directors). This can include de facto directors provided there was a clear, even if implicit, designation by the company of this directorship, or lower level ofcers or employees, provided that senior ofcers within the above class could have prevented such conduct through adequate surveillance. This lack of surveillance can be based on aws in the companys organisation. In addition, the wrongful conduct must constitute the improper performance of the corporations obligations, or the corporation must have been unjustly enriched by the conduct for liability to attach.62 There is debate as to whether it is accurate to compare the German system of administrative sanctions against corporations with criminal law sanctions. On the one hand it is reported that within Germany itself the system is perceived as non-criminal.63 With the origins of the system as a successor to an earlier decriminalised system for ning primarily petty offences, defendants and the

58. Coffee, supra n. 10, p. 22. 59. Stessens, supra n. 11, p. 503, fn. 45. Cf., G. Fieberg, National Developments in Germany: An Overview, in Eser, et al., eds., supra n. 36, p. 83. 60. For a background to Germanys current philosophical position see Weigend, supra n. 35, pp. 930-932. 61. This system was established gradually from 1968-1986: Heine, supra n. 36, p. 174. 62. This description of the conditions of liability have been compiled based on: L.H. Leigh, The Criminal Liability of Corporations and Other Groups: A Comparative View, 80 Michigan L Rev. (1982) p. 1508 at pp. 1522-1523; Stessens, supra n. 11, pp. 507-508, 513, 514-515, 516; Coffee, supra n. 10, pp. 22-23. 63. Coffee, supra n. 10, p. 22. Cf., Heine who describes the sanctions imposed under the German system as having neither the status of criminal sanctions nor that of purely administrative measures: Heine, supra n. 36, p. 174.

344

J. KYRIAKAKIS

NILR 2009

general public are said to view the sanctions as non-criminal in kind.64 Further, German scholars often distinguish the German administrative sanctioning system from the criminal law because administrative offences are thought to be morally neutral and without stigma (a factor that was important to German legislators in opting for this system)65 and because they relate to offences that cannot be punished by imprisonment if committed by a natural person.66 Leigh, on the other hand, argues that administrative offences cannot be deemed devoid of moral content simply by virtue of the label that has been attached by, and to, the governing law. He states:
That fault finds no place in the formal definition of the offence does not imply that a person who commits such an offence can be assumed to have acted without moral fault.67

There is substance to Leighs claim. The grounds for ascribing responsibility under the German corporate liability scheme resemble the English identication doctrine and organisational models of attributing corporate fault respectively.68 Unlike strict and absolute liability (where negligence or fault is entirely irrelevant to the commission of the wrong) or vicarious liability (where the wrongdoing of employees are automatically transferred to the corporation), the German system appears to require some degree of fault on the part of the corporation before liability will be imposed.69 This is either because the relevant conduct is committed by the highest corporate ofcers, which can therefore be legitimately implied to the corporation, or because of some failure in the functioning of the corporate hierarchy. Characteristics such as these, as well as the appeal rights of corporations to the criminal courts70 and the severity of the nes that can be imposed,71 have prompted some commentators to describe the German system of corporate administrative sanctions as quasi-criminal in kind.72 However, if the public message delivered by the imposition of this form of liability does not denote moral wrongdoing as a result of the established social meanings around that liability, then a distinctive feature of criminal liability is lacking. This idea is discussed further in section 4 below.

64. Coffee, supra n. 10, p. 22. Stessens, on the other hand, suggests that this origin is a mark of the quasi-criminal nature of the system: Stessens, supra n. 11, p. 503. 65. Stessens, supra n. 11, p. 503. 66. Leigh, supra n. 62, p. 1523. 67. Ibid. 68. See, e.g., Coffee, supra n. 10, p. 23. Cf., Stessens, who compares the system to a disguised form of vicarious liability: Stessens, supra n. 11, p. 508. 69. For example, Jescheck has criticised the German system on the basis that the nes are tainted with notions of guilt that are inappropriate to a legal person: Leigh, supra n. 62, p. 1523. 70. Heine, supra n. 36, p. 174. 71. Stessens, supra n. 11, p. 504. 72. Leigh, supra n. 62, p. 1523; Coffee, supra n. 10, p. 23.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

345

2.2.2

Italy

The most signicant obstacle to the adoption of corporate criminal liability in Italy is based on the Italian Constitution. Article 27(1) of the Italian Constitution states that la responsabilit penale personale (criminal liability is personal).73 Article 27(1) has been interpreted by Italys Constitutional Court to mean that a criminal charge can attach only to an individual human being.74 As a result of this constitutional barrier and a dominant legal tradition in Italy rejecting forms of corporate criminal responsibility,75 Italy has instead introduced direct administrative liability for corporations with Legislative Decree 231/2001 issued on 8 June 2001. Italys corporate administrative liability scheme shares features common to corporate criminal liability schemes. In what might be viewed as analogous to the physical element of a criminal offence, or its objective element, the statute imputes legal liability to a corporation for an offence committed in its interest and for its benet (Art. 5(2)) by either: Category 1: a person in a position of authority, management or control (both de facto and de lege) of the corporation, or of a nancially or functionally autonomous subsidiary (Art. 5(1)(a)), or Category 2: persons subject to the authority of or control of persons indicated in category 1, in other words subordinate staff such as employees or agents (Art. 5(1)(b)).76

73. Art. 27(1) Italian Constitution: English text available online at Italy Constitution, International Constitutional Law, <servat.unibe.ch/icl/it00000_.html> (last visited 18 October 2009). 74. This interpretation was conrmed with the Constitutional Court sentence no. 364 in 1988: C.E. Paliero, Criminal Liability of Corporations-Italy, in De Doelder and Tiedemann, eds., supra n. 36, p. 251 at pp. 255, 258-259. This view is believed to be conrmed by Art. 27(3) of the Italian Constitution, which states that punishments may not contradict humanity and must aim at re-educating the convicted: V. Militello, The Basis for Criminal Responsibility of Collective Entities in Italy, in Eser, et al., eds., supra n. 36, p. 181 at p. 184. A number of Italian commentators have proposed an alternative interpretation of Art. 27 that does not preclude, but would be consistent with, corporate criminal liability: Paliero, at p. 260. 75. For example, Militello reports: The theoretical obstacle to admitting forms of collective criminal responsibility in the Italian legal system is obdurate. Indeed, this kind of responsibility has been labelled and recently more than heresy, judicial blasphemy Militello, supra n. 74, p. 182. 76. J. Gobert and E. Mugnai, Coping with Corporate Criminality Some Lessons from Italy, Criminal L Rev. (2002) p. 619 at p. 625. See also N. Ferro, Riding the Waves of Reform in Corporate Law, An Overview of Recent Improvements in Italian Corporate Codes of Conduct, Fondazione Eni Enrico Mattei (FEEM) Working Paper No. 82 (2006), at <papers.ssrn.com/sol3/ papers.cfm?abstract_id=907285> (last visited 18 October 2009) p. 8. The terms category 1 and category 2 have been introduced for explanatory purposes and do not appear in the legislation.

346

J. KYRIAKAKIS

NILR 2009

Depending on the category of individual whose conduct constitutes the basis of a corporations liability, different subjective fault elements are required to make out the liability of the corporation. In either case, to avoid liability the corporation must show that it has established certain effective systems of control and supervision over the behaviour of individuals within the corporation. However, the demands made by the Decree regarding the requisite components of the control systems are more stringent in the case of offences conducted by heads of the corporation (category 1)77 and less demanding for subordinates (category 2).78 In addition there is an inverted burden of proof in the case of category 1 offenders, whereby the corporation is required to prove that an efcient and suitable control system has been put in place,79 reecting a similar idea to that originating in English law that top tier corporate ofcers represent the identity of the corporation.80 Conversely, in the case of liability based on the conduct of a category 2 individual, provided that the corporation can point to an appropriate system of control and supervision, the prosecution has the burden of proving the systems insufciency.81 It has been suggested that the label of administrative liability given to the Italian law was adopted to overcome the constitutional obstacle rather than to accurately reect the nature of the liability regime established.82 Gobert and Mugnai point to a number of characteristics of the regime that suggest it is largely penal in nature: companies will be responsible for criminal offences, cases are heard by criminal courts and criminal procedures are used.83 On the other hand, De Maglie notes that, like the German model mentioned above, the labelling of the sanctions as administrative rather than criminal means that the stigma normally associated with the nding of criminal responsibility is lacking.84 It is interesting to highlight a few features of the Italian law that might make it particularly amenable to addressing the types of contexts in which transnational corporations are typically implicated in international crimes, were the law extended to cover such crimes. First, the law has extraterritorial reach based on the jurisdictional ground of active nationality. Article 4 of the Italian statute

77. Art. 6 Decree 231/2001. See Gobert and Mugnai, supra n. 76, pp. 626-628; Ferro, supra n. 76, pp. 9-10. 78. Art. 7 Decree 231/2001. See Gobert and Mugnai, supra n. 76, p. 628. 79. Art. 6(1) Decree 231/2001, quoted in Gobert and Mugnai, supra n. 76, p. 627. 80. Ferro, supra n. 76, pp. 8-9; Gobert and Mugnai, supra n. 76, p. 627. 81. Art. 7 Decree 231/2001. See Gobert and Mugnai, supra n. 76, p. 628. 82. See, e.g., Gobert and Mugnai, supra n. 76, p. 624; Ferro, supra n. 76, pp. 8, 19. 83. Gobert and Mugnai, supra n. 76, p. 624. The resemblance of the scheme to criminal law may not be entirely novel. Paliero argues that in the Italian legal system, at least since certain changes in 1981, the structure of administrative torts and the principles underlying them are closely connected to the modern European criminal model: Paliero, supra n. 74, pp. 265-266. The issue of the proper characterisation of these new Italian laws has been debated in Italy: see De Maglie, supra n. 39, pp. 561-562. 84. De Maglie, supra n. 39, p. 562.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

347

allows for a corporation to be prosecuted in Italy for an offence committed overseas (for example by an overseas subsidiary) provided that the corporation is headquartered in Italy and that proceedings have not been initiated in the foreign jurisdiction thus protecting against double jeopardy.85 Second, the law appears to create broad powers for looking beyond the corporate veil. Article 5 provides that a corporation can be liable for offences committed by a head of an autonomous sub-unit or subsidiary. Such a person would be designated as a category 1 person and therefore subject to the inverted burden of proof mentioned above. Third, according to Article 8, although the liability of a corporation is predicated on proof of an underlying human actor (which it should be noted is already wider than the English identication model), the corporations liability can still be established even where the individual perpetrator cannot be identied or convicted of an offence,86 thus addressing some of the concerns regarding the diffusion of individual responsibility particularly characteristic of larger corporations. These features appear to cut across some of the most challenging aspects for prosecutions of transnational corporations operating in a global economy: the traditional territoriality of criminal law; the doctrine of separate legal personality;87 the problem of parent companies avoiding liability through a hands off managerial attitude to the conduct of their subsidiaries; and the difculty of identifying individual wrongdoers in complex transnational corporate structures. It is also interesting to note that since 2003 the Italian scheme extends to the offences of placing or holding a person in a condition of slavery or servitude, trafcking in human beings, and the sale and purchase of slaves.88 It is therefore already directed to conduct of a kind with that addressed in international criminal law. The Italian statute was designed to bring Italian law into accord with a number of European Conventions and Protocols requiring member states to enact laws that render corporations liable for a variety of offences.89 It is therefore a prime example of the inuence international developments have on national laws and practices, including how models of corporate liability are adapted to local circumstances. The following section sets out

85. Gobert and Mugnai, supra n. 76, p. 624; Ferro, supra n. 76, p. 8. 86. Gobert and Mugnai, supra n. 76, pp. 628-629. 87. For an excellent article on difculties created by the concept of separate legal personality over achieving the accountability of transnational corporations, see P.I. Blumberg, Accountability of Multinational Corporations: The Barriers Presented by Concepts of the Corporate Juridical Entity, 24 Hastings International and Comparative L Rev. (2001) p. 297. 88. Inserted into Art. 25 of Decree 231/2003 by Art. 5 of Law no. 228 on Measures against Trafcking in Persons (2003). English text at <www.legislationline.org> (last visited 18 October 2009). In the event that the offending corporation or one of its organisational units is exclusively or mainly run for the purpose of committing one of these crimes, irrevocable disqualication from practicing the activity in question shall apply: Art. 5(3) of Law no. 228 on Measures Against Trafcking in Persons (2003). 89. Gobert and Mugnai, supra n. 76, p. 623.

348

J. KYRIAKAKIS

NILR 2009

recent international instruments that provide examples of codied corporate liability under international law. 2.3 International developments

A recent study conducted by Anita Ramasastry and Robert Thompson for Fafo has shown that increasingly states have law on the books that could be applied to corporations for their role in international crimes. Based on surveys of 16 countries, which sought to assess the liability status of business entities under national statutes governing international (and related) crimes, Ramasastry and Thompson conclude that, despite the exclusion of corporations from the jurisdiction of the ICC, it is already possible to hold business entities liable for the commission of international crimes.90 As a result of the domestic implementation of ICC Statute offences by states that make provision for the prosecution of business entities and the introduction of complementary crimes directed at business entities, such as crimes of bribery and money laundering, Ramasastry and Thompson argue that there is an expanding potential web of liability that, if applied, greatly reduces the ability for business entities to avoid accountability for international crimes.91 While this trend has important ramications for the liability and accountability of corporations for international crimes, it does not in itself answer the problem of the comparative law challenge that was initially posed at the Rome Conference as an argument against the extension of liability to corporations under the ICC Statute, nor does it provide any guidance as to the proper form such liability, if adopted, should take. It is one thing for a state to elect to apply its own criminal law to the problem of corporate involvement in particular crimes and another for an international instrument to effectively oblige states to do so. It does however suggest the signicant impact international developments have on the creation of enforceable duties at a domestic level and it describes the new environment, one in which corporate criminal liability for international crimes is increasingly accepted at a state level, in which any future debate on corporations and the ICC must now be situated. In contrast to the ICC Statute, there are a number of international and regional instruments that explicitly require States Parties or member states to provide for the liability of categories of legal persons, including corporations, within their national legal systems. These instruments are targeted primarily to crimes with transnational or international dimensions, such as corruption,

90. Ramasastry and Thompson, supra n. 5, pp. 27-28. The survey covered countries across both the civil and common law divide. These were Argentina, Australia, Belgium, Canada, France, Germany, India, Indonesia, Japan, the Netherlands, Norway, South Africa, Spain, Ukraine, the United Kingdom and the United States. 91. Ibid. I argue elsewhere that the incorporation of legal persons in the jurisdiction of the ICC would encourage the application of these new domestic international crimes laws to companies, where appropriate: see Kyriakakis, supra n. 5.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

349

terrorism and environmental damage and demonstrate how the comparative law challenge has been negotiated at regional and international levels in the recent past. On balance, most favour a pragmatic approach to the comparative law problem of corporate criminal liability, requiring punitive sanctions against legal persons under national law but deferring to individual countries as to the exact legal construction and categorisation of the law.92 In this way, while demanding the establishment of national liability regimes, most of these treaties do not criminalize corporate conduct in the same way that they demand a recognition of the criminal responsibility of the individual.93 Bert Swart suggests that the approach of these international instruments, which permit exibility in the characterisation of municipal corporate liability schemes, may constitute an emerging international norm.94 The international instruments that provide for corporate liability display some variations on how exibility might be achieved while still addressing the aims of the law. Article 2 of the OECD Convention on Combating Bribery of Foreign Public Ofcials in International Business Transactions requires States Parties to establish the criminal liability of legal persons for the bribery of a foreign public ofcial except where, under a partys legal system, criminal responsibility is not applicable to legal persons. In that case, the state is required to ensure that the legal person shall be subject to effective, proportionate and dissuasive non-criminal sanctions.95 In an alternative approach, permissible categories of liability are listed which, if established, satisfy the treaty obligations of States Parties. For example, Article 9(1) of the Council of Europe Convention on the Protection of the Environment Through Criminal Law requires States Parties to impose criminal or administrative sanctions or measures on legal persons on whose behalf an offence has been committed by their organs or by members thereof or by another representative.96 Similarly, the International Convention for the Suppression of the Financing of Terrorism,97 the United Nations Convention against Transnational Organized

92. See, e.g., M. Pieth, Criminal Responsibility of Legal and Collective Entities: International Developments, in Eser, et al., eds., supra n. 36, p. 113 at p. 114. 93. A. Clapham, Human Rights Obligations of Non-State Actors (Oxford, Oxford University Press 2006) p. 251. 94. Comments of Swart, supra n. 7, pp. 949, 953. 95. Arts. 2 and 3(2) OECD Convention on Combating Bribery of Foreign Public Ofcials in International Business Transactions Anti-Bribery Convention, opened for signature 17 December 1997, 37 ILM p. 1 (entered into force 15 February 1999) (OECD Anti-Bribery Convention). 96. Art. 9(1) Convention on the Protection of the Environment through Criminal Law, opened for signature 4 November 1998, CETS No. 172 (not yet entered into force). Despite the explicit provision for administrative, instead of criminal, measures on legal persons under this Convention, Italy has reserved the right not to apply Art. 9(1) in the part regarding the application of criminal sanctions and measures. 97. Art. 5 International Convention for the Suppression of the Financing of Terrorism, opened for signature 9 December 1999, 39 ILM p. 270 (entered into force 10 April 2002).

350

J. KYRIAKAKIS

NILR 2009

Crime,98 and the United Nations Convention against Corruption,99 state that the type of liability adopted by States Parties for the purpose of establishing the liability of legal persons may be criminal, civil or administrative. Article 18 of the Council of Europe Criminal Law Convention on Corruption100 exemplies an alternative drafting option, which is to simply omit reference to the kind of liability that States Parties must establish in relation to legal persons altogether. By implication states are therefore entitled to determine the most appropriate form of liability to achieve the objectives of the Convention be it criminal, civil or administrative, or some hybrid of these.101 Like the OECD Anti-Bribery Convention, most of these conventions require that the sanctions to which the legal person will be subjected must be effective, proportionate and dissuasive,102 so as to reect the seriousness of the offences in question. Article 18 of the Council of Europe Criminal Law Convention on Corruption provides another point of interest. Although the Convention is silent on the type of liability that States Parties must adopt in order to satisfy their treaty obligations, it nonetheless sets out a detailed prescription of pre-conditions of liability that must be adopted. It reads:
1. Each Party shall adopt such legislative and other measures as may be necessary to ensure that legal persons can be held liable for the criminal offence of active bribery, trading in influence and money laundering established in accordance with this Convention, committed for their benefit by any natural person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on:

98. Art. 10 United Nations Convention against Transnational Organized Crime, opened for signature 15 November 2000, 2225 UNTS p. 275 (entered into force 29 September 2003). 99. Art. 26 United Nations Convention against Corruption, opened for signature 31 October 2003 (entered into force 14 December 2005) (UN Doc. A/58/422). 100. Art. 18 Criminal Law Convention on Corruption, opened for signature 27 January 1999, CETS No. 173 (entered into force 1 July 2002). 101. Art. 18(1) requires States Parties to adopt such legislative and other measures as may be necessary to ensure that legal persons can be held liable for [specied] criminal offences. The Explanatory Report conrms that by failing to stipulate the kind of liability required, the latter provision does not impose an obligation to establish that legal persons will be held criminally liable for the offences mentioned therein: Council of Europe, Criminal Law Convention on Corruption: Explanatory Report, para. 86. This is further supported by Art. 19(2) that allows the imposition of criminal or non-criminal sanctions. 102. Art. 5(3) International Convention for the Suppression of the Financing of Terrorism, opened for signature 9 December 1999, 39 ILM p. 270 (entered into force 10 April 2002); Art. 10(4) United Nations Convention against Transnational Organized Crime, opened for signature 15 November 2000, 2225 UNTS p. 275 (entered into force 29 September 2003); Art. 26(4) United Nations Convention against Corruption, opened for signature 31 October 2003 (entered into force 14 December 2005) (UN Doc. A/58/422); Art. 19(2) Criminal Law Convention on Corruption, opened for signature 27 January 1999, CETS No. 173 (entered into force 1 July 2002).

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

351

a power of representation of the legal person; or an authority to take decisions on behalf of the legal person; or an authority to exercise control within the legal person; as well as for involvement of such a natural person as accessory or instigator in the above-mentioned offences. 2. Apart from the cases already provided for in paragraph 1, each Party shall take the necessary measures to ensure that a legal person can be held liable where the lack of supervision or control by a natural person referred to in paragraph 1 has made possible the commission of the criminal offences mentioned in paragraph 1 for the benefit of that legal person by a natural person under its authority. 3. Liability of a legal person under paragraphs 1 and 2 shall not exclude criminal proceedings against natural persons who are perpetrators, instigators of, or accessories to, the criminal offences mentioned in paragraph 1.

According to this model, the liability of a corporation can be based either on the seniority of the individual committing the offence, reective of an extended version of the English identication model (para. 1) or on the basis of organisational defects (para. 2). Similar models for the conditions of liability of legal persons are set out in a number of instruments adopted by branches of the European Union on corruption,103 and a number of Council Framework Decisions on terrorism,104 trafcking in human beings,105 environmental protection,106 and the sexual exploitation of children and child pornography.107 There are also some examples of initiatives at an international level that move towards national recognition of the criminal responsibility of corporations. According to Article I(2) of the International Convention on the Suppression and Punishment of the Crime of Apartheid,108 States Parties, currently representing over 80 states, declare criminal those organizations, institutions and individuals committing the crime of apartheid. In another example, Andrew Clapham has argued that the Global Convention on the Control of Transboundary Movements of Hazardous Wastes might be interpreted as requiring states to criminalise the unauthorised transboundary

103. See, e.g., Arts. 5 and 6 Joint Action of 22 December 1998 adopted by the Council on the Basis of Art. K.3 of the Treaty on European Union, on Corruption in the Private Sector, Ofcial Journal (1998), L 358, p. 2. 104. Arts. 7 and 8 Council Framework Decision of 13 June 2002 on Combating Terrorism, Ofcial Journal (2002), L 164, p. 3. 105. Arts. 4 and 5 Council Framework Decision of 19 July 2002 on Trafcking in Human Beings, Ofcial Journal (2002), L 203, p. 1. 106. Arts. 6 and 7 Council Framework Decision of 27 January 2003 on Protection of the Environment through Criminal Law, Ofcial Journal (2003), L 29, p. 55. 107. Arts. 6 and 7 Council Framework Decision of 22 December 2003 on Combating the Sexual Exploitation of Children and Child Pornography, Ofcial Journal (2004), L 13, p. 44. 108. Art. I(2) International Convention on the Suppression and Punishment of the Crime of Apartheid, opened for signature 30 November 1973, 1015 UNTS p. 243 (entered into force 18 July 1976).

352

J. KYRIAKAKIS

NILR 2009

movement of hazardous wastes and, by extension, to subject both natural and legal persons to this criminal jurisdiction.109 In the context of non-binding instruments, the Draft Convention on the Establishment of an International Penal Tribunal for the Suppression and Punishment of the Crime of Apartheid and Other International Crimes envisaged the establishment of an International Penal Tribunal with competence to investigate, prosecute, adjudicate and punish any person or legal entity accused or guilty of certain categories of crimes.110 The language clearly implies that the drafters intended the application of criminal jurisdiction to both natural and legal persons. Another example is Recommendation No. R (88) 18 of 20 October 1988 of the Committee of Ministers for the Council of Europe, according to which enterprises should be rendered liable for offences committed in the exercise of their activities.111 Whether liability should be criminal or non-criminal is to be based on an assessment of certain factors. Specically, Recommendation I(3) states:
To render enterprises liable, consideration should be given in particular to: a. applying criminal liability and sanctions to enterprises, where the nature of the offence, the degree of fault on the part of the enterprise, the consequences for society and the need to prevent further offences so require; b. applying other systems of liability and sanctions, for instance those imposed by administrative authorities and subject to judicial control, in particular for illicit behaviour which does not require treating the offender as a criminal.

No reference is made to consideration of local law factors. Although not yet reected in the binding conventions that have been adopted, the Council of Europe has therefore in principle called for the adoption of criminal measures by its member states where certain considerations warrant the imposition of criminal, rather than any other form of, liability, despite difculties that may arise from national legal traditions. Perhaps unsurprisingly, both the representatives of the Federal Republic of Germany and of Greece reserved the right of their governments not to comply with the Recommendation. In 1998, the academic members of a colloquium on the criminal responsibility of legal and collective entities held in Berlin favoured the promotion of criminal or quasi-criminal responsibility of legal and collective entities.112 The
109. Clapham, supra n. 40, pp. 173-174. 110. Contained in Sub-Commission on the Promotion and Protection of Human Rights (1981), Study on the Ways and Means of Insuring the Implementation of International Instruments such as the International Convention on the Suppression and Punishment of the Crime of Apartheid, including the Establishment of the International Jurisdiction Envisaged by the Convention (E/CN.4/1426). 111. Recommendation No. R (88) 18 of the Committee of Ministers to Member States Concerning Liability of Enterprises Having Legal Personality for Offences Committed in the Exercise of their Activities (Adopted by the Committee of Ministers on 20 October 1988 at the 420th meeting of the Ministers Deputies). 112. Recommendations, in Eser, et al., eds., supra n. 36, pp. 367-371.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

353

recommended factors to be taken into account in determining whether criminal or quasi-criminal liability should be required were identied as:
the scope of other systems of liability, the scope of corporate activities, the nature of offences, the character and degree of fault on the part of the entity, the need to prevent further offences and to influence entities by direct or indirect means, and the consequences for society. In any case, clear prerequisites for responsibility are necessary.113

By extending their recommendations to encompass both criminal and quasicriminal responsibility as comparably distinct to other forms of liability, the colloquium participants seem to recognise legal side systems in national laws such as regulatory offences [and] administrative penal law114 as legitimate alternatives to formal criminal accountability. The ICC Statute does not specically demand that states adopt criminal laws for the purpose of prosecuting perpetrators of international crimes, but it does have the ability to adjudicate a case in the event that states fail, or are unable, to do so. The following section looks at how the ICC Statute treats national noncriminal measures applied to individual perpetrators of international crimes and what this means for extending ICC jurisdiction to include corporate defendants.

3.

CORPORATE CRIMINAL LIABILITY AND THE ICC STATUTE

There is debate regarding the permissibility of national non-criminal mechanisms to address conduct proscribed under the ICC Statute. While the focus has been primarily on the status of truth commissions, amnesties and pardons, the question has also been directed to non-criminal sanctions imposed by civil courts, administrative agencies or other law enforcement authorities outside a criminal trial.115 In short, the ICC Statute envisages that states will primarily apply their criminal law to conduct proscribed by the Treaty. This is reected, among other things, in the Statute preamble. However, the denitive status of national non-criminal mechanisms was intentionally left unresolved in the drafting of the Statute as a result of strongly divergent views on the matter.116 Robinson reports that on the one hand most delegations had misgivings about mandating prosecution as the only acceptable response in all situations.117 In some cases

113. Ibid., p. 369. 114. Ibid., p. 368. 115. See, e.g., F. Meyer, Complementing Complementarity, 6 International Criminal L Rev. (2006) p. 549 at p. 552. 116. D. Robinson, Serving the Interests of Justice: Amnesties, Truth Commissions and the International Criminal Court, 14 EJIL (2003) p. 481 at p. 483. 117. Ibid.

354

J. KYRIAKAKIS

NILR 2009

alternative mechanisms may be necessary for achieving peace and security,118 as well as for pragmatic reasons following mass atrocities. On the other hand, the option of creating blanket exceptions to criminal prosecution was viewed during negotiations as equally untenable given the severity of the crimes dealt with by the ICC and its purpose as a prompt to states to overcome the considerations of expedience and realpolitik that had so often led them to trade away justice in the past.119 The prevailing view is that, as a result of this ambiguity, the ICC Statute leaves a few small avenues open to alternative accountability mechanisms,120 although there is debate as to the precise scope afforded by those avenues. Each avenue is considered briey below. 3.1 Avenues for recognition of non-criminal mechanisms under the ICC Statute Prosecutorial discretion under Article 53

3.1.1

Under Article 53, the Ofce of the Prosecutor (OTP) has discretion as to whether to proceed with an investigation of a given matter and, in turn, whether to proceed with prosecution following an investigation. There are two relevant grounds that must be considered by the OTP, which may allow some scope to defer to national non-prosecutorial responses to international crimes. These considerations are the likely admissibility of the case under Article 17 and whether proceeding with an investigation or prosecution would serve the interests of justice.121 The notion of interests of justice is likely to be a relatively broad concept, entitling considerations beyond those relevant to the interests of retributive criminal justice.122 It is this aspect of prosecutorial discretion that is regarded as the most likely point at which deference to alternative national approaches might occur.123

118. Ibid., p. 495. 119. Ibid., p. 483. On debate during drafting, see also W.A. Schabas, An Introduction to the International Criminal Court, 2nd edn. (Cambridge, Cambridge University Press 2004) p. 87. 120. Robinson, supra n. 116, p. 483. See also Meyer, supra n. 115, p. 581. 121. See, e.g., Robinson, supra n. 116, pp. 486-487; C. Stahn, Complementarity, Amnesties and Alternative Forms of Justice: Some Interpretive Guidelines for the International Criminal Court, 3 JICJ (2005) p. 659 at pp. 697-698, 717-718; Meyer, supra n. 115, pp. 552-553; Schabas, supra n. 119, p. 87, fn. 72. 122. Robinson, supra n. 116, p. 488. 123. Ibid., p. 486. See also Ofce of the Prosecutor, Informal Expert Paper: The Principle of Complementarity in Practice (2003) (ICC-01/04-01/07-1008-AnxA) pp. 22-24.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

355

3.1.2

Admissibility determinations under Article 17

Under Article 17(1)(b), where a competent and appropriate national authority has decided not to prosecute a specic case and decides instead to utilise an alternative process, the case may be excluded from the ICC through a nding of inadmissibility. The prevailing view is that to qualify as a bar to ICC adjudication under this provision, a national non-criminal measure must have been preceded by (or involved): rst, an investigation into the facts (which does not necessarily have to be a criminal investigation); second, a genuine contemplation by the appropriate national authority to prosecute; and third, a decision to deliberately refrain from doing so.124 Further, any such decision must not constitute unwillingness or inability to genuinely carry out investigation and prosecution.125 Article 17(1)(b) presupposes that prosecution is an available option under domestic law and that this avenue has been genuinely contemplated in the given case.126 The requirement that a decision must be made requires that there is more than one option available to the purported decision maker. Thus, there must at least be a possibility of prosecution.127 The use of the term prosecute implies that the domestic options must include the application of criminal procedure.128 It is therefore generally not seen to cover the blanket use by national authorities of non-criminal mechanisms in relation to particular categories of defendants. In the case of corporate defendants, this would mean that for countries like Germany and Italy, for example, the application of administrative liability to corporations may not satisfy Article 17(1)(b) as the option of criminal prosecution would not be available. The case specic nature of any deference to a national non-criminal procedure may be equally true in relation to prosecutorial decisions not to proceed with a given case. This is because interests of justice considerations also appear to be designed to refer to a specic case rather than general policy considerations.129 3.1.3 The ne bis in idem principle under Article 20(3)

The ne bis in idem principle (meaning no one shall be tried twice for the same offence) contained in Article 20(3) sets out a means for prior completed national proceedings to bar ICC adjudication of the same matter. Article 20(3) does not specify the character of the prior national decision maker contemplated

124. Meyer, supra n. 115, p. 566; Robinson, supra n. 116, pp. 499-500; Stahn, supra n. 121, pp. 701-712. 125. Robison, supra n. 116, pp. 500-502; Stahn, supra n. 121, pp. 712-716. 126. Meyer, supra n. 115, p. 566; Robinson, supra n. 116, p. 500; Stahn, supra n. 121, p. 712. 127. Robinson, supra n. 116, p. 500; Stahn, supra n. 121, p. 712. 128. Meyer seems to implicitly reach a similar conclusion: Meyer, supra n. 115, p. 566. 129. Stahn, supra n. 121, pp. 717-718.

356

J. KYRIAKAKIS

NILR 2009

by the Statute.130 It has therefore been argued that proceedings before decision makers other than pursuant to a criminal trial might be functionally equivalent to being tried by another court for the purposes of Article 20(3)131 and might therefore constitute a bar to ICC adjudication under Article 17(1)(c). Adopting this view, Meyer argues that trials of a non-criminal nature that attach to an individual and that express wrongdoing should potentially preclude ICC jurisdiction under the principle of ne bis in idem. In Meyers view, this should only be the case where principles of double jeopardy as they operate in the state in question would have precluded a subsequent national criminal prosecution.132 Other commentators take the view that only prior criminal measures could operate as a bar to a subsequent trial of the same matter by the ICC. In the broader context of the Statute, the application of criminal justice mechanisms seems to be implied.133 Bassiouni argues that only a conviction or acquittal could constitute a bar to prosecution by the ICC.134 Others have argued that other decisions made in the context of a criminal trial might be sufcient, for example dismissals during trial. However, these views also presuppose the application of criminal jurisdiction.135 One of the further difculties for extending Article 20(3) to encompass non-criminal trials is that such other proceedings must not be for the purpose of shielding the person concerned from criminal responsibility (Art. 20(3)(a)) and must be consistent with bringing the person to justice (Art. 20(3)(b)).136 3.1.4 Deferral by the Security Council under Article 16

Finally, the Security Council may require the ICC to suspend an investigation or prosecution on the basis that to go ahead would jeopardise attempts to secure international peace and security (Art. 16).137 This avenue seems most likely to arise where the use of alternative mechanisms, such as truth and reconciliation commissions or amnesties, are viewed as a practical necessity, for example, in securing the transition from one regime to another. In light of the statutory framework and a need to balance pragmatism with the demand for a criminal justice response in relation to international crimes, commentators have identied a number of considerations that might be

130. Meyer, supra n. 115, p. 555. 131. M.P. Scharf, Amnesty Exception to the Jurisdiction of the International Criminal Court, 32 Cornell ILJ (1999) p. 507 at p. 525. 132. Meyer, supra n. 115, pp. 556-564. 133. Ibid., pp. 555-556. 134. Ibid., p. 555. 135. Ibid. See also M.M. El Zeidy, The Principle of Complementarity: A New Machinery to Implement International Criminal Law, 23 Michigan JIL (2002) p. 869 at p. 938. 136. Scharf, supra n. 131, p. 525. 137. Robinson, supra n. 116, p. 486. See also, Meyer, supra n. 115, pp. 549-583; Stahn, supra n. 121, pp. 659-720.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

357

appropriately taken into account by the requisite authorities in decision making under Articles 17 and 53. These indicate thinking around the kinds of characteristics a national measure should display if deference should be contemplated within the avenues afforded by the ICC Statute and in what circumstances divergence from the prosecutorial norm might be legitimate in relation to international crimes. These are considered briey in the following section. 3.2 Guidelines for the assessment of non-criminal mechanisms

Frank Meyer has advocated a principle of contextual proportionality in relation to assessments of the adequacy of national non-criminal mechanisms in relation to international crimes.138 Meyers contextual proportionality approach determines the sufciency of national measures initially by reference to usual state practice, an approach he justies in part on the basis that local measures are generally a better means than international measures for generating pedagogy regarding international crimes. This argument is in turn based on the view that local systems are more likely to resonate in accordance with the moral and criminal codes offenders and their communities are familiar with and hence will have the requisite pedagogical effect.139 However, Meyer also acknowledges that not all national practice is acceptable at an international level and therefore recommends that a national measure should identify a specic wrongdoer, constitute an expression of wrongdoing and be administered credibly and fairly according to standard national practice before operating to bar ICC adjudication.140 In addition, Meyer argues that a national measure should comply with internationally acceptable minimum standards, including the requirement that non-criminal mechanisms are unlikely to be appropriate in relation to core offenders of international crimes, whereas outer-circle offenders may be legitimate candidates for non-criminal sanctions.141 Core offenders would encompass those most responsible for crimes, such as military or civilian leaders involved in the orchestration of crimes. The idea that core perpetrators of international crimes must be subject to criminal prosecution, while lesser perpetrators may be more legitimately dealt with through alternative (but still sufcient) means, is echoed by a number of commentators.142 A similar sentiment is reected in the practices of the International Criminal Tribunals for Rwanda and the former Yugoslavia, and the

138. Meyer, supra n. 115, pp. 549-583. 139. Ibid., pp. 574-575. For a similar argument in relation to international punishment not calibrated to national expectations and norms, see I. Tallgren, The Sensibility and Sense of International Criminal Law, 13 EJIL (2002) p. 561 at pp. 581-583. 140. Meyer, supra n. 115, pp. 552, 576-557. 141. Ibid., pp. 576-578. 142. Ofce of the Prosecutor, supra n. 123, p. 23; Stahn, supra n. 121, pp. 707-708. For justications for this differentiated approach to offenders, see Robinson, supra n. 116, pp. 493495.

358

J. KYRIAKAKIS

NILR 2009

International Military Tribunal in Nuremberg, to focus on the most responsible individuals and to leave lesser offenders to national mechanisms. In general, the considerations that have been recommended in relation to assessing the sufciency of national measures reiterate the case specic nature of the permissibility of non-prosecutorial avenues for accountability. These considerations focus upon the quality of, and reasons behind, the alternative measures adopted. Considerations include the severity of the crime, and whether the alternative mechanism is compatible with international obligations to prosecute under treaty or custom,143 the reason for the departure from the norm of criminal prosecution144 and the sufciency of the punishment. 3.3 Ramifications for the proposal to include corporations within ICC jurisdiction

In light of this brief review of the status of national non-criminal mechanisms for dealing with international crimes under the ICC Statute, if corporations were included in the jurisdiction of the ICC according to the same conditions of admissibility applied to cases against natural persons then states could not be guaranteed that the application of non-criminal accountability mechanisms would necessarily operate to bar ICC adjudication of the same conduct. Instead, there is a risk that the ICC may decide to adjudicate the activities of a State Partys corporate national or to adjudicate corporate aspects of international crimes that have occurred on a State Partys territory, despite a desire by the host or home state to take jurisdiction of the matter in question. It is reasonable to suggest that such a risk is reasonably small given that the ICCs OTP must make decisions as to how to best allocate its scarce resources. Particularly in states with robust quasi-criminal systems of corporate liability and in cases where the corporation does not constitute a core offender, the genuine application of such a system may persuade the OTP not to proceed in the same matter. This would be particularly persuasive where the alternative measure involves a genuine inquiry into the specic corporations involvement in the relevant international crime, the possibility of proportionate punishment and reects the usual practice of the state in relation to such entities. However, state anxieties regarding the status of national non-criminal mechanisms may nonetheless prevail and lead states to seek statutory assurance of the sufciency of alternative local measures in relation to corporate defendants. Ultimately, there is the option of clarifying the specic status that national non-criminal corporate liability schemes shall be given in the ICC Statute. The choices are at least three-fold. First, the ICC Statute could adopt a noncriminal corporate liability scheme and recognise similar national non-criminal

143. Robinson, supra n. 116, pp. 490-493; Stahn, supra n. 121, pp. 703-704; Ofce of the Prosecutor, supra n. 123, pp. 23-24. 144. Robinson, supra n. 116, pp. 502, 496-497.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

359

liability schemes in relation to corporations. Second, corporations could be treated in terms equivalent to natural persons under the Statute. This would mean, as outlined above, that states could not be guaranteed that non-criminal accountability mechanisms would be deemed sufcient in all circumstances and so could not be guaranteed of barring ICC jurisdiction if relied upon to the absolute exclusion of criminal liability. A number of arguments commend this approach, including limiting interference with the existing statutory framework. Others are set out below. Third, the Court could adopt a criminal liability scheme in relation to corporate defendants adjudicated within the ICC but take a more permissive approach to national non-criminal corporate accountability mechanisms for the purpose of admissibility determinations. The approaches outlined earlier that have been adopted in international instruments relating to corporate liability offer examples of codication where the local designation of a law may be left open but preconditions for corporate liability nonetheless made explicit. This option would require a positive statement of that intent in the ICC Statute to circumvent the prevailing presuppositions in favour of the application of criminal jurisdiction. The next section considers this question, arguing in favour of equivalency in terms of the treatment of measures aimed at corporations and natural persons, based on the nature of the crimes in question and the unique normative capacity of the criminal law. However, given the need for a very broad base of support for the proposal to include corporations in the jurisdiction of the ICC, the third alternative is recommended as an inferior but still justiable alternative.

4.

THE CASE OF CORPORATE DEFENDANTS: IS A FLEXIBLE APPROACH BEST?

There are arguments in favour of adopting a more permissive approach to the use of national non-criminal liability schemes directed at corporations than that adopted in relation to natural persons in the ICC Statute. The demanding conditions for introducing amendments to the ICC Statute and the ability for States Parties to opt out of the Statute if they oppose an amendment145 means that proposals for statutory change will require a signicant level of support before they could (or should) be introduced. From a pragmatic perspective, affording equal status to different national liability schemes would bypass concerns about the differential impact the ICC Statutes complementarity regime might have on states that do not provide for corporate criminal liability. It is also supported by the pedagogical argument, that local laws will best resonate in a community when they accord with local moral and legal norms. Such

145. The procedures for review and amendment of the ICC Statute of a non-institutional nature are set out in Arts. 121 and 123 ICC Statute.

360

J. KYRIAKAKIS

NILR 2009

an approach may be more acceptable to a greater number of states. This much seems implied by the adoption of a pragmatic and deferential approach to the comparative law problem in existing treaties and the reservations that have been made by states to more demanding proposals. A response to this argument might be that the kinds of conduct dealt with by the existing international instruments that provide for corporate liability are qualitatively different to those at proscribed by the ICC Statute. If categories of crimes under international law are conceived as a triangle, the ICC Statute crimes sit at its pinnacle. Where pragmatic considerations may have more weight in relation to other categories of crimes, they become less defensible in relation to international crimes. In addition, certain international crimes are jus cogens and it has been argued that criminal responsibility for such crimes already applies to all persons, both natural and legal, under customary international law.146 If accepted, there would be an argument that any international codication processes should not derogate from, or undermine, the full extent of these duties. Bert Swart has also pointed out that the existence of criminal liability of corporations may make international cooperation between states easier and more effective.147 A stronger but related argument for a exible approach to the characterisation of local laws stems from the view that the label afxed to a particular corporate liability scheme is ultimately less important than the achievement of measurable improvements in corporate accountability. This is particularly so given that there may be far less difference between criminal and non-criminal approaches adopted by different states than is sometimes implied. Leigh, for example, argues that systems of full corporate criminal liability, such as in Australia, and administrative liability schemes, such as those of Germany and Italy, often arrive in practice at a structure of liability that produces broadly similar answers to the problems of corporate crime.148 This claim is to some degree conrmed by the comparative review outlined earlier in the article, where parallels could be drawn between the conditions of liability set out in the German and Italian administrative sanctioning schemes and the common law identication and organisational models of corporate criminal liability. In light of the similar outcomes that have been achieved through the various national systems of corporate liability, despite their developing from diametrically opposed rst principles,149 Leigh states:
[C]orporate criminal responsibility is not necessarily the only way to cope with problems of economic power, or with the problem of proving offences by omission.

146. See, e.g., A. Ramasastry, Corporate Complicity: From Nuremberg to Rangoon. An Examination of Forced Labor Cases and their Impact on the Liability of Multinational Corporations, 20 Berkeley JIL (2002) p. 91 at p. 96. 147. Swart, supra n. 7, pp. 952-953. 148. Leigh, supra n. 62, p. 1509. 149. Ibid.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

361

Whether the range of sanctions is seen as penal or administrative in nature, the important point is that the sanctions be available.150

In a similar vein, after reviewing existing treaties that demand states adopt systems of corporate liability, Andrew Clapham states:
The fact that treaties leave states a choice as to how to sanction a corporation does not undermine the aim of the international treaty, which is to outlaw the relevant corporate conduct.151

Although Clapham is not advocating either in favour or against criminal or non-criminal corporate liability schemes, his point highlights that the aim of an international treaty to address the corporate dimension of certain crimes is not necessarily undermined by a permissive approach to national measures adopted to outlaw the relevant conduct. An argument that both criminal and non-criminal corporate liability may be sufcient to achieve the outcomes sought by international criminal justice is further supported by work emanating from the eld of economics and law on domestic corporate liability. The law and economics school contends that civil liability regimes are more efcient and effective in terms of deterring unlawful conduct in the corporate context than criminal regimes, and for this reason it is civil liability, and not criminal liability, that should be pursued for the purpose of achieving effective corporate accountability.152 A problem with the arguments that criminal and non-criminal corporate liability are roughly equivalent and the argument that non-criminal liability can better achieve the objectives of the criminal law in the corporate context is that they fail to account for the unique retributive purposes and capacities of criminal liability. In his article, In Defence of Corporate Criminal Liability, Lawrence Friedman sets out the expressive theory of the retributive rationale for criminal liability, in defence of the necessity of corporate criminal liability in relation to certain corporate misconduct. Criminal liability, Friedman argues, is not justied solely by the aim of deterrence. Although this is an important feature of criminal law, it is one that it shares with other forms of liability. In contrast, it is the unique positioning of the criminal law in the framework of social meanings as a means of assert[ing] moral truth in the face of its denial that is signicant.153 This expressive theory of retribution holds that the criminal law establishes the standards by which persons and goods should be properly valued.154 Criminal liability in turn,
150. Ibid., p. 1526. 151. Clapham, supra n. 93, p. 251. 152. See, e.g., L. Friedman, In Defence of Corporate Criminal Liability, 23 Harvard Journal of Law and Public Policy (2000) p. 833 at pp. 837-841 (setting out the work of seminal United States law and economic theorists on deterrence and corporate liability). 153. Ibid., p. 843. 154. Ibid.

362

J. KYRIAKAKIS

NILR 2009

expresses the communitys condemnation of the wrongdoers conduct by emphasizing the standards for appropriate behaviour that is, the standards by which persons and goods properly should be valued.155

In expressing community condemnation, the criminal law also re-afrms the real value of the victims or goods, whose inherent value has been denied in the commission of the offence. Like deterrence, the expressive theory of retribution views criminal liability as instrumental, as a means to an end, towards establishing goodness by reinforcing community values.156 A fundamental feature of criminal liability is the expression of moral condemnation and the reiteration of moral standards through a verdict of guilt and the imposition of proportionate punishment.157 The nding of criminal guilt in this theory is central in expressing the communitys moral condemnation. The consequences of a criminal conviction take their expressive character from the verdict that preceded them. For this reason, even if non-criminal liability may be followed by the imposition of similar consequences as those available pursuant to criminal liability, the message being delivered by the imposition of the penalty is different.158 Friedman argues that the retributive message that is delivered through a nding of criminal wrongdoing cannot be achieved through other forms of liability. The reason for this arises from the different grammars particular to each form of liability the matters to which they speak and each category of liabilitys different underlying assumptions about how persons and goods should be valued.159 It is worth quoting Friedman at length:
The aim of expressive retribution is the defeat of the wrongdoers valuation of the worth of some person or good. Unlike deterrence, this objective cannot be accomplished more efficiently via the civil liability regime; indeed, it cannot be accomplished at all through civil liability. Notwithstanding the retributive character of some aspects of civil liability (a punitive damages award, for example), only criminal liability is understood against the background of social norms, codified by the criminal law, as conveying the particular moral condemnation that expressive retribution contemplates In light of their distinct social meanings, findings for civil and criminal liability are not transmutable for the purposes of moral condemnation. The expressive rationale eschews commodification; it operates from the presumption that the community has determined, and expresses through its laws, that there are circumstances in which persons and goods have a certain inherent worth that must be respected. To properly counter the wrongdoers incorrect assessment of those persons or goods,

155. 156. 157. 158. 159.

Ibid. Ibid. Ibid., p. 856. Ibid. Ibid., p. 854.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

363

the retributive act must recognize that the wrongdoer denied their inherent worth, whatever that may be. In other words, the finding of liability must recognize that, in the circumstances, the victim or objects value is beyond price. Because, in the criminal context valuations are presumed to be established, it follows that a finding of criminal liability a criminal conviction is understood as the vehicle of moral condemnation.160

Gerard Lynch sets out a similar thesis for distinguishing criminal liability from other forms of liability. For Lynch, the distinguishing feature of the criminal law is the special moral and stigmatic purposes of the criminal law and criminal punishment. In a fashion similar to Friedmans thesis, Lynch argues that the criminal law seeks to reinforce societys moral standards and the imposition of stigma on those who violate them in a way not true of civil law. In doing so the criminal law constructs not only the bad citizen, but also the good citizen.161 In Lynchs view the question regarding when corporate conduct should be characterised as criminal should not be derailed by concerns regarding the ction of judging the morality of an articial legal entity (which he takes as either an extension of the culpability of its responsible human agents or as a metaphor) but should be approached in terms of when it is appropriate to apply stigmatic sanctions to corporate entities.162 The idea that the criminal law has a unique role in communicating moral condemnation and in constructing good and bad citizens, is also reected in international criminal law theory. Luban describes the purposes of international criminal determinations as one of norm projection. According to his view, international criminal tribunals declare, in the most public way, that the condemned deeds are serious transgressions.163
Former eras may have thought aggressions, tortures, massacres, rapes, or mass exiles as acts of state, spoils of war, public necessities, inevitabilities of realpolitik, or inexorable products of the historical dialectic. Post ICL declares them to be crimes, pure and simple. It thus implicitly declares theories about acts of state, class liquidation, or the eternal friend-enemy structure of politics to be bunk cosmetic attempts to justify the unjustifiable.164

Luban notes that a similar idea arises in German criminal law theory, under the concept of positive general prevention. This theory acknowledges the communicative aspect of criminal law that takes place through the criminal

160. Ibid., pp. 854-855. 161. G.E. Lynch, Crime and Custom in Corporate Society: The Role of Criminal Law in Policing Corporate Misconduct, 60 Law and Contemporary Problems (1997) p. 23 at pp. 46-47. 162. Ibid., pp. 50-51. 163. D. Luban, Beyond Moral Minimalism (Response to Crimes against Humanity), 20 Ethics & International Affairs (2006) p. 353 at pp. 354-355. 164. Ibid., p. 355.

364

J. KYRIAKAKIS

NILR 2009

punishment of the guilty and acquittal of the innocent.165 A similar sentiment is also reected in the Council of Europes Recommendation No. R (88), where it is stated that whether criminal or non-criminal liability should attach to a corporation for particular conduct should depend, in part, upon whether the particular behaviour requires treating the offender as criminal.166 In light of the particular expressive capacities of criminal law, De Maglie argues that even the most sophisticated non-criminal models are inadequate to control corporate crime.167 Despite the many commendable aspects of both the German and Italian systems of administrative sanctions against corporations, what both lack is the capacity to communicate the communitys moral condemnation of the corporations behaviour and to re-afrm the values that have been harmed by that behaviour. As mentioned earlier in the article, it was precisely the fact that administrative sanctions did not impart the same moral message as criminal sanctions that contributed to the decision made on the part of German authorities to adopt a system of administrative sanctioning to corporate wrongdoing, rather than to impose criminal liability. As long as the prevailing social meanings that attach to criminal and non-criminal liability persist, the argument that non-criminal liability schemes can achieve the full range of purposes of international criminal justice is unpersuasive. The current trend across states is toward the recognition of corporate criminal liability, despite the continued reluctance of some states to do so. This trend also appears to be moving in favour of organisational models for determining corporate fault, which highlight the unique ways in which corporate behaviour results from internal policies and cultures. The ICC Statute should therefore reect this position in keeping with the progressive development of international law. This is particularly so in light of the problem of corporate involvement in international crimes and the benets of a response at an international level. The comparative material capacities for corporations to contribute to international crimes in contrast to individuals suggests from a consequential perspective that such entities are important subjects of attention in the effort to achieve the aims set out in the preamble to the ICC Statute.

5.

CONCLUSION

In light of the argument from expressive retribution, the nature of the crimes and the signicance of business in the commission of international crimes, if corporations were included in the jurisdiction of the Court it should be according to the same conditions that currently apply to individuals. Once it is accepted that corporate liability is a fundamental complement to individual

165. Ibid. 166. Recomm. I(3) Recommendation No. R (88) 18, supra n. 111. 167. De Maglie, supra n. 39, p. 562.

NILR 2009

CORPORATE LIABILITY AND THE ICC STATUTE

365

criminal responsibility in terms of achieving the goals of international criminal law, and this of course is a separate question entirely, it would be contrary to the unique normative positioning of the ICC to declare the equivalence of national non-criminal liability schemes with criminal ones. Instead, by treating corporations as equivalent to natural persons in terms of their capacity to commit international crimes and to be answerable under criminal law, the ICC would contribute to the clarication of what is and is not permissible in the context of doing business in the global market which are the good corporate citizens and which are the bad. Existing avenues for the Court to defer to national non-criminal measures, together with the limited resources available to the OTP, suggest that the genuine application of quasi-criminal liability schemes to corporations believed to be involved in international crimes may be sufcient to avoid ICC adjudication of the same matter. However, this would not be guaranteed and, as is the case in relation to natural persons, the circumstances of the particular case would need to be taken into account to determine if that should be the outcome. As the ICC Statute does not mandate that states take any particular steps in relation to criminalising the conduct proscribed under the Statute, the treatment of corporate defendants in terms equivalent to natural persons would not oblige the adoption of national corporate criminal liability schemes. To effect this option, a provision for corporate criminal liability would need to be inserted within the ICC Statute. No amendments to provisions relating to admissibility determinations or procedures would be required. Ideally, the provisions for corporate criminal liability within the Statute should also reect the more progressive models of corporate criminal liability. That is, models that do not predicate the liability of the corporate entity upon the identication and prosecution of an individual offender and which include an organisational model for the attribution of criminal fault to the corporation. However, it is accepted that the proposal to include corporations within the jurisdiction of the ICC will require a substantial degree of state support in order to succeed and the complementarity objection reects the anxiety of states that if they fail to adopt adequate local measures to deal with corporate defendants they are at risk of forfeiting cases to the ICC. For this reason, adoption of the proposal on corporations in a way that does not assure states that non-criminal measures will be adequate for the purpose of admissibility determinations may not attain the requisite level of state support to be introduced without risking the ongoing involvement of States Parties to the Statute. Ultimately, some hard law measures to improve corporate accountability in relation to international crimes are preferable to no improvement whatsoever and there is some evidence that locally acceptable measures are more likely to generate the type of pedagogical effect sought through the introduction of a scheme of liability. For this reason, an alternative drafting option would be to adopt a provision for corporate criminal liability within the ICC Statute but to acknowledge the sufciency of quasi-criminal national liability schemes in those states that do not recognise the principle of corporate criminal responsibility, provided certain conditions

366

J. KYRIAKAKIS

NILR 2009

of liability are satised. Conditions could reect the same principles of organisational fault for founding liability, even if the law is locally constructed as non-criminal as a means of bypassing constitutional or other local barriers. Any sanctions should be effective, proportionate and dissuasive, as demanded in the models of corporate liability adopted in other international instruments. Any allowance made to quasi-criminal national liability schemes should be limited to countries that do not recognise the principle of corporate criminal liability, as per the approach taken in OECD Anti-Bribery Convention. This would ensure that countries are not entitled to derogate from their own usual practice regarding corporate criminal liability and would reinforce the emerging state practice to extend responsibility for international crimes to companies in those states containing provisions for the prosecution of legal persons. However, the ICCs own corporate liability scheme should be characterised as criminal so that at the international level the message of the criminality of corporate conduct, when participating in a sufciently close way in international crimes, is communicated. It is worth saying just a few words on the benets of the inclusion of corporations in the ICC Statute in contrast to a new and independent treaty specically addressing corporations and human rights, at least in relation to international crimes. The most obvious is the existence of the Court as a mechanism for adjudicating wrongs where states fail to act and the ow on effect that could be generated by the complementarity scheme to encourage state action (not simply legislation) in relation to international crimes. In addition, the inclusion of corporations in the ICC would allow the role of corporate actors in the commission of international crimes to become part of the narrative developed by ICC jurisprudence, which could contribute to an increasing appreciation of the role of global business in creating the circumstances in which international crimes occur. However this is not to suggest that a distinct multilateral agreement to address corporations and human rights more broadly is not likewise warranted and would indeed make a great contribution to improving corporate accountability for wrongs of global concern.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.