IJCentral: International Justice Central

In 1993, Shell Oil was complicit in, the Nigerian government’s arrest and execution of several people protesting Shell’s labor and environmental practices. The case was settled before it started in a United States federal court, but—Should the International Criminal Court have the opportunity to prosecute cases, like this one against Shell Oil?

This week I gave a talk on why it is important that U.S. anti-trafficking laws be amended to include corporate liability provisions. Corporations and businesses control the majority of the demand for labor trafficking, thus if they are liable for this crime, it is likely that the crime will greatly decrease. The same is true for many other international crimes. Yet, not only are there not corporate liability provisions in many international human rights laws, but, no international court, including the International Criminal Court (ICC), can even prosecute businesses.

The Basics of Corporate Liability

The basic concept of corporate liability has not received universal recognition. In fact, most countries do not prosecute corporations. However, many common law based countries recognize corporate liability, including Australia, Canada, and the United States.

In the U.S., corporate liability works by imputing the crime from a person to the rest of the corporation. To do this you must (1) have an actor who is personally guilty of the crime and (2) that actor must be an “agent” of the corporation. To be an agent of the corporation, the actor must be authorized to act on behalf of the corporation and must be working to benefit the corporation while acting under its control. If these factors are present, the court can impute liability from the actor and hold the corporation liable. 

Penalties for corporations convicted of crimes can include heavily fines, dissolution and reorganization, revocation of licenses or permits, or even the surrender of the corporation’s ability to conduct business in the jurisdiction. Thus, when corporate liability is a possibility, corporations pay attention because the results can be devastating. 

Leaving Companies Out of the ICC

The idea of prosecuting businesses was considered during the development of the ICC. One of the initial drafts of the Rome Statute, the founding document of the ICC, contained a provision on the criminal liability of all legal persons except states. Because “legal person” includes both people and organizations recognized by law, the ability to prosecute all legal persons would allow the court to prosecute corporations. France actually submitted a draft provision which would hold a corporation liable if an agent was found guilty of committing a crime on the corporation’s behalf.

However, there was a “deep divergence” of views over the advisability of prosecuting corporations. Many supported the inclusions of corporate liability because it would be an effective way to eliminate certain crimes. Many other countries had trouble supporting it because their own national legal systems don’t prosecute corporations, thus making it hard to authorize an international one to prosecute them.

There are arguments that despite the final decision to leave corporations out of the ICC, they may still be prosecutable under it- but we have yet to see this attempted or even considered.

The Debate: Should We Be Able to Prosecute Corporations?

So should the ICC ever revisit this and consider amending their jurisdiction to include fictional legal persons or corporations? In short, yes. Here’s why.

The legal purpose of a corporation is to make money for their shareholders. If a corporation is taking time out of this purpose to give money to charity or, for example, ensure there is no slavery occurring in its supply chains, there’s a chance it that its shareholders could actually bring a law suit against the business’s board of directors. For example, in the famous case Dodge v. Ford Motor
, shareholders sued Ford Motor Company for giving nice benefits to its employees and factory workers and thus failing to maximize profits for its shareholders.

This means that movements encouraging corporate social responsibility can only go so far. The company will still have that legal obligation to make money for its shareholders. However, if corporations risked being prosecuted for human rights crimes, this would give the company the legal obligation and incentive it needs to invest in being responsible. Because a company that is prosecuted for committing human rights violations is not maximizing shareholder profits.

And the more companies that invest in responsible business practices, the less human rights violations we will have. Prosecution in the International Criminal Court would not only scare corporations into social responsibility, but actually provide them with a path to social responsibility that didn’t previously exist.

In a world of increasing corporate influence and sway, where multi-national conglomerates exceed many countries in terms of annual turnover, it is irresponsible to leave these actors outside the law. History has proven that where loopholes exist in international law, they will inevitably be exploited. Implementing corporate liability at the international level can serve to protect us against this risk.

Share if you approve of bringing these changes to the ICC, and re-post on corporations’ Facebook pages.

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Sarah Pierce is a recent law school graduate with a long history of experience working with nonprofit organizations devoted to international justice and social change.

Follow Sarah on Twitter: @sarahcpierce