A brief of corporate criminal liability

Commission of a crime by an individual is usual hearsay in our community and known universally. However, some instances show that the commission of a crime cannot be limited to individuals alone; it would seem unfair to allow corporations engaging in illegal conduct to escape all punishment. Therefore, over time there has been an extension of corporations being held liable for a crime committed through its human agents.


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The two pillars of criminal liabilities are actus reus and the mens rea and so to establish corporate criminal liability confronted issues of the existence of actus reus and mens rea since a company was known to be an artificial body that had no physical existence, let alone a mind of its own to be subject to penalties prescribed. For instance, to say a company as a body should serve a term of imprisonment or death penalty is abstract as neither the whole staff (who have no mens rea) nor the physical structure of the company can be imprisoned to serve a jail term.

Now you ask, what are examples of crimes a company can commit, but before that, to determine the meaning of the subject matter 'corporate crimes' cannot be overemphasized.  Corporate crimes are defined as illegal acts, omissions or commissions by corporate organizations themselves, as social or legal entities or by employees of the corporations acting by the operative goals or standard, operating procedures and cultural norms of the organization, intended to benefit the organizations themselves. Examples of corporate crimes (white-collar crimes) that could be committed by companies include tax evasion, manipulation of sales, falsified financials and accounting fraud, security violations, and an environmental crime such as commercial pollution of air and water, especially for industrial corporations whose operations produce pollutants. The importance of imposition of corporate criminal liability inferred from the above is to protect the society because half the lives of citizens in a country depends on corporations; ranging from food to eat, the house we live in, the water we drink and the environment we inhabit. It follows without a doubt that our safety is more affected and depends largely on how corporations, large or small, conduct themselves. In the region of Niger Delta in Nigeria, the recklessness of multinational oil companies in the extraction of oil has almost destroyed the environment. These oil spillages destroy the aquatic life which is a source of livelihood and also possible lands that could be used for agricultural purposes. In the same vein, the destabilization of the stock market by corporate misconduct and misfeasance has led to the loss of billions in shareholders’ equities and the loss of hundreds of thousands of jobs. This unfortunate result has been renamed ‘economic meltdown’.

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There are exceptions however to the strict liability imposed on a company in cases such as murder, rape or bigamy. This is because since the company does not have a physical existence, it would be difficult to subject it to receiving the attached penalties. For instance, the penalty of murder is a death sentence and since a corporation has no physical human existence, it might be difficult to subject it to punishment such as death sentence.  Therefore, the imposition of corporate liability in such instances would most times then be; double of ‘whatever’ fine amount the company would have been liable to in civil cases or the company would be dissolved to avoid future reoccurrence. The doctrine of lifting the veil makes it possible for the court to look beyond the corporate structure to individual agents such as the directors or officer who violates economic or regulatory statutes since a company can only operate through its human agents. The penal code of the American law institute makes it clear that a corporation should only be punished or held criminally liable for conduct authorized, performed or recklessly tolerated by its board of directors or by a high managerial agent acting on behalf of the company within the scope of employment.

The most common way a corporation can be punished or regulated, include heavy fines(a branch of IBM (international business machines corporation) was charged with exporting computers to a Russian nuclear lab that was believed to be testing, constructing and maintaining nuclear explosives. The fine was $8.5million), loss of business license, and regulation by government agencies (for example in Nigerian, certain laws regulate these: Food and Drug act, Standard Organization of Nigerian act, Federal Environmental Protection Agency Act, Oil in Navigable Waters Act).
In conclusion, the most effective, I believe of these punishments are the dissolution or loss of business license (in very serious cases) or the limitation of powers of the company. This action would serve a proper warning and example for other companies or corporations to learn from and deter them from the future commission of crimes rather than fines on another part that demands a very little percentage of the power of the revenue and profit these companies receive.



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