ABSTRACT
The evolution of the concept of corporate criminal liability of corporations is characterized by relentless struggles of the judiciary to overcome the problem of assigning criminal blame to fictional entities. Initially, a corporation was considered to be an entity devoid of a person in the strict sense; therefore, criminal guilt was considered to be quite difficult to establish in cases of aberrations of criminal nature by it. The principle of vicarious liability instead of criminal liability was invariably sought in such cases. With the emergence of welfare states with considerable emphasis on accountability and in view of some serious violations by corporations resulting in the loss of lives, public money, and damage to health and property, the issue of fixing a strict criminal responsibility was brought to focus. The doctrine of corporate criminal liability is therefore a developing phenomenon. Presently, the courts and the legislatures in Nigeria and other jurisdictions have devised some theories and evolved legal basis in a bid to place liability for crimes of intent on corporations. In this work, attempt is made to show that corporations can have the state of mind together with the physical elements necessary to constitute an offence. The work also examines the legal framework for corporate crime in Nigeria and other common and civil law countries. The work further examines criminal sanctions and their role in controlling corporate crime, the problems of corporate crime, and the incident of corporate killing in work places. The study also discusses the alternative models of corporate liability which are not derivative but which locate the blameworthiness within the corporation itself or at most take cognizance of the compartmentalization of knowledge within a corporation for corporate crime. In this work expository, analytical and comparative jurisprudence has been carried out with the help of relevant statutes and case law. Part of the findings of this work is that criminal law jurisprudence is settled on the point that corporations can be held liable for offences which require evidence and proof of mens rea. It has also been found that the ascription of criminal liability to companies meets several conceptual problems. The research further shows that neither the Nigerian Criminal nor the Penal Code expressly provides for the criminal liability of corporate bodies. Nigerian laws on corporate criminal liability are inadequate; they lack clear basis for corporate criminal responsibility especially as it relates to corporate manslaughter. The thesis also shows that lack of successful prosecution of companies in Nigeria for corporate manslaughter despite the wave of work place killings is largely due to defective and inadequate legal framework. The study has further found that the assumption that corporate liability must be derivative has come under increasing attack from legal commentators, academic writers, jurists and law reform bodies, who all attempt to locate criminal liability on an organizational basis. The work has attempted to outline a number of possible alternative models of corporate liability that have been put forward for Nigeria to borrow ideas from. The result of the work also shows that the existing modes of sanctioning in Nigeria is inadequate; imposing paltry fines of N1000 or N500 Naira for such a high environmental crime as oil spillage is not enough to deter corporations. To also prosecute individual officers of a company is equally unfair and ineffective.The research suggests that there is, therefore, no alternative to an adequate reform, appraisal and revamp of corporate criminal liability law in Nigeria given the recent law reforms that have taken place in other countries like the United Kingdom, United States, Australia, Canada and Netherlands, as indicated in this work. In order to handle these issues successfully, the researcher chose a framework comprising eleven chapters with well articulated headings and sub-headings (as can be seen under the scope of study on pages 26-27 of this discourse) which form a road map which underlines the theoretical basis of this work, while the bibliography concludes the thesis.
CHAPTER ONE
GENERAL INTRODUCTION
1.1 Background of the Study
It is important to study corporate crime because of the economic damages that organizations can cause. In the contemporary world, the impact of the activities of corporations is tremendous in the society. In their day-to-day activities, not only do organizations affect the lives of people positively, but they also bring many devastating impact upon the people. Activities of corporations may cause serious damage to health or the environment; and may sometimes result in death. Fraudulent actions by some companies may lead to huge financial losses for individuals, groups, or other companies. In the 1990s, both the United States of America and Europe recorded an alarming number of environmental, antitrust, fraud, food and drug abuses as well as false statements, workers’ death, bribery, obstruction of justice, and financial crimes involving corporations. The most recent and prominent case in the United States has been the Enron scandal in which one of the largest accounting firms in the world, Arthur Andersen LLP, was charged and convicted for obstruction of justice and for destroying Enron-related documents.[1] Other corporations, among which are Olympic Pipeline, Exxon-Mobil, Pfizer and Bayer pharmaceutical companies, breached the environmental or health and safety laws.[2] MC Wane Incorporated, one of the world’s largest manufacturers of cast iron pipes, has an extensive record of violations which have caused the death of workers in the work place.[3]
The capsized Zeebrugge ferry, the King’s Cross fire, the Clapham and Paddington Rail crashes, and the Hillsborough football tragedy all represent recent disasters in the United Kingdom.
In Nigeria, we have had incessant reports of plane crashes, collapsed buildings, petroleum oil pipe and gas explosions, sea disasters and breaches of environmental or health and safety laws by corporations, killing innocent Nigerians in their thousands. There is also an account of the loss of lives involving over 120 employees of a rubber-related product manufacturing factory aggravated mainly by the company’s policy of locking the workers inside the factory at the commencement of work daily.[4] The recent events in the Nigerian Banking sector are reminiscent of what was witnessed during the era of the Failed Banks Tribunals.[5] Directors and bank officers were prosecuted and punished despite the fact that they acted on behalf of the banks. We can not also forget in a hurry the dumping of harmful toxic waste materials in Koko, Delta State of Nigeria in June, 1988 by a foreign company.
Generally, corporations are now involved in relatively new and usually white collar crimes such as: tax evasion, fraudulent trading or insider dealing, fraud, unfair competition, breach of fiduciary duty, banking and insurance frauds, and false invoicing (including over-invoicing). Companies may also commit crimes ranging from corporate fraud, commercial pollution of air and water, environmental and health and safety violations, illegal currency manipulations, capital transfers, illegal mining, maritime fraud scheme, currency counterfeiting, murder and corporate manslaughter, and so on.
Corporate criminal liability, more than ever before, is becoming increasingly prevalent. These corporate crimes result in great loss of lives and properties. The consequences which most directly affect our society are the enormous loss of money, jobs and lives. At the same time, the long-term effect of these crimes, such as the damaging effects on the environment and health, which may not be apparent now, should not be underestimated.
The reaction to this corporate criminal phenomenon has been the creation of judicial and legal regimes that could deter and punish corporate wrongdoing. Corporate misconduct has been addressed by civil, administrative, and criminal laws. At the present, most countries agree that corporations can be sanctioned under civil and administrative laws.
However, criminal liability of corporations, which is the focus of this study, has been very controversial. While several jurisdictions have accepted and applied a concept of corporate criminal liability under various models, other legal systems have not been able or willing to incorporate these theories into their legal systems. Critics have voiced strong arguments against its efficiency and consistency with the principle of traditional criminal law. At the same time, a large pool of partisans has vigorously defended corporate criminal liability.
In this study, attempt is made at justifying the purposes of corporate criminal liability, the reasons that some jurisdictions adopt this concept, but others still refuse to accept it, the models of corporate criminal liability developed so far, the reason that corporate criminal liability developed differently in different countries and the lessons that may be learnt from these developments. Now, it is well settled that a corporation can be held criminally liable for committing offences that require mens rea. Generally, corporations may be held responsible for the illegal acts of its employees if such acts are related to and committed within the course of employment, and in furtherance of the business of the corporation.
[1] Arthur Andersen LLP. v U.S., 544 U.S. 696 (2005).
[2] For a detailed list of the top 100 corporate criminals see Russell Mokhiber, (accessed on January 17, 2011).
[3] D. Barstow & L. Bergman, “Deaths on the Job, Slaps on the Wrist”, (2003), N.Y. T, Jan. 10, p. 1.
[4] L. Ali, Corporate Criminal Liability in Nigeria, (1st edn., Malthouse Press Limited, Lagos, 2008), p.181.
[5] Four of the five bank chiefs sacked by the Central Bank of Nigeria Governor were arraigned before a Federal High Court on five separate charges of 131 counts bordering on fraud, concealment and grant of loans without adequate collateral running into about N625.95 billion. This Day, Tuesday September 1, 2009, p. 1.
