As a legal fiction, corporations can only act through the act of the natural persons within and on behalf of the corporations. Therefore, to establish the criminal liability of corporations, several important questions should be answered. Firstly, what acts and what level of intent of natural persons within the legal persons can make corporations criminally liable? Secondly, what is the meaning by the act within the scope of corporations? And the third question is important that the acts should be with the intent to benefit the corporations?
In establishing the criminal liability of corporations, in comparative perspective, several general criteria have been established in many countries’ legal system. Theory in civil law regime which is “repondeat superior theory” has been adopted to establish the liability of corporations based on the conduct of other parties.180 Besides respondeat superior theory that attributes the conduct of certain natural persons within corporations to the corporations, there is also a theory that uses the policy and practice within corporations that fail to counter the misconduct within corporations as the determining factor to establish liability. The corporations recently became more modern and have a complex structure of bureaucracy. That condition leads to the difficulties in establishing criminal liability based on certain individual conduct within corporations. Therefore, the policy and the procedure within corporations, especially those that are inadequate to protect society are important factors in making corporations criminally liable. Even though it is different among the countries, general similarities can be highlighted. Commonly, a corporation can be considered criminally liable when the agent of the corporation commits a criminal offence within the scope of the corporation with the intent to benefit to the corporation.181 From those general approaches, certain countries have their own specific approaches by broadening the interpretation of the criteria or make narrow interpretation of the criteria. The various interpretations from those criteria are:
179 The discussion related to the corporate manslaughter can be seen for example on Gobert, J., ‘The Corporate
Manslaughter and Corporate Homicide Act 2007 – Thirteen years in the making but was it worth the wait?’, (2008) The Modern Law Review, 71: 413–433.
180 Christina de Maglie, Op. Cit., p. 551. 181Ibid., p. 553
1. Defining the agent of corporations who commit a crime
Since a corporation is a legal fiction, all corporate activities are conducted by natural persons of corporations (agent of corporations) and the establishment of criminal liability is based on the certain conduct and intent of the agent. Therefore, determining who can be considered the agent of corporations is key to establishing the criminal liability of corporations since the mens rea of the agent determines the mens rea of corporations based on respondeat superior theory. In general, there are two models to attribute the act of the natural persons within the corporations to the corporations.182 The first model is by attributing the acts of the
senior officers of the corporations as the act of the corporations. This model is called the direct attribution because the directors of the corporations are the representation of the corporations; therefore, a corporation is deemed to have acted when the directors have acted.183 Therefore, the actus reus and the mens rea of the high officers of the corporations are considered as the
actusreus and the mens rea of the corporations.
The second model to determine what acts of the natural persons within the corporations can lead to the criminal liability of corporations is based on the vicarious liability principle. Corporations can be held criminally liable based on the act of all natural persons within the corporations, both the act of the directors of the corporations and the act of the ordinary employees or the representatives, as long as those persons have acted within the scope of corporations.184
Countries that use a broad interpretation to determine that the agent of corporations consider all natural persons who act on behalf of the corporations regardless of their position. Not only natural persons who have managerial position, but also ordinary employees and other parties can be the agent of corporations and their conduct can be considered as the conduct of corporations. On the other hand, countries which use a narrow interpretation only consider that natural persons who have managerial and authoritative position within corporations can be the agent.
Broadening the interpretation on the agent of corporations can lead to the effectiveness of the law enforcement. The conduct of corporations do not only rely on the conduct of certain people within the corporations. In the context of the complex structures and modern forms of corporations, broad interpretations can mitigate corporations from taking
182 Guy Stessen, Op.Cit., p. 506. 183Ibid., p. 507.
cover from the prosecution by hiding within the complex structure of corporations. Law enforcers can easily determine the parties and conduct of the natural persons within corporations required to establish the liability of corporations. This approach also has a negative side. Since many types of individual conduct within corporations can lead to the criminal liability of corporations, corporations can be easily become a victim when the misconduct is committed by an ordinary employee without the knowledge or outside the consent from the director or the management of corporations.
2. Interpreting the conduct within the scope of corporations
As an organization, the activities of natural persons within corporations should be separated by the individual conducts within corporations and the individual conducts on behalf of corporations. Not all individual conducts within corporations is done on behalf of corporations. The individual conducts on behalf of corporations should have a link with the daily activities of corporations. The important element to establish corporate criminal liability of is proving that the act of the natural persons within corporations is done within the scope of the corporations. The individuals within the corporations who act in their own interests cannot lead to the liability of the corporation, even when those persons are the director of the corporations. The acts can be committed within the scope of corporations when the acts are done by the individuals who have the authority or the capacity to act and their acts comply with the internal regulations of the corporation.185
The act of individuals within corporations should reflect their daily activities, tasks and duties as the employee of the corporation. In the past, the scope of corporations was interpreted as all the conducts that were clearly or implicitly approved by the authoritative power within corporations. This has changed into all conduct of employees that occur when performing the duties in their jobs, even though the conduct is out of consent of the authoritative power of corporations.186
3. Intention to give benefit to the corporations
The existence of the intent of perpetrators to benefit corporations from their misconduct is an essential requirement, since economic motive is the main reason for corporate crime. The question then, is what kind of benefit is needed to be proved in corporate crimes. The important requirement is that the perpetrator is proven to want to benefit the corporations. The important
185Ibid., p. 513.
186‘Developments in the Law-Corporate Crime: Regulating Corporate Behavior Through Criminal
thing is to prove the intent to benefit and not the benefit itself, as the corporations can be found guilty even when they do not receive actual or partial benefits from the misconduct. Several countries regulate the benefit criterion differently. One country requires that the acts should give benefit corporations, while another country does not require that corporations obtain an economic advantage as a result of the offence.187