This is the second article in a two-part series examining the Malabo Protocol on the Statute of the African Court of Justice and Human Rights (ACJHR). When it comes into effect, the Malabo Protocol will empower the ACJHR to exercise jurisdiction over international crimes as well as introduce a regulatory scheme for corporate criminal liability. The first part of this series outlined the scope of the Court’s new jurisdiction with respect to international and transboundary offences. This second part explores the new corporate criminal liability provisions in more detail.
Traditionally, only natural persons could be prosecuted for the commission of international crimes in either domestic or international jurisdictions. Corporate criminal liability has been recognised in most domestic jurisdictions, but not under international criminal law. The ACJHR is set to change this with the introduction of Malabo Protocol provisions regarding the international criminal jurisdiction of the court (Article 28A), and a regulatory scheme for corporate criminal liability (Article 46C).
Background to the Draft Corporate Criminal Liability Provisions
In January 2010, the African Union (AU) contracted the Pan African Lawyers Union (PALU) to draft a legal instrument amending the existing Protocol on the Statute of the ACJHR. In July 2010, I co-presented a conference paper on corporate complicity in international crimes with Emeritus Professor Eric Colvin at the Africa and the Future of International Criminal Justice Conference at the University of the Witwatersrand in Johannesburg, South Africa, which was attended by the PALU CEO, Donald Deya. Our conference paper, later published as a book chapter [pp 297-318], proposed a regulatory scheme for corporate criminal liability and provided draft legislation to be considered for inclusion in the International Criminal Court’s founding document, the Rome Statute. It was these draft provisions that PALU reproduced for the Article 46C provisions of the Malabo Protocol. Additionally, the draft provisions of that conference paper formed the basis of my doctoral thesis, later published as a book: The Complicity of Multinational Corporations in International Crimes: An Examination of Principles. At the time, my doctoral thesis recommended that the ICC, being a permanent court exercising jurisdiction over international crimes, was the preferred forum to deal with the liability of complicit multinational corporations, but only where domestic jurisdictions prove inadequate.
Development of Models of Corporate Criminal Liability
Most domestic jurisdictions recognise corporate entities as separate legal persons, conferring legal personhood so they operate as autonomous legal entities. This concept is known as the ‘veil of incorporation’ [p 17]. The concept of legal personality determines which corporate liability model will be applied when attributing criminal responsibility to the entity.
There are two competing models of corporate criminal liability that are applied in most domestic jurisdictions: the derivative liability model and the non-derivative liability model.
Traditionally, common law courts applied two approaches stemming from the doctrine of derivative liability: vicarious liability and identification liability. Both approaches are similar in that liability is established through an individual whose culpable actions are imputed to the entity. The approaches differ in that, with vicarious liability, the actions of an individual are imputed to the entity insofar as the individual was acting in the course of their employment. With identification liability, it is only the actions of those individuals said to be the ‘directing minds’ that are imputed to the entity.
Part 2.5, Division 12 of the Australian Criminal Code (Cth) provides a model for non-derivative liability. A major concern is that it overlooks the distinctions between forms of subjective fault; thus, the model applies an equal scheme of liability to all offences. The Australian non-derivative liability model incorporates a ‘corporate culture’ concept. With this non-derivative liability approach, the organisation is treated as a separate real entity in its own right; the culpability of the organisation itself, as opposed to the culpability of its individuals, is of primary concern. This is because non-derivative liability is established on the basis of ‘corporate policies, procedures, practices and attitudes; deficient chains of command and oversight; and corporate “cultures” that tolerate or encourage criminal offences.’ [p 4].
Section 12.3(2) of the Australian Criminal Code (Cth) stipulates the manner in which authorisation or permission for the commission of the offence could be attributed to the body corporate. There are four alternative means by which this may occur, including ss 12.3(2)(c) and (d): the existence of a corporate culture that directed, encouraged or tolerated the offence; and the failure to create and maintain a culture of compliance that adhered to the law.
In my research, I was most attracted to a unique feature of this model, namely prosecuting a corporation on the basis of its corporate culture. Multinational corporations operate through complex organisational structures, coupled with a high turnover of corporate personnel. ‘[T]he fault element … can be located in the culture of the corporation even though it is not present in any individual.’ [p 35]. However, the prospect of establishing corporate criminal liability via the corporate culture is a concern to some. The Australian Law Reform Commission discussed the Australian corporate criminal liability provisions at length, noting that they have never been successfully prosecuted in Australia.
ACJHR Regulatory Scheme for Corporate Complicity in International Crimes
(i) Corporate criminal liability provisions pursuant to Article 46C of the Malabo Protocol
The heading preceding Article 46C of the Malabo Protocol states: Corporate Criminal Liability, indicating that the “legal persons” specifically mean (or at least include) corporate entities, although it expressly excludes states (Article 46C(1)). Multinational corporations tend to operate through a number of business forms, such as joint ventures, partnerships and no-liability companies. Of the competing corporate criminal liability models, the theory of non-derivative liability is the approach that we see in the Malabo Protocol.
Unlike Article 30(1) of the Rome Statute, which adopts intention and knowledge as the requisite mens rea, the Malabo Protocol does not provide express General Provisions with respect to mens rea. Ideally, the non-derivative liability model applied at the ACJHR should reflect the distinctive nature of subjective fault and the distinctions between forms of subjective fault. The liability model should incorporate forms of intention and knowledge, even though the corporate forms may differ, in some respect, from those formulated for individuals.
With respect to the requisite mens rea form of intention, corporate policy should be considered because corporate culture alone cannot provide sufficient grounds to conclude that a corporation committed an offence intentionally. According to Article 46C(2): ‘Corporate intention to commit an offence may be established by proof that it was the policy of the corporation to do the act which constituted the offence.’ A corporate policy to commit an offence purposefully may be shown in a number of ways. Corporate policy may be identified where there are specific instructions to commit the offence. Admittedly, such cases will be rare; most corporations would shy away from directly ordering their personnel to commit an offence, or doing so in a form that can be later produced as evidence.
In addition, it may be difficult to isolate specific instructions in the context of a complex organisation. Although an idea may be initiated by an individual within the corporate entity, the idea may only be officially seen as company policy when it has been subjected to scrutiny by a working party or committee within the entity. Also, the idea may require sanction by senior management or even ratification by a board of directors.
Even where specific instructions cannot be identified, corporate policy might also be established on the basis that ‘…it provides the most reasonable explanation of the conduct of that corporation’, as stated in Article 46C(3). Presumably corporate personnel would view this as implied authorisation. It has been argued that this constructive form of intention is already well-established in legal doctrine, in the concept of legislative intent. The legislative intent, which is routinely diagnosed by later courts, is not usually the intent of the original legislators. It is a constructive intent which is subsequently imposed by courts attempting to make sense of what the legislation said. Legislative intent is the intent which provides the best explanation for what has been enacted. However, there is a significant difference between using this method to explain ambiguous legislation and relying upon it to prove criminal intent.
Mens rea in the form of knowledge, rather than purpose, will mostly be the issue for corporate complicity. Arguably, it could be possible to establish corporate knowledge on the basis that the knowledge is located somewhere within the corporation. In addition, the notion of collective knowledge could be invoked where ‘…the relevant information is divided between corporate personnel’, as provided in Article 46C(5). According to the theory of collective knowledge, the knowledge possessed by one employee may be combined with the knowledge of several other employees, i.e. aggregated, in order to construct the requisite mens rea form required to deal with the commission of an offence. The theory of collective knowledge has largely been developed in the United States, though other domestic legal systems have been somewhat wary.
Article 46C(4) of the Malabo Protocol refers to ‘…actual or constructive knowledge of the relevant information’. One interpretation could be that the PALU drafters inserted this to denote some form of collective knowledge.
Finally, Article 46C(6) specifies that the liability of natural persons is not excluded, whether as ‘…perpetrators or accomplices in the same crimes’. The term “natural persons” could include corporate individuals such as members of the board of directors, managers, employees, and agents of multinational businesses or other related business associates. It stands to reason that natural persons who aid and abet crimes should be dealt with pursuant to the existing provisions provided in Article 46B(1) of the Malabo Protocol, with respect to individual criminal responsibility.
(ii) Aiding and abetting provisions pursuant to Article 28N of the Malabo Protocol
The involvement of corporations in international crimes is often by way of complicity in the actions of others, rather than through direct perpetration. Corporations and their personnel tend to be complicit perpetrators, most notably through the provision of finance, infrastructure, materials, and logistical support. Complicity by aiding and abetting is the form of participation most often alleged against multinational corporations with respect to core international crimes, particularly crimes against humanity. Allegations of criminal complicity by multinational corporations have increased, particularly where they operate in conflict-affected areas. The risk of complicity with egregious human rights abuses is also prevalent in countries where good governance is most challenged.
Liability for aiding and abetting is well established in international criminal law. Traditionally, aiding and abetting primarily involves the provision of practical assistance, encouragement, or moral support for the perpetration of a crime or the underlying offence. Furthermore, it must be shown that the provision of such had a substantial effect on the crime. The mens rea standards in the ad hoc tribunals and special courts have differed. In Africa, the ICTR and the SCSL all apply a “knowledge” test when assessing the liability of an aider and abettor – the complicit perpetrators must have knowledge that their actions would assist the commission of the offence. In contrast, Article 25(3)(c) of the Rome Statute applies a “purpose” test to establish the liability of an aider and abettor – the complicit perpetrator must have acted for the purpose of facilitating the commission of such a crime. This mens rea purpose test is not unique to the ICC, and is mirrored by other legal institutions, including the Iraqi High Tribunal (IHT).
The ACJHR is empowered with jurisdiction to prosecute complicit persons. Modes of responsibility are provided pursuant to Article 28N of the Malabo Protocol. Specifically, pursuant to Article 28N(ii), criminal responsibility arises where a person: ‘aids or abets the commission of any of the offences set forth in the present Statute’. Furthermore, Article 28N is not restricted by any “purpose” test, as seen in the Rome Statute provisions.
Challenges in Accommodating the Characteristic Forms of Corporate Involvement in International Crimes based on the Current Malabo Protocol Provisions
While the Malabo Protocol presents a potentially powerful innovation in international criminal law, it could be enhanced in a number of ways, some of which are set out below.
First, the Protocol should provide express provisions dealing with joint or separate trials for legal and natural persons. A joint trial of a corporate offender and its corporate individuals could be cost-effective and timely, especially if the charges relate to the same offence and the Court is dealing with the same evidence. Alternatively, the Court could order separate trials in the interests of justice if a joint trial would be prejudicial to the legal or natural person.
Second, according to Article 46C(4): ‘Corporate knowledge of the commission of an offence may be established by proof that the actual or constructive knowledge of the relevant information was possessed within the corporation.’ However, this stops shy of expressly prohibiting criminogenic corporate cultures that encompass informal conduct and practices as well as stated policies and formal rules. A practical addition to the existing Malabo Protocol Article 46C(4) provision could be formulated along the following lines: …and that the culture of the corporation caused or encouraged the commission of the offence.
A third option for improvement is to integrate corporate punishments and penalties. Many domestic jurisdictions have specific corporate punishments and penalties in place. These criminal sanctions include measures such as fines; imprisonment of senior management or members of the board of directors; corporate probation; and corporate capital punishment. Additionally, there have been measures adopted in domestic jurisdictions to penalise corporations, such as instructing a convicted corporation to substitute its directors, or change its senior management; execute corporate compliance plans; carry out community service; and, engagement of corporate monitors.
The Malabo Protocol could benefit from a provision specifying corporate penalties, such as fines, dissolution, closure of premises, forfeiture of criminal proceeds, property and assets and reparations to victims, etc.
Finally, the ACJHR could be affected by “weak-governance syndrome” afflicting member States who may be unable or unwilling to prosecute corporate misconduct. It stands to reason that ‘…the creation of an additional legal institution will not somehow magically resolve real issues of lack of political will to address human rights violations on the continent.’ [p 727]. The lagging rate of prosecutions to date suggest that the States where these kinds of multinational corporations are headquartered appear disinterested. Also, the domestic courts in conflict-affected areas or weak-governance zones where these crimes take place face numerous administrative and socio-legal challenges. Moreover, the significance of foreign direct investments made by multinational corporations in such domestic jurisdictions can provide strong disincentives to prosecuting those corporations.
Nonetheless, once it comes into effect, the Malabo Protocol will be instrumental in the development of corporate criminal liability for international crimes pursuant to international criminal law. The ACJHR is a regional court that will exercise jurisdiction on the African continent alone. Time will tell whether other regional courts or the ICC will follow suit and adopt a similar scheme.
Dr Jessie Chella is a Lecturer with the School of Law, The University of the South Pacific, Vanuatu. (Jessie.Chella@usp.ac.fj). Jessie holds a PhD and LLM (by Research) from Bond University, Australia, specialising in international criminal law. She is admitted as a Solicitor in New South Wales, Australia, as well as Assistant to Counsel at the International Criminal Court in the Netherlands.
Suggested citation: Jessie Chella, ‘A Review of the Malabo Protocol on the Statute of the African Court of Justice and Human Rights – Part II: Corporate Complicity in International Crimes’ on ILA Reporter (12 March 2021) <http://ilareporter.org.au/2021/03/a-review-of-the-malabo-protocol-on-the-statute-of-the-african-court-of-justice-and-human-rights-part-ii-corporate-complicity-in-international-crimes-jessie-chella/>