Reform on corporate criminal liability needed, but caution required

By Tony Zhang|01 September 2020
Reform on corporate criminal liability needed

Legal bodies have welcomed the new tabled ALRC review of corporate criminal responsibility, but one has called for caution.

Human rights and legal organisations have welcomed the proposals by the Australian Law Reform Commission (ALRC) to strengthen Australia’s corporate criminal laws in relation to human rights abuses committed by Australian companies overseas.

The ALRC’s review of Australian corporate criminal laws, published on Monday, recommends that the Australian government introduce a “failure to prevent” offence for serious transnational human rights offences by companies such as forced labour and trafficking. 

Keren Adams, a legal director at the Human Rights Law Centre, said in recent years, Australian companies operating overseas have been linked to modern slavery, land grabs and environmental destruction, public health scandals and prolonged unlawful detention and abuse. 

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“Yet prosecutions for these human rights violations are rarely if ever pursued,” she said.

Rawan Arraf, director of the Australian Centre for International Justice stated that it is critical that when companies are involved in serious human rights violations overseas they can be prosecuted here in Australia. 

“Otherwise we risk entrenching a culture of corporate impunity,” Ms Arraf said.

“We support the ALRC’s recommendations and urge the Australian [government] to establish a specialised investigations unit for transnational corporate crimes, as many other countries have done”.

However, the Law Council of Australia is urging Parliament to take a cautious approach when considering the fundamental principles of criminal law.

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The LCA said that contained in the ALRC review are recommendations that would make a corporate accused guilty if any officer, employee, or agent of the corporation committed an offence, while acting within the actual or apparent scope of their authority. 

LCA president, Pauline Wright, said policymakers should approach this recommendation with caution.

“Criminal convictions carry serious consequences, both for bodies corporate and the people who work within them,” Ms Wright said.

“The ALRC’s recommendations in this area are not consistent with the general criminal law principles applicable to the most serious offences, including that an intention to commit the crime must be proven. The Law Council urges caution in fundamental changes to general principles of criminal responsibility governing corporate attribution.”

Ms Wright said that if these recommendations were accepted by Parliament it could lead to corporations attracting criminal convictions for the misdeeds of relatively junior employees, which could have severe, unintended, and unnecessary consequences for many innocent parties.

“It is important to note these recommended amendments would not only touch the large corporations at the top end of town. They may place a disproportionate burden on small businesses and charities, many of which operate as corporations,” she said.

“Under the recommendations the person need not hold office as a director or a ‘high managerial agent’, whose responsibilities may be fairly assumed to represent the body corporate’s policy, as is presently required.

“A guiding principle of the Australian Criminal Code was that corporations should be treated no more or less favourably than natural persons, and that principles of corporate criminal responsibility should be as close as possible to the general principles that underpin the criminal law as it applies to natural persons. The Law Council continues to support that principle.

Reform on corporate criminal liability needed, but caution required
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