Corporate Criminal Liability for International Crimes? Yes Please

Simon Taylor is a Director and co-founder of Global Witness

Over the last 20 years, we at Global Witness have waded through an endless stream (now a torrent) of corporate and individual abuse, asset-stripping and the furtherance, through financial support, of mass murder and destruction. So with great excitement, I read James Stewart’s paper, “The Turn to Corporate Criminal Liability for International Crimes.” From my perspective, anything that could be deployed to begin the process of holding companies and their officers to account for the kind of behaviours that we regularly expose is a welcome development. So please continue the debate and bring us those tools.

I should pre-empt my comments by stating I am not a lawyer, and have little exposure to legal matters and their finer points beyond the often tough process we conduct to ensure our output stands, despite the brutalities of the UK’s libel laws. That leaves me, I think, with a fairly basic understanding of James Stewart’s arguments, and comments about his paper on the Opinio Juris site. I am also left with many questions. For this reason, I would ask readers to forgive me my likely mangling of terminology, and instead, I hope I can contribute to the debate with a challenge or two, and hopefully provide you with an insight into our world of investigation, exposé and frequent collision with corporate and individual perpetrators.

Some of you will be familiar with our work – from its start with the exposure and shutting down of illegal timber exports from Khmer Rouge areas in Cambodia to Thailand, through bringing “blood diamonds” to world attention, conceiving and co-launching the global Publish What You Pay (PWYP) movement, and our work on banks that take dictators loot, and anonymous companies and trusts that hide the perpetrators. Across our work, there are common themes and many of them relate to the mechanisms and facilitators used, not to mention the legal inadequacies that variously aid and abet the perpetrators.

Global Witness “investigates and campaigns to prevent natural resource-related conflict and corruption and associated environmental and human rights abuses.” For the purpose of this discussion, think of the following question: How could we ensure that exploitation of natural resources can lead to a positive development outcome given that the natural resources of a country generally belong to the people of that country? Rather than what we currently see, with very few exceptions, which is a predatory relationship between exploiting company/investors, more often than not, involving a “Faustian pact” with kleptocratic elites who view their country’s resources as their own personal cash-cow?

Half of what we do is to investigate. We look for the facts. We want credible evidence that clarifies what is happening, who is doing what, and how they are doing it. The other half is seeking change – and that can often end up in the long-term grind of seeking new international mechanisms that bring change in behaviour. We deploy the strength of our evidence to help shape the outcome. James Stewart mentions a number of these, including the Kimberley process on conflict diamonds. I won’t go into that here, but I would mention another, the Extractive Industry Transparency Initiative, or EITI, where civil society in theory is empowered to hold governments and companies to account for the payments received and paid.

In seeking to answer my development question, I think the following analogy helps: Imagine in front of you, a bathtub, full of milky water, due to bath salts. You cannot see the bottom, but the water is leaking away. This is because the tub has various holes in the bottom, of differing sizes, and in multiple locations. Your task is to find the location of the holes, work out how large they are and their shape, and then fashion a plug to stem the flow. EITI, which remains a work in progress, should eventually become one of those plugs.

Over time, my attitude to the corporate role in these processes has hardened, but it has been because of the behaviour of the companies. To illustrate this point, let me focus on corruption in the oil sector. Thinking back to the late 1990’s and early 2000’s, and to the question asked of oil companies: whether they should disclose the payments they make for extraction in countries like Angola? At that time, around 90% of Angolan state income was generated from oil, and tens of billions of dollars were being (and continue to be) siphoned off by the elite. I remember the response: “What is the business interest?” I found it unfathomable how anyone, given the situation of utter deprivation that prevailed in Angola at the time, could ask such a question. That is unless one takes into account the thesis of Joel Bakan in his extraordinary documentary/book “The Corporation” – that the predominant corporate model behaves like a psychopath! I don’t mean as we often think of psychopaths as deliberate and unthinking killers, more that the corporate interest always comes first, thus outright criminal behaviour, or behaviour that by any normal ethical standards should be criminalised, can become acceptable – the cost-benefit analysis being the extent of thinking about whether to proceed!

For me, this demonstrates the limits of Corporate Social Responsibility. For sure, there have been some major improvements in corporate behaviour, thanks to some incredible work by key CSR specialists within and outside companies – and this should continue. But they do not go anywhere near far enough. In my experience, the limits of CSR are delineated by the boundary that separates corporate interests from public interests – where they are aligned, progress can be made, but where not, the corporate interest always comes first. Our experience from over 17 years of campaigning to obtain a global standard of disclosure of project-level payments made by extractive companies strongly supports this thesis. Within months of launching the PWYP campaign in 2002, we had won the moral argument as to whether extractive companies should disclose such payments. But, with some notable company exceptions, it has taken what I would describe as trench warfare ever since, with us and our amazing PWYP colleagues, fighting the companies for every incremental improvement.

Why do companies that now profess their support for transparency behave in this way? In my opinion, this is because in many natural resource-rich, but desperately poor countries, access to concessions often requires illicit payments – often a situation created by the companies. Thus disclosure, could either lead to companies falling foul of anti-corruption legislation, or at least major embarrassment. This is precisely why we are seeking mandatory disclosure laws so that companies cannot make such payments without being exposed. Conversely, rather than helping to make a global standard, thereby helping themselves to avoid this situation, many companies have decided they want to maintain the status quo, and are expending considerable effort to undermine incoming disclosure laws, such as Amendment 1504 of the Dodd-Frank Act and the transposition in Europe of the Accounting and Transparency Directives, which require project-level payment disclosure.

So back to my bathtub – we need help. We’ve found many of the holes, and we are shaping several of the plugs – and we will continue to do so. But there are several we simply cannot find, and perhaps we do not even appreciate their existence. Here I am particularly thinking of legal remedies that can be used to bring cases, or at least imply that possibility, to impact decision-making at the board room. People often think of corruption as an exercise of payments with brown envelopes to get what you want. But in our experience, it is much more pervasive and of a scale that frequently bleeds countries dry – driving conflict, acting as a recruiting sergeant for disenfranchised youth. Denial of healthcare, education or frankly any prospect of a future breeds violence – and whilst it often might not be possible to link corrupt corporations and their officers with pulling the trigger, we know of many examples where they have been directly responsible for the conditions that lead to the trigger being pulled, and even bankrolled buying the gun. Of course we want to see efforts on all fronts to bring about changes in corporate behaviour, but until we see serious jail time as a possibility, and an end to what I consider ineffectual “cost of doing business” style fines, nothing will change.