Guarantee accountability and transparency in the justice process when pursuing corporate crimes
Ensure the justice process is as accessible, transparent and accountable as possible, from when the crime is alleged to the close of the case.
Lawyers and investigative NGOs interviewed stated that they faced significant obstacles in accessing the justice system and obtaining effective remedies for victims. They expressed concerns that law enforcement may not pursue cases even if compelling evidence is presented to them. Prosecutors may be permitted broad limits of discretion by law, and this may contribute to cases not being pursued. In many jurisdictions, the prosecutor’s discretion is unfettered and cannot be legally challenged.
Prosecutors interviewed also stated that issues of independence and accountability are especially problematic in corporate crimes cases, as law enforcement may face particular political or external pressures not to pursue a case due to the power and influence of the corporate actors involved.
Many of these cases are brought to the attention of law enforcement by NGOs, whistle-blowers and others acting in the public interest. These actors request State action based on evidence of illegality that has come to light, possibly during the course of their work or their investigative research. As they are external to the formal State system, these actors often have no official rights to demand action by law enforcement.
If authorities do respond to complaints, they sometimes do so only with significant delays. In the worst-case scenario, statutory time limits for charging or prosecuting the crime may have already lapsed when they do. They may also respond by declining to pursue a case without explaining their reasons. Victims or other persons reporting crimes may be unable to formally challenge that decision, or may be unaware that such a right exists. Where a formal review process does exist, it may lack transparency because final decisions are not made public. These issues relating to access, transparency and accountability are not unique to corporate crimes, but can be exacerbated in these instances.↥ Back to top
To overcome these obstacles, law enforcement should ensure that the justice process in their jurisdiction is as accessible, transparent and accountable as possible.
What law enforcement can do in practice will vary from country to country depending on the legal limits and practical challenges within their national systems.
In recognition of these variations, law enforcement should consider best practices across jurisdictions including what is outlined in the examples below. At a minimum, law enforcement should issue publicly-available guidance on how to access the system by bringing a complaint as well as how law enforcement will respond. This guidance should include: an overview of the process, timeline of the different steps including appropriate time-frames for responses to complaints, criteria for deciding whether or not to pursue the complaint, any right to review that decision and the procedure for doing so. Law enforcement should act in accordance with the guidance, and communicate with the complainants about their decision-making process to the extent possible.
The importance of accountability and transparency in the justice process is recognised by international organisations, such as the International Association of Prosecutors (IAP) and the United Nations Office on Drugs and Crime (UNODC). In 2014, the UNODC and the IAP produced a guide on The Status and Role of Prosecutors (“UNODC/IAP Guide”).66 The UNODC/IAP Guide highlights that in jurisdictions where prosecutors have discretion over whether to prosecute cases or not, this discretion “can potentially lead to abuse”.67 As such, the UNODC/IAP Guide states that prosecutors should be able to make that decision “free of outside influence” and recommends the relevant jurisdiction adopt policy guidelines on the use of the discretion.68 To reduce outside influence, it calls for transparency and public accountability in the relationship between prosecutors and any government ministers to which prosecutors are accountable. It also recognises that internal review mechanisms and the ability of victims to appeal decisions not to prosecute can minimise the risk of prosecutorial discretion being abused.
The UNODC/IAP Guide also notes that prosecution services are “accountable to the public they serve and as such they should be in a position to inform and explain actions they have taken in the administration of justice”.69 In particular, it highlights the importance of providing reasons for specific decisions and notes that “prosecutors should be held accountable for the way in which they discharge their functions and duties”.70↥ Back to top
UK codes of practice and guidance include various provisions that seek to address issues of transparency, accessibility and accountability in the justice system.
The Code for Crown Prosecutors sets out general principles that prosecutors should follow in deciding whether or not to prosecute a case. It provides a two-stage test for prosecutors to apply: is there a realistic prospect of conviction (the evidential test) and do the public interest factors against prosecution outweigh those tending in favour (the public interest test).71 The Code includes a number of public interest factors to take into account for these purposes, such as the seriousness of the offence and the harm caused to victims. UK law enforcement agencies have also issued the Guidance on Corporate Prosecutions.72 This includes additional guidance on evidential and public interest issues relevant to the prosecution of corporate actors, including whether the corporate entity has a history of similar conduct.73 Both sets of guidance are publicly available. The Crown Prosecution Service (CPS) also publishes guidance on its website which describes the legal tests and relevant precedents for establishing criminal offences (such as corporate manslaughter) as well as certain procedural issues (such as what offences require Attorney General consent before prosecution).74
In particularly serious or noteworthy cases, UK law enforcement agencies may issue public statements explaining their reasons not to pursue a case. For example, the CPS issued a detailed statement in December 2015 explaining its decision not to prosecute News Group Newspapers in connection with well-publicised phone hacking charges.75
Victims can seek review of a decision by the CPS not to prosecute, through the Victims’ Right to Review Scheme. The CPS has issued public guidance on the Scheme, which includes time limits for review and response. Victims and other interested parties can also apply for judicial review of any decision whether or not to investigate or prosecute a case.76 Court judgments are generally made public.↥ Back to top
Political interference has been recognised by the Organisation for Economic Co-operation and Development (OECD) as a serious concern in certain cases, such as those that involve bribery. Article 5 of the OECD Anti-Bribery Convention (OECD Convention) provides that the investigation and prosecution of bribery should not be influenced by, among other things, “the potential effect upon relations with another State” (which has been interpreted by some to include national security).77
Although the UK government is a party to the OECD Convention, it has not incorporated Article 5 into domestic law. While not a human rights case, a decision to discontinue an investigation by the UK Serious Fraud Office (SFO) calls into question the implementation of Article 5 and illustrates how political interference may affect the exercise of prosecutorial discretion.
In 2004, the SFO began an investigation into bribery allegations concerning a 1985 arms-for-oil deal between the UK and Saudi Arabian governments under which UK defence company BAE Systems was the key contractor.78 In December 2006, the SFO, a prosecuting authority that is independent of the government, decided to stop the investigation following representations by BAE, the UK government (including then-Prime Minister Tony Blair) and the Saudi government that the continuation of the investigation would negatively affect the United Kingdom’s national security.79 That month, according to newspaper reports, the Saudi government had given the United Kingdom ten days to halt the investigation or lose a key contract to supply fighter jets worth US$10 billion.80 In March 2007, the OECD expressed “serious concerns” about the decision to discontinue the investigation and whether it was consistent with the OECD Convention, as well as about shortcomings in the UK’s anti-bribery legislation.81↥ Back to top
A criminal case in France against a multinational timber company illustrates the challenges that claimants may face when there is uncertainty and significant delays in the investigation and prosecution process. The company was alleged to have bought illegally obtained timber during the Liberian civil war, the sale of which enabled its then President Charles Taylor to procure arms in breach of UN sanctions and to wage a campaign of violence which saw over 250,000 people killed and almost 1 million displaced.
In November 2009, human rights and environmental organisations, including SHERPA, Global Witness, Greenpeace France and Les Amis De La Terre (collectively “the complainants”), filed a criminal complaint in France against DLH France and DLH Nordisk A/S, both part of the Dalhoff, Larsen, Horneman Group (collectively referred to as “DLH”), one of the world’s biggest timber and wood products wholesalers.
The complaint alleged that DLH bought wood from timber companies in Liberia that had been illegally awarded forest concessions by Charles Taylor.82 More specifically, the complaint alleged that DLH France traded in wood originating from Liberian timber companies that failed to comply with Liberian law and/or did not have a legal right to operate. The complaint relied on evidence of DLH’s suppliers’ involvement in corruption, tax evasion, environmental degradation, UN arms sanctions violations and gross human rights abuses. As a result, it was claimed that by importing timber from forest concessions operated by unscrupulous and corrupt Liberian companies, the French arm of DLH was guilty of recel – the handling of and profiting from goods obtained illegally, punishable under French criminal law.
Revenue from forestry was a major source of funding for President Charles Taylor’s illicit off-budget activities during the conflict. Taylor also used forest exploitation as a major source of funding for arming his forces during the Liberian civil war.83 In fact, two companies that were major suppliers of logs to DLH were operated by Dutch businessman, Guus Kouwenhouven, who smuggled arms through timber factories into Liberia and to Charles Taylor.84 Kouwenhouven was charged in the Netherlands in June 2006 with illegally supplying weapons in violation of the UN arms trade ban and complicity in war crimes committed with these weapons. After a lengthy legal battle, he was acquitted of all charges due to lack of reliable evidence in 2008.85
The prosecutor in the Republic of Nantes (France), where the case against DLH was filed, initiated a preliminary investigation in 2010. After two years of investigation, he transferred the case to the public prosecutor’s office of Montpellier.86 During this period, the complainants sent letters, translated documents from English to French, and requested to meet with prosecutors in both Nantes and Montpellier in order to encourage a proper consideration of this case.87 Complainants advised that prosecutors were reluctant to communicate with them. They were also advised that the prosecutor’s office could not comment on the case as an inquiry was still underway. In 2013, the prosecutor in Montpellier dismissed the complaint citing insufficient evidence to support the claims.88 The complainants made four written requests to see the documents the prosecutor had on file for the case, but received no answer.89
In March 2014, after the prosecutor dismissed the case, the complainants decided to initiate a criminal case themselves by filing a claim avec constitution de partie civile. Under this proceeding, victims can submit a complaint directly to a French magistrate who can start a criminal investigation.90
Meanwhile, Global Witness also submitted a complaint to the Forest Stewardship Council (FSC) regarding DLH’s purchasing of illegal timber and violations of Liberian national laws for harvesting timber.91 The FSC is an international NGO established to promote the responsible management of forest resources, while providing sustainability certifications to its stakeholders.92 In February 2015, the FSC officially decided to terminate DLH’s membership and suspend its sustainability certificates.93 In February 2016, the FSC placed DLH back on probation after the company submitted a report on progress made to compensate communities affected by the illegal timber trade and on improving DLH’s due diligence system.94
While the French court case remained pending adjudication, and the FSC continued to keep DLH on probation, DLH announced in February 2016 that it would be closing down DLH France, one of the defendants in the criminal case.95 The closure process, including selling of DLH France’s assets, was due to be completed by August 2016. The termination of DLH France may further affect the decision of the French magistrate to pursue this case, as it will make it difficult for the authorities to enforce the sentencing if the complainants’ recel case proves successful.↥ Back to top
A case concerning the murder of a Colombian trade union activist who was involved in a labour dispute with a subsidiary of Swiss food company, Nestlé, demonstrates how prosecutorial decisions about whether or not to pursue a case can obstruct the investigation and prosecution of corporate crimes.
In September 2005, a former employee and trade union activist of Nestlé’s Colombian subsidiary was kidnapped, tortured and murdered by members of a paramilitary group.96 The former employee, Luciano Romero, had previously received death threats following a long-standing labour dispute between the trade union and the subsidiary. The trade union reported these death threats to the subsidiary as well as Nestlé in Switzerland.97
In March 2012, the European Centre for Constitutional and Human Rights (ECCHR) and the trade union filed a criminal complaint against Nestlé and five of its managers in the canton of Zug, Switzerland, alleging that they were guilty of “homicide through negligence through omission” under Swiss Criminal Code Articles 117 and 12(3) for failing to take precautionary measures to prevent the murder. In particular, ECCHR’s complaint alleged that the subsidiary put Romero in greater danger by falsely accusing him of being a guerrilla and that Nestlé in Switzerland failed to prevent these actions.
The office of the prosecution in Zug transferred the case to the canton of Vaud because it had jurisdiction over Nestlé’s other headquarters in Switzerland. In May 2013, the Vaud prosecutor’s office decided not to open an investigation, on the basis that the seven-year time limit for prosecuting the case under the statute of limitations had passed in September 2012. Prosecutors did not therefore consider the substance of the allegations made by ECCHR.98
Under Article 7 of the Swiss Criminal Code, criminal justice authorities are “obliged to commence and conduct proceedings that fall within their jurisdiction where they are aware of or have grounds for suspecting that an offence has been committed”. The ECCHR appealed the prosecutor’s decision to the Cantonal Court, arguing that the case was not statute-barred because the criminal liability of corporate entities represents an on-going offence and that prosecutors were in breach of their obligations under Article 7 of the Criminal Code for failing to take action for fourteen months after ECCHR filed the complaint.99 The Cantonal Court dismissed the appeal in December 2013 on the grounds that the statute of limitations had passed. The ECCHR then made a final appeal to the Swiss Federal Supreme Court. In July 2014, the Supreme Court confirmed the legal reasoning of the prosecutor’s office and the Cantonal Court and concluded that the investigations were statute-barred.100
In October 2012, the ECCHR and other human rights organisations included the Romero case in a communication requesting the International Criminal Court (ICC) to open an investigation into the situation in Colombia, on the basis that the level of violence against trade unionists reached the threshold of crimes against humanity. At the time of publication, the ICC is still conducting a preliminary examination into the situation in Colombia. In December 2014, ECCHR submitted a complaint to the European Court of Human Rights on behalf of Romero’s widow, asking the court to examine whether the Swiss judiciary adequately investigated the case. The Court dismissed the complaint in March 2015 without providing any reasons.101↥ Back to top