Transnational Corporate Crimes and Dealing with the Issue of “Jurisdictional Veil”

Abstract

Accounting for transnational corporate criminal liability has been one of the most challenging areas of international law in the era of globalisation. Many fundamental questions relating to the effectiveness of the regulatory legal framework remain unsettled in relation to the scope of corporate accountability for human rights violations amounting to international crimes. This paper argues that prosecuting transnational corporations for the violation of human rights activities abroad needs to be critically evaluated in the light of the prevailing jurisdictional and legal issues. In order to support the central argument, the paper seeks to initially examine the difficulty of attributing criminal liability to transnational corporations under current corporate laws. Further, it examines the challenges of regulating the conduct of transnational corporate behaviour under the existing framework of extraterritorial regulations. Later, it critically assesses the effectiveness of the current international legal framework in regulating transnational corporate crimes causing human rights abuse. In the final section the paper will explore the opportunities to deal with this issue, by critically evaluating the possibility of jurisdictional harmonisation to address the issue of the transnational corporate crimes and human rights violations; and finally by examining opportunities for the home state to regulate the TNCs’ extraterritorial behaviour to address the governance gap created by jurisdictional incompetency. In the absence of binding international legal regime and tribunal to regulate transnational corporations’ (TNCs) activities, the emphasis is on the domestic legal framework to lift the jurisdictional veil and prosecute TNCs for violation, for crimes amounting to human rights abuse.  Sharmila Mahamuni is a doctoral candidate at Faculty of Law at University of Ottawa. Introduction The purpose of this paper is to outline the research proposal, to explore the jurisdictional framework in the domestic and international legal system while dealing with transnational corporate crimes. Regulating transnational corporate activities abroad has remained a formidable task for domestic legal systems across the world. There are many fundamental questions relating to the effectiveness of regulatory legal framework, which have remained unsettled in relation to the scope of corporate accountability for human rights violations amounting to international crimes.1 The corporate involvement in the commission of international crimes can be categorized as: corporate actors who are directly involved in the commission of international crimes, and corporate actors’ complicit in violation of international law.2 The issue of jurisdiction over transnational corporations refers to the exclusion of legal person from the jurisdiction of the International Criminal Court under the international criminal law, as well as non-binding standards are proposed in respect of corporate human rights accountability at the international level. Further, in terms of domestic law, when corporations operate transnationally it creates a regulatory dilemma. The parent company keeps ‘distance by design’3 from its subsidiaries. In such situation TNCs can mobilize their operations from one jurisdiction to another, if they apprehend that legal proceedings can be instituted against them in a particular jurisdiction.4 While TNCs can become invisible and disappear beyond boundaries, either by taking 1 Wolfgang Kaleck and Miriam Saage-Maaz, “Corporate Accountability for Human Rights Violations Amounting to International Crimes: The Status Quo and its Challenges” (2010) 8 Journal of International Criminal Justice at 700. 2 Ibid at n.702. 3 Surya Deva, “Regulation Corporate Human Rights Violations: Humanizing Business” (2012) (Routledge: Oxon) at 30 – 31. 4 Ibid. a new form or new name,5 the victims of corporate human rights abuses amounting to crime remain frustrated without recourse to justice under criminal law because of the procedural limitations. The procedural limitations restrict the capacity of the courts and judicial tribunals to prosecute TNCs placed in different jurisdiction. The Bhopal Gas Disaster is a classic example of