By Marissa Florio
Under international and U.S. law, individuals can be prosecuted for membership in criminal enterprises. But what do we mean by “criminal enterprise”? The FBI defines a criminal enterprise as “a group of individuals with an identified hierarchy, or comparable structure, engaged in significant criminal activity.” Typically, we think of drug cartels, racketeering enterprises, or even the Gestapo. But what about corporations? They have shown themselves to be capable of egregious and criminal behavior: insidiously evading regulations or instigating and carrying out violent acts. Corporations should likewise be eligible to be labelled as criminal enterprises, as they are groups of individuals with an identified hierarchy that can engage in significant criminal activity. Corporate directors and officials could thus then be found guilty for the corporation’s bad acts much more easily, which I find appropriate.
Both international law and U.S. domestic law provide for criminal liability for membership in a criminal enterprise. Simply being a member in such a group is enough to warrant prosecution, without further evidence that a specific individual committed any other crime. Domestically, membership in an enterprise that participates in racketeering activity is penalized under the Racketeer Influenced and Corrupt Organizations Act (RICO). Internationally, at the Nuremburg trials, the Gestapo was declared a criminal enterprise and all members were automatically penalized. Similarly, in the ICTR, a defendant can be found guilty for the acts of others under the theory of extended joint liability for a joint criminal enterprise. What would it take for a corporation to be deemed a “criminal enterprise”?
In Doe I v. Unocal Corp., the Ninth Circuit assessed whether there was a genuine issue of material fact as to whether Unocal, as a corporation, aided and abetted the Myanmar military’s perpetration of forced labor, murder, and rape. The Myanmar military was providing security and other services for Unocal’s project of producing, transporting, and selling natural gas deposits off the nation’s coast. Allegedly, the military was committing human rights violations in connection with the project, forcing men to work on the project under threat of violence, killing those who tried to escape from the forced labor program, and torturing their families:
“For instance, Jane Doe I testified that after her husband, John Doe I, attempted to escape the forced labor program, he was shot at by soldiers, and in retaliation for his attempted escape, that she and her baby were thrown into a fire, resulting in injuries to her and the death of the child. Other witnesses described the summary execution of villagers who refused to participate in the forced labor program, or who grew too weak to work effectively. Several Plaintiffs testified that rapes occurred as part of the forced labor program. For instance, both Jane Does II and III testified that while conscripted to work on pipeline-related construction projects, they were raped at knife-point by Myanmar soldiers who were members of a battalion that was supervising the work.”
The Circuit court assessed Unocal’s knowledge that the Myanmar military was allegedly committing human rights violations in connection with this project. The court found there to be sufficient evidence of knowledge to withstand summary judgment. The court stated,
[E]ven before Unocal invested in the Project, Unocal was made aware – by its own consultants and by its partners in the Project – of this record that the Myanmar Military might also employ forced labor and commit other human rights violations in connection with the Project. And after Unocal invested in the Project, Unocal was made aware – by its own consultants and employees, its partners in the Project, and human rights organizations – of allegations that the Myanmar Military was actually committing such violations in connection with the project.
The parties in Unocal settled shortly after this ruling on summary judgment. However, had the case gone to trial, could plaintiffs have presented an argument that Unocal was a criminal enterprise?
In domestic cases, the answer is no. The Ninth Circuit held that RICO could not be argued, as the statute did not apply extraterritorially. (For more on the presumption against extraterritoriality in U.S. domestic law, see also EEOC v. Arabian American Oil Co.)
Could international law be applied in these types of cases to hold a corporation as a whole liable as a criminal enterprise, and therefore extending criminal liability to its officers without proving personal involvement in specific acts? Several international tribunals do just that.
The Nuremburg Charter provides: “At the trial of any individual member of any group or organisation the Tribunal may declare . . . that the group or organisation of which the individual was a member was a criminal organisation.” This declaration is final and cannot be challenged in subsequent cases against other members of the same organization: “In cases where a group or organisation is declared criminal by the Tribunal, the competent national authority of any Signatory shall have the right to bring individuals to trial for membership therein before national, military or occupation courts. In any such case the criminal nature of the group or organisation is considered proved and shall not be questioned.”
The Nuremburg Tribunal is not the only international tribunal that can find a group to be a criminal enterprise in this fashion. A recent International Criminal Tribunal for Rwanda (ICTR) ruling could lay the groundwork for the International Criminal Court (ICC) to similarly use the theory of a criminal enterprise to find greater liability for a corporation’s wrongdoing. (The ICTR rulings can have some precedential value for the ICC under the Rome Statute.)
In Edouard Karemera and Matthieu Ngirumpatse v. The Prosecutor, the ICTR found two politicians culpable under a seldom-used theory of liability, whereby the defendants were found guilty for the acts of others, because they participated in a scheme that had a plausible consequence of certain human rights violations. The ICTR found two high-ranking politicians from Rwanda’s 1994 interim government liable for human rights atrocities during the Rwandan genocide, specifically the mass rape, mutilation, and sexual assault of thousands of Tutsi women and girls. There was no evidence that either defendant personally perpetrated rape, mutilation, or sexual assault, or even that either politician ordered such acts to be committed. They were convicted on the grounds of extended liability for joint criminal enterprise. Id.
Under extended liability for joint criminal enterprise, a defendant must be found liable for participating in a “basic” joint criminal enterprise (here, the destruction of the Tutsi people) and significantly contributing therein. The defendant can then be found liable for a crime outside of the purpose of the basic joint criminal enterprise that was committed by another joint criminal enterprise member, so long as it was “foreseeable that the extended crime was a possible consequence of the implementation of the basic [joint criminal enterprise].” A defendant could similarly be found liable for the acts of a non-member of the original joint criminal enterprise if: (1) the non-member has the requisite intent to participate in and significantly contribute to the joint criminal enterprise, (2) it was foreseeable that the non-member would commit the extended crime in the execution of the common purpose of the joint criminal enterprise, and (3) the defendant knew the extended crime was a possible consequence of the implementation of the common purpose of the joint criminal enterprise and he willingly took the risk it would be committed.
Were this same theory to be applied to a corporation, a corporate official could be found liable for participating in such a joint criminal enterprise, such enterprise being the corporation. Therefore, even if a corporation were being prosecuted as a person/entity independent of its officers, as in Unocal, the corporate structure could still be used as a framework around which to build cases against individual officers, specifically in establishing duties to know and act, and knowledge of improper actions.
International law thus appears to be better suited than U.S. domestic law to finding that a corporation is a criminal enterprise, since Ninth Circuit precedent now blocks RICO from applying in all cases where the bad acts occurred outside of the United States. If a case with facts similar to Unocal did emerge and the corporation therein was declared to be a criminal enterprise under an international tribunal, would this be a move in the right direction? Should the U.S. defer to the jurisdiction of international tribunals in cases like Unocal, making it possible to penalize corporate officers? Could the U.S. defer jurisdiction? How far could this theory go: could all employees of a corporation become criminally liable, regardless of their involvement or personal knowledge of the extent to which the corporation was involved in illegal activities? Is this just?
Marissa Florio is a 2016 J.D. candidate at Harvard Law School and a Feature Editor of the Harvard International Law Journal Online.