Ian Binnie on the Corporate Crimes Principles and Bridging the Impunity Gap

The United States, France, Germany, and the UK need to start taking steps to hold multinational corporations criminally accountable for human rights abuses.

Ian Binnie

That’s the conclusion of a group of legal experts who earlier this year released a report titled The Corporate Crimes Principles.

The goal of those behind the report – to advance the investigation and prosecution of human rights cases.

The legal experts were pulled together by Amnesty International and the International Corporate Accountability Roundtable (ICAR). The idea was to bridge what the experts called “the impunity gap.”

“No company, however powerful, should be above the law, yet in the last 15 years no country has put a company on trial after an NGO brought evidence of human rights related crimes abroad,” said Amnesty International’s Seema Joshi. “The inability and unwillingness of governments to meet their obligations under international law and stand up to rights-abusing companies sends the message that they are too powerful to prosecute.”

“Many of the documented cases implicate western corporations in serious human rights abuses in fragile or war-torn areas, and the ‘out of sight, out of mind’ mentality of these companies’ governments exposes a deadly double standard. Though prosecution is far from perfect even in countries that are headquarters to global corporations, there is no way that authorities would be passive spectators if these alleged abuses were happening in New York, Vancouver, London, Paris or Beijing.”

One of those experts who headed the effort is Ian Binnie, a retired Supreme Court Justice in Canada. He currently practices law at Lenczner Slaght in Toronto.

Was there something in your career that drew you to this project?

“I have been an advocate both while I was on the bench and since for attempting to close the governance gap, as it’s called,” Binnie told Corporate Crime Reporter in an interview last week.

“When you have multinational companies operating around the world and the legal systems are national in scope, it becomes very difficult to hold corporations liable, both civilly and criminally. The courts could have been more adventurous in fashioning remedies to deal with transnational crime and civil liability.”

“Clearly, if somebody is injured by the actions of a British mining company in Peru, they are going to have difficulty in civil proceedings where there is such a disparity in resources between the corporate defendant and the alleged victim.”

“Whereas in criminal procedure, there is a more level playing field. The corporate defendant is well resourced, but so is the state. The problem in the criminal field is generally the lack of political will to prosecute these offenses.”

Why is there a lack of political will?

“There is a mixture of interests. The state of the host country – the state where the corporation is incorporated – benefits from the economic activity of that corporation and may not be inclined to go through the resource heavy investigation of what that company is doing in a country halfway across the world.”

“In terms of the country where the harm occurs, you may well have a country that is hard up for investment, that is desperately trying to kick start economic activity. Prosecuting companies that do invest in that country may be seen as counterproductive. There is a kind of coincidence of inertia both in the originating country and the country where the activity takes place.”

“Of course, this is complicated by the corporate structure. You will have a head corporation and it will spin off a number of affiliates and subsidiaries for tax and other reasons — many of them perfectly good reasons. And then you get down to the actual operating company.”

“There was a case involving Anvil Mining in the Congo. The actual operating company at the bottom end of this pyramid did not have much in the way of resources and was quite close to the government. They were charged with being complicit in the government’s use of excessive force to put down protesters at the Anvil mine site.”

There is a war crimes tribunal. Should there be a corporate crimes tribunal?

“There is the International Criminal Court that the United States does not subscribe to. It has encountered procedural problems and has run into this North/South divide that you mentioned earlier,” Binnie said. “There is a real need for some kind of international body that doesn’t rise to the level of the international criminal court.”

“I find it extraordinary for example that globalization has created on the civil side such things as the World Trade Organization – a comprehensive judicial system with an appeals tribunal that functions to handle trade disputes. There are broad agreements dealing with intellectual property. So in areas where there is a strong business incentive to globalize the justice system, it gets done. And it’s not to the credit of the international community that when it comes to human rights abuses, the legal reform is lagging.”

“But I also think that domestically, in the common law countries, the courts could do much more to address this problem of the corporate veil and the corporate pyramid. You can’t hold this company liable unless you have direct evidence that a senior director gave orders. There can be a structure put in place to facilitate cooperation by prosecutors less formal than the mutual assistance treaties, but that will create an exchange into which prosecutors, non governmental organizations and whistleblowers could feed information. I don’t believe they would do prosecutions themselves. But they could certainly facilitate the bringing of criminal prosecutions in the jurisdictions most apt to do so.”

What are you hoping for this report?

“I’m hoping that this will not be one of these reports that winds up on a shelf somewhere as a doorstop. ICAR and Amnesty International have been pushing it to the International Association of Prosecutors. There is a further meeting in Oslo, Norway in October. They are organizing sessions in different countries, particularly in Europe and North America. They have got to get some momentum while the report is relatively fresh. And they somehow have to get some traction with the politicians. That’s a difficult constituency.”

“But many of these NGOs have good political contacts. Ultimately, the criminal prosecutions are dependent on resources. If the Minister of Justice says – I’d much prefer spending the money on insider trading or drug prosecutions rather than tie up accountants and forensic analysts in a case involving Guatemala, then this thing isn’t going to go very far. There has to be political will to move the agenda forward if criminal sanctions are going to be an effective recourse. If countries are not prepared to put the resources into criminal prosecutions, you run into all sorts of problems in getting civil redress, because most of the victims will have very little in terms of resources.”

“Many countries don’t have contingency fees. The corporate defendants are often powerfully situated and unless you happen to hit a company that takes seriously its responsibilities and reacts positively to try and remedy a situation, the courts have not been very effective in adopting domestic law to deal with transnational civil offenses.”

“What is vital now, having laid out a comprehensive framework, is the process of engaging stakeholders in the criminal justice system and pushing them hard. One way of addressing the politicians is through the prosecutors. The prosecutors will have to persuade their political bosses that this is a good thing to pursue. Then that can be effective.”

“The whole issue of education is important. If you look at a case that we are discussing here – crimes committed in some Third World country – politicians just glaze up. They have no idea how to deal with it. They have to be brought on board. The basic strategy is to create these centers of sensitivity or knowledge about the problems – and hope that those centers will radiate out with seminars, lectures, informal contacts. There is no question we have a very serious problem both on the criminal and civil side.”

“A couple of weeks ago I was in Tanzania in a mine area. It has a certain notoriety for human rights abuses. Sometimes corporate misconduct is exaggerated. Sometimes corporations get away with an unsatisfactory explanation. But there are enough serious outrageous abuses of human rights out there. And the criminal law is the most effective way to get at it. And it should be coupled with concern for the victims and an attempt to get some civil redress, which will get some compensation for the victims, rather than just punishment for the corporations. But the criminal law has an important role to play.”

“The UN Guiding Principles on Business and Human Rights lay out a framework to deal with the civil side. The criminal side has been neglected. The real contribution of this ICAR and Amnesty report is it says — hold on a minute. Let’s focus on an undeveloped area where important things can be done, even within the existing legal framework.”

[For the complete q/a format Interview with Ian Binnie, see 31 Corporate Crime Reporter 38(11), Monday October 2, 2017, print edition only.]

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