1.

INTRODUCTION

The corporates have come a long way from being accused of creating public nuisances or being a culprit
under the law of torts. They can today easily be seen creating a grave dent in the working of any society.
They have become the necessary evils today. The society cannot survive without them and at the same
time it is becoming difficult to survive with them. The difficulty lies not only in the fact that it is way too
difficult to put the blame on the companies for a criminal wrong committed by them rather the most
challenging part is to put the blame on the right shoulders when a wrong has been done. Who carried
the plan out, who drafted the plan to why the plan was drafted? What profits would be achieved are the
few questions which keep the investigators of the corporate crimes busy.

Even though a separate legal presence and existence of the company has long been established by the
courts yet, the complex hierarchy of todays’ mainstream body corporate make it a tiresome process to
find out the real culprit who acted on behalf of that legal personification. The employees, the directors,
the agents, the other stakeholders, all of them can be held liable guilty on behalf of the criminal acts of
the company.

Money laundering, privacy frauds, nuclear disasters, human trafficking, environmental disasters,
corruption, bribery, violence etc. are the few of the crimes which have been associated with the modern
day multi-national giants. Their new characters have forced the courts to give newer interpretations
about the concept of criminal liability of the corporates and also has led to new legislations being
adopted where by the governments have incorporated new jurisprudence of handling the corporate
crime and corporate guilt. In this chapter the researcher has attempted to analyze the concept and
theories of corporate crime and criminality, that who are perpetrators of a corporate crime and who may
be held liable for them and what are the various types of corporate crimes and their impact on the
society.

1.1 Meaning of Corporate Crimes

The Australian criminologist John Braithwaite defined corporate crime as "the conduct of a corporation
or employees acting on behalf of a corporation, which is proscribed and punishable by law.1 This
definition stands the test of time as these crimes can be categorized into two sub sects. In the first
subsect the employees or the company commits the wrong and in the second subsect the company
faces the wrong against itself. Both these categories lead to corporate crimes. In many cases the face of
the criminal is separate from the company but over the past decades it is visible that the corporate veil
has hidden quite a few faces behind it and saved them from being punished. Corporate conduct has
been regulated by the corporate laws since long. It’s time that the liability of a company for criminal
wrongs be addressed. The common laws make a corporation liable for the actions of its agents when
employees/ agents act within the scope of their employment and create a profit for the corporation with
that act.

The corporate environment of any company today, effects and includes many aspects. Every aspect here
is indeed affected when this environment gets vitiated. There are so many people who get affected by
the acts of the company both directly and indirectly.

1 See, John Braithwaite, Regulatory Capitalism: How it Works, Idea for Making It Work Better, Edward
Elgar Publishing (2008).
The first party that gets effected are the consumers or stakeholders who are its main beneficiaries and
are at maximum risk.

Then comes the Employees of the Corporate; who are in twin roles; one role is of the victim and on the
other hand it is the main protagonist of crime. Then comes the State; who receives the economic returns
from it and also faces a dual loss when corporate is guilty of a crime in the shape of employment and
revenue loss and the loss faced by the society. There are many other categories also who are involved in
the corporate environment and get effected by the corporate crime like the international community, the
NGO working in those areas, the independent contractors, the shareholders, the creditors, the close
society where the company operates and the environment surrounding the company etc. Hence, it
becomes more and more pertinent to understand the nature of crime and criminality in the corporate
sector.

The theories put forward that the corporate crimes are offenses committed by corporate officials for
their corporation. The offenses are committed for corporate gain or to bring harm to any other
corporate. Like any individual, a company is fully capable of committing many criminal acts like, bribing a
national or international public servant or government to attain business, dumps toxic industrial waste
into rivers or pollute the underground water resources, indulge in money laundering, human or drug
trafficking, monetary frauds etc. Corporate crimes are often quiet acts because in maximum cases
people don’t know whom to blame and are not even aware about the fact that they have been
victimized until a massive damage has been done to them, their families or their surviving environment.

These organized and white-collar crimes are also committed by individuals for themselves in the course
of their occupations for personal gain. It may be committed with or without the knowledge of the
employer or owner of the company. Monetary frauds and tax frauds are the most common corporate
crime. The white-collar crimes which were defined by Sutherland have seen a drastic change today. They
have become more institutionalized and organized. The modern Corporate has become a giant who is
pilfering not only from the buyer alone but from the society at large and that too without a glitch.

1.2 Nature of Corporate Crime

Corporate crimes are considered to be general varieties of the White-Collar Crime. Corporate crimes are
also known with reference to occupational crimes. The distinction between corporate crime and
occupational crime is that whereas corporate crime refers to situations in which corporate managers
commit a criminal act for the benefit of the corporation, the occupational crimes are committed by
individual employees against the corporation itself or the customers or consumers of the corporation, in
the course of employment. When we deal with 'corporate crime' the first question that emerges is
whether the corporate actually commit crime. This question can be answered by looking at the
situations in which substantial harm is caused in the operation of the corporations which is much more
than the traditional crimes committed by individuals.

Looking the matter from criminological perspective, the criminal behavior in corporate crimes it is
altogether different from the traditional crimes committed by the individuals. The criminological theories
have developed in different settings by placing the behavior of the individual as an individual in focus
and not in the organizational structure. Still, these are the acts and activities of individuals in the
corporate crimes which are attributed to the corporation.
As such there is no separate branch of criminology dealing with corporates. The criminal behavior of
corporations is tried to be understood by applying the existing theories applicable to individual
delinquency. However, there is a need to analyze the corporate crime and criminal behavior in the new
settings in which corporations operate.

Another significant aspect of corporate crime is that while the response of the criminal justice to the
individual crime is prompt and aggressive it is lacking or mild to the corporate crime. At the same time
oblivious societal response also tends to minimize the seriousness of the corporate crime.2 Therefore
corporate crime has acquired a new meaning which is required to be understood and addressed, if we
are to control and combat this emerging form of criminality. Therefore, before embarking upon study of
various theories of corporate criminality the typical features of corporate crime need is distinguished
from the related areas of criminality in the following discussion.

2 Brian K. Pyne Susannah Tapp, Corporate Crime, Oxford Bibliographies at