Legal issues Summary

Legal issues have broadened to include what was not included in the past with the onset of the corporate and white collar crimes. This has however come with its challenges as dealing with corporate crimes has not been easy as it is for any other crime. This challenge has been great to the effect that dealing with corporate crimes has failed to take precedence in most instances. The corporate crimes are seen to involve a very different set of relations between the offender and the victim in the sense that there is unlikely obvious direct harm or as Clarke call it ‘blood on the street’ (Friedrichs, 1996).

Such crimes appear to be less personal since the immediate victims are usually the employers, the government, the public health, or the environment. In most instances, safety legislations are usually broken leading to death or injury to the employees and that there is usually no direct harm intended to victims. Other perspectives on the victimization in corporate crimes include all citizens without regarding age, class or gender; while others consider victims of such crimes to be the poor and the powerless since they are usually committed by the rich and those in power within the society.

This paper shall seek to analyze the difficulties encountered in addressing the incidences of corporate crimes in the society. Corporate Crimes: According to experts of criminology, a corporate crime is an example of white collar crime. In the early 1930s, a sociologist by the name Edwin Sutherland came up with the term ‘white collar crime’ in an effort to help in the explanation of criminal behavior amongst individuals of the business community who by extension belonged to the upper social class within the society.

According to Sutherland, white collar crime could be regarded as a criminal activity that is committed by a respectable individual of a higher social status in regard to his occupation (Sutherland, 1940). He studied crimes committed by the individuals from the business community and noted various observations regarding the behavior of corporate offenders. He observed that recidivism amongst these criminals was high, their malpractice was widespread, and that such criminals were not guaranteed to loose their status amongst their peers (Lowell & Arnold, 2003).

With Sutherland’s definition, many more sociologists set out to give a clear definition of the corporate crime with David Friedrichs describing corporate crimes as illegal and harmful activities that are committed by officials and workers of organizations in promoting either organizational or individual interests (Friedrichs, 1996). David Simon on the other hand defined corporate crimes as acts of economic domination (Simon, 2002).

In most definitions, describing the corporate crimes, the victims are usually the general public, consumers, employees of an organization, and the organization’s competitors among others. The offenses involved in the corporate crimes include corrupt practices, fraud with domestic and even international implications, and corporate stealing (Simon, 2002). Most of the corporate crimes may not be having violent consequences though the price that is paid by the victims is usually catastrophic.

Fraud and anti-trust crimes affect the whole organization, the economy, or even the society as a whole. In early 1990s, the corporate crimes did cost the American consumer a whooping $260. 06 billion which was six thousands times more than the amount stolen in all bank robberies during the same period and forty times more than the amount that had been taken during street crime incidences (Simon, 2002). The employees and the consumers are forced to pay for such crimes through job losses and inflations.

This is an indication that corporate crime has mounted a serious challenge that should be addressed with the urgency that it deserves (Dunning, 2003). The nature of corporate crimes is that it usually occurs in large and complex organizations which operate with a complicated hierarchy of positions that range from board of directors, executives, corporate divisions, and individual employees. Such structures are responsible for the facilitation of corporate crimes due to the fact that it is usually difficult to detect and hold an individual responsible (Pearce & Snider, 1995).

It is also thought that since the corporate executives have the belief that higher profitability should be the main concern of their profession and thus as organizational leaders, they aspire to act in the interest of the shareholders to the organization in an effort to attain maximum profits no matter what it takes. Anomie and strain theories may aid in the understanding of the corporate crimes. According to Emile Durkheim, individuals perceive an unlimited amount of success and that crime gets motivation through the desire for more wealth and greater powers (Stephen, 1974).

Challenges in dealing with corporate crimes: Dealing with corporate crimes has presented a lot of challenges to law enforces in many aspects. Compared to conventional crimes, white collar crimes are in most instances seen as not being part of the crime problem and that the high status of the culprits is often seen as being able to lead to avoidance of criminalization of their activities. Corporate crimes present many challenges due to its unique characteristics.

This include the fact that victims are usually not aware of any harm and are unable to detect it by themselves as it happens for instance with some major frauds, pollution, food adulteration, and descriptions of the consumer goods. Victimization in these cases is often indirect and has an impersonal bearing as it affects entities including the government, even though the individuals are affected indirectly through paying taxes for instance (Bagaric, 2005).

Corporate crimes may involve various areas involving corporate misconduct that may be regarded as a breach of law. Such areas include companies and securities offences which encompass improprieties that are intrinsic in the formation and structure of the company and failure to register with the necessary authorities. Such offences also include irregularities involved in raising capital and not adhering to the necessary procedures that govern company takeovers.

These offences in most instances involve managerial practices that may lead to the liquidation of the company for instance the collapse of Balanced Property Trust in Australia in the year 1983 where pensioners had to bear with the loss of an estimated $50 million. In this case, investigations were delayed for two years and that charges were only recently laid (Dunning, 2003). The other category of corporate crime is about taxation in which case the various Commonwealth and state statutes regarding tax such as evasion of tax obligations are broken.

In Australian context, apart from the state statutes, such offences can be found in the Commonwealth laws in regard to customs duty which is payable on all imports. For instance, towards the end of the 1970s, a businessman was the chief administrator of a tax avoidance cartel and managed to be the head of more than four hundred companies before he was exposed. He had already managed to avoid more than $30 million in tax. In 1984, the businessman was convicted of the crime and only sentenced to a two year jail term (Bradshaw, 1998).

The occupation health and safety crimes also fall under the corporate crimes. There are legislations in the state and territories which provide for penalties for unguarded machinery, inadequate fire precautions and the general safety at the workplace. There are also the environmental offences whereby there are various statutory provisions governing emissions from industries, noise pollution, waste management and control of hazardous substances. Some provisions govern breaches of zoning or any other planning restrictions (Pearce & Snider, 1995).

Offences touching on the consumers’ affairs also amount to corporate crimes. Such offences include deceptive advertising, sale of defective products, unlawful debt recovery, consumer fraud and violation of restrictions placed on license acquisition. An example of such a crime can be found in the 1984 incident where a second hand car dealer in the southern part of Australia sold close to ten vehicles without a license and also wound back the odometers to make them more appealing to the prospective buyers. The dealer was convicted and fined close to $1500 (Parkin, 1998).

There are many more forms of corporate crimes that include restrictive trade practices where anti-competitive conducts such as maintaining of resale prices, price fixing and monopolization, and boycotting. Other forms of corporate crimes are based on the food standards, economic offences against the workers of a given company, and discrimination practices in employing, provision of goods and services and accessing public places and accommodation. Any discriminatory advertisements on grounds of gender or any other criteria amount to a corporate crime.

In 1978, Ansett Airlines turned down a prospective pilot based on her gender and the Victoria Equal Opportunity Tribunal and the High Court of Australia ordered that the Airline was to employ the pilot and reimburse her with the foregone wages (Parkin, 1998). The most substantive issue in addressing corporate crimes lies in the notion as to whether corporations deserves to be criminalized and if that is the case, what are the doctrinal basis upon which criminalization of these corporations has to be achieved?

In Australia, there is generally lack of an authoritative legal framework to handle the corporate crimes. In most instances, the penalties available from the law are often modest and those which are actually imposed following a conviction usually falls below the maximum. It has been observed that in most instances, the penalties imposed on corporate criminals are nominal fines whereas prison sentences for the offenders are very rare (Parkin, 1998). The tragic incident at Westray mine in Canada provides an insight of the challenges that corporate crimes might present in responding to such crimes.

In this incident, a coal miner, while on duty and working under horrible working conditions caused an ignition in the coal mine leading to a coal-dust explosion. This led to massive deaths where all the miners on duty never survived. The death toll from the 1992 tragedy was a total of 26 men and despite the criminal charges that were brought against the Curragh Resources Inc. company, nobody was convicted (Bradshaw, 1998). This was made possible given the complexities of the case.

This was revealed through the exposure of the report of the Public Prosecution Service Special Prosecutions Unit which estimated that the Prosecution of the Westray officials on criminal charges could have cost close to ten million dollars (Lowell & Arnold, 2003). In this case, the employees were susceptible to being victimized at the place of work. During the Westray Public Mine Inquiry hearings, it was established that the miners were working under harsh conditions and that they were forced to work in unsafe conditions whereby they were subjected to verbal abuse whenever they protested.

With the passage of time, the dangers of their place of work became more eminent and the miners worked under the fear of being killed any moment. The Westray disaster gained media prominence with different articles written about the disaster even two years after the tragedy. The media coverage during the first days of the tragedy was overwhelming but as the incident took a legal direction, media coverage decreased substantially (Bradshaw, 1998).

The Westray tragedy was a complex problem that involved political interference, omissions, incompetence, cynicism, negligence, stupidity, and lack of concern. Historically, such explosions had been experienced in mines and Westray could not learn from previous experiences. The tragedy was therefore facilitated by corporate greed; incompetence from the government side; and bureaucratic ineptness. The inspectors would ignore making simple observations in regard to the security of the workers in the mine and they were fond of announcing whenever they were to visit for an inspection.

They even asked the miners whether they had something to complain about in the presence of their supervisors (Bradshaw, 1998). Following the law suit that was filed in regard to the tragedy, those who had survived the tragedy were given severance pay for twelve weeks whereas the law suit by the families and relatives of the deceased against the province of Nova Scotia was thrown out on the grounds that the Province was insulated from lawsuits by the Workers Compensation Act. The company responsible for the mine, Curragh Resources Inc.

was charged with 52 counts of operating an unsafe mine before it went bankrupt in 1993. The charges were later dropped following the criticism from a Nova Scotia judge regarding the manner in which those charges were laid. The case went back to trial only to be dismissed for a second time, but this time by the Supreme Court (Bradshaw, 1998). There were also charges of negligence and manslaughter brought against two mine managers and this failed to materialize as it was argued that there was lack of enough evidence to incriminate the two.

The founder, the president and the chief executive of the Curragh Resources Inc. did not testify before the inquiry that was set to look into the tragedy since it lacked federal powers thus subpoenas couldn’t be enforced outside Nova Scotia hence the company officials were safe in their head offices in Toronto. This indicates how complex and frustrating dealing with cases of corporate crimes can be at times (Bradshaw, 1998). Conclusion: Corporate crime is a new phenomenon and is very unique from other conventional crimes.

This concept has come with its challenges especially in regard to the complexity involved in the criminal activity. Nevertheless, different countries of the world have tried to put legislations into the judicial system which can help in handling the emerging trend the in field of criminology. This has however not been able to comprehensively deal with the corporate crimes as the culprits often escape the legal punishment or get a lighter bit of the sentence.


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