Justice And Climate Reparations: Corporate Criminal Liability Of Pollutor In Jurisprudential Approaches To Environmental Harm

By /

Author(s): Parija Mittal

Paper Details: Volume 4, Issue 5

Citation: IJLSSS 4(5) 03

Page No: 23 – 34

Download Paper

INTRODUCTION

“…Nature provides a free lunch, but only if we control our appetites…”[1]

The word environment is derived from the French word “Environ” which means “surrounding” or “en-circle”. As Justice Chinappa Reddy stated in Sachidanand Panda v. State of West Bengal[2]:

“Every part of the earth is sacred… every shining pine needle, every sandy shore, every mist in the dark woods, every claring and humming insect is holy in memory and experience of any people. This sap which courses through the trees carries the memories of red man…We are part of the earth and it is part of us. The perfumed flowers are our sisters; the horse, the great eagle, these are our brothers. The rocky crusts, the juices in the meadows, the body heat of the pony, and man-all belong to the same family.”[3]

The above quotation, from the letter of ‘the wise Indian chief of Seattle’ to the ‘ great white chief in Washington’, reflects a praiseworthy consciousness towards environment and the inner gratitude of those people, towards the contribution of nature in the development of mankind.[4]Both natural and legal persons contribute to the destruction of the environment but as society evolved humans started doing destructing through corporation as well which initially had no liability. The corporate criminal liability emerged in past few decades and is still evolving and filling the gaps. This also reflects a final call, if we do not adhere to the principles what is taught to us by the nature, we would face the most antagonistic face of nature; Something which would be synonymous to destruction.[5]

CONCEPTUAL FRAMEWORK

Stuart Bell has defined the environment as:

“Its normal meaning relates to ‘surroundings’, but obviously that is a concept that is relative to whatever object it is which is surrounded. Used in that sense environmental law could include virtually anything;…However, ‘the environment’ has now taken on a rather more specific meaning, though still a very vague and general one, and may be treated as covering the physical surroundings that are common to all of us, including air, space, waters, land plants and wildlife.”[6]

With this environment came pollution as the society evolved and with that came liability for those who cause such pollution. Through this research project we will be looking into the criminal liability of polluter and its evolution. In the course of social evolution, certain acts of the individual came to be treated as harmful for the preservation of society as well as individual themselves, and society started to formulate certain patterns of behavior for its members, wherein deviation from the standard pattern behavior, accepted by society, was treated as ‘wrong’.[7]Though initially the ‘wrong’ done had no redressal mechanism by society as it has today for the person to whom the wrong has been done. As stated by Kenny that the development of criminal liability could be associated with three outstanding features. In the first place, a man was held strictly accountable for any harmful result traceable to his active conduct; secondly, the consequential principle, that a man was not liable when he had done nothing active, even though his omission to act may have been clearly the cause of the harm; and thirdly, the great severity of the penal system when the sanction of compensation payment was replaced by afflictive punishment.[8]

EMERGENCE OF MENTAL ELEMENT

In the Normal conquest, for the first time emphasis was laid upon the ethical element in wrong doing. It was gradually being released that intent is a necessity for imposing criminal liability on a person. But later with the maxim of St. Augustine, ‘reum linguam non facit nisi mens rea’; the principle was set and became the best known maxim of English criminal law. This was further refined by Coke to form a maxim, ‘et actus non facit reum nisi mens sit rea’ which made and expressed a clear distinction being the active conduct of a person and the mental element involved to the intended act. Later, the maxim, actus non facit reum nisi mens sit rea, became the standard principle for imposition of criminal liability. However, problems arose when instead of a person, the criminal liability needed to be imposed on corporations which has a fictitious personality with no mind and body of its own. Initially in late sixteenth and seventeenth century the court refused to impose any sought of liability on corporations but gradually changes have been seen in subsequent centuries regarding corporate criminal liability.

EMERGENCE OF STRICT LIABILITY

Strict liability emerged with the realization and expansion of offences into a much broader concept which was not only restricted to body and property only but expanded beyond into social, economic and political spheres which made the imposition of criminal liability complex as the crime in itself became complex. This shift came with the Industrial revolution and the maxim generally used was turned out to be not useful for imposition of criminal liability on many offences. Therefore, a shift was seen from focusing only on the crime into the quantification of liability as per the impact the crime had on the society which led to the emergence of ‘statutory strict liability’.

CORPORATE CRIMINAL LIABILITY

The term ‘corporation’, contemplates, in the first place, a body of human beings united for the purpose of forwarding certain of their interests; secondly, this body must have an organ through which it acts.[9]Corporation was first accepted as a juristic personality in Roman Law. This recognition of corporate liability gave rise to accountability on the corporation but with it came many obstacles both moral and legal in imposition of such liability on a corporation. Indeed, when puzzling over the curious practice of blaming inanimate entities, many doubt “the juristic and wisdom of imposing a stigma of moral blame in the absence of blameworthiness in the actor.”[10]

 Many theories were formed to justify its liability such as organic theory. However, there are mainly three different theories which justify the corporate criminal liability.[11] As stated by Lord Reid that the liability of a company for its directions or policy makers is equivalent to the personal liability of a human being.[12]The criminal liability of a corporation is not dependent upon the intent of any particular person or criminal act of his single agent, ‘but an overall reasonableness of corporate practices and procedures designed to avert injurious regulatory offences.’[13]Thus in modern times, a corporation can be held liable like a natural person, except in two cases.[14]The first exception is for the offences where the corporation itself cannot commit such an offence such as perjury, bigamy, rape. But it can made vicariously liable for the wrongful acts of its own servants or agents. So also, a corporation is liable when an agent commits a crime for the benefit of the corporation.[15]The second exception operates, where no effective order can be made against corporation, viz, offences where death sentence or imprisonment are the punishments prescribed by law.[16]

A MODERN OUTLOOK TO CORPORATE CRIMINAL LIABILITY

Today, the social and economic life of the people is greatly influenced by big business houses as well as domestic companies.[17]In it’s endeavor to check the operation of corporations, the state has sought to impose criminal responsibility on them,[18]in addition to civil regulations, as a last resort to punish the recalcitrant or egregious corporate bodies.[19]A corporation being a legal fiction cannot have the effect of deterrence (sense of fear) like natural persons. Deterrence against corporation can take place in two form-civil and criminal. The dissimilarities lie in the fact that the criminal sanction has stronger procedural protection, more powerful devices which are severe in nature, unique features of its kind (eg., stigmatization) and ‘a greater message sending role than corporate civil liability’.[20]

So how can deterrence work on a corporation. The members of a corporation are its shareholders. So, they can devise plans to regulate the activities of the board of directors or managers and employees.[21]

SCHOOLS OF JURISPRUDENCE

POSITIVE SCHOOL OF JURISPRUDENCE

The word positivism was coined by August Comte who developed this theory of positive law. This theory of positivism was initially founded by Jeremy Bentham. This school of jurisprudence focuses on “what law is” and “what law ought to be”. This school is also known as Analytical School. A positivist jurist will focus on the authority of law or statutory laws and not what is morally wrong or right. It will rather focus on what is already written in the existing legal framework to support a contemporary issue at hand. This school applies a logical, scientific and analytical approach to understand a situation of society. Therefore, it focuses on the present form of law. This methodology of “what law is” was first used by John Austin. Hence, this school is also known as Austinian School.

SOCIOLOGICAL SCHOOL OF JURISPRUDENCE

This school focuses on the relation between law and society. It emphasizes that the welfare of state and individual beliefs must be balanced off. Therefore, this school tries to look into the legal perspective of the day-to day issues or changes that occur in society. This makes law and society interlinked as law is influenced by changes in society and society is affected by laws as society functions according to the laws in place. This school considers law as a social phenomenon. According to this school, every problem has two aspects: one legal and the other sociological which implies that both aspects need to be considered and worked together. Hence, law and society are interdependent on each other. Since laws cannot be formulated effectively and implemented if society’s need and structure are not accounted for. Society also cannot live peacefully if effective and strict laws are not in place in the country.

ENVIRONMENTAL JURISPRUDENCE

This school of jurisprudence is centered around the belief that humans and the environment are part of a single interdependent ecosystem. Environmental Jurisprudence is understood as the “pursuit of equal justice and equal protection under the law for all environmental statutes and regulations without discrimination based in race, ethnicity and/or socio-economic status.”[22]It is considered  as “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations and policies.”[23]

 It advocates for balancing of interest of both the environment or the natural world in view of the welfare of the people or human society which is intrinsically tied to the health of the environment. The forerunner of this jurisprudence in India is M.C. Mehta who has helped extensively to build this jurisprudence from scratch to introducing the concept of absolute liability.

APPLICATION OF JURISPRUDENTIAL CONCEPT

POSITIVE SCHOOL OF JURISPRUDENCE

Since positive law only focuses on what is written in the existing legal framework and statutes which is in force, so according to this school a pollutant will not be liable because it is or can be an inherent moral wrong to cause pollution but rather on the basis of specific statutes or sanction already in place in the authority for a particular wrong that prohibits it and prescribes punishment for the same.

SOCIOLOGICAL SCHOOL OF JURISPRUDENCE

This school of jurisprudence will apply the law to the polluter’s liability as a dyamic institution not static which will consider both aspects: moral and illegal and will try to find a middle path to reach a solution or remedy.But the focus will be on the ethical approach. So even when a written authority if law or statute is not present, the sociological school will apply the morality principle to the harm caused by corporation to the environment. It will consider the duty to keep a healthy environment as a moral duty as well which needs to be fulfilled by everyone as a functional mechanism which will serve social purpose. It will further emphasize that law should include such provisions related to liability for environmental harm caused by corporate in cases where it is not already available and thereby include provisions that promote social good for environment, that is, the evolving needs of society shall included in the law.

Roscoe Pound’s concept of Social Engineering is applicable in this case and is crucial to understand the dynamic between law and society. According to his point of view, the polluter’s interest in conducting business with the society’s interest in a clean and healthy environment must be balanced. If one interest like pollution harms the other interest(society) then criminal liability will arise and will become the means for rebalancing of these interests.

ENVIRONMENTAL SCHOOL OF JURISPRUDENCE

According to this school, the polluter must pay principle and precautionary principle is used to impose liability. This principle implies that the one who does the environmental harm shall be liable for the harm so caused. In India, through Public Interest Litigation(PIL) provides a mechanism for the individuals and NGOs to be vocal about the wrong done with the environment which is indirectly and directly harming the society. Environmental jurisprudence also emphasizes public participation and corporate liability to preserve natural resources for future generations implying the concept of sustainable development. The polluter pay principle was first applied by the Supreme Court in M.C. Mehta v. Union of India.[24] The Constitution of India through Article 48A and 51A provides for foundation for protection and preservation of environment. The former is the State’s obligation to protect and improve the environment whereas the latter imposes  the same obligation on the citizens.

COMPARATIVE ANAYLSIS

Different countries have different mechanism to deal with corporate criminal liability and ways to impose such liability on a corporation. The present project will compare the position of corporate criminal liability of India with Australia.

INDIA

India considers that “there is no doubt that a corporation or company could be prosecuted for any offence punishable under law, whether it is coming under strict liability or under absolute liability. In terms of statutory offences both corporations and individual persons are on the same footing. In Standard Chartered Bank and Ors v Directorate of Enforcement and Ors, it was held that It is only in a case requiring mens rea, a question arises whether a corporation could be attributed with requisite mens rea to prove the guilt otherwise the intent of the legislative is to punish corporate organizations and never meant to exclude them.[25]However, in Bangalore and Ors v. Velliappa Textiles Ltd. and Ors.[26], it was held that criminal liability cannot be imposed upon corporations under existing legal framework in India.

In Aneeta Hada v. Godfather Travels & Tours (P) Ltd.,[27] the Supreme Court held that a corporation can be criminally liable and if the members of the corporate that run its operation have a criminal intent then that will be prescribed to the corporation itself.

In Iridium India Telecom Ltd. v. Motorola Inc.,[28]the Supreme Court held that a corporation can be held criminally liable even in offences where mens rea is required. In this case the court applied the alter ego theory which is essentially treating the company as an extension of its controlling shareholders, thus they will be imputed to the corporation under the applicable attribution and imputation rule.

Jurists have opined that, ‘when a corporation does not have sufficient net assets to pay the optimal cash fine, other penalties such as loss of license, probation and debarment may supplement fine’.[29]probation is desirable when, for example, one wants to rearrange or improve some of the corporation’s internal procedures.[30]Thus, deterrence plays a significant role in the area of corporate crimes.[31]

AUSTRALIA

In Australia, the development in relation to corporate responsibility for wrongdoing provides insight into the influence of corporate theory in shaping legal doctrine.[32]For example, the early treatment of the corporation as persona ficta, incapable of intention or mens rea, insisted in liability for certain kinds of wrongdoing.[33]According to this theory, the ‘personhood’ of the corporation is ‘a matter of convenience rather than reality.’[34]

The legitimacy of the corporation is based, not upon private consent, but upon the relationship between the corporation and society and the overall social function of corporation.[35]Within this analytical frame, the potential for external effects from corporate activities upon the public realm justify its public concern and corporate regulation and accountability.[36]It has also been argued that corporation as a result of their greater resources and access to knowledge, are in fact more appropriate bearers of responsibility, and are often better able to avoid the commission of offences, than individuals.[37]Therefore ,in Australia more focus is given on the public awareness about the actions of the corporation rather than the corporate criminal liability so that public opinion can be formed which can be worked against the wrongdoing of the corporation. Nonetheless, a corporation can be held criminally liable for actions and omission of its members if done within the scope of employment based on the principles of vicarious liability. However, there is no specific statute to implement this liability but recommendations had been made for the same by The Australian Law Reform Commission(ALRC).

CRITICAL ANAYLSIS

In the words of H.L.A. Hart, ‘consequentialist considerations such as crime prevention represent the central of punishment, but that particular impositions of punishment should be constrained by the familiar principles that only the criminally guilty should be punished, and only in proportion with the serious of their crimes.’[38] Hence, the aim is deterrence in India as it also follows the principle of  ‘due process of law.’ Corporate criminal liability in India has evolved gradually from the failure to provide adequate justice to victims and the future generation Union Carbide Tragedy at Bhopal to a rare case of providing punishment to a person(a sweet manufcaturer) for violating of the Water(Prevention and Control of Pollution) Act,1974 in Vikash Bansal Partner M/s Haryana Paneer Bhandar v. Delhi Pollution Control Committee.[39]India did face issue with dealing with corporate intent through theories like identification or aggregation to overcome the corporate veil of limited liability. Jurisprudence has helped in lifting and piercing this corporate veil particularly when members use it to evade responsibility. Though there are certain gaps in the implementation and enforcement of laws which has led to increased environmental harm. This also call for stringent deterrence in the country to protect further environmental harm. In this, the work of jurisprudence is to balance the rights of both the corporation’s economic interest and the public’ right to a healthy environment. Hence, as of today it calls for an international discussion on the corporate liability in environmental law to reach sustainable goals and to work towards a healthy environment and to look towards imposing criminal liability in environmental cases only on a polluter. For this reason in India, environmental statutes include criminal liability for polluter which includes both natural and artificial persons.

CONCLUSION

The very ‘nature’ of environmental offence is different from any other offence.[40]And since crime has been in society from time immemorial it can be concluded that we hardly live in a crime-free society. The traditional idea which was also followed in India was that criminal law applies only to human beings but later altered its position and held corporations criminally accountable for their offences punishable by fines. It has been highlighted that by Law Commission of India that Indian laws are weak in this aspect of punishing the corporations under criminal law as it allows punishment of imprisonment not fine, so fine should also be inserted in the provisions. So, the problem is the framing of relevant and efficient laws by the Parliament in dealing with corporate criminal liability in causing environmental harm.

BIBLIOGRAPHY/REFERENCES

  1. William Ruckelshaus, Business Week,18 June 1990
  2. Sachidanand Panda v. State of West Bengal AIR 1987 SC 1109
  3. (1987) 2 SCC 295
  4. INDRAJIT DUBE, ENVIRONMENTAL JURISPRUDENCE POLLUTER’S LIABILITY, (LexisNexis 2007)
  5. Basu Palok, Law relating to Protection of Human Rights, pp. 27-28, First Edition 2004, Modern Law Publications
  6. Stuart Bell & Donald McGillivary, Environmental Law, Oxford University Press,2000, pp 3-4
  7. Turner, Russell On Crime, vol, 1, 4th edn., Steven & Sons,1964, p 20,n 3
  8. R C Nigam, Law of Crimes in India, vol 1 ,Asian Publishing House,1964 pp 220-221
  9. Sanford H. Kadish, Some observations on the Use of Criminal Sanctions in Enforcing Economic Regulations, Rev. 422 (1963)
  10. Developments in the Law-Corporate Crime: Regulating Corporate Behavior Through Criminal Sanction, Harvard Law Review, no 92,1979, pp 1227,1241
  11. GOWER, PRINCIPLES OF MODERN COMPANY LAW(Sweet & Maxwell 1992 ), p 948 ,n 23
  12. Cross and Jones, An Introduction Criminal Law, fifth edn, Butterworths,1964, p 99
  13. GLANVILLE WILLIAMS, TEXTBOOK OF CRIMINAL LAW,( Steven & Sons, London 1978) p 946
  14. ICR Honbage Ltd [1994] KB 551
  15. Friedmann, Law in a Changing Society,2nd edn, Sweet & Maxwell,1996, p 207
  16. Kevin B Huff, ‘The Role of Corporate Compliance Program in Determining Corporate Criminal Liability: A Suggested Approach’, Columbia law Review, no 96, 1996, p 1252
  17. Sarah D Himmelhoch, ‘Environmental Crimes: Recent Efforts to Develop a Role for Traditional Criminal Law in Environmental Protection Effort’, Environmental Law Review, no 22, 1922, p 1497
  18. Monrad G Paulson and Sanford H Kadish, Criminal Law And Its Process, Little Brown & Co.,1962,p 437
  19. Richard Hofrichter, Introduction in Toxic Struggles: The Theory and Practice of Environmental Justice,9 (1993)
  20. First National People of Color Environmental Leadership Summit, Principles of Environmental Justice (1991)
  21. M.C. Mehta v. Union of India AIR 1987 SC 965
  22. Standard Chartered Bank and Ors v Directorate of Enforcement and Ors AIR 2005 SC 2622
  23. Bangalore and Ors v. Velliappa Textiles Ltd. and Ors. AIR 2004 SC 86
  24. Aneeta Hada v. Godfather Travels & Tours (P) Ltd. AIR 2012 SC 2795
  25. Iridium India Telecom Ltd. v. Motorola Inc. AIR 2011 SC 20
  26. Morton J Horwitz, ‘Santa Clara Revisited: The Development of Corporate Theory’, West Virginia Law Review, no 88,1985,pp173,223-224
  27. Christopher D Stone, ‘The Place of Enterprise Liability in the Control of Corporate Conduct’, The Yale Law Journal, no 90,1980,p 1
  28. Jonathan R Macey, ‘Agency Theory and Criminal Liability of Organizations’, Boston University Law Review, no 71,1991, p 315
  29. Richard M Buxbaum, ‘Corporate Legitimacy, Economy Theory, Legal Doctrine’, Ohio State Law Journal, no 45, 1984, p 515
  30. M McDonald, ‘The Personless Paradigm , University of Toronto Law Journal’, no 37,1987, p 212
  31. Law of Commission of India, ‘Forty-Seventh Report: The Trial and Punishment of Social and Economic Offenses’, Government of India,1972
  32. Gower, Principles of Modern Company Law, Sweet & Maxwell,1992, p 1499
  33. H.L.A Hart, Prelegomenon To the Principles of Punishment, In Punishment and Responsibility: Essays in the Philosophy of Law 1 ,8-13 (2008)
  34. Delhi Pollution Control Committee v. M/s Haryana Paneer Bhandar & Ors (2018)
  35. Madhuker Sharma, Environmental Criminal Law Jurisprudence & Enforcement of Wildlife Protection Law, HPNLU Law Review

[1] William Ruckelshaus, Business Week,18 June 1990

[2] Sachidanand Panda v. State of West Bengal AIR 1987 SC 1109

[3] (1987) 2 SCC 295

[4] INDRAJIT DUBE, ENVIRONMENTAL JURISPRUDENCE POLLUTER’S LIABILITY, (LexisNexis 2007)

[5] Basu Palok, Law relating to Protection of Human Rights, pp. 27-28, First Edition 2004, Modern Law Publications

[6] Stuart Bell & Donald McGillivary, Environmental Law, Oxford University Press,2000, pp 3-4

[7] INDRAJIT DUBE, ENVIRONMENTAL JURISPRUDENCE POLLUTER’S LIABILITY, (LexisNexis,2007)

[8] Turner, Russell On Crime, vol, 1, 4th edn., Steven & Sons,1964, p 20,n 3

[9] R C Nigam, Law of Crimes in India, vol 1 ,Asian Publishing House,1964 pp 220-221

[10] Sanford H. Kadish, Some observations on the Use of Criminal Sanctions in Enforcing Economic Regulations, Rev. 422 (1963)

[11] Developments in the Law-Corporate Crime: Regulating Corporate Behavior Through Criminal Sanction, Harvard Law Review, no 92,1979, pp 1227,1241

[12] GOWER, PRINCIPLES OF MODERN COMPANY LAW(Sweet & Maxwell 1992 )p 948 ,n 23

[13] Developments in the Law-Corporate Crime: Regulating Corporate Behavior Through Criminal Sanction, Harvard Law Review, no 92,1979, pp 1227,1241

[14] Cross and Jones, An Introduction Criminal Law, fifth edn, Butterworths,1964, p 99

[15] GLANVILLE WILLIAMS, TEXTBOOK OF CRIMINAL LAW,( Steven & Sons, London 1978) p 946

[16] ICR Honbage Ltd [1994] KB 551

[17] Friedmann, Law in a Changing Society,2nd edn, Sweet & Maxwell,1996, p 207

[18] Kevin B Huff, ‘The Role of Corporate Compliance Program in Determining Corporate Criminal Liability: A Suggested Approach’, Columbia law Review, no 96, 1996, p 1252

[19] Developments in the Law-Corporate Crime: Regulating Corporate Behavior Through Criminal Sanction, Harvard Law Review, no 92,1979, pp 1227,1241

[20] Sarah D Himmelhoch, ‘Environmental Crimes: Recent Efforts to Develop a Role for Traditional Criminal Law in Environmental Protection Effort’, Environmental Law Review, no 22, 1922, p 1497

[21] Monrad G Paulson and Sanford H Kadish, Criminal Law And Its Process, Little Brown & Co.,1962,p 437

[22] Richard Hofrichter, Introduction in Toxic Struggles: The Theory and Practice of Environmental Justice,9 (1993)

[23] First National People of Color Environmental Leadership Summit, Principles of Environmental Justice (1991)

[24] M.C. Mehta v. Union of India AIR 1987 SC 965

[25] Standard Chartered Bank and Ors v Directorate of Enforcement and Ors AIR 2005 SC 2622

[26] Bangalore and Ors v. Velliappa Textiles Ltd. and Ors. AIR 2004 SC 86

[27] Aneeta Hada v. Godfather Travels & Tours (P) Ltd. AIR 2012 SC 2795

[28] Iridium India Telecom Ltd. v. Motorola Inc. AIR 2011 SC 20

[29] Law of Commission of India, ‘Forty-Seventh Report: The Trial and Punishment of Social and Economic Offenses’, Government of India,1972

[30] ibid

[31] Gower, Principles of Modern Company Law, Sweet & Maxwell,1992, p 1499

[32] Morton J Horwitz, ‘Santa Clara Revisited: The Development of Corporate Theory’, West Virginia Law Review, no 88,1985,pp173,223-224

[33] Christopher D Stone, ‘The Place of Enterprise Liability in the Control of Corporate Conduct’, The Yale Law Journal, no 90,1980,p 1

[34] Jonathan R Macey, ‘Agency Theory and Criminal Liability of Organizations’, Boston University Law Review, no 71,1991, p 315

[35] Richard M Buxbaum, ‘Corporate Legitimacy, Economy Theory, Legal Doctrine’, Ohio State Law Journal, no 45, 1984, p 515

[36] ibid

[37] M McDonald, ‘The Personless Paradigm , University of Toronto Law Journal’, no 37,1987, p 212

[38] H.L.A Hart, Prelegomenon To the Principles of Punishment, In Punishment and Responsibility: Essays in the Philosophy of Law 1 ,8-13 (2008)

[39] Delhi Pollution Control Committee v. M/s Haryana Paneer Bhandar & Ors (2018)

[40] Madhuker Sharma, Environmental Criminal Law Jurisprudence & Enforcement of Wildlife Protection Law, HPNLU Law Review

Scroll to Top