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Australian Journal of Human Rights |
Not-so-innocents abroad: corporate criminal liability for human rights abuses
Jonathan Clough*
This article seeks to demonstrate the role that domestic criminal law could play in the regulation of transnational corporations for human rights abuses committed outside their jurisdiction of incorporation. It begins by summarising the US case of Doe I v Unocal Corporation (Doe v Unocal) as illustrative of some of the key issues that arise in cases of this kind. This is followed by a brief summary of the current approaches to regulating the conduct of transnational corporations, before discussing the suggested advantages of domestic criminal liability. The mechanics of corporate criminal liability are then addressed, with particular emphasis on the ways in which liability may be imposed for the conduct of subsidiaries and other independent entities. Principles of extraterritorial criminal jurisdiction are then discussed, along with the importance of international agreement. In conclusion, it is suggested that there is no legal impediment to the enactment of such legislation. The obstacle to reform is therefore not legal, but political.
It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience.
— Henry David Thoreau, 1849 (Thoreau 1983: 387)
The abuse of human rights by corporations is not a recent phenomenon. For centuries, corporate interests have sought to exploit resources and people, often with little regard for what would later come to be regarded as human rights (Freeman 2001: 433). Early examples include the role of the British East India Company in the colonisation of India (Ratner 2001: 453) and the use of slavery in the 18th and early 19th centuries (Stephens 2002a: 49). However, recent decades have seen an increasing focus on the role of transnational corporations in human rights abuses. Transnational corporations are corporations that, although incorporated in one country, operate in one or more other countries (Muchlinski 1999: 12–15).1 In an increasingly deregulated and global commercial environment, these corporations are able to seek conditions that are most favourable to profit maximisation, wherever they may occur. Such conditions are commonly found in the developing world, where countries are often resource rich, regulatory requirements (and associated costs) may be weak or non-existent, and labour is relatively cheap.
This environment has produced transnational corporations of truly awesome proportions. It has been estimated that of the 100 largest economies in the world, between 29 (United Nations Conference on Trade and Development (UNCTD) 2002: 90) and 51 (Anderson and Cavanagh 2000) are transnational corporations.2 According to the UNCTD World Investment Report, there are approximately 65,000 transnational corporations with 850,000 foreign affiliates (UNCTD 2002: 14). With 54 million employees and sales of almost US$19 trillion, they represent approximately 11 per cent of the world’s combined gross domestic product (UNCTD 2002: 4, 14).
While the foreign investment associated with global trade is undoubtedly beneficial for many developing countries, there is also the clear potential for transnational corporations to be involved, whether directly or indirectly, in human rights abuses in those countries. Corporations may find themselves dealing with governments that are either directly responsible for human rights abuses or unwilling or unable to stop them. There is also the danger that in seeking lower regulatory standards, corporations may exploit vulnerable developing countries without due regard for the human rights of citizens in those countries. The relative power of many transnational corporations allows them to operate more and more independently of host governments, which may be reluctant to impose obligations for fear of discouraging investment (Ratner 2001: 461–5).
These circumstances have led to a search for suitable mechanisms to render transnational corporations accountable for their conduct in the developing world. To date, the primary focus has been on voluntary codes of conduct, civil litigation and international law. Despite the obvious criminality of much of the alleged conduct, there has been relatively little discussion of the application of domestic criminal law in this context (Stephens 2002a: 64–7; Forcese 1999/2000; Amann 2001).
Drawing primarily upon the laws of Australia and the US, this article seeks to demonstrate the role that domestic criminal law could play in the regulation of transnational corporations for human rights abuses committed outside their jurisdiction of incorporation. It will be argued that there are a number of advantages to the imposition of domestic criminal liability in such cases, and that such liability should form a vital part of an integrated regulatory framework governing the conduct of transnational corporations. The article begins by summarising the US case of Doe v Unocal as illustrative of some of the key issues that arise in cases of this kind. This is followed by a brief summary of the current approaches to regulating the conduct of transnational corporations, before discussing the suggested advantages of domestic criminal liability. The mechanics of corporate criminal liability is then addressed, with particular emphasis on the ways in which liability may be imposed for the conduct of subsidiaries and other independent entities. Principles of extraterritorial criminal jurisdiction are then discussed, along with the importance of international agreement. In conclusion, it is suggested that there is no legal impediment to the enactment of such legislation. The obstacle to reform is therefore not legal, but political.
The case of Doe v Unocal provides a useful example of the type of case with which this article is concerned. It involved an action against the US energy company Unocal Corporation in relation to its operations in Myanmar (formerly known as Burma). Unocal Corporation is the parent company of Union Oil Company of California, trading as Unocal, and its subsidiaries (Doe v Unocal, 2002, at 4). Unocal is incorporated in Delaware and listed on the New York and Swiss stock exchanges. In 2004, Unocal reported revenues of US$8.2 billion, net earnings of US$1.2 billion and total assets of US$13.1 billion (Unocal Corporation 2004). Unocal operates globally, including in China, Gabon, Thailand, India, Vietnam, Indonesia, Bangladesh, Myanmar, Azerbaijan, Congo and Brazil.
The initial actions against Unocal were brought in the US District Court and were based primarily on the Alien Tort Claims Act 28 USC § 1350 (1789). They related to Unocal’s involvement in the production, transportation and sale of gas in Myanmar (the Project), the plaintiffs being villagers in the area through which the gas pipeline passed. It was alleged that Unocal was knowingly involved in human rights abuses by the Myanmar military, which caused the villagers ‘to suffer death of family members, assault, rape and other torture, forced labour, and the loss of their homes and property’ (Doe v Unocal, 2002, at 22). Although the District Court gave summary judgment in favour of Unocal regarding the forced labour, murder, rape and torture claims, this was reversed by the Court of Appeals in respect of all but the torture claims (Doe v Unocal, 2002, at 1). While that decision was to be appealed to an 11 judge en banc court within the Ninth Circuit (Doe v Unocal, 2003, at 3), Unocal has since agreed to compensate the surviving plaintiffs for an undisclosed amount (Redford et al 2005).
For the purposes of this article, this case is important not for its legal issues but as a useful illustration of the factual context in which allegations against transnational corporations may be made. The following is a summary of the factual and procedural background described in Doe v Unocal. The Project had been licensed by the state-owned Myanmar Oil and Gas Enterprise to the French company Total SA. Unocal acquired a 28 per cent interest in the Project from Total, that interest being held by two wholly owned subsidiaries.
It was not disputed that the Myanmar military provided security and other services for the Project. Ostensibly, the need for security arose because of rebel activity in the region, although the centre of the Myanmar civil war was some 150–200 miles away and there was little or no rebel activity in the region of the pipeline. Although disputed by Unocal, the Court of Appeals found that there was ‘evidence sufficient to raise a genuine issue of material fact’ that Unocal was aware that the Project had hired the Myanmar military to provide these services (Doe v Unocal, 2002, at 6–7).
The specific allegations by the plaintiffs related primarily to forced labour and related abuses (Doe v Unocal, 2002, at 11). It was further alleged that the plaintiffs were subjected to acts of murder, rape and torture. For example, one plaintiff testified that after her husband attempted to escape the forced labour program, he was shot at by soldiers. It was alleged that in retaliation for his attempted escape, she and her baby were thrown into a fire, resulting in injuries to her and the death of the child (Doe v Unocal, 2002, at 12).
Unocal’s knowing involvement in these abuses was supported by evidence that Unocal was aware that successive military governments of Burma/Myanmar had a long and well-known history of imposing forced labour on their citizens. Unocal President John Imle acknowledged that if the pipeline was threatened, there would need to be more military protection, and that ‘if forced labor goes hand and glove with the military yes there will be more forced labor’ (Doe v Unocal, 2002, at 16). John Haseman, a former military attaché at the US embassy in Rangoon and consultant to Unocal, reported that ‘egregious human rights violations have occurred, and are occurring now, in southern Burma ... Unocal, by seeming to have accepted [the Myanmar military’s] version of events, appears at best naïve and at worst a willing partner in the situation’ (Doe v Unocal, 2002, at 18–19).
This brief summary demonstrates many of the key features of such cases, which in particular are as follows.
• The defendant is a large, well-resourced transnational corporation.
• The alleged human rights abuses occurred in a country (the ‘host jurisdiction’), other than the transnational corporation’s country of incorporation (the ‘home jurisdiction’).
• The host jurisdiction is unable and/or unwilling to investigate and prosecute the alleged abuses.
• The transnational corporation was alleged to be complicit in the human rights abuses either directly or, more commonly, indirectly through the interposition of subsidiaries or other intermediaries such as independent contractors.
In recent years, there have been numerous attempts to render transnational corporations accountable for their alleged involvement in human rights abuses. In general, these approaches fall into one of four main categories.
There are a number of voluntary instruments that seek to encourage corporations to observe and protect human rights in the conduct of their business. These include the UN’s Global Compact (2000), the Organisation for Economic Co-operation and Development’s (OECD’s) Guidelines for Multinational Enterprises (2000), the International Labour Organisation’s Tripartite Declaration of Principles Concerning Multinational Enterprises (2000) and the Caux Round Table’s Principles for Business (1994). Of particular importance, in 2003 the UN proclaimed the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (the Norms), which are currently being considered by the UN Commission on Human Rights (UNCHR) (UNCHR 2005). In addition to specific human rights obligations, the Norms state that ‘transnational corporations and other business enterprises have the obligation to promote, secure the fulfilment of, respect, ensure respect of and protect human rights recognized in international as well as national law’. Although currently having no legal effect, the Norms represent the most comprehensive international instrument in relation to the conduct of transnational corporations. Together, these measures represent a growing consensus on the need for transnational corporations to operate in an ethical and sustainable manner. They also demonstrate a recognition by the business community that it carries greater responsibility than merely returning value to shareholders (Macek 2002: 104–8; Stephens 2002a: 49). There is, however, no formal compliance mechanism and such instruments rely primarily on good will and the fear of negative publicity.
To date, efforts to render corporations liable for alleged involvement in human rights abuses have centred on the use of civil litigation (Joseph 2004; Stephens 2000; Byers 2000). These actions have in general been brought under the Alien Tort Claims Act or as more conventional actions in tort (Ward 2001: 456–8; Joseph 2004). While there have been some limited successes in bringing such actions, they are vigorously contested and face considerable procedural hurdles (Ramsey 2001; Dodge 2001; Hall 2002). To date, none of these actions have proceeded to judgment on the merits.
In both the US and Australia, Bills have been introduced seeking to ensure that corporations conducting overseas operations of a certain size abide by minimum standards of conduct. Under both the Corporate Code of Conduct Bill 2001 (US) and the Corporate Code of Conduct Bill 2004 (Cth), the obligations sought to be imposed are very broad, including environmental, workplace safety, consumer protection and anti-discrimination obligations. Although neither Bill has been passed,3 they provide an illustration of the type of regulation proposed in this article, albeit in a civil context. They also provide a salient reminder of the political hurdles that lie in the path of such reform. Another, less onerous, approach is to impose reporting requirements on corporations in relation to their social, environmental and economic impacts (Performance of Companies and Government Departments (Reporting) Bill 2004 (UK), which has superseded the Corporate Responsibility Bill 2003).
Another option is to subject transnational corporations to direct liability under international human rights law. As it is states that bear the primary responsibility for human rights obligations, the application of international law could be extended to include transnational corporations in two ways (Ratner 2001: 465–72; Joseph 1999: 175–6). The first, and most ambitious, would be to subject corporations to direct human rights obligations as actors in their own right (Joseph 1999: 184–5). This is likely to be extremely difficult to achieve politically, as evidenced by the fact that the Statute of the International Criminal Court does not encompass corporate criminal liability (Ward 2001: 471; Clapham 2000). The second possibility would be to extend the horizontal application of human rights obligations to encompass state liability for the extraterritorial conduct of corporations within their jurisdiction. This goal is recognised by the UN Norms, which provide that in addition to their primary responsibility to promote and protect human rights, states have an obligation to ensure that transnational corporations and other business enterprises respect human rights. A precedent for such obligations may be found in the OECD’s Convention on Combating Bribery of Foreign Officials in International Business Transactions, which obliges parties to exercise extraterritorial jurisdiction over conduct by their nationals committed abroad (Joseph 1999: 184).
The various measures proposed to regulate corporate human rights abuses are in danger of being dismissed when considered individually. Voluntary codes of conduct are non-binding, civil actions are subject to formidable procedural obstacles and international law is of limited application to non-state actors. There is a further danger that the debate will degenerate into a defence of the different methods of regulation rather than a search for an integrated regulatory response.
As with domestic corporate regulation, the regulation of transnational corporations will be most effective when there is a range of measures in place, increasing in severity and compulsion. Rather than each measure being seeing as distinct, they should be viewed as part of a broader regulatory structure — one that mirrors the regulatory pyramid described by Ayres and Braithwaite (1992; Fisse and Braithwaite 1993: 85–7).
As illustrated in Figure 1, self-regulation forms the base of the pyramid. Where there is a departure from voluntary obligations, civil actions may be relied upon, forming the next layer of the pyramid. While in many cases private actions may be sufficient to resolve these disputes, there will be situations where the need arises for civil enforcement by public regulatory agencies. In this way, voluntary compliance is supported by a desire not only to conform to societal standards, but also to avoid the legal consequences that lie further up the pyramid. Criminal law would ordinarily occupy the apex of the pyramid, representing society’s condemnation and exerting downward pressure on the other measures. However, the role of criminal liability has largely been absent from the debate surrounding the regulation of transnational corporations for human rights abuses. It is therefore suggested that there is a need for domestic criminal liability against parent corporations to be incorporated into the broader regulatory framework.
The advantages of imposing domestic criminal liability on parent corporations in respect of human rights abuses are that it:
• provides a public law remedy;
• targets the parent company; and
• is supported by a range of sanctions.
Most importantly, it is argued that only criminal law carries the level of denunciation appropriate to conduct involving the abuse of human rights.
Unlike civil litigation, the application of domestic criminal liability provides a public law remedy, the advantage of which is self-evident. The control of corporate misconduct should not rely upon there being plaintiffs with sufficient means to bring civil actions against well-resourced transnational corporations. In criminal proceedings, the power of the corporation is balanced by the power of the state, including compulsory powers of investigation and interrogation. Thus, rather than relying upon discovery and related pre-trial procedures, corporate offices may be searched and officers interviewed. In addition, as with the Unocal settlement discussed above, the terms of civil settlement will usually be confidential, denying the opportunity for a public determination and/or acceptance of culpability.
In many cases of alleged human rights abuses, the most appropriate target for prosecution is the parent corporation rather than the subsidiaries or other intermediaries actually present in the host jurisdiction (Ward 2001: 463–4; Gibney and Emerick 1996: 144–5). Generally, this is due to a lack of effective regulation in the host country. Relevant standards may be non-existent or below what would be expected in developed countries. Even those standards that do exist might not be pursued for a number of reasons, including corruption or fear of losing foreign investment. Even where relevant laws are in place and there is a desire to prosecute, local agencies may lack sufficient resources to proceed against a large corporation.
Even if these obstacles were to be overcome, the operations of transnational corporations in developing countries are routinely structured though a complex web of subsidiaries and related companies. These subsidiaries and other entities are deliberately interposed to minimise risk and insulate the parent. While such structures have obvious taxation, regulatory and risk management advantages, they also present a considerable challenge to the effective accountability of transnational corporations. The reasons for this lie in two concepts that are fundamental to the success of the modern corporation: the doctrine of separate corporate identity and the principle of limited liability (Blumberg 2001). The first states that a corporation is a separate legal entity, distinct even from its shareholders. This applies as between parents and subsidiaries, so that each company in a corporate group is treated as a separate legal entity (Industrial Equity Ltd v Blackburn; Slade LJ in Adams v Cape Industries, at 1019; also see Collins 1990). Consequently, one company in a corporate group will generally not be liable for the acts of another, despite the ‘commercial reality that every holding company has the potential and, more often than not, in fact does, exercise complete control over a subsidiary’ (Rogers A-JA in Briggs v James Hardie & Co, at 577).
The benefits of such corporate structures are further enhanced by the principle of limited liability, which limits the liability of shareholders, including corporate shareholders, to the unpaid amount on their investment. The risk of the parent is thereby transferred to the subsidiary, which is often undercapitalised. If the subsidiary is successful, revenue will flow to the parent. If it is unsuccessful, that subsidiary can be sued, prosecuted or even liquidated with limited impact on the parent.
As a result of these principles, ‘[i]n the typical multi-tiered multinational group in the modern economy, this has resulted in three, four, or even five or more separate layers of limited liability’(Blumberg 2001: 303). Consequently, prosecution of the subsidiary in the host jurisdiction will have limited effect and in some cases the subsidiary may even be dissolved before any action is taken (Lubbe v Cape). Prosecution of the ultimate parent corporation by authorities in the host jurisdiction will also be impractical because of its limited, if any, presence in that jurisdiction.
In contrast, for all their ability to move capital around the world through complex structures, the ultimate parent corporation in a transnational enterprise tends to remain incorporated in the highly regulated and financially safe developed world. For example, in 2000 the top 25 transnational corporations ranked according to foreign assets were incorporated in the US, Europe, the UK, Japan and Hong Kong/China (UNCTD 2002: 86). It is not a simple matter for such large entities to leave the jurisdiction, as to do so would effectively require deregistration or removal of assets. Therefore, flight of the parent company will, in many cases, not provide a major obstacle to prosecution in the home jurisdiction.
However, the imposition of liability on the parent corporation is not justified solely on the basis that it is the only target available. In appropriate cases, the parent corporation should be prosecuted because of the criminality of its conduct. To be knowingly involved in severe human rights abuses in the host jurisdiction, whether directly or indirectly, is conduct that should legitimately be the subject of criminal sanction. Subsidiary corporations do not establish themselves in the developing world. They are created by, and for the benefit of, the parent corporation. It is not unreasonable to expect that the parent should bear some ultimate responsibility for the conduct of corporations and others over which it has actual or effective control.
Targeting the parent corporation may also be the most effective way of bringing about meaningful change (Ratner 2001: 473–5). Given the transient nature of individuals within a corporation, punishing individuals may have little or no impact on the corporate culture that gave rise to the offending in the first place (Ermann and Lundman 1996: 5). In contrast, punishment of the corporate entity may produce more lasting change by providing an incentive for the corporation to monitor its own processes and utilise its own internal policing mechanisms (Fisse and Braithwaite 1988: 489). This may be particularly appropriate in the context of large corporate groups, where change at the level of parent can have considerable impact throughout the entire corporate group.
To advocate prosecution of the parent corporation is not to dismiss the importance of pursuing the perpetrators, including subsidiary corporations, in the host country (Betz 2001: 202–5). It does, however, recognise that there are many practical difficulties in doing so, and that in taking advantage of such situations transnational corporations may be complicit in human rights abuses and contribute to their continuation. Such behaviour should rightly be made the subject of criminal sanction.
When the suggestion of imposing criminal liability on corporations is raised, a commonly asked question is ‘what purpose does it serve to punish an artificial entity?’. The answer to that question lies in the realm of sentencing. If the imposition of criminal liability is to be more than a rhetorical gesture, effective sanctions must be put in place. It is often erroneously thought that corporate criminal liability merely results in the imposition of a fine, the magnitude of which may be derisory relative to the wealth of the defendant corporation. While the latter observation may be true in some cases, there is in fact a range of sanctions that may be imposed upon corporations (Clough and Mulhern 2002: Ch 5; New South Wales Law Reform Commission 2003: Chs 4 and 5). What follows is a brief outline of the types of penalties that could be attached to new offences punishing corporate abuse of human rights.
Adverse publicity orders — whereby the court may order an organisation, at its expense and in the format and media specified by the court, to publicise the nature of the offence committed, the fact of conviction, the nature of the punishment imposed and the steps that will be taken to prevent the recurrence of similar offences (United States Sentencing Commission 2003 § 8D1.4; Fisse and Braithwaite 1983; see also s 86D Trade Practices Act 1974 (Cth)).
Corporate probation — requiring a corporation to comply with certain undertakings and be subject to a period of supervision. These conditions may be remedial, such as clean up orders, or rehabilitative, such as requiring the implementation of an effective compliance program to help prevent future offending (United States Sentencing Commission 2003 §§ 8B1.2, 8D1.1 and 8D1.4(c); Fisse 1981; Rush 1987; see also s 86C(2)(b) Trade Practices Act 1974 (Cth)).
Fines — it is important that fines are set at a level that is not seen as derisory in comparison to the wealth of the corporation. This requires not only increased maxima, but also that the sentencing judge may take into account the wealth of the offender in deciding to impose a greater penalty. In addition, it should be possible to adjust the size of the relevant maximum according to the relative size of the corporation, based, for example, on assets, turnover or profit.
Incapacitation and restraint — while the ultimate sanction against a corporation is deregistration, this is unlikely to be imposed in the context of transnational corporations and tends to be reserved for those situations where the corporation has no legitimate business (United States Sentencing Commission 2003 § 8C1.1). Although it has been argued that, given the seriousness of some human rights violations, total dissolution of the corporation would be the only appropriate penalty (Amann 2001), the potential collateral effects, particularly on employees, are likely to be regarded as too severe for such a sanction to be contemplated. Potentially more suitable is the option of restraining the corporation’s business by ordering that it cease trading for a period of time or cease a certain part of its activities — most obviously, that part of its operations connected to the human rights abuse. This is most commonly done by withdrawing licences for particular activities — for example, export licences or foreign investment approval. Under US federal law, a corporation can be disqualified from contracting with the US Government as a result of indictment or conviction (Federal Acquisition Regulations 48 C FR 9.407) and health care providers may be excluded from participation in federal health care programs (Social Security Act 42 USC § 1320a-7 (2004)).
Reparation — although not strictly a penalty, reparation is now found as an addition to criminal sanctions in most jurisdictions. It is submitted that reparation should be encouraged in the context of corporate offenders, which are often better placed than individuals to ‘make amends’. Such a view is adopted by the US Sentencing Guidelines, which state that, as a general principle, an organisation should be required to take all appropriate steps to provide compensation to victims and otherwise remedy the harm caused or threatened by the offence (United States Sentencing Commission 2003 § 8B1.1).
It must be acknowledged that each of the advantages outlined so far could equally be achieved using a civil regulatory structure. Civil regulation is commonly adopted in the context of corporate illegality because it is in many ways more ‘efficient’, due to the lower standard of proof and less stringent procedural rules. However, no matter how similar civil regulation may be in terms of investigative powers and sanctions, the fact remains that the imposition of civil penalties does not carry the same stigma and moral condemnation as criminal sanctions. The fact that conduct is designated as criminal reflects the view that ‘society has refused on moral grounds to recognise the legitimacy of the benefit to the defendant in these cases ...’ (Coffee 1991: 195). To abandon criminal proceedings in favour of civil penalties, particularly for reasons of efficiency, is to deprive the community of its right to express its contempt for conduct that seriously breaches the standards set by society (Kahan 1996: 622).
It is therefore argued that denunciation of the relevant conduct is the primary justification for the imposition of criminal liability, as opposed to other forms of regulation. However, even in the case of human rights abuses, the choice of civil or criminal regulation is not always straightforward. So, for example, while it is difficult to see how serious human rights abuses such as those alleged in Unocal could be seen as anything other than criminal, it may be argued that less serious wrongful conduct could be subject to civil penalties. The appropriate form of regulation must be based on a careful consideration of the nature of the offence and the culpability of the offender, balanced against the need for effective and efficient enforcement. ‘This is not merely a question of formalism or even of the amount or type of damages available; rather it concerns the proper characterization of the kind of wrongs meant to be addressed ...’ (Woodlock J in Xuncax v Gramajo, at 183).
While there are those who subscribe to the particularly dismal view that the only purpose of corporate activity is to maximise profits and return value to shareholders, such a view does not preclude the imposition of the criminal law to corporations. Just as amoral individuals are subject to the criminal law to the same extent as those who feel remorse for their actions, an amoral corporation can be regulated by the state and have a sense of ‘morality’ imposed upon it. ‘As proponents of the amorality of profit disengage corporate policy from social concerns, they merely emphasize the role of government in setting the boundaries of acceptable corporate behaviour’ (Stephens 2002a: 63).
If we accept that corporations are to be made criminally liable for human rights abuses, the question naturally arises as to how an artificial entity is to be made liable for conduct that is, of course, committed by individuals. How is individual action to be translated into corporate responsibility? The imposition of criminal liability on a corporation does not, of itself, present a significant obstacle. The law has devised a number of models of corporate criminal liability covering the whole spectrum of corporate activity and culpability (Clough and Mulhern 2002). The greater challenge in the context of transnational corporations is presented by complex corporate structures. However, these challenges are not peculiar to the human rights area. Corporations routinely structure their operations in such a way as to minimise exposure under various regulatory regimes. Consequently, the law has already developed a number of mechanisms whereby corporations may be made liable for their involvement in the offence of other corporations or individuals. In general, these mechanisms fall into three categories:
• functional liability;
• complicity; and
• conspiracy.
While the common law is reluctant to look behind notions of separate corporate identity and limited liability, it must be remembered that these are simply legal fictions and are subject to legislative intervention. One way in which this may be done is by imposing liability in functional terms. By imposing liability upon corporations that ‘control’ other corporations, the controlling corporation may then be made liable for the conduct of the group (Blumberg 2001: 311–6). For example, under the United States Age Discrimination in Employment Act of 1967 29 USC § 623(h) (1994), where an employer controls a corporation incorporated in a foreign country, any prohibited practice by that corporation is presumed to be the conduct of the employer. The determination of whether an employer controls a corporation is based upon:
• interrelation of operations;
• common management;
• centralised control of labour relations; and
• common ownership or financial control of the employer and the corporation (also see Bank Holding Company Act of 1956 12 USC §1841).
Principle 2 of the UN’s Global Compact (2000) provides that corporations should ‘make sure that they are not complicit in human rights abuses’. The application of principles of complicity has the potential to increase greatly the liability of transnational corporations by punishing the corporation’s indirect involvement in the commission of an offence (John Henshall (Quarries) Ltd v Harvey; National Coal Board v Gamble; Cavendish Laboratories (Australasia) Ltd v Crafter). Liability may still attach, even though the principal offence was committed by a separate legal entity, such as a subsidiary or an independent contractor. Accessorial liability may also encompass offences that a company is incapable of committing in its own right. So, for example, while a corporation cannot generally commit a sexual offence such as rape, a corporation may be complicit in such an offence (Law Commission 1985: 23).
The essence of complicity is that the parent company was involved in ‘aiding and abetting, counselling or procuring’ the commission of a criminal offence by another person. The phrases ‘aiding and abetting’ and ‘counselling or procuring’ both refer to providing assistance to, and encouragement of, the principal offence. The distinction is essentially one of timing, with aiding and abetting generally applying to conduct at the time of the offence, whereas counselling and procuring precede the offence.
The application of principles of complicity to human rights abuses has been extensively discussed by Clapham in the context of corporate liability for complicity in human rights abuses by state actors (Clapham 2002: 241; Clapham and Jerbi 2001). Professor Clapham’s analysis provides a useful outline of the different ways in which a corporation may be said to be complicit in human rights abuses. In particular, he outlines three categories of complicity: direct; silent; and beneficial or indirect (Clapham and Jerbi 2001: 341–2).
Direct complicity occurs when a company knowingly assists in the human rights violation — for example, knowingly assisting the forced relocation of peoples in circumstances related to business activity (Clapham and Jerbi 2001: 342) or providing financial or material support to security forces known to engage in human rights abuses (Forcese 1999/2000: 185). Such conduct would clearly constitute complicity under domestic criminal law.
Silent complicity describes those situations where the corporation is said to assist or encourage the human rights violation through its inaction — for example, where a corporation is aware of human rights abuses but fails to raise any objection. In limited situations, silence or failing to act may amount to complicity under domestic criminal law. However, the silence must arise in circumstances whereby the silence of the accused constitutes tacit approval for the conduct of the principal offender, and the accused remains silent knowing this to be the case (Cave J in R v Coney, at 540; also see Clapham and Jerbi 2001: 347–9). Consequently, where the parent corporation is aware of a violation by a subsidiary or independent contractor, and that person or company is aware of the parent’s knowledge and is encouraged by its inaction, this could be said to amount to silent complicity so long as the parent corporation intended that its silence would encourage the commission of the principal offence.
Beneficial or indirect complicity suggests that a company benefits directly from human rights abuses committed by someone else. For example, the company may benefit from the suppression of peaceful protest against its business activities or the use of repressive measures while guarding company facilities (Clapham and Jerbi 2001: 347). In the absence of conduct more akin to direct or silent complicity, the mere fact of benefiting from a human rights violation is unlikely to constitute complicity under domestic criminal law.
A parent corporation could also be liable for conspiring with its subsidiaries or independent contractors. The essence of the offence of conspiracy is an agreement between two or more people to perform an unlawful act. A corporation may conspire with another corporation (Canadian Dredge & Dock Co v R), or even an individual (R v ICR Haulage Ltd; US v Investment Enterprises), and as companies within a corporate group are generally treated as independent entities, it is also possible for related companies to conspire with one another (Martin 1998).
The controversy surrounding corporate criminal liability for human rights abuses relates not so much to the nature of the offences, as corporations are routinely made criminally liable for much less serious offences than those under consideration. Rather, the controversy lies in imposing criminal liability in respect of conduct occurring outside the home jurisdiction.
Criminal jurisdiction is essentially based on one of four principles: the territorial principle, the nationality principle, universal jurisdiction and the protective principle (Council of Europe: European Committee on Crime Problems 1992: 451–3; American Law Institute 1988: § 402; Lanham 1997: 37–8). Of these, the most relevant to the extraterritorial liability of transnational corporations are the territorial and nationality principles.
There is a general presumption that criminal laws are local in operation and apply only to the sovereign territory of the state that enacted the law (Liangsiriprasert v United States of America; Equal Employment Opportunity Commission v Arabian American Oil Co). This ‘territorial principle’ is almost universally recognised and is the most common basis for the exercise of criminal jurisdiction (Council of Europe 1992: 446; American Law Institute 1988: §402; Lanham 1997: 30). The principle is based on two rationales. First, a nation’s criminal law is presumed to protect the citizens of that jurisdiction alone (Griffiths LJ in Liangsiriprasert v United States of America, at 244–5). Second, it would be an intrusion on the sovereignty of another country to extend the operation of criminal laws to conduct occurring within that country (Diplock LJ in Treacy v Director of Public Prosecutions, at 561).
Although narrowly framed, the territorial principle may be used as the basis for jurisdictional claims that are effectively extraterritorial (Council of Europe 1992: 447 and 462). Such claims may be based on ‘objective territoriality’, which allows a claim of criminal jurisdiction for conduct occurring outside the jurisdiction but which has a substantial affect in the jurisdiction (Podgor 2003: 123–5), or the ‘doctrine of ubiquity’, which allows a state to exert jurisdiction over an offence when only a part of the offence was committed within the jurisdiction (Council of Europe 1992: 446).
In the context of transnational corporations, this extended territorial principle is of particular relevance to offences of complicity and conspiracy. It allows a state to claim jurisdiction where only part of the conspiracy or complicity occurred within the jurisdiction, and even where the principal offence would not have occurred within the jurisdiction. For example, the offence of conspiracy may apply to an agreement to commit an offence that would occur wholly outside the jurisdiction, so long as the elements of the offence would be a crime if committed within the jurisdiction and one of the parties to the agreement is within the jurisdiction (Crimes Act 1958 (Vic), ss 321 and 321A).
The most appropriate basis for the extraterritorial application of criminal laws to transnational corporations is the ‘nationality’ or ‘active personality’ principle.4 This principle recognises that a state may extend the application of its criminal laws to its own nationals wherever they are in the world, and is generally based on two rationales (Council of Europe 1992: 448). First, in those countries that do not extradite their own nationals, it is a way of ensuring that the offences of those nationals do not go unprosecuted. This rationale could apply equally to transnational corporations that are incapable of being extradited. Second, other states see it as a means of ‘subjecting their own nationals to certain national norms and the protection of fundamental interests from attacks by a state’s own nationals from abroad’ (Council of Europe 1992: 448). Again, this rationale is clearly applicable in the context of ensuring the observance of international human rights norms by transnational corporations (American Law Institute 1988: § 402).
The nationality of a corporation is determined by its place of incorporation. While other determinants of corporate nationality have been suggested, the place of incorporation is preferred for reasons of ‘certainty and convenience’ (American Law Institute 1988: §402 comment c).5 The place of incorporation is easily established and avoids factual disputes as to the principal place of business and the like. For while a corporation may conduct operations globally, through branch offices and subsidiaries, each corporate entity can have only one place of incorporation and hence one nationality. A company incorporated in another jurisdiction is a new and distinct entity. This is especially important in the context of multinational enterprises which, although often described as entities in their own right, are merely ‘a group of corporations, each established under the law of some state, linked by common managerial and financial control and pursuing integrated policies’ (American Law Institute 1988: § 213 comment f). The nationality of each constituent corporation is therefore determined separately and not by reference to its parent or related corporations.
One of the primary concerns in relation to the assertion of extraterritorial criminal jurisdiction, or even the broad application of the territorial principle, is that it may give rise to competing jurisdictional claims (Council of Europe 1992: 465). However, while competing claims may cause difficulties in relation to natural persons, in the context of corporations any conflict is subject to the reality that there is no ability to arrest and extradite a corporation. Therefore, it is only the jurisdiction of incorporation that has the practical ability to proceed against the corporation, as ordinarily the trial of serious criminal offences cannot proceed in the absence of the defendant. Even if a jurisdiction were to return a verdict against the defendant corporation in absentia, such a verdict would only be enforceable against those assets of the corporation that remained in the jurisdiction. It could also give rise to arguments of double jeopardy if another jurisdiction were subsequently to try the corporation.
Nonetheless, even in relation to corporations, extraterritorial jurisdiction has the potential to intrude upon the sovereignty of other states by impacting upon the way in which those corporations operate in another jurisdiction, or if they operate at all. It is therefore reasonable that departures from the principle of territoriality be justified, ‘having regard to the need for international comity; that is mutual respect for the sovereignty of other States and refraining from unjustified interference in the internal affairs of those States’ (Council of Europe 1992: 459).
The principal justification for the imposition of extraterritorial criminal liability in the context of human rights abuses is ‘a manifestation of international solidarity in the fight against crime’ (Council of Europe 1992: 464). Given the absence of effective international regulation, and the difficulties often faced by host countries in regulating the activities of transnational corporations, the home jurisdiction is arguably in the best position to control the conduct of those corporations (Stephens 2002a: 49). This may apply even where the harm caused is in another jurisdiction (Diplock LJ in Treacy v Director of Public Prosecutions, at 561–2).
The principal contrary argument is that such legislation is paternalistic and arrogant in seeking to impose external values on another sovereign country. However, such arguments do not withstand closer analysis.
First, the argument that such legislation involves the imposition of external, presumably ‘Western’, values is a question of degree. Many of the human rights obligations that are sought to be imposed are derived from international instruments, such as the International Covenant on Civil and Political Rights, which are almost universally recognised or, at the very least, have a wide degree of international acceptance. While individual countries may choose not to recognise a particular human rights obligation, it is neither arrogant nor patronising for another country to seek to ensure that its own nationals abide by international norms wherever they may be in the world (Paul 2001: 290).
Second, it is of course false to suggest that such legislation intrudes upon the sovereignty of another country. The host country is not required to abide by particular standards and there is no jurisdiction over the nationals of that country. Nonetheless, there is some force in the argument that the regulation of extraterritorial corporate activity has the potential to remove greatly needed economic activity from a developing country by making it a less desirable country in which to invest. In this de facto sense, such laws may be said to intrude upon the sovereignty of another country. However, such arguments can only go so far. While in some cases it may be unreasonable to effectively impose standards that a wealthy developed country can afford but a developing country cannot, there are equally some offences that can never be justified by arguments of economic necessity. There is no clear line of demarcation and each legislature must decide whether it is acceptable for its nationals to engage in conduct overseas that would clearly be prohibited in the home jurisdiction. This decision must be made against a background of trying to balance moral and economic imperatives that are, in many cases, incommensurable. However, once that decision is made it should apply equally to all jurisdictions, so the only ‘disadvantage’ will be suffered by those countries that promote, or at least allow, the particular human rights abuse to be committed.
Concerns that extraterritorial criminal laws may intrude upon the sovereignty of another state could also be addressed by providing for a defence where the conduct was lawful, or at least not unlawful, in the host jurisdiction. In such cases it may be argued that a corporation should not be made criminally liable where it is simply complying, or at least not contravening, the law of the country in which it is operating. Such a defence also takes into account cultural differences and helps to resist accusations of cultural imperialism.
Whether a local law defence should be recognised will depend upon the nature of the offence and the laws of the host jurisdiction. In the case of extremely serious offences, particularly universal crimes, it is argued that no local law defence should be recognised even where such conduct would be lawful in the host country. In the context of less serious offences, there may be an argument that the importance of respecting the sovereignty of another country outweighs the need to ensure that nationals of the home jurisdiction do not engage in certain conduct overseas.
A distinction may be drawn depending upon whether or not the relevant conduct is regulated in the host jurisdiction. In circumstances where the host country has no laws regulating the prohibited conduct, it may be argued that a local law defence should be recognised. The right not to prohibit certain conduct is as much an exercise of sovereignty as enacting specific laws or, at the very least, indicates a lack of concern on the part of the host jurisdiction. Such a defence is found in ss 15.1–15.3 of the Criminal Code Act 1995 (Cth), which provide that in certain circumstances it is a defence to a charge if the conduct constituting the alleged offence occurs wholly in a foreign country and there is not in force in that foreign country a law that creates an offence that corresponds to the offence charged.
Alternatively, it may be argued that no local law defence should be recognised in such circumstances, as the transnational corporation would not be contravening the laws of the host country by complying with the requirements of its home jurisdiction. This is the position of the US Department of Justice and Federal Trade Commission’s Antitrust Enforcement Guidelines for International Operations (1995) §3.32. Although a defence of ‘foreign sovereign compulsion’ is recognised, it is not recognised if it is possible for the party to comply with both the foreign law and the US antitrust laws.
The situation is different, however, where the laws of the host country effectively govern the relevant conduct. This may arise where the host country’s laws specifically recognise the conduct to be lawful, or where local law effectively requires the corporation to act in a manner that would be unlawful in the home jurisdiction. For example, where the host country forbids women to be employed, any corporation that chooses to operate there will necessarily discriminate against women (Joseph 1999:189).
While such circumstances may loosely be described as ‘compulsion’ (Joseph 1999: 189), they do not constitute compulsion in any sense known to the criminal law. A corporation is not ‘compelled’ to act unlawfully in such situations; it is simply faced with an unpalatable choice. It can either breach the laws of the host jurisdiction, breach the laws of the home jurisdiction or cease to operate in that country. While there may be strong commercial imperatives to remain, the justification for a local law defence in such circumstances lies not in the notion of compulsion, but in deference to the law of the host country. An appropriate example can be found in the Foreign Corrupt Practices Act of 1997 15 USC §§ 78m-78ff, which provides that it is a defence to certain charges under the Act if the alleged conduct was lawful under the written laws and regulations of the foreign country (15 USC § 78dd-1(c)).
The potential for extraterritorial application of criminal laws to impact actually or symbolically upon the sovereignty of another jurisdiction may give rise to diplomatic and foreign policy concerns (Ramsey 2001: 364–79). One way in which such concerns may be addressed is by a requirement that the approval of the executive government must be obtained before launching such a prosecution. This allows broader political considerations to be taken into account in addition to normal prosecutorial considerations.
Such authorisation may be required under prosecutorial guidelines, as in the United States Attorneys’ Manual § 9-47.110, which provides that certain prosecutions for violations under the Foreign Corrupt Practices Act must not be commenced without express authorisation of the Criminal Division of the Department of Justice. Alternatively, executive approval may be a legislative requirement, as under s 16.1 of the Criminal Code Act 1995 (Cth), which provides that the Attorney-General’s written consent is required for the prosecution of certain offences where the alleged conduct occurs wholly in a foreign country.
While in many cases the host government may itself be complicit in the alleged human rights abuses, this will not always be the case and lack of prosecution in that jurisdiction may primarily be due to a lack of resources (Stephens 2001: 403). Under the ‘representation principle’, extraterritorial jurisdiction may be justified in such circumstances on the basis that jurisdiction is exercised on behalf of another state (Council of Europe 1992: 452). Therefore, criminal provisions could be supported by mechanisms allowing for a host jurisdiction to request formally that the home jurisdiction exercise extraterritorial jurisdiction over conduct occurring within the host jurisdiction.
In considering whether extraterritorial criminal liability should be imposed, it is important to stress that in appropriate cases legislatures are perfectly willing to legislate extraterritorially. An example that is particularly apposite in the corporate context is the Foreign Corrupt Practices Act §§ 78dd-1, 78o (1994), which allows for both civil and criminal enforcement against individuals and corporations in respect of bribery of foreign officials, even where the conduct occurred extraterritorially.
The Act was first passed in 1976, in response to findings that there was widespread bribery of foreign officials by US corporations. However, it appears that this was conceived not so much as a moral or ethical issue, but as an issue having significant implications for US foreign policy (Breed 2002: 1029). Significantly, it was also seen that bribery could damage the long-term interests of US corporations and this encouraged US corporate and political interests to lobby for an international response (Breed 2002: 1035). The US was then instrumental in lobbying for the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions, the Inter-American Convention Against Corruption and the European Union Convention on the Fight Against Corruption Involving Officials of the European Communities or Officials of the Member States of the European Union, 1977 (Blumberg 2001: 315).
Another example is found in s 270 of the Criminal Code Act 1995 (Cth), which creates a number of offences relating to slavery. Of particular relevance is s 270.3, which provides that a person (including a corporation) who:
... whether within or outside Australia, intentionally:
(a) possesses a slave or exercises over a slave any of the other powers attaching to the right of ownership; or
(b) engages in slave trading; or
(c) enters into any commercial transaction involving a slave; or
(d) exercises control or direction over, or provides finance for:
(i) any act of slave trading; or
(ii) any commercial transaction involving a slave;
is guilty of an offence.
Such provisions provide clear examples of the sort of legislative provisions that may be enacted imposing extraterritorial criminal liability upon transnational corporations. This is reflected in cll 7 and 10 of the Corporate Code of Conduct Bill 2004 (Cth), which seek to give extraterritorial operation to a number of Commonwealth Acts.
Having established that corporations may be made criminally liable in respect of certain conduct committed extraterritorially, the difficult issue arises as to which human rights obligations should be imposed on transnational corporations. The potential spectrum is wide, reflecting the whole range of potential human rights obligations [Breed 2002: 1008–11; Paust 2002: 817–9.]
It is not the purpose of this article to advance a view as to which human rights obligations should be subject to domestic criminal law and which should not. This is a complex issue that must be thoroughly debated, although examples may be found in the UN Norms and Pt 2 of the Corporate Code of Conduct Bill 2004 (Cth). However, two important points should be made. First, there are certain human rights abuses that are jus cogens and cannot be tolerated in any circumstances — for example, the right to freedom from slavery and torture. Involvement in such abuses should not merely be unlawful; it should be criminal wherever it occurs. Second, in the context of domestic criminal law the term ‘human rights’ may be unnecessarily complicating. In the literature, the question is understandably framed as ‘to which human rights obligations should transnational corporations be subject?’. However, the question conceals an obvious point, which is that transnational corporations are already subject to human rights obligations within their home jurisdiction. Put another way, corporations are subject to some form of public regulation across the entire spectrum of their operations, including consumer protection, workplace safety, environment protection and anti-discrimination laws. Many of these offences overlap with what, in an international context, would be described as ‘human rights obligations’. In the domestic context, they are simply crimes or, at the very least, civil wrongs subject to public enforcement.
This is not to suggest that all existing obligations should be imposed on transnational corporations operating extraterritorially. It is to emphasise that the debate is not about whether corporations should be subject to such obligations; in the majority of cases, they already are. The debate is about whether those obligations should extend to conduct occurring outside the jurisdiction.
While it may be argued that transnational issues should ideally be dealt with at a truly international level, such a possibility is at present remote. Domestic criminal liability, however, may be imposed immediately. Nonetheless, international acceptance is central to the success of domestic legislation seeking to regulate transnational activity. As was the experience with the Foreign Corrupt Practices Act (discussed above), the impact of such legislation will be greatest where it gains international acceptance with mirror obligations imposed by countries worldwide. In any event, a ‘theory of responsibility under international law in no way precludes, but rather invites and assumes, a role for States and their citizens (individual and corporate) in developing appropriate norms and enforcement mechanisms’ (Ratner 2001: 451).
International agreement has a number of important advantages in the regulation of transnational activity. First, it helps to resist accusations of self-interest or imperialism, which may be raised where one or a few developed countries act in isolation. Second, in the domestic context it helps to limit perceived or actual problems of competitive disadvantage. The more uniform domestic standards are, the less corporations are able to evade regulation by transferring their operations to countries with weaker regulatory standards (Stephens 2002a: 82). Third, facilitating the drafting of laws in such a way that they take into account jurisdictional differences helps to address the danger that local regulation will ‘respond in an ad hoc manner, driven by domestic priorities or by legal frameworks that are likely to differ significantly across the planet’ (Ratner 2001: 448).
Any strategy for achieving international agreement in relation to the regulation of transnational corporations must, however, take into account jurisdictional differences, not just in terms of applicable law but also in terms of legal culture (Stephens 2002b). For example, in the US there is a much stronger tradition of allowing individuals to bring civil actions in respect of conduct that would be regulated by an executive agency in other jurisdictions. Some jurisdictions do not recognise corporate criminal liability at all, and in those that do, some may prefer to impose civil or administrative sanctions rather than criminal (Stephens 2002a: 65–6; 2002b: 44–6).
Although the focus of this article has been on criminal liability, such differences must be recognised and acknowledged if international agreement is to be achieved. As stated in art 10 of the UN Convention Against Transnational Organized Crime:
Each State Party shall adopt such measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for participation in serious crimes involving an organized criminal group ... Subject to the legal principles of the State Party, the liability of legal persons may be criminal, civil or administrative.
We are seeking to prevent ... the perpetuation of a double standard under which most foreign corporations, as well as their home governments, operate. There is one set of standards — legal and moral — in domestic operations; but a completely different and much lower set of standards when these same entities are operating abroad, particularly in much poorer countries. This dichotomy is wrong, and the governments in the industrialized world have the means of preventing it; by applying extraterritorially many of the domestic and international standards that are adopted and enforced at home. [Gibney and Emerick 1996: 145.]
This article has sought to demonstrate that it is both possible and desirable to impose domestic criminal liability upon transnational corporations in respect of their involvement in human rights abuses outside their home jurisdiction. It has been argued that in the context of serious human rights abuses, society’s condemnation can only be expressed effectively through the imposition of criminal law. Criminal liability should therefore form part of an integrated response to the conduct of transnational corporations. That liability must encompass the parent corporation, not only because of the difficulty of pursuing offenders in the host jurisdiction, but also because of the culpability of the parent corporation itself. Principles of separate corporate identity cannot be allowed to conceal the fact that these operations are ultimately controlled by, and for the benefit of, the parent corporation. It has been demonstrated that the criminal law has developed numerous models of liability for attributing fault to the parent corporation, including where the alleged conduct occurs extraterritorially. In short, this article has demonstrated that there is no legal impediment to the imposition of extraterritorial criminal lability on transnational corporations. In doing so, it is hoped that the debate can progress from whether such liability can be imposed, to asking why it should not.
To those who might say that criminal liability should not be imposed on transnational corporations, the Foreign Corrupt Practices Act provides the most salient example of what can be achieved when it is seen to be in the national and/or corporate interests. Here we have a situation where unconscionable conduct, occurring overseas, was seen to impact negatively on US foreign policy and on US business interests. As a result, the US government and corporate interests lobbied not only for extraterritorial US legislation, but also for an international response. In doing so they achieved international agreement, backed by legislation, outlawing the bribery of foreign officials. The challenge is to see the same leadership shown in protecting the interests of some of the most vulnerable from exploitation by some of the most powerful.
* Senior Lecturer, Faculty of Law, Monash University. I am grateful to Adam McBeth, Professor Sarah Joseph, Professor David Kinley and the anonymous referee for their helpful comments; Jennie Lester and Owen Griffiths for their research assistance; and the Castan Centre for Human Rights Law, Monash University, for research funding.
1 In this article, the term ‘transnational corporations’ is adopted, although terms such as ‘multinational corporations’ and ‘multinational enterprises’ are also found in the literature. The focus of this article is on corporations rather than other forms of organisational entities that, in the absence of statutory provision to the contrary, are not subject to criminal liability in their own right.
2 The higher figure is based on a comparison of sales with Gross Domestic Product (GDP), while the lower is adjusted to allow for the ‘value added’ nature of GDP as opposed to sales.
3 The US Bill was referred to the House Subcommittee on International Monetary Policy and Trade on 24 August 2001, while the Commonwealth Bill was introduced after the Corporate Code of Conduct Bill 2000 (Cth) was rejected by the Commonwealth Parliamentary Joint Statutory Committee on Corporations and Securities in 2001; see Parliament of the Commonwealth of Australia 2001.
4 This is in contrast to the less common ‘passive personality principle’, whereby extraterritorial jurisdiction is based upon the nationality of the victim.
5 Other suggested bases including the siége local (the principal place of management), the locality of the principal shareholder or the principal place of business in the state.
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