I recently had the chance to learn a bit more about the recent reforms in the Spanish Penal Code, which establish corporate criminality for a number of acts for the first time ever. Until now, Spain has been one of a dwindling number of countries (along with Germany, Italy, and Russia) that has resisted subjecting corporations to criminal law.
The list of crimes covered includes environmental crimes, corruption, terrorism, human trafficking, drug trafficking, and money laundering, as well as wide variety of economic crimes. Businesses are criminally liable for the acts of their directors, managers, and legal representatives that are committed on behalf of the company, and for the acts of employees that are committed in the course of their employment and on behalf of the company, if the company did not exercise reasonable control over the employee under the circumstances.
The criminal liability established here gives rise to concurrent civil liability as well.
The articles and documents I’ve read don’t give me much of a sense of how far criminal jurisdiction extends – for example, whether a Spanish company can be prosecuted in Spain for committing one of these crimes abroad. (It may depend on the crime — it’s clear that the anti-corruption provision applies to bribery of foreign officials, but I’d imagine that the environmental provisions apply only to violations of Spanish environmental law, which probably doesn’t have extraterritorial effect.) And for those parts of the new reform that do apply extraterritorially, it’s unclear to me whether and under what circumstances Spanish companies may be held responsible for the actions of their foreign subsidiaries.
There are two aspects of the Spanish reforms that I find particularly exciting. First, they represent at least a partial fulfillment of Spain’s obligations under international treaties to prosecute corporate involvement in international crimes like human trafficking and bribery. And second, they establish corporate criminality that does not rely on the ability to identify individual, physical persons who are also criminally liable. In other words, a corporation can be convicted even is there is no single human being connected with the company who is guilty of a crime. This recognizes that corporate criminality can be different in quality from individual criminality; it can arise from a corporate culture of impunity and derive from group dynamics and incentives that are impossible to pin on a single physical person. Many physical persons can play some role in a corporate crime – with varying levels of moral or criminal culpability – but it is the corporation itself, as an entity, which is responsible for the overall act.
The reforms are a bit disappointing, though, in that they omit from the corporate criminality list the international crimes that Spain has committed to prosecuting under the Rome Statute of the International Criminal Court: war crimes, crimes against humanity, and genocide. This is not too surprising, perhaps, given the Spanish government’s recent moves to rein in the ability of courts to prosecute human rights crimes committed abroad and to censure Baltasar Garzón, the Spanish judge who opened criminal investigations into alleged human rights abuses by foreign officials, including Augusto Pinochet, the Argentine dictatorship, and several U.S. Justice Department officials associated with mistreatment of detainees. I can only hope that these reforms are just a first step towards normalizing the status of corporations within Spanish criminal law, and that the omissions will be quickly rectified.