II. Criminal justice: international and national frameworks

The fight against international corruption: A call for a global approach in corporate criminal liability law and procedure

Introduction: The need for a global approach in corporate criminal liability law

The fight against internal and international corruption is a fundamental aspect of the political action of countries interested in promoting not only the broadest protection of human rights but also civil, economic and social progress.[1]

Indeed, there is no doubt that high levels of internal corruption result in malfunctioning democracy and democratic institutions. In particular, the proliferation of corruption, on the one hand, determines a low standard of protection of fundamental rights and freedoms, and, on the other hand, reduces the ability of a legal system to ensure optimal conditions for the development of the capitalist economy (Cantone, 2018). It is apparent that these factors can hinder the progress of the social community and undermine the country’s credibility and competitiveness in the global arena.

Jurists, social scientists in general and policymakers of market economy countries unanimously agree on the need to elaborate common policies aimed at combating the phenomenon of international corruption (see Hess and Dunfee, 2000; Del Vecchio and Severino, 2014; Hough, 2017). These policies would work alongside national measures adopted by each legal system to tackle internal corruption and they would be an essential means to protect international competition and free trade and, ultimately, to foster economic growth and development.[2]

In light of the globalisation of markets and the ever-increasing integration and financialization of economies (as demonstrated by the recent financial crisis of 2008-2012), it is undeniable that international corruption is a factor which seriously contributes to distortion of competition between States and companies having a transnational dimension.

Competitors operating in the global market tend to emulate each other. This creates a cascade effect which can lead them to overcome (or, if necessary, circumvent) the barriers posed by national regulator)' frameworks and to adopt the development models, the company processes and, more generally, the business strategies which are deemed to grant a competitive advantage on the basis of a mere cost-benefit analysis. Competitors emulate such commercial practices or organisational and behavioural models regardless of the fact that their conduct does not strictly comply with the standards established by national legislation or supranational sources of hard and soft law in order to ensure the fair management of economic processes and to limit corrupt practices.

Therefore, the issue at hand has undoubtedly an impact not only on international politics and relations between States but also on the governance of economic trends, which are likely to affect the future of individual companies and consumers and to influence (by directing) the development models of entire business sectors and areas of civil life.

When considered as a practice resulting into an unlawful competitive advantage for companies or economic actors operating in the world stage, international corruption is one of the major obstacles to the exercise of individual and economic liberties and political rights, as well as a serious threat to the integrity of the markets, the protection of competition in the global economy and the fair development of free trade.

The starting point of the reasoning outlined in this chapter is thus that the main targets of international corruption are the integrity of the competitive mechanism and, in a wider perspective, the proper functioning of the global economy. As a consequence, the purpose of the following reflections is to emphasise the urgent need to concentrate all the efforts to fight corruption on establishing a framework of shared rules in the field of corporate criminal liability.

Only such an approach, at least within the context of the democratic countries having a market economy and governed by the rule of law, could actually implement the existing law enforcement tools, as it would increase the possibility for national judicial systems to prosecute and hold large economic organisations with complex structures and operating in international markets responsible for their misconduct.

Indeed, it should not be overlooked that these entities, especially those of larger dimensions and those operating in different countries, are the main protagonists of corruption practices in the global arena.

It is just because of the leading role played by the earlier-mentioned organisations in the economy that they are most exposed to the risk of being disadvantaged by unfair competitive practices (such as those deriving from the use of corruptive methods by competitors). It follows that they could easily decide to resort to the same expedients, either with a view to filling a competitive gap which might otherwise jeopardise the very existence of their organisation or, in turn, with the aim of gaining advantages that could improve the company’s position in the international market.

In other words, the various forms of corruption are mostly carried out within companies, corporations and other legal entities. Therefore, the main reason for the introduction of corporate criminal liability is precisely the need to provide effective means of combating economic crime (Beale, 2009).

Indeed, corporate criminal liability changes corporations’ approaches to fighting corruption and promotes a new culture within these complex structures (De Maglie, 2002). One of these is the social antidote to corruption, which consists in spreading best practices in the business community in accordance with criminal law. It is necessary that companies and corporations consider abiding by laws and regulations as the standard way of doing business and corporate criminal liability is a crucial instrument to achieve this goal and compel companies and corporations to become those primarily responsible for combating corruption.

  • [1] As recently observed by the president of the Italian National Anti-Corruption Authority, MrRaffaele Cantone, during his speech at the Austral University of Buenos Aires, as part of theconference The Criminal Crime to the Phenomenon of Corruption, the World Bank has recentlycalculated that in corrupt countries a business grows, on average, 25% less than a companyoperating in a context with low levels of corruption. In this regard, see Cantone, 2018.
  • [2] The importance of such an approach clearly emerges from the incipit of the OECD Foreign Bribery Report 2014: ‘Corruption, and the perception of corruption, erodes trust ingovernments, businesses and markets. In the aftermath of the greatest financial crisis of ourtime, we need to rebuild that trust more than ever before. Corruption also underminesgrowth and development. On the one hand, businesses forego innovation and competitiveness by participating in bribery. On the other hand, individuals within governments divertfunds meant for the promotion of the well-being of the people to be used for their ownpersonal gain. By ending impunity and holding corrupt people to account, we can begin torestore faith in our institutions and industries’ (OECD, 2014). In this regard, see Mauro,1995; Brademas and Heiman, 1998; Carlin et al., 2006; Fisman and Svensson, 2007; Johnson et al., 2011; Shirazi, 2011.
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