An Act of Corporate Loathing

Bookmark and Share | Ken Phillips
Australian Financial Review 18th December, 2003

Late last month the Australian Capital Territory passed the first corporate manslaughter legislation in Australia setting a precedent that will be a potential model across the country. Now any organization operating in the ACT needs to be aware of its increased criminal liability if a death occurs when work is done for it.

The legislation applies to businesses, churches, governments, unions, not for profit organizations, volunteer associations, clubs and any organization that requires work to be done. If an employee, a contractor, an outworker or a volunteer dies while doing work for an organization, defined under a broad definition of 'employer' the organization itself can be found to have committed a criminal act. Penalties against the employer include fines and/or jail.

The legislation creates two expanded streams of criminal liability. The first is against 'employers'. The second is against 'senior officers' which includes executives, government ministers and department heads, and anyone in a position where they take part in decisions affecting the functioning of an organization. A senior officer is guilty of industrial manslaughter if their conduct was reckless or negligent or if they failed to do something that would have prevented the death.

The Crimes (Industrial Manslaughter) Amendment Act takes effect on 1 March 2004 and comes after the failed Victorian attempt in 2001 to create corporate criminality. The ACT government says they have fixed flaws in the Victorian approach which included a process where on finding a corporation guilty of criminality, a senior officer would go to jail on the corporations behalf. This pathway to jail does not apply in the ACT legislation where a senior officer only goes to jail if they had directly committed an offence.

This direct link between criminality and an individual's actions is consistent with core ideas of criminal justice. On this basis the ACT legislation may not cause concern. Surely if someone's criminal behaviour has lead to a death they should go to jail.

But although the ACT legislation is a significant improvement on the Victorian approach its real problem rests in why the legislation is needed. What was so seriously wrong with existing ACT criminal law that it became necessary to expand criminality so that groups, however defined, are said to be capable of criminal acts?

The many forms of 'employers' caught by the Act are groups of people who have formed a legal structure for a common purpose. The ACT government says that these groups, which can be religious, ethnic, business or any other, can engage in collective criminal behaviour and their culture may be to blame. What drives this view of collective criminality?

The answer is found in a quirk in the ACT legislation which allows for groups which are guilty of criminality to be subject to a process of court ordered public humiliation. This may include orders to publicize an offence and undertake community projects. Surprisingly, this applies only to corporations but not to government or community groups.

The ACT legislation aims to attack only corporations by humiliating them and damaging their brand name. The idea is that corporations' fear of brand name damage is so high that the risk of public humiliation will cause a shift in corporate cultures. But why only corporations?

The answer lies within the current deep seated obsession with demonizing corporations who some see as big, bad, ugly and anti-community. This view maintains that corporations need humiliation and disciplining.

But will this approach lead to fewer workplace deaths? If corporations are uniquely bad perhaps yes. But what is forgotten is that the human dynamics inside organizations that lead to accidents and workplace deaths, are common within any formalized group structure. People working in churches and governments behave on the safety front no differently to people working in corporations.

In this respect the ACT legislation is naïve but also dangerous. In turning an anti-corporate sentiment into criminal legislation they have collapsed the idea of criminal justice. Individuals act criminally, not collectives. What is dangerous, is that this invention of collective criminality is not driven by principles of justice but rather prevailing political perceptions of which collective is in favour and which is out.