UNIVERSITY OF PADUAUNIVERSITY OF PADUAFACULTY OF ENGINEERING FACULTY OF ENGINEERING

INTERNATIONAL ENVIRONMENTAL LAWINTERNATIONAL ENVIRONMENTAL LAW Second Cycle Degree in Environmental Engineering Second Cycle Degree in Environmental Engineering

2009-20102009-2010

EIGHTH PART: EIGHTH PART:

CORPORATE GOVERNANCE CORPORATE GOVERNANCE ANDAND

ENVIRONMENTAL CRIMESENVIRONMENTAL CRIMES

Ilaria MartinelliIlaria Martinelli

General IndexGeneral Index

• Short story of the corporate Short story of the corporate liability for environmental liability for environmental crimescrimes

• Italian corporate liability Italian corporate liability disciplinediscipline

• New environmental crimes New environmental crimes in the Penal Code and for in the Penal Code and for corporationscorporations

Part IPart I

Short story of theShort story of the

corporate liability corporate liability

for environmental for environmental crimescrimes

Evolution of Corporate Evolution of Corporate liability liability

Seveso (I)Luglio 1976

Beek (NL)Novembre 1975

Bhopal (India)Dicembre 1984

Mexico City (MEX)Novembre 1984

Basel (CH)Novembre 1986

Elkins Act 1903

River Rail Road Co. Case 1909

TB&G Railway Co. Case 1842

GNE Railway Co. Case 1846

2008/99/EC Directive 2008

Societas delinquere (et puniri) non potest

New Penal Code1994

Evolution of Corporate Evolution of Corporate liability liability

River Rail Road Co. Case (1909) about Elkins Act (1903) River Rail Road Co. Case (1909) about Elkins Act (1903)

““While the law should have regard While the law should have regard to the rights of all, and to those to the rights of all, and to those of corporations no less than to of corporations no less than to those of individuals, it cannot those of individuals, it cannot shut its eyes to the fact that the shut its eyes to the fact that the great majority of business great majority of business transactions in modern times transactions in modern times are conducted through these are conducted through these bodies (...) to give them bodies (...) to give them immunity from all punishment immunity from all punishment because of the old and exploded because of the old and exploded doctrine that a corporation doctrine that a corporation cannot commit a crime would cannot commit a crime would virtually take away the only virtually take away the only means of effectually controlling means of effectually controlling the subject-matter and the subject-matter and correcting the abuses aimed at” correcting the abuses aimed at” (Supreme Court USA).(Supreme Court USA).

““Se la legge deve avere riguardo per i Se la legge deve avere riguardo per i diritti di tutti, e per quelli delle diritti di tutti, e per quelli delle corporationscorporations non meno per quelli non meno per quelli dei singoli, non può chiudere gli dei singoli, non può chiudere gli occhi sul fatto che la grande occhi sul fatto che la grande maggioranza delle transazioni maggioranza delle transazioni economiche nei tempi moderni economiche nei tempi moderni sono compiute a mezzo di queste sono compiute a mezzo di queste entità (...) accordare loro immunità entità (...) accordare loro immunità da ogni pena, nelle attuali da ogni pena, nelle attuali condizioni, a causa della vecchia e condizioni, a causa della vecchia e superata dottrina secondo cui una superata dottrina secondo cui una corporationcorporation non può commettere non può commettere un reato, comporterebbe un reato, comporterebbe virtualmente l'eliminazione dei soli virtualmente l'eliminazione dei soli mezzi per un controllo effettivo di mezzi per un controllo effettivo di questo tipo di criminalità e per la questo tipo di criminalità e per la correzione degli abusi accertaticorrezione degli abusi accertati” ” (Corte Suprema USA).(Corte Suprema USA).

Evolution of Corporate Evolution of Corporate liability liability

Debate in France Debate in France

before the New penal Codebefore the New penal Code

(1994)(1994)I've never seen

a corporate going to the restaurant

... But I've often seen it

paying

The EU structureThe EU structure

European UnionEuropean UnionMaastricht Treaty

I pillarEuropean Community

EC Treaty(Council, Commission, Parliament)

III pillarPolice and Judicial

Co-operation in Criminal Matters

VI Titles of EU Treaty

II pillarCommon Security,

Defence Policy and Internal Security

Case C-176/03Case C-176/03Commission of the European Commission of the European

Community vsCommunity vsCouncil of the European UnionCouncil of the European Union

“As to the content of the framework decision, Article 2 establishes a list of particularly serious environmental offences, in respect of which the Member States must impose criminal penalties. Articles 2 to 7 of the decision do indeed entail partial harmonisation of the criminal laws of the Member States, in particular as regards the constituent elements of various criminal offences committed to the detriment of the environment. As a general rule, neither As a general rule, neither criminal law nor the rules of criminal procedure fall within the Community’s criminal law nor the rules of criminal procedure fall within the Community’s competence .competence . However, the last-mentioned finding does not prevent the Community the last-mentioned finding does not prevent the Community legislaturelegislature,, when the application of effective, proportionate and dissuasive criminal penalties by the competent national authorities is an essential measure for combating serious environmental offences, from taking measures which from taking measures which relate to the criminal law of the Member States which it considers necessary in relate to the criminal law of the Member States which it considers necessary in order to ensure that the rules which it lays down on environmental protection order to ensure that the rules which it lays down on environmental protection are fully effectiveare fully effective”. ”.

Part IIPart II

Italian corporate Italian corporate liability liability

disciplinediscipline

Evolution in ItalyEvolution in Italy

1. environment protection2. trough the criminal law3. against corporate bodies

?

Environmental damage Act, n. 349 - 1986

Corporate liability Actn. 231 - 2001

“Mastella” Bill2007

“Merli” Actn. 319 - 1976

“Antismog” Actn. 615 - 1966

The essential elements The essential elements to have a criminal liabilityto have a criminal liability

• a crimecrime -> a law that says that a conduct is not accepted from the society and need a deep punishment

• a factfact -> intention in not sufficient

• a criminalcriminal -> subject individuate

• a victim victim -> not always necessary

• the responsibility responsibility -> the criminal has to be guilty. Not guilty if he's compos mentis or of sound mind (incapace di intendere e volere) or justified

1. crime 1. crime

crimes committed against Public Administration (i.e. fraud against the State or other Governmental Agency; theft of public funds; fraud for obtaining public financings; bribery);

crimes concerning the forgery of coinages, banknotes and duty stamps;

corporate crimes (so called “white-collars” crimes, as misrepresentation of company accounts; obstructed control; fictitious capital formation; fraudulent restitution of contributions; etc.);

crimes committed with purposes of terrorism;

crimes against the fundamental rights of freedom;

crimes against person, committed in violation of safe working practices and the protection of hygiene and health at work;

Crimes concerning receiving, recycling and use of money, goods or usefulness of unlawful origin;

crimes of organized crime;

etc...

2. criminal2. criminal

managers or executives of the legal

entity;

their subordinates and other subjects

acting on behalf of the legal entity (as the

agents)

3. the responsibility 3. the responsibility

Mechanism of attribution:Mechanism of attribution:

the unlawful conduct of the material the unlawful conduct of the material author has been carried out author has been carried out in the in the interest interest of or to theof or to the benefit benefit of the of the entity concerned entity concerned

Which is the corporate guilty?Which is the corporate guilty?

Organizational negligence or Organizational negligence or management failuremanagement failure vs vs compliance compliance programprogram

Systematic use of the entity for Systematic use of the entity for unlawful aimsunlawful aims

Exclusion of Exclusion of responsibilityresponsibility

The company is not liable if it can demonstrate that: The company is not liable if it can demonstrate that:

• prior to the commission of the crime, its governing body has prior to the commission of the crime, its governing body has adopted and effectively implemented adopted and effectively implemented compliance programscompliance programs; ;

• a a body of the company body of the company with autonomous powers of initiative with autonomous powers of initiative and control has been vested with the task of and control has been vested with the task of monitoring the monitoring the functioning of and compliance functioning of and compliance with the models; with the models;

• the offenders have the offenders have fraudulently fraudulently avoided compliance with the avoided compliance with the models; models;

• the supervisory body has the supervisory body has not omitted to exercise oversight not omitted to exercise oversight or or has not exercised inadequate oversight. has not exercised inadequate oversight.

4. sanctions4. sanctions

- pecuniary sanctions - pecuniary sanctions (apply in any case)(apply in any case); ;

- prohibitive sanctions:- prohibitive sanctions:disqualification from exercise of the whole activity (i.e., disqualification from exercise of the whole activity (i.e., suspension or revocation of licenses or authorizations suspension or revocation of licenses or authorizations necessary for the performance of the activity);necessary for the performance of the activity);

suspension or revocation of authorizations, licenses or suspension or revocation of authorizations, licenses or concessions relating to the activity specifically concerned by concessions relating to the activity specifically concerned by offense committed; offense committed;

prohibition to negotiate with the Public Administration prohibition to negotiate with the Public Administration except for obtaining a public service. The prohibition can be except for obtaining a public service. The prohibition can be limited to particular types of contracts or to certain limited to particular types of contracts or to certain departments or branches of the Public Administration; departments or branches of the Public Administration;

exclusion from grants, loans, contributions or subsidies and exclusion from grants, loans, contributions or subsidies and possible revocation of any of them already granted; possible revocation of any of them already granted;

prohibition of advertisement of goods or services. prohibition of advertisement of goods or services.

4. sanctions4. sanctions

+ Confiscation+ Confiscationof the price or profit of the crime, except for the part that can of the price or profit of the crime, except for the part that can be returned to the damaged party and save for the rights be returned to the damaged party and save for the rights acquired by third parties in good faith. acquired by third parties in good faith.

+ Publication of the Judicial Decision+ Publication of the Judicial Decisionwhen a disqualification has been imposed on the entity. when a disqualification has been imposed on the entity. The publication must be made in one or more newspapers at The publication must be made in one or more newspapers at the entity’s expense as well through posting it in the town hall the entity’s expense as well through posting it in the town hall of the place where the entity has its registered office.of the place where the entity has its registered office.

Part IIIPart III

New environmental crimes New environmental crimes

in the Penal Code and forin the Penal Code and for

corporationscorporations

DIRECTIVE 2008/99/EC DIRECTIVE 2008/99/EC

of the European Parliament of the European Parliament

and of the Council and of the Council

- 19 November 2008 -- 19 November 2008 -

on the protection of the environment on the protection of the environment

through criminal lawthrough criminal law

Article 8 “Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this

Directive before 26 December 2010.”

DIRECTIVE 2008/99/EC DIRECTIVE 2008/99/EC

Article 5 Penalties

“Member States shall take the necessary measures to ensure that the offenses

referred to in Articles 3 and 4 are punishable by effective, proportionate and

dissuasive criminal penalties” .

Article 7Penalties for legal persons

“Member States shall take the necessary measures to ensure that legal persons

held liable pursuant to Article 6 are punishable by effective, proportionate and

dissuasive penalties”.

DIRECTIVE 2008/99/EC DIRECTIVE 2008/99/EC

Article 6

Liability of legal persons“1. Member States shall ensure that legal persons can be held liable for offenses referred to in Articles 3 and 4 where such

offenses have been committed for their benefit by any person who has a leading position within the legal person, acting either

individually or as part of an organ of the legal person, based on:

(a) a power of representation of the legal person;

(b) an authority to take decisions on behalf of the legal person; or

(c) an authority to exercise control within the legal person.

2. Member States shall also ensure that legal persons can be held liable where the lack of supervision or control, by a person

referred to in paragraph 1, has made possible the commission of an offense referred to in Articles 3 and 4 for the benefit of the

legal person by a person under its authority.

3. Liability of legal persons under paragraphs 1 and 2 shall not exclude criminal proceedings against natural persons who are

perpetrators, inciters or accessories in the offenses referred to in Articles 3 and 4”.

Member States must ensure that each of a range of proscribed Member States must ensure that each of a range of proscribed activities constitutes a criminal offence, when activities constitutes a criminal offence, when unlawfulunlawful and and committed committed intentionallyintentionally or with at least or with at least serious negligenceserious negligence..

The proscribed conduct includes:The proscribed conduct includes:

• • pollution of the air, which causes or is likely to cause harm to any person, plant, animal and so forth;

• the collection, transport, recovery or disposal of waste which causes or is likely to cause death or serious injury to any person or substantial damage to the quality of air, the quality of soil or the quality of water, or to animals or plants;• certain activities in respect of the shipment of waste;

DIRECTIVE 2008/99/EC DIRECTIVE 2008/99/EC

the operation of a plant in which a dangerous activity is carried out or in which dangerous substances or preparations are stored or used and which, outside the plant, causes or is likely to cause death or serious injury to any person or substantial environmental damage;

• subject to conditions, the killing, destruction, possession or taking of specimens of protected wild fauna or flora species;

• subject to conditions, trading in specimens of protected wild fauna or flora species or parts or derivatives thereof;

• any conduct which causes the significant deterioration of a habitat within a protected site;

• the production, importation, exportation, placing on the market or use of ozone-depleting substances.

DIRECTIVE 2008/99/EC DIRECTIVE 2008/99/EC

Thank you!