Corporate Crime: Impact on Society and Human Rights Violations

Criminal Law

Table of Contents
Introduction................................................................................................................................2
Main Context..............................................................................................................................2
Analysis..................................................................................................................................2
Corruption...........................................................................................................................3
Fraud...................................................................................................................................4
Human Rights.....................................................................................................................4
Right of workers.................................................................................................................5
Pros.....................................................................................................................................6
Cons....................................................................................................................................6
Roles and responsibilities of a CEO.......................................................................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10
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Introduction
The corporate crime is referred to the crimes that are being committed either by an
organization or individuals who act on behalf of the organization. Some of the negative act
carried out by an organization may not actually be considered a crime because the laws and
regulations vary. For example, insider trading is being allowed by some jurisdictions. The
corporate crime is considered to be overlapping with white collar crime, organized crime and
state corporate crime. In white-collar crime, the majority of individuals represent the interest
of the organization or act is considered to be the white collar professionals1. In organized
crime, criminals can establish organizations either for laundering activities or for the purpose
of criminal activities. In state-corporate crime, the opportunity for committing crime begins
from the relationship between the state and the corporation. The corporate law regulates the
activities carried out by a corporation. It is very much important to address the illegal
activities of the organizations because it imposes a significant impact on society. The
common laws make an organization liable for the activities of its employees. The acts of a
corporation affect people both indirectly and directly2. The stakeholders or consumers are the
affected as they are at the maximum risk and main beneficiaries. The employees can be the
victims or carry out criminal activities. The state receives economic benefit and also incurs a
loss due to the illegal activities carries out by the corporations. The illegal acts that are being
carried by a corporation are bribing an international or national government or public servant
for attaining business, monetary frauds, drug or human trafficking, involving in money
laundering, dumping toxic wastes into water resources. The most common crimes that can be
seen are tax frauds and monetary frauds.
Main Context
Analysis
The life of individuals and society are getting affected at large by the criminal activities of
multinational corporations and it has become a new phenomenon in the world. Corporations
1 Jessie Chella, 'The Complicity Of Multinational Corporations In International Crimes: An
Examination' (Pure.bond.edu.au, 2012)
<https://pure.bond.edu.au/ws/portalfiles/portal/18264556/The_Complicity_of_Multinational_Corp
orations_in_International_Crimes.pdf> accessed 28 January 2019.
2 Roger LeRoy Miller, Frank B Cross and Gaylord A Jentz, Business Law (9th edn, South-
Western Cengage Learning 2013).
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of any country can be considered more powerful than the state because they have huge
capital. They can even control the government and use their power to fulfil their object that is
getting a boost in the profit level3. The corporations focus only on increasing their profit at
any cost and often discard their ethics, moral values and laws in order to get it. The powers of
corporations are not limited to a particular territory; being a multinational corporation it
operates in multiple countries and spread crime all over the world. This has become a global
problem and it is mandatory to monitor the activities of these corporations as corporate
crimes have become harmful to society. Corporate crimes cannot be detected easily as it is
different from ordinary crimes4. And also the punishment for corporate crime is a big
challenge for the government. The developing countries are suffering more because they are
more unsafe and affected by corporate crime.
Corruption
IBM found engaged in delivering cash as bribe in shopping bags to win the business of
computer with the government of South Korea. IBM won the Korean contract for millions of
dollars with the help of bribes. The agency was charged and also IBM for creating a slush
fund to give gifts like laptop, camera and for visiting government officials in China. The
involvement of two managers and more than 100 employees of China-IBM were being found
for misconduct in China5. IBM never admitted nor denied wrongdoing but paid $10 million in
order to settle down the civil charges. As per the SEC, the misconduct came into the role
from 1998 to 2003 in South Korea and in China from 2004 to 2009. The agency said that the
total bribe which was given to Korea was $207,000. IBM was also charged for making
improper payments as legitimate business expenses and violates the requirements that are for
maintaining accurate records and books. SEC also include that IBM was paying government-
related clients to get approved the "unapproved sightseeing itineraries" in China. The
employees of IBM were creating fake invoices with the help of local travel agency.
Bribery is one of the largest threats to society as corruption is a serious problem and making
an impact on all societies. Corruption is a barrier to democracy and to the rule of law. It
destroys the allocation of resources, slow down productivity and economic growth. Bribery is
3 Hazel Croall, Corporate Crime (8th edn, SAGE 2009).
4 Michael R Czinkota, Ilkka A Ronkainen and Michael H Moffett, International Business (8th
edn, Wiley 2011).
5 Frederick Guy, The Global Environment Of Business (7th edn, Oxford University Press 2010).
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