Criminal sanctions for businesses

There is no international obligatory standard of corporate liability for offences in violation of human rights. However, jurisdictions that recognize corporate criminal liability, could pursue criminal liability at the national level. As discussed below, the case of Lafarge in France sets a precedent for multinationals operating in high conflict zones where there is a high risk of contributing to gross human rights violations.

i) Canada

Canada recognizes corporate criminal liability. Under Canadian criminal law, legal persons – included in the definition of “organization” under the Criminal Code – can be held liable for most criminal offences. Although the Criminal Code largely operates on the principle of territoriality, there are exceptions, including, where a “real and substantial connection” can be made between Canada and the alleged offense. For the most serious international crimes, Canada asserts universal jurisdiction.

With the adoption of the Crimes Against Humanity and War Crimes Act (CAHWCA), Canada incorporated the obligations of the Rome Statute of the International Criminal Court into its national laws. The CAHWCA has extraterritorial effect and allows both natural persons and legal persons to be prosecuted for crimes against humanity, war crimes, and genocide based on customary and conventional international law. The elements required to establish criminal responsibility follow section 22.2 of the Criminal Code. Application of the CAHWCA to corporations has not yet been tested, and there has been limited enforcement of the CAHWCA as applied to individuals.

ii) International

Criminal charges for alleged business complicity in international crimes are growing. In November 2021, Swedish prosecutors charged Lundin Energy executives with complicity in war crimes. The charges relate to Lundin's request for Sudanese armed forces to secure an oil field in South Sudan between 1999-2003. The case is in its early stages and Lundin denies the charges. The prosecutors are also attempting to confiscate Lundin's profits from selling its Sudan business in 2003.

In June 2018, the French multinational company Lafarge and its subsidiary Lafarge Cement Syria were indicted for complicity in crimes against humanity, the financing of a terrorist enterprise, and endangerment of other people’s lives related to Lafarge Cement Syria’s operations in northern Syria during Syria’s civil war. The indictment followed from a criminal complaint filed in November 2016 by eleven former Syrian employees, the European Center for Constitutional and Human Rights and its French partner organization, Sherpa.

This case marks the first time a French parent company was charged for the acts undertaken by one of its subsidiaries abroad. In November 2019, the Paris Court of Appeals dropped the charge against Lafarge of complicity in crimes against humanity but upheld three other charges against Lafarge, including the charges of deliberately endangering the lives of its Syrian workers and financing a terrorist enterprise. However, in September 2021, France's top court, the Cour de cassation, overturned the appeal ruling and sent the case back to its investigating magistrates. The magistrates will review whether to reinstate the charge of complicity in crimes against humanity and add a new charge of "endangering the lives of others". 

While most standalone BHR legislation does not provide for criminal liability, the Netherlands Child Labour Due Diligence Law (Netherlands Law) carries the potential for criminal penalties for companies. In cases of persistent non-compliance with the reporting and due diligence requirements of the Netherlands Law, there can be penalties of up to four years of imprisonment, community service, or a fine of up to €83,000.