1. UNIVERSITY OF PADUA FACULTY OF ENGINEERING INTERNATIONAL ENVIRONMENTAL LAW Second Cycle Degree in Environmental Engineering 2009-2010 EIGHTH PART: CORPORATE GOVERNANCE AND ENVIRONMENTAL CRIMES Ilaria Martinelli Ilaria Martinelli

2. General Index Short story of the corporate liability for environmental crimes Short story of the corporate liability for environmental crimes Italian corporate liability discipline Italian corporate liability discipline New environmental crimes in the Penal Code and for corporations New environmental crimes in the Penal Code and for corporations

3. Part I Short story of the corporate liability for environmental crimes

4. Evolution of Corporate 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 Code 1994

5. Evolution of Corporate liability River Rail Road Co. Case (1909) about Elkins Act (1903) While the law should have regard to the rights of all, and to those of corporations no less than to those of individuals, it cannot shut its eyes to the fact that the great majority of business transactions in modern times are conducted through these bodies (...) to give them immunity from all punishment because of the old and exploded doctrine that a corporation cannot commit a crime would virtually take away the only means of effectually controlling the subject-matter and correcting the abuses aimed at (Supreme Court USA). While the law should have regard to the rights of all, and to those of corporations no less than to those of individuals, it cannot shut its eyes to the fact that the great majority of business transactions in modern times are conducted through these bodies (...) to give them immunity from all punishment because of the old and exploded doctrine that a corporation cannot commit a crime would virtually take away the only means of effectually controlling the subject-matter and correcting the abuses aimed at (Supreme Court USA). Se la legge deve avere riguardo per i diritti di tutti, e per quelli delle corporations non meno per quelli dei singoli, non può chiudere gli occhi sul fatto che la grande maggioranza delle transazioni economiche nei tempi moderni sono compiute a mezzo di queste entità (...) accordare loro immunità da ogni pena, nelle attuali condizioni, a causa della vecchia e superata dottrina secondo cui una corporation non può commettere un reato, comporterebbe virtualmente l'eliminazione dei soli mezzi per un controllo effettivo di questo tipo di criminalità e per la correzione degli abusi accertati (Corte Suprema USA). Se la legge deve avere riguardo per i diritti di tutti, e per quelli delle corporations non meno per quelli dei singoli, non può chiudere gli occhi sul fatto che la grande maggioranza delle transazioni economiche nei tempi moderni sono compiute a mezzo di queste entità (...) accordare loro immunità da ogni pena, nelle attuali condizioni, a causa della vecchia e superata dottrina secondo cui una corporation non può commettere un reato, comporterebbe virtualmente l'eliminazione dei soli mezzi per un controllo effettivo di questo tipo di criminalità e per la correzione degli abusi accertati (Corte Suprema USA).

6. Evolution of Corporate liability Debate in France before the New penal Code (1994) I've never seen a corporate going to the restaurant... But I've often seen it paying

7. The EU structure European Union Maastricht Treaty I pillar European Community EC Treaty (Council, Commission, Parliament) III pillar Police and Judicial Co-operation in Criminal Matters VI Titles of EU Treaty II pillar Common Security, Defence Policy and Internal Security

8. Case C-176/03 Commission of the European Community vs Council of the European Union As a general rule, neither criminal law nor the rules of criminal procedure fall within the Communitys competence. 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 criminal law nor the rules of criminal procedure fall within the Communitys competence. the last-mentioned finding does not prevent the Community legislature, from taking measures which 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 are fully effective. However, the last-mentioned finding does not prevent the Community legislature, 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 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 are fully effective.

9. Part II Italian corporate liability discipline

10. Evolution in Italy 1.environment protection 2.trough the criminal law 3.against corporate bodies ? Environmental damage Act, n. 349 - 1986 Corporate liability Act n. 231 - 2001 Mastella Bill 2007 Merli Act n. 319 - 1976 Antismog Act n. 615 - 1966

11. The essential elements to have a criminal liability crime a crime -> a law that says that a conduct is not accepted from the society and need a deep punishment fact a fact -> intention in not sufficient criminal a criminal -> subject individuate victim a victim -> not always necessary responsibility the 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

12. 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...

13. 2. criminal managers or executives of the legal entity; their subordinates and other subjects acting on behalf of the legal entity ( as the agents )

14. 3. the responsibility Mechanism of attribution: the unlawful conduct of the material author has been carried out in the interest of or to the benefit of the entity concerned Which is the corporate guilty? Organizational negligence or management failure vs compliance program Organizational negligence or management failure vs compliance program Systematic use of the entity for unlawful aims Systematic use of the entity for unlawful aims

15. Exclusion of responsibility The company is not liable if it can demonstrate that: prior to the commission of the crime, its governing body has adopted and effectively implemented compliance programs; prior to the commission of the crime, its governing body has adopted and effectively implemented compliance programs; a body of the company with autonomous powers of initiative and control has been vested with the task of monitoring the functioning of and compliance with the models; a body of the company with autonomous powers of initiative and control has been vested with the task of monitoring the functioning of and compliance with the models; the offenders have fraudulently avoided compliance with the models; the offenders have fraudulently avoided compliance with the models; the supervisory body has not omitted to exercise oversight or has not exercised inadequate oversight. the supervisory body has not omitted to exercise oversight or has not exercised inadequate oversight.

16. 4. sanctions - pecuniary sanctions (apply in any case) ; - prohibitive sanctions: disqualification from exercise of the whole activity (i.e., suspension or revocation of licenses or authorizations necessary for the performance of the activity); disqualification from exercise of the whole activity (i.e., suspension or revocation of licenses or authorizations necessary for the performance of the activity); suspension or revocation of authorizations, licenses or concessions relating to the activity specifically concerned by offense committed; suspension or revocation of authorizations, licenses or concessions relating to the activity specifically concerned by offense committed; prohibition to negotiate with the Public Administration except for obtaining a public service. The prohibition can be limited to particular types of contracts or to certain departments or branches of the Public Administration; prohibition to negotiate with the Public Administration except for obtaining a public service. The prohibition can be limited to particular types of contracts or to certain departments or branches of the Public Administration; exclusion from grants, loans, contributions or subsidies and possible revocation of any of them already granted; exclusion from grants, loans, contributions or subsidies and possible revocation of any of them already granted; prohibition of advertisement of goods or services. prohibition of advertisement of goods or services.

17. 4. sanctions + Confiscation 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 acquired by third parties in good faith. + Publication of the Judicial Decision when a disqualification has been imposed on the entity. The publication must be made in one or more newspapers at the entitys expense as well through posting it in the town hall of the place where the entity has its registered office.

18. Part III New environmental crimes in the Penal Code and for corporations

19. DIRECTIVE 2008/99/EC of the European Parliament and of the Council - 19 November 2008 - on the protection of the environment through 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.

20. 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 7 Penalties 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.

21. 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.

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

23. 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