Corporate Environmental Obligations and Directors' and Officers' Liability

AuthorJamie Benidickson
Pages197-218
197
CHAPTER 9
CORPORATE
ENVIRONMENTAL
OBLIGATIONS AND
DIRECTORS’ AND
OFFICERS’ LIABILITY
A. THE LIABILITY OF CORPORATIONS
Among the principal forms of business organizations sole propri-
etorships, partnerships, and corporations the last, corporations,
has attracted particular attention from an environmental perspective.
Despite many variations in corporate form, from small, not-for-prof‌it
entities to major multinational f‌irms, in the environmental context
corporations are regarded as serious sources of potential harm whose
operations require careful supervision and control.
While the nature and mag nitude of the risks create an obvious pub-
lic interest in channelling corporate behaviour in ways that reduce the
likelihood of environmental damage, the practical problems of inf‌lu-
encing corporate behaviour through the legal regime must be faced.
Those who rely on legal mechanisms, criminal sanctions in particular,
have had to consider how a regime of prohibitions and penalties will
affect corporate operations. In the context of corporate accused, some
aspects of criminal law pose especially intriguing problems. The need,
in relation to the prosecution of certain offences, to establish a guilty
mind or some form of intent on the part of accused corporations is one
obvious example.
Although it may be argued that cor porate action ultimately depends
on human agency, or that the corporation can never act alone, the ten-
dency is to subordinate philosophical dilemmas in the context of hold-
ing corporations responsible for wrongdoing. One analysis sets out the
ENVIRONMENTAL L AW198
normative and practical arg uments. First, justice requires that ever yone
in breach of penal law be equally subject to prosecution. “It is hardly
fair,” the analysis continues, “that individuals committing rather petty
crimes, almost alway s entailing only one or a few victims, are subject to
prosecution and imprisonment while a corporation might cause harm
on a far grander scale, yet escape punishment.” Second, although indi-
vidual actions within a corporate environment may not constitute a
crime when considered separately, the cumulative impact can be crim-
inal and blameworthy; to exempt the corporation from liability would
be to permit such conduct to go unchecked. Moreover, corporations,
because of the collectivity of individuals involved, can and do behave
as the persons that they, in strict point of law, are. Corporations are
therefore susceptible to stigmatization (harm to status or reputation)
and deterrence in the same way individuals are. Finally, access to
resources, information, and expertise makes corporations better able
to take measures to avoid the commission of criminal offences than
individuals ordinarily are.1
Another approach to the conceptual challenges of holding corpor-
ations accountable for criminal offences attributed to them is to mini-
mize the criminal dimensions of the situation. Such an approach is
hinted at by Lamer CJ, who express ed the opinion that “when the crim-
inal law is applied to a corporat ion, it loses much of its ‘crim inal’ nature
and becomes, in essence, a ‘v igorous’ form of admini strative law.” Since
the stigma attached to conviction is effectively reduced to a f‌inancial
penalty, the corporation which cannot be imprisoned — is in a com-
pletely different situation than is an individual.2 As discussed below,
changes to the Criminal Code in the aftermath of the Westray Mine
disaster appear to have increased the direct exposure of corporations
to criminal liability.
Corporate liability for environmental violations has rested on a
variety of grounds. One means of linking the responsibility of the cor-
poration directly with the conduct of individuals in its employ takes
the form of vicarious liability. Such an approach appears in some regu-
latory legislation, Alberta’s Environmental Protection and Enhancement
Act, for example, where it is provided that
for the purposes of this Act, an act or thing done or omitted to be
done by a director, off‌icer, off‌icial, employee or agent of a corporation
in the course of his employment or in the exercise of his powers or
1 MA Bowden & T Quigle y, “Pinstr ipes or Prison Strip es? The Liability of Corpo-
rations and Di rectors for Environmental Of fences” (1995) 5 Journal of Environ-
mental Law & Pract ice 209 at 222.
2 R v Wholesale Travel Group Inc, [1991] 3 SCR 154 at 182.

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