Corporate Guilt: Imposing Penalties on Corporations

In a fast-changing world where trade and commercial transactions are increasingly conducted through corporations, stricter regulation of corporate conduct must be pursued. The increasing and evolving role of juridical entities in society has resulted to a bigger challenge of finding an effective mode to curb and punish corporate misconduct.

Corporate criminal responsibility was virtually unknown until the latter half of the 19th century and then, it was on the basis of vicarious liability. Today, the concept of corporate criminal liability has been formally adopted and embraced in many countries including the United States, France and Australia.

As it happened, Philippine penal laws have not yet fully adopted this concept. Up to now, both the 1932 vintage Revised Penal Code and other special penal laws have not incorporated penalties aimed at sanctioning corporations, except for a 2001 legislation, and another trailblazing law that was passed in 2012.

Civil law remedies largely remain to be the available mode, such as the imposition of damages and issuance of injunctive writs.
But are these civil remedies adequate to curb or dissuade scurrilous, wayward and illegal corporate conduct? Would corporate criminal liability be specious given the availability of civil redress?

In the Philippines, we have yet to see a corporation being criminally sanctioned. Hefty administrative fines are also rarely imposed, except for one being recently meted against a mining firm.

Absent any penal laws punishing corporations, these entities cannot be convicted as criminal offenders for disregarding and disrespecting the law — be it for flouting competition and anti-trust laws, violating taxation regulations, or ignoring environmental rules.

With the growing participation of corporations as business and economic tools, there is clearly a need to revisit and sharpen the legal fangs and framework to more effectively deter and clamp on corporate misconduct.

There is a dearth of studies on corporate criminal liability under Philippine laws. But the time may be ripe for the Philippines to now pursue laws that penalize corporations for criminal misconduct. The current effort to pass a new Philippine Code of Crimes may just be the perfect opportunity to do so.

At the end of this course, you should be able to:

• Describe the Philippine model of corporate criminal punishment
• Determine the basis of corporate criminal liability
• Distinguish how other countries punish corporations for criminal acts
• Determine whether the Philippines should make corporations liable for criminal misconduct
• Identify the sanctions imposed on erring corporations in the Philippines