Chapter 5: Crime, harm and corporate power. BLOCK 1, BOOK 1. Flashcards
CORPORATE POWER, CRIME AND HARMS
1
Q
WHAT ARE CORPORATIONS?
CORPS are ‘legal entities’ that give privileges …………
A
- Corporations are are ‘LEGAL ENTITIES’ that give privileges to those that enter into business (exchange and provision of goods and services for agreed-upon fees)
- Term ‘CORPORATION’ - describes a number of different participants, i.e investors, directors, shareholders, and employees who combine and mobilise to deliver business activities (PEARCE, 2001)
- The GEOGRAPHICAL SCALE OF CORPORATE ACTIVITY has expanded rapidly, as ‘new technologies’ have made the flow of commodities, money, information possible across borders at high speeds.
- Corporations are key enterprises with enormous economic, political and social power
- Corporations also have an enormous potential for producing harm and crimes on their part.
- CORPORATIONS and CORPORATE POWER can influence definitions of crime, processes of criminalisation, nature of regulation through direct and indirect influence, overt and covert forms of intervention, and shape what is desirable and feasible in in terms of their regulation.
2
Q
TYPES OF HARM CAUSED BY CORPORATE ACTIVITY in chapter 5.
A
- Corporate harm
- Harms caused by theft and fraud
- Harms caused by working
- Harms caused by air pollution
- Harms caused by food poisoning
3
Q
CORPORATE CRIME AND CORPORATE HARM.
Difficulties of measuring and collating corporate harm.
Distinguishing corporate crime from corporate harm is a complex task
A
- CORPORATE HARMS - are those CRIMES AND HARMS committed within the context of profit making and which victimise workers consumers and the general public
- MEASURING CORPORATE HARMS - is fraught with difficulty, as these harms rarely concern official crime statistics or victim surveys. It is difficult to quantify the scale of corporate crime within the UK and INTERNATIONALLY. Formal records of corporate crimes vastly understate the scale of corporate offending.
- OFFICIAL DATA - is usually published by GOVERNMENT BODIES and NON-GOVERNMENTAL ORGANISATIONS (NGO’s), but almost certainly not by the HOME OFFICE.
- OFFICIAL DATA - is usually spread across national and local government departments, so locating, collating and interpreting them is frustrating and time consuming
- INVESTIGATIVE JOURNALISTS - tend to uncover the most informative data.
- CONCLUSION -people are killed globally each year on a huge scale by CORPORATE ACTIVITY. Data indicates that victims of corporate harms dwarf those of conventional crimes such as theft and violence.
4
Q
HARMS CAUSED BY CORPORATE THEFT AND FRAUD.
A
- CORPORATE FRAUD is widespread
- 37% of the US population have been victims of corporate fraud or theft (REBOVICH AND KANE, 2002)
- UK EXAMPLE ONE - 2.4 Million lost their pension funds after being persuaded to replace their occupational pension schemes with high-risk private schemes by high street firms between 1988-94 (FINANCIAL SERVICES AUTHORITY, 1999).
- UK EXAMPLE TWO - ENDOWMENT MORTGAGE FRAUDS of the 1990’s involved the mis-selling of a risky mortgage product to risky customers. This included 5 million cases with estimated losses of £130 billion (WHYTE, 2004).
- ‘CORPORATE PRICE FIXING’ - the illegal agreement between parties to keep prices artificially high has become routine for large and respected corporations (SLAPPER AND TOMBS, 1999).
- It is difficult to distinguish how much fraud is produced by corporations
- HOWEVER - Even on basis of small number of known corporate frauds and thefts- the EXTENT OF HARMS this causes is vast in terms of people affected and economic losses.
5
Q
HARMS CAUSED BY WORKING (WORK-RELATED HARMS)
STATISTICS.
IMPORTANT TO NOTE - In this category of HARMS - a majority of deaths caused by work occur in the context of CORPORATE or PROFIT-MAKING business activities (TOMBS AND WHYTE, 2007).
A
- Death, injury, disease caused by working are a global phenomena.
- ILO (2012), a United Nations Agency - estimated that 2.2 million people die as a result of work-related injuries or disease every year (3.9% of global deaths per annum)
- 270 million occupational injuries and 160 million victims of work-related illnesses annually (ILO, 2005).
- VICTIMISATION IS GLOBAL - Of 345,000 estimated WORK DEATHS from INCIDENTS (not including disease or conditions), 220,000 of those that died from incidents worked in in Asia. (ILO, 2005)
5 WORK DEATHS - Highest no. of deaths in Asian country was China - 73,795.
- IN UK - 1200 - 1500 Work-related FATAL INJURIES each year (TOMBS AND WHYTE, 2008).
- In UK - 50,000 workers die from FATAL DISEASES each year (O’NEILL, 2007). NOTE - This figure omits some categories but does include cancers, heart diseases or respiratory diseases.
6
Q
HARMS CAUSED BY FOOD POISONING:
CASE STUDY - CADBURYS was unjustly FINED for not declaring that some of its products had been contaminated with SALMONELLA.
A
- Corporate harm relates to the responsibilities that corporations have for large numbers of food-related illnesses and deaths.
- Lack of official figures means full scale of food poisoning related deaths remains unknown.
- 100-200 people die each year in UK through SALMONELLA etc, but this does not capture the full extent of food-poisoning related DEATHS.
- SALMONELLA etc - triples the average persons chances of dying from any other disease/condition within a year (HELMS ET AL, 2003)
- GOVERNMENT estimates reveal half of all food-poisoning cases in the UK can be attributed to OUTLETS (i,e fast food shops) owned/franchised by large BUSINESSES/CORPORATIONS (UK PARLIAMENT, 2003)
- CASE STUDY - CADBURYS (2006) discovered SALMONELLA in some of its products and did not declare it, six months later high levels of salmonella were reported. FSA made Cadburys withdraw products, 3 people went to hospital, dozens fell ill. Investigation took place, Cadburys admitted 9 charges and was fined £ 1 million. However, this was an injustice as annual revenue from 2007 was £7,971 MILLION (CADBURY SCHWEPPES, 2008). This is an example of the powerful having influence over what behaviour is criminalised, and why some behaviours/events are not subject to criminal sanction, yet others are.
7
Q
HARMS CAUSED BY AIR POLLUTION:
Separating ‘CORPORATE POLLUTION’ from ‘INDIVIDUAL ENVIRONMENTAL POLLUTION’ i.e pollution from driving cars).
A
- Air, land and water pollutants are a key cause of death and disease.
- IN GLOBAL TERMS - exposure to air pollutants causes 800,000 (1.2% of total) of premature deaths (COHEN, 2005). This figure is supported by WHO.
- 65% of deaths from air pollution are in Asia (Cohen, 2005)
- In UK -24,000 each year die from air pollution (DOH, 2001).
- This usually occurs in those places that have the least resources to be able to prevent or respond to such air pollution.
- Separating ‘CORPORATE POLLUTION’ from ‘INDIVIDUAL ENVIRONMENTAL POLLUTION’, i.e pollution by driving cars is difficult.
- However - OFFICIAL DATA - shows largest known killers are nitrogen oxide, fine particle emissions, and sulphur dioxides, and the primary source of these are CORPORATIONS/COMMERCIAL.(WHYTE, 2004).
8
Q
CRIME WITHOUT CRIMINAL LAW?
SUTHERLAND and WHITE-COLLAR CRIME
WHITE COLLAR CRIME - encompasses a range of HETEROGENEOUS actions, with different types of offences, offenders, victims, consequences etc. Sutherland also applied this to CORPORATE ACTIVITY.
SUTHERLAND created an EXTENDED/EXPANDED DEFINITION OF CRIME.
A
- EDWIN SUTHERLAND attempted to determine concept of white-collar crime as a ‘CRIME’ committed by a person of respectability and high status within the course of his occupation. (SUTHERLAND, 1983).
- SUTHERLAND recognised that POWERFUL BUSINESS men committed crimes, and were aided by the POWER of their class to influence the implementation and administration of the law (SUTHERLAND, 1983)
- SUTHERLAND - sought to produce a more encompassing definition of crime than that delineated by law.
- His definition recognises that many laws enforced by administrative bodies regulate actions that cause HARMS to specific individuals, and undermine SOCIAL INSTITUTIONS.
- It also recognises there is a range of formal LEGAL RESPONSES other than criminal prosecution
- SUTHERLAND - His EXTENDED/EXPANDED definition made reference to the law as he defined offences that were punishable, rather than those that had been punished by the law, but he also extended the term crime to cover those offences that fall outside of the law.
9
Q
ROLE OF MEDIA TO HIGHLIGHT CORPORATE CRIME
A
- The mass media play an important role in highlighting and reporting on CORPORATE CRIME
- The mas media can bring social phenomena including social problems and crimes to wider attention
- It would be inaccurate to claim that there is no coverage of corporate crime through the media.
- However - the media tends to operate as a mutually reinforcing social process in terms of law, politics, victimisation etc that maintains a stubborn distinction between CORPORATE CRIME/OFFENDERS on one hand and REAL CRIMES/CRIMINALS on the other.
- FICTIONAL treatment s of crime on the television, news, newspapers, crime fiction, cinema and film etc tend to conceptualise crime in a way that reinforces dominant stereotypes of crime and the criminal. (CHIBNALL, 1977).
- However, whilst corporate crime is covered, it is usually in lesser profile outlets that have small specialist circulations, such as the WALL STREET JOURNAL or FINANCIAL TIMES. Corporate crime is less visible in tabloid newspapers.
- BY THIS - Through a series of such processes - the prospect of corporate crime being treated as CRIME is ‘SCREENED OUT’.
- AS A RESULT - A net effect of these SCREENING PROCESSES is that FORMAL RECORDS OF CORPORATE CRIMES vastly understate the actual scale of CORPORATE OFFENDING.
- The HIDDEN FIGURE of CORPORATE CRIME is thus likely to be far greater than most forms of traditional CRIMES.
10
Q
POWER, CRIME AND REGULATION:
CORPORATE POWER IN ACTION. (COVERT AND OVERT POWER)
CASE STUDY - LOBBYING BY THE ASBESTOS INDUSTRY
A
- A key characteristic of POWER is to be able to operate with the least possibility of being held to account.
- This is the case if much CORPORATE CRIME is not recognised as HARM, or if recognised is NOT treated through LAW, or if treated through law is not treated through criminal law, or if is treated through criminal law, is often not recognised as a ‘REAL CRIME’
- CORPORATIONS - engage in work to pre-empt or frame national and international regulation. This is to avoid LEGAL RESTRICTION on their activity and to protect themselves from critical legal scrutiny.
- Here - POWER is used to smooth CONFLICTS OF INTEREST and influence formal decision-making processes.
- One manifestation of CORPORATE POWER is found in corporations ‘DIRECT LOBBYING’ of governments and policy makers nationally and internationally (BARKER AND MANDER, 1999).
- By this - companies prefer less rather than more regulation, seek to remove existing laws, challenge interpretations of it, and undermine its enforcement.
- Corporate sector devotes time, money, effort to DIRECT LOBBYING. It is a key corporate activity. It is facilitated by interpersonal links with trade associations and governments.
- EXAMPLE OF DIRECT LOBBYING was by the ASBESTOS INDUSTRY company that used a variety of techniques to deny the problem until effective regulation was introduced in 1969 (TWEEDALE, 2000).
- CONSEQUENCES OF LOBBYING: STATISTICS ( TAKALA, 2006).
a) - Currently 125 million people exposed to asbestos in workplace globally (WHO, 2006)
b) ILO - 100,000 people die each year from work-related asbestos exposure (TAKALA, 2006)
c) In UK - 4000 per annum (TAKALA, 2006)
d) In USA - 21,000 per annum (TAKALA, 2006)
e) In RUSSIA - 10,000 per annum (TAKALA, 2006)
f) In CHINA - 110,000 per annum (TAKALA, 2006)
CORPORATE POWER AND CORPORATE REGULATION:
- OVERT POWER - Corporate representatives work actively in government. They work in governmental strictures to determine regulatory policy and set standards for acceptable emissions of substances, adequate food labelling, acceptable exposures to workplace chemicals etc. These are likely to be structured to allow business interests to predominate (TWEEDALE, 2000). These activities are FORMAL and OVERT (POWER).
- COVERT POWER - is also important in understanding regulatory process. This is where corporations shape peoples preferences and perceptions so that certain outcomes seem natural, as opposed to socially constructed effects of power. Here POWER works effectively as it does not seem to be present at all.
11
Q
REGULATION AS CONFLICT MANAGEMENT:
GOVERNMENTS form REGULATORY AGENCIES to dissipate social conflicts.
NOTE - The level of regulation in any one society, at any one time, to any specific issue, can be understood in terms of an effect of the distribution of POWER.
A
- Primary view of regulation is that it is a process that that responds to, manages, and seeks to dissipate ‘SOCIAL CONFLICTS’.
- REGULATORY AGENCIES emerge after times of crisis and where conflicts over corporate activity are HIGHLY VISIBLE.
- EXAMPLE - Government demanded grater regulation following the collapse of financial institutions in 2008.
- Governments form REGULATORY AGENCIES to dissipate struggles between conflicting social groups. By this - governments aim to represent the interests of pro-regulatory groups, as well as protect the general interests of society.
- HOWEVER - REGULATORY AGENCIES are not ‘neutral’ in dealing with corporate crime - they are unequal as they tend to subordinate the interests of the LEAST POWERFUL to the interests of BUSINESS (i.e make business interests the top priority). This makes regulatory agencies vulnerable to pressure from corporations etc (SHAPIRO)
- From this perspective - regulation and strategies enforcement are dependent on external factors that shape the capacity or incapacity of subordinate groups to fight back (TOMBS, 1996).
- NOTE - REGULATION is a way of managing ‘conflict’ within an existing social order. However, the exact form it takes is down to the effect of the ‘POWER’ that the DOMINANT GROUP has in this conflict. In other words, if the most powerful side are FOR the regulation, then it will be implemented, if they are AGAINST it, then it most likely wont.
NOTE - This helps us understand why certain forms of HARM and CRIMES are subject to different levels of regulation.
- So regulation allows capitalist production to proceed, whilst managing any antagonism from the public against such production and its growth.
12
Q
THE SPACE BETWEEN AND WITHIN LAWS:
NOTE - An attempt to close the ‘SPACE BETWEEN LAWS’ is ‘THE NORM PRINCIPLES’ published by UNITED NATIONS COMMITTEE ON HUMAN RIGHTS (UNCHR).
A
- MICHALOWSKI and KRAMER (1987) - noted that the expansion of ‘TRANSNATIONAL CORPORATIONS’ in poor countries exposes those citizens to growing number of CORPORATE HARMS’.
- FOR EXAMPLE: The MALAYSIAN GOVERNMENT indicated that they might allow electronic workers to set up a TRADE UNION, but in response several US ELECTRONIC FIRMS threatened to relocate. As a result the government had to back down and the workers continued to be exploited.
- MICHALOWSKI AND KRAMER (1987) - suggest that corporations can exert ‘DIRECT’ and ‘INDIRECT INFLUENCES’.
a) DIRECT INFLUENCE - straightforward use by corporations ECONOMIC POWER to influence government decisions
b) INDIRECT INFLUENCE - refers to ways in which corporations can manipulate the economy to make it more attractive to global investors, ensuring social and environmental regulations are lax and taxes are low etc. - ONE ATTEMPT to close this ‘SPACE BETWEEN LAWS’ is ‘THE NORM PRINCIPLES’ published by UN COMMISSION ON HUMAN RIGHTS (UNCHR). This calls for ‘human rights obligations’ to apply to CORPORATIONS.
- The UN calls on ‘corporations’ to comply with the NORM principles voluntarily.
- The UN appeals to NATION STATES to establish the necessary legal and administrative networks so that THE NORMS can be followed.
- HOWEVER - no formal enforcement or prosecution mechanism exists for this purpose at the moment, and we are a long way from international legislation that allows corporations to be put on trial for ‘HUMAN RIGHTS VIOLATIONS’.
13
Q
EXPORT PROCESSING ZONES (EPZ’s)
CASE EXAMPLE - US run sweatshops in SAIPAN. This is an example of corporate power and corporate harm.
In 1999 - NGO’s filed a lawsuit on behalf of the sweatshop workers against global brand companies who claimed that that their international human rights AND US LABOUR LAWS were violated as they worked and lived in intolerable unsanitary conditions, underpayment of wages, unpaid overtime, contaminated water etc.
All the companies such as Calvin Klein, Donna Karan, Abercrombie and Fitch etc paid out of court. Only Levi-Strauss won their case in 2007.
A
- These are created by GOVERNMENTS as ‘lawless zones’ with the deliberate intent of attracting CORPORATIONS. - POWER
- ILO (2003) - they are industrial zones with special incentives to attract investors. They are set up with the aim of creating a haven from the law. - POWER
- INCENTIVES - include suspension of normal rates of export and import duties, tax exemption, exemption of labour rights and health and safety regulations. - POWER
- EXAMPLE - USA operates huge EPZ in SAIPAN. This is a US island, but the immigration controls, controls on labour rights, and minimum wage are structured differently (NEGATIVELY) from the way they are in the US.
- So - SAIPAN and its sweatshops exists in a ‘SPACE BETWEEN LAWS’. This means that for the purpose of regulation SAIPAN is outside of the USA, but for marketing purposes it is inside the US, as companies get their sweatshops in SAIPAN to label their clothes as made in USA.
- ALSO - women sweatshop workers have to pay thousands in recruitment fees for jobs in SAIPAN and work till they have paid them off, which takes years (BAS, 2004). - HARM
14
Q
‘CORPORATE SOCIAL RESPONSIBILITY’ (CSR): PLUGGING THE SPACE BETWEEN THE LAWS
A
- ‘CORPORATE SOCIAL RESPONSIBILITY’ (CSR) - has emerged in the face of STATES inability or unwillingness to REGULATE ‘CORPORATE ACTIVITY’.
- This is based on the claim that corporations will recognise EITHER their OWN SELF-INTEREST in meeting or going beyond their targets, or that they have SOCIAL OBLIGATIONS they need to meet in the absence of external law and enforcement.
- ‘BEHIND THE MASK (2004) - produced by UK charity CHRISTIAN AID argue that CORPORATE SOCIAL RESPONSIBILITY (CSR) strategies are not only aimed at counteracting criticism corporations receive for environmental damage, but are used as a means of challenging arguments for legal regulation.
- ESSENTIALLY then - CSR will be used strategically to support ‘SELF-REGULATION’ and to claim that corporations CAN comply with the law with little or no external oversight.
- FURTHERMORE - Corporations ALSO argue that LEGAL REGULATION is counterproductive because it is likely to encourage companies to abide to the minimum standards, and stifles innovation.
- HOWEVER - The BEHIND THE MASK REPORT concluded that the way forward is not CORPORATE SOCIAL RESPONSIBILITY (CSR), but ‘CORPORATE ACCOUNTABILITY’, meaning that companies in the future will have a LEGAL OBLIGATION to uphold international standards (CHRISTIAN AID, 2004).
- The BEHIND THE MASK report suggests that changes in the law and new enforcement mechanisms are necessary as the way corporations are constructed means that they cannot be expected to self-regulate or to behave responsibly in an autonomous fashion.
- WHATEVER THE ANSWER IS -SNIDER (1991) suggests that PRO-REGULATORY FORCES ‘ have an important role to play in the struggle to get more effective regulation, I.E TRADE UNIONS, VICTIM MOVEMENTS, ENVIRONMENTAL ORGANISATIONS, whether this is to involves social responsibility, accountability, or simple compliance with existing law.
15
Q
CORPORATE CRIME
A
- CORPORATE CRIME: Offences committed by business corporations in the furtherance of profit.
