CORPORATE CRIMINAL LIABILITY IN NIGERIA

INTRODUCTION

Corporate criminal liability is a legal concept that holds corporations liable for criminal acts committed by employees acting on behalf of the organisation. This concept extends beyond individual responsibility to hold companies accountable for criminal acts. The evolution of corporate criminal liability reflects a recognition that organisations, as legal entities, can engage in illegal acts that harm society, the economy, and the environment.

The fundamental idea is that a corporation can be held criminally accountable for illegal conduct undertaken by its employees or agents in the course of their employment or in the interest of the company. This principle ensures that corporations cannot avoid culpability simply because a crime was committed by people within the organisation.

SCOPE OF CORPORATE CRIMINAL LIABILITY

Corporate crimes are defined as illegal acts, omissions, or commissions by corporate organisations, corporate officials or employees acting in accordance with the organisation's operational objectives or standards, operating procedures, and cultural norms, intended to benefit the corporations itself.

Under common law, companies can be criminally liable for certain serious offenses, though historically, this liability was limited to specific crimes such as assault, robbery, murder and rape. This position allows a company to be held criminally accountable for acts of nonfeasance under common law, which was later expanded to include only misfeasance. In this regard, no mental state was required, and the only conceivable punishment was a fine that an organisation could readily pay.

CONCEPT OF CORPORATE PERSONALITY

Corporate personality is a legal principle that treats an incorporated company as a distinct entity separate from its shareholders and directors. Upon incorporation, a company is in law, a separate person from the subscribers to its memorandum. Even if the business is exactly the same as before, with the same people serving as managers and the same hands receiving profits, the company is not in law the subscribers' agent or trustee nor are the subscribers as members responsible in any shape or form save to the extent and in the way prescribed by the law.^[1]

The separate personality principle was further elucidated in the case of A.I.B. Ltd, v Lee & Tee Ind. Ltd^[2] where the court held that a limited liability company has an entity separate from its proprietor. Once incorporation takes place, the company becomes a separate legal entity from those who incorporated it, and there is no personal liability for any debt incurred by the company.^[3]

CORPORATE CRIMINAL LIABILITY IN NIGERIA

The Nigerian legal system has the same framework as the English legal system and is in tandem with the common law position that companies can be held criminally liable, although not for all acts. Previously, it was believed that corporations could not face criminal proceedings because of the artificial character of a company's personality, it was considered to lack the necessary mens-rea to suspect a crime. It cannot be imprisoned since it lacks both a body and a soul. It is thus maintained that a company cannot conduct treason, felony, or other crimes in its corporate role, although its individuals may be held to commit crime in their different individual capacities. As a result, while a company cannot be indicted, individual members may be indicted for the unlawful activities they commit. It is noteworthy that this notion of corporate culpability was projected on the jurisprudential basis that there is no vicarious liability for crimes committed by agents or servants since in most cases, the confluence of actus reus and mens-rea alone would give rise to criminal liability.^[4]

The evolution of this doctrine of corporate criminal liability can be traced back to the opinion expressed in the case of Lennard's Carrying Co. Ltd v Asiatic Petroleum Co. Ltd[5], which held that a corporation is an abstraction and thus its directing will must be sought in the people who truly represents the company's directing mind and will. The court of criminal appeal, rejecting the position that a company cannot be guilty of conspiracy to defraud as a crime including mens-rea, found that both on principle and in accordance with the balance of authority, the current indictment was lawfully lodged against the company. Also, in Moore v Brester^[6] Ltd, a company was convicted of making use of a document with intent to deceive contrary to the provision of a statute.

The aforementioned English cases illustrate the legal position in Nigeria. It is now unquestionably established in Nigeria that a business is criminally liable for the actions of its members or employers. A company can be held accountable for its employees' criminal conduct as long as they act within the limits of their job and benefit the organisation. Companies cannot be imprisoned or punished in the same way that individuals can, but may be punished in a variety of ways, including high penalties, loss of business licence, and rigid government regulation.

In Nigeria, there has been a growing trend of subjecting companies to harsher punishments than those prescribed for individuals who may have acted on the company's behalf, and statutes have been enacted in addition to the Nigerian criminal code and penal code, which include provisions for corporate criminal liability. The Food and Drug Act, the Standard Organisation of Nigeria Act, the Companies and Allied Matters Act, the Consumer Protection Council Decree (2004), and so on.

In R. v Zik Press Ltd^[7] a company was convicted of an offence contrary to section 51(1)(c) of the Criminal Code. Similarly, in Mandilas & Karaberis v. COP^[8], a corporation was convicted of the offence of stealing under sections 390 and 383 of the Nigerian criminal code. In A.G Eastern Region v. Amalgamated Press of Nigeria Ltd^[9] the preliminary objection raised by the defence counsel on the ground that an offence could not be committed by a company in the absence of mens-rea was overruled by the court. In Orji Uzor Kalu v FRN ^[10], the Court of Appeal held that conclusion when asked to determine corporate criminal liability by stating that the defendant, who was the first to be convicted in the case before the Federal High Court, was the alter ego of the second accused Slok Nigeria Limited and remained his driving spirit even while he was the Governor of a State. Another panel of the Court of Appeal in Romrig Nigeria Limited v FRN^[11] similarly held that another accused person who is a director of Romrig Nigeria, was its alter ego and his absence at a key meeting with the Prosecutor meant that the company was not part of the agreed outcomes at the plea bargain meeting.

Although a company, once incorporated, has all of the capabilities of a full-fledged natural person^[12], it may only act in a general meeting through its members or its directors as its alter ego. The actions of these alter egos are attributed to the company. As a result, any act of the members in general meeting, the board of directors, or a managing director while conducting the company's business in the usual manner shall be treated as the act of the company itself, and the company shall be criminally and civilly liable to the same extent as if it were a natural person. The preceding is an example of the alter ego principle.

LIFTING THE VEIL OF INCORPORATION

The concept of corporate personality creates a 'veil' that separates the company from its shareholders. Lifting of the corporate veil occurs when a shareholder is held liable for the debt or guilty of the company's offence notwithstanding the concepts of distinct personality and limited liability.
The concept of lifting the veil is invoked when shareholders blur the distinction between the company and the shareholders in order for the latter to pursue their dishonest and selfish interests. Arguably, the fact that a person is an agent and is aware of his status does not exclude him from incurring personal culpability; whether he does so is determined by the form and terms of the contract, as well as the surrounding circumstances.

In the case of Oyebanji v State^[13] court held that by virtue of section 35 of the Criminal Code, a person who being a member of a co-partnership, corporation or joint- stock company, does or omits to do any act with respect to the property of the co-partnership, corporation or company which, if he were not a member of the co-partnership, corporation or company would constitute an offence is criminally responsible to the same extent as if he were not such member. As a result, the allegation of crime lowers the veil of corporate or voluntary connections, revealing the face of the suspected criminal who will face prosecution. When the corporate veil is lifted, the law will reach out to individual members of the firm whose conduct or act is criminally abhorrent. Recognising a company's distinctive personality results in drawing a veil of incorporation over it.

CONCLUSION

Corporate criminal liability has progressed from a narrow understanding of corporate responsibility to a more comprehensive framework that recognises the unique nature of corporate organisations while ensuring accountability. In Nigeria, this progression shows a growing acceptance of corporate culpability for criminal activities, which is backed up by judicial precedents and legislative changes. Maintaining the balance between corporate personality and accountability is crucial, with the lifting of the corporate veil serving as a key tool to ensure individual accountability within organisations.