Corporate and White Collar Crime

John Minkes, Leonard Minkes, John Minkes, Leonard Minkes

• Publisher: SAGE Publications Ltd
• Year: 2008
• ISBN:
  9781446241882
• Edition: 1
• Topic: Social Sciences
• Subtopic: Criminology
• Index: Social Sciences

`This timely collection contains contemporary case studies and critical analyses by leading writers in the study of white collar corporate crime. It makes an invaluable contribution to the ?criminology of the corporation?" - Professor Hazel Croall, Glasgow Caledonian University

Corporate and White Collar Crime is an essential overview of this diverse subject area and encourages students to develop a broad understanding of the topic. Aimed primarily at undergraduate and postgraduate students in Criminology, Criminal Justice and Business and Management Studies, the book will cross-over into many other disciplines including Law and Social Policy.

"This is an innovative and multidisciplinary analysis of corporate and white collar crime that is both theoretically and empirically rich. The text serves as a poignant reminder why research involving the powerful must be a central part of criminological inquiry and why this book is essential reading."

Professor Reece Walters, The Open University

"Again and again, pension funds are pillaged, investors fleeced, commuters killed, workers maimed, and communities poisoned. Why is it that so few of these acts are defined as crimes, and why is it that, even when they are, prosecution is so rarely effective? Corporate Crime and White Collar Crime addresses these very questions through its rigorous, well-developed analysis and its wide ranging empirical focus - on Europe, North America, Asia and beyond. The book can help all of us to re-examine our understanding of the nature of crime and of criminals, and to reassess the costs as well as the benefits of our current economic, political and social order."

Professor Frank Pearce, Queen?s University, Canada

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ONE

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Corporations and Health and Safety

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Steve Tombs

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Introduction

Corporations affect – or, as this chapter will begin by indicating, infect – every area of our lives. And if the ubiquity of the corporation is, it must be remembered, a relatively recent phenomenon, in the past 30 years or so, the influence of corporations over and within our daily lives has grown exponentially. Swept along on the international tidal wave of neo-liberalism, governments across the world have, in that 30-year period, relinquished ownership and control of whole swathes of economic activity and services provision. Transportation systems, the provision of basic utilities such as electricity, gas, water, telecommunications, health care and social services, pensions provision, even the conduct of war, state security and intelligence, and criminal justice are now arenas in which corporations play increasingly significant roles. If the mixed economy still exists in some states, the private sector has gained political, economic and moral (Tombs, 2001) ground during this period.

If there are benefits of this activity, the rise of the corporation, coupled with the states’ very recent handing over of activities to them at the same time as softening regulatory regimes, has increased our exposure, as citizens, workers, consumers, and so on, to the inherent downsides of corporate activity. Some of these, those harmful and illegal activities of corporations which detrimentally affect human health and safety, are the subject of this chapter.

Corporate crimes against health and safety

Corporate crime is a wide-ranging term, and has been subject to enormous, and in many respects unhelpful, definitional controversy. For the purposes of this chapter, such crimes are as ‘illegal acts or omissions, punishable by the state under administrative, civil or criminal law, which are the result of deliberate decision-making or culpable negligence within a legitimate formal organization’ (Pearce and Tombs, 1998; 107–10, following Box, 1983, Schrager and Short, 1977). Even this relatively simple definition encompasses a vast range of offences of omission and commission with differing types of modus operandi, perpetrators, effects, and victims – and many of these offences impact directly, or vicariously, upon people’s health, safety and well-being.

One general area of corporate crimes are those committed directly against consumers, many of which affect their health and safety. Examples include: the sale of unfit goods (such as the drug Thalidomide); the provision of unfit services (trains which crash, aircraft in which we breathe polluted air or suffer illness as a result of inadequate leg room); false/illegal labelling or information (endangering health when household cleaning products are improperly used, for example); and the fraudulent safety testing of products (as in the development of the contraceptive device, the Dalkon Shield). A classic example of a crime directly against consumers, routine in its commission but perhaps unique in its consequences, was the outbreak of E-Coli among Lanarkshire residents in November 1996, resulting in 18 deaths and almost 500 people ill. The poisoning was traced back to a local butchers, eventually fined £2,500 for failing to ensure equipment was kept clean and that food was protected against contamination. More generally, food poisoning, although with generally far less significant consequences, is widespread. For example, the 2001 FSA Consumer Attitudes to Food survey recorded 12 per cent of UK consumers – equivalent to 5.5 million people – stating they had experienced food poisoning in the last year. Almost three-quarters of them – approximately 4.2 million – believed their food-borne illness was caused by food prepared out of the home.¹ By the fourth survey, self-reported incidence of food poisoning was at 16 per cent of the sample population, 82 per cent of them claiming the source was outside the home (TNS, 2004: 61). Only 2–3 per cent reported these cases of food poisoning to their local council or an environmental health officer; of this percentage, just 11 per cent were aware of any action being taken against the outlet in question (TNS, 2004: 65). According to the Food Standards Agency, 365,356 establishments were inspected in the UK in 2005/06; 160,158 uncovered infringements which led to formal action by the enforcement authorities.²

We can also identify crimes arising out of the employment relationship. One area that has been subject to study more than most, and which falls into this category, are crimes against worker health and safety. And even a cursory scrutiny of this one sub-category indicates the heterogeneity of the offences under consideration in this chapter. Such offences may, for example, produce large-scale disaster – such as the gas leak at Bhopal, India, which killed tens of thousands (see Pearce and Tombs, 1998: 194–219); or a multiple fatality train crash (Wolmar, 2001: 155–79); more often, the consequences of such an offence are very localized, if often tragic (such as the death of Simon Jones, a 24-year-old student who died within hours of his first day at work at Shoreham docks).³ Even more likely is the creation of an illegal and unsafe state of affairs which may produce no death or injury. That said, being a victim of a work-related fatality in the UK is much more likely than being a victim of homicide. And even if not all of these deaths are formally processed as crimes – of the 1,600–1,700 deaths per annum, only about 200 are ever investigated – there is good evidence from the regulator, the Health and Safety Executive, to believe that some two-thirds to three-quarters are the result of offences (Tombs and Whyte, 2007). Offences producing death – and the same goes for injuries – are widespread.

A final category of offence, crimes against the environment, includes illegal emissions to air, water, and land; the failure to provide, or the provision of false information; hazardous waste dumping; and illegal manufacturing practices. Thus, as citizens we may breathe illegally polluted air, ingest toxins from waterways, and suffer exposures from poorly maintained HGVs (Heavy Goods Vehicles), taxis and buses. The vast majority of such exposures are never recognized, let alone processed as crimes. For example, a 2001 Greenpeace report calculated that between 1999 and 2001 there were 533 known breaches of licences by the ten municipal waste incinerators operating in England. Most were likely to be emissions of dioxins, highly toxic, known cancer-causing substances – but only one of these breaches had been prosecuted (Brown, 2001; Whyte, 2004). More recently, the Government’s latest Corporate Environmental Crime⁴ report notes that

[The] number of substantiated environmental incidents reported to the Agency remains relatively constant at about 29,000 pa … Of this number, approximately 1,300 are of the most serious category 1 and category 2 types where major or significant environmental harm has been caused. (House of Commons Environmental Audit Committee, 2005: Evidence Ev1).

The Environment Agency currently conducts about 700 prosecutions per annum (ibid.). The Report further noted that ‘SMEs [Small and Medium Enterprises] are responsible for up to 80% of all pollution incidents and more than 60% of the commercial and industrial waste produced in England and Wales.’ ‘[Environment Agency] … research shows that, 70% … or 75% of SMEs are not actually aware of their environmental obligations’, and ‘the majority of these businesses are also not aware of environmental legislation’ (ibid.: 14). There are 3.7 million SMEs registered in the UK; it is clear that the scale of environmental offending is vastly under-recorded.

Even this brief overview of the range of offences that fall within the general rubric of ‘corporate crime’ indicates that such crimes have enormous physical costs – deaths, injuries, ill-health – arising out of dangerous workplaces, polluted environments, unsafe goods and services, and so on. Corporations impact upon our health and safety in a myriad of direct ways. Yet corporate crimes also have corrosive social effects. The physical costs in general fall upon those in society who are already relatively disadvantaged: low paid workers are most likely to work in dangerous workplaces; poorer people are least able to relocate from polluted neighbourhoods; those on the tightest budgets are most vulnerable to purchasing unfit goods, such as the cheaper cuts of ‘fresh’ or processed meat. A further social cost of corporate crime is a diminution of social trust in the corporations upon whom we rely for employment, the food we eat, the services we use, and, by implication, the lack of trust in governments for their failure to regulate effectively the activities of these corporations.

Corporate crimes, law and order

Given their ubiquity and significant consequences, why are corporate crimes against health and safety almost entirely absent from ‘crime, law and order’ agendas? To address this question we need to recognize that there is an array of social processes that contribute to removing such offences from dominant definitions of ‘crime, law and order’ (Slapper and Tombs, 1999).

For example, both formal politics and the law play crucial roles in the production and maintenance of definitions of ‘real’ crime that exclude corporate crimes against health and safety. At the political level, both in particular policy decisions – such as resource allocations for various enforcement agencies – and in the political rhetoric of crime, law and order, corporate crimes are largely marginalized. As political parties ratchet up the stakes to sound tougher on crime, the crimes to which they refer, so ‘natural’ that this never needs definition, refers to those conventional offences, mostly committed by marginalized, lower-class young men. Turning to the application of law and legal regulation, we find that, at every stage of the legal process, law tends to operate quite differently with respect to corporate crimes than in the context of ‘conventional’ crimes. Thus, in the very framing of the substance and parameters of legal regulation, its enforcement, the ways in which potential offences and offenders are investigated, the prosecution of offences, and the use of sanctions following successful prosecution, most forms of corporate and organizational offences are relatively decriminalized. As indicated above, if just 200 of the 1,600-plus fatal work-related injuries that occur in the UK each year are investigated, then the prosecution, conviction and sanctioning levels are similarly low – most recent figures show 22 prosecutions following a work-related fatality, with 18 convictions resulting in an average fine of £27,876.

Related to the political and legal invisibility afforded to corporate crime is the poverty and paucity of official corporate crime data. Measures used to indicate the scale of the crime problem do not include corporate offences. Quite simply, we lack basic, utilizable data on the scale of victimization to corporate crimes against health and safety. Even official measurements of deaths at work – irrespective of whether or not these were the result of crimes – is unreliable. Thus, while the Health and Safety Executive (HSE) claims there is a headline figure of around 250 such deaths in any one year, the more accurate total is some 1600–1700 (Tombs and Whyte, 2007). Deaths from occupationally caused illness are even less reliably measured. The example of one category of deaths in one country – deaths from asbestos exposures in Britain – is instructive here. HSE has noted that in 2004, there were 1,969 deaths from mesothelioma, an asbestos-related cancer, and ‘around as many asbestos related lung cancer deaths in Great Britain’ in the same year, along with 100 deaths where ‘asbestosis is described as being the underlying cause’.⁵ In fact, as the HSE itself recognizes, the actual numbers of deaths related to asbestos exposure are far, far higher than this 4,000 per annum total. Asbestos-related deaths continue to rise in this country (not to peak until around 2025, according to the British government), years after the apparent demise of the industry, and over 100 years after the first record of death related to asbestosis in this country (Tweedale, 2000: vii). Thus:

Excess deaths in Britain from asbestos-related diseases could eventually reach 100,000 … One study projected that in western Europe 250,000 men would die of mesothelioma [just one asbestos-caused cancer] between 1995 and 2029; with half a million as the corresponding figure for the total number of West European deaths from asbestos. (Ibid.: 276)

Even these estimates can be questioned if one examines attempts to uncover much more localized estimates. For example, through the use of novel sources of data, the Merseyside Asbestos Victims Support Group has been able to compile indications of the sheer scale of victimization in Liverpool and surrounding areas. It uncovered a letter sent by a consultant pathologist working in Liverpool Broadgreen Hospital in 1976 to the Asbestos Information Committee, an asbestos industry-supported body. Part of that letter notes:

At present I am assessing the asbestos fibre lung content of the adult population of Liverpool, from post-mortem tissues and surgical tissues, in people who had no known asbestos contact. By the method I use most urban adults have between 2,000 and 7,000 asbestos fibres of dried lung. Only 8% of the population studied so far had a total absence of asbestos.⁶

Similarly, as the Group also reports, an occupational health project interviewed 2,601 men in doctors’ waiting rooms in Liverpool between April and October 1992 and found 335 cases of exposure to asbestos. Thirteen per cent – or one in eight – men ...