Corrupt Execs, Corporate Accountability and Human Rights: Untangling the Net Around Corporate Criminal Prosecutions

06/04/2015 03:02 pm ET | Updated Jun 04, 2016

Co-authored by Sati Harutyunyan

The potential that Nike may not face charges connected with the recent FIFA scandal would be all too consistent with the trend of corporations getting away with criminal activity, with hugely detrimental effects for the protection of human rights. The U.S. government has a duty to protect human rights, including against businesses, and where there are allegations of criminal activity by a company, it is incumbent on our officials to investigate and prosecute those crimes. Unfortunately, there are significant legal, political and practical challenges to doing so that must be overcome.

Without naming Nike, the indictment of 14 FIFA officials for corruption and other charges alleges that a major U.S. sportswear company paid bribes to secure a sponsorship deal for the Brazilian national team. And Nike owes some of its success to World Cup sponsorship -- Nike's profits have grown as it has worked to edge past competitors as the world's premier soccer brand. These increases in earnings and soccer attire sales can be linked to the company's heavy investment in the World Cup.

Although the sponsorship deal struck years ago may be of little interest to soccer fans, focusing on illegal acts by corporations is critical. Prosecuting and convicting corporations and corporate officials deters future bad acts, serves as an example for other companies, and in some instances, can help secure redress for victims of those crimes. All of this is especially necessary when human rights are implicated by criminal acts.

The human cost of corruption -- and the illegal corporate acts that enable them -- has come to light in the aftermath of awarding Qatar the 2022 World Cup bid as there have been suggestions that Qatar secured the World Cup through bribery. Human rights organizations have uncovered flagrant exploitation of laborers and abuse that amounts to modern-day slavery in Qatar's preparations for the tournament. Reports have revealed workers living in abysmal conditions, and working around the clock for extremely low wages. In 2012, 246 workers reportedly died from "sudden cardiac death." The record-breaking number of laborer deaths and poor workplace safety assurances do not fully encapsulate the human rights at stake, though. In addition to the grief of greeting their loved ones in body bags, widows and families inherit debts to employers that fail to provide compensation for the laborers' deaths to begin with.

Corporations have a responsibility to respect human rights, including in instances where they are merely linked to human rights abuses. Accordingly, activists have created "anti-logos" to shame corporate sponsors of the Qatar World cup despite overwhelming evidence of ongoing human rights concerns.

Where businesses participate in corrupt schemes to obtain business, their responsibility is even stronger -- these businesses could be said to have contributed to the abuse. The United Nations Guiding Principles on Business and Human Rights stipulate that "States must take appropriate steps to ensure ... those affected [by business-related human rights abuses] have access to effective remedy." This State duty includes punitive sanctions such as enforcement of criminal laws. An ongoing project looking at the issue of corporate criminal activity lead by the International Corporate Accountability Roundtable and Amnesty International -- the Commerce, Crime, and Human Rights Project (CCHRP) -- will develop recommendations for States as to how to address challenges to enforcing such laws.

Because the U.S. anti-corruption law, the Foreign Corrupt Practices Act, prohibits bribery of foreign officials, corporations like Nike that allegedly commit commercial bribery may evade prosecution by the Department of Justice, but the Securities and Exchange Commission could enforce its books and records rules aimed at curbing corruption by businesses, and it should indeed do so. This move could be quite meaningful in deterring future acts by companies, and in securing some form of remedy to the countless victims.