CHAPTER 6.

CRIMINAL LIABILITY OF CORPORATE BODIES 1 Introduction Only a human being can perform an act,
as the latter term is understood in criminal law. There is an exception to this general rule: a
corporate body can also in certain circumstances engage in conduct and be liable for a crime. The
law distinguishes between a natural person on the one hand and a legal persona, juristic person,
corporation or corporate body on the other. The latter is an abstract body of persons, an institution
or entity which can also be the bearer of rights and duties, without having a physical or visible body
or a mind. Examples of corporate bodies are companies, universities, Eskom, church societies and a
local authority. 2 Desirability of punishing a corporate body It is sometimes debated whether it is
desirable to punish an entity such as a corporate body which is not, like a natural person, capable of
thinking for itself or of forming any intention of its own. It is sometimes said that the idea of
blameworthiness inherent in the concept of culpability presupposes personal responsibility –
something which an abstract entity such as a corporate body lacks. The corporate body has no
physical existence and does not think for itself or act on its own; its thinking and acting are done for
it by its directors or servants, and it is argued that it is these persons of flesh and blood who ought to
be punished. On the other hand, there is in practice a great need for this form of liability, especially
today when there are so many corporate bodies playing such an important role in society. It is very
difficult to track down the individual offender within a large organisation; an official can easily shift
blame or responsibility onto somebody else. In any event, other branches of the law, such as the law
of contract, acknowledge that a corporate body is capable of thinking and of exercising a will. This
form of liability is especially necessary where failure to perform a duty specifically imposed by
statute on a corporate body (eg, the duty to draw up and submit certain returns or reports annually),
constitutes a crime.1 Holding a corporate body criminally liable raises certain procedural questions
such as who must be summoned, who must stand in the dock, who must act on the corporate body’s
behalf during the trial, and what punishment must be imposed. In South Africa the matter has been
regulated by statute since 1917. The original section 384 of the Criminal Procedure and Evidence Act
31 of 1917 has been replaced by other sections, and at the moment the matter is governed by the
provisions of section 332 of the Criminal Procedure Act 51 of 1977. 3 Liability of corporate body for
the acts of its director or servant The section formally distinguishes between the liability of the
corporate body for the acts of a director or servant, and the liability of the director or servant for the
“acts” of the corporate body. An act by the director or servant of a corporate body is deemed to be
an act of the corporate body itself, provided the act was performed in exercising powers or in the
performance of duties as a director or servant,2 or if the director or servant was furthering or
endeavouring to further the interests of the corporate body.3 A corporate body can commit both
common-law and statutory crimes.4 It can commit crimes requiring intention, those not requiring
intention (that is, crimes requiring negligence)5 and strict liability crimes.6 Acts by a director or
servant are held to include not only acts performed by such persons personally, but also acts
performed on their instructions or with their express or implied permission.7 The culpability of the
director or servant is similarly ascribed to the corporate body.8 The word “director” has an extended
meaning: it means any person who controls or governs a corporate body or who is a member of a
body or group of persons which controls or governs a corporate body.9 Where there is no such body
or group of persons, the term “director” refers to any person who is a member of the corporate
body.10 4 Director or servant no longer liable for crimes of corporate body Section 332(5) of the
Criminal Procedure Act provides that a director or servant of a corporate body may be convicted of a
crime committed by the corporate body, unless she can prove that she did not take part in the
commission of the crime and that she could not have prevented it. In Coetzee11 the Constitutional
Court held that this provision was unconstitutional because it created a reverse onus which infringed
the presumption of innocence in section 35(3)(h) of the Constitution and that this violation could not
be justified in terms of the limitation clause in section 36(1). 5 Appearance at trial, plea, punishment
Who must stand in the dock at the prosecution of a corporate body, who must speak on its behalf
and what punishment can be imposed on it? To solve these problems, the section provides as
follows: In any prosecution against a corporate body, a director or servant of that corporate body is
cited, in her capacity as its representative, as the offender.12 She may then be treated as if she were
the accused.13 It is she who has to stand in the dock. If she pleads guilty, the plea is not valid unless
the corporate body has authorised her to plead guilty, except in the case of minor crimes where a
fine may be paid as an admission of guilt.14 If the corporate body is convicted, the court may not
impose any punishment other than a fine, even if the statute which created the crime does not
make provision for the imposition of a fine.15 The fine must then be paid by the corporate body,
even if this necessitates the attachment and sale of its property.16 The reason why a fine is the only
punishment which can be imposed is of course the fact that an entity that has no physical existence
cannot be thrown into gaol. 6 Association of persons The section further provides that if a member
of an association of persons which is not a corporate body commits a crime in the course of carrying
on the business or affairs of the association, or while endeavouring to further its interests, any
person who is a member of that association at the time of the commission of the crime is deemed to
be guilty of the crime, unless she proves, first, that she did not take part in the commission of the
crime and, secondly, that she could not have prevented it.17 If the business or affairs of the
association are governed or controlled by a committee or other similar body, these provisions are
not applicable to a person who was not, at the time of the commission of the crime, a member of
that committee or other body.18 The association of persons as an abstract entity cannot commit a
crime itself, since it is not a corporate body. A partnership is not a corporate body, but is an
association of persons for the purposes of the provision in question.19 Whether these provisions of
section 332(7), which creates the liability just set out, is compatible with the constitution, is very
doubtful. These provisions, like those in subsection (5) of section 332, create a reverse onus which
violates the presumption of innocence, and this presumption may not be justifiable in terms of the
limitation clause. The reasons set out in Coetzee20 for holding that subsection (5) is
unconstitutional, may also apply to the present subsection (7).21