Government Response to the Fifteenth Report of the Standing Committee on Justice and Human Rights

Corporate Liability

November 2002

Background

The Westray Disaster

The impetus for the consideration of the criminal liability of corporations, officers and directors by the Standing Committee was the 1992 Westray mining disaster which killed 26 miners. The province of Nova Scotia appointed Justice K. Peter Richard to conduct an inquiry in to the disaster. Justice Richard concluded that the deaths were the catastrophic result of a series of failures in mining practices. Indeed, he entitled his report on the tragedy "The Westray Story, A Predictable Path to Disaster."

The Westray mine was subject to a complete set of rules and regulations to promote the safety of the mine set by the Province of Nova Scotia and enforced by provincial officials. However, as the Report states: The key to any successful regulatory regime is compliance, and the key to compliance is enforcement. As has been so graphically illustrated in the Westray experience, regulations, no matter how effective on paper, are worthless when they are ignored or trivialized by management and when their enforcement is in the hands of an apathetic and insensitive inspectorate. [1]

In his report, Justice Richard made many findings of unsafe practices and inadequate inspection and training. He made more than 70 specific recommendations on changes in legislation, policies and practices to rectify the problems. The contrast between these recommendations and the recommendation that the Government of Canada should study "the accountability of corporate executives and directors for the wrongful or negligent acts of the corporation"[2] is striking. Justice Richard made no findings with respect to inadequacies of the criminal law or recommendations for change and noted that making recommendations to overhaul the criminal law was beyond the scope of the inquiry.

The Government is aware of the frustration felt by the families of the Westray victims over the apparent inability of the criminal justice system to deal with what appears to have been serious corporate wrongdoing. However, the failure of the Westray prosecutions was the result, in part, of a series of prosecutorial decisions which were themselves the subject of a review by provincial authorities. Indeed, it appears that prosecutors believed there was a reasonable possibility of conviction of both the corporation and two of its officers, under current Canadian law governing corporate criminal liability, until one of three prosecution experts developed doubts as to the cause of the explosion. As a result, the question whether the actions of Curragh Inc., the owner and operator of the Westray mine, and some of its officers and directors amounted to criminal negligence causing death or manslaughter never came to trial.

While witnesses before the Standing Committee frequently referred to Westray, the Government notes that no witness claimed that the disaster would have been prevented by changes in the criminal law alone. At best, it was suggested that changes in the law could prompt directors and officers of corporations to be more vigilant on safety issues.

Workplace Safety and the Criminal Law

Fostering greater safety for the workers and the public was the central concern in the Committee hearings. The secondary role of the criminal law in this field must, however, be recognized. As Professor Poonam Puri wrote in her paper "Sentencing the Criminal Corporation", which she provided to the Standing Committee, "Most corporate wrongdoing is not prohibited by the Criminal Code, but rather by various regulatory statutes such as the Competition Act, provincial securities acts, the federal and provincial corporate law statutes, the Income Tax Act, occupational health and safety legislation and environmental protection statutes." [3]

Unlike workplace safety and health legislation that can mandate certain practices, the criminal law, by its very nature, is reactive. It does not prescribe how an activity should be carried out. Instead, it sanctions harm that has been caused by a flagrant disregard of the norms of society. Consequently, reform of the criminal law in this area must not be considered without taking into account the various regulatory regimes that apply to corporations.

The criminal law must be reserved for the most serious offences, those that involve grave moral fault. In 1976, the Law Reform Commission of Canada made an eloquent plea for restraint in pushing back the limits of the criminal law: Criminal law is not the only means of bolstering values. Nor is it necessarily always the best means. The fact is, criminal law is a blunt and costly instrument--blunt because it cannot have the human sensitivity of institutions like the family, the school, the church or the community, and costly since it imposes suffering, loss of liberty and great expense. So criminal law must be an instrument of last resort. It must be used as little as possible. The message must not be diluted by overkill - too many laws and offences and charges and trials and prison sentences. Society's ultimate weapon must stay sheathed as long as possible. The watchword is restraint - restraint applying to the scope of criminal law, to the meaning of criminal guilt, to the use of the criminal law and to the criminal sentence. [4]

It is the view of the Government that the first line of defence against death and injury in the workplace is workplace safety and health regulation. For that reason, the Government has taken significant measures to ensure that workers in federally-regulated industries are protected, most recently through extensive amendments to Part II of the Canada Labour Code (Bill C-12, now S.C. 2000, c. 20) that mandate significant new rights for workers: the right to be informed about hazards in the workplace, the right to participate in correcting those hazards, and the right to refuse dangerous work. As well, the role of such committees as the Workplace Health and Safety Committee, and the Policy Health and Safety Committee is strengthened and fines of up to $1,000,000 are provided for breach of the Code.

The Government does not intend to use the federal criminal law power to supplant or interfere with the provincial regulatory role in workplace health and safety. At the same time, the Government believes that the criminal law can provide an important additional level of deterrence if effectively targeted at -- and enforced against -- companies and individuals that show a reckless disregard for the safety of workers and the public. The Government shares the sentiment expressed by many members of the Committee, and by most of the witnesses during the course of the hearings, that our current approach to corporate criminal liability has deprived the criminal law of much of its deterrent effect in this area.

The Government notes the testimony of Assistant Commissioner William Lenton of the RCMP that the issues before the Standing Committee dealt with "a mixture of Labour Code and worker safety issues which are covered primarily in a regulatory scheme." [5] Regulatory violations that rise to the level of criminal wrongdoing will ordinarily be detected by regulatory inspection officials rather than the police. The Government will consult with the provinces and the police to ensure effective integration of regulatory and police policies and practices addressing workplace safety.

Date modified: