Putting firms in the dock

One of them – currently the subject of a heated debate – is should businesses, as legal entities, be subject to criminal proceedings. To date, criminal acts must always be directed at personal individuals in order to come in line with the current laws.

The amended Penal Code draft has, however, tried to address the criminal behaviour of businesses by defining them as individual legal entities. The question of what sanctions to apply, or whether businesses should be regarded as legal entities subject to criminal proceedings at all, has sparked a hot debate, with both lawyers and members of the public weighing in with their opinions.

According to Nguyen Van Hoan, deputy head of the Department of Criminal and Administrative Law under the Ministry of Justice, it is important to allow for the criminal liability of businesses as legal entities because violations have become increasingly widespread in recent years, causing serious consequences economically and socially.

For example, in past years there have been rising cases where businesses deliberately discharged wastewater into the environment, with huge negative impacts on the health and means of living for people in the surrounding areas. However, under current regulations such violators are not subject to criminal proceedings, and will instead only incur meagre fines – the equivalent to a rap on the knuckles – but nothing approaching a meaningful deterrent to reoffending.

Meanwhile, when those affected are seeking compensation they must provide concrete evidence proving how much damage they incurred and how this has been evaluated. Using civil law to handle these cases is often time-consuming and ends with claimants coming away empty-handed.

Within this context, the amended Penal Code draft has proposed a range of sanctions applicable to misdeeds by businesses, including fines; temporarily suspending business licences, or temporarily suspending the operation of businesses; permanently revoking business licences, or suspending their operations; or barring offending businesses from operating in certain areas; or barring them from raising capital.

Lawyer Le Viet Ha, director of Vinh Duc Law & Associates said that 119 member countries of the International Convention on Anti-Corruption had regulated the criminal liabilities of business legal entities. As such, Vietnam should follow suit to ensure the fair treatment for local businesses.

The proposed new sanctions have, however, generated a backlash of concern. For example, in cases where a business faces having its licence taken back permanently, this would also affect the lives of its labourers, who may be completely blameless in the firm’s misconduct. In such a case, objectors have asked, who will bear the responsibility of creating new jobs or paying compensation to the out-of-work labourers?