Judith van Erp

Messy Business: Media Representations of Administrative Sanctions for Corporate Offenders

Enforcement against corporate offenses is increasingly carried out by specialized regulatory agencies. These often use publicity as a regulatory tool, in the expectation that disclosure of sanctions will invoke the threat of reputational damage and broadcasts a moral message about desired behavior. This article investigates how media represent administrative offenses in the Dutch financial market, in terms of punitiveness for offenders and in terms of the message about the wrongfulness and harm of offenses. Media coverage of administrative fines is messy in several senses. First, adverse publicity is unpredictable and disproportionally affects small firms in comparison with large, professional firms. In addition, it is also messy in terms of its contribution to the prevention of corporate misbehavior. Media do not unequivocally disapprove of financial market offenses. Rather than clarifying the demarcation line between right and wrong, media describe financial market behavior as a grey zone where differences of opinion can exist over whether certain behavior constitutes an offense. More than a publicity sanction or moral message, media was found to frame offenses by retail banks and capital market firms in terms of the power struggle between firms and the regulatory authority.

Naming and Shaming in Regulatory Enforcement

The publication of names of corporate offenders is often referred to as ‘naming and shaming.’ This term is, however, controversial, and regulators generally prefer the more neutral term ‘disclosure.’ For reasons of legal equality, regulators often prefer to publish the names of companies with prosecution decisions, inspection results, enforcement measures and sanctions systematically in publicly accessible inspection reports, benchmarks, performance indicator scores, offenders’ indices, public registers, black lists of offending companies, or incidental press releases on enforcement actions. This chapter is concerned with whether and how such publications influence compliance. It argues that disclosure will only positively influence compliance when regulators succeed in connecting with firms’ concern for a good reputation as a motive for compliance. It identifies three aspects of firms’ reputations that can motivate compliance. First, a reputation is a financial asset, because it enables firms to increase their market share, share value or business opportunities. Second, entrepreneurs do not only strive for a good reputation because it pays off financially, but also because they value being regarded as respectful, credible and reliable, and want to act in accordance with social norms. Third, a reputation defines duties and obligations and thus increases firms’ awareness about normative expectations of its stakeholders. Regulatory disclosure can influence compliance when it connects to one or more of these three aspects of firm’s reputations: by invoking firms’ fear of reputational sanctions, by invoking firms’ fear of public disapproval and shame, and by increasing firms’ awareness of the duties and obligations that constitute a good reputation.

Why External Witnesses Report Organizational Misconduct to Inspectorates: A Comparative Case Study in Three Inspectorates

Inspectorates and enforcement agencies increasingly depend on information from societal actors to detect and enforce business offenses, but little is known about the factors underlying external reporting. This paper aims to contribute to a better understanding of what drives external reporters to report offenses to enforcement agencies, and how reporters experience the reporting process. Potential reasons to report are derived of the literature on whistleblowing and on business relations within organizational fields. The article then presents findings of an extensive comparative, qualitative empirical study on reporting businesses. We find that reporters aim to incapacitate competitors who gain economic advantage by bending the rules, and regard inspectorates as their ally in maintaining a level playing field.

The Effect of Media Exposure of Suspects on Solving Crime

In this study we investigate the effect of showing suspects of crime in a TV programme on the probability of apprehension. We exploit exogenous variation in the number of viewers of the crime programme induced by Champions League games broadcast on competing channels. The estimates show that an increase in the number of viewers of the TV programme increases the probability of solving crime, especially for criminal cases with many potential observers or cases for which it is easier to recognise suspects due to the quality of the images. The implication of our findings is that media can be effectively used for detection of crime suspects.

Anti-cartel thrillers as a new film genre: How regulator-produced films portray and problematize cartels and communicate deterrence

This article directs the ‘visual turn’ in criminology to corporate crime, a topic that has been understudied by cultural criminologists. A recent trend of corporate crime movies suggests that film ...This article directs the ‘visual turn’ in criminology to corporate crime, a topic that has been understudied by cultural criminologists. A recent trend of corporate crime movies suggests that film can compellingly critique economic crime and unethical business cultures. This article studies how law enforcement agencies, particularly competition authorities, have connected with this trend by using film in their communicative strategy. This article introduces the emerging genre of anti-cartel enforcement thrillers: regulator-produced realistic docudramas in which fictional cartels are exposed and punished. These films’ narratives about cartel enforcement are reconstructed by studying how the films portray cartels, perpetrators and their motives, and the regulator. An analysis of four films produced in four jurisdictions demonstrates that the films deter only to the extent that the local legal and political-economic context allows: the British film reflects that country’s neoliberal ‘pro-business’ climate, while the Swedish film depicts businesses as socially responsible and the Dutch film is pragmatic rather than moralistic. Only the Australian film is explicitly punitive in its narrative as well as its imaginary, and exemplifies the persuasive potential of film in enforcement.

Motivations for Reporting Organizational Misconduct by Professional Bystanders

The vast majority of business offenses, whether systematic and serious or small and relatively harmless, remains undetected by public regulatory authorities. Yet, they are often witnessed in some form by employees, local residents, customers, competitors, accomplices or other parties. Reporting these signals to authorities can provide valuable information to regulatory agencies’ own detection and investigation activities, and thus contribute to more efficient and effective enforcement. Although an extensive scholarship exists on reporting, it has mainly focused on whistle-blowers: insiders who are directly part of or involved in the offending behaviour. This study focuses on one type of external witnesses, namely bystanders who maintain a professional relationship with a company. These could include suppliers, customers, and competitors. These parties distinguish themselves from whistleblowers in the sense that although they sustain a close relation with a (suspected) offending business, they are not directly part of the organization, let alone do they take part in the offense. Therefore, the name ‘bellringers’ has been suggested for this category. Building on the existing literature about whistleblowing and bell-ringing, this paper asks what motivates ‘bellringers’ to report suspected business violations to enforcement authorities, and how they experience the reporting process. To answer this question, an extensive empirical study was carried out of more than 350 reports of offenses at three inspectorates in the Netherlands, and 60 interviews with reporting business owners and representatives of business sector organizations and inspectorates.

Legal and Extralegal Enforcement of Pollution by Seagoing Vessels

Seagoing vessels frequently blend heavy fuel oil (HFO) with toxic waste and subsequently dump the oil in the sea. This contributes considerably to marine and air pollution. This chapter discusses the scope and nature of both activities. The high costs of legal waste management and the relative ease and impunity with which waste materials can be mixed with HFO or dumped represent a significant criminal opportunity structure. Law enforcement against hazardous waste processing at sea has tremendous limitations, which are related to detection problems and the strategic behaviour of the corporate owners of the vessels. Moreover, sanctions are often limited to financial penalties, which lack impact because the firms involved in the oil and shipping industry are among the world’s largest and financially powerful firms. Although naming and shaming is often presented as an alternative when enforcement is lacking impact, we argue that in the oil and shipping industry it might lack effectiveness because of limited media coverage of oil-related environmental incidents, the lack of ‘end consumer’ contact, and the fact that the companies involved may be able to effectively neutralise negative publicity.