Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50882
ORRUPTION ON E ON very year, Transparency International, an anti-brib- ery watchdog with chapters across the world, puts out a global map of corruption based on a perceptions survey it con- ducts. There is corruption everywhere, says Bronwyn Best, executive director at the organization's Canadian chapter. "It is part of the strata of every coun- try in the world, including Canada." But the more you look at the map, the more a general trend becomes visible: the poorer the country, the higher the corruption. Canada shows up on the clean end, placing sixth in the world for low corruption, up there with the Scandinavian countries, performing bet- ter than the United States. The problem is many Canadian companies don't do business only in Canada. Many operate in countries where bribing officials to get an advantage is perceived as a com- mon occurrence. How do they hold on to Canadian values in a place where the business landscape is so different? The Bank of Nova Scotia, for example, has operations under its Scotiabank brand in about 50 countries, some of which show up as highly corrupt in the TI index. Its executive vice president, general coun- sel, and secretary, Deborah Alexander, says the bank's answer has been to impose strict internal rules to meet the highest international legal standards and educate everyone who works for the bank abroad to follow the best practices. "We actually spent a lot of time on this. We have trans- lated everything into I don't know how many different languages. Training is a huge issue for us," says Alexander. How to deal with corruption abroad is a dilemma Canadian companies don't face alone. That's why there have been efforts at both the national and international levels to punish companies that bribe foreign officials, hurting a fair competition process and further impoverishing the countries where they are operating. There are con- ventions sponsored by the United Nations and the Organisation for Economic Co-operation and Development to fight bribes abroad and national laws in many countries, including Canada's Corruption CORRUPTION of Foreign Public Officials Act, which has been in the books since 1999. Best says since Canada has signed on to all the appropriate conventions on the matter — both at the OECD and UN — it has an obligation to fully enforce the anti- corruption laws against its own companies operating abroad. But at least one of those organizations is saying Canada might not be doing enough. In late March, Ottawa became the target of an OECD report highly criti- cal of Canada's enforcement of its foreign official anti-bribery laws. The report noted Canada needs to do more to investigate and prosecute bribery of foreign public officials by Canadian companies. It also said given the size of Canada's economy and its high-risk industries — oil, gas, and mining — Canada should review its law and approach to enforcement. Since the CFPOA passed in 1999, only a single pros- ecution under it has been completed in Canada, but there are currently 20 ongo- ing investigations and one case is in the courts. The report acknowledged the number of investigations has increased, crediting the creation of the RCMP International Anti-Corruption Unit. It "has been mak- ing substantial efforts to investigate allega- tions of the bribery of foreign public offi- cials and raise awareness of the offence," said the report, adding "Canada's ability to successfully prosecute these investiga- tions will be in jeopardy unless the Public Prosecution Service of Canada is given the resources it needs to prosecute the large volume of cases that may soon follow the investigations." The report roused a lot of debate in Canada in late March, including an expert panel discussion at the University of Toronto Faculty of Law, where Alexander and Best made their comments. Those in attendance included the RCMP's top man in charge of enforcing Canada's foreign official anti-bribery legislation, Insp. Gord Drayton. He told the Toronto audience he can't comment on ongoing investiga- tions, but the fact that there are 20 ongo- ing cases is a sign the system is at work. It just takes time to investigate, so patience is required. "Take a case in Canada, that's CORRUPTION complex. Going through different prov- inces causes enough problems — take that and start crossing borders," says Drayton, adding it can take six months to a year for authorities in other countries with which the RCMP has agreements to respond to requests for information. "Yes, we have investigations that are ongoing, there are some that are going to be rolling out and will be coming to an end where they will be going in front of the court system in the next few years. But you have to be patient with us, because it takes time to conduct these investigations." The OECD report noted the RCMP might not have enough resources to be aggressive, because officers of the task force are often reassigned to other duties. But Drayton says his task force has the necessary manpower to investigate, and just as the task force lends officers for other duties when they are needed, additional external RCMP teams also assist the for- eign corruption task force when it requires extra help. Manpower is not an impedi- ment, he says. Drayton does point out the unit faces some problems. There is not a lot of report- ing when it comes to this type of offence, for example, and the Canadian legislation is very short and can be hard to interpret during an investigation. "There is no juris- prudence on it, so it's very difficult," he says. Anita Anand, a professor at the University of Toronto Faculty of Law, agrees. "If you take a look at the [Canadian] legislation to see what its goals are you will see that the act itself is very, very short, one, maybe two pages long. There is no preamble, and there is no discussion in the statute as to what the objectives of this statute are." The Canadian legislation does point out the country's commitments under the OECD convention it has ratified, which offers more details on the responsibilities for companies operating outside their home countries. But the expert panel noted that in addition to the Canadian law, which meets the country's interna- tional obligations, many Canadian com- panies operating abroad are, or at least should be, mindful of U.S. and U.K. laws in this area, which affect Canadian com- panies in several ways. INHOUSE JUNE 2011 • 31 CORRUPTION CORRUPTION CORRUPTION