Canadian Lawyer InHouse

CFPOA. In January of this year, it paid a $10.35-million fine, the highest ever under Canadian bribery law. In 2011, Niko Resources Ltd., also of Calgary, paid a $9.5-million fine for bribing a Bangladeshi government minister with free trips and a luxury vehicle after a blowout at one of its wells in that country. More recently, in August this year, the Ontario Superior Court convicted Nazir Karigar, an agent for Cryptometrics Canada, an Ottawa-based technology company, for agreeing to bribe a foreign official under the CFPOA. It's the first prosecution to have proceeded to trial involving an individual. With more than 30 active investigations underway by the RCMP team tasked with rooting out corruption by Canadian companies, lawyers expect more cases will be hitting the courts. Goodman's Keefe says general counsel need to have a compliance and education program in place "and if they do not they should be taking steps immediately to do so because there are going to be a lot more investigations in Canada." aTTiTudeS changing Kristine Robidoux, a lawyer at Gowlings LLP who began specializing in corruption and business ethics in 2005 when she saw enforcement in the U.S. step up and expected that to "trickle north," says directors initially looked at her like she had "three heads." "I can't tell you how different that is now," says Robidoux, who led the team that marshaled Griffiths through its investigation and disclosure. She also defended Niko. "It really has changed," she says, noting directors at private and public companies are taking corruption seriously. Primero's Lendon notes "when people on boards see potential jail term for 14 years, it gets their attention."  While Canada's law has been in place since 1999, Robidoux says "historically Canada has not prosecuted this kind of activity." That is quickly changing due to a number of factors, such as the OECD focus on anti-corruption and the increasingly global nature of the economy. The RCMP now have exclusive jurisdiction for laying charges and Robidoux says the division responsible is "well funded," becoming "increasingly specialized," and is developing "expertise, knowledge, and investigative techniques" to address corruption. For companies that already operate globally or are inter-listed on U.S. exchanges, the heightened focus on anticorruption won't change much, since they have already been dealing with foreign bribery laws, often under the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act, which is considered the gold standard among bribery laws. "Those of us who are in global organizations have been ahead of the game. We have been dealing with corruption legislation in other jurisdictions," notes Christa Wessel, chief human resources and legal officer with McCain Foods Ltd. in Toronto. However, for privately held companies and those expanding globally, it's putting pressure on them to develop more comprehensive anti-corruption policies and programs and forcing general counsel to more closely examine company practices and develop an understanding of what constitutes corruption. For example, one of the interesting points about the CFPOA amendments is Canada has elected to follow the U.K. and eventually eliminate facilitation payments; however, our largest trading partner, the U.S., has not. That worries John Boscariol, head of the international trade and investment law group at McCarthy Tétrault LLP. "It is causing a lot of concern among Canadian companies that do business in jurisdictions where facilitation payments are normally required to do business." He said in some countries, such as Africa, facilitation payments "happen all the time." It could be something as innocuous as paying to exit a country or get a passport back or to speed up the clearance of goods across a border. "I hope the government will not eliminate this exception, while the U.S. companies can still benefit." However, a number of Canadian companies already ban facilitation payments. Daniel Desjardins, senior vice president and general counsel at Bombardier Inc., says Canada is catching up to what the U.K. does. Desjardins, who has a 175-lawyer department spread across 17 jurisdictions, said the focus by governments on anti-corruption laws is good for businesses and "levels the playing field for everybody." "It's a fact of life. You have to conduct your business in the proper way. The U.K. B ribery is a growing problem, according to Transparency International, a global organization that tracks corruption. The 2013 Global Corruption Barometer, a survey of 104,000 people from 107 countries, found 27 per cent of people reported paying a bribe and 53 per cent say corruption has increased in the past two years. Only 18 per cent believe it has decreased. The police and judiciary were cited as the two services most bribe prone; utilities and taxes were least. According to its 2011 Bribery Index, companies from the Netherlands, Switzerland, and Belgium were least likely to engage in bribery, while companies from Russia, China, and Mexico were most likely to offer bribes, according to executives it surveyed. The organization noted the Bribery Index scores have remained relatively the same since it started the survey in 1999. Canada currently ranks sixth as the country where its corporations are least likely to bribe; however, its score declined from 2008, where it ranked first. According to Transparency International's 2012 Corruptions Perception Index, which examined 176 countries, Afghanistan, Korea, and Somalia were perceived to have the most corrupt public sector. However, many countries where Canadian companies do business scored poorly, including many South American countries where mining firms operate, most African countries, and Russia and the surrounding regions. Denmark, Finland, and New Zealand were perceived as having the least corrupt public sector. Canada ranked 9th, tied with Netherlands, but ranked higher than the U.K. or U.S. — JM

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