Canada lax on mining anti-bribery efforts: OECD

Published by MAC on 2011-04-04
Source: Postmedia News, statement

Canada lax on mining anti-bribery efforts: OECD

'Significant concerns' raised that only one conviction made

By Peter O'Neil

Postmedia News

29 March 2011

Canada, given its leading role in the corruption-prone global mining sector, should be producing better results in its battle launched a dozen years ago to fight against the bribery of foreign government officials by Canadian corporations, the Organization for Economic Co-operation and Development said Monday.

Only one company has been found guilty of paying a bribe to a foreign government official since the federal government passed legislation in 1999 to comply with OECD's global antibribery convention.

The OECD, which has been monitoring all signatories to the convention since it was adopted in 1998, said it has "significant concerns" about Canada's antibribery law and its enforce-ment capabilities.

It drew its conclusions after a so-called working group of U.S. and Austrian government experts on bribery visited Canada in October, following up on a 2004 on-site assessment of the federal government's performance.

"Given the size of Canada's economy and its high-risk industries, the working group recommends Canada review its law implementing the convention and its approach to enforcement to determine why it has only had one conviction to date," concluded the report released Monday by the Paris-based policy think-tank that is funded by 34 member countries.

The report cited Canadian government information noting that in 2008 more than three-quarters of the world's exploration and mining firms were Canadabased, and that these 1,293 companies were involved in Canada and more than 100 countries around the world.

Officials with industry and non-governmental organizations who met with the OECD working group noted that "high risks of bribe solicitation are pres-ent in a number of countries where the extractive industry operates," Monday's report said.

In 2005 the Alberta-based Hydro Kleen Group Inc. received a $25,000 fine for bribing a U.S. immigration officer at Calgary International Airport, becoming the only company ever convicted under the act.

The OECD report said it "welcomes" stepped-up Canadian enforcement since the RCMP established anti-corruption teams in Ottawa and Calgary in 2008.

It credited this initiative for recent progress that has led to the launch of one prosecution, of an Ottawa man named Nazir Karigar who was accused last year of bribing an Indian government official, and more than 20 active investigations.

"However, the working group considers that the future of these cases and enforcement more generally of the Corruption of Foreign Public Officials Act may be uncertain, due to significant concerns that remain about Canada's framework for implementing the convention," the report stated.

---

Canada's enforcement of the foreign bribery offence still lagging; must urgently boost efforts to prosecute

OECD Statement

28 March 2011

Although Canada has recently made progress in investigating the bribery of foreign public officials by Canadian businesses, Canada has only completed one prosecution since it enacted its foreign bribery law in 1999. A new report by the OECD states that Canada's regime for enforcement of the Corruption of Foreign Public Officials Act (CFPOA) remains problematic in important areas.

The OECD Working Group on Bribery has just completed a report on Canada's enforcement of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Enforcement has recently increased, with one company convicted in 2005 for violating the CFPOA, one ongoing prosecution and over 20 active investigations, the report notes. Credit for these cases is largely attributed to the RCMP International Anti-Corruption Unit, established in 2008. The RCMP Unit has two teams - one in Ottawa, Canada's capital, and another in Calgary, Canada's hub for the extractive industries. The Unit is also commended for its substantial public outreach and awareness-raising efforts.

But the report warns that Canada's ability to successfully prosecute these investigations 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.

Other main recommendations of the Group are as follows:

• Amend the CFPOA so that it is clear that it applies to bribery related to the conduct of all international business, not just business ‘for profit';
• Ensure that sanctions applied in practice for CFPOA violations are effective, proportionate and dissuasive;
• Take such measures as may be necessary to prosecute Canadian nationals for bribery of foreign public officials committed abroad; and
• Clarify that police and prosecutors may not consider factors such as the national economic interest and relations with a foreign State, when deciding whether to investigate or prosecute allegations of foreign bribery.

The Working Group commended Canada for codifying corporate liability in the Criminal Code for CFPOA and other offences, as well as important initiatives for increasing reporting of foreign bribery in the public and private sectors, including enacting a Criminal Code offence of threatening or retaliating against employees who report misconduct.

The report, available at www.oecd.org/daf/nocorruption, lists all of the recommendations to Canada adopted by the Working Group on Bribery - which includes the 34 OECD Member countries plus Argentina, Brazil, Bulgaria and South Africa - and includes an overview of enforcement efforts and specific legal and policy features in Canada for combating the bribery of foreign public officials. Due to the significance of the issues raised in this report, the Working Group recommends that Canada report back to it on progress in October 2011. Following the usual process, Canada will also make an oral report within one year and a further written report within two years, which will be made publicly available.

For further information, journalists are invited to contact Mary Crane-Charef, OECD Anti-Corruption Division Communications Officer, e-mail Mary.Crane@oecd.org, tel. +33 1 45 24 97 04.

For more information on OECD's work to fight corruption, visit www.oecd.org/daf/nocorruption.