Business Corruption: Canada To Toughen Law Against Bribing Foreign Officials

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FOREIGN BRIBERY CANADA
Pierre Duhaime leaves SQ headquarters in Montreal, Wednesday, November 28, 2012, after being arrested on charges relating to fraud. The Harper government is set to introduce legislative changes that will toughen the country’s laws against bribing foreign officials, amid growing allegations against Canadian companies operating abroad. (THE CANADIAN PRESS IMAGES/Graham Hughes) | CP

The Harper government is set to introduce legislative changes that will toughen the country’s laws against bribing foreign officials amid growing allegations against Canadian companies operating abroad.

Foreign Affairs Minister John Baird announced changes to Canada’s Corruption of Foreign Public Officials Act that will raise the maximum penalty for bribing a foreign official from five years to 14.

The changes to the law will also make it easier to prosecute suspects by giving law enforcement jurisdiction over any Canadian or Canadian company, regardless of where the alleged bribery took place.

But the law will limit who can launch foreign bribery prosecutions, giving the RCMP sole jurisdiction in the matter.

“Our government ... expects Canadian business to play by the rules,” Baird said.

“This, we hope, is a good faith sign that Canada’s good name retains its currency.”

But Canada’s name has taken some hits recently with respect to business dealings abroad. Most prominently, allegations of bribery have swirled around engineering giant SNC-Lavalin, whose former CEO, Pierre Duhaime, was arrested last fall on charges relating to fraud.

Canadian and Swiss authorities are investigating allegations that senior SNC executives paid hundreds of millions of dollars in bribes to Libya’s former Ghadafi regime in order to secure contracts in the country.

The Canadian mining sector has been hit with numerous allegations of corruption in recent years, both at home and abroad. A Fraser Institute report last year suggested the Canadian mining sector’s reputation with respect to corruption is suffering. The survey showed five Canadian jurisdictions — Alberta, B.C. Quebec, Nunavut and the Northwest Territories — had worse reputations when it came to corruption in mining than parts of Africa.

Three companies have been successfully prosecuted under the Corruption of Foreign Public Officials Act since it was put into place in 1998, and there are two pending cases before the courts.

Calgary-based Niko Resources pleaded guilty in 2011 to one count of bribing Bangladesh’s energy minister.

Hydro-Kleen of Red Deer, Alta., pleaded guilty in 2005 to bribing a U.S. immigration official at Calgary International Airport.

Most recently Griffiths Energy of Calgary agreed to pay a penalty of more than $10 million over a $40 million bribe to land an oil contract in Chad.

The government plans to introduce amendments to the foreign corruption law in the Senate on Tuesday. Other changes to the law will include closing a loophole that allows "facilitation payments" to government officials in places where this is common practice, and another loophole that limits prosecutions to companies that are operating "for profit."

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