Canada is the second-least corruption-prone country in the world, with only Ireland having a lower risk of bribery, according to a new index measuring business corruption.
The study comes as business groups across the country pressure the federal government into rescinding strict new rules that would ban companies convicted of bribery and other corrupt acts from winning government contracts.
The first edition of the TRACE Matrix, developed by the anti-bribery non-profit TRACE International and the RAND Corporation, names Nigeria as the country with the highest risk of bribery. It scored 97 out of 100; Canada scored 22, with Ireland coming in at 20 (the higher the score, the higher the risk of bribery).
The most and least corrupt countries, according to TRACE Matrix (story continues below):
The index looks at four broad areas: businesses’ interactions with government; anti-bribery laws and enforcement; government transparency; and and capacity for civil oversight, including media.
But Canada being named one of the least corrupt countries is not the same thing as Canadian business being declared to be corruption-free.
Many Canadian companies that operate abroad have been accused of bribery and other forms of corruption. Since 1999, these companies have been subject to the Corruption of Foreign Public Officials Act, which makes it a crime in Canada for a business to bribe officials in other countries, provided some part of the corruption involves Canada.
Canadian mining companies, in particular, have been accused of bribing officials. This year, Canadian mining industry groups came together to endorse a plan to increase transparency in the industry, in order to combat corruption.
Engineering and construction giant SNC-Lavalin, which is heavily involved in mining activities, has been banned from doing business with the World Bank, due to ongoing allegations of corruption in numerous developing countries.
The company’s former CEO, Pierre Duhaime, was arrested by Quebec police in 2012 on fraud charges., having resigned earlier over allegations of $56 million in improper payments.
Former executive Riadh Ben Aissa recently reached a deal with authorities on charges involving corruption in Libya. He was extradited to Canada this fall to face charges related to allegations of corruption in the construction of the McGill University Health Centre in Montreal. At least nine SNC execs have been charged in that scandal.
SNC-Lavalin recently lost a contract for the maintenance of federal government buildings that could have been worth up to $22.8 billion.
It is one of many companies that could be banned from doing business with the federal government under new anti-corruption rules put in place by the Harper government.
Companies that have been convicted of bribery abroad would be banned for 10 years from doing business with Ottawa. According to the Globe and Mail, that would preclude not only SNC-Lavalin (into which investigations are still ongoing), but many other companies including Hewlett-Packard, Tyco, Siemens and Alcatel-Lucent.
Numerous business and lobby groups are now pressuring the government to get rid of the new rule. They argue that, unlike similar rules in the U.S. and EU, the Canadian rule doesn’t allow for companies to have the ban lifted if they take action against corruption, such as new rules or firing the employees involved.
Because of that, industry groups say businesses would be afraid to come forward and be honest about corrution.
“Some companies will just pull out of the market and you’re not going to fix this issue,” Martin Lavoie, director of policy for Canadian Manufacturers and Exporters, told the Globe and Mail.