Canada has again been scolded on the international stage for its “lack of progress” in fighting bribery and corruption by a watchdog agency that ranks it among the worst of nearly 40 countries.
Transparency International, a group that monitors global corruption, put Canada in the lowest category of countries with “little or no enforcement” when it comes to applying bribery standards set out by the Organization for Economic Co-operation and Development.
In a report to be released Tuesday, the group singled out Canada as the only G7 country that has been stuck at the bottom of bribery-fighting rankings since TI began issuing its reports in 2005.
“Unless there is strong political will to take this on as an important issue, Canada and other countries that are laggards will remain behind,” said Huguette Labelle, the chair of Transparency International and a Canadian who served as a deputy minister in Ottawa for 19 years. “It is important for Canada’s reputation. We need to move from where we are now.”
The poor rating places Canada in the embarrassing company of countries like Greece, Hungary, the Slovak Republic and Slovenia – although New Zealand and Australia are also among the 21 countries in the bottom rung.
The rebuke by Transparency International comes on the same day as the OECD opens its 50th anniversary meeting in Paris, focusing in part on a “new push on corruption” and as Prime Minister Stephen Harper joins other world leaders in France for an economic summit. Last March in its own stinging report, the OECD raised “significant concerns” about Canada’s “problematic” anti-bribery efforts.
Since the Corruption of Foreign Public Officials Act became law 13 years ago in Canada, a small fine against an Alberta company in 2005 has been the only conviction ever recorded. A trial set to start this August against an Ottawa man accused of bribery in India would be only the second time a charge has been laid under the act.
By contrast, the United States has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world,” according to Peter Dent, a partner at Deloitte and Touche, LLP who also sits on the board of Transparency International.
“It is naive to think that you cross that 49th parallel and somehow we’re pure as the driven snow,” he said. “Canada does not have a great reputation when it comes to the enforcement of white-collar crime. If it’s not taken seriously by government, it won’t be taken seriously by the corporate sector.”
The Transparency International report cited what it considered several glaring flaws in Canada’s anti-bribery laws, most notably the lack of “nationality jurisdiction” that already exists for terrorism or child sex tourism offences – allowing authorities to go after a Canadian abroad even if there is no direct link to the crime in this country.
Charities are not covered by the law, which only focuses on bribery “for profit,” and there are no strict rules for maintenance of “accurate books and records” – a key tool the Americans have used to nail corporate corruption.
Canada is also one of a handful of nine countries that explicitly permits so-called “facilitation payments” to foreign officials for acts of a “routine nature” that may be part of their jobs.
When it comes to enforcement, Transparency International warned there was an “inadequacy of resources” at the RCMP’s Anti-Corruption Unit because officers were periodically re-assigned to other duties.
Todd Shean, the RCMP’s chief superintendent in charge of financial crime, said the unit has 14 investigators in Ottawa and Calgary currently handling about 23 cases of alleged foreign bribery.
“My hope is they stay on task and you won’t see a great ebb and flow,” he said.
But Mr. Dent suggested that was not sufficient.
“These are extremely complex investigations and resource-intensive to prosecute,” he said. “Is there enough political commitment to raise the profile of this issue and have the resources devoted to it?”
Nazir Karigar – India
Nazir Karigar, a former executive of Cryptometrics of Ottawa, is scheduled to appear in court this August, only the second time in history a Canadian has been charged under the foreign bribery act.
The RCMP laid charges last year, alleging he “made a payment to an Indian government official in order to facilitate a multimillion contract” to supply a security system.
Niko Resources – Bangladesh
In January 2009, Niko Resources of Calgary said it was the subject of a “formal investigation into allegations of improper payments” in Bangladesh.
Neither the company nor the RCMP would comment on the status of the case.
Last year, the Bangladesh High Court quashed a $2-billion corruption case against a former prime minister related to natural gas fields run by the Canadian company.
Blackfire – Mexico
In March 2010, Canadian mining watchdog groups filed a complaint with the RCMP against Blackfire Exploration Ltd, alleging improper payments to a local mayor in the Chiapas state of Mexico. The Calgary-based firm operated a controversial barite mine that was the site of protests after a local activist was murdered.
But in a complaint filed with the Chiapas government, the company insisted it was the victim, “extorted by the mayor” for money to ensure people “would not rise up in arms” against their mine.
Alcoa – Bahrain
The Wall Street Journal reported in 2010 that American authorities were investigating Victor Dahdaleh, a prominent Canadian businessman based in London, as part of a probe of Alcoa Inc., and allegations of bribery in Bahrain.
An Alcoa spokesman told The Globe and Mail “the investigation is ongoing and we continue to co-operate.”
By the Numbers: The number of bribery cases prosecuted
227 – United States
135 – Germany
35 – Switzerland
24 – France
18 – Italy
17 – United Kingdom
2 – Canada