Canada’s enforcement of laws against bribing foreign officials is “exceedingly low,” the Organization for Economic Co-operation and Development says in its latest assessment, warning that the lack of action is a serious concern for the international organization.
An OECD working group assessed Canada’s enforcement of anti-bribery laws, as well as other anti-corruption efforts the country has made since the organization’s last evaluation more than a decade ago. It found that although Canada has taken some steps to deter corruption, such as increasing sanctions, far more needs to be done.
Canada has long been criticized, by the OECD and others, for lagging on anti-corruption policy. The new assessment says not only that Canada’s enforcement in this area has been weak, but that poor statistics and a lack of public information make it difficult to assess the effectiveness of what efforts the country has made.
A report from the group says this is “a serious concern, especially in view of the size of the Canadian economy and the industrial sectors in which Canadian companies operate, which represent high corruption risks.” For a relatively small country, Canada is home to an outsized number of mining, oil and gas companies with operations abroad.
Legal action against bribery committed by Canadians doing business abroad remains “exceedingly low,” 25 years after the adoption of Canada’s Corruption of Foreign Public Officials Act (CFPOA), the report says.
The OECD’s last evaluation of Canada’s anti-corruption efforts was in March, 2011. Canada is subject to these reviews because it is a signatory to the OECD’s anti-bribery convention.
Since the act came into force in 1999, the new report says, related charges have been laid in just nine cases, and “conclusion of foreign bribery cases with sanctions remains scarce.” Only two people have been convicted of foreign bribery, and four companies sanctioned.
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An increase in the number of foreign bribery investigations opened in the past decade, “although encouraging, is offset by the high proportion of discontinued investigations,” the report says, adding that the root causes of Canada’s shortcomings in this area are hard to pinpoint because of the limited information available.
Low enforcement is compounded by “a general lack of detailed statistics on foreign bribery detection sources, mutual legal assistance, and enforcement, which does not allow the working group, or Canada, to assess the effectiveness of efforts to combat foreign bribery,” the report adds.
Speaking in an interview before the report’s release, Toby Mendel, chair and president of Transparency International Canada, a non-profit anti-corruption organization, argued that Canada needs to step up its anti-bribery efforts. “The enforcement piece is where Canada is weaker, where we stand out a little,” he said. “Certainly Canada should take the recommendations, and any criticisms, very seriously.”
The OECD report calls on Canada to conduct an analysis of its foreign bribery enforcement actions so far, and to look at what is impeding investigations and prosecutions. The country should develop an action plan, the report says, and it should start by collecting comprehensive data on how foreign bribery is detected, investigated, prosecuted and sanctioned. The group also recommends “promptly” giving the public easily accessible information on key aspects of resolved foreign bribery cases.
Canada’s most notorious case related to foreign bribery in recent years revolved around SNC-Lavalin Group Inc., now known as AtkinsRéalis. The company and two of its affiliates were charged in 2015 with violating the CFPOA in connection with business dealings in Libya during the regime of the late dictator Moammar Gadhafi. The company ultimately struck an agreement with prosecutors in 2019, in which a subsidiary pleaded guilty to a single charge of fraud and the corruption charge was dropped.
Canada’s extractive sector has a huge presence abroad, and in 2015 the country introduced another act, which requires mining, oil and gas companies to disclose certain payments made to governments anywhere in the world. The OECD review found that although this act could prevent and detect foreign bribery in a sector “particularly prone to corruption risk,” the effectiveness of the mechanism is hard to assess, in part because few statistics are available on reports of foreign bribery.
In an emailed statement to The Globe and Mail, Global Affairs said Canada is “building on the resolution of a number of high-profile foreign bribery cases in recent years,” which it said are examples of successful investigative work from the RCMP. It said Canada will examine the OECD’s findings “with a view to strengthening efforts to combat foreign bribery.” In its annual report to Parliament on fighting foreign bribery, published last year, the department noted that Canada continues to take steps to deter Canadian companies and people from paying bribes to foreign officials. Global Affairs said Canada is raising awareness of the issue, and is encouraging companies to adopt measures to stop bribery.
The working group acknowledged that Canada has introduced legislative reforms to address the issue – including an increase to sanctions, a broadening of the foreign bribery offence and an increase in training for public officials. Though Canada has introduced a remediation agreement framework, a mechanism that aims to bolster enforcement against companies through voluntary disclosure to law enforcement authorities, the OECD group noted that only one foreign bribery case has been resolved through this mechanism since its introduction in 2018.
The review and recommendations are based on findings from lead examiners in Austria and New Zealand. The report is based on a review of legislation, research and an on-site visit earlier this year. The evaluation team met with representatives of the public and private sectors, along with members of law enforcement, media and civil society. Canada will submit a written report in two years on the implementation of the recommendations and its enforcement efforts.
Tavia Grant