Hewlett-Packard Co. (HP) printers and computers sit on display in the lobby at the company's headquarters in Palo Alto, California, U.S. Photographer: Tony Avelar/BloombergTony Avelar/Bloomberg
Has the Harper government backed itself into a corner with its zeal for law and order? Under rules it quietly implemented earlier this year, it has obliged itself to bar giant multinational firms like Hewlett-Packard, Siemens AG and BAE-Systems from bidding on federal government contracts, because the companies were convicted of bribery or fraud charges in other countries in the past 10 years.
But so far Ottawa hasn't done that, and its inaction speaks volumes. The government's ever-stricter "Integrity Framework" for bidding on public works contracts is too harsh, too punitive and too one-size-fits-all. It needs to be rethought.
Since taking power, the Conservatives have steadily tightened the eligibility rules. The most recent and draconian changes, made quietly in March, render companies ineligible to bid on contracts for 10 years if they or their affiliates have been convicted anywhere in the world of bribery, extortion, falsification of books and other serious crimes. Previous Conservative changes to the rules removed all leniency and discretion from the process. If a company is convicted, it is out. No exceptions – except for public interest reasons, such as when an important life-saving drug can only be obtained through a convicted company, or if banning a firm would cause "economic harm."
Hewlett-Packard's Russia subsidiary pleaded guilty to U.S. bribery charges in September. BAE Systems pleaded guilty to making a false statement in 2010 in a U.S. bribery case. Siemens AG pleaded guilty to violating U.S. bribery laws in 2008. Unless we're missing something, the overbroad new rules mean that all three are supposed to be banned from doing business with the government of Canada.
Corruption and fraud are serious crimes, and of course companies that commit them should be punished. But other jurisdictions allow convicted firms to take remedial steps – dismissing implicated employees, paying a fine, introducing new compliance measures – before barring them from government work. In Canada, it's one strike, anywhere in the world, and you're out. The CEO of SNC-Lavalin, Robert Card, has stated bluntly that, if his company is charged in connection with ongoing bribery cases in foreign countries, the threat alone of being unable to do business with the Canadian government could force it to close.
Hyperbole? It doesn't matter. The Harper government loves to be tough on crime. It has imposed mandatory prison terms for some offences and tried to remove judges' discretion to factor time served into sentencing. This black-and-white world view has its supporters, but we aren't among them. Punishments calibrated to the gravity of the offence are critical pillars of justice. Like individuals, companies convicted of different crimes shouldn't all be hit with the same penalty. And they should have the opportunity to demonstrate sincere efforts to take remedial action without facing an irrevocable punishment that could ruin them.