Australia: Canada's anti-bribery laws show they have teeth with a $9.5 million penalty

Last Updated: 8 July 2011
Article by Gary Berson, Andrew Morrison, Ross Perrett and Greg Williams

Most Read Contributor in Australia, November 2017

The first significant prosecution under Canada's Corruption of Foreign Public Officials Act 1998 has led to a fine of nearly $9.5 million Canadian and three years' probation, in a case which not only puts all companies with a Canadian link, in particular dual-listed companies, on notice, but also shows the increased regulator activity in the global fight against bribery and corruption.

The prosecution of Calgary's Niko Resources by the Alberta Crown Prosecutor was resolved by a plea agreement, under which Niko pleaded guilty to one charge after co-operating fully with the investigation.

What did Niko do?

In 2005, there were blowouts and fires at one of Niko's drilling sites for natural gas at the Tengratila gas field in Bangladesh. This required the evacuation of nearby villagers, and left the drinking water contaminated and local agriculture destroyed.

The Bangladeshi Government was involved in a dispute with Niko over the value of the as yet uncovered gas. Its junior Energy Minister, A.K.M. Mosharref Hossain, was responsible for determining the compensation payable to the affected villagers.

Niko purchased a luxury SUV worth $190, 984 Canadian and delivered it to its local partner, BAPEX, which then delivered it to the Minister. Niko also paid $5,000 Canadian in travel costs for his trip to an Energy Expo in Calgary and a subsequent trip to New York.

Seeing local press reports about the delivery, a Canadian diplomat queried it with the president of Niko's local subsidiary. He was told "These things are done all the time".

There is no evidence that the bribes did Niko any good whatsoever.

What is Canada's anti-bribery law?

Canada's Corruption of Foreign Public Officials Act, similar to other anti-bribery legislation, takes an expansive view of the organisations it covers. Under it, business "means any business, profession, trade, calling, manufacture or undertaking of any kind carried on in Canada or elsewhere for profit".

It is an offence under the Corruption of Foreign Public Officials Act for a person:

  • in order to obtain or retain an advantage in the course of business
  • directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official
  • and that benefit is as consideration for an act or omission by the official in connection with the performance of the official's duties or functions; or
  • that benefit is to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organisation for which the official performs duties or functions.

There are exceptions for reasonable expenses, payments required by law, and facilitation payments.

The Mounties investigate, and Alberta prosecutes

The Royal Mounted Canadian Police conducted a six-year long investigation in to the matter, which involved law enforcement agencies in Switzerland, Japan, the UK and Barbados, and cost nearly $900,000 Canadian.

Niko co-operated with the investigation and pleaded guilty in the Alberta Court of Queen's Bench to one charge under the Corruption of Foreign Public Officials Act in an agreed statement of facts. No individual officer was charged.

The Court imposed the penalty agreed between the Alberta Crown Prosecutor and Niko:

  • a fine of $8,260,000 Canadian;
  • an additional 15% Victim Fine Surcharge, bringing the fine up to $9,499,000 Canadian; and
  • a three-year Probation Order, under which Niko will be audited to ensure its compliance with the Act – audits which Niko must pay for.

Although the fine is high, it could have been higher – Niko's full co-operation almost certainly had an effect on the penalty.

It also apologised publicly, and according to its media statement it "adopted a full anticorruption compliance program, training program and processes for risk assessment due diligence and compliance monitoring and reporting around the world to ensure it meets all Court probationary requirements and its own internal ethical and best practices standard. "

Although this is the end of the criminal prosecution in Canada, it isn't the end of Niko's legal woes. Two Canadian law firms who have strong class action practices, Siskinds LLP and Jensen Shawa Solomon Duguid Hawkes LLP, announced on Monday 27 June that they are conducting an investigation into Niko's disclosures, stock option practices and foreign business practices.

The law in Australia – why you could be liable in two (or more) countries

One other aspect of these laws that is rarely appreciated is that a single offence in Country A could be punishable in Countries B, C and D, depending upon the links the person or company has with those countries.

For example, bribery offences committed by Australian citizens or residents or companies incorporated in Australia, including dual-listed companies, are covered by the Commonwealth Criminal Code. As a result a company which is dual-listed in Countries B or C, depending upon the circumstances, could be liable in two or more countries for a single act of bribery or corruption. The same goes for its employees: an employee who is a citizen of Country B could be prosecuted by Country B for something they did in Country A for a company incorporated in Country C.

This is even more of a concern following the introduction of increased penalties in 2010 in Australia. Individuals charged with bribery offences for conduct occurring after that date now face a fine of $1.1 million and up to 10 years' gaol time.

Companies face a penalty of whichever is the greater of:

  • a fine of up to $11,000,000;
  • three times the value of the benefit obtained as a result of the breach; or
  • 10% of the body corporate's turnover during the 12 period in question.

What should you do now?

As noted above, Canada's expansive definition of the businesses its Corruption of Foreign Public Officials Act covers means that any company with a presence in Canada could find itself susceptible to prosecution under the Canadian Act. With the Mounties' Commercial Crime unit reported to have another 20 investigations underway, it's clear that Canada is taking anti-bribery enforcement seriously.

Even if you don't have a link to Canada, the international trend towards greater regulator activity in combating bribery and corruption in international business dealings means that wherever you are, you could still fall under the scope of similar legislation – the US Foreign Corrupt Practices Act, the UK's Bribery Act which came into force on 1 July 2011, and our own Commonwealth Criminal Code which we discussed above.

Businesses with any sort of foreign link, especially those which are dual-listed on the ASX and TSX, should look at implementing internal risk management, including:

  • obtain privileged legal advice and risk assessment;
  • putting in place corporate compliance programs and policies ie. Codes of Conduct, Compliance Guide and Compliance agreements;
  • procedures to promote appropriate record-keeping culture;
  • training of all staff and board members;
  • anti-corruption protocols in internal audit processes;
  • adequate due diligence when engaging in any transaction with a third party, particularly acquisitions; and
  • ensuring a demonstrable focus on identifying and assessing appropriate remedial actions when a breach is detected.

You might also be interested in...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions