Canada: Anti-Bribery Compliance In Canada: An Interview With Kristine Robidoux

Last Updated: February 25 2015
Article by Kristine Robidoux

Today we welcome Kristine Robidoux, Partner, Gowlings, for a view of anti-bribery and compliance issues from Canada.

RB:  Hello Kristine, thank you for joining me in today's interview, as we try to share some of the issues confronting individual's and corporations who are subject to Canadian anti-corruption laws. But first, perhaps you share some of your background:

KR:  Richard, thank you so much for this opportunity to discuss the latest developments in Canada in respect of the ongoing fight against domestic and foreign corruption "up north". There is certainly a lot going on in Canada on this front, from policy, legislative and enforcement perspectives, and in terms of the approach to compliance being taken by our clients.

I am a partner with the Gowlings firm in Calgary, where I practice in the area of white collar defence, investigations and compliance. I came to the "Big Firm" practice of law through a bit of a bizarre career trajectory: I started as a criminal defence lawyer in a small firm, then became a General Counsel and then a Director of Ethics and Compliance before I started my own corporate ethics and compliance consulting firm. I joined Gowlings in 2008, and since then, have specialized in the prevention, detection and defence of white collar and ethics cases, both domestic and transnational in nature.

RB: So, what is the current enforcement environment in Canada, and has that changed in recent years?

KR:  The enforcement climate in Canada certainly has changed in recent times. Significantly, Canada was one of only 2 countries to improve its ranking (from "Limited Enforcement" to "Moderate Enforcement") in Transparency International's 2014 progress report. This probably has much to do with the fact that the Royal Canadian Mounted Police ("RCMP") has made a concerted effort to increase and better align its resources so that more Corruption of Foreign Public Officials Act ("CFPOA") cases can be pursued more efficiently, and due to the fact that a couple of major prosecutions have now taken place. For example, Niko Resources was prosecuted in 2011 for bribes paid in Bangladesh (fine: $9.5 million) and Griffiths Energy International was prosecuted in 2013 for bribes paid to the Chadian Ambassador to the US and Canada in 2013 (fine: $10.35 million). As far as Canadian corporate criminal penalties go, fines at these levels are considered significant. Those cases served as a wake-up call for Canadian businesses operating overseas, and they also seemed to give the RCMP a boost of confidence and some recognition by the international community that Canada was starting to take its enforcement responsibilities more seriously. Then, in 2014 we saw another watershed case, where the first individual to be convicted under the CFPOA after a trial (for conspiracy to bribe foreign officials in connection with the Cryptometrics case) was sentenced to a term of 3 years of federal incarceration. Again, a jail sentence of this length would certainly not go unnoticed, and served to reinforce the message that Canada's enforcement agencies are treating offences of foreign bribery very seriously.

RB:  Do you see a focus on individuals, corporations, or both?

KR:  The RCMP seems to have stopped its earlier practice of publicly announcing the number of open foreign bribery cases, so it's hard to say whether the pendulum might swing back, but at this moment, I would say that there seems to be a focus on the prosecution of individuals. As mentioned earlier, the first individual charged under the CFPOA was found guilty after trial and has been sentenced to jail. But there are others. In connection with the lengthy and wide-ranging investigation of Canadian engineering and construction giant SNC-Lavalin, the RCMP has brought charges against five individuals to date in connection with the Padma Bridge project in Bangladesh (although one of those individuals, the former Bangladeshi government official allegedly involved in exerting influence over the bridge project, saw his charges stayed by a Canadian court last year due to lack of jurisdiction over him). The four others are awaiting trial. And in connection with the Cryptometrics case referred to earlier, in addition to the one individual presently serving out his sentence, there are charges pending against three others (the Cryptometrics former CEO, the former CFO, and the former agent... interestingly, they are all foreign nationals). We are continuing to watch with great interest, because notwithstanding the existence of charges against individuals connected with these cases, there have not yet been any corporate charges. I would be surprised if there weren't charges brought against the companies eventually, but to date there has been no public indication as to whether or when that might occur. Another corporation that may face charges this year is TSX-listed mining company MAG Industries, who just issued a press release on January 29 that the RCMP had conducted a search and seizure at its corporate offices in connection with alleged corrupt payments in the Republic of Congo.

RB: What do you see as Canada's role in engaging in international law-enforcement and prosecutorial cooperation?

KR: I believe Canada has an obligation to assist in international investigations, and in my experience, Canada appears to work very effectively with its international counterparts. I observed first-hand the interaction and cooperation between Canadian and US investigators and prosecutors on a number of my cases and the relationship appears to be healthy. There appears to be a great deal of communication between the two countries.

RB: Kristine, what about companies? Here is the US, there is much debate about the "rogue employee" script, which the OECD Bribery Report clearly addresses when it demonstrates that in many cases upper level management knew of the bribes. Where is that debate in Canada?

KR: It's hard to say where that debate is at, frankly. There simply haven't been enough enforcement cases to be able draw any kind of patterns or conclusions about the attitudes of the enforcement agencies in that regard. But while I do believe that truly "rogue" employees can and do exist, my sense is that companies are not using the "invisibility cloak" to avoid the hard discussion about whether a rogue employee might be out there and what the board needs to do to ensure he or she is not out there. Our law provides that if the offence is carried out by a company's "senior representative" (which, given its definition in our Criminal Code, may include a company's foreign country manager – whether "rogue" or not), then the company becomes a party to the offence. As a result, I am seeing Canadian boards of directors and management teams increasingly rolling up their sleeves to effectively and properly discharge their obligations to ensure the business is being run ethically overseas. In the past, there may have been more of a willingness to rely on the in-country management's verbal reassurances that "everything was OK", and to stop short of asking the tough questions or verifying compliance externally, but that is not happening anymore.

RB: What are some of the greater challenges facing Canadian companies and their international teams who operate in high risk (low integrity) regions?

KR: One of the greatest risks may be simply that Canada hasn't had foreign bribery squarely on the enforcement radar as long as the US and so perhaps education levels are still catching up to where they need to be. We are an entrepreneurial culture, and our resource companies (in particular) courageously enter some of the most daunting foreign markets around the world. We are also believed by many to be a very polite, deferential and culturally sensitive people. This can actually be a bit of a dangerous recipe, when you think about it.

If Canadians enter a high risk market and, in an effort to be deferential and polite, simply accept the local jurisdiction's assertions that "this is the way we do business here", and they don't have sufficient education about foreign bribery risks and how to mitigate them, the results can be disastrous. The answer is to continuously promote and communicate the message of compliance and ethics, and for companies to ensure their on-the-ground personnel are well equipped to handle the inevitable requests for cash, gifts and favours.

RB: Any other thoughts?

KR:  There are three more Canadian developments which may be of interest to your readers, Richard, particularly to those who may be involved in the oil and gas or mining sectors. First, Canada recently passed the Extractive Sector Transparency Measures Act (which is expected to come into force in early 2015) to require resource companies to report on payments it makes to governments, both domestically and internationally, as well as government agencies and similar bodies carrying out governmental functions. The list of payments to be reported is broad. Importantly, after a two-year transition period, the reporting requirement will also extend to payments made to Aboriginal governments in Canada. The Act provides for significant penalties for companies and their officers and directors in cases of non-compliance, so your readers should ensure that they are well informed about the specifics of the reporting obligations.

Second, Canada recently (November 2014) announced its enhanced Corporate Social Responsibility strategy. The strategy reiterates Canada's commitment to international best practices in CSR, including those related to foreign bribery and corruption, and provides that resource companies that do not comply may lose diplomatic support and financing or other support from Export Development Canada.

And third, of interest to all companies interested in bidding on Canadian federal government projects and procurement, will be the implementation of Public Works and Government Services Canada's Integrity Framework. ("PWGSC", the Government of Canada department responsible for coordinating all of the federal government's managed contracts and real property transactions, including construction contracts, goods and services contracts, etc., wields a very big stick indeed!)The Integrity Framework will essentially debar any supplier from doing business with PWGSC if it or an affiliate is convicted or pleads guilty to an offence, even if the conviction or guilty plea results in a conditional or absolute discharge at sentencing.

These offences apply to acts committed in Canada as well as to convictions received abroad, and "affiliates" include parent companies, subsidiaries and directors, as long as they have control of one another, or if they are under the common control of a 3rd party. In this way, it is anticipated that Hewlett-Packard Canada, one of the leading technology suppliers to the Government of Canada, will find itself debarred as a result of the guilty plea in the US of Hewlett Packard's Russian and Mexican subsidiaries, notwithstanding the lack of any complicity by the Canadian subsidiary. The debarment period is 10 years from the date of conviction and further, the application of the policy is retroactive: a company can be debarred as a result of a conviction dating back up to 10 years.

Germany-based Siemens has already received official confirmation of debarment by PWGSC. At present, the debarment process does not include discretionary provisions: there is no ranking system of offence and no opportunity to demonstrate that the corporation has undergone restructuring or implemented risk-mitigation strategies, such as a compliance program, to reduce the length of the debarment period. The Framework's wide reach and severe penalties have not gone unnoticed and have been the subject of lobbying efforts by members the business community. In response, the Government of Canada has recently re-engaged with various stakeholders to address the provisions and application of the Framework. So stay tuned, there may be further changes!

Thank you for this opportunity to connect with you and your readers, Richard. Feel free to reach out anytime for further insights into the ethics and compliance environment north of the 49th!

This article first appeared in the Richard Bistrong FCPA Blog and is republished with the permission of Richard Bistrong.

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 Mondaq.com.

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

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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