Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
U.S. regulations will force Canadian commodity extractors to disclose all payments made to governments over $100,000
For Canadian resource companies, the cost of doing business abroad is about to go up. New reporting requirements passed under the U.S. Dodd Frank financial overhaul bill will require resource extraction issuers to disclose all payments made to governments over $100,000, beginning in 2014. The Securities and Exchange Commission regulations will add new expenses for Canadian mining and energy companies listed in the U.S., and may hinder their competitiveness overseas.
Section 1504 of the bill is intended to empower citizens of resource-rich countries to hold their governments accountable for the money they receive, which often lines the pockets of corrupt officials rather than going to the betterment of the population. The regulations also seek to shed light on illegal payments made by companies to gain access to resources in developing nations.
The SEC’s new requirements are part of an international crackdown on corruption, which has been steadily gaining momentum since the Organization for Economic Co-operation and Development signed its anti-bribery convention in 1997. As part of its obligations as signatory, Canada passed the Corruption of Foreign Public Officials Act (CFPOA) in 1999. But it is only in the past five years that Canadian authorities have been taking serious steps toward enforcement.
“There was precious little action on enforcing the law until 2007,” said Janet Keeping, chair of the anti-bribery organization Transparency International Canada. The major shift came in 2007 after Canada signed the United Nations Convention Against Corruption, and the RCMP formed two special teams to focus on cases of Canadian companies making illicit payments abroad.
In June, 2011, an RCMP case against Niko Resources led to a $9.5-million fine against the Calgary oil and gas company for bribing a Bangladeshi government official. It marked the first major prosecution under the CFPOA, and sent a message to Canadian companies that the government would no longer overlook corrupt activity.
“The Niko Resources case said, ‘we are going to take this seriously, this isn’t just tokenism on the international scene,’ ” Ms. Keeping said.
In Transparency International’s annual ranking, Canada moved from last place among the G7 nations in 2011 to being listed among the most improved countries in 2012 for it’s anti-bribery efforts. Now, according to their annual report, the Canadian authorities are working on 34 open files.
For the rest of this article, please go to the Globe and Mail website: https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20121115/RBBWBMININGCAMERONATL