Why rules aimed at cracking down on corruption by mining firms miss the mark
When International Trade Minister Ed Fast announced the Tories’ enhanced corporate social responsibility (CSR) strategy last year, he sternly warned that Canadian mining companies involved in corrupt practices in other countries would be punished.
Most notably they would lose the diplomatic support of the Canadian government. If Doing Business the Canadian Way: A Strategy to Advance CSR in Canada’s Extractive Sector Abroad is Fast talking tough about corruption, it has some industry experts underwhelmed.
John Boscariol, a legal specialist in anti-corruption laws and policies, suspects the measures are an attempt by Canada to catch up to other countries that have long been cracking down on these illegal practices. “This is something [the Conservative government] can no longer pretend it is not seeing,” he says of corrupt practices by Canadian companies in other countries.
“If you look to the U.S., they have a much stronger record of enforcing the Foreign Corrupt Practices Act where penalties sometimes in the hundreds of millions of dollars have been handed out for violations,” he says. “Canada is catching up to that under pressure from the U.S., the Organisation for Economic Co-operation and Development (OECD), Transparency International (TI) and others.”
“Internationally there is a rejection of the attitude ‘when in Rome do as the Romans do,’ ” Boscariol says. “People are recognizing that part of the problem of corruption is not only with the folks in developing countries who are asking for the bribes. It’s the companies that are paying the bribes.” Canadian companies account for roughly half of the world’s mining and mineral exploration activity.
Canada has taken measures in the past to get tough on corruption and illegal development practices. In 1991, for example, the Income Tax Act was amended so that one can no longer claim payments in connection with the bribery of a foreign public official as a business expense.
In 1999 the Corruption of Foreign Public Officials Act was passed, but it has seldom been enforced. Kristine Robidoux is a white-collar investigations and compliance lawyer. She agrees that enforcement has “been slow to start,” and calls the first anti-corruption conviction under the CFPOA in 2002 “an international embarrassment.”
For the rest of this article, click here: http://www.macleans.ca/news/world/canada-gets-soft-on-bribery-and-corruption-abroad/