CRACKING
DOWN ON
CORRUPTION
According to The
Twelfth Annual Report to
Parliament released late
last year on the country’s
fight against bribery
beyond our shores,
there are currently 22
investigations under the
Corruption of Foreign
Public Officials Act.
There have been two
convictions to date, and
one case is awaiting a
judicial decision:
Niko Resources Ltd.,
a natural gas company
based in Calgary,
pleaded guilty to one
count of bribery. The
charge referred to
two specific incidents
that occurred in 2005:
Provision of a vehicle
for the personal use of
the then-Bangladeshi
energy minister, valued
at $190,984, and the
provision of travel costs
to the same minister
to attend an energy
expo in Calgary and a
subsequent personal trip
to New York, valued at
$5,000. For this, last year
Niko was fined $8.26
million plus a 15 per
cent victim surcharge.
As well, the sentence
includes a probation
order, which puts the
company under the
court’s supervision for
the next three years
to ensure audits are
done to confirm Niko’s
compliance with CFPOA.
Hydro-Kleen Group
Inc., a heating company
based out of Red Deer,
Alta., entered a guilty
plea to one count of
bribery in 2005 and last
year was ordered to
pay a fine of $25,000.
Along with its president
and another employee,
the company had been
charged with, among
other things, two
counts of bribing a U.S.
immigration officer who
worked at the Calgary
International Airport.
The charges against
the director and the
officer of the company
were stayed. However,
the immigration
officer pleaded guilty
to accepting secret
commissions and
received a six-month
sentence and was
subsequently deported
to the United States.
To ensure this happens, Rambert said, in-house counsel actually need to map applicable laws onto business activities to
reveal areas of risk.
They also need to identify key contact times, said Klotz, co-
chair of his firm’s International Business Transactions Group.
“If a company is going into a country and importing goods [for
example], there will be a touch point at customs and immigra-
tion. These touch points grow and change.”
The first step en route to formulating an internal anti-cor-
ruption policy is ensuring there is a committee of senior mem-
bers, preferably including in-house counsel, to act as a bribery
compliance committee, said Sosnow.
As well, he said, the legal department should prepare a due
diligence checklist of issues to examine prior to hiring foreign
agents; make certain that expenses are properly documented
and reviewed regularly; and provide the compliance committee
with authority to approve expenses, such as gifts, amounts for
political and charitable contributions and entertainment.
In-house counsel should also be actively involved in training.
“The key is for all employees including senior management and
members of the board to receive periodic compliance training to
cover at least two topics: the company’s anti-corruption policy
and anti-corruption laws affecting the company,” said Sosnow,
chairman of Blakes’ International Trade and Investment Group.
In particular, said Rambert, who previously worked as a civil
litigator with the Department of Justice Canada, “in-house
counsel should identify company employees whose jobs afford
them opportunities to engage in bribery as well as their supervisors. In-house counsel can then tailor the training required.
This could include role-playing programs to develop skills to
identify, respond to, and report situations where bribery may
arise. Self-directed education may also be appropriate.
“Speaking more broadly,” he added, “any company anti-brib-
ery program should be rooted in the company’s code of conduct
along with topics like human rights, competition, and sanctions.”
While a focus on those individuals most at risk of run-
ning afoul of anti-bribery requirements is strategically sound,
it is not the exclusive domain of general counsel and their
staff—and should not be perceived as such, cautioned
Garver. “While in-house counsel should play a key role in
developing programs to educate employees on corruption is-
sues, ultimately it is not a legal issue as much as it is a mat-
ter of business ethics and leadership. Compliance programs
should come principally from the managers of the business.
If compliance is seen by employees as largely a ‘legal’ issue,
the risk is much greater that it can become marginalized.”
Indeed, said Rambert, “in-house counsel should operate as part
of an integrated team, comprising compliance, human resourc-
es, training, internal audit, and outside legal counsel.”
Understanding the policies must also extend outside the or-
ganization, Garver said. “Generally speaking, all relevant third
parties should be informed of a company’s anti-corruption poli-
cies and be obliged to conform to those policies in connection
with their business dealings with or for the company.”
That endorsement needs to be in writing, he said. “Today,
commercial contracts with third parties should include a range
of anti-corruption provisions including audit rights, compli-
ance certifications, termination rights and the like. If someone
