MIL-OSI Global: SNC-Lavalin: Canada’s anti-foreign bribery laws did their job

By   /  March 7, 2019  /  Comments Off on MIL-OSI Global: SNC-Lavalin: Canada’s anti-foreign bribery laws did their job

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Source: The Conversation – Canada – By Elizabeth Acorn, Postdoctoral Associate and Lecturer in Ethics, Politics and Economics, Yale University

At the heart of the scandal engulfing Prime Minister Justin Trudeau’s government are allegations that it attempted to politically interfere with the prosecution of Québec engineering giant SNC-Lavalin.

We continue to learn more about the allegations. Both Gerald Butts, Trudeau’s former principal secretary, and Michael Wernick, Clerk of the Privy Council, have testified about the former attorney general’s allegations to the House of Commons Justice Committee, denying Jody Wilson-Raybould was pressured to allow SNC-Lavalin to avoid criminal prosecution.

But we should not reflexively impugn laws that many Canadians might now associate with SNC-Lavalin, including those that could have terminated its prosecution.

The anti-foreign bribery law that SNC-Lavalin is charged with violating, and the remediation agreement that Wilson-Raybould testified that she was pressured to pursue, are both promising pieces of Canadian policy. They’re aimed at combating corruption in international business and corporate crime.

While some have raised questions about why Canada prohibits its businesses from bribery overseas — particularly in countries where bribery can be common — Canada’s efforts to fight foreign bribery are not only required, but urgently needed.

Canada assumed obligations under international law to criminalize foreign bribery by becoming a party to the Organisation for Economic Cooperation and Development’s (the OECD) Anti-Bribery Convention, as well as the Organization for American States’s Inter-American Convention Against Corruption and the United Nations Convention Against Corruption.

Foreign bribery prohibitions focus on only one side of a bribery transaction — the “supply” rather than the “demand” for bribery — but they’re needed to address corruption in international business.


Read more: The SNC-Lavalin affair and the politics of prosecution


Host states to international business can prosecute public officials for accepting bribes, but institutional weaknesses and complicity of government officials in corruption can often make this difficult in practice.

Curbing the export of corruption

Prohibitions of foreign bribery by wealthy OECD states like Canada that have both significant regulatory capacity and active engagement with the international economy can fill the void. They can curb “the export of corruption globally,” according to Transparency International, a well-respected anti-corruption organization.

This is all the more necessary for Canada — a leading player in the global extractive sector, well-known for its high risk of corruption.

There is evidence that anti-foreign bribery laws are working. A recent study finds that “even minimal enforcement” of these laws makes a corporation less likely to pay bribes abroad.

Canada and all states stand to benefit if corruption in international business is reduced. The cost of corruption is estimated at five per cent of global gross domestic product, or US$2.6 trillion dollars.

Reducing corruption globally is also expected to advance the UN’s sustainable development goals and reduce security risks, not to mention improve the daily lives of citizens in two-thirds of the world’s countries with high levels of corruption.

The promise of a new enforcement tool

The remediation agreements that the Prime Minister’s Office allegedly pressured Wilson-Raybould to consider were introduced into law in June 2018. A remediation agreement allows a corporation accused of certain criminal offences, including foreign bribery, to obtain a stay of proceedings if the corporation agrees to specific penalties.

SNC-Lavalin was one of many businesses that supported remediation agreements, as did Transparency International Canada.

SNC-Lavalin President and CEO Neil Bruce following the company’s annual general meeting in Montreal in May 2018. Bruce stressed the need for changes to Canada’s anti-corruption measures ‘as expeditiously as possible.’ THE CANADIAN PRESS/Graham Hughes

Looking at international trends can help us understand why remediation agreements may have been attractive to domestic organizations and the government, even without the SNC-Lavalin prosecution.

As I’ve described elsewhere, Canada originally implemented its international anti-foreign bribery obligations using exclusively criminal-law tools — criminal prohibitions and criminal investigations and prosecutions.

Other OECD states used a broader range of tools, including civil or administrative prohibitions and diversionary resolution mechanisms like we see in the deferred prosecution agreements that are common in the United States.

But when it comes to enforcement, the traditional criminal-law tools that Canada had relied upon pose real challenges.

Obtaining evidence to meet the high threshold of criminal guilt can be particularly difficult when the defendant is a corporation. It’s even more demanding for a cross-border crime like foreign bribery where evidence and witnesses can be an ocean away.

The OECD has criticized Canada for its “lagging” enforcement of anti-foreign bribery laws. With a new round of OECD reviews under way, Canada is likely to face more international pressure.

Signalled a commitment

And so by adopting remediation agreements, Ottawa was able to signal its commitment to fighting foreign bribery. It also adopted a resolution tool — remediation agreements — that could ease some of its enforcement challenges.

The availability of remediation agreements provides an incentive to corporations to self-report wrongdoing and co-operate in any investigation. Such agreements also encourage reforms to corporate policy that can prevent criminal wrongdoing in the first place.

But to deliver on these promises, it’s crucial that remediation agreements operate as one enforcement tool within a broader regime that includes traditional criminal prosecutions.

The Trudeau government appears to have been well aware of the need to use remediation agreements judiciously.

The government solicited input during public consultations and identified criteria in the Criminal Code that would allow a prosecutor to invite a corporation to negotiate a remediation agreement.

These criteria include conditions that would weigh in favour of such an agreement, such as whether the corporation self-reported to authorities or made efforts to prevent future wrongdoing.

But other criteria — including whether the corporation faces allegations, sanctions or convictions for other criminal offences —would add up on the other side of the ledger.

Criminal Code criteria

The Criminal Code also identifies criteria that “the prosecutor must not consider.” Specifically, “the national economic interest” and “the identity of the organization” are not to be weighed if the corporation, like SNC-Lavalin, is charged with foreign bribery.

By adding remediation agreements to a legislative framework that sets clear criteria for eligibility, Canadian law has the potential to improve upon deferred prosecution agreements. DPAs developed in the U.S. through prosecutorial practice, and lack such explicit legislative guidance.

The eligibility criteria set out in the Criminal Code had been considered by Canadian prosecutors when they decided against allowing SNC-Lavalin to negotiate a remediation agreement.

Any political interference in this determination would undermine the law’s safeguards to ensure that remediation agreements are used judiciously and the promise made by such agreements to encourage good corporate behaviour.

And so political interference not only threatens prosecutorial independence and the rule of law, but also the potential of the new enforcement tool for corporate wrongdoing that the Trudeau government created.

ref. SNC-Lavalin: Canada’s anti-foreign bribery laws did their job – http://theconversation.com/snc-lavalin-canadas-anti-foreign-bribery-laws-did-their-job-112758

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