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Canada ranked worst of G7 nations in fighting bribery, corruption

Source: The Globe and Mail
Written By: Julian Sher

Canada has again been scolded on the international stage for its “lack of progress” in fighting bribery and corruption by a watchdog agency that ranks it among the worst of nearly 40 countries.

Transparency International, a group that monitors global corruption, put Canada in the lowest category of countries with “little or no enforcement” when it comes to applying bribery standards set out by the Organization for Economic Co-operation and Development.
In a report to be released Tuesday, the group singled out Canada as the only G7 country that has been stuck at the bottom of bribery-fighting rankings since TI began issuing its reports in 2005.

“Unless there is strong political will to take this on as an important issue, Canada and other countries that are laggards will remain behind,” said Huguette Labelle, the chair of Transparency International and a Canadian who served as a deputy minister in Ottawa for 19 years. “It is important for Canada’s reputation. We need to move from where we are now.”

The poor rating places Canada in the embarrassing company of countries like Greece, Hungary, the Slovak Republic and Slovenia – although New Zealand and Australia are also among the 21 countries in the bottom rung.

The rebuke by Transparency International comes on the same day as the OECD opens its 50th anniversary meeting in Paris, focusing in part on a “new push on corruption” and as Prime Minister Stephen Harper joins other world leaders in France for an economic summit. Last March in its own stinging report, the OECD raised “significant concerns” about Canada’s “problematic” anti-bribery efforts.

Since the Corruption of Foreign Public Officials Act became law 13 years ago in Canada, a small fine against an Alberta company in 2005 has been the only conviction ever recorded. A trial set to start this August against an Ottawa man accused of bribery in India would be only the second time a charge has been laid under the act.

By contrast, the United States has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world,” according to Peter Dent, a partner at Deloitte and Touche, LLP who also sits on the board of Transparency International.

“It is naive to think that you cross that 49th parallel and somehow we’re pure as the driven snow,” he said. “Canada does not have a great reputation when it comes to the enforcement of white-collar crime. If it’s not taken seriously by government, it won’t be taken seriously by the corporate sector.”

The Transparency International report cited what it considered several glaring flaws in Canada’s anti-bribery laws, most notably the lack of “nationality jurisdiction” that already exists for terrorism or child sex tourism offences – allowing authorities to go after a Canadian abroad even if there is no direct link to the crime in this country.

Charities are not covered by the law, which only focuses on bribery “for profit,” and there are no strict rules for maintenance of “accurate books and records” – a key tool the Americans have used to nail corporate corruption.

Canada is also one of a handful of nine countries that explicitly permits so-called “facilitation payments” to foreign officials for acts of a “routine nature” that may be part of their jobs.

When it comes to enforcement, Transparency International warned there was an “inadequacy of resources” at the RCMP’s Anti-Corruption Unit because officers were periodically re-assigned to other duties.

Todd Shean, the RCMP’s chief superintendent in charge of financial crime, said the unit has 14 investigators in Ottawa and Calgary currently handling about 23 cases of alleged foreign bribery.

“My hope is they stay on task and you won’t see a great ebb and flow,” he said.

But Mr. Dent suggested that was not sufficient.

“These are extremely complex investigations and resource-intensive to prosecute,” he said. “Is there enough political commitment to raise the profile of this issue and have the resources devoted to it?”

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