The Legal Front: Corruption
BORDEN LADNER GERVAIS
© 2012 FrontLine Defence (Vol 9, No 5)

The Corruption of Foreign Public Officials Act (CFPOA), which makes it an offence for Canadian companies or individuals to engage in bribery of foreign officials, has quietly existed for over a decade. However, until recently, this Act was almost never enforced.

Times have changed and Canada is now paying serious attention to the global problem of corruption. Canadian companies operating internationally can no longer afford to operate without ensuring they remain in compliance with the CFPOA.

Particularly in countries where government bureaucracies rely on systemic bribery, Canadian businesses must remain steadfast in their obligations to steer clear of any form of bribery. Ensuring the answer is “no” to any opportunity to secure a deal abroad by greasing palms is now more important than ever.

A number of significant signals confirm that Canada is responding to international pressure to start aggressively enforcing its anti-corruption laws.

The starkest of these is the 2011 conviction of Niko Resources. Niko, a large and successful Calgary-based, TSX-listed oil and gas company, plead guilty to bribery charges laid under the CFPOA. Those charges related to two specific incidents that followed an explosion at one of the company’s natural gas wells in Bangladesh. At the time, Niko was also engaged in negotiations for a gas pricing contract with the Bangladesh government. Niko’s Bangladesh subsidiary gave the Bangladesh Minister of Energy a $190,000 luxury vehicle. It also paid about $35,000 for the Minister to travel to Calgary for an Oil and Gas Expo event and to visit family in New York and Chicago.

Canada’s Court fined Niko a staggering $8,260,000, plus an additional Victim Fine Surcharge of 15%, for a total hit of $9,499,000. This was much greater than any previous fine, and the amount – in and of itself – is sobering evidence of Canada’s increased vigilance in aggressively prosecuting the bribery of foreign officials.

To truly appreciate the significance of this fine, compare it to the previously largest fine from the 2005 conviction of Hydro Kleen Systems Inc. Hydro Kleen paid a modest fine of $25,000 for the only prior conviction under the CFPOA.

Please visit blg.com/defence-article4 to read the full story.

====
Jennifer Radford is a member of Borden Ladner Gervais’ Defence and Security Industry Group and primarily practices in the area of civil litigation. She can be reached at [email protected].
© FrontLine Defence 2012

RELATED LINKS

Comments