Madelaine Drohan

Friday, August 08, 2008

OTTAWA — When German conglomerate Siemens AG decided last month to sue 11 of its former executives for not cracking down on corruption, it barely rated a mention in the Canadian business press.

Yet it is the kind of news that should have executives all over the world shaking in their boots.

The company has already paid a sizable fine in Germany and is facing potentially a much larger one in the United States for bribing governments to secure contracts between 2000 and 2006.

Not content to leave it at that, Siemens has now decided to sue two former chief executive officers and nine other former senior executives for not doing enough to avoid the bribes-for-business scandal.

This precedent-setting move in Germany received a lot of attention in countries, such as Germany and the United States, where governments are coming down hard on corruption and bribery offences.

Sadly, Canada is not in that number.

Our collective response, reflected in the business press, is that corruption is not our concern.

It happens somewhere else to someone else. Readers of a certain age will recognize this as the Alfred E. Neuman reaction to problems: “What, me worry?”

The federal government says all the right things about corruption, how it undermines democracies, human rights and the rule of law. The so-called accountability report published at the recent Group of Eight summit in Japan, detailing the steps each government has taken, makes Canada sound like a potential saint.

(This wasn't a huge surprise, given that each country appeared to have written its own section.)

Canada has signed and ratified the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business, the Inter-American Convention Against Corruption, the UN Convention Against Transnational Organized Crime, and the UN Convention Against Corruption.

We've funded training for officials here and abroad, financed and attended seminars and conferences to discuss the problem, and set up not one, but two, dedicated anti-corruption units with the RCMP.

It all sounds impressive until you realize that this is all about process and not about actual results.

For information on those you have to turn to a report, quietly tabled in the House of Commons last November by the Minister of Foreign Affairs, that details what progress has been made since Canada passed the Corruption of Foreign Public Officials Act in 1998.

The report goes on at some length, with an especially long section on awareness-raising that talks about all the information that various government bodies have put on their websites.

But the truly relevant section is the one labelled

“Prosecution,” which starts with the following line: “There has been one successful prosecution under the Corruption of Foreign Public Officials Act.”

That's right. One prosecution in the last decade.

It involved a U.S. immigration officer at the Calgary airport who accepted bribes from Hydro Kleen Group, an Alberta firm. The immigration officer was deported and Hydro Kleen paid a fine of $25,000. There have been no other provincial prosecutions, according to the report, and no federal prosecutions at all.

Little wonder then that Canada was criticized in another report on corruption that also came out around the time of the G8 summit.

This one, written for Transparency International, a non-governmental organization based in Berlin, was a good deal more critical than the G8 whitewash.

It noted that 16 of the 37 countries that have signed the OECD convention against bribery were actively enforcing it, whereas in 18 others, including Canada, there was little or no enforcement. Canada, according to the report, was the only one of the 37 to prohibit its tax inspectors from reporting suspicions of foreign bribery to law enforcement officials. It is also the only country to reserve the right to allow prosecutors to take into account a range of restrictive considerations in the decision to prosecute.

The criticisms don't end there. The definition of foreign bribery that Canada uses is inadequate, according to the report, because it limits offences to those committed for profit.

As well, Canada limits the application of its law to offences committed in Canada, instead of applying it to offences committed overseas by Canadian nationals.

Finally, Canada's federal structure meant that there is no centralized office to organize enforcement, although co-ordination of efforts was deemed satisfactory.

The predictable result of all this is a dismal national record on enforcement. Will it change?

It's been well over a year since a report co-authored by both industry and non-governmental groups recommended that the government at least extend its anti-bribery laws beyond Canada's borders.

The government has taken no action to date. For those hoping for a more robust approach to corruption, the lack of movement on this one issue is a strong indication they should not hold their breath.

© The Globe and Mail

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