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CCCA_V5No4_AntiBribery-FIN_CCCA_V1No1_DriversSeat-FIN.qxd 11/21/11 11:06 AM Page 17 Cover I n the spring of 2005, two representatives from Calgary- The Niko case is the latest broadside in the global effort based Niko Resources’s subsidiary in Bangladesh delivered a to crack down on corruption.Anti-bribery legislation is not new Toyota Land Cruiser worth $190,984 to the country’s new — the United States was one of the first countries to state minister for energy and mineral resources.Little did they tackle corruption with the introduction of the Foreign know that the relatively small bribe would lead to a fine that Corrupt PracticesAct (FCPA) in 1977 (amended in 1998),and would ultimately cost their parent company about 50 times many Canadian companies that do business in, or with the that amount — and ratchet up anti-corruption compliance U.S. have already implemented measures to comply with standards in a country with a reputation for complacency. the legislation. But the stakes are getting higher:The cost of Niko Resources ended up pleading guilty to an offence getting caught is escalating — the German multinational under Canada’s Corruption of Foreign Public Officials Act Siemens AG paid a record $1.6-billion (U.S.) in 2008 — (CFPOA) and paid $9.5-million in fines and penalties.The and the net has been cast even wider with the introduction court also ordered the company to undertake a thorough of the U.K.’s Bribery Act on July 1 — on paper the strongest review of its existing internal controls, policies and proce- anti-corruption law yet to be enacted, observers say. dures; implement a detailed compliance program and con- “Anti-bribery laws are front and centre now,” says Amita duct compliance audits at least once a year thereafter,among Kent, regional lead counsel for Europe and Canada with other things. Merck Canada Inc.in Montreal.“This is forcing companies Corporate Canada is paying attention. to have a long hard look at their policies [and] training.” “There is a sense that the net is starting to tighten and that the importance… of Western companies having to stay A brand new era clear of corruption has become much more intense,” says Earlier this year, the Organization for Economic James Klotz,a partner with MillerThomson LLP inToronto Development and Co-operation (OECD) released a highly and president of Transparency International Canada. critical report of Canada’s anti-corruption practices. For “Until now,the vast majority of inquiries from corporate example,it noted that since the introduction of the CFPOA counsel were generated because of [Foreign Corrupt Practices in 1999, only one company — Alberta-based Hydro Kleen Act] practices in the U.S.,” says John Boscariol, a partner Group Inc. — had been found guilty of paying a bribe to a with McCarthy Tétrault LLP in Toronto. “But Niko has foreign government official. (The company was fined fundamentally changed that. Now, the questions are based $25,000 in 2005 for bribing a U.S. immigration officer at on what’s going on in Canada. Finally, we’ve got a case that Calgary’s international airport.) shows Canadian law has teeth. It’s a very strong signal that raided the office of Calgary-based mining company But since the Niko case this summer, the RCMP has the Canadian government is serious about enforcement in this area.” Blackfire Exploration Ltd. based on allegations that it Here’s what your organization needs to do to stay out of trouble. By Pablo Fuchs PAUL EEKHOFF HIVER 2011 CCCA Canadian Corporate Counsel Association 17