Bill S-14 (Historical)

Fighting Foreign Corruption Act

An Act to amend the Corruption of Foreign Public Officials Act

This enactment amends the Corruption of Foreign Public Officials Act to
(a) increase the maximum sentence of imprisonment applicable to the offence of bribing a foreign public official;
(b) eliminate the facilitation payments exception to that offence;
(c) create a new offence relating to books and records and the bribing of a foreign public official or the hiding of that bribery; and
(d) establish nationality jurisdiction that would apply to all of the offences under the Act.

Fighting Foreign Corruption Act

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, corruption is an evil thing that is very similar to cancer. Unfortunately, when Canadian companies are allowed to get away with things too easily, once they become corrupt, it rubs off on the lives of Canadians as well as on our institutions and our representation.

All too often, at our embassies overseas—

[The Deputy Speaker]

I am sorry to have to interrupt the hon. member, but there is a translation problem. Can the member continue?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, the problem is that, unfortunately, at our embassies—

Suspension of Sitting

[The Deputy Speaker]

There is a problem with the equipment in the translators' booth, so we will suspend for a few minutes.

(The sitting of the House was suspended at 11:16 a.m.)

(The House resumed at 11:24 a.m.)

Sitting Resumed

[The Deputy Speaker]

The hon. member for Marc-Aurèle-Fortin has the floor and may continue with his question.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, if we are serious about fighting corruption, we should also discuss the often inappropriate behaviour of the Canadian government, which provides scholarships, immigration opportunities and jobs in our embassies to foreign students whose parents or families are associated with foreign governments.

Will our diplomats not only seek to enforce this legislation but also ensure that, ethically, they are beyond reproach?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, when we talk about accountability and oversight, it is important that all our officials abroad are going to be involved.

I heard the parliamentary secretary talk about the training of our diplomats to deal with issues like the one we are discussing today. However, it needs to have strong oversight when it comes to the government of the day being able to assure its citizens that everyone who is working abroad is doing it for the public good. That is why we have touched on the need for more ethics in ministers' offices, for instance. It is high time that the staff and advisors to ministers provide the highest ethical standards that they can provide to their ministers. We have asked to see that happen. The same has to happen with our diplomatic corps. We have to see that they are going to be abiding by the highest ethical standards.

However, I am more concerned now with the relationship between some who are involved in commerce abroad and dealing with foreign governments. The rules have not been clarified. Businesses will tell us that if there are clear rules they will follow them. The problem is that the government has not clarified the rules. We need to see more of that.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I congratulate my colleague from Ottawa Centre for doing a great job as the foreign affairs critic for the official opposition. At the same time, I would say I am rather shocked that the minister has failed to recognize the hon. member's excellent work.

Indeed, judging by his question to my colleague, he seems to have been offended by some of the points he raised, yet my colleague was quite right when he said that this bill does not go far enough and will barely lift Canada out of Transparency International's bottom rankings, in terms of the transparency measures in its anti-corruption legislation.

My colleague mentioned several extremely interesting points. I would like him to talk about them a bit more. In particular, he stated that Canada is a laggard when it comes to bringing its legislation in line with the international treaties it signs. Often, Canada simply does not live up to these treaties.

What does my colleague think Canada can do to improve its image, which has taken a serious beating in recent years?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, simply put, we need to start living up to the treaties we sign. We need to make sure that when we bring in legislation to enact these treaties, we are not undermining them. We must also sign on to the ones we have agreed to, like the arms trade treaty.

That would perhaps get us going in providing more credibility in the international community. Our international image is suffering. The government is seemingly living in the past. It is time to get on with living in the real world and getting on with the standards that have been seen set by our allies.

On the G8, let us hope that this communiqué is not going to be just words and that we will see action from it.

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I am pleased to add my voice to the debate on Bill S-14, an act to amend the Corruption of Foreign Public Officials Act.

This bills makes six much-needed amendments to the Corruption of Foreign Public Officials Act. First, it would remove the words “for profit” from the definition of business so that bribes involving non-profits and charities are included in the act.

Second, it would increase the maximum sentence of imprisonment applicable to the offence of bribing a foreign public official, from the current maximum of 5 years in jail and unlimited fines, to 14 years in jail and unlimited fines.

Third, it would eliminate the exception contained in the act for what are called “facilitation payments”. These are payments for carrying out acts of a routine nature. That exception would be eliminated.

Fourth, it would create a new offence relating to books and records, and the bribing of a foreign public official or the hiding of that bribery.

Fifth, it would establish nationality jurisdiction that would apply to all of the offences under the act, so that all Canadians, permanent residents, Canadian companies, etcetera, can now be charged for crimes taking place in foreign countries.

Finally, it would designate the Royal Canadian Mounted Police as the agency with the exclusive ability to lay charges associated with the act. This specifically refers to the RCMP international anti-corruption unit.

These changes, as we have already heard, are meant to bring Canada in compliance with the OECD conventions on combatting bribery of foreign public officials in international business transactions, which this country ratified in 1998, as well as other international obligations. The Liberal Party will be supporting this bill, as it did through the Senate.

Despite widespread calls for Canada to step up its foreign anti-bribery measures, during the seven years the Conservatives have been in power, they have only begun to deal with the shortcomings of this statute that they propose to fix by this bill.

Bill S-14 updates Canada's anti-corruption laws and puts them in line with Canada's international anti-bribery convention commitments made with the OECD, as well as others made through the United Nations and the Organization of American States. In addition to meeting our commitments to various anti-bribery conventions, Bill S-14 allows Canada to be a country that demonstrates a high level of ethical standards for other countries.

There are important preventative measures that governments should be taking to ensure the RCMP has the resources to successfully investigate cases that are relevant to Bill S-14. A private member's bill, Bill C-474, proposed by the Liberal member for Scarborough—Guildwood, is one such measure, but sadly it is being opposed by the government.

Bill C-474 would attempt to make revenue transparency the norm in resource extraction industries. This transparency would allow for Bill S-14 to be more preventative instead of reactive.

Bill S-14, presently before the House, would result in more prosecutions and convictions for foreign bribery offences. Canada is a bit of a laggard in this regard, even accounting for size differences in population and economy. Canada falls behind, having only prosecuted three cases compared to other major economies. There were 227 cases prosecuted in the United States, 135 in Germany, 35 in Switzerland, 24 in France, 18 in Italy, and 17 in the United Kingdom, as examples.

This bill, as was indicated, would amend the Corruption of Foreign Public Officials Act, which was passed in 1998 and came into effect the next year. Its passage meant that Canada ratified the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Corruption of Foreign Public Officials Act also implemented Canada's international obligations under the United Nations Convention against Corruption and the Inter-American Convention Against Corruption. In 2002, there were several technical amendments that were made to the act because of amendments to the relevant sections of the Criminal Code.

The OECD working group on bribery has produced at least three follow-up reports on Canada's progress. The phase 1 report was released in July of 1999, the phase 2 report in March of 2004, and the phase 3 report in 2011. Each one commented on Canada's progress and set out areas where Canada needed to improve to stay on par with its international neighbours.

The phase 1 report, in 1999, was focused on the implementation of the Corruption of Foreign Public Officials Act. It was almost entirely positive. It stated that the working group was of the opinion that the Canadian act met the requirements set by the convention. It did address the issues that might need to be discussed during the phase 2 evaluation in 2004, including the exemption for “acts of a routine nature”, which are the facilitation payments that I referred to earlier; the effectiveness of the penalties, including monetary sanctions; and the lack of the nationality jurisdiction. All of these things that were referenced in that phase 1 report, in July 1999, are now contained in Bill S-14.

Five years later, the recommendations contained in the phase 2 report included the following: giving a coordinating role to one of the agencies responsible for the Corruption of Foreign Public Officials Act's implementation; reconsidering the subsection 3(4) exemption for facilitation payments, which I referred to earlier; redefining the word “business” in section 2 to include “not for profit”; and reconsidering the decision to not establish nationality jurisdiction for the crime of bribing foreign officials. Again, all of these recommendations from the working group have been included in the provisions of Bill S-14.

In 2008, the RCMP formed an international anti-corruption unit, which became responsible for investigating bribes of foreign officials. It has two seven-man teams, one in Ottawa and one in Calgary, the latter being the centre of Canada's resource extraction industry. They work with the Public Prosecution Service of Canada, which does the prosecutions in foreign bribery cases. As of May of this year, there are 35 ongoing foreign bribery investigations. There have been only three convictions against companies in the oil and gas sectors, with fines of $9.5 million and $10.35 million in two of those cases.

As the House is aware, one was the case of Griffiths Energy International, an engineering company that had an inappropriate financial relationship with the wife of the former ambassador from Chad. Another case was Niko Resources, for bribing a Bangladeshi official. SNC-Lavalin, Canada's premier engineering firm, was recently convicted on bribery charges in Bangladesh and has been barred from competing for World Bank contracts for the next decade.

In 2009, an attempt to implement similar changes to those that are in the bill before us today passed at second reading. It was at committee stage when it died, after the Prime Minister prorogued Parliament in December of 2009.

That brings us to the phase 3 report of the OECD working group from a couple of years ago. This report again found problems in several areas. These included only counting bribes for the purpose of gaining a business advantage for profit. These sanctions were not effective, proportionate and dissuasive. The extraterritorial jurisdiction issue, which I mentioned in connection with the nationality jurisdiction, only applies to bribery carried out overseas if there is a real and substantial link to Canadian territory. Considerations of national economic interest, the potential effect upon relations with another state, or the identity of the natural or legal persons involved, are only prohibited if improper.

In 2011, the Transparency International Global Corruption Report noted that Canada fell in the lowest category of countries since it had little or no enforcement in terms of following the OECD bribery standards and was the lowest ranked member of the G7.

As indicated, the measures contained in Bill S-14 are long overdue and are needed to bring Canada in line with its international obligations. They are measures that the Liberals will be supporting.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I listened with interest to my hon. colleague's comments on this legislation. I certainly agree with him that the bill is long overdue.

I just wonder whether he also picked up on the communiqué from the G8 that my colleague from Ottawa Centre mentioned earlier in the debate. One of the items that he focused on in looking at the G8 communiqué was the need to have a public registry, a need to have much better transparency for companies operating abroad, and to get away from the practice of hiding behind a shell company. Even if we do want to enforce the law, it is hard to know on whom it should be enforced.

Does my colleague agree that we need to go further than this legislation and adopt measures such as a public registry to avoid shell companies being set up?

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I share the concerns expressed by the member. With Canada being such a significant player in the resource extraction industry worldwide, this is a real opportunity not just to meet and to be level with its international obligations, but to lead. An excellent example was just cited with respect to transparency. The private member's bill brought forward by the member for Scarborough—Guildwood would go a long way toward that goal of Canada being an international leader in transparency and ethical conduct.

Often, it is not good enough just to be level. In our case, there is a real opportunity to lead. This is an opportunity that should be seized both with respect to the initiatives that emanated from the G8 and with respect to the initiatives contained in the private member's bill, Bill C-474.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, in its 2012 report, Transparency International indicated that active enforcement was a real way of combatting this type of foreign bribery. We also know that the RCMP is the body responsible for conducting these investigations and reporting the facts.

I would like to know what my colleague thinks about the cuts that have been made to the Canada Border Services Agency and the RCMP in successive budgets.

Can he elaborate on that?

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I would like to thank the hon. member for her question.

This remains a problem. Time and time again, budget cuts are being made to very important services that affect the public. We have here yet another example. These organizations need to have sufficient resources to accomplish essential tasks, such as the ones set out in this report.

Most of the time, there is a lack of consideration. Not enough good ideas are being put forward and not enough effort is being made before budgets are cut.

I absolutely share the concerns expressed by my colleague from the NDP that all too often with this single-minded focus on trying to balance the books as a result of the financial mess that we have been thrust into by the government, we see very important front-line services, very important international obligations, compromised because of some wrong-headed and misguided assessment of priorities.