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

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to thank my colleague for his interesting comments. It is true that the bill deserves additional debate. The next step will be to send it to committee, and the House has the NDP’s support to do so.

For many years now, or at least since the Conservative government has been in power, no one in Canada has been convicted of taking a bribe or paying a bribe to a foreign company, as set out in the bill.

What changed the government's mind? Can we really believe that it is going to go forward and attempt to do away with this practice? Apart from the bill itself, does the government really intend to do that? Over the past five years, we seem to have had a great deal of difficulty in understanding what the government wants.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, I mentioned in my speech the three recent convictions that have been processed under this act.

I want to state that the OECD had some concerns about our legislation, and so we are bringing this bill forward, to tighten that up a little bit more. There are a number of things we propose to amend that would help to increase times and make sure that the RCMP is directly responsible for looking into and creating charges.

I know that this is timely, and even though we have probably not processed many in the past, as we move ahead, we look forward to being tougher on these individuals.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, as was illustrated earlier, there is a wide belief that in fact there is unethical, unacceptable behaviour that takes place within the corporate world, and at a great cost to many communities in certain areas of the world.

There is an expectation that Canada would play a stronger leadership role in ensuring we are doing what we can. My colleague talked about the sunshine bill earlier, which is an important private member's bill that would have gone a long way in dealing with this issue in a clear fashion.

Can the member indicate to what degree the government is genuinely open to receiving amendments to the legislation that would enable it to be stronger legislation going forward?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, as we look at fighting foreign bribery, I think Canadians recognize that Canadian companies around the world do a great job. Are there some bad actors? Yes, there certainly is from time to time. However, in any opportunity I have had to speak with ambassadors around the world, they look to Canada for leadership and they look for help, whether it is with their own legislation in developing countries or on how they can tighten legislation that may affect them.

I would say to the hon. member that this is something that will strengthen what has already been in place for a certain amount of time. We realize that there are probably some gaps there that we could fill, which is why we are looking at moving forward with that.

I have a couple of quotes that talk about support for the bill.

Ian Pearce, the chief executive officer of Xstrata Nickel, said, “As a Canadian-based company with operations and projects around the world, we applaud the government's efforts to combat corruption and bribery. As part of the Xstrata Group, we have a commitment to the highest standards of personal and professional ethical behaviour, and we have a policy of zero tolerance towards any form of bribery or fraud”.

I also have a quote from a former Liberal cabinet minister, John Manley, regarding the amendments to the Corruption of Foreign Public Officials Act. On Tuesday, February 5, 2013, he said, “Good corporate citizenship at home and abroad is essential to Canada's economic success. These latest measures aimed at eliminating corruption and bribery, will strengthen Canada's already strong reputation for good governance and ethical business practices”.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, to get up after my colleague from Niagara West—Glanbrook is filling big shoes, but it is a pleasure today to speak to Bill S-14. On February 5, the Minister of Foreign Affairs announced our government's efforts in taking further steps to combat corruption and bribery.

Through the introduction of Bill S-14, which includes a number of amendments to the Corruption of Foreign Public Officials Act, we are redoubling our fight against bribery and corruption, strengthening Canada's anti-corruption laws and placing Canada at the leading edge of countries taking robust action against corruption, action that will benefit Canadian companies at home and abroad.

The Corruption of Foreign Public Officials Act, CFPOA, is not new. In fact, Canada has had anti-corruption legislation in place since 1999. We passed it primarily in response to the OECD's anti-bribery convention. It is a good law that has already produced several convictions. However, we have identified a number of ways in which we can make it better. These can be found in the six amendments proposed in the fighting foreign corruption act.

Others before me have briefly explained each of these amendments, so I would like to focus particularly on that which proposes to clarify the scope of the CFPOA. This specific but important amendment, the elimination of the words “for profit” from the definition of business, would clarify that the scope of the CFPOA is not limited to bribes paid by for-profit enterprises or in the course of profitable business. Eliminating the words “for profit” from the definition of business ensures that the net is cast as widely as possible. By removing the for profit requirement from the definition of business, we expand the scope of the CFPOA.

We believe this will translate into two advantages in our fight against corruption. First, we wish to seize the opportunity to target those who pay bribes on behalf of companies that may or may not earn a profit during a given year. Second, we would also target organizations whose main purpose is not for profit as well as those whose main purpose is to generate a profit. In other words, we would treat all organizations the same way in the context of foreign bribery. Whether or not an entity is capable of generating revenue and earning a profit, and whether an entity conducts business in anticipation of profit, they would receive the same treatment under the CFPOA.

With respect to the first scenario, a company not earning a profit on a given year, a gap currently exists in the legislation. This gap does not support enforcement or prosecution. A company may try to escape the application of the law by conducting their business in a manner to establish that no profit is reflected in their books. This might be accomplished by way of strategic planning and the application of appropriate accounting methodologies. There is no reason that clever accounting should make the payment of bribes legal.

Our amendment would go a long way to ensuring the act applies to all questionable activities related to bribes, by ensuring that all business activities are captured regardless of the anticipation of profit from those specific activities.

With respect to the second scenario, an entity's reason for being is either profit or not for profit. All entities should be treated in the same manner. The fight against corruption cannot be won if we make exceptions for certain organizations and not for others. If we continue with unequal treatment, we do nothing more than shift the focus of bribery transactions to the not-for-profit sector.

In addition, if we close only the gap for the for-profit sector, we would have a realistic expectation that the number of newly created not-for-profit entities would increase. Why? They would increase in order to escape detection. In other words, we would continue to have an enforcement issue in our fight against corruption and it would simply shift to the not-for-profit sector. The focus would be on determining whether the not-for-profit entities are really that: not for profit. We do not have the resources for this, nor should we. We can be more fair, more strategic and more cost-effective if we simply treat everyone the same.

We have a realistic expectation that by closing these two gaps by simply deleting the words “for profit” from the definition of “business”, we would facilitate enforcement and prosecution. After all, timely and responsive enforcement can enhance investigations and facilitate successful prosecution. In the end this is what we want: to successfully prosecute those involved in the corruption of foreign public officials.

Our government's top priority is to secure jobs, growth, and long-term prosperity. It involves pursuing an aggressive trade agenda and creating the conditions for Canadian companies and businesses to succeed. However, our government expects Canadian companies to play by the rules and compete fairly. As such, the legislation that is before us signals our commitment to fighting corruption and bribery.

These amendments would further deter and prevent Canadian companies from bribing foreign public officials and would reinforce Canada's good name. These amendments would help ensure that Canadian companies continued to act in good faith in the pursuit of freer markets and expanded global trade.

I want to read a few statements in support of this bill.

Ian Pearce, chief executive officer of Xstrata Nickel, said that as a Canadian-based company with operations and projects around the world, they applaud the government's efforts to combat corruption and bribery. He said that as part of the Xstrata group, the are committed to the highest standards of personal and professional ethical behaviour, and have a policy of zero tolerance toward any form of bribery or fraud.

Janet Keeping, chair and president of Transparency International Canada, said that Transparency International Canada is delighted that the federal government is moving to strengthen the Corruption of Foreign Public Officials Act in accordance with Canada's international obligations and encourages the government to ensure that the RCMP have the resources necessary to enforce the CFPOA effectively. She said that legal changes of the kind proposed are only as good as the government's commitment to making the law meaningful on the ground.

On Tuesday, February 5, 2013, the Hon. John Manley, former Liberal MP, said, regarding amendments to the Corruption of Public Officials Act, that good corporate citizenship at home and abroad is essential to Canada's economic success. He said that these latest measures, aimed at eliminating corruption and bribery, will strengthen Canada's already strong reputation for good governance and ethical business practices.

We have this bill before us and as I said earlier, from time to time we review many pieces of legislation in this House. At some point all legislation needs to be reviewed because, while it may be good at one point, circumstances change, and there are people out there who lay awake at night looking for loopholes and thinking of ways to skirt the system.

I certainly urge all my colleagues on all sides of the House to support this bill. If I happened to have a bunch of people from my riding here tonight, I would certainly want them to see all parties in this place stand to support this bill at the end of the night.

I would be happy to take any questions.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, at the moment, the rule on facilitation payments is applicable at the cabinet's pleasure.

Does the member agree that the committee should determine whether cabinet or Parliament should decide?

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, I think I understand the question.

We discuss many issues in this House and there are decisions that are made by governments, made first by cabinets through discussion. Some decisions are made at committee and recommendations come back to this House in committee reports. This is a bill that ended up before the whole House, and rightly so. We all have a chance to speak to it and debate it. Who cannot support something that provides balance?

As I said in my speech, not-for-profit and for-profit organizations were being treated basically in two different manners. It does not matter what we deal with in this place, we should always look for balance and equity at all levels, and this bill goes a long way toward that.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, even though we are in favour of the principle underlying this bill, I have some questions.

I have a specific question for the member who just spoke about paragraph 5(1)(b) of Bill S-14, which says that a permanent resident who commits an offence under the Corruption of Foreign Officials Act outside Canada is not deemed to have committed that offence if the person does not return to Canada. That could last for years, and on the day the person returns, he or she could face certain charges under the act.

I would like my colleague to state whether a Canadian resident would receive the same treatment as a permanent resident. In the United Kingdom, care was taken to place limits on this provision. Bill S-14 is different from what is found in other countries.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, I am not sure that I totally understand the member's question. I think he may be looking for a needle in a haystack.

The bottom line is that if that individual he speaks of comes back here, whether the individual is a permanent resident or a citizen of Canada, the expectation would be that the individual would be treated the same way under the law.

If the member has concerns about a loophole, he certainly should bring it to our attention and it could be looked at.

Those are the only comments I can make on that.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I will be very brief. I thank my colleague for his interesting observations, but would like to ask him a question.

Knowing as we do that the government has made significant cuts to the RCMP, where will the funds come from to finance this bill?

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, there is always so much “gravy”, as we like to call it, in government.

In our term, over the last seven years, this government has eliminated or decreased 150 taxes. I do not know whether the member is trying to imply that because it may be tough to find the money to enforce this, we should let bribery go on. I do not believe that is the way we should deal with it, and neither does this government.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I am splitting my time with the member for La Pointe-de-l'Île.

It is always a pleasure to be in a full house. Everyone has flocked to the House of Commons to hear my speech tonight.

This bill is a start. Obviously, New Democrats recommend that the bill go to committee so it can be analyzed, witnesses can be brought in, some of the points ironed out, and hopefully make the bill stronger.

There are four main changes to the Corruption of Foreign Public Officials Act contained in the bill. It increases the maximum sentence of imprisonment applicable to the offence of bribing a foreign public official from 5 to 14 years. It eliminates the exception for so-called facilitation payments where a foreign official is paid to expedite the execution of his or her responsibilities. It creates a new offence for falsifying or concealing books or records in order to conceal bribery of a foreign official. It establishes a national jurisdiction that would apply to all of the offences under the act, such that Canadian nationals could be prosecuted for offences committed overseas.

One of the issues the committee might want to look at is how this would affect various groups and NGOs overseas that are trying to function in a country in which corruption is everywhere. We have seen films in which people are trying to advance through checkpoints and through no fault of their own, they have to pay bribes at illegal roadblocks or whatever, in order to deliver the aid. This bill would certainly tighten up the reaction to that corruption. I am wondering how we would address that situation. Obviously, a strong message would have to be sent to the government of that particular country. I am sure the committee will be looking at that.

There are a couple of points I want to emphasize. One is that we have long supported clear rules requiring transparency and accountability by Canadian individuals and corporations overseas. This bill complements legislative efforts by NDP MPs to encourage responsible, sustainable, and transparent management practices. We acknowledge that the lack of enforcement in Canada with respect to bribery can be considered, to an extent, a national embarrassment. We are pleased that the government is finally responding to this problem. It took a long time, but at least we are on the right track.

Most Canadians want our companies to be successful and responsible representatives of Canada. Canadian companies want clear and consistent standards for international business. In other words, why would we allow an official of a Canadian multinational to act differently in another country than we would allow here? That is what this bill is trying to enforce. We need to enforce loophole-free regulations that will create a level playing field for all companies while ensuring environmental, labour, and human rights protection of which we can all be proud in this country.

We have certain values and standards in this country when we deal with each other. We need to ensure that when we are doing business in other countries, we apply the same values and standards. That is one of the points this bill is driving at.

In a report released in 2011, Transparency International ranked Canada as the worst of all the G7 countries with respect to international bribery. I say this is disgraceful. The organization pointed out that Canada rarely, if ever, enforces its negligible anti-corruption legislation.

Since then, the government has started trying to address this national embarrassment. However, since 1999, there have only been three convictions, two of them in the past two years. When I read that, I was surprised. It seems that we should be in first place with regard to corruption and our fight against corruption.

By eliminating the facilitation payments exception, the bill will bring Canada’s practices in line with 36 of the 39 other OECD countries. That is a good idea.

However, while the rest of the bill comes into effect on royal assent, the rules on facilitation payments will come into effect at an unknown later date, as cabinet wishes.

I am wondering about this point and I hope we will discuss the bill’s mechanism in more detail in committee.

In the United States, the rule on accounting records is already used in civil matters by the Securities and Exchange Commission. Canada has no equivalent regulatory authority, but there is a similar rule in criminal law.

I would also like to point out that the bill is of particular importance for the mining industry, where the NDP has been and is still an ardent defender of accountability. I can cite, for instance, Bill C-323 from the member for Burnaby—New Westminster, which seeks to permit people who are not Canadian citizens to initiate tort claims based on violations of international obligations in Canadian courts.

Furthermore, I can cite Bill C-486 from the member for Ottawa Centre, I think, which requires companies that use minerals from the Great Lakes Region of Africa to exercise due diligence.

The political elite that benefits from corruption, particularly in countries and industries where corruption is rife, is made up primarily of men, which is interesting. At the same time, it is primarily women who lack government protection.

We support this bill and we believe that it must be sent to committee to facilitate discussion, as I just mentioned.

The bill will amend the definition of the term “business” to include the non-profit organizations I mentioned earlier. At committee stage, members will have to study the impact of this provision on charitable organizations and humanitarian relief agencies, which can sometimes be required to make a payment to accelerate the provision of essential aid or to actually obtain aid, something that I also mentioned at the beginning of my speech.

The committee should also determine the impact of making these activities indictable offences that are subject to imprisonment of up to 14 years, because it is a threshold over which conditional discharges, absolute discharges and conditional sentences become impossible. Therefore, the committee really must determine whether 14 years of imprisonment is the right direction to take.

I am going to stop here, and I look forward to all the questions.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, I thank the hon. member for his speech.

Once again, why is this bill even necessary, given the large number of mining and oil and gas industries in Canada that are involved in operations abroad? Why did it take 14 years to introduce this legislation, and why is it coming from the Senate?

We want to support the bill so that it is referred to committee and can be discussed at greater length and in more detail, particularly with regard to changes such as generally accepted accounting principles.

Once again, why is this bill, which is essential to ensure fairness in that industry, coming from the Senate?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I thank my colleague for his question.

In the seven years that I have been here, I have noticed that the large multinational corporations in Canada put a great deal of pressure on the various levels of government to avoid having any legislation, because it is not to their advantage. That is why I am pleased that there is finally a bill that really deals with this issue.

In Canada, we have always had rules, and we still do. Rules exist. Multinational corporations do not follow the rules willingly, but since these rules exist, they comply with them. Corporations in other countries do not have to follow rules, because there are none.

It is therefore up to us to impose rules on our corporations, so that they will comply with them.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I want to congratulate my colleague on his excellent speech.

I want to ask him whether he shares my view on this government's way of doing things. Personally, I do not quite share my colleague's optimism when he says that the government has taken some positive action. I think that the government is reacting rather than being proactive.

Let me explain. We are aware of the incident involving SNC-Lavalin in Libya. Three Alberta companies were also recently involved in wrongdoings or offences abroad. I think the government took a “marketing” approach, as it always does. That is how I describe its behaviour. In the end, the government reacts because the media has reported on these incidents. However, as my colleague so clearly explained, this is already well known, because Canadian mining and gas companies have done bad things and violated various laws.

Why did the government not react and, more importantly, why did it not take action sooner? Why did it wait until it no longer had any choice because the media had a hold of certain stories?

I would like to hear the hon. member's comments on this issue.