Foreign Affairs Committee on April 30th, 2012

[The Chair, Conservative, Dean Allison]

Pursuant to Standing Order 108(2), our study on the role of the private sector in achieving Canada's international development interests will begin.

I would like to welcome our witnesses who are here today. From the Royal Canadian Mounted Police, we have Stephen Foster, director of the commercial crime branch; and Gisèle Rivest, the officer in charge of operations of national interest and international corruption from the commercial crime branch.

I want to welcome both of you here today.

Mr. Foster, I believe you have an opening statement for us. I'll turn the floor over to you for that.

[Supt Stephen Foster, Director, Commercial Crime Branch, Royal Canadian Mounted Police]

Thanks.

Good afternoon, Mr. Chairman and honourable members of the committee. Thank you for inviting the RCMP to participate in today's proceedings. We understand that the committee is studying the role of the private sector in achieving Canada's international development interests.

In 2007 Canada ratified the United Nations Convention Against Corruption. The convention introduced a comprehensive set of standards, measures, and rules that all countries can apply to strengthen their legal and regulatory regimes to fight corruption. It calls for preventive measures and the criminalization of the most prevalent forms of corruption in both public and private sectors.

The convention also includes several measures to improve global collaboration against corruption. One of these requires that each member state establish a preventive anti-corruption body to enforce the appropriate anti-corruption policies, gather and disseminate knowledge, and assist foreign partners in the fight against corruption.

To help fulfill Canada's commitments under the convention, the Government of Canada provided funding to the RCMP for the creation of two RCMP international anti-corruption units. These units were established and implemented in the RCMP commercial crime sections in Ottawa and Calgary in 2008. Oversight of the program is provided by a commissioned officer at the RCMP headquarters commercial crime branch.

The two units are strategically located to cover eastern and western regions of Canada. Each seven-person international anti-corruption unit focuses on detecting, investigating, and preventing international corruption. Their primary focus is on the offence of bribing a foreign public official, contrary to Canada's Corruption of Foreign Public Officials Act.

In addition to conducting investigations, the international anti-corruption units deliver prevention and awareness messaging to business and government communities. They also work closely with foreign enforcement bodies, as well as Canadian partners such as the Department of Foreign Affairs and International Trade, the Department of Justice Canada, and the Public Prosecution Service of Canada.

The commercial crime branch and other anti-corruption authorities recognize several high-risk areas related to international corruption. Five areas at risk of involving higher dollar values and prominent public officials are extractive industries, mega-construction projects, country-to-country development assistance, disaster recovery assistance, and government procurement contracting.

The levels of corruption vary from country to country. One reason for this is that countries have treated corruption differently. They have criminalized, enforced, and penalized corrupt activities differently. Another reason is that cultures of corruption develop over time, and once they exist, they persist. They become entrenched in the way business is done and in that way of life.

Corruption interferes with economic productivity as well as normal market forces. Corruption can result in contracting processes in which the successful bidders do not deserve to win. Corrupt processes do not provide the public with good value for public funds expended. Those who conduct business internationally need to be aware of the risks and eliminate or mitigate them. They need to conduct themselves with honesty and integrity.

There are instructive Internet resources available to assist businesses to operate internationally and avoid corrupt practices. Some of the best practices for internationally operating organizations include having robust internal controls and compliance policies, knowing the laws in the jurisdictions where they operate, having a code of conduct, delivering appropriate training, and knowing the agents or employees who represent their companies.

Transparency International's website includes an area devoted to the subject of how to fight corruption. The Organisation for Economic Co-operation and Development's website has an area on supporting the fight against corruption in developing countries. Foreign Affairs and International Trade Canada, the Canadian International Development Agency, Export Development Canada, and other Government of Canada departments have anti-corruption-related material and resources available on their websites.

The way to combat corruption on a global scale to the benefit of developing countries and internationally operating organizations is for governments and businesses to continue to work together to create a level playing field, a playing field without corruption.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to start with Mr. Dewar.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

Thank you to our guest for appearing today. My recollection is that when we were in the previous parliament looking at the whole issue of corporate social responsibility, the RCMP was able to bring forward their testimony to help us with that particular piece of legislation. It's good to see you back again to help us look at the study of the private sector when it comes to international development.

One of the matters we have of course been seized with most recently—and we in fact brought the issue up today in the House of Commons—is that of a Canadian company, one vice-president of which was recently arrested amid concerns around corruption and money laundering that were raised following investigations in another jurisdiction. I'm talking about Mr. Ben Aissa, who's been charged in Switzerland.

I'm wondering if you're aware of that case and if you can tell us whether the RCMP was involved in that case.

[Supt Stephen Foster]

The RCMP was aware of that case. In fact, I brought a copy of today's online Globe and Mail article with me.

With respect to actual matters that relate to the investigation, I would not say more than what the RCMP spokesman in the article said, which I could quote for you:

...would confirm only that the police force’s Ottawa-based A-division, which handles international corruption investigations, had “received a request for assistance” in the case of Mr. Ben Aissa.

[Paul Dewar, NDP, Ottawa Centre, ON]

From that, can we assume that there were also investigations that were coordinated with Foreign Affairs here in Canada as well as overseas? In other words, were there RCMP helping with the investigation by the Swiss with Foreign Affairs here in Canada?

[Supt Stephen Foster]

I would just reiterate that we had received a request for assistance. That's what was confirmed by our media relations representative. Commenting further on ongoing investigations would be inadvisable on our part.

[Paul Dewar, NDP, Ottawa Centre, ON]

Many people have concerns when we have a company as prevalent and dominant as SNC Lavelin. We know, for instance, that this gentleman was working with the governments of Tunisia and Libya. We know that in Libya, at the time, which concerned many of us—and this is prior to the demonstrations in the streets by Libyans—there were contracts for such things as building prisons. I'm not sure too many people would be comfortable with being in a Libyan prison under Mr. Gadhafi. But it seems to me there is a concern around countries that have had corruption in the past, and there's a need to keep an eye on Canadian companies that are involved in enterprise in countries where there are concerns.

Let's put aside this case for a second.

Do you track, and are you aware of a method in which the RCMP actually tracks, Canadian companies and their affairs in other countries? Or do you wait for the response to come from other jurisdictions, as was the case with SNC Lavelin, in which case it was the Swiss who in fact got in touch with us when we didn't initiate the investigation? In other words, do you track Canadian companies or do you wait for other jurisdictions to contact you?

[Supt Stephen Foster]

From the RCMP perspective, we work with open-source information. There are certain activities that might attract our attention in open-source information. As well, we're prepared to take complaint information or requests for assistance from other countries.

[Paul Dewar, NDP, Ottawa Centre, ON]

Do you ever initiate an investigation based on a complaint from citizens from other countries?

[Supt Stephen Foster]

There might be circumstances where we would, depending upon how credible the information is, how much it might have in the way of supporting documentation or supporting information from other sources.

[Paul Dewar, NDP, Ottawa Centre, ON]

You're aware of the new counsellor office that the government recently set up in response to concerns people might have regarding the operations of the Canadian extractive industries abroad.

[Supt Stephen Foster]

The corporate social responsibility counsellor?

[Paul Dewar, NDP, Ottawa Centre, ON]

Yes.

[Supt Stephen Foster]

Yes.

[Paul Dewar, NDP, Ottawa Centre, ON]

Have you had any requests from her to investigate complaints or companies?

[Supt Stephen Foster]

We've been in contact with her office, and I'll say we've received no referrals from her office.

[Paul Dewar, NDP, Ottawa Centre, ON]

So you've been in touch, but she hasn't contacted you, if I can put it that way?

[Supt Stephen Foster]

Yes.

[Paul Dewar, NDP, Ottawa Centre, ON]

I find that interesting, of course, Chair, because one of the concerns that people had was that there wasn't going to be enough reach in her mandate to be able to investigate. I find it interesting, considering that there have been requests for investigation, that this office and this officer has not contacted the RCMP—but that's for another day, perhaps.

Finally, I just wanted to comment on your comment that Canada recently has gone down in terms of its ranking in fighting corruption. We had previously been in sixth place, which is not number one. We'd all like to be number one in fighting corruption. But we're down to tenth place.

Were you aware of this change in ranking? What do you attribute it to?

[The Chair, Conservative, Dean Allison]

Could you give just a quick response? We have about 30 seconds.

[Supt Stephen Foster]

With respect to your question about going from sixth place to tenth place, I was aware of the change in the status. There are a couple of factors that are at play there. It's a corruption perception index, so it's what level of corruption is perceived. In part, more enforcement is going to be something that's publicized, so that would make the index go up in terms of perceived amount of corruption. At the same time, the actual enforcement might make it go down. So it's one of those things that has competing factors.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move to Mr. Van Kesteren for seven minutes, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

In line with those questions, Mr. Foster, what other countries are in front of Canada? Do you know them offhand?

While you're looking that up, who determines the rankings? Is it a UN determination?

[Supt Stephen Foster]

Norway and Sweden might be countries that are in front of Canada at the present time. Transparency International is the actual operator of the corruption perception index. The information is available on their website. It goes back several years. They've changed the way the tool operates on a couple of occasions, which might have impacted different standings.