Foreign Affairs Committee on June 11th, 2013

[John McKay, Liberal, Scarborough—Guildwood, ON]

Welcome. Thank you, Chair, and thanks to you all.

My first question has to do with the threshold, if you will, to trigger interest on the part of a crown attorney in whatever payments are being made, because a lot of this stuff is pretty low-level—$20, $40, $60 to get through a border and so on. At this point, we don't seem to have much of a definition as to what will create the interest of a crown attorney in these payments.

As I would understand the way you've framed it, everything is illegal until it's not, which leaves a pretty major area of uncertainty in the law.

Why take that approach? Why not establish, either by regulation or in legislation, a de minimis requirement and a specific exclusionary requirement of what does not constitute these kinds of offences?

[Alan H. Kessel]

What we are doing is joining the vast majority of other countries in basically ruling out facilitation payments, together with Australia, which is now looking at doing the same thing as Canada, and New Zealand, which is in a similar position and probably will be along the same track soon. The U.S., we know, are looking at it, but they have their own ways of dealing with things. We would be practically the only country left in the OECD grouping that has facilitation payments, so we've joined the other countries that have totally outlawed facilitation payments.

What we're trying to do is build a culture and a value system in how businesses deal with their issues. You've raised a question of the prosecutions. While I dare not tread on the toes of the Canadian prosecution service, I would suggest that their objective would be to look at companies trying to influence business deals, and that is where they would focus their intentions.

I don't think the objective of the legislation, either in the past or in the future, would be to stop people from giving a bottle for Christmas or a tip to a tour guide or something like that. Clearly, this—

[John McKay, Liberal, Scarborough—Guildwood, ON]

It's because there is this kind of grey area. In theory, at least, you could slip $20 to a border guard and that could attract the attention of a prosecutor. Is that correct or not correct?

[Alan H. Kessel]

Let me say this—and I think we have this in common with other countries. We're not going to put Canadians into risk situations, such that if they're sitting in a bus somewhere and an odd fellow comes along and says that if you don't give me $20 you can't get out of here. I don't the Government of Canada is interested in putting people's lives in danger for $20.

We have to have an intention to bribe a foreign official for a business transaction. What prosecutors look for, in legal parlance, is mens rea, and together with actus reus, they would then have a possibility.... I don't think anybody is going to die for it.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Well, you and I went to the same boring lectures in the first year of criminal law.

[Alan H. Kessel]

Exactly.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I understand that, but because there is no minimal threshold, if you will, everything is illegal until it's not.

I'm just pointing it out. I'm not sure I would react any differently than you.

I am puzzled, frankly, by the government's attitude, its kind of resistance to going ahead with my bill, which creates in effect a database of information on what's actually happening out there in terms of payments to governments.

It seemed to me that, one way or another, Canada will be dragged into the Dodd–Frank regime, and in effect that will be a database for a prosecutor. With a database, you then have some basis for determining what catches a criminal prosecutor's attention and what doesn't catch a criminal prosecutor's attention.

Let's face it, when I pay a licensing fee to obtain a mining concession, I am trying to facilitate my business; there is another line where I am bribing someone to facilitate my business.

I'd be interested in your thoughts as to whether in fact, while you are postponing the implementation of the facilitation payments section, the buildup of their database would in fact be useful to a prosecutor.

[Alan H. Kessel]

Thank you for that.

I wouldn't mind getting Marcus, who has been immersed in some of these things, to just give us a few thoughts as well.

[Marcus Davies]

Thank you.

We appreciate that there are different tactics taken toward databases. Looking at the issues of a database to provide a source of information, you can have an administrative or regulatory regime. I think the message we're trying to clarify with the CFPOA, the Corruption of Foreign Public Officials Act, is that this legislation is designed to put in place the penalties for when there is actually a bribe, and not to be addressing the regulatory and administrative procedures that companies would have to do for reporting in terms of the parallel mechanisms with taxation or things like this.

You did mention a question, though, that I wanted to come back to with regard to paying $20, or issues like that. Our legal adviser brought up the issue of mens rea.

What is happening now with our international treaties is that they've all put on states an obligation to criminalize the bribery of foreign public officials and other offences that are associated with that. So it's creating a norm, a practice, an enforcement.

But then the institutional civil society recognized that there are environments where you may be asked to do this, to pay a bribe. For Transparency International, when dealing with crisis situations, failed state situations, their approach is to have civil societies put in place mechanisms and risk assessments in monitoring and evaluation, and create transparency in their laws so that it's clear the company doesn't pay.

The reason, and we see this with companies, is that if you pay a little bit, you get targeted to pay more. Then you find yourself drawn in.

[John McKay, Liberal, Scarborough—Guildwood, ON]

What's interesting to me about taking out the profit part of the definition is that you actually increase the universe of people who will be exposed to this kind of criminalization of their activity. Without the actual definition, a lot of NGOs operate on very low levels of “facilitation”, for want of a better term.

I want to leave that question, but I still.... The difference between regulatory and criminalization is sometimes a very fine line. I would have thought that building up a regulatory data bank of information is a prosecutor's dream. You'd be able to look back at five years of filings and say to yourself, “Well, this is what they disclosed, and this is what they didn't disclose.”

[The Chair, Conservative, Dean Allison]

John, that's all the time. You're actually over your time, but I wanted you to finish that thought.

So that's it.

[John McKay, Liberal, Scarborough—Guildwood, ON]

You're a generous chair.

I do have another one, if....

[The Chair, Conservative, Dean Allison]

Here's what I'm going to propose. We have notice of votes, and the bells will start in 10 minutes.

My suggestion to the committee is that we have one more round of five minutes each, with two interventions to the Conservatives and one to the NDP, and that we bring back our witnesses for the second hour—because we would not get back here until almost quarter to—on Thursday for the first hour.

Is that okay with everybody?

[Some hon. members]

Agreed.

[The Chair, Conservative, Dean Allison]

All right.

So here's what we'll do. We'll finish off one final round, which will be three interventions of five minutes each.

We'll start with Ms. Brown, go to the NDP, and finish off with Mr. Van Kesteren.

Ms. Brown, five minutes, please.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you very much, Mr. Chair, and my thanks to all the witnesses for being here and giving us this information.

This is a very important piece of legislation, and I was pleased to hear you talk, Mr. Kessel, about how Canada is viewed by the rest of the world in this regard. We've taken a strong stand, and we are recognized as a country that is intent on combatting this problem.

I happened to be in an African country where a police official came on the bus. There were several parliamentarians there and the police officer was demanding a bribe from us to leave the country. It was kind of backwards to all of this.

Canada has signed on to the EITI because we believe we need to be clear about how we do business overseas. We signed on to the Equator Principles, and we have a councillor in place to deal with our extractive industries and our other businesses overseas.

Given that so many other countries are signatories to this OECD treaty we're discussing, can you talk a little bit about where Canada stands? Are we close to the top? Are we doing well? Are there other suggestions we can look at from other countries?

[Alan H. Kessel]

You raised a number of very important questions, and I think one of the key things is to remember that we should stop beating ourselves up. We're a country with a great reputation. We have a population that believes in these things, for the most part. We are in the top percentage of those who adhere to these values. We are in a group of countries that has helped craft the international regime that builds the playing field we want to be on.

So let's not beat ourselves up, but let's not relax completely. We have to make sure that we remain vigilant and don't become complacent, and that when we see changes are needed, we actually make them. I think the responsibility to be alert is something we also have as a trait. The perception of how we do business is crucial to our economy, as a major exporting country. How we react in these various countries is critical to how those deals come about. These things don't just happen because we're nice guys; they happen because we have a reputation to live up to.

You mentioned a particular incident. We don't believe that's the kind of thing this act is going after. We keep forgetting the full title is An Act to amend the Corruption of Foreign Public Officials Act. So this has to be in a business transaction. This whole legislation is about business transactions. Be careful when you start dragging in everybody else and thinking they're going to be caught by this thing, because the prosecutors going to a court know they're using a very fine filter. They have to prove a whole bunch of things, so they're not going to be doing malicious prosecutions just to make people's lives a misery. They're going to go after the characters who are out there trying to make a better deal by bribing somebody. Those are the ones we're trying to get. That's what this legislation is trying to do. But we're trying to do it surgically and strategically, and to ensure that we are with the others we're competing with.

We don't want to put Canadian businesses at a disadvantage, and we're not. In some cases, we're catching up with others. In other cases, we want to be leading. This is the delicate balance of where Canada should be, and it is crucial to the role parliamentarians and others play. In fact, to a large degree, you're ambassadors for this kind of legislation and ethic. When you're going off to your meetings internationally, and when you're talking to visiting delegations, we expect you to be putting that message out there. When we go off as the voice of the Government of Canada, when we're giving lectures at industry seminars, or when we're talking to compliance officials in businesses, we're doing it as part of this scheme.

Thank you for opening....

Is the chair going to rule me out...?

[The Chair, Conservative, Dean Allison]

I'm not going to cut you off; I'm going to cut her off.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

I just want to say that it was really interesting last week to see the article in The Economist magazine talking about the role that private enterprise is playing globally now and how important it is in light of that to have these kinds of measures in place.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you.

Madame Péclet.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Thank you, Mr. Chair. I will be sharing my time with Ms. Laverdière.

Mr. Kessel, at the beginning of your presentation, you mentioned having held consultations with private corporations. There are some questions to be asked about this.

The RCMP will have exclusive authority for the enforcement of the bill. Have you consulted the RCMP to find out whether it has the necessary resources? Since there have been only three convictions over the course of about 10 years, do you know whether the RCMP will have the resources it needs to implement this bill?

[Alan H. Kessel]

Thank you. That's a very important question. It's one that did come up in the other place as well.

I'm going to ask Marcus if he would repeat that. We don't speak for the RCMP, but we certainly listen to them and we can repeat what they say.

[Marcus Davies]

I can assure the committee that we work very closely with the RCMP. We have a trilateral approach. We work with the Department of Justice, the RCMP, and Finance. We're consulting with Transparency International.

The RCMP has set up international anti-corruption units. They have one based in Calgary. They had one based here in Ottawa, but they've recently been changing that into more of a proceeds of crime.... The reason they've done that is to coordinate it with their drug enforcement and to identify other areas of transnational crimes, so they can pick up corruption in addition to other crimes. So they're very active in it.

They have expert people. I was on the phone talking with them yesterday. We serve as a focal point for enforcement under the CFPOA. They have the team behind it, but most importantly from our perspective, they have the expertise behind it, and they participate in our meetings before the OECD, but they also, as we table our annual report to Parliament.... Our 13th annual report to Parliament extensively lists what the RCMP is doing; they're doing events in education with enterprises, in particular the day of dialogue, which was mentioned by Member of Parliament Bob Dechert. They are there consistently; they have good resources. They have expert people behind it, and they're committed to doing that.

That's why we have the 35 investigations, and they're proceeding with their investigations. The resources are there, and they are supportive and behind us, and they were part of the stakeholder consultations and encouraged this to happen.

Thank you.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you for your presentation. As always, it was very interesting.

In the U.S., facilitation payments are essentially managed through the U.S. Securities and Exchange Commission. Am I to understand that it does not cover not-for-profit organizations?

[Marcus Davies]

Within Canada we don't have a national securities exchange commission. The focus on this legislation is preventing bribery.