Mr. Speaker, I rise with pleasure to speak to a matter of concern to all of us, the subject of Bill S-21, the bribery and corruption of foreign public officials in international business.
This bill when enacted will allow Canada to ratify the convention on combating bribery of foreign public officials in international business transactions. This convention was negotiated by the members of the Organization for Economic Co-operation and Development.
The 29 member OECD, which includes Canada, the United States, most European countries, Japan and South Korea, is the major economic policy forum for the world's most advanced industrialized democracies.
It is an accepted fact that corruption distorts international trade and competition. It impedes economic development. In developing countries in particular corruption distorts public policy. It leads governments to make decisions that are not in the public interest but are in the interest of those who benefit from the bribes.
Corruption also has the effect of lowering the quality of goods and services provided by the private sector in the course of meeting its contracts. If substantial bribes are being offered the money comes either by shortchanging the countries with which one has a contract or by undermining the quality of the goods and services being provided.
Furthermore it has an insidious effect of threatening the rule of law, democracy and human rights. It undermines the development of competent political and democratic institutions. Where they are in the course of development, it blocks that development. Stability and security are essential preconditions for economic growth. Prosperity, sustainable development and employment engender greater security and stability.
The successful promotion of Canadian values abroad can be assisted by increased economic partnerships between Canada and other countries.
The issue of the corruption of foreign public officials is not new and continues to be a major problem affecting international trade and investment. The problem has been the focus of attention within the OECD, the Organization of American States and the Council of Europe.
To implement the OECD convention would enhance Canada's reputation as a world leader in fighting corruption. It would honour the commitments Canada has made at the OECD, at the Denver and Birmingham summits of the G-8 and at the United Nations. And it would continue to ensure if not enhance Canada's standing at the OECD.
Some have questioned whether what we are doing is enough. My response is that this is a dramatic and significant first step in the right direction.
I will highlight the key elements in this legislation. The essence of the convention is the requirement that each state party criminalize the bribery of foreign public officials in international business transaction and take measures to establish the liability of legal persons for the bribery of a foreign public official. This provision appears in section 3 and is the centrepiece of the proposed act. It prohibits the bribery of a foreign public official in the course of business whether directly or indirectly. It calls for significant penalties. The offence would be punishable on indictment and carries a maximum penalty of five years imprisonment.
This legislation will use the definition of person found in the Criminal Code that includes Her Majesty and public bodies, bodies corporate, societies, companies and inhabitants of counties, parishes, municipalities or other districts in relation to the acts and things they are capable of doing and owning respectively.
Therefore for the purpose of the offences under this proposed act, potential accused are not limited to natural persons. Corporations also fall within the scope of these offences. The bill describes facilitation payments that would be exempted from the ambit of the offence. It would not be an offence if the advantage were lawful in the foreign official's country or public international organization. Reasonable expenses incurred in good faith and directly related to the promotion, demonstration or explanation of products and services or to the execution or performance of a contract with the foreign state could also be argued as a defence.
The bill would amend section 67.5 of the Income Tax Act to add this new offence to the list of Criminal Code offences referenced in that section in an effort to deny the deductibility of bribes paid to foreign public officials.
The convention requires the parties to provide that the bribe and proceeds of the bribery of a foreign public official be subject to seizure and confiscation. It requires the parties to consider the imposition of additional civil or administrative sanctions. For this reason the bill proposes to create two additional criminal offences, the offence of possession of property or proceeds obtained or derived from the bribery of foreign public officials or from laundering that property or those proceeds, and the offence of laundering the property or proceeds obtained or derived from the bribery of foreign public officials.
The bill incorporates the proceeds of crime provisions of the Criminal Code for use on prosecutions of the new offences. The new offence of bribery of foreign public officials is an enterprise crime offence to permit the search, seizure and detention of these proceeds of crime and is a predicate offence for the offence of laundering of the proceeds of crime. The convention has provisions dealing with mutual legal assistance and extradition with which Canada can comply. If possible under their legal systems, each party must also provide legal assistance in criminal and civil matters.
It is important to note the Canadian business community is behind this initiative. It considers the OECD convention as the most significant achievement to date in the international campaign against bribery and corruption. This convention is seen as an opportunity to create a level playing field on which Canadian companies can compete on the basis of quality, price and service. This was said loudly and clearly by members of Transparency International when they appeared before the Senate last week.
When he appeared before the Senate, the Minister of Foreign Affairs quoted Donald Johnston, a former Canadian Minister of Justice and current Secretary General of the OECD, who said in a recent article that “Integrity in commercial transactions is essential in making the global market work and to ensure that the public supports it. A logical consequence of globalization is that honesty has to be enforced at the global, not just national, level”.
With the passage of this legislation Canada has the opportunity to be the fifth country to ratify the OECD convention and to bring it into force, thus ushering in a new era of international accountability. I ask all hon. members to consider that the war on corruption is well underway. There is now no looking back.