EDITORIAL — Government proposing tough legislation — Fighting bribery abroad

Sadly, this Earth is riddled with tin-pot dictators skimming cream from state-owned enterprise and sleazy bureaucrats ushering in “big tippers” to the backrooms where business deals are made. In this shadowy underworld, enterprise is anything but free, and capitalism is perverted to serve entrenched interests. The bad guys get the goods, and the nice guys finish last.

The Canadian government is hoping to change all this by introducing legislation that would make the bribery of foreign public officials by Canadian businesses a criminal offence.

The legislation is expected to be far-reaching and similar to the U.S.

Foreign Corrupt Practices Act, widely considered the most stringent anti-bribery law in the world.

American businesses have long complained that they alone had to carry the anti-corruption torch. They argued, justifiably, that while they idled on the high road, their ethically challenged competitors were roaring down the inside track of the low road, where some really big business deals are done.

Late last year, Canada and other member nations of the Organization for Economic Cooperation and Development (OECD) signed the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (a mouthful, that). The Canadian government plans to introduce amendments to the Criminal Code in April, just before the tulips bloom in Ottawa. This anti-corruption legislation is expected to come into force by the end of this year.

Proponents of the legislation expect that, over time, the prevention of international bribery at its source will help provide a level playing field against competitors from other major trading nations, including the United Kingdom, France, Germany and Japan. However, parity will come only when many more nations sign similar legislation and when fair business practices are the global norm, rather than the exception.

Canadian law firms point out that the new legislation will bring new challenges. They urge companies with international operations to plan today to ensure compliance with the new law tomorrow, and thus, avoid legal problems. They recommend that training programs, corporate policies and employee codes be upgraded. And they suggest that business people make their views known to the federal government during the legislation-drafting stage.

This is sound advice, particularly for Canadian-based executives and directors who may find themselves liable to fines and imprisonment for the acts of foreign subsidiaries, agents, distributors and even joint-venture partners. Many problems of this type have surfaced in the United States, as it is not always easy to monitor what goes on in far and distant lands where business practices can be very different than at home. Nor is it easy to be sure that foreign partners are always on the up-and-up.

Canadian business with international operations should make their views known to the federal government before the legislation is introduced. Many of these companies have a good handle on the “real-world” challenges that can surface when operating in distant lands. The goal should be to draft legislation that targets the perpetrator, not innocent directors and officers.

While it will not eradicate the corruption and mismanagement that prevail in some developing nations, anti-bribery legislation in Canada and other developed nations is a step in the right direction, and an example that we hope developing nations will follow.