Canada has slipped from the top spot of countries with a reputation for honest overseas business practices to a much less impressive middle ranking among Western countries whose companies pay bribes abroad.
The Bribe Payers 2011 Index, compiled by the global anti-corruption group Transparency International and slated for release on Wednesday, has Canada tied with Australia in 6th place – a sharp decline from the last survey done in 2008, when Canada tied for first place with Belgium as “least likely to bribe abroad.”
The latest ranking indicates Canadian business executives are more likely to pay bribes overseas than their counterparts in the Netherlands, Switzerland or Germany, but are slightly more reputable than their corporate rivals in Britain., the U.S. and France.
“Canada needs to continue to be concerned and ensure that its laws on criminalizing the bribery outside of our borders are enforced and strengthened,” said Huguette Labelle, the Canadian chair of Transparency International. “It is clear that bribery remains a routine business practice for too many companies.”
The TI survey is not an accounting of proven cases of corruption but rather a self-reporting poll of 3,000 business executives from 30 countries around the world who were asked to talk confidentially about bribes paid to foreign governments or companies.
But Canadian executives may not even know the full extent of the corrupt practices carried out by their employees abroad, warned Rudy Duschek, a forensic investigator with chrismathers Inc., a crime and risk consulting firm in Toronto.
“Many boards of directors in Canada are fooling themselves,” he said. “They want to believe that their companies are not engaging in corrupt activity abroad but they may not be doing enough to check to see that that in fact is the case.”
Transparency International and other watchdog groups have called on Prime Minister Stephen Harper and other Western leaders at the G20 meeting in Cannes, France, this week to speed up implementation of the group’s new Anti-Corruption Action Plan, which includes stiffer laws and a more robust international crackdown.
The TI survey says business leaders admit they engage in “the widespread practice” of paying bribes to government officials and companies to win contracts, avoid regulation or influence policy. Public works, construction and the oil and gas sector are “especially prone” to payoffs.
“It is costing countries, people and business not only a huge amount in money and reputation but also in lives,” said Ms. Labelle, noting that corruption in the global construction trade – estimated by TI to be between 10 and 40 per cent of the billions spent worldwide – leads to unsafe buildings, roads and other structures.
Canada has been repeatedly scolded for its lacklustre performance in fighting bribery and corruption. Last spring, Transparency International singled out Canada as the only G7 country that has been stuck at the bottom of its bribery enforcement rankings since the agency began issuing its reports in 2005.
But after years of what TI and the Organization for Economic Co-operation and Development criticized as “little or no enforcement,” there has been a burst of activity in recent months by federal authorities to investigate bribery allegations.
In September, the Mounties searched the Oakville Ontario office of SNC-Lavalin Group, after the World Bank tipped off Canadian authorities about corruption allegations involving SNC employees and a multibillion-dollar bridge project in Bangladesh.
The World Bank has since suspended its loan for the deal pending the result of investigations. SNC said it was conducting “our own internal inquiry into the situation.”
In July, the RCMP raided the office of Blackfire Exploration Ltd., alleging in an affidavit that the company funnelled bribes to a mayor in Mexico.
And in June, Calgary-based Niko Resources paid a $9.5-million fine after pleading guilty to bribing a Bangladeshi energy minister with a luxury SUV and foreign trips.
“I don’t think we should feel comfortable or complacent at all,” said Mr. Duschek. “There still haven’t been enough cases to really grab the attention of Canadian executives.”