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2011 Corruption Perceptions Index: How did Canada fare?

02/12/2011


On December 1, 2011, Transparency International (TI) issued the results of its annual Corruption Perceptions Index (CPI). According to TI, “the index scores 183 countries and territories from 0 (highly corrupt) to 10 (very clean) based on perceived levels of public sector corruption. It uses data from 17 surveys that look at factors such as enforcement of anti-corruption laws, access to information and conflicts of interest.”

A synopsis on corruption in 2011

Events in 2011 continued to demonstrate that there is less and less tolerance for corruption worldwide, and people everywhere are demanding more transparency and accountability from their public officials. Canada has historically fared well on the CPI. However, although TI cautions that the CPI methodology is not necessarily conducive to year over year comparisons of country scores, Canada’s ranking of 10th out of 283 countries (compared to last year’s 6th place) may be an indication that Canada is not immune to recent events when it comes to bribery and corruption.

2011 has seen a number of developments which have raised the collective awareness of Canadians around corruption. Early this year, the RCMP announced that it had 23 active investigations into suspected breaches of the Canadian Foreign Public Officials Acts (CFPOA). In June 2011 Calgary-based Niko Resources was fined $9.5-million after pleading guilty for violations of the Corruption of Foreign Public Officials Act (“CFPOA”) in Bangladesh. The RCMP also announced investigations of two other Canadian companies suspected of violating the CFPOA, SNC-Lavalin and Blackfire Exploration.

Closer to home, Quebec has been rocked with corruption scandals in its construction industry, the Federal spending related to the G20 summit in 2010 has come into question and the Toronto mayoral election campaign spending is currently under scrutiny.

It is therefore no surprise that a survey based on perceptions would result in a lower score for Canada this year; this can be expected to continue assuming that the RCMP continues to increase its CFPOA enforcement efforts in coming years.

What does that mean for Canadian businesses doing business internationally?

As the pace of enforcement of corruption laws increases in many countries around the world, any company operating outside Canada should ensure that it has a robust compliance program and other internal controls in place to protect its operations and its brand from violations of anti-corruption legislation.

Understanding the risks is crucial

For instance:

  • Is the company operating in an industry or in jurisdictions with a high risk of corruption?
  • Are you unsure what constitutes a robust compliance program, and whether yours would make the cut?
  • Does the company interface with foreign public officials?
  • Does the company retain any agents, consultant resellers, distributors or other third parties to help it operate in foreign jurisdictions?
  • Are some of these third parties related to foreign public officials?
  • Are you unsure whether the fees paid to these parties are in line with the services they are providing, for that specific market?
  • Are you unsure which anti-corruption laws may impact your company?

Your next move

If you answered yes to any of these questions or are unsure of the answers, you should seriously think about evaluating the risks your organization may face when it comes to anti-corruption compliance, and address any gaps which may exist in your compliance program. A small investment now could help you avoid significant costs and disruption in the future. And besides, it’s the right thing to do.

For more information please contact Greg Draper, CGA, DIFA, CFE, Investigative & Forensic Services Leader at MNP.