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Small companies need to pay heed to anti-corruption matters

RCMP may be targeting big companies now but enforcement is becoming more stringent
|Written By Jennifer Brown
Small companies need to pay heed to anti-corruption matters
The RCMP ‘are on a serious enforcement tract’ regarding anti-corruption, says Jonathan Drimmer.

It’s still early days when it comes to the enforcement of Canada’s anti-corruption legislation, but some companies may still not be ready should the RCMP come calling, says a senior counsel with Barrick Gold Corp.

“I think what Canadian companies have to come up to speed on is all of the learning and education that comes out of the U.S. prosecutions that are being adopted here in Canada. They should be tapping into that knowledge,” says Jonathan Drimmer, vice president and assistant general counsel at Barrick Gold Corp.

“In the last couple of years, the RCMP has been enforcing in a more serious way and there is no way to reach any other conclusion than they seem to be fairly serious about reaching resolutions,” says Drimmer. “They are on a serious enforcement tract.”

Considered a leading speaker on anti-bribery and corruption in the United States, Drimmer will be speaking at an anti-corruption and compliance conference being held in Toronto Feb. 20-22. He says while big companies such as SNC Lavalin are in the headlines right now, small to mid-size operations could easily be targets for the RCMP as it seeks to enforce Canada’s Corruption of Foreign Public Officials Act.

“It certainly feels like they’re sending a signal that they’re going to start with an iconic Canadian company and pursue it aggressively,” says Drimmer. “You could certainly see relatively new prosecution entities wanting to make a splash with a case against a big name as a means of establishing themselves and sending a signal. SNC is important because it is an iconic company.”

In Sept. 2011, the RCMP executed a search warrant at SNC’s Oakville, Ont., office. In April 2012, the RCMP charged two Canadians and former SNC employees, Ramesh Shah and Mohammad Ismail, with violating the Corruption of Foreign Public Officials Act.

In November, Quebec’s special anti-corruption squad arrested former CEO Pierre Duhaime. SNC’s former president is accused of fraud, conspiracy, and forgery in relation to the $1.3-billion contract to build McGill University’s new super-hospital.

“But it’s also important for the small and medium-sized companies to understand they can also be a target and they can’t say, ‘We’re not SNC so we’re safe.’ Based on the public disclosures of SNC, it looks like fairly traditional kinds of bribery you see out there,” says Drimmer.

For large multinationals like SNC, he says the day has passed for loose anti-corruption controls.

“The reality is you look at the fact this [SNC] is about situations in Bangladesh, Libya, and Montreal and you think they really must have had seriously lax controls. This isn’t one operating unit, not just one project — this does seem to be more of a global pattern for them. I would be pretty nervous if I was on their board. I like SNC and we work with them, but you look at that span and you wonder about the strength of their systems.”

Drimmer, who is based in Washington, D.C. and Toronto, was a partner at Steptoe & Johnson LLP where he helped run the anti-corruption practice. Barrick was a client before he went to work for the company.

“Somehow they managed to talk me into going in-house,” he says.

He will be leading a session at the second annual Canadian and Global Anti-Corruption Compliance Conference called “Effectively complying with government investigations.” He will discuss the current priorities of anti-corruption units, what to expect with an investigation by the RCMP, and how to respond. Some of the current investigations he will refer to include one involving Calgary-based mining company Blackfire Exploration Ltd. In September, the RCMP raided the office of the Canadian mining company alleging in an affidavit that it funnelled bribes into the personal bank account of a small-town Mexican mayor to ensure protection from anti-mining protesters. The company has not been charged and says it is co-operating with the RCMP investigation.

Drimmer will also address cross-border corruption and bribery investigations through assessing how enforcement is co-ordinated between regulatory bodies in different countries.

“A lot of it has to do with interfacing with government authorities in a multi-jurisdiction investigation and how you deal with the different investigation authorities,” he says.

Barrick has a dedicated anti-corruption compliance program that is consistent with what’s going on in the United States.

“We want a level playing field for what we’re doing and we try and operate honestly and ethically everywhere we are. We are diligent in our compliance efforts and we think everyone else should be too, just to level the playing field,” says Drimmer.

The upside to all the developing anti-corruption legislation and enforcement, Drimmer notes, is when it comes to making acquisitions, partnerships, and joint ventures, the increased regulatory framework means companies can be more confident when others say they’re obeying the law they won’t get into trouble for doing business with them.


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