Morgan Frontczak, senior counsel of the ethics and compliance group with Weatherford International, a Houston-based oil field service company with operations in Alberta, Quebec, and the Maritimes, was tasked with talking about anti-corruption enforcement trends in Canada. “I woke up this morning, walked out of my hotel room, and the first thing I saw was ‘SNC bribery probe widens to Algeria.’”
In fact, SNC-Lavalin Group Inc.’s name came up in just about every presentation that day. The engineering and construction company will likely become the new benchmark in Canada for how investigations are conducted and fines may ultimately be levied.
Frontczak can sympathize with SNC. Weatherford itself is currently under investigation by the U.S Securities and Exchange Commission and Department of Justice. It has been, in her words, “a very long investigation.”
“I know what it’s like to be under the scrutiny of the government regulators. I feel your pain,” she said, addressing those at the conference from SNC.
Frontczak has experience training employee groups about anti-corruption and compliance. She started in 2010 and admits it was a struggle to sell compliance training in the organization. But it’s a much easier sell now as news about Canada’s Corruption of Foreign Public Officials Act makes the headlines more often.
It’s been a long time coming. Canada signed the convention on combating bribery of foreign public officials in 1997 and in 1999 the act became law. In 2008, the RCMP set up an international anti-corruption unit and there are now two units at work investigating and bringing to prosecution violations of the CFPOA.
A 2011 peer review by the Organisation for Economic Co-operation and Development recommended increased efforts on the part of the RCMP and suggested the federal government make it easier to prosecute and make more resources available. That has been done, with amendments proposed in February to CFPOA.
In the beginning though, the only references to a Canadian company being fined under the act was Hydro-Kleen Group in 2002 when the company pled guilty to bribing a U.S. immigration officer and was fined $25,000. “It didn’t give me a lot to drive home the message that Canadians care about this like the U.S. and other regulators,” said Frontczak.
Frontczak pointed out increased resources for the RCMP and self-reporting, like the recent Griffiths Energy International Inc. case in Alberta, demonstrate there will be a greater “speed to indict.” The SNC-Lavalin case, she said, will put the RCMP’s enforcement efforts under heightened scrutiny. But more importantly for Canadian corporations, it’s also going to be harder for companies to feign ignorance. “This is very much a national conversation that is being held now and it’s something all Canadian operations should very much know about.”
As Jennifer Lay, senior manager of business conduct and anti-corruption compliance at Scotiabank, says, it’s no longer a nice to have but a must have to launch an effective anti-corruption compliance program.