The fight against international corruption

International corruption is a complex phenomenon.  To fight it requires a mix of strong legislation, international coordination among well-resourced enforcement agencies and a sustained effort to foster a culture of anti-corruption within the business community.

Lawyers, in some capacity, intervene in all of these facets.  But where the legal profession has the most influence in countering corruption is in its dealings with clients.  Indeed Lawyers, occupying an advisory position, guide them through all sorts of commercial complexities, and the parameters of anti-corruption legislation are an increasingly important part of that.  

Surprisingly, a 2010 survey by the International Bar Association (IBA) and the Organization for Economic Cooperation and Development (OECD) revealed that over 40 percent of lawyers in developed countries, including Canada, were unaware of any anti-corruption instruments such as the OECD anti-bribery convention and the United Nations Convention Against Corruption (UNCAC). They also knew little about Canada’s own regulatory framework, most notably the provisions of the Corruption of Foreign Public Officials Act (CFPOA).  Anti-corruption is one of the fastest growing areas of law, which is why educating Canadian lawyers about the regulatory framework is such a priority.   

It’s worth noting that in Canada, the RCMP’s special anti-corruption unit is currently investigating 35 international corruption cases.  But, the RCMP has only teams of dozens investigating and prosecuting those that run afoul of the law. Lawyers number in the tens of thousands, and can do far more to educate clients and the public about anti-corruption compliance, placing them in a unique position to combat corruption. 
 

Compliance

Lawyers can do much more than simply advise on the requirements and ramifications of the law.  They can have a direct impact by taking a proactive role in helping companies develop anti-bribery compliance policies and programs.

There are networks in place that can provide guidance and resources.   The Canadian Bar Association, for one, has an anti-corruption team (CBA-ACT), made up of experienced lawyers across Canada from private practice, charitable organizations, in-house legal departments and academia.  Its aim is to help lawyers understand their role in the global fight against corruption and monitor and respond to developments in anti-corruption policy.

The CBA-ACT is also piloting the International Bar Association’s Anti-Corruption Guidance for Bar Associations, designed to encourage bar associations to take affirmative steps to support the legal profession in combating corruption.
 

In-house and external lawyers

Each lawyer’s role in anti-corruption is different and is expected to mirror how lawyers of all stripes interact with anti-corruption legislation and compliance depending on whom they advise. 

The role of a lawyer in fighting international corruption will vary depending on their practice -- whether they work in-house or in private practice, advise NGO’s or charitable organizations, or use their credentials as compliance officers within a company.

Corporate counsel working in companies with operations outside of Canada will often be involved in cross-border transactions. Part of their job is to scrutinize these transactions and ensure they meet regulatory requirements. They will also be called upon to develop and help implement anti-corruption compliance programs.

But even with the most vigilant compliance program in place, things can go wrong. An organization can suddenly become the target of an RCMP investigation; or corruption can be detected internally, prompting internal investigation. 

At this point, the involvement of external counsel presents some obvious advantages.  Corporate counsel’s familiarity with the business is surely an advantage during an investigation; but they may also be seen to lack the necessary independence to carry out a proper investigation of their company. Complicating matters in some jurisdictions – in Europe in particular – corporate counsel do not always benefit from solicitor-client privilege, making confidentiality an issue.

Once questionable conduct has been discovered, it is wise for corporate counsel to hire external help to conduct an investigation. The Griffiths Energy case offers a good example of a company board discovering problematic consulting agreements, then reacting quickly by hiring external counsel with a broad mandate to conduct a thorough and extensive investigation. 

External counsel’s role at this stage is to assemble and review all relevant documents necessary for the investigation. When interviewing company personnel, they can preserve their independence, provided they are clear about who their client is – i.e. the company, not the employee. 

Ethical obligations extend to a lawyer’s duty of candour while also ensuring they are serving the best interests of their client. It is widely believed that the Griffiths Energy’s decision to voluntarily disclose the findings of the internal investigation and bring the unlawful conduct to the attention of the RCMP, bought the company a reduced fine.  Griffiths entered a guilty plea and agreed to pay a fine of $10.35 million for violating the CFPOA.  While this number is not insignificant, it could have been much higher.

External counsel are also instrumental in preventing corruption, especially when they work in partnership with corporate counsel in developing a sound compliance policy.

But taking preventative measures against corruption also means ensuring that proper due diligence is done to detect and root out all signs of corruption and related offences, such as money laundering.  It’s important to understand how to draft agreements to include strong anti-corruptions representations and warranties.  And it goes without saying that lawyers must see to it that their good offices and, indeed, their trust accounts are not used in furtherance of corrupt activities.  They must ensure that their “know-your-client” procedures include reviews of prohibited party lists, such as those maintained by the U.S. and Canadian governments.
 

NGO's and charitable organizations

The role of a lawyer working for an NGO or charitable organization is more closely aligned with that of corporate counsel as they are often called upon to act as compliance managers. 

But a common problem for these lawyers is struggling to balance ethical requirements of the Law Society and the CFPOA with humanitarian ethical obligations.  Consider, for example, a problem often faced by organizations working to unload humanitarian aid supplies: Their efforts often come up against customs officials who demand a payment for access.  But recent amendments to the CFPOA have removed the exception for facilitation payments. Though the repeal is not yet in force, lawyers for these organizations face a tricky dilemma: Should they advise against offering a bribe if that puts a number of lives at risk?  The debate over facilitation directly impacts how the professional obligations of lawyers operating in this setting interact with the mandate of their client. This is one of the most important areas where lawyers must be able to advise their clients in matters of anti-corruption legislation. 

Regardless of the setting in which they perform their duties, getting organizations to come clean or clean up their ways is never an easy job.  But it’s important to remind lawyers that they are one of the most important pieces of the puzzle in fighting corruption.  Due to their size in numbers and varied clients they serve, lawyers enjoy the largest direct access point to educate the business community and the public about anti-corruption compliance. Whether it is through prevention, detection, investigation or prosecution, lawyers will always be at the front lines of the fight against corruption.