A plea for redress
Fines paid in corporate settlement deals must do more for the victims of foreign corruption.
Canadian courts have long recognized that corruption is not a victimless crime. It diverts funds from those in need of public services, and as the Supreme Court of Canada stated in 2016, it is “a significant obstacle to international development.” And yet, where victim surcharges have been imposed, it is far from clear that they have helped the foreign victims of crimes by Canadian corporations. Our laws and policies must do more to protect those victims.
Consider two prominent foreign bribery cases under Canada’s Corruption of Foreign Public Officials Act (CFPOA) that attracted my initial interest in this topic almost a decade ago. Both cases involved the overseas activities of Alberta-based companies in the natural resources sector. In one case, Niko Resources negotiated a plea deal to settle a charge of paying bribes to secure concessions in Bangladesh. In the other case, Griffiths Energy International negotiated a plea deal to settle a charge of paying bribes to influence the award of resource development rights in Chad. Griffiths Energy and Niko Resources both paid hefty fines ($9 million and $8.26 million respectively) as well as victim surcharges ($1.35 million and $1.239 million). Left unanswered was how the surcharges were to help the victims, who were based in Bangladesh and Chad.
The surcharges were made payable to the Alberta treasury, but without any clear direction on how it should use the funds to support victims’ assistance activities. Years later, it now appears that many of these funds have gone unused, with the Alberta government recently suggesting that the multimillion-dollar surplus that exists in the province’s victims-of-crime fund could be used to hire more police and prosecutors.
Concerns about victims of economic crime ought to have been heightened by another recent high-profile case. In 2019, the SNC-Lavalin scandal resurfaced in the wake of allegations that the Quebec-based construction and engineering giant had committed fraud and foreign corruption to secure lucrative work in Libya. SNC-Lavalin faced a decade-long ban on bidding for government contracts, and throughout the scandal, politicians and the media focused their attention on the impact prosecution would have on its employees, pensioners and shareholders. There was barely a mention of the employees of the companies that had lost out because of rigged contracts, or of the foreign victims of the crimes, with post-civil war Libya in desperate need of development assistance.
The SNC-Lavalin scandal also drew attention to a new tool available to prosecutors to address corporate wrongdoing. The federal government had introduced amendments to the Criminal Code, ushering in a remediation agreements regime with the stated intention to provide “reparations for harm done to victims or to the community.” While similar to the deferred prosecution agreements (or DPAs) in the United States, remediation agreements in Canada are more akin to the English model involving judicial oversight and which came into force in 2014. This link between Canada’s remediation agreements regime and that used in England and Wales provided a basis for conducting comparative research with the UK’s Serious Fraud Office (SFO), which has undertaken efforts to ensure that the interests of the overseas victims of economic crime are taken into account. The SFO has also steered a path to ensure that the overseas victims of bribery, corruption, and economic crime can benefit from asset recovery proceedings and compensation orders made in England and Wales.
A fund for foreign victim redress
We can also gain insight by examining other areas of law, in particular environmental law. The Government of Canada has long had a specified purpose account known as the Environmental Damages Fund (EDF) into which are paid monies obtained from court orders, negotiated settlements, and voluntary payments relating to the commission of environmental offences. The funds in the EDF are then used to support projects aimed at environmental rehabilitation and wildlife conservation. This idea could serve as a model to create a similar fund to support development assistance projects overseas, using some portion of the huge fines paid by Canadian companies in settlement of foreign corruption charges, possibly as part of a negotiated deal.
The timing to implement such a fund is propitious as the need to strengthen international cooperation in support of asset recovery and the return of the proceeds of crime will be an important focal point at the United Nations General Assembly Special Session against corruption in 2021. More importantly, the fund would be one means for providing for victim redress for acts of foreign corruption, at a time when foreign aid globally is in decline, including from Canada.
A longer treatment of this issue by the author has recently appeared in the Dalhousie Law Journal.