Canadian Companies Toughen Corporate Governance After “Watershed” Case

Sept 7, 2011

By Ryan Bolger, International Financial Law Review (IFLR)

An increasing number of Canadian companies are looking to revise their international corruption compliance procedures following a “watershed” enforcement under the country’s bribery statute, according to competition partners.

The change comes after Niko Resources pleaded guilty under theCorruption of Foreign Public Officials Act (CFPOA) in June for bribing the energy minister of Bangladesh. The company was fined C$9.5 million ($9.65 million) and required to implement a compliance program to be reviewed by an independent auditor under a three year probation order.

Osler Hoskin & Harcourt partner Graham Reynolds said the sentence was a dramatic development in Canadian law.

Three months before the Niko case, an OECD working group issued a report which, although acknowledged some progress in the Act’s implementation and enforcement, criticised Canada’s enforcement regime.

“Prior to the recent Niko Resources case there was only minima l enforcement under CFPOA. I would describe it as a watershed case for Canadian enforcement,” Reynolds said.


While there is still some concern over CFPOA enforcement, the Niko sentence signifies a move towards greater corruption oversight of international companies operating out of Canada.

Many Canadian companies are heavily involved in natural resource exploration and extraction in less developed countries. The Niko sentence was of particular interest to these companies which operate in “jurisdictions where there is an increased risk of corruption,” Reynolds said.