By: Joanna Harrington
Professor, Faculty of Law, University of Alberta
I am delighted to have this opportunity to share my research and writing on corruption, corporate accountability, and victim redress with the wider Dalhousie Law Journal community.
My article on “Providing for Victim Redress within the Legislative Scheme for Tackling Foreign Corruption” arose from a concern that much more needed to be done in law and policy for the foreign victims of acts of corruption committed by Canadian corporations. Canadian courts have long recognized that corruption is not a victimless crime. Corruption diverts funds from those in need of public services, and as stated unanimously by the Supreme Court of Canada in 2016: “Corruption is a significant obstacle to international development.” And yet, even in cases where there was a mandatory imposition of a victim surcharge, it was not evident that those funds were used to provide assistance to the foreign victims of the crimes of Canadian corporations.
Two prominent cases concerning the corporate commission of foreign bribery under Canada’s Corruption of Foreign Public Officials Act (CFPOA) attracted my initial interest. Both cases were concerned with 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 change of paying bribes to influence the award of resource development rights in Chad. In both cases, the corporations involved paid a hefty fine, as well as a victim surcharge, with sums that attracted media attention. Griffiths Energy paid a fine of CAD $9 million and a victim surcharge of CAD $1.35 million, while Niko Resources paid a fine of CAD $8.26 million and a victim surcharge of CAD $1.239 million. There was, however, the unanswered question of how these victim surcharges were to be used to help the victims of the crimes, who were based in Bangladesh and Chad respectively.
The victim surcharge was made payable to the Alberta treasury, but without any direction to use the funds for victim assistance activities of some relevance or connection to the foreign victims of foreign bribery. Indeed, 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.
And then along came the SNC-Lavalin scandal in 2019, involving allegations that a Canadian company had committed fraud and foreign corruption to secure lucrative work in Libya. This scandal provided the prologue for my article, with politicians and the media having focussed their attention on the impact of SNC-Lavalin’s potential prosecution on employees, pensioners, and shareholders, with barely a mention of the employees of the companies that had lost out if the award of a contract had been rigged. There was also never a mention made of the foreign victims of the crimes, with post-civil war Libya clearly a country in need of development assistance.
The SNC-Lavalin scandal also drew attention to a new tool available to prosecutors to address corporate wrongdoing, with the legal regime for what is called a “remediation agreement” embracing an intention to provide “reparations for harm done to victims or to the community.” While similar to its American cousin, the deferred prosecution agreement, Canada’s remediation agreement is more akin to an English model involving judicial oversight, which came into force in 2014. This link provided a basis for conducting comparative research, with the UK’s Serious Fraud Office (SFO) having 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 that aims to ensure that the overseas victims of bribery, corruption, and economic crime are able to benefit from asset recovery proceedings and compensation orders made in England and Wales.
A Fund for Foreign Victim Redress
My final research angle of note was inspired by the recognition that insights can be gained from examining other areas of law, in this case, 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. I argue in my article that one might build on this idea by creating a similar fund to support development assistance projects overseas, using some portion of the huge fines paid by Canadian companies in the settlement of foreign corruption charges, possibly as part of a negotiated deal.
Such a fund would be one means for providing for victim redress for acts of foreign corruption, using the word victim in its broadest sense. This proposal comes at a time when foreign aid globally remains on the decline, with cutbacks in development assistance evident in so many states, including Canada. I also suspect that the need to strengthen international cooperation in support of asset recovery and the return of the proceeds of crime will be an important focalpoint at the United Nations General Assembly Special Session against corruption in 2021.