Vanguard Magazine

22 APRIL/MAY 2018 www.vanguardcanada.com Anti-BriBery of countries are enacting anti-corruption laws that force companies to take notice and take action. Many countries have now implemented or are looking at enacting "failure to prevent bribery" laws that put a legal onus on companies to have adequate anti-corruption measures (e.g. UK Brib- ery Act, Section 7). Other countries who do not have specific "failure to prevent bribery" laws nevertheless provide pro- cedural and prosecutorial incentives for companies to implement an Anti-Bribery/ Corruption (ABC) compliance program. For example, the U.S. Department of Jus- tice (DOJ), under the Foreign Corrup- tion Practices Act (FCPA) guidance docu- ment and pilot program, outlines what is expected in an ABC compliance program and the conditions under which compa- nies can get credits and even a declination for alleged wrongdoings. The underlying premise of such approaches is to motivate and incentivise companies to self-disclose, be cooperative in the prosecution of indi- vidual wrongdoers, and to be proactive in implementing robust ABC measures. Canada is joining other jurisdictions in updating and improving its ABC efforts. Following a round of public consultation, the Government of Canada announced this past February that it will be reviewing its integrity regime on procurement and will be introducing Deferred Prosecution Agreements (DPAs) for Anti-Corruption and other financial crimes. For defence companies and others vying for govern- ment contracts, these changes indicate that Public Services and Procurement Canada (PSPC) will likely be increasing its due diligence processes to prevent, deter and detect corruption, collusion and oth- er wrongdoings. Additionally, there will also likely be changes and improvements to the Integrity regime that will impact those companies investigated or charged for listed offences. Some of the criteria for ineligibility, suspension or debarment, as well as rehabilitation or leniency, will likely be reviewed and enhanced. Through these reviews, the Government of Canada is re- affirming its commitment to meet its UN and OECD anti-corruption convention obligations and aligning its ABC efforts with other jurisdictions. What this means for domestic and for- eign defence companies is that the busi- ness environment is changing, and com- panies need to adapt to these changes. Whether operating domestically and/ or internationally, defence procurement contracts oftentimes attract greater media and public scrutiny than most other indus- tries. For large contracts, political, social, economic and national security factors in- crease the level of pressure and scrutiny on companies vying for those contracts. Few industries, if any, face this level of scrutiny. Additionally, M&A's, joint venture part- ners and the entire supply chain now fall under this level of scrutiny. In this con- text, the need for a robust and far reach- ing compliance program that encompasses business partners and the supply chain is that much more important. While the implementation of an ABC compliance program does not guarantee business success in bidding for a contract, it provides the foundation to prevent, mit- igate and manage corruption related risks. Where the need for an ABC compliance program may not be explicitly required by contracting authorities, a company that proactively demonstrates and promotes the strength and scope of their ABC com- pliance program is more likely to be no- ticed and be credited for it. There are a growing number of organizations– from financial institutions, VC, insurance com- panies, development banks and others – who are either requiring or crediting com- panies who have implemented robust ABC measures. Some countries, like Argentina, have now made it mandatory for any com- pany bidding for a government contract to have an ABC program. The new evolving reality is that not only does an ABC compliance program help a company more effectively prevent, miti- gate and manage corruption related risks, but it can now provide a competitive busi- ness advantage. ABC compliance should not be seen as an expense, but as an in- vestment in the continued success of the organization. More than a paper exercise ABC compliance has evolved in the past several years. The professionalization of the compliance function combined with more aggressive enforcement actions and regulatory requirements has established best practices and higher standards for compliance. The U.S. DOJ and UK Brib- ery Act guidance documents are key rec- ognized benchmarks for the implementa- tion of a robust ABC compliance program that will satisfy regulatory scrutiny (at least in those jurisdictions). There are also several reliable and trusted organiza- tions –Transparency International Canada, TRACE International, OECD, UN and others – that provide tools and informa- tion for companies who wish to implement an ABC compliance program. There is no shortage of information and best practices to be found. How these best practices are adopted, however, is the critical test. The key element here is that if a com- pany chose to implement an ABC com- Bombarded by continual headlines of corporate and government corruption, the general public cannot be blamed for their anger, distrust and frustration at such behaviour.

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