Peter Dent and Ken Jull may not have seen it all, but as two of Canada’s leading experts on corporate corruption, foreign corrupt practices, and anti-bribery due diligence and compliance—Dent as a partner at Deloitte specializing in forensic financial crime; Jull as counsel at law firm Gardiner Roberts—they’ve seen most of it. Speaking together at a symposium on white-collar crime in Toronto in November, they had stern warnings and frank advice for Canadian executives.
On vulnerability to offshore corruption, Jull notes a major blind spot: “The landscape shows there’s a lot of complacency in Canada and a lack of appreciation of the extent to which you need to monitor third-party agents.” He cited the example of health sciences company Nordion, fined US$375,000 by the U.S. Securities and Exchange Commission after an agent hired to secure raw materials for its equipment made illegal payments to a Russian official. Nordion management discovered the bribery and self-reported it, hence the modest fine and no criminal charges. But Jull says Nordion’s lack of “a system to evaluate the third-party agent” was all too typical.
For companies seeking to improve, Dent flagged a new International Organisation for Standardization’s standard for anti-bribery management systems (ISO 37001). It lays out a list of accountabilities for compliance that, Dent says, mirror those of Transparency International, the OECD and the U.S. Sentencing Commission guidelines. “There’s a lot of consistency now around the expectations of regulators,” he says.
Both speakers advocate a “risk-based approach” to evaluating partners, which starts by asking such questions as what countries and industries they operate in. “If you’re in the mining or oil and gas sectors, your most dangerous business partners are in the construction industry,” says Dent.
If companies are caught out and investigators arrive, Dent and Jull stress their defence hinges on being able to show controls were in place and leadership followed them. Things regulators look at to test this include whistleblower programs, anti-corruption training and openness to the reporting of trouble. Failure in the latter, says Dent, “can be a death knell for a corporate compliance program.”