There is not a week that goes by where we do not see a headline reporting some type of bribery and corruption scandal, or yet another example of unethical behaviour by an executive or politician.

After 35 years with the RCMP, and several years as the Compliance and Anti-Corruption expert with the Sensitive and International Investigations Unit, these types of headlines should not really surprise me. From the Panama and Paradise Papers to revelations of corruptions amongst company executives and politicians, it appears that the ugly spectre of corruption is being highlighted everywhere.

One could easily become jaded and cynical by these constant reminders of how some people let greed and a lack of integrity distort their moral compass.

Bombarded by continual headlines of corporate and government corruption, the general public cannot be blamed for their anger, distrust and frustration at such behaviour. These feelings are further fueled by the belief that those actively involved in corrupt conduct are not being made to account for their unethical and criminal behaviour.

Technology and a new generation of business leaders is leading us in the right direction

Contrary to the prevailing wisdom, however, I see this growing trend of headlines and scandals as a very good sign that we are on the right path to slowly change the culture and environment that has allowed corruption to thrive for so many years. The reality is that ten, even 5 years ago, we would not have seen these headlines. Those corruption scandals would have been buried, and the individuals involved would have continued to operate with impunity and without fear of public disclosure, let alone being prosecuted.

The very fact that that we now have high ranking public officials, senior corporate executives, and well-established companies being named, shamed and prosecuted for unethical behaviour is a clear sign that the fight against corruption is evolving in the right direction.

More aggressive enforcement action, new laws, as well as the growing demand for greater transparency and accountability around the world is having a visible impact.

Two key factors that are driving this change are the growing push-back from civil society, along with the power and immediacy of social media platforms. These platforms are empowering civil society to organize, and people to report instantly on corrupt and unethical conduct. Consequently, it has become much harder for public officials and companies to hide their corrupt activities or control the narrative.

In this new and changing environment, it is likely that the corruption headlines will continue for some time and we will see more disclosures similar to the Panama and Paradise Papers occur.

The millennial generation are also playing a critical role in changing the business culture. This next generation of business leaders are much less accepting of unethical behaviour, and crucially, are connected through social media with countries and people being victimized by corruption. As a result, those millennials are more likely to speak-up and report unethical and corrupt behaviour.

Organizations who fail to have a robust compliance program, which includes an effective whistleblowing program, will see millennials report wrongdoing to authorities or leak information to the web.

I have always warned managers that if I get a complaint of wrongdoing by an employee, they and their company have failed in implementing an effective anti-corruption compliance program and ethical business culture.

Having an anti-corruption compliance program does not necessarily mean that a company is ethical

Having a robust compliance program is a very important step in mitigating and managing corruption risk, but will invariably fail if it is not supported by a corporate culture that not only supports compliance, promotes integrity and ethical governance.

An ethical business culture is the foundation on which a compliance program succeeds. Compliance is the framework to tackle corruption while an ethical business culture is the foundation on which this framework operates. Organizations cannot control the integrity of individuals, but they can certainly influence it.

An organization’s culture influences the integrity of those employees that are either on the fence or would rationalize wrongdoing. This occurs when the culture promotes willful blindness, permits ignorance of policies and controls, or encourages the avoidance of those controls through unreasonable business goals and rewarding ‘success by any means’.

No controls, policies or compliance program can totally eliminate or prevent unethical people from getting involved in wrongdoing, but the absence of those measures greatly increases the capacity of wrongdoers to operate with impunity and fear of detection.

The absence of a robust anti-corruption compliance program:

• seriously increases risk and liability,
• depreciates M&A and joint venture value,
• potentially damages the brand,
• undermines and reduces trust and confidence,
• increases the potential for prosecution,
• and threatens sustainability

Protect your company by incentivizing ethical behaviour

On the flip side, the existence of a robust compliance program and an ethical business culture can not only prevent, detect and mitigate misconduct, but will markedly increase the chances of authorities going after the individual wrongdoers instead of the company itself.

In addition to an organization’s culture, business and thought leaders must also consider what role greed, selfishness, blind ambition, reckless need for recognition or even performance anxiety can play in the non-compliance rationalization process. These leaders must be pro-active and continuously diligent in their efforts to mitigate individual and organizational risks by exploring new, creative ways to recognize performance and incentivise ethical behaviour.

In this changing business environment insurance underwriters, development banks, financial institutions, venture capitalists, pension funds and a growing number of businesses and government agencies are looking at mitigating their risk and exposure to bribery and corruption. Having a robust compliance program and adopting ethical business practices is now becoming a competitive business advantage.

We need to raise the bar collectively and work towards creating an environment where compliance does imply integrity.

You can find more information on the CCEAC’s anti-corruption and ethics training here.

The post Today, compliance does not eliminate corruption – but that’s changing appeared first on Trade Ready.

A leading expert on business ethics, Richard Bistrong is the founder and CEO of Front-Line Anti-Bribery LLC. After spending the first decade of his career as an international sales VP, his career took a turn when he pleaded guilty to violating the FCPA and served 14.5 months in prison. His valuable assistance as an international law enforcement cooperator paved the way for a transition into full time work in anti-corruption efforts. With his unique perspective, he is now an award-winning consultant, writer and speaker on current front-line anti-bribery and compliance issues for businesses and organizations around the world.

Richard will be leading an instructive and eye-opening discussion on how to mitigate one of the uglier aspects on international business at Your Future in Global Markets on October 4^th – bribery and corruption. As one of the world’s leading compliance experts with a truly unique perspective on these issues, we’ve asked him how companies can do better to protect their people and their organizations from corruption.

Listen to the full interview here:

Richard Bistrong – The gaps in your compliance program and how to fill them

You have a unique perspective when it comes to corruption and compliance efforts. What has that taught you about corruption in international business, and how to identify and mitigate it?

Well, Pamela, thank you for the question, and thank you for the opportunity to chat a little bit today. Firstly, people who work on the front lines of international business like I did are far away from home, working in remote offices or even from their hotel rooms, and often thinly supervised. And this is what my experience as a 10 year international sales vice president taught me the hard way, and what some of the challenges are today:

When it comes to anti-corruption compliance efforts and ethics programs, they don’t always make sense on the front lines of international business, particularly where local cultures might appear to conflict with the rules.

Think about the environment in which people work today – who are they talking to on a daily or weekly or quarterly basis? They are talking to their supervisor or their regional manager, and they are talking mostly about commercial objectives. They’re talking about business success, meeting their quota, their forecast and their bonus plan. So those are the conversations that you’ll find most among a commercial workforce. So how does a compliance program, or an ethics initiative make sense as a partner to those tasks at hand?

I think for people who are in the home offices or well-staffed and supervised regional offices, compliance doesn’t look that complex. What are the problems here, what’s not understood? But, for those who are forward-based, working in the field, compliance might not look so simple. The program might appear to have gaps, be contradictory. Maybe the compliance program and those messages seem to conflict with the unspoken messages of incentive systems. So I always ask from the field perspective, do anti-bribery compliance programs just look like a business partner to success? And are they geared and calibrated to the tasks at hand?

Corruption’s ‘Perfect Storm’

Can you tell us more about how international business people find themselves in the position to rationalize bribery? What is the “perfect storm” for corruption?

I didn’t ever wake up in the morning and say, “how am I going to violate the FCPA today, or how am I going to violate international bribery conventions?”

People are out there in the field thinking “how do I execute on my commercial objectives?” There are some very strong winds that can tip people in the wrong direction.

I’ll talk about a few of these in my session at Your Future in Global Markets.

Corrupt conversations are typically camouflaged using many interesting and colourful words from ‘taking care of people’ to ‘paying tolls’. Recently there was a leader at the World Bank who said he heard of a situation where the farm bribes were referred to as ‘sunshine payments’ or ‘chocolates’.

These conversations and these colourful words used to describe bribery are happening all over the world, often in remote regions, where people aren’t thinking they are within the earshot of international law enforcement or their company’s compliance programs. So the first rationalization is often, “I won’t get caught”. For those that are interested in social psychology theory, they call that optimism bias.

On the other side of that storm, are people who might not jaywalk when they’re back home, who are good, honest hard-working people. I’m often asked “When you were basically breaking the law, conspiring to bribe people for a decade, did you ever lose any sleep over it?” This is still tough to talk about, but I did it because I was ethically numb to the consequences and implications of my decisions. I wasn’t spending my nights on the Transparency International website. I wasn’t thinking about how bribery and corruption robs whole societies of governance, of human rights, of social and economic development. I wasn’t thinking about the consequences to my employer, and regrettably, not to myself and my family.

What was I thinking about?

I was thinking “who’s losing here?” I was in the defense business, and I wasn’t pulling layers out of a bullet-proof vest. The end-user was always getting a world class product. Maybe the company would have to hire workers to manufacture the order, creating more jobs. The company is happy.

They make the sale, I get my quota, my forecast, my bonus, the intermediary moves on to the next sale, and the public official who, in many parts of the world are paid at poverty wages, get a little something to make ends meet. So from the field perspective, as difficult as it is to say this, I looked at it as a win-win. Who’s getting hurt here?

There’s a wonderful book called Sidetracked by Professor Francesca Gino at Harvard, and she wrote a really interesting paper that talks about how, when we think our unethical actions benefit others, we come to think of them as morally acceptable and maybe even altruistic. So for me, over those 10 years traveling from nice business class lounges, hotels and restaurants, I wasn’t thinking about the wider consequences of my behaviour. And I certainly wasn’t thinking about the consequences when I looked at my incentive programs, which were very heavily geared to a win above all else. In many parts of the world I thought of my commercial success as a zero sum game to executing on my FCPA training. I thought,

What does my management really want? All of this FCPA paperwork I’ve signed, or success? Because where I’m sitting, I can’t deliver both.

So those are a few things professionals on the front lines of international business encounter. But just to make this clear – this isn’t an exercise in ethical spinning. I wasn’t forced to break the law. I didn’t need to bribe to be successful. And while I shared these rationalizations and justifications, it’s in no attempt to deflect responsibility on other people or other organizations. I wasn’t a fall guy. There’s only one person who was responsible for Richard Bistrong going to prison and that’s Richard Bistrong, and I paid the consequences for that.

I think that’s all really relatable, which is what’s so interesting about your story and why it’s so important to hear from people with your perspective,  people who have been under pressure, and faced opportunities to cross a line. It provides a lot of insights into what the challenges are and why you can’t just say “here are the rules, don’t break the rules,” and everything just goes smoothly from there.

Let’s remember these multi-nationals and the people who write these compliance programs, they’re living and working in what we call the ‘green zone’.  But the people who are responsible for executing on commercial objectives are often working in the ‘red zone’. We should consider what this all looks like from their perspective.

Creating an environment for ‘courageous conversations’

What are some things that organizations of all sizes can do to mitigate corruption within their organization?

In other words, how can a corporation insure that the front line international business teams are highly successful and rewarded both individually and corporately while embracing an anti-bribery program and ethic? – Richard Bistrong, FCPA Blog

The first thing to look at with any compliance program, is what’s happening in the world right now. We always have change in our external environment  – for example, countries like Brazil are going through dramatic societal change. This is not an issue that’s fixed, it’s ever evolving and compliance programs need to evolve with it. This means that every program is going to have gaps. It’s going to have weak points. And that’s the whole goal, discovering what compliance leaders can do to lean in, and listen to get to what they don’t know. If you want to try to mitigate risk, who knows how to do that better than the people who are working in the middle of it? So, what successful compliance leader will do is say,

Even with a well-intentioned program, we might get it wrong, there might be a gap.  And no one would see that quicker than the people that are in the field. So where there’s a problem, come talk to us about it. Let’s unpack that together.

If you think that your incentive system and your forecast is drowning out the voice of compliance you need to be able to recognize that and act on that. You don’t want your front line staff trying to figure out what the company really wants. You don’t want them to try to untangle what they think are conflicts between commercial objectives and compliance, you want them to talk to you about it as the compliance leader.

You want your employees to hear “don’t assume anything, and let’s unpack those challenges together. Because if we do it together, we’re going to help you, we’re going to fix that problem. We’re not going to put you back in the field where it’s unresolved. Just don’t make that decision on your own.”

And I think when compliance leaders can show that, for lack of a better word, humility or humanity, it’s really encouraging the workforce to speak up when they do think there’s a problem or a conflict. When you have ambassadors, where compliance leaders feel like they are the champion for the commercial workforce, and people in the commercial workforce think of themselves as compliance ambassadors as well, those weak points are always getting mitigated and they’re always getting raised up and addressed. From a communications standpoint that is critical.

Is it important to empower potential whistleblowers within an organization? Are organizations doing this successfully today?

Let’s talk about whistleblowing in a wider sense. It takes a village to deliver international goods or services. Think about all the people involved. You have sales order processing, people in logistics, accounts receivable and finance, and people who are wide and deep in the org. chart.

I always like to ask, do these people – no matter where they are – feel like they are a part of the ethics and compliance team? If someone gets a piece of paperwork, even if it’s from their supervisor, and something doesn’t look right do they feel empowered to hit the pause button and to speak up about this? Or do they feel like they’re just a small gear in a large machine, and “who am I to make issue of this”?

It’s about more than just whistleblowing, it’s courageous conversations. Being able to talk about problems where you see them.

Some recent surveys have demonstrated that people down in the org. chart don’t feel like they’re compliance ambassadors – but they are such a wonderful ethics and compliance resource.

Compliance leaders really need to think holistically about all the people who might touch international goods and services when they think about their anti-bribery and compliance efforts, just like they need to encourage people in the commercial workforce to speak up when they see an issue. Even to the point when they can say, “You know what? If you do speak up and you hear that we’re upset, that actually means that it’s a good conversation, because you’re sharing something with us and we’re fixing a problem together.”

I think companies have a long way to go to really be encouraging that in a wider sense than just whistleblowing.

It sounds like that would have to originate from and really permeate the entire company culture.

That’s exactly right. It has to go wide and it has to go deep to people within an organization who are all working for the same company, but they’re not necessarily on the same team organizationally. They’re in different divisions. It has to span support functions.

What resources are out there that can help organizations of all sizes set up successful compliance programs?

There are so many of them. There’s a proliferation of publicly sourced material out there, including videos and compliance organizations offering programs and certifications. I don’t think there’s any single source of information, but in a way that’s a good thing because there’s so much data and thought leadership out there that it’s a little bit overwhelming right now.

So compliance leaders really need to focus on where they think their program needs a little bit of support, and then to do the online searches and ask within their networks to find out what the best sources of that information might be.

And really take advantage of those on the front-line within their organization.

That’s the wonderful part about how much the whole compliance field has evolved right now. There’s really some wonderful, incredible thought leadership. And it’s one of the things I love about the work that I do now. It’s anything but static. It’s changing and it’s getting richer and deeper year after year.

Richard, thank you so much for taking the time to chat with me about this. It’s so great to hear from people who have different perspectives on this, who have been involved on the front lines and are watching compliance issues evolve and giving people and organizations the tools to tackle often complicated issues. We are really looking forward to hearing you talk about these issues and others at Your Future in Global Markets October 4^th!

It’s a pleasure, and our panel is going to be really interesting. We’ve got Kristine Robidoux who has extensive experience as both in-house and external counsel and has had involvement in some really interesting anti-bribery cases in Canada. And we’ve got Sgt Pat Poitevin from the RCMP with the enforcement perspective, and we’ve got my perspective. So I think we’re going to have a lot of different perspectives on this issue up in the National Capital Region, and I am super excited to see you up there!

The post How to protect your organization from the “Perfect Storm” of corruption – A Q&A with FCPA expert Richard Bistrong appeared first on Trade Ready.

In what is possibly the strangest and ugliest election cycle in American history, “what if” articles abound.

For those of us working in the field of compliance and good governance, there is concern about what lies ahead for anti-bribery efforts and the hard-fought improvements we’ve seen so far this century.

Is anti-bribery legislation putting American businesses at a disadvantage?

Donald Trump has publicly aired his thoughts on anti-bribery laws. On May 15, 2012, shortly after news of Walmart’s problems in Mexico broke, Trump made three statements as part of a rant during an interview on CNBC:

“Mexico’s a mess and this country [the U.S.] is absolutely crazy. They [the U.S.] prosecute people for going over to China and Mexico and other countries and getting business…”

Every other country is doing it and we’re not allowed to—it puts us at a huge disadvantage.

“Let them clean up their own act, we shouldn’t be cleaning up their act for them.”

No country is free of corruption—just as no country is free of other forms of crime—but it is absurd to suggest that companies in every other country are given a free pass.

It’s true that “we’re not allowed to”, but the United Nations Convention against Corruption requires every member state to criminalize bribery. It therefore isn’t correct to suggest that everyone but the U.S. is engaging in bribery.

According to the TRACE Matrix—a tool that measures business bribery risk in all countries across four separate domains—the U.S. is ranked 10^th out of 197 countries. To clarify, that means there are nine countries, including Canada and Japan, less corrupt than the United States.

Suggesting that the U.S. is alone in combatting bribery is both smug and incorrect. It undermines the leadership role taken on by the U.S. on this important issue.

Trump also indicates that American companies are put at a “huge disadvantage” by the American anti-bribery law, the Foreign Corrupt Practices Act (FCPA). The facts do not bear this out.

Corruption is expensive and bad for business

Eight of the ten most expensive actions pursued by American enforcement authorities were directed at companies from other countries. European companies determined to use bribery as a misguided marketing strategy have more cause for complaint than American companies have.

• Siemens AG (Germany): $800 million
• Alstom SA (France): $772 million
• Kellogg Brown & Root LLC / KBR Inc. / Halliburton Company (U.S.): $579 million
• BAE Systems plc (UK): $400 million
• Total SA (France): $398.2 million
• VimpelCom Limited (Netherlands): $397.6 million
• Alcoa World Alumina LLC (U.S.): $384 million
• Snamprogetti Netherlands B.V. / ENI S.p.A (Netherlands & Italy): $365 million
• Technip SA (France): $338 million
• JGC Corporation (Japan): $218.8 million

Trump appears to equate anti-bribery with anti-business, but most well-governed companies recognize that bribery is a terrible idea. Siemens’ former General Counsel, Peter Solmssen, has said repeatedly that:

If Siemens had spent the same amount on research and development that they spent on bribes, they would have had a viable product.

Not only have these cases not put American companies at a disadvantage with respect to the international business community, but these ten companies alone have added more than $4.6 billion to American coffers.

A prohibition on bribes only places companies who can’t sell by legitimate means at a disadvantage. If the company has a good product available at a competitive price, it doesn’t want to bribe buyers and it doesn’t want competitors doing so.

Marketing without recourse to bribes is more attractive to the business community. Only companies with inferior products or inflated prices need to rely on paying off decision makers.

From a business perspective, transparent dealings are preferable in every way. They are less expensive; bribes cost money which, as illegal payments, can’t be written off as business expenses.

They are more predictable; bribe-tainted contracts are unenforceable, and companies can’t sue corrupt government officials who change the terms of the deal partway through.

And they are less risky; even if the U.S. wasn’t prosecuting bribery internationally, other jurisdictions are, and several of these have the death penalty for bribery.

Private corruption steals public dollars

Even if there were some measurable disadvantages for companies that reject bribery as a way of doing business, most reputable companies recognize that the corrosive nature of corruption runs counter to the image they want to project.

Bribery prevents the citizens of corrupt countries from getting the full benefit of public dollars spent on everything from major infrastructure to routine public services.

A visibly corrupt government undermines confidence in public institutions. Paying off the decision makers to win contracts, regardless of quality or price, is not a strategy that any responsible government condones. Like restrictions on competition, dumping toxins, or using trafficked labor, any short-term financial advantage is outweighed by longstanding principles of good governance.

Trump also mocked the idea that the U.S. should have to clean up other countries, stating that corrupt nations should have to clean themselves up instead.

While this comports with the “it isn’t fair” theme he often returns to, that’s not really the point. When a head of state has his arms in a country’s coffers right up to his elbows, who exactly will be leading the charge to clean that country up?

When the poorest in the kleptocratic nations are unable to meet their basic needs, often in spite of great national natural resource wealth, it is unreasonable to expect them to take on their corrupt leaders, corrupt military, and corrupt police.

For the same reasons that we don’t imagine people living under dictatorial siege should be told to “clean up their own act”, people under financial siege by their leadership shouldn’t be left responsible either.

U.S. leadership in anti-corruption could be a thing of the past

The U.S. and its allies can be a force for good. They aren’t always, certainly, but they can be.

The U.S. has traditionally been willing to take on a leadership role in international anti-bribery initiatives. In 1977, the U.S. Foreign Corrupt Practices Act was signed into law by President Jimmy Carter.

In 2006, President George W. Bush unveiled his “National Strategy to Internationalize Efforts Against Kleptocracy.” Former Secretary of State Hillary Clinton has spoken repeatedly about the importance of anti-corruption efforts.

On International Anticorruption Day in 2011, she made the observation that:

People around the world are showing that they will not accept the corruption that prevents too many from living with dignity and having opportunities to realize their potential.

Her stance reflected President Obama’s own determination to keep global anti-bribery efforts at center stage. As Obama put it during his speech in Ghana on his first trip to Africa, “No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery.”

Bribery is a problem that crosses borders and needs a coordinated global response. Without cooperation, the bribe-takers can shake down multinationals with impunity and play an elaborate shell game with their hoard.

Unfortunately, Trump has shown little interest in international cooperation. He has called NATO “obsolete” and has been almost as dismissive of the United Nations. He appears to place no value at all on the soft power that has been critical to the success of global anti-bribery efforts over the last two decades.

What would a Trump presidency mean for anti-bribery efforts?

We should expect a relaxing of anti-bribery laws under the guise of a defective pro-business message, and for the scrupulously cultivated partnerships that produced the OECD, UN and other anti-bribery conventions to be cast aside flippantly, possibly irreparably.

The post What a Trump presidency would mean for international anti-corruption efforts appeared first on Trade Ready.

“Your criminal actions raise serious questions as to whether you have the requisite personal integrity and business ethics to be a responsible Government contractor.”

That’s me.

I was debarred from being a U.S. government contractor, and based on my conduct and offense, it was an appropriate and fair decision. The process by which I was suspended and ultimately debarred was also fair and appropriate.

Furthermore, the protocol the government afforded me in terms of providing an opportunity to address the length of the debarment (it was reduced by one year, if my record remains clear) was quite reasonable and objective.

The unintended consequences of debarment

So, what does debarment have to do with trade? Well, I think everything.

Why should an organization or individual who has breached fair trade, either through bribery or export offenses, be entitled to continue to export without some sanction?

While there has been a recent increase in the discourse around debarment, including the recent changes in the Canadian Public Works and Government Services Canada (PWGSC) Integrity Framework, it remains an infrequent sanction tool.

In fact, according to the OECD Foreign Bribery Report, of the 427 cases from which the OECD used as its data set, only two resulted in debarment (of which this author is one). The OECD defines debarment as relating “to the additional non-automatic sanction of provisional exclusion from participation in national public procurement processes for a set period.”

So, why is debarment not being used as an instrument of sanction and deterrence?

As University of Virginia (disclosure, my Masters in Foreign Policy is from UVA) Professor Brandon Garrett states in Too Big to Jail, suspension and debarment “may result in what is effectively a death penalty for a company, and in many cases prosecutors and regulators are right to want to avoid such severe consequences for the entire company.”

Avoiding collateral damage

Agreed. For example, in my own case, would it have been responsible to have my former employer debarred, with potentially catastrophic economic consequences, for conduct attributable to me?

Clearly not, and as Professor Garrett states,

Prosecutors are absolutely right to try to avoid collateral consequences of a corporate conviction.

In his concluding chapter, Professor Garrett argues, “for corporate prosecutions to have real teeth, debarment and suspension should be exercised more clearly and forcefully, particularly for recidivists, to ensure that they implement meaningful compliance,” and he reminds us that prosecutors “can wield the most powerful tools.”

Thus, if the FCPA and other anti-bribery enforcement regimes are proving inadequate, even if essential, in terms of deterring foreign bribery, perhaps the “debarment” tool needs to be taken out of the shed.

Perhaps it should be utilized in a way which, while economically painful, is not catastrophic to the hard-working employees and foreign end-users who play a legitimate and lawful role in the value chain.

Here, I think Canada leads the way, and we will get back to the “why and how.”

Hitting where it hurts on the front lines

As to why I consider debarment to be a fair, appropriate and well calibrated sanction and deterrence tool, well, we need to take a deep dive into the front lines of international business. More specifically to hotels, conference center bars and restaurants where business teams congregate after corporate meetings.

It is in this environment, away from the ears of management, where business personnel are likely to exchange ‘war stories,’ and in this case, frustration with the interruption of business due to debarment.

While criminal and enforcement fines, even massive ones, have financial impact on earnings and balance sheets (but as we have seen, not necessarily to share values), they don’t automatically impact field personnel.

Debarment does, as it disrupts sales opportunities, income streams, revenue models, and finally, incentive compensation potential, to those who have international business development responsibility.

When business teams who have had their forecasts and plans interrupted due to debarment start pressuring peers not to engage in conduct which can “screw up the market,” the thinking might really start to shift.

Those internal pressures should not be underrated. If it is the business teams who are misbehaving, why not have the business teams feel the pain?

Even if the ones who are getting the brunt of the punishment are not the ones who committed the fraud, from my perspective, they will be sure to “share the pain and shame” with their cohorts in a way which just might change the “engage in or refrain from” corruption calculus to everyone’s long term benefit.

Now back to Canada.

The Canadian solution of remediation, rehabilitation and cooperation

As Kristine Robidoux, Partner, Gowling Lafleur Henderson LLP, stated in a recent blog article, entitled The New Canadian Integrity Regime: Compliance Carrots to Join the Sticks,

“The previous Integrity Framework had a number of controversial provisions that led to widespread criticism; in particular, suggestions that the Framework was so draconian, confusing and inflexible as to “drive underground” allegations of corporate wrongdoing, contrary to PWGSC’s stated objective of deterring such wrongdoing.”

As for what Canada did to balance the Regime, as Kristine states, “the Regime now provides for the period of contracting ineligibility to be reduced by up to five years if it can be demonstrated that the supplier has adequately addressed and remediated the causes of the misconduct and has cooperated with enforcement agencies in investigating and resolving the conduct at issue.”

Thus, in addition to the debarment sticks, Canada has introduced the carrots of remediation, rehabilitation and cooperation that can all be used to reduce the debarment period.

As Kristine adds, “it is clear that with the recent changes to the Integrity Regime, the Canadian government is attempting to foster an environment that will encourage cooperation, self-investigation and voluntary disclosure by using inducements to potentially shorten the debarment period.”

So, from my perspective as one who has been debarred, it is a fair and appropriate tool which has real impact on the front lines of business, which is where unethical export practices often occur.

While recognizing the potential disproportionate consequences which might result from its use, I think that Canada gets it right by incentivizing organizations via downward departures in the length of debarment, when they show responsible changes in behaviors, policies and compliance practices.

I hope that other countries will look at Canada’s approach and think about how this tool can have a dramatic impact on those who operate on the front lines of overseas business, as well as to the organizations that ultimately have responsibility to maintain ethical, lawful and compliant business practices.

Do you think Canada’s new anti-corruption measures are a step in the right direction?

The post How Canada’s leading the way to compliance with anti-corruption sticks and carrots appeared first on Trade Ready.