Mining News

Fight against global corruption brings changes for Canada’s miners abroad

Posted by Cheryl Rutledge on 5/7/2013 9:36:30 AM

By Alana Wilson

Canada’s mining industry is global, with Canadian listed firms active in exploration and development projects around the world. Practices that are seen as bribery in Canada may be quite common in emerging economies where miners operate, such as requests from public officials for under-the-table payments to help obtain permits, licenses, and other permissions. [1]

Changes to legislation to combat corruption and bribery abroad enacted by the UK, the USA, and Canada are bringing changes for the mining industry. In Canada, the RCMP is increasingly cracking down on corruption both in Canada and overseas through the Foreign Corrupt Practices Act (FCPA). [1] Canadians may also be covered under the US Foreign Corrupt Practices Act (FCPA) and UK Bribery Act through international holdings. [2] In addition, there is rapidly growing cooperation between different governments to prosecute corruption, regardless of where it occurs. [2] The repercussion for companies failing to comply with these laws is potentially severe, including large fines, penalties, and jail time.

In a recent Grant Thornton White paper, the following six steps are recommended to help identify and address the risk and prepare for expanded legislation: [1]

  1. Understand the specific risks facing your organization by undertaking a detailed risk analysis
  2. Be sure you understand the laws to which your international operations are subject
  3. Develop an effective anti-corruption policy that considers the prevention, detection and ramifications of foreign corruption and bribery
  4. Ensure that all individuals and entities acting on your behalf overseas are properly trained in your anti-corruption policies and procedures
  5. Design and implement a specific plan to meet the above challenges and requirements for your company’s particular situation
  6. Understand that failing to take action on these issues results in severe risks for companies and their officers/directors.

Show References

References

[1]Grant Thornton LLP, Venturing into new territory – mining and risk in emerging markets. Accessed May 2, 2013, http://insights.grantthornton.ca/i/57403/6.
[2]Grant Thornton LLP. (2012), Anti-corruption legislation casts a global net: Don't get caught because you don't know the rules., Accessed May 2, 2013, http://www.grantthornton.ca/resources/insights/white_papers/Anti-corruption-white-paper-Electronic.pdf.




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