Analysis

Ottawa's anti-terror, corruption crackdowns show the problem with rushing in

Ottawa has taken two strong initiatives linked to the troubled world, one designed to counter corruption by Canadian firms abroad, the other to confront the jihadist threat at home. Both have gaps with how the world really operates, Brian Stewart writes.

Harper government said ready to compromise on bribery rules, CSIS powers may be another matter

Prime Minister Stephen Harper announces the government's new anti-terror initiative in Richmond Hill, Ont. Unlike other allies, CSIS's proposed new powers will not be subject to legislative oversight. (The Canadian Press)

The federal government has recently taken two strong initiatives linked to the troubled state of the world  one designed to counter potential corruption and bribery by Canadian firms abroad, the other to confront the jihadist threat at home.

Both are meant, at least in part, to toughen up Canada's image in the world, and both have stirred up considerable opposition among those who think Prime Minister Stephen Harper is expanding government powers too far.

That opposition, mind you, is vastly different. One is made up of the nation's corporate elite, the other is the civil liberties crowd, backed by at least some of the opposition parties in Parliament.

It will be interesting to see which has the most muscle in Harper's often populist Ottawa. Personally I'd bet on the boardrooms.

Already, corporate Canada looks to have pushed the government into retreating on its tough new anti-corruption rules, which were rushed into place in 2013 and then much strengthened by Public Works and Public Safety Canada without serious consultation with those firms actually trading overseas.

All indications are that Ottawa will announce changes to the rules, possibly as early as next month.

What this shows is how impressive the push-back campaign has been as it was only mounted a few months ago, albeit by a grand coalition representing 250,000 businesses in associations such as The Canadian Council of Chief Executives, Canadian Manufacturers and Exporters, and the Information Technology Association of Canada.

These business leaders are not objecting to all regulations against overseas corruption. Just those they deem too ambitious and clumsy, and which have slammed Canadian companies with more restrictions abroad than any of their competitors from the U.S., Britain, Germany or Japan.

The Harper government clearly meant to clean up the weak image Canada has long had internationally for its tepid response to how certain Canadian firms were behaving overseas.

But the business argument was that these rules were recklessly harsh and put Canadian companies at a disadvantage in foreign trade, with potentially serious consequences for jobs at home.

Caught in the net

So what do these regulations do? They create new punishments for any Canadian companies and citizens deemed to have made any form of payment to gain business regardless of where it takes place.

They even bar minor "facilitation" payments to foreign government functionaries to speed up sluggish bureaucracy, a form of gratuity previously permitted, and still OK even under the strict U.S. Foreign Corrupt Practices Act.

They also take the limits off fines, which now might run into the tens of millions of dollars, for overseas bribery, and they stunned the business world by hiking potential prison terms to up to 14 years.

While bribery and corruption is considered almost the norm in many part of the world, lawyers are now warning their Canadian clients that the risk of any impropriety in seeking a foreign contract is just too high now.

Allies at times, John Manley (right), head the Canadian Council of Chief Executives, has been leading the campaign to have Stephen Harper rethink the government's new "integrity framework" on corporate corruption, which business groups say goes too far. (The Canadian Press)

Indeed, the RCMP is currently said to be pursuing at least 35 significant cases of bribery abroad.

What particularly riled board rooms was the new initiative to bar companies, including foreign ones, from selling any products or services to the Canadian government for a full decade if, at any time in the last 10 years, they or even their foreign affiliates were found guilty of having bribed abroad.

This cast a net so wide that five global giants have been snagged, including Hewlett Packard, Siemens and BAE Systems.

In fact, it has been the fierce protests over these big-name cases that seem to have moved Ottawa to start weakening its regulations.

Canadian companies are warning of potentially billions of dollars in lost contracts when our important trading partners, furious over their firms being barred for competing for Canadian contracts, launch some sort of tit-for-tat retaliation.

Ottawa has been rattled. According to a recent Globe and Mail story, an effort to "placate critics is under way," an effort that includes a special review committee to look at the regulations "with the help of a number of industry groups."

The other campaign

Still, any weakening of these regulations will present its own set of problems as global corruption is said to be growing, by an estimated 10 per cent a year, and a strong case can be made that it's a graver threat to the world than even terrorism.

The World Bank estimates corruption siphons away up to $1 trillion a year from developing nations and helps create the failed states that terror groups thrive in.

It's that threat of terrorism, of course, that brings us back to the other campaign underway, the one by critics hoping to restrain Harper's new anti-terrorism legislation, which greatly extends the of powers of CSIS, our domestic spy agency, without increasing political oversight.

NDP Foreign Affairs critic Paul Dewar has been in the forefront of the opposition campaign to temper Harper government's new anti-terror bill. (The Canadian Press)

These new powers give CSIS unprecedented, near-police powers that would allow agents to move in forcefully to disrupt the lives of anyone they believe "might" act in support of a terrorist action at home or abroad, and to seek detention without charge for up to seven days.

Yes, there is provision for some judicial oversight in the new law, but critics argue that this isn't enough, and they are far from satisfied with the current five-member Security Intelligence Review Committee, which once a year reports on CSIS.

They want legislative oversight of intelligence operations — along the lines of our main counterterrorism partners, the United States, Britain, Australia and New Zealand.

But while the Harper government wants to bring Canada more in line with these partners in terms of toughening up our security and spying powers, it sees no reason to spend extra money on creating similar oversight by elected officials.

This sets up an important debate over the nature of security in Canada today, especially given our country's frankly shaky record of failures to protect rights whenever we have been unnerved by threats in war or peace.

It remains to be seen, of course, whether in such nervous times the stand for civil rights protection and oversight can be as effectively championed in Ottawa as the case for corporate freedoms seems to have been. 

About the Author

Brian Stewart

Canada and abroad

One of this country's most experienced journalists and foreign correspondents, Brian Stewart is currently a Distinguished Senior Fellow at the Munk School for Global Affairs at the University of Toronto. He also sits on the advisory board of Human Rights Watch Canada. In almost four decades of reporting, he has covered many of the world's conflicts and reported from 10 war zones, from El Salvador to Beirut and Afghanistan.

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