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Opinion

Canada is weak on corporate crime

By Steven Bittle      
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The SNC-Lavalin scandal is not just about Trudeau’s alleged muscling of his former attorney general to play nice with one of Quebec’s biggest employers—it is the harmful endpoint of four decades of privatization, the crafting of laws favouring powerful interests, and the unprecedented power of multinational corporations.

The story so far has been mostly about the politics—who knew what and when and who has done wrong—but it is really about the role the state can and should play in controlling corporations. And to date, the state has done far too little, leaving ordinary people exposed to the harms that result from corporate greed taking precedence over the rule of law.

While it’s important to find out what went on here, the roots of this scandal stem from a series of decisions by different governments over the past four decades to embrace privatization as a means of building public infrastructure and, in the process, ensure companies like SNC-Lavalin became ‘too big to fail’. For instance, P3s (public-private partnerships) are now the norm, meaning the stakes are extremely high for companies looking to secure lucrative contracts involving considerable public monies—a scenario that breeds ‘win-at-all-costs’ corporate cultures fostering bribery and other forms of malfeasance. What’s more, the fact successive governments have championed private enterprise is part of the reason why corporations have become so powerful, able to throw around their influence with relative ease. It’s also why governments find themselves in a contradictory position in facing the prospects of having to discipline the very entities they’ve helped catapult to such prominence.

Another issue requiring deeper scrutiny is Canada’s remediation agreements. For some, they’re an appropriate option for prosecutors in cases where a company admits wrongdoing before it’s uncovered by authorities. Through remediation, a company can plead guilty to an offence, pay a fine and/or enter an agreement to amend their policies and practices to avoid future offending. The logic of this approach is the belief it’s too difficult to investigate and prosecute complex financial crimes. However, Canada’s record of even trying to prosecute serious financial crimes is less than stellar, evidenced by the fact the country still doesn’t have a unified securities regulator and that the introduction of markets fraud legislation in 2003, along with resources to ensure its enforcement, has failed to generate tangible results. It is thus misleading to suggest remediation agreements can help address the difficulties of prosecuting financial corporate crimes when the government has never really seriously undertaken such efforts.

There’s also the issue of ensuring companies follow the conditions set out in remediation agreements. Based on its track record, we can’t really trust companies like SNC-Lavalin to openly and honestly report what they’re up to. And if governments aren’t prepared to regulate corporations adequately in the first place then there’s little chance they’ll be motivated or capable of doing so after the fact. Ensuring compliance with remediation agreements is therefore much more than a technical matter; it strikes at the heart of what it means to hold corporations accountable under the law.

Companies also aren’t prone to come forward to admit wrongdoing unless they have a rogue operative on their hands and/or they believe an offence is about to be exposed. If corporations were so motivated we wouldn’t have witnessed the litany of corporate scandals in recent decades that involved more than the occasional bad actor and wherein company officials failed to stop what was so obviously wrong. Either this situation means companies are rationally choosing to evade the law or they’re so disorganized or out of control that they struggle to operate legally. Regardless, the answer isn’t embracing alternative measures like remediation agreements, but instead to seriously discuss how best to control corporate criminals.

In the end, there exist very real incentives for corporate executives to ignore the law. From this vantage point, the problem isn’t the bad apples scenario we’ve heard so much about but that the barrel itself is rotten. If we’re serious about preventing another SNC-Lavalin from happening again, then we should use this case as the basis for going after bad corporate and state structures, not just an occasion to rain on Justin Trudeau’s promise of sunny politics.

Steven Bittle is an associate professor in the department of criminology at the University of Ottawa. 

The Hill Times 

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