The guilty plea of Calgary-based Niko Resources Ltd. represents the most significant development in Canada’s efforts to fight foreign bribery since the 1999 implementation of Canada’s Corruption of Foreign Public Officials Act.
Along with investigations initiated by the RCMP in 2011 against Blackfire Exploration and SNC-Lavalin and the continued prosecution Nazir Karigar for alleged bribery of officials in India, the Niko case appears to signal a new era of aggressive enforcement of foreign anti-bribery rules in Canada. Additional prosecutions or settlements are expected in the near future as it is understood that the RCMP has approximately 30 other foreign corruption investigations ongoing.
The general facts surrounding the Niko case are now well known , but a closer examination of the Alberta Court of Queens Bench sentencing proceedings and the Agreed Statement of Facts provides helpful insights into the approach Canadian authorities are taking to the investigation and prosecution of foreign bribery and the steps companies should be taking to minimize risk of CFPOA violations.
On June 24, 2011, Niko pled guilty to a single charge of bribery under the CFPOA related to two incidents that occurred in 2005 following an explosion at its Bangladesh natural gas field. At that time, Niko was also engaged in negotiations of a gas pricing contract with the Bangladesh government. Niko’s Bangladesh subsidiary provided a $190,984 vehicle to the Energy Minister in Bangladesh and paid his travel costs of $5,000 to attend an Energy Expo in Calgary and for a trip to New York and Chicago to visit family.
The Court accepted the sentencing recommendation which included a fine and victim surcharge totalling $9,499,000 and a Probation Order under which Niko will be subject to Court supervision and regular independent audits to confirm its compliance with the CFPOA. Costs of compliance with the Probation Order will be borne by Niko.
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