A number of industry associations including the Information Technology Association of Canada (ITAC) are increasing pressure on Ottawa to bend on its recently made regulations which may ban Hewlett-Packard Canada and Siemens AG from federal contracts for a decade because divisions have been convicted of corruption in other countries.
ITAC chief executive Karna Gupta said this morning in an interview he met as recently as last week with unnamed government officials on the issue, part of a campaign that has been going on since April to get more clarity on the government’s policy.
“There has been no consultation to the process” since the regulations were released in March, he complained. “We raised it in April” with the government, he said, had talk about it in regular meetings with bureaucrats and government ministers. Only recently has the Harper government said “it will engage with a conversation with industry,” he said. “But we have no indication how this will unfold.”
“It’s not about we should not have good practices,” he said. “It’s about clarity, circumstances, its about recourse.”
The Public Works regulation essentially says companies cannot do business for 10 years with the federal government if they or their affiliates have been convicted or entered a guilty plea to fraud, corruption, criminal breach of conduct or similar offences in Canada or in another country.
It’s part of an anti-corruption campaign that the United Nations and the G20 nations have pledged to conduct. For example in 2010 in Toronto the G20 created an anti-corruption working group; later that year the countries endorsed an action plan.
HP’s name has been mentioned because in September its Russian division pled guilty to felony violations of the U.S. Foreign Corrupt Practices Act and was sentenced for its role in bribing Russian government officials to secure a large technology contract with the office of the Prosecutor General of the Russian Federation.
What irritates Canadian industry is that other countries, including the U.S. and the European Union, offer convicted corporations a way to get off the bad list by responding firing staff responsible for corrupt practices.
There are exceptions to the ban for reasons such as an emergency or national security, but only on a case-by-case basis
The issue isn’t whether there should be an integrity policy, Gupta said but “it needs to be clarified what constitutes a violation, and what is the due process and what is the recourse if something happens.”
“Industry does not like to operate in an uncertain environment,” he added.
According to today’s Globe and Mail, not only is ITAC pushing on this issue, so is the Canadian Council of Chief Executives and the Canadian Manufacturers and Exporters.
Gupta complains that the regulation has no provision for a company to defend itself by pointing to actions it has taken for “crossing the red line.” There is no way a company can provide “their side of the story — this has happened because of a rogue employee in some country which does not have Western rules…. there is no due process. You are automatically disbarred (from selling products and services to Ottawa) if you are found in some court, even if a foreign affiliate.”
And no one knows how an exemption might be granted, he said.
Asked if the government takes the position it wants to make sure industry knows certain practices won’t be tolerated, so wants a tough penalty, Gupta said “you cannot be found guilty unless you demonstrate what you’ve done.”
If an alleged criminal offence happens here, there is a due process in the courts, he said. That’s not necessarily so in some countries.