The RCMP (Royal Canadian Mounted Police) searched the offices of Canadian mining company Blackfire Exploration Ltd. (Blackfire) amidst allegations the company bribed a local official in Mexico. Blackfire has faced local opposition to its mining operations in Mexico, which culminated in shooting death of an anti-mine activist in 2009. According to an affidavit filed by the RCMP, Blackfire is alleged to have paid $19,300 (CDN) into the personal bank account of a local Mexican mayor in order to “keep the peace and prevent local members of the community from taking up arms against the mine.”
Blackfire has stated that the funds were not intended as a bribe, and that the company has never knowingly paid bribes to anyone. Rather, Blackfire explained that is was under the impression that the money was transferred in order to support public works for the citizens of the town of Chicomuselo. Blackfire has further stated that all payments were stopped once it became aware the funds were possibly being used for other purposes.
The situation highlights the importance to Canadian companies carrying on business abroad of having an effective compliance program. Such policies are critical in identifying and preventing the improper use of company funds, and in maintaining strict internal control mechanisms. In particular, a compliance policy, together with effective compliance training, can provide a key safeguard for the proper handling and disbursement of company payments for legitimate purposes.
Canada’s Corruption of Foreign Public Officials Act makes it an offence for any company or individual to directly or indirectly offer a bribe of any sort to a foreign public official. The Blackfire investigation and the $9.5 million dollar fine recently levelled against Alberta-based Niko Resources Ltd. highlights the RCMP’s increased scrutiny of Canadian businesses operations outside Canada. Reports indicate that more than 20 investigations into allegations of bribery by Canadian companies acting overseas are currently underway.
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