ITAC Response to the Government’s Consultation on Corporate Wrongdoing – Integrity Framework

ITAC RESPONSE TO THE GOVERNMENT’S CONSULTATION ON CORPORATE WRONGDOING (INTEGRITY FRAMEWORK AND DEFERRED PROSECUTION AGREEMENTS

On November 17th, ITAC submitted an ICT industry response to Public Services and Procurement Canada’s consultations on the current Integrity Regime, and proposals for Deferred Prosecution Agreements. Recognizing the legitimate goal of addressing corporate corruption, ITAC believes that serious cases of corporate fraud and economic crime should be addressed by Government. ITAC has worked co-operatively with the federal government in recent years to clarify and streamline the Integrity Framework Guidelines.

ITAC is of that view that current Integrity Policy is unnecessarily broad and rigid.  A more targeted and flexible approach is needed to achieve an outcome that best serves and balances the interests of all stakeholders.

Deferred Prosecution Agreements have an important role to play in providing the necessary balance that is missing from the current Integrity Policy.

ITAC Submission – Integrity Framework and Deferred Prosecution Agreements 

Integrity Regime and DPA Submission – Final

Integrity Regime, ITAC recommends that (non-exhaustive list, see report for full submission):

  1. The definition of affiliate be narrowed to, at a minimum, exclude (i) affiliates over whom a supplier does not have direct corporate control or indirect control through a clear “directing mind”, and (ii) senior officers.
  2. (i) reduce the circumstances in which debarment is automatic (rather than discretionary), (ii) shorten the debarment period to 3 years (the timeframe in the United States), and (iii) allowing for the debarment period to be reduced (potentially to no time) in appropriate circumstances (e.g., if the vendor enters into an administrative agreement).
  3. All relevant factor should be taken into consideration in determined whether a supplier should benefit from discretion.
  4. Narrow the scope of offences covered by the Integrity Regime to crimes that involve bribery, fraud and similar corruption-related wrongdoing.
  5. The regime and debarments should be limited to federal procurement and should not be applied to non-procurement federal services.

Deferred Prosecution Agreements, ITAC recommends that(non-exhaustive list, see report for full submission):

  1. DPA’s can encourage engagement and proactive disclosures by organizations which will in turn result in improved compliance with the regime and encourage companies to take action against employee misconduct.
  2. DPAs should be available for all offences included within the ambit of the Integrity Regime.  A subset might be acceptable, but only if discretion on debarment is built into the Regime in a way that covers all offences.
  1. There should be an administrative process by which an organization can proactively submit a DPA or settlement proposal without prejudice to any future proceeding, or to the independence of the public prosecutor.
  2. The duration of a DPA should depend upon the circumstances of each case. DPAs should have a schedule for review and expiry. Ongoing reviews should be leveraged to encourage organizations to take additional actions and develop further policies against misconduct to limit the duration of the DPA (e.g. limitations for good corporate behavior).
  3. To encourage proactive disclosures of misconduct, organizations and their representatives need to have a safe harbor to negotiate the DPA.