The Supreme Court of Canada has issued a resounding endorsement of international anti-corruption efforts by upholding the archival and personal immunities of the World Bank Group and its anti-corruption investigators.
“This is the first time the high court has dipped their toes into this,” says Mark Morrison of Blake, Cassels & Graydon LLP in Calgary. “They’ve demonstrated a real sensitivity to international cooperation and anti-corruption laws.”
It also appears to be the first judicial discussion of the subject anywhere.
“The issue has never been discussed by any other court anywhere else in the world,” says Guy Pratte of Borden Ladner Gervais LLP in Ottawa and Montréal, who with partner Nadia Effendi in Toronto represented several interveners, including the Organisation for Economic Co-operation and Development.
World Bank Group v. Wallace arose from the World Bank Group’s investigation of whistleblower allegations that executives of a multinational had tried to bribe Bangladeshi officials by way of trying to secure a multi-billion dollar construction contract.
The WB investigators provided the results of their application to the RCMP, which used the information to get wiretap authorizations and a search warrant. After they were charged, the executives challenged the wiretaps and sought an order requiring WB investigators to appear in court and produce relevant records.
The trial judge granted the applications but the SCC overruled the decision. In support, the court notes that Canada had adopted the WB’s immunities by passing the Bretton Woods and Related Agreements Act.
Morrison says it is the tone of the decision that is notable.
“It begins by positing that ‘corruption is a significant obstacle to international development,’ observes that ‘corruption often transcends borders’ and suggests that ‘in order to tackle this global problem, worldwide cooperation is needed,’” Morrison says. “There is no mistaking the court’s view on the importance of the issue.”
The sensitivity shines through in the Supreme Court’s rejection of technical arguments seeking to interpret the immunities narrowly.
“The court’s real recognition of the important role of the World Bank in combatting international corruption is demonstrated in its purposive approach to the privileges and immunities involved,” Morrison says.
But the court was also careful to limit the scope of its decision.
“The Supreme Court of Canada was quite careful to point out that there had in fact been considerable production of records in the case,” Morrison says. “They focused on the particular application before them and the more traditional test for relevance as a way of not allowing this decision to be read too broadly.”
As Pratte points out, the 188 nations who have joined the World Bank have agreed to transfer the organization’s governance to the international body.
“By doing so, each state has agreed that the benefits of membership in the organization and the granting of immunity justify the transfer from domestic governance,” he says. “It’s the price of admission.”
Indeed, what’s clear is that the judicial systems of the World Bank’s member states vary widely.
“You don’t want an international organization that has to abide by the rules in 188 different systems,” Effendi says. “If it did, you could easily have one or more countries attempting to use their judicial system to interfere with the World Bank’s work.”
As it turns out, World Bank also provides some practical insights about the Canadian approach to anti-corruption enforcement and compliance.
“The case underscores the breadth and effectiveness of cooperation efforts between state and non-state actors in this context as well as the tools available to local law enforcement in Canada,” Morrison says. “It also underscores the importance of effective and targeted corporate compliance programs, especially for companies operating in high-risk jurisdictions.”
Indeed, the consequences for the accused were severe: they were prohibited from participating in World Bank Group-funded projects for 10 years, suffered reputational harm and significant legal costs.
“These ramifications greatly outweigh the costs of implementing and maintaining a robust and effective compliance program tailored to detect and prevent improper conduct,” Morrison says.