The supply and demand sides of corruption: Canadian extractive companies in Africa

Authors: Frederick Stapenhurst, Fahri Karakas, Emine Sarigöllü, Myung-Soo Jo & Rasheed Draman

Publication: Canadian Foreign Policy, Vol 23, No. 1, 2017

Abstract: 

With the rapid expansion of Canadian investment in extractives around the world, it is perhaps not surprising that Canada’s reputation as a low-corruption country has faltered: Canada currently ranks ninth internationally in Transparency International (TI)’s corruption perception index, down from sixth in 2010, and sixth, down from first (i.e. best), in 2009 in TI’s Bribe Payers index. This article presents the preliminary findings of our ongoing research regarding both the demand side (that is, the request for bribes, principally by foreign officials) and the supply side (that is, the giving of bribes, principally by corporations) of corruption. We have examined Canadian mining companies operating in Ghana and Burkina Faso and have identified 10 “tensions” which need to be acknowledged in public policy formulation. We note that Canada is implementing policies to reduce supply-side corruption (e.g. by adopting anti-bribery legislation and guidelines for corporate social responsibility) but recommend that more be done, especially oversight of anti-corruption laws by Parliament. We also recommend that mining companies undertake ex-ante corruption risk assessment and develop proactive corporate anti-corruption policies. And, finally, while host countries have anti-corruption laws, implementation is weak. Global affairs could usefully support stronger parliamentary oversight in these countries.

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