The answer to the question posed in the title depends upon how the Canadian Supreme Court rules in World Bank Group v. Kevin Wallace. If the court rules that, despite laws providing it is not subject to the orders of domestic courts, the World Bank must obey a directive of the Ontario Superior Court, cooperation between the Bank and national law enforcement agencies is likely to end – or be severely weakened at the least. The pleadings filed in the case, and just made available on the Supreme Court’s web site, describe how the court is poised to weaken transnational efforts to curb corruption. In summary . . .
in March 2011 the World Bank received a tip that bribes had been paid to win an engineering contract on a bridge construction project in Bangladesh it was helping to finance. As Oluwafunmilayo explained in an August post, like other development banks, the Bank has a unit that investigates allegations of corruption in projects it finances, and if the allegations are substantiated, the Bank can deny those implicated the right to bid for contracts it or the other development banks finance for a set period of time or even permanently. But debarment is the only sanction the Bank can levy, and particularly for those whose business does not depend upon competing for development bank contracts, even permanent debarment is not much of a deterrent.
Hence, the Bank may share what it learns about corruption in one of its projects with law enforcement agencies in countries that can prosecute the wrongdoers, prison time and large fines being a much more effective deterrent than debarment. When the Bank uncovered information that executives of SNC Lavalin, a Montreal engineering and construction company, were the ones who had paid the bribes on the bridge project, it notified the Royal Canadian Mounted Police. The RCMP investigated and SNC Lavalin senior executive Kevin Wallace and two other employees are now charged under the Canadian law making the bribery of a foreign public official a crime.
During pre-trial proceedings Wallace and his co-defendants sought to question the World Bank investigators who had conducted the investigation that led the Bank to bar SNC Lavalin and its affiliates from bidding on development bank contracts for ten years. Defendants also demanded to know who blew the whistle on their bribery scheme and to rummage through the files the Bank compiled during the course of its investigation. The justification, according to an account leaked to the Toronto Globe and Mail, is “to allow the defense to scrutinize [the] investigation for using unreliable witnesses, such as those with an axe to grind, or for relying on flimsy information.” (Until last week, when the pleadings suddenly appeared on the court’s web site, this news story was only information publicly available on the case.) The Bank has appealed the trial court’s order, setting up the confrontation in the Supreme Court.
As an international organization, the Bank enjoys the same immunity from orders issued by domestic courts as any foreign government. The rationale for the immunity rests on several grounds. One example: if it were to decline to finance a project a government sought, might the government sue it in its domestic courts to force financing? Or more likely, might it conjure up a criminal case against one of its staff members to pressure the staff to approve the project? Immunity protects the Bank and its staff from such potential abuses of domestic legal processes.
Before the Canadian Supreme Court the Bank is making a number of legal arguments that turn on fine questions of the immunity of international organizations under public international law and even finer questions of the implied waiver of such immunities under Canadian law. But the more important arguments are policy-based. In the case at issue, the immediate concern is that if the Bank discloses the identify of those who blew the whistle on SNC Lavalin, potential informants in the future may be reluctant to come forward — fearing those on whom they blew the whistle will ultimately learn their identify.
An even more important argument is that while it may be one thing to provide information in a proceeding in a country with a strong, trustworthy judiciary, it is quite another in countries where the judiciary is weak and easily penetrable. In Canada one could imagine crafting a compromise order. The Bank would agree to a narrow waiver of its immunity, say providing the names of the whistleblowers to defense counsel only and allowing the judge in the case to inspect certain of its investigate records in his or her chambers. But if the Bank were to allow even this small breach of the rule giving it absolute immunity, it could be employed in countries where such a compromise order is unlikely to be observed. Hence on policy grounds the Bank’s resistance to the Canadian court’s order rests on the ramifications compliance would have in the 100 plus countries where it does business.
If the Canadian Supreme Court upholds the trial court’s order, the Bank most likely will refuse to provide the information requested, and the trial court will most likely then dismiss the bribery case. Much worse than the free pass defendants in this case will win will be the likely reluctance of the Bank to provide information on corruption to domestic law enforcement agencies in the future. Fearing exposure to similar orders, the Bank and indeed other international organizations may simply stop sharing information about corrupt activities with national authorities. That would, if not wreck the robust cooperation between international organizations and national police and prosecutors, undermine it significantly.
Admittedly, there are considerations weighing in favor of the court upholding the order. Perhaps those who blew the whistle to the Bank were lying about who paid the bribe? Or perhaps the Bank lied to the RCMP about what it knew about the bribery scheme? Or at least didn’t tell the Mounties the full story.
But these issues are side issues, collateral to the question of whether the defendants bribed Bangladeshi officials or not. Knowing who blew the whistle on the corruption scheme or what the Bank knew about it won’t change the answer to that question. The Canadian Supreme Court should therefore deliberate long and hard before it allows issues collateral to the guilt or innocence of defendants to blow a large hole in the international fight against corruption. Perhaps it would help the court reach the correct result if members of the anticorruption community weighed in with friend of the court briefs?