World Bank Group v Wallace: International Organizations’ Immunities and their Involvement in the Fight Against Corruption

bwl_montreal

Was this a great victory or a near miss?

Much has been written about the recent Supreme Court of Canada (“SCC”) judgment World Bank Group v. Wallace.[1] Advocates of whistleblower rights and the anti-corruption community have declared this decision a clear stance in favour of whistleblower protection and a big win in the fight against corruption.

A further review of the decision and a close examination of the context in which the SCC was asked to rule reveals, however, a far more nuanced result. An examination of the underlying facts which led to the decision exposes certain shortcomings on the part of the World Bank Group (“WBG”) and the Royal Canadian Mounted Police (“RCMP”) collaborators. These shortcomings risk compromising the sanctity of international organizations’ immunities and that of the fundamental right of an individual to a fair trial. They also highlight the need for the implementation of clear protocols when domestic law enforcement and international organizations wish to collaborate. A review of the facts and context of this matter is necessary to allow an understanding of the actual issues arising in the case and the takeaways stemming therefrom.

 

I.  THE FACTS, THE POSITION OF THE PARTIES AND THE JUDGMENTS

A. The Facts

Kevin Wallace (“Wallace”), a former executive of SNC-Lavalin Group Inc. (“SNC-Lavalin”), is accused of one count of bribing foreign public officials under the Corruption of Foreign Public Officials Act (“CFPOA”).[2] Dating back to 2010, the World Bank Group’s Integrity Vice Presidency (“INT”)[3] received emails from four tipsters alleging that certain representatives (the “Accused”) of SNC-Lavalin were planning to bribe foreign officials in Bangladesh in order to obtain a contract relating to the construction of the Padma Multipurpose Bridge.[4] Following their own investigation, INT contacted the RCMP and exchanged various documents including their investigative reports and the tipsters’ emails, in an effort to assist the RCMP prosecute the Accused. Following this information exchange, the RCMP obtained wiretap authorizations in furtherance of obtaining direct evidence of the Accused’s involvement in the alleged corruption.[5]

Wallace intended to challenge the merits of the wiretap authorizations by way of a Garofoli Application[6], therefore he brought forth a pre-trial motion to the Ontario Superior Court of Justice requesting that the trial judge find that the two subpoenas he issued to WBG’s senior investigators were validly served. Moreover, he sought a third party production order by way of an O’Connor application[7], requesting access to certain WBG documents (“Archives”) that were relied upon by the RCMP to support their requests for the wiretap authorizations.[8]

 

B. The Lower Court’s Decision Under Appeal

The Ontario Superior Court of Justice authorized the Accused’s subpoenas to compel testimony of WBG’s senior investigators, Mr. Paul Haynes and Mr. Christopher Kim, and the third party production order of the Archives in the possession of the WBG in order to use these Archives as evidence in a motion to contest the wiretap authorizations. It is those decisions that were appealed to the SCC by the WBG.

It is thus critical to understand that this matter was before the SCC essentially on a procedural question: could Wallace obtain certain Archives and testimonies from the WBG in an attempt to attack the wiretap authorizations that the RCMP obtained, which wiretap authorizations were based on information stemming from the WBG collaboration? The questions were framed to the SCC, as follows: 1) whether the WBG could be subject to a production order issued by a Canadian court and 2) if so, whether in the context of a challenge to the wiretap authorizations pursuant to a Garofoli application, the Archives sought met the test for relevance.[9]

 

C. Position of the Parties

i. Wallace (One of the Respondents)
Counsel for Wallace argued that the materials sought from the O’Connor Application, within the context of a Garofoli Application, were likely relevant.[10] Moreover, they argued that there was no evidence that INT forms part of the WBG and therefore did not benefit from the immunities outlined in the Bretton Woods and Related Agreements Act.[11] Notwithstanding this and assuming that the immunities did apply to INT, they argued that the immunities were purely functional, not absolute.[12] Finally, they argued that the WBG implicitly waived its immunities through the conduct of the INT personnel.[13]

ii. World Bank Group (Appellant)
Counsel for the WBG argued that the information sought by the Accused from the O’Connor Application, within the context of a Garofoli Application, was not likely relevant. Moreover, they stated that INT forms part of the WBG and, as such, their immunities must be absolute in order to prevent undue interference in the operations of an international organization. Finally, counsel argued that archival immunity is not subject to waiver, while personnel immunity is subject to express waiver.[14]

iii. Interventions
Counsel for Transparency International argued the importance of enforcing immunities as they are essential in encouraging cooperation in fighting corruption and protecting whistleblowers.[15]

Counsel for the European Bank for Reconstruction and Development, the African Development Bank and other international organisations, argued that waiver of immunities must be done expressly and not implicitly. According to them, express waiver is the only way of protecting and ensuring uniformity of the status of international organizations from one jurisdiction to another.[16]

Counsel for the British Colombia Civil Liberties Association argued that implied waiver is necessary in certain circumstances in order to promote the accused’s right to full answer and defence.[17] Similarly, counsel for the Criminal Lawyer’s Association argued the importance of balancing international organizations’ immunities with the accused’s right to a fair trial. As such, international organizations’ immunities must be functional and can be waived. They also suggested remedial action in cases where production of documents could not be ordered.[18]

 

D. The Judgment of the Supreme Court of Canada 

The SCC ruled in favour of the WBG by stating that both their personnel and their Archives were protected by absolute immunities conferred to them in the Bretton Woods and Related Agreements Act.[19]  While archival immunity is not subject to waiver, personnel immunity is subject to express waiver.[20] In the present case, the SCC concludes that the WBG did not waive its immunity, as they always expressly reiterated that they provided the information without prejudice to its immunities.[21] Finally, the court concluded that even if the WBG did not possess immunities, the production order should not have been issued under Canadian law as the Archives sought were not deemed likely relevant under a Garofoli Application.[22]

 

II. LAW ENFORCEMENT COOPERATION AND THE RIGHT TO A FAIR TRIAL

There have been numerous articles about this decision being a hallmark case for the protection of whistleblowers and a victory for the global fight against corruption. While on its face it is tempting to jump to this conclusion, the actual judgment reveals that this case is not about whistleblower protection or corruption at all. Aside from an introductory passage from the SCC on the idea of corruption transcending borders and the necessity of worldwide cooperation in tackling this problem[23], the impacts of this decision on whistleblower protection and the fight against corruption are incidental at best.

Then, what is this case really about? At its core, this is a case that was born of the competing interests of an international organization’s foundational right of privileges and immunities and the relatively new quasi enforcement practices of integrity offices within these organizations.

Although in this specific matter, the WBG’s immunities are upheld and Wallace’s attempt to compel evidence is denied, we feel it is important not to lose sight of risks resulting from ad hoc collaboration between domestic law enforcement and international organizations like the WBG. Certain shortcomings on the part of the WBG and the RCMP collaborators created two important risks in this matter: (A) the potential miscarriage of justice through a denial of certain fundamental rights of the accused; and (B) the risk of compromising the immunities enjoyed by international organizations.

 

A. The Potential Infringement on the Fundamental Rights of the Accused

Section 11 of the Canadian Charter of Rights and Freedoms[24] states that an accused is presumed innocent until the prosecution proves beyond a reasonable doubt that he is guilty. Moreover, an accused is entitled to a fair trial, that includes the right to full answer and defence. As part of this right, Accused have the right to full disclosure of evidence by the prosecution.[25]

Applying this to the present case and perhaps stating the obvious, Wallace may very well be innocent with no violation of the CFPOA having been committed. At the outset, it should be pointed that calling this a win for anti-corruption efforts presumes the guilt of the Accused. The enthusiasm on the part of pundits should be tempered, at least until such time as the Accused has had the opportunity to be heard and tried.

Further, the RCMP played a significant role in the risk of the course of justice being perverted by failing to respect their own operational policies.[26] While the trial judge attempted to remediate this misconduct, it remains that there were deficiencies in the Stinchcombe[27] disclosure that may be prejudicial to the Accused, for example, the lost emails and missing notes from the RCMP affiant.[28]

Finally, while the SCC has confirmed the WBG immunities, it has not addressed the impact this will have on an accused’s right to a fair trial. The SCC has opened the door to that argument being raised by Wallace to the trial judge. The WBG may risk the course of justice being perverted by providing only the incriminating evidence to local law enforcement, while neglecting to provide the exculpatory evidence. As well, the level of enmeshment of the WBG in criminal prosecutions may have the adverse effect of throwing out a case instead of contributing to a successful prosecution. In the present case, the following outcomes are still possible:

  1. Conviction of Wallace based on the evidence provided;
  2. Acquittal of Wallace based on the evidence;
  3. Acquittal of Wallace on other grounds altogether, based perhaps on the RCMP’s investigative missteps resulting from Stinchcombe[29] disclosure deficiencies; or
  4. Acquittal of Wallace on grounds that the SCC’s decision to uphold the immunities of international organizations violates his right to receive all relevant material to his case and thus impedes his right to a fair trial.

Indeed, if Wallace raises this 4th argument successfully at trial, the chilling effect on future collaboration will be dramatic. Future accused, by being denied critical evidence in possession of the prosecution – due to international organizations’ immunities, may obtain acquittals based on the resulting denial of fundamental rights.

 

B. Jeopardizing Immunities 

This decision was being closely monitored the world over for precisely the following reason: Would a well respected high court rule in a manner which could weaken, even in the slightest, the privileges, exemptions and immunities afforded to and guarded so preciously by international organizations?

While the SCC confirmed that INT has absolute archival immunity not subject to waiver and absolute personnel immunity that is subject only to express waiver, it cannot go unnoticed that INT’s actions posed a threat to the immunities of international organizations. The Accused questioned INT’s archival immunity since they were willing to provide hundreds of documents to the Crown, however, they were opposed to providing certain documents to the defence.[30] Moreover, the Accused questioned INT’s personnel immunity since they were willing to accept subpoenas from the Crown and testify in court. However, while they accepted a subpoena from the defence, they later refused to be bound by it.[31] At the SCC, the WBG argued primarily on the importance of absolute immunities and stated that they never waived their personnel immunity, as they always replied by stating that they were accepting the subpoenas subject to their privileges and immunities.[32]

Although the SCC deemed this method as being sufficient in the protection of their immunities[33], it should be noted that the WBG seemed to be prioritizing and even showing favouritism to the Crown’s case by assisting them in any way they could. Though the decision was rendered in favour of the WBG and immunities were upheld much to the relief of international organizations, it should be viewed by international organizations as a near miss rather than a great victory. International organizations would be doing themselves a disservice if they don’t recognize the precarious situation that INT’s actions put the WBG in and do a post mortem to ensure immunities are not put in peril in the future.

 

 

 III. POINTS OF CONSIDERATION FOR LOCAL LAW ENFORCEMENT AND INTERNATIONAL ORGANIZATIONS

A balance must be achieved between the protection of international organizations’ immunities, their willingness to cooperate in national law enforcement files and the fight against corruption. To what extent can the WBG provide information to local law enforcement while nonetheless being immune from any type of production order or subpoena? How can INT ensure that their immunities are never put into question again?

International organizations are well positioned to lead the fight against corruption. Their raison d’être places them at the nexus between private industry and government agencies of developing countries often high on the corruption index. Cooperation and information exchanges must be carefully managed to support domestic law enforcement initiate prosecutions in a matter so as not to infringe the basic right of the accused to a fair trial, failing which, the accused’s right to full answer and defence may be compromised and the related prosecution jeopardized. The following are points that should be considered by domestic law enforcement and international organizations when they wish to collaborate.

 

1) Establishing clear protocols for disclosure of information between International Organizations and local law enforcement

The international organization should create a hermetic investigative file and limit channels of communication with local law enforcement in order to shield its investigators from being pulled into domestic criminal cases. International organizations may even consider going as far as limiting disclosures to a single written submission.

 

2) Ensure protection of immunities by employing a consistent approach when engaging with third-parties

To bolster personnel immunity, international organizations must be consistent in their approach when faced with a subpoena request. All subpoena requests should be rejected at the outset on grounds that accepting a subpoena goes counter to the inviolable right to personnel immunity. The handling of the subpoena in the Wallace case was hasty and exposed personnel immunity to an unnecessary challenge. The SCC upheld the immunity but a proactive and disciplined approach internally would have avoided the challenge altogether. This can be achieved through clear internal policies and standard operating procedures instructing personnel on how to handle judicial orders.

Additionally, while their involvement is of assistance in international criminal prosecutions, international organizations must not completely enmesh themselves with the investigation. The WBG should be reminded that, in the absence of their ability to prosecute, they must allow domestic law enforcement and public prosecutors to independently fulfill their respective roles.

 

3) Recognize the difference between the burden of proof between international organizations’ sanctioning practices and criminal prosecutions

Domestic law enforcement, and particularly Canadian agencies such as the RCMP, the Canadian Competition Bureau, the Sureté du Québec’s Unité Permanente Anti-Corruption, the Ontario Provincial Police and others,should understand that the investigative findings of international organizations are not held to the standard of proof of beyond a reasonable doubt, required in a criminal prosecution. INT, for example, when dealing with sanctions cases, relies on a standard of proof akin to civil matters in its prosecution of files within the WBG, i.e., on a balance of probabilities, and INT, just as most enforcement functions of other international organizations, will base its cases on proof that does not meet the higher evidentiary standards of criminal prosecutions. As against that, international organizations’ investigative units do not have broad, intrusive, domestic law enforcement rights to search, seize, detain or compel evidence from third parties. As such, collaboration between international organizations and domestic law enforcement can lead to a perfect storm where certain allegations brought forth in a quasi-prosecutorial forum with a lower burden of proof, are relied on to obtain criminal investigative powers such as wiretaps or searches. It is the prosecutor’s duty to present this in a neutral position to the judge hearing requests for such ex parte authorizations. Having this element discussed explicitly at the authorization stage and fleshed out by the judge may shield it from future scrutiny on this issue at trial.

 

4) Domestic law enforcement must respect their own operational policies

Finally, and most evidently, the RCMP must respect its own operational policy by listing document exchanges, meetings and telephone calls as well as document and preserve all written requests and designate key points of contacts at the outset of the collaboration with the international organisation.[34] In the event that an RCMP Sergeant presents an affidavit, primarily based on the information provided by investigators of an international organization, the RCMP must ensure that all the statements declared can be disclosed and proved to the defence. The RCMP must look at the information coming from the international organization in a manner akin to any allegation received from the public and refrain from becoming overly reliant on it in its own investigations and prosecution.

 

 IV. CONCLUSION

There remains a possibility that Wallace benefit the most from the outcome of this judgment. The real consequence of this decision will only be understood at the conclusion of this trial. If the trial judge does not address the SCC’s judgment as a foundation for Wallace’s acquittal, then this judgment will leave us with nothing more than a clear pronouncement on the standard to meet for an applicant to successfully obtain documents from law enforcement when attacking a wiretap authorization, as well as a good obiter discussion on the question of international organizations’ immunities.

Regarding whistleblowers, upholding the immunities of the international organizations may appear at first glance to be useful in protecting the identities of the tipsters, as international conventions encourage or mandate domestic whistleblower protection. For example, The United Nations Convention Against Corruption[35] suggests that states consider adopting appropriate measures to protect whistleblowers. The Organisation for Economic Co-Operation and Development[36] also has numerous guidelines and recommendations promoting and encouraging states to create adequate whistleblowing protection mechanisms. Transparency International has been a strong vocal advocate of such measures for years.

We are strongly supportive of such measures and note despondently that Canadian legislation on whistleblowing protection is woefully deficient. However, it is not in the upholding of international organizations’ immunities that the court can compensate for the lack of clarity in domestic law. International organizations must protect whistleblowers under their rules and whistleblowers should be protected whether they are in a matter involving international organizations or not. International organizations’ immunities were never intended, and should not be construed as a de facto whistleblowing protection policy.

Whichever way this case unfolds, one thing remains clear from the present facts: if collaboration between international organizations and law enforcement is to strengthened, international organizations and domestic law enforcement would be wise to review their current modus operandi in light of this decision and consider implementing improved measures.

Co-written by:

Ayman Daher, Partner at Bretton Woods Law Canada

Mr. Daher works in the fields of anti-bribery and anti-corruption, compliance and investigations related disputes and and regulatory and quasi-judicial sanctions cases.

Alan Sarhan, Partner at Bretton Woods Law Canada
Mr. Sarhan is active in the field of in Multilateral Development Banks sanctions, business integrity crisis prevention and anti-corruption and bribery legislation.

In collaboration withJessica Lee Moye, Student-at-Law at Bretton Woods Law Canada.

Ms. Moye attends the Faculty of Law at the University of Sherbrooke, graduating in the Summer 2017.

 

[1] World Bank Group v. Wallace, 2016 SCC 15.
[2] Corruption of Foreign Public Officials Act, S.C. 1998, c.34.
[3] World Bank Group v. Wallace, prec., note 1, par. 13, 50: The INT is an integrity office that forms part of the WBG, “responsible for investigating allegations of fraud, corruption and collusion in relation to projects financed by the WBG.
[4] Id., par. 11,14.
[5] Id.,par. 16.
[6] Id., par. 100,116, 120;R. v. Garofoli, [1990] 2 S.C.R. 1421: A Garofoli Application is a motion brought to challenge the admissibility of a wiretap authorization. In the present case, the Accused is seeking to challenge wiretap authorizations by demonstrating that Sergeant Jamie Driscoll (the “affiant”) from the RCMP, knew or ought to have known that there were errors or omissions in the affidavits he drafted in order to obtain the authorizations.
[7] Id., par. 112-113, 116; R. v. O’Connor, [1995] 4 S.C.R. 411: An O’Connor Application is a motion brought to obtain Archives that are in the hands of third parties “third party production order”. The Accused has the burden of proof of demonstrating that the requested Archives are “likely relevantto an issue at trial, such as the credibility or reliability of a witness to testify […] that will have a direct impact on the guilt or innocence of the accused”.
[8] Id., par. 124; In the present case, the Accused is seeking a third party production order (O’Connor) from the WBG in order to use the Archives to contest the wiretap authorizations (Garofoli).  Therefore, in this context, the Accused has a narrower burden of proof of demonstrating that the requested Archives are likely relevant in indicating that the affiant knew or ought to have known of certain errors or omissions in the affidavits drafted to obtain the wiretap authorizations.
[9] Id., par. 23.
[10] Id., par. 35.
[11] Id., par. 36.; Bretton Woods and Related Agreements Act, R.S.C. 1985, c.B-7.
[12] Id., par. 37, 56: “Functional Immunity is one that only applies when it has been specifically demonstrated that the immunity is necessary for the organization to carry out its operations and responsibilities […], [whereas Absolute Immunity] is not subject to this case-by-case determination of functional necessity”.
[13] Id., par. 37.
[14] Id., par. 32-33,56; Factum of the Appellant, World Bank Group, SCC File No. 36315, par. 105.
[15] Id., par. 39.
[16] Id.
[17] Id., par. 40.
[18] Id.
[19] Id., par.48,59; Bretton Woods and Related Agreements Act, prec., note 11.
[20] Id., par. 82,87,90.
[21] Id., par. 95.
[22] Id., par. 100.
[23] Id., par. 1.
[24] Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, art. 11.
[25] R. v. Stinchcombe, [1991] 3 S.C.R. 326.
[26] Factum of the Respondent, Kevin Wallace, SCC File No. 36315, par. 37.
[27] R. v. Stinchcombe, prec., note 26.
[28] Factum of the Respondent Kevin Wallace, prec., note 27, par. 18,37-39; World Bank Group v. Wallace, prec., note 1, par. 18, 110.
[29] R. v. Stinchcombe, prec., note 26.
[30] Factum of the Respondent Kevin Wallace, prec., note 27, par. 2, 117.
[31] Id., par.3,21,58,62-64,67, 137, 140.
[32] Id., par. 62.
[33] World Bank Group v. Wallace, prec., note 1, par. 95.
[34] Factum of the Respondent Kevin Wallace, prec., note 27, par. 37.
[35] United Nations Convention Against Corruption, 31st October 2003, art. 33, online:
https://www.unodc.org/documents/brussels/UN_Convention_Against_Corruption.pdf.
[36] The Organisation for Economic Co-Operation and Development,“Recommendation on Guidelines for Managing Conflict of Interest in the Public Service”, June 2003, online: http://www.oecd.org/governance/ethics/2957360.pdf.

Leave a Reply

17 − fifteen =