Managing Local and International Criminal Law Risk for Mining Companies

Despite internal safe guards and the best efforts of mining companies and their executives, criminal investigations can arise in relation to operations at home or abroad.  How a company responds to a criminal investigation or to possible internal criminal misconduct, can have a serious legal and reputational impact, particularly since changes to Canadian law have made it easier for prosecutors to convict corporations and their officers of criminal wrongdoing.  Today at Fasken Martineau’s PDAC 2016 seminar, Peter Mantas and Norm Keith of Fasken Martineau and Sandy Boucher of Grant Thornton discussed how proactive a mining company should be during the critical period after suspected criminal wrongdoing is discovered.

The involvement of experienced, external corporate criminal lawyers at the point when suspected criminal wrong doing first comes to light is critical to managing legal risks.  To this end it was recommended that, to the extent permitted by applicable law, companies establish anonymous whistleblowing procedures to allow employees and other stakeholders to report instances of suspected wrong doing directly to the company without fear of retaliation.  Internal reporting of wrong doing is generally to be preferred to external reporting.  This provides the company with an opportunity to be proactive in managing risk rather than reactive to an external investigation, media report, or other sudden, external revelation of possible wrongdoing.

It is at the point when suspect wrong doing first comes to light that the company is best able to prevent the commission of an offence, assess its exposure, and gather evidence.  When retained at this stage, corporate criminal lawyers are able to work with the company and regulators in an attempt to prevent charges from ever being laid, or if charges are unavoidable to ensure that the company’s legal rights are protected during the regulatory investigation. In some cases, depending on a careful assessment of the circumstances, a company may choose to volunteer information to investigators, but that decision needs to be made carefully to ensure that the appropriate balance is struck between protecting legal rights, and cooperation.  A further and significant advantage to retaining external corporate criminal lawyers is the ability to ensure that communications—including the internal investigation into possible wrongdoing—are privileged and confidential and not subject to production to investigators.  Where executives are also targeted for investigation, it is generally recommended for them to retain separate legal counsel to ensure they also have the benefit of solicitor-client privilege.

Criminal investigations and prosecutions of corporations and executives attract considerable media attention.  This can have catastrophic impact on an executive or company’s reputation and the company’s value, particularly if a company is publicly traded.  It is recommended that a small, responsive media relations team be assembled to provide key written messaging for the corporation and executives during the investigation and prosecution, and that experienced corporate criminal counsel be involved directly in any interactions with journalists.

For a full summary of the topics discussed in today’s seminar or for more information about managing criminal law risks, please contact Peter Mantas, Norm Keith, or another member of the White Collar Defence and Investigations team.