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I'm following this story more to see how countries answer the question of... How do you punish a big firm that your country deeply depends on? Canada is going

• duxup 8y ago
  Fine the bank enough that stock holders give a damn. And as you say actually punish executives with jail time.
• thefounder 8y ago
  One thing they could do is to put all the people who knowingly facilitated the crime in jail(i.e top executives). I'm pretty sure that would be a better detterent than some huge fines.
  • onemoresoop 8y ago
    I absolutely second this. But I don't think it will happen
• marvin 8y ago
  You could also make the shareholders accountable. Seize a percentage of their ownership, for instance. That way, the company itself doesn’t suffer. Would be painful the first few times, because it would also hit pension funds and minority investors, but investors should quickly adapt. This is also how bailouts should work to ensure that owners/leadership doesn’t gamble on a bailout.
  • SEJeff 8y ago
    This is what Maduro and Chavez before him did in Venezuela. It results in flight of all foreign investment out of the companies and is a terrible idea as a result.
    • mijamo 8y ago
      This is just wrong. The main problem of Venezuela was the central bank policy and fixed exchange rate while printing money, and clientelism at all levels leading to sub efficient systems and unfair competition. Of course investor left when their dolars lost 60% of their real value when converted in bolivares.
      • SEJeff 8y ago
        So Oil firms didn't leave after their refineries were nationalized? They didn't break down because non-Exonn / Chevron employees left and the existing people didn't know how to fix them? Hmmmm: https://en.wikipedia.org/wiki/History_of_the_Venezuelan_oil_industry https://en.wikipedia.org/wiki/History_of_the_Venezuelan_oil_... Granted, the monetary policy certainly helped, but when you spend billions investing in a country to only have that money literally stolen from you, so much so that a court ordered PDVSA to pay Conoco $2 billion, all investment is going to leave the country.
  • harperlee 8y ago
    A big enough fine has the same effect, doesnt it?
    • marvin 8y ago
      Not if it results in the company collapsing. You couldn't do this with the banks in the wake of the 2008 financial crisis, for instance. I'm not talking about expropriating the whole ownership of the company, I'm saying demand the fine is paid in shares of the company rather than dollars. This type of punishment doesn't affect the operations of the company unless the owners do something stupid in response, which will be prevented by shareholder interest laws.
• mtgx 8y ago
  Sounds like these countries need better anti-trust laws that prevent companies from becoming so large and making countries co-dependent on them. This usually happens because one company makes so much money from its near-monopoly that it starts extending into other markets. This is the #1 sign that anti-trust isn't working well. And then you get situation where X company "does everything."
• Scoundreller 8y ago
  Iunno, the employees must have gone through some serious mental gymnastics when they were building Gaddafi a “world class” prison in Libya. With or without bribes, SNC hasn’t been a successful engineering company in a while: most of their net worth is in one highway they got a share of 20-25 years ago in a shitty deal by the Ontario government at the time. But bankruptcy (protection) is the way to go. Ie: zero out the shareholders (if necessary), and sell off the worthwhile chunks to someone else.
  • howard941 8y ago
    This. Bankruptcy for the entity so as to incentivize shareholders to select directors with proper mindsets, civil penalties for good heart/empty headed directors, and criminal penalties for the c-suite denizens to penalize intentional misbehavior.
    • Scoundreller 8y ago
      directors have insurance for their civil penalties, so that cost is ultimately borne by someone else: the shareholders/creditors/employees.
      • howard941 8y ago
        Yes, you're right. The penalties and therefore the premiums would need to be massive to encourage the provider to properly vet and continuously monitor its insureds because we're unlikely to see a legislative solution.
• swayvil 8y ago
  Nationalize their assets. It's the only way to be sure.
  • Gpetrium 8y ago
    That can set bad precedents (e.g. Venezuela nationalizing oil industry) and goes against the free market economy countries are trying to propel
    • Scoundreller 8y ago
      How is it any different than the IRS getting paid first when a company goes bankrupt? The government is a creditor like any other when there’s a price to be paid.
      • Gpetrium 8y ago
        Nationalize assets = usually means transferring the business to Gov IRS getting paid first = liquidating a portion of the assets to pay a fine.the rest can still go to the next in line It becomes a political tool to gain brownie points from your base and it disrupts other businesses by adding another level of risk.
    • whatislovecraft 8y ago
      > goes against the free market economy countries are trying to propel This is confusing. Canada and other countries are not "trying to propel" a free market. And well they shouldn't be, free markets don't work! They cause significant increased pain in the future as externalities that the market didn't price in come to fruition and hurt everyone. Costs will be much higher in the future to fix problems that we could solve at reasonable cost today, due to "free markets" running amok and causing problems. Canada is not pursuing a "free market" and it shouldn't be. Important things like banking, and infrastructure, construction, etc should be heavily regulated and the government should have significant participation to protect the public. As it stands today, corporations abuse the public's wallets buy polluting our air and water and then assuming we will pay the bill to fix it while our health is failing and our cities sinking. Free markets are bad and we should not vie for them.
• derefr 8y ago
  If the company is big enough, I’d suggest splitting the company (as if as the result of an anti-trust proceeding), taking the fragment of the resulting company that the govermnent depends on for services and nationalizing just that part; and then throwing the rest of the company—the part that the government now explicitly doesn’t depend on—to the wolves, by allowing the case against it to proceed. Basically, rather than protecting the whole just because some part of it’s necessary for you, just pluck that part out and keep it for yourself.
  • Fjolsvith 8y ago
    This policy would greatly incentivize companies to behave.
    • VBprogrammer 8y ago
      The danger is that it would also greatly incentivise governments to misbehave though, right?
      • close04 8y ago
        Perhaps we should look at the people rather than the companies or governments. Narrowing down the blame would prevent future executives (and rogue engineers /s) from being too comfortable under the cloak of "the company" when taking such initiatives. Volkswagen didn't cheat on emissions tests, specific people knowingly lied and cheated to get to achieve their goals. And while the company should be allowed to pay back all damages in a fashion that does't cripple it entirely, those people responsible for the decisions should not be given this privilege. I'm sure there are equitable options in this regard. Of course none of them would ever apply to those people since surely they put all that money to "good use".
      • stunt 8y ago
        > The danger is that it would also greatly incentivise governments to misbehave though Government having the power to choose how to apply the law will lead to misbehave and corruption as well.
    • 8y ago
• MrBuddyCasino 8y ago
  If a company is a critical part of national infrastructure, regulate it like a utility.
  • nradov 8y ago
    PG&E is regulated as a utility but that didn't stop them from making short-sighted, unethical decisions which burned down a big chunk of California.
• ekovarski 8y ago
  Remember, the road to hell is paved with good intentions. Holding the c-suite accountable is a start. Financial penalties don't seem to faze these companies.
• Gpetrium 8y ago
  To add to the SNC case, they said that depending on the govs decision, that they would move headquarters to another country. It became a political and national interest issue. Do you simply nationalize a company that says that? Would the precedent be worth it? A similar issue happens with c-suite, the average person seems eager to get 'unethical actors' jailed, however, the government has to consider the impact it creates in the long-run. For example: 1. Will businesses take less risk because of personal risk to c-suits? 2. Will this lead to stagnation in riskier projects? 3. Should a company headquartered in Canada follow the same letter of the law in other countries where bribe is a pre-requisite to business success? 4. Is a country willing to lose a powerhouse business for the sake of justice? What about the trickle down impact in the economy? 5. What is the moral cost of letting something like this go? Does it create a negative moral precedent? 6. Does imprisoning a c-suit for X create a precedent for imprisoning them for Y, Z and F? 7. Will there be lower quality c-suits because of the inherent risk of going to prison in that country? Whether we like it or not, there are unintended consequences to decisions we sometimes feel are the moral one to take. It has always been a difficult issue to balance.
  • kbenson 8y ago
    > 3. Should a company headquartered in Canada follow the same letter of the law in other countries where bribe is a pre-requisite to business success? What if they contributed to getting someone locked up without cause and/or tortured or even disappeared in a country where that was commonplace (or if not commonplace, known to happen)? Even if it's the remote government doing it, if it was started at the behest of that company, is that okay? If that's not okay, why are bribes? Where's the line drawn if there's a distinction? This one is actually pretty tricky in my eyes, because it's not inconceivable that this gets used to punish some companies for allowing more liberal local customs. What if your company doesn't hire a minority in a remote company because they are repressed and not allowed to work. If one of them approaches your company for a job, are you allowed to turn them down because the law of the region disallows them working, or do the laws in your base country regarding equality come into play and you need to consider them? I think a lot of companies are dealing with a moral variation of this with China right now. Do you do business with China and honor their laws regarding information access, or do you refrain from doing business because of that. It's a very old question, is it better to stay involved with an organization you believe to be corrupt so you can enact change from the inside, or do you remove access your services or abilities to punish them for that corruption? It's made harder by the fact that a sizable portion of the population (in the west at least) seems to think that only one of those is correct, and doing the other helps perpetuate the problem. Unfortunately, they can't seem to decide which is which. > 7. Will there be lower quality c-suits because of the inherent risk of going to prison in that country? That seems like it would depend on how you judge quality. If quality doesn't consider willingness to bribe, or considers it a positive, then I'm sure quality would decrease. Otherwise, there's probably a lot of factors to consider.
• stunt 8y ago
  > I'm following this story more to see how countries answer the question of... I think the problem is governments not making any red line. You can’t find any country without similar cases, but almost all the time the penalty is paying money. Which clearly doesn’t stop anyone to take the risk. Perhaps in some cases their profit is so unmeasurable that they don’t even call it a risk. (Many Oil contracts in the past with bribes involving corrupted governments in the middle-east) Which is so unfair when you compare it to incomparably smaller cases that a normal citizen might face.
• viscanti 8y ago
  > So how do you punish these banks and not hurt the 10,000+ workers who had no part in this? If the C-Suite or other senior managers make bad decisions they can put the business at risk. That's one of the inherent risks in working for a company. It's unfortunate that there might be collateral damage, but if you work for a corrupt company that gets shut down because it was corrupt I don't think you should expect to be bailed out. It's partially on employees to blow the whistle on bad behavior earlier or to leave those companies. It's also very possible that those corrupt companies grew to be so big because of corruption, so it would be weird to bail them out.
• dustingetz 8y ago
  i think an accountable civilization has to prevent this from occurring, once it occurs it just builds up to a boiling point and we get an opportunity to learn and do better in the next era