February 14, 2019

Why Quebec sees SNC-Lavalin as an asset, not a liability

Chorus of defenders doesn't want current employees punished for past misdeeds

Jonathan Montpetit | CBC News

In Ottawa, there appears to be little sympathy these days for SNC-Lavalin, the giant engineering corporation facing prosecution for bribery schemes in Libya.

The company was hoping to strike a deal with federal prosecutors in order to avoid a trial. If guilty, it would be cut off from lucrative Canadian government contracts for a decade.

But since it was alleged last week that the Prime Minister’s Office had pressured then attorney general Jody Wilson-Raybould to allow SNC-Lavalin to sidestep prosecution, few federal politicians have been willing to stick their necks out for the company.

In Quebec, however, where it has operated for more than 100 years, SNC-Lavalin has a chorus of defenders that include the premier, the Opposition and pundits.

[ … ]

Too big to fail?

Once the undisputed king of the province’s engineering firms, SNC was overtaken in market capitalization last year by Montreal rival WSP.

The company’s involvement in a number of corruption cases has been the longest-running cause for its loss of lustre.

“The reputation of SNC-Lavalin is much weaker today than it was 10 years ago because of the poor policies of its board [of directors],” said Michel Nadeau, head of the Institute of Governance.

Along with the allegations of bribery in Libya, SNC executives were implicated in a 2009 bid-rigging scheme to build a Montreal hospital.

The company is also serving a 10-year ban on World Bank contracts for its involvement in corruption in Bangladesh.

And the RCMP is currently investigating the possibility executives were aware of bribes paid between 2001 and 2003 to secure a $127 million contract to refurbish the Jacques Cartier Bridge in Montreal.

But Nadeau said the company has moved on since then under the leadership of current CEO Neil Bruce and a new board that is more committed to governance oversight.

He said he was puzzled at the unwillingness of federal prosecutors to use the deferred prosecution agreement, which would have allowed SNC to pay a fine in exchange for avoiding a trial.

 ‘When you have that critical mass you should be able to weather storms,’ Economy Minister Pierre Fitzgibbon said when asked if SNC-Lavalin was too big to fail. (Jacques Boissinot/Canadian Press)

“Many countries in the world have these types of agreements for companies involved in foreign bribery,” said Nadeau, a former executive at the Caisse de dépôt.

“Unfortunately, the corporation is being punished, and it is its 50,000 employees — many of them Canadians — who are being penalized.”

Read more