Opposition actions on the SNC case could come back to haunt them ~ Hugh Holland

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It’s election year and political parties are out for blood; hoping to get something on their opponents. Conservatives and the NDP have smelled blood with the recent shift of Ms. Jody Wilson-Raybould from Minister of Justice to Minister of Veterans Affairs. The media and Conservatives allege that the Prime Minister’s Office made this change because Ms. Wilson-Raybould refused to consider use of a “non-prosecution agreement” that could avoid the possibility of banning SNC-Lavalin from bidding on any federal contract for 10 years, as punishment for bribing officials to get a contract in Libya.

It should be noted that Britain, the US and Australia have found that, provided the defendant agrees to cooperate, to pay appropriate fines and to take appropriate action against involved employees, non-prosecution agreements are an effective way of combatting corruption in large organizations without applying capital punishment to valuable strategic assets and to the thousands of other employees who had nothing to do with the crime.

In the case against SNC in Libya, fines have been paid, several SNC executives including the rogue executive in Libya and the CEO have been fired, and the SNC Board has implemented new corrective procedures. SNC now questions how much more punishment is necessary for its other 61,000 employees. Many US politicians want to ban Canadian companies from bidding on state and federal contracts in the USA. Banning SNC from federal contracts in Canada could be a fatal blow.

SNC-Lavalin, originally called Dominion Bridge, has been a flagship Canadian company since 1911 and is now a valuable strategic asset to Canada with offices in 50 countries. It is one on a very short list of Canadian Engineering and Construction firms with the capacity to operate on the world scale. Stephen Harper’s Conservative government privatized the former Atomic Energy Canada to better enable those world-class assets to compete outside of Canada. SNC was the successful bidder and is now building a fourth-generation advanced nuclear-energy plant in China. A major global expansion of nuclear power is essential to combatting climate change and offers great potential to Canadian research and business.

It’s a very tough world out there. Canada has a relatively small population which limits economies of scale for even our biggest companies. To flourish, our biggest companies must do business outside of Canada. Canada has only 12 companies on the Fortune 500 list of the World’s biggest companies in terms of revenue. The 12 from Canada rank from #274 to #483 on the list. Neither SNC nor Bombardier, Canada’s only manufacturer of aircraft and railway rolling stock, make the Fortune 500 list.

Ultimately, corruption does not pay. Corruption undermines democracy, facilitates crime and terrorism and saps economic growth. 181 counties agreed with the 2003 UN Convention Against Corruption. Certainly, there must be consequences for engaging in corruption. But only 20 of those 181 countries including Canada are classed as full democracies. The other 161 are classed as flawed democracies or autocracies. Notwithstanding the UN Convention, bribery is still endemic in most underdeveloped countries. Ten well-known US companies, including Walmart, GE and Halliburton, have been charged with corruption under the UN convention. There have been fines and firings, but is there any indication that any of those companies have been banned from doing business? If SNC were to fail, which country would acquire those valuable assets?

Canada likes to be the world’s Boy Scout, but we should not let that destroy us. Opposition Parties should be careful. They could come to regret any short-term political gain they might achieve through this case. Without using a non-prosecution agreement, this case could grind on for a year or more. Any elected party could find itself dealing with the fallout of the SNC case or other such cases affecting important business in any part of Canada.

What if the real reason that Ms. Wilson-Raybould was shifted had nothing to do with SNC, but was to remove her from having to take a very difficult and sensitive stand against her father who is a hereditary chief of a BC First Nation? Several BC hereditary chiefs are attempting to block construction sites for the biggest natural gas pipeline project in Canada’s history, even though the elected chiefs are in favour of the project. Is that not a form of corruption? Queen Elizabeth is a hereditary chief. Her job is to ensure the orderly transition of governments. It is not to thwart the will of the people by overruling their elected representatives. The job of the hereditary chiefs should be the same as the Queen. If not, how can First Nations govern themselves? What would the Conservatives or the NDP do about that?

Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.

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19 Comments

  1. Interesting point re: a possible conflict of interest as being the excuse for Ms. Wilson-Raybould’s resignation. If I understand correctly, Hugh, you are suggesting corruption between the Hereditary Chief’s and the Elected Chief’s..(?) as you already know, they have distinctly different roles and jurisdictions (Elected govern reservations etc) so I’m not sure where the corruption would happen?

    • Susan, as I understand it, some hereditary chiefs are attempting to thwart the will of the people by overruling their elected chiefs. That could be considered a corruption of true democracy.

  2. Hugh, as you are aware, I always enjoy your cogent analysis of whatever Canadian/World issue is receiving the most ink at a particular time. It is too simplistic to merely condemn the use of DPA’s, without considering the alternative to their existence. Potentially putting so many innocent people out of work, and losing the corporate presence of one of our finest on the world stage IS too high a price to pay.
    .
    On the other hand, however, the price paid over the Libyan debacle is, perhaps, too low. Using a DFA to set an undisclosed penalty appropriate to the crime is why they exist. As a card-carrying Liberal (no doubt a big surprise to anyone who has ever read a comment of mine); I would hate for this cloud to hang over the PMO for the next 9 months: Mr. Trudeau has not done an exemplary job on all fronts, granted, but he still deserves a fair shake from the electorate.
    .
    You make an interesting point vis-a-vis Ms. Wilson-Raybould’s potential conflict of interest with her father. Few would have looked beyond the headlines in this instance. But wouldn’t that be a moot point as she is on the “side of the angels”, the elected Chiefs? The only possible conflict would be if hereditary Chiefs hold over-arching powers in certain, select areas, e.g. their traditional lands.

  3. Thank you Hugh, but sadly deflection is not to be tolerated in this situation.
    SNC Lavillon is accused of bribery and fraud. They spent 48 million dollars bribing Libyan officials. They ripped off and impoverished the nation for hundreds of millions of dollars, and then the Liberals sneak a law into a omnibus bill that even their own party members are not aware of because it was never discussed at committee. This is all public knowledge. Then prior to these legislative changes they lobbied the Government over 50 times. They also donated to the Liberal Party of Canada and they were convicted in 2016 for illegally contributing to that party .
    Anyone can connect the dots and see a troubling pattern forming. Trying to deflect from this
    really makes me wonder what the writers’ motives are in this piece. Canadians Deserve The Truth.
    Welcome to Canada where the rule of law is not applied to everyone in the same fashion. Now banks and corporations can become involved in fraudulent activities and avoid federal prosecution by paying a fine. Bribery and Fraud and Obstruction of Justice are federal offences. People get put in jail for doing these things.
    There are currently over 1400 Canadians who have not been formally convicted in custody across Canada awaiting trial. Is this what we call justice in Canada; languishing in a jail cell.
    And how do any of their crimes compare to a 48 million dollar bribery scheme that allowed SNC Lavellin to benefit extremely well financially for
    their despicable act. Should we as Canadians not expect that these individuals are brought to justice for crimes this heinous in nature?
    Charging a few individuals and forcing a large organization to suffer is unfair. But it can also be said that electing a few individuals and forcing the whole country to suffer is also unfair. Welcome to Canada. I can’t wait to see how this all plays out. My intent is to encourage people to engage in meaningful dialogue and be aware of the issues facing our great nation. I mean no disrespect to anyone. I am just stating the facts.

  4. S. Derek Shelly on

    From my perspective it all could have been handled differently. I do not know why Ms. Raybould-Wilson was demoted as AG unless she did not agree with the PM or his office or for that matter the Cabinet as a whole. We supposedly live in a democracy and if she wasn’t about to receive her way (whether or not it was “truth to power” is not the issue) – if her “truth” was not that of the “power”/final decision, she simply should have resigned as AG/Minister of Justice.
    To place Ms. R-W in another cabinet position was the big mistake and now we all suffer.

  5. I am appalled by Mr Hollands column.
    If as official policy, the principles of justice are not to be uniformly applied in Canada we are a poor excise for a democracy.
    How be I rob a bank and then having been caught I claim that I have turned over a new leaf and won’t do it again and ask for forgiveness rather than proper punishment? How do you suppose that would work out?
    The reason a few other Western countries have instituted a policy where their corporations can be forgiven with a slap on the wrist rather than embarrassing criminal prosecution is to provide them a safe landing place should they be caught employing corrupt practices winning contracts in paces in the world where corruption is a way of life. The reference to Canada being a Boy Scout etc is pretty poor I think.
    As Trudeau himself has said many times lately Canada is a country operating under the rule of law. Apparently this applies only until it is awkward for a large Quebac company where upon it is a dispensible principle. Corruption in Quebec has always been an embarrasing fact and it has been said to be a cultural characteristic there. Those who will recoil from this statement need to square their objection with the present Lavalin prosecution proposal.
    On another point made, I am not at all sure Lavalin’s building a state of the art nuclear plant in China is a particularly wise idea or anything to boast about since China will simply steal the technology and build others on that pattern themselves. It would not come as a surprise if Canadian tax payers are in fact paying for this enterprise in China as China is after all a so called developing country etc.
    I am disappointed in the entire thrust in Mr Holland’s commentary and join another reader in wondering exactly where it was intended to take us?
    Trudeau has in fact bungled almost every file and is guilty of misleading Canadians in promising to do several things remaining as yet undone and not do do the some things he has done. Eg. We were promised no deficit. Has has given us a 30 billion deficit.
    Anyone apologizing for this Liberal government needs to give their head a shake. I have voted Liberal at times in the past but no more!

  6. I usually agree with Hugh on many things, but on this one I am afraid we must disagree. The points made about the effect of the prosecution of SNC Lavelin on the “innocent” employees, the economy, etc. are all well taken, but I believe are without merit. If this was the first, or the only, time SNCL had done anything like this, one could say “okay – they corrected it and learned a lesson, so lets give them the benefit of the doubt and not prosecute”. However that is not the case at all. As anyone who has read the history of SNCL and followed this story must know, they (or some of their executives) have been charged and convicted since the Libyan affair of corruption and bribery in 2 high profile Montreal projects – the super hospital at McGill and the Cartier bridge project. It is not a stretch to assume there have been many others as well both at home and abroad. In fact according to news reports SNCL is currently in the 6th. year of a 10 year prohibition from bidding on World bank projects around the world for bribery. Obviously bribery and corruption are part of this company’s method of operation.

    A conviction on this charge would result in SNCL being barred from bidding on Canadian projects for 10 years (I do not know if that ban would apply to International contracts or not). This would be a major blow to SNCL, but the projects would still go ahead and someone else would get the business – just not SNCL – so there still would be jobs somewhere. Even Quebecers are unhappy with the corruption and bribery by SNCL, so this might clean some of it up.

    As far as the governments actions with respect to the process and the smearing of Miss Wilson-Raybold, why should we be surprised if the Globe story is true. Unfortunately due to the obstruction by the PM and the PMO, we really do not know the truth, and until she speaks (or is allowed to speak) we will not hear the other side of the story. We only have the PM’s version of what happened, and of course the truth is always spoken by politicians of any stripe (if you believe that I know a nice bridge that is for sale!). The Liberal party does not exactly have a clean record when it comes to telling the whole truth (see the sponsorship scandal, gas plants, etc. etc.). We keep electing them at all levels thinking they will change and history keeps repeating itself.

    • John, it is important to Canada to keep SNC-Lavalin alive and healthy and not impose restrictions and penalties over and above what their competitors face. Here is the list of the World’s Top Civil Engineering and Construction firms by revenue:
      1. Vinci – France – Revenue $49.1 Billion
      2. Group ACS – Spain
      3. Bechtel – USA – Revenue $32 billion
      4. Hochtief – Germany
      5. American Bridge – USA
      6. Balfour-Beatty – UK
      7. Bouygues – France
      8. Kiewit – USA
      9. Royal ABM – Netherlands
      10. Laing-O’Rourke – UK – Revenue $11 billion
      11. SNC-Lavalin – Canada – Revenue $9.3 billion

      SNC-Lavalin is Canada’s largest Engineering and Construction company employing 61,000 people to do major projects in North and South America, Europe, Asia, Africa and the Middle East, including :
      • Electricity Generation and Transmission – Hydro, Wind, Nuclear
      (including Darlington Nuclear Refurbishment)
      • Mining and Metallurgy, Oil and Gas, Industrial plants
      • Infrastructure – Marine Ports, Airports, Highways, Bridges, Rail, Transit
      (Including Toronto’s Eglington cross-town subway)
      • Environmental – Flood control, Water and Sewer Systems, Shoreline Stabilization

      • HUGH .. your biases are showing ..”Hugh Holland is a retired engineering and manufacturing executive”! .. Now .. your ‘Opinion’ makes sense! “Birds of a feather flock together”! How dare ‘anyone’ disagree or question the Liberals policy and procedure? or ”’ Whoops .. THEY got caught with their fingers in the cookie jar and guess what is in the cookie jar? … $$$$$ lots of money! Quick .. change the laws, fire those in the know, blame TRUMP, write new bills, don’t let HER testify, it’s Quebec .. it’s ‘OK’, thank GOD we liberals have a majority, ..quick .. get the BIG BIG broom!

  7. Jim and Jim, your comments suggest that your opinions are based on a dislike for Trudeau and Quebec, rather than on whether a procedure that works for the UK, The USA and Australia could also be appropriate for Canada. Sometimes we have to rise above our biases. Sometimes even the Liberals can do something right. The idea is to punish the guilty parties without killing the company. If the concept of a non-prosecution agreement is adopted, the court will still decide what level of penalties is appropriate without killing a valuable Canadian flagship company and penalizing the other 61,000 good employees who had nothing to do with the crime. The competition and buying power of US companies kills enough of our Canadian companies. If we kill them ourselves, we will have nothing left. The Business Council of Canada agrees because no-one knows who and where might be next to have a rogue employee show up in their midst.

    • Hugh, I have been delving deeper into the whole issue of DPA’s since your article. I was unaware that Bill C-74 (which was ostensibly an omnibus budget-satisfying Bill) had the use of DPA’s as an add-on. This was 100% for the benefit of SNC-Lavalin; as Canada had no prior DPA legislation. The feeling in the Liberal Caucus was that DPA’s could not wait for Bill C-75 to be tabled (although it was purely a judicial Bill). With so many provisions, Bill C-75 would not pass in time to help SNC. The further point which interested me (but which I haven’t researched to date) is that Canda’s DPA legislation differs subtly, but meaningfully, from both the US’s and UK’s. Things just keep getting curiouser and curiouser. I’m still on your side, but I wonder why these ancillary facts were not included in your original article.

      • Rob, all political parties have used omnibus bills to expedite what they deem to be important legislation and then scream their heads off when their opponents do the same thing. I am not an expert on the details of the bill. All I can tell you is that I believe the principal makes sense and that the Business Council of Canada, who I’m sure have studied every comma, are in favour of the bill.

  8. Jim Logagianes on

    Hugh, do you not believe that several Canadians working for SNC Lavalin are guilty of the charges they are currently facing in court? How does a corporation of this size orchestrate a 48 million dollar bribery? I’m sure it would be a concerted effort involving several individuals and all upper management. So this surely is not about one individual in a company gone astray.
    SNC has been accused of this kind of practice on several occasions. I feel terrible for all the honest people who work for SNC. But how can Canada sit by and pretend that the corruption does not exist?
    Hugh you are a Liberal in every sense of the word if you think that SNC deserves preferential treatment. I believe, as I stated before, that the rule of law must apply evenly to all Canadians without exception. Even Engineering firms Hugh.

    • Jim, of course I am appalled at the actions of perhaps as many as 10 dishonest people who were obviously involved. But they, including the CEO, have been purged and I still believe that Canadian business and the other 59,990 good people should not be punished for the actions of those few. Otherwise the other big competitors, who are very likely doing the same things as SNC did, will feast on the carcass of SNC. The spin-offs of a failure of SNC would be enormous. By the way, after many years of voting conservative, I will no longer be labelled as a members of any party. I am a Canadian. Period. For each election and important issue in between, I will do my best to determine what is best for Canada and cast my support accordingly. That is the only way we can avoid having Canada fall into the partisan quagmire of our good neighbours to the south. Most of them are now totally embarrassed.

  9. Great Article Hugh!
    Anyone who would be appalled by your fair and balanced “for the greater good” perspective is clearly biased as “Anti Trudeau/Liberal.”
    Politics is blood sport and anyone who would suggest sacrificing a great Canadian company (because of the actions of a few bad apples) just to remove Trudeau from power is somewhat shortsighted.
    When you hold this example of corruption against what is currently taking place with the Republican Party/Trump in the USA it pales in comparison.

    • Bob Gibson …stay focused .. talking about Canada ..and ..try to stop blaming EVERYTHING on Trump and running down the citizens of the USA! The people in the USA will vote in 2020 ..not you ..and ..the way it is going down south .. your view is in trouble! Again!

  10. Something smells! Liberals are in trouble and no dance, or selfie, or funny socks etc etc will make this go away! And folks ..lets stay focused in the present … history is history .. unless JR will re-write it? .or ..JT will re-write more current law process and procedure? .. stay tuned .. he will need his best ‘drama teacher’ skills to make this go away! … https://www.thepostmillennial.com/the-real-snc-lavalin-scandal-trudeau-government-gives-big-corporations-a-get-out-of-jail-free-card/?fbclid=IwAR1F1thpKj6zcFjpeJRTPz_y_DKaGnSFWfgx-Az-RLcqCh6z4g8TN9KYNho

  11. Thanks Hugh, interesting view point. Here is my take on this mess:

    1. SNC is a large Canadian firm, and their work on Nuclear, although just a small part of their overall business, is important. Their new thorium reactor technology is a part of helping to keep the nuclear industry alive globally, which as both of us have stated before, is critical if you care about climate change. Nuclear remains the only viable energy technology that can scale to replace fossil fuel energy in the power grid. But, we can’t trust China, as Jim Boyes correctly points out. (see my recent Doppler article also https://doppleronline.ca/huntsville/listen-up-come-election-time-i-will-opt-for-a-more-pragmatic-realistic-and-less-flashy-pm/ ). SNCL and our government need to be much more cautious in sharing our technology with them.

    2. The reality is SNCL has a long history of misbehavior and corruption, as others have pointed out here very clearly. The PM and his office have totally botched this whole affair, beginning with sneaking the DPA into law right through to their now constantly changing story on what went down. Its an embarrassment to say the least, and an indictment of political corruption in the top ranks of the Federal Liberal elite power structure in this country.

    So there are only bad and worse options. I believe the rule of law must prevail. Can’t have 2 justice systems. SNCL will survive, certainly weakened, which is truly sad for the employees. Perhaps, if convicted on these serious charges, a compromise on the 10 year Federal ban on future government contracts with them can occur, softening the blow, but still sending the message that the rule of law matters more than “too big to fail”.

  12. Like it or not people this is the way the system works! This is how bridges get built. This is how 9000 people get work to raise their families. Not counting the spinoffs to suppliers etc. Corruption is such an ugly word! If we could change things around so the price is submitted, “Fees are paid’ and the work gets done. Everybody goes home at the end of the day knowing the project isn’t going to collapse anytime soon. The only thing wrong here is that Justin hasn’t got the brains his Daddy had. A smile will only get you so far while stupidity will always take you further but in the wrong direction, Using this system would result in a lot of good things happening so long as corruption and bribery become marketing and necessary “Fees”.

    If the world was a perfect place, all the armchair quarterbacks would be congratulating themselves knowing that the execs of SNC were in Jail, Wise up and move on”

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