SNC-Lavalin Group may be battling international corruption charges related to actions of long-gone executives, but the legal cloud still hanging over the global engineering giant now won’t keep it from bidding public works in Canada.
The Montreal-based firm inked on Dec. 10 an “administrative agreement” with the federal government in Ottawa that will allow it to compete on government projects as it defends itself in a federal fraud case now progressing through the court system.
The company, as well as its construction division and international subsidiary, had faced a 10-year debarment from government contracting after it was charged last February by the Royal Canadian Mounted Police on one count of corruption and one count of fraud tied to alleged bribes to gain work in Canada and Libya. Several former executives await trial proceedings on pending charges, and they and the company have filed civil suits against each other.
The agreement is part of changes made this past summer to amend the original stiff debarment rule included in Canada's "Integrity Framework" that was issued in the wake of the SNC-Lavalin revelations and separate Charbonneau construction corruption hearings in Quebec. Canadian businesses, including SNC-Lavalin, had objected strongly to the original penalties.
Agreement compliance will be monitored by an independent third party.
“This agreement is a milestone that allows us to continue to be an important contributor to the Canadian economy,” said SNC-Lavalin President and CEO Neil Bruce, in a statement.
SNC-Lavalin has been a major competitor for Canadian government public-works projects, part of consortia that recently won a $5-billion deal to build the new Champlain Bridge in Montreal and a light-rail line in Toronto and to manage nuclear facilities in eastern Ontario.
Companies hit with corruption charges in Canada still can face an 18-month ban from doing work on government contracts, with penalty expanding to a decade in the event of conviction.
SNC-Lavalin now is fighting the federal charges, contending the executives charged have long since left the company and that it has taken sweeping measures to bolster its business practices and ethics. The company argues it should not have been charged.
Bruce is pushing Canada’s new Liberal government to follow U.S. and U.K practice and agree to a settlement deal under which the firm would pay fines but not face potentially disastrous criminal convictions.
"The administrative agreement … has nothing to do with Canada adopting a deferred prosecution agreement, which would allow SNC to settle its case without facing debarment from federal work," says Yuri Lynk, construction sector analyst based in Canada for CanAccord Genuity, "Given the U.S. and U.K. have DPAs in place, we believe Canada is likely to eventually adopt it as well."
