Winnipeg Free Press - PRINT EDITION

Canadian bribery law weak

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SNC-Lavalin, the Montreal-based engineering and construction firm, last week announced the appointment of Robert G. Card as president and chief executive officer to repair the firm's damaged reputation and unravel the ethical and political tangles in which it ensnared itself.

Mr. Card, who was undersecretary of energy in the Bush administration from 2001 to 2004, was hired away from the engineering and construction firm CH2M Hill of Englewood, Colorado, where he played a large role in designing and building the London Olympic athletic complex.

SNC-Lavalin badly needs a house-cleaning. Last November, Mexican police arrested Cynthia Vanier in Mexico City -- she remains in prison -- believing she had organized a possible escape from Libya for one of the sons of Moammar Gadhafi, the Libyan strongman who had been an important client of SNC-Lavalin.

Ms. Vanier's boss, SNC-Lavalin construction chief Riadh Ben Aissa, said she was innocent, but then Swiss police arrested him for bribing public officials in North Africa and he was dismissed from SNC-Lavalin. Stephane Roy, vice-president of finance, quit at the same time.

CEO Pierre Duhaime said he knew nothing about the matter, but when auditors followed the paper trail they found he had authorized $56 million of unexplained payments by Mr. Ben Aissa. Mr. Duhaime resigned in March and SNC-Lavalin had been looking for a new CEO ever since.

SNC-Lavalin is a Canadian giant on the international construction and engineering stage. The company reported $7.2 billion in revenues and 28,100 employees in 2011. It is building highways in Alberta and Colombia, hospitals in France, an office tower in Monaco and airports in the Americas, Europe, Russia, Africa, the Caribbean and the Indian Ocean.

It continues to operate the Highway 407 east-west bypass around Toronto and it builds nuclear power plants for Ontario. It works closely with governments, who are its main clients. Gwyn Morgan, former president of EnCana Corporation, became chairman of SNC-Lavalin in 2007, succeeding banker John Cleghorn.

In the murky world of government mega-projects, where bidders are often asked for kickbacks, the Organization for Economic Co-operation and Development, representing governments of the industrialized countries, has been trying to set some minimum anti-corruption standards. The OECD Working Group on Bribery complained last year Canada's Corruption of Foreign Public Officials Act too-narrowly defines the kinds of bribes that are forbidden. Prosecutions are rare and penalties mild. Few police resources have been applied to investigating overseas corrupt practice of Canadian firms. Canada, in short, talks a good game about business ethics overseas but doesn't do much about it.

The Gadhafi family rescue mission in which SNC-Lavalin or its agents may have been involved shows how dangerous it can be for a Canadian firm to venture into the minefield of Third World public works without firm management control and clear legal limits. It may never become wholly clear who was doing what and who was paying for it in the proposed rescue mission, but it is fairly clear already someone at SNC-Lavalin was intimately involved with the Gadhafi family and was caught on the wrong side of the Libyan revolution. The use of intermediaries has not saved SNC-Lavalin's name from damage. The lax state of Canadian bribery law and enforcement gives a Canadian firm little help in refusing the demands of an overseas client.

Mr. Card, the new Mr. Clean at the helm of SNC-Lavalin, plans to learn French before taking up his duties in Montreal in October. He has vast experience in the management of overseas construction and engineering. He may have something to teach SNC-Lavalin and other Canadian firms on the subject of keeping their wits about them when bribery is in the air.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition August 17, 2012 A12

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