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SNC-Lavalin Continues To Pout

Child Crying

But Mom / Dad, when Johnny gets into trouble his parents do things a little bit differently, why can’t I benefit from that?

That was my reaction in this February 2015 post when SNC-Lavalin was criminally charged by Canadian authorities for alleged improper payments to Libyan officials. Upon being charged, the company issued this release stating:

“It is important to note that companies in other jurisdictions, such as the United States and United Kingdom, benefit from a different approach that has been effectively used in the public interest to resolve similar matters while balancing accountability and securing the employment, economic and other benefits of businesses.”

In the meantime, much has happened in Canada. As highlighted in prior posts herehere, and here Canada considered and ultimately adopted deferred prosecution agreements (referred to as remediation agreements). During the  consultation process, the Canadian government learned, unsurprisingly, that businesses prefer less harsh criminal sanctions (see here).

Last week SNC-Lavalin’s pouting continued as the company disclosed:

“SNC-Lavalin has been advised  by the Director of the Public Prosecution Service of Canada (DPPSC) that at this time they will not invite SNC-Lavalin to negotiate a Remediation Agreement. SNC-Lavalin strongly disagrees with the DPPSC’s current position and remains open and committed to negotiating such an agreement in the interest of its employees, partners, clients, investors, pensioners and other stakeholders, all innocent parties that have been affected during the last six years, and now face an unnecessary extended period of uncertainty.

The Company will continue to operate as it has since the charges were laid in 2015, focused on bringing value to its shareholders and other stakeholders by continuing to offer industry leading engineering and professional services and by growing its business, all the while vigorously defending itself against the charges. The Company is reviewing its options to appeal this decision.

The government of Canada undertook an exhaustive legislative process that led to the adoption of a Remediation Agreement regime permitting companies to defer prosecution in exchange for fines, remediation and cooperation. This regime enables fair, effective and globally competitive resolution of issues for Canadian corporations, if companies admit wrongs, make compensation, pay fines, cooperate and help ensure the individuals responsible are held to account.

A key purpose of the legislation is “to reduce the negative consequences of the wrongdoing for persons — employees, customers, pensioners and others — who did not engage in the wrongdoing, while holding responsible those individuals who did engage in that wrongdoing.” The Company believes that the legislation should be utilized to its intent with regards these innocent stakeholders.

Since 2012, SNC-Lavalin has developed and built a world-class ethics & compliance framework. This has been embodied to the extent that ‘Integrity’ has become one of the Company’s core values, and the Integrity function within SNC-Lavalin has a remit beyond traditional ethics & compliance.  The Company has co-operated fully with regulatory and government authorities. The Company has tirelessly worked towards a world class ethics and compliance culture through numerous means, which remain unaffected by [this] update, including:

Changed leadership at Board and Management levels with an enhanced culture of Integrity

Established a world-class ethics & compliance framework

Signed an administrative agreement concerning ethics and compliance with Public Services and Government Services Canada to continue our eligibility to provide services to the government of Canada

Reached an agreement with the Commissioner of Canada Elections

Concluded in 2016 an agreement between engineers and ex-engineers of SNC-Lavalin and the syndic’s Office of the Ordre des ingénieurs du Québec following investigations about political contributions

Reached a fair and final settlement with Quebec’s voluntary reimbursement program

Autorité des marchés financiers (AMF) certification renewed

Settled class actions in Quebec and Ontario filed in 2012 on behalf of security holders”

Once again, but Mom / Dad, when Johnny gets into trouble his parents do things a little bit differently, why can’t I benefit from that?

This is what happens when government so distorts traditional law enforcement functions. In the bribery and corruption space, the U.S. started this and the U.K., France, Canada and other countries have followed.

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