Canada leads World Bank blacklist of fraudulent companies thanks to SNC-Lavalin
Scandal-plagued engineering firm and other Canadian companies make up a fifth of the list
Exterior of the SNC-Lavalin building in Montreal as RCMP officers carry a raid out on offices at the international engineering firm, Friday April 13, 2012.
Canada leads the world in companies and individuals that have been banned by the World Bank from contributing to international aid and infrastructure projects.
Of the 608 companies and individuals listed on the World Bank’s just-released blacklist for fraudulent or corrupt conduct, 119 are Canadian companies. But engineering firm SNC-Lavalin and its subsidiaries, many of which are registered outside Canada, comprise 16 per cent of the total.
The World Bank bans companies from participating in aid and development contracts if they “have been sanctioned under the Bank’s fraud and corruption policy.”
The number of companies included on that list soared in 2013, rising from only 65 banned entities on last year’s list, according to the South China Morning Post. The World Bank says about $40 billion of the roughly $200 billion it has given out since 2008 has been stolen.
Companies with head offices listed in Canada, which does not include overseas subsidiaries, comprise 119 names on the World Bank list, the most of any country. The U.S. is second with 44 debarred firms, Indonesia third with 43 and Britain close behind with 40.
The grounds for getting blacklisted vary, but usually include some manner of bribery, fraud, collusion, coercion or obstruction either in bidding for contracts or in carrying them out.
The RCMP raided the Montreal headquarters of the engineering and construction giant in April as part of an investigation into $56 million in mysterious payments. One multimillion-dollar payment allegedly went to the family of former Tunisian dictator Zine el Abidine Ben Ali to win construction contracts in the North African country. The company also had ties to Libya’s former dictator Moammar Gadhafi.
The former CEO of SNC-Lavalin, Pierre Duhaime, was charged with fraud in late 2011 in connection with the Quebec anti-corruption commission, which has been probing corruption in the province’s construction sector.
Last Updated: April 29, 2016
World Bank investigators don't have to testify in SNC-Lavalin bribery case, Supreme Court rules
SNC-Lavalin engineer turns Crown witness in Bangladesh bribery case
Former SNC-Lavalin executives accused of bribery in Bangladesh are facing two pieces of potential bad news: one from the Supreme Court of Canada and the other from an engineer who is prepared to testify against his former bosses.
The Supreme Court ruled Friday that the World Bank's anti-corruption staff have immunity and don't have to appear in court in Toronto to provide information about the whistleblowers who first sounded an alarm about the engineering giant's efforts to secure a supervision and advisory contract for the $3-billion Padma Bridge project in Bangladesh.
Lawyers for former senior vice-president Kevin Wallace had argued the defence should be able to examine bank records and challenge the World Bank investigators because they initially tipped off the RCMP, who then set up wiretaps to investigate the SNC-Lavalin employees.
SNC-Lavalin agrees to 10-year ban from World Bank projects
CBC News · Posted: Apr 17, 2013 4:11 PM ET | Last Updated: April 17, 2013
Montreal-based engineering firm SNC-Lavalin Inc. has settled a complaint from the World Bank that will see the company forbidden from bidding on any projects funded by the international monetary body for at least 10 years.
While the specific terms of the settlement are confidential, SNC-Lavalin said in a release Wednesday it has agreed to be suspended from bidding on any construction projects that are backed by the World Bank for the next decade.
The ban applies specifically to SNC-Lavalin Inc., a subsidiary of SNC-Lavalin Group, and any "controlled affiliates."
The World Bank has not commented on the reason for the complaint or the settlement.
SNC-Lavalin is embroiled in an ongoing scandal surrounding improper payments the company may have made to secure construction contracts in North African nations including Libya under Moammar Gadhafi.
Last fall the company's former CEO, Pierre Duhaime, was arrested and charged with fraud in connection with the contract to build the McGill University superhospital in Montreal.
And just last month, a top executive with the company admitted to dubious political donations while testifying at the Charbonneau commission, which is looking into corruption in Quebec's construction industry.
"The company's decision to settle signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach," SNC-Lavalin CEO Robert G. Card said. "The company has already taken, and will continue to take, measures to ensure rigorous compliance and control procedures are in place."
In the release, SNC-Lavalin noted that World Bank-funded projects currently make up less than one per cent of its revenues.
- An earlier version of this story reported that the ban covered SNC-Lavalin, its subsidiaries and controlled affiliates. In fact, the ban applies to SNC-Lavalin Inc., a subsidiary of SNC-Lavalin Group.
Apr 17, 2013 5:50 PM ET