Canadian Manufacturing

SNC’s new CEO wants Ottawa to adopt corporate corruption settlement deals

Current system putting Canadian businesses at disadvantage when competing against rival firms, Bruce says

MONTREAL—SNC-Lavalin’s CEO wants the new federal government to allow companies to settle corporate corruption cases – as what happens in the United States and United Kingdom – so that Canadian firms can remain globally competitive.

In his first speech since taking control of Canada’s largest engineering company last month, Neil Bruce said federal corruption charges laid against a few of SNC-Lavalin’s legal entities unfairly point the finger at 40,000 employees who did nothing wrong.

Instead, Canada should allow corporate settlements outside the court system so that SNC-Lavalin and other Canadian businesses are not at a disadvantage when competing against rival firms in other G7 countries, Bruce said.

“With the great strides we have made in our goal to be both a Quebec and Canadian player on the global stage, nevertheless we still have to deal with the reality of the current business environment in Canada which presents real challenges to a company like ours,” he told the Montreal Council on Foreign Relations on Tuesday.

Bruce said the Montreal-based company is willing to reach a “reasonable and fair solution on issues of the past,” but changes are needed to allow companies to deal with their actions, pay fines and move on.

He said countries that have so-called deferred prosecution agreements have found that companies and people who perpetrate illegal actions are held to account more swiftly.

The system encourages companies to be transparent with authorities about ethics issues and allows for settlements, including improved internal monitoring and compliance, he said.

“This is not a way of the company getting away from its responsibilities,” he later told reporters after his speech.

But it would allow them to avoid questions about why they don’t settle and whether criminal charges make them ineligible to compete for contracts.

“Every time we talk to potential clients we need to explain, go to great lengths around the fact that although we’ve been charged we have not been found guilty and we are pleading not guilty to the charges,” Bruce said in a subsequent interview.

While he said the proposed changes are likely not a priority for federal politicians, Bruce hopes they will look at this option closely and work with civil servants and the judiciary to put something similar in place.

“For us, it’s such a huge important issue,” he said. “We’d really like to get into dialogue about accepting proportionate responsibility for what’s been done and move on.”

SNC’s former CEO, Robert Card, made a similar approach to the previous Conservative government, which changed anti-corruption rules last July but didn’t provide a pathway outside the legal system.

Companies are barred from government contracts for 10 years if they have been convicted of bribery, money laundering or other offences in the past three years. But that ban can be cut in half if the company co-operates with authorities and takes remedial action.

Canada’s business lobby has been urging Ottawa to make changes to procurement rules which it said were “out-of-step with Canada’s trading partners and affecting investment decisions.”

Bruce said SNC-Lavalin has improved its ethics and compliance programs since issues first surfaced nearly four years ago, before it was charged with fraud and corruption over its dealings in Libya.

The company has said it will plead not guilty to the charges. The case will return to court on Feb. 26.

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