Canadian Manufacturing

Quebec economic development minister worried about SNC-Lavalin’s future

Jacques Daoust concerned after SNC-Lavalin hit with fraud, corruption charges for decade-long dealings in Libya

MONTREAL—Quebec’s economic development minister said he is worried about SNC-Lavalin Group Inc.’s future in the face of corruption and fraud charges against the engineering giant over its dealings in Libya.

Jacques Daoust described the Montreal-based company as a “jewel,” calling it one of the province’s few global companies and one that needs to be preserved “at all cost.”

The RCMP alleges that between 2001 and 2011, SNC-Lavalin paid nearly $47.7 million to public officials in Libya to influence government decisions.

It also charged the company, its construction division, SNC-Lavalin Construction Inc., and its SNC-Lavalin International Inc. subsidiary of defrauding various Libyan organizations of about $129.8 million.

Three individuals—two former SNC executives and one of their lawyers—were previously charged by the RCMP as part of the investigation that began in 2011.

Although it is up to the provincial securities regulator’s authority to decide if companies are eligible to bid on provincial contracts, Daoust told reporters he believes Quebec should continue to grant SNC-Lavalin that right even if it is barred at the federal level in the event of a conviction.

Daoust added that a potential 10-year bidding ban on federal contracts under Ottawa’s so-called integrity framework is excessive.

“It has a lot of expertise and if it can’t go after contracts it would be unfortunate if their skills based in Quebec are put at risk,” he said.

SNC-Lavalin said it will plead not guilty to the charges.

On Thursday, it said companies facing similar problems in the United States and United Kingdom benefit from a different approach that considers the “public interest” by “balancing accountability and securing the employment, economic and other benefits of businesses.”

Daoust said individuals should face charges for illegal actions but not the company that has worked to cleanse its operations of the alleged problems that happened years ago.

“It is no longer the company it was and it was individuals that did those things,” he said. “So blame the individuals but don’t destroy the economy (by hurting the company).”

SNC-Lavalin has about 45,000 employees around the world, including 16,650 in Canada, in oil and gas, mining, water, infrastructure and power sector projects.

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