Canadian Manufacturing

Ottawa vows legislation allowing firms to settle corporate corruption

Deferred prosecution agreements would potentially allow companies to settle corruption cases and avoid being put at disadvantage when competing against rival firms in G7 countries that have such dispute resolution options


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OTTAWA—The Canadian government is vowing to introduce legislation for corporate wrongdoing that could help SNC-Lavalin Group Inc. address criminal charges.

The government says deferred prosecution agreements (DPA), which were called for in public consultations last fall, will be another tool used by judges to hold companies accountable.

Shares in SNC Lavalin, which faces fraud and corruption charges, increased more than four per cent Friday following the announcement and the company’s results a day earlier that beat analyst expectations.

The firm has argued that the agreements would allow companies to settle corporate corruption cases and avoid being put at a disadvantage when competing against rival firms in G7 countries that have such dispute resolution options.

Ottawa also says it will make enhancements to the Integrity Regime, introduced by the former Conservative government.

No timeline for the legislative changes was provided.

More than 70 submissions were received and more than 370 Canadians, industry associations, businesses, non-governmental organizations and others participated in the consultations.

Public Services and Procurement Canada says addressing corporate wrongdoing protects the integrity of markets and promotes fair competition.

Montreal-based SNC said Thursday that it has a Plan B if suitable legislation isn’t adopted but prefers DPAs.

SNC-Lavalin has pleaded not guilty to the one fraud and one corruption charge filed by the RCMP against SNC-Lavalin and two of its subsidiaries.

The RCMP alleges SNC-Lavalin paid nearly $47.7 million to public officials in Libya between 2001 and 2011 to influence government decisions. It has also charged the company, its construction division and its SNC-Lavalin International subsidiary with one charge each of fraud and one of corruption for allegedly defrauding various Libyan organizations of about $129.8 million.

Convictions could result in companies losing the ability to compete for government business.


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