SNC-Lavalin Inc.-associated companies involved in some of British Columbia's biggest transportation projects – from the Canada Line to Vancouver International Airport to the Sea-to-Sky Highway – are among those suspended from receiving World Bank financing for the next 10 years.
World Bank's fraud and corruption suspension was issued Wednesday against the embattled Montreal engineering giant – including its 100-plus affiliates – over bribes related to the Padma Multipurpose Bridge Project in Bangladesh and Rural Electrification and Transmission Project in Cambodia.
Details of the negotiated settlement were not published. The World Bank referred the matter to the RCMP, according to a statement from its vice-president of integrity Leonard McCarthy.
"Going forward, I hope that SNC-Lavalin's commitment under this agreement represents meaningful action in deterring the risks of fraud and corruption to development," McCarthy said.
The penalty includes cross-debarment from the African Development Bank, Asian Development Bank, Inter-American Development Bank and European Bank for Reconstruction and Development. The 10-year ban expires April 17, 2023, but may be reduced to eight years if compliance requirements are met.
SNC-Lavalin senior vice-president Leslie Quinton downplayed the impact on Vancouver operations, which include the company's vast transportation division under vice-president James Burke at 1075 West Georgia.
"Only projects that have [World] Bank financing are affected, so none of the projects in Vancouver are affected," Quinton said. "We did not have much say in who they decided to suspend."
SNC-Lavalin is a partner in BC Ferries' $55 million-a-year Terminal Asset Management, was the owner's engineer for the $800 million Sea-to-Sky Highway Improvement Project and is the owner's representative and project and construction manager for Vancouver International Airport, the terminus of the $1.9 billion, SNC-Lavalin-built Canada Line. The 2009-opened SkyTrain line's operator, Protrans BC, is on the World Bank blacklist.
SNC-Lavalin's Okanagan Lake Concession Ltd. was involved in the $144 million Bill Bennett floating bridge private-public partnership in Kelowna and was hired last October to lead the designing, building and financing of the $1.4 billion Evergreen Line rapid transit extension. Calgary-registered Evergreen Rapid Transit Holdings and SNC-Lavalin Evergreen Line Holdings Inc. are on the World Bank blacklist.
The World Bank also named SNC-Lavalin's: Pacific Liaicon and Associates and Harder Associates Engineering Consulting; Shenyang SNC-Lutong (Canada) Co. Ltd.; SNC-Lavalin Airport Management Inc.; SNC-Lavalin Builders Inc.; SNC-Lavalin Constructors (Western) Inc., SNC-Lavalin Constructors (Eastern) Inc. and SNC-Lavalin Constructors (Pacific) Inc.; SNC-Lavalin Equity (B.C.) Inc. and SNC-Lavalin Holding Inc.
The list includes federally registered, SNC-Lavalin controlled numbered companies (4246047 Canada, 4246241 Canada and 4470184 Canada) c/o Davis LLP in Vancouver and Cayman Islands-registered BC Hydro International Transpower Corp. and IPC Transpower Corp., which were sold in 1997 and 1999, respectively, to SNC-Lavalin.
"BC Hydro now has no ownership interest, operations or activities with these companies," said BC Hydro spokeswoman Simi Heer.
Quinton said a lot of the smaller affiliates were acquisitions and some are inactive.
"Even though many of those affiliates may have never touched or been involved in a World Bank-financed project, they're all subject to the conditions of the settlement," she said.
Delta-native Alexandra Wrage is president of TRACE International, a non-profit, anti-bribery organization based near Washington, D.C. Wrage said SNC-Lavalin could not avoid the hefty penalty because its bargaining power has eroded with each scandal.
"SNC-Lavalin is no longer in a position to say this was a rogue employee, this was not a systemic problem," Wrage told BIV. "This is a reputational matter even in countries that were not implicated. In this position everyone looks a little closer at the transactions, everyone is a little bit more cautious proceeding because the extent this was considered an acceptable business practice within the company historically."
BC Liberal Transportation Minister Mary Polak was not available for comment. On March 23, she told BIV "we don't have any concerns" about SNC-Lavalin building the Evergreen Line and claimed the hiring of fairness monitor Jane Shackell to oversee bidding was sufficient to safeguard taxpayers.
Miller Thomson's Shackell, however, told BIV that her role was not to vet the bidders.
"I'm not really reporting on anything other than the process," Shackell said. "The evaluation committee reports to the project board about who the bidders are and who's successful."
Ex-CEO Pierre Duhaime is the highest-ranking former SNC-Lavalin executive among several who have been charged with corruption. Duhaime is accused of fraud, conspiracy and forgery in Quebec. The company had more than $8 billion in revenue from operations in more than 100 countries where it employed 33,900 people in 2012.
SNC-Lavalin chair Gwyn Morgan is stepping down at the company's May 2 annual general meeting. Morgan was part of Premier Christy Clark's transition team after she won the BC Liberal leadership in February 2011.