Like this article? rabble is reader-supported journalism. Chip in to keep stories like these coming.
While most Canadians proudly recognize the beaver, the hockey player and the curling broom as symbols of this country, some of us would be made uncomfortable by another enduring emblem of the Great White North: a businessman wearing a Maple Leaf lapel pin discretely passing a plain manila envelope stuffed with cash to a foreign official.
Two weeks ago SNC-Lavalin agreed to pay $1.5 million to settle a corruption case brought against it by the African Development Bank. Accused of bribing officials in Uganda and Mozambique, the Montréal-based company also accepted a number of other non-monetary conditions on its operations to avoid being blacklisted from projects financed by the African Development Bank.
Over the past half-decade Canada’s biggest engineering company is alleged to have greased palms in Libya, Algeria, Tunisia, Angola, Nigeria, Mozambique, Ghana, Malawi, Uganda and Zambia as well as a number of Asian countries and Canada. A joint CBC/Globe and Mail investigation of a small Oakville based division of SNC uncovered suspicious payments to government officials in connection with 13 international development projects. In each case, between five and 10 per cent of costs were recorded as “‘project consultancy cost,’ sometimes ‘project commercial cost,’ but [the] real fact is the intention is [a] bribe,” a former SNC engineer, Mohammad Ismail, told the CBC.
In Libya, the RCMP accused SNC of paying $50 million to Saadi Gadhafi, son of the late Libyan dictator, in exchange for a series of contracts. The company is also alleged to have defrauded $130 million from Libyan public agencies. In a less high-profile incident, the RCMP accused SNC of paying $6-million to the son-in-law of former Tunisian dictator Zine al-Abidine Ben Ali in exchange for assistance securing contracts.
In Angola, SNC allegedly paid millions of dollars to government officials in exchange for a hydro dam contract. Former SNC employee Joseph Salim sued the company for wrongful dismissal, claiming he was terminated after he blew the whistle on the illegal payments. Salim alleged that SNC’s former CEO, Jacques Lamarre, agreed to pay a 10 percent “agent fee” but company officials were unwilling to declare more than five percent on the books, which necessitated artificially increasing the price of the dam.
In northern Nigeria, SNC officials allegedly paid 1.2 million naira in cash — nearly five times the annual average Nigerian salary — to a government official responsible for a World Bank-funded water and sewer project. One company spreadsheet noted that money was “paid to Musa Tete [the Nigerian bureaucrat overseeing the World Bank-financed project] through Yaroson,” SNC’s Nigerian partner.
As allegations of SNC bribery began to seep out in 2012, the company continued to win billions of dollars in Canadian government contracts, maintained the backing of the Canadian Commercial Corporation and garnered support from Canadian diplomats abroad.
Canada has been quick to denounce corruption in Africa, but has lagged behind the rest of the G7 countries in criminalizing foreign bribery. For example, into the early 1990s, Canadian companies were at liberty to deduct bribes paid to foreign officials from their taxes, affording them an “advantage over the Americans” — they’re forbidden by law to pay out agents’ commissions,” according to Bernard Lamarre former head of Lavalin (now SNC-Lavalin).
In 1977, the US Foreign Corrupt Practices Act outlawed bribes to foreign officials. Ottawa failed to follow suit until the Organisation of Economic Co-operation and Development (OECD) launched its anti-bribery convention in 1997. The OECD convention obligated signatories to pass laws against bribing public officials abroad and two years later Canada complied, passing the Corruption of Foreign Public Officials Act (CFPOA). Still, for the next decade Canadian officials did little to enforce the law.
The RCMP waited until 2008 to create an International Anti-Corruption Unit and didn’t secure a significant conviction under the CFPOA until 2011.
Anti-corruption watchdogs have repeatedly criticized Ottawa’s lax approach. A March 2011 report from the OECD Working Group on Bribery criticized Canada’s framework for combating foreign corruption and Ottawa has fared poorly in Transparency International’s rankings. In 2013 Transparency International complained that between 2005 and 2011, Canada exercised “little to no enforcement of the OECD Anti-Bribery Convention.” The group repeatedly ranked Canada the worst performer among G7 countries on this front.
Last week Toronto-based Kinross Gold disclosed that the United States Department of Justice launched an investigation into “improper payments made to government officials and certain internal control deficiencies” at its operations in Ghana and Mauritania. In my new book, Canada in Africa: 300 years of Aid and Exploitation, I detail numerous reports of Canadian companies accused of bribing officials.
While the federal government recently strengthened anti-bribery legislation, Ottawa has so far largely turned a blind eye to corporations paying off public officials abroad.
Should bribery really be seen as “Canadian” as the RCMP’s Musical Ride?
Like this article? rabble is reader-supported journalism. Chip in to keep stories like these coming.
Support rabble today!
We’re so glad you stopped by! Thanks for consuming rabble content this year.
rabble.ca is 100% reader and donor funded, so as an avid reader of our content, we hope you will consider gifting rabble with a donation during our summer fundraiser today.
Whether it be a one-time donation or a small monthly contribution, your support is critical to keep rabble writers producing the work you’ve come to rely on as a part of a healthy media diet.
Become a rabble rouser — donate to rabble.ca today.
Nick Seebruch, editor
