Efforts by Canada’s SNC-Lavalin to seek a Deferred Prosecution Agreement (DPA) or ‘remediation agreement’ - which recognises an organisation’s wrongdoings whilst protecting innocent employees, shareholders and other third parties - in relation to historic allegations of corruption have been dealt a blow by Canada’s Federal Court.
The legal wranglings are linked to allegations of bribery and financial fraud aimed at former SNC-Lavalin management members to secure business opportunities in Libya dating back to between 2001 and 2011.
The engineering and infrastructure services firm had hoped for a judicial review of the Director of Public Prosecutions (DPP)'s decision last October to proceed with criminal charges rather than allowing remediation. However, the Court has rejected the request.
SNC-Lavalin has made it clear that all senior officials who were investigated since charges were laid in 2015 have since been dismissed.
In response to the court’s decision, the firm was reported in Canadian media to have said: "Our objective was to negotiate a remediation agreement that would have been both in the public interest and in the interest of our innocent stakeholders: our employees, customers, shareholders and pensioners. SNC-Lavalin will vigorously defend itself against the charges in court if no remediation agreement is possible."
In a statement at the end of last year, the company said it had "worked tirelessly over the last six years to remediate itself whilst taking responsibility for others’ actions".
Last October, having previously apologised for the firm’s shortcomings, SNC-Lavalin president and CEO Neil Bruce wrote an open letter setting out the steps taken by the firm since the allegations came to light - including changed leadership at board and management levels, and the development of a "world-class" ethics & compliance framework - and his arguments in favour of a remediation agreement.
Bruce also underlined that continued uncertainty and failure to conclude the process swiftly had already led to the loss of 10,000 highly-skilled Canadian employees from the firm since 2013. Negotiating an agreement would on the other hand protect innocent employees and other stakeholders, encourage transparency and self-reporting, as well as generating jobs, trade and tax revenue. Concluding, he said SNC-Lavalin did not want to be treated differently, nor the past to be forgotten but that it wanted the chance to move forward through a remediation agreement.
Under a remediation deal, the firm could be subject to fines or third-party oversight. If on the other hand it was convicted criminally, SNC-Lavalin could be barred from bidding on federal contracts for ten years.
Bruce - appointed CEO of SNC-Lavalin in 2015 (EA 17-Sep-15) - was named co-chair of the World Economic Forum’s Partnering Against Corruption Initiative (PACI), a CEO-led anti-corruption initiative to which 90 partner companies have signed up worldwide, at the start of 2018.
The affair has engulfed Canadian prime minister Justin Trudeau’s premiership. He has been accused of putting pressure on the country’s former minister of justice and attorney general, Jody Wilson-Raybould, who has since resigned, to avert criminal proceedings. Whilst long established in the US and more recently in European countries, remediation deals or DPAs were only added into Canada’s Criminal Code in September 2018. SNC-Lavalin has been one of the first major Canadian companies to seek such a deal.
According to Canadian media reports, the firm’s last hope of avoiding criminal prosecution rests on Canada’s new Minister of Justice and Attorney General, David Lametti, overturning the DPP’s decision.