Snc-lavalin case prompts attention from global agency

OTTAWA • The Organization for Economic Co-operation and Development’s working group on bribery has issued a press release about Canada on just two occasions in the last decade.

The first came in 2011, when a statement noted that while one of its standard compliance review had found “progress” in the investigation of bribery of foreign officials by Canadian businesses, enforcement was still “problematic in important areas.” The OECD, an intergovernmental group that promotes trade and economic progress, issues similar statements on a regular basis about nearly every country among the 44 that signed on to its anti-bribery pact. Rarely does it flag a more serious problem.

But on Monday, it announced it was closely following the allegations swirling around Canada’s criminal prosecution of the Montreal engineering firm Snc-lavalin. It is only the second time in 20 years it has raised concerns over specific allegations related to its anti-bribery rules.

Drago Kos, who chairs the OECD’S bribery working group, told the National Post Canada is ordinarily a “very credible” presence at the table. Nonetheless his group is paying specific attention to former attorney general Jody Wilson-raybould’s allegations that Prime Minister Justin Trudeau and top officials exerted inappropriate political pressure on her to facilitate a remediation agreement for the company.

As it stands Snc-lavalin is being prosecuted for fraud and bribery in Libya under former dictator Moammar Gadhafi. But if ethics or justice committee investigations bear out that there was political interference in the case, it would mean the Canadian government violated the international standards it agreed to as a founding signatory to the OECD Anti-bribery Convention.

If there is a breach of the rules in this case, the OECD can make recommendations for improvement, but “I really hope there will be no need to do so,” Kos said.

The OECD has no power to enforce the convention, other than to repeatedly name and shame governments that are doing a poor job prosecuting individuals and corporations that use bribery to conduct business abroad. In its 20 years of monitoring the OECD has issued more than 1,500 recommendations across the board, according to its website.

“We are very persistent in making our countries implement the recommendations. Of course countries are sovereign entities so we cannot force them to do anything. We have a whole list of things, let’s say, followup reports again and again, public statements, we can organize a high-level mission,” Kos explained.

Poland needed to make “urgent legislative reforms” in 2018. Sweden’s laws, too, needed “urgent reform” in 2017, even as Finland’s “high acquittal rate” jeopardized its efforts. Ditto Ireland’s in 2016. Belgium was shamed for its “limited implementation” of the convention that same year.

Greece, in 2015, was chastised for neither tackling domestic corruption nor foreign bribery.

Some countries, such as Russia and Argentina, are targeted more consistently for their failures. Repeated statements reproached Argentina for its “serious non-compliance” until, many years after it signed on to the convention, its sitting government introduced a corporate liability bill at the end of 2016.

But as OECD spokesman Spencer Wilson pointed out, there is only one other example in the working group’s history of a statement being made related to allegations regarding a specific case: the drawn-out scandal in the U.K. over corruption and bribery allegations at BAE Systems.

The British government had signed an oil-for-arms deal with Saudi Arabia, with BAE Systems acting as contractor, back in 1985. After sporadic reports of inflated payments by the company in its business dealings over the years, the British Serious Fraud Office began an investigation into irregularities in that deal in 2004.

That investigation was dropped in December 2006. The British government cited national security reasons, but unnamed sources told The Daily Telegraph that Saudi Arabia had given the U.K. an ultimatum: stop the investigation, or lose a major contract.

Dropping the case is what raised the OECD’S ire. The working group issued a stern report stating it had “serious concerns” about the decision’s compliance with the rules and the following year “sharply criticized the United Kingdom’s failure to bring its anti-bribery laws into line with its international obligations.” It went on to follow the U.K.'S compliance closely in the years that followed. As of 2017 the OECD noted enforcement was significantly up.

The U.K.’S Serious Fraud Office had meanwhile investigated BAE for other cases, including alleged bribery in Tanzania, South Africa, the Czech Republic, Chile Romania and Qatar, and the United States launched its own probes into the company’s international dealings, including with Saudi Arabia. Ultimately the two countries co-ordinated a global settlement with BAE in 2010, which included a $400 million fine and its pleading guilty to a criminal charge of conspiring to defraud the U.S.

However, Kos cautioned against making a direct parallel between the U.K. case and today’s allegations in Canada. The statement Monday, he said, “is much milder than the one we issued then.”

RARELY DOES THE OECD FLAG A MORE SERIOUS PROBLEM.