SNC-LAVALIN subsidiary banned from bidding on World Bank projects.
The World Bank Group has debarred SNC-Lavalin Group’s key subsidiary from bidding on World Bank projects for 10 years following the company’s misconduct in two projects, including a $1.2-billion bridge project in Bangladesh.
The decade-long debarment is the longest ever levied by the bank’s anticorruption unit and follows its investigation into allegations of a high-level corruption conspiracy involving SNCLavalin Inc. and officials in Bangladesh.
The Montreal-based company participated in “misrepresentations” when bidding for bank-financed contracts and conspired “to pay bribes,” the bank said Wednesday.
While the investigation into the Padma Multipurpose Bridge Project contract was ongoing, the bank said it learned of misconduct by SNC-Lavalin Inc. in relation to a bank-financed rural electrification and transmission project in Cambodia.
“Once we had evidence of the company’s misconduct, we referred the matter to the Royal Canadian Mounted Police whilst the World Bank finalized its investigation,” Leonard McCarthy, World Bank Integrity vice-president said in a statement.
“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 projects.”
SNC-Lavalin Inc. represents more than 60 per cent of SNC-Lavalin Group’s business, the bank said.
The negotiated settlement also covers over 100 affiliates of the SNC subsidiary.
In its statement, SNC noted that the settlement does not include a financial penalty.
“Historically, revenues generated from projects in the affected subsidiaries that are financed by the World Bank” and related development banks represent about one per cent of the parent company’s annual revenues, SNC said.
“The company’s decision to settle signals our deter- mination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach,” Robert Card, SNC’s president and CEO, said in a statement.
“The company has already taken, and will continue to take, measures to ensure rigorous compliance and control procedures are in place.”
The debarment can be reduced to eight years if the companies comply with all conditions of the agreement. The remainder of the SNCLavalin Group faces debarment if they fail to comply with the terms and conditions of the agreement.
In November, Quebec’s anti-corruption squad charged former SNC CEO Pierre Duhaime and Riadh Ben Aïssa, the former head of the company’s construction arm, with fraud in connection with construction of the McGill University Health Centre super hospital.