CN AND CP MAY BE HEADED FOR BIDDING WAR OVER U.S. LINE.

• SNC-LAVßALIN Group Inc. said the World Bank Group has lifted sanctions on the company two years early, allowing the Montreal-based builder to resume bidding on a wide range of international projects.

SNC was debarred by the World Bank in 2013 for 10 years due to misconduct in relation to a bridge project in Bangladesh. The move followed an investigation by the Washington-based lender into allegations of bribery schemes involving SNC and Bangladesh officials.

Tuesday’s decision, which follows a thorough assessment and monitoring process by World Bank authorities and an independent monitor, “confirms that Snc-lavalin has met all the settlement agreement’s terms and conditions,” the company said in a statement. SNC is now eligible to bid, win and complete projects financed by the World Bank, the African Development Bank, the European Bank for Reconstruction and Development, the Asian Development Bank and the Inter-american Development Bank.

The announcement is “a positive development for the company from a reputational perspective,” Sabahat Khan, an analyst at RBC Capital Markets in Toronto, said in a note to clients. “This indicates that SNC has made good progress through its ‘Integrity Program’ and the company’s efforts on this front are being recognized by its stakeholders.”

World Bank-associated revenue at the time of the settlement in 2013 represented about one per cent of SNC’S annual sales, Khan said.

Even so, the World Bank’s decision is “pretty major because it’s got a global impact,” Hentie Dirker, SNC’S chief integrity officer, said Tuesday in a telephone interview. “The ban had a big impact on us as it relates to our business, our employees and our reputation. What we found is that a lot of companies out there rely on the World Bank debarment list as part of their due diligence exercises to determine who they want to deal with. So there was quite a lot of outflow that negatively affected us.”

The lifting of World Bank sanctions comes about 18 months after SNC’S construction arm pleaded guilty to committing fraud “against various Libyan authorities” and agreed to pay $280 million in fines over five years.

While the settlement imposed a three-year probation order on Snc-lavalin Construction, it more importantly ended all charges against the parent company and its international marketing arm, Snc-lavalin International. It also eliminated the threat of a prolonged corruption trial.

Simply put, SNC is a different company than the one that routinely became entangled in unsavoury practices in countries such as Libya more than a decade ago. It has a new top management team, a new board of directors and an integrity program — led by Dirker, who reports directly to the board — that aims to prevent, detect and punish wrongdoing. Key features include compulsory training for all employees, annual code of conduct certification, mandatory “integrity checks” of suppliers and third parties, and an anonymous hotline to report possible problems.

“The company went through a complete reinvention over the past eight years,” said Dirker. The South African executive runs a global team of 38 people that oversees SNC’S integrity program.

Staff recruitment efforts should benefit from this decision, as will employee morale, Dirker said.

The way Dirker sees it, the World Bank decision shows “you can globally do business in an ethical way. There’s always going to be good business and there’s going to be bad business. It’s up to a company to make sure that you go after the good business and train your employees to be able to identify the bad business and call it out.”

SNC shares, up about 25 per cent since beginning of the year, closed up 0.3 per cent at $27.30 in Toronto on Tuesday.