REMEDIATION AGREEMENTS AND SNC-LAVALIN

What are they?

Remediation Agreements are a relatively new concept in Canada. They were introduced into the Criminal Code as part of the 2018 Budget Implementation Act (s.404). This section is in ‘Part 6 – Various Measures’. There is a discussion to be had regarding the propriety of dropping items unrelated to the government’s finances in the BIA, but that is a discussion for another day.

S. 715.31 sets out the purposes of a remediation agreement. They are to denounce the conduct in question, hold the organization accountable, contribute to the culture of respect for law by imposing a compliance regime, encourage voluntary disclosure, and provide reparations. The final object appears to be the most relevant in the discussion of SNC-Lavalin:

(f) to reduce the negative consequences of the wrongdoing for persons — employees, customers, pensioners and others — who did not engage in the wrongdoing, while holding responsible those individuals who did engage in that wrongdoing.

When is an agreement appropriate?

The next section then sets out the conditions for the agreement. Among them are that there is a reasonable prospect of conviction, that negotiating the agreement is in the public interest, that there was no bodily injury, and the act was not injurious to national security. There is one more condition –particularly relevant with respect to the controversy around SNC-Lavalin– that the Attorney General consent to the remediation agreement.

Why is this last criteria particularly relevant? The reason is that it means that the AG is acting in a quasi-judicial role. She must satisfy herself that the criteria have been met under the Criminal Code. Let’s look at this in a different light. Suppose that the Director of Public Prosecution had determined that a remediation agreement was appropriate and was recommending it to the AG. Would it have been appropriate for the AG to embark upon a secret fact finding expedition that was not disclosed to the DPP or the accused and then withhold the consent? I think the law is pretty clear that this would be highly problematic. This leads to the conclusion that the AG’s decision with respect to a remediation agreement should be made based upon the record.

S. 715.32(2) lists a number of factors to be considered in deciding whether a remediation agreement is appropriate. What is interesting is that the next subsection states:

(3) Despite paragraph (2)(i), if the organization is alleged to have committed an offence under section 3 or 4 of the Corruption of Foreign Public Officials Act, the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved.

Allegations against SNC-Lavalin

The charges that were laid against SNC-Lavalin in 2015 relate to allegedly corrupt actions in relation to its work in Libya. According to this article from AdvocateDaily.com:

Police allege that between 2001 and 2011 SNC-Lavalin paid nearly $47.7 million to public officials in Libya to influence government decisions. It also charged the company, its construction division and its SNC-Lavalin International subsidiary of defrauding various Libyan organizations of about $129.8 million.

These charges were under the Corruption of Foreign Public Officials Act and the Criminal Code.

It is also interesting to note that SNC-Lavalin executives have been charged in relation to construction of a dam in Bangladesh. As a result of these allegations, in 2013 the World Bank barred SNC-Lavalin from bidding on any projects for a period of ten years. According to the World Bank’s press release this was part of a ‘Negotiated Resolution Agreement’ with SNC-Lavalin.

In addition to the Libya charges, the CBC has compiled this helpful interactive map of contracts around the world where SNC-Lavalin’s conduct is in question.

Applying the factors

Let’s look at the factors in 715.32 in the most charitable light:

(2) For the purposes of paragraph (1)(c), the prosecutor must consider the following factors:

(a) the circumstances in which the act or omission that forms the basis of the offence was brought to the attention of investigative authorities; At best this factor is neutral. There is no evidence of self-reporting and no publicly reported evidence of cooperation with authorities in any of the investigations.

(b) the nature and gravity of the act or omission and its impact on any victim; Negative factor. Corruption of public officials is by definition the undermining of the rule of law.

(c) the degree of involvement of senior officers of the organization in the act or omission; Negative factor. Some of the most senior officials of SNC-Lavalin were allegedly involved.

(d) whether the organization has taken disciplinary action, including termination of employment, against any person who was involved in the act or omission; Positive factor. There have been extensive terminations.

(e) whether the organization has made reparations or taken other measures to remedy the harm caused by the act or omission and to prevent the commission of similar acts or omissions; Positive factor. This conclusion is based upon taking the comments of the company at face value although I have seen no evidence of reparations being paid to Libya. SNC-Lavalin appears to want to make payment of reparations conditional upon the government entering into an deferred prosecution agreement tends to diminishes the weight given to this factor.

(f) whether the organization has identified or expressed a willingness to identify any person involved in wrongdoing related to the act or omission; Charitably a positive factor. I have seen little evidence of cooperation.

(g) whether the organization — or any of its representatives — was convicted of an offence or sanctioned by a regulatory body, or whether it entered into a previous remediation agreement or other settlement, in Canada or elsewhere, for similar acts or omissions; Negative factor. Has entered into other remediation agreements. There is a long list of alleged contraventions around the world. There are also outstanding proceedings involving SNC-Lavalin employees and corrupt practices in Canada. This also includes a compliance agreement with the Commissioner of Elections in relation to illegal political donations.

(h) whether the organization — or any of its representatives — is alleged to have committed any other offences, including those not listed in the schedule to this Part; and Negative factor. See comment above.

(i) any other factor that the prosecutor considers relevant. Nil. Pursuant to subsection 3 the DPP is prohibited from considering national economic interests because of the nature of the charges.

On balance it appears that the negative factors greatly outweigh the positive.


Author: Tom Jarmyn