WB expels SNC-Lavalin for 10 yrs

                            WB expels SNC-Lavalin for 10 yrs

 

A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal, May 7, 2009. Photo: Reuters

The World Bank has expelled Canadian company SNC-Lavalin and over 100 of its partners for 10 years following the company’s misconduct in connection with Bangladesh’s Padma bridge project, according to a statement of the global lender.

Due to the bar, the Canadian engineering firm and its subsidiaries will not be able to take part in any bidding on any of the WB’s development projects for the next decade, said the WB statement published on April 17.

Click here for the full WB statement.

The bank took the decision after SNC-Lavalin admitted that it conspired to bribe several Bangladeshi public officials in an effort to secure a US$50-million bridge contract, said the statement.

SNC-Lavalin Inc is a subsidiary of SNC-Lavalin Group and represents more than 60 percent of its business.

The WB’s announcement about SNC also expanded the list of countries where the embattled engineering company has been accused of corruption.

The global lender said it has uncovered evidence that SNC conspired to bribe public officials in Cambodia and that it has passed that information along to the Royal Canadian Mounted Police, who are already probing the company’s activities in Libya, Algeria and Bangladesh.

The debarment is part of a Negotiated Resolution Agreement between the World Bank and SNC-Lavalin Group following a WB investigation into allegations of bribery schemes involving SNC-Lavalin Inc and officials in Bangladesh.

While the investigation was ongoing, the World Bank’s integrity vice presidency also learned of misconduct by SNC-Lavalin Inc in relation to the WB-financed Rural Electrification and Transmission project in Cambodia.

The debarment can be reduced to eight years if the companies comply with all conditions of the agreement.

The remainder of the SNC-Lavalin Group has been conditionally non-debarred for the same period of time.

Under this sanction, the remainder of SNC-Lavalin Group faces debarment if they fail to comply with the terms and conditions of the agreement, said the Washington-based multilateral lender.

“This case is testimony to collective action against global corruption,” said Leonard McCarthy, World Bank integrity vice president.

“Once we had evidence of the company’s misconduct, we referred the matter to the Royal Canadian Mounted Police whilst the World Bank finalised its investigation. 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,” the integrity vice president of the WB added.

SNC-Lavalin’s misconduct involved a conspiracy to pay bribes and misrepresentations when bidding for WB-financed contracts in violation of the World Bank’s procurement guidelines.

Under the agreement, the SNC-Lavalin Group and its affiliates commit to cooperating with the World Bank’s integrity vice presidency and continuing to improve their internal compliance program.

The debarment of SNC-Lavalin Inc qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.

The World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalising on the experience of a multilingual and highly specialised team of investigators and forensic accountants.

The WB cancelled its $1.2 billion credit for the Padma bridge project on June 30 last year, saying it has proof of corruption conspiracy involving Bangladeshi officials, executives of a Canadian firm and individuals.

Earlier, the WB temporarily barred a unit of SNC-Lavalin from bidding in new World Bank projects following an investigation into the Padma bridge project.

SNC-Lavalin had submitted its bid to act as the owner’s engineer for the Bangladesh government to supervise the contractor responsible for Padma bridge construction.

Following a WB request, the Royal Canadian Mounted Police (RCMP) launched an investigation against the Canadian company on October in 2011.

It raided SNC-Lavalin office, seized documents from there and arrested former chief executive Pierre Duhaime, Bangladeshi-born Canadian citizen Ismail Hossain and Indian-born Canadian citizen Ramesh.

The RCMP claimed that they had gleaned information from the detainees and found proof of various irregularities regarding the consultant’s appointment for the bridge project.

It also claimed that the SNC-Lavalin had offered several influential Bangladeshis, including former communications minister Syed Abul Hossain, fat bribes to obtain the consultant’s job in the bridge project.

The five others, whose names came up in the RCMP investigation, are: Abul Hasan Chowdhury, ex-state minister for foreign affairs, Mosharraf Hossain Bhuiyan, ex-secretary of the Bridges Division of the communications ministry, Rafiqul Islam ex-director of Padma Multipurpose Bridge project, Mujibur Rahman Chowdhury alias Nixon Chowdhury, civil contractor and younger brother of parliament whip Noor-E-Alam Chowdhury, and Ziaul Huq, managing director of Engineering and Planning Consultant Ltd (CEP), who represented SNC-Lavalin in the Padma bridge tender, said ACC sources.