Bad Habits from Abroad: SNC -Lavalin and Overseas Contracts

It is not so often news surrounding Canadian politics manage to outshine the proverbial black hole known as the US political news cycle. The still growing SNC-Lavalin scandal is one of the few Canadian news items that seem to have enough staying power to overcome what can sometimes feel like an American monopoly of our news cycles. As this not SNC’s time in the spotlight, one begins to wonder why it is so adept seemingly at attracting the wrong sort of publicity.

To give some context to SNC-Lavalin, it is prudent to understand what SNC does in  in operational terms besides bribing the sons of Libyan dictators with lavish Toronto condo renovations and attempting to influence the highest levels of Canadian government. SNC-Lavalin’s core lies in its engineering procurement and project management business. In total SNC has over 50,000 employees spread over offices in 50 countries and further operations in 160 total countries, making it a true MNC as defined in this class. This scale of operations makes SNC one of the largest engineering/construction firms in the world, rivaling giants like the infamous Bechtel corporation.

Both Bechtel and SNC are infamous for their roles in many different scandals, so the question must be asked, is there something about the engineering/construction management sectors that makes them so prone to scandalous behaviour? Perhaps something in regards to the nature of FDI within this sector causes these continuous problems. When one analyzes the types of projects that these firms are bidding on, it is often large public sector projects in LDC’s. LDC’s are often more vulnerable to corruption and bribery and as such it is not necessarily a leap why these firms could get used to operating in ways that their home countries see as antithetical to good business practices. SNC for example, has bid and and won a sizable number of construction projects in India and Libya stretching back from the early 1990s till around 2014. many of these projects were later accused of involving bribery, infamously in regards to their attempts to woo Muammar Gaddafi’s son through, among other things, the aforementioned renovations of his downtown Toronto condo, were valued at over $200,000.

Anecdotally, the business practices that became successful for these firms overseas and then later or perhaps unilaterally with the home nation-state, resulted in the accusations of corporate misconduct. While much more evidence is needed, perhaps the poor track record especially of SNC-Lavalin could be explained by a very different operational environment abroad when it was conducting FDI and other forms of international business. The business may have correctly adapted to a very different method of doing business where there is less oversight and the state’s are more vulnerable. SNC may then have begun to use the same rulebook in places where oversight was stronger and the state’s more able tolerate corporation’s allure, as in the case of its home market of Canada.



STEAMROLLED: A Special Investigation into the Diplomacy of Doing Business Abroad.

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