SNC-Lavalin Group Inc. is a Montreal based Canadian MNC that provides engineering, procurement and construction services in various industries and globally operates in fifty countries. In 2012 they were accused of a bribery and fraud scandal; they were accused of criminal charges “defrauding Libyan organizations of an estimated $130 million” and paying nearly “$48 million to Libyan public officials” in exchange for construction contracts. In 2019 they are the centrepiece of an ongoing political scandal that involves alleged political interference and obstruction of justice by the Prime Minister’s Office (PMO).
In 2016, the company started a lobbying effort with the newly elected Liberal government; advocating for the rapid adoption of legislation allowing Deferred Prosecution Agreements (DPA) and changes to Ottowa’s integrity regime that prevents it from doing business with bad actors. Due to the the ongoing criminal prosecution, the company’s stock had significantly tanked (buy stocks now!) and the company has since threatened to shutdown its Canadian operations and set up shop in America. The shutdown will cost 9,000 jobs and all in PM Justin Trudeau’s hometown; 2019 December is elections. One can only speculate now, but the question is did the PMO senior staffers exert improper/illegal pressure on the attorney general? The PM has denied any wrong doing. SNC CEO Neil Bruce has denied the above accusations and said, “A company cannot be prosecuted as a criminal, but if the company does not get the DPA then 9000+ innocent employees would lose their jobs as SNC attempts to secure greener pastures”.
Parag Khanna highlights that globalization and capitalism has shifted power from states to MNCs. This scandal directly embodies this power struggle. Here we have an MNC exercising it’s power to influence policy makers (including the PM) and successfully implemented the DPA. A policy that overlook their crimes on foreign soil and let it continue its operations. However, the state is resisting but SNC is continuing its coercion tactics by applying economic pressure (loss of jobs and relocation to a different nation).
The question is, who will yield?
References:
Swain, Diana (2019, Mar 08)An economic reality check on SNC-Lavalin: Are 9,000 jobs really at stake? Retrieved from
https://www.cbc.ca/news/business/snc-lavalin-scandal-economics-jobs-risk-1.5047248
Thurton, David (2019, Mar 12)Four questions without answers about the SNC-Lavalin scandal. Retrieved from
https://www.cbc.ca/news/politics/snc-lavalin-wilson-raybould-trudeau-1.5051909
Khanna, P., & Francis, D. (2016, March 15). These 25 Companies Are More Powerful Than Many Countries. Retrieved from https://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/