Canada’s SNC-Lavalin Affair: The Site C Dam Project and Bulk Water Export
By Joyce Nelson, Global Research, March 13, 2019
In all the press coverage of the “the SNC-Lavalin affair,” not enough attention has been paid to the company’s involvement in Site C – the contentious $11 billion dam being constructed in BC’s Peace River valley.
The Liberals say that any pressure they put on Jody Wilson-Raybould to rubber-stamp a “deferred prosecution agreement” for SNCLavalin was to protect jobs at the company. But the pressure may have been to protect something much bigger: the Liberals’ vision for Canada’s future. Site C epitomizes that vision.
The “Many Lives” of Site C
Birthed in 1959 on the drawing boards of the US Army Corps of Engineers and BC Electric (then owned by Montreal-based Power Corp), the Site C dam has been declared dead, then alive, then dead again several times over the next five decades until 2010, when BCPremier Gordon Campbell announced that Site C would proceed.1
Tracking SNC-Lavalin’s involvement in Site C during recent years has been difficult, but Charlie Smith, editor of The Georgia Straight, has filled in some of the missing information.
Sometime in 2007, the Site C dam project was quietly moved to Stage 2 of a fivestage process. Smith wrote, “SNC-Lavalin and Klohn Crippen Berger were prime consultants for Stage 2 of the Site C project. This had to occur before the project could proceed to Stage 3 in the five-stage planning process. The decision to advance to Stage 3 was based on a prediction in the Stage 2 report that demand for BC electricity will increase 20 to 40 percent over the next 20 years. ‘As extensive as BC Hydro’s hydroelectric assets are, they will not be enough to provide future British Columbians with electricity self-sufficiency if demand continues to grow as projected,’ the Stage 2 report [Fall, 2009] declared. Bingo. This gave the pro-Site C politicians in the BC Liberal party…all the justification they needed.”2
On April 19, 2010 Premier Campbell announced that Site C would proceed. At the time, Chief Roland Willson of the West Moberly First Nation called the entire fivestage process a “‘farce,’ and said the government hadn’t finished the second stage of the development process, so he doesn’t know how it can go ahead to the third. Willson said First Nations in the area haven’t seen studies on land use, wildlife, the fishery or the cultural significance of the region, and the process can’t move on to environmental assessments [Stage 3] without that work.”3
Nevertheless, the process did move on, and SNC-Lavalin may have been involved in the next stage of the planning process, as well. The Dogwood Institute recently reported that SNC-Lavalin was “an environmental consultant for Site C.”4
In 2011, SNC-Lavalin Chair Gwyn Morgan (image on the right) became an advisor to BC Liberal leadership winner Christy Clark during her transition to the premiership. Morgan had joined the SNC-Lavalin board in 2005 and was chair of the company from 2007 until 2013. As The Tyee reported in 2014, “Morgan retired in May 2013, the month after SNC-Lavalin agreed to a 10-year corruption-related ban from the World Bank related to a power project in Cambodia and a bridge in Bangladesh. Among the SNC-Lavalin companies on the World Bank [corruption] blacklist are divisions involved in publicly funded BC projects like the Bill Bennett Bridge, Canada Line and Evergreen Line.”5
Going Forward
At the time of Gwyn Morgan’s 2013 retirement from the SNC-Lavalin Chair-manship, the company was being investigated in at least ten countries, including: Bangladesh, Cambodia, Ghana, India, Kazakhstan, Malawi, Mozambique, Nigeria, Uganda and Zambia.6
While we have no way of knowing whether Gwyn Morgan, as an advisor to Christy Clark as of 2011, in any way lobbied on behalf of SNC-Lavalin, we do know that “Morgan’s personal, family and corporate donations to the BC Liberals totalled more than $1.5 million.”7
At the same time, in 2011 SNC-Lavalin had won the engineering, procurement and construction management (EPCM) contract for the Muskrat Falls hydro project in Newfoundland. But the company was apparently so “distracted” by corruption charges internationally that eventually crown utility Nalcor had to take over the project, which went way over budget and is now the subject of an inquiry.8
That didn’t dissuade the BC Premier from going forward. On December 16, 2014, the Christy Clark provincial government gave approval for Site C, despite recommendations by the Joint Review Panel (JRP), which had concluded two months previous that Site C’s hydropower was not needed in the time-frame that BC Hydro was arguing. (Recall that the Stage 2 report had claimed a 20-40% increase in demand over the next 20 years.) JRP member Harry Swain had concluded that demand for electricity in BC has been flat dating back to 2005.
While the newly elected BC NDP government in 2017 debated the cancellation or suspension of Site C, the Financial Post reported that Montreal’s SNC-Lavalin is “part of the lead design team for the [Site C] project.”9 That little-known contract may have been signed much earlier.
On February 21, 2018 the Journal of Commerce reported on the progress being made by Site C’s lead design team, com-prised of SNC-Lavalin and Klohn Crip-pen Berger and involving “approximately 40-plus engineers, nine modellers and 15 drafters.”10 SNC-Lavalin Building Informa-tion Modeling (BIM) Manager Rodrigo Freig told the Journal that, “In three years and 43 models later, we only had two model crashes, related to slow server speeds.”11
That comment would suggest that the lead design contract had quietly been issued to SNC-Lavalin and Klohn Crippen Berger sometime in 2015.
Turning off the Tap: Site C and Water Privatization in Canada
A few days ago (March 7), the Canadian Press reported: “SNC-Lavalin is working on the five biggest infrastructure projects in Canada, according to trade magazine ReNew Canada. Those contracts alone amount of $52.8 billion, and include projects for Bruce Power and the Darlington nuclear plant in Ontario as well as the Site C dam in BC.”12
While the exact amount of the Site C lead design contract is not known, it is likely at least $1 billion in BC taxpayer dollars. If the lead design contract was indeed issued in 2015, this would fit with Christy Clark’s effort to push the project past “the point of no return.”
Help from Trudeau
In February 2015, under the Harper government, federal fraud and corruption charges were filed against three of SNC-Lavalin’s legal entities over its dealings in Libya. But after the Trudeau Liberals were elected in Fall 2015, the company “signed a deal with Ottawa that will allow the engineering and construction company to continue bidding on federal contracts until criminal charges it faces are resolved.”13
As we know now, SNC-Lavalin also began lobbying extensively for a deferred prosecution agreement (DPA) that would effectively free the company of charges without forcing it to admit wrongdoing. In exchange, the company would pay a fine and prove that it has changed its practices to prevent a repeat of any wrongdoing. The Trudeau government quietly inserted changes to the criminal code allowing for DPAs in its 2018 Budget. According to recent report by the Buffalo Chronicle (March 11), SNC-Lavalin’s in-house attorney Frank Iacobucci “was instrumental in persuading” Trudeau to insert that new legal provision into the budget bill.14
The Buffalo Chronicle also notes that in October 2018, Trudeau asked Iacobucci to lead the government’s negotiations with indigenous communities in BC regarding the TransMountain Pipeline expansion proj-ect – a project that SNC-Lavalin hopes to construct. Quoting an unnamed source, the Chronicle states: “Iacobucci, who was already angry that [Jody] Wilson-Raybould was refusing to allow his client [SNC-Laval-in] to negotiate a deferred prosecution agree-ment, feared that his consultations in British Columbia could be construed as improper. He would only agree to take the role on the condition that Trudeau replaced her with a ‘more doting’ Member of Parliament.”15
The full story of Iacobucci’s role in the SNC-Lavalin scandal has yet to emerge, but it’s clear that the Trudeau government has been exceedingly accommodating to the company’s wishes.
The Georgia Straight’s Charlie Smith has further spelled out the Trudeau government’s help: “Keep in mind that Trudeau helped SNC-Lavalin with its World Bank problem by endorsing the Asian Infrastructure Investment Bank. This entity was created by China as a rival to the US-led World Bank on infrastructure financing. SNCLavalin might be debarred from World Bank financings, but it can bid on AIIB-backed projects. Trudeau also helped SNCLavalin and other companies involved in huge public projects by creating the Canada Infrastructure Bank. And the Trudeau government accelerated construction of the Site C dam by awarding federal permits over the opposition of First Nations in the area.”16
Bulk Water Export
In two slightly different chapters within two recent books, I have argued that the Site C dam on the Peace River is perfectly placed to facilitate bulk water export east of the Rockies and into the American Southwest. Readers can consult my Chapter 10, “Water Export: The Site C End-Game” in editor Wendy Holm’s Damming the Peace: The Hidden Costs of the Site C Dam (Lorimer 2018), and the chapter entitled “Site C and NAWAPA: Continental Water Sharing” in my latest book Bypassing Dystopia: Hopefilled Challenges to Corporate Rule (Watershed Sentinel Books 2018).
SNCLavalin’s involvement in Site C has been so well-hidden that the company name does not appear anywhere in Damming the Peace. But by the time I was writing the water-chapter for my own book, SNCLavalin’s connections to Site C were becoming clear enough for me to state that the company “is intricately involved in Site C.” Only now are we learning just how involved they are.
SNC-Lavalin has had its eye on continental water-sharing for at least three decades. Back in the 1980s the SNC Group (as it was called at the time) was part of a consortium called Grandco, which was promoting a continental water-sharing plan entitled the Grand Canal Project. Grandco’s other consortium members included the UMA Group of Calgary, Underwood McLellan Ltd. of Saskatoon, Rousseau, Sauve & Warren Inc. of Montreal, and Bechtel Canada Ltd. (son of US Bechtel, the world’s largest engineering firm).
Grandco’s head lobbyist was Canadian financier Simon Reisman (uncle of current Bilderberg member Heather Reisman). After Simon Reisman publicly advocated for Canadian water export,Prime Minister Brian Mulroney (himself an advocate for large-scale water exports) appointed him as Chief Negotiator for the 1988 Canada-US Free Trade Agreement (FTA), the predecessor to NAFTA, signed by Jean Chrétien in 1994. Both the FTA and NAFTA essentially strip Canada’s sovereign right to protect our water resources and make Canada vulnerable to massive water export.
While Site C may provide energy and water for fracking in BC and potentially for tar sands mining in Alberta, in the long term the “end-game” of Site C, according to Wendy Holm, is water export because that freshwater water “will have a far higher value” than oil and gas. The vast 83-kilometres long reservoir needed for the Site C dam will submerge 78 First Nations heritage sites (including burial grounds) and flood about 3,816 hectares (9,430 acres) of prime agricultural land in the Peace River Valley
A similar scenario is being played out in Quebec with Hydro-Quebec’s massive $5 billion Romaine Complex, which is damming the River Romaine and flooding 100 square miles of land; in Newfoundland where the Muskrat Falls mega-dam project “boondoggle” is now the subject of a public inquiry; in Manitoba where several megadam projects are poised to flood First Nations land.
Now, thanks to the Trudeau government’s Mid-Century Long-term Strategy, that same scenario is poised to repeat itself many times in the coming years.
Long-Term Strategy
In 2017, the Trudeau government released its Mid-Century Long-Term Strategy (MCS) intended to reduce emissions of greenhouse gas (GHG) at rates to comply with its Paris Climate commitments.
Scientist David Schindler has summarized the MCS: “In brief, Canada has agreed to reduce its GHG emissions by 80 percent by 2050, using 2005 emissions as a baseline. This sounds wonderful, until one reads how this is to be done, as described in the report. All the scenarios used to achieve the miraculous carbon reduction goals rely on replacing fossil fuels by generating massive amounts of hydroelectric power, which is assumed to emit no GHG…. The required hydro development would require the equivalent of building over one hundred Site C dams in the next thirty-two years, an extraordinary plan….”17
Once all that water has been impounded behind the dams, it is subject to NAF-TA treatment (including in the rewritten USMCA agreement) as a tradable “good” or commodity. Chrystia Freeland and the negotiators for the USMCA did not secure an explicit exemption for water under the goods, services, and investment provisions of the deal. According to Bill C-6 (which became law in 2001), as Minister of Foreign Affairs, Freeland has water-export licensing authority and can issue permits for water export.
As I explain in some detail in Damming the Peace and Bypassing Dystopia, massive drought and overuse of freshwater in the Colorado River region and in the US Southwest have prompted big investors like the Blackstone Group (with Brian Mulroney on its board) to look north for water-investment opportunities. The Blackstone Group has been involved in water issues for years, and in 2014 it announced a new portfolio company called Global Water Development Partners to “identify, develop, finance, construct, and operate large-scale independent water development projects.”
The Blackstone Group is just one of many investment firms eyeing Canada’s freshwater resources. The Bank of America Merrill Lynch – which designed the Canada Infrastructure Bank – has predicted a global water market worth $1 trillion by 2020.
Obviously, SNC-Lavalin wants to be in on all that MCS hydroelectric development and other projects to be financed by Trudeau’s Canada Infrastructure Bank in the coming years. But if they have to face prosecution, the company risks being barred from federal contracts for ten years.
The Trudeau government says it is attempting to protect SNC-Lavalin jobs. That may be true, but it is also likely that the Trudeau government is attempting to protect its longterm vision for Canada: a vision that jettisons “reconciliation” and the environment in favour of damming the country and then draining it.
Freshwater has been turned into a commodity and it will be worth far more than oil or gold in the near future. Follow the money. That’s what SNC-Lavalin is doing.
The original source of this article is Global Research; Copyright © Joyce Nelson, Global Research, 2019.
oyce Nelson is the author of seven books, including Beyond Banksters and its sequel Bypassing Dystopia. She can be reached via www.joycenelson.ca.
Our Comment about DPAs
A deferred prosecution agreement (DPA) is a provision enabling a large corporation like SNC, to go on receiving government contracts despite past wrongdoings.
Wilson-Raybould’s persistent opposition to the government’s intention to seek a DPA for SNC-Lavalin, has drawn much public attention to this practice.
If DPAs are such a good idea, why sneak in the enabling legislation for one, under cover of an omnibus bill?
That “an ounce of prevention is worth a pound of cure” has always seemed to me to be a good idea.
One has to wonder what a DPA really costs – and who really pays for it – the effect that bribery would have on the cost of construction; the cost of the investigation that leads to prosecution; the expense of “closely monitoring the operations” of “one of the world’s largest electrical engineering companies”!
One has to wonder, too, what sort of profit would tempt a corporation to risk prosecution in the first place?
How difficult is it to qualify for a DPA? Does the punishment fit the crime?
Or does crime really pay after all?
Canada’s Corrupt Foreign Policy Come Home to Roost
By Yves Engler, therealnews.com, March 3, 2019
Justin Trudeau’s government is engulfed in a major political scandal that lays bare corporate power in Ottawa. But, SNC-Lavalin’s important role in Canadian foreign policy has largely been ignored in discussion of the controversy.
The Prime Minister’s Office has been accused of interfering in the federal court case against the giant Canadian engineering and construction firm for bribing officials in Libya. Former attorney general Jody Wilson-Raybould claims she was repeatedly pressured to defer prosecution of the company and instead negotiate a fine.
Facing a 10-year ban on receiving federal government contracts if convicted of bribing Libyan government officials, SNC began to lobby the Trudeau government to change the criminal code three years ago. The company wanted the government to introduce deferred prosecution agreements in which a sentencing agreement would allow the company to continue receiving government contracts. At SNC’s request the government changed the criminal code but Wilson-Raybould resisted pressure from the PMO to negotiate a deferred prosecution agreement with the company headquartered in Montréal.
Incredibly, before Trudeau went to bat for SNC after the firm had either been found guilty or was alleged to have greased palms in Libya, Bangladesh, Algeria, India, Kazakhstan, Tunisia, Angola, Nigeria, Mozambique, Ghana, Malawi, Uganda, Cambodia and Zambia (as well as Québec). A 2013 CBC/Globe and Mail investigation of a small Oakville, Ontario, based division of SNC uncovered suspicious payments to government officials in connection with 13 international development projects. In each case between five and 10 percent of costs were recorded as “‘project consultancy cost,’ sometimes ‘project commercial cost,’ but [the] real fact is the intention is [a] bribe,” a former SNC engineer, Mohammad Ismail, told the CBC.
While the media has covered the company’s corruption and lobbying for a de-ferred prosecution agreement, they have barely mentioned SNC’s global importance or influence over Canadian foreign policy. Canada’s preeminent “disaster capitalist” corporation, SNC has worked on projects in most countries around the world. From constructing Canada’s Embassy in Haiti to Chinese nuclear centres, to military camps in Afghanistan and pharmaceutical factories in Belgium, the sun never sets on SNC.
Its work has often quite controversial. SNC constructed and managed Canada’s main military base in Kandahar during the war there; SNC Technologies Inc provided bullets to US occupation forces in Iraq; SNC has billions of dollars in contracts with the monarchy in Saudi Arabia.
Across the globe SNC promotes neoliberal reforms. The company greatly benefits from governments shifting to public-private partnerships. SNC is also a member or sponsor of the Canadian Council on Africa, Canadian Council for the Americas, Canada-ASEAN business council, Conseil des Relations Internationales de Montréal and other foreign policy lobby/discussion groups.
SNC has been one of the largest corporate recipients of Canadian “aid.” The company has had entire departments dedicated to applying for Canadian International Development Agency (CIDA), UN and World Bank funded projects. SNC’s first international contract, in 1963 in India, was financed by Canadian aid and led to further work in that country.
In the late 1960s the firm was hired to manage CIDA offices in African countries where Canada had no diplomatic representation. In the late 1980s CIDA contracted SNC to produce a feasibility study for the Three Gorges Dam, which displaced more than a million Chinese. During the occupation of Afghanistan CIDA contracted SNC to carry out its $50 million “signature project” to repair the Dahla dam on the Arghandab River in Kandahar province ($10 million was spent on private security for the dam).
In 2006 SNC was bailed out by the Canadian aid agency after it didn’t follow proper procedure for a contract to renovate and modernize the Pallivasal, Sengulam and Panniyar hydroelectric projects in the southern Indian state of Kerala. A new state government demanded a hospital in compensation for the irregularities and SNC got CIDA to put up $1.8 million for the proj-ect. (SNC-Lavalin initially said they would put $20 million into the hospital, but they only invested between $2 and $4.4 million.)
Company officials have been fairly explicit about the role Canadian diplomacy plays in their business. Long-time president Jacques Lamarre described how “the official support of our governments, whether through commercial missions or more private conversations, has a beneficial and convincing impact on our international clients.”
Even SNC’s use of bribery has a made-in-Ottawa tint. For years Canada lagged behind the rest of the G7 countries in crimi-nalizing foreign bribery. For example, into the early 1990s, Canadian companies were at liberty to deduct bribes paid to foreign officials from their taxes, affording them an “advantage over the Americans,” according to Bernard Lamarre former head of Lavalin (now SNC-Lavalin). In 1991, Bernard, the older brother to SNC-Lavalin’s subsequent head Jacques Lamarre, told Maclean’s that he always demanded a receipt when paying international bribes. “I make sure we get a signed invoice,” he said. “And payment is always in the form of a cheque, not cash, so we can claim it on our income tax!”
In 1977, the US Foreign Corrupt Practices Act outlawed bribes to foreign officials. Ottawa failed to follow suit until the Organisation of Economic Co-operation and Development (OECD) launched its antibribery convention in 1997. The OECD convention obliged signatories to pass laws against bribing public officials abroad and two years later Canada complied, passing the Corruption of Foreign Public Officials Act (CFPOA). Still, for the next decade Canadian officials did little to enforce the law. The RCMP waited until 2008 to create an International Anti-Corruption Unit and didn’t secure a significant conviction under the CFPOA until 2011.
As the recent scandal demonstrates – and the Financial Post noted years ago – SNC has “considerable lobbying power in Ottawa.” Placing its CEO among the 50 “Top People Influencing Canadian Foreign Policy,” Embassy magazine described SNC as “one of the country’s most active companies internationally,” which “works closely with the government.” The now-defunct weekly concluded, “whoever is heading it is a major player” in shaping Canadian foreign policy.
And, as it turns out, in shaping the way things are now done at home in Ottawa.
Yves Engler is a Canadian commentator and author. His most recent book is The Ugly Canadian – Stephen Harper’s Foreign Policy, and previously he published The Black Book of Canadian Foreign Policy and Canada in Haiti: Waging War on the Poor Majority.
Our Comment
Were Canada’s chief engineering and construction corporation to forfeit the right to foreign contracts, presumably those would go, instead, to foreign competing corporations.
The political and economic ramifica-tions of that would most certainly extend beyond “nine thousand jobs in Quebec.”
As Yves Engler has pointed out, the controversy has focussed on the scandal of corporate power in Ottawa, while “SNC’s important role in Canada’s foreign policy has largely been ignored.”
In a Global Research article, SNC-Lavalin The Corporate Face of “Ugly Cana-dian,” March 11, 2019, Engler contends that “some Canadian diplomatic posts are PR arms for SNC-Lavalin.”
On the other hand, he has attributed “Ottawa’s support for SNC, despite corruption allegations in 15 countries,” to the fact that “the company has proven to be a loyal foot soldier, fighting for controversial foreign policy decisions under both Liberal and Conservative governments.”
He goes on to cite various examples of cooperation between SNC and Canadian governments, as “a strong proponent of neoliberalism, promoting, for example, privatization of water services in a number of countries.
Joyce Nelson, in her article on the Site C Dam project further corroborates SNC’s role in Canada’s foreign policy, arguing that “the pressure on Jody Wilson-Raybould may have been to protect something much bigger than jobs – the Liberals’ vision for Canada’s future,” explaining the common goal of such projects in terms of a “predicted global water market worth $1 trillion by 2020.”
All this is borne out in the desperate effort to reign Wilson-Raybould in.
