OECD Bribery Working Group Issues Statement on SNC-Lavalin Controversy in Advance of Phase Four Review

On March 11, the Organization for Economic Co-operation and Development (OECD) Working Group on Bribery issued a statement expressing concern about “recent allegations of interference in the prosecution of [Canadian engineering firm] SNC-Lavalin” by Canadian authorities.  This concern was prompted by a sequence of recent events relating to Canadian prosecutors’ pursuit of both SNC-Lavalin and former SNC-Lavalin officials for violations of the Corruption of Foreign Public Officials Act (CFPOA).

In February 2019, allegations came to light that one or more officials in the administration of Canadian Prime Minister Justin Trudeau had pressured then-Attorney General Jody Wilson-Raybould to resolve the prosecution of SNC-Lavalin with a deferred prosecution agreement.  By March 11, three senior Trudeau officials had resigned as the controversy over those allegations expanded: Wilson-Raybould (who had been shifted to the less prestigious post of Minister of Veterans Affairs), Prime Minister Trudeau’s top political adviser Gerald Butts, and Treasury Board President Jane Philpott (who resigned in solidarity with Wilson-Raybould).

In its statement, the Working Group pointedly reminded the Canadian government that

[a]s a Party to the OECD Anti-Bribery Convention, Canada is fully committed to complying with the Convention, which requires prosecutorial independence in foreign bribery cases pursuant to Article 5. In addition, political factors such as a country’s national economic interest and the identity of the alleged perpetrators must not influence foreign bribery investigations and prosecutions.

The Working Group also took note of the fact that in February, two inquiries were opened into the alleged political interference: an investigation by the Canadian Federal Conflict of Interest and Ethics Commission into potential violation of Canada’s Conflict of Interest Act, and a Parliamentary inquiry by the Parliamentary Commons Justice Committee.  The Working Group stated that it “is encouraged by these processes, and notes that the Canadian authorities stress that they are transparent and independent.”

The Working Group also included two statements that indicated that it intends to focus on the controversy in connection with its scheduled Phase Four review of Canada’s compliance with the OECD Anti-Bribery Convention.  First, it recognized “Canada’s willingness to keep it fully informed of developments in the proceedings, including at its [the Working Group’s] next meeting in June 2019.”  Second, it stated that it “will closely monitor Canada’s updates, and has also sent a letter to the Canadian authorities confirming its concerns and next steps in this matter.”

Subsequent public comments by Working Group Chair Drago Kos have confirmed those indications.  Kos said that Canada would be subject to a Phase Four review, and that while that review was routine, one aspect of it would address the SNC-Lavalin controversy.

Note:  The Working Group’s statement is extraordinary in two respects: (1) it is only the second time in the last decade that the Working Group has issued a statement about Canada’s compliance with the Convention; and (2) it indicates that the Working Group is likely to make the SNC-Lavalin controversy a centerpiece of its Phase Four review.

One media report termed the OCED Working Group process “toothless,” in light of Kos’s acknowledgment that the Phase Four review does not entail the power to sanction Canada.  No signatory nation to the Anti-Bribery Convention, however, wants to be the subject of a critical review by the Working Group in ordinary circumstances, and the circumstances surrounding the SNC-Lavalin scandal are anything but ordinary.

Since March 11, in fact, the risk of a highly critical review for Canada has already increased substantially.  A fourth Trudeau official, Privy Council Clerk Michael Wernick (who allegedly made “veiled threats” to Wilson-Raybould in the matter), has since resigned.  In addition, the Justice Committee – one of the two inquiries that “encouraged” the Working Group — decided to shut down further hearings on the scandal, even as Wilson-Raybould and Philpott have reportedly indicated they have more to say on the matter but reportedly want the Prime Minister’s waiver of Cabinet privilege before they would testify again.  As Prime Minister Trudeau is continuing to face challenging questions from the media over the controversy, it is unlikely that he and his administration can damp down the controversy before the Working Group’s June meeting.

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