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Tuesday, February 25, 2020
Connecting Our Communities

Corruption in construction trade isn’t limited to SNC-Lavalin

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Justin Trudeau is embroiled in a scandal of his own making, one that’s a logical offshoot of institutionally corrupt systems of government, finance and business, even more so when they interconnect, which is always.

Those in the prime minister’s circle who interceded with former attorney general Jody Wilson-Raybould over SNC-Lavalin’s legal woes will argue they were doing so for the public good, not private gain. Think of the innocent employees, shareholders and suppliers who’d be harmed if the company was essentially forced out of business if it were banned from bidding on government contracts, they’ve argued.

Likewise, the company itself is putting a virtuous spin on its incessant lobbying to sweep under the rug its long history of criminal and unethical behaviour. Its efforts in fact resulted in carefully hidden legislation allowing for deferred prosecutions and the pressure that was brought to bear when officials refused to make use of the rule changes to shelter Lavalin from real legal action.

The Liberals are defending their actions as run-of-the-mill government activity, advocating for constituents. Never mind the poor optics of surreptitiously changing laws and entertaining multiple lobbying sessions from a corporate donor with dubious ethical issues. Oh, and just ignore that it’s an election year – there was certainly no consideration given to the potential reaction of Quebec voters.

While publically declaring itself a reformed company, SNC-Lavalin would undoubtedly maintain its past involvement with bribery and influence-buying was perhaps just the cost of staying competitive in a cut-throat industry.

While not excusing the company, it’s not alone in corrupt practices in a suspect industry. The construction business is routinely listed as among the most suspect, from employees stealing supplies from job sites right through to bribery and racketeering. On top of that, it’s an industry rife with mismanagement and inefficiencies.

All of that comes at a massive cost to society, particularly in wasted trillions – yes, with a ‘t’ – that come with business as usual.

Crumbling public infrastructure is a problem – a buzzword among politicians and bureaucrats who seem eager for more of your cash, but less eager to spend it where it’s most needed – and massive amounts of resources siphoned off by crooks, grafters and incompetents make matters worse.

A construction-industry watchdog called the Infrastructure Transparency Initiative (CoST) advocates for global transparency and accountability in public infrastructure. It notes global construction output already exceeds US$9 trillion per year, a figure that is likely to rise to $17.5 trillion by 2030. The alarming numbers arise with estimates that put the value of losses due to corruption at between 10 and 30 per cent. A similar amount could be lost through mismanagement and inefficiency.

“This means that by 2030, unless measures are introduced that effectively improve this situation, close to $6 trillion could be lost annually through corruption, mismanagement and inefficiency,” reads a 2018 report from the organization.

“Losses on this scale cannot be tolerated in any sector, but losses in infrastructure investment have particular significance. This is because infrastructure underpins almost every aspect of economic growth and human development. It is a vital component of the most pressing global challenges that we face, including eliminating poverty, achieving food security, rebuilding the global economy and dealing with the effects of climate change. Put simply, unless we rapidly improve the efficiency of infrastructure investments, our efforts to meet the great global challenges of our era are less likely to succeed.”

Similar concerns about the industry are routinely flagged by Transparency International, who’s past studies of bribery have ranked public works and construction as the most corrupt sector.

Though Canada is traditionally ranked as much less corrupt than most other countries, we’re no stranger to those issues here. In the construction industry in particular, we need look no further than the investigations in Quebec, which found rampant corruption – a systemic stew of mafia control, contractors rigging bids, civil servants on the take and grafting politicians fleecing taxpayers of hundreds of millions of dollars. Only the most naive among us would believe we’re immune from that here. Indeed, governments from the smallest municipality through to the federal level (especially) are rife with abuse of the public trust.

We don’t see the kind of outright bribery that greases the wheels in other parts of the world – the cash slipped to bureaucrats to move the paperwork to the top of the pile, the cop who pulls you over just to shake you down – as corruption is much more systemic here. That’s not to say money doesn’t change hand in small quantities, but on the whole the corruption is more involved and less blatant, as lobbying efforts and corporate sales tactics, aided by self-serving bureaucrats and politicians, aim to funnel away tax dollars.

By international standards, Canada stacks up well on the corruption front. The ratings of groups such as Transparency International are based on perceptions of corruption, using a wide array of indicators, because actual numbers are difficult to come by: in every instance, the actions are illegal and, thus, out of sight except for those rare instances when they come to light. Cases like Mulroney’s brown envelopes, Adscam, the in-and-out scandal, G8/G20 wrongdoings, robocalls, ORNGE and the like are typically just the tip of the iceberg.

Corruption also extends to the selling out of the public interest to corporations, most notably in the abdication of oversight and regulation that led to the global financial crisis. The resultant meltdown and tough economic times creates an ideal climate for yet more corruption of all sorts.

We have seen that economic growth without good governance does not guarantee that the fruits of that growth will be shared equally, nor does it guarantee stability. When political decisions are unduly influenced by special interests, when valuable resources are exploited by profitable companies but the wealth does not reach the citizens, people lose faith in their leaders.

Beyond bribery and skimming of profits, corruption extends to the heart of the financial sector, which has benefited from deregulation and decreasing oversight from governments … changes that were not made out of the goodness of officials’ hearts.

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