The corruption-plagued SNC-Lavalin Group Inc., Canada’s largest construction and engineering firm, announced that it has hired a new chief compliance officer to replace Andreas Pohlmann, who will become a consultant on June 1.
Replacing Pohlmann will be David Wilkins, who for the past six years headed compliance at the Dow Chemical Company. Wilkins, who will report to SNC’s chief executive officer, also is former general counsel of the Dow subsidiary Union Carbide Corporation and ex–chief diversity officer of the American Red Cross.
“Having witnessed the rapid progress SNC-Lavalin has made over the past year to strengthen its ethics and compliance framework, I am thrilled to be on board,” Wilkins said in a statement. “SNC-Lavalin’s employees have shown the world that they have turned the page.”
Montreal-based SNC hired Pohlmann in March 2013 to help it reform a compliance-challenged company humiliated by corruption probes and lawsuits. Pohlmann, who was not immediately available for comment, is a veteran compliance expert from Germany who was hired by engineering giant Siemens AG to reform its programs after its own bribery scandal in 2008.
SNC needed similar help. After a lengthy probe, last April the World Bank Group debarred SNC and 100 of its affiliates from participating in bank-financed projects because of bribes paid on World Bank–backed projects in Bangladesh and Cambodia.
In his time at SNC, Pohlmann told Corporate Counsel magazine that he centralized the compliance efforts into one global department, helped change the “tone at the top” to support compliance efforts, implemented massive training programs, and instituted due diligence procedures and other investigative processes to probe any hint of wrongdoing.
In his new job as a consultant, SNC said Pohlmann would work closely with Wilkins and have “a strategic focus on ongoing World Bank compliance initiatives.”
Satisfying the terms of the World Bank’s debarment agreement is crucial to SNC for several reasons. First, the debarment can be reduced to eight years if the companies comply with all conditions of the deal.
Second, the remainder of SNC subsidiaries not debarred could still be excluded from World Bank contracts if they fail to comply with the terms.
But perhaps most important, compliance carries global economic consequences for the company. That’s because more than just World Bank projects are at stake.
The World Bank exclusion marked SNC for cross-debarment by other multilateral development banks (MDBs) under the 2010 “Agreement on Mutual Enforcement of Debarment Decisions” [PDF]. Under that agreement entities debarred by one MBD, such as the World Bank, may be sanctioned for the same misconduct by the others.
The mutual enforcement agreement was signed by the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank Group, as well as by the World Bank.
SNC’s debarment is the longest ever imposed by a World Bank settlement. The embarrassment, and ensuing international criticism, inspired Canada’s Parliament to pass amendments toughening the country’s anticorruption law.