Update: Pierre Duhaime quit his job as chief executive at SNC-Lavalin on Mar. 26, becoming the third executive to leave the firm in under a month. Duhaime’s resignation followed news that he had authorized $56 million in payments previously rejected by the CFO, thus breaking the company’s ethics code. Exactly what the money paid for is unknown. Here is a Maclean’s Q+A with Duhaime from April of last year.
As one of the largest engineering firms in the world, Quebec-based SNC-Lavalin is a corporate giant in Canada and beyond. Starting as a small engineering firm in Montreal in 1911, the company now operates in 100 countries across the globe, with annual revenues of over $6 billion. Yet SNC’s centennial year has been marked by upheaval in many of the countries—Egypt, Libya and Tunisia among them—where it does business. President and CEO Pierre Duhaime recently spoke about the company’s operations in these suddenly unstable parts of the world—and about its contract to build an immense prison complex in Libya.
Q: Tell me about SNC-Lavalin’s decision to build Libya’s Guryan Judicial City prison.
A: For us, in Libya or elsewhere, this is an infrastructure project. We have been in Libya for 25 years, we have been building airports, roads and water plants. It was presented to us as way of opening up the country, of respecting civil rights. It was one of the key projects of Gadhafi’s son, Saif. We went around the world but mostly in the United States to find out what were the best jails in terms of respect. We thought, “What’s wrong with this?”
Q: How much did you consider Libya’s human rights record before taking on the project?
A: Libya was part of the human rights commissions with the United Nations. Mr. Gadhafi was very welcome by many prime ministers and presidents around the world. Saif was very vocal in terms of respecting human rights in Libya. And of course, you need to have jails, no matter what. It’s not for political prisoners, it’s for prisoners.
Q: But we have no way of knowing if it was for political prisoners or not.
A: The way it was presented to us, it was nothing to do with political prisoners.
Q: SNC-Lavalin did a fair bit of publicity around the irrigation projects and the airport work. The prison wasn’t publicized.
A: Because it’s too small. The project was $200 million. It wasn’t really big enough to attract that much attention. We talk about billion-dollar jobs. A hundred million or $200 million is not something we talk about. And it wasn’t even 100 per cent us, it was with a joint venture with another company. We see that more as a service contract, nothing else.
Q: I have trouble believing that a jail is the same thing as an airport.
A: For me, it’s the same thing. Here in Quebec we are bidding on jails, we are bidding on hospitals.
Q: But our human rights record is pretty good. In Libya, it’s not good.
A: Why are you saying that? Do you have any proof?
Q: Sure. You mentioned Saif. He referred to the people in the rebellion as “rats” and has handed out arms to pro-Gadhafi forces.
A: Yes, after the rebellion started. Look, you just have to go back to what Saif said in the last five years. He has given speeches at the London School of Economics. Go and see what he said.
Q: Do you believe him now?
A: When you are in a war you say some things that maybe you wouldn’t repeat later on, and you don’t really believe it. He’s in a war and he has to defend his family’s interests. Maybe they are reacting too heavily. And I don’t support what he is saying. I am totally against what they are saying. But they’ve said it.
Q: What has been the fallout from all of this, as far as public relations?
A: We are trying to explain to people that we are an engineering company working for a customer who was totally welcomed by the Canadian, American and British governments. Today, things have changed. There are all kinds of politics behind the scene. Who has initiated the thing? Who has armed the rebels? Why has it suddenly happened now?
Q: I think it happened because people were fed up with 40 years of dictatorship.
A: That’s a bit naive. There’s always external forces behind these things to help the rebellion. It didn’t happen just like that. I’m not saying all the people were happy, but there are a lot of people who still support Gadhafi. Right now we don’t have a true democracy. And I support what the international community is doing, because the way [the Gadhafi regime] has resisted is not the right thing. I’m not there to defend the Gadhafi system. I’m saying we have been working in Libya for the last 25 years, we respected the government conditions, we were well in line with the rest of the world. What’s wrong there?
Q: One of the advantages of working in places like Libya and Tunisia is the stability that these countries brought. What does it mean for SNC-Lavalin when that stability evaporates overnight?
A: We put a hold on the projects, and when the situation comes back to normal we go back. We are back in Egypt. We are back in Tunisia. It isn’t the first time we’ve seen rebellion before in the world. We make sure our people are safe, and when the political situation is back, we are going to return, if we are welcome in the country.
Q: Do you think that will be the case?
A: Sure. I truly believe that when we are working in these countries we bring in Canadian people, we bring our know-how; you extend your hand to the people, you create links. I personally believe that we are helping people in that way. Libya was looking for an opening for the world. If you don’t have communication, you will not be able to influence them.
Q: Diplomacy through capitalism, in other words.
A: It needs to be. You can’t isolate a country. Look at North Korea. If we were able to say to North Korea, “We would be pleased to work with you, but you need to respect our people, our way of doing things, and if you don’t behave we’re out of there.” By doing that, you get North Korean people out to see the rest of the world. I think it would be much better, and I think that’s what we’re trying to do.
Q: But it’s an imperfect model in the sense that you have to deal with strongmen, with bad guys.
A: Hey, we are not in a perfect world. I will never pretend to be perfect. The only way to reach people is to be open, to talk and see how we can change and influence them. I see you are spending a lot of time on politics. I’m in engineering and construction.
Q: Politics are inescapable. You can’t just say that you’re in engineering and wash your hands of it.
A: I hope you get this point. We always follow Canadian laws and rules. If Canada says there is a boycott or tells us not to work in a country, we don’t go there.
Q: SNC hasn’t had the easiest ride, what with Libya and Tunisia…
A: Tunisia has been perfect. The government changed. We have offices there. Things just go on.
Q: But it was awful there for hundreds of thousands of people. The rebellion started when a guy literally set himself on fire.
A: We have people living in Tunis. They were not even relocated. The Tunisia situation happened, the transition has been done, though maybe not as easily as we might see in Canada.
Q: SNC-Lavalin is in negotiations to acquire Atomic Energy of Canada Limited. What’s the future of nuclear power, given the catastrophe in Japan and the outcry against it?
A: I still believe in nuclear power. If you take into consideration that a carbon tax may eventually be applied on power production, it’s one of the cheapest ways to produce power, after hydro. What happened in Japan was out of this world: an earthquake and a tsunami at the same time, and while it’s not perfect, the thing is still up. There will now be reinforcement of these systems based on the lessons learned in Japan, which will make it even safer.
Q: What happens if you acquire AECL and nobody wants to buy any nuclear reactors?
A: There is more than one aspect to that business. There are 30 reactors which need to be rebuilt, including the one here in Quebec. The Canadian government and the industry cannot forget that they have a responsibility to support those 30 reactors. AECL has the intellectual property know-how, and we want to maintain that in Canada.
Q: Ontario’s an interesting example, as far as nuclear power goes. Premier Dalton McGuinty made a big deal about green energy, and yet you have this sheer volume of people in southern Ontario to supply power to, and the argument is you can’t provide that power simply through green means.
A: So far, if we exclude hydro, green energy is not able to provide power during the peak hours. What if the wind or the solar isn’t there at the peak? What do you do?
Q: Turn the lights off. I’m kidding.
A: In the power industry, we need to have sustainable production of power when we need it. When there is the possibility to produce green energy, you can slow down or shut off the production of the other one. Nuclear is there to produce base, carbon-free power.
Q: SNC-Lavalin is celebrating its 100-year anniversary. Tell me about your involvement in the company.
A: I started as a project manager 21 years ago. It’s been my passion to build equipment, plans, whatever it is, to help people. It’s one of the most gratifying things in your life when you are part of a big job and you’ve created something that is sustainable, bringing jobs to the regions and bringing futures to young people. It’s fantastic.