Returning
to Canada from Mexico at the
beginning of March coincided with
controversy surrounding the Liberal
government and its former Justice Minister
and Attorney General, Jody
Wilson-Raybould. The Globe and Mail had
earlier released the report on an
investigation suggesting that her demotion
to Minister of Veterans Affairs was
related to her unwillingness to instruct
the prosecutor to offer SNC-Lavalin, a
large consulting engineering firm based in
Quebec, to negotiate a fine instead
of continuing prosecution for bribery.
In
rapid succession, the former
Attorney General testified that she felt
under pressure from the Prime
Minister. The Prime Minister said there
were misunderstandings. She resigned as
Minister. The head of the Prime Minister’s
office resigned. A second senior minister
resigned.
My
immediate impression was that this
was a bit like the collapse of the banks
in 2008. SNC-Lavalin was too big and
too important for Quebec to fail on
account of bribery and corruption charges.
My
sympathies have not been with corporations
who can only make profits and must
be paid to prevent bankruptcy – taking
away our tax dollars in the process. It
doesn’t help me to be told that all
similar large companies do it!
Extending
the arguments of Tim Wu
about breaking up monopolies (my January
2019 article), I suggest banks that
are too big to fail should be broken into
units that can be allowed to fail. Free
enterprise pundits have always argued the
risks taken justify the profits. To
me that means there should be real risks
if there are to be real profits.
So
my sympathies were with the former
Attorney General and not SNC-Lavalin. They
grew when I thought about the
serious criminal charges involved. Don’t
we have courts to deal with these
matters – courts that take into account
the various factors in a sentencing? Do
we have to second-guess a court? Why
should “we the people” go to court for
criminal prosecution, but corporations
have a way to be let off with a negotiated
settlement? The first step should be that
an appointed body reviews evidence
and declares whether or not one broke the
law. Formal recognition of a broken
law allows the breech to be known and
appropriate punishment to be prescribed.
It
can enable change.
More
information drifted out about
SNC-Lavalin.
One senior official of the
company had been charged and convicted in
Switzerland on bribery and money
laundering. Yet Canadians knew little
about that. Moreover it is not known who
else in senior management at the company
was involved in bribery and money
laundering. The reports say the convicted
official will cooperate with the
prosecutor, enabling further insights into
criminal activity to be brought to
light. That makes continuing this case
very much in the public interest, and it
is important to pursue prosecution at this
time.
On
March 9 and 11, the Globe revealed more.
There are 10,000 employees of SNC-Lavalin
in Britain, 9,000 in Quebec and a
majority,
33,000, spread elsewhere in the world. It
was not clear that experienced
engineers would have trouble finding work.
Yet it does not seem as if the jobs had
really been the major concern, but rather
a drop in share prices and a concern
that the company might be bought out.
Then
another Globe article quoted four
former Attorney Generals as saying that
government officials used legal
principles to inappropriately justify
political interference. Changed
circumstances, i.e. the drop in share
prices when the prosecution was pursued,
did
require the Attorney General to think
again. Although the Attorney General may
have second thoughts at any time, she does
not have to change her mind. That legal
principle does not justify political
interference from others. The four former
attorneys quoted thought asking her to
seek outside advice was inappropriate
and insulting. If one thinks an Attorney
General is unreasonable, one can go to
court. Elsewhere I found out that in this
case, SNC-Lavalin did ask a court. The
Federal Court found there was no reason
not to proceed with prosecution - as
the Minister had found.
I
conclude that justice was being
compromised for the sake of SNC-Lavalin
share prices and the related
possibility that this could precipitate a
sale of the company. Here Wu’s
thinking on Anti-Trust comes to mind. Wu
showed that, historically, breaking
huge companies into various pieces
improved the overall economic development
and performance in that area of the
economy. And to me it would seem to make
take-over of the resultant several smaller
companies less likely. But more insight
on the case in question emerged.
The
former head of the Canadian Tax
Foundation wrote an opinion piece in the
Globe & Mail March 11th.
“Bribery
of
foreign officials raises serious ethical
concerns, and undermines global economic
development. In 1997, the OECD
[Organisation for Economic Co-operation
and
Development] issued a convention to
address foreign bribery, which all of its
members and eight additional countries
have signed, agreeing to make foreign
bribery
a criminal offence under their respective
domestic laws. Canada is one of those
signatories and, in 1999, enacted the
Corruption of Foreign Public Officials
Act. That is the legislation under which
SNC-Lavalin has been criminally
charged.”
The
OCED allowed for the possibility
of a deferred prosecution agreement, DPA,
but with limiting conditions. The
possibility
of the DPA was added to Canadian law a
year ago. But most of the conditions do
not appear to be met in this case.
Moreover, the Canadian legislation
explicitly prevents the prosecutor from
considering Canada’s “national economic
interest” as a factor. The
same March 11th
article reported:
“And,
on Monday,
the OECD issued a press release on the
SNC-Lavalin case, cautioning that a
country’s
national economic interest must not
influence foreign bribery prosecutions.”
All
of this reinforced my view that
justice is important for corporations;
special deals should be very rare. And
other reading set me thinking more widely
about the economy and other things
like justice and integrity.
First,
well-known Canadians wrote their
wish lists in the Globe & Mail for 5
March 2019 “175 A birthday wish for
the Globe and Mail.” Some seemed
particularly pertinent.
Galen
Weston, a businessman, wrote: “Our current
take-make-waste model for the economy is
outdated, and in the future, growing
prosperity cannot be linked to growing
landfills.”
David
Suzuki, a broadcaster and
environmentalist, wrote “Politicians now
elevate the economy, a human
construct, above the atmosphere that gives
us air, weather climate and seasons.
… we are biological creatures for whom
clean air, clean water, clean soil and
food and clean energy are necessary to
live and to live well.”
Another
wanted “doubling the biomass
of fish populations and halving the amount
of plastic in our oceans …” And more
of them mentioned a higher priority for
nature, for justice and equity, and for
inclusiveness for native peoples. Two
mentioned increased concern for education
and for resources available to teachers. I
was pleasantly surprised. These are
themes I want to reinforce here, because
these seem to me to indicate the
planks on which to build an economy.
What
have I noticed in recent reading?
The book Silk
Roads (November 2018
article) reminded me that trade routes
have been the trails of civilization, but
that plundering has been a historic way to
wealth and distortions – taking gold
from the new world then oil from the
Middle East. So fairer forms of trade are
important.
At
the same time, the Silk
Roads revealed huge new reserves of
oil and gas to the north of the Middle
East in the Commonwealth of Independent
States and in Russia. The book talks about
these New Silk Roads. This begs
questions for me about the Canadian oil
sands and the news in Canada. In 2015 the
Harper government told us Canada is
an oil producer. We are still told Canada
needs pipelines to get oil out. The
government owns one pipeline now. Alberta
has jobs and an economy dependent on
oil that is costly to extract and on
pipelines to get it to market over much
community land – often environmentally
fragile and related to Indigenous
peoples.
Yet
aren’t the vast new oil resources north
of the Middle East writing on the wall? If
the world has plenty of accessible
oil, only the unpredictable work of the
oil cartel can keep the price high
enough for Alberta’s costly and dirty oil
to be worth extracting. And more
people than I question whether digging and
polluting traditional Indigenous
lands makes sense when the UN is asking
the world to cut greenhouse gases. That
is not to be insensitive to the needs of
Albertans for jobs and a vibrant
economy. It is to ask questions and invite
choices.
The
current world of economics raises
other questions beyond SNC-Lavalin and the
issue of justice versus SNC-Lavalin share
prices, and the issue of Alberta Oil given
vast new reserves. Ontario saw a
major foreign automaker and employer, GM,
leave. Perhaps it was because the history
of tax breaks and bail-outs was not
enough? But in the end, why should people
with skills and know-how be left high and
dry after a lifetime of commitment
because financial opportunity for the
corporation is now better elsewhere?
Maybe,
if they could have formed a cooperative,
workers might have taken over their
plants and produced something of their own
- accepting long-term lower profits with
jobs and with greater satisfaction from a
share of control? Maybe they could
have invited another manufacturer to come
and run a factory with them? Perhaps
the trade agreements preclude such a
possibility? Why should typical agreements
allow capital to move freely and investor
losses to be essentially insured by
governments when workers can be left
without pensions? More than this, why can
we not put tariffs on goods imported so
our workers can compete? It appears as
if free trade is promoted as great unless
the United States finds that it is
not so and goes on to apply tariffs. I
guess this puts me where the “occupy
wall street” movement was in 2010.
My
reading of the intriguing little book
Beyond
Banksters: Resisting the New
Feudalism, by Joyce Nelson,
Watershed Sentinel Books, 2016 stimulated
some
concerns about the extent to which private
bankers and investors tell governments
to use private loans and investments.
These benefit private banks and investors
more than the people. Similarly, loans and
the trade agreements seem designed
to create debt that then leads to calls
for higher taxes or cutting public jobs;
they seem made to avoid communities’
taking control of their own economies.
For
example I had no idea that a
Committee on Monetary and Economic Reform,
COMER, saw the Bank of Canada as
“part of the Civil Commons” and is leading
a lawsuit to make the Bank return to
its original mandate – a mandate it
applied from 1938-1974. During that time
the bank could issue money and make low or
interest free loans to the federal
and provincial governments. Similarly I
was not aware of the proposition that
the Canadian Post-Office take on a banking
function for the people, especially
in rural communities – as the UK post
office still does in the UK. That would
be a potentially valuable change. Nor
was
I aware of the potential value of a
government’s power to halt the outflow
of capital in an emergency – a capability
that helped Iceland after the
collapse of its banking system. The lack
of this power hurt Greece in its
economic crises. These powers can be
prohibited under the trade agreements. It
seems to me that these are areas where the
new nationalist movements could more
usefully push for better deals for trade
without bigger incomes for investors
or debt creators.
I
concluded that my fellow Canadians and
I should look at what economy we want
rather than leaving it to the
international
league of corporations and their drive for
the next profitable item on their
world tour for a bargain. That, of course,
was a concern for Tommy Douglas concerning
his Saskatchewan early last century. This
century, there are still some
enterprises rightly tied to a community -
like their electricity generation, water
plants and banks. Keeping these as
community controlled or bringing them
under
the control of their community seems to
make sense for a community economy. After
all, on the Silk
Trade model, a
community has to have something to “trade”
with if it is to benefit from the
civilization that follows trade.
Unfortunately, community enterprises are
also
targets for investors who want guaranteed
income and insurance from governments
often beyond the trade agreements of our
day. At the same time there is evidence
that being linked to things bigger than
local is important.
My
November 2018 article on the book Silk
Roads shows that trade has been a
good thing for human civilization. With
caveats,
trade can be good. Total freedom for large
corporate entities from
anywhere in the world to buy and sell the
land and resources of one’s country seems
to me a different matter. Trade needs to
be sharing, taking into account our
needs and priorities as a country and as a
community too. The corporate
sector’s quest for profit needs more
limits than trade agreements currently
seem
to offer.
Something
is seriously wrong with
trade agreements that allow companies that
are fracking to sue the government
of Quebec when Quebec sets a moratorium on
fracking in part of Quebec on account
of legitimate concerns for the
environmental consequences. The human
rights of
human beings to basic things – water,
food, health - should trump corporate
profit plans and share prices and research
costs. Business should involve risks
and investors should be rewarded with
profit if a risk pays off. If a risk
taken doesn’t pan out, the business should
know it was a risk and this time a
loss was generated. It is not a
government’s job to provide guaranteed
income
agreements to investors in the form of
trade agreements.
I
am told ethical investments produce
returns comparable with investments in
general. That makes me think. Surely
there is a place for a club that makes
ethical trade agreements? I’m sure NGOs
could draft something! Of course, ethical
agreements require politicians of
integrity.
So
these are my thoughts from mad March
days. Let’s seek justice applied to
corporations – as our former Attorney
General Jody Wilson-Raybould modeled for
us. Let’s seek an economy that is
chosen by and for the people living and
working in a place at whatever level [in
a political body like ours] and wherever
the place is. I think of an Indigenous
people’s territory for example. Let’s look
at limits on corporate size so that
losses can be more limited if a
corporation moves or is sold or collapses.
Let’s
seek trade agreements that allow basic
human rights to water, food and health -
and I would add electricity - to prevail
without court cases and government
guarantees of income to investors. And
let’s
retain the power to halt capital movement
in a national emergency.