“Too big to fail” helps privatization industry avoid accountability | National Union of Public and General Employees

“Too big to fail” helps privatization industry avoid accountability

Low- or middle-income Canadians who falsely claim too much from government programs will find themselves in court faster than you can say “P3 privatization scheme,” but large corporations walk away with millions and barely get a slap on the wrist.

Ottawa (12 Feb. 2019) — In 2013, it was revealed that 2 companies that operated privatized correctional services had deliberately over-charged the British government by more than £180 million. The 2 companies, G4S and Serco, operated privatized services and had contracts for electronic monitoring of prisoners.

6 years later the UK's Serious Fraud Office is still investigating.

But even though these companies had improperly collected over £180 million from the British government and were under investigation for fraud, they didn't lose any of the other contracts they had to run privatized services. ‎In fact, both Serco and G4S have been allowed to bid for new contracts to operate other privatized services.

Years of privatization made 'too big to fail' possible

Both Serco and G4S were able to avoid being banned from operating privatized services because so many public services in Britain have been privatized. That has left the British government dependent on companies operating privatized services.

Because the current British government is ideologically committed to privatization, even the revelation that operators of privatized services had improperly billed for £180 million was not enough to get privatization reversed. Instead, the government just kept on giving the 2 companies contracts.

SNC-Lavalin shows too big to fail a problem in Canada

As we are now seeing with SNC-Lavalin, Canada has its own scandal with a company that makes much of its money from privatization.

SNC-Lavalin is involved in some of Canada’s largest P3 privatization schemes. These include the scandal plagued McGill University Health Centre (MUHC) where bribery was used to get the contract for the P3 privatization scheme.

Now, SNC-Lavalin is lobbying the federal government to avoid facing a criminal prosecution for paying bribes to get contracts in Libya. It has already persuaded the federal government to amend the Criminal Code to allow corporations accused of crimes go through a “remediation process” instead of the criminal justice system. What has not been decided is if SNC-Lavalin will be allowed to use that remediation process.

Scandals haven’t stopped SNC-Lavalin getting contracts for privatization schemes

The bribery scandals have not affected the ability of SNC-Lavalin and consortiums in which it plays a major role to get contracts for P3 privatization schemes. The company was allowed to keep the contract for the McGill University Health Centre P3. It has also received new contracts for other P3 privatization schemes, including the Champlain Bridge in Montreal and a light rail line in Toronto.

Large corporations can avoid being held accountable when governments depend on them

Whether it is for providing privatized services or other roles, when governments depend too much on large corporations, those corporations start to be above the law. Low- or middle-income Canadians who falsely claim too much from government programs will find themselves in court faster than you can say “P3 privatization scheme,” but large corporations walk away with millions and barely get a slap on the wrist.

Strengthening the public sector first step to ensuring the law applies to everyone

If we believe the law should apply equally to everyone, the first step is to strengthen the public sector and end the privatization of public services. That will mean governments don’t have to keep awarding contracts to companies that are behaving inappropriately. Ending privatization also means ending the secrecy that makes it easier for large corporations and senior executives to avoid being held accountable for their actions.

Both of the federal opposition parties have expressed concern about the federal government’s dealings with SNC-Lavalin. But unless they are willing to take steps like ending the use of P3 privatization schemes, they are doing nothing to reduce the ability of companies like SNC-Lavalin to put pressure on governments.


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE

 

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