42 LEXPERT MAGAZINE
|
MAY 2018
| INTERNATIONAL PROJECTS |
date I was expected to leave. en, I sub-
mitted my report."
e contract was cancelled, "so my re-
port was taken seriously by the govern-
ment or whoever ultimately decided."
at's important to note, he says, because
politically unstable jurisdictions oen
have different factions, "and it's oen not
the government that's corrupt, it's one
faction or another."
Dunsky says one of the first things he
tells clients working on a mega project
in these types pf countries is "make sure
they're dealing with the right people. You
might be dealing with the people who, on
paper, have all the authority to enter into
the contract with you. But they may not
actually have the true authority."
e way for clients to protect themselves
is to have reliable contacts on the ground,
whether local law firms, local engineering
firms, or even "fixers," business consultants
who know the lay of the land and help for-
eigners navigate through the minefield of
dealing there. "You can't just walk into a
country and say: 'I'm going to build an air-
port here.'"
Like Sabine, Dunsky says the anti-cor-
ruption regimes of Canada, the US, the EU
and most of the G7 countries put Cana-
dian companies at a relative disadvantage
to companies from other countries not
similarly bound, "although less so [in infra-
structure] than in mining.
"Corruption is endemic in some of
these countries, and some are worse than
others, and our clients — not that they
want to pay bribes, they don't want to
PPP group, says risks of delay on large infra-
structure mega projects abroad can make
the cost of the project "easily twice those of
a similar project in Canada."
And every now and then, they can make
things for the lawyer quite uncomfortable.
Dunsky — who's done scores of mega
projects abroad for project sponsors, for-
eign governments and third parties such as
engineering firms — was hired a few years
ago by the airport authority of an African
country, which he preferred
not to name, to audit the
process that resulted in the
awarding of the right to de-
sign build, finance and oper-
ate a new airport, "one of the
busiest airports in Africa,"
to a local private company
majority owned by the son of the president.
"It was a big deal, about US$1 billion
in investment," Dunsky says. e project
was structured so that the private company
would turn around and subcontract ev-
erything to a foreign company that would
actually design, build, finance and operate
the new facility.
"e challenge was to see if there was
any legitimacy to the structure," Dun-
sky says. When he went through all the
contracts, he says, it became apparent
the two-step structure "was just a way to
shovel money, or funnel money, through
that local company first."
at put Dunsky in an awkward posi-
tion. "I was supposed to make a report on
whether this was a legitimate structure
but I was still in the country, so I was
afraid to submit it while I was there. So
basically, I spent a few days at the hotel. I
went to the swimming pool, I had noth-
ing else to do, and le the country on the
— but they sometimes can't do business
in those countries without conforming
to local business practices that may not
conform to Canadian legal requirements,
to which Canadian companies want to
strictly adhere.
Jody Aldcorn, who does a lot of in-
frastructure and project finance work in
the Vancouver office of McCarthy Tétrault
LLP, says "this is one of the areas where Ca-
nadians are kind of [good scouts], and, in
my experience, there are very strict policies
in place. It probably wouldn't be any sur-
prise to most people that in the airport-pro-
curement space, given these are very large
JODY ALDCORN
>
MCCARTHY TÉTRAULT LLP
"It probably wouldn't be any
surprise to most people that
in the airport-procurement
space, given these are very
large and lucrative projects,
there's the potential for there
to be undue influence."
