"Where's the f'ing money, Lebowski?"

Though they avoid the terrible press of their American peers, the past few weeks have been showing that Canadian companies are just as bad as ever when it comes to pulling money out of countries and general evil.

When it goes well, like in Guatemala, Canadian companies get to cover all the blood up with nice shiny silver.

Or at least that's what Vancouver-based Tahoe Resources Inc. is trying to do at one of the largest silver mines in the world.  The locals in the region are none-too-happy about the effects on the local water supply and have made a point of strong opposition to the project at several consultations and blockades.

Both the government of Guatemala and Tahoe have responded by going on the attack against the (mostly indigenous) people of the region.  In the past couple of months, security guards employed by the company shot and wounded 6 people, while the government declared public demonstrations and meetings in the region illegal.  Dozens of people have been detained while there have been several cases of alleged harassment.

Early last-month, things got even more hairy for the company, when it was found that one of their executives had ordered protesters be killed and that the crime scene and police report be doctored...all on wire tap.

A bad day for Tahoe indeed, even though their company is still able to pull billions of dollars of silver out of Guatemala despite strong local opposition.  

Of course other times, it goes slightly poorer.  That's what Toronto-based First Quantum Minerals is facing today in Zambia.  

Poor First-Quantum.  Things haven't been going well for them in Africa.  After breaking UN regulations by going into the Democratic Republic of Congo and buying mines during a civil war, they probably thought they were off the hook, given that the Canadian government wasn't going to do anything about it.

However, they were mighty sad with the government of Congo seized the mine from them, only to sell it to someone else.
 
Things have now gone to pot in Zambia where a new political veteran, Michael Sata, has taken power and is, (shockingly, I know!) trying to crack down on tax avoidance.  The country says that over $2 Billion has been lost by companies not paying their fair share.

Unlike Canada, where we talk about cracking down only to ensure the exact opposite, Zambia is doing its best right now to ensure that those multi-national billionaires are paying their fair share.  

Foreign companies are now doing what they do best in these scenarios - going on the counter offensive claiming the government is "interfering" and that they "are not sure the economic environment is being sustained."  

According to the Financial Times, Seta's plan will really put the screws to companies like First Quantum,  Glencore, ENRC, Vedanta and Vale.  These companies (among others) are being forced to bring back to Zambia from offshore and home bank accounts any money over $10,000 that has been made in exports.  A financial expert has been quoted as saying the plan "has been designed on the assumption that everybody is a criminal."

Yup.

Speaking of criminals, though Tahoe and First-Quantum have it bad, things have gone even worse in Kyrgystan.  The Central Asian state of 5 million has been having a similar issue to that of Zambia.

Mining profits for Toronto-based Centerra Gold have been great at the Kumtor gold mine, one of the largest gold mines in the former USSR.  As it accounts for about 12 percent of the Kyrgystan economy, many folks in the country want to see it nationalized for public benefit.  

Protesters are arguing that too much is going to the company, while the government and Canterra have said similar things such as in Zambia about needing to attract more foreign investment and maintaining a positive climate for foreign capitalists.

Things came to a head a couple weeks ago when hundreds of local protesters took over the mine and clashed with police.  A week before, thousands of protesters stormed the mine and cut power, with other protests spreading to other parts of the country.  The issue is long standing with protests calling for nationalization of the mine last October saw a bunch of opposition lawmakers jailed on coup charges.

Rather than nationalizing the mine, the president has declared a state of emergency sending in the military.  

Though all three Canadian companies have had their share of bad news, little compares to the utter gong show that has engulfed Canadian stalwart SNC-Lavalin.  

In September last year, the Montreal offices of the Montreal-based engineering goliath were raided by the RCMP looking into corruption in Bangladesh.  This led to suspension of billions of dollars of World Bank loans to Bangladesh and a ten year ban on World Bank projects for the company.  

The RCMP probe has gone from bad to worse for the company.  In April, Swiss authorites asked the RCMP to raid the company again, this time focussing on the Toronto-offices.  The probe uncovered all kinds of crazy allegations about SNC-Lavalin's operations in Libya and around the world.  

According to the RCMP, they found SNC-Lavalin evidence that executives for the company fraudulently siphoned off hundreds of millions of dollars for bribes among other things that ended up in a host of bank accounts, properties and in the hands of the son of Moammar Gadhafi.  These executives had won billions in contracts for the company in Libya and one of them is now behind bars in Switerzerland. In addition, to Libya and Bangladesh, a further $56 million in 'mysterious' payments were found.

In classic fashion, the company went on a typical counter-offensive saying that it's all the work of a rogue employee.  But not without some pretty difficult facts to face.   

For one the company's chief executive, Pierre Duhaime, was forced to resign because he signed off on on at least some of the $56 million in payments.

For another, a woman who has been accused of trying to smuggle members of the Gadhafi family out of Libya was hired by several SNC-Lavalin executives, including those who have been accused of laundering the hundreds of millions.  This was coming out right around the company was found to have offered the Gadhafi son a vice-president position in the company and asked the Canadian government for a permit to bring him to Canada.  

And it keeps rolling.  The companies offices in Algeria were raided last week as part of an expanded and ever-growing probe into their construction projects all over the world.  

I gotta say, this 'rogue employee' line is looking pretty thin to me.  Now the company itself (not just the executives) have been accused by the RCMP of being a party to the fraud and bribery charges.  None of the RCMP allegations have been proven in court.

American Eugene V Debs, once said that “The class which has the power to rob upon a large scale also has the power to control the government to legalize their robbery”

Just another another day for Canadian companies abroad. 

The Liebowski blog tracks big piles of money.  It appears regularily on the Toronto Media Co-op.