Regimes change but the work stays the same for SNC chief

As violence flared in Libya this year, SNC-Lavalin Inc. was caught in a commercial crossfire. The Canadian engineering giant shelved a $480-million backlog of projects in the fiefdom of embattled strongman Moammar Gadhafi. It was an uncomfortable time, but also highlighted the international thrust of the Montreal-based company. In its centenary year, chief executive officer Pierre Duhaime explains how SNC-Lavalin approaches a world that is politically more explosive and commercially more exciting.

Is it a tough moment to be heading the country's biggest engineering firm?

I love the time we're in - when the world is in the midst of huge change. We need to find new ways to produce power. We need cleaner energy. We have huge population growth worldwide, and people moving to cities. People are getting wealthier, and they want cars and things - which puts pressures on commodities. It is a great time to be an engineering firm.

Are we seeing a turning point in the Middle East?

There is a turning point - and for the best. The current situation rings a big bell there. Everybody now needs to be open and concerned about the well-being of their populations. They need to develop their countries and their economies. They need to give the population hope, and many have money to do it.

If you go into Saudi Arabia, the King is investing hundreds of billions to create a new economy, to diversify and to create jobs. He's building a university for women. … He's building a financial centre, a tax-free city to attract commerce.

But how do you decide to work with one of these undemocratic regimes?

We are looking for countries where there is need, where SNC-Lavalin could make a difference. We also need to find a country where our own people would be safe to go and work. And of course, where the law is in place. If there is a contract, we need to be sure it will be respected; if not, we should have the means to challenge it in court.

What about human rights?

Human rights, of course. If there is danger for our own people, we are not going to that country. But if the Canadian government has a relationship with these countries, and if the United Nations is there to say yes, I cannot be the one trying to decide who is right and who is wrong.

We are going in and giving work to people. We take care of local populations. So human rights is important to us, but it's translated into the safety of our own people, as well.

So if Canada has relations with this country, you're willing to go?

Exactly. Right now, there is no way I'm going to work in North Korea, but we are working in Cuba - we are welcome in Cuba.

Does your Cuban involvement create problems in the United States?

No, it doesn't. We're not big in the U.S., but we still have more than 1,000 people there, out of a total of 24,000. The U.S. is a kind of new market, and that market is moving more towards public-private-partnership [P3]projects. That could open opportunities for a company like SNC-Lavalin that has the [size of]balance sheet and expertise in infrastructure.

What keeps you awake?

People issues, because it's a business of people. Do I have the best people? How do I maintain the motivation? There is a shortage of people - how do I make sure that my people are happy to work for us? We have an aging work force, and we need to be ready for the next generation to take over.

You're committed to nuclear energy with your recent bid for Atomic Energy of Canada Ltd. But with the Japanese crisis, what is your outlook now for nuclear?

I think it will continue. To build a reactor takes eight years. So [the market]may slow down for one year or so, but the truth is, we need clean power, and there are not too many alternatives. If you want to eliminate carbon from energy generation, you cannot go with wind, you cannot go with solar. To have a base load that's carbon-free, there is nothing right now other than nuclear.

Either you decide to maintain your coal-fired plant, or you swing over to nuclear. That's a good discussion to have. We have been building safe nuclear reactors for many years. We have learned, certainly, from what happened in Japan, and that will be applied to the design of new reactors. But we can build reliable reactors now.

Is your interest in AECL as strong as it was?

It's still strong, but it's certainly linked to what's going to happen in Ontario. Are we going to go forward with the "new build" at Darlington [nuclear station in Clarington, Ont.] or not? There is a business case for the revamping of the existing reactors, but the construction of the new reactors in Ontario is important to us.

And that affects the business case. It doesn't affect maybe the interest [in AECL] but it affects the business case. [After the interview, it was learned that Ontario's municipal employee pension plan had pulled out of talks with SNC-Lavalin for a joint AECL bid.]/p>

You are also active in the oil sands. Don't you worry about environmental backlash?

We need to make the best of what we have, and the oil sands are a great asset for Canada. I truly believe we can make oil sands into clean energy by treating it properly. We have been talking about the water ponds and the water cleaning system. We can treat these waters, and we know how to make the ponds recoverable.

We are also talking about emissions, and the use of power to liquefy the tar in the soil. Maybe we can find a way to reduce that consumption. Over all, I think the oil sands could become better for the environment; we can continue to improve.

What was the turning point in your career?

I am the son of a dry-goods merchant, and went to the CEGEP [postsecondary college]intending to be a technician. One of my teachers said, "Pierre, you have the talent for engineering - you should not stop as a technician." I went on to my engineering degree. That teacher made a difference.

How are you different from your predecessor, Jacques Lamarre?

I came more from the service side. Jacques came from more the big-project part, and that makes a difference in how we are developing the company. I'm focusing on expertise, on people. Certainly, a big project is important but delivering day-to-day services to our customers is also important.

We are now at a size that we cannot rely only on sheer big projects. We have 10,000 projects at any time, and we need people who know their business to run these projects.

What do you want as your legacy in, say, six years?

We have some strong leadership in some products. I want to enlarge that leadership to more products, where we will be recognized as the No. 1 or No. 2 in the world. And I want SNC-Lavalin to be truly a global organization - where the organization in Brazil, for example, will be known as an SNC-Lavalin of Brazil. It means they can deliver big projects in Brazil, but not be seen just as a Canadian company bringing expats to Brazil, delivering a product, but then going back home.

At the same time, we need to keep the culture of SNC-Lavalin. That's the challenge I have, and why we are using the celebration of the centennial to spread that culture around the world.

When will you know it's time to get back to Libya?

There will be a new government, and that government, no matter what it is, will call us back, and it will be recognized by the international community. And that new government will need to rebuild the country. It will happen. We have such experience and a long track record in this country; and Libya, like the rest of the region, will need to build its infrastructure. They need to create jobs. They need to create wealth for their population, and that's what we are doing.

So regimes come and go …

We have been around for 100 years. We have seen many regimes come and go.