The shipbuilder responsible for supplying Toronto’s anticipated $92 million electric ferries is currently facing accusations of forgery and breaching Russian sanctions in the Netherlands, as disclosed by Dutch prosecutors and a city representative. The Netherlands Public Prosecution Service is pursuing legal action against international shipbuilder Damen for suspected bribery, forgery, and money laundering spanning from 2006 to January 2017, as outlined in an April press release. The prosecution asserts that significant commission payments to intermediaries posed a risk of them potentially bribing local authorities.
Moreover, the company was under scrutiny for potential violations of sanctions related to items and technologies that could enhance Russia’s military capabilities or contribute to the defense and security sector, according to a translation of the Dutch announcement. Damen’s spokesperson, Robin Middel, described this as a distinct legal matter concerning the supply of ship cranes to the Russian fishing industry in early 2022, acknowledging discussions on the compliance with European Union sanctions during that period. The Toronto Star first reported the charges against Damen.
Middel noted that if Damen is definitively convicted following legal proceedings, the forgery case could impact future bidding processes. However, Middel assured that the City of Toronto has no grounds to anticipate any repercussions for the ferry program in the upcoming years. Damen has made substantial investments in compliance since 2014 and claims to have consistently upheld high standards in this domain. The company is scheduled for a pre-trial hearing in Zwolle, a city in northeastern Netherlands, on November 24.
The city only became aware of the allegations on Tuesday, according to a spokesperson’s statement. The city anticipates the delivery of two electric ferries costing $92 million in 2026 and 2027, constructed at Damen Shipyards Galati in Romania.
The charges against Damen involve business dealings in Africa, Asia, and South America and revolve around the payment of substantial commissions to agents involved in ship transactions in those regions. Prosecutors argue that these payments pose a significant risk of officials being influenced in the countries where the transactions occur. The release of false documents over several years is suspected as an attempt to conceal these substantial payments, as per a translated version of the press release.
The city enforces strict criteria for vendors to disclose any prior convictions, as stated by a spokesperson via email. Mayor Olivia Chow confirmed that Damen had no criminal convictions and complied with all vendor disclosure requirements during the contract negotiations. Mayor Chow, addressing the issue on Wednesday, mentioned that the contract with Damen was awarded in 2024 and emphasized the city’s serious consideration of the charges, with a third-party inspector monitoring the ferry project at the shipyard.
In response to queries about potential actions regarding the contract in light of this situation, Mayor Chow stressed the importance of the ferries to the city and indicated that the project is currently underway at the shipyard. The city will adapt its response accordingly should circumstances change or new information emerge.