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The shipbuilder awarded the $92 million contract to supply Toronto's long-awaited electric ferries is facing forgery charges and charges of violating Russian sanctions in the Netherlands, which the city only learned of this week, according to Dutch prosecutors and a city spokesman.
According to an April press release, the Dutch Public Prosecution Service is prosecuting international shipbuilder Damen for bribery, forgery and money laundering, focusing on the period from 2006 to January 2017. Prosecutors argue that high commission payments to agents created a risk of bribery of local officials.
The allegations have not been tested in court.
An April press release said the company was also being investigated for violating sanctions on goods and technologies that could contribute to Russia's military and technological strengthening “and/or the development of the defense and security sector,” according to a Dutch translation of the announcement.
Damen spokesman Robin Middel called this a “separate claim” regarding the delivery of ship cranes to the Russian fishing industry in early 2022 in an email to CBC News.
“Looking back, there was some discussion about whether this was allowed under [European Union]-package of sanctions at that time,” Middel said. The allegations against Damen were first reported by the Toronto Star.
Counterfeiting case could have implications for future tenders, company says
Document forgery case could have possible consequences for future tenders, Middel said, if Dahmen is found irrevocably guilty at the conclusion of the trial.
“The City of Toronto has no reason to anticipate any impact on the ferry program in the coming years,” Middel said. The company has “invested heavily” in compliance since 2014 and has met “the highest standards in the field” for many years, Middel said.
On November 24, Damen will hold a preliminary hearing in Zwolle, a city in the northeast of the Netherlands.
After a weekend of long lines at the ferry terminal, there are renewed calls for the city to move forward with building a bridge to the Toronto Islands. As CBC's Britney Bilhete reports, some Torontonians reported wait times as long as an hour and a half.
City officials were not aware of the allegations until Tuesday, a spokeswoman said in a statement.
The city is expecting two electric ferries. worth 92 million dollarswhich will be delivered in 2026 and 2027 after construction at Damen Shipyards Galati in Romania.
The charges relate to businesses in Africa, Asia and South America.
The case brought against Damen by Dutch prosecutors concerns payments of high commissions to agents involved in the sale of ships in Africa, Asia and South America.
Paying these commissions creates a “substantial” risk of bribery of officials in the countries where the business was conducted, prosecutors say.
“It is suspected that a huge number of false documents were created over several years to hide these high payments,” the translation of the press release says.
The city has “strict requirements” for sellers to disclose whether they have “prior criminal records,” a city spokesman said in an email.
Damen was not prosecuted and the company complied with all disclosure requirements for suppliers when it awarded the contract, Mayor Olivia Chow said Wednesday.
“We need our ferries,” says mayor
She said the contract with Damen was awarded in 2024. The mayor said the city is taking the allegations seriously and has an outside inspector at the shipyard who is providing updates on the ferry project.
“If the situation changes or new information becomes available, the city will respond accordingly,” the mayor said in an unrelated TTC statement.
“We need our ferries and they are under construction. [them]So we’ll see,” the mayor said when asked if the city’s response could include trying to terminate the contract.
