Syria: LafargeHolcim has accepted that its conduct at a cement plant in Syria in 2013 and 2014 was ‘unacceptable.’ An internal investigation by the group into Lafarge’s behaviour has reported that staff committed ‘significant errors in judgment.’ The probe, supervised of the Finance and Audit Committee of the Board, was started in response to media allegations in 2016 that legacy Lafarge operations had engaged in dealings with armed groups and with sanctioned parties during 2013 until the plant was ultimately evacuated in September 2014.
The investigation has found that the Lafarge subsidiary appears to have provided funds to third parties to work out arrangements with a number of armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged. However, LafargeHolcim says that it believes its staff acted in a manner they believed was in the best interests of the company and its employees.
Following the review, the board has approved the creation of a new Ethics, Integrity & Risk committee, supervised by a member of the Executive Committee. The group will also adopt a more rigorous risk assessment process focusing in particular on high risk third parties and joint venture partners, a restricted party screening program, a new sanctions and export control program and further efforts resulting from a benchmarking exercise it has undertaken.
Finally, LafargeHolcim does not believe that its culpability poses any financial impact to its business. It says that its operations in Syria operated at a loss during the time period in question and represented less than 1% of the group’s sales at the time.
