Displaying items by tag: ethics

Switzerland: Eric Olsen, the chief executive officer (CEO) of LafargeHolcim, has resigned from the company following the completion of a review into a conduct of a cement plant in Syria. An independent internal investigation concluded that the a number of measures taken to continue safe operations at the plant were ‘unacceptable’ and ‘significant’ errors of judgement were made that contravened the applicable code of conduct. Although Olsen was not found personally culpable or even aware of the misconduct by the board of directors he has resigned to draw a line under the affair.

The review examined allegations that company personnel had struck deals with armed groups and sanctioned parties during 2013 until the plant closed in September 2014. The findings also confirmed that selected members of group management were aware of the situation. Remedial measures announced in March 2017 will be taken including: the adoption of a more rigorous risk assessment process focusing on high risk third parties; introduction of a restricted party screening program and a new sanctions and export control program; as well as continuation of other efforts from an external benchmarking exercise. Eric Olsen and his executive management team will implement the remedial measures supported by the Ethics, Integrity & Risk Committee.

“Although I appreciate that those responsible for the Syrian operations appear to have acted in a manner they believed was in the best interests of the company and its employees, there can be no compromise when it comes to compliance rules and adherence to the standards set out in the company’s code of conduct, no matter what the operational challenges are. We are absolutely committed to ensuring that events like those that occurred in Syria must never happen again at LafargeHolcim,” said Beat Hess, chairman of the board of LafargeHolcim.

Olsen will leave LafargeHolcim on 15 July 2017. Hess will become interim CEO whilst a replacement is found. Roland Köhler, currently an executive committee member with responsibility for Europe, Australia/New Zealand and Trading, will be appointed chief operating officer.

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.