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Lafarge admits to failings in firm’s abandoned Syrian operations

Building materials supplier LafargeHolcim has admitted to failings by company bosses running its Syrian cement plant. They engaged in dealings with armed groups as they sought to protect employees as the area became increasingly dangerous as a result of the civil war. The plant which opened in 2010 was eventually abandoned in 2014 as a result of the war.

The company launched an investigation last year after allegations of misconduct were reported in a number of publications.  LafargeHolcim said that the findings of the investigation illustrated that the deterioration of the political situation in Syria during 2013 posed very difficult challenges for the security and operations of the plant and its employees. Such challenges, the company said, included threats to the safety of its employees as well as disruption of supplies needed to operate the plant and product distribution.

Different armed factions controlled or sought to control the areas around the plant at varying times LafargeHolcim said.  The investigation uncovered that the local company provided funds to third parties to work out arrangements with a number of these 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, the company said.

LafargeHolcim said: “In hindsight the measures required to continue operations at the plant were unacceptable.  Those responsible for the Syria operations appear to have acted in a manner they believed was in the best interests of the company and its employees.  However, the investigation revealed significant errors in judgment that are inconsistent with the applicable code of conduct.”

The company said that the legacy Lafarge 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.

As a result of the investigation LafargeHolcim said it had decided to create an ethics, integrity & risk committee, supervised by a member of its executive committee. The company said it would be adopting 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. The company said its board had made it clear that there can be no compromise with compliance nor with adherence to the standards reflected in the company’s code of conduct no matter the operational challenges.

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