French-Swiss Company Admits to ‘Unacceptable’ Activity in Syria

The company said an internal investigation found evidence its Syrian unit had paid third parties to work out arrangements with armed groups, including “sanctioned parties”, in order to maintain operations at the factory in 2013 and 2014.

Violent conflict erupted around LafargeHolcim’s cement plant in northern Syria in 2013, with terrorist groups fighting with Syrian army forces to control parts of the country’s border regions with Turkey. The fighting raised questions about the security of the factory and the safety of employees.

In a statement, Lafarge said that while its investigation uncovered payments to third parties, it could not uncover “with certainty” who ultimately received the funds.

By the time the Syrian plant was evacuated in September 2014, it had fewer than 30 employees left from the original workforce of 240. LafargeHolcim was created in 2015 through the €41bn merger of France’s Lafarge and Switzerland’s Holcim.

“In hindsight, the measures required to continue operations at the plant were unacceptable,” the group said in a statement. ”The investigation revealed significant errors of judgment that are inconsistent with the applicable code of conduct.”

LafargeHolcim said criminal complaints were reported to have been filed in France in connection with its activities in Syria. The company had not been made party to any proceedings, it added, the Financial Times reported.

Based on information available so far “there is no indication that the reported allegations are likely to have an adverse financial impact that is material to the group”, LafargeHolcim claimed.

Internal procedures have been tightened, including by creating an ethics, integrity and risk committee supervised by an senior executive.