LafargeHolcim admits to ‘unacceptable’ activity in its Syrian company that paid third parties to work out arrangements with armed groups around the plant.
The revelations came as the group reported like-for-like adjusted operating earnings of $6.1bn (€5.8bn) for last year, up 8.7% compared with 2015.
LafargeHolcim said in a statement today that “unacceptable” measures were taken to keep its Syrian plant open, following allegations that staff had dealt with armed groups in the country.
The company said an internal investigation found evidence that its Syrian unit had during 2013 and 2014 provided money to third parties to work out arrangements with armed groups, including “sanctioned parties”, in order to maintain operations at the factory.
Violent conflict erupted around LafargeHolcim’s cement plant in northern Syria during 2013, with armed factions controlling or seeking to control certain areas, and this raised questions about the security of the factory and the safety of employees.
“It appears from the investigation 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,” said LafargeHolcim in a statement.
“The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged. “In hindsight, the measures required to continue operations at the plant were unacceptable”.
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 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. 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”, said LafargeHolcim. Internal procedures have been tightened, including by creating an ethics, integrity and risk committee supervised by an senior executive.
