Lafarge accused of funding Islamic State

LafargeHolcim, a French-Swiss cement-maker is being accused of funding Islamic terrorist. Lafarge is accused of paying, via third parties, local armed groups, including some designated as terrorists, to keep the plant open and its staff secure. A report last year in Le Monde, a French paper, said the firm might unwittingly have funded IS. The company blundered so badly while running operations in Syria as fighting raged.

According to the Economist of London, “On April 24th the firm said that its chief executive, Eric Olsen, will go, a casualty of a growing scandal over its activities in the country. The board of the world’s biggest cement producer stated only last month that Mr Olsen was not responsible for, nor aware of, wrongdoing by the firm in Syria.

“But public pressure has been increasing, notably after Jean-Luc Mélenchon, a left-wing candidate in France’s presidential election, attacked the firm and its “damned cement” in a television debate on April 4th. François Fillon, a pro-business rival, agreed the firm should be punished if allegations against it proved to be true.
According to the report “At issue is the activity of Lafarge before the firm’s merger with its Swiss rival, Holcim, in 2015. In 2010 Lafarge had built a cement factory of 240 workers for $680m near Kobane, a north Syrian town. Operations there continued until 2014, long after the violence began in 2011. The firm evacuated foreigners in 2012; local workers fled in September 2014 as Islamic State (IS) fighters seized the plant.

“It looks extraordinary that managers hung on for so long after other foreign firms fled Syria—most did so soon after violence flared. Lafarge is accused of paying, via third parties, local armed groups, including some designated as terrorists, to keep the plant open and its staff secure. A report last year in Le Monde, a French paper, said the firm might unwittingly have funded IS.

“LafargeHolcim said then that it “completely rejects the concept of financing of designated terrorist groups”. But in March this year, after an internal independent inquiry into possible dealings with armed groups, its board said the investigation had found that measures taken by staff had been “unacceptable” and described “significant errors of judgment” which contravened the firm’s code of conduct. Senior managers, not only local staff, knew “violations of Lafarge’s established standards” were likely. In March the firm said that Bruno Lafont, CEO of Lafarge before the merger and now co-chairman of the merged firm, will not seek re-election.

“Evidence of exactly what happened in Syria is piling up. A Norwegian security officer at the plant for two years to 2013 has given details in a book of how he visited local militants to exchange information, “creating alliances” to cope with a power vacuum. France’s economy ministry filed a complaint with prosecutors in September 2016 and legal proceedings are ongoing.
LafargeHolcim’s troubles do not end there.

“The company has also attracted criticism from Emmanuel Macron, one of the two candidates in the second round of the election (see article), and from other French politicians for saying it was ready to supply cement for Donald Trump’s planned wall along America’s border with Mexico. The giant firm’s market value is stuck at 15% below its level in July 2015, when it began trading, as it struggles to cut costs and generate earnings. The company doubtless hopes that Mr Olsen’s resignation will help to put at least one of its headaches behind it.”