US inquiry into legacy Lafarge operations in Syria resolved

Department of Justice recognizes that the conduct in question did not involve Holcim in any way

IN a press statement issued today [18 October], Holcim have affirmed their support for the agreement reached by Lafarge SA with the US Department of Justice (DOJ) to resolve the DoJ’s inquiry into Lafarge SA and their long-defunct subsidiary Lafarge Cement Syria (LCS), relating to the legacy conduct of certain former executives during the Syrian civil war, before Holcim acquired Lafarge SA.

Under the terms of the resolution, Lafarge SA and LCS will pay a financial penalty of US$777.78 million and have agreed to plead guilty to one count of conspiring to provide material support to designated foreign terrorist organizations in Syria between August 2013 and October 2014, by which time LCS had ceased operations in the country.

In a separate statement also issued today, Lafarge SA said: ‘Lafarge SA and LCS have accepted responsibility for the actions of the individual executives involved, whose behaviour was in flagrant violation of Lafarge’s Code of Conduct. We deeply regret that this conduct occurred and have worked with the US Department of Justice to resolve this matter.’

The DoJ noted that its inquiry did not find that any of the individuals who were involved in the conduct shared or supported the methods, goals, or ideologies of the terrorist groups that were operating in the area. The conduct occurred during a period of intense violence and coercive pressure from terrorist groups, as LCS tried to manage the grave security challenges in the area surrounding their cement plant during the Syrian civil war.

Lafarge SA also said today that they will continue to co-operate fully with the French authorities in their investigation of the conduct and will defend themselves against any judicial actions that they regard as unjustified in the French proceedings.

None of the conduct in question involved Holcim, who have never operated in Syria, or any Lafarge operations or employees in the US, and none of the executives who were involved are with Lafarge or any affiliated entities today. The DoJ noted that former Lafarge SA and LCS executives who were involved in the conduct concealed it from Holcim before and after Holcim acquired Lafarge SA in 2015, as well as from external auditors.

Holcim say the conduct in question is in stark contrast to everything they stand for, and that when they learned of the allegations from media reports in 2016, they proactively and voluntarily conducted an extensive investigation, led by a major US law firm and overseen by the board of directors. Holcim publicly disclosed the principal investigative findings in 2017 and separated from former Lafarge SA and LCS executives who were involved in these events.

The DoJ also noted that Holcim have effective compliance and risk-management controls and functions in place to detect and prevent any similar potential conduct, and, as a result, determined that the appointment of an independent compliance monitor is not necessary.

In today’s statement, Holcim said the company operates to the highest ethical standards in strict compliance with the laws of all its jurisdictions, and that today’s resolution reaffirms Holcim’s commitment to conducting all their business with the utmost integrity.