LafargeHolcim chairman says 'unacceptable errors' made in Syria

The chairman of Swiss-French cement maker LafargeHolcim (LHN.S) said the company had made unacceptable errors in Syria and that it was cooperating with French investigators, according to an interview published in the French newspaper Le Figaro on Sunday.

In April, LafargeHolcim’s chief executive, Eric Olsen, left after the company admitted it had paid armed groups to keep a factory operating in war-ravaged Syria.

ISIS seized tons of toxic Hydrazine material from Lafarge Cement in 2014: documents

French cement company in Syria buys oil from ISIS: documents

French prosecutors have placed three people under formal investigation as part of a judicial inquiry into Lafarge’s operations and its possible “financing of a terrorist enterprise”. At issue are allegations about payments that were made to banned groups.

An independent internal inquiry found protection payments made to intermediaries to keep open the Jalabiya plant in northern Syria were not in line with its policies.

“Unacceptable errors were made that the group regrets and condemns. It’s of course easy to say that with hindsight, but the group certainly pulled out from Syria too late. That could all have been avoided,” Chairman Beat Hess told the newspaper.

Asked whether Bruno Lafont, who was the CEO of what was then Lafarge before its merger with Holcim, knew about the payments, Hess said: “I wasn’t in the company then, but I have no reason to have doubts about Bruno Lafont, in view of our internal investigation.”

Hess also said there was no reason to change the name of the company after the revelations. “Simply changing the name would not solve anything,” he said.

In February 2016, Zaman al-Wasl in an exclusive report revealed how the giant Cement group LafargeHolcim struck oil deals with ISIS and how tons of toxic materials were delivered to the radical group.

Zaman’s investigative report stood behind the sack of Eric Olsen, LafargeHolcim’s executive officer, according to the company statement on Monday. Such a decision took a while but still not enough unless an international law case should be filed against the French company, Syrian activists said.

French NGO Sherpa filed a complaint accusing the company of maintaining commercial relations with ISIS, AFP reported.

Cement group LafargeHolcim said its chief executive officer is resigning, weeks after the multinational acknowledged that its branch in northern Syria had struck deals with ‘armed groups’ so that it could keep business there running.

Under Olsen's leadership, Lafarge merged with Swiss company Holcim in 2015 to create LafargeHolcim, the world's largest cement maker. Lafarge's Syrian plant stopped operating in September 2014.

The resignation of Eric Olsen is effective July 15, the company said Monday. The statement did not mention the internal investigation into the Syria branch, which the company in March acknowledged funneled money to armed groups in 2013 and 2014 to guarantee safe passage for employees and supply its plant.

A judicial source in France said prosecutors are studying the statements made by LafargeHolcim, and they may expand the scope of the investigation, but no decisions have been made until now.

The French Le Monde newspaper published a report discussing Lafarge’s relationship with the Islamic State based on Zaman al-Wasl’s report on 21 June 2016.

At the time, Zaman al-Wasl directed questions to Federic Jolibois, the executive president of Lafarge in Syria, about the company activities. Jolibois said that his company, “does not respond to guesses and rumors.” He insisted that the company, “adheres to United Nations decisions.” He then explained, “Security is our primary priority, and so we suspended all our industrial and commercial activities in Syria since September 2014. At that time we evacuated the al-Jabaliya site entirely (The Lafarge cement factory in the Jabaliya town that is subordinate to Ayn Arab in north eastern Aleppo), and we officially banned our employees from going to the site.”

Zaman al-Wasl was the first media outlet globally to open the file of Lafarge’s relationship with the Islamic State. Zaman al-Wasl relied on email correspondence among high-ranking company officials revealing that Lafarge was involved in buying oil from “non-governmental organizations” in areas outside the regime’s control. In the summer of 2014, Bruno Pescheux, the General Manager of Lafarge, suggested several excuses and alibis the company may use to justify buying oil “illegally.” In addition, the company was selling the Islamic State forces cement.

In the autumn of 2014, a prominent official in the Islamic State directed a sharp message to the executive president of Lafarge warning him that the company needed to pay the financial dues owed to the Islamic State. He recommended the company understand that they are “dealing with the strongest Islamic Army on earth, and the company does not want to ruin its relationship with them.”

In the second part of its investigation, Zaman al-Wasl showed that the Lafarge company stored the dangerous Hydrazine chemical into its factory headquarters before these fell into the hands of the Islamic State.

Hydrazine is used to treat water for electrical generation processes, but the substance is also used for other things such as preparing explosives and as fuel for rockets.

According to Zaman al-Wasl sources, Lafarge held a large storage of the substance in its factory in Syria, and no one is sure what the Islamic State forces used the chemical for after they took control of the factory.

Other than the dangerous Hydrazine chemical, Lafarge had equipment carrying radioactive material in its factory laboratories, as well as a Gamma Matrix Device and a density measurement device which were all subject to periodical checks by the Atomic Energy Committee due to the danger and extreme sensitivity of this material. Any attempt to dismantle or move the ground equipment would spread radiation harmful to humans and the surrounding environment.

During the past few years, the map of control of the Lafarge-Syria factory located in Ayn al-Arab countryside changed. In August 2013 the area went out of regime control and became part of territory controlled by the Kurdish Protection Units, the armed wing of the Democratic Union Party which is considered an extension of the Kurdistan Workers’ Party.

On 19 September 2014, the Islamic State forces managed to gain control of the Syria-Lafarge factory and kick out the Protection Units. The Units returned in the spring of 2015 and kicked out the Islamic State forces. (With Reuters)