(Adds details and background)
ZURICH, March 2 LafargeHolcim said one
of its cement plants probably paid protection money to armed
groups in Syria to keep the factory running in the war-torn
The embarrassing disclosure follows an internal
investigation and highlights the dilemmas companies face when
working in conflict zones. French prosecutors are also
investigating the cement group's activities in Syria.
"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," the world's
biggest cement maker said in a statement.
It said it could not establish the ultimate recipients of
the money and declined to say how much money had been paid in
2013 and 2014.
"In hindsight, the measures required to continue operations
at the plant were unacceptable," the Swiss company said. It is
setting up a new ethics and risk panel and further steps
designed to boost regulatory compliance.
A judicial source in France told Reuters prosecutors were
looking into the company's comments and could widen their
investigation, but no decisions had been taken yet.
The inquiry was launched last year after allegations
appeared in the French media.
French newspaper Le Monde reported in June that Lafarge,
which merged with Switzerland's Holcim in 2015, had paid taxes
to Islamic State to continue operating.
Two human rights group said in November they had filed a
legal complaint in Paris against Lafarge, saying some of its
work in Syria may have made it complicit in financing Islamic
State and in war crimes.
LafargeHolcim had issued a statement in November denying it
had financed "designated terrorist organisations".
Lafarge owned a cement factory in Jallabiya in northern
Syria, between the IS stronghold of Raqqa and the town of
Manbij. The company repatriated its expatriate staff in 2012 due
to fighting in the region, which came under IS control in 2013.
Fewer than 30 employees from the original workforce of 240
were on site when the plant eventually closed in September 2014.
LafargeHolcim on Thursday said the deteriorating political
situation in Syria had posed "very difficult challenges for the
security and operations of the plant and its employees."
It said the site was an important source of employment in
the region and played a vital role in supplying Syria with
essential building materials.
"Shutting down the operations while we were providing basic
goods to civilians and had several hundred people making a
living from our operations was a difficult decision and one that
we considered very seriously," a LafargeHolcim spokesman said.
"Once the decision to close had been taken in 2014, we acted
responsibly to remove our personnel from the site as quickly as
LafargeHolcim said it did not expect the case to have a
material financial impact on the company.
(Reporting by John Revill in Zurich and Chine Labbe in Paris;
Editing by Michael Shields/Keith Weir)