LafargeHolcim: Board of Directors Concludes Syria Review and Confirms Remedial Measures
April 24 2017 - 1:00AM
Business Wire
Regulatory News:
On 2 March 2017 LafargeHolcim (Paris:LHN) communicated the
initial findings of an independent internal investigation,
commissioned by the Board of Directors, into allegations concerning
the Lafarge plant in Syria: specifically that company personnel had
engaged in dealings with armed groups and sanctioned parties during
2013 until the plant closed in September 2014. The internal
investigation was carried out by independent external counsel with
substantial experience in complex cross-border investigations.
The Board has now concluded the independent investigation and
confirmed that a number of measures taken to continue safe
operations at the Syrian plant were unacceptable, and significant
errors of judgement were made that contravened the applicable code
of conduct. The findings also confirm that, although these measures
were instigated by local and regional management, selected members
of Group management were aware of circumstances indicating that
violations of Lafarge’s established standards of business conduct
had taken place.
As part of the internal investigation and given his current role
as CEO of LafargeHolcim, the role and potential implication of Eric
Olsen has been a point of attention. Following an in-depth review,
the Board has concluded that Eric Olsen was not responsible for,
nor thought to be aware of, any wrongdoings that have been
identified as part of its review. In light of current legal
proceedings in France, the company will not comment further on the
findings or individual conduct.
The Board confirms the remedial measures announced on 2 March
2017, on the basis of the earlier findings including: the adoption
of a more rigorous risk assessment process focusing on high risk
third parties; introduction of a restricted party screening program
and a new sanctions and export control program; as well as
continuation of other efforts from an external benchmarking
exercise. Having now concluded the review, the Board has mandated
Eric Olsen and his executive management team to implement these
remedial measures.
The previously announced Ethics, Integrity & Risk Committee
will be responsible for overseeing the rigorous implementation
which will strengthen and enhance Group-wide compliance. The
committee is co-chaired by the Executive Committee member
responsible for Organization and Human Resources and the Chief
Legal and Compliance Officer, and reports to the Finance and Audit
Committee of the Board of Directors.
Beat Hess, Chairman of the Board of LafargeHolcim said:
“Although I appreciate that those responsible for the Syrian
operations appear to have acted in a manner they believed was in
the best interests of the company and its employees, there can be
no compromise when it comes to compliance rules and adherence to
the standards set out in the company’s code of conduct, no matter
what the operational challenges are. We are absolutely committed to
ensuring that events like those that occurred in Syria must never
happen again at LafargeHolcim.”
Based on the updated information available today, there remains
no indication that the reported allegations are likely to have an
adverse financial impact that is material to the Group.
A summary of the final report on the investigation can be
downloaded from LafargeHolcim’s website
(www.lafargeholcim.com/summary-syria-investigation-findings)
About LafargeHolcim
LafargeHolcim is the leading global building materials and
solutions company serving masons, builders, architects and
engineers all over the world. Group operations produce cement,
aggregates and ready-mix concrete which are used in building
projects ranging from affordable housing and small, local projects
to the biggest, most technically and architecturally challenging
infrastructure projects. As urbanization increasingly impacts
people and the planet, the Group provides innovative products and
building solutions with a clear commitment to social and
environmental sustainability. With leading positions in all
regions, LafargeHolcim employs around 90,000 employees in more than
80 countries and has a portfolio that is equally balanced between
developing and mature markets.
More information is available on www.lafargeholcim.comFollow us
on Twitter @LafargeHolcim
About LafargeHolcim in Syria
Due to the nature of cement and its manufacture, cement plants
are located in or near the markets they serve. In some locations,
this presents distinct challenges. Syria is one such place.
Lafarge’s cement plant in Syria took almost 3 years to build at a
cost of approximately $680 million. It started production in May
2010 and was a source of meaningful employment for the surrounding
communities, as well as providing cement for homes, businesses,
roads and other infrastructure for various communities throughout
Syria. Almost from its opening, the political situation in Syria
deteriorated rapidly, posing very difficult challenges for the
security and operation of the plant and its employees. Such
challenges included disruption of the supplies needed to operate
the plant, difficulties with product distribution and threats to
the safety of employees. Different armed political factions
controlled or sought to control the areas around the plant at
different times. Conditions around the plant became increasingly
difficult in 2014 resulting in the evacuation of the plant in
September 2014. The Group has not attempted to operate on site
since that time.
Important disclaimer - forward-looking statements
This document contains forward-looking statements. Such
forward-looking statements do not constitute forecasts regarding
results or any other performance indicator, but rather trends or
targets, as the case may be, including with respect to plans,
initiatives, events, products, solutions and services, their
development and potential. Although LafargeHolcim believes that the
expectations reflected in such forward-looking statements are based
on reasonable assumptions as at the time of publishing this
document, investors are cautioned that these statements are not
guarantees of future performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are difficult to
predict and generally beyond the control of LafargeHolcim,
including but not limited to the risks described in the
LafargeHolcim's annual report available on its Internet website
(www.lafargeholcim.com) and uncertainties related to the market
conditions and the implementation of our plans. Accordingly, we
caution you against relying on forward looking statements.
LafargeHolcim does not undertake to provide updates of these
forward-looking statements.
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