Samath Subramanian is one of our favourite writers and in this terrific piece of investigative journalism he tears into the French cement company Lafarge (which merged in 2015 with the Swiss cement company Holcim to create the giant, LafargeHolcim). As we read Mr Subramanian’s piece we were struck by the stupidity of railing against penurious states like Pakistan when true power in today’s world actually lies with giant conglomerates who will stop at nothing to make money.
First, here is in Mr Subramanian’s words is what Lafarge did: “Again and again, Bruno Pescheux made one point to his colleagues: no one must know what their company was up to. Secrecy was paramount. In 2013 and 2014, Pescheux ran the Syrian subsidiary of Lafarge SA, the French company that was then the world’s biggest cement conglomerate. As a civil war caught and spread, the company struck a grim deal: to pay millions of dollars to Islamic State (IS), the world’s most notorious terrorist group, treating it as a strategic ally.
These payments bought IS’s blessing so that Lafarge’s factory in Syria could keep making and selling cement – even as its European executives left the country, its local employees got kidnapped, and bombs and gunfire tore up the region. Lafarge bought raw materials from IS-approved vendors, supplied IS with cement, and paid them to squeeze the competition – in this case, cement imports coming over the border from Turkey….
The managers in Lafarge’s Syrian subsidiary knew all too well what they were doing, and they tried hard to hide it. Once, while referring to vehicle passes that IS issued Lafarge’s trucks, Pescheux emailed a go-between to say that “the name of Lafarge should never appear for obvious reasons in any document of this nature. Please use the words Cement Plant if you need but never the one of Lafarge.”
At the time, the factory, in the town of Jalabiya, was one of more than 1,600 that Lafarge ran in 61 countries. But this was no distant outpost going rogue, unnoticed by headquarters. Executives in Lafarge’s offices in Paris were complicit in the relationship with IS, as dozens of internal emails and documents show. On such evidence of wilful collaboration with IS, the US Justice Department filed criminal charges against Lafarge. (The company merged with the Swiss cement giant Holcim in the summer of 2015, not long after IS finally annexed the Jalabiya factory for itself.) Lafarge pleaded guilty to conspiring to provide material support to terrorist groups – the first successful criminal prosecution of any company on this charge in the US. In the autumn of 2022, the Justice Department fined Lafarge $778m. One prosecutor described Lafarge’s acts as a “staggering crime”.”
Now, some readers – especially those who work in asset management and like to invest in crony capitalistic companies – might be thinking that ‘these things happen and are part and parcel of business life’. Such readers would be especially interested in knowing what happened next to Lafarge:
“The penalty threw open the doors to still more legal trouble. A group of more than 800 Yazidis, represented by Amal Clooney and other lawyers in the US, is suing Lafarge for its aid to IS, which murdered, kidnapped and raped thousands of members of this religious minority group in northern Iraq. Others who have suffered IS’s violence have filed separate lawsuits, including US journalists, aid workers, military service members and their families. “None of the $778m fine imposed by the Justice Department went to any of the victims,” a lawyer in one of these suits told me. “And this is a deep-pocketed defendant – not a random front company for al-Qaida.” These are civil cases, though, so even if Lafarge loses them, the consequences will be all too familiar. A corporation pays an affordable sum in damages. The court issues a stern scolding. Onward to business as usual.
But on home turf in France, Lafarge faces a criminal case that might yield a reckoning without precedent. Dozens of former Lafarge employees in Syria, along with two non-profits, Sherpa and the European Center for Constitutional and Human Rights, have accused Lafarge of complicity in crimes against humanity. The history of treating companies as actors stoking conflict for profit dates back to the Nuremberg trials, says Mark Taylor, the author of a book titled War Economies and International Law. But criminal prosecutions usually target executives, rather than the companies they run – and even then, accountability is rare. “I can only think of three businessmen who’ve been convicted over the last 20 years, for complicity in war crimes or crimes against humanity – and none before that,” Taylor told me. “And I can’t think of a single company that has ever been convicted on either of these charges.””
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