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Angelika Hellweger of Rahman Ravelli explains the case and its significance.
The former CEO of French cement conglomerate Lafarge has been sentenced to six years in prison for paying terrorists in order to further the company’s business interests.
Bruno Lafont was jailed by a French court for making payments to jihadists in an attempt to maintain business operations in war-torn Syria in 2013 and 2014. Lafont was ordered to start serving his sentence immediately. Former deputy managing director of Lafarge, Christian Herrault, was given a five-year sentence and the company - which is now owned by Swiss conglomerate Holcim - was fined €1.125 million; the maximum allowed.
All eight defendants in the case were found guilty of financing terrorist organisations, with prison sentences for the individuals ranging from 18 months to seven years. A related case, regarding alleged complicity in crimes against humanity, is yet to be concluded.
Significant
The case is significant for a number of reasons. It was the first time that a company has been tried in France for financing terrorism. The fact that the court ordered that the maximum fine should be imposed on Lafarge and handed out numerous jail sentences shows the seriousness with which the French authorities viewed the company’s activities.
The ruling can be seen as a major turning point in the fight for corporate accountability and sets a legal precedent. It is a very stark reminder of the responsibilities facing companies that operate in conflict zones. It also raises questions for companies about whether it is worth staying operational in conflict zones and whether potential complicity with extremist groups is worth the profit. The number of prison sentences imposed highlights the personal liability of both those in managerial positions in companies and the individuals who act on their instructions.
Many companies may have to recalibrate their risk assessments in the wake of this case and take appropriate action to avoid this type of legal liability.
Partnership
The court heard that Lafarge paid nearly €5.6 million via its subsidiary Lafarge Cement Syria (LCS) to jihadist groups and intermediaries to keep its plant operating in northern Syria. According to the court’s findings, the payments were made in violation of EU restrictive measures imposed on Syria, which prohibit providing funds or economic resources to sanctioned groups.
Presiding judge Isabelle Prevost-Desprez said Lafarge had established a "genuine commercial partnership’’ with Islamic State (IS) to protect operations at the plant, which the company began operating in 2010 after spending €680 million on it. The court heard that the single aim of the payments was to make a profit.
Other multinational companies left Syria when civil war broke out in March 2011. But Lafarge only evacuated foreign workers and left its Syrian staff working until IS jihadists seized the factory in 2014. LCS paid IS and other terrorist groups via intermediaries for access to raw materials and to ensure its vehicles and staff could move freely.
Four years ago, in a United States case, Lafarge admitted conspiring to provide material support to US-designated terrorist organisations and paid a $778 million fine as part of a plea agreement. It was the first time a corporation had been charged with that offence.
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