Wednesday 29 July 2020

LafargeHolcim’s ‘internal controls have failed again after the Syrian IS scandal’


We posted how a UN report by the Independent International Fact-Finding Mission on Myanmar listed LafargeHolcim – parent company of Aggregate Industries – as having ties to construction companies controlled by the Myanmar military, the Tatmadaw, who now face charges of genocide against the Rohingya people:
Company leadership links between Lafarge, now LafargeHolcim, with Sinminn Cement, a MEHL subsidiary company... The Mission finds that any foreign business activity involving the Tatmadaw and its conglomerates MEHL and MEC poses a high risk of contributing to, or being linked to, violations of international human rights law and international humanitarian law.
Our post has recently been attracting high traffic levels, appearing on the first page of this Google search:

Clearly something was going on, and indeed it was.

Last weekend, SonntagsZeitung, a Swiss Sunday newspaper, published Wie LafargeHolcim in Burma am nächsten Skandal vorbeischrammte. Myanmar Now followed, with Swiss cement company backtracks on plans to sell to military cronies. This article pointed to the report by SonntagsZeitung’s journalist Konrad Staehelinhad:
The world’s largest cement producer is liquidating its Myanmar assets and reversing its previously stated intention to sell to its military-linked partners, after reporting in the Swiss press shed light on the possible impact on human rights of the sale.

More details can be found in the Myanmar Now article, but here are a few excerpts:
In June, LafargeHolcim said it was selling its shares [in a cement project] to companies owned by two of the project’s investors, Hla Myo and Ye Myint, according to reporting by journalist Konrad Staehelin in the German-language SonntagZeitung newspaper.
Both men are close allies and business partners of the military.
Staehelin, who has previously reported for Frontier Myanmar, wrote that the company likely knew about the potential problems with their partners but only pulled an “emergency brake” on the sale once the issue became public.
“Compared to the company’s intentions expressed in June for the sale, this is a 180-degree turn,” he wrote. “There is no other plausible explanation for this but that LafargeHolcim, confronted with SonntagZeitung’s reporting, switched course.”
“For LafargeHolcim, the liquidation of the Burma business means a write-down of a few million. More serious is the fact that internal controls have failed again after the Syrian IS scandal.”
Eva Mairinger, head of media relations at LafargeHolcim, said the company ceased operations in Myanmar in 2018, and claimed LafargeHolcim – which had previously been involved in funding terrorists in Syria – "takes all necessary measures to ensure we operate according to the highest standards of governance and human rights around the world":
We are now in the process of liquidating the dormant company and do not intend to sell anything.
Justice For Myanmar welcomed LafargeHolcim’s volte-face:
We see that by halting a planned sale to their business partners, who are members of the military cartel, LafargeHolcim is denying a future revenue stream to the Myanmar military, who are war criminals. Justice For Myanmar calls on LafargeHolcim to undertake the liquidation with full transparency and ensure it has no impact on human rights, in accordance with their responsibilities under the UN Guiding Principles for Business and Human Rights.

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