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Terrorism Financing Charge Upheld Against French Company Lafarge

Business|Terrorism Financing Charge Upheld Against French Company Lafarge

The case is the first in France to have led to a criminal inquiry into a company’s liability for its activities abroad.

Credit…Christophe Ena/Associated Press

Liz Alderman

PARIS — A French court on Thursday upheld preliminary criminal charges against one of France’s biggest companies over allegations that it financed the Islamic State and other armed groups in Syria, while putting the lives of its employees there in danger.

In its ruling, the Court of Appeal in Paris also said the company, the multinational cement maker Lafarge, had violated international embargoes as it sought to maintain business in Syria despite a civil war.

But the court rejected a separate, more serious charge that the company was complicit in crimes against humanity after former employees accused Lafarge of abetting terrorist groups operating in the region by funneling financing to them.

The ruling paves the way for a possible future trial over the other charges, which are part of an investigation by French authorities and were brought last year against Lafarge as well as six former executives, including its former chief executive, Bruno Lafont.

The case is the first in France to have led to a criminal inquiry into a company’s liability for its activities abroad.

The Lafarge plant, on Syria’s northern border with Turkey, was shuttered after the Islamic State, known as ISIS, attacked it in 2014 as employees fled the factory. It was subsequently converted into a strategic base for the United States military in Syria until President Trump withdrew American forces from the country last month.

“It’s an example to multinationals that might feel encouraged not to act legally responsible for the human rights of its employees in other countries,” said Marie-Laure Guislain, the head of litigation at Sherpa, a French anti-corruption organization that pursues human rights abuses by corporations. Sherpa filed a lawsuit in 2016 on behalf of the former Lafarge employees in Syria.

Ms. Guislain added that the group would appeal the decision to drop the war crimes charge.

Lafarge, which merged with the Swiss cement giant Holcim in 2015, has acknowledged “unacceptable errors committed in Syria” and that supervisors at its headquarters in Paris and in Syria failed to identify breaches of company rules at the Syrian subsidiary. But it has insisted that the company as a whole was not liable.

“The court has come to the same conclusion as us, that there are no elements to charge Lafarge” for crimes against humanity, Christophe Ingrain and Remi Lorrain, lawyers for Lafarge, said in a statement. Lafarge “must be exonerated for other offenses alleged against it,” they added.

The case could take months or even years to come to trial. All of the former Lafarge executives have denied the charges against them. If prosecuted, the executives could face penalties of up to 10 years in jail as well as financial fines.

It has riveted attention in France, where Lafarge has long been considered a corporate icon with international clout. Mr. Lafont’s successor as chief executive, Eric Olsen, resigned in 2017 after an internal inquiry, although Lafarge concluded that he was not responsible for, or aware of, the activity.

In the lawsuit, nearly a dozen former Syrian employees claimed that the company ignored the risks they faced and pressured them to keep working while war bore down. They alleged the company put them in danger in part by making them pass through checkpoints held by ISIS and a rotating cast of other armed militants from 2011 to 2014, and by asking them to keep the plant running even as ISIS increased its deadly presence in the region.

According to French court documents reviewed by The New York Times as well as interviews with former employees, Lafarge is accused of funneling money to intermediaries who conducted negotiations with the Islamic State, as well as Al Qaeda’s affiliate in Syria and other armed factions, in order to move supplies and employees through dangerous areas and to secure raw materials.

All told, Lafarge agents paid more than $5 million to armed groups, according to the documents, which included statements to investigators by former Lafarge officials, testimony and witness accounts of former employees, company correspondence and a confidential internal review of Lafarge’s Syria operations by the global law firm Baker McKenzie.

The investigation underscores the costs and complexity of doing business in war-torn regions, especially by companies in the energy and industrial sectors.

It is rare for international companies to face charges for crimes against humanity. Of a handful of cases brought in the past, most have been abandoned. Among them was a 2008 lawsuit brought by Burmese refugees against the French oil giant Total, which accused the company of providing support and financing to the Burmese junta that was accused of engaging in forced labor, executions and torture. The case, brought in a Belgian court, was dismissed.

Melissa Godin contributed reporting.

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