Terrorism does not deprive Lafarge of public contracts

The cement giant Lafarge Canada can continue to bid for Quebec and Canadian public contracts without hassle, even if one of its sister companies admitted last week to having financed the terrorist group Islamic State.

• Read also: A billion dollars to avoid a lawsuit linked to terrorist financing

• Read also: New legal setback for a cement manufacturer linked to the Desmarais clan

Our Bureau of Investigation has compiled 121 public contracts worth more than $53 million obtained by Lafarge Canada since 2012.

However, its sister company Lafarge SA entered a guilty plea in the United States on October 18 in connection with the financing of terrorism in Syria.

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Meanwhile, small Quebec entrepreneurs are being barred from public contracts for less serious and above all non-bloodthirsty offences, such as corruption or the production of false documents.

Lafarge SA has admitted conspiring to provide material support to extremely violent organizations such as the Islamic State (IS) and the Al-Qaeda-linked Al-Nusra Front.

Among other things, it was admitted that the company had entered into an agreement with IS to share profits, described as a “cake” in a concealed email, but which was found thanks to the ingenuity of investigators Americans.

According to them, in the summer of 2014, during which IS beheaded several hostages during horrific filmed stagings, Lafarge SA was earning income from its partnership with the group.

IS also claimed responsibility for the November 15, 2015 attacks in France, including the Bataclan attack.

Disputed position

The Government of Quebec and that of Canada told us that it would not be prohibited for Lafarge Canada to do business with the State in our country.

“There is no business relationship between Lafarge Canada Inc. […] and any corporate entity based in Europe, like the one that was sentenced in the United States recently,” writes the Autorité des marchés publics (AMP), which has jurisdiction in Quebec.

However, according to its most recent annual report, it is the same company, namely Holcim, which holds 100% of the interests in both Lafarge Canada and Lafarge SA. The latter indeed merged with the Swiss firm Holcim in 2015. C oday the name Holcim is used to oversee the entire group.

Not provided for in law

Also, an academic expert specializing in international criminal law does not agree with the AMP’s position and believes that Lafarge Canada should be banned from public contracts (see text below).

For his part, Michel Forget, assistant inspector at the Office of the Inspector General of Montreal also has reservations, even if it is not his organization that is responsible for certifying Lafarge Canada.

“It’s a tricky area, especially if Lafarge [S.A.] has been convicted in the United States. I tell you, it’s surprising to see these holding companies, what do they hold in Quebec, ”he says.

On the federal side, Public Works Canada indicates that Lafarge Canada also has the green light… but for a completely different reason. It is that the current law does not prohibit companies found guilty of financing terrorism from bidding for public contracts.

Called to comment, Lafarge Canada directed us to a New York firm of strategic advisers who told us in English that they would not make a statement.

– With Yves Lévesque, Nicolas Brasseur and Philippe Langlois

PUBLIC CONTRACTS BY THE SHOVEL

Lafarge Canada has obtained contracts worth at least $53 million in Quebec over the past ten years, according to a review carried out by our Bureau of Investigation.

City of Montreal

Lafarge has received contracts worth at least $37.7 million. A $15.7 million contract was awarded in 2021 for the rental of a space for snow disposal. Three other contracts of more than $6 million each were given for the supply of crushed stones.

Other municipalities

Many cities in western Quebec, the Laurentians and Montérégie have given contracts to Lafarge, especially for the supply of abrasives during the winter and for the supply of gravel.

Public transport

In 2021, the Société de transport de Montréal (STM) awarded Lafarge Canada a contract worth nearly $60,000 for concreting at the Côte-Vertu garage. The Société de transport de Laval (STL) awarded a contract for approximately $95,000, also for concrete, several years ago.

Government of Quebec

Lafarge has received contracts from the Ministry of Transport, the Société québécoise des infrastructures and the Régie des installations Olympiques. A contract worth $1.6 million in 2021 is for the supply of concrete for a seniors’ home in Châteauguay and another of $130,000, dated 2020, is for concrete at Hôpital Maisonneuve-Rosemont . Another is for the purchase of granular materials for the reconstruction of culverts in the Outaouais.

Federal government

Our Bureau of Investigation was able to trace contracts worth approximately $35,000 between 2013 and 2018 with Ottawa.

Not to mention the grants

The company has also received grants of $15 million since 2011. They come mainly from the federal government, including $7.5 million from Environment and Climate Change Canada in 2021. The Green Fund of the Government of Quebec gave just under $130,000 to Lafarge in 2019 as part of an energy efficiency program.

The parent company did not fully cooperate

The current owner of Lafarge Canada, Holcim, did not cooperate fully with the investigation in the United States and made few checks before the transaction with Lafarge SA, according to American authorities.

“The company that acquired Lafarge failed to conduct due diligence on Lafarge’s operations in Syria, despite clear compliance risks posed by operations in the region,” said US Attorney General Lisa O. Monaco.

This is not all, because the firm did nothing either “to investigate the illegal activities of Lafarge or to evaluate them, before they are publicly exposed”, according to the prosecutor.

She added that Holcim did not cooperate fully with the US authorities’ investigation.

Desmarais influence

It should be noted that the Quebec Desmarais family would have played an important role in the merger that took place between Lafarge and Holcim in July 2015.

“Mr. [Bruno] Lafont [ex-PDG de Lafarge] and its major shareholders, first and foremost the Brussels-Lambert Group of Belgian billionaire Albert Frère and Canadian Paul Desmarais […]want the merger more than anything,” reported The world in March 2015.

At the material time, a holding company of the Desmarais and Frère families was also the leading shareholder of Lafarge SA, with 20% of the capital, according to The world.

The former CEO of Lafarge SA Bruno Lafont has been indicted by the French authorities in this case. He even sometimes went on vacation with Desmarais and benefited from his support, according to an article in the Figaro in 2015.

Not up to date

Paul Desmarais fils claimed in 2018 that the board of directors of Lafarge SA had never been aware of the links between the company and the Islamic State.

In an interview at Parisian in 2022, Holcim big boss Beat Hess said Holcim was betrayed by the ex-management of Lafarge SA, who deliberately hid what happened before the merger, according to him.

Bruno Lafont for his part published a press release last week, in which he accuses Holcim of having carried out an “exclusively incriminating” investigation against him.

A 10-year exclusion, says an expert

Lafarge Canada should not have the right to bid for public contracts in Canada, believes Amissi Manirabona, professor at the Faculty of Law of the University of Montreal and specialist in international criminal law.

“At the federal level, even if the guilty plea took place in the United States, I think that the company should be on the list of companies that will not be able to benefit from public contracts”, he maintains, in an interview with our Bureau of Investigation.

According to Mr. Manirabona, it is more common to see multinational companies being accused of corruption and fraud than of financing terrorism.

But he argues that on the list of federally disqualifying offenses is “participation in the activities of a criminal organization.” “I think we’re in there,” he explains.

“The 13 million that were given to the organization [État islamique]it was done knowingly”, he asserts, adding that the firm “should be excluded for at least ten years”.

Same in Quebec

According to the expert, at the Quebec level, the same thing should apply, because it is essentially the same offenses that are sanctioned.

“The company should suffer the consequences […] and be excluded from public contracts for five years”, he judges.

The expert indicates that it is not clear whether Canadian law allows an entire group to be excluded if one of its subsidiaries is found guilty of a crime.

But he points out that a large organization like the World Bank has a very clear policy on the matter.

“When a parent company is implicated, all the subsidiaries are targeted by the sanctions,” he points out, about the World Bank.