The Lafarge case and the corporate criminal responsibility for the financing of terrorism
Joan-Marc Ferrando Hernández, international law professor in the University of Valencia (Spain) and a member of the Human Rights Institute of the same university. He holds a PhD on Human Rights, Democracy and International Justice. His main research lines focus on international humanitarian law, the protection of cultural heritage in armed conflict, the accountability for international crimes, and the protection of human rights.
The French cement company Lafarge is being prosecuted before the French courts for several criminal offences in relation to its activities during the Syrian armed conflict. Among other charges, the corporation has been accused of complicity in crimes against humanity and financing terrorism.
There are several interesting legal aspects that must be considered in relation to the Lafarge case and the alleged crimes aforementioned. This blog contribution addresses, in particular, the issue of corporate responsibility arising from the financing of terrorism. To this end, we firstly analyze the background of the criminal proceedings brought against the company in France where the charges are presented. Secondly, we describe the configuration of the crime of financing of terrorism both in international law and in the French Criminal Code. Thirdly, the paper examines the link between the financing of terrorism and the complicity in crimes against humanity according to the decisions of the French courts.
Background: Lafarge activities in Syria and the criminal proceedings in France
There is an ongoing armed conflict in Syria since 2011. A year before, Lafarge had started running a cement factory in Jalabiya, a northeastern town 90km away from Raqqa, the city which became de facto capital of Islamic State of Iraq and Syria (ISIS).
Large swaths of the country fell under the control of different non-state armed groups. Hence, Lafarge dealt with different armed factions, including ISIS, through its subsidiary named Lafarge Cements Syria (LCS) with the aim of maintaining the company’s operations in the area.
At that time, most of the foreign corporations working in Syria had left or stopped their production. Lafarge did not. According to the available information, Lafarge paid money to ISIS in order to ensure the protection and the proper functioning of its Jalabiya factory. The relationship between LCS and ISIS was kept since ISIS took control of the cement plant in September 2014. Lafarge was then one of the most relevant cement corporations of the world. Nowadays, the company remains as one of the most powerful in the cement sector, despite changing its name.
In 2016, several human rights organizations (Sherpa and ECCHR) along with eleven former Syrian workers filed a lawsuit in France against Lafarge, LCS, and their former CEOs. Lafarge was accused of complicity in the commission of international crimes, financing terrorism, and deliberately endangering workers’ lives. The facts under investigation occurred between 2013 and 2014.
Legal scholars have underlined interesting aspects of the Lafarge case in the field of business and human rights. For instance, the liability of a parent company for the acts of its subsidiary abroad. Likewise, the case plays a role in the development of corporate responsibility in crimes against humanity. Another relevant element is the indictment of a transnational corporation like Lafarge for the financing of terrorism.
Corporate responsibility for the financing of terrorism
The financing of terrorism is criminalized in the International Convention for the Suppression of the Financing of Terrorism adopted in New York in 1999. The offence is also enshrined in the Council of Europe Convention no.198 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, adopted in 2005. France has ratified both international treaties.
According to Article 2 of the New York Convention, any person who “by any means, directly or indirectly, unlawfully and willfully provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part” to carry out the listed terrorist acts, is considered to be committing such offence.
Article 5 of the Convention establishes that State Parties undertake to adopt all necessary measures to enable legal entities in their territory or organized under their laws to be held liable when a person responsible for the management or control of that legal entity has, in that capacity, committed the offence set forth in article 2. Such liability may be criminal, civil or administrative, and without prejudice to the individual criminal responsibility.
The French Criminal Code includes the offence of the financing of terrorism in article 421-2-2. The offence resembles to that enshrined in the New York Convention. According to this provision, it constitutes a terrorist action the financing a terrorist enterprise by providing, collecting or managing funds, securities or property of any kind or by giving advice to that end, with the intention that such funds, values or goods be utilized, or knowing that they are intended to be utilized, in whole or in part, for the commission of any terrorist acts regardless of the actual commission of such act.
Article 121-2 of the French Criminal Code also establishes that legal persons may be held criminally liable for offences committed on their account by their bodies or their representatives. In addition, French nationals, legal or natural, may be prosecuted for the crimes perpetrated abroad following article 113-6.
Lafarge and the financing of terrorism
Lafarge was accused of financing terrorism together with the charge of complicity in crimes against humanity. In 2021, the French Court of Cassation confirmed the indictment for the crime of financing terrorism. In doing so, the court referred to the fact that the investigation and an internal report revealed that Lafarge and its subsidiary had paid 15 million dollars to armed groups, including ISIS. The company irregularly recorded the transactions. The Cour de Cassation also found that Lafarge’s senior executives agreed upon the payments to ISIS knowing that ISIS was a terrorist group and that there was an armed conflict in Syria.
As a consequence, the French Court of Cassation stated that, in accordance with article 421-2-2 of the Criminal Code, it was sufficient for the facts to be established that the author of the financing knows that the funds provided were intended to be used by the terrorist undertaking to commit a terrorist act, whether or not this act occurred, regardless of whether he or she intended to see the funds used for this purpose.
Two relevant aspects in the Lafarge case may be added. Firstly, the Court of Cassation linked the financing of terrorism with the complicity in crimes against humanity. The tribunal reasoned that, in the light of the facts, payments to ISIS and the awareness of its criminal activities were sufficient to uphold the charge of complicity in crimes against humanity. Once again in January, 2024, the highest court confirmed the charge. A few days after, the French National Anti-terrorist Prosecutor’s Office (PNAT) requested that Lafarge and nine former executives be tried on charges of financing terrorism. Secondly, Lafarge was also accused of financing ISIS before the US courts. In this case, the company pleaded guilty in 2022 and agreed to pay financial penalties totaling 778 million dollars.
Conclusion
The Lafarge case constitutes a valuable precedent in the fight against impunity for corporate serious violations of human rights. The recognition that a transnational company, as a legal person, may be tried for complicity in the commission of crimes against humanity is a positive step. In this sense, the offence of financing terrorism may help to trail complicity in such international crimes.
This also confirms that corporate activities abroad should be analyzed under the perspective of the prevention terrorist financing, particularly in areas of armed conflict where terrorist organizations operate. In the end, the Lafarge case shows that the debate around corporate criminal responsibility is now more alive than ever before. We should remain vigilant to the resolution of this case.
This contribution is part of the project “Acceso a la justicia en el contexto de abusos corporativos: la litigación como estrategia de resistencia y de empoderamiento a las víctimas (ACCJUSTEDH)” (ICI023/23/000001), financed by the International Catalan Institute for Peace.
Suggested Citation: J.M. F. Hernánde ‘The Lafarge case and the corporate criminal responsibility for the financing of terrorism‘, Nova Centre on Business, Human Rights and the Environment Blog, 24 september 2024