Sustainable Development

More about the Group's strategy business by business, the Lafarge's development key dates, and the building materials sector...

More about our values, our governance, our approach to managing sustainable development and our public positions...

The complete version of our stakeholders' comments is available to download as a table...

By François Vincke, Chairman of the ICC Anti-Corruption Commission:

"You asked me to give you my opinion and comments concerning a document you forwarded to me under the title ‘Lafarge Code of Business Conduct Workshop'.

A Lafarge ethics training template
The document I received is a template prepared by the head office services of Lafarge for its Business Units worldwide and serves as a useful tool for conducting all round ethics training sessions within the Lafarge Group. The scope of the document is remarkably large, as it encompasses all chapters of Lafarge's Code of Business Conduct. You explained to me, however, that the ethics training sessions, made on the basis of said template, would be organized in such a way as to provide ample time for both the trainers to bring over their message and the trainees to become familiar with these important subjects.

As promised, I give you hereunder my written comments for possible improvement of the document.

General evaluation

• A high quality document. The substance of the document is of high quality and of a very good degree of precision. If I compare it to a number of similar documents I have been given the opportunity to see, this one can be rated very high.
• A lengthy document. The dimension of the document is impressive, as it contains no less than 70 pages. For an ethics/compliance presentation conceived for non-specialist attendees (where one will find employees and officers alike), one may run the risk of having an "overdose". You have, however, told me that it was your Company's clear option to prepare and present a general non-specific training for all the Group employees and officers, covering all the (main) themes of the Code of Business Conduct. It is therefore impossible to be much shorter and one has to accept the length of the text as it is.
  I would nevertheless recommend not to expand further the document and to try to lighten it up, wherever this opportunity would be present. For purely psychological reasons (which are important in an ethics training context) it might be useful to try to skip a few pages, like for instance (i) the pages reproducing abstracts from the Lafarge Code of Business Conduct and (ii) the pages on the Training Sequence, which may be considered as repetitive. Before a presentation is made, the attendees would have received an extra copy of the Code and could, during the presentation, refer to the relevant passages by themselves.
• The individual employee dimension. A presentation of this type should serve a triple objective: (i) teach the attendees about the content of the Code of Business Conduct, (ii) educate them to make implementation of the corporate rules a base requirement for their day-to-day behavior, but also (iii) create motivation, if not enthusiasm, for fully adopting the Group rules by showing how much adherence to the Group values can enhance their careers and their self accomplishment.
  I must say that I miss the last element. The text is quite didactical, which is normal for such type of document, but it does hardly call upon the attendees' natural wish for self-promotion. As I see it, everybody now, and mainly the younger persons, comes to such kind of training sessions with the idea "What is in it for me?" If the only answer to such question is a list of dry commandments, ethics and compliance will be perceived as something imposed from above and with only negative consequences for the individual employee. While ethics clearly remains something of an obligation or a commitment, one should not omit mentioning the positive reasons for an individual employee to go for a resolute engagement in corporate ethics: (i) reconciling personal life with corporate behavior, (ii) adopting a community - friendly attitude, (iii) promoting corporate social responsibility and finally (iv) succeeding in the double challenge of enhancing profitability for the Company, while contributing to the promotion of a better society at large.
  The Company on its side should show appreciation for the ethical behavior of its officers and employees and indicate that the Group's HR policies are also designed in a way that "adherence to the [Group] values is rewarded and breaches of the law [and Company values] are met with dissuasive consequences or penalties (1)".
  In such a way, corporate ethics (or good corporate business conduct) leads to a mutually beneficial situation, where the Company thrives economically, its reputation is preserved, the employees can behave in a way that is compatible with their personal values and their attitude is duly recompensed.

 
Specific comments
I have several specific comments but, for sake of easiness, I have incorporated them in the presentation. Please revert to that document which is in attachment.

Conclusion
The presentation you have prepared is by all means outstanding. It will be interesting to perfect it on the basis of the comments which you will no doubt receive from the various attendees to the training sessions."
 

(1) OECD Principles of Corporate Governance, 2004, Chapter VI Responsibilities of the Board, Section 7, p.63.

By Daniel Lebègue, Chairman, and Julien Coll, General Delegate of Transparency International:

"The fight against corruption is a priority for the international community today because the lack of integrity and transparency is one of the main obstacles to development; in particular, to the development of the poorest countries. Corruption hinders good governance and threatens democracy - indeed, it undermines the very basis of democracy itself. Moreover, we are increasingly seeing its damaging effects on international efforts in the field of environmental protection and climate change.

The Lafarge Group's commitment to say no to corruption should therefore be considered an integral part of its commitments in the area of social responsibility. Just as governments have a duty to ensure that progress is made in the fight against corruption - in particular by making sure that their representatives abstain from any improper solicitation - companies also have a responsibility to adopt honest, transparent practices and to promote them to all their employees in all the regions in which they operate.

We note that compliance with laws and regulations is the underlying principle for all the policies of the Lafarge Group. It is important for all the Group's managers to familiarise themselves today with the relevant standards regarding the fight against corruption. These standards have undergone considerable developments over the past ten years, and noncompliance with them entails major risks (legal, business, financial and in terms of reputation), threatening the very survival of companies, as demonstrated by a number of widely reported scandals.

France and the United States are two countries that are particularly active in prosecuting bribery of foreign public officials committed by companies whose headquarters are based within their borders or which are listed on their financial markets (1). An act voted in November 2007 in France further increased the range of corrupt practices abroad that are punishable by law (2). According to Lafarge's 2007 sustainable development report, 31% of the company's sales are in countries where the risk of corruption is considered to be high or very high.

The presentation module for Lafarge's Code of Business Conduct provides a good overview of the risks of corruption with which the Group's employees may be confronted. It is clear and as comprehensive as possible, considering that attention had to be given to the other subjects covered in the Code of Business Conduct. The risk of active bribery of a public official - for which the consequences are the most severe - is addressed effectively by the fictitious scenario described. The risk of conflict of interest is also very well explained.

The elements that we believe should definitely be covered by this type of training are included:

• explanation of the regulations in force;
• explanation of the applicable penalties in the event of non-compliance with the regulations;
• employees are encouraged to ask for advice if they are unsure as to how to behave;
• it is clearly indicated that anyone who raises the alert in good faith will never be punished and that compliance with anti-corruption regulations has precedence over winning a contract;
• the risks associated with dealings with officials are emphasised.

 
Lafarge should supplement this general presentation on the risk of corruption with other, more detailed training tools which cover the areas of risk and principles for behaviour that we believe should be brought to the attention of managers:

• risks of compliance associated with joint ventures and acquisitions;
• obtaining operating rights for quarries and other licences;
• contributions to political parties and charities;
• the correct way to behave in response to extortion attempts (small facilitation payments, customs or tax extortion) - a risk highlighted by the analysis carried out by TI France in 2003-2004;
• regulations in force for giving and receiving gifts and invitations;
• risk of passive corruption (purchases).

 
We encourage Lafarge to continue its efforts in training managers to handle the risks of corruption wisely, as we believe that this is the key to an effective prevention plan. These efforts should particularly target the new units recently acquired by the Group in regions with a high risk of corruption (in particular Africa and the Middle East)."
 

(1) In 2008, the United States has already opened enquiries into 103 companies for bribery of foreign public officials. Some relate to companies that are not American but conduct business in the United States (e.g. Siemens, BAE Systems). 19 enquiries have already been opened in France, mostly involving high-profile companies (Alstom, Total, Thalès).
(2) Act of 13 November 2008 on the fight against corruption

More about the actions in the field in terms of environmental development and climate change...

Lafarge is reopening the disused Dura limestone quarry. In doing this we have undertaken an environmental and social impact assessment and engage with many local, national and international stakeholders including government agencies, elected representatives, academics and NGOs including Uganda Wildlife society, International Union for the Conservation of Nature, Nature Agenda, Advocates Coalition for Development and Environment, UNESCO and WWF.

As with some other projects, Lafarge received a detailed inquiry from an NGO, the Ecumenical Council for Corporate Responsibility (ECCR). Lafarge entered into correspondence with them about the subject.

The correspondence with ECCR has included information on the background to the development, legal concerns, socio-economic concerns, stakeholder consultation and environmental issues. That latter includes biodiversity assessment and impact mitigation, environmental impact assessment, impact on Queen Elizabeth National Park, RAMSAR site status and also wildlife corridor and monitoring.

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