The cement giant Lafarge Canada can continue to bid for public contracts in Quebec and Canada without hassle, even if one of its sister companies admitted last week to having financed the terrorist group Islamic State.
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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 S.A. entered a guilty plea in the United States on October 18 in connection with the financing of terrorism in Syria.
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 S.A. has admitted conspiring to provide material support to extremely violent organizations such as the Islamic State (IS) and the Al-Qaeda-linked 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 in horrific filmed stagings, Lafarge S.A. 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 governments of Quebec and Canada told us that Lafarge Canada would not be prohibited from doing 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 S.A. The latter indeed merged with the Swiss firm Holcim in 2015. C Today, 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 position of the AMP 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 is a delicate area, especially if Lafarge [S.A.] has been condemned 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 be making 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 for 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. In particular, 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 a little less than $130,000 to Lafarge in 2019 as part of an energy efficiency program.
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 S.A., 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.
That's not all, because the firm also did nothing "to investigate or assess Lafarge's illegal activities, before they were publicly exposed," according to the prosecutor.
She added that Holcim has not fully cooperated 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-CEO of Lafarge] and its major shareholders, first and foremost the Brussels-Lambert Group of Belgian billionaire Albert Frère and Canadian Paul Desmarais [...], are keen on the merger more than anything”, reported Le Monde in March 2015.
At the material time, a holding company of the Desmarais and Frère families was also the largest shareholder of Lafarge S.A., with 20% of the capital, according to Le Monde.
The former CEO of Lafarge S.A. 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 Le Figaro in 2015.
Not up to date
Paul Desmarais Jr. claimed in 2018 that Lafarge S.A.'s board of directors had never been aware of the company's links to the Islamic State.
In an interview with Le Parisien in 2022, Holcim's big boss, Beat Hess, said that Holcim was betrayed by the ex-management of Lafarge S.A., who deliberately hid what had 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.
Lafarge Canada should not be allowed to bid on public contracts in Canada, said 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 in the list of offenses supposed to result in disqualification at the federal level, is “Participation in the activities of a criminal organization”. “I think we are in there,” he explains.
"The 13 million that were given to the organization [Islamic State], 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 involved, all subsidiaries are subject to sanctions,” he notes, about the World Bank.
