The Lafarge Affair.

If you read the papers, it is easy to get the idea that the post-WWII order is breaking down.[1]  However, elements of one era can live on, for a time at least, in a new era.[2]  One part of the post-war order took the form of multi-national corporations operating in the developing world.

What happens when civil war or terrorism breaks out in those countries?  Do companies abandon their often-substantial investments and call the insurance company?  Do they pull out their Western leadership staff and abandon their local employees to their fates?  Alternatively, should they stay and try to continue operating?  In many developing countries, both the regime in power and the opponents willing to take up arms against it are unsavory.  In peacetime, the government can hide a lot of its brutality and oppression.  Once war breaks out, both sides come out into the open with unchecked violence.  If the companies remain, what kind of adaptations might they have to make as war drags on?

As anyone who has read Nevil Shute’s Most Secret (1945) or just walked around Paris knows, the French have long been pioneers in the use of reinforced concrete for construction.  (They call it “beton.”)  Cement is a major component of concrete.[3]  Currently, Lafarge SA is a major force in the business.[4]   It made large investments in Syria before the civil war began in 2011.[5]

The initial stage of the war raised the troubling questions of “should I stay or should I go.”[6]  Lafarge decided to stay.  Then the initial war, the basis of the company’s calculations, went sideways.  In eastern Syria from 2013 to 2015, the Islamic State (ISIS) seized control of territory and proclaimed a caliphate.  (They also videotaped and posted to the internet the burning to death of a captured Jordanian pilot, among other indications of their mind-set.)  ISIS exploited all the economic resources available within its domain.  This included extorting Western companies, as well as selling oil and trafficking in non-iconic antiquities.

Mired in this situation, Lafarge may have made some questionable choices.  Lafarge allegedly paid ISIS and other groups $5 million to insure the safe passage of employees and goods through territory controlled by the caliphate.  Local managers pressed local employees to keep working while the security situation deteriorated.  Critics also cite “lax security” at the Lafarge properties.[7]

Confusing the effect with the cause, a French court has “indicted” Lafarge SA.

[1] And not just because Donald Trump got elected president.  Doesn’t matter what the daily edition of the New Republic (i.e. the New York Times) thinks.

[2] See, for a highly readable example, R. F. Arragon, The Transition from the Ancient to the Medieval World (1936).

[3] On the deeply fascinating subject of Portland cement, see: https://en.wikipedia.org/wiki/Portland_cement

[4] Liz Alderman, “France Indicts Cement Giant on Charge of Aiding Terror Groups in Syria,” NYT, 29 June 2018.

[5] If you look at news photographs of Syrian cities during the war, you will see that a huge market existed for concrete and cement before the war.  Commonly, one sees that artillery fire and aerial bombing blow out the front walls of apartment buildings.  The poured-concrete floors then fall downward like the pages of a book, rather than disintegrating or collapsing straight down.  The back walls and staircases serve as the hinge or binding.  So, the concrete appears to be generally of high quality to the eye of a non-expert.

[6] See https://www.youtube.com/watch?v=xMaE6toi4mk

[7] Without seeking to exculpate the company, it is fair to ask just how Lafarge could have provided adequate security against ISIS when the governments of Syria and Iraq could not defend themselves without foreign military aid.

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