2005 Sustainability Report - Lafarge

PANEL
Contributing to local economic development
Managing our multi-local
development
MANAGING POLITICAL,
ECONOMIC AND
FINANCIAL ISSUES LINKED
TO OUR LOCATIONS
Guiding our investment
decisions
Investments above €25 million are
under the responsibility of the
Group Executive Committee. A global
investment budget is approved for each
country and takes into account political,
economic and financial risks. Each year,
we circulate the updated country risk
analysis methodology to all the Group's
units. In 2004, we updated the
weighting of the “country risk” rating
and took into account Transparency
International's recommendation to
increase the weighting of corruptionrelated
criteria (political risk), which
was thus increased from 8% to 15%. This
country risk rating prompted us to
draw up a list of ten or so countries,
exceeding the threshold tolerated by
MARION HELLMANN
BWI
PAGE 36 | 2005 SUSTAINABILITY REPORT | LAFARGE
Lafarge based on the criterion of
political risk, which does not cover
China.
Ensuring that Human Rights
are respected in the countries
where we are present:
the example of China
Lafarge is developing in China in the
total respect of its Principles of action.
In order to enable its new units to
benefit from its experience, Lafarge
is implementing a management system
that favors respect and individual
development, occupational safety and
training. For 11 years, Lafarge has been
developing progressively in China. Until
2004, Lafarge operated 13 sites. After
a joint venture with the Hong Kong
group Shui On, the Group acquired 7
new sites which considerably increased
the scope. With this sharp increase in
the scope new issues have arisen which
have to be considered by Lafarge.
The Group needs to provide human
resources that are capable of ensuring
the integration. The integration plan
will start in 2006 with audits in different
areas: social integration, safety,
technical evaluation… and with the
setting up of local teams, supported by
international teams.
The driving effect across the entire
industrial sector is becoming stronger
over time. The priority placed on
training and developing employees,
with the opportunity to pursue an
international career, makes them
receptive to new organizational and
working methods.
Lafarge has been present in China for over 11 years and should therefore be more transparent on
the impact of their operations on workers and local communities with regard to employment, social
and environmental conditions. The report does not explain why China is not included in the Group’s
list of high political risk countries and why Lafarge has increased its business in countries with
a critical Human Rights record between 2003 and 2004. Finally, I would like to see third party
verification of Lafarge’s performance in matters of Human Rights in the workplace, both through
external audits and involvement of concerned stakeholders.