The proposed Minister for Economy, the leader of the cement cartel

Appointed Prime Minister Dacian Ciolos proposed Costin Borc for the posts of deputy prime minister and minister of Economy, Trade and Tourism. Borc is a controversial figure, his company being fined for creating a cement cartel.

During 2002-2006 Costin Grigore Borc was the general director and administrator of Lafarge Aggregates Concrete. During his mandate as the company’s administrator, Lafarge created a cement cartel which operated from 2000 to 2004 in Romania, for which the company was fined 10 million Euros by the Competition Council.

Before being Ciolos`s nominee, Costin Borc was the CEO of Lafarge Romania. He came to the public’s attention during 1998 and 1999 when he was acting as the Head of Cabinet to the former Prime Minister Radu Vasile. After becoming notorious in politics, Borc went to the United States where he began working as a project manager in the Lafarge group. In 2002 he was sent to Romania as general manager of the Lafarge Concrete Aggregates subsidiary. He was also appointed administrator of the company as demonstrated by the company’s Memorandum and Articles of Association.

In 2005, following an investigation, the Competition Council announced that during 2000 and 2004 Lafarge, Holcim and Carpatcement formed a cement cartel within the Romanian market. The inquiry showed that these three companies acted together in order to impose prices on the cement market in Romania and therefore were fined 28 million Euros. Lafarge was fined 10 million Euros because they initiated this cartel.

A press release of the Competition Council shows that “aggravating and mitigating circumstances were considered when the fines were set which ultimately led to the corresponding differences. Thus Lafarge, by exporting below cost, and so having to recuperate the differences on the domestic market, was considered the initiator of the cartel”. Basically, one ton of cement was exported in 2003 at the price of 24 dollars, but domestically Romanians had to pay about 80 dollars.

This cartel also attracted the attention of the European Commission. In 2005, Neelie Kroes, the European Commissioner for Competition, declared that “Cartels represent the most serious violation of competition by hijacking the business environment and the financial exploitation of consumers, thereby nullifying the benefits of a functional market”. Following the cement scandal, Lafarge sent Costin Borc to Paris as the companies Regional Director of Development and Strategy. The Competition Council investigated Lafarge one more time in 2009, when another company reported a possible abuse of dominant position on the CEM I 52,5R cement market. At that time Borc was the CEO of Lafarge Serbia.

On January 8th 2013, Romanian environmental inspectors found in the Medgidia harbor dozens of tons of waste imported by Lafarge from Italy. The garbage was supposed to be burned as fuel in the city`s cement production factory. Following the environmental inspector’s control Lafarge got fined with 40,000 lei in 2012 for failing to register an imported quantity of waste. At the same time, Lafarge was fined 100.000 lei for failure of one of the companies from the group to comply with the environmental permit. The waste intended for Lafarge was improperly stored in the berths of the Medgidia port, thus being a risk for the population and the environment.