CAO Cases

Arne Hoel, The World Bank

Middle East & North Africa

Egypt / Alex Dev Ltd-02/Beni Suef

Date Filed
February 13, 2017
Concerns
Labor issues, occupational health and safety, compliance with national legislation and IFC standards
Case Status
Open - Compliance
 

Synopsis

Project Overview 

IFC has an active project with Titan Group to support and expand its Egyptian cement operations which consist of two entities: Beni Suef Cement Company (BSCC) and Alexandria Portland Cement Company (APCC). The plants have a combined production capacity of 3.5 million tons per annum (mtpa) and are engaged in an investment program to add a second integrated cement production line of 1.5 mtpa in BSCC, and various debottlenecking investments in both plants.


As per IFC, its project with Titan Group for the expansion of their cement manufacturing in Egypt (#27022) was a EUR80 million equity investment in Titan’s investment holding company Alexandria Development Limited (ADL).


In February 2017, a complaint was lodged with CAO by seven former employees of BSCC, through the Egyptian Association for Collective Rights and the Egyptian Center for Civil and Legislative Reform, two local NGOs. The complaint raises a range of labor issues, including suspension without cause, forced early retirement, occupational health and safety, among others.

 


CAO Action

CAO found the complaint eligible for further assessment in March 2017. The CAO team conducted an assessment trip in July 2017. During CAO’s assessment, the Complainants expressed an interest in engaging in a dispute resolution process convened by CAO, while the Company decided against engaging in such a process. The Company did offer informational meetings with the relevant workers, which were convened by CAO in October 2017. Given that there was no agreement for dialogue and in keeping with CAO’s Operational Guidelines, the case was referred to CAO’s Compliance function for appraisal.


The purpose of CAO’s compliance appraisal is to determine whether or not an investigation of IFC's role in the project is merited in order to provide assurance to the World Bank Group President and the public of IFC’s compliance with relevant social and environmental policies and procedures.


In August 2018, CAO merged this case with a later case, the Alex Dev Ltd.-03 case (ADL-03), as they raise similar issues. The ADL-02 and ADL-03 cases raise concerns regarding project impacts on the health, safety, and livelihoods of current and former workers that are substantial in nature, considering both the impacts of retrenchment, loss of wages, and workplace injuries, and the number of potentially impacted workers. A review of IFC’s pre-investment due diligence and supervision of the project raises compliance questions relevant to the issues in the complaints, namely, whether IFC discharged its review and supervision duties in relation to:


i. the client’s suspension and retrenchment of workers in 2016/2017;

ii. the client’s OHS policies and practices; and

iii. the client’s handling of its ongoing dispute with workers alleging forced early retirement in 2003.


 

In this context, CAO has concluded that the ADL-02 and ADL-03 cases merit a compliance investigation.


Status

CAO’s investigation is underway.  The Alex Dev Ltd.-02 and Alex Dev. Ltd.-03 cases have been merged for the purposes of the compliance process.

 


Status as of January 18, 2019

Project information

Institution
IFC
Project Name & Number
Alex Dev Ltd 27022
Department
Global Manufacturing & Services
Company
Alexandria Development Limited (ADL)
Sector
Manufacturing
Region
Middle East & North Africa
Country
Egypt
Environmental Category
B
Commitment
80 million euros

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: In Process

Compliance

  • Under Appraisal: Completed
  • Under Audit: In Process