Egypt: Alex Dev-01/Wadi al-Qamar

Date Filed
09 Apr 2015
Status
Open
Phase
Compliance
Country
Egypt

Case Tracker

Eligibility
Eligibility
Assessment
Transferred
Assessment
Dispute Resolution
Compliance
Appraisal
Investigation
Monitoring
CURRENT Status
Monitoring (COMPLIANCE)

Complaint Overview

Complainant

Confidential

Concerns

Pollution, community health and safety, labor issues, compliance with national legislation and IFC standards, EIA, consultation and information disclosure

Cross-Cutting Issues
Risk Management Labor Resource Efficiency Community Health and Safety Land Resettlement Informal Settlers Air Land Water Children Discrimination Coercion Violence / Abuse Loss of Livelihoods Private / Personal Property Damage Public Infrastructure Damage

Project Information

Region
Middle East & North Africa
Institution
IFC
Name & Number
Alex Dev Ltd 27022
Company
Alexandria Development Limited (ADL)
Sector
Manufacturing
Department
Manufacturing, Agribusiness & Services
Category
B
Commitment

80 million euros

Synopsis

Complaint

Titan Group, an existing IFC client, is seeking to expand its Egyptian 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.

According to IFC, the project with Titan Group for the expansion of their cement manufacturing in Egypt (#27022) was a EUR 80 million equity investment in Titan’s investment holding company Alexandria Development Limited (ADL).

In April 2015, a complaint was lodged with CAO by Wadi al-Qamar community members who live in close proximity to APCC along with current or former employees of APCC through the Egyptian Initiative for Personal Rights (EIPR), a local NGO. The complaint raises issues regarding the proximity of the plant to residential areas and the effects plant pollution has on community health and safety.  Other issues raised include compliance with national legislation, labor issues, and lack of information disclosure and community consultation, amongst others.

CAO Action

CAO found the complaint eligible for further assessment in April 2015 and an assessment trip was conducted in September 2015. During the assessment there was a lack of consensus amongst the parties to engage in a CAO facilitated dispute resolution process. In accordance with CAO’s Operational Guidelines, the case was referred to CAO’s Compliance function.

A compliance appraisal was completed in July 2016. The appraisal concludes that the complaint raises substantial issues related to IFC's appraisal and supervision of the environmental and social impacts of the project. CAO found that a compliance investigation is warranted, and the Terms of Reference for the compliance investigation were published on September 2, 2016.  In January 2017, CAO released a communique outlining its investigation process, including a CAO site visit to Egypt which happened in the same month.

In July 2020, CAO finalized its compliance investigation in relation to the ADL-01 complaint. The investigation report was sent to IFC for formal response.

CAO investigation report includes findings of noncompliance in relation to IFC’s performance in its investment in Titan Alex Dev. CAO found that at the pre-investment review stage, IFC’s review was not appropriate given the nature and scale of the project or commensurate with the level of E&S risks and impacts, as required by IFC's Sustainability Policy. 

During supervision, CAO found that IFC has supported the client to gradually reduce its air emissions and to take steps to address fugitive dust. However, current air quality monitoring is not sufficient to demonstrate compliance with WBG standards for stack emissions, fugitive dust, or noise pollution, and IFC has not ensured that the client’s disclosure, grievance handling, and community engagement practices meet PS1 requirements. In relation to labor, more focused attention on occupational health and safety and contract workers has led to improvements in personal protective equipment use and increased oversight of labor contracting companies during the period of IFC’s investment. However, CAO finds that IFC has not assured itself that the client’s current labor arrangements for contract workers meet Performance Standard 2 requirements or that the client has engaged with concerns raised by 2003 retirees or former contract workers.

On September 16, 2021 the Board of Directors cleared CAO investigation and IFC’s official response, including a Management Action Plan.

In accord with the CAO Policy, CAO will monitor the effective implementation of actions set out in IFC’s Management Action Plan.  All documents relating to this case are available under the "Case Documents" section below.

Status

CAO finalized its compliance investigation in relation to the ADL-01 complaint in July 2020. IFC’s sent their formal response in January 2021. The report will be published after the approval of the Boards.

 

Status as of Sept. 22, 2021

Case Documents

  • Dispute Resolution

    Complaint
    Complaint to the International Finance
    Jan 01, 2012
    English
    Complaint to the International Finance
    Assessment Report(s)
    CAO Assessment Report
    Apr 01, 2016
    English
    CAO Assessment Report
    CAO Assessment Report
    Apr 01, 2016
    Arabic
    CAO Assessment Report
    IFC Formal Response
    May 01, 2016
    English
    IFC Formal Response
  • Appraisal Report(s)
    CAO Compliance Appraisal Report
    Jul 01, 2016
    English
    CAO Compliance Appraisal Report
    CAO Compliance Appraisal Report
    Jul 01, 2016
    Arabic
    CAO Compliance Appraisal Report
    Audit Report(s)
    CAO Media Communique
    Jan 01, 2017
    English
    CAO Media Communique
    CAO Media Communique
    Jan 01, 2017
    Arabic
    CAO Media Communique
    Terms of Reference for CAO compliance investigation
    Sep 01, 2016
    English
    Terms of Reference for CAO compliance investigation
    Investigation Report
    Compliance Investigation Report - IFC Investments in Alexandria Portland Cement Company Egypt
    Jul 22, 2021
    English
    Compliance Investigation Report - IFC Investments in Alexandria Portland Cement Company Egypt
    IFC Response to Compliance Investigation Report
    Jul 30, 2021
    English
    IFC Response to Compliance Investigation Report
    IFC Response to Compliance Investigation Report & Management Action Plan
    Jul 30, 2021
    Arabic
    IFC Response to Compliance Investigation Report & Management Action Plan