Egypt: Alex Dev Ltd-03/Beni Suef
A group of three former employees claiming to represent 300 other former workers
Labor issues, compliance with national law and IFC standards
80 million euros
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 in BSCC, and various debottlenecking investments in both plants.
As per IFC disclosures, its project with Titan Group for the expansion of their cement manufacturing in Egypt (#30274, previously #27022) comprised a EUR80 million equity investment in Titan’s investment holding company, Alexandria Development Limited (ADL).
In May 2017, a complaint was lodged with CAO by three former employees of BSCC, claiming to represent more than 300 other former workers through the Egyptian Association for Collective Rights and the Egyptian Center for Civil and Legislative Reform. The complaint raises concerns regarding labor issues, notably involuntary early retirement.
CAO found the complaint eligible for further assessment in July 2017 and an assessment trip was conducted that same month. During the assessment, there was a lack of consensus amongst the parties to engage in a CAO-facilitated dispute resolution process. Hence, in accordance with CAO’s Operational Guidelines, the case was referred to CAO’s Compliance function for appraisal.
The purpose of a 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 previous case, the Alex Dev Ltd. 02 case (ADL-02, 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
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.
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 19, 2018