Morocco: Zalagh-01/Tiddas

Date Filed
21 Mar 2016
Status
Open
Phase
Dispute Resolution (DR)
Country
Morocco

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Monitoring
Compliance
CURRENT Status
Mediation (DISPUTE RESOLUTION)

Complaint Overview

Complainant

Community Members.

Concerns

Pollution, community health and safety.

Cross-Cutting Issues
Labor Resource Efficiency Air Children Community Health and Safety

Project Information

Region
Middle East & North Africa
Institution
IFC
Name & Number
Zalagh 32390
Company
ZALAR HOLDING SA
Sector
Agribusiness
Department
Manufacturing, Agribusiness & Services
Category
B
Commitment

Equity US $24 million

Synopsis

Project Overview

According to IFC, Zalar Holding SA (previously Zalagh Holding SA) is a vertically-integrated industrial poultry producer in Morocco, present across the entire poultry meat value chain: grain trading/import, animal feed production, day-old-chick/poultry production, broiler production, poultry slaughtering, and meat processing.  The project is mainly financed via IFC’s equity investment of up to US$24 million and local bank loans.

Complaint

In March 2016, CAO received a complaint filed on behalf of a coalition of community-based NGOs alleging that the installation of a poultry breeding facility in their village is causing air pollution and subsequent health issues for residents. The complaint is in relation to Atlas Couvoirs, a subsidiary of Zalar Holding Group.

CAO Action

CAO found the complaint eligible for assessment in April 2016  and conducted a field visit to discuss options for addressing the complaint with the relevant parties. During the assessment process, the complainants and the IFC client expressed their willingness to engage in a voluntary dispute resolution process facilitated by CAO. The assessment report is available at the below links in English and Arabic.

Starting in November 2016, CAO worked with the parties to plan the dialogue, and in December 2016, the parties agreed on a set of ground rules that set out, among other aspects, who would represent the community and the company in the process, principles of engagement such as good faith, and the roles and responsibilities of the parties and of CAO. 

Over a period of four months, CAO interacted with the parties both jointly and separately to assist them in working towards a mutually acceptable agreement. In February 2017, the company and community representatives found an agreement that sets out:

  • The company’s commitment to adhere strictly to environmental regulations. The company further committed to sharing relevant government permits and independent expert audits regarding the environmental performance of its operations with the community representatives.
  • The company’s commitment to prioritize hiring local community members from the Ristou, Tiddas, and Maaziz villages.
  • The establishment of a dialogue committee that will meet at least once a year to discuss issues of concern or common interest, including community priorities for development projects for the company to support.
  • The company’s commitment to a five-year plan to carry out community benefit projects responding directly to priorities identified by community representatives each year. In the context of this five-year plan, the company committed to finance projects worth up to 100,000 dirhams per year. See the full agreement via the “Case Documents” section below this page.

This agreement was finalized and signed in August 2017 and is posted under the documents below.  The agreement between the affected community and the company concluded the CAO dispute resolution process. CAO is currently monitoring the implementation of the agreement to assist in ensuring its smooth implementation, sustainability, and success. In 2018, the parties successfully carried out the first company-funded community development project geared to benefit the village. The community representatives had identified the need for the local students to have a bus to transport them to a secondary school outside the village. The bus was effectively transferred and delivered to the community in June 2018. A Progress Report is available below for more details.

After careful considerations, and having debated other possible options, parties decided in 2019 that the second community development project would be the construction of a water tower along with the digging of a well, which would distribute water to Tiddas and surrounding villages. Over the course of the past three years, with delays in part due to the COVID-19 situation, parties have been working on the implementation of such a project, including choosing adequate land on which to dig the well and build the water tower, requesting relevant authorizations, working on a budget and choosing a construction firm. The construction works started in September 2021 and are well underway.

Given the budget allocated to those two community-development projects, which equals the total amount provided for in the settlement agreement, parties agreed that with the completion of the water tower project, the obligations under Provisions 6 and 7 of the agreement would be considered fully implemented. According to Provision 8 of the agreement, once the water tower project is completed, the parties will discuss the possibility of further collaboration. 

 

Status

Parties are currently implementing the last community benefit project provided for in the settlement agreement. The other agreement provisions have been duly implemented.

 

Status as of February 4, 2022

 

Case Documents

  • Assessment

    Assessment Report(s)
    CAO Assessment Report, Zalagh-01
    Dec 01, 2016
    English
    CAO Assessment Report, Zalagh-01
    CAO Assessment Report, Zalagh-01
    Dec 01, 2016
    Arabic
    CAO Assessment Report, Zalagh-01
    IFC's Response to CAO Assessment Report
    Dec 08, 2016
    English
    IFC's Response to CAO Assessment Report
  • Agreement(s)
    Final Agreement, Zalagh-01
    Aug 01, 2017
    Arabic
    Final Agreement, Zalagh-01
    Final Agreement, Zalagh-01
    Aug 01, 2017
    Français
    Final Agreement, Zalagh-01
    Final Agreement, Zalagh-01
    Aug 01, 2017
    English
    Final Agreement, Zalagh-01
    Progress Report, Zalagh-01
    Nov 01, 2018
    Arabic
    Progress Report, Zalagh-01
    Progress Report, Zalagh-01
    Nov 01, 2018
    English
    Progress Report, Zalagh-01