25136 - IPI

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Environmental & Social Review Summary

Project Number

25136

Company Name

INTERSTATE PAPER INDUSTRIES SAE

Date ESRS Disclosed

Feb 14, 2007

Country

Egypt, Arab Republic of

Region

Africa

Last Updated Date

Sep 30, 2022

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Mar 23, 2007
Signed : Mar 26, 2007
Invested : Jun 28, 2007

Sector

Paper Tissue

Industry

Agribusiness and Forestry

Department

Regional Industry - MAS Africa

Project Description

The project involves the greenfield development of a 50,000 tons per year paper tissue mill to manufacture jumbo rolls of tissue paper. The mill will be located on a 129,879 sqm flat desert site in an industrial estate in Sadat City. Infrastructure (i.e. power, natural gas, water, wastewater treatment) will be provided to the site by the industrial estate. The project is being developed by the INDEVCO Group, a major industrial group which already has paper making operations in Egypt, namely Unipak Nile in 6th of October City. Unipak Nile is already an IFC client. INDEVCO has other manufacturing operation in the Kingdom of Saudi Arabia, Lebanon. the Gulf region, the European Union, the United States, and Brazil. Raw material for the tissue mill will be a mixture of recycled paper and virgin pulp, depending on the quality of the tissue required.

Overview of IFC's Scope of Review

IFC’s review of this project consisted of appraising a wide variety of technical, environmental, health and safety, labor, community and social information provided by the client. In addition discussions on environment, health and safety, and labor were held with relevant corporate and project staff in Egypt and Lebanon including senior operations and technical management, the Directors of Human Resources and Research and Development, and the Manager of Communications who is responsible for permitting of the new mill in Sadat City. The Executive Director of the INDEVCO Foundation (recently renamed the Georges N. Frem Foundation) in Lebanon provided many details of the Group’s extensive community and social activities. With regard to the issues of recycled paper and cardboard in and around Cairo, meetings were held with the General Manager of the Brotherhood for Paper Industry and Trading, the largest paper recycling company in Egypt with a capacity of about 75,000 tpa. Plant visits were made to the Unipak Nile cardboard plant in Egypt and to the Unipak Tissue Mill in Lebanon. The IFC team also visited the proposed new plant site in Sadat City, Egypt.

E & S Project Categorization and Applicable Standard

The following Performance Standards apply to this project:

- PS 1 Social and Environmental Assessment and Management System;
- PS 2 Labor and Working Conditions;
- PS 3 Pollution Prevention and Abatement;
- PS 4 Community Health, Safety and Security; and
- PS 5 Land Acquisition and Involuntary Resettlement.

PS 6 Biodiversity Conservation and Sustainable Natural Resource Management does not apply as the proposed site is within an industrial estate and was previously desert.
PS 7 Indigenous People (IP) does not apply as there are no IPs involved or impacted by this project.
PS 8 Cultural Heritage also does not apply as there is nothing of cultural significance on or near the 129,879 sqm site.

The relevant PSs have been provided to and discussed with the client as have the relevant IFC guidelines (i.e. General Environmental Guidelines, July 1998; Hazardous Materials Management Guidelines, December 2001; and the Occupational Health and Safety Guidelines, June 2003).

Based on the site visit to Sadat City and to Unipak operations in Egypt and Lebanon, discussions with the client and with the civil administration in Sadat City (the Mayor), this project will have limited potential adverse environmental and social impacts. Also any impacts will be few in number, site-specific, reversible and easily addressed through agreed mitigation measures. As a result of the above this is a Category B project according to IFC’s Environmental and Social Review Procedures.

Environmental and Social Mitigation Measures

The client has presented plans to address any impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements of Egypt as well as the IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow.

A site for this project has been selected and purchased and the Mayor of Sadat City has approved the site, the IPI has begun the process of obtaining all the necessary permits. Applications for all the relevant Egyptian permits will be sent to IFC for review and comment to ensure that the project complies with IFC’s requirements. Any information deficiencies in terms of compliance with IFC’s requirements will be addressed by the client as will any potential noncompliance issues (in an Action Plan). The management of IPI as well as their parent, INDEVCO Group, is committed to comply fully with all the Egyptian and IFC requirements. At present an environmental and social management program is not required but this may change based on the results on the permit application review process. Certainly IPI will be required to prepare policies and operational procedures on environment, labor, and occupational health and safety (this will be part of their agreed Action Plan). IPI will achieve ISO 9000 (Quality) certification; moreover, the benefits of ISO 14001 (Environmental Management) and OHSAS 18001 (Occupational Health and Safety) certifications were discussed with the client (as was the 6 Sigma quality program), although IFC does not require these certifications.

IPI will employ about 170 staff and will use the Human Resource (HR) policies and procedures developed and implemented by INDEVCO Group for use in all the Group companies. INDEVCO Group has about 4,000 employees in the Middle East. INDEVCO Group has a corporate HR Department that provides leadership, guidance and advice to the Group companies on HR issues. Also IPI can use the knowledge and experience in Egypt of Unipak Nile (with 400 employees). Consistent with INDEVCO Group’s approach to HR, IPI will have its own HR Department but it will have to operate according to the Group’s HR policies and procedures. All new IPI employees will receive copies of the Group’s HR policies and procedures and, consistent with Egyptian law, details in writing of their employment contract. INDEVCO Group has an open door policy on grievance issues with all employees having the right to meet the President of the company or the General Manager. All employees are aware of this right and are encouraged to use it if necessary. INDEVCO Group views their employees at all levels as their primary resource and takes care to ensure they are well paid, properly trained, and have opportunities for advancement. Currently IPI as a new company does not yet have an Occupational Health and Safety Management system (OHSMS). With the assistance of INDEVCO Group and Unipak Nile, IPI will develop and implement an OHSMS acceptable to IFC.

IPI will buy its raw water from the Sadat City municipal system. Pretreated wastewater will be discharged to the municipal sewer from the plant and then subject to additional treatment (i.e. sedimentation in this case) prior to reuse as non-food crop irrigation water – thus all the wastewater from the new plant will be reused. Electricity to the plant will be supplied from the grid and natural gas will also be available for the boilers. Waste paper of the proper quality will be recycled in the process. Other solid waste will whenever possible be sold to a licensed contractor for recycling (e.g. paper, cardboard, plastic, glass and metal). The remaining solid waste will be collected regularly by a licensed contractor for disposal in Sadat City’s landfill. It is anticipated that the plant will meet both IFC and Egyptian environmental requirements. IFC will review the Egyptian permit applications to ensure compliance with IFC and Egyptian requirements. IPI plans to build and operate a very efficient mill based on their international experiences. Plans are as follows:

- Water: to limit water use to about 10 to 15 m3 per ton of tissue paper – the international best practice is about 25 m3 per ton of tissue paper;
- Energy: to use energy efficiently and limit its use to about 1,000 to 1,200 kWh per ton with international best practice at about 1,500 to 1,800 kWh per ton of tissue;
- Operational Characteristics: IPI plans to manufacture multiple products using varied inputs of raw materials. This will require considerable flexibility in the tissue making process; and
- Quality: IPI intends to make high quality tissue products suitable for the European market at a reasonable cost.

There is a large and sophisticated waste paper recycling industry in Egypt particularly in and around Cairo. There is an excellent supply of the correct quality of waste paper to meet IPI’s needs for tissue production (50,000 tpa). Currently Egypt collects about 100,000 tpa of waste paper and IPI expects to buy about 30,000 tpa of waste paper from the market.

Stakeholder Engagement

Unipak Nile and INDEVCO Group are active in the communities in which they operate and IPI will adopt a similar approach. The bulk of INDEVCO Group’s community engagement is handled by the Georges N. Frem Foundation. The Georges N. Frem Foundation is mainly active in the education, civil society, social welfare, community and economic development areas. IPI has already established a very effective working relationship with the civil administration in Sadat City, including importantly the Mayor. As IPI’s new plant will be in an industrial zone/park, there is no affected community. However IPI’s management will have an open door policy to address any community concerns that might arise.

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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