26138 - Wadi II

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Environmental & Social Review Summary

Project Number

26138

Company Name

Wadi Agro-Industries

Date ESRS Disclosed

Jun 6, 2007

Country

Egypt, Arab Republic of

Region

Africa

Last Updated Date

Sep 30, 2022

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jul 9, 2007
Signed : Jul 11, 2007
Invested : Nov 4, 2008

Sector

Poultry Farming

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Wadi Group (Wadi), an existing client, has requested assistance to support its investment program in Egypt, which will:

- aid the Group to expand the feed mill’s pelleting capacity from 60 tons/hour to 120 tons/hour;
- establish a poultry CeLPad (a system to cool and humidify hot, dry air for poultry sheds);
- expand grape and olive plantations by about 1200 acres; and,
- add a new glass furnace and increase container glass manufacturing capacity from 90 tons per day (tpd) to 250 tpd.

The project implementation will occur over a period of 30 months ending in December 2009. Additionally, Wadi is considering an investment to further integrate its poultry business. However the size is contingent on government plans to ban live poultry markets, which have been implicated in Avian Influenza propagation. This project would include design and construction of a slaughterhouse and further expansion of broiler farms to support this facility.

Overview of IFC's Scope of Review

In 2006 and 2007 IFC reviewed Wadi Group’s (Wadi) annual monitoring and corrective action status reports submitted in accordance with the IFC investment contract. Review of these documents confirmed material compliance with at approval requirements including timely completion of the mandatory tasks in the Environmental Action Plan. There are minor exceedances of NOx emissions from electric power generators situated at Km 54 that will be addressed in the environmental action plan (EAP) for this current investment. Additionally, IFC staff conducted a physical inspection of Wadi operations in May 2007 including the newly commissioned glass manufacturing plant, poultry rearing, agricultural plantations, food processing, olive oil manufacturing, and organic waste composting operations. IFC also conducted interviews with Wadi employees to clarify specific points about operations and the expansion project. In the offing, if Wadi decides to construct a slaughterhouse and continue integrated operations expansion, IFC will require preparation of an environmental and social impact assessment and mitigation plan as part of the project. Wadi will investigate regulatory agencies’ requirements for environmental assessments or audits of proposed feed mill and glass manufacturing expansions and obtain certification that no such studies are required or conduct the requisite evaluations.

E & S Project Categorization and Applicable Standard

In view of IFC''s review of this client''s environmental and social assessment information including annual monitoring reports for the existing investment, a visit to current operations and the current project definition, the following Performance Standards (PS) are deemed applicable as of the date of this ESRS. Changing circumstances and project definitions may, in the offing, engender applicability of additional Performance Standards. This eventuality will be examined as part of IFC project supervision; and, further assessment and mitigation measures will be required as deemed necessary and appropriate.

- PS1: Social and Environmental Assessment and Management Systems;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement;
- PS4: Community Health Safety and Security; and
- PS5: Land Acquisition and Involuntary Resettlement.

Wadi is an IFC portfolio client in Egypt with an environmental and social risk rating of B-1-Good. This proposed investment project will facilitate expansion of glass manufacturing, agricultural production acreage, and poultry rearing operations. Environmental and social aspects of the existing investment project were evaluated carefully; and, a corrective action plan (CAP) was prepared to close specific compliance gaps. An Environmental Assessment (EA) was prepared and approved for the glass manufacturing facility and the facility has recently completed startup operations. Wadi is in compliance with the ameliorative measures defined in the corrective action plan (CAP) prepared for the first investment, annual reporting, and, with minor exceptions, compliance with at-approval requirements. This investment will expand olive and grape planting activities and further implement the recommendations of an IFC-donor funded study to optimize composting of organic waste to produce organic fertilizer to aid in expansion of croplands. The original glass manufacturing plant was supplied to comply with IFC guideline emissions limits; Wadi and the equipment supplier for the expansion will be required to adhere to the same limits. If required by local regulatory agencies, the proposed expansion projects at the feed mill and glass manufacturing facility will be examined in environmental assessments or environmental audits.

Environmental and Social Mitigation Measures

The sponsor has presented plans to address potential impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements, host country laws and regulations and World Bank/IFC environment and social performance standards and environmental, health and safety guidelines. Information about how these potential impacts will be addressed by the sponsor and this project is summarized in the paragraphs that follow. Further information is provided in the attached environmental action plan (EAP).

- Social and Environmental Assessment and Management Systems:

Beginning in 1999 Wadi obtained ISO 9001-2000 quality management certification for several of its operations, which are situated along the rural highway connecting Cairo to Alexandria. At present all Wadi poultry operations have ISO 9001 quality management system certifications. Wadi maintains Hazard Analysis and Critical Control Point (HACCP) food safety, ISO 9001 (quality), and OHSAS 18001(occupational health and safety) certifications for all Wadi Food Industries operations at KM 49, Km 54, and Km 90 in Sadat Industrial City. Wadi will continue expanding its quality and food safety management systems to accommodate new operations and expansion activities. For example Wadi Glass will obtain both ISO 9001 and OHSAS 18001 in 2007; and, Wadi Foods existing certifications will be replaced with ISO 22000, an internationally recognized food safety and quality management certification. Wadi’s grape and olive farms are certified organic in accordance with European Standard EU 20092\91, which provides ecological guidelines for all agriculture products imported into or grown in the European region in a bid to protect consumers from fraud. Additionally, Wadi has obtained National Organic Program (NOP) certification, which is under the direction of the Agricultural Marketing Service (AMS) of the United States Department of Agriculture (USDA) for grape and olive plantations. Wadi will conduct further assessments or audits for the proposed glass plant and feed mill expansions if required by local regulatory authorities.

- Labor and Working Conditions:

Wadi’s human resources policy structure is incorporated into specific management system procedures, which incorporate specific actions and responsibilities to ensure transparency in labor management, that are part of the ISO 9001 quality management system. The HR manager is ultimately responsible for appropriate implementation of the procedures. Each employee confirms in writing that he has received copies of procedures governing human resources and labor management issues; and each has written contract. New employee induction orients employees to these procedures and introduces the managers responsible for enforcement of polices and procedures; and individuals are advised where information on rights under national labor and employment law is available. Performance reviews are conducted four times per year and a fifth session is held to discuss employee profit sharing based upon performance. In the event of an employee grievance that is not resolved through Wadi’s system, employees are free to contact the Labor Office, which in turn will investigate the allegation. Wadi’s procedures also address recruitment, discipline, performance and grievance procedures. The Labor Office has reviewed and endorsed Wadi’s disciplinary procedure. No retrenchment is anticipated as the company is growing; however, during the Avian Influenza epidemic, several employees resigned because of fear of working with poultry. Wadi’s procedures adhere to existing Egyptian law on matters related to retrenchment. Egyptian law does not allow anyone under 18 to be employed even as a day worker. Consistent with existing and planned occupational health and safety certifications OHSAS 18001, Wadi provides pre-employment physical examinations for employees and medical care. Additionally, the company provides general and job specific training programs for employees. Wadi Glass and Wadi Feed operations are targeted for OHSAS 18001 certification during calendar year 2007. There are existing workplace safety issues at Wadi Glass that will be rectified in accordance with the attached EAP. In order to improve occupational health and safety in all existing and planned new operations, Wadi will continue audits and job hazard analyses of existing operations to determine gaps between present operations and IFC’s general guideline and the requirements of the OHSAS management system.

- Pollution Prevention and Abatement:

Wadi’s poultry, olive and grape production, food processing and olive oil manufacturing operations produce high volumes of organic waste. With external technical advice funded by IFC donors, the company modified its existing composting activity into an efficient, well-organized operation that is now used to convert all animal rearing waste into a byproduct for agricultural operations. The modified operation’s high operating temperatures stabilize pathogenic organisms and produces high quality humus to add nutrients and water-retaining ability to soils. At Wadi Natrum where Wadi will plant about 3000 hectares (ha) of olive trees the client has constructed a second composting operation to support planting and maintenance of the orchards. Industrial effluent from food processing at Km 54 is treated and utilized for irrigation in the grape and olive groves. Air emissions from several electric power generation units at Km 54 exceed IFC’s NOx limits. In order to determine the impact of these exceedances, Wadi will model the emissions and if required take corrective actions to mitigate projected negative impacts in compliance with the attached EAP. Wadi Glass’ new operation at Sadat City relies upon utilities (natural gas and electric power from the national grid) and waste management services from the industrial park. In order to reduce energy consumption the facility uses about 30% cullet (old, broken or waste glass) in raw materials. Air emissions have not been measured to date as the facility has recently emerged from startup in recent months. However, suppliers of the glass plant provided IFC with a certification that emissions would comply with IFC’s guideline limits before the plant was purchased. In accordance with the attached EAP Wadi Glass will provide up to date emissions data to confirm current performance. Wadi’s quality management system procedures incorporate waste segregation procedures for plastics, carton, paper and waste hydrocarbons that are accumulated for sale to third parties. Wadi’s farm inputs include water from deep wells, inorganic mineral fertilizers (dolomite-magnesium; sulfur; feldspar; gypsum; rock phosphate; and chelated micronutrient compounds), and compost prepared at Km 49. Organic compost is biologically produced from solid waste emanating from animal rearing and farming operations and used extensively in nurseries, planting and grove maintenance. Wadi operations utilize integrated pest management techniques and selected biological controls for pests of economic significance. Specifically, light traps, pheromone traps, and Trichogramma wasps are used to control the most common pest species include the olive fruit fly, Bactrocera oleae, and the olive fruit moth, Prays Oleae; and, physical and glue traps are employed for capture of rodents in and around food manufacturing operations. Wadi’s biosecurity measures include vehicle and passenger shoe and hand disinfection at all points of entry and transfer points to individual farms to prevent the spread of microorganisms and release to non farming areas. Wadi poultry operations are surrounded by physical barriers to prevent entrance of dogs and other animals.

- Community Health Safety and Security:

Wadi’s industrial operations are predominantly situated on large plots of isolated land or in industrial parks (e.g. Sadat City) segregated from communities in the vicinity of the rural highway from Cairo to Alexandria. The sole exception to this is the existing facility situated at Km 54 where Wadi activities are situated in the general vicinity of small, local communities. However, existing operations at this locale will not be affected by this investment project. Wadi will evaluate the potential for community impacts associated with ongoing operations including consideration of infrastructure and equipment safety, exposure to disease and communicate the nature of the project and control mechanisms in place to avoid negative impacts to the local community. An important consideration in this project is that efficient organic waste management contributes to biosecurity and avoidance of impacts to communities in general. Biosecurity and physical security at Wadi farming operations is provided by unarmed company employees who are charged maintaining isolation of the farms and with vehicle and personnel disinfection. Wadi’s only formal, contracted security service is in place at operations headquarters in Cairo. Two guards have been granted licenses by the government are armed. Firearm-licensed employees have been trained by Egyptian Security Forces. Specific procedures addressing the use of force and appropriate response are clearly defined in national law.

- Land Acquisition and Involuntary Resettlement:

Prior to the first IFC investment Wadi acquired about 2000 ha of undeveloped, uninhabited desert land in the vicinity of Wadi Natrum for the purpose of expanding olive orchards. Recently the client has acquired an additional about 1000 ha from previous owners. No physical or economic dislocation occurred as part of the many small transactions (multiple, piecemeal acquisitions of about 4 ha) that were required to purchase the additional land.

Stakeholder Engagement

Wadi’s operations are in general segregated from community developments on isolated farms or in industrial parks such as Sadat City (Km 90). The small community in the vicinity of Km 49 operations consists exclusively of Wadi employees and staff. They are well informed of Wadi’s operations and activities including the nature of the expansion project and ongoing biosecurity measures including organic waste composting and measures to prevent cross contamination of farms and the propagation of disease agents. Previously, Wadi’s community engagement activities consisted of interface with regulatory agencies as part of environmental assessment for proposed expansions and greenfield developments (e.g. Wadi Glass at Sadat City). These activities will continue for proposed expansions of the feed mill and Wadi Glass.

At Km 49, Wadi operates the Wadi Environmental Sciences Center (WESC), which is an NGO funded by the client (see http://www.wesc.org/AboutUs/). The facility provides environmental education for ~3000 Egyptian public school children each year. WESC is a sustainable development and industrial ecology demonstration and training center dedicated to improving science education and fostering technology transfer so that Egypt can build a robust technical culture contributing to a bright future with environmentally sound economic growth. WESC is a non-profit, field-based immersion learning environment. Visitors from all over the world gain first-hand, hands-on experience in Egypt''s ecological, agricultural, and industrial environments at WESC.

Wadi will translate this document and the EAP into Arabic and make these documents available in public locations in the vicinity of all of its operations. These documents may be viewed publicly at:

Headquarters of the Sadat Investors Association
Address: 28th of Abi Zarr Al Ghaffary
Residential zone number 1 - Sadat City, Egypt

The Wadi Representative and Contact Person:

Mr.Maged Fahmy, Commercial Manager
Wadi Holdings SAE
10 Al Managem Wal Mahager Str.
Mohandiseen, Giza
Egypt

Telephone: 00202-3043839
Fax. 00202-3447136

Client Documentation

File Name	Actions
Wadi II EAP 06062007.pdf

**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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