27155 - Nile Suez

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Environmental & Social Review Summary

Project Number

27155

Company Name

NILE SUEZ SPINNING AND WEAVING SAE

Date ESRS Disclosed

May 9, 2008

Country

Egypt, Arab Republic of

Region

Africa

Last Updated Date

Sep 30, 2022

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Jun 13, 2008
Signed : Jun 16, 2008
Invested : Jun 29, 2009

Sector

Household Textile Products (Including Drapes, Mattress Covers, Carpets, Towels, etc.)

Industry

Manufacturing

Department

Regional Industry - MAS Africa

Project Description

The proposed transaction supports Mr. Nikhil Poddar (Mr. Poddar, or the Sponsor) in establishing Nile Suez Spinning and Weaving SAE (Nile Suez, or the Company). Nile Suez is currently setting up a greenfield integrated weaving, finishing and dyeing operation for bed sheets and towels in Sadat Industrial City, Egypt.

Nile Suez has also operated, for less than one year, a small sheeting cut and stitch factory at Port Said Egypt. This facility will continue after completion of the Sadat City project.

Overview of IFC's Scope of Review

IFC’s review included visits to the project site at Sadat City, Egypt, where the results of early stage construction activities were observed, and to the existing cut and stitch facility at Port Said. Meetings were held with the company’s directors, managers and advisors to discuss the company’s approach to management of social and environmental matters, and the outline design of the new facility. Documents relating to the proposed Human Resources policy, and sample contracts of employment were reviewed. Measures taken by the Sponsor to ensure that labor and working conditions in the supply chain to his existing textiles trading business were also discussed, and supplier audit reports undertaken by a number of well known American retailers buying from the Sponsor’s trading company were also reviewed.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security.

IFC’s due diligence has shown that project impacts related to IFC’s other Performance Standards are not encountered in this project. No impacts related to land acquisition and involuntary resettlement do not apply because before its conversion to industrial estate the site was unoccupied desert which supported no economic activity. The project will occupy an 8 hectare site, in a well-established industrial zone, in an industrial city that will ultimately occupy some 375 km2. Project impacts on biodiversity conservation are not suspected because of the considerable development of the desert site which pre-dated the project. No Indigenous Peoples are present in the project area, nor has any item of cultural significance been identified on or near the construction site.

The key environmental and social issues associated with this project are social and environmental assessment, management of social and environmental issues in operation, labor and working conditions, emissions to air and water, and efficient use of energy and water.

These issues can all be readily mitigated by the application of readily available techniques and technology, are site specific and are reversible. This is therefore an environmental category B project according to IFC’s Environmental and Social Review Procedure.

Environmental and Social Mitigation Measures

The company has presented plans for mitigation of environmental and social issues associated with this project. Details of these mitigation measures are given in the sections that follow.

- Social and Environmental Assessment:

The project is being developed within the context of the master-plan for Sadat City, which has been subject to environmental assessment by the Sadat City authorities. This plan envisions residential and industrial zones, and anticipates development of separate industrial zones dedicated to, for example, steel and textile industries. Nile Suez’s site is one of those set aside for textile processing.

The project is progressing following the environmental assessment and permitting procedures required by the Sadat City authorities before issuance of construction permits.

- Social and Environmental Management:

Niki, although a successful import distribution company recognizes that the Nile Suez project represents a change of scale, and requires a highly professional approach to all management disciplines including management of social and environmental issues. Therefore Nile Suez has recruited a new management team, and has appointed highly experienced and professionals to key positions in general, human resources and technical management.

Nile Suez plans to ground its management structure with ISO 9001 certified quality assurance procedures. It similarly plans to develop environmental and occupational health and safety management systems compliant with the requirements of ISO 14001 and OHSAS 18001 respectively and certified accordingly within one year of the start of processing operations. Management system structures will require regular monitoring and reporting of results to senior management levels and will include revision of target to promote continuous improvement.

- Labor and Working Conditions:

In order to meet its clients’ requirements, Niki has managed a social conditions assurance process in its supply chain. It has defined and enforced minimum working conditions for its suppliers and has commissioned social auditing companies familiar with these cultures to check that its requirements are met. The success of this work is confirmed by numerous positive audits of these suppliers carried out by and on behalf of Niki’s customers. With this background there is every reason to suppose that Nile Suez will have the ability to ensure its employment practices at least maintain these standards, and will be compliant with Egyptian requirements, its customers’ requirements and IFC’s Performance Standard 2. To this end, Nile Suez has recruited a highly experience Human Resources (HR) professional who is currently developing the HR structure to be used at the new manufacturing site.

-Human Resources Policy:

Nile Suez has prepared a comprehensive Human Resources framework which amounts to its HR policy. This covers all generalized aspects of the employer / employee relationship. It is displayed in writing in the Arabic language prominently at the entrance to the Port Said facility and will be similarly displayed at Sadat City.

-Working Relationship:

Each employee has an individual written contract of employment, either open-ended or fixed term according to post. This contract covers issues such as working hours, place of work, remuneration, annual leave, disciplinary rules and other matters, and is signed in triplicate, with copies for the employee, employer and the public social employment office.

-Working Conditions and Terms of Employment:

Working conditions and terms of employment are defined in the individual contract. For manual staff, normal weekly working hours are 45, from which allowance for breaks is deducted. Overtime is paid when worked at the stitching facility and similarly will be recorded and paid at the new site. Annual leave is provided according to the requirements of the Egyptian labor code, starting at three weeks/year, and increasing with age and length of service. Salaries paid and non-salary benefits will be set at a competitive level for the factory location, at a level sufficient to attract and retain high caliber staff.

- Workers’ Organizations and Grievance Mechanism:

Nile Suez will permit the establishment of a labor union should one be requested by the workforce. Nile Suez expects its flat management structure, open-door management policy and regular meetings throughout the company will promote a “fearless” culture in which grievances may be expressed. This will be supported by a parallel human resources department which will make itself available to receive employee representations.

- Non-Discrimination and Equal Opportunity:

Nile Suez has a policy of non-discrimination in employment and advancement, in compliance with Egyptian law, and recruits and promotes solely on merit.

- Retrenchment:

Nile Suez is expanding and expects to continue to do so. Retrenchment is not expected. The Port Said cut and stitch facility will remain in operation after completion of the Sadat City factory.

- Protecting the Workforce:

Nile Suez will at a minimum comply with the Egyptian labor code over employee age. The Company will not employ or benefit from forced or harmful child labor. Please refer to the introductory paragraph above describing Niki’s assurance of working conditions in its supply chain. All workers who work regularly for Nile Suez in its core business will be employees; the Company will not employ regularly working staff through third parties such as employment agencies.

- Occupational Health and Safety (OHS):

A Health, Safety and Environmental committee will be established. This will be chaired by the general manager, and will include the HR manager, manufacturing section heads, and technical support. The factory is being designed and will be managed by experience industry professionals, who have considered the normally-occurring risks in this industry during plant design. Thus design will include, for example, measures to suppress cotton dust, well-defined and distinct areas for machinery and people, guarding at nip-points, emergency stops and so on. Areas with wet processing will be either curbed, or sloped to drains beneath machines, to prevent water accumulation and hence a slip hazard. A consultant will be employed to develop a staff training program, which will include training on site specific risks, as well as generic industrial safety techniques such as application of lock-out-tag-out systems. The factory and grounds will be equipped with a fire protection system based upon hydrants and hose reels, though automated sprinkler will be provided in the warehouse. Emergency exit routes will be clearly signed and exits readily available.

The Port Said facility is well ventilated, and has readily accessible emergency exits at each end of the building. Fire protection is provided by hand-held extinguishers, and CO2 / powder canisters in storage areas, all of which are regularly serviced by a specialist company. Appropriate personal protective equipment (PPE) is provided. Stitching operators wear masks, while cutting operators have chainmail gloves on their guiding hands. Workplace dust levels will be measured, and staff health checked annually.

- Pollution Prevention and Abatement:

- Emissions to Air

Emissions to air will result from boilers and the stenter. Both will be natural-gas fired, therefore particulate and sulphur dioxide emissions are not expected. Low NOx burners will be specified. Process emissions from the stenter are expected to be small, but will be measured upon commissioning and additional emissions controls added if necessary to meet IFC or local requirements.

- Emissions to Water

Nile Suez will pre-treat its liquid effluents in order to meet the acceptance criteria of the Sadat City industrial estate waste water treatment facility. This facility treats effluents further before discharging for irrigation of vegetated (but not food-growing) areas within Sadat City.

- Resource Conservation and Energy Efficiency

Several resource conservation features will be included in process plant design. For example, caustic soda will be recovered from the mercerizing range and size will be recovered and returned to the sizing kitchen. Energy will be conserved through heat recovery heat exchangers to recover heat from hot effluents to preheat process water, and rinsing stages will operate in countercurrent flow to conserve water and the heat it contains, condensate will be recovery from processes for return to the boiler-house. Drying cylinder stands will have moisture controls to prevent overdrying. A cold pad dyeing system will be used for short production runs; this will minimize water, heat and dyestuff use. A sophisticated climate control system has been specified which it is expected will be able to maintain satisfactory air conditions in the weaving shed without refrigerated cooling.

- Hazardous Materials

All dyestuff will meet the Ökotex safety standard. Procedures for the safe storage, handling and use of hazardous materials will be developed and communicated to staff through the training programs described above.

- Community Health, Safety and Security

Both the Port Said cut and stitch facility and the new factory at Sadat City are in well established industrial zones with no residential neighbors. Adverse impacts on surrounding communities are minor due to factory locations.

Stakeholder Engagement

To date, community engagement has been limited to compliance with the authorities’ planning requirements, and ongoing communication with industrial neighbors. This will include community meetings at Sadat City. The Port Said factory has made some community contributions at festival time, but the factory locations preclude great dialogue with residential communities because they are absent.

Publication of this ESRS constitutes the first wide ranging publication of project information.

**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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