Key environmental and social risks associated with this project are social and environmental assessment; E&S management system covering all operations; labor management and working conditions for permanent and seasonal employees; recycling, treatment, and discharge of effluent and air emissions; efficient management and monitoring of energy and water use; waste minimization, recycling and reuse; consultations with communities impacted by operations to be financed; and physical and economic resettlement and/or impacts on biodiversity and natural habitats associated with land acquisition.
Social and Environmental Assessment and Management Systems
As required under Egyptian law and regulations, Wadi prepares Environmental Impact Assessment (EIA) Studies for all of its new projects. The Group has provided copies of the approvals received from the Egyptian Environmental Affairs Agency (EEAA) for all recent developments. In addition, Wadi provided copies of the independent EIA studies carried out for the new soybean crushing project, which was recently submitted to EEAA for review and approval; and for the mono-calcium phosphate (MCP) plant, which received approval from EEAA on April 28, 2010.
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) for food safety, ISO 9001 (quality), and OHSAS 18001(occupational health and safety) certifications for all Wadi Food Industries operations in Sadat City. Wadi Glass and Wadi Feed obtained both ISO 9001 and OHSAS 18001 in 2007. Wadi will utilize the same management systems to cover all of the new operations to be financed under this investment.
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 Hatcheries and Glass operations maintain an environmental register as required by national environmental law. During a recent supervision visit, it was noted that Wadi Food also requires an environmental register and that Wadi Hatcheries’ environmental register needs to be updated, as it is was found outdated following the last EEAA visit in 2007. The Wadi Group will ensure that all required environmental registers are in place and regularly updated, and will document this in the AMRs submitted to IFC. In addition, Wadi will include an update in the AMR regarding the deployment of its E&S management system throughout the Group’s various companies and facilities. Going forward, Wadi will conduct environmental impact assessment studies for the proposed trailer assembly plant and fish production project, if required by local regulatory authorities.
Wadi has organized the management of its environment, occupational health and safety operations in two units. The environmental assessment and management unit is located in the Project Management department, which reports directly to the Group’s Chief Executive Officer (CEO). Once a new project is implemented, environmental compliance and reporting is transferred to the project’s General Manager, who reports indirectly to the Chief Operating Officer (COO) on environmental and safety compliance. Occupational Health and Safety (OHS) is handled by the Quality Department, which reports to the COO. The Company has a safety policy in place. Wadi’s Food and Glass operations are equipped with fire alarm and fighting system with sprinklers and handheld extinguishers. Wadi Hatcheries, Food and Glass all have emergency response teams, wardens and designated collection point. Fire drills are undertaken at all facilities 1-2 times a year. To ensure systematic emergency management and response for all of its facilities, Wadi will review and revise its Emergency Response and Preparedness (ERP) plans and procedures to ensure compliance with the Menofeya governorate “Civil Protection Authority” that these will be adopted at all operations. The corporate ERP plans and procedures will cover all of the risks that may be present at any of its facilities, including Avian Influenza, gas explosions, life and fire safety, etc., including risks related to all of the new operations to be financed under this investment.
As part of its overall Quality Management approach, Wadi Group recently contracted Ernst and Young (E&Y) to formulate a corporate strategy including vision, mission, objectives and targets and a balanced scorecard that will result in key performance indicators (KPIs) at the corporate level. These KPIs will be cascaded to the production team and individual level to improve overall performance management. To further improve productivity and quality of its operations, Wadi engaged Competitive Capabilities International to work at the shop floor level to implement a total productive maintenance (TPM) program for Wadi Food and Wadi Glass production facilities.
Labor and Working Conditions
The Company’s total labor force currently numbers 3364 full time employees, including head office and field operations, and 307 part time employees. As a result of the proposed developments to be undertaken as part of the Project, Wadi expects to increase its labor force by 1130 full time and 100 part time employees. The minimum age for both full- and part-time workers is 20 years. The company’s management practices equal opportunity employment. The company has two separate departments that handle issues related to labor and working conditions: Quality for safety/health issues and field management, and Human Resources (HR) for recruitment, training, and performance management.
Wadi’s HR 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 policies and procedures; and individuals are advised where information on rights under national labor and employment law is available. Performance reviews are conducted four times a year and a fifth session is held to discuss employee profit sharing based upon performance. In the event of an employee grievance that cannot be 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 continuing to grow. Wadi is developing an HR manual that consolidates all of its HR policies and practices and will include an explicit commitment to comply with IFC’s PS2.
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. As part of its continual improvement objectives, Wadi will carry out job hazard analysis of its operations to identify gaps between its operations and IFC’s EHS guidelines and requirements of its OHSAS management system. The analysis will cover all of the new operations to be financed under this investment. In addition, the Group’s OHS management system and standard operating procedures will be reviewed and revised, as needed, to take account of OHS issues at each of the new operations. Given that the MCP plant will be an entirely new type of venture for Wadi, the Company has agreed to develop specific OHS operational procedures for each job family in the plant at least six months prior to trial production, and to provide OHS training for all employees based on their positions at least one month prior to trial production.
The Quality Department has adequate systems and procedures in place to manage occupational health and safety (OHS) across Wadi’s various companies. There is an on-site nurse and daily physician visits to Wadi facilities in Sadat City, the nearest hospital is 6km within the city. The company offers transportation and accommodation within industrial city to all employees. Personal protective equipment (PPE) is provided and insurance is in accordance to Labor Law. Wadi Group maintains accident investigation reports and log books in all facilities. The Group provides extensive training to its full- and part-time workers, including OHSAS 18001 health and safety training, and training on the corporate Quality management system, which includes environmental performance. In addition, the Group contracts with several external training providers to conduct professional development training on a range of topics and skills. Wadi has established an environment, health and safety (EHS) committee comprised of staff and management from different departments, which meets regularly to review EHS issues and concerns.
Wadi typically manages its own construction projects, with support from contractors for civil works. All construction activities are carried out in accordance with the Group’s OHSAS management system. The Group’s standard OHS training is provided for all construction workers, whether they are employees of Wadi or its contractors. Accident and near miss statistics are monitored, investigated and responded to in exactly the same manner as is done during normal operations.
Pollution Prevention and Abatement
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 one of its plants (which is located near the 49 kilometer peg of the Cairo-Alexandria Agricultural Road and is therefore referred to as the ‘Km 49’ plant). 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, which include the olive fruit fly, Bactrocera oleae, and the olive fruit moth, Prays Oleae. Physical and glue traps are employed for capture of rodents in and around food manufacturing operations.
Wadi’s poultry, olive and grape production, food processing and olive oil manufacturing operations produce high volumes of organic waste. In 2006, with technical assistance provided by IFC, the company modified its composting activity into an efficient, well-organized operation 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 its Wadi Natrun operations, the client has constructed a second composting operation to support planting and maintenance of the orchards. Industrial effluent from food processing at its El Beheira facilities (referred to as the ‘Km 54’ facilities) is treated and utilized for irrigation in the grape and olive groves. 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. A recent supervision visit as well as a review of the 2008 AMR found a few instances where housekeeping needs to be improved. Wadi has committed to resolving these issues and reporting on the resolution in the 2009 AMR, which is due in August 2010.
As all existing facilities visited are located in a designated industrial zone, power, water and sewerage systems are provided by government utilities. In addition, most facilities are equipped with standby diesel generators and there are two boilers in operation at the Km 54 plant, the Sadat City plant, and the Noubaria feed plant. The Group has provided recent air monitoring reports which indicate that all sources comply with both Egyptian limits and IFC guidelines. Fuel at all facilities is stored appropriately in shaded areas or underground tanks, and equipped with secondary containment structures in the event of a spill or leak. The new Wadi Glass operations at Sadat City rely on utilities (natural gas and electricity from the national grid) and waste management services from the industrial park. To reduce energy consumption the facility uses approximately 30% cullet (recycled old, broken or waste glass) as input materials. Going forward, Wadi will include energy consumption figures for each of its facilities in the AMRs submitted to IFC.
Water for all existing operations is sourced from deep wells, for which Wadi has obtained abstraction permits from the relevant authorities. All wells are equipped with meters, and Wadi monitors water consumption monthly at each facility. Total water consumption in 2009 was approximately 1.095 million cubic meters (m3). Wadi has established internal KPI targets to reduce water and energy consumption for each of its plants. In addition, IFC’s Cairo-based Cleaner Production (CP) team has recently begun discussions with Wadi management about providing Advisory Services (AS) support to the Group to carry out systematic CP audits across Wadi’s facilities. Going forward, Wadi will include water consumption volumes for each of its facilities, as well as the results of effluent treatment analyses, in the AMRs submitted to IFC.
In addition to pollution prevention and abatement performance at Wadi’s existing facilities, IFC reviewed risks and issues arising from the following proposed new developments.
Expansion of table eggs production: The expansion will be carried out on the site of Wadi’s existing poultry services operations in Wadi Natrun or on a new location to be determined at a later stage where the land will be purchased on a willing buyer-willing seller basis. Environmental and OHS issues during both the construction and operational phases will be handled in accordance with Wadi’s existing OHSAS 18001certified management system. E&S impacts will include an additional energy requirement of 8 million KW per annum to be sourced from the national grid or from Wadi’s own power generating station. The water requirement for the expanded production is expected to result in approximately a tenfold increase in solid and liquid wastes generated, which will be managed in the same manner as is done for Wadi’s existing poultry operations. Air emissions from the layer houses (principally ammonia and hydrogen sulfide emissions) will be controlled through air ducts that provide chickens with fresh air, which increases layer comfort, lowers mortality and improves laying productivity. The sheds have a ventilation system that automatically controls and adjusts the temperature. Sheds floors are covered with wood chips and are cleaned daily; the wood chip/manure mixture is used as input to Wadi’s compost plant. Inorganic solid wastes are recycled, sold, or disposed of in municipal landfills. Refrigerants used in chillers/air conditioning equipment comply with Montreal Protocol requirements. As is the case for the existing egg production operations, handling of products will be in accordance with Wadi’s HAACP-certified food safety procedures.
Water is obtained from municipal sources or from ground water sources, such as deep wells. Current consumption is 35,000 m3 per year, which is expected to increase to 300,000m3/yr as a result of the expansion. Most of this volume is consumed by birds (approximately 400 cc per bird per day) or for cleaning of sheds and equipment. No process effluent is generated at the feed mill and only small amounts of effluent/domestic wastewater at the farms. Hatcheries generate a significant volume of wastewater by washing equipment after every hatch. A wastewater treatment plant is already in operation at the existing poultry services facilities in Sadat City, and treated effluent meets both Egyptian and IFC standards.
In regard to chemical use and storage, Wadi uses chlorine, internationally accepted disinfectants and lime as part of its cleaning and disinfection processes, as well as formaldehyde as a fumigant. All chemicals are stored on site in drums in a secure room located away from the bird sheds. Staff handling these chemicals receive appropriate training and are provided with suitable PPE, in accordance with Wadi’s OHSAS-certified management system.
Mono-calcium phosphate plant: The MCP plant is designed to produce 50,000 tons per annum (tpa) of MCP. Wadi is committed to follow measures that comply with the IFC guidelines for handling and transport of acidic substances. In addition to the processing equipment, the plant facilities include a crushing plant (for phosphorus rock) with two crushers of 30 tons per hour (tph) capacity, grinder (for calcium carbonate, three boilers, cooling towers, three sulfur absorption towers, a laboratory, and raw material and product storage warehouses. The dual-fired boilers utilize natural gas. The boilers are equipped with waste heat recovery (at 420º C). Power will be sourced from the national grid, with standby diesel generators as backup. Annual power consumption is expected to be 80,000 KW yearly for the entire MCP plant, and annual greenhouse gas emissions will be approximately 66 tons annually of CO2 equivalent.
All stationary sources (boilers, dryers) will be equipped with filters or bag houses to ensure that particulate emissions do not exceed 30 mg/m3, in compliance with both the Government of Egypt and IFC limits. Conveyors for phosphate rock will be covered to control fugitive dust emissions from phosphate rock conveyors. According to equipment specifications and the conclusions of the EIA, air emissions are expected to meet all local requirements and IFC limits, with the exception of gaseous fluorides which, at 9 mg/Nm3, meet Government of Egypt limits but exceed the IFC guideline limit of 5 mg/Nm3. Wadi has agreed to modify the process equipment and tail gas scrubbers during detailed design to ensure compliance with IFC limits. US manufactured air filtration systems will be installed throughout the plant to ensure workplace air quality meets national and IFC standards. In accordance with Wadi’s OHSAS management system, hearing protection will be provided for employees working in areas of the plan with high levels of noise, such as the crushers.
Water for the MCP plant will be drawn from municipal supplies, with a permitted on site well for emergency backup purposes. Total water consumption is expected to be 50 m3/day. The plant has been designed to maximize water reuse and recycling; water from scrubbers and cooling towers will be recycled and treated before being used for irrigation of the greenbelt at the plant. The process produces only small volumes of effluent, which will be treated in an onsite tertiary treatment plant with activated sludge, to comply with both national and IFC limits. Sanitary wastewater will be discharged to the municipal sewerage system.
Hazardous materials, including intermediate and final products such as phosphoric acid, will be stored and monitored in accordance with the Group’s OHSAS management plan and will meet Government requirements, IFC guidelines, and good industry practice standards. Material Safety Data Sheets (MSDSs) for all hazardous substances will be posted in the plant and accessible at all times, and staff will be trained on the safe handling and use of all hazardous materials. Wadi is conducting a full hazard and operability (HAZOP) study which will be provided to IFC when completed. Hazardous wastes will be collected and stored separately, and disposed of in a government approved hazardous waste landfill in Nasriya, Alexandria.
Fire and explosion risks will be managed by adhering to industry good practice procedure related to cleaning and maintenance as stipulated in Wadi’s OHS procedures. All of the plants in the complex will be equipped with fire alarms, extinguishers, and sensors to detect leaks of hazardous substances. The process will be monitored remotely by both computer management programs and human operators. Plant staff will be fully trained in the use and monitoring of equipment, in accordance with Wadi’s OHS procedures. Fire and emergency drills will each be conducted at least once a year. Wadi has an excellent track record for prevention of fires and explosions at all of its premises. Although Wadi expects to use part of the MCP plant’s output on its own farms, major part of the product will be packaged and sold.
Soybean crushing plant: The soybean crushing plant will be constructed on the same 31.8 ha plot as the MCP, located in a heavy industry are of Sadat City. Construction impacts and OHS performance will be managed in accordance with Wadi’s existing management systems, which have been described in detail above. Hazardous materials such as solvents used in the extraction process will be handled, stored and used in accordance with OHSAS requirements. Material Safety Data Sheets (MSDSs) for all hazardous substances will be posted in the plant and accessible at all times, and staff will be trained on the safe handling and use of all hazardous materials. Handling of products will be in accordance with Wadi’s HAACP-certified food safety procedures. Equipment for the plant is largely automated, and is being sourced from reputable international vendors. All machinery will be equipped with standard safety features such as guard rails, automatic shut off features, and shields for moving parts.
Trailer assembly plant: The plant will be constructed on a new site to be purchased on a willing buyer-willing seller basis in Sadat City. Apart from environmental and OHS issues during construction and operations, which will be handled in accordance with Wadi’s existing OHSAS 18001 certified management system, no significant E&S impacts are anticipated. The additional energy and water requirement will be incremental, as will be air emissions, process effluent, and solid waste generation. All of these impacts will be managed and monitored in accordance with Wadi’s existing E&S and Quality management systems.
Fish nursery production project: The fish nursery project will be developed on the site of the Wadi Natrun facilities, located in a desert area on a turnoff road at the 115km peg of the Cairo-Alexandria highway. The project consists of a single breeding pond, 100 m2 in size, to grow sea bream and sea bass fry and 2 pre-grow and growing ponds of 520 m2 in size. When the fry reach viability, they will be translocated to an existing fish farming enterprise on Lake Fayoum, approximately 130km southwest of Cairo. Construction impacts, which will be minimal, will be managed in accordance with Wadi’s existing OHSAS 18001 certified management system. Water for the pond will be from groundwater sources, located 250 m from the surface, which are highly salinated in this part of the Egyptian desert. Few other significant E&S impacts are anticipated. The additional energy requirement will be incremental. The project is being developed because of the existence of brackish groundwater resources at this location. No air emissions are associated with the project. Organic wastes will be transported to Wadi’s compost plant at the Wadi Natrun facilities.
Community Health, Safety and Security
Wadi’s agro-industrial operations are predominantly situated on large plots of isolated land or in industrial parks (e.g. Sadat City) segregated from residential communities in the vicinity of the rural highway from Cairo to Alexandria. The sole exception to this is the existing facility situated at its Km 54 facilities in Sadat City, where Wadi activities are situated in the general vicinity of small, local communities. Wadi assesses the potential for community impacts associated with its ongoing operations on a regular basis, 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.
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.
Soybean crushing and mono-calcium phosphate plants: The site for both plants is located in a heavy industry section of Sadat City. The industrial facilities in closest proximity to the site are steel mills and a new rail line. As the production lines are largely automated, the risk of human error is minimized. Wadi The EIAs for both facilities considered traffic impacts associated with delivery of raw materials and removal of products. Given the location of the plants within n existing heavy industrial area, which has no residential or commercial activities in close proximity, impacts on communities from an increase in vehicular movement are not expected. Wadi will install sufficient fire-fighting equipment at the project site. Wadi will conduct onsite/offsite emergency response (ER) drills for potential fires or chemical release. The emergency response and preparedness plan is being prepared and will cover fire safety, injuries, spills, and an evacuation scheme.
Expansion of table eggs production: An important consideration in this component of the project is that efficient organic waste management contributes to biosecurity and avoidance of impacts to communities in general. Biosecurity and physical security at Wadi’s poultry and farming operations is provided by unarmed company employees who are charged maintaining isolation of the farms and with vehicle and personnel disinfection. In accordance with accepted international good practice, 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. The exact same approach to biosecurity will be used at the expanded table egg production facilities.
Fish production project: There are few community health, safety and security risks associated with the proposed nursery project that will not be managed by adherence to Wadi’s general OHS management systems. The one potential risk that is unique to the project related to the presence of a large body of water that could provide a breeding ground for disease vectors such as mosquitoes. Wadi will manage the risk by preventing the accumulation of standing, stagnant water, and by monitoring for mosquito larva infestations. If infestations nonetheless occur, they will be treated immediately with non-toxic products.
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 Natrun for the purpose of expanding olive orchards. In 2007, Wadi acquired an additional 1000 ha from private owners on a willing buyer-willing seller basis. No physical or economic dislocation occurred as part of the many small transactions that were required to purchase the additional land. Land acquired for the new facilities to be financed under this investment includes the following: soybean crushing plant and mono-calcium phosphate plant will be constructed on the same 31.8 ha plot, and grain discharge and storage river port will be on a 4 ha plot. The table eggs production expansion, trailer assembly plant and fish production project will be developed either on existing land holdings or newly purchased land acquired on a willing buyer-willing seller basis with no involuntary displacement, either physical or economic, resulted from any of these transaction. All of the land acquired for the new developments was purchased on a willing buyer-willing seller basis. No involuntary displacement, either physical or economic, resulted from any of these transactions.
Biodiversity Conservation and Natural Resource Management
The only developments that have the potential to impact biodiversity are the fish nursery project. Given the small size of the proposed fish pond, and its location in a desert area of no unique biodiversity importance, actual impacts on biodiversity are not expected.