TCE has presented plans to address the environmental and social impacts to ensure that the project will, upon implementation of the specific agreed mitigation measures, comply with Egyptian laws and regulations, IFC’s Policy and Performance Standards on Social and Environmental Sustainability and IFC’s applicable 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 and in the E&S Action Plan attached to this document.1. Social and Environmental Assessment and Management Systems
The Project Sponsor, Titan of Greece, is a well-known cement manufacturing company and a member of the Cement Sustainability Initiative (CSI) sponsored by the World Business Council for Sustainable Development (WBCSD). The Titan Group was a founding member of the Hellenic Network for Corporate Social Responsibility (2000), among the first 500 companies to sign up to the Global Compact (in 2002), and became a member of WBCSD in 2003. The Group has established a corporate-level approach to environmental and social assessment, management, monitoring and reporting, as well as corporate social responsibility (CSR), both of which are implemented in each of its subsidiary companies, including TCE. Titan Egypt has an established Environmental, Health and Safety (EHS) management system and comprehensive Human Resources policy and procedures in place, both of which have been reviewed by IFC. Within the Egypt operations, oversight of environmental issues at both plants is the responsibility of the Industrial Director, with day-to-day oversight by a full time EHS Manager, who is based at APCC but responsible for both plants. Labor and working conditions issues are managed by the TCE HR Director with the support of 2 full time HR managers and 33 officers. The Titan Group employs a corporate level CSR Manager, responsible for working with each of the Group’s subsidiaries to establish CSR programs in the communities located near each of its plants.
Both of the existing plants were established by the Government of Egypt (APCC in the 1940s and BSCC in the 1990s), at a time when there was no requirement to undertake an Environmental Impact Assessment (EIA) of new industrial developments. However, to comply with more recent Government of Egypt requirements, an independent EIA was prepared in 2002 for the shutdown/dismantling of the four original wet clinker production lines at APCC and installation of new dry clinker production lines. In addition, an EIA was prepared in 2002 for the second line at BSCC by an independent consultant including faculty from the Environmental Hydraulics Department at Cairo University, in accordance with current Government requirements. The EIAs contained summaries of key environmental impacts as well as mitigation and monitoring plans, which TCE has committed to implementing in full. Every second year environmental audits are conducted by Titan experts in a benchmarking process focused on continuous self-improvement. Both APCC and BSCC are scheduled for such audits in 2010 and recommendations as well as relevant action plans will be disclosed accordingly. The audits that will be implemented in APCC and BSCC in 2010 will be the first after separation from Lafarge.
In 2009 TCE commenced the process of obtaining an integrated quality, environmental and health and safety certification against ISO 9001, 14001 and OHSAS 18001 for both plants. The Company has engaged an external consultant to conduct audits of both BSCC and APCC’s operations in preparation for a certification audit in early 2010, with certification targeted for mid-2010. In addition, KPMG audited APCC and BSCC for CO2 emissions and Safety performance according to WBCSD/CSI Protocols and Standards in April 2009, and made recommendations for improvements (see attached files referring to APCC and BSCC). An Action Plan has been developed and is currently under implementation at all plants respectively.
2. Labor and Working Conditions
Human Resources Policy and Management: The Titan Group, including TCE, has in place comprehensive HR polices and management systems that cover all key aspects of labor management, including informing employees of their rights under national labor and employment laws, documented in both Arabic and English. Employees are provided with written job descriptions, and performance evaluations are conducted annually for all full time employees. Performance factors are clearly spelled out, as are criteria for achieving specific performance ratings and for promotion. Titan’s HR management program includes policies and processes designed to establish, maintain and continuously improve relations between employees and management. These include establishment of joint worker/management committees in each plant tasked with identifying safety issues and problems and seeking to resolve them collaboratively. The committees meet once a month and prepare Action Plans against which mitigation measure are monitored. There is a formal written grievance process in place across the Titan Group’s operations that are available to all employees. TCE’s HR department periodically commissions independent industry salary/benefit surveys as well as internal staff surveys in order to benchmark its compensation packages, working conditions and employee satisfaction to ensure it is competitive with the rest of the industry in Egypt.
Worker’s Organizations: At the time of Project appraisal, TCE’s employment totaled approximately 800, including 335 full time equivalents (FTEs) at APCC, 286 FTEs at BSCC and 8 FTEs at the Company’s headquarters in Cairo. (Some employees work less than full time, which accounts for the disparity between the FTE total and the number of employees.) TCE estimates that it will hire an additional 35 FTEs to operate the second line at BSCC. All non-salaried employees at both plants are members of the Government-sponsored General Syndicate for Building Materials and Wood, the relevant workers organization for the cement industry; this covers approximately 80% of the employees at APCC and 88% of the employees at BSCC. The syndicate negotiates on behalf of all employees in the sector on issues related to working conditions and benefits. Wages and salaries are negotiated collectively between TCE employees and TCE’s HR Department. TCE appears to have good relations with its employees and has not had any labor actions in the past seven years.
Non-Discrimination and Equal Opportunity: As a member of U.N. Global Compact Initiative, the Titan Group subscribes to key ILO conventions, including promoting the fair treatment, non-discrimination and equal opportunity of workers. TCE has a program in place to increase its employment of women in appropriate positions in its management and operations facilities this includes a reassessment of its maternity policy and benefits. TCE currently employs a total of 37 persons (16 in APCC and 21 in BSCC) with special needs (i.e. handicapped) reaching almost the target of 5% of total employment as required by law.
Retrenchment: No retrenchment occurred as a result of TCE’s buy-out of Lafarge’s stake, and none is expected in the context of the project. The construction of the second line at BSCC has created employment for some 1300 contract laborers over the 15 month construction period, and TCE will hire an additional 35 employees at BSCC as a result of the expansion. Annual staff turnover has decreased over time and now stands at 2.3%.
Protecting the Work Force: TCE complies with all national labor laws and does not hire workers below the age of 18.
Occupational health and safety (OHS): TCE has a well established and extremely effective occupational health and safety (OHS) program in place, developed during the period (1998-2008) when both plants were operated under a joint venture between Lafarge and Titan,. IFC has reviewed the OHS statistics for plants, including lost time injuries (LTIs), training procedures, average number of hours for OHS training per staff member, and has found them to be consistent with global best practice for the cement industry: as of May 31, 2009, APCC had achieved 703 days with 0 LTIs, and BSCC had achieved 565 days. In 2007, TCE received a corporate OHS award for having one of the lowest LTI rates across the entire Lafarge group; in 2005-07 APCC achieved 868 days without a single LTI. In mid-2008, after the Lafarge buy-out was completed, TCE re-launched the OHS program, incorporating its own monitoring and reporting requirements. OHS data, including LTIs, accident investigation reports and other information, is input online to a central monitoring and reporting system, enabling Titan’s corporate management as well as TCE’s management team to track OHS performance. In accordance with the requirements of its insurer, TCE requires that all employees undergo routine medical examinations (full blood workups, chest x-rays, blood pressure, etc.) at the time of hiring and annually thereafter. Both plants have well equipped clinics on site staffed by full time medical personnel. Appropriate personal protective equipment (PPE) for specific work areas is provided, including respirators or dust masks, safety harnesses for working at height (above 2 meters), safety helmets, earmuffs, steel-toed boots, safety goggles, reflective vests, coveralls, gloves, and face masks (welders). IFC visits to both plants during the appraisal indicated a strong and consistent approach to OHS and use of PPE.
Titan’s OHS policies and procedures apply to all persons at its facilities, including employees, contractors, casual workers and visitors, and LTI statistics reflect incidents involving individuals from any of these groups. All contracts with third parties, including construction contracts and the bi-annual maintenance that takes place at APCC include the Group’s OHS standards and requirements as a Code of Conduct clause. Contractors who fail to adhere to these requirements are given a one-time warning; any further breach of the requirements stated in the Code of Conduct or any legal requirement are grounds for removal of the contractor from the work site and termination of the contracts.
In 2008, the Titan Group, along with other corporations including L’Oreal, Volkswagen, and Hewlett Packard, undertook a Responsible Supply Chain Management initiative, under the auspices of CRS Europe. The initiative developed and launched a web portal (http://www.csr-supplychain.org/) for Responsible Supply Chain Management, providing tools to help suppliers improve their working conditions in accordance with globally recognized labor principles. The Titan Group has developed its own procurement code, which is provided to suppliers along with training and guidance on how to assess and improve labor practices among its supply chain.
3. Pollution Prevention and Abatement
Consistent with its participation in the Cement Sustainability Initiative, the Titan Group has established a culture of continuous improvement to ensure that all of its plants are operated in a way that is consistent with good international practice for the sector.
BSCC: Thermal Energy for both the existing and second lines is supplied largely by natural gas, although some amount of heavy fuel oil is used for equipment start-up and as standby. Fuel oil consumption in 2008 was 9.700 tons (t) or 7% (thermal basis) of the plant’s total consumption; fuel oil is stored on site in two x 10,000 t fuel tanks fitted with adequate secondary containment structures. Water for the existing plant (~580,000m3/yr) is sourced from the Nile River under a permit with the Egyptian authorities; an additional volume less than 50 m3/hr will be drawn for line 2; 575,000 m3/ yr (65.6m3/hr) for each line. This water is consumed in conditioning tower process and domestic waste water is treated in an on-site treatment plant and recycled or reused for irrigation purposes. The design of the new line provides for lower specific energy consumption, best practice emission controls, continuous monitoring of key pollutant emissions (particulates, nitrogen oxides (NOx), sulfur oxides (SOx) and volatile organic compounds (VOCs), discharge of waste water treated to comply with Egyptian regulations and IFC guidelines, and no significant amount of solid or hazardous production waste. Performance guarantees from suppliers for the new line will meet or exceed both IFC and Egyptian limits. Particulate emissions from all stationary sources will be controlled with either baghouses or an electrostatic precipitator (ESP) in the case of the cooler dust collector, to meet a limit of = 20 mg/Nm3. NOx emissions will meet a limit of = 600 mg/Nm3 and SO2 emissions are negligible. CO2 emissions from the new line, which has a production capacity of 1.3 mpta, are estimated at 774 kg of CO2 per ton of clinker. Slag will not be used with the start of the new line, whereas it is used for line1 and will continue to be used for this line. Current total thermal and electrical energy consumption for BSCC line 1 is 6247 terajoules per year (TJ/yr) or 3.97 GJ/ ton of cement. Specific water consumption for the existing line is approximately 371lt/ton of cement.
All stationary sources at BSCC’s existing operations are fitted with baghouses or ESPs to control particulate emissions; captured materials are recycled as feedstock for the kiln. Emissions are monitored daily and submitted online to the Egyptian authorities; current particulate emissions average approximately 166 mg/Nm3 which is within the Egyptian regulatory limit but exceeds IFC guidelines. TCE is considering upgrading and improving of existing filters so as to limit emissions up to 100 mg/Nm3 within a timeframe agreed with IFC (Action Plan items 2a and 2b) to meet IFC standards. In case of replacement of the existing filters with new ones, these will be according to IFC standards.
TCE has a comprehensive program in place to control and monitor fugitive dust emissions throughout BSCC, including the quarry, limestone loading area, limestone conveyor, other raw material storage areas, and product bagging area. During the windy summer months (June and July), water based dust suppression is used as needed. The 1.8 km conveyor that transports limestone from the quarry to the crusher is enclosed, and storage areas for other raw material (gypsum, sand, marl), which are located outside, are covered with tarpaulins if needed to suppress dust during extreme winds. Dust in the product bagging area is controlled through bag filters installed separately for each packing machine combination of direct suction equipment, frequent and stringent housekeeping measures (sweeping, collection and recycling of dusts), a layout that provides adequate space and minimal material drops during handling, and staff training in proper materials handling. Appropriate personal protective equipment (PPE) including dust masks, gloves, goggles are provided to all employees in the packaging areas and their use is enforced. Noise levels are monitored three times a year; employees are required to wearing hearing protection in areas that exceed internationally acceptable noise levels. Given the fact that emissions from all stationary sources are monitored continuously, TCE is not required by the Egyptian authorities to monitor ambient air quality at its boundaries.
BSCC is supplied by a single limestone quarry located less than 2km from the plant. Quarry design, management and OHS are excellent. TCE’s existing concession expires in nine years, after which it has the right to renegotiate the terms of the concession agreement for an additional 20 years. The capacity of the quarry is expected to be able to supply both lines at BSCC for approximately 40 more years. TCE has prepared a detailed quarry reclamation plan and budget, which is implemented on an ongoing basis and will be kept current during the lifetime of the project. The rehabilitation method requires re-depositing layers of cement kiln dust. Rehabilitation will be carried out progressively as quarry zones are depleted. As the surrounding landscape is desert, re-vegetation is not possible. TCE has provided copies of its current quarrying program. Quarry rehabilitation plans are under development according to Titan Group standards for all quarries. TCE will develop both a long term ‘master plan’ for final quarry rehabilitation and a medium-term (five-year) plan and provide these to IFC within an agreed timeframe (Action Plan items 5 and 6). BSCC sources limestone, clay and silica, from 3 different quarries (limestone, clay and sand quarries). Iron oxide and gypsum are purchased from suppliers.
APCC: Thermal energy is supplied 100% by natural gas. Water (approximately 1,000,000m3/yr in 2008) is sourced from nearby surface water sources (rivers and canals) under a permit with the Egyptian authorities. Specific water consumption for the existing line is approximately 588 lt/t of cement. All stationary sources at APCC are fitted with ESPs to control particulate emissions; captured materials are recycled to the kiln. Emissions are monitored daily and submitted online to the Egyptian authorities; current particulate emissions average approximately 128 mg/Nm3, which is within the Egyptian regulatory limit but exceeds IFC guidelines. The Company is in the process of upgrading the ESP for the kiln to reduce particulate emissions. The Company has agreed to undertake measures (e.g., enhanced maintenance of ESPs or installation of supplemental controls) to ensure that the emissions are reduced to =100 mg/Nm3 within a timeframe agreed with IFC (Action Plan item 2c). Recent air monitoring results showed NOx emissions at 448 mg/Nm3, which meets both Egyptian standards and IFC guidelines. SO2 emissions are negligible. Recent emissions tests estimated CO2 emissions at 763 kg of CO2 per ton of clinker.
The APCC plant is located on a small plot (11 acres) in a mixed use area on the outskirts of Alexandria that includes both a number of other industrial facilities as well as heavily populated residential areas. For this reason, TCE has adopted an aggressive program to control fugitive dust emissions at all locations on the site. A new project is underway to provide 360º encasing of the main conveyor located near the site boundary, which is currently equipped with a cover above the belt. Dust collected from all sources is recycled to the kiln. As at BSCC, dust in the three product bagging areas is controlled through a combination of suction equipment that extract dust directly to bag filters, frequent housekeeping measures, layout with adequate space and minimal material drops during handling, and staff training in proper materials handling. Appropriate personal protective equipment (PPE) including dust masks, gloves, goggles are provided to all employees in the packaging areas and their use is enforced. Given the small size of the APCC site and the fact that dust emissions from all sources are monitored and reported daily, TCE is not required by the Egyptian authorities to monitor ambient air quality at its boundaries.
APCC is supplied by three limestone quarries located at distances of 24km, 35km, and 72km from the plant, as well as smaller quarries for clay, marl and other raw materials. Management and OHS at all of the quarries are consistent with TCE’s overall systems, which are comprehensive, well implemented and well monitored. As is the case for BSCC, TCE has in place quarry reclamation plans for each quarry, which are implemented on an ongoing basis and will be kept current during the lifetime of the project. TCE employs a dedicated Quarries Management team including a Manager (a geologist by training), Quarries Operation section head (geologist), quarries development section head (civil engineer), and three staff chemists: one responsible for clay and marl quarry, one for the limestone quarries, and one for preparation of other raw materials. Rehabilitation will be carried out progressively as quarry zones are depleted, and include contouring consistent with the original landscape, storage and replacement of overburden, and re-vegetation where appropriate. TCE has provided copies of its current quarrying program and draft quarry rehabilitation plans and budget (the final plans will be completed in 2010). Quarry rehabilitation plans are under revision and further development according to Titan Group standards. The Company will also develop both a long term ‘master plan’ for final quarry rehabilitation and a medium-term (five-year) plan and provide these to IFC within an agreed timeframe (Action Plan items 5 and 6).
Solid and hazardous wastes at both plants are either sold (used refractory bricks) or handled by authorized waste handlers. Non-hazardous solid wastes, including broken cement bags are recycled where possible and the balance disposed at municipal landfills, and construction wastes (including the large volume of demolition wastes at APCC) are consigned to reputable contractors for recycling and proper disposal. Used oils and lubricants are collected and reprocessed by an authorized unit of the Government-owned Egyptian General Petroleum Corporation (EGPC).
4. Community Health, Safety, and Security
Health and safety impacts on nearby communities are an important consideration for Titan at both of its plants. The Company has in place life and fire safety (LFS) and Emergency Response (ER) Plans for both plants, which are reviewed and updated annually. At BSCC, TCE works closely with the Beni Suef municipality and the Nile Valley Gas Company to review emergency plans and conduct drills at least twice a year. Given its status as the largest industry in Beni Suef, the Company’s ER teams effectively serve as the fire brigade/first responder for fires and other incidents in and around the town. The plant site is fenced and patrolled by 24-hour unarmed private security guards. There are no residential communities within 10km of the plant.
Community health, safety and security are of paramount important at APCC, given the proximity of residential areas to the plant’s southern boundary. The Company employs a full time Environmental, Health and Safety Manager at APCC with primary responsibility for ensuring that plant operations do not negatively impact nearby communities. Community engagement is frequent and ongoing: meetings with nearby communities are held every six months (the most recent meeting was held on 12 April 2009), at which TCE presents current EHS projects underway (e.g., the 360º encasing of the main conveyor located near the site boundary to reduce fugitive dust), and community members – many of them plant employees – raise issues of concern for discussion with APCC management. All meetings are minuted, with written action plans and timetables for all mitigation measures agreed to. The name and 24-hour mobile telephone numbers of key APCC management, including the Plant Manager and EHS Officer are posted at the gate to the plant, provided to key municipal and community leaders, and included on all documents prepared for community meetings and circulated to residents. Residents are encouraged to report any concerns to the EHS Manager, who is available to respond to these inquiries on a 24 hour, 7-day a week basis. All community communications are reported immediately to the Plant Manager and on-site supervisor, 24 hours a day. As a result, APCC has had positive and very active relations with the residential communities adjacent to the plant for the past decade.
5. Biodiversity Conservation and Sustainable Natural Resource Management
As described, BSCC is located in an uninhabited desert area on the outskirts of Beni Suef, with no unique biodiversity elements or natural resources. APCC is located in a highly modified peri-urban section of Alexandria housing industrial facilities that date to the 1940s and earlier. Neither of the EIAs prepared (for the demolition/plant modifications at APCC or the new line at BSCC) identified any biodiversity conservation or natural resource management issues requiring management or mitigation.
