E&S issues relating to this proposed investment are summarized below, along with specific information on how potential impacts and risks will be addressed by the Company in its construction and fertilizer production businesses. Upon implementation of the specific measures summarized, and included in the attached Environmental and Social Action Plan (“ESAP”), OCI’s activities will comply with E&S requirements, namely host country laws and regulations, IFC’s Performance Standards and the applicable IFC Environmental, Health and Safety guidelines.
Performance Standard 1: Social and Environmental Assessment and Management Systems
Construction activities
OCI has an HSE policy covering its construction activities that describes the Company’s principles and commitment in relation to HSE management. Implementation of the policy and compliance with applicable laws, regulations, codes and standards is supported by OCI’s HSE management system. The integrated management system is developed in accordance with the international environmental standard ISO 14001 and the international occupational health and safety management system specification OHSAS 18001, and has achieved ISO14001 certification.
The HSE management system is applied to each construction project. The system contains a number of HSE standards and internationally accepted procedures and requirements for the management of HSE construction project risk. It requires that HSE project related risks be identified prior to starting the construction activities on each project and that measures are developed in a site-specific HSE management program to mitigate and manage these risks throughout the construction period. The measures adopted are to ensure compliance with host country applicable HSE laws and regulations and are in accordance with good international industry practice. Project-specific HSE plans include references to OCI policy and guiding principles, a summary of the identified HSE impacts and risks, the HSE supervision structure for the project, detailed site management plans and procedures, emergency plans, required monitoring and documentation, and internal HSE auditing requirements. OCI’s sub-contractors are also required to carry out their activities in accordance with OCI’s HSE policies and procedures.
OCI has a corporate HSE department responsible for overseeing the HSE aspects of all their construction activities through implementation of the management system. The HSE department comprises a team of over 200 professionals, including the Director, 35 managers and acting managers, approximately 175 professional staff and an eight person internal corporate audit team. The HSE department is responsible for the implementation and continual improvement of HSE policies, guidelines and procedures. At an operational level the HSE department is responsible for (i) ensuring compliance of projects with corporate policies, guidelines and procedures, (ii) providing individual projects with technical advice and guidance on complex HSE issues, (iii) carrying out periodic supervision and monitoring of all projects, (iv) documenting and reporting HSE performance at the corporate level, and (v) conducting on-site/main office HSE training through in-house certified OSHA training, and professional third party training. Every construction project has a dedicated on-site HSE manager, supervisors and representatives, with dual reporting to the construction Project Manager and corporate HSE director.
OCI’s HSE management system includes a number of procedures that guide OCI’s monitoring of HSE compliance in all active construction projects. The monitoring program covers all key aspects of HSE performance including the monitoring of the implementation of project-specific HSE plans and procedures, the monitoring of key H&S statistics and the reporting of the results to the on-site Project Director and corporate HSE management. In addition, all projects are audited, at least quarterly, and in some cases monthly, by the OCI HSE department’s internal audit team. Audit results are reported to both the Project Director and the HSE director. In addition to these formal audits, corporate HSE staff make both scheduled and unannounced visits to construction sites to assess performance. Performance indicators are used to monitor performance and are assigned numeric scores; weighted according to significance and aggregated to give a composite score with scores used to assess trends and determine which projects need to be visited or require additional support from the corporate HSE department. The scores are also used in the calculation of annual bonuses/profit share/end of project bonus - all full time staff have HSE indicators as part of their annual performance objectives.
In accordance with the schedule outlined in the attached ESAP, OCI will incorporate the provisions of IFC’s Performance Standards and applicable World Bank Group Environmental, Health, and Safety guidelines into OCI’s current HSE management system and standard operating procedures (ESAP Item 1). As potential adverse E&S risks and impacts of individual construction projects will depend upon each specific project characteristics, incorporation of the Performance Standards will include principles and guidelines for construction projects that include procedures to ensure that E&S risks and impacts anticipated in IFC’s Performance Standards have been adequately screened and identified in accordance with the requirements of IFC Performance Standard 1 (ESAP item 2), and that appropriate Performance Standard compliant risk mitigation measures are devised and implemented. These principles and guidelines will be used as part of the construction project bid decision process and will assess potential projects to ensure that E&S impacts and risks are understood by the project developer and that adverse impacts and risks identified will be mitigated, they will also ensure that project-specific impacts that may arise in the course of construction activities are identified and that mitigation and management measures can be developed. An E&S advisor will be designated in the HSE team to oversee E&S risk and impact screening and assessment of existing and potential new construction business at the corporate level (ESAP Item 3).
Fertilizer Production Assets
HSE management at OCI’s operational fertilizer plants is conducted through the implementation of a plant specific HSE management system. At the established EFC plant the system is certified to the international quality standard ISO 9001, as well as ISO 14001 and OHSAS 18001. EBIC is in the process of preparing for ISO 9001, ISO 14001 and OHSAS 18001 certification audits and certification is planned for 2012. Each system contains the program, organization, training and monitoring and reporting necessary for the effective HSE management of the fertilizer plants in line with good international industry practice. An HSE department is present at each plant with an HSE manager, safety section manager and plant HSE advisors. A management system including an HSE organizational structure is under development at Sorfert in readiness for the start of production operations. The fertilizer plant management systems will be further strengthened through the adoption and integration with IFC Performance Standards and applicable EHS Guidelines (ESAP Item 4).
EIA programs for both EFC and EBIC have been conducted in accordance with Egyptian law, the more recent EIA for EBIC also considered the Equator Principles in the assessment program. The EIA for the Sorfert plant in Algeria was also carried out in line with the Equator Principles. It included a social assessment and public consultation program to evaluate socio-economic impacts on the communities in the area surrounding the project’s industrial zone (see the Client’s Community Engagement section below).
The Sorfert construction site is being managed like any other OCI construction site as described above. An OCI HSE team is on site to supervise the ongoing construction and the construction mitigation measures identified in the Sorfert EIA form part of the agreement with the EPC contractor for the project
There is no corporate entity covering the nitrogen fertilizer production assets that is similar to the corporate HSE department that covers OCI’s construction business, as each fertilizer facility is managed at the individual plant level. OCI is in the process of amending its corporate organizational structure and this will include a corporate HSE function for their fertilizer business. The corporate HSE department will ensure HSE performance at OCI’s fertilizer assets is managed consistently across all assets and that HSE performance monitoring is reported at the corporate level (ESAP Item 5).
Performance Standard 2: Labor and Working Conditions
OCI’s full time employees total approximately 15,000, and its current headcount (including short-term contract workers at all construction sites) numbers approximately 52,000. The company employs no one under the age of 18; at every OCI construction site there is a strict policy to verify the age of all workers; anyone who cannot produce a valid national ID is not allowed to enter the site. This policy applies to OCI’s own workers as well as to employees and casual workers of all subcontractors.
OCI has an established HR department with a comprehensive set of HR policies and procedures that have been approved by the Board of Directors and are applicable in all of the countries in which OCI has operations. These policies and procedures are implemented consistently across all construction activities and company operations, with the exception of specific provisions needed to ensure compliance with host country labor law. The key elements of OCI’s HR management approach are embodied in its corporate Code of Conduct, Employee Relations policies and procedures and HR Assessment Policy. These documents specify the Company’s working relationship with its employees and are communicated to each employee through their employment contracts, induction training and via OCI’s online HR portal, to which all employees have access. Employment contracts clearly specify each employee’s position, detailed job description, functional and behavioral competencies, annual performance assessment and promotion processes, rights and responsibilities of the employee and OCI, contract duration, salary and benefits, and feedback and grievance procedures. All employees receive copies of these documents during their induction training. OCI has made a robust commitment to talent identification, career path planning and training, and promotion from within. OCI recently engaged Watson Towers, a global HR consulting firm, to review employment categories, grading structure and competencies and make recommendations to bring these in line with global best practice. OCI complies with all relevant labor laws and regulations covering short term workers on construction projects including those related to minimum wages for the type of work undertaken, working hours, and additional payment for overtime work.
In 2008 the Company launched the OCI Academy, which is responsible for Learning and Development, including all occupational health and safety training, programs to identify future leaders who are placed on a specialized corporate development track, as well as oversight of the performance assessment process for all employees.
OCI endorses the principle of freedom of association consistent with host country law; in Algeria, for example, all of OCI’s Algerian employees belong to a union that negotiates new contract terms collectively on their behalf every three years. OCI’s HR Policy also contains an explicit commitment to nondiscrimination and equal opportunity. The policy is supported by a formal written performance evaluation system which includes assessment of the suitability of the staff member for wage increases and/or promotion. OCI’s grievance procedures allow staff to raise employment related issues to their immediate supervisor, HR Manager and/or HR Director. OCI also has an HR hotline that allows employees to raise issues directly to the HR Director; all such communications, which are treated as confidential, are responded to within 48 hours. The HR management system includes detailed procedures for dismissal with cause and retrenchment, in line with international good practice.
Workforce health and safety (“H&S”) is a key component of OCI’s HSE management system for construction activities and each of the individual HSE management systems for each fertilizer production facility. Project related activities are subject to hazard identification and risk assessment to ensure that H&S controls to manage risk are in place prior to starting the activity and that the workforce, including sub-contractors and casual labor, are all suitably aware of the work hazards present, the correct use of equipment, the procedures to be followed and protective gear to be worn.
At construction sites, the Company provides induction HSE training for employees, sub-contractors and casual workers. OCI’s policy is to hire as many locally based laborers as possible on each construction contract and, as such, short-term contract workers typically constitute 70% of the OCI headcount on any construction project. Short-term contract workers receive the same training, personal protective equipment (PPE) and on-site medical care as OCI employees. There is an HSE briefing (“Toolbox Talk”) at the start of every shift. On-site HSE supervisors and site officers are in place at all construction sites to ensure implementation of H&S procedures, equipment safety and the safe use of equipment and to monitor performance.
OCI has established standards for construction worker camps that include size and number of beds in each worker accommodation unit, number of ablution facilities, and requisite infrastructure including food preparation, prayer areas, and recreation facilities. These facilities are regularly inspected as part of OCI’s audit process. Every OCI construction project site also has a clinic staffed by a full time doctor, ambulance and fire truck present during every shift. Fire-fighting and emergency response plans are established for each construction program.
An HSE manager and HSE advisors are available at each fertilizer plant. The workforce receives considerable training in H&S procedures to be followed along with more targeted HSE training that is relevant to their specific job responsibilities. As part of OCI’s policy of continual improvement, DuPont H&S consultants were commissioned to review OCI’s current systems in place at the fertilizer assets in Egypt and to recommend improvements. This resulted in the recent adoption of the “STOP” safety observation cycle, an internationally recognized safety behavioural system, at the EBIC plant. OCI is considering adoption of STOP at other plants.
There are fully equipped clinics with round the clock medical staffing at each fertilizer plant along with emergency response teams that are trained in response and rescue. Fire and life safety systems meet international fire code requirements and the fire fighting tenders and fire teams in place at the Egyptian sites currently operating are world class. Similar facilities will be in place at Sorfert. On-site drills and exercises are regularly conducted to practice and test the response arrangements.
The strict enforcement of H&S procedures by OCI is reflected in the positive safety statistics reported at OCI’s construction sites; OCI has won a number of awards for strong HSE performance on many of their construction contracts. Strong HSE performance at each of the fertilizer plants is also reported.
Incidents are reported to management and each is investigated through root-cause analysis. Procedures are adapted where necessary to prevent re-occurrence.
Performance Standard 3: Pollution Prevention and Abatement
Construction Activities
OCI manages environmental risks and impacts at construction sites in accordance with the requirements of host country laws and regulations, specific client standards, and standards stipulated by financiers or other stakeholders; where these requirements differ the most stringent standard is used. OCI’s HSE management system includes an Environmental Protection Plan that contains procedures and guidelines to follow to avoid or reduce potential adverse impacts on the biophysical and human environment during construction. Measures and guidelines in the Environmental Protection Plan cover the management of water and waste waters, including storm waters, air and noise emissions control and monitoring, the protection of soils and groundwater, the control of substances hazardous to health, and the handling, management and safe disposal of construction wastes. The plan can be adapted for each construction program as necessary. Implementation of the plan is monitored as part of the overall HSE management program, as described above, and the monitoring results reported to the HSE director. Monitoring focuses on key parameters including compliance with local regulations and other contractual requirements, results of previous internal audits, and qualitative and quantitative indicators such as compliance with relevant standards for air emissions, noise limits, and waste water discharges; as well as collection and proper disposal of solid and hazardous wastes.
Fertilizer Production Assets
At the operating fertilizer plants in Egypt (EFC and EBIC) both at the Ein Sokhna industrial site, the majority of process water for EBIC is drawn from underground aquifers with back-up from the municipal system. Water from the underground aquifer is not potable and is treated by reverse osmosis before being used in the process. Process water for EFC is from the municipality. At Sorfert in Algeria, water will be sourced from the sea and used as cooling water and in the process following reverse osmosis. Natural gas is supplied directly via pipeline from the municipal gas supplies.
A granulator scrubber is in place at EFC, and will be in place at Sorfert, to reduce dust generation during the granulating process. Air emissions at both fertilizer plants in Egypt are compliant with all local regulatory requirements and relevant WBG EHS Guidelines, and are monitored at each stack every six months by a third party on behalf of the regulator. Both plants are self-sufficient in electricity, using the process to produce steam for power generating steam turbines. Air emissions at Sorfert will meet Algerian standards and WBG EHS Guidelines.
Waste waters are not discharged at either of the plants in Egypt. Waste water at EBIC is routed to lined evaporation ponds, with evaporation aided by a sprinkler system. Waste water generated at EFC is routed to an irrigation system for a tree farm planted by OCI to use the water following treatment. OCI planted over 49,000 “camphor” trees for this purpose and the irrigation system is maintained and operated by local Bedouin who live near the plant. The trees may be harvested by the Bedouin for own use or as a source of income. Treated sanitary waste water is used for the irrigation of landscaping around each fertilizer plant in Egypt. The reject effluent from the reverse osmosis treatment units are discharged into injection wells. Waste waters and storm drainage waters at Sorfert will be treated to meet Algerian standards and discharged to sea under consent granted by the authorities. Marine dispersion modeling of the effluent discharge has shown the design and location of the outfall provides dispersion that will result in no negative impacts from the Sorfert plant effluents.
Carbon dioxide generated from the ammonia production facilities at EFC are entirely consumed in the integrated urea production facilities at the site. The excess carbon dioxide produced in the manufacture of ammonia at EBIC is currently mainly vented to atmosphere. As part of OCI’s corporate effort to reduce its carbon footprint, a pipeline was constructed between the EFC plant and EBIC allowing EBIC to supply EFC with its carbon dioxide; however, EFC is only able to take approximately 5% of the produced carbon dioxide at current production rates and approximately 2,400 tons of carbon dioxide are vented at EBIC daily. EFC is currently undergoing an upgrade that will increase urea production and allow the plant to take more of the carbon dioxide from EBIC. EBIC is also considering a number of other options for utilizing the excess carbon dioxide, including construction of a urea plant to take the carbon dioxide, carbon dioxide liquefaction and export, and/or the production of dry ice. Carbon dioxide from the Sorfert ammonia production process will also be mainly used by the urea production facilities, liquefaction and export for any excess produced is under evaluation. In accordance with the ESAP OCI will report annually on its annual generation of GHGs, as well as its aggregate water usage (ESAP Items 6 and 7).
Raw materials, intermediate products, and products at the fertilizer plants comprise significant amount of hazardous materials. OCI has established equipment and procedures for the transfer, storage, handling, and transportation of these materials, with process safety constituting the most important operational issue at these plants. The process, including leak detection sensors and emergency shut-down systems, is monitored and managed at the plant’s control room. Ammonia for the process is stored at the EFC plant at atmospheric pressure in controlled dedicated tanks fitted with automatic sprinkler systems. Ammonia produced at EBIC is exported to OCI’s terminal adjacent to the site at the Ein Sokhna port via a dedicated underground pipeline prior to export by ship. Urea produced at EFC is granulated and transported by road tanker either in bulk or bagged on site prior to transport. Ammonia and granulated urea produced at Sorfert will be exported directly from the existing port at the industrial zone where the plant is under construction. Two liquid ammonia storage tanks will be available adjacent to the export loading jetty, both will be double walled structures and refrigerated.
Solid and hazardous wastes are segregated and handled in accordance with the waste management procedures and transferred for recycling, re-use or treatment and disposal at licensed waste management contractors. The main hazardous wastes generated at the fertilizer sites are various used catalysts, which are designed to be returned to the manufacturers for re-generation or disposal.
Performance Standard 4: Community Health, Safety and Security
Construction Activities
OCI’s standard operating procedures for construction projects include guidelines for ensuring the safety of all construction project infrastructure and equipment, limiting and controlling public access to construction sites, appropriate use of signals and physical barriers, separation of pedestrian ways from heavy equipment and vehicle routes and defensive driving, among others. Traffic control forms a large part of OCI’s activities during typical construction projects and detailed traffic management procedures are developed in a Traffic Management Plan for the construction program. The proposed traffic controls are advised to all affected personnel including the public, property owners and occupiers, businesses, local authorities, and emergency services. In addition to notification of traffic disruption and management measures, OCI also has measures in place to notify residents and businesses that may be affected by temporary disruption to property access or possible disturbance from night-work providing times when the disruption would be expected and performing the work in the times notified. Signboards at all construction sites give the contact details by which members of the public can make inquiries, register complaints or obtain additional information on project activities and schedules. Where OCI is responsible for site security, it either hires security professionals directly or utilizes the services of professional security companies with which it has a successful track record. OCI will adapt emergency response plans and security forces arrangements for all construction sites and assets to ensure compliance with community notification requirements and other provisions of IFC’s PS4 (ESAP Items 8 and 9).
Fertilizer Production Assets
As described earlier the fertilizer plants in Egypt are located in existing industrial sites that are far from residential areas, although Bedouin are living close to these sites. The Sorfert plant under construction in Algeria is also located in an industrial port area, however, the nearest neighboring villages include: El Maghoum approximately 1 km to the northwest; Hassi Mefsoukh over 2 km to the southwest; and, Douar El-Ayaida over 2km to the south - southeast.
All major risks to the population are considered in the design of the fertilizer plants. The plants are designed and built based on internationally accepted fertilizer practice with technologies selected for the process units that are proven to be safe. Risks are evaluated using quantitative risk assessment to consider equipment positioning and plant layout with the results of the assessment used in Front End Engineering Design. In accordance with international industry standard design codes, specific facility safety measures include; hazard emissions and leakage detection systems; automatic and manual shutdown systems; emergency isolation valves; secondary containment and, alarm systems.
The Bedouin living near to the EBIC and EFC plants at the Ein Sokhna industrial zone are no longer nomadic; they are provided with assistance and, in some cases employment, by the companies in the industrial zone and are engaged regularly by OCI staff. They are made aware of the hazards, signage and emergency procedures to follow in the event of a major incident at any of the facilities. The existing emergency response plans for each fertilizer plants will be adapted to ensure compliance with community notification requirements and other provisions of PS4 (ESAP Item 10). Specific emergency response arrangements will be prepared for the local residents in the proximity of the Sorfert plant prior to the start-up of operations.
