31441 - Nile Kordsa

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Environmental & Social Review Summary

Project Number

31441

Company Name

NILE KORDSA COMPANY FOR INDUSTRIAL FABRICS S.A.E.

Date ESRS Disclosed

Feb 23, 2012

Country

Egypt, Arab Republic of

Region

Africa

Last Updated Date

Sep 30, 2022

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 4, 2012
Signed : Sep 5, 2012
Invested : Nov 13, 2012

Sector

Other Textile Products (Including Industrial and Medical Products)

Industry

Manufacturing

Department

Regional Industry - MAS Africa

Project Description

The proposed modernization Project entails the replacement of obsolete equipment with more efficient machinery at Nile Kordsa Company for Industrial Fabrics S.A.E (the “Company”). Based in 10th of Ramadan City, Area No. 7, Industrial Zone B1 Egypt, the Company is a joint venture between Kordsa Global Endustriyel Iplik ve Kord Bezi Sanayi ve Ticaret A.S. (“Kordsa” or the “Group”) and the Egyptian Partners focusing on tire cord fabric processing. The Project will increase the Company’s production capacity and enable it to expand its product offering. The total Project cost is estimated at US$11 million. The proposed IFC investment entails an A-Loan for IFC’s own account of US$11 million.

Overview of IFC's Scope of Review

Social and environmental issues reviewed during the appraisal mission for this Category B investment included: Nile Kordsa’s social and environmental assessment and management systems; labor relations and working conditions at the Cairo plant including particularly workplace air quality, occupational health and safety; hazardous materials management; emissions to air and water; hazardous materials management; solid waste disposal; resource efficiency including potential to improve energy and water efficiency and recycling of waste; relations with the nearby communities. Kordsa Global corporate programs were also reviewed through a visit performed to Kordsa Global in Turkey where the corporate Research and Development Center; Environmental, Health and Safety Management, and Human Resources Management Teams are located.

E & S Project Categorization and Applicable Standard

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

Project site is readily located in an industrial zone. PS5 does not apply as the project involves no land acquisitions or involuntary resettlement; there is no biodiversity conservation or significant natural resource management issues in relation to PS6; PS7 and PS8 do not apply as there are no indigenous peoples or cultural heritage sites in the area of influence of the project. Other PS may become applicable in the future should any new IFC investment in this project have impacts beyond the ones hereby identified.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria as is described in the following sections.

Key environmental and social issues reviewed during the appraisal include the following:

Management of environmental, health and safety performance;
Occupational health and safety conditions;
Human resources policy and practices, labor relations;
Hazardous materials and waste management;
Management of emissions to air and water arising from the operation of its facilities;
Use of energy, water and other resources;
Relations with the nearby communities.

Environmental and Social Mitigation Measures

PS1: Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment. The manufacturing plant of Nile Kordsa Company for Industrial Fabrics S.A.E (“Nile Kordsa” or the “Company”) was built in 1993 in 10th of Ramadan City Industrial Zone, on a total surface of approximately 50,000 m2. At the time of the initial establishment and the expansion which occurred in 1998 with the addition of a dipping unit, the construction and operations were compliant with the Government of The Arab Republic of Egypt’s environmental requirements and the compliance has been maintained with the environmental and social regulations developed afterwards. The current expansion project is subject to governmental assessment and Nile Kordsa has started to obtain the required permits. The Company will submit the copy of the environmental register to the IFC and will keep the IFC regularly informed about the status of all operational and environmental permits. Planned expansion creates a positive social impact as the workforce number increases by 5 to 10%.

Management Systems. Nile Kordsa has quality, environmental and health and safety management systems certified by an accredited third party in accordance with the international standards of ISO 9001, ISO 14001 and OHSAS 18001. In light of the commitment for continuous improvement, Nile Kordsa aims to enhance further its environment, health and safety management systems in line with the corporate standards of Kordsa Global Endustriyel Iplik ve Kord Bezi Sanayi ve Ticaret A.S. (“Kordsa Global” or the “Group”), the parent Company, which is an active member of the regional network of the World Business Council for Sustainable Development, an organization that states its aim to be providing business leadership for social and environmental sustainable development in the countries where it operates.

EHS Organization and Capacity. Nile Kordsa has capable and dedicated environmental, health and safety staff and is in the process of reviewing and continuously improving its organization. The Safety, Health and Environment (“SHE”) Coordinator, Quality Systems Manager and Human Resources Manager who reports directly to the General Manager of the production plant, are responsible for implementing the corporate standards of Kordsa Global and other management system standards that the Company adheres to. The SHE Coordinator’s responsibilities include: environment, occupational safety, emergency preparedness and response, and development of management systems. Labor issues, occupational health, security and community relations are managed by the Human Resources Manager. SHE Coordinator holds also responsibility for reporting environmental, health and safety performance to the SHE Coordinator of Kordsa Global and attends regularly to the corporate SHE meetings. Nile Kordsa has an on-going program to enhance SHE monitoring and management in line with the latest corporate requirements of Kordsa Global. The corporate SHE Coordinator of Kordsa Global reports directly to the Vice President of Operations and is responsible for ensuring training of on-site SHE professionals with the goal of extending implementation of the corporate SHE standards to overall production plants including Nile Kordsa.

Training. The Company provides regular training to its employees in a number of areas according to their roles and responsibilities. Training areas include: quality; safety, health and environment; manufacturing practices; human resources; and career development. The SHE Coordinator receives regular trainings from Kordsa Global.

PS2: Labor and Working Conditions

Human Resources (“HR”) Policy and Management. The Company’s workforce includes 283 employees. The Company reported compliance with local requirements regarding labor laws and has a human resources policy and procedures that includes corporate ethics, non-discrimination and grievance mechanisms.

The Company communicates the HR Policy to its employees at inception and keeps it available for all employees. During induction all employees receive documentation that contains (i) human resources policy and procedures, (ii) Corporate Code of Ethics, and, (iii) Occupational Health and Safety Rules. A grievance mechanism is in place to respond and resolve any concerns of the workers which the Company is committed to track and address as appropriate.

A limited number of permanent contractors are employed cleaning services at Nile Kordsa. Nile Kordsa uses formal contractor''s agreements which include requirements for its contractors to respect SHE standards of the factory and local regulation of the Arab Republic of Egypt. The Company also abides by Kordsa Global’s Corporate Code of Ethics which is a public document made available to all workers at the production site and shared with Nile Kordsa''s contractors. Furthermore, Nile Kordsa is continuously improving its contractor control mechanisms in line with Kordsa Global practices.

Worker’s Organizations. While trade unions are not currently active at Nile Kordsa, the Company’s management reported that the employees are free to join any workers’ organizations.

Retrenchment. Nile Kordsa is currently in an expansion phase; therefore, no retrenchment is expected.

Protecting the Work Force. The Company does not hire employees under 18 years old. There is no issue related to child labor and forced labor. Salaries and benefits are in line with market conditions. Employees are provided with medical insurance and transportation.

Occupational Health and Safety. The Company has a SHE management system that comprises programs and procedures to develop and maintain health and safety at the workplaces. The programs and procedures are currently under further development in line with the latest corporate standards of Kordsa Global.

Training is provided to all employees on the ground in a cascaded manner. Initial SHE training and regular reinforcement by supervisors and fellow workers are in place at Nile Kordsa. The Company undertakes regular reviews of its occupational health and safety risks and implements an action plan to mitigate the risks. No fatality or irreversible injury has occurred at the plant of Nile Kordsa over the last 5 years.

The Company will continue to perform risk assessment studies and develop engineering controls to avoid exposure to hazardous materials, and to ensure safe manufacturing and storage practices. The Company will complete development of work permit procedures primarily related to confined space entry and further enhance emergency control measures on life and fire safety as well as medical first aid by establishing an on-site occupational health assistance.

PS3: Resource Efficiency and Pollution Prevention

Pollution Prevention, Resource Conservation and Energy Efficiency. Nile Kordsa is compliant with the environmental requirements in The Arab Republic of Egypt and has all corresponding permits and licenses for its existing operations and obtained clearance for the current expansion project. Nile Kordsa regularly monitors its environmental performance and keeps it within the standards of authorities in The Arab Republic of Egypt. The Company will review its existing monitoring activities and aims to reasonably improve in line with Kordsa Global’s latest corporate standards as well as the World Bank Group (WBG) guidelines. The WBG guidelines include the General Environment, Health and Safety (EHS) General Guidelines and sector specific EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing.

At Nile Kordsa, electricity is used mainly in the converting operations for air conditioning and lighting; natural gas is used to fuel the ovens in the dipping area. Nile Kordsa promotes resource conservation and energy efficiency in manufacturing and has continuous cooperation with the Research and Development Department of Kordsa Global to further improve in these areas. .

Air Emissions. Given that no polymerization takes place at the Company plant, air emissions are mainly from the dipping area, and include the exhaust from the gas ovens and from the dipping materials such as ammonia, volatile organic compounds, nitrogen oxides and formaldehyde. The Company will review its air emissions monitoring and aims to reasonably improve in line with Kordsa Global standards and WBG EHS Guidelines. The total generation of GHG at the Nile Kordsa’s plant in The Arab Republic of Egypt is equivalent to around 10,000 tons per year CO2 equivalent.

Liquid Effluents. Waste dipping solution following an on-site treatment mechanism is mixed with excess cooling water and domestic wastewater and disposed of into the municipal sewer as permitted. The expansion project includes installation of a dipping unit and Nile Kordsa increased its wastewater treatment capacity as necessary. Nile Kordsa will review its wastewater monitoring program and aims to reasonably include additional parameters, particularly including phenol compounds in the process effluents which can result from the formaldehyde utilization in the dipping process. If shown necessary by this monitoring, the Company aims to reasonably develop relevant treatment systemsin line with the Kordsa Global corporate standards and good practices as well as WBG EHS Guidelines.

Waste. The Company has an elaborate system for separation and recycling which reduces the disposal of unrecoverable waste. The company recycles a number of wastes including cardboard, paper, plastic, metal, and wood. All final waste is collected under contract with a private company and disposed of according to the characteristic of the waste either in the municipal sanitary land fill or in dedicated disposal sites for hazardous materials.

Hazardous Materials. The dipping unit uses materials that are considered hazardous because of toxicity or corrosiveness. Nile Kordsa has in place several precautions for the handling of hazardous materials including Material Safety Data Sheets (MSDSs), personal protective equipment, spill containment, and fire prevention equipment. In coordination with its suppliers, the Company will take further precautions to ensure appropriate packaging, labeling and safe transportation of the hazardous chemicals, including particularly formaldehyde and resorcinol. Open handling will be restricted through enhanced containment of the transfer processes until replacement/minimization of hazardous materials will be made possible. Existing emergency measures will also be reviewed and enhanced where appropriate in line with the good practices implemented at Kordsa Global.

PS4: Community Health, Safety and Security

Community Health, Safety and Security. The Company’s operations are located within the industrial complex at 10th of Ramadan City with limited contact with communities. As mentioned in the previous section, the Company will review and enhance measures related to the safe supply and handling of hazardous materials.

Emergency Preparedness and Response. The Company has emergency response programs and is in the process of developing further measures and procedures with focus on life and fire safety and chemical safety.

Security Personnel Requirements. The company employs security personnel that work in accordance to procedures consistent with the IFC requirements, which require that personnel be properly trained to deal with security issues with due consideration to the rights of Company employees, visitors and the community.

Stakeholder Engagement

The company has a number of social development activities aimed the development of personnel and support to the workers’ families.

Nile Kordsa operations are located in an industrial zone at 10th of Ramadan City, 60 km from Cairo. Given the industrial zone location, interaction with the communities is minimal and the Company’s focus is its employees. There is an on-going program to enhance employees’ satisfaction, to create opportunities for knowledge and skill development and to support employees’ families.

Nile Kordsa will strive to develop further its community engagement activities along with Kordsa Global which is part of the Sabanci Holding, a corporation stating its commitment to provide leadership in sustainable development, involved in a variety of community engagement activities supporting health and education, development of professional skills, women’s empowerment (which is an initiative of United Nations) and protection of cultural heritage in the locations where it operates.

Client Documentation

File Name	Actions
Nile Kordsa ESAP F (2).pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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