While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
Construction activities being undertaken by OC resulting in impacts pertaining to one or all of the remaining Performance Standards (PS3: Resource Efficiency and Pollution Prevention; PS4: Community Health, Safety and Security; PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resource; PS7: Indigenous Peoples and PS8: Cultural Heritage) may be encountered under specific circumstances.

IFC''s review of OC''s existing contracts indicates that the construction activities described above will have potential limited adverse environmental or social risks and/or impacts that are few in number, generally site-specific, and readily addressed through mitigation measures. It is therefore concluded that this is an Environmental Category B project according to IFC’s Environmental and Social Review Procedures.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. The key risks for OC''s construction activities are: occupational health and safety; environmental control of noise and vibration, soil erosion, dust, effluents and wastes, and hazardous materials; and community health and safety (site hazards, disease prevention, and construction traffic). In its role as a construction contractor, OC''s responsibilities for E&S mitigation measures are confined to those activities it is managing at various project sites (including those of its sub-contractors) and not for the broader assessment of environment and social impacts for these projects (that are the responsibility of the project developers). The principles and procedures that OCI/OC currently uses to address and manage E&S risks for its construction operations, and how these will be modified in some instances to ensure its activities comply with IFC’s Performance Standards, are summarized below.

OCI/OC 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 OC’s HSE management system. The integrated management system is developed in accordance with the international environmental standard ISO 14001:2004, the quality standard ISO 9001:2008, and the international occupational health and safety management system specification OHSAS 18001. The international ISO certificates were renewed in November 30, 2011 for three years.

In accordance with the conditions of IFC’s earlier investment, OCI incorporated the provisions of IFC’s Performance Standards and applicable World Bank Group Environmental, Health, and Safety (EHS) guidelines into OC’s current HSE management system and standard operating procedures. As of June 1, 2011, OCI’s HSE procedures currently included principles that address pollution prevention (PS3), community environmental safety aspects (PS4), biodiversity conservation (PS6), Indigenous People (PS7) and Culture Heritage (PS8) and the various aspects of IFC’s Performance Standards.

- Management Programs and Procedures
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 OC’s 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. OC’s sub-contractors are also required to carry out their activities in accordance with OC’s HSE policies and procedures.

OC 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. The company’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.

OC’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 the company’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, OC 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 OC 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. In compliance with the requirements stipulated in the ESAP dated May 24, 2011, OC has developed and incorporated as of June 1, 2011 Community Environmental Safety Procedure. The guidelines address infrastructure and equipment safety, hazardous material safety, natural resources, community exposure to disease and emergency preparedness and response, security personnel, etc. to evaluate the risks and impact to health and safety of affected communities. The procedure is in full compliance with the requirements and provisions of IFC’s PS4 (ESAP dated May 24, 2011 items 8, 9 and 11).

OC has also recently updated the HSE procedures to include: a Biodiversity Conservation Procedure that fully complies with PS6 requirements; an Indigenous Peoples Procedure that fully complies with PS7 requirements; and a Cultural Heritage Procedure in compliance with PS8.

- Organization Capacity and Competency
OC 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. As a condition of IFC’s earlier investment (ESAP dated May 24, 2011, item#3), OC recently designated an E&S advisor to oversee E&S risk and impact screening and assessment of existing and potential new construction business at the corporate level. In addition, 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.

- Monitoring and Review
OC’s HSE management system includes a number of procedures that guide the 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 health and safety statistics and the reporting of the results to the on-site Project Manager and corporate HSE management. In addition, all projects are audited, at least quarterly, and in some cases monthly, by the 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 carries 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. Contractors also have HSE indicators that affect their selection process for future projects.

OC’s current headcount (including short-term contract workers at all construction sites) is approximately 45,000 as of end of 2011, and a turnover rate of 1-2% (mostly junior roles).

- Working Conditions and Management of Worker Relationship
OC 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 the company operates. 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 OC’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 OC’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 the company, contract duration, salary and benefits, and feedback and grievance procedures. All employees receive copies of these documents during their induction training. OC has made a robust commitment to talent identification, career path planning and training, and promotion from within. The annual training budget is about 5-7% of the annual salaries. OC recently engaged Towers Watson, 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. The company 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. Separate medical insurance is extended to temporary labor.

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.

OC endorses the principle of freedom of association consistent with host country law; in Algeria, for example, all of OC’s Algerian employees belong to a union that negotiates new contract terms collectively on their behalf every three years. OC’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. The grievance procedures allow staff to raise employment related issues to their immediate supervisor, HR Manager and/or HR Director. OC 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.

OC’s HSE policies include temporary accommodation guidelines that are applicable to employees and subcontractors alike. The standards for construction worker camps 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 OC’s audit process. Every OC’s 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.

- Protecting the Work Force
The company employs no one under the age of 18; at every construction site there is a strict policy to verify the age of all workers; anyone who cannot show a valid national ID is not allowed to enter the site. This policy applies to OC’s own workers as well as to employees and casual workers of all subcontractors.

- Occupational Health and Safety (OHS)
Workforce health and safety (“H&S”) is a key component of OC’s HSE management system. Project related activities are subject to hazard identification and risk assessment to ensure that H&S controls 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. OC’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 company’s headcount on any construction project. Short-term contract workers receive the same training, personal protective equipment (PPE) and on-site medical care as OC’s employees. There is an HSE briefing (“Toolbox Talk”) at the start of every shift. On-site HSE supervisors and HSE site officers are present in every shift in all sites to ensure implementation of H&S procedures, equipment safety and the safe use of equipment and to monitor performance.

The strict enforcement of HSE procedures by OCI is reflected in the positive safety statistics reported at OC’s construction sites and the Loss Time Incident Rate (LTIR) is 0.014 [ ] ; OC has won a number of awards for strong HSE performance on many of their construction contracts.

- Workers Engaged by Third Parties
The company’s HR policies and procedures extend to workers of subcontractors, mainly HSE, OHS, temporary accommodation.

- Supply Chain
OC extends all the HSE policies to the subcontractors and HSE performance is part of the evaluation and award of works. As indicated earlier, OC extends the HSE training to subcontractors and the audit team include the subcontractors in all internal audits as well as.

OCI Group has an established and explicit commitment to community engagement: “The support provided by our home and host communities is integral to our success. In return, we believe that it is our responsibility to continue to earn their support and set global good corporate citizenship standards by supporting the economic and social well-being of our stakeholders and communities while respecting local sensitivities” (Orascom 2009 Annual Report). The Company defines this as a commitment both to its internal community – its employees – as well as to the greater community – the local communities in which it operates.

The company’s commitment to communities includes a number of corporate social responsibility programs. In 2000, the Company launched the “OCI Foundation”, which invests in educational programs designed to improve the communities in which OCI Group operates. To date the Foundation has provided scholarships to 44 Egyptian graduate and undergraduate students to attend world class universities in the US and Europe. At the local level, OC contributes to sustainable development by providing training, infrastructure development and sponsorships across Egypt, including construction of schools and clinics.

As a condition of IFC’s earlier investment, OC included Community Environmental Safety Procedures as part of the HSE procedure documents. The procedure is in compliance with IFC requirements and reflects proper communication with external communities and handling of any grievances about the HSE performance.

Translated versions of the ESRS and ESAP will be available at:

Corporate headquartersOrascom Construction IndustriesNile City South Tower2005 A Corniche El NilCairoEgypt 11221General enquiries: +20 2 2461 1111

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.