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
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category B project according to IFC’s Environmental & Social Sustainability Policy as the E&S impacts associated with the project are limited, generally site-specific and could be addressed through the implementation of standard good international industry practices. Key environmental and social aspects at all properties are labor and working conditions, emissions to air and water, use of energy and water, life and fire safety, emergency response and possible public health impacts arising from swimming pools, and hotel food and water. The effectiveness of existing corporate E&S management system to manage these aspects was also evaluated during IFC’s appraisal.
The land on which each component of the project will be located is privately owned by Credence. Land was acquired on a willing seller willing buyer basis. There was no involuntary land acquisition or economic displacement, therefore PS5 on Land Acquisition and Involuntary Resettlement is not considered applicable to this proposed investment. Similarly, any future land acquisition by Credence for the proposed project is not expected to have PS5 impacts. The 2 project sites planned for acquisition in Cairo are not expected to trigger PS6 as they will be selected in commercial zones. The Hurghada project site lies on migratory bird flyways. However, the project site is highly developed and the proposed development is not expected to have significant impacts on Biodiversity. Hence, PS 6 is not triggered. There are no indigenous people in the project area, and therefore PS7 on Indigenous Peoples is not applicable to the project. PS8 on Cultural Heritage is not applicable since no actual impact has been identified or is likely since no cultural heritage is known in the vicinity of the project site.

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.

Policy

As part of ISO 14001 and OHSAS 18001 certified management systems, Credence has established environmental, health and safety policies defining guiding principles that apply across all the group activities. Based on these guiding principles, an HR charter, financial charter and a corporate governance code were developed. Under the corporate governance code, clear commitment is made to E&S aspects through good board practices and control environment and process. These include a structure that hosts the audit committee responsible for undertaking internal audits of the existing management systems for Environment, Health and Safety (EHS) to ensure that the policies in place and the management system procedures are followed in alignment with these policies.

Identification of Risks and Impacts

The Egyptian regulations stipulate that, for new or expansion developments, an Environmental & Social Impact Assessment (ESIA) has to be developed and approved by the Egyptian Environmental Affairs Agency (EEAA) to acquire the relevant environmental approval before proceeding with the construction plan. No ESIA was produced for the existing Sindbad club hotels in Hurghada as these were constructed in 1992 before the environmental Law 4 was issued in 1994. For the proposed Hotel in Hurghada, an Environmental Impact Assessment (EIA) was submitted in 2008 by the group to the EEAA. Concerns were raised by the EEAA about the state-mandated construction setback regulations (120m away from the shore). Hence, the group formally requested the revision of the setback control line to 100m. Approval was granted from the shore protection agency which was subsequently communicated in Jan 2014 to the authority representing the EEAA locally in the Red Sea governorate. Based on this, an EEAA committee is reviewing the request prior to issuing the environmental permit.

Similarly for the planned lifestyle hotels, the EIAs required by national law and issuance of environmental permits are a prerequisite to proceed with construction. The group plans to proceed with these once the land has been selected for the lifestyle hotels.

The Hurghada project site and surroundings are located in the Red Sea region, which is characterized by diverse coral species. Although older developments may have resulted in the wearing down of the existing richness and abundance of corals, Sindbad club has positively contributed to the re-building of coral reefs for the particular use of its submarine trips and to minimize impacts on the existing corals and fish populations. Additionally, based on the IBAT review, it was indicated that the Hurghada project site is located in a migratory bird flyway. Although impacts on biodiversity are expected to be limited, baseline data on biodiversity is required as part of the EIA (ESAP Action Item #1).

As the marina was established in 1992 before the Environmental Law was issued in 1994, a scoped EIA was produced in 2000 in replacement to the EIA. A 2010 report on the environmental status of the Marina based on the scoped EIA indicates that the marina is operating in line with environmental requirements. The project site does not affect any Marine Protected Areas (MPAs) and recent coral health studies have indicated the prevalence of coral diseases in areas of the Northern Red Sea that are heavily impacted by touristic activities. These are mainly attributed to nutrient enrichment due to sewage discharge and terrestrial sedimentation. Sindbad does not have a wastewater outlet to the sea as the wastewater generated is treated at the in-house wastewater treatment unit described under the PS3 wastewater treatment section of this document.

Management Program

Based on the EIA submitted for the attainment of the environmental permit for the planned project in Hurghada, the EMP was developed for construction phase as well as the operations phases of the project. Environmental Management actions currently do not cover solid waste management, soil management, dust control, site security and traffic safety amongst other topics. The EMP should also include a separate section on monitoring actions, frequency of monitoring, performance indicators and the responsible entity. Credence will enhance the EMP and ensure that the construction contractor workers and operation phase employees understand the requirements, measures, and protocols stipulated within the EMP.

The Sindbad club hotels under the group currently hold valid ISO certificates for Quality Management System (ISO 9001), Environmental Management System (ISO 14001), Occupational Health & Safety Management Systems (OHSAS 18001) and Food Safety Management System (ISO 22001). This integrated Environmental and Social Management System (ESMS) will be extended to cover the new project, with provision of additional human and other resources.

Organizational Capacity and Competency

The above-mentioned management systems are integrated under a subdivision of guest experience which is the Environment, Occupational Health and Safety (EOHS) and document control unit. The day to day responsibility for the implementation of the integrated management system is held by the EOHS team which is composed of 4 staff members. The team is managed by the EOHS and document data control manager who receives reports directly from the EOHS team. The EOHS team monitor gaps in the EHS management system through an internal daily inspections schedule. This team will also be in charge of the E&S aspects of the new site under development in Hurghada. They will also ensure that all newly hired E&S personnel for the planned lifestyle hotels are competent to carry out their duties, or, where necessary, arrange for suitable training to be undertaken where knowledge is transferred from the existing team.

In addition, Sindbad club has initiated a sustainability committee. The committee convenes on quarterly basis and conducts a management programs review twice annually. This committee has been spearheaded by the EOHS director and has been operational since 2010. The sustainability committee discusses new ideas for implementation on the club’s environmental aspects usually raised by the frontline employees. Meetings typically entail follow-up on action plans from previous meetings and discusses the environmental aspects and other issues related to transportation, waste management etc. that need the immediate attention of the quality team. In addition, a course in the coastal protection, about spillage of oil into sea water, was attended by the recreation department head and EOHS head.

Credence currently deploys its civil construction team to act as EOHS officers to monitor implementation of health and safety conditions at construction site in Hurghada. During the operations phase these aspects will be covered by the existing EOHS team. Similarly for the new lifestyle hotels planned in Cairo, current management system will cover new hotels and necessary financial and human resources will be employed to ensure this. A community liaison officer will be retained for both the construction and operations phases for all planned project sites and will report to Credence EOHS officer as identified under ESAP Action Item (#4). The community liaison officer will manage the community grievance mechanism. The EOHS officer will be responsible for the implementation of the EMP and outcomes of the public consultation, if any, including monitoring actions.

Emergency Preparedness and Response

Emergency preparedness and response procedures are in place including fire risk assessment and control systems, fire alarm systems and drills, emergency preparedness and planning, among related topics and are part of Occupational H&S Procedures to be carried forward to both the construction and operation phases of the proposed project. As mentioned in the ‘Occupational Health and Safety’ sub-section in PS2 of this document, such procedures are designed to be specific to the project site (referencing nearby emergency facilities, responsible entities on-site or in the region, etc.). The Life and Fire Safety (LFS) arrangements are detailed under PS4 of this document.

Monitoring and reporting

Currently, OHS and environmental monitoring are undertaken by the EOHS team at the existing operations under Sindbad Club. Environmental parameters currently monitored include: air emissions, water quality at the desalination unit outlet, and waste water quality at the wastewater treatment plant outlet where chlorine levels are monitored daily. Measurements of noise levels, heat stress and luminosity are conducted once a year. Non-compliances are recorded and are being followed up by Credence. Implementation are measured and monitored through specific KPIs tied to incentives and evaluated monthly through the executive committee, headed by Credence’s Chairman & CEO. Credence internal corrective action plans are recorded and monitored on ongoing basis.

Working Conditions and Management of Workers Relation

Credence currently has 1200 employees with work contracts at all existing operations. The number of workers during the construction and operation phases of the project has not been determined by the group as the capacity of each facility is still not confirmed pending the land purchase.

The Human Resources policy and procedures that are now in place for the existing Hurghada operations are in line with IFC’s Performance Standard 2 and with the Egyptian labor law.

The existing Human Resources policy and procedures are communicated to staff through The Sindbad Club handbook in both Arabic and English. The HR policy and procedures stipulate that the grading system based on job description, career ladder and recruitment guidelines, employee evaluation methodology, evaluation grievance mechanism, terms of employment, such as incentives and privileges, training, official holidays, vacation system are established according to national labor regulations, and are included in the employee handbook. Additional workers’ benefits for full-time staff include health insurance and medical assistance, among others. Working conditions (including health, safety and security), employee end of service remuneration upon retirement age, policy on sexual harassment, prohibition to employ minors, disciplinary actions, workers’ rights and obligations, employer’s rights and obligations are also included in the manual which is referenced in the employment contract.

Credence has existing legal provisions to ensure that construction contractors abide by Credence’s HR policy framework. In terms of training, any contractor employees join trainings provided for direct employees especially on Occupational Health and Safety (OHS) aspects.

In line with Performance Standard 2, the group’s Human Resources Policy is not impeding workers from freedom of association and collective bargaining. There are no worker unions in the company and workers have not requested to join unions. The company management does not prevent workers from joining unions though and national legislation allows for such.

The group is committed to avoid all forms of discrimination against its employees, based on the age, gender, sexual orientation, health, race, nationality, political opinions or religious beliefs. The requirements of non-discrimination and equal opportunities will be extended to all contractors and subcontractors as part of contractual obligations.

The group’s Human Resources Policy excludes the use of any form of forced or compulsory labor, in accordance with national law and IFC PS 2.

As indicated by the existing training plan, training for direct and indirect workers is covered in the group’s Human Resources procedures. Induction training on the Human Resources Policy and Procedures and basic safety awareness training is provided to all newly hired workers and by rotation for departments that require refreshers. Other types of technical skills training is provided for staff on an as-need basis. Training topics include: English language, computer skills, continuous improvement of performance, food safety, hospitality, fire-fighting, financial training, HR training on Performance appraisal, effective management of procurement, negotiation skills, warehousing, natural gas processing technology, construction risk assessment, project planning (Primavera), e-marketing and Training of trainers. OHS training is rotational to include 50% of staff of the existing hotel facilities in Hurghada in each round.

Similar to the existing suggestions box, the project will develop and make available a grievance mechanism for workers. The group will inform the workers of the grievance mechanism, through the construction contractor and for operations staff, and describe how to make use of it during the induction training. The grievance mechanism is also be accessible to other performing work in core business processes of the project such as gardening workers which are hired seasonally.

Occupational Health and Safety

Key occupational health and safety (OHS) risks for a hospitality and tourism development includes water and drowning, kitchen-related hazards, hygiene, food safety, exposure to electric shocks and burns, safety issues related to use of heating equipment and noise from equipment such as generators and boilers. Noise levels are measured at the desalination unit, the wastewater treatment unit, generators of different sizes, hot water boilers, steam boilers, swimming pools pumps station, kitchen, carpentry workshop, laundry and chillers. Noise exceedances are compensated for by the availability of PPE for staff during exposure. Heat stress is measured by the hot water boilers, steam boilers, kitchen and laundry unit. Despite minor exceedance of national guidelines detected at the boilers of the Aqua Hotel and Spa in 2014, the group is working towards reduction of these levels to achieve compliance. A designated physician is in charge of reporting and handling cases of heat stress when required is provided in the Environmental Register.

Construction hazards typical of construction sites such as working at heights, moving equipment and tractor traffic are also expected on-site. Taking into account the heat and lack of shaded areas on the project site in Hurghada, construction workers might be at risk of dehydration, heat exhaustion and heat stroke if not hydrated properly. Water is currently provided by Sindbad club as the network connections have not been finalized and no workers are housed on-site. OHS procedures were provided by the group for the identification of construction and operation-related risks.

Credence will ensure that the construction contractor will follow a site-specific OHS Procedure for the construction phase based on the risk assessment completed for the new Hurghada project. The OHS Procedures will include location-specific emergency preparedness and response procedures which may rely on the arrangements for the existing Sinbad club facilities across the street in the Hurghada project. These currently include CO2, dry, liquid fire extinguishers and water reels. Sindbad has also recently built a1000 m3 water tank which is used for fire-fighting. Separate plans will be required for the Cairo project sites.

The group will also ensure that OHS performance is monitored during both construction and operation phases. The EOHS officer (acting as the E&S focal point at each facility under the project) will record and track any OHS incidents through an incident tracker and will report on OHS performance during both construction and operation phase.

Resources Efficiency

Credence is in the process of introduction of natural gas to its facilities which is expected to reduce electricity consumption at least by 50% by its existing kitchen facilities. Credence has also prepared an application for the LEED certification for its new hotel facility in Hurghada which entails proposals for storage and collection of recyclables, the implementation of a construction waste demolition plan, energy consumption metering, where applicable minimize energy performance and optimize energy performance as well as renewable energy production. There are also plans for recovery of waste heat once Sindbad is connected to a source of natural gas supply from the municipality for more efficient use of energy. The installation of water meters and monitoring of water consumption is planned as well as indoor and outdoor cooling tower water use reduction as stated in the application for LEED certification provided by Credence for the proposed project.

Water

Given that the project involves hotel facilities, water consumption is proportional to occupancy rate. Currently, water is sourced both from the municipality freshwater network and the desalination unit operating on site. The total dissolved salts levels are measured daily in-house for the desalination unit to ensure compliance with national guidelines which follow WHO standards for potable water. The desalination unit is currently operating on the Sindbad club premises. The inlet for the water is an underwater pipe that is 230 m away from the coast line and the reject saline water is discharged back to the sea through a pipe that is 500 m away from the coastline which is in compliance with the national regulations. The quality of reject saline water is tested daily to ensure compliance with national regulations for discharge back into the open sea.

The desalination unit has the capacity to produce 900 m3 daily and will expand in capacity to reach the production of 2000 m3. The 2014 consumption of water by the three hotels of Sindbad Club (currently exceeding 900 rooms) was 293,526 526 m3 with an annual average consumption of 0.686 m3 per guest from 2014 statistics. While this figure is comparable the industrial benchmark provided in the World Bank Group (WBG) EHS Guidelines, efforts are under way since December 2014 to further reduce consumption. Water conservation measures have been recently completed in the guest rooms including the replacement of shower heads, water faucets and minimized flush capacity to achieve almost a 50% reduction of consumption which has reached 0.44 m3/guest in January 2015 at one of the Sindbad club hotels currently in operation. Water for the aqua park and swimming pools of the three hotels under Sindbad Club consume 5,650 m3 water which passes over filters before being recirculated for re-use.

Energy

Electricity at the existing and future hotels is provided through the grid. Current consumption of electricity by the Sindbad club hotels for 2014 is 11,939,588 kWh and the serviced area is 158,830 m2. This accounts for 75 kWh per m2 which is within range of the industry benchmark. Fuel consumption is 92,636 L of Diesel and 3,926 L of Gasoline. A total of 305 LPG cylinders (34 small and 271 large cylinders) were consumed by the Sindbad club kitchen facilities in 2014.

Green House Gases (GHGs)

There are 5 back-up generators at Sindbad club for emergency power cuts. There are currently 22 Vehicles directly owned by Sindbad club including transportation for employees. The GHG emissions for the planned project are estimated as 12,170 tonnes CO2 eq/yr for the 4 new hotels. It is planned under the LEED certification process to monitor effectiveness of the adopted GHG reduction measures.

Air Emissions and Air Quality

Air Quality at Sindbad Club hotels in operation is measured annually and reported in the Environmental Register (ER) of each hotel. Environmental parameters undergoing regular monitoring by the Measurement and Calibration Labs at the existing Sindbad Club facilities include air emissions at the boilers and generators stacks. No exceedances with national standards or IFC guidelines were reported in 2014. However, the height of stacks for the generators and boilers had to be extended to 3.5m which was recently implemented. Also minor exceedance of the national environmental law decree 710/2012 in CO levels were recorded for the generators at the existing Sindbad Hotel facilities. This will require monitoring and a corrective action plan to be included in the E&S Annual Monitoring Report.

In the planned project, emissions to air are expected to arise as combustion products from steam boilers used to provide hot water, laundry and (seasonally) space heating of the hotels which will be monitored through the existing third-party monitoring scheme. Emissions to atmosphere will be measured and for devices exceeding the WBG/IFC General Environmental Guideline’s threshold, actions will be taken to reduce emissions.

Hazardous Material

Hazardous materials such as swimming pool disinfectants and pesticides are stored in a dedicated area; a register is maintained and Material Safety Data Sheets are on record. Total production of hazardous material is 1.7 tons in 2014, mainly produced at the Sindbad Beach resort and 1 ton of engine oil is produced by Sindbad Aqua hotel and beach resort. In 2014, 5.3 tons of cooking oil was generated by the three Sindbad Club hotels. All used oils are collected separately and sold to a third-party contractor based on a contract that stipulates that the contractor follows national laws for disposal.

Solid Waste

Both solid and hazardous waste generated by the project during construction is expected to be minimal. Solid (paper, wood, plastic, scrap metals, glass, mud and food waste) and hazardous (absorbent material, batteries, tires, metal drums, empty chemical containers and waste oil from machinery lubricants) waste streams will be segregated and volumes recorded. Solid waste collection will be managed by a licensed third party and disposal will take place in the municipal and construction waste landfills designated by the municipality of Hurghada. During operation, waste generated consists of domestic waste and minimal medical waste from the hotel clinic. Currently, Sindbad club hotels generate 5,585 bags (83,775 kg in total which is 0.195 kg per guest in 2014) which is in range of the industrial benchmark. Solid waste is collected by The Hurghada Environmental Protection and Conservation Association (HEPCA), which is a Non-Governmental Organization and waste is sorted at the landfill facility. Kitchen operations also produce 1 ton of spent engine oil and 5.3 tons of cooking oil annually on average based on the year 2014 figures which is sold to a contractor. Waste management procedures are included in the existing environmental management system. Hazardous waste is collected by a licensed third parties based on type by contract.

Wastewater Treatment

Sindbad club operates a wastewater treatment plant (WWTP) and the resulting treated water is completely used for irrigation of 33,000 m2 green areas on-site as well as other green areas belonging to the municipality on the airport Road. The proposed new hotel in Hurghada will also be connected to this WWTP. Sludge is removed by a contractor. Irrigation water is tested daily for chlorine by the in-house team. Regular wastewater quality tests are carried out by Cairo University Faculty of Engineering Measurement and Calibration labs which were found compliant. About 20 tons of sludge are produced per day from the three wastewater tanks pertaining to the three existing Sindbad club hotels and removed by a contractor.

The Life and Fire Safety (L&FS) systems were installed in the older hotel facilities in 1992. Despite this, the Sindbad Hotel and Spa facility had a L&FS review and sprinklers were installed during the upgrades and additions carried out after 2005. Credence will commission an L&FS review to assess further possibilities to strengthen LFS at existing hotels in accordance with international standards and good industry practices. If found necessary, improvement LFS plan for existing hotels will be agreed and implemented as part of IFC’s project. (ESAP Action item #3). Hotels to be built or undergo major renovation as part of IFC’s project will be designed and constructed in accordance with the Egyptian Code for Design and Construction for Fire Protection of Structures (ECP 305-2007) and one internationally recognized code, like NFPA 101. For each individual hotel the group will provide third party certification by a qualified professional acceptable to IFC that the design and construction of life and fire safety systems comply with the specifics of IFC life and fire safety guidelines. (ESAP action item #3).

Hygiene at Sindbad Club is covered by the management system and is monitored by Cristal as a third-party auditor.

Sindbad club is located on a touristic walkway and is surrounded by the beach, other hotel developments and a shopping mall. Security personnel are directly hired by Credence and are not armed. Security at the gates of Sindbad Club includes local Police force, an officer is designated for each hotel operating on a schedule and there is a patrolling car roaming the premises externally 24 hours a day patrolling beach, monitoring chalets, at the new project, the shopping mall and the hotel gates. Sindbad club has seven entry gates. The security system also includes CCTV cameras (a network of 111 cameras). Security personnel are located at the hotel entrances. Rarely is there a need to search guests and mostly vehicles are checked upon entrance into the parking or at the hotel entrance.

Client’s contacts:

Ihab El Laithy 
Director of Corporate Governance
Credence
53 Abou El Feda St.
Zamalek, 11211
Cairo, Egypt
Tel/Fax: +202 2735 6050 ext. 105
Email: mailto:iellaithy@credencehd.com
http://www.credencehd.com

Broad Community Support is not applicable for this project

Credence(33360) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
A baseline biodiversity assessment given the location of the Hurghada project to be included in the EIA	30-Sep-2015	Completed	Completed	10/30/2017
a) Identification of stakeholders: a social assessment is required of potential project-related impacts on neighboring residential communities, including Al Kawthar community (through direct consultation and/or through a knowledgeable third party). Based on this, the project will also determine the impacts of the project on these communities and define an appropriate communication mechanism based on the community profile. b) Stakeholder engagement: Carry out public consultations based on national EIA requirements based on the social assessment (ESAP item 2a) that identifies project risks and impacts and development stages that is tailored to the characteristics and interests of the Affected Communities, and includes differentiated measures to allow the effective participation of those identified as disadvantaged or vulnerable. Stakeholder engagement shall verify that community representatives such persons do in fact represent the views of Affected Communities and that the representatives faithfully communicate the results of consultations to their constituents.	30-Jun-2015	Completed	Completed	10/30/2017
Life & Fire Safety (L&FS) Engage professional services of a qualified L&FS engineer acceptable to IFC to: a) Conduct a risk-based review of the current level of L&FS at existing hotels in Hurghada; b) Provide certification that design and construction of project’s greenfield hotels and hotels undergoing major reconstruction comply with L&FS requirements of the WBG General EHS Guidelines. c) If necessary, develop a Corrective Action Plan, which will contain required remedial measures and completion dates. Credence will implement the L&FS Corrective Action Plan to IFC’s satisfaction in accordance with the agreed schedule.	31-Dec-2016	Completed	Completed	10/30/2017
a) Community Grievance Mechanism: Plan and Implement Community Grievance Mechanism. Implement and maintain a procedure for external communications that includes methods to (i) receive and register external communications from the public; (ii) screen and assess the issues raised and determine how to address them; (iii) provide, track, and document responses, if any; and (iv) adjust the management program, as appropriate. The grievance mechanism shall ensure that grievances from affected communities and external communications from other stakeholders are responded to and managed appropriately. b) A community liaison officer: will be retained for both the construction and operations phases for all planned project sites and will report to the Credence EOHS officer.	30-Sep-2015	Completed	Completed	10/30/2017