PS:4 Community Health, Safety, and Security is not applicable as sites are located in sites where there are no communities in their vicinity, or as in case MGM there is a small residential area but the project does not pose a risk on this community. In addition, in all of the three sites there is no armed security guards.  PS5: Land Acquisition and Involuntary Resettlement is not applicable because no new land is required for the proposed project and hence no involuntary resettlement is expected. The sites for the three facilities are owned by the company and are operational for several years, and were acquired on a willing seller willing buyer basis.  The three sites are located in modified habitat - either in the well-developed industrial/peri-urban residential or commercial areas.. Hence, PS6: Biodiversity Conservation and Sustainable Management of Living Resources does not apply for this investment. Also, there are no indigenous people in the area thus PS 7: Indigenous People does not apply and neither does PS 8: Cultural Heritage given the project location

 If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with the Performance Standards.

     This project involves rebuild of existing furnaces, and introduction of automation in machines for handling cullet and for inspection of the products. This is expected to result in better production and energy efficiencies as well as reduced emissions. The production process generally does not generate much solid waste or wastewater. The investment is expected to have limited E&S impacts which are site-specific, and temporary in nature. Accordingly, this is a Category B project as per IFC’s Environmental and Social Sustainability Policy.

Key environmental and social issues and risks for this investment are: assessment and management of E&S impacts associated with the project, management systems and practices for E&S and OHS; working conditions and terms of employment; resource efficiency, water use; air emissions from the furnaces; supply chain; and impacts on surrounding communities.

          Environmental and Social Assessment, Policy and Management System

MEG and MGM facilities were established prior to national environmental regulations being in place. Accordingly, requirements for developing an Environmental Impact Assessment (EIA) and obtaining approvals from the Egyptian Environmental Affairs Agency (EEAA) did not apply. However, for MEG the company has contacted EEAA, and obtained EEAA approval in 2016.

MGM was inspected by EEAA in March 2014, and certain areas of noncompliance were identified. A compliance action plan was developed and implemented and accordingly in June 2014, EEAA issued a letter indicating that the company is in compliance with national regulations.

For MEG Sadat, the facility was established in 2007 and an EIA has been developed and an EEAA approval obtained as a prerequisite for obtaining the license. The company will contact the competent administrative authorities to get access to the EIA and EEAA approval.

The operations in the three plants are certified compliant with international management systems standards, viz. ISO 9001:2008 Quality Management System; ISO 14001:2004 Environmental Management System; OHSAS 18001-2007 Occupational Health and Safety Management System, and FSSC 22000- 2013 Food Safety System Certification. In addition, MGM operations are certified against ISO 22000-2005 Food Safety Management System, and SA 8000-2014 Social Accountability.

Accordingly, the company has an integrated management system policy on the corporate level for quality, environment, health, safety and food safety, that was last updated in 2018. The company has also a corporate social accountability policy issued in March 2018. MEG has also detailed standard operating procedures covering all environmental, OHS, and social aspects in the operation.

The company has a hazard identification, risk assessment and determining control procedures developed in December 2017. The scope of the procedures covers the production areas, the administration buildings and the workshop and warehouse.

For each of the three plants there is an assessment of all the activities, the expected risks, the likelihood of occurrence, the severity of the risks, and the mitigation measures.

Management Programs

The company has established standard operating procedures covering all aspects of HSE across all the facilities 

One of the management programs implemented by the company is measuring and controlling of environmental aspects, such as oil spills and air emissions. This is conducted through determination of the environmental aspects, evaluation and analysis of the aspects, and environmental performance measuring and monitoring. The periodic monitoring and inspection conducted by the company ensures that all identified environmental aspects are controlled.

During appraisal evidence of implementation of the management systems was visible across all the facilities, across the various departments. Standard Operating Procedures (SOPs) and work instructions were clearly displayed together with key performance indicators (KPIs) across all the facilities in addition to other signage; and other management system documentation (manuals, monitoring and training records) were found to be properly maintained. However, as described further in OHS section under PS2, housekeeping practices need further enhancement in the production areas, and the emergency exits need to be cleared.

Organizational Capacity and Competency

The company has a qualified corporate QA & HSE Manager who reports directly to the Group CMO.  The corporate QA & HSE Manager, has two teams reporting to him: one team for QA and the other for HSE. To oversee HSE aspects there is one section head in each of the three plants and each section head manages a team of three supervisors dedicated to HSE.

Emergency Preparedness and Response

At the Group level, the company’s Emergency Preparedness and Response Procedures was developed in December 2017. The scope of the procedures covers an overview of all incidents and emergency situations, such as fire, explosions, outbreak of infectious diseases, and chemical or biological contamination from external sources.  At the plant level, a detailed emergency preparedness and response plan has been developed for each of the three plants. These plans are pending approvals from the Civil Defense Authority.

During the appraisal, it was observed that there are smoke detection systems in the warehouses, and there is a manual alarm system in the production areas. There are water sprinklers in some of the warehouses. The company has fire extinguishers and hydrants installed across the plants. The types of fire extinguishers depend on the fire risk in each area, and they include carbon dioxide, foam, nitrogen and dry powder. The emergency exit signs are visibly posted. However, the emergency exit doors were blocked in some locations, and a fire detection and firefighting system was not adequately installed in areas with high risk including hazardous chemicals storage area and the fuel and oil storage area.

Fire drills are conducted on annual bases for each of the three plants, and every three months for different units in the plant. The workers have received training from the Civil Defense Authority.

As requested by IFC after the appraisal visit, a life and fire safety audit was conducted in the three sites and gaps from national L&FS standards were identified. An action plan was developed by the company to address these gaps

Monitoring and Review

As per national regulatory requirements the company conducts annual environmental monitoring across all the facilities. This includes workplace measurements related to noise, heat stress, illumination, and air pollutants (including Silica, Total Suspended Particulate (TSP) and Particulate matter (PM10), Volatile organic compounds (VOCs)). In relation to environmental aspects this includes furnace stack emissions and wastewater quality. The monitoring is carried out by external agencies every year.  The most recent monitoring was undertaken by a third party in January 2018 for MEG, in February 2018 for MEG Sadat, and in March 2018 for MGM.

The company also retains an environmental register as per the national regulations for each of the three facilities, and this includes information on the production process, raw materials types and consumption rate, output types and production rate, as well as waste types, generation quantities and methods of disposal and treatment. The register is updated on an annual basis and retained by the company to be reviewed EEAA representatives during inspection visits. As set forth in the ESAP, the company will develop an environmental register for the cullet unit separately or as an annex to MEG environmental register.

     Human Resources Policies and Procedures

The company has HR policies and procedures in line with national regulations. The policies and procedures covers recruitment and selection procedure, leaves and vacations policy and procedures, employees complaint procedures, anti-discrimination policy, anti-harassment policy, and training policy. The company has also a code of conduct. The company has performance appraisal system in place that need to be documented in a formal procedure. The company’s policies and procedures are mostly in line with PS2, except for having formal procedures for employees’ appraisals, workers organization, grievance mechanism for third party workers, and termination policy. As set forth in the ESAP, the company will revise its HR policy and procedures in line with PS2.

Working Conditions and Management of Workers Relation

MEG employs 1990 staff of whom 468 are in MEG facility, 506 in MEG Sadat, 878 in MGM, 11 in the cullet unit, and 127 corporate staff. All the 1990 are direct employees of the company and has contracts. Workers recruited through a third party are seasonal workers, typically medium skilled workers required for non-technical activities such as packing.

The plant operates continuously with three shifts per day of eight hours each.  All workers hired by MEG or by the third party have medical insurance through a private company. Also, the company provides transportation. All workers receive free meals or meals allowances according to their facility location during their shifts.

During appraisal visit, it was witnessed that there are workers below 18 years. As per national regulations workers between 16 and 18 years are allowed under specific conditions.  As requested by IFC after the appraisal visit, the company has revised its HR policies and procedures to reflect that it strictly forbidden to employ minors under 18 years of age in any function or facility of MEG and its affiliates. The company has also developed procedures and a commitment letter to be signed by the contractors to ensure that contractors hiring minors follow the national regulations requirements in this respect. 

Workers’ Organizations

There are worker unions in two of the facilities and a worker committee in the third facility and the plans are underway to establish a formal union in the third facility. MEG management is in continuous interaction with the union heads to resolve any issue raised by the workers.

Non-Discrimination and Equal Opportunity

Hiring and appraisal of employees are carried out based on the equal opportunity practices Recruitment is done through posting vacancies internally, on the company’s website, and through recruitment agencies. In respect of salaries, an annual appraisal is carried out and the minimum salary for all employees is within the average industry range.  Due to the nature of the business, there are no women in production process, women are only in administrative and managerial jobs.

Grievance Mechanism

The company has an employee’s complaints procedures, where its sets different routes for the employee to place the compliant and procedures implemented to address these complaints. Although not explicitly mentioned in the procedures, but the company address also any anonymous complaint.

Occupational Health and Safety

In addition to the company’s general HSE policy, there are detailed procedures covering OHS. These are incidents near misses’ investigation and reporting, work permits procedure, health and safety committee procedures, usage of personnel protective equipment, health and safety instructions for drivers, health and safety instructions in laboratories, forklifts health and safety instruction, cranes and elevators health and safety instructions, health and safety instructions in workshops, and lock-out-tag-out procedures. Oversight for OHS is provided by the QA & HSE Manager and the team supporting him.

The training plan for workers is developed by the Organizational Development Unit in the HR Department. HSE training is part of the induction of each employee. In addition, on monthly basis there is an HSE training for different group of workers and the training is tailored to the nature of their work.

As described earlier, the company annually monitors the workplace conditions including work place air quality, noise levels, light intensity and heat stress. The air quality monitoring included TSP, PM10, silica , nitrogen oxide, nitrogen dioxide, carbon monoxide, Sulphur dioxide, total volatile organic compounds, HCL, xylene, acetone, fluorides, lead, silver, nickel, silicon, zinc oxide, copper, aluminum, chromium, manganese, tin, arsenic, cadmium.

Light intensity in most locations is within the regulatory limits and WBG General HSE guidelines. In limited locations was found to be below the limits. Noise intensity was found to be above the regulatory limits and WBG General HSE guidelines in a number of locations.

Heat stress and air emissions are mostly within the regulatory limits, the only exception is TSP and PM10 in the crushing and batch areas in MEG site. As per the ESAP, the company will evaluate options to enclose sand storage and handling measures to minimize dust generation associated with this source.

During appraisal it was observed that workers who are working on inspecting the products coming out from the furnace are exposed to high heat intensity and noise levels., The company will conduct heat stress measurements in locations where workers are highly exposed. For noise levels exposure the company will develop a plan to ensure the duration of exposure to workers to noise is in line with the regulatory limits

The company has KPIs to monitor and set target for Lost Time Injury (LTI), Lost Time Injury Frequency Rate (LTIFR), Number of days away from work (DAFW), and lost time injury severity rate (LTISR), and safe hours. The available KPI results are for 2016, and indicates an improvement in all OHS KPIs from 2015 and 2014.  The company did not have any major injuries in the last three years.  The company conducts a quarterly and annual analysis of the KPIs to identify areas of improvement.

Supply Chain

For external cullet used in production, 50% is obtained from Coca Cola and Pepsi, the main MEG customers, and the other 50% is obtained through contractors. The contractors collect the cullet from garbage collectors. In the glass industry, there is usually a general risk of using child labor for cullet collection. As set forth in the ESAP, the company shall undertake supply chain mapping and develop a policy against child labor for collection of cullet to be implemented on best effort basis.

    The main raw materials used in production are sand, limestone, soda ash, feldspar, selenium and other raw materials. The company sources the raw materials mostly locally. The company uses natural gas and electricity as the main source of energy. Once the raw materials are received at the factory, they are stored in separate piles. Before melting, the raw materials are weighed and mixed with cullet in the automated batch house to ensure homogeneity. The mixture is then fed into the melting furnace which heats the raw materials and causes the materials to be transformed into molten glass. The molten glass is then cooled thermally, subjected to a forming process and then the glass is annealed to remove unwanted stress from the formed glass. This is followed by several stages of manual and automatic inspection, testing, packaging and storage.

The cullet is also a main ingredient in the glass production. The percentage of cullet in the product depends on the type of the glass. For green containers the percentage of cullet ranges from 60-65%, for flint containers from 30 -35% and for amber from 20 -25%. One third of the cullet is internal clean cullet resulting from rejects during the production process, while the other two thirds are external cullet being processed in the culet unit within MEG plant.

Resources Efficiency

The glass manufacturing process is very energy intensive. In all the three factories natural gas is used as the fuel in the melting process in the furnaces and in the printing furnaces. Electricity is used for electric boost heating in the furnaces and is used in operating all other equipment. Diesel oil is used for the compressors and in the emergency backup generators. The company has improved its efficiency through increase in capacity utilization and reduction in internal rejects.  However, there is still a substantial potential for energy efficiency improvement

Compared to the specific energy consumption benchmark in the WBG HSE guidelines, all three sites are above the benchmark and have potential for improvement. As set forth in the ESAP, the company will develop an energy efficiency plan to reduce its specific energy consumption.

Water and Wastewater

Water consumed in the production facilities is obtained from the public network, except in MGM plant where the water is partially obtained from the underground wells. The plant has five wells, but only two are being utilized.

Water for industrial purposes is mainly for cullet washing, and compensating the blowdown and evaporation from the closed cycle cooling system and for compensating the evaporation from the firefighting emergency tank.  The water used in the closed cooling cycle is treated by sedimentation and filtration. The sedimentation tank is cleaned periodically and the wastewater is discharged in to the sewage network for MEG facility or in the industrial sewage network for MGM. The specific water consumption in the three sites is either within the industry benchmark as per the WBG HSE guideline or slightly above it.

Greenhouse Gas (GHG) emissions

Based on 2017 figures considering the consumption of natural gas, electricity and diesel, the total GHG emissions from MEG, MGM and MEG Sadat are about 67,000; 106,000; and 45,000 ton CO2 equivalent per year respectively.

These also include the process emissions due to the decarbonization of the carbonate raw material in the process input, mainly sodium carbonate Na2CO3, limestone CaCO3 and dolomite CaMg(CO3)2.

Air emission and ambient air quality

Air emissions are generated from the stacks of the furnaces. Flue gases emitted from the furnace stack are monitored with the measured parameters including particulates, sulfur dioxide and nitrogen oxides, HCL, fluorides, lead, cadmium, and arsenic. Emissions are within national regulatory limits as well as limits defined in the WBG General/Glass Manufacturing  EHS Guidelines. As selenium is part of the raw materials used, emissions for selenium might also be emitted. For the next monitoring of emissions, measurements will also include selenium.

Hazardous Materials Management

The main hazardous materials used are those used as coloring agents and paints. There is a designated storage area in each of the plants for the hazardous material. The MEG facility storage area has recently been demolished and a new storage will be constructed. As set forth in the ESAP, the company will establish a chemical storage warehouse. This storage area will be equipped with necessary firefighting equipment and safety measures and will ensure proper storage of chemicals and their compatibility.

Solid and Hazardous Waste Management

Hazardous waste generated from the plant includes used filters, spent oil, and used florescent lamps and empty containers of hazardous chemical substances. Spent oil is sold to specialized licensed waste management company. Other hazardous wastes are collected and disposed by Nasriya Hazardous Waste Management Facility. Non-hazardous solid waste is collected by solid waste contractor.

         The company, in line with the ESAP, will develop a Stakeholder Engagement Plan (SEP) that identifies key stakeholders and provides a procedure for external communication. Initially the key stakeholders are considered as the neighboring industries, the competent administrative authorities, EEAA, industrial zone authorities, and neaboring communities in sites where they exist. The SEP will include a grievance redress mechanism (GRM) to address any concerns that people living in the vicinity of the project. The main objective of the GRM will be to provide a mechanism to mediate concerns. The SEP will be reviewed periodically during implementation and will be updated as necessary to ensure effective ongoing engagement with stakeholders. Appropriate channels will be used to inform the stakeholders of project issues and will be part of the SEP.