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
Regarding PS5 (Land Acquisition and Involuntary Resettlement), this PS is not relevant to HAC since land acquisition is the responsibility of the developers, not the EPC contractor. It could be relevant for future HAH activities, however, including future activities of other subsidiaries. Regarding PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), biodiversity concerns would be addressed in management plans that included project-specific requirements based on client studies and ESIAs as well as this PS. Regarding PS7 (Indigenous Peoples), none have been identified in current project areas although HAH will include an IP Policy in case IPs may be affected by future activities. Similarly, regarding PS8 (Cultural Heritage), although no cultural resources have been identified in current project areas, the company will prepare a “Chance Finds” procedure to be applied in the event of any accidental unearthing of cultural heritage resources.

This is a Category A project according to IFC’s Policy on Environmental and Social Sustainability. Part of IFC’s proposed investment will be used to acquire a minority interest in a new thermal power plant which has been categorized as A. The primary environmental, social and health and safety (ESHS) issues of concern with regard to the current investment in HAH are construction-related, including occupational health and safety, transportation management, labor and accommodation, and pollution prevention, among others. In addition, some construction projects could present diverse E&S risks and impacts, as they may involve large numbers of workers and may be in locations where major construction works could present risks to local communities and the environment. The primary issues of concern in relation to the proposed new thermal power plant have yet to be assessed, but are likely to include noise and air emissions and impacts on cumulative ambient air quality as well as potential social impacts such as land acquisition and influx of large numbers of workers during the construction phase. Other future infrastructure projects that the company plays a direct role in developing and owning may also be considered Category A depending on the nature of their E&S risks and impacts.

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 and Management Systems. HAC has a Health, Safety, and Environment (HSE) Policy that has been approved by Chairman Elwy Hassan Allam. The Policy will also be adopted by HAH, where Elwy Hassan Allam serves as Managing Director. HAC also has a corporate-level Environmental and Social Management System (ESMS) that comprises ESHS management plans and procedures, which define how to deal with specific risks and impacts. These plans and procedures are also followed by subsidiary companies in Egypt and in other countries.



It is HAH’s corporate policy, as it is for HAC, that its companies’ E&S management systems be certified. In this regard the management system of HAC is fully certified for quality management (ISO 9001), environmental management (ISO 14001), and occupational health and safety management (OHSAS 18001). Certifications were achieved in 2015 and extend to mid-2018. Subsidiaries in Saudi Arabia and Algeria are not certified but are reported to have adopted Environmental Management Plans based on the HAC corporate plan.



Management Program. HAC has developed a series of ESHS management plans and procedures, including an environmental management plan (EMP), Safety and Health Manual, Safety and Health Guideline (which includes OHS requirements for many work procedures), Safety and Health Training Plan, Safety and Health Training Program, and an emergency response plan. The EMP includes broad requirements for spill prevention and response, dust and vehicle emissions control, noise control, site housekeeping, waste management, hazardous materials management, emergency response, reporting, sediment and erosion control, water reuse and management, and chance finds. It also includes requirements for orientation and training, communication, and reporting, but does not include requirements for traffic control. The OHS manuals and materials include detailed procedures for major project tasks, including PPE and safe behavior guides, and detailed training requirements for new hires and new jobs.



IFC conducted a high-level review of the plans and found them generally consistent with the PSs and good international industry practice (GIIP). For individual construction projects, HAC requires the corporate management plans (specifically, the EMP [including waste management, erosion control, etc.], OHS manual and training program, and the emergency response plan) to be modified to reflect site-specific conditions and requirements, and then to be approved by the corporate HSE Manager. The corporate-level plans have enough detail to allow ready modification in response to conditions at individual sites. Site-specific plans have been prepared (or in a few cases at new sites are in the process of being prepared) at 34 of the 38 active sites in Egypt and at all foreign sites. The absence of plans at some sites can be attributed to the rapid growth and expansion experienced recently. The absence of formal plans is at least partially overcome by th
e fact that site HSE managers are all experienced, and many are not new to HAC but have been employed at other sites in the past, and also that many workers were already experienced with HAC practices and procedures. In addition, HSE supervisors and officers receive job-specific and site-specific training appropriate for their jobs. IFC requires that HAH, including subsidiary HAC, implements its management program as designed, so that site-specific environmental and health and safety management plan(s) are prepared before construction begins at all sites. (ESAP #1) In addition, the EMP will include procedures for traffic management, including the requirement for site-specific plans at sites where there could be significant impacts from construction-related traffic or changes in traffic patterns. (ESAP #2)



HAC requires subcontractors to have equivalent management systems and ESHS programs, which must be approved by the site HSE Manager. These are also lagging in some cases, and will be required to be in place before subcontractors begin work. (ESAP #1)



The existing plans and procedures are tailored for construction projects, and cover HAC activities through commissioning. Since HAH will now begin investing in other projects, there will need to be corporate procedures for assessing and controlling adverse impacts at non-construction projects as well, along with requirements for developing project-specific plans and programs for OHS and for major E&S issues. The current EMP could be expanded so it covers non-construction projects, or a separate corporate-level ESMP could be developed to guide E&S management at infrastructure projects. In addition, other plans will be required during initial operations for projects where HAC retains responsibility for commissioning and for some period of initial operations, which can last for a year or more. In these, cases, HAC will work with project owners to determine the most efficient way to proceed, whether to develop ESHS plans and procedures or to modify and adopt owners’ plans. (ESAP #3)



Identification of Risks and Impacts. HAC’s corporate EMP does not include a requirement that site HSE managers review E&S impact assessments that may have been completed by project owners (HAC’s clients) under Egyptian or other countries’ law and which may have included mandatory mitigations and framework E&S management plans. The corporate HSE Manager reported that site managers and site HSE Managers do evaluate site risks and impacts at construction sites, however, and in order to complete site-specific environmental management plans, risks and impacts would necessarily have to be evaluated to some degree. The EMP does not require this before construction begins, although it does require frequent evaluations during the course of construction. In addition, the EMP at present is designed to deal only with construction projects, not infrastructure projects such as are now to be under HAH control. IFC requires that t
he EMP be specific in requiring the client’s E&S assessment to be used in designing site-specific requirements, and when clients have not conducted an assessment, for the HSE manager to conduct an assessment of hazards and risks for use in preparing site-specific plans. (ESAP #4)



The HAH subsidiary constructing the Benban solar project in Egypt is undertaking an E&S assessment for its solar project in accordance with Egyptian law and IFCs PSs. Similarly, the power project in which HAH is acquiring a minority interest is conducting an E&S assessment to meet the same standards.

In relation to land acquisition, as HAH diversifies into infrastructure development, the company may need to acquire land, which may cause involuntary resettlement and/or adverse effects on livelihoods. To address this risk, HAH will include in the EMP/ESMP a policy on land acquisition, resettlement, and livelihood restoration that is consistent with national law and PS5 (ESAP #3). In relation to biodiversity conservation, IFC will require that HAH develop an EMP to include requirements, and appropriate procedures, to protect biodiversity as required by formal or informal impact assessments. (ESAP #2 and #3) In addition, the current EMP, or an equivalent document for infrastructure investments, will need to include requirements for biodiversity conservation in line with PS6 (ESAP #3). Finally, in relation to Indigenous Peoples, IFC will require HAH to include in the EMP/ESMP a policy on indigenous peoples that is consistent with national law and PS7 (ESAP #3).



Organizational Structure and Capacity. ESHS is managed at the corporate level by a team of three: the HSE Manager and two professionals who report to him; an OHS Manager; and an environmental processional whose primary role is to deal with reports and to compile statistics and reports from the various project sites. The HSE Manager reports to the CEO and to the Egyptian, Algerian, and Saudi Arabian operations managers.



Each construction site has an HSE Manager who has to be approved by the corporate HSE Manager. These are permanent HAC employees, many of whom have transferred from other sites when their previous projects are complete. Only experienced professionals are hired as site HSE Managers. They are supported by HSE Supervisors and HSE Officers, who are responsible for day-to-day oversight of environmental and OHS performance. In practice, the Officers’ efforts focus on OHS at most sites, and they are trained accordingly. HAC’s goal is to have at least one HSE Supervisor or Officer per 50 employees, although there is some variation among sites. New HSE managers do not necessarily undergo training in HAC E&S procedures before assuming their responsibilities. Thus, while they may be expert in Egyptian law and in good international industry practice, they may not be familiar with HAC’s procedures and practices. Under IFC’s investment, all HSE managers and E&S professionals will need to receive tra
ining in HAC’s plans and procedures before taking their positions of responsibility (ESAP #5).



The HAC OHS training plan and program require that all staff receive induction training before they begin work and also job-specific OHS training before they begin any new job. They also require refresher training and more informal means of communicating requirements during the course of employment. As these same plans are used by subsidiaries, including foreign ones, staff at subsidiaries’ sites also undergo induction and refresher training.



Emergency Preparedness and Response. The company has an Emergency Response Preparedness Instruction that provides appropriate procedures for responding to emergencies at construction sites, including incidents and accidents that result in injuries, fire, explosion, flammable and toxic vapor release, natural disaster, spills of hazardous material, and civil unrest. The Instruction guides the development of site-specific emergency plans at construction sites. The Instruction will need to be modified for infrastructure projects, or an equivalent Instruction will need to be developed. (ESAP #3) As noted above under PS1, not all site-specific plans are in place at present, even at sites where construction is well underway. This will need to be addressed as per ESAP #1.



Monitoring and Reporting. HAC’s EMP calls for periodic audits of each project’s management systems and practices, and all projects are subject to a formal E&S audit by internal resources at least every four months, with auditors coming from both the corporate HSE Department and from other HAC projects. In addition, there are much more frequent partial inspections and observations, as every site in Egypt is visited by the corporate HSE Manager or the OHS Manager at least once a week. Site HSE managers send informal reports to the corporate HSE Manager every day and formal reports on a weekly and monthly basis. A wide variety of OHS statistics are maintained and reported, including hours worked, fatalities and serious injuries, lost-time-incidents, and near misses

Human Resources. At the time of appraisal, HAH/HAC and subsidiaries employed 3,086 managers and staff and nearly 14,000 contract workers in Egypt. Of the permanent staff, about 300 are employed at HAH/HAC corporate offices (33 females) and the remainder on project sites (few or no females). Due to the ongoing growth, there have been no layoffs in recent years, and the company has made strong efforts to retain permanent staff through slow periods. As a result, employee retention was said to be about 90-95 percent, with no layoffs of permanent employees in the past several years. Wherever possible, HAC retains even contract workers and transfers them to other sites if their performance merits retention and they are willing.



HAC estimates that subcontractor staffing is approximately equivalent to HAC’s. In Algeria, HAC currently employs 190 permanent managers and staff and 743 contract workers laborers. In Saudi Arabia, there are 284 employees. Most employees and workers in both countries are Egyptian, an estimated 85 percent in Algeria and 90 percent in Saudi Arabia.



HAC establishes the conditions of contract workers with a standardized contract form that makes clear employment is not permanent but for the term of a specific project. The contract establishes the payment rate, defines conditions for overtime, and defines the accident insurance that is provided. In addition, when the company is to provide meals and/or accommodations, the contract describes the conditions they will be provided. Some elements of good international industry practice are not included, and IFC will require the contract be modified accordingly, to include terms and duration of employment, wages and benefits to be paid, wage calculations and payslip details, hours to be worked and overtime to be paid, details of breaks, deductions from wages or salary, work locations and conditions, company and worker insurances (including health and social insurance), termination procedures, and details on pension benefits and payments. (ESAP #7).



The Employee Relations Policy establishes the requirements for contracts for regular employees in accordance with Egyptian law. These contracts define the salary, position, and period of contract. Contracts also define leave and insurance.



The human resources (HR) department was established about a year ago. The company has a number of human resource policies, including employee relations, recruitment, compensation and benefits, and training. The Employee Relations Policy includes a commitment to nondiscrimination in employment opportunity and to compliance with Egyptian labor law; Egypt has ratified the eight fundamental conventions of the International Labor Organization. Saudi Arabia and Algeria subsidiaries are reported to follow the same procedures as Egypt except for differences in national law. Overall, the company’s HR policies meet the requirements of Egyptian law and PS2, except there is no formal worker grievance mech
anism. The company reported there are guidelines for dealing with complaints but no formal process, and complaints are currently handled somewhat informally. As part of its investment, IFC will require that HAH adopt a formal worker grievance mechanism for all of its subsidiaries and projects, and that subcontractors use HAH’s mechanism or have an equivalent mechanism. (ESAP #8)



As is true for the EHS program, the HR program is having to deal with rapid growth. In the past year, over 1,000 permanent employees have been added to bring the current total to over 3,000. There is no retrenchment policy, but that has not been needed as they have not laid off employees in the last year. When projects end, contract workers are evaluated and, if found suitable, are offered jobs at new projects.



Worker Accommodations. Accommodations are provided for workers at up to 70 percent of construction sites. The company follows Egyptian law for accommodations but has no written requirements or procedures. IFC will require the company to develop a procedure for worker accommodations that is consistent with the national law and with the principles contained in the IFC/EBRD guidance note entitled Worker accommodation: processes and standards. (ESAP #2)



Occupational Health and Safety (OHS). HAH/HAC has a company Health and Safety Manual that includes the corporate policy. This manual includes general and specific safety procedures that cover the main hazards on construction sites. There is also a Safety and Health Guideline which provides guidance to workers regarding safe working conditions and habits, particularly for jobs that that involve exposure to hazardous conditions. The Guideline also describe corporate and site HSE organizational responsibilities as well as communications and project-specific hazard assessments.



As noted under PS1, there is a robust OHS monitoring and reporting program, and this is described in the Guideline. The company attempts to have one person responsible for OHS monitoring and instruction for every 50 workers, and maintains roughly that ratio at its project sites. Serious incidents are reported immediately. Corporate-level OHS statistics for both HAC and subsidiaries from 2010 to 2014 show steadily improving OHS performance, with 2014 figures showing only four subcontractor work-days lost to injury out of over 37 million work-hours and no HAC days lost out of over 15 million work-hours.



OHS practices – such as PPE use and safety equipment condition- at the sites visited by IFC showed inconsistent application of the procedures outlined in the corporate manuals, although the ratios of OHS Officers to workers were in line with corporate policy. The company will undertake additional training to ensure those responsible for OHS oversight are fully cognizant of HAC policies and procedures and with good international industry practice, so HSE managers and foremen/supervisors will enforce PPE use more rigorously and be more
aware of unsafe equipment and conditions. (ESAP #5)

The construction sites visited by the IFC team each manage, as do most or all construction sites, a certain amount of hazardous materials, such as fuels and lubricants, and generate a certain amount of waste, including sanitary wastes. Proper management of such materials and wastes is needed to prevent contamination of soil and/or water, and risks to workers. In addition, construction activities can generate noise and dust that can create a nuisance or hazard to workers and local communities. HAC’s corporate EMP includes appropriate procedures and requirements to control dust and other air emissions, noise and vibration, water quality, hazardous and nonhazardous wastes, and hazardous materials, and also requirements for water reuse and conservation. These corporate-level requirements are generally in line with IFC’s EHS Guidelines. Client E&S assessments may also include relevant requirements. As needed to control potentially significant impacts, the EMP will need to require site-specific management plans to be developed and implemented. (ESAP #1) In addition, the company will develop requirements for avoiding or controlling pollution and using water efficiently at infrastructure projects, not only the construction projects where this is currently required. (ESAP #3)

Community Health and Safety: Most of HAC’s projects are in and around Cairo, so there is the potential for significant interactions with local communities. The EMP has very few requirements that are specifically related to avoiding or minimizing impacts on local communities, or to communicating with affected people and local leaders. The primary risks and impacts to off-site receptors would be from dust, noise and vibration, and traffic, and from worker influx. The EMP includes appropriate measures to control noise, and to monitor noise at project boundaries. As noted under PS 1, however, there are no requirements related to traffic management, and there are also no requirements related to worker behavior.



IFC requires the company to include in the EMP more requirements regarding the evaluation and avoidance or control of potential risks and impacts on local communities; that is, it will need to become more of an Environmental and Social Management Plan (ESMP). The following issues, all of them mentioned under other PS discussions, will be added to the EMP in order to better protect local communities:

Requirements and procedures for identifying and evaluating potential social risks and impacts prior to beginning work, including risks and impacts on local people (ESAP #4) and inclusion of requirements into site-specific E&S management plans (ESAP #1)

Requirement and procedures for traffic management, including the requirement for site-specific plans where there are significant risks and impacts from project-related traffic or traffic patterns. (ESAP #2)

Requirement to develop procedures to manage impacts due to worker influx, including modifying the Code of Conduct to include appropriate provisions for avoiding or reducing adverse impacts on local communities, including minimizing the risk of spreading communicable diseases. See below. (ESAP #2)



Influx management. As noted under PS 2, worker accommodations are provided at many of HAC’s construction projects in Egypt, and accommodations can be provided for hundreds of workers at any one project. Especially in rural areas, inappropriate behavior by workers can have adverse effects on local individuals and communities and also can adversely affect relations between the company and local officials and people. At present, the Code of Conduct does not include requirements intended to control worker behavior in local communities but rather is more intended for professional employees. The company will modify its Code of Conduct to include appropriate requirements for worker behavior in camps and in interactions with local people and communities, and, at sites where there could be significant impacts on local communities from the influx of workers, to develop a plan to manage the influx of workers to rural areas. (ESAP #2)



Security. Except for linear projects – roads and transmission lines – all construction projects are fenced, with controlled access by security guards at all entrances.
Only unarmed security personnel are hired by HAC; when armed security is necessary, or is required by clients, HAC hires subcontractors to provide the personnel. HAC will develop and include in contracts for armed security personnel standard provisions, procedures and training requirements to ensure the appropriate conduct of security personnel in accordance with IFC PS 4 requirements (ESAP #9)

The primary stakeholders who would be affected by the company’s construction projects would be the company’s clients, government authorities with jurisdiction over aspects of the projects, the people who live on and around the project sites, or those who use public roads that are affected by project-related traffic. Stakeholders could also include nongovernmental organizations and other interested parties.

HAC does not have a corporate Stakeholder Engagement Plan (SEP), and their E&S manuals do not require project-level SEPs because, until recently, the company was focused on construction contracting where the responsibility for engagement lay with the owner/developer. The corporate EMP establishes rules for communicating with Government agencies and NGOs, but no requirements to do so beyond what is required by law.

For projects to be developed and owned by the company, a generic corporate stakeholder engagement plan template and procedure will be developed in line with relevant PS 1 requirements. This will be tailored to each new project that the company develops (unless partners are already undertaking this along similar lines) and implemented. The SEP for each project to be developed by the company will include a fit-for-purpose community grievance redress mechanism.

For construction projects where the company is providing services to a third-party developer, the details of stakeholder engagement and grievance mechanisms will need to be agreed with project owners. (ESAP #6) As a matter of good risk management practice, the company will consider collaborating with owners to appoint community liaison officers in complex projects where company activities will result in direct social impacts and interactions, especially where the owner has no stakeholder engagement plan or procedure of its own.

Contact person name and title: Hala Shalaby, Group Human Resources Director
Address: Yehia Zakria Street, Industrial Zone-Lot 5, Sheraton Heliopolis, Cairo, Egypt
Tel: +202 26785917-8
Email: mailto:hala.shalaby@allamsons.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Site-specific ESMPs: HAH/HAC will require development of site-specific ESHS management plans before projects begin and to implement them before potential impacts can be realized. In addition, HAH/HAC will review and approve subcontractor plans/procedures prior to subcontractor mobilization, or require subcontractors to implement the company’s plans. For existing projects, HAH/HAC will develop and implement any management plans that are not yet complete.	09/30/2016
HAH will revise the current EMP to include the following for construction projects: - Addition of appropriate procedures and requirements for traffic management at road and other projects where there may be adverse effects on communities and individuals from project-related changes in traffic and traffic patterns. This will include requirements for signage and flagmen where traffic on public roads is disrupted. - Addition of appropriate procedures to avoid or minimize adverse impacts on habitats, flora, and fauna in accordance with IFC PS 6 and national law. - Expansion of current requirements related to cultural heritage to include additional procedures to implement the current “chance find system”, including discovery, reporting, and consultation with relevant authorities, as well as to include consideration of intangible cultural heritage. - Addition of appropriate requirements and procedures specifically intended to protect communities from project-related noise, dust, and other construction impacts. - Standards for worker accommodations that meet the requirements of EBRD/IFC guidance note Worker accommodation: processes and standards. - Worker Code of Conduct to minimize adverse effects of worker on local communities	09/30/2016
HAH will modify the existing EMP or develop a separate ESMP that includes management systems and procedures for identifying, assessing, and avoiding or controlling risks and impacts at non-construction projects. These would include many or most of the risks and impacts at construction sites, and will need to include the addition or expansion of procedures to address land acquisition and involuntary resettlement, biodiversity conservation, and indigenous peoples.	12/31/2016
At construction projects, HAC will review owners’ environmental and social assessments when preparing/modifying site-specific plans/procedures, and when determining which site-specific plans may be needed. When the owner has not assessed potential risks and impacts, HAH will conduct an independent risk assessment. When an owner’s or HAH’s own assessment requires specific measures to avoid, reduce or otherwise mitigate potential adverse impacts, HAH will address them in site-specific plans/procedures.	09/30/2016
HAH/HAC will conduct training on HAC EMP and OHS plans and programs for all new HSE managers, supervisors, and officers, including training in enforcing PPE use and inspections of safety equipment and work spaces.	09/30/2016
HAH will develop for IFC review and approval a corporate Stakeholder Engagement Plan in line with PS1 to guide communications with external stakeholders. The Plan will include a mechanism by which external stakeholders can express concerns or make complaints concerning the company’s activities and by which the company will process and deal with expressed concerns and complaints. In addition, the Plan will include guidelines for developing project-specific SEPs for construction and non-construction projects.	09/30/2016
HAH/HAC will include in all employment and casual labor contracts at least the following requirements: terms and duration of employment, wages and benefits to be paid, wage calculations and payslip details, hours to be worked and overtime to be paid, details of breaks, deductions from wages or salary, work locations and conditions, company and worker insurances (including health and social insurance), termination procedures, and details on pension benefits and payments.	09/30/2016
HAH/HAC will develop for IFC review and approval, and thereafter adopt and make available to all workers, including both employees and contract workers, a grievance mechanism that includes requirements for processing, considering, and resolving grievances in a consistent, transparent, and timely manner.	09/30/2016
HAH will include in contracts for armed security personnel standard provisions, procedures, and training requirements to ensure the appropriate conduct of security personnel, consistent with the United Nations Code of Conduct for Labor Enforcement Officials, and UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials, and the Voluntary Principles on Security and Human Rights.	09/30/2016