PS:4 Community Health, Safety, and Security is not applicable as sites are in industrial areas and accordingly do not pose a risk on communities. In addition, there are no armed security guards present. 

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 five facilities are owned by the company, have been operational for several years and were acquired on a willing seller willing buyer basis.  No claims nor grievances on land have happened. The five sites are in modified habitat in an industrial area.

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 facilities location.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance

with the Performance Standards.

  This project involves expanding of Edita’s operations in Egypt by introducing additional production lines, and to establish operations in new markets beginning with Morocco. 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, risks and areas of improvement for this investment are: (i) enhancing the capacity to assess and manage social impacts associated with the project,  (ii) more comprehensive human resources policies and procedures, and monitoring of working conditions and terms of employment, (iii) enhanced implementation of resource efficiency measures, including wastewater management; and (iv) increase monitoring and management of supply chain risks.

Environmental and Social Assessment, Policy and Management System

For all its five plants, Edita has prepared an Environmental Impact Assessment (EIA) that was approved by the Egyptian Environmental Affairs Agency (EEAA) as part of the process of acquiring the license. These documents describe typical risks and impacts expected during the construction and production. Social aspects were not assessed in detail and will be further discussed in the coming sections. All plants have the relevant E&S permits which are renewed accordingly.

The operations in the five 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, ISO 22000-2005 Food Safety Management System, and Hazard Analysis and Critical Control Point (HACCP).

Accordingly, the company has an integrated management system policy on the corporate level for environment, occupational health, and safety, that was last updated in 2017. The company also has detailed procedures for risk assessment, environmental impact assessment, managing risks associated with change, compliance with regulations, operational control, auditing and monitoring, and incident reporting and investigation. The procedures also cover the EHS objectives and the roles and responsibilities of each entity within the company.

The company has a risk assessment that covers all activities within the plants’ premises, including routine, non-routine, and maintenance work, as well as risks that might occur from neighboring facilities and affect the company. The risks assessment procedures cover also contractors and visitors. The risk assessment does not cover social risks. However, the emergency plan of each facility covers risks from extremal demonstrations and riots  

For each of Edita’s 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 management programs, Standard Operating Procedures (SOPs) covering all aspects of HSE (Health, Safety and Environment) across all facilities. These programs and SOPs describe mitigation and performance improvement measures and actions that address identified E&S risks and impacts. SOPs and work instructions are communicated to all workers and were clearly displayed together with key performance indicators (KPIs) across all facilities. In addition, management system documentation (manuals, monitoring and training records) were found to be properly maintained.

 Organizational Capacity and Competency

The company has established and maintains an organizational structure that defines roles, responsibilities, and authority to implement the management of environmental, OHS and social matters. Specific personnel have been designated to fulfill those roles.

Edita has an HSE department, composed of an HSE manager and six section heads, managing the five plants and headquarters. Each of the section heads has a group of HSE coordinators working in shifts and available in the plants 24/7. In addition, there is an assistant HSE manager for the Distribution Centers (DCs) and sales department supported by an HSE supervisor. In total, 36   staff have HSE responsibilities and have the relevant qualifications.

The HSE manager reports to the QHSE Manager who reports to the Supply Chain VP. The HSE manager works closely with the continuous improvement department, which is responsible for monitoring and analyzing recorded data with respect to resource consumption and improving the overall production efficiency. The continuous improvement manager also reports to the Supply Chain VP.

Emergency Preparedness and Response

This type of production process does involve specifically identified aspects that have the potential to generate impacts resulting from emergency situations. Each of Edita’s plants and DCs have an Emergency Preparedness and Response plan. The scope of the plan covers potential natural, industrial or environmental risks including earthquake, rain and flood, fire, spillage, natural gas leakage, explosion, workers injuries, strikes and riots. The plans are approved by the Civil Defense Authority as per national regulations requirements.

During the appraisal, it was observed that there are smoke detection systems in the warehouses, and there is a beam detector fire alarm and manual alarm system in the production areas. 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, and dry powder. The emergency exit signs are visibly posted.

Fire drills are conducted six times per year for each plant, two times per shift. All employees receive a firefighting and emergency response training. The drills analysis and training records are reviewed through inspection visits by the ministry of manpower.

Monitoring and Review

The company has established procedures to monitor and measure the effectiveness of the management programs, as well as compliance with related regulatory requirements.  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 workplace emissions including particulate matter (PM10), as well as combustion emissions (carbon monoxide, sulfur dioxide and nitrogen dioxide and carbon dioxide). In relation to environmental aspects this includes the boilers stack, furnace stacks and the ventilation outlets emissions and wastewater quality. The monitoring is carried out by external agencies every year. 

The company also retains an environmental register as per the national regulations for each of the 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 by EEAA representatives during inspection visits. 

Senior management within the company receive performance reviews of the effectiveness of the management of environmental risks and impacts. Performance is summarized on a scorecard that reports on efficiencies in production, quality as well as environment and human resources. Based on results from such reviews, senior management takes the necessary and appropriate steps to ensure the operations are run in a way that supports the client’s policies with regards to E&S matters. In addition, the HSE scorecard results is one of the factors considered in the workers performance evaluation.

Human Resources Policies and Procedures

The company has HR policies and procedures in line with national regulations. The policies and procedures cover terms of employment and working conditions including, recruitment and selection process, leave and vacations, development training, performance management, and termination. The company’s policies and procedures are mostly in line with PS2, except for the implementation of the following procedures: (i) a formal grievance mechanism covering both Edita’s workers as well as third party workers; (ii) nondiscrimination policy and procedure; (iii) freedom of association; and, (iv) sexual and anti-harassment policy and procedures. As set forth in the ESAP (#1), the company will update its HR policy and procedures in line with PS2 requirements.

Working Conditions and Management of Workers Relation

Edita employs 5,500 staff of whom 5% are females. Women are mainly hired in administrative and managerial positions. All the 5,500 are direct employees of the company and have open ended contracts. In addition, there are 310 employees hired by contractors as service provider, mainly working at entry level in production and in the distribution centers.

Terms of employment for direct employees are aligned with national labor regulation and include employee responsibilities, benefits, absence/vacation, probation periods, and grounds for termination. Minimum salaries are aligned with national minimum wages, working hours are 48 per week. Overtime is voluntary, with a higher hourly rate. In line with national regulations, the overtime hourly rate depends on time of the day and reaches the double in case of weekends and national holidays. As per the company’s policy, the overtime should not exceed 25% of the workers monthly salary. The plants operate continuously with three shifts per day of eight hours each. All workers hired by Edita or by contractors have medical insurance through a private company. The company provides transportation to all workers and provides free meals per shift.

For a higher retention rate, the company provides a loyalty allowance and a retention plan for senior management. The company has no labor claims nor grievances.

Workers’ Organizations

There are no worker unions present within Edita’s operations. Discussions with company management revealed that workers have not requested establishing a union. In the revised HR policy and procedures, Edita will indicate the right of workers to form and join unions.

Non-Discrimination and Equal Opportunity

Hiring and appraisal of employees are carried out based on equal opportunity practices. Recruitment is done through posting vacancies internally, on the company’s website, and through recruitment agencies. Salary survey is conducted twice a year to ensure that Edita’s salaries are in line with market benchmarks. Due to the nature of the business and national regulations, women only work in the morning shifts and at headquarters in administrative and managerial jobs.

Grievance Mechanism

The company has an open-door policy for receiving grievances from workers. There is no formal mechanism that allows for systematically processing grievances, including anonymous complaints or sexual harassment cases. As set forth in the ESAP (#1), Edita will develop and implement a formal grievance mechanism as part of the revised HR policy and procedures.

Third party workers

Third party workers are seasonal workers, who mainly assist the distribution team in loading and unloading activities, and in the production plants as entry level workers. The company review the contractual agreement between the contractor and the workers. The company ensures that the workers have access to health insurance. The contractor provides the workers with necessary personal protective equipment, identified by the company. In case they were not provided, the company provides it to the workers and deducts its cost from the contractor. The company provides free meals and transportation to the third-party workers.

Occupational Health and Safety

In addition to the company’s general HSE policy, there are detailed procedures covering OHS to ensure a safe working environment. Those jobs that have inherent hazards and risks (such as working at height, and confined spaces) have been assessed and safe working measures developed and implemented. For example, procedures include incidents investigation and reporting, work permits procedure, machine safety, working at heights, working in confined space, lock-out-tag-out procedures, contractors management, and fleet safety. Oversight for OHS is provided by the HSE Manager and the team supporting him.

The training plan for workers is developed by the HR Department. HSE training is part of the induction of each employee. OHS operational training is provided periodically and covers specific aspects of the jobs, such as lock out tag out systems, manual handling, electrical safety, working at height and confined spaces, firefighting and emergency response, first aid and safe cleaning procedures. In addition, contractors and visitors receive OHS induction while on site.

As described earlier, the company annually monitors the workplace conditions including workplace air quality, noise levels, light intensity and heat stress. The air quality monitored includes PM10 and combustion emissions. They are found to be within the regulatory limits and WBG General EHS guidelines. As per the ESAP (#2), the company will measure additional relevant air pollutants, such as volatile organic compounds, in the production areas.

Light intensity in some of the locations was found to be below the regulatory limits and WBG General EHS guidelines. The company is currently revising the lighting arrangements in all facilities and will implement corrective measures by introducing energy efficient lightening.  Noise intensity was found to be within the regulatory limits and WBG General EHS guidelines in most of the locations. In some locations it was found to be slightly above the WBG General HSE guidelines, and workers are required to wear personal protective equipment, specifically hearing protection devises.

Heat stress measurements, which were all conducted in winter, in all facilities are within the regulatory limits and WBG General EHS guidelines. During appraisal it was observed that workers in the production area are exposed to high heat intensity that is expected to exceed the regulatory limits.  As set in the ESAP, the company will conduct the heat intensity measurements during summer time, and will reassess the ventilation system in the plants, and develop procedures for limiting workers exposure time in line with regulatory limits and WBG General EHS guidelines.

The company monitors lost time injury frequency rate, injuries per million working hours, working days without lost time injuries, recordable injuries, and lost days due to injuries. The available results indicate improvements over the last three years and are within industry benchmarks.  The company did not have any major injuries in the last three years. Most of the injuries are related to slipping. The company has improved its housekeeping practices and ensures that workers wear safety shoes, the company is also in the process of exchanging all tiles in the production area with Acrylicon.

Supply Chain

The main raw materials used in production are sugar, flour, eggs, cocoa powder, sweeteners, milk products, and oil and fats, including palm oil.  Oil, fats, flour and eggs are obtained from local suppliers, while sugar, cocoa powder, sweeteners and milk products are imported. All local strategic suppliers, who represent 75% of Edita’s total supply, are audited by the company with the focus on product quality. The remaining 25% of total supply, compromise approximately 20 suppliers, change constantly and are not audited. As set forth in the ESAP (#3), the company shall undertake a supply chain mapping and undertake a risk assessment. For raw material and commodities that contribute largely to the product, such as oil and fats, the company will conduct a more detailed assessment of the supplier in line with IFC’s supply chain requirements. For other suppliers an environmental and social questionnaire will be completed as a first step.  In addition, relevant environmental and social requirements by commodity will be included in procurement contracts, including reporting.

    Resources Efficiency

Edita is in the process of developing a three-year resource conservation strategy and implement a plan starting 2019. One of its main pillars is energy efficiency. The company plans to conduct a detailed energy audit at all plants and based upon which, an energy efficiency plan will be developed and implemented.

Edita has conducted some initial energy saving initiatives, including the change of all lighting in the production areas and offices with energy saving lamps, which reduced consumption.

In E6, the company started using the steam generated in heating the boiler water to reduce the energy consumption of the boiler. At headquarters, studies are underway to install solar panels to reduce electricity consumption.

Edita has established HSE KPIs for each plant including water consumption, electricity consumption, fuel consumption and solid waste generation. Annual targets are set, and they are monitored on a monthly basis. 

Water and Wastewater

Water consumed in the production facilities is obtained from the public network and no groundwater is used. Based on average water consumption in 2017, consumption ranges from 1.5 m3/ton of product in E10 where cakes are only produced to 11.9 m3/ton of product where candies and jellies are produced. Based on incoming water quality, a pre-treatment process might be required. For example, at the Beni Suef plant, incoming water is treated through multistage filtration prior to usage.

The industrial wastewater generated is mainly from cleaning of machinery. The industrial wastewater is currently being discharged separately or mixed with domestic wastewater and discharged directly to the sewage network. The wastewater analysis conducted indicates that the Biological Oxygen Demand (BOD), Chemical Oxygen Demand (COD), and Oil and Grease are above the regulatory limits.

Edita is in the process of installing industrial Wastewater Treatment Plants (WWTPs) in all its facilities to ensure compliance with the discharge limits. A WWTP was installed in E10 plant and has started operations. In E6, a WWTP was installed and is in commissioning phase. Plans are underway to establish a WWTP in E15.  As per the ESAP (#5), the company will develop a plan and allocate CAPEX for developing WWTPs in E15, E7 and E8. By 2021 all plants will have WWTPs installed ensuring compliance with regulatory requirements and WBG EHS guideline levels.

Greenhouse Gas (GHG) emissions

Based on 2017 figures considering the consumption of natural gas, electricity and diesel, the total GHG emissions from four of the five plants, as E8 was not operating throughout 2017, was 38,000 tons of CO2 equivalent per year. Given that this is above the threshold, the company will annually calculate GHG emissions and report to IFC.

Air emission and ambient air quality

Air emissions are generated from the stacks of the furnaces and boilers and ventilation stacks. Furnaces and boilers operates using natural gas as fuel. Flue gases emitted from the furnace stack as well as from boilers are monitored with measured parameters including temperature, carbon monoxide, sulphur dioxide, and nitrogen oxides. Temperature and particulate matter are the parameters monitored in the ventilation stacks. Emissions are found to be within national regulatory limits and WBG EHS guideline limits.

Solid and Hazardous Waste Management

Hazardous waste generated from the plant includes used filters, spent oil, used florescent lamps and empty containers of hazardous chemical substances, including spent ink, solvents, and sorbitol. 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 (#6), will develop and implement a Stakeholder Engagement Plan (SEP) that identifies key stakeholders and provides a procedure for external communication. Initially the key stakeholders are considered to be the neighboring industries, the competent administrative authorities, EEAA, and industrial zone authorities. The SEP will include a grievance redress mechanism (GRM) to address any concerns that people living in the vicinity of the project may have. 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.

Edita has recently joined the United Nations Global Compact (UNGC), which is a sustainable leadership initiative for all participant companies to align their strategies and operations with the ten principles of the Global Compact on Human Rights, Labor, Environment and Anti-Corruption. Edita will be reporting periodically to UNGC on compliance with these principles.

Edita is also in the process of developing an annual sustainability report, which will be publicly disclosed by end of 2019. This report will include a stakeholder mapping and will help inform stakeholders on key environmental and social aspects of Edita’s operations.