IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s 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 implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
The Grantor, RSPA prepared the Environmental and Social Impact Assessment studies, (ESIAs) for the marine works, desalination plant and wastewater treatment plant and the dredging of the navigation channels. However, several shortcomings were noted. The ESIA covering the marine works has obtained approval but lacks evidence to show that the site is in compliance with the conditions of approval. The ESIA for the dredging of the navigation channel has received approval from Egypt Environmental Affairs Agency (EEAA) in September 2024 however no evidence was provided to show that the monitoring activities recommended in the ESIA have been carried out and no evidence that the conditions of approval have been met. As per ESAP #1, an audit on compliance with all existing environmental approvals (i.e., RSPA permit conditions) must be undertaken. The scope of the audit must include all associated facilities (where covered by existing environmental approvals/ permits). The ESIA covering the desalination plant and the wastewater plant have been submitted for approval from the relevant authorities. The study indicates that it would use ground water for desalination while it entails a description of a seawater pipeline intake in the description. ESAP #2, supply evidence of environmental approval from EEAA for: de-salination plant and wastewater treatment plant; if the project would involve intake of/discharge to ground water, an aquifer study should be prepared and approved from the Egyptian Ministry of Water Resources and Irrigation (ESAP #3).
On ADPG/ STOC side, an ESIA for the multipurpose terminal has been conducted aligning with ADPG’s to conform with EEAA requirements and IFC PSs. The ESIA is not fully aligned with the IFC PSs and does not account for all the project impacts. The ESIA has been approved by EEAA. In accordance with ESAP #4 the ESIA will be updated to account for induced and residual impacts from previous activities including (i) monitoring and review of mitigation measures; (ii) traffic, transport, safety and security; (iii) labor influx; (iv) ownership and use of past and existing building structures: (v) additional social aspects including baseline adequacy.
Environmental and Social Management Systems
Several corporate policies are available at ADPG such as the ADPG Integrated Management Systems Policy, corporate OHS policy, corporate EHS manual. However, no project specific policies have been developed due to the early nature of the project. As per ESAP #5, the company will develop project-specific E&S policies and environmental and social management system (ESMS) in line with IFC PS and local requirements and ADPG corporate management system. The E&S policies will include at minimum (i) an overarching environmental policy; (ii) a health and safety policy; (iii) a social policy; and (iv) a code of conduct. The company will communicate the content of the above policies and code of conduct to its employees, contractors, service providers, and display them throughout the project. The ESMS will include (i) procedures for the identification and management of Environmental, Health, Safety, and Social (“EHSS”) risks and impacts; (ii) subject-specific E&S Management Plans (“ESMPs”); (iii) an organizational EHSS structure including training and competency; (iv) emergency preparedness and response (v) monitoring, auditing, and review mechanisms; (vi) regulatory, permits and action tracking register; (vii) stakeholder engagement; and (viii) a community grievance mechanism. The ESMS will be updated prior to the operational phase and supplemented with the required standard operating procedures and work instructions.
Management plans
As part of its ESMS (ESAP #5), the company will develop and implement a Contractor Environmental and Social Management and Monitoring Plan (“CESMMP”) that will build upon the contractor clauses included into the contractor tendering documentation and outline contractor EHSS responsibilities. The CESMMP will include explicit requirements to comply with legal requirements, the ESIA, the ESIA approval permit conditions, IFC PSs, WBG General EHS Guidelines, WBG EHS Guidelines for Ports, Harbors, and Terminals, all relevant company policies, code of conduct, and management and monitoring programs (e.g., ESMPs). Construction management plans associated with the ESMS must include plans for: (i) Water Supply; (ii) Pollution Prevention; (iii) EHSS Staffing; (iv) Medical Services; (v) Labour Management; (vi) Recruitment Strategy & Process; (vii) OHS plan and (viii) Traffic. The CESMMP will also outline contractors' EHSS organizational capacity and required training courses.
As per ESAP #6, the company will develop and implement operations phase ESMS and applicable management plans for terminal operations, including monitoring by STOC/ADPG of the implementation of the plans. All management plans associated with the ESMS must include plans for: (i) Water Supply; (ii) Pollution Prevention; (iii) EHSS Staffing; (iv) Medical Services; (v) Labour Management; (vi) Recruitment Strategy & Process; (vii) OHS plan; (viii) environmental controls and mitigation measures for air quality, noise, and effluent emissions in line with IFC PSs, and applicable WBG EHS Guidelines and (ix) Traffic. A dredging plan will be developed only in case dredging takes place during operations, and in co-ordination with relevant authorities.
Organizational Capacity
ADPG E&S function is managed at the corporate level. ADPG have provided an overview of their EHSS staffing plan, together with that of their project management company (PMC) for construction that will be supervising the construction works on site with its own adequate EHSS team, although the reporting lines remain unclear. The company will appoint a suitably qualified onsite EHSS manager for operations, supported by onsite occupational health and safety, environmental, community liaison officer, and labor officers during construction and operation (ESAP#7). EHSS Manager (for operational phase) must be integrated with the construction management team prior to the completion of construction to ensure proper handover and oversight of the construction close-out (including snagging). For the Engineering and Procurement contractor (EPC), an EHSS structure will be put in place as well as for subcontractors, to adequately support the ESMS implementation. Emphasis will be placed to hire a qualified HSE Manager, HSE Engineer and HSE officers (one for every 50 workers) as well as a Human Resources Officer (ESAP #8). Ultimately, the company will be responsible for implementing the ESMP and reporting on it.
Given the potential for labour to be carried over from Phase 1 RSPA marine works contract, the EHSS Training Programme for Phase 2 port terminal construction, must meet the objective of bridging any potential gap in competence between a project that was aimed at meeting local regulatory requirements (as a minimum) and the current project, which will be aimed at meeting the requirements of the Lenders according to relevant performance standards, WBG General EHS guidelines and WBG EHS Guidelines for Ports, Harbors, and Terminals. As per ESAP#9, STOC will develop and implement HSE training for all project workers during construction and operation. The training shall include any lessons learnt by ADPG from other projects.
Monitoring and Review
The company will develop EHSS monitoring, auditing, and reporting requirements including Key Performance Indicators (KPIs) to assess overall EHSS compliance and performance. This will include (i) daily/weekly inspection activities; (ii) monthly EHSS performance reports with OHS leading and lagging indicators (e.g., inspections, training, lost time injuries, incidents, etc.), social and labor performance (e.g., external and internal grievances, terminations, overtime, strikes, etc.), environmental performance (e.g., water, energy, waste, etc.), non-compliances and corrective actions; and (iii) stand-alone internal and third-party audits (ESAP #5 and #6).
Emergency Preparedness and Response Plan
ADPG has its own emergency and incident reporting procedures and related protocols which are included in the HSE guidance provided to the contractors. As part of the ESMS, a project-specific emergency preparedness and response plan (EPRP) will be developed in line with ADPG procedures and IFC PS1 (ESAP #10). The EPRP provides access to critical, site-specific information necessary to effectively respond to different types of emergencies, including mitigation, control and escalation if required. Additionally, prior to commencement of operations, the port will develop and implement a site-specific Facility Response Plan (FRP). The FRP will be developed in line with ADPG EPRP template, Lender’s requirements and GIIP (ESAP #11).
Further, the port will establish a central port coordination and interface unit that focuses on emergencies across the entire complex, vessels, and port authorities, with detailed guidelines outlining the relevant criteria and requirements for the transport, handling, and storage of dangerous cargoes, including procedures for the release of hazardous materials, spills (land and sea), leaks onboard vessel, and during road traffic incident (ESAP #12). The port will be provided with a strong fire protection system (water tank, pumps, hydrant system, etc.) covering all areas, material handling equipment and buildings, emergency alarm (wide voice) and civil defense professional personnel permanently on site.
PS2: Labor and Working Conditions
The construction and operation workforce required by ADPG or the EPC contractor is expected to reach a peak of 1000 workers during construction whilst during operations, more than 700 workers (direct and indirect) are anticipated for full port operations.
Human Resource Policies and Procedures
ADPG has a code of conduct and business ethics policy as well as the code of conduct and business ethics manual that applies to the direct workforce and third-party workers. The code of conduct policy outlines the procedures and processes applicable to human capital management. The Group chief HR officer is responsible for creating awareness, overseeing implementation and supporting investigations on human resource matters. The policy includes the prohibition of bullying and harassment and Gender -Based Violence and Harassment (GBVH). The corporate policies will be revised and adapted to the construction phase of the project aligned with national legislation and IFC PS2 (ESAP #13).
The company will develop project-specific Human Resource (“HR”) policy and procedures for the terminal operations aligned with national legislation and IFC PS2 requirements (ESAP #14). The HR policy and procedures will include (i) non-discrimination and equal opportunity; (ii) prevention of child and forced labor; (iii) worker representation; (iv) contractor monitoring; (v) gender aspects and Gender Based Violence (“GBV”); and (vi) provision of contracts clarifying working conditions (such as working hours, overtime payments, assigned leave, and life and medical insurance). The HR plans and procedures will be communicated transparently and effectively to all the company and contractor workers, including direct and indirect workers and third-party employees.
The company will contractually require contractors and subcontractors to align their HR plans and procedures, with the company HR plans and procedures. The contractors will be required to develop and implement a Human Resources plan / Employment Handbook for the construction stage (inclusive of all legislated labour policy requirements for non-discrimination and equal opportunity, disciplinary procedure, leave policy, workers organization, retirement, retrenchment, performance, hiring & recruitment procedure, remuneration (ESAP #15). As per ESAP #8, the company will hire a qualified HR manager to effectively implement the company HR policies, plans, and procedures, in line with national and IFC PS2 requirements.
Working Conditions
Should the company, contractors, or subcontractors require worker accommodation during the construction or operations phases, whether within or outside the port, the accommodation plan will be in line with the IFC/EBRD Guidance Note on Workers Accommodation. As part of the ESMPs, the accommodation and worker management plan will be developed and implemented (ESAP #16). These plans will require the company to assess and mitigate any risks and impacts in relation to worker influx and worker accommodation, which will be regularly monitored and audited by the company and included in the reporting requirements.
Worker Grievance Mechanism
ADPG has a reporting of violations and concerns under its code of conduct which does not fully align with IFC PS2 requirements. The company will develop a formal Worker Grievance Redress Mechanism (“WGRM”) and associated procedures, including for gender-based violence and harassment (GBVH), for the construction and operations phases of the project, in line with PS2 requirements (ESAP #17). The WGRM will outline the company and contractor’s roles and responsibilities towards the implementation of the WGRM including raising grievances, resolutions process, a clear non-retaliation policy, training, sensitization, and a clear resolution timeline. The WGRM will be made available to all project workers irrespective of their employment status and will be communicated effectively to the entire workforce through induction, toolbox talks, and other sensitization mechanisms. The WGRM will allow for the submission of anonymous complaints to guarantee confidentiality.
While the requirements for GBV according to the Code of Conduct is referenced, the specific frequent training of the labour force in respect to GBVH is not clear in the Project's ESMP. The company will develop and implement GBVH training and activate worker’s GRM (containing GBV GRM) during both construction phase (ESAP#18) and terminal operations phase (ESAP#19).
Occupational Health and Safety
ADPG occupational health and safety requirements in the EPC contract does not fully conform to IFC PS2, EHS Guidelines and sector-specific guidelines. Site specific issues such as fugitive dust emanating from neighboring ports are not covered in the document. HSE deliverables including water supply, pollution prevention, EHSS staffing, medical services, facilities management, accommodation management, labor management and recruitment strategy and process were also found to be missing from the EPC contract.
The company will prepare an OHS Management System that will include the necessary control procedures to mitigate relevant OHS risks in line with local regulations, WBG General EHS Guidelines, and WBG EHS Guidelines for Ports, Harbors and Terminals (ESAP #5 and #6). Similarly, the company will communicate the requirements of their OHS plan to all project workers (inclusive of contractors, sub-contractors, and suppliers). Construction contractors will be required to develop their own OHS implementation plans, as part of their CESMMP, including training, monitoring and reporting requirements as per ESAP #5 whereas the company will develop and implement the OHSMS for the operations phase (ESAP#6). An OHS committee comprised of managers, supervisors, and workers will meet regularly and oversee the implementation of the OHS management plans.
PS3: Resource Efficiency and Pollution Prevention
Electricity will be supplied from the national grid. The desalination plant and the wastewater treatment plant (WWTP) will be constructed by RSPA for industrial and non-potable uses, reducing pressure on the Nile and other freshwater resources. Water will be for general and sanitary uses, fire water, and irrigation of landscaped areas. As indicated in PS1, the environmental permits for the plants have been obtained. The proposed desalination plant uses reverse osmosis (RO) technology, which is more energy-efficient than thermal distillation. Energy recovery devices (turbines and pressure exchangers) will be installed to further reduce electricity consumption. Treated wastewater will be reused for irrigating green areas, maximizing water resource efficiency. All Ship to Shore (STS) cranes and the Rubber Tired Gantry cranes (RTGs) will be electrical. To align with efficient and effective resource use, the company will monitor fuel and water consumption and define measures to improve efficiency during the operation phase (e.g., maximize use of electrical RTG’s).
Green House Gases
The Project supports the switch to electric container handling equipment and induces modal shift from road freight to short sea shipping. In the base case, the use of diesel in container handling equipment leads to Scope 1and 2 emissions of 8,412 tCO2e per year. In the Project scenario, Scope 1and 2 emissions are 8,983 tCO2e per year which is higher than in the base case due to the Egyptian grid emissions factor exceeding that of using diesel. Scope 2 emissions are expected to fall over time as the grid decarbonizes.
Air and Noise Quality
The construction of the terminal will result in temporary air and noise emissions including particulate matter, emissions from construction equipment, stormwater and sewage discharges, and elevated noise levels. As part of the CESMMP (refer to ESAP #6 above), the company will contractually require their contractors to place environmental controls and mitigation measures for air quality, noise, and effluent emissions in line with IFC PSs, and applicable WBG EHS Guidelines. Such mitigation measures include the use of water to control dust, the use of covers by trucks, and noise dampening, among others. In addition, fugitive dust exposure (from the neighboring mining port) must be addressed through controls and mitigation measures to be included in the EPC Contractor’s HSE documentation (ESAP #20). To confirm the effectiveness of these control measures, the company will implement an air, dust, noise and effluent discharge monitoring program, at a minimum monthly during construction and include the results in the monthly and annual monitoring report.
Erosion
At the time of the appraisal, the land reclamation by RSPA was nearing completion, The direct impact of the backfilled and dredged areas on the seabed was obvious. The loss of near-shore habitat is permanent. As indicated in the ESIA, construction and dredging works on marine infrastructure (associated facilities) were expected to induce an increase in water turbidity. Deposition of the resuspended sediment could alter benthic habitats in the neighborhood of the project. Dumping of the dredged material could also alter the seabed (see PS6 section). Increase of water turbidity will be temporary but deposition of resuspended sediments will be permanent.
The 1,000 m long berth is a vertical wall which will reflect most of the incident waves inducing an increase of wave disturbance in the offshore. Neighboring areas affected by diffraction effects will be sheltered, including the shipyard area. Currents will also be diverted by the reclaimed terminal. Suspended sediment transport could be enhanced in front of the terminal and then reduced in sheltered areas leading to unwanted deposition of sediments.
Pollution Prevention
Potential soil contamination from the Phase 1 construction of marine infrastructure may remain as a legacy issue if unattended – this includes spills identified at generators providing power to lights (for working at night). Additionally, an Ad Hoc servicing and maintenance area was observed. Furthermore, bulk fuel storage was provided on site without any bunding at the refueling area. Bulk chemical storage was also provided at the batching plants. The waste management area for Phase 1 could leave a legacy issue if not cleaned up properly and the area inspected for spills. Additional information is also required related to septic tanks and whether these will be removed from site prior to commencement of the multi-purpose terminal construction. All these areas could be considered potential sources of pollution. The company will undertake an environmental site assessment to determine no legacy waste issues (including soil contamination) remains from the marine works phase of the project (ESAP #21).
Wastewater Management
As per the ESIA, high-salinity brine from the desalination plant RO process will be discharged into deep groundwater wells, far from the sea and freshwater aquifers, to prevent marine and groundwater pollution. The ESIA for the desalination plant includes a comprehensive environmental management and monitoring plan that covers brine disposal impacts as well as measures to prevent environmental harm: these include (i) site selection for wells – wells to be located in a desert area, far from residential zones, agricultural land, and sensitive ecosystems to minimize the risk of contaminating drinking water sources or harming biodiversity; (ii) depth and isolation of wells - brine to be injected into deep aquifers that are geologically isolated from freshwater layers to prevent upward migration of saline water into usable groundwater zones; (iii) engineering standards - wells are planned to be constructed with corrosion-resistant materials and sealed to prevent leakage. Injection systems are designed to ensure uniform distribution and avoid localized salinity spikes. Effluent from the treatment plant will be required to meet national standards for reuse in irrigation. As both the desalination plant and the wastewater treatment plant are associated facilities, regular monitoring will be required to (a) detect any changes in salinity or contamination of groundwater quality to and (b) ensure compliance with BOD, COD, TSS, and pathogen limits from the WWTP and this will be documented in a plan in consultation with RSPA. Results from monitoring will be included in the annual monitoring report.
Hazardous Substances Management
Transportation of hazardous materials to waste sites is detailed in ADPG’s Hazardous Waste Management Plan. Hazardous materials used during construction phase would require proper risk management. The company will ensure the Hazardous Management Plan is revised to include the description of bulk storage of hazardous substances and materials during construction (ESAP #22) and during the operations phase (ESAP #23).
PS4: Community Health, Safety and Security
Labor Influx
There is little indication that the new terminal would result in impacts from community exposure to disease. However, in the event that there is need to develop a worker camp, the company will develop and implement a worker influx management plan and assess the surrounding local health facilities to determine the capacity to deal with disease and epidemics (ESAP #24).
Traffic Management
The port activities entail movement of vehicles in and out of the terminal to increased safety risks for road users. The roads adjacent to the terminal is a travel highway with a few sensitive receptors on the road related to nearby ports and a parking area that will be used by the surrounding operators including the Safaga Port. A Traffic Management Plan will be developed and implemented by the company, including mitigation measures to minimize impacts traffic access and parking to the local surrounding communities (ESAP #25).
Security Management
Given that the terminal is 5km away from the nearest population, the project is not exposed and does not expose the community to safety and security risks. The existing terminal has a robust security system in place. For the project operations, the company will implement its own security system through a service provider. Prior to the operations phase, the company will develop a Security Management Plan, based on a security risk assessment, in alignment with IFC PS4 and IFC Good Practice Handbook on Use of Security Forces: Assessing and Managing Risks and Impacts (ESAP #26).
PS6: Biodiversity
ESIA studies for different components of the Project have been conducted, including an ESIA for the multipurpose terminal, compliant with the local regulatory requirements and IFC performance standards, as well as Critical Habitat Screening. However, the area of influence in the ESIA for biodiversity is set to be 1km without clear justification. This is insufficient to address the potential impact on marine ecology particularly in and around the dredge area for the navigation channel and the associated dredge disposal area, and for the movement of vessels during operation. Further, there are concerns that a future Marine Protected Area may be impacted by the dredging of the navigation channel and the use of the dredge disposal area; as the Egyptian Ministry of Environment has announced that it will be initiating protective status to the entire Great Fringing Reef in the Red Sea. Initial discussions with HEPCA indicated that the Port of Safaga would be in an “exclusion zone”; however, more recent discussions on this matter with HEPCA seem to suggest that the exclusion zone will no longer be applicable. Either way, the dredge disposal area may have an impact on sensitive habitats not yet mapped in the area.
Marine mammals (Dugong, Dolphins, Porpoises, Seals etc.) have been addressed in the description of the environment and Appendix 4 of the ESIA (Marine Ecology Assessment. Critical Habitat Screening indicated the likelihood of corals, turtles and sea grass at the bay but, due to difficulties faced by ADP to undertake marine survey work, both construction impacts and the effects of the operation of the port cannot be fully assessed against an adequate baseline. In the absence of such data and given the high likelihood of the project being in critical habitat, net gain will be required to comply with IFC PS6. Given that the main triggers for Critical Habitat are likely to be marine turtles, coral reef habitats and associated species net gain would focus on the protection and restoration of these features. In order to be compliant with IFC PS6 the ESAP will require that the Company will conduct a complementary Critical Habitat Assessment (CHA) in line with PS6. The survey work will identify the Critical Habitat likely to be affected and the level of net gain required to offset project impacts, including direct, indirect and cumulative impacts, as well as impacts from associated facilities (to also take into account regional level threats, the area of influence, and climate impacts such as related to corals) (ESAP #27). It is possible that such surveys would identify a lower level of impact on Critical Habitat features than the precautionary estimates required in the absence of such data. However, where residual impacts remain, compensation must be considered to obtain a net gain of biodiversity. For this, a Biodiversity Action Plan (BAP) shall be developed to identify the net gain required and how it will be achieved. The biodiversity action plan, offset implementation plan and monitoring plan shall be prepared and agreed with IFC. The Company will need to hire or contract a Biodiversity Specialist to advise on the development and implementation of the BAP, as well as all monitoring and reporting actions that may be applicable (ESAP #28).
The ESIA and ESMP did not assess past/potential induced and residual impacts to divers or recreational users due to dredging dump site and dredging in the access channel. The dredging dump site is close to a diving spots and reef structures. Anecdotal evidence from HEPCA shows that the Salem express wreck (4-5 kms from dump site) is utilized by divers, as is the access channel. Dredging activities in the access channel could, due to prevailing sea currents, also impact dive sites and reef structures. The company will conduct a PS6 compliant Ecosystem Services Assessment (ESAP #29) and identify priority ecosystem services and associated mitigation or control measures.
