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
Policy, E&S Management System and Assessment of Risks and Impacts:
The Company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. The Company drafted an E&S training manual, as a guidance document, to be followed by each hotel. Some hotels implemented brand’s ESMS and there is no corporate level coordination and/or requirement for an ESMS implementation for each hotel. Per ESAP#1, the Company will develop a corporate level Environmental and Social Management System (ESMS) to be implemented by all hotels and town utilities management operations in El Gouna. ESMS will include (but not to be limited to) a risk register, E&S management plan (including OHS, contractor/service providers management, supply chain, management review and stakeholder engagement/external grievance mechanism), in line with IFC PSs. A cumulative environmental and social impact assessment (ESIA) was not required for El Gouna hotels, whereas project level ESIA was required for some hotels as a part of construction and environmental permits. For the renovation works, no ESIA is required.
In 2021, the Egyptian Environmental Protection Authority (EPA) filed a case against ODE for El Gouna, for violating environment law due to pollution. According to ODE’s management, this was settled through a dispute resolution process and contract, involving the Ministry of Environment and Ministry of Irrigation in February 2023.
Organizational Capacity:
Environmental and Social responsibilities are delegated across different departments of the Company. A corporate transformation team was nominated to collect the E&S information leading to the Parent Company’s first E&S reporting for fiscal year ending 2023, Per ESAP #2, the company will designate a corporate level Environmental and Social (E&S) coordinator to oversee all E&S and Governance, as well as the development, implementation, update, and reporting of the ESMS. The E&S coordinator will be supported by corporate and hotel/town management level E&S teams to coordinate the day-to-day implementation of the ESMS.
Management programs:
Per ESAP #3, or the renovation works, the Company will develop and implement a contractor management plan (CESMP) to identify and mitigate, E&S construction risks and to monitor and report the E&S performance to its management, in accordance with IFC PSs and World Bank Group’s (WBG) General Environmental Health and Safety (EHS) Guideline and Good Practice Note on Managing Contractors’ Environmental and Social Performance. The CESMP will include (but not to be limited to) identifying and managing OHS risks, risk prevention, work permits, hazardous and non-hazardous waste management, environmental monitoring, spill management, emergency preparedness and response. The Company will contractually require its contractors to adhere to the CESMP and the IFC PSs.
For the hotel operations and utilities management, the ESMS that will be developed and implemented per ESAP#1, will include the relevant management programs, procedure, and safe working practices.
Monitoring and Review:
As part of the ESMS to be developed per ESAP#1, the Company will establish procedures to monitor and report on the E&S performance and implementation and effectiveness of the ESMS. The ESMS will define the process for the E&S performance review by the senior management, in addition to at hotel/town management and corporate level.
Emergency preparedness and response plan:
The Company’s E&S training manual includes emergency preparedness and response plan (EPRP), covering floods, fire, and injuries. At the hotels, fire exits, evacuation routes and assembly points are clearly marked, alarm buttons, smoke detectors, emergency lights are installed, fire suppression systems, including fire hydrants and portable fire extinguishers are provided. Town management is responsible for emergency response, and coordinates and provides training to hotel staff. Emergency drills are conducted annually. All staff are provided with firefighting training and approximately 25 % of all staff, who also received first aid training, are members of designated emergency response teams.
As per ESAP#1, ESMS will require all hotels to adapt an emergency preparedness and response plan, specifically updated per their properties and operations, in line with a corporate EPRP template. The EPRP will also address emergencies such as natural hazards, other than floods, such as extreme weather conditions, storms, oil and fuel spills at the hotels and town management utilities.
PS2: Labor and Working Conditions
ODE has around 1,910 workers within the hotels business line including 5% females. There are around 15 migrant staff in hotel business, in addition to 20 staff members working in rented spas.
While each hotel has its own HR Manager and administrators to manage attendance and day-to-day matters, at the corporate level a Communications Manager, based in Dubai, is in charge, supported by an HR Manager in the head office with a team for contracts, payroll, and personnel investigations.
Human Resources Policies and Procedures:
El Gouna hotels are governed by Orascom Corporate HR Policies and Procedures, except for three brand operated hotels who fall under the HR Policies of their operators. ODE’s Code of Conduct includes Company’s statements on diversity and equal opportunity, harassment and discrimination and workplace violence. As per ESAP#4, The Company will align corporate HR policies and procedures with the existing code of conduct to be implemented by all hotels and town management in El Gouna, including the ones operated by the brands, in line with national legislation and IFC PS2 requirements. The policies will include commitments in line with the existing code of conduct, for non-discrimination and equal opportunity, anti-sexual harassment and GBV, and other commitments, addressing freedom of association, prevention of child labor and worker grievance mechanism. These policies will be applicable to all workers including third party workers and will be communicated through induction and other regular refresher training.
Working Conditions and Terms of Employment:
Workers are employed by ODE through open term contracts (70%) and fixed term annual contracts. Both contracts define working conditions and terms of the employment, including maximum working hours and benefits such as transportation, free meals and medical services through the hotel clinic and El Gouna Hospital.
Protecting the Workforce:
The Company’s code of conduct includes a statement on non-discrimination and equal opportunity and some jobs were allocated for people with special needs. As per ESAP #4, ODE will develop a corporate non-discrimination and equal opportunity policy and procedure, addressing its principles that relate to protect the workforce, through the recruitment practices and day to day work.
Workers’ Organizations:
According to Company’s management, ODE’s is in line with Egyptian labor laws, which recognizes employees’ rights for freedom of organization. In El Gouna, only one hotel has its workers unionized (Sheraton Miramar). Among the HR policies and procedures (ESAP#4), the Company will include its commitments for employee’s freedom of association, in line with IFC PS2.
Retrenchment:
ODE had not implemented any retrenchment during Covid-19 pandemic. The Project is not expected to increase workforce in El Gouna upon its completion and no retrenchment is anticipated as the existing workers will be encouraged to either take their unused annual leaves or will be temporarily transferred to other hotels operating under OHM in El Gouna during the renovation period. For any hotel's refurbishment, ODE will develop a transition plan aimed at minimizing the adverse impact on the workforce of the hotel closure for renovation. This plan will emphasize the Company's commitment to maintaining current employment levels, include provisions for redeployment of workers to hotels within the Company's portfolio, and detailed support measures for those who will temporarily lose their jobs. This transition plan will be developed in consultation with employees and their representatives and all aspects of the plan, from reallocation to support mechanisms, will adhere to transparent and non-discriminatory criteria (ESAP#5)
Workers Grievance Mechanism:
The Company has an internal grievance procedure, defining the mechanism to raise concerns, how those are investigated, addressed, and responded. The Company will update its grievance procedure to include specific provisions for gender-based violence (GBV) grievances, as well as clear statements on anti-retaliation, anonymity, and a clear timeline for responses. The updated grievance procedure will be made accessible for all third-party workers and all staff will be trained to use the workers’ grievance mechanism (WGM) all in line with the requirements of IFC PS2 (ESAP #4).
As of December 2023, there were almost 30 on going labor related court cases filed against OHM and/or ODE. Most of these are related to dismissals, compensation upon contract expiration and/or requesting annual increases. ODE will provide to IFC a report on labor cases, with detailed information for the ongoing court cases including name of worker, type of contract, date of employment and termination/non-renewal, position, litigation history such as nature and value of claim, dates of labor court hearing, status of the claim and timelines, likely outcome. The report will also highlight any resulting reforms to HR policies and procedures (ESAP #4).
Third Party Workers:
The EPC contractors for renovation work have not been selected as of December 2023. ODE will develop a contractor management plan for all its EPC contractors and will contractually require them to follow ODE‘s ESMS, construction ESMPs and procedures (ESAP#3). Similar contract templates will be developed for other outsourced service providers, such as for waste management company, to follow ODE’s ESMS (ESAP #1).
Worker Accommodation
In El Gouna, ODE provides accommodation to its staff, in five locations, in addition to resort houses, provided to some technical and admin staff. The worker accommodations consist of more than 96 buildings (each with 8 units). There are air conditioners, mosquito nets, exit signs in place. Town management is providing cleaning, gardening, and waste services. The ESMS, that will be developed, will include procedures for the workers accommodation to be maintained and managed in accordance with the IFC/EBRD Guidance Note for Worker Accommodation Processes and Standards (ESAP#1)
Occupational Health and Safety:
Over the last three years, there have been no fatalities or major incidents reported for El Gouna. ODE has a documented training manual, applicable to hotel segment and town management operations, which includes a process for risk assessment, emergency response including life and fire safety and evacuation, electrical safety, use of personal protective equipment, handling hazardous substances and infection control. ODE will improve its OHS management system by developing an OHS policy and procedure based on the inherent risks to its operations in line with IFC PS2, the WBG General EHS Guideline and EHS Guideline for Tourism and Hospitality Development. The system will include (but not to be limited to) the identification of potential hazards, preventive measures, reporting and investigation of near misses, hazards and incidents, safe working practices, work permit for hazardous task, and training of workers and monitoring and reporting of incident performance to senior management (ESAP#1).
There is a hospital in El Gouna, serving around 60.000 outpatient and 5,000 inpatient per year, with eight ambulances, six intensive care units, and almost with 30 beds. All ODE’s staff, their families and visitors have access to hospital’s services.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency, Water Supply and Greenhouse Gases:
For El Gouna, energy is supplied from public network, whereas town management operates almost 15 diesels fired back up generators in addition to 7.2 MW installed solar plant. Water is supplied from wells, from three areas with 6.000 m3/day, 16.000 m3/day and 24.000 m3/day capacity. Water is treated by desalination and water treatment facilities, by town management and water quality parameters, including salinity, pH, alkalinity, hardness is monitored in line with local legislation requirements. Drinking water is supplied in bottles/closed containers. There are resource efficiency measures in place, such as use of energy efficient equipment, low water consumption shower heads, dripped irrigation, recycling of treated wastewater for road cleaning and irrigation. The greenhouse gas (“GHG”) emissions, upon completion of renovation, are expected to be less than 25.000-ton carbon monoxide equivalent emission per year, in contrary, the renovation is expected to reduce the GHG, as more efficient materials, in terms of GHG, will be used and installed.
Emissions:
Stationary air emission sources at El Gouna are limited to back up generators and cooking operations / pool/ SPA heating needs at the hotels. Emissions are monitored, are in line with local legislation requirements and relevant WBG EHS guideline guidance values.
Wastewater:
Effluent water is treated through three separate biological wastewater treatment plants with 2000 m3/day, 3.000 m3 day and 2.700 m3/day capacities, and effluent quality monitoring includes online and daily tests for parameters such as biological oxygen demand, chemical oxygen demand, pH, total suspended solids, total phosphate, total nitrogen, which are in line with local legislation requirements and relevant WBG EHS guideline guidance values. Treated wastewater is used for road cleaning and/or irrigation and sludge is disposed at an authorized cement plant and authorized landfill.
Waste and Hazardous Materials Management:
Town management requires hotels at El Gouna to segregate and store the wastes. Wastes consist of cardboard paper, plastic bottles, metal and wooden packaging, food wastes, where there is a nearby authorized waste company collects and recycles. There are initiatives such as converting plastic wastes into plastic bags, which later to be used as waste bags at the hotels.
Hazardous materials are limited to cleaning substances for housekeeping, chemicals, pool/water treatment chemicals such as chlorine, pH neutralization agents, disinfectants, and are used in limited quantities. ESMS to be developed will include documented procedures for waste management and hazardous materials including storage, handling, accidental release, evaluation of hazardous materials alternatives (if possible, to select non-hazardous or less hazardous materials), access control protocols, with references to material safety data sheets and good industrial practices (ESAP#1).
As discussed under PS1, within ESMS, the Company will establish procedures to monitor and report on the E&S performance, which will include (but not be limited to) monitoring of resource efficiency (energy and water), water/wastewater quality data, emission measurements, generated/recycled waste amounts (ESAP#1).
Pest control:
The Company outsourced pesticide management. As per ESMS to be developed, ODE will develop procedures for hazardous materials management, including evaluation of hazardous materials alternatives covering pesticides.
PS4: Community Health, Safety and Security
Guests’ safety is managed at hotel level, and mitigation measures, include lifeguards on the beach and pools, control of access to the pool, storage and waste areas, housekeeping cabinets and utilities are in place. Traffic is managed by town management. Traffic signs, speed reduction measures are installed, and vehicle/pedestrian traffic is separated as appropriate. In and around El Gouna, other than guests and resident owners within the hotels, there is no affected nearby community. Town management is coordinating with such residents to monitor and mitigate noise, traffic, and other potential impacts. The ESMS, to be developed per ESAP#1, will include documented procedures to monitor and mitigate such potential impacts to the communities, including residents within the hotel properties.
Structural Safety / Life and Fire Safety:
As a part of the construction permit, designs are provided to local authorities, for their approval in accordance with national construction and fire codes. For the renovation of Movenpick Hotel, the Company will engage with an external L&FS expert to review the design in line with international codes (such as US-NFPA, German-DIN, UK-BS) and develop an action plan to update the design accordingly (as needed) (ESAP#6a). Upon completion of the renovation, ODE will engage with an external L&FS expert to verify/certify that the designed L&FS specifications have been implemented (ESAP #6b)
Security Personnel: Access to El Gouna is through three gates for guest and staff and a separate gate for heavy service vehicles and contractors. There are almost 70 ODE staff in addition to 220 outsourced security guards for the hotels. All guards are unarmed, and their recruitment is subject to criminal checks, phyco-technic evaluation, and training such as use of defensive force, communication is provided. Egyptian tourism police, as appointed by the state, are also present at the gates and are in charge of the security and access control.
