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
Environmental and Social management system (ESMS): The company has an integrated management system (IMS) certified to ISO 9001 (quality management), 14001 (environment management) and ISO 45001 (occupational health and safety). The IMS consists of company E&S policies, Standard Operating Procedures (SOPs), manuals, and defined Key Performance Indicators (KPIs) for monitoring, evaluation, and reporting. The IMS is underpinned by an overarching environmental and occupational health and safety (OHS) policy, which commits the Company to compliance with applicable legal regulatory requirements, ISO standards, and other voluntary requirements to which NS subscribes. The policy also addresses the identification and management of OHS hazards and environmental aspects. The IMS will be cascaded down to the land plots in Menya through the agriculture engineers managing the plots as well as the implementation of contractor management (ESAP#1).
Identification of Risks and Impacts: The company has in place an environmental and social impact assessment for the sugar processing plant and for its extension. For the land reclamation project, there is a regulatory requirement for an environmental impact assessment. However, the project is located on land acquired from El Reef El Masry, a semi governmental entity that undertook studies covering the broader 1.5 million feddan area before the land was designated for agricultural use as part of the national land reclamation plan. The client has conducted a soil study and technical water abstraction study leading to the issuance of the relevant well-digging and water abstraction permits for two of its own plots. With no access to the overall ESIA for the wider reclamation plan, the company will conduct an environmental impact assessment specific to the two plots of land in Menya (ESAP#2).
Management Programs. Management plans are prepared for EHS aspects in alignment with the company’s standards, and the necessary regulatory environmental permits are then obtained. The company will transfer its EHS management programs to the land plots in Menya. EHS management plans will be tailored to mitigate the anticipated risks and impacts specific to the land site and nature of agricultural activities (ESAP#2). The NS agricultural engineers’ team is responsible for communicating applicable E&S management plans to suppliers and contractors as part of the screening process. This includes guidance and mitigation measures related to sustainable water practices, pollution prevention, water management, wastewater and ambient water quality, air quality management and waste management.
The company currently has a total of six contractors engaged in land reclamation activities on the Menya land plots. To align with IFC’s PSs requirements, the company will develop a contractor management plan to formalize the monitoring and oversight of land reclamation activities at the newly developed land plots in Menya in line with national regulations, and WBG EHS guideline requirements. The contractor management plan will specify E&S management measures required for the contractors to address impacts such as labor sourcing, heat stress, life and fire safety, traffic, waste, OHS, emergency preparedness and will also cover and be extended to the main subcontractors, (ESAP#1).
Organizational Capacity and Competency. various departments serving specific operational needs such as Agriculture, HR, and EHS systems departments define KPIs on EHS that are shared to the company board and are reported on by the EHS team. The EHS team report to the IMS manager who oversees E&S management of all operations, currently covering production facilities. The agriculture department oversees supplier farms and land reclamation projects and is responsible for implementing and monitoring company policies and standard operating procedures (SOPs) for land projects at both the preparation and cultivation stages, as well as evaluating compliance with company requirements. HR manages all policies and procedures relating to the workforce and has an HR representative at each plot that the company is developing in Menya. At the sugar processing factory level, the General Manager (GM) holds ultimate responsibility for managing operational, E&S, and OHS issues supported by technical, administrative, and human resources teams.
Emergency Preparedness and Response (EPR). For the sugar processing factory, the company has documented an EPR plan covering emergencies related to fire, explosions and chemical spills. Similarly, the company will develop an ERP for the plots in Menya prior to the start of cultivation (ESAP#1).
Supply chain management. Nile Sugar sources sugar beet from approximately 25,000 smallholder farmers operating under pre harvest agreements, the majority of whom supply beets exclusively to the Company. Supplier farms are managed through the Company’s Agriculture Department, which is responsible for supplier screening, ongoing engagement, and the provision of technical support, including agricultural inputs such as seeds, pesticides, herbicides, and fertilizers. Procurement of materials and equipment is managed through a centralized procurement system, which maintains a database of qualified suppliers and applies screening and evaluation procedures. A dedicated database is maintained for sugar beet supplier farms.
To align its supply chain management practices with IFC Performance Standard 2, including requirements related to the prevention of child labor, forced labor, and sexual harassment, the Company will enhance its existing supplier Inspection and Control Framework to: (i) formally communicate applicable environmental and social policies to suppliers; (ii) integrate explicit prohibitions on child labor and forced labor, and requirements for safe working conditions, into contractual arrangements and/or a Suppliers’ Code of Conduct; (iii) verify supplier commitments and environmental and social performance through structured screening of existing and new suppliers; and (iv) conduct periodic monitoring to confirm ongoing compliance (ESAP#3).
The Out Grower Code of Conduct will include provisions on, at a minimum: (a) prohibition of child labor and forced labor; (b) safe handling and use of agro chemicals and fertilizers; (c) prevention of and response to gender based violence and harassment (GBVH); (d) restrictions on expansion into areas of biodiversity value or conversion of natural habitats without prior authorization; and (e) defined reporting and monitoring requirements.
In addition, NS will enhance the supplier farm Inspection and Control Framework which will include PS-2 related requirements, including OHS, minimum age of workers, review pay slips, grievances mechanism management, stakeholder engagement, among others (ESAP#3).
Monitoring & Reporting. The company has a monitoring and reporting system, whereby, key performance indicators (KPIs) related to its operations are internally audited, regularly compiled and any gaps are addressed through mitigation measures that are monitored for timely completion.
PS2- Labor and working conditions
At corporate level, 2 out of 5 board members are female. NS currently has 768 employees working at the sugar processing plant of which women employees make up 2.5% of the workforce. During peak operations at the sugar refinery, locally hired seasonal workers can almost reach 350 and do not include females. For the land plots in Menya, there are 2 females working as agriculture engineers under the Nile Company for Agricultural Crops Cultivation out of 79 in total. All employees are regular staff, and the Company does not employ temporary workers. The Company does not employ workers under the age of 18. As part of the hiring process, HR team verifies birth certificates and national ID. No forced labour is used within the Company’s operations.
Human Resources Policies and Procedures. The Company has Human Resources (HR) policies and employee manual which outline the policies and procedures covering terms of employment, including working hours, overtime, compensation and benefits such as medical insurance coverage for employees and family members), training plan and training evaluation, freedom of association, termination and dismissal. In addition, minimum wage is respected and overtime is compensated in compliance with national labour law. All new employees receive a written contract and are on probation period for 3 months upon hiring. During the probation period, employees receive induction training where they are informed of their terms of employment, HR policies, procedures and receive on the job training.
Workers’ Organization. The company respects the rights of workers to form unions and does not restrict their establishment. A previous workers’ syndicate was replaced with an HR committee where employee well-being is discussed and provides a channel for employees to present issues or grievances to management. A formal employee grievance mechanism is in place and an HR open-door policy. No outstanding employee issues or grievances were reported or identified at the time of appraisal. In line with ESAP#5, the company will update its termination and dismissal policy, align its internal grievance mechanism and update its anti-sexual harassment policy in line with Performance Standard 2 (PS2) and provide training to staff on the updated policies and procedures.
Non-discrimination: The Company’s HR policy includes explicit provisions on non-discrimination and equal opportunity. All hiring and promotion decisions are merit-based, and there is no difference in salary between female and male employees with the same level of experience. A business code of conduct is shared with all employees and suppliers as part of the documentation presented at the time of hiring.
Retrenchment. The Company has not undertaken any retrenchment to date and does not anticipate any retrenchment in the foreseeable future. Once the reclamation work has been completed by contractor workers, they will be replaced by employees directly contracted for maintenance of the agricultural land and conduct agricultural related activities.
Grievance Mechanism (GM). The HR team are assigned to manage grievance and document their resolution. Moving forward, the Company will designate trained and competent personnel to handle matters related to Gender-Based Violence and Harassment (GBVH), applying a complainant-centric approach and ensuring full confidentiality. In addition, the company will conduct a GBV Risk Assessment and develop an accompanying GBVH Action Plan to mitigate risks identified, if any. The company will also request on all contracts, including suppliers of truck and bus drivers, that training of all staff is conducted on Code of Conduct, GBVH and response available for survivors (ESAP#5).
Occupational Health and Safety (OHS). Key OHS risks include heat stress, particularly in field work. There is an OHS management program and the Company has appointed qualified safety personnel. There is also an OHS committee with members from various departments in the factory. In addition, safety teams conduct regular internal inspections and provide monthly monitoring and reporting on safety performance. Over the past three years, only first aid incidents were recorded, and no lost-time incidents have been reported. There is a clinic and an equipped ambulance on site. Going forward, the company will roll out its OHS risk assessment to the farms and enhance its EHS reporting system to capture additional key OHS indicators. The system will be regularly updated and indicators will be monitored and reported on an annual basis. (ESAP#6).
Workers Engaged by Third Parties. The Company engages contractors for the land reclamation on the new land plots in Menya. This typically takes 12 months with a peak workforce of 100 workers. As per ESAP#7, the company will make sure that the construction contractor complies with the IFC guidelines on accommodation and it will be implemented in the new accommodation planned with the design of the agricultural land in Menya. As per ESAP#1, NS will implement the Oversight Management Plan to oversee and document contractor E&S performance, including hiring practices, minimum age, fair wages, overtime, and OHS compliance with the contractor management plan.
PS3-Resource Efficiency and Pollution Prevention
Resource Efficiency. The company implements environmental protection and resource conservation during sugar beet cultivation and sugar processing to comply with applicable environmental laws and regulations.
Natural gas is the primary energy source for the sugar processing plant, supplied directly by the local gas company. Electricity from the public grid is used as a back-up energy source. There are also 4 back-up generators on site with minimal quantity of diesel fuel stored on site within secondary containment.
Water consumption in the industrial process for sugar extraction is expected to be 1m3 per ton of sugar beet entering the process. At the beginning of the harvest season, when sugar beet starts flowing in, water from the Nile river is pumped into the on-site water treatment station. Operational parameters are optimized for water recycling which has resulted in reduction of this figure to (50 litres of water) per ton of sugar beet. Water consumption in sugar beet supplier farms is regulated by the Ministry of Irrigation and Water resources. Water for beet crop irrigation is permitted for 3 days every 14 days from the nearest Nile water channel. At the Menya land plots, the fractured limestone aquifer is the source of water for irrigation. The company has the relevant well digging permits and operates within the water abstraction cap. The Company will develop a well sustainability study and adjust the water abstraction rate based on the study outcomes (ESAP#2).
Waste Management. Considering the minimal quantity of process waste generation, waste management at the sugar processing plant primarily involves management and disposal of domestic waste from offices. These are handled through the local municipality waste management services. The sugar production process generated waste from the washing step where soil and leaves are removed from received beets; the cleaned beets are then sliced into thin shreds (cossettes) to maximize extraction efficiency. Sugar is extracted using hot water to produce raw juice, which is then filtered into thin juice. This juice is concentrated and crystallized to form a crystal–molasses mixture and centrifuged to separate sugar crystals from molasses; while by-products such as beet pulp, molasses, and lime sludge are recovered and sold to contractors. Beet pulp pellets are exported to European markets. At farms, agricultural waste during harvest season is removed by allowing sheep and cattle grazing for removal of beet tips.
Air Emissions. Diesel-fueled generators are used in the factory to produce the steam needed for the turbines used in production. Boilers use piped natural gas as fuel. Air emissions are regularly monitored to comply with environmental permit requirements. There have been no exceedances of CO2, NOx, or VOC emissions beyond permitted level and World Bank Group (WBG) EHS guidelines limits.
Carbon Footprint. GHG emissions resulting from the proposed Project are estimated based on PNG and Diesel consumption at the company’s sites. The Project’s total GHG footprint is thus estimated at about 19,080 tons CO2eq / year for both Scope 1 and Scope 2 GHG emissions. The company currently tracks GHG emissions. Hence, actual records will be used to review amounts of tons of CO2 equivalent per year that will be emitted from the project once the land plots in Menya are cultivated.
PS4-Community Health, Safety and Security
As mentioned above, the location of the sugar refinery poses minimal risks and impacts of operations on the health, safety, and security of nearby communities. Transportation from farms to the refinery is managed by NS and uses a fleet of around 40 outsourced vehicles. Traffic impacts on nearby communities are also limited during the harvest season as the company implements a traffic management plan to house the incoming trucks daily to and from the plant, which is well connected by good road infrastructure. The client will document the implemented traffic management plan for the factory when needed as per ESAP#8.
Security guards are arranged in accordance with the host country’s requirements. Both at the sugar processing plant and Menya land, no armed security guards are deployed by the company or the private security provider at the refinery. Responsibilities of security guards are limited to monitoring the entry and exit of personnel and vehicles to and from the plant and agricultural sites in Menya.
