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Egypt, Arab Republic of

Pasabahce Egypt Glass Manufacturing SAE

$18 million
Manufacturing and Services
ESRS
Proposed
glass manufacturing

Project Facts

Project Facts

Project Facts

Arab Republic of Egypt
Project ID
13803
Guarantee Holder
Pasabahce Cam Sanayii. ve Ticaret. A.S.
Investor Country
Turkey
Environmental Category
B
Date SPG Disclosed
March 08, 2018
Projected Board Date
July 20, 2018
Project Type
Non-SIP
Fiscal Year
2018

This Environmental and Social Review Summary (ESRS) is prepared by MIGA staff and disclosed prior to the date on which MIGA’s Board of Directors considers the proposed issuance of a Contract of Guarantee. Its purpose is to enhance the transparency of MIGA’s activities. This document should not be construed as presuming the outcome of the decision by MIGA’s Board of Directors. Board dates are estimates only. 

Any documentation that is attached to this ESRS has been prepared by the project sponsor, and authorization has been given for public release. MIGA has reviewed the attached documentation as provided by the applicant, and considers it of adequate quality to be released to the public, but does not endorse the content.

The Project consists of an asset acquisition of Pearl Glass Manufacturing S.A.E. of Egypt (Pearl Glass) by Paşabahçe Turkey as part of its business growth plan in the glassware sector. The new company is incorporated in Egypt under the name Paşabahçe Egypt Glass Manufacturing S.A.E. (Paşabahçe Egypt). The plant acquired is located in the industrial area of 6th of October City, 47 km outside of Cairo. The 6th of October is one of several designated industrial zones in the country. The plant will be modernized and different production processes introduced to bring the quality up to Paşabahçe’s standards. The plant currently has two production lines and as part of the modernization, one will be upgraded and the plant will also increase to four press-blow and two press machines.  Through the modernization of the plant, production capacity is planned to increase by 50%, from 80 ton/day to 120 ton/day.

Sisecam, the parent company of Paşabahçe, is an industrial group based in Istanbul, Turkey, with 80 years’ history in the fields of glass and chemicals production. The group produces flat glass, glassware, glass packaging, and chemicals businesses with a total of 44 plants, 18 local and 26 abroad, providing employment opportunities to over 21​,000 employees. In addition to being one of the leading industrial companies in Turkey, it is a global player with exports to 150 countries and operations in 13 countries. Sisecam’s glassware division is operated by its subsidiary, Paşabahçe, that manufactures soda-ash and crystal glass, both handmade and automatic production.

The Project is a Category B under MIGA’s Policy on Environmental and Social Sustainability (2013) because the potential environmental and social (E&S) impacts are limited, site-specific, largely reversible, and can be readily addressed through mitigation measures. No major E&S concerns were identified but the Project does require an Environmental and Social Management System (ESMS) as per MIGA’s Performance Standard (PS) 1: Assessment and Management of Environmental and Social Risks and Impacts, as well as the following additional management plans and policies:

  • Stakeholder Engagement Plan (SEP);
  • Human Resources (HR) Policy and the relevant procedures;
  • Workplace Noise Control and Monitoring Plan;
  • Air Quality Control and Monitoring Plan;
  • Waste Management Plan;
  • Hazardous Material Management Plan;
  • Emergency Preparedness and Response Plan, including procedures for Fire Prevention and Protection Procedure and Risk Assessment; and
  • Occupational Health and Safety Management Plan.

The Plant will also be required to monitor and report on greenhouse gas emissions, as per MIGA PS 3: Resource Efficiency and Pollution Prevention requirements.

While all PS will be applied to the Project, based on current information, it is expected that the Project will be managed in accordance with the following PSs:

  • PS1: Assessment and Management of Environmental and Social Risks and Impacts
  • PS2: Labor and Working Conditions
  • PS3: Resource Efficiency and Pollution Prevention
  • PS4: Community Health, Safety and Security

PS5 (Land Acquisition and Involuntary Resettlement) does not apply to this Project as it is located within the 6th of October, the second largest industrial area in Cairo. Issues related to land acquisition and resettlement are therefore not expected and any additional project construction activities will take place within the defined Project boundaries. Currently 55% of the land at the Project Site is used and 5% is available for further expansion, as per Egyptian legislation.

PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not relevant to this Project as it is located within an industrial zone. 

PS7 (Indigenous Peoples) is not relevant to this Project since indigenous communities are not present in the area.

PS8 (Cultural Heritage) does not apply to this Project as it is located within an existing industrial zone.

In addition, the following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project:

  • WBG General EHS Guidelines; and
  • WBG EHS Guidelines for Glass Manufacturing.

MIGA’s review consisted of a due diligence mission and appraisal of environmental and social information submitted by Paşabahçe Turkey and Paşabahçe Egypt. The following documents have been reviewed by MIGA:

  • Paşabahçe Turkey/ Şişecam Code of Conduct, 2017;
  • Paşabahçe Turkey Sustainability Report, 2016;
  • Şişecam Environmental and Energy Policy, undated;
  • Şişecam Health and Safety Policy, undated;
  • Şişecam Anti-Bribery and Corruption Policy, undated;
  • Environmental Impact Assessment (EIA) Study Approval for El Lola (Pearl) Glass Manufacturing, November 2011;
  • Report on Environmental Monitoring Workplace and Stack Emission Measurements, February 2018;
  • Analysis Results of Wastewater Samples, November 2017; and
  • Maximum Emissions from Fuel Combustion, February 2018.

PS1: Assessment and Management of Environmental and Social Risks and Impacts

Management Program

The International Organization for Standardization (ISO) 14001: Environmental Management System (EMS) has expired for the Project and a study to renew the certification is ongoing.  Elements of an ESMS are also contained within the Paşabahçe   Code of Conduct (2017), which will be required to be applied to the Project’s operations. These include:

  • Legal compliance to national and international legislation;
  • Environmental protection, which included conformance to legislation, the development of waste management plans, staff training on environmental awareness and the development of environmental performance reports;
  • Workers’ rights, duties and training as well as freedom of association and collective bargaining;
  • Working hours and fair remuneration, specifically the payment of wages in a timely manner, regularly and fully in legal tender reflecting the skills and education of workers;
  • No child labor, as well as protection for workers less than 18 years old;
  • No forced labor or harassment for workers;
  • Subcontractor conformance to the Code of Conduct;
  • Occupational Health and Safety (OHS), including OHS training programs and regulations, as well as Emergency Action Plans and the use of Personal Protective Equipment (PPE);
  • Grievance mechanism, for both employees and the local communities;
  • Code of ethics and fair business practices.

Sisecam, the parent company, also has the following policies, which will also be required to be applied to the Project:

  • A comprehensive corporate Energy and Environment Policy, which includes energy, resources efficiency, and other key sustainability measures;
  • Occupational Health and Safety Policy; and
  • Anti-Bribery and Corruption Policy.

Organizational Capacity

As per the Paşabahçe Turkey Sustainability Report (2016) the Şişecam Sustainability Committee was established in 2015 and consists of the following members: Chief Corporate Strategy Officer, Human Resources President, Production Vice-Presidents of Business Units, Sustainability Director, Corporate Communication Director, Industrial Relations Director and Innovation Manager and reports directly to Chief Executive Officer. The working groups within the body of the committee are responsible for conducting activities related to the subjects of Environment, Energy, Water, Inclusion and Diversity, Occupational Health and Safety and Corporate Social Responsibility. The following Environmental Health and Safety (EHS) staff are based at the Project and they report to the Human Resources Manager;

  • A Quality Manager, responsible for environmental issues, supported by an Environmental Engineer; and
  • An Occupational Safety Specialist and Technician.

Monitoring and Review

Once developed, the ESMS will include procedures to monitor and measure the effectiveness of the management program. MIGA will also require annual monitoring reports throughout the guarantee period. As per Article 17 of the Egyptian Law 4 for the Protection of the Environment, the Project will also keep an annual register that records the impact of the Plant’s activities on the environment, as follows:

  • Emissions discharged;
  • Specifications of discharges after the treatment process;
  • Efficiency of the treatment units used;
  • Follow-up and environmental safety procedures applied;
  • Periodical tests and measures and their results; and
  • The individual responsible for the follow-up.

Stakeholder Engagement

The Paşabahçe Turkey Sustainability Report (2016) refers to the various stakeholders (shareholders, employees, suppliers, customers etc.), engagement platforms and types of engagement. This will be applied to the Project and a site-specific Stakeholder Engagement Plan (SEP) will be developed and implemented that is scaled to the Project’s risks and impacts, as per PS 1, and part of the ESMS.   

PS2: Labor and Working Conditions

Human Resources (HR) Policies and Procedures

Labor practices in Egypt are regulated by Labor Law No. 12 of 2003, its executive regulations and ministerial decrees. These regulations standardize employees’ work related rights. Book V of the Labor Law is focused on occupational safety and health and the assurance of the adequacy of the working environment. It is supplemented by the following Ministerial Decrees:

  • 126/2003, for reporting work-related accidents and injuries; 
  • 134/2003, for organizing the occupational health and safety in establishments; 
  • 211/2003, for preventing hazards and mitigating work-related risks; and 
  • 265/2008, for adopting the frame work of managing occupational health and safety at work.

As part of the ESMS and to fulfill MIGA’s Performance Standard (PS) 2: Labor and Working Conditions, a HR Policy and relevant procedures will be prepared. 

Retrenchment

The Project currently has 180 employees and it is estimated that this number will increase to 618 employees by the end of 2018. No retrenchment is envisioned as part of the acquisition.

Worker Grievance Mechanism

Sisecam/Paşabahçe Turkey has a Grievance Mechanism as part of the Code of Conduct (2017), which includes both employees and subcontractors. Grievances will be raised anonymously. The grievance mechanism will be formalized as part of the ESMS and extended to the Project.

Supply Chain

The Egyptian Child Law No 12/1996 and the Sisecam Code of Conduct that state that no child below the age of 15 should be employed. However, the Project will not employ workers under 18 years of age. Current and future subcontractors should also be committed to these provisions, by signing to these terms in the Code of Conduct.

Occupational Health and Safety

Within the Project, there is an ongoing training program for local Egyptian employees in Turkey on the plan and operations, which includes EHS issues. The training is being carried out for all press and packaging operators and translated for those employees who only speak Arabic. To date, one Emergency Response Plan (ERP) has been held by Paşabahçe. The following management plans will be developed, as part of the ESMS and in line with PS 1:

  • Emergency Preparedness and Response Plan, including procedures for Fire Prevention and Protection Procedure and Risk Assessment; and
  • Occupational Health and Safety Management Plan.

Noise and vibration

The main noise sources within the plant are located within the glass-container forming process. During the site visit it was noted that several employees do not wear PPE, specifically ear defenders within the noisy areas. A workplace Noise Control and Monitoring Plan will be prepared for the Project as part of the ESMS. Recommendations for preventing and controlling exposure to noise, including the use of hearing protection and other PPE will be included in this Plan.

PS3: Resource Efficiency and Pollution Prevention

Water Supply

Water consumption of the Project is estimated to be 300m³ per day and this is provided through the existing water supply line of the municipality.

Wastewater

Wastewater is discharged directly into the municipal sewerage. Samples are collected and tested by the Egyptian Environmental Affairs Agency (EEAA), with the sample point just outside the plant. While the wastewater analysis shows compliance with Egyptian legislation, they slightly exceed the WBG EHS Guidelines for Glass Manufacturing.

Waste Management and Disposal

Solid waste generated from glass manufacturing is mainly in the shipping areas. However, waste housekeeping at the Plant is poor, with cullet and scrap metal at several locations. A Waste Management Plan and Hazardous Material Management Plan will be developed, as part of the ESMS.

Air Emissions

The main emission sources are CO2 and nitrogen oxides (NOx) caused by high furnace temperatures and the oxidation of nitrogen contained in fuels. An Environmental Monitoring Team from Cairo University measured both workplace gaseous air pollution and stack emissions in February 2018 and established compliance with the Egyptian Environmental Legislation. The results were also found to be within the WBG EHS limit values for glass manufacturing.  An Air Quality Control and Monitoring Plan will however need to be developed.

GHG Emissions

There are no data available for greenhouse gas emissions from the existing 2 production lines. However, with the additional production lines it is expected to be around 36,700tCO₂/year. As per MIGA PS 3 requirements, the Project will be required to quantify the direct and indirect emissions and undertake necessary actions to minimize these and report on CO₂ emissions annually.

PS4: Community Health, Safety and Security

Community health, safety and security risks associated with the plant are security and access control, as the Project is located within an existing industrial zone. Security is outsourced to an external security company that provides unarmed security guards. There is a Closed-Circuit Television (CCTV)/surveillance system and the site is surrounded by security fencing.   The 6th of October Industrial Area has its own police post.

The Project falls under the Egyptian Law 4 for the Protection of the Environment Amended by Law 9/2009 and therefore has an Environmental Impact Assessment (EIA) study approval dated November 2011, under the name El Loloa (Pearl) Glass Manufacturing Company. The EIA approval states that the following requirements should be complied with:

 

  1. Commitment to the activities distribution map showing the project location and surrounding activities;
  2. Construction of the factory using the latest available technology as well as new equipment and components;
  3. Only natural gas fuel to be used for smelting furnaces and gradual cooling;
  4. Necessary chimneys to be installed in accordance with Article 42 of the executive regulation Law No 4 of 1994;
  5. All chemicals used in the factory to be stored in closed stores in accordance with international specifications and codes;
  6. All necessary precautions be taken to limit pollution and contamination of the surrounding environment in case of any leaking, spills and fires;
  7. All Material Safety Data Sheets (MSDS) sheets to be complied with;
  8. Maximum gas emission limits inside and outside the workplace must not be exceeded and comply with permitted limits contained in Appendices 5 and 6 to the executive regulation of Law No 4 of 1994;
  9. Installation of all necessary ventilation hoods and filers;
  10. Commitment to provide health workplace and workers’ safety especially in the pistons and furnace areas in compliance with Appendix 9 of Law no 4 of 1994;
  11. The cooling water to be in a closed cycle;
  12. An industrial wastewater treatment plant be operated and meet the standards of the industrial wastewater permitted by law No 93 of 1962 and the executive regulation thereof and Resolution no 44 of 2004 regarding the wastewater sewerage networks.

 

Overall, the Plant is compliant with the above requirements

 

MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.


In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.


Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.


Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400

E-mail: cao-compliance@ifc.org

The following documentation is available electronically as PDF attachments to this ESRS at www.MIGA.org

  • Paşabahçe Turkey/ Şişecam Code of Conduct.
  • Paşabahçe Turkey Sustainability Report.
  • Şişecam Environmental and Energy Policy.
  • Şişecam Health and Safety Policy.
  • Şişecam Anti-Bribery and Corruption Policy.
  • Environmental Impact Assessment (EIA) Study Approval for El Lola (Pearl) Glass Manufacturing.
  • Report on Environmental Monitoring Workplace and Stack Emission Measurements
  • Analysis Results of Wastewater Samples.
  • Maximum Emissions from Fuel Combustion.