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Complaint to the International Finance Corporation on Alexandria Portland Cement (Titan) in the Wadi al-Qamar area of Alexandria According to publications of the International Finance Corporation (IFC), the institution’s sustainability framework sets out its strategic commitment to sustainable development, an integral part of the IFC’s approach to risk management. This framework is comprised of the Policy and Performance Standards on Environmental and Social Sustainability. The sustainability policy describes the institution’s commitments and roles on environmental and social sustainability, while the performance standards are directed to the institution’s clients to provide guidance that helps them run their businesses in a sustainable way. The IFC’s eight performance standards must be met by IFC clients throughout the duration of the IFC’s investment. 12 This complaint is related to the Alexandria Portland Cement (Titan) plant in the Wadi al-Qamar area of Alexandria, which receives financing from the IFC. We explain below why IFC financing for the plantwith its questionable legal status, the harm to the local community from its environmental performance, and the harm to its workforce due to its non-compliance with the social standards on labor rights and conditions—is incompatible with the IFC’s environmental and social sustainability policies. Nevertheless, as we note, the IFC continues to finance the plant despite its continued breach of the IFC’s own ostensibly obligatory performance standards. Introduction to Wadi al-Qamar and Alexandria Portland Cement Plant Wadi al-Qamar is located in western Alexandria on the northern Egyptian coast, part of the Agami neighborhood. Most local residents belong to the tribes that long ago 1 IFC Performance Standards on Environmental and Social Sustainability, Jan. 2012, introduction paragraphs 12. 2 Note: The IFC’s investment in Titan Egypt was approved in 2009 and signed in 2010, and therefore the 2006 IFC Performance Standards should apply. However, violations have continued to be documented until now, and we have therefore referenced the IFC’s 2012 Performance Standards as the most up-to-date standards used by the institution.

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Complaint to the International Finance Corporation on Alexandria Portland Cement

(Titan) in the Wadi al-Qamar area of Alexandria

According to publications of the International Finance Corporation (IFC), the

institution’s sustainability framework sets out its strategic commitment to sustainable

development, an integral part of the IFC’s approach to risk management. This

framework is comprised of the Policy and Performance Standards on Environmental

and Social Sustainability. The sustainability policy describes the institution’s

commitments and roles on environmental and social sustainability, while the

performance standards are directed to the institution’s clients to provide guidance that

helps them run their businesses in a sustainable way. The IFC’s eight performance

standards must be met by IFC clients throughout the duration of the IFC’s

investment.12

This complaint is related to the Alexandria Portland Cement (Titan) plant in the Wadi

al-Qamar area of Alexandria, which receives financing from the IFC. We explain

below why IFC financing for the plant—with its questionable legal status, the harm to

the local community from its environmental performance, and the harm to its

workforce due to its non-compliance with the social standards on labor rights and

conditions—is incompatible with the IFC’s environmental and social sustainability

policies. Nevertheless, as we note, the IFC continues to finance the plant despite its

continued breach of the IFC’s own ostensibly obligatory performance standards.

Introduction to Wadi al-Qamar and Alexandria Portland Cement Plant

Wadi al-Qamar is located in western Alexandria on the northern Egyptian coast, part

of the Agami neighborhood. Most local residents belong to the tribes that long ago

1 IFC Performance Standards on Environmental and Social Sustainability, Jan. 2012,

introduction paragraphs 1–2. 2 Note: The IFC’s investment in Titan Egypt was approved in 2009 and signed in

2010, and therefore the 2006 IFC Performance Standards should apply. However,

violations have continued to be documented until now, and we have therefore

referenced the IFC’s 2012 Performance Standards as the most up-to-date standards

used by the institution.

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settled the northwestern coast of Egypt and Libya, most prominently Awlad Ali and

the Juhayna tribe. The area is home to some 60,000 people, many of whom have

heard stories of the region’s history passed down from their ancestors. Some

remember the moon’s reflection on the barley fields that used to cover vast areas and

which gives the area its name. But we are not concerned here with the sentimental

history of the place, previously known as a site for excursions and recreation. We

simply wish to underscore that the area has been a legal, zoned residential

neighborhood, not an informal area, for at least 70 years, as evidenced by the maps

drawn by the Egyptian Survey Authority, which date to 1944.3 These maps

demonstrate that Wadi al-Qamar is a long-standing residential area, not an informal

neighborhood, that was planned and surveyed by the survey authorities, and existed in

the area prior to the cement plant.

The Alexandria Portland Cement plant was established in Wadi al-Qamar in 1948. It

was owned by the Egyptian government at the time and remained that way for

decades until it was privatized, when the British Blue Circle Industries bought it in

2000. In 2001, Blue Circle was given a temporary license to operate the plan (the fifth

kiln). In 2007, Blue Circle Cement Egypt was incorporated into Alexandria Portland

Cement. Currently, the fifth kiln is the only one operational; the other older kilns were

unused and thus demolished. The fifth kiln was built adjacent to the residential area

from the north. The plant’s smokestack and homes are separated by an area of no

more than ten meters, while the Mediterranean coast is only 100 meters away. Since

the winds in this coastal area are largely northwesterly, the residential area lies right

in the path of the plant’s emissions.

I. Titan’s non-compliance with environmental protection standards

1. The plant operates illegally, without a license

The IFC financing framework states that clients must comply not only with the

institution’s performance standards, but also with applicable national laws.4 Clients

are obligated to maintain a comprehensive policy, which should specify that the

project will comply with all applicable laws and regulations in its jurisdiction. The

3 Attached is a copy of the Egyptian Survey Agency’s map of Alexandria, which clearly shows

the Meks Saltworks, but not yet any cement plant. Attachment no. 3 4 IFC Performance Standards on Environmental and Social Sustainability, 2012, paragraph 5.

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policy must also identify the individual in the client’s organization responsible for

ensuring compliance with and execution of the policy, if necessary by reference to a

competent government agency or a third party.5

But we have found that Titan Cement has never obtained the proper operating license

necessary under Egyptian laws. The company’s conduct in this regard is marked by

evasion, aided or at least ignored by the competent administrative authorities, which

has allowed the company to continue operating for years despite this serious breach.

This is confirmed by a report issued by the State Commissioners Agency (State

Lawsuit Authority)6 in case no. 11632/64/Alexandria administrative. Area residents

filed the suit seeking the annulment of the administrative decree issued to the plant

due to its unlawfulness on 2010. The court referred the case to the State Lawsuit

Authority for a legal opinion. A copy of the report is attached.7

According to the report, Blue Circle received a six-month temporary permit to operate

the fifth kiln on 5 February 2001, pending fulfillment of the legal conditions required

for a final operating permit. But, instead, the company requested extension of the

temporary permit. Blue Circle received successive six-month renewals of the

temporary permit until 2004, when on 28 November the temporary permit was

renewed for five years, to expire on 31 January 2010. After Blue Circle was

incorporated into Alexandria Portland Cement in 2009, both companies applied with

the licensing directorate in Agami to amend the permit and obtain a new license under

the company’s new name. This permit was issued on 28 May 2009 by the Agami local

directorate. The permit also stipulated that the plant not go into operation until a final

permit was issued from the Industrial Development Agency. The plant continued

operations without the required permit and, despite this; its “temporary” permit was

again renewed for five years in July 2011.

5 IFC Performance Standards on Environmental and Social Sustainability, Jan. 2012,

Performance Standard 1, paragraph 6. 6 The State Lawsuit Authority is an independent judicial body which, under the constitution, is

responsible for representing the state in lawsuits, settling cases at any stage of litigation, drafting state

contracts, and exercising technical supervision of legal affairs directorates in the state administrative

apparatus. Its members enjoy all guarantees, rights, and duties of members of the judiciary. See

http://sla.gov.eg/history.aspx. 7 Attachment no.1

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The State Commissioners Agency report concluded that the permit in question, issued

on a temporary basis since 5 February 2001 pending fulfillment of the necessary legal

conditions, had been renewed by the administration for more than 15 years, stating

that this means “the temporary license was effectively made permanent, emptying the

license of all content and rendering the legal conditions that the company must meet

to obtain the license nonexistent.” The report advises a judgment ordering the closure

of the plant for operating without a permit.8

The company’s performance thus violates several Egyptian laws, among them Law

453/1954 on industrial, commercial, and other aggravating, harmful, and dangerous

enterprises, Law 21/1958 regulating and encouraging industry in the Egyptian

territory, and Law 4/1994 on the environment.9 All of these laws regulate the

conditions and requirements for the licensing of industrial and commercial enterprises

in Egypt.

Under Egyptian law, the State Commissioners report is not binding on the judge, and

thus far, no final ruling has been issued in the case, which has been pending since 5

February 2010. It was recently referred to a new circuit in Cairo after years in the

Alexandria court. It is feared that the company’s connections and influence are behind

the delay in adjudication or the disregard of the State Commissioners

recommendation.

2. The company confiscates public land by force in violation of the law

The willful violation of Egyptian laws by the management of Alexandria Portland

Cement is not limited to operating without a license. The company has also assumed

possession of 60 meters of the public road in front of the plant, building metal wall in

front of the main entrance to the company on the public road.

Local residents filed complaints with the Agami Municipal Directorate about the wall,

which narrows the road in front of it. The municipal chief ticketed the company on 16

January 2012, and the Alexandria governor issued a demolition order for the wall on

8 Report from the State Commissioners Agency in case no. 11632/64/Alexandria

administrative, p. 62. 9 Ibid, pp. 55 and 57.

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19 February 2012. The order was not implemented, after which several local residents

harmed by the wall filed a suit seeking its removal.10

The State Commissioners report issued on 2013,11about the case noted that the wall

was built without a license and that as a wall; it cannot be licensed since the road is a

public utility. This requires the removal of the wall for its breach of the construction

law (Law 119/2008). The report reprimands the administrative and executive

authorities for not implementing the demolition order, finding them in violation of the

law. Although the suit has been pending since 29 April 2012, the wall still stands.

Local residents also attribute this to the company’s powerful influence and

connections with the competent administrative and executive bodies.

3. Flawed assessment and management of environmental and social risks and

impacts.

As noted above, the plant did not receive a proper legal operating license, one of the

conditions of which is the Ministry of Environment’s approval of the environmental

impact assessment (EIA) study. Cement production has severe impacts on the

environment, and Egyptian law requires a comprehensive environmental and social

impact assessment and approval of the study prior to licensing.

The fact that the company has not received a permit raises doubts regarding the

approval from the competent bodies for its environmental impact assessment. We

could not find a copy of the EIA study, and the documents submitted to the court by

the company in connection with the lawsuit contain no reference of any such study.

Area residents suspect that even if the EIA study exists and was approved, it may not

have been conducted properly, especially as regards environmental protection from

emissions and local community participation in light of actual existing pollution and

sustained opposition from the local community.

This raises concerns about the company’s breach of Performance Standard 1 in the

identification and assessment of environmental and social risks and impacts and

measures for mitigation, prevention, and compensation. It also violates the standard’s

10

Case no. 13827/66JY, Court of Administrative Justice in Alexandria. 11 Attachment no. 2.

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requirement to comply with applicable laws and regulations within the company’s

jurisdiction, including laws on the implementation of the host country’s obligations

under international law, as well as compliance with any legal and contractual

obligations.

The company’s conduct may be in breach of the Egyptian environmental law and its

implementing regulations. Article 19 of the law states, “Every natural or legal person,

public or private, must submit a study assessing the environmental impact of the

facility or enterprise to the competent administrative body or the donor body for

licensing prior to implementing the enterprise. The study shall be conducted in

accordance with the elements, designs, specifications, foundations, and qualitative

burdens issued by the Environmental Affairs Authority in coordination with the

competent administrative bodies.” Article 23 of the law states, “Expansions or

renovations in existing facilities are subject to the same provisions set forth in Articles

19, 20, 21, and 22 of this law.”

4. Opposition to the company from the local community and stakeholders

There is no serious involvement of stakeholders in the management of the enterprise’s

environmental and social impacts. From the outset, the company’s performance has

been characterized by compulsion and coercion, which violates the requirements of

Performance Standard 1 to involve all parties affected by the enterprise, and that the

participation of affected communities constitutes the foundation of strong,

constructive relations and is a fundamental condition for the successful management

of environmental and social impacts.

Residents of Wadi al-Qamar reject the fifth line of the plant in their neighborhood

because it infringes on their right to health, to safety, and to life. It impacts their

resources and livelihoods by polluting the sea and nearby lakes. This is in violation of

the objectives of Performance Standard 1: the duty of business activities to respect

human rights and refrain from infringing the human rights of others.

Local residents have engaged in all manner of peaceful protest against the plant,

including protests, meetings with officials, petitions and complaints, the use of social

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media, and the production of documentary films.12 They have even conducted

researches and submitted alternative proposals. They have also turned to the courts,

filing more than one lawsuit against the company. These suits are currently pending

before Egyptian courts, in which reports from the State Commissioners Agency have

condemned company practices.

Area residents have formed a popular committee to represent and defend them and

speak on their behalf, the Popular Coordinating Committee to Defend the Residents of

Wadi al-Qamar. The committee has the support of family chiefs in the region, which

in this tribal area enjoy significant status, power, and quasi-legal authority.

Instead of cooperating with the committee, the company has fought it. Local residents

say that the company has set thugs against the committee leaders and filed police

complaints against them, accusing them of vandalism and violence, thereby exploiting

generally unstable circumstances and the company’s influential relationships in order

to “discipline and intimidate them.” Several locals added that the services offered to

the area by the company are limited to a particular segment of the community, in the

form of gifts such as pilgrimage trips for some religious political parties and other in-

kind benefits in exchange for a favorable position toward the company. They added

that other services offered by the company aim to gloss over and conceal the pollution

it causes, such as offers to paint home exteriors, especially those close to the plant.

Some residents rejected these offers because they believe it seeks to conceal the

accumulation of black dust on the house facades, as stated in one of the attached

videos.

5. Parliamentary opposition to the company’s performance

Opposition to the plant is longstanding. The problem with the pollution caused by the

plant was put before the People’s Assembly in 2007. The assembly referred the issue

to the environmental protection committee in the local popular council of the

Alexandria governorate for study. A committee of environmental and health experts

and executive officials was formed to consider the issue. The committee members

visited the area and issued their report on 23 July 2008.13 In it, they described the

12 Links for some of these films are present on attachment list, attachment no. 10

13 Attachment no.8

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company’s violations as severe: “Emissions from the company are causing severe

harm to the residents as well as nearby companies, their products, and their industrial

equipment. There is a severe danger to citizens’ health.” The report notes that the

committee learned that the company had not followed the recommendation of the

municipal council to stop using diesel and mazut. Nor had the plant regularly changed

the filter—in fact, the report continues: at times the company used no filters at all. In

the report (attached), the committee advised the governor to relocate the company

from its present location to an area far from residential neighborhoods, while stressing

the general need for compliance with the environmental protection law.14 But this

recommendation was disregarded by the executive bodies.

6. Opposition from and harm to nearby industries

Opposition to the pollution caused by the plant emissions has extended to other

industrial facilities in the area that existed prior to the establishment of the cement

plant, primarily Meks Saltworks. The largest saltworks in the Middle East, Meks was

established in the 18th century. It extracts salt from seawater by evaporation in large

open tanks covering an area of approximately 9,000 feddans (one feddan is 4200 sq

meters). The company employs some 1,000 workers.15

Big part of the salt tanks are located to the west of the cement plant, which puts them

in the path of the emissions coming from the plant’s main smokestack. As a result, the

salt is exposed to cement dust, leading Meks to file suit against the company. The

court appointed an expert to determine if the emissions were coming from the cement

plant and the impact of these emissions on the saltworks. The expert report issued on

2010, found that the salt in tanks and vats exposed to the smokestack were indeed

covered with gray cement dust, easily identifiable when compared to the whiteness of

the salt in the more distant tanks. Although harm was thus proven, the expert limited

the consequences of the cement dust on the salt to increased production costs, noting

that the saltworks was thus forced to break the crust and wash the salt, thereby losing

14

Report of the environmental protection committee on the residents of Wadi al-Qamar and the

emissions from the Alexandria Cement company, Alexandria governorate, local popular council,

session of 23 Jul. 2008. Attachment no.8 15

Gamil Mikhail Botros, consultant and environmental engineering expert, technical report,

case no. 238/2010/expedited, Alexandria Court of Expedited Matters, second circuit, filed by al-Meks

Saltworks against Alexandria Portland Cement. Attachment no. 4

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an estimated 5 percent of the salt produced.16 The expert did not address the

suitability and efficiency of washing the salt to prevent any harm to the health of

those who consumed the salt, sold by Meks to millions in and out of the area.

7. Environmental pollution

Article 34 of the Egyptian environmental law states, “The site on which the enterprise

is established must be appropriate for the facility’s activity in order to guarantee that

the acceptable limits of air pollution are not exceeded and that the total pollution

produced by a group of facilities in the same area remains within the permitted

limits.” The executive regulations define these permitted limits and burdens. Article

34 of the executive regulations states, “The site on which the enterprise is established

must be appropriate for the facility’s activity insofar as it concords with the area’s

zoning…In all cases, when determining the suitability of the site, there must be

consideration of its distance from urban areas in both the area of the enterprise and the

surrounding areas, the prevailing wind direction, and its natural capacity to absorb

pollutants.”

Performance Standard 3 seeks to avoid or minimize the negative impacts on human

health and keep environmental safety by avoiding or minimizing pollution resulting

from the project’s activities. Performance Standard 1 seeks to ensure that the

enterprise’s activities respect human rights and do not infringe the human rights of

others. The Alexandria cement plant breaches both of these standards. Local residents

complain of declining health, especially severe, chronic respiratory ailments and

asthmas that affect both adults and children. Several medical certificates and

prescriptions are attached that attest to their complaints17.

a. Dust and particulate emissions

The cement plant is located just 10 meters to the north of the residential area, putting

the latter in the wind path and exposing it to emissions and to dusts produced by

manufacturing processes such as grinding, packing, and transport. A report from an

expert with the Ministry of Justice, prepared in connection with case no.

16

Ibid. 17 Attachment no. 7

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238/2010/expedited/Alexandria, found that the plant produces some 4,750 tons of

cement every day with smokestack emissions coming in at 890,617 cu m per hour.

Calculating the average rate of dust emissions (120 mg/cu m) and considering dust

caught by filters, the expert estimated that on average the smokestack emits 70 kg of

dust per hour, or 1,700 kg per day and 570 tons every year. Residents inhale this dust,

it accumulates on their food, and it causes their children illnesses that undoubtedly

impact their right to health and life.

Performance Standard 3 also states that when the regulations of the host country differ

from those in the environmental and health safety guidelines, clients should comply

with the more stringent of the two. If less stringent standards or levels are appropriate

in light of specific project circumstances, the client must submit a full, detailed

justification to the IFC of any proposed alternatives, outlining the social and

environmental risks and impacts. This justification must demonstrate that the

alternative performance level is consistent with the general objectives of the standard.

The Egyptian environmental law permits dust emissions up to 200 mg/cu m for the

Titan plant, or four times the internationally accepted limits under the performance

standards. According to the aforementioned expert report,18 the plant produces 120

mg/cu m, or more than twice the limit under the standard. Although the performance

standard allows in excess of the more stringent limit if justified, we must question the

justifications accepted by the IFC to permit this level of emissions in a plant that is

situated just a stone’s throw from the heart of a residential neighborhood and abutting

the Mediterranean coast, lakes, and fisheries.

Although Egyptian emissions standards are less stringent than their European

counterparts, the cement plant has exceeded even these limits on several occasions

(reports establishing the infractions on year 2011 are attached)19. Moreover, the

environmental monitoring regime in Egypt measures emissions produced by the

smokestack; dust emitted at any other stage in production is not recorded or

discovered except through onsite inspections. Yet, local residents complain that

18 Attachment no.4

19 Attachment no.5

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inspections are irregular and only take place after a complaint is filed with the

competent bodies.

b. Dioxin and furan emissions

Studies conducted in some industrial areas in Egypt, like Helwan which have many

cement factories,20 have found massive levels of these elements in the environment. It

is only natural to feel apprehensive about the plant’s high emissions given this lax

environmental performance and the plant’s proximity to the residential area. This is

especially worrisome since dioxin and furan levels are not routinely recorded by the

National Network for Environmental Monitoring, and laboratories capable of

measuring these elements are rare and expensive. The plant’s intention to use coal

increases the risk of high concentrations of these substances.

c. Risks of coal use

Increasing the risk of pollution, the company will soon move toward coal use in the

plant. Attached is a letter from the company to the Egyptian Stock Exchange 2013

stating this intention.21 This act is expected to increase particulate emissions, as well

as nitrogen and sulfur gases, heavy metal emissions such as mercury and lead, and

dioxin and furan. Egyptian law prohibits the use of coal in residential areas. Article

42(b) of the executive regulations of the environment law states, “The use of coal is

prohibited in urban areas and near residential areas.”

d. Noise pollution

Given the plant’s close proximity to the residential area, the noise resulting from the

operation of equipment, trucks, and grinders causes severe noise pollution and

disturbs the peace of local residents.

e. Impact on the residents’ security and safety

Area residents say that the tremors produced by the operation of equipment,

machinery, and grinders has been forceful enough to cause cracks in and otherwise

20

Contamination of chicken eggs from Helwan in Egypt by dioxins, PCBs, and

hexachlorobenzene, extracted Jan. 2015. link

http://ipen.org/sites/default/files/documents/5egy_egypt_eggsreport-en.pdf. 21 Attachment no.6 probably 2013

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impact nearby buildings. On more than one occasion, external parts of several

buildings have collapsed due to these tremors, threatening residents’ security and

safety.

8. Company administration seeks to displace local residents

Performance Standard 5 is related to land acquisition and involuntary resettlement.

Thus far, there is no legal action that permits the resettlement of Wadi al-Qamar

residents, and they do not wish to relocate. Tens of thousands of people live in the

area, bound to it by immovable assets, livelihoods, jobs, and cultural affiliation. While

Performance Standard 5 dictates avoiding involuntary resettlement, representatives of

the company management are advocating precisely this. This is evidenced by the

attached statement,22 which is a transcript of an interview with the deputy executive

president of Titan, who is also the head of the cement division in the construction

materials chamber of the Federation of Egyptian Industries. The interview, published

in al-Ahram al-Iqtisadi on 5 November 2012, not only urges the resettlement of local

residents, but also attacks environmental protection and sustainability, describing

them as destructive. He is quoted in the interview as saying that the cement industry is

under severe attack, including attacks to force it to relocate its plants to the desert

interior on the grounds that it is environmentally polluting, which threatens and

impedes the industry.

9. The plant is moving toward coal use, exacerbating the greenhouse effect

Performance Standard 3 aims to limit greenhouse gas emissions and implement

feasible alternatives that rely on renewable energy sources or low-carbon energy.

Moreover, the World Bank has announced restrictions on financing projects that use

coal in order to limit greenhouse gases in the context of its commitment to sustainable

development and its response to climate change.

Alexandria Portland Cement intends to begin using coal as a cheap source of energy

instead of natural gas. The disclosure letter sent to the Egyptian Stock Exchange states

that the company has already made investments to begin operating with coal starting

in 2014, regretting that the project has been delayed because of resistance and

22 Attachment no.9

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postponements by the former environment minister. A supporter of the move to

renewable and clean energy sources and an opponent of coal energy, the former

minister urged cement plants to use solid waste as an alternative, in order to minimize

carbon emissions and help solve the problem of accumulated garbage in Egypt,. In

any case, cement companies prefer coal, and the cement lobby managed to obtain

government approval of coal use. In fact, it is believed that the coal lobby is behind

the dismissal of the former environment minister.

II. Titan’s non-compliance with Performance Standard 2 on labor and working

conditions

The introduction to the IFC’s Performance Standards on Environmental and Social

Sustainability,23 issued on 1 January 2012 by the World Bank Group, states that direct

investment is conditional on clients’ compliance with the performance standards for

managing environmental and social risks and impacts and promoting opportunities for

development. The document also states that together the eight performance standards

must be met by clients for the lifetime of the investment.

These standards include Performance Standard 2 on labor and working conditions,

which includes the right to strike. We will limit our discussion here to points related

to this standard in which we have confirmed evidence, noting that this does not imply

that the other standards are being met, nor does it minimize the importance of a

holistic application of all the standards. The requirements of Performance Standard 2

are guided in part by several international agreements and conventions.

The introduction to Performance Standard 2 states that it “recognizes that the pursuit

of economic growth through employment creation and income generation should be

accompanied by protection of the fundamental rights of workers. For any business,

the workforce is a valuable asset, and a sound worker-management relationship is a

key ingredient in the sustainability of a company. Failure to establish and foster a

23

IFC, Performance Standards on Environmental and Social Sustainability,

http://www.ifc.org/wps/wcm/connect/c8f524004a73daeca09afdf998895a12/IFC_Performance_Standar

ds.pdf?MOD=AJPERES.

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sound worker-management relationship can undermine worker commitment and

retention, and can jeopardize a project. Conversely, through a constructive worker-

management relationship, and by treating the workers fairly and providing them with

safe and healthy working conditions, clients may create tangible benefits, such as

enhancement of the efficiency and productivity of their operations.”

The objectives of this standard are:

1. To promote the fair treatment, non-discrimination, and equal opportunity of

workers.

2. To establish, maintain, and improve the worker-management relationship.

3. To promote compliance with national employment and labor laws.

4. To protect workers, including vulnerable categories of workers such as children,

migrant workers, workers engaged by third parties, and workers in the client’s supply

chain.

5. To promote safe and healthy working conditions, and the health of workers.

6. To avoid the use of forced labor.

We detail below the most significant violations by Alexandria Portland Cement of the

rights of workers as set forth in the requirements of this standard.

1. Company in breach of the IFC’s stated objectives for projects and contravenes

objective 4 of Performance Standard 2

The stated objective of IFC financing is to promote economic growth by creating jobs

and generating income. Objective 4 of the standard is protecting workers, particularly

vulnerable workers. Nevertheless, since it purchased the company, Titan has cut the

permanent labor force to one-eighth its size at the time of purchase, according to

estimates from labor leaders. This reduction of the labor force is not related to actual

labor needs, as evidenced by the fact that company supplements its labor needs by

regularly contracting temporary workers, obtained through a labor supply company.

Some of these contracted “temporary” workers have been with the company for 12

years.24 Since Titan does not provide this so called temporary workforce any of the

rights of its permanent labor force, including in wages, incentives, profit-sharing, or

24

Field interviews conducted by an EIPR researcher from 2012 to 2014. See also the

documentary film by the Center for Trade Union and Workers Services, “Workers without

Restrictions,” https://www.youtube.com/watch?v=8zycbsOiwVo.

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services, it is clear that Titan sought to increase its profits by cutting its permanent

labor force and exploiting temporary labor in its place, in a clear violation of objective

number 4.

2. Company contravenes objective 1 of Performance Standard 2 objectives

Although the first objective of Performance Standard 2 is “to promote the fair

treatment, non-discrimination, and equal opportunity of workers,” Titan willfully

discriminates against different categories of workers doing the same job depending on

whether they are company employees or hired by one of its labor supply companies.

Although the contract labor performs the same jobs as Titan employees, they do not

enjoy the same rights.

Titan also disregards note 4 to Performance Standard 2, which states, “Contractors

retained by, or acting on behalf of the client(s), are considered to be under direct

control of the client and not considered third parties for the purposes of this

Performance Standard.” The explicit meaning here is that labor supplied by

contractors must enjoy the same legal rights as other workers and that the client—in

this case, Titan—bears legal responsibility for these workers, even if they are supplied

by subcontractors. In practice, Titan’s disregard of this point allows it to shirk its

responsibility towards workers’ rights as set forth in the IFC standards by using labor

supplied by contractors.

3. Company contravenes objective 3 of Performance Standard 2

The introduction of the document on performance standards (paragraph 5) states, “In

addition to meeting the requirements under the Performance Standards, clients must

comply with applicable national law…” This is reiterated by objective 3 of the

standard. Nevertheless, we found that Titan has not complied with numerous Egyptian

laws, including Law 159/1981 (Article 41) on workers’ right to profit sharing, by

limiting this right exclusively to its formal employees and denying it to the contract

labor. It has also breached the labor law (Law 12/2003), particularly as concerns

collective bargaining and parity between workers doing the same job.

Article 79 of Law 12/2003 states, “If the employer commissions another to perform

one of or part of his activities in the same work area, the latter must treat his workers

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and the original employer’s workers as equals in all rights, and the latter shall share

joint liability with him in this.” Article 8 of the law states, “If there is more than one

employer, they are jointly liable for meeting the obligations arising from this law. The

person to whom the employer has ceded all or some of his activities is jointly liable

with him to meet all the obligations imposed by the provisions of this law.”

Article 16 of the law states, “The employer may announce job vacancies in various

media and commission a consulting office to consider the applications submitted, give

an opinion or recommendation, or aid him in selecting the best candidates for these

jobs. He may not employ workers through a commissioned party or a labor contractor.

The competent minister may license by decree associations, institutions, and trade

union organizations in relation to their members to establish offices for the

employment of the unemployed. In this case, these bodies must abide by the

provisions set forth in this section and the aforementioned decree.”

The company is in flagrant violation of paragraph 2 of Article 16 of the Egyptian

labor law, which explicitly states that workers may not be hired through labor

contractors or suppliers.

Moreover, in 2013, company management refused to negotiate with the contracted

labor on profit-sharing parity, family medical treatment, and other benefits on an

equal basis with permanent workers. The company told them it was not obliged to

negotiate with them and that they should instead negotiate with their employing

companies, although it is well known that labor contracting companies generally act

in a prejudicial manner with the employees they supply and use various tactics to

circumvent their legal duty to workers.

Titan management also refused to distribute profits to the company’s long-standing

workforce, as required by Law 159/1981, arguing that that they were temporary

workers employed by the labor supply company, not Titan itself, prompting the

workers to launch a sit-in followed by a strike. According to interviews with these

workers, some have been working for the company for long time, but have not been

made permanent employees in order to deny them shares in profits.25 This refusal is in

breach of Law 12/2003 as well as requirement 10 of Performance Standard 2, which

25

“Workers without Restrictions,” documentary film.

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states, “Where the client is a party to a collective bargaining agreement with a

workers’ organization, such agreement will be respected. Where such agreements do

not exist, or do not address working conditions and terms of employment, the client

will provide reasonable working conditions and terms of employment.”

This conduct is further in violation of requirement 25 of Performance Standard 2,

which states, “The client will establish policies and procedures for managing and

monitoring the performance of such third party employers in relation to the

requirements of this Performance Standard.” It also contravenes requirement 26 of the

standard, which states, “The client will ensure that contracted workers, covered in

paragraphs 24–25 of this Performance Standard, have access to a grievance

mechanism. In cases where the third party is not able to provide a grievance

mechanism the client will extend its own grievance mechanism to serve workers

engaged by the third party.” It additionally violates Guidance Note 2 on labor and

working conditions, which states (GN7), “Companies need to ensure that contractual

arrangements, including those involving multiple parties, are clear and establish who

is responsible for providing adequate labor and working conditions to workers,”. It

also violates GN10, which states, “…if the client controls the working conditions and

treatment of these workers [workers nominally engaged by third parties] in a manner

comparable to that for workers directly engaged by the client.”

It also contravenes international agreements. Article 1 of ILO Convention 95/1949 on

the protection of wages states, “In this Convention, the term wages means

remuneration or earnings, however designated or calculated…” Denying workers their

legal right to profits therefore constitutes a violation of IFC standards, Egyptian labor

law, and international treaties. Furthermore, it contravenes ILO Convention 100/1951

on equal remuneration for men and women workers for work of equal value. Article

1 of which states that “…the term remuneration incudes the ordinary, basic or

minimum wage or salary and any additional emoluments whatsoever payable directly

or indirectly, whether in cash or in kind, by the employer to the worker and arising out

of the worker’s employment.”

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4. Company contravenes objective 5 of Performance Standard 2

One of the objectives of Performance Standard 2 is “to promote safe and healthy

working conditions, and the health of workers.” This has not been realized, whether

due to the pollution caused by the company to all area residents, including workers,

most of whom live in the area, or the unhealthy work environment. This is also in

violation of requirement 23 of Performance Standard 2 on occupational health and

safety, elaborated in Guidance Note 2 on labor and working conditions.26

Requirement 23 states:

The client will provide a safe and healthy work environment, taking into

account inherent risks in its particular sector and specific classes of hazards in

the client’s work areas, including physical, chemical, biological, and

radiological hazards, and specific threats to women. The client will take steps

to prevent accidents, injury, and disease arising from, associated with, or

occurring in the course of work by minimizing, as far as reasonably

practicable, the causes of hazards. In a manner consistent with good

international industry practice, as reflected in various internationally

recognized sources including the World Bank Group Environmental, Health

and Safety Guidelines, the client will address areas that include the (i)

identification of potential hazards to workers, particularly those that may be

life-threatening; (ii) provision of preventive and protective measures,

including modification, substitution, or elimination of hazardous conditions or

substances; (iii) training of workers; (iv) documentation and reporting of

occupational accidents, diseases, and incidents; and (v) emergency prevention,

preparedness, and response arrangements.

5. Regarding severance, workers who have taken early retirement

Since 2003 these workers have still not received the benefits to which they are entitled

from the fellowship fund, the workers’ shares in the shareholders’ federation, and

numerous other benefits. The workers have also filed a complaint with the Greek

embassy in Alexandria regarding the issue.

26

http://www.ifc.org/wps/wcm/connect/e280ef804a0256609709ffd1a5d13d27/GN_English_2012_Full-

Document.pdf?MOD=AJPERES>.

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6. Company in violation of international UN and ILO agreements by breaking

strikes and peaceful sit-ins with force

The requirements of Performance Standard 2 state that the standards were guided in

part by international agreements and conventions issued by the ILO and UN, and

workers have the right to strike to realize their demands, as set forth in numerous

conventions and treaties, among them the International Covenant on Economic,

Social, and Cultural Rights. Article 8 of that covenant states, “The State Parties to the

present Covenant undertake to ensure: …the right to strike, provided that it is

exercised in conformity with the laws of the particular country.” Nevertheless,

company management has denied workers the right to strike and stage peaceful sit-

ins, calling in the police to disperse strikes and assemblies by force.

The aftermath of the sit-in by Titan workers in February 2013, the usurpation of their

rights, the dispersal of the sit-in with police dogs, and the arrests are clear evidence

that Titan infringes not only basic standards adopted by the IFC and the World Bank

Group, but also a long list of fundamental human rights and liberties set forth in

international conventions.27

The 425 temporary workers with three companies (Yathrib, Anwarco and IBS)

supplying contract labor to Titan Cement launched a sit-in at the company’s head

office on Thursday, 14 February 2013, demanding the same employment terms and

benefits as workers employed directly by Titan. The latter earn five times as much as

the contract workers and are given shares in profits that are denied the contract labor.

Titan employees also have the right to medical treatment for their families, similarly

denied to the temporary workers, although some of them have worked at Titan for

more than 12 years.

The workers launched the sit-in, followed by a strike by packing workers, after having

exhausted all bargaining options. The independent union for the company workers

had asked to negotiate their demands with Titan Cement; the last meeting of 24

November 2012 ended with company management rejecting the workers’ demands,

27

See the EIPR press statement on the workers’ sit-in and its dispersal at

http://www.eipr.org/pressrelease/2013/02/19/1634.

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since, according to Titan, the contracted workers are not employees and should

instead take their demands to the labor supply companies. This argument is

unacceptable since the demands of the contract workers are related to their denial of

benefits provided by the company to the permanent workers; at no time was it

mentioned that Titan gave the value of these benefits to the labor supply companies,

for example. The same issue appeared again when Titan disbursed profits to

permanent workers but refused to give them to contract workers.

It should be noted that despite their grievances, the contract workers showed due

regard for the interest of the work and sought not to harm the company, deciding that

some workers should continue to operate the kiln, since a suspension of work in the

kiln would entail massive losses for the company, and restarting the kiln is extremely

costly.

It is established that the worker’s sit-in inside the company was peaceful. When

company management claimed that the workers were detaining bosses, the police

chief for western Alexandria, Gen. Ahmed al-Tarabulsi, came to the company and

asked the managers present if anyone had forcibly detained them. They responded in

the negative. This is supported by video footage of the incident in the workers’

possession.

The protesting workers reported that at dawn on Saturday, 17 February 2013, Central

Security Forces and anti-riot forces launched a brutal assault on the company offices

where the workers were holding their peaceful sit-in. The number of CSF troops was

estimated in the hundreds; according to the workers, they came in 25 trucks armed

with weapons and police dogs. The police forces set the dogs on the workers, beat and

dragged them, and threw chairs at them, injuring some workers seriously. One worker

told EIPR researchers that some workers threw themselves from windows trying to

escape the dogs. The workers also said that security forces arbitrarily arrested at least

80 workers during the dispersal; 28 of them were brought before the prosecution,

while the rest were released. In report no. 1477/2013/al-Dekheila administrative, the

prosecution charged them with unlawful detention of 15 administrative personnel,

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assault of security forces, and the destruction of company property, all the charges

spurious.28

As a result of this, 425 workers were fired (92 were reinstated and are currently

employed by Anwarco Labor Supply). Twenty-eight workers were brought before the

prosecution, which released ten of them on 17 February 2014, but renewed the

detention of the remaining 18 several times. They were finally released on bail of

LE1,000 each after having spent 49 days in lockup. The case is still pending, hovering

over the workers like a sword at their necks. At the time of the incident, the al-Amiri

Hospital and the prosecution refused to document on record the injuries sustained by

the workers during the storming of the factory and the dispersal of the sit-in.

The workers tried on more than one occasion to protest in front of the company in

Wadi al-Qamar, but company management deployed individuals to use violence

thugs) if the workers approached the facility, according to worker statements. One

worker told the EIPR researcher in Alexandria that they are being pressured to

abandon their claims, with an attorney with the company allegedly using his

connections with a relative at State Security.

Titan’s workforce of 320 (227 permanent workers and 93 workers contracted through

Anwarco) staged another sit-in from Tuesday, 18 March to Thursday, 20 March 2014.

The workers then escalated with a strike by packing workers next to the sit-in, from

20 to 24 March. The workers launched the action after management refused to give

them their share of profits (10 percent), which should have been disbursed in February

2014. Prior to the action, the workers, through their union, had urged management to

release the profit shares to no avail, until on Monday, 17 March, the company

administration posted a notice that it would not disburse the profit shares, prompting

the sit-in and later strike. The workers later suspended the action after management

promised to accede to their demands. Workers later received 30 percent of the profit

shares to which they were entitled and were waiting for management to release the

rest of their shares in November 2014 as promised.

28

See the al-Rassd story on workers’ protesting the arrest of their colleagues, 18 Mar. 2013,

https://www.youtube.com/watch?v=JYAekY3iOyk.

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III. Requests

1. In general

The procedures by which projects are chosen for financing by IFC should be reviewed

to ensure that projects chosen to be funded are not those that do not comply with the

standards on environmental and social sustainability. All parties financed by the IFC,

including Alexandria Portland Cement, should be effectively monitored to ensure

actual, compliance with these standards, and proper compliance should be a condition

of continued financing. An effective instrument should also be established to ensure

genuine participation in monitoring by the local community and civic associations.

2. Regarding workers

a. Require Titan to change its offending practices, such as discriminatory treatment

between permanent and contract labor in profit shares, wages, and incentives; require

it to open channels for collective bargaining and dialogue between workers and

management; and require it to comply with the labor law’s prohibition on

employment through labor supply companies.

b. Require Titan to reform and pay restitution for the harm arising from its failure to

comply with these standards and agreements, most importantly by reinstating all fired

workers and compensating them for material damages incurred as a result of their

dismissal. They should be paid accumulated wages since the time of dismissal as well

as the difference in wages resulting from discrimination between permanent workers

and contract workers.

c. Implement occupational health and safety standards set forth in the standards and

international agreements, especially the provisions of requirement 23 of Performance

Standard 2 on occupational health and safety, including (i) identification of potential

hazards to workers, particularly those that may be life-threatening; (ii) provision of

preventive and protective measures, including modification, substitution, or

elimination of hazardous conditions or substances; (iii) training of workers; (iv)

documentation and reporting of occupational accidents, diseases, and incidents; and

(v) emergency prevention, preparedness, and response arrangements.

d. Complete actions taken to settle pension claims for those who have taken early

retirement since 2003 and disburse all benefits to which they are entitled from the

fellowship fund and company shares.

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e. Comply with all national laws that company management has not complied with,

such as the labor law (Law 12/2003), the investment law, and the social insurance

law.

3. Regarding environmental protection

a. Relocate the plant from the residential neighborhood where it is operating

unlawfully and its emissions harm citizens’ health and cause material losses for local

residents.

b. Remove the metal wall unlawfully erected on the public road.

c. Do not use coal as fuel as planned by the company given that this violates Egyptian

law and given that coal use is likely to place an additional, severe burden on the

environment.

d. Treat the environment affected by pollutants and restore it to its previous state.

e. Compensate local residents for the health and economic damages incurred as a

result of the deterioration of their health, loss of livelihood, and erosion in the value of

their property.

IV. Attachments

1-Report of the State Commissioners Agency in case no. 11632/64JY

2- Report of the State Commissioners Agency in case no. 13827/66JY

3- Plate no. 504.000/936.800, Alexandria, Egyptian Survey Authority, surveyed 1944,

reviewed 1973

4- Technical report in case no. 238/2010, Alexandria Court of Expedited Matters

5- Environmental infraction reports

6- Letter from Alexandria Portland Cement to the director of disclosure at the

Egyptian Stock Exchange

7- Collection of medical reports for local residents

8- Report of the environmental protection committee on the residents of Wadi al-

Qamar and the emissions from the Alexandria Cement, Alexandria governorate, local

popular council, session of 23 July 2008

9- Copy of an interview published in al-Ahram al-Iqtisadi with Medhat Estafanos on

5 November 2010

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10- Documentary films:

https://www.youtube.com/watch?v=ipewxMsSua0;

https://www.youtube.com/watch?v=cOgWEL5GBP0

11- Copy of signatures to the complaint from residents and workers and Civil society

organizations.

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