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Wadi Al Qamar near Alexandria, Egypt. Photo: © http://bit.ly/2aHaT3J
In April 2015, the Compliance Advisor/Ombudsman – the International Finance Corporation (IFC)’s independent accountability mechanism – received a complaint from Egyptians living in Wadi al-Qamar, concerning the IFC-financed Titan cement plant and its incompatibility with IFC’s environmental and social requirements, including its violation of Egyptian national licensing and profit-sharing requirements and its failure to disclose an Environmental Impact Assessment. Unable to establish an agreement between the disputing parties, the CAO’s dispute resolution team transferred the case to CAO’s compliance function in May 2016.
In order for CAO to properly assess whether a full compliance investigation is warranted, it first conducts a compliance appraisal. According to CAO, “the purpose of compliance appraisal is to ensure that compliance investigations are initiated only for those projects that raise substantial concerns regarding environmental and/or social outcomes.” While conducting the appraisal, CAO reaches out to the IFC team and other stakeholders to understand which criteria the IFC used while investing in the project. After CAO concludes the compliance appraisal, it then decides whether to close the case or commence a compliance investigation.
CAO released its compliance appraisal report in July 2016, finding that the Titan Cement case does indeed raise significant concerns as to whether IFC complied with its environmental and social standards in this investment. Thus, a full investigation will be conducted by the CAO to determine whether IFC was compliant with its policies regarding labor and working conditions, and environmental protection.
In the upcoming months, BIC will continue to follow the compliance investigation process regarding this project.
For more information regarding the status of the Titan Cement CAO case, see the CAO’s webpage on this case
http://www.cao-ombudsman.org/cases/case_detail.aspx?id=234
To read TITAN Cement Egypt’s response to the CAO’s assessment process, and the Egyptian Initiative for Personal Rights’ rejoinder, see the Business and Human Rights Resource Center page on Titan Cement
https://business-humanrights.org/en/titan-cement-in-egypt-environmental-and-labour-concerns#c139397
For more information and background on this project, see BIC’s webpage on the Titan Cement project