Lara Hamidi
Principal researcher at ImpACT International

The relationship between financial development and social responsibility has always been one of great contestation in the world of corporate greed. Often social responsibilities, such as employee’s rights, community development and environmental protection are commonly taken as second to the priorities for businesses seeking financial growth at the cost of other factors. 

The Middle East and North Africa (MENA) region is an environmentally extremely diverse region that includes some of the world largest natural reserves of fossil fuel, including petroleum, coal, oil shales, heavy oils and natural gas. With a region so highly dependent on such natural resources, it is essential that businesses in the region work towards protecting the environment and communities that they represent. 

The MENA region is significantly affected by the outcomes of climate change beause of its naturally scarce water resources, and with its wide span of coastal areas, the threat of rising sea levels is undoubtedly a great concern.  A report by Eco Experts on global levels of pollution for air, light and noise, ranks the most and least toxic cities in the world. Cairo tops the worst ten list according to their criteria. In particular, the authors note that scarcity of land and water are the greatest problems challenging society, not taking into account increasing levels of air pollution, marine degradation, desertification and climate change.  

Egypt in crisis - Arid climates and water insecurity 

The MENA region suffers from semi-arid to arid climates where vast lands are exposed to little or no rain, resulting in barren conditions hampering economic development. Egypt is one of the leading examples of water scarcity that has affected the state and businesses significantly.

Over recent years, Egypt’s water crisis has been getting worse, with negligent irrigation methods, misuse of natural water resources and uneven water distribution, the future for development looks distressing. With heavy reliance on the River Nile as the main source of renewable freshwater, the 6,650 km river is the main pillar for the Egyptian agricultural and industrial sector, whilst additionally being the main source of drinking water for the country.  

According to the World Resources Institute, Egypt has been ranked as the 43rd country to be at risk of water scarcity with a ranking of 3.07 and its risk level labelled high. With this, Egypt has faced an annual water deficit of around 7 billion cubic metres and has approximately as little as 20 cubic meters of international renewable freshwater resources per person. 

Water security is one of the two major national security priorities that are in constant review, however, it should not only be addressed as a security crisis; rather a crisis that affects all sectors of Egypt’s society, specifically affecting the quality of life of civilians and businesses. 

With time, the climate will get drier and heat waves will hit more regularly in the region, therefore the Egyptian economy and population should not sit in silence. The state and businesses across the country must recognise the importance of water conservation in their daily production methods, hence looking after the scarce natural water reserves they have access to. 

Air pollution 

Apart from the concerning levels of water insecurity, Egypt, specifically, the city of Cairo is facing increasing air pollution through the accumulation of factories and industries coupled with transport emissions. The main sources of pollution in Egypt come from industry and open burning of organic solid material. The country's location as a desert region results in increased transmission of dust and sand particles blowing into the neighbouring lands.

According to the world pollution index as of the middle of 2021, Cairo has been ranked as the 13th most polluted city in the world, with a pollution index of 91.45. With the air quality being recorded to vary from between 10 to 100 times more polluted than the worldwide acceptable rate. Thus, it should be mandatory that businesses and the state focus on monitoring and eliminating the effects of the heavy toxic contaminants in the capital city. 

Air quality in Cairo varies from between 10 to 100 times more polluted than the worldwide acceptable rate.

One of the main reasons for the recent rise to such levels of air pollution we are seeing in 2021, is possibly the large cement and industrial industries that hold very little regard for the impact of their production methods. With such industrial negligence, industries are key actors in destroying Egypt’s ecological system without remorse. 

In support of this, previous Governor of Egypt’s Baheira region and the first female to hold such a position, Nadia Abdo, emphasised the urgency of the environmental situation, by stating that all factories polluting the environment at a governorate level must vow to take strict measures, or face fines and immediate repercussions.

Ultimately, the governor highlighted the four main factories in the Baheira region that have been the main cause of air pollution and source of danger to human health. All four of these main pollutant factories are located in the industrial city of Badr, North East of the Cairo city governorate, home to 129 factories and a further 350 factories under planned construction. In this city, there are 3 major polluting brick factories coupled with an “ice cream” factory in the village of Umm Saber.

Environmental impact of cement factories 

In Egypt, one of the biggest contributors to environmental degradation lies with the cement industry, which produces alarming rates of cement glut with each production batch. Over the past three years, the Egyptian cement production capacity rose from an annual 85 million to 87 million tonnes. This major industry accounts for 10% of the Egyptian manufacturing GDP, making up to 1% of the Egyptian GDP. 

In May, in an attempt to contain  the environmental impact of this industrial sector, the government proposed that cement factories must cut their production output by 10% to make up for the cement glut. 

The solution to improving production standards in the industry is, as at the development of the sector in 1998, is to persuade the private sector to invest. The Government must deal with the private cement companies and the state-owned companies. This will not be simple as, of 2019, there were 19 operating cement companies with 42 lines of production across the country, 18 in the private sector, one by the Egyptian state and 52% owned by foreign investors.  It is essential that the proposed production and emission criteria are uniform, transparent and applicable to all the plant in the country. 

On March 21, 2018, a final court ruling by the Dekheila Appellate Misdemeanor Court found that the Alexandria Portland Cement factory, owned by Titan Multinational Corporation, had been found guilty of causing environmental pollution by violating the right to health of the neighbouring community. The impact of cement production was emphasised by the residents of Wadi al-Qamar, in western Alexandria who accused the Alexandria Portland Cement factory of causing grave harm to their health as a result of their emissions. 

The results of such heavy production could be seen on the rooftop of homes where the accumulation of cement dust can be seen. Subsequently, through a court case, the cement factory was charged for failure to take measures to prevent atmospheric emissions., and failing to take appropriate measures to the disposal of hazardous waste. 

It is commonly difficult to provide physical evidence of the environmental violations caused by cement factories; companies such as Titan typically submit legal documents that demonstrate their compliance with the laws on pollution and water use standards. Yet, these documents often contradict the evidence and experiences experienced by the neighbouring community. 

Impact on economic development 

In Egypt’s capital , Cairo, the annual economic cost alone of the air pollution produced is estimated to account for 1.4% of Egypt’s GDP. Ultimately, it is evident that the impact of climate change and environmental degradation is extremely detrimental to Egypt’s economic development. 

Egypt’s methods of irrigation have proven insufficient as the country only receives as little as 80 mm of rainfall a year, with the country having only 6% arable land for the agricultural economy. Furthermore, the country's methods of sourcing water primarily from the Aswan High Dam has proven inefficient in its attempt to ration the country's water supply. Coupled with this, the country loses 3 billion cubic meters of water loss from the evaporation of the Nile River water supply.

Within the near future, if the country's water supply continues to decrease at this alarming rate, the state will continue to lose  arable land available for  agriculture and water for industry. Furthermore, the agricultural sector is the largest employer of youth with a decrease in the ability to produce,  large agricultural  businesses will be forced to close resulting in a significant increase in unemployment.. 

Egypt Vision 2030

Egypt Vision 2030, launched in 2016 stands as a national plan presented under President Abdel-Fattah Al-Sisi. This vision has eight main agendas representing separate goals to be met by 2030. This vision is a step in the right direction for Egypt’s reform policies. Yet, with a population of 104,365,057 million and an annual growth rate of approximately 2%, solutions to environmental decay and human development must be far more prominent. This state-initiated agenda must be monitored with great care and managed carefully to allow the country to enjoy the fruits of its long-term success.

One of the goals addresses the environment, aiming to address issues caused by natural or man-made disasters; and, to encourage innovation and increase know-how that will enable businesses to prosper through environmental hardships.  It aims to identfy the main causes of the environmental risks facing Egypt.  The ultimate goal of this project is to reduce air pollution by 50% by the year 2030. 

The following project reassures us that Egypt is taking the correct steps to transition to an environmentally friendly economy built from more sustainable, inclusive and resilient industries. Yet, for this to work businesses must all be on board with the broader picture, and to ensure that the lives of all Egyptians are taken into consideration. 

Greater Cairo Pollution Management and Climate Change Project 

The urgency of the environmental situation in Egypt, specifically Cairo, was reinforced at the end of 2020 with a loan of $200 million by The World Bank towards the reduction of air pollution in Greater Cairo, through reduction of industrial emissions and to address issues arising from climate change. 

This project aims to include all sectors of the Egyptian economy, both state owned and private sector to reach defined goals by the closing date of December 31st, 2026. This project works hand in hand with Egypt’s Sustainable Development Strategy entitled Egypt Vision 2030. 

According to the World Bank The Greater Cairo Pollution Management and Climate Change Project aims to:

1. Modernise the country's air quality management system whilst strengthening the population of Greater Cairo’s ability to adapt to high pollution disasters or events, all of which would be caused as an effect of high climate temperatures and increased levels of pollution emissions. 

2. Implement activities for the communities to undergo behavioural change and service providers to ensure citizens and businesses engage actively in the aims and strategies of the project. 

3. Contribute to the reduction of vehicle emissions by supporting the increased use of electronic buses and other industrial services under the public sector. In this light, the state will assess the technical and financial ability to engage in such an aim. 

4.Support the solid waste management methods in Great Cairo, including a major project to construct an integrated waste management facility at the 10th of Ramadan City, following the closure and reestablishing of the Abou-Zaabal dumpsite and the increased regulatory framework for waste management in the city.

Recommendations 

In the coming years, climate change and its environmental implications will have detrimental effects on businesses across the globe, yet many companies and states have not yet addressed the issues with the degree of urgency it requires. 

Overarchingly, it is essential for the Egyptian economy and the development of its human capital that major initiatives such as Egypt Vision 2030 and the Greater Cairo Pollution Management project are seen through, leading to a cleaner Egypt, higher productivity, increased use of human capital and economic prosperity. 

For this reason, the following suggestions should assist companies, and the state, in playing their respective roles in their implementation.

Businesses should:

1.Choose to work with suppliers who engage in sustainable practices

Businesses will always have a wide selection of suppliers across the globe with whom they may choose to work. However, there are issue that lie within those businesses in the supply chain that may have poor environmental and labour practices.

Businesses should engage in extensive research on the policies of their chosen suppliers to mitigate the effects of their production practices. The suppliers should have a good record of environmental practice and demonstrate their willingness to improve their environmental policies.

2. Ask their suppliers to adopt more sustainable practices or, in turn, change to more sustainable and environmentally-friendly suppliers.

3. Use green energy: renewable energy varieties such as solar, wind, and hydroelectric power can reduce your office’s carbon footprint.

4. Conduct regular self-assessment to find out how well their business prevents pollution in their operations, to ensure over time, an eco-friendly performance. Give awards to employees who reduce emissions in their shifts.

5. Identify raw materials that have the potential to become environmentally toxic and where possible replace them with cleaner, non-toxic raw materials.

6. Use modern technologies that provide industrial factories and power plants with cleaner options for filtering emissions. Wet scrubbers clean particulates and can, with catalysts, remove certain chemical contaminants.

In addition to the company structures suggested there should be effective monitoring to ensure the levels of contaminants in the environment.

Back the constitutional provisions on pollution by law – with the regulatory and authoritative bodies to enforce 

7. Hire a professional waste management business that is competent and qualified in the sector 

Businesses should conduct regular self-assessment to find out how well their business prevents pollution in their operations

8. Educate staff and the business administration on the fundamentals of environmental protection to ensure that the policies implemented are understood and followed by all members of staff.

In this sense, staff must have an understanding of the composition of the dust and pollutants, their relationship to the production process. Ultimately, this understanding will contribute to broader understanding of the primary sources of pollution. 

Through this, staff members, businesses and the wider community will feel a sense of inclusivity and responsibility. 

10. Implement ethical regulations and legislation that will support the health and safety of their employees, thus enabling them to work in a positive and environmentally beneficial manner.

11. Ensure that the most important regulations and policies of environmental monitoring are accessible by all businesses, foreign investors and state industries. These can come in the shape of community and business guidelines which are intended to enable a safe working environment.

12. Follow state regulations on industrial production and ensure that they comply with international health and safety standards.

13. Implement improved electrostatic precipitators. These are most commonly used in the cement plants in Egypt to filter the dust from atmospheric. 

14. Implement real-time monitoring of dust emissions.  As dust is the main pollutant in cement factories in Egypt, real-time monitoring should ensure that all the plants of the cement companies are constantly regulated and updated. 
 

Report summary 

• The United Nations estimated that by 2025 Egypt could run out of water.
• Egypt has been facing an annual water deficit of around 7 billion cubic metres, with only 20 cubic metres of internal renewable freshwater per person remaining available.
• The government's goal for the ending of this project is to reduce air pollution by 50% by the year 2030. 
• According to the world pollution index as of mid 2021, Cairo has been ranked as the 13th most polluted city in the world, with a pollution index of 91.45.
• Seeing as 35% of the country's underground water leaks, Egypt’s irrigation methods are heavily wasting the country's natural water resources.
• 98.4 million Egyptians are currently living under the water poverty line by an alarming rate of 50%, which is below the internationally acceptable line of 1,000 m3.
• According to the world bank, 19,200 people died prematurely and over 3 billion days were lived with illness in Egypt in 2017 as a result of ambient PM2.5 air pollution in Greater Cairo, and inadequate water, sanitation, and hygiene in all of Egypt. The estimated cost of these health effects was equivalent to 2.5% of Egypt’s GDP in 2016/17.
• The cost of particulate matter air pollution produced from factories is the highest in Greater Cairo, amounting to 47 billion Egyptian Lera (LE), equivalent to 1.35% of GDP.
• The cost of unsanitary drinking water and hygiene nationwide is LE 39 billion, equivalent to 1.15%.
• The population is predicted to reach 110 million by 2025.