Sustainable business isn’t just good for the world — cleaner production technologies mean smarter, more profitable business, as Egyptian industry is slowly discovering
By Fatima El-Saadani
Does this sound at all familiar? Can you imagine its application in Egypt? “The continuous application of an integrated preventative strategy to processes and products to increase efficiency, prevent the pollution of air, water and land, reduce wastes at the source and minimize risk to humans and the environment.” That’s the United Nations’ definition of cleaner production (CP), and it is one of the main concerns of the majority of the world’s population today, from the radical environmentalist to the man on the street.
Global warming is not a new phenomenon that we happened upon recently — it has been on tree-huggers’ agendas for years, but its impact is starting to hit closer to home.
Developed economies have been enforcing environmental-quality standards for years now, and as their companies have found it increasingly expensive to comply with the regulations, many have moved their operations to countries where the standards are not that high — countries like Egypt.
There’s no denying that Egypt has a pollution problem, but few are aware of the ongoing efforts to clean the country’s air. The Environmental Compliance Office (ECO) was created under the authority of the Federation of Egyptian Industries (FEI) and operates in association with the Egyptian Environmental Affairs Authority (EEAA)’s Environmental Sector Program (ESP).
The ECO’s mandate has been to help FEI members implement cleaner production technologies.
“In Egypt there are more than 23 donor agencies and each one has its own area to assess,” says Ahmed Kamal, ECO’s acting project manager. “ECO assesses small and medium enterprises [SMEs] that employ anywhere between 15 and 500 people. The larger factories are handled by other agencies, as are the micro-enterprises that employ 2–3 people.”
Currently, the ECO targets only five sectors — chemicals, metal finishing, metallurgy, food and textiles — but aims to expand its mandate to encompass other sectors.
The ECO offers environmental impact assessments, an assessment of the facilities and systems for cleaner production, and implements the best available technologies at factories in its focus sectors.
Initially, ECO had received a grant from the Danish International Development Assistance (DANIDA), as well as other international donor agencies, which have extended funds worth $11.9 million to support initiatives abating pollution, promoting safe working conditions and ensuring compliance with environmental legislation.
With sustainability of the ECO being one of the main concerns, Kamal explains that the FEI opted to better utilize the donations by employing them in a revolving fund.
“ECO [does] the technical part of the [assessment in partnership] with the National Bank of Egypt (NBE) and EEAA/ESP,” he explains. “We study the factory technically and we give the credit-worthiness study to the NBE [which] makes sure that we get the money back. It’s usually paid back over five years with a one year grace period.”
Kamal is proud of the idea of a revolving fund that promises to serve more than DANIDA’s initial grant would have covered. “We would have only been able to use the grant for 30 or so factories,” he says. “But having a revolving fund allows us to use it for 100 or 150, or whatever number of enterprises we can serve.”
The loan is paid back at zero interest with a 2.5% fee going to the NBE in return for its administrative role in the fund. Loans average LE 3 million per enterprise. This means that factory owners taking out such a loan to save the environment would pay LE 3.075 million back in about five years. It’s a hefty investment outlay for some SMEs and it’s not easy to convince them of the benefits.
“We can show them the long-term economic benefit for them and the overall environment of investing in cleaner production technologies, training their people and bringing their factory up to standard, but we can’t force anyone to take the loan,” Kamal says.
For some factory owners, the investment is not worth strapping themselves for cash for the five years it takes to pay back the loan, and they’re happy to continue production using their 1970s-era production lines, especially since environmental consciousness is not too strong in Egypt.
“Whether it’s a loan or a soft loan, it’s still money the factory has to pay,” Kamal concurs. “We try to explain and show the factory owners the economic benefits as well as environmental benefits [of applying cleaner production technologies], because environmental benefits on their own are not enough of an incentive.”
Besides the noble cause of saving the ozone layer, the ECO’s application of CP technologies has helped raise efficiency, reduced energy-consumption levels and helped its clients to attain higher profits. ECO statistics show that annual savings achieved by around 45 enterprises in 2005 due to the application of CP technologies reached a combined total of LE 35 million. Should the ECO be able to serve all 39,000 members of the FEI, the savings could be in excess of LE 30 billion.
According to ECO statistics, Egypt’s emissions of 93.7 million tons of carbon dioxide in 1998 cost the economy $7.5 billion (LE 42.77 billion). The pollution increased over the years, with carbon dioxide emissions reaching 118.3 million tons in 2003, costing the country $9.5 billion (LE 54.18 billion).
The energy sector has been the biggest culprit, releasing 39% of total carbon dioxide emissions (46 million tons), with the industrial sector releasing 26% (30.7 million tons) and transportation with 6.24% (7.3 million tons).
In addition to its current operations, the ECO has considered also offering consulting services outside Egypt.
“We haven’t started yet, but we aim to become a regional consultant,” Kamal says ambitiously. “The idea is that most of the consulting firms are international, and also have offices in Arab countries. To get a Danish consultant, for example, to go to Jordan or Algeria costs a lot and they are not from the culture.”
The ECO could help Egypt’s neighbors cut the cost of becoming environmentally friendly by taking on the bulk of the consultancy work and still bring in European experts to assess the situation at a lower cost.
“We [would] still bring the European experts, but instead of bringing a Danish or German expert for 50 days, they can be brought over for 10–15 days and ECO can do the rest of the consultancy.” The idea has yet to take off, as it is still on the negotiation table with Europe-based consultancy firms. Although the ECO offers its services to FEI member companies in Egypt for free, its regional consultancy region would be done for a fee.
ECO provides not only technology to FEI members who opt to take out the loan to improve their environmental standards, but also provides a training program for factory workers and owners alike using Egyptian trainers from specialized outsourced entities.
“Under ECO’s umbrella, we have over 42 consulting firms specialized in each branch of environmental consulting; many in universities like Cairo, Helwan and Alexandria universities and the National Research Center. We also contract private consulting firms,” says Kamal, explaining the ECO’s direction towards dividing labor to ensure efficient capacity building.
Training includes awareness-raising sessions for environmental issues and the importance of the implementation of an environmental management system to train staff to operate alternative production lines, OHS awareness-raising sessions and education on energy efficiency.
While they’re training factory workers on how to operate a cleaner production line, the ECO is also training women on their rights and duties, to encourage fair treatment and enhance job opportunities by developing their skills. Children are also protected by the ECO; a factory requesting ECO investment support will have to abide by the office’s requirement that should the factory employ children, they be provided with suitable jobs, avoiding strenuous or dangerous work.
With efforts like this underway, how much longer will it be before Egyptian manufacturers are taking their own initiative towards applying environmentally friendly production processes? It can’t be measured accurately since ECO and other environment-saving initiatives have only been underway for a couple of years. This much is clear: It will be years before we see — and breathe — real change. bt
posted
I had read short references to a program like this in other articles without the journalist really elaborating.
its nice how one journalist took the time to find the details of this project and report to us!
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