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Egypt: Forced to allow coal

December 11, 2014 by   ·   No comments

In the last year, in Egypt the cement industry has orchestrated a very strong push to switch their factories from natural gas to coal.

In February 2014 during a public lecture Egypt’s environment minister jokingly complained about the lobbying efforts the industry applied on her, and how she continually has rebuff their arguments.  Despite her opposition in March 2014, the minister of investment and the prime minister announced that they would allow the switch to coal. The minister of environment never complied to this decision and was removed from her post in June 2014.

The Egyptian Center for Economic and Social Rights, assisted by Habi’s lawyers accordingly went to the State Council to dispute this decision, as only the minister of Environment has the authority to take decisions that pertain to the environmental issues.  This was a high profile case and on the day of the judgement the judge stepped down, expressing his “unease and discomforture”.  During this case we were confronted with other complications, in court the government announced that no decision was ever taken and no official announcement was published despite wide media coverage of this decision.

To help the environmental agency put pressure on polluting companies and the judiciaryHabi tries to monitor and follow up on the complaints the environmental agency registers and files.  As such we traced official reports that registered how four cement companies had started importing coal and altered their production process without the necessary licenses (which is grave, because after fracturing the coal it has to be washed and this produces a lot of untreated water) long before a decision was taken.

The coal industry and those who helped them have thus able to both undermine the power of the environmental minister, the State Council and the government’s environmental framework as a whole.

We’ve seen a similar pattern, political pressure is exerted and when this doesn’t succeed they undermine the legal system, in January 2012 when it emerged that genetically modified seeds were imported into the country after months of pressure to allow this.  The main company behind this lobby, which also owns one of Egypt’s main newspapers, is the same in both cases.

For us, the undermining of the legal and executive system might be even more severe than their intent to import coal and can affect Egypt on the long term, as now a similar push is emerging to switch Egypt’s power plants to coal.

This is not only a domestic matter.  Egypt has no history of using or extracting coal for these industries, and multinationals have acquired most of Egypt’s cement market in recent years.On a global scale there’s a strong lobby for coal and the EU is currently pushing the OECD to arrange additional export support to first world countries’  coal equipment manufacturers to allow them to search for new markets, such as Egypt.

All these factors add up and increased pressure on Egypt to allow the import.  On March 20th 2014,  the Italian Embassy announced a government grant of $1.3billion for “energy and infrastructure projects” in Egypt. Although it does not explicitly state an intent to fund coal, it is likely that it will be used for this, especially as Italcementi – a major Italian cement business – reported that Egypt was its largest profit earner in 2009.  Similarly the European Bank for Reconstruction and Development (EBRD) indicated since its December 2013 deliberations with Egypt’s Minister of Industry  that it intends to fund the cement industry’s gas to coal to switch in the form of loans, despite civil society resistance.  This support raises questions about the international promotion of Egypt’s switch to Coal.

Habi continues to work on this case. The State Council case has been referred to a panel of judges,  similarlyHabi is taking legal steps against two of the four companies that imported coal or its equipment without a permit and we filled an access of information case at the European Commission to know more about the lobbying that happens behind the scene.  These months Habi is also giving environmental right training to 80 lawyers from specific governorates to allow them to better monitor these factories and act quickly whenever such violations occur.

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