Mezz Tower and Djibouti International Business Centre

Project Description

Horafia S.A, Switzerland has asked the Multilateral Investment Guarantee Agency (MIGA) to cover its investment into Mezz Afrique S.A.S., a company incorporated in Djibouti that provides a global office service to businesses operating in Djibouti and throughout the horn of Africa. The project is a 17-storey office tower constructed on a separate parcel of land that has been reclaimed from an internal lake near the first island of an area encompassing five reclaimed islands enclosed by a lagoon. The entire estate belongs to Mezz Afrique S.A.S., with each island intended to be developed separately.

The Project is located along a prime waterfront site facing the Gulf of Tadjourah in North West Djibouti City. The Project is in close proximity to the main demand generators for office space in the capital, namely the City Centre, the Sea Port, the Free Trade Zone and the Fishing Port. The site has a total area of 95,188 square meters, land and water included, and has a single access point from the main road that serves all five islands. The tower itself is accessed via a 17m pedestrian bridge from the first island. The project footprint includes a car parking area, maintenance areas, one water tank for sanitary water distribution and firefighting, and another for irrigation, adjacent wastewater treatment plant, solid waste storage area, services building, HVAC area, enclosed storage area for hazardous materials and a back-up generator building. Tower design has been to high standards with modern energy efficient systems installed and attention paid to overall resource minimization. Eligibility for LEED, or other certification program recognizing the energy/water consumption efficiency is being explored by the management company.

The Project will be managed either directly by Mezz Afrique S.A.S. or, alternatively, by Djibouti International Business Centre S.A.S, which is an entity fully owned by Horafia and would act as the exclusive agent of Mezz Afrique in providing the global office service to businesses occupying the tower and would also be responsible for the maintenance and management of the tower and facilities.

Environmental and Social Categorization

The Project is a Category B under MIGA’s Policy on Environmental and Social Sustainability (2013) because the potential environmental and social impacts are limited, site-specific, largely reversible, and can be readily addressed through mitigation measures. Construction of the tower is now virtually completed and so the key environmental and social issues relate to operations. These include: life and fire safety, resource conservation, general solid and liquid waste management, and occupational as well as community health, safety and security.

Applicable Standards

While all Performance Standards (PS) will be applied to the Project, based on current information, it is expected that the Project will be managed in accordance with the following PSs:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts
• PS2: Labor and Working Conditions
• PS3: Resource Efficiency and Pollution Prevention
• PS4: Community Health, Safety, and Security

The following Performance Standards are considered not relevant for this project.

PS5: Land acquisition and Involuntary Resettlement, does not apply to this investment.  The project site has been developed inside a public lagoon area bordered by the main land and the Rue de Venise. Prior to land reclamation and development, the area was entirely covered by water, with no economic activity nor use of the project site. The site was acquired from the Djibouti Government and a definitive property title (Titre Foncièr Définitif) over the area was assigned by the zoning authority (Direction des Domains) to the project enterprise Mezz Afrique on July 3, 2011.

PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources. Though the land reclamation activities and project were not subject to an ESIA, as these requirements did not come into effect until 2011, 4 years after project initiation, the area of the coast involved is located adjacent to the port, the Doraleh container port and other coastal activities that have already significantly disrupted the coastline.

PS7: Indigenous Peoples. Indigenous communities are not present in the area.

PS8: Cultural Heritage. Impacts on cultural heritage were not encountered during land reclamation and the project site is located in an area not known to be of cultural significance.

In addition, the following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project:

• World Bank Group General EHS Guidelines

Key Documents and Scope of MIGA Review

MIGA’s review consisted of appraising environmental and social information submitted by Horafia S.A. The following documents have been reviewed by MIGA:

• Corporate Master EHS Program, Cosmezz S.a.r.l., November 29, 2016
• EHS Plans for Construction and Operation, with annexes

Key Issues and Mitigation

PS1: Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment

The policy, legal and environmental framework of Djibouti essentially focuses on four main themes (desertification control, conservation of biodiversity, improvement of the population's living, and management of water supply). The country has ratified the international conventions on biodiversity, climate change, and desertification. The National Environmental Action Plan was launched in 1997 and the Ministry of Housing, Urban Planning, Environment and Land Management created in 1999. Management of the environment falls under the mandate of the Ministry’s Directorate of Environment and Sustainable Development. The Environmental Framework Law (Law No. 51/AN/09 6eme L of 1 July 2009 instituting the Environment Code) provides the enabling framework related to protection of the environment.

A decree was adopted in 2011 (Decree No. 2011-029/PR/MHUEAT of 24/02/2011 revising the environmental impact assessment procedure in the Republic of Djibouti) outlining a revised procedure for conducting Environmental Impact Assessment (EIA). However, as the Project was initiated in 2007, 4 years prior to these requirements, the Ministry of Habitat, Urban Planning, Environment, & Land Management did not require one to be prepared. Discussions with the Directorate indicate that the project is located in an already industrialized area of the coast with the adjacent Djibouti port and Doraleh Container Terminal and is distant from the wadi delta area that empties into the red sea. The permit to construct did include a clause stating that any construction related environmental impacts should be minimized. Construction took place within the lagoon area that is bounded by the roadway.

Key risks and impacts identified for the construction phase of the Project included health and safety risks intrinsic to construction activities such as physical hazards related to the use of machinery and vehicles, management of hazardous substances, increase of dust emissions from excavation and noise emissions from vehicular traffic, piling and machinery operation.  The construction company Cosmezz S.a.r.l., is a locally registered company and an experienced contractor that has in place an effective management system to international standards that was used to minimize the impacts due to construction. The tower was designed and constructed to international standards incorporating measures to cope with seismic activity.

During operation of the business center, key potential environmental and social risks include: community safety related to life and fire safety of the building; resource conservation; management of solid and liquid wastes, and occupational health and safety. It is expected that proper implementation of an Environmental and Social Management System (ESMS) during the operation of the Project will avoid and/or minimize risks and impacts to the extent possible ensuring safe working conditions for the workers and neighboring community. 

Management Program

During construction, Cosmezz implemented its comprehensive Corporate Master EHS Program (November, 2016) that is compliant with the requirements of PS1. For operations, the management company will be required to develop its own policies for environmental and social issues as well as health and safety, and implement a comprehensive environmental and social management system (EHSMS).  As part of the overall EHSMS for the tower, site and ancillary facilities, the following subject specific management plans and procedures will be prepared:

• Life and Fire Safety, emergency preparedness and response
• Water and wastewater management and monitoring
• Solid waste and hazardous material management and monitoring
• Site security management policy and plan for the building and ancillary areas
• Health and safety
• Community health and safety and grievance mechanism for visitors

Organizational Capacity

The managing company is yet to be staffed. During operations, the company will have an EHS manager with support staff (for example, technicians, safety reps, fire wardens), and staff will be trained on environmental and health and safety measures. 

Emergency Preparedness and Response

An Emergency Response and Preparedness Plan (ERPP) will be developed by the managing company. The plan will cover: emergency response to incidents, for example: environmental, spillages, security and vehicle incidents; life and fire safety; and natural disasters such as flooding and earthquakes, as well as describing relevant roles and responsibilities of personnel. The managing company will conduct periodic fire drills for tower occupants and ensure that each occupier is provided with fire and safety information.

Monitoring and Review

Monitoring plans for resource use, noise and waste emission will be included in the operations ESMS. This will include monitoring procedures for key parameters and indicators to evaluate potential adverse social and environmental impacts. The ESMS will also identify responsible parties, timing and reporting requirements. MIGA will also require annual monitoring reports throughout the guarantee period.

PS2: Labor and Working Conditions

During construction of the tower by Cosmezz, construction activities involved 140 workers at peak with almost 2 million man hours input and only one LTI. The workers are locally based and there was no labor or construction camp. The expatriate workers were housed in appropriate accommodation.

Human Resources (HR) Policies and Procedures

In Djibouti, the Labor Code was issued in 2006 (Code du travail, Loi n°133/AN/05/5ème du 26 janvier 2006). The Code regulates the labor market by protecting employees’ rights. The minimum wage was introduced in December 2011. Prior to the start of operations, the managing company will assign an OHS manager, and will develop a HR policy and relevant procedures and plans, in accordance with PS2. Employees will be provided with training on all relevant environment, social, health and safety management topics.

Supply Chain

There is virtually no manufacturing capacity in the country and so all materials used for construction were imported. During operation, the company will source as many local supplies as possible.

PS3: Resource Efficiency and Pollution Prevention

This section summarizes the proposed mitigation measures to minimize resource use and control potential impacts related to wastewater discharge, and solid and hazardous waste management.

Wastewater

The Project site is not currently served by the public sewerage network, so wastewater originating from the tower will be processed in a septic tank wastewater treatment plant located in the southern corner of the property. The septic tank system was designed assuming an occupancy of 300-350 people with an average consumption of 60L of water/person/day requiring a plant to handle 20 cubic meters/day. The plant has been designed to the WB EHS Guidelines. Treated water will be stored in a water tank of 115 cubic meter capacity before being re-used for the irrigation of plants and green areas of the estate. The tanks will be periodically emptied with the sludge removed by licensed contractor to the municipal treatment plant. Rain water will also be collected from the surface areas and also used for irrigation.

Waste Management and Disposal

Solid wastes will be collected and stored prior to removal by licensed contractor to the new municipal landfill site.  Currently there is no recognized waste recycling and recovery system operating in the country but the company plans to instigate waste separation and will explore recycling options. Storage and generation of hazardous wastes will be limited to batteries, printer cartridges/toners, paints, cleaning materials. These are stored in a separate locked and bunded area. Each office will be equipped with segregated waste collectors to achieve separation between non-hazardous and hazardous waste, such as expired electronic equipment, batteries and toners.

Air Emissions

A small 560kW Caterpillar diesel generator has been installed as a back-up electricity supply for the short duration and infrequent power outages that occur in the country. Generation of greenhouse gas emissions during the operation of the back-up generators is expected to be very limited with their use required infrequently.  The generator has a small double-skinned integrated tank and there is no requirement for the bulk storage of diesel. The unit is housed in the utilities building and will be located in a bunded impervious surround to minimize fuel or oil spillage leakage during filling/maintenance.

Noise

The back-up electrical generator set is installed with a soundproof enclosure within a dedicated room in the utilities building, located some 75m from the tower. Nominal noise emissions are of 71 dB(A) at a distance of 15m, and will occur exclusively during the activation of the generator in case of black-outs. Sound will be attenuated by the soundproof enclosure, the surrounding walls and the distance from the working areas of the tower. The 34 HVAC outdoor units are installed in an area adjacent to the outer parking lot of the tower at a distance of about 15m from the basement of the building. This area is delineated by a partition wall and is at a lower elevation of about 1.5m compared to the parking lot. The manufacturer’s data indicates the maximum noise level measured at a distance of 15m with simultaneous operation of all the units is equal to approximately 68 dB(A). Overall, noise levels are expected to meet WBG EHS Guidelines.

Water and energy use

Drinking and potable water for the building is supplied by bottled mineral water that meets WHO drinking water standards. During operations, there will be water use related to general domestic and sanitary use, fire-fighting and irrigation. The public water distribution network managed by the local company ONEAD does not reach the property and so currently this is being supplied by tankers from boreholes 30km inland, for which there is an extraction permit. The company is in the process of installing an onsite reverse osmosis plant in place of the borehole supply. 

The main systems requiring energy are: electrical; externally sited HVAC units, and lighting. All three systems are equipped with a centralized and integrated system for the monitoring and management of power consumption. Energy efficiency for operations was considered in the Project design and construction has incorporated these design parameters to minimize energy consumption. Energy consumption has been estimated at just 165 kWh/m2 serviced space, which is excellent given the tropical climate. There is an energy control system that allows retrieval of consumption data. Periodic reports on the overall energy performance will be prepared. This will vary with the number of people hosted inside the tower and the external climatic conditions. Energy Efficiency measures included: reduction of thermal loads through the use of an external filtering aluminum skin and high efficiency double glazing leading to reduced air conditioning needs; reduced operating loads with the use of lighting fixtures fitted throughout with LED lamps; installation of electromechanical components with inverters; energy efficient cabling throughout the building and, provision of medium-voltage electrical power directly to the tower.

PS4: Community Health, Safety & Security

Community health and safety risks associated with the Project include unauthorized site access, life and fire safety, infrastructure safety and security. The risks and impacts of the Project, in the context of community, health and safety, will be managed through a Community Health and Safety Management Plan, which is to be developed.

The Project has been designed and constructed in accordance with the Italian “Approval of fire prevention technical regulation for the design, construction and the exercise of buildings and /or premises for offices” issued by Ministerial Decree, February 22, 2006 (G. U. n. 51 del 2/03/2006). Relevant technical requirements, including those delineated in applicable international standards, were integrated into the building design. There are fire extinguishers on each floor as well as fire hoses. From the lift area, a fire-resistant double door grants escape access on each floor and the staircase leads down to the lobby. The stairwell and lobbies are lit by emergency lighting and exits are well signed. The building is equipped with a fire detection and alarm system, a Honeywell fire alarm panel composed of both automatic systems and manual signaling buttons. During operation, the Project will comply with worker health and safety and fire signage and provisions for life and fire safety under PS4 and the WBG EHS Guidelines.

A Life and Fire Safety, emergency preparedness and response plan will be developed for the operation of the Project in accordance with WBG EHS Guidelines. Prior to operations, a third-party audit will be conducted to assess the effectiveness of the system and determine if there are any gaps in local and international life and fire safety requirements. Per WBG EHS Guidelines, the Project will obtain the design and post-construction life and fire safety certifications from a professional acceptable to MIGA.

Under the World Bank managed Global Facility for Disaster Reduction and Recovery, in Djibouti the earthquake hazard is classified as medium. Consequently, the necessary criteria (e.g. appropriate international standards, regulations, etc.) have been taken into account in the design of the facilities to address the seismic risks. Prior to determining the final physical location of the tower, extensive geotechnical surveys and test pits were conducted on the lagoon area. The structural design of the tower was in accordance to Italian anti-seismic laws (Decreto Ministeriale 14.01.2008 and Circolare 02.02.2009 n° 617 C.S.LL.PP). The design includes a concrete foundation platform 3.6m high, connected to 96 pillars of 1m diameter each, reaching a depth of 20 to 25m below ground. Each floor is divided into two symmetrical halves by a highly-reinforced concrete core, providing primary structural resistance.

Traffic Safety

The estate is physically separated from the rest of the urban road network. The impact on the main road, Rue de Venise, is minimized by an additional incoming lane approach to the main entry gate and an outgoing one to allow exiting vehicles to join the main road flow. The circular layout of the internal roads is a natural impediment to excess speed, in addition to imposed site speed limits. Vehicles entering the estate pass through a main entry gate with road blockers and a secondary entry gate also equipped with road blockers giving access to the dedicated parking lot.

Onsite Security

During the construction period, there has been comprehensive security to secure the site 24 hours a day. During operations, access to the site will be via the two vehicle entry gates onto the islands and then building entry will be via biometric scanning, electronic identification cards for employees and scanners. There are alarms, telecommunication devices and closed-circuit television cameras.

Environmental Permitting Process and Community Engagement

A definitive property title (Titre Foncièr Définitif) over the area was assigned by the zoning authority (Direction des Domains) to the project enterprise, Mezz Afrique S.A.S, on July 3, 2011. The Project will be subject to periodic environmental audits by the Directorate for Environment. Following an application submitted to the National Agency for the Promotion of Investments (Agence Nationale pour la Promotion des Investissements - ANPI), the project was assigned with tax benefits according the Code of Investments.

MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400

E-mail: cao-compliance@ifc.org

Availability of Documentation

The following documentation is available electronically as PDF attachments to this ESRS at www.MIGA.org. 

• Environmental and Social Action Plan: Djibouti International Business Center, Draft, March 2017