People power

Residents of Damietta have won their battle against Canadian-based multinational E Agrium over the construction of a controversial fertiliser plant, reports Mohamed El-Sayed

---

Click to view caption

Damietta residents celebrating their victory

The months-long battle between residents of Damietta and E Agrium over the construction of a fertiliser plant on Ras Al-Barr island is at an end. A week ago a majority in the People's Assembly voted that the plant be relocated. "It must now be moved to a more suitable industrial zone, in a way that protects the economic interest of both Egypt and the company," parliamentary speaker Fathi Sorour said.

The vote followed a report by the assembly's fact finding committee, formed after the rise of local opposition to the project, that concluded that E Agrium had failed to observe international standards on environment protection or secure the consent of civil society before beginning construction. MPs called on the government to relocate the plant to another governorate and to a site far removed from residential areas.

Prime Minister Ahmed Nazif said the government "welcomes and respects the findings of the committee".

"The government is currently negotiating with the company to discuss alternatives," he said.

In an e-mailed statement E Agrium claimed that the parliamentary committee had cleared it on all issues. "We are surprised the Egyptian government has not recognised the reality of the situation and stepped to help get the truth out and restart the project," insisted investor relations director Richard Downey.

E Agrium estimates it will cost more than $500 million to move the $1.2 billion project. Relocating the facility at this stage will require refinancing, permits and the negotiation of new engineering, procurement and construction contracts. Company officials say that while they will evaluate other options proposed by the government they intend to "aggressively pursue full recovery of its costs, equity contribution and future lost profits". The company also claims it may have to write off $280 million invested in the project in the second quarter of 2008.

The People's Assembly decision sparked a wave of celebrations in the coastal city of Damietta, with thousands of people gathering in streets and squares. "No to the killing plant" banners that were once draped from balconies around the town were replaced by others congratulating the people of Damietta on the removal of the plant.

The Governor of Damietta, Fathi El-Baradei, declined to comment on the decision, saying only that he was happy with the "civilised way people had expressed their opposition to the project". Some local MPs, however, were more outspoken. "Members of parliament and civil society played a key role in supporting the people of Damietta's demand whereas the government failed to act on President Mubarak's instructions to campaign to secure the consent of civil society," MP Gamal El-Zein told Al-Ahram Weekly.

"This is a sweeping victory for civil society in Damietta, and we appreciate the efforts exerted by everyone who supported us in our battle against the project," said Nasser El-Emari, coordinator of the Public Campaign against the E Agrium Plant. Environmental activists and civil society organisations were central to the mobilisation of public opposition to the project.

Gamal El-Beltagui, coordinator of the Public Committee for Defending the Environment, called on the government to resign. "Parliament's decision is an indictment of government officials who granted approvals and facilitated the company's plans without carefully examining the project."

The Council of Ministers was scheduled to hold a meeting yesterday to discuss the implementation of the assembly's decision and locate another, more suitable site for the plant.