Fishermen working in front of the Misr Oil Processing Company (MOPCO), Damietta, November 2008.
Damietta Mobilizes for Its Environment
Journal Article, Middle East Report Online
October 21, 2009
Belfer Center Programs or Projects: Dubai Initiative
In 2008, Egypt's Mediterranean port city of Damietta saw escalating protest against EAgrium, a Canadian consortium building a large fertilizer complex in Ra's al-Barr. Ra's al-Barr sits at the end of an estuary, where the Damietta branch of the Nile River joins the Mediterranean. It is a prime destination for vacationing Egyptians in the summertime and the location of the year-round residences of the Damiettan elite. Fishermen ply the waters offshore. When plans for the fertilizer complex were announced, a coalition of locals feared that all three sources of income -- tourism, real estate and fishing -- would be jeopardized by emissions into the air and water. As summer temperatures climbed and the protests mounted, the government found itself caught between its contractual obligations to international investors and a well-organized local movement opposed to the project on both environmental and developmental grounds.
The Damietta protests may well mark a watershed for environmental mobilization in Egypt. The coalition that emerged to oppose the EAgrium plant crossed class and occupational lines, and included representatives of voluntary associations, members of Parliament, businessmen, university professors, landowners, and members of unions and professional syndicates. These groups employed a diverse repertoire of protest tactics and mobilizing strategies, including coordinated statements, petitions, marches, vigils, litigation and strikes. The coalition also framed its concerns in ways that resonated with the vast majority of Egyptians struggling to cope with the rapidly deteriorating conditions in the Delta. Mobilization against the factory emphasized the health threats posed by polluting industries, the subsidy of foreign investors, pervasive government corruption and the lack of environmental enforcement. These concerns were diffused through Egypt's increasingly lively public and media sphere, including new independent newspapers, private TV stations and well-known regional satellite channels such as al-Jazeera.
The diverse protest tactics employed in Damietta are part of a larger wave of social protest that has washed over Egypt in recent years. Strikes, sit-ins, petitions, road closures and demonstrations of all kinds are increasingly employed by a dizzying array of actors, including textile workers, ambulance drivers, public sector employees, syndicate members, farmers and others. Egypt's authoritarian regime has responded with a mixture of repression and accommodation. While the regime has ringed striking workers with security personnel, often leading to arrests and skirmishes, it has also sought to placate them with wage increases, bonuses and other economic benefits. In stark contrast, protesters making political demands have invariably been met with force.
The Damietta protests proved effective in part because they did not simply pit civil society against the state. Local economic elites and politicians played key roles in articulating a different developmental vision for the city and its environs than that promoted by the central government. To wit, they argued that the area's economic development should rest on its natural advantages of sun and surf, capitalizing on the traditional status of Damietta and Ra's al-Barr as premier summer resorts for Egyptians. This case was bolstered by the input of respected environmental scientists, whose opinion was solicited as part of a broader government commission of inquiry. And the movement was not merely local. When the idea of relocating the plant to Suez or Port Said surfaced in the press, protests erupted in these cities as well.
The protesters, however, won the battle and not the war to compel the state to reorder its priorities for development in Damietta and the country. The eventual "solution" reached by the government in August 2008 was to offer the foreign investors equity stakes in the Misr Oil Processing Company (MOPCO), mostly owned by the state and located right next door to the EAgrium construction site, with assurances that MOPCO would double its production capacity by 2011.
The Damietta protests must be situated within Egypt's broader attempt to attract foreign investment, particularly in the petrochemical sector, by "underpricing" its energy resources. The proposed fertilizer complex in Damietta was sizable, encompassing two ammonia plants that would produce 1,200 tons per day, and two urea plants that would produce 1,925 tons per day, along with handling and storage facilities. The consortium backing the project was 60 percent held by the Canadian firm Agrium, one of the largest global producers of fertilizer, with minority shares in the hands of Egyptian state-owned petrochemical and natural gas companies and an inter-government Arab petroleum investment corporation. It was to be the seventh identical fertilizer complex designed and constructed in Egypt by the German engineering firm Uhde since 2002, except that EAgrium (E stands for Egypt) was to have double the production capacity. Other turnkey complexes by Uhde have been completed in Abu Qir near Alexandria, ‘Ayn al-Sukhna on the Red Sea coast, Helwan south of Cairo and, in 2006, the Damietta free trade zone directly adjacent to the proposed new site. This last company, the state-owned MOPCO, remains operational.
Like many energy producers, Egypt sets the price for natural gas, the primary input to urea and ammonia plants, below those that emerge in futures markets or in prevailing long-term contracts. Energy-exporting countries face powerful incentives to "underprice" domestic energy resources in order to attract investment in secondary processing industries such petrochemicals, fertilizers, steel and other energy-intensive industries. The Cairo daily al-Misri al-Yawm reported that the Egyptian government would supply the consortium with natural gas at a price of $1 per million British Thermal Unit (MBtu) for five years. This price was set at a time when natural gas had become more expensive on the world market, and the government was planning to raise it to $2.65 by 2010. Even after the anticipated increase the price was far below the level then prevalent on the New York mercantile exchange -- the so-called Henry Hub price -- that climbed above $11 per MBtu in May 2008.
By keeping prices on energy inputs low, the government effectively created a rent that state-owned companies and private investors alike were quick to exploit. Most foreign direct investment was earmarked for sectors related to oil and natural gas. Petrochemicals and fertilizers, reliant on energy inputs, emerged as two of the fastest-growing sectors in the Egyptian economy. The five-year plan of 2002-2007 saw industrial investments worth $9.8 billion. Egypt exported over $1.1 billion worth of fertilizers in 2005, and that figure more than doubled to $2.5 billion by 2007, according to the Ministry of Trade and Industry. Statistics vary widely among official sources, but the State Department estimates that investment flows into the country grew steadily from $3.9 billion in 2004-2005 to $13.2 billion in 2007-2008. The government, eager to retain foreign direct investment, was thus reluctant to interfere with the EAgrium project.
The revenues from these investments, however, accrued only to the operating and investing firms. The government's contracts with consortiums have not included revenue sharing for local communities or offset funds to invest in remediation of the impact upon public health and or the environment. In addition, these capital-intensive plants generated relatively little employment, particularly when compared to the privately owned workshops that constitute the backbone of Damietta's economy.
Investors in Egypt prefer to locate in "special economic zones" geared mainly to exports, where they enjoy long-term tax holidays, release from customs duties, expedited permits and guarantees from expropriation by the state. These enclaves are often close to large towns as well as other industrial facilities. Minimally regulated by Law 83, passed in 2002, most "special economics zones" are exempt from the nascent systems of environmental management in Egypt. While the Environmental Management Unit of each governorate is responsible for monitoring industrial pollution, industrial investments in these zones fall under the General Authority for Investment and Free Zones, while investments in new cities and settlements are governed by the mandate of the Ministry of Housing. Agrium itself was granted an investment permit under said Law 83.
Local vs. National Development
In Cairo's view, multinational petrochemical plants easily met local environmental standards and contributed to the gross domestic product. According to the committee of inquiry later appointed by Parliament in response to the Damiettan protests, EAgrium was licensed on two conditions, that it export 75 percent of its annual production and that it meet environmental and safety standards. By 2007, project approvals had been obtained from the cabinet and the relevant officials in the Ministries of Transport, Environment, Agriculture, Industry, Irrigation and Investment.
National priorities, however, were in distinct contrast to those of Damietta's elites. The coastal province as a whole depends upon revenue from summer tourism, industry, fisheries and agriculture. Industry employs 35 percent of the labor force, while agriculture employs 25 percent. Ra's al-Barr itself is primarily reliant upon domestic tourism and agriculture. Meanwhile, industrial employment in the province is concentrated in small and midsize workshops, mostly in the furniture, woodworking and food processing sectors. These workshops account for over a quarter of Egypt's national output in these activities. Workshop production has been expanding; between 1976 and 1996, the state statistical agency CAPMAS reported 400 percent growth in furniture makers and 500 percent growth in food processing operations.
Fishing is another important means of livelihood for the people of Damietta. Its boats make up 70 percent of the national fleet, although the increase in aquaculture, or fish farming, means that Damiettans catch only about 14 percent of the total fish eaten in Egypt.
This diverse economy gives Damietta a higher per capita income than most other Nile Valley provinces. The maritime province ranked third countrywide in the latest UN Development Program index of human development; real GDP per capita in 2005-2006 was $6,159. But Damietta also suffers from the poverty, poor education, ill health and lack of access to sanitation that plague other provinces. Bilharzia, a waterborne disease, is endemic, and the problems with water quality and disposal of solid waste are as severe as they are elsewhere in the Nile Delta, if not more so.
The governor, Muhammad Fathi al-Barad‘i, had pursued several highly visible initiatives to "beautify" Damietta and Ra's al-Barr to lure more tourists. He issued a decree restricting economic activities in Ra's al-Barr to tourism and related enterprises, an action repeatedly invoked by those protesting EAgrium. During the protests, the governor quietly sought to play a mediating role: In April 2008, he met with the man who appointed him, President Husni Mubarak, and emerged to ask for "self-control, solidarity, alertness and civilized conduct" from the people of Damietta, a theme he reiterated as protest accelerated.
Black Banners Over Ra's al-Barr
The same month, organizers in Damietta formed the Popular Committee Against the Fertilizer Factory. This step came on the heels of a rally in January called by opposition political parties in the city's main square. The rally was quelled by state security forces, leading to a reevaluation of tactics, according to interviews with participants. Where the initial rally had relied upon "the street" alone, the Popular Committee held conferences and issued communiqués laying out their objections to the factory and calling for presidential intervention. The first communiqué, addressed to Mubarak from the people of Damietta, declared that the Committee represented a collection of civil society organizations, unions and professional syndicates.
In May, the Committee issued a statement signed by 150 prominent citizens, some representing political parties and the local chamber of commerce. The Committee then sent an open message to the Egyptian delegates at the Davos economic forum, arguing that Egyptians welcomed foreign investment as long as it was compatible with geography. Ra's al-Barr, they suggested, needed investment, but not in the petrochemical sector. The Committee also noted that residents were willing to buy the land allocated to EAgrium; several days later, the head of the local housing cooperative formally applied to purchase the plot for a new tourism development. He noted that the land had been sold to EAgrium for about $7.50 per square meter, and that the cooperative could sell it to developers for much more. Other groups, such as the similarly named Popular Committee for the Defense of the Environment, emerged. The original Popular Committee, according to its coordinator, Nasir al-‘Umari, was made up of independent lawyers. Opposition parties led the second, and its head, Samih Balah of the Wafd party, claimed it was equally active, though less media-savvy.
Environmental activists and the Popular Committees organized a series of workshops and conferences to educate the public. Among the events were "Black Industries and Their Impact on the Environment," "No to Agrium, No to Dialogue, Yes to Investment in Tourism" and an Earth Day celebration titled "Against Resource Drain and Pollution in Damietta...and No to Pollution in Ra's al-Barr."
The popular committees strategically timed vigils and demonstrations to coincide with holidays and special events. For Sham al-Nasim, the Egyptian folk holiday celebrated each spring by both Muslims and Copts, thousands of people trooped to Ra's al-Barr, where cabins, villas and apartments were festooned with black flags and anti-factory statements. Children stood at the city gates, carrying black banners emblazoned with the slogan "in sympathy with Ra's al-Barr." A day later, an estimated 5,000 citizens marched bearing still more black banners. The governor, after failing to get the crowd to disperse, told the protesters that "Damietta is in the heart and mind of the president" and that the factory would be moved to Suez. As part of the Earth Day events, children marched carrying balloons, flowers and banners that appealed to "President Mubarak and Mama Suzanne" to "save us from Agrium and grant us the right to a clean life."
Such pleas to the president and his family were intended to distinguish the "legitimate" protests in Damietta from others that had an anti-regime flavor. This tactic paid dividends when Mubarak, according to al-Misri al-Yawm's local correspondent, announced that the plant would not be built without the approval of the people of Damietta. From then on, it was a leitmotif of the protesters to invoke the president's pledge. For instance, when the members of the Damietta local councils announced they would freeze work if the government did not cancel the project, they reminded the governor of Mubarak's promise. In early June, thousands of protesters held vigils outside mosques, calling directly on the president for a binding decision on the EAgrium project. They chanted slogans (rhymed in Arabic) like "We want a decision, disaster beckons," "If no one listens to your demands, we'll remove the factory with our own hands," and "Governor, tell the boss, Damiettans are good folks." The protesters thus deliberately played upon the paternalist image cultivated by the regime, in which the president, as head of the family, should intervene directly to resolve disputes.
Strikes, formal complaints to authorities and lawsuits were another tactic employed by various groups in Damietta, such as professional syndicates and civil servants. The head of the Chamber of Tourist Facilities in the Middle Delta threatened that his affiliates would strike, while Damietta's lawyers did keep their briefcases shut, effectively delaying the hearing of numerous court cases.
Opposition members of Parliament also voiced their concerns, as did the NDP -- though only after the campaign had gained momentum, according to Balah and al-‘Umari. An NDP deputy from Damietta observed, "The government with its terrible suspicious silence did not move forward and was oblivious to the feeling of the street, which won't be calmed until the matter is resolved." The secretary-general of the NDP Youth in Damietta filed a court case against the Ministries of Housing, Environment and New Communities for issuing permits for the project.
Charges of corruption were rife. Al-Misri al-Yawm reported that local council members accused Agrium of fraudulently using their signatures to indicate their approval of the plant, when in fact they had merely signed their names as attendees of a meeting called by the firm. Anti-factory campaigners, including members of Parliament, also alleged that the company had paid various officials $25 million in kickbacks to secure the required permits. These allegations were later found by the parliamentary fact-finding mission to be inaccurate (a finding al-‘Umari disputes). It seems that Agrium had donated funds to other projects of the ministries and local official bodies; if the firm bought influence, it did so indirectly. Nonetheless, the accusations of bribery helped fuel the protests.
The fact that the company is foreign did not help its cause. The Popular Committees played upon nationalism and local pride to stoke public opposition. Thus one writer observed that Damiettans had vanquished the Crusaders, and today could defeat the Canadians. Several calls were made to declare a "national Damietta day" on days when decisive moves were made against the project, such as June 19, 2008, when the lower house of Parliament voted to move the proposed factory. In the same vein, appeals were made to native sons to come to Damietta's aid. The secretary-general of Egypt's Lawyers' Syndicate, Samih ‘Ashour, a Nasserist opposition figure, argued that "the West" refused to build polluting factories within its borders, but had no such compunctions in Egypt. The people of Damietta, he wrote, were merely defending their "land, honor and property."
Experts Weigh In
The government's response to the uproar in Damietta was to convene two expert committees, one representing environmental scientists and another composed of authorities from the relevant ministries. Prime Minister Ahmad Nazif, who had come under sharp criticism for his supposedly close relationship to Agrium because he had once lived in Canada, also endorsed a parliamentary fact-finding committee.
Mustafa Kamal Tolba, the highly respected former director of the UN Environment Program, chaired the scientists' committee. His colleague, the equally well-regarded Muhammad al-Qassas, had headed the International Union for the Conservation of Nature. These men had been instrumental in promoting environmental laws and policies within Egypt, and were widely perceived as authoritative and independent.
The Tolba report, released on June 8, confirmed the central contentions of opponents of the project. As summarized by al-Misri al-Yawm, the report said that the site of the fertilizer complex had been chosen in the economic interest of EAgrium, and without adequate regard for its proximity to population centers. In addition, it noted that Damietta already hosted a large number of polluting factories besides its wood and furniture workshops. The report argued that while the direct outputs of the new complex were not particularly hazardous, fertilizer production was a hazardous activity and must be handled produced according to well-defined procedures. Tourism was the better option for development for Ra's al-Barr and environs. Nevertheless, the report aptly summed up the dilemma of Egypt's cabinet in noting that breaking the contract with EAgrium would be costly in terms of compensation and discourage of foreign investment.
The parliamentary fact-finding committee report, published on June 9, documented the contract and the permissions obtained by the company from various government agencies. The committee found no evidence of corruption, wrongdoing or environmental violations, but did not address the central question of whether the proposed location of the complex was appropriate.
The Tolba report thus provided the seal of scientific authority that parliamentarians needed to vote unanimously against EAgrium on June 19. Although parliamentary decisions are hardly binding in Egypt, where Mubarak and his predecessors have aggrandized the executive at every opportunity, it was widely believed that the government could not pursue the project when its own party had roundly rejected it. In what newspapers described as a "carnival" atmosphere, celebrations of the vote continued through the night in Ra's al-Barr and Damietta. The following day, Agrium announced it was studying two options put forward by Prime Minister Nazif, whereby the government would either directly purchase the company's investment or offer Agrium stock in the adjacent MOPCO plant. The second alternative eventually prevailed.
This "solution," however, posed new challenges for the Damietta movement. People living in the vicinity of both MOPCO and EAgrium said they had no prior knowledge of the construction of the state-owned MOPCO complex. While press coverage mostly focused on EAgrium, residents and allied activists embarked on actions against MOPCO. Residents complained of smoke, dust, dead fish in the canal, foul odors, skin rashes and respiratory difficulties. In December 2008, MOPCO was in regular operation and residents reported bitterly that their complaints had produced little response.
The fact that MOPCO has continued to operate, with plans for expansion, highlights the privileged position that well-connected firms maintain in Egypt's economy. Despite an intensified privatization program since the early 1990s, a number of new companies in Egypt incorporate various forms of state ownership, with stakes held by various holding companies, government and military agencies, and influential persons within the regime. As a consequence, these firms remain more insulated from public pressure than foreign investors.
Exception or Model?
Some have suggested that the opposition to EAgrium in Damietta was an exceptional case, in that the campaign succeeded in pressing its grievances whereas many other environmental protests have failed. But it is probably misleading to focus on "Damiettan exceptionalism." The Damietta protests reflected the coincidence of the economic interests of the elite with the health fears of the commoners, the foreign identity of the firm and the previous experience of the residents with a similar fertilizer plant. These factors would have converged in any Egyptian city (as they did in Suez, which also has a massive fertilizer complex nearby). The campaign further had a limited, well-defined and seemingly apolitical aim: blocking the factory. In its aims, the movement was similar to the strikes that have mushroomed in the country since late 2004, where the government has often acquiesced, in whole or in part, to concrete, specific demands.
One key dimension of the EAgrium protests was the mobilization of the local elite. From Cairo's perspective, EAgrium was another example of its success in attracting foreign investment, itself a pillar of the regime's efforts to improve the macro-economic picture. But the provincial elite, in their resistance to the factory, anticipated Cairo's argument and married the environment to the economy. In light of this gambit, neither the government and nor the company could afford to be nonchalant about environmental damage -- and its associated health and economic costs. In response, they tried to argue that the project was environmentally sound or offered fixes that they claimed would make it so.
The other striking feature of the Damietta protests was the inclusive nature of the oppositional coalition. Much of the recent protest in Egypt has been carried out by relatively homogenous groups, such as members of unions and syndicates. The Damietta protests, however, mobilized participants across the highly stratified citizenry. The ability to act coherently and tenaciously as a community may well reflect the historical mercantile nature of the city and its diversified economic foundations in private economic activities of tourism, furniture and woodworking, fishing and real estate. The political opposition, both parties and individuals, was a key player as well. They found the EAgrium project an effective rallying cry against the government, and were able early on to mobilize civil society organizations, catalyzed in the Popular Committees, as well as the local councils and ordinary citizens. The Muslim Brothers -- the strongest organized political opposition -- were also an important factor, as evidenced by the frequent use of Friday prayers as occasions to challenge the government. Environmental scientists played a prominent role by providing journalists and parliamentarians with expert assessments of potential risks and environmental impacts.
This relatively broad-based coalition employed a range of creative protest tactics. These included holding rallies on holidays, calling directly upon the governor and the president to intervene, and highlighting how foreign investors would profit at the expense of the health of the locals. Campaigners evoked the historical memory of Damietta as a bulwark against the Crusaders, equating new petrochemical firms and their associated pollution loads with invading armies. Protest leaders also made shrewd use of the independent press, which was eager to enter the fray to demonstrate its centrality and enhance circulation. Sales of al-Misri al-Yawm in Damietta, according to its local correspondent, more than tripled, from approximately 2,000 to 6,000 copies.
Damietta has already inspired an imitator in the crowded working-class Cairo district of Shubra al-Khayma against a proposed petrochemical factory in close proximity to residential areas. The campaign -- which goes by the name Itkhannaqna, a colloquial expression meaning "We've Been Suffocated" -- has established a Popular Committee modeled after Damietta's, and is hoping to be as successful. In Shubra, however, local economic elites are not at the helm of the protests. It remains to be seen whether commoners can force the hand of business and the government on their own.
Author's Note: Our thanks to Karim Kasim, the UN Development Program representative in Damietta, and the students in Sharif Elmusa's sustainable development seminar at the American University in Cairo. Our thanks also to Hoda Baraka for her research and interview assistance; and ‘Umar ‘Abd al-Salam and Gamal Mareya for their insights and observations. The authors share equal responsibility for the content and analysis herein.
 Daily News (Egypt), August 20, 2008.
 Interviews with Samih Balah and Nasir al-‘Umari, Damietta, June 22, 2009.
 Interview with Nasir al-Kashif, Damietta, June 1, 2009.
 Al-Misri al-Yawm, June 7, 2008.
 Al-Misri al-Yawm, April 26, 2008.
 Al-Misri al-Yawm, May 25, 2008.
 On their role in preserving biodiversity through nature preserves, see Jeannie Sowers, "Nature Reserves and Authoritarian Rule in Egypt: Embedded Autonomy Revisited," Journal of Environment and Development 16/4 (2007).
 Interviews with residents, Damietta, November 22, 2008.
 Interview with Nasir al-Kashif, Cairo, June 1, 2009.
 Sharif Elmusa and Hoda Baraka, "Justice for the Environment," al-Ahram Weekly, April 9-15, 2009.
This article first appeared in Middle East Report Online, published by the Middle East Research and Information Project.
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