Five years on, Damietta's Agrium controversy reignites

Ahmed Feteha, Monday 14 Nov 2011

Since 2008, local activists in Damietta have fought to preempt construction of a contentious fertilizer production plant. Ahram Online revisits the roots of the controversy

Agrium (Photo: Bassam El-Zoghby)

Egypt’s ruling Supreme Council of the Armed Forces (SCAF) on Sunday ordered a halt to the construction of a controversial fertilizer factory in the northern Damietta Governorate’s Ras El-Bar district.

This latest development in what has become a five-year-long saga, however, has not stopped local residents – long concerned about the plant’s possible impact on public health – from staging angry protests outside the factory and clashing with security forces.

The story began in 2006, when Canadian fertilizer company Agrium signed a deal with the Egyptian government to build a factory for the manufacture of ammonia-based fertilizers in Ras El-Bar, a middle-class coastal area close to the Damietta seaport. Total investment was expected to stand at $1.2 billion for the project, which would boast an annual production capacity of 1.3 million tonnes of fertilizer.

Construction of the plant began in 2008, but it faced a well-organised popular opposition campaign by local residents who feared the factory’s potential effect on both public health and the local environment. Damietta is the economic hub of Egypt’s Nile Delta region, residents of which depend largely on fishing and fish farming.

Even local government officials, including the governor and municipal council members, were reportedly opposed the project.

Some commentators believed that opposition to the project on the part of local officials had to do with a turf struggle between then- Damietta Governor Fathy El-Baradie and the central government. Some even suggested that El-Baradie started the campaign against the factory.

Other observers believe the popular backlash against the factory was driven by landowners and businessmen with current or prospective interest in Ras El-Bar.

The company, for its part, has consistently said that the factory’s operations would not have an adverse environmental impact, citing inspection reports by environmental bodies to support its assertions.

Nevertheless, with local government officials and civil society groups all voicing opposition to the project, the case was eventually referred to parliament. A parliamentary committee drawn up to discuss the issue recommended that the factory be moved to Suez.

But the recommendation was never implemented. The Canadian firm refused to move the plant and threatened to resort to international arbitration since it had already obtained all necessary legal permits – and a green light to commence operations – from the Egyptian government.

Then, following a month of popular protests, the government abruptly announced the cancellation of the project. In compensation, the Canadian company was offered a 26 per cent stake in state-owned Egyptian fertiliser maker MOPCO.

At the time, campaign activists voiced fears that the move was a trick by the government, which, they believed, would allow construction of the plant to continue once public opposition to the project had cooled.

Three years later, these fears appear justified. Local residents were recently disconcerted to find new construction work on what the company is calling "extensions" to the factory. The apparent resumption of the project has again galvanised local activists, who have since been joined by thousands of concerned citizens.

On Sunday, violent confrontations between local activists and security forces – including police and military personnel – left at least one dead and dozens injured. 

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