The Maqatra landfill site in desert between Abu Dhabi and Hmeem is eight kilometres long.
The Maqatra landfill site in desert between Abu Dhabi and Hmeem is eight kilometres long.

Toxic wasteland may pose long-term health hazards



ABU DHABI // The battle to gain control over the rubbish dumps on the outskirts of the city is set to be a long one, admits Majid al Mansouri, secretary general of the Environment Agency - Abu Dhabi (EAD). Because of the complexity of the issues, he said, it was impossible to say exactly how long it would take to bring all the sites up to international standards, but interim measures would be introduced to ensure waste was properly treated before it reached the landfills.

For years, waste from Abu Dhabi's households, industries and hospitals has been simply dumped in the desert with little treatment, leaving the emirate now facing serious environmental and public-health threats. The long-term measures are likely to include efforts to minimise the amount of waste generated and the volume that reaches the dumps. However, at present, authorities lack a clear idea of exactly how much rubbish is produced by households and industries in Abu Dhabi.

The authors of last year's State of the Environment Report, published by the EAD, which is responsible for the new clean-up initiative, estimated that every inhabitant of the greater Abu Dhabi area generated about 2.3kg of waste every day. This figure, exacerbated by the fact that there are no large-scale recycling schemes in the emirate, is much higher than the average for member countries of the Organisation for Economic Co-operation and Development, which produce on average 1.54kg of waste per inhabitant per day.

"As industries often take care of their own waste, there is no precise information available on the waste created by that sector either," said the report. The amount of construction waste at Al Dhafra is estimated to range from 920 to 940 tonnes per day, a figure expected to grow as the rate of building increases rapidly. Hazardous waste is generated mainly by the oil industry and agriculture, with a smaller but significant contribution made by households disposing of such items as batteries, computers and mobile phones.

"Since hazardous substances are not collected separately from households in Abu Dhabi, their quantities can only be deducted on the basis of their estimated percentage of total municipal waste," said the report. "The amount of hazardous household waste that could be collected separately would increase to 740 to 1,100 tonnes per year in 2010 and to 875 to 1,300 tonnes per year in 2015. "These amounts are small compared with the amounts generated by industry."

The oil industry is responsible for many by-products with hazardous qualities, such as hydrocarbon drill cuttings and sludge, waste oil, catalysts, corrosion inhibitors and laboratory chemicals. Agriculture, on the other hand, relies on a large amount of fertilisers and pesticides. "Many hazardous substances are persistent, meaning that they break down very slowly in the environment," said the report. "They enter food chains through the groundwater or soil, being transferred from one species to another and becoming more concentrated in the process."

Chemicals, it said, could "cause higher mortality, slow down growth or disturb reproductive processes in plants, animals and microorganisms. In mammals, hazardous chemicals are transferred from mother to offspring through the placenta or the mother's milk." While the effects of short-term exposure to hazardous waste are well understood, and can include acute poisoning or burns, cancer, fetal damage and reduced fertility, the effects of long-term exposure to smaller doses are still not well understood.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”