IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical, environmental, and social information submitted by the project sponsor as well as site visits to the existing manufacturing facilities in Gaesti by staff of IFC’s Environmental and Social Development Department. The following environment, health, safety and social impacts of the projects were analyzed: Arcelik-Arctic’s commitment to quality including ISO certification and implementation of the Total Productive Maintenance (TPM), 6 Sigma and EFQM programs; compliance of the manufacturing plant with IFC and Romanian environmental, health and safety requirements; and labor and community issues including retrenchment.

The sponsor has presented plans (or has already implemented plans) to address these impacts to ensure that the proposed project will comply with the applicable Romanian laws and regulations and IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be (or has been) addressed by the Arcelik-Arctic is summarized in the paragraphs that follow. Arcelik has for many years had a very strong commitment to quality that is embodied in the company’s Total Productive Maintenance (TPM) program. The TPM program is very detailed, has been effectively used by Arcelik since the mid-1990s, and is certified by the Japanese Institute of Productive Maintenance (JIPM). TPM is being implemented for this project and staff of JIPM will regularly visit the Gaesti facility to assist plant staff in their continuing quality improvements which are a necessary part of the TPM program and to certify that the quality standards are being maintained. Arcelik-Arctic also plans to implement the 6 Sigma quality program at the plant. Arctic has previously (in 1998) received ISO 9001 (Quality) certification and in 2002 ISO 14001 (Environmental Management) certification from the Romanian Society for Quality Assurance. Arctic also has ISO 9001 certification from the UL Society for Quality Assurance. Arcelik-Arctic will continue and expand the ISO certification programs at the Gaesti facility. Product manufacture and development will also benefit from Arcelik’s product Life Cycle Assessments (LCA) activities carried out in Turkey. Arcelik-Arctic has already made many improvements in the Gaesti plant including improvements to the working environment (e.g. lighting, ventilation, sanitary conditions, and the rest areas), changes to improve the efficiency of the products (refrigerators and freezers) by for instance changing the refrigerant, improvements to worker training programs, decreasing energy use in the plant, and improvements to the handling and disposal of waste material. Arcelik has a detailed Environmental Policy that states that the Company is committed to be environmentally conscious in product development, packaging, and manufacturing operations. The Policy is explicit about minimizing the environmental impact of their operations, meeting all regulatory EHS requirements, recycling and reusing materials, energy and eco-efficiency, adopting safe work practices, training of employees and suppliers and monitoring performance. This Policy will be implemented by Arcelik-Arctic at the Gaesti facility. The plant has extensive systems to treat air emissions and domestic and industrial wastewater (e.g. industrial wastewaters are pretreated by pH adjustment and primary sedimentation before discharge to the City of Gaesti municipal sewer for additional chemical and biological treatment before discharge to a local river). Solid and chemical materials are reused or recycled where appropriate with any remaining wastes being sent for proper disposal in a fully licensed municipal landfill. Arcelik-Arctic’s operations are fully compliant with Romanian and IFC EHS requirements. Arcelik-Arctic employs about 1,800 staff (about 60% are women) and has implemented a very detailed worker health and safety plan with the objective of zero accidents. There is a fully equipped health clinic on-site with a doctor in attendance 8 hours per day as well as nursing staff. Employees who work in the plant receive annual medical check-ups. Staff benefits are excellent with a competitive salary structure, bonus program, health care and pension, and free meal support. Early in 2003 approximately 350 employees were retrenched. The Government of Romania has strict regulations covering retrenchment and these regulations were followed in this case including extensive consultation and negotiation with the plant unions and implementation of a very transparent severance package.

Not applicable

Accordingly, IFC concludes that the proposed project will meet the applicable IFC and Romanian environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

IFC will evaluate the project's compliance with the applicable IFC and Romanian environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering the ongoing performance of project-specific environmental, health and safety (EHS) activities. Periodic site supervision visits will also be conducted.