IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community 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 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 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 store visits and appraising technical and environmental information submitted by the project sponsor. The following potential environment and health and safety impacts of the projects were analyzed. - Life and fire safety - Food hygiene - Refrigerants - Energy efficiency - Liquid effluent. - Solid waste - Land acquisition and planning

Wumart’s operations have been visited by IFC and IFC has reviewed how Wumart complys with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how potential impacts should be addressed by the sponsor/project is summarized in the paragraphs that follow. - Life and fire safety. Wumart has an in-house design team, which develops designs for new stores or stores to be built in refurbished buildings. Draft designs are submitted to a building design institute, which reviews for compliance with national design standards. The reviewed and agreed design is then submitted to the bureau of fire safety for final review and approval, without which planning permission will not be granted. The stores visited by IFC displayed various fire-fighting equipment according to building size and complexity. All were equipped with manually-operated fire alarms, fire extinguishers and fire hydrants, and featured alternative escape routes. The larger supermarkets and hypermarket also have fire and smoke detection systems and sprinkler systems, and store compartmentation as required by the Chinese authorities. Fire safety housekeeping has weaknesses in that examples could be found in the stores visited of obstructed or locked emergency exits, unclear emergency exit routes and signage and obstruction of access to fire fighting equipment by sales displays. Wumart should develop additional training and other systems to increase the awareness of store managers and staff in identification and avoidance of housekeeping deficiencies such as those identified above. This training should involve external agencies if this is shown to be necessary. In certain circumstances, it may be necessary to devote floor area to dedicated storage rather than display of goods for sale. - Food hygiene Food was prepared for sale in all the stores visited. Additional housekeeping work and training is required to ensure that staff in this area make correct use of face masks, and are provided and use appropriate hair covering. Additionally, running hot water should be provided to the food preparation areas for clean-up purposes. - Refrigerants The stores visited use HCFC and HFC refrigerants rather than CFCs. There was some evidence of refrigerant loss from refrigeration systems: Wumart should measure refrigerant loss from its stores and take appropriate action to eliminate leaks. - Energy efficiency Wumart’s stores are set energy consumption budgets, which are based on use in a settling-in process and by comparison with similar stores whose budgets were set in the same way. Wumart should strengthen its energy management processes by comparing specific energy use per unit of floor area and other appropriate parameters, and should take corrective action when high energy use is indicated. Refrigeration system designs will be examined and possible higher-efficiency alternatives adopted if cost-effective. The cost-effectiveness of high-efficiency lights will be examined and these implemented if cost-effective. - Liquid Effluent All effluent arising from store operations is discharged to the municipal sewer for subsequent treatment and disposal. - Solid waste Waste card packaging materials are collected and sold to recycling companies. Other solid waste is collected from the stores by the municipal authorities for disposal. - Land acquisition and planning Wumart stores are either leased from existing landowners or bought on a willing buyer, willing seller basis. Land acquisition is expected to continue on this basis. No formal environmental assessment is required by local authorities in the store planning process, though Wumart does select its mechanical systems for low noise output.

This ERS contains the full environmental and social documentation prepared for the project. On November 5, 2003 the Environmental Review Summary (ERS) was released, in the Chinese language, at the following locations: Wumart Headquarters Floor 7 Yuquan Building, Yuquan Road, Beijing, 100039 IFC Beijing 9/F Tower B, Fuhua Mansion No. 8, Chaoyangmen Beidajie Dongcheng District Beijing, 100027 The ERS has further been released on the following two local internet addresses: http://www.worldbank.org.cn as a pop-up what will work if accessing from within China, and http://www.echinastores.com/dpt/homepage/index.htm a leading Chinese retail stores website, where information on the Chinese retail industry is released.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC 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 environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: - the status of implementation of any measures contained in this ERS and - ongoing performance of project-specific environmental, health and safety activities. Periodic site supervision visits will also be conducted.