22328 - Schwarz Group

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Environmental Review Summary

Project Number

22328

Company Name

D. SCHWARZ BETEILIGUNGS KG

Date ERS Disclosed

Mar 8, 2004

Country

Eastern Europe Subregion

Region

Europe

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 13, 2004
Invested : Jun 29, 2004

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

other

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Schwarz Group (the Group or the company) is one of the largest European discount retailers. It operates two types of discount food stores in Europe:

- Lidl, limited range deep discount stores; and
- Kaufland compact discount hypermarkets.

The purpose of the project is for the company to plan a large expansion program, involving the establishment of a number of new stores and hypermarkets in Central and Eastern Europe to be implemented over the next couple of years.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will comply 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 these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

- Environmental and safety management procedures

Stores are designed to meet all applicable legislative requirements, ranging from those imposed by the EU to local bylaws. Designs generally are standardized, though adaptations are made to account for differences in legislative requirements. These designs are defined within country-specific design manuals which are updated as legislative requirements change or environmental technology improves. Relevant operating units within Lidl and Kaufland have an environmental manager who has responsibility, to train all employees within the unit in environmental and safety matters.

Kaufland and Lidl have defined many environmental impacts which are monitored regularly, and performance compared with targets which are defined by in-house knowledge of best practice. Similar stores are compared, and trends for each store examined. Adverse monitoring results are investigated and corrective actions implemented.

- Store site acquisition and planning procedures

For its expansion, the Group will acquire sites either by leasing or by purchasing from private landowners on a willing buyer, willing seller basis. The Group conducts its own environmental due diligence on prospective sites; it does not acquire sites which are occupied and it investigates possible contamination of land from previous use. If contamination is identified, sites will be remediated if economic, or alternatives found.

- Fire protection and emergency response

The Group’s design processes require that stores are designed to the minimum of German or local standards in the country of operation. Both Lidl and Kaufland stores have well-signed emergency exits, and the stores visited had unlocked and unobstructed exits. Fire extinguishers are provided throughout the stores, and fire hydrants are provided where store scale requires them. The Kaufland stores, and distribution centers have sprinklers throughout.
All employees are trained in life and fire safety matters. Emergency response plans are in place, in which nominated individuals and deputies have specific roles. In-house fire brigades are established in the larger stores, and all stores have first-aiders and a first aid room with stocked medical cabinet. Lidl and Kaufland have regular internal auditing of life and fire safety provision, and this is supplemented by unannounced audits by the insurance agency. Audit results are documented, as is any necessary corrective action.

- Selection of refrigerants

The Group has standardized on R404a, a non ozone-depleting HFC refrigerant. Experiments were undertaken using natural refrigerants, though these were not considered suitable for the store environment.

- Utility Use

Lidl and Kaufland employ energy-conscious design with high levels of building insulation. Utility systems are specified to be energy-efficient, for example condensing gas-fired boilers and modern control systems are used for space heating, and heat is recovered from refrigeration systems for hot water heating in stores where wash-down water is required. Utility consumption is monitored by the environmental management system, and corrective actions taken as necessary as described above. The newer stores include a pilot building management system which provides for monitoring from a single point. This system will be replicated throughout the estate if shown to be cost-effective.

- Liquid and solid waste recycling, treatment and disposal.

Sanitary waste water, process effluent arising from store operations and storm water run-off from paved areas is collected and directed to the municipal sewage systems. If the Group builds stores in locations where municipal waste water treatment systems are absent or ineffective, waste water treatment systems will be installed to ensure that all effluent meets IFC standards before discharge to the municipal system.

- Child Labor

The minimum age of the Group’s normal employees is 18 years, though young people from 16 years of age are employed as trainees. If the Group ever identifies unsanctioned work by children associated with its stores (such as children offering to carry shopping for tips) then it will consult with local authorities and IFC to identify appropriate measures to be taken to minimize potential harmful effects of this.

Conclusion & Monitoring

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 ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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