25180 - Rubliovskiy

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Environmental & Social Review Summary

Project Number

25180

Company Name

MILLEX INTERNATIONAL LIMITED

Date ESRS Disclosed

Mar 17, 2008

Country

Belarus

Region

Europe

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : May 22, 2008
Signed : Jun 6, 2008
Invested : Sep 11, 2008

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

Tourism, Retail and Property

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

RTL Holdings (the Group), is a corporate designation that refers to the companies controlled by Millex International Ltd. (Millex or the sponsor). The Group, owners of one the largest supermarket chains in Minsk, Belarus and a leading wholesaler of packaged foods, has approached IFC to provide up to $26 million in debt and quasi-equity financing to fund its 2008-12 expansion program. The project will comprise:

- the expansion of the Group’s chain of supermarkets trading under the “Rubliovskiy” brand name, including the construction of 20 new supermarkets in Minsk and regional cities;
-the construction of 6 new Class A and B+ warehouses in Belarus; and
- the development of a logistics business.

Overview of IFC's Scope of Review

The environmental and social (E&S) review of this project comprised a visit by an IFC Environmental Specialist to the Group’s HQ in Minsk in July 2007. IFC’s appraisal included visits to a number of supermarkets under operation, interviews with Group’s experts; review of information provided by the Group’s management in response to social and environmental questions; and telephone and e-mail follow up to clarify issues which remained outstanding.

E & S Project Categorization and Applicable Standard

While all Performance Standards (PSs) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following PSs:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security

Stores and logistic centers will be located in or close to established residential areas and access infrastructure, and it is therefore highly unlikely that issues related to biodiversity conservation (PS6) will arise. There are no populations of Indigenous Peoples, within the meaning of IFC’s Performance Standard, therefore PS7 will not apply. No items of cultural heritage were uncovered in the past, and are most unlikely in the future (PS8). The project is also not expected to acquire land from private owners or displace people (PS5). Nonetheless, in the event that such risks/impacts may arise, the Group will provide for their assessment and management consistently with the requirements of PS5-8 through the application of its social and environmental management system (SEMS).

This is a Category B project according to IFC’s Environmental and Social Review Procedures, because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria.

The key environmental and social aspects of the project, which have been considered are the following:

- Social and Environmental management systems and structure;
- Labor and working conditions;
- Life and fire safety;
- Energy efficiency;
- Refrigerant selection;
- Food hygiene.

Environmental and Social Mitigation Measures

Key environmental and social issues are summarized in the paragraphs that follow. The Group has presented plans to address the discussed impacts to ensure that the project, upon implementation of the specific agreed measures, will comply with the environmental and social requirements: the host country’s laws and regulations and IFC’s environment and social Performance Standards. Further information is provided in the attached Environmental and Social Action Plan (ESAP).

- PS1:Social and Environmental Assessment and Management System

At the moment of IFC’s appraisal, the Group’s retail chain trading under the “Rubliovskiy” brand name consisted of 18 supermarkets in the city of Minsk. The Group also had one logistic center under construction in Minsk. In the future, the Group does expect to construct a number of new supermarkets and warehouses in Minsk and the regional cities of Belarus.

Acquisition of the existing stores (either stand-alone or at the base of residential apartment buildings) and their refurbishment typically does not require environmental impact assessment. The stores are located in established residential areas and are connected to all utilities such as electricity, central heating, water supply and sewage. It is therefore highly unlikely that the project activities will result in any adverse environmental or social impacts.

Land acquisition for new premises construction (stores and logistic centers) is possible through long-term lease only and is strictly regulated by the state. New land plots with designated zoning are offered through bidding procedures, carried out solely by the state authorities. Local authorities are responsible for initial assessment of the land plots before offering them for bidding, including environmental and social screening. Based on the results of the screening specific requirements could be applied to future land developer (e.g. in case the land is contaminated by the past activities, etc.). Belarusian regulation prohibits development of agricultural land in use or protected forestry. Local authorities are also responsible for organizing consultations with stakeholders potentially affected by the new development.

The project developers are responsible for carrying out environmental impact assessment (EIA) study of the proposed development and for designing environmental action plans. Assessment entails the evaluation of the potential environmental and social risks associated with the project; and development of measures to minimize adverse social and environmental impacts. The EIA outcomes are reviewed for E&S compliance with Belarusian law by the responsible state agencies. Their positive opinion is required to commence the construction.

The Group’s engineering arm OOO Arkhiterra is responsible for design and construction of all new developments. Environmental Impact Assessments of new projects are carried out by the design contractors as part of their design assignment and supervised by an environmental specialist of OOO Arkhiterra.

The company employs the designated full time OHS and fire protection engineer. Responsibility for environmental issues is hold by the designated person in project development arm of the Group (Arkhiterra).

Expansion program of the Group requires more systematic and unified approach towards assessment and management of environmental, social, health and safety (ESHS) issues. In the framework of IFC’s financing, the Group will establish environmental policy, corporate standards and operational procedures consistent with the IFC environmental and social Performance Standards. Operational procedures will provide for environmental and social assessment of future project development, comprehensive Environmental, Social, and Health & Safety (ESHS) performance monitoring of all its operations and associated facilities and allocation of necessary resources for continued compliance with Belarusian regulatory requirements and IFC PSs.

- PS2: Labor and working conditions

As of January 1, 2007 the number of permanent staff employed by Rubliovskiy retail chain was 1,244, including 401 specialists, 835 workers and 8 top managers. RTL Holdings as a whole employed 3,515 people. It is expected that by January, 1 2008 the number of Rubliovskiy’s employees will increase to almost 1,900 people. Total number of employees at RTL Holdings will be around 4,600 people.

The Group has adopted a number of internal Standards on Human Resources Management. These are consistent with Labour Code of Belarus and IFC Performance Standards including written terms of employment and termination, disciplinary practices, personnel training and development, conflicts resolution and staff satisfaction assessment. Each employee is familiarized with these documents before signing the individual contract.
The Group has committed to establishing additional means for workers to express their grievances and protect their rights regarding working conditions and terms of employment. The Group will establish a grievance mechanism for workers consistent with IFC PS requirements, through which workplace concerns and suggestions can be brought to the management’s attention and addressed expeditiously.
The Group has carried out an independent job safety review for various workplaces. Based on the review results, an Action Plan to minimize employees’ exposure to hazards was developed by in-house OHS engineer and approved by the Group’s management.

Training is provided to staff in safe working practices. All employees have to undergo a full OHS training program at induction and subsequently a health and safety training relevant to their job activity.

For further details on workplace and labor- related matters please see Environmental and Social Action Plan.

- PS3: Pollution prevention and abatement

Stores and warehouses are located in or close to established residential areas and are connected to electricity, central heating, municipal water supply and sewage utilities. If required to comply with the sewage authority’s acceptance criteria, Rubliovskiy stores are installing fat traps to pre-treat wastewater from in-house cooking facilities before its discharge to the municipal sewage network.

The Group is paying close attention to efficient use of utilities through utility management plan. New stores are equipped with high efficiency fluorescent lighting and energy saving refrigeration equipment. The Group is gradually replacing equipment in the old premises. Stores are equipped with electricity and water meters.

Several types of solid waste, mainly packaging materials and damaged goods and expired food products are produced in the stores. Paper, cardboard and plastic packaging materials are collected and sold for recycling. Damaged goods are collected and disposed of by an authorized waste management company. Mercury lamps are collected separately and removed from stores by the licensed company.

Non ozone-depleting refrigerants are used in the stores’ refrigeration systems.

- PS4: Community Health, Safety & Security

Several kinds of cooked food and ready-to-eat food such as salads, are made and sold at Rubliovskiy stores. The Group is following Belarusian sanitary regulations. Going forward, this will be supported by a HACCP-based food hygiene procedure, which will be developed either with in-house expertise or using external resources, and ultimately certification of compliance with ISO 22000 or equivalent standard.

The Group’s management gives high priority to Life and Fire Safety (L&FS). The company employs a full-time fire protection engineer. New and existing properties are constructed and refurbished in compliance with the local building codes and fire regulations. This includes installation of fire protection systems, such as fire detection and alarms, fire hoses and extinguishers, multiple exit routes, emergency exit signage and lighting. Fire protection systems are inspected by an external company on a regular basis. L&FS improvement plans are updated annually. Action Plan for 2007 includes installation of fire detection/alarm systems in a number of leased stores, purchasing of fire rated suits for stores’ fire brigades, equipping exit doors with magnetic locks connected to fire alarm systems and others.

The Group''s management recognizes L&FS as a key risk and is committed to carry out a review of L&FS systems and equipment against international standards. To ensure compliance with internationally recognized fire safety standards, the company will prepare a corporate Life and Fire Safety Policy, which should include at least the following components:

- a policy for establishing and maintaining life and fire safety at all new, existing, owned or rented properties;
- specific roles and responsibilities for internal and external parties/people within the process;
- generic L&FS Master Plan that can be tailored to all Group’s properties (technical);
- specific guidelines for emergency response, safety education, housekeeping, inspections and testing of fire protection systems (operational).

The Master Plan as applied to each store will include drawings and specifications identifying major fire risks, applicable codes, standards and mitigation measures. A suitably qualified professional will review the Master Plan and certify to IFC that the design meets internationally recognized fire safety standards.

Stakeholder Engagement

Client Documentation

File Name	Actions
Environmental and Social Action Plan_Rubliovskiy.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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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