25748 - Nature Flooring

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Environmental & Social Review Summary

Project Number

25748

Company Name

NATURE HOME HOLDING COMPANY LIMITED

Date ESRS Disclosed

Mar 24, 2008

Country

China

Region

East Asia and the Pacific

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : May 16, 2008
Signed : May 21, 2008
Invested : May 29, 2008

Sector

Wood Panels and Engineered Wood Products

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

China Flooring Holding Co., Ltd. (or the company or Nature) is one of the largest flooring manufacturers in China. The company, which was established in late 2007 based on the restructuring of its fully owned onshore wood flooring business in China, is aimed to become a world class flooring manufacturer through following expansions:

- investment in three new plants in Guangdong province, Shanghai area and North East of China;
- investment in a plantation/MDF/Flooring integrated project located in Jiangxi province of Central China;
- investment in sales channel expansion. The company is planning an IPO on the Hong Kong stock exchange in late of 2009.

The total project cost is about $120 mln which will be financed by: $70 million new equity from Morgan Stanley Asian Fund
($50 million) and IFC ($20 million), $20 million long term debt from IFC and $20 million from local banks and the internal cash flow.

Further details of the project are provided in the Summary of Project Information (SPI).

Overview of IFC's Scope of Review

The review of the project comprised:

- a number of pre-appraisal discussions with company management and the Manager of the China Forest Trade Network (CFTN) program (of which Nature is a founder member);
- a four day appraisal, which included visits to the Shunde Yingram and Zhongshan Nature facilities (owned and operational), the Shunde Yingbin (original equipment manufacturer – hereafter OEM – operational) and the Kunshan Yingyi (owned, under construction). Time was also spent at Nature’s headquarters in Shunde, Guangdong Province, to meet with Nature management and staff to assess the key social, environmental, health and safety aspects of the company’s operations and their management, including wood sourcing; and
- a progress meeting with CFTN.

E & S Project Categorization and Applicable Standard

While all Performance Standards 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 Performance Standards (PS):

- PS1 on Social and Environmental Assessment and Management Systems
- PS2 on Labor and Working Conditions
- PS3 on Pollution Prevention and Abatement
- PS4 on Community Health, Safety and Security
- PS5 on Land Acquisition and Involuntary Resettlement
- PS6 Biodiversity Conservation and Sustainable Natural Resource Management,

The project appraisal also assessed the applicability of:

- PS7 Indigenous Peoples, and
- PS8 Cultural Heritage.

With respect to these two Performance Standards, the appraisal did not identify any existing operations where either would apply, but ongoing assessment will be required, particularly in relation to PS7 if Nature decides to acquire hardwood concessions in Peru or elsewhere (see below).

Continuous assessment of potential, additional Performance Standard requirements will be part of the company’s responsibilities through PS1 and where identified, IFC must be promptly informed and appropriate mitigation agreed. This will also be a priority for IFC’s supervision of the investment. Nature is committed to demonstrating its compliance to PS requirements.

The applicable Performance Standards have been provided to, and discussed with, the client.

The key environmental and social issues and impacts from the proposed project include wood/fibre sourcing, acquisition of land for new production facilities and the Jiangxi plantation, plantation management, environmental control at manufacturing sites and employee and community environment, health and safety. These are limited adverse social and environmental impacts, generally site specific, largely reversible and readily addressed through mitigation measures. As such, the project has been classified as a Category B project according to IFC’s Environmental and Social Review Procedure.

Environmental and Social Mitigation Measures

The following environment, health and safety and social aspects of the project were analyzed during appraisal:

- social and environmental assessment and environmental, social, and health and safety management systems, including the
- application of such control systems to Original Equipment Manufacturers (OEMs);
- procedures for the acquisition of land use rights;
- labor and working conditions (including occupational health and safety);
- pollution prevention and abatement (including dust emissions to air, wastewater management and management of hazardous materials and wastes);
- community health, safety and security;
- sourcing for softwood and wood fibre for laminate and engineered flooring (legality, third party audit);
- sourcing of hardwood for solid and engineered flooring (legality, third party audit);
- application of sustainable forest management principles and FSC certification (or equivalent) for any plantation or concession - acquired by the company.

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, 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. Mitigation measures about how these potential impacts will be addressed by the sponsor/project are identified and incorporated into the attached Environmental and Social Action Plan (ESAP).

- PS1: Social and Environmental Assessment and Management Systems:

- E&S Assessment

In accordance with Chinese legislation, Nature has provided evidence of Environmental Impact Assessment (EIA) documents, each of which has been submitted to the relevant provincial Environmental Protection Bureau (EPB) as shown in Table 1. Notification of EIA submissions and subsequent EPB response is part of IFC’s monitoring requirements for the investment.

IFC requirements for the proposed Jiangxi plantation are described under PS 6: Biodiversity Conservation and Sustainable Natural Resource Management. The environmental and social assessments for proposed new plants (ShangRao laminate, ShangRao MDF and ZhangjiaGang veneer must be submitted to IFC as a condition of debt disbursement. The assessments must address the issue of wood/fibre supply for each plant, detailing where this will be sourced and the actions the company will take to ensure sustainable supply. Wood supply for the plants will also need to be integrated into the company’s CFTN targets (see below).

- E&S Management and Organization

The company has no formal corporate Environmental, Social, Health and Safety (ESHS) management system. Initiatives have been undertaken primarily at the plant level, with two facilities (Zhongshan Nature and Shunde Yingbin) being certified to ISO 14001. Shunde Yingbin is now an OEM. The majority of plants – directly owned and OEMs - are taking a staged approach to certification, starting with ISO 9001 (three certified, three in progress), ISO 14001 (two certified) and Forest Stewardship Council Chain-of-Custody certification (Zhongshan Guoli and Hailin Yingtail certified, two more planned for 2008). A corporate application for the European Union product quality certificate is also being considered.

Given the rapid growth of the company and the significance of some of the issues it faces, a more formalized approach to ESHS management systems is necessary (see ESAP). The Human Resources Department holds the budget for ISO and other systems based work, with each site based-initiative handled as a specific project.

Nature uses the Five S framework to promote good housekeeping within its plants and OEMs.

Nature has made a corporate commitment to wood sourcing targets as part of its membership of the China Forest Trade Network (CFTN: http://gftn.panda.org/gftn_worldwide/asia/china_ftn/index.cfm). CFTN is the national body of the Global Forest Trade Network, a program established by World Wide Fund for Nature (WWF) to promote responsible forest management and forest product purchasing. Nature was a founder member of CFTN, joining in 2005. Attainment of the annual CFTN targets is the key environmental performance indicator for IFC’s proposed investment in the company. Further details are provided under Wood Sourcing.

The Vice President of the Export Division has taken a leadership on ESHS issues among Nature’s management team, including the initiation of the company’s CFTN membership. He meets with the company’s other senior management representatives (CFO, VP Domestic, VP Brand, VP Human Resources and the Chairman) on a weekly basis. ESHS issues are not a standing agenda item for each meeting, but VP Export provides updates on wood sourcing issues. The VP HR has responsibility for worker safety, including accident investigation and reporting.

Nature provides staffing for a number of key functions in OEMs, including human resources, quality control, inventory, accounting and production. The staffing arrangement and dedicated nature of OEMs brings them firmly within Nature’s ‘sphere of influence’ and as such, ESHS management system commitments need to be consistent across Nature and OEM facilities. This is addressed in the Environmental and Social Action Plan (ESAP).

Through its CFTN membership, three wood supplier audits have been undertaken to date (see Wood Sourcing). In addition to this process, Nature will also need to engage with its main domestic suppliers of fibreboard and encourage them to consider FSC certification for their products – or find alternative suppliers. Proactivity on this supply chain issue will be essential if Nature is to meet the wood sourcing targets that it has committed to.

- Training

The company provides basic induction training for new staff, which includes a safety briefing. Fire drills are undertaken on a routine basis.

- Monitoring and Reporting

Aside from the wood sourcing audits, the absence of a formal ESHS management system results in a lack of routine monitoring and reporting activities across Nature’s operations. Some monitoring has been undertaken however (e.g. for workplace noise in 2006). The provincial Environmental Protection Bureaus periodically monitor at Nature facilities. Monitoring and reporting is addressed in the action plan.

- Community Engagement

Nature sponsors five educational scholarships each year and provided a 10 million RMB donation to a reafforestation project in NE China in 2006. As the company develops its plantation project in Jiangxi province, assessment of the needs of any affected communities will need to be part of the project implementation plan.

- PS2: Labor and Working Conditions:

Nature has 900 direct employees (600 production, 300 office) and a further 1200 work in the OEMs. Total headcount is estimated to rise to 4000 by mid 2008. Plants operate on a two shift system of nine hours each, six days a week. Staff is entitled to a one hour lunch break during the shift. The company recognizes public holidays and can staff apply for additional leave during the year. Production workers work in small teams of 4-5 and are paid according to production volumes (m2), calculated on a shift basis. An hourly rate is provided when there is no production. A quality premium also paid to who workers are rated above a monthly mean score.

During the appraisal in December 2007, the company was preparing to comply with the new China Labor Law, which requires all employees to have formal contracts. The Law will also introduce stronger rights for employee consultation and union negotiation with management. The company has subsequently confirmed that it has implemented all necessary actions to meet the Law’s requirements.

Employees receive medical and social security coverage. Accommodation is also provided at a number of sites. This comprises a mix of shared rooms and dormitories. Workers contribute between 0% and 35% of the accommodation cost, depending on location and type of accommodation. Approximately 500 workers currently use the company’s accommodation, with others housed in that offered by OEMs.

Staff opinion/suggestion boxes are present in plants. These are highlighted in induction training and submissions read by reviewed by designed member of management team, who then assigns the responsibility for follow up.

- HR Policy and Manual

Given the recent changes to Chinese Labor Law and the requirements of PS2, the company will update its current HR policies and manual to assure compliance, including:

- establishing, maintaining and improving employee-management relations
- promoting fair treatment, non-discrimination and equal opportunity of workers
- ensuring compliance with national labor and employment laws
- promoting safe and healthy working conditions, and
- protecting and promoting the health of workers.

A draft of the revised HR policies and procedures will be reviewed as part of the baseline study referred to in the ESAP item 2. The policy will establish a mechanism that allows employee grievances to be articulated and addressed, as well as procedures to cover retrenchment, as and when it may occur. Nature has confirmed that it will not employ child labor or forced labor. Nature’s minimum hiring age is 16.

- Occupational Health and Safety

All new staff undergo a health check and health and safety is a component of the induction training. Workers in higher risk areas (e.g. coating line technicians, sanding areas) are subject to routine testing.

Workers are provided with company work overalls and personal protective equipment (PPE), including helmet, mask, gloves, safety glasses and ear plugs. Use of signage to indicate mandatory use of PPE was inconsistent across the plants visited. Company management stated that a workplace noise survey had been undertaken in 2006 at the main production facilities and found to be within acceptable limits.

Apart from workplace noise, workers are also exposed to dust and fume from the laminating and coating processes. Local exhaust ventilation (LEVs) have been installed at the plants visited, but there a number of deficiencies were observed, particularly in relation to coating processes. These included:

- inadequate LEVs coverage for some coating areas, resulting in high workplace concentrations,
- LEVs venting back into the workplace and
- ineffective LEVs (no suction).

As part of the ESAP attached to this ESRS, the company will undertake a comprehensive occupational exposure survey at both owned plants and OEMs, in order to build a baseline for each facility and determine where improvements to processes, equipment or training need to be made. This should include noise, dust, chemical exposure and heat. Subsequent workplace monitoring should become a component of the company’s overall ESHS management plan.

Management reported that no fatalities have occurred at Nature facilities or OEMs. The most serious injury reported to IFC was a severed finger (saw accident). The most common injuries are wood splinters and minor cuts and abrasions. Management report that no claims had been made for longer term occupational injuries such as hearing loss. Accident statistics are compiled by the HR Department.

- PS3: Pollution Prevention and Abatement:

- Pollution Prevention, Resource Conservation and Energy Efficiency

The principal emissions from manufacturing operations are wood dust and chemical emissions from the sanding (solid and engineered flooring), cutting and grooving (all flooring), laminating (laminate flooring) and coating (all flooring). Solid wood arrives at manufacturing plants pre-cut to a number of standard flooring dimensions and as such, there are negligible offcuts or other solid wood waste. Wood dust is collected by central LEV systems served by a cyclone. At the majority of sites, the wood dust is used to fuel on site boilers, which provide heat for wood kilns and other purposes. At the sites visited, the boiler stacks were served by a basic wet scrubber to reduce particulate emissions – the resulting effluent passes through an interceptor before discharge to municipal drain. Boiler ash is disposed by a licensed garbage collector. Any excess dust is sold (and subsequently used to make fire briquettes).

Emissions from laminating and coating processes are vented to atmosphere – either via roof vents or LEV exhaust outlets. Coating chemicals are sourced in standard drums, which are decanted or siphoned at point of use. No emissions monitoring has been undertaken to date. Routine monitoring of the boiler stack emissions, the wastewater discharge and LEV exhausts will be required as part of the company’s environmental management plan.

Current operations use approximately 540t of coating materials (lacquer, UV coating, ink) per annum. At the sites visits, chemical storage would benefit from a more formalized approach (e.g. dedicated storage rooms, clearly marked areas in production areas where chemical containers can be placed, provision of drip drays and spill response materials).

The company has been provided with a copies of the ‘Environmental, Health and Safety Guidelines for Sawmilling and Manufactured Wood Products’ (April 2007) and has committed to use this as a reference and performance benchmark for its ESMS. The ‘Environmental, Health and Safety Guidelines for Board and Particle-Based Products’ (April 2007) will be applicable to the proposed MDF plant in Jiangxi (Nature ShangRao).

- Emergency Preparedness and Response

As part of its ESHS management system, Nature has confirmed that it will prepare an emergency preparedness and response plan (EPRP) for their facilities; including appropriate fire prevention, fire response and chemical storage protocols. The EPRP will be based on appropriate risk assessment and analysis (and could be integrated into a broader baseline audit/assessment including occupational exposure and emissions monitoring). Submission of a draft EPRP acceptable to IFC is included in the ESAP.

PS4: Community Health, Safety and Security:

Nature deploys security staff in a manner consistent with other manufacturing companies (e.g. to control vehicle movements on and off site and as act nightwatchmen. Their presence and role is therefore considered appropriate, proportionate and compliant with the security personnel requirements of PS4.

PS5: Land Acquisition and Involuntary Resettlement:

- Manufacturing Operations
- Manufacturing plants (owned and OEMs) have been constructed in areas zoned for industrial use.

At the recently developed sites or those to be developed:

- Shunde Yingran is in the long-established Wa Sha industrial park. Shunde Yinbin (OEM) will soon relocate to an adjacent lot.
- Kunshan Yingyi is located in an established industrial zone designated by the government prior to 2001
- Yichun Nature is located in an industrial zone, with land leased from the local government
- Hailin Yingtai is located in an established industrial zone designated by government
- The MDF plant and laminate flooring plant at Nature ShangRao (Jiangxi Province) are to be constructed within a government designated industrial zone.

The company has provided copies of land use rights certificates for two of these sites (see PS1) and has committed to provide certificates for all current landholdings before disbursement.

- Jiangxi Plantation:

As part of the proposed project, the company is seeking to acquire a plantation asset of approximately 33,000 hectares. This will provide a future, secure source of FSC certified fibre for its plants (see PS6: Biodiversity Conservation and Sustainable Natural Resource Management).

Nature is currently negotiating with local officials, including those from ShangRao Municipal Forestry Bureau and the Poyang County Forestry Bureau to identify appropriate land parcels to aggregate for the plantation. The current proposal comprises marginal state-owned agricultural land (23%), existing timber assets on land held by local farmers or communities (35%) and uncultivated upland areas (42%). No physical resettlement is anticipated.

Nature estimates that acquiring the various land leases, timber purchase and collaboration agreements for the plantation asset will require negotiation with several hundred parties. As such, the company will need to develop a Land Acquisition and Compensation Framework Plan (LACP), which describes procedures for land acquisition, consultation, setting compensation/payment levels, record keeping (e.g. of compensation payments, proof of receipt), establishing a grievance mechanism for farmers and other stakeholders and all other applicable requirements of the Government of China and PS5 on Land Acquisition and Involuntary Resettlement.

The LACP can be integrated into the company’s broader ESMS and used for all future land lease negotiations or acquisition of land use rights.

Once the negotiations with all parties are concluded, the company will be able to obtain a Forest Right Certificate from the Forest Bureau(s), confirming land use rights and contract terms and duration (typically 30-50 years).

PS 6: Biodiversity Conservation and Sustainable Natural Resource Management:

- Management of Wood and Fibre Sourcing
Wood is the primary resource for Nature’s operations. This includes hardwoods (for solid wood flooring, facing on engineered flooring and veneers), softwoods (for cores and plywood in engineered flooring) and particle board (e.g. MDF/HDF - for laminate flooring).

For 2008, the company estimates that its total wood demand (owned factories and OEMs) will be 322,000m3, comprising:

- Solid wood: 97,000m3 (30%)
- MDF/HDF: 160,000m3 (50%)
- Plywood and cores: 65,000m3 (20%)

Of these volumes, approximately 70% is purchased by Nature for its own factories the two OEMs for which it procures (Shunde Yingbin and Zhongshan Guoli). The remaining 30% is purchased directly by OEMs. The total projected solid wood requirement for 2008 of 97,000m3 represents approximately 1% of total hardwood log imports into China (2007 data: source IHB).

Within Nature’s central purchasing department (which reports to the VP, Export Division), there are currently two staff who are dedicated to wood procurement. Purchase screening criteria have been developed, which assess against five high risk areas for:

- civil rights abuses,
- high conservation values,
- genetically modified trees,
- illegal harvesting and
- plantation wood from converted natural forests.

Using the criteria, Nature staff is trying to build a supply chain map for its core suppliers, tracking documentation back through agent to sawmill to concession. CFTN is also assisting with this process.

Nature has committed itself to sustainable sourcing of its wood and fibre needs. It became a founding member of the China Forest Trade Network in 2005 (see PS1) and has an ongoing working relationship with CFTN to improve its performance and meet the sourcing targets to which it has committed. These are summarized in Table 2.

To assess the company’s performance against these targets, CFTN has undertaken three reviews audits to date: January 2006 (baseline appraisal), April 2007 and October 2007 (both progress reviews). The results from these are provided (in parenthesis) in the table above. While some of the data in the reviews is commercially sensitive, Nature has committed to publicly disclose a summary of each progress review (minimum frequency: annual). The summary will be made available on the Nature, GFTN and IFC websites. The report will also identify the actions Nature is implementing in response to the findings of each review.

The progress reviews indicate that Nature has made significant progress to ensure legality of wood supply: in 22 months the proportion has risen from 2% to 67%. Consequently, the proportion of unknown supply has fallen, although the October 2007 figure of 33% exceeds the 2007 target of 20%. Eliminating unknown wood supply from its supply chain therefore remains the priority and company has taken been proactive in this regard, dropping one significant supplier of hardwoods due to a lack of progress on this issue. The target is to eliminate all unknown wood supply by the end of 2009. The latest progress report also recommends that Nature initiate full chain of custody process for wood supply, mapping and documenting from origin to receipt. Successful implementation of chain of custody would allow Nature to meet the CFTN ‘verified legal’ classification. The current CFTN audits only track back to Nature’s direct suppliers and the documentation they provide.

Given the resource required to implement robust sustainable sourcing practices, IFC has recommended to Nature that it create a dedicated wood procurement group, which takes responsibility for direct procurement, CFTN target compliance, chain of custody research and certification, action plan monitoring and provision of procurement criteria, training and monitoring oversight to OEMs. Given the reputational and financial importance of appropriate wood sourcing, creation of such a center of expertise is of strategic importance to the company’s success.

GFTN has formally commented on Nature’s approach to its membership, stating in July 2007 that ‘the actions your company took to improve the environmental status of raw material purchasing are obvious, countable and long term. Your company has established new sources in a number of state-owned forestry enterprises in China, developed a new product [engineered flooring] which uses more planted species other than high value tropical solid wood and [searched for] responsible suppliers in South America and Indonesia. All these are exactly a move [in the] right direction as a responsible business’.

Through the partnership with CFTN, the company has been active in visiting timber origins, meeting suppliers (and potential new suppliers) and assessing alternative species for wood supply (e.g. Ana Caspi from Peru). CFTN continues to research new sourcing opportunities for the company, both domestic and international.

To achieve the certification targets, Nature needs to identify FSC or equivalent sources for all of its raw material. Certified hardwood is available in the market, but often in small or unpredictable quantities. It also typically sells at a significant premium (5-10%) above the prevailing market rate. Both factors make it currently difficult for Nature to source certified hardwood, but this emphasizes the need for the ongoing collaboration with CFTN (new suppliers, species substitution). The company’s first certified purchase was sourced from Paraguay in 2007, but contributed negligible volume (0.02%).

In the longer term, Nature is interested in acquiring its own hardwood concession, thus giving it security of supply and stabilizing cost. Nature has committed to IFC that any future concession purchase would already be under a certification standard (FSC or equivalent).

FSC certified particle board (MDF/HDF), plywood and cores are also options for the company. In the longer term, the Jiangxi plantation will provide this (certification is a condition of IFC financing) but it will not come on stream until 2015 or thereabouts. In the interim, Nature will need to negotiate with its existing suppliers or identify new suppliers for certified materials. The price premiums for certified particle board are unlikely to be as high as those for solid wood (due to the lower costs associated with certification for softwood plantations and a 70% by content threshold). Particle board as a component of overall raw material cost for laminate flooring is also lower than that of hardwood for solid flooring. Discussions with the CFTN manager in December 2007 indicated that a new Chinese supplier of FSC certified particle board is likely to come on stream in the near future. Purchase and promotion of certified laminate flooring is also a product differentiation opportunity for the company, in line with the company’s brand objectives.

Meeting the CFTN wood sourcing targets that the company has set for itself is the headline environmental performance indicator for IFC’s investment, with initial focus on elimination of unknown wood supply by the end of 2009 and attainment of 100% legal supply by the end of 2011. The requirement must also be extended to purchases made by OEMs (baseline assessment by the end of 2008, 0% unknown by end of 2012, 100% legal by end of 2014). The wood supply for new plants (e.g. Nature ShangRao MDF and laminate plants, Nature Zhangjiagang) must be integrated into these targets.
In addition to public disclosure of the summary CFTN audits (see above), IFC will review in detail with the company the results of each audit, agree the key actions to be taken as a result and update the environmental and social action plan accordingly. Failure to meet a particular target will reviewed on a case by case basis, in order to determine if there was a compelling set of circumstances that prevented its attainment. If IFC has reason to believe that Nature has not acted in good faith to attain the targets (including those agreed for 2011 onward) and negotiation or mediation had failed to deliver a satisfactory action plan, IFC will withdraw its financing.

To compliment the existing collaboration with CFTN, IFC will also explore the opportunity of providing advisory services support to help the company meet its sourcing targets. This could focus on, for example, a market assessment of certified particle board in China and working with key producers to bring more supply to market.

- Jiangxi Plantation:

As highlighted in the discussion on PS 5: Land Acquisition and Involuntary Resettlement, the company is seeking to acquire a plantation asset of approximately 33,000 hectares. The area under consideration spans 12 counties in the ShangRao region of Jiangxi Province.

Poyang Lake is situated with the ShangRao region. It is the largest freshwater lake in China, surrounded by a system of wetlands. 22,400 hectares comprise the Poyanghu National Nature Reserve, one of the thirty sites currently listed in China under RAMSAR convention (an international framework to protect wetlands of international importance: see www.ramsar.org). The site was listed in 1992 and is well known given its significance for a number of bird species, including the migratory (and endangered) white Siberian crane. The lake is also an important agricultural and fishery resource and therefore faces a number of competing land uses. As a result, there are a number of active programs to promote integrated management, including the WWF Yangtze Focal project, which is supported by broad range of national and international partners.

The proposed plantation areas will be situated to the east of the Lake and Reserve, on land above the wetland areas (minimum altitude 17m). The local government supports forestry projects in the region as a economic development opportunity for farmers, given its marginal value as agricultural land.

A social and environmental impact assessment will be required for the plantation, which will define measures needed to achieve eventual FSC or equivalent certification of sustainable plantation management. These will then need to be incorporated in the company’s overall environmental and social management plan, and implemented according to an agreed timetable. The study will be a condition of disbursement of IFC’s debt financing.

Stakeholder Engagement

Nature’s community engagement practices have been primarily philanthropic to date. Nature sponsors five educational scholarships each year and provided a 10 million RMB donation to a reafforestation (‘public green’) project in NE China in 2006. As the company develops its plantation project in Jiangxi province, assessment of the needs of any affected communities will need to be part of the project implementation plan.

Client Documentation

File Name	Actions
Nature ESAP Final.pdf
Table 2 - ESRS Supplement.pdf
Table 1 - ESRS Supplement.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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Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Client Documentation

Similar Projects

Projects

Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Identified Applicable Performance Standards

Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

Stakeholder Engagement

Stakeholder Engagement

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Related SII

Client Documentation

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