25832 - Unitim Holdings A.S

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Environmental & Social Review Summary

Project Number

25832

Company Name

UNITIM HOLDING A S

Date ESRS Disclosed

Apr 24, 2007

Country

Turkiye

Region

Central Asia and Turkiye

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Jun 19, 2007
Signed : Jun 21, 2007
Invested : Jun 27, 2007

Sector

Garment and Apparel (With Primary Textile Operations, Excluding Footwear)

Industry

Manufacturing

Department

Regional Industry MAS MCT

Project Description

Unitim Holding A.S is a leading retail and garment manufacturer. It was founded by Burchan Cemiloglu as a textile company in 1985 making and exporting knitted apparel for global brands such as Tommy Hilfiger, Nike, Adidas and Marks & Spencer. In 1998 the company entered the retail market by purchasing the Tommy Hilfiger retailing license in Turkey and has since added 12 new brands to its portfolio and distributes those brands through 134 sales points in Russia, Ukraine, Romania, Central Asia Turkish Republics and Turkey. Unitim also has 1 restaurant in Istanbul and is planning to open additional ones in Istanbul and Ankara over the next few months. Finally, Unitim is planning to open a several stores in Joint Venture with Sephora, the cosmetic company.

Unitim has approached IFC to request a loan of $30 million for its $90 million corporate investment program which includes:

- refinancing the company’s short-term debt due to high growth of business,
- expansion of the company’s existing retail networks by adding about 17,000 square meters of additional space, or 89 new stores in order to take advantage of economies of scale; and
- expansion of the company’s textile production base to Egypt to reduce costs.

The manufacturing expansion will occur during the second phase of the corporate program and will add an additional 4.8 million piece capacity to the existing 8 million piece manufacturing capacity.

Overview of IFC's Scope of Review

The review of this project consisted of appraising technical, environmental and social information submitted by the company, including:

- a review of the environmental and social management system and the HR Policy and manual;
- visits of the company retail stores and restaurant in the Kanyon and Akmerket Malls;
- visit of the Dogu Tekstil facility in Istanbul, of the Karduz Tekstil in Duzce and of the Imtek facility also in Duzce.

E & S Project Categorization and Applicable Standard

Standards applicable to all plants:

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

For the existing facilities and in regard to PS5, all plant sites are located either in industrial areas, in semi rural well established agricultural areas or close to urban areas no people were displaced or lost economic livelihoods when the plants were established. All lands are clearly modified habitat, with no known critical habitat present. No indigenous peoples are known to be present, and no cultural heritage sites have been identified close to any of the plants.

The relevant PSs have been provided to and discussed with the client as have the relevant IFC Guidelines, i.e. Environmental, Health and Safety (EHS) guidelines:

- General EHS guidelines, draft August 2006;
- Environmental Health and Safety guidelines for Textile manufacturing; draft August 20006.

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.

Environmental, social , health and safety issues associated with this project include:

- Air emissions and effluent disposal;
- Site material storage and handling;
- Solid and hazardous waste management and disposal;
- Housekeeping and Occupational health and safety;
- Corporate capacity in environmental management;
- Sustainable community relations and initiatives and
- Labor and working conditions.

Environmental and Social Mitigation Measures

UNITIM has plans to address these impacts to ensure that the proposed operations comply with the host country laws and regulations; IFC environment and social performance standards; and IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow.

- Environmental and Social Assessment & Management:

All of Unitim’s facilities have operational permits delivered in compliance with Turkish procedure and regulation. Since 1998, all the production facilities are regularly audited by Unitim’s international customers who assess in particular the following parameters: product quality, OH&S, fire safety, labor issues and training. For the new facility planned in Egypt, Unitim will carry out an ESIA as requested by local legislation and demonstrate that it is fully in compliance with IFC’s standards.
While no facilities are yet certified ISO 14001, Unitim’s management is planning to certify its Imteks and future Egypt facilities for IS0 14001 and OHACS by 2009. This is a commitment included into the Environmental action plan.

Management System and Organization: While Unitim and Imteks do not have a corporate wide EMS, each facility has an Environment and H&S manager and is operating in compliance with ISO 14001.
Imtek has developed a set of specific procedures on environmental and occupational health and safety issues which are also implemented by its subcontractors. The retail stores are located in shopping malls and are serviced and monitored as part of the Mall’s administration.

Unitim has agreed to develop a Corporate wide Environmental Management System and designate Environment officer, who will report directly to Unitim‘s senior management group and consolidate the data from the various business stream and facilities. This is part of the commitments listed in the Environmental Action Plan

Training:

Unitim has established a comprehensive program to provide necessary training for all its direct and contracted employees on the environmental and health and safety aspects related to its operations.

Monitoring and Reporting:

Unitim is monitoring its all of its facilities (Imteks and subcontractors) in accordance with ISO 14001 standards. At Imtek, the Ministry of Environment carries out annual monitoring of the water quality and the working conditions on site. Unitim’s facilities are also regularly audited annually by its major clients (Puma, Adidas, Nike, Otto). Unitim does not have a consolidated system for annual reporting and has agreed, as part the Environmental Action Plan, to set up such consolidated reporting and provide annual monitoring report to IFC.

Labor and working conditions:

Human Resources Policy and Management: Unitim Holdings employs 2240 persons, Imteks around 2700 persons, its sub-contractors around 500 and Unitim employs around 1760 persons in its retail stores. As well as a code of ethics, Unitim has developed a Human Resource (HR) Policy and Manual applicable to all its facilities (including subcontractors) and retail stores. These include procedures for selection, hiring, training, promotion, resignation, lay-off and firing. It also specifies wages and benefits, working hours and overtime, leave and holidays. The human resources function is a corporate function and is managed centrally by the human resources manager. At each store and each facility, there is a responsible for this function. All policies, procedures and guidelines follow Turkish labor law.

Worker’s Organizations:

Unitim employees are organized through elected workers committee wherever there is more that 10 employees one site. Workers committees have monthly meeting, attended by the Environmental H&S coordinator as well as by the HR manager. For the stores in Russian and Romania, which only have a small number of staff, there are no official committees but the HR department carries out monthly meetings.

Non-Discrimination and Equal Opportunity: Unitim is an equal opportunity employer and encourages professional development.

Retrenchment:

While there are no current plans for retrenchment, Unitim group would apply Turkish regulations should this occur. These request detailed justifications for the retrenchment, a retrenchment plan, public disclosure and compensation for retrenched workers. These regulations also include procedures designed to ensure that any retrenchment is carried out in a manner that is non-discriminatory, equitable and transparent.

Protecting the Workforce:

The company does not employ child labor and is not involved in forced labor, in line with national laws that prohibit such labor. A doctor is available on all of Unitim’s facilities, including subcontractors in compliance with Turkish regulations for companies with more than 50 employees. Workers are provided with Tetanos and flu vaccination. Medical benefits also include social security, and for Imteks’ direct employees, additional private health insurance.

Occupational Safety and Health:

Environmental, health and safety procedures are in place at all facilities in compliance with the requirements of customers such as Nike, Puma, Adidas, who carry out regular audits. Monthly OH&S meeting take place at all facilities. The site visits carried out during appraisal confirmed that PPE equipment is used by all workers and discussion with site managers indicated that PPE monitoring was taking place on a daily basis. Unitim has also provided statistics on rates of injury and work related fatalities. All employers are submitted to medical check twice a year in addition to an initial medical check prior to the start of employment.

The canteens provided to the workers are very well kept, with smoke free areas. Workers are provided with Tetanos and flu vaccination. Medical benefits also include social security, and for Imteks’ direct employees, additional private health insurance

Pollution Prevention and Abatement:

Although not fully certified, Unitim‘s facilities (Imteks and its subcontractors) have been operating according to IS0 14001 system and to the code of conduct of its major customers (Nike, Puma, Adidas). At the Duzce Imtek facilities, permits for water discharge and air emissions are renewed every 3 years, and monitored by the Ministry of Environment. Other facilities are connected to the sewage network and serviced by the municipality while the retails stores are serviced by the Mall’s management.

Resource Conservation:

Power is supplied by the local municipality at all facilities and by the mall management for the retail stores

Water:

For the Duzce Imteks facility, water is obtained from an authorized borehole on site. At other facilities, it is obtained from municipal sources but all of Unitim’s facilities processes are water free. At the Imtek facility, used water is treated on site by a closed vessel methanisation plant and treated water is discharged to a near by small steam. Water quality is checked every 3 months for compliance with the operational permits and review of recent results indicate compliance with IFC standards.

Air Emissions:

Air emissions are regularly controlled since 2004 for compliance with operational permit at the Duzce Imtek facility

Noise:

In compliance with customers and Government requirements, noises measurements are regularly carried out in all facilities and workers are provided with PPE whenever they work in areas exceeding the limits.

Solid Waste:

The small quantities of hazardous waste produced at Unitim’s facilities are stored on site, in specific containers and annually collected by licensed collectors for final disposal at Izaydas, a licensed hazardous waste treatment company. Non-hazardous wastes such as waste paper, card board and fabric waste are recycled on site or collected by/sold to licensed vendors. At the Imtek facility, used water is treated on site by a closed vessel methanisation plant and treated water is discharged to a near by small steam. Water quality is checked every 3 months for compliance with the operational permits and review of recent results indicate compliance with IFC standards. At the Unitim‘s restaurants, used oil is collected for recycling and for the rented store space in malls, waste is collected as part of the services provided by the mall management. At IFC‘s request, and part of the Environmental Action Plan, Unitim has agreed to look into the possibilities of recycling some of the waste produced in the restaurant (glass, packaging, food waste).

Fire and Safety:

Emergency response Programs are implemented in all of Unitim’s facilities. The procedures were developed in cooperation with Ministry of Civil Defense. At Imteks facilities, fire drills are carried out regularly, in compliance with customer’s standards. The Malls in which retail stores are located carry out regular fire drill and the Harvey Nichols department store has its own fire fighting unit and carried out its first fire drill in January 2007 ( the store had opened in 2006).

Community Health, Safety & Security:

To date and since its creation, the company has had not record of negative impact on the community
At IFC’s request, Unitim will designate at each of its facility a contact person within the organization who will be responsible for receiving and responding to questions, concerns or complaints raised by nearby communities or other stakeholders. The contact details (phone number and email address) for these persons will be displayed prominently on the signage at facilities entrances.

Stakeholder Engagement

Unitim carries out multiple types of actions with the local community such as support of campaigns against drugs, Earth Day events, donations of left over food to an animal welfare. It has also developed a football team for its employee, organized Christmas parties, lotteries and other social events.

For environmental documents, please contact:

Mr. Ozan Gulseni
Bykdere Caddesi Ecza Sokak No:6 Kat:3-4
34394 Levent
Istanbul, Turkey
Telephone: +90 212 319 90 00; +90 212 319 91 00
Fax: +90 212 319 90 01
Website: www.unitim.com.tr

This information will be made available in Turkish on the Unitim website: www.unitim.com.tr. It will also be posted at the entrance of each facility.

Client Documentation

File Name	Actions
EAP Final doc..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/
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Email: cao@worldbankgroup.org
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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.
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