25845 - ADMIC

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Environmental & Social Review Summary

Project Number

25845

Company Name

ADMIC SAL

Date ESRS Disclosed

Apr 9, 2007

Country

Lebanon

Region

Middle East

Last Updated Date

Oct 2, 2024

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 4, 2007
Signed : Jun 15, 2007
Invested : Oct 22, 2007

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

Tourism, Retail and Property

Department

Regional Industry MAS MCT

Project Description

Admic, Lebanon’s leading retailer has been negatively affected by the repercussions of the 2006 war in Lebanon and the subsequent political conflict. In that regard, ADMIC has requested up to $20 million IFC loan and equity/quasi equity financing to:

- complete its second BHV department store; and
- replace its expensive short term debt with more appropriate long term funding to enable its expansion.

Overview of IFC's Scope of Review

IFC’s project review comprised inspection site visits to all Admic’s existing premises in Greater Beirut, , i.e. to Citymall, including the BHV (under construction) and Géant stores, to the Monoprix and BHV stores at Jnah, and to the Monoprix stores at Zouk, Baabda, Achrafieh and Verdun. In addition, the review included a review of Admic’s answers to questions on environmental and social matters presented by IFC, and meetings with Admic’s Chairman / CEO, Deputy General Manager / Chief Operating Officer, Director of Human Resources, store managers and maintenance staff. A meeting was also held with the General Director of Socotec Liban, to discuss the extent to which Socotec has advised Admic on life and fire safety related matters. Refrigeration systems manuals for all stores, and Admic’s general emergency response procedure, and bespoke emergency response procedures for the Citymall, Jnah, Zouk, Baabda, Verdun and Achrafieh sites were also reviewed.

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 may have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS 1. Social and Environmental Assessment and Management System;
- PS 2. Labor and Working Conditions;
- PS 3. Pollution Prevention and Abatement;
- PS 4. Community Health Safety and Security;
- PS 5. Land Acquisition and Involuntary Resettlement; and
- PS 8. Cultural Heritage.

The project proposed for IFC’s support is an existing retailing operation with urban locations. Future developments are also likely to be brownfield sites because Admic seeks to develop stores close to established residential areas of the city, meeting market demand for neighborhood stores.

The key environmental and social issues in ongoing operations are terms of employment and provision of a safe working conditions and environmental, fire and life safety and solid waste management. New sites must be developed in accordance with Lebanese and IFC land acquisition provisions, environmental assessment and planning requirements.

As a result of its due diligence, IFC has concluded that the potential adverse environmental and social impacts presented by the project are few in number, site-specific and have been or can be readily addressed through mitigation measures. It is therefore concluded that this is a Social and Environmental Category B project.

Environmental and Social Mitigation Measures

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. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow and summarized in the attached Environmental Action Plan.

-Land Acquisition

Admic''s stores and Citymall have been developed, and future sites will be developed and land acquired by purchase or lease from willing sellers / lessors. No involuntary economic or physical displacement has resulted or will result from Admic''s developments.

-Environmental and Social (“E&S”) Management

Admic does not have a formal environmental management program, though potential impacts are managed through:

- a general Admic emergency response, safety and security manual, which has been expanded to provide a bespoke manual for each store;
- standard store operating procedures;
- routine maintenance by store staff and specialist external contractors.

This management program does not have quantitative targets, nor has it formally identified the most significant ongoing environmental issues. The Chief Operating Officer has part-time responsibility for management of environmental issues within Admic, drawing upon store managers, engineers and consultants for support.

Admic will quantify its operations'' ongoing environmental impacts, identify and quantify reduction targets and develop monitoring and reporting systems to drive such reductions.

-Environmental and Social Assessment and Planning Procedures

There are few formal requirements for E&S assessment in Lebanon. However, Admic is aware that as a retailer, and in particular, as an operator of neighborhood stores, its fortunes are closely related to its neighbors'' views of its operations, and therefore strives to ensure that its stores are developed in a manner sympathetic to their surroundings.

Admic always completes studies to examine the impacts that its stores may have on local traffic and availability of car-parking space, and considers possible noise impacts in the design and placement of refrigeration systems and store delivery zones. Assessments also take account of the availability of utility service, and landscaping of the sites.

In store design itself, Admic is influenced by the requirements of its franchisors, and commissions appropriate professional advice (e.g. from architects, fire protection engineers and refrigeration specialists) all of which base advice on Western European (especially French) practices.

Admic will develop more formal E&S screening of future projects, initially through a desk review of possible adverse E&S impacts. This screening will record either that the screening assessment provides adequate review of E&S risk , or alternatively may identify issues which should be subject to more detailed E&S assessment.

Admic will insert a chance finds protocol into its future construction contracts such that any cultural property uncovered during construction will be protected.

-Employment Conditions

Admic has comprehensive human resources procedures which were established by an experienced HR professional who is now Admic’s HR Director. These operational procedures and templates, which cover all envisioned HR eventualities, are embedded within the standard operational procedures for each store, and these are communicated by store managers to store staff. An employee "welcome pack" which covers HR basics is under preparation: already its contents are presented to staff during Induction Training.

The working relationship with employees is documented and communicated to each employee through a written employment contract which states the position, the rights and responsibilities of the employee and employer, contract duration (open ended after a probation period), working hours, annual leave and salary.

Normal working hours are 6 x 8 hour days weekly, and not more than 208 hours per calendar month. Working time is recorded by a hand-reading system, and hours worked over these figures are paid at 150% basic pay. In addition, overtime allowance is made when working is necessary during the 8 annual paid Lebanese public holidays.

Non-wage benefits provided to employees include paid annual leave and other benefits such as maternity leave, sick leave and social security (NFSS) costs for its employees all provided in accordance with Lebanese law. After satisfactory completion of a probationary period, Admic offers employees insurance (with premiums paid by the Company) to cover the remaining 20% of health care costs, and an Admic stores discount card. Admic also has a transport fleet used to bring workers from their homes to places of work and is able to provide salary advances as loans in special cases.

Admic pays minimum basic salaries of around $300/month equivalent, which is around 50% greater than the legal minimum wage in Lebanon. A bonus structure enables qualifying staff (those who meet or exceed stated minimum performance standards) to receive bonuses of half to three quarters of basic salary based on individual, departmental and store level performance. The sales-related element of this bonus has not been triggered since the July 2006 war badly affected the Lebanese economy.

There is no formal employees'' grievance procedure, though employees can make grievances known to their store managers or to the Admic HR department.

Some of Admic''s workers are members of trades unions, though there is not an official trades union within Admic. Admic would not discriminate against any worker organization which might be formed to discuss purely workplace related issues. Admic does not permit religious or political argument among its staff because it fears that such argument can quickly develop into serious conflict.

Admic does not tolerate in its operations any discrimination on religious or political grounds or on the basis of any other characteristics not related to a staff member''s ability to undertake his or her job. This is supported by a formal written performance appraisal system which includes assessment of the suitability for promotion of the appraised staff.

Employment within Admic fell from close to 1,400 immediately before the July 2006 war to around 1,100 immediately afterwards; no further retrenchment is anticipated.

Admic''s youngest employee is 18 years of age; age of all employees being confirmed through examination of ID cards. Admic does employ trainees aged 16-18 years old during summer months.

-Occupational Health and Safety (“OHS”)

OHS risks are relatively few in Admic''s operations, and lost time accidents are monitored through the HR systems. One person was injured after falling from an improperly used fork lift truck forks. A few items of unguarded machinery were observed in the back-of-house areas of the stores and at the Achrafieh store the internal staircase giving access to the fifth floor roof is unlit, uneven underfoot and inadequately guarded. Some secure electrical switch rooms have exposed electrical conductors. Some electrical and generator rooms have automatic CO2 fire-suppression systems which present a potential asphyxiation hazard to persons working in these rooms, since they are not disabled on entering the rooms.

Admic will undertaken OHS risk assessment at all sites, and should follow up with corrective action as shown necessary. In particular, guards will be added to unguarded pump couplings and fans, the Achrafieh staircase will be lit, repaired underfoot and a guard rail added, and procedures developed and implemented to protect staff working in areas with CO2 fire suppression systems from asphyxiation.

-Fire and Life Safety

Citymall was designed in compliance with French fire safety codes; the building has sprinklers, fire alarms, smoke detectors and fire hose reels throughout, and features smoke control measures and multiple fire exits. A fire safety consultant was involved in mall design and has confirmed that the building was designed and has been constructed to date (BHV is not yet complete) in accordance with French fire safety codes. This consultant (Socotec Lebanon) also advised in the design of Admic''s BHV and Géant stores located within this mall, and in the design of the mall''s cinemas. Socotec has also reviewed fire safety provision at the Jnah Monoprix and BHV stores, and at Achrafieh. At these premises, recommendations for additional smoke detection and some fire doors were adopted.

Admic''s Monoprix stores at Zouk, Verdun or Baabda will be audited by a qualified fire protection engineer, who shall either confirm that the stores meet French and Lebanese fire safety requirements or will make recommendations which when implemented shall result in compliance wit these requirements. At all stores, emergency exit signage and lighting will be reviewed and upgraded where necessary.

Emergency response plans exist in the form of a company plan, and bespoke versions for each store. Some of the materials could be transferred from store-specific the general plan, but these plans are adequate in scope. Execution is rehearsed regularly, though defects were observed because the practices take place before store opening and sometime before all staff are present. The consultant should review these plans and recommend necessary revisions if any to these plans, and the practice schedule.

Security personnel check vehicles for bombs before they are allowed access to the malls'' parking facilities. These staff are licensed by the Police after background checks, and require annual renewal of their licenses.

-Emissions to Air and Water

Air conditioning at Citymall, which houses a number of Admic''s retail stores is based upon HFC 134a refrigerant. Air conditioning at other stores uses HCFC 22 refrigerant. All supermarket refrigeration systems use HFC 404A refrigerant except those at the Jnah and Achrafieh stores which use HCFC 22. It is anticipated that the HCFC 22 air conditioning and refrigeration systems will require replacement well in advance of Lebanon’s agreed phase-out data for HCFC refrigerants, at which time non ozone-depleting refrigerants will be specified. Refrigerant use in maintenance of air conditioning systems and super/hypermarket refrigerant systems shall be monitored to identify possible leakage.

The most significant releases to air are probably the currently unquantified emissions from standby diesel generators, whose annual use varies from around 1000 to 2100 hours. Air emissions from generators at Citymall, Jnah, Achrafieh and Baabda stores will be monitored, and if necessary maintenance actions to reduce emissions to air will be undertaken.

All sites’ drains have oil/grease traps which are serviced regularly, and thereafter discharge effluents to the city sewer systems.

All sites store oil used to power emergency generators. Citymall has an underground storage tank, with containment system and leak detection. Other sites have underground storage tanks, without provision to identify possible leakage Oil stock, deliveries and usage shall be reconciled at all stores, to provide early warning of oil leakage if any from underground storage tanks.

Stores and the mall adopt high efficiency lighting systems, and store refrigerant systems are adjusted to provide higher levels of efficiency than often found. Refrigerated display cabinets are fitted with night blinds which are used outside operating hours to reduce heat gains. However, IFC’s review identified a number of opportunities for further energy efficiency improvements at Citymall and the other sites. Admic will appoint a consultant to evaluate and further quantify these opportunities.

- Solid and Hazardous Waste Management

Solid wastes arising from operations are segregated by category (paper / card, "plastics" and styrofoam packaging) and each group of wastes is compacted and sold for recycling.

Hazardous Materials such as used lubricants and maintenance residues are stored at sites before removal by an authorized contractor. At Jnah, these wastes were simply stored in drums on pallets outside the generator room - not a secure area.
Secure hazardous material storage facilities shall be created and used at Jnah .

Stakeholder Engagement

Admic''s community engagement is based upon the business necessity to be, and to be seen to be, a good neighbor. This was most recently demonstrated through a series of regular public meetings that were held during the construction of the Verdun store. On an ongoing basis, while Admic does not actively solicit community comments, the Company is very receptive to comments made to store managers , through informal contacts with Admic staff, or formally to Admic. All comments or complaints are logged, and the Chief Operating Officer checks regularly that they have been adequately dealt with. This process resulted in Admic revising the delivery system for its Verdun store to eliminate noise nuisance, and has lead to the installation of low-noise refrigeration condensers at the Jnah store. Admic considers that these procedures have worked well and will replicate them in future store construction.

This Environmental and Social Review Summary, and the associated Environmental Action Plan may be viewed at the information desk within Citymall, which is located at:

14, Dora Highway, Bauchrieh, Naher El Mott, Lebanon.

Contacts within Admic are:

Mr. Michel Abchee, Chief Executive Officer and General Manager
Mr. Gaby Abchee, Assistant General Manager

Telephone: + 961 1 905000

Client Documentation

File Name	Actions
EAP Admic March 26 2007.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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