26253 - A1 Belarus

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Environmental & Social Review Summary

Project Number

26253

Company Name

TIGULLIO HOLDINGS LIMITED

Date ESRS Disclosed

Oct 12, 2007

Country

Belarus

Region

Europe

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 24, 2008
Signed : Jul 1, 2008
Invested : Feb 13, 2009

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

Tourism, Retail and Property

Department

Regional Industry MAS LAC & EUR

Project Description

The A1 Group (A1 or the sponsor) plans to open a chain of 128 modern-format stores in Belarus, which the sponsor expects to complete by 2010. These stores are characterized by relatively low numbers of Stock Keeping Units (SKUs), limited in-store service, and, affordable prices. The first stores have been opened in Bobruisk, followed by stores in Minsk, Molodechno and Zhodino. Further plans include expansion into Mogilev, Brest, Gomel and Vitebsk regions, with an expected ratio of owned to rented stores of 40:60. These stores, located in residential areas, will have an average trading area of 500 m2 and will serve low- to mid-level income customers.

Overview of IFC's Scope of Review

The social and environmental review of this greenfield project comprised a visit by an IFC Environmental Specialist to the sponsor’s Moscow office, where there was a discussion of IFC’s environmental and social requirements for the project, as defined in IFC’s Performance Standards on Social and Environmental Sustainability. These requirements were then clarified in written form, and explained further and agreed with the Sponsor. No site visits were made, since the project locations remain to be determined.

E & S Project Categorization and Applicable Standard

While all Performance Standards (PS) 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:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
- PS5: Land Acquisition and Involuntary Resettlement

The small stores will be located in established residential areas, and it is therefore highly unlikely that issues related to biodiversity conservation, indigenous peoples or cultural heritage will arise.

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

- Environmental assessment and site planning processes;
- Social and Environmental management systems and structure;
- Labor and working conditions;
- Resource efficiency;
- Refrigerant selection;
- Emissions to water;
- Solid waste disposal and management;
- Life and fire safety;
- Food hygiene;
- Site acquisition.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because the project has limited potential adverse environmental and social impacts that are few in number, site specific and readily mitigated.

Environmental and Social Mitigation Measures

It should be noted that this is a greenfield operation, very much in its start-up phase in Belarus. It may therefore become necessary for the company to adapt the mitigation measures described below as it expands and becomes more complex. Another implication of the start-up phase is that many of the mitigation measures described below take the form today of planning, to be followed by development and adoption of procedures which have not yet been implemented. IFC will liaise closely with the company, particularly during the early stages of this project, to ensure that the mitigation measures described here, with such adaptation as may be necessary do in fact operate as expected.

- Environmental Assessment and Planning Processes

The company expects to buy or lease existing stores, (which will be standalone buildings or stores located in the ground floor of residential apartment blocks or within large trading centers) and to redevelop and rebrand these sites. It also plans to lease or buy buildings previously used for other commercial purposes in order to convert them into stores. The stores will be located in established residential neighborhoods and will be connected to all necessary utility suppliers and so very limited adverse environmental or social impacts may be anticipated – such that environmental assessment is not required by the regulatory authorities. However, the company will develop a mechanism to screen for adverse E&S impacts when obtaining sites.

Although not in its immediate plans, the company may in future buy land for the development of stores or logistics centers. In such a case, project developers are responsible for carrying out an environmental impact assessment (EIA) study of the proposed development and to develop environmental action plans.

The company plans to develop neighborhood stores, and therefore its business success relies upon creating and retaining the goodwill of its neighbors.

- Social and Environmental Management

The company does not presently have a formal environmental or occupational health and safety (OHS) management structure. Environmental management is currently the responsibility of the company’s Board of Directors.
While this is sufficient for a very young and small company, this structure does not provide adequate environmental oversight for the much larger organization which the company aspires to become. Al, the company and IFC will regularly review the adequacy of this environmental management structure, and the company will appoint managers within the company to be responsible for environmental and safety issues when the work justifies, and expects subsequently to expand the team as operations grow. These managers’ early tasks will include ensuring that adequate provision is made for life and fire safety in the store refurbishment and re-branding process, moving onwards to the design and implementation of environmental, occupational health and safety and food hygiene management systems, or an integrated management system covering these issues.

- Labor and Working Conditions

The company will develop and implement employment policies in full compliance with local legislative requirements. A1 is familiar with IFC’s requirements in this area and will ensure that the company’s employment policies are compliant with Performance Standard 2. These policies and procedures will be presented to IFC for review as a condition of disbursement of funds to the company.

The company will have written contracts with employees, which define the keys issues of the employee/employer relationship such as mutual obligations, working time, benefits and holidays, remuneration etc. Employee selection and advancement will be based on a principle of no discrimination on any grounds unrelated to ability to undertake the work required. The company will establish and operate an employee grievance mechanism which will permit employees to express grievances, if any exist, while protecting employment rights.

A1 is not planning to retrench the personnel of the acquired stores. Former employees will be offered a new job on a competitive basis and will be hired on a preferred alternative basis.

In accordance with Belarusian regulations, after start-up of its operations, the company will carry out job safety analysis for each workstation and develop OHS action plan to minimize any exposure of employees to identified hazards.

- Resource efficiency

Energy represents a significant expense in the retail industry and one which the company wishes to control closely. Stores will be equipped with high efficiency fluorescent lighting, and refrigeration equipment selection shall emphasize its energy use. Stores will be equipped with electricity and water meters which will be regularly monitored, and a utility management system developed to promoting efficient use of utilities.

- Refrigerant selection and use

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

- Waste water disposal

The company will discharge waste water from the stores to the municipal sewage network. If required to comply with the sewage authority’s acceptance criteria, install fat traps or other pre-treatment systems will be installed.

- Solid waste management and disposal.

Some solid wastes, in the form of damage goods and time-expired food products will arise in stores. These will be collected and disposed of by an authorized waste management company. Other solid wastes, such as paper and cardboard, and plastic packaging materials will be collected and sold for recycling.

- Life and fire safety

Life and Fire Safety (L&FS) will be the part of the overall EHS management system. The company will recruit or commission a fire safety processional and will retain access to this specialist until sufficient in-house expertise has been developed to safely operate existing stores. The fire safety professional shall develop a corporate L&FS Master Plan, effectively a refurbishment specification, to ensure that existing properties will be refurbished in full compliance with the local building codes and fire regulations and consistently with internationally recognized Life Safety and Fire protection Codes, such as NFPA,. This “Master Plan” will contain guidance on how to adapt the generic L&FS-related aspects of refurbishment according to individual store circumstances.

The company anticipates building small stores with trading areas averaging around 500m2. Store design plans will be developed to include generic fire protection facilities appropriate for a building of this size, and will include consideration of fire suppression, fire detection and alarms, multiple unobstructed exit routes, emergency exit signage and lighting and emergency response plans. Staff training and routine inspection needs will be considered in the development of the social and environmental management system, and post-construction inspections by the fire safety professional will be included to confirm that the construction and operation of the building are compliant with the Master Plan.

- Food Hygiene

A1 does plan to prepare and sell some fresh food stuffs, for example salads, and is committed to follow Belarusian sanitary regulations.

- Site acquisition and planning processes

At the present time, the company is developing store premises by buying existing stores which are sometimes located in the ground floors of apartment buildings, and redeveloping these premises. These purchases are on willing buyer, willing seller basis, and do not cause physical or economic displacement.

The company may in future buy land plots for development of stores or logistics facilities. The company will develop policies and develop and implement land acquisition procedures consistent with IFC Performance Standard 5, Land Acquisition and Involuntary Resettlement. All land to be purchased will be examined for contamination, and either avoided or appropriate safeguards adopted in the event that contamination is identified.

Stakeholder Engagement

Publication of this ESRS and associated Environmental Action Plan constitutes the client’s first community engagement related to its project plans. Such engagement is not required by the Belarus authorities having regard for the limited potential for adverse social and environmental impacts arising from the project.

Going forward, the company will establish a formal system, the “Book of Suggestions and Complaints” one of which will be held in each store, to receive comments from members of the public. These comments will be studied and acted upon by the company’s senior management. All store personnel will be trained in customer relations. The numbers of grievances received and resolved will be used in determination of store staff performance.

It is expected that the major part of the company’s community engagement will take the form of advertising and brand-building.

Client Documentation

File Name	Actions
ESAP_A1.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

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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