The Company reported that all existing facilities have been developed in compliance with local legislation and operational permits that were provided prior to the start of operations.

Sarten has the IS0 9001 quality management system in place at all facilities. Silivri, Gebze, Gemlik and Petpak facilities are certified to the ISO 14001 environmental management system standard as well. The ISO 14001 certification will gradually be expanded to all facilities by the end of 2012. Occupational health and safety management system in compliance with the OHSAS 18001 international standard will also be established at all facilities to be certified by the end of 2013.

Sarten has received several awards on packaging design from the Turkish Standards Institute and from several professional institutions on packaging industry, including the international World Packaging Organization. The awards were granted to Sarten’s products given their ergonomic and environmentally friendly design in addition to other characteristics.

With its commitment to go beyond regulations and make continuous improvement, the Company has already set Key Performance Indicators on quality, occupational health and safety (OHS) and environment which are monthly monitored at its sites, in order to continuously improve performance.

At each Sarten facility, Quality Manager, Human Resources Manager, Occupational Health and Safety Officers and Environmental Officers reporting to the Site General Managers are coordinated by the Corporate Human Resources, Quality and EHS Coordinator who is a member of the senior management located at the Silivri plant. Sarten is under the process of reviewing its organization to provide further resources to its Human Resources (HR) and EHS management organizations.

Sarten has established strong training programs for new and existing staff. The program includes an induction program on orientation, quality and EHS. External training programs are made available upon request from the staff members. The latest significant development is the establishment of the Sarten Academy which completed the first stage of a management trainee program.

Sarten’s facilities are regularly monitored by local authorities, as per the operational permits and by the external accredited institutions within the context of ISO certifications. In addition, the facilities are also regularly audited by Sarten‘s major clients which are leading national and multinational companies with robust management system standards on quality, environment, health and safety. All major clients are certified by third party accredited bodies. The domains that are audited beside the product quality include also EHS management, human resources practices, training for staff and transport facilities. It has been reported that the food packaging intensive plants are also regularly audited for compliance to the international food safety management standard of ISO 22000. Karacabey plant is certified to ISO 22000 and the Company plans extension of certification to all critical food packaging facilities. The certification schedule will be submitted to IFC.
For its further investments and expansion plans, Sarten will ensure that there are procedures in place to undertake comprehensive social and environmental impact assessments in order to develop relevant management plans in order to minimize adverse impacts.

2. Labor and Working Conditions (PS2)

- Labor Relations

Corporate principles of Sarten attach the highest importance to its human resources committing provision of resources for their continuous development. There are currently 1725 people working in Sarten Group operations in Turkey, Bulgaria, Romania and Russia. Blue collar employees represent approximately 80 % of the total workforce. Approximately 30% of the total workforce are women. At some of the facilities, such as Karacabey and Manisa where the production is concentrated on packaging for the food sector and mainly for processed vegetables, seasonal/temporary workers who can represent up to 25% of the total workforce, are hired particularly during harvesting seasons. Catering and security services are mostly provided by sub-contractor companies under the full control of Sarten’s management.

The Company does not employ child labor and is not involved in forced labor, in line with the national and international regulations. The minimum age of employment is 18. The Company provides employment also for the disabled at a required percentage by the national labor laws.

Sarten has stated that there is a freedom of association in the Company and has provided documentation that indicate that around 23% of its staff are member of the Turk Metal-Is Union which is a member of the European Workers Union. In Romania, Bulgaria and Russia there is also active presence of the workers unions. In Turkey where its majority of the workforce is located, Sarten has signed the last collective labor agreement on 1/1/2009, which includes working conditions, minimum salary and other benefits. Every two years, a new collective agreement is negotiated between the unions and the management. Sarten reported that at all its facilities, similar working conditions and benefits are provided to employees both member and non-member to the union, without discrimination.

The Company has developed detailed personnel regulations specifiying the terms and working conditions for the employees. The internal regulations and the collective agreements contain also a mechanism allowing grievances to be articulated and addressed by the employees. Besides, the management states that there is an open door policy which allows workers to raise their concerns and suggestions directly to the management. As reported by Sarten, Site General Managers and Human Resources (HR) Managers meet weekly to discuss HR issues and to take actions to address employee concerns.

There are no current plans for retrenchment at Sarten. Nevertheless, the Company will make sure that documented procedures are in place to avoid retrenchment wherever possible and for unavoidable cases, to minimize it and proceed in a manner that is non-discriminatory, equitable and transparent.

Sarten will conduct a comprehensive review of its documented human resources policy, procedures and practices and make necessary revisions as necessary, to ensure full compliance with IFC’s Performance Standards and for continuous improvement of working conditions of its workforce.

- Occupational Safety and Health:

At Sarten, several occupational health and safety programs and procedures are in place. The Company is in the process of developing further its programs and procedures to be implemented at all its facilities in line with international standards and IFC’s requirements.

Monthly OHS meeting are held with the participation of occupational physician, production managers, human resources managers, OHS officers and employee representatives to identify risks, to continuously improve workplace health and safety conditions and to promote employee health programs.

All accidents and incidents are investigated, reported and communicated to employees for taking corrective and preventive actions. No work related fatality has been encountered on any of the facilities since they were taken over by Sarten or since they started to operate under Sarten’s management as reported by the Company officials. Sarten will further develop accident incident reporting to track injury rates in addition to the lost days which is the severity indicator. Sarten will also ensure that these statistics are monitored at all locations where it operates.

Employee health monitoring programs are managed by nurses and occupational physicians at the sites. All employees are subject to regular medical examination in addition to an initial medical check prior to the start of employment. Regular vaccination programs are also available to the employees.

The major OHS risks present at the workplaces include machinery hazards which can cause injuries, noise and chemical exposure, and risks related to life and fire safety.

Machine guardings to prevent machinery hazards are adequately in place in new equipments to protect workers from injuries. The Company will conduct a comprehensive machine guarding assessment and implement upgrades to the machines presenting high injury risks, with the priority on cutting and pressing machines.

Sarten reported that all safety critical equipment such as pressurized vessels, fork-lifts and cranes are inspected regularly by competent third parties.

Sarten has established in-door air quality monitoring programs starting from the facilities where solvent based paints, lacquers and resins are being used. The monitoring program will be enhanced to all facilities and will cover additional parameters which need to be monitored, such as hydrocarbons and particulate matter, in line with the IFC’s requirements. In order to reduce chemical exposure risks, Sarten has VOC collection and incineration systems at the Silivri site and will expand this practice to the other facilities where similar operations are present.

In addition, Sarten will study further technical solutions to eliminate or –if this is not possible- to minimize chemical exposure at sites. Actions which will be studied and implemented in this context include further improvement of ventilation, use of electrical fork-lifts at in-door areas, and most importantly, replacement of hazardous substances including organic solvents and heavy metal containing painting chemicals used in the processes with non or –if this is not possible- with less hazardous compounds. In this respect, the Research and Development Department will be progressing its chemical research activities. Organic solvent formulations have already been replaced at a number of processing areas with water based solutions. Lead-free painting chemicals are used at some of the printing processes. These developments are of major importance to minimize risks at source and they will be expanded.

Noise monitoring programs are also established at the facilities and employees are provided with the relevant personal protective equipment. The Company will perform feasibility studies to reduce noise levels in the production areas through technical solutions.

Emergency response programs are implemented at all Sarten’s facilities. This includes fire, earthquake and flooding emergency procedures. The Company states that fire drills are regularly conducted. Sarten is actually in the process of reviewing life and fire safety installations. Installation of fire detectors and alarms at the facilities will be completed and it will be audited by an independent fire safety expert. The audit will review if there is adequate protection and proper maintenance. Emergency exit signs, evacuation routes and placement of emergency lighting will be part of this review. The Company reported that fire prevention and emergency response means are included in the training programs for all employees and that there is an emergency team available at each shift.

Sarten will ensure that comprehensive health and safety risk assessments are regularly conducted at all plants and mitigation measures developed within an agreeable timeframe based on the risk level and its priority, as defined in the Environmental and Social Action Plan.

3. Pollution Prevention, Resource Conservation, Energy Efficiency (PS3)

- Exhaust Air Emissions

Emissions from process stacks are measured annually. Review of the available data indicates compliance with the local regulations as well as with the relevant IFC’s guidelines. As previously indicated, at the Silivri plant, an exhaust gas incinerator for the VOCs has been installed to better protect local communities close to the plant. This measure will be extended to all facilities of Sarten with similar operations. As part of the action plan, Sarten will review its air emissions monitoring program and expand it to cover all process and combustion facilities including those for heating purposes.

- Liquid Waste

Water is obtained from municipal sources particularly for use at social facilities. Sarten reported that the production processes are actually water free except the molding operations. Domestic wastewater is discharged to the municipal drainage where available, except at the Silivri plant where advanced treatment is applied for the wastewater and the treated water is re-used for irrigation of the green areas within the Company premises. The Company reported that the rest of the liquid waste including the effluent from the molding operations is separately collected by a certified company to be disposed of as hazardous waste. The Company will further establish effluent monitoring programs at all its sites to ensure full compliance with the local regulations and IFC’s requirements.

- Hazardous Materials and Waste Management;

Hazardous waste that are produced at Sarten’s facilities are stored on site, in specific containers on site and annually collected by licensed contractors for final disposal at a licensed hazardous waste treatment facility that disposes such waste via a specific incinerators and via licensed cement plants.

Non-hazardous wastes such as waste paper, card board and processing metal and plastic waste are recycled on site or collected by/sold to licensed vendors.
Non-hazardous solid waste which is not recyclable is evacuated by the municipality to the local licensed landfills.

Sarten is in the process of improving conditions for its chemical storage facilities and will mitigate environmental and safety risks through provision of adequate storage areas away from sun exposure, with proper ventilation and fire fighting installations as well as with appropriate secondary containment.

As previously indicated, Sarten will further develop its hazardous materials management program in order to replace hazardous chemicals used in its processes and its facilities, with non –or if this is not possible- with less hazardous compounds. Sarten will undertake a comprehensive study of all hazardous materials used at its sites in the production, construction, maintenance and cleaning operations and will regularly present reports to IFC, as defined in the Environmental and Social Action Plan. The first priority is for the lacquering solutions and printing chemicals used in the processes as well as for asbestos, PCB and ozone depleting substances such as R-22 which is currently used at the old facilities. IFC is requiring that a full documented inventory of the hazardous materials is available and procedures are in place for safe handling, removal and disposal within an agreeable time frame.

- Management of EHS Risks at Material Supply and Delivery

Sarten uses external contractors for the transport of its final products to the customers. The Company states that these are compliant with local standards, as well as with Sarten’s own standards which amongst other parameters, requesting all the trucks to be new and fully contained. These standards as well as Sarten’s OHS requirements are included in tender documents. Sarten yearly audits its suppliers with the focus on product quality, safety and environmental issues.

Sarten is certified for transportation of hazardous chemicals and is regularly inspected by local authorities as well as by the international accredited body BVQI within the context of ISO 14001 certification.

- Resource Conservation, Energy Efficiency and Control of Climate Change Effects:

Sarten has recently developed new tin can templates that lead to a 10 to 23% reduction of raw material and is looking for further reduction. As previously mentioned, all recyclable materials including metals, plastics and wood form the pallets that are used for the product delivery are recycled in house for re-use. The Silivri plant for instance, domestic wastewater is re-used on site for irrigation purposes after treatment through a reverse osmosis plant.

While electricity of sites are supplied by municipal grid, natural gas is mainly used in the process of combustion of VOC gases from the production. Coal or wood fired combustion facilities are the fuel source at a number of the sites for heating purposes. Sarten is progressively reducing wood and coal usage for combustion in its facilities. LPG is also being used at several facilities.

There are on-going studies to reduce energy and water consumptions. Process specific improvements have been achieved through technical measures such as reduction of air pressure at the operations.

The Company will study further opportunities of conservation and will continue to regularly report to IFC the progress. The study will include feasibility of the heat recovery from the VOC combustion units.

4. Community Health, Safety and Security (PS4)

Sarten facilities are established within industrial zones. Potential impacts to the local communities are limited in number and can be mitigated as described in the previous sections. The Company reported that security teams are trained to address emergency conditions and that the management of the teams is in line with IFC’s Performance Standards. As previously indicated, Sarten has implemented an emergency preparedness and response plan which is under review for further development.

Since its creation to date, the Company has not have any record of negative impact on the community.