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: PS1: Social and Environmental Assessment & Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement PS4: Community Health, Safety and Security PS5: Land Acquisition and Involuntary Resettlement PS6: Biodiversity Conservation & Sustainable Natural Resource Management is not applicable because the project involves expansion of QSRs and bakeries in built up urban environments. The surrounding areas around FRF farmland have been designated for agricultural development by the Ogun State Government which has earmarked 3,000 hectare concession strictly for agricultural and agro-allied development. Further, the FRF farmland lies in areas of converted farm land due to its use for subsistence agricultural production by the Isaga Orile and Ilewo Orile communities prior to its acquisition. The company will however, commission an ecological baseline survey of the seasonal stream that flows along and forms the western boundary of FRF. The objective of this survey, which will supplement the EIA, will be to provide the general ecological profile of the stream and its vicinity to facilitate the subsequent impact assessment. In addition to obtaining an inventory of the flora and fauna of the stream, the ecological baseline survey should also aim at providing insight into the ecological functions and importance of the habitats in and around the stream, if any. No PS7: Indigenous Peoples and PS8: Cultural Heritage issues have been encountered in Food Concepts operations to date and thus these are not applicable. However, the company will continue to screen for the applicability of these PSs to its FRF and future expansion activities, as part of the EIA process. Specifically, should any cultural heritage issues be encountered, Food Concepts will immediately notify the relevant authorities. The World Bank Group (WBG) Environmental, Health & Safety (EHS) Guidelines that are expected to be applicable to this investment include: The General EHS Guidelines (April 2007), and Agribusiness/Food Production (April 2007), including the Poultry Production, Poultry Processing and the Food and Beverage Processing Guidelines.

The key environmental, health, and safety and social (EHSS) issues associated with this investment are: Environmental, social, food safety and quality management system and related issues, Occupational health and safety (OHS) management during construction and poultry production, processing, storage and transport operations, Supply chain management, including child labor and contractors management, Management of waste from poultry production, abattoir, and processing activities, Bio-safety controls, including preparedness for avian influenza, and any other poultry disease, Energy and water consumption and efficiency, Community relationships, land acquisition and economic resettlement for FRF activities, and, Standardization of EHSS management systems across the different countries. For the FRF project, Food Concepts has teamed up with Innodis of Mauritius (www.innodis.mu) who is its technical partner. Innodis will offer technical services including site evaluation/assessment, design, specifications, planning, project supervision, training, recruitment of key personnel, installation and support, and continuous technical support. In addition to its partnership with Innodis, Food Concepts has committed to an Environmental and Social Action Plan (ESAP) to address the identified issues and meet the requirements of IFC’s Performance Standards. As a result, based on the limited and site-specific E&S impacts which could be easily mitigated, the project has been classified as a Category B according to IFC’s Environmental and Social Review Procedures.

PS1: Social and Environmental Assessment and Management Systems

Assessment: With respect to the farmland acquisition of FRF in Nigeria and, in accordance with the Environmental Impact Assessment (EIA) Decree 58 of 1992, new major developments, such as those proposed for FRF, require an EIA. The EIA is required prior to any planning and building approvals. Thereafter, a Letter of Approval is issued by the relevant government authority. Food Concepts commissioned Oyekanmi & Associates to undertake an EIA Study for FRF for which a final draft report was submitted to the Ogun State Bureau of Urban and Physical Planning for review and approval. The EIA approval is currently pending, and once obtained, Food Concepts will provide IFC with a copy of this approval for filing at least 30 days prior to start of construction.

The main potential adverse impacts associated with FRF and identified in the EIA report are water use, ground and surface water pollution, soil contamination and air pollution. Water supply for FRF will be sourced from boreholes which will be drilled on site. Ground and surface water pollution is directly linked to both solid and liquid wastewater handling, including sewage, on site. Solid waste will include manure, carcasses from the broiler houses and the abattoir, feathers, and sewage sludge. The effluent produced from the abattoirs could generate pollution problems due to the high content of animal fat, manure, blood and any cleaning detergents. Air quality pollution could also arise as a result of dust and vehicular emissions during construction and sharp and pungent odor from Ammonia gas (NH3) produced from manure during broiler house operations.

The EIA study did not apply the Performance Standards to the project. In particular, the study minimally addressed social issues associated with land acquisition and on-going community engagement. To this end, Food Concepts will commission a resettlement audit to ensure full compliance with PS5. Equally, the EIA study did not fully cover the issue of groundwater supply for which a separate study will be implemented by the company.

Through this EIA process, Food Concepts will be able to develop appropriate environmental and social policies and procedures for FRF operations. Under IFC’s investment, Food Concepts will be required to strengthen the implementation of the actions identified in the EIA through use of comprehensive Action Plans with time-bound targets for completion. In future, for similar developments, Food Concepts will also ensure that the environmental and social consultants use both local Nigerian EIA and the IFC’s PS requirements in the environmental and social assessments of its projects.

Food Concepts is ISO 9001: 2000 certified with effect from 25 May 2009. Additionally, the company has an Operations Excellence unit whose core objective is to ensure strict adherence to all its internal operational standards as defined in the Operations & Training Manual, and a Dry and Processed Food Products Policy to manage quality in the supply chain.

For the QSR and bakery operations, and as part of the business permit application process, the company applies to all regulatory bodies on the requisite standards and requirements that need to be obtained to conform to national food production standards. The applications will include provision for life & fire safety, and adherence to Food Handlers’ Test requirements in both Nigeria and Ghana.

Organizational Capacity: Quality Management for Food Concepts is run through the Operations Excellence Unit. The unit manager is qualified and experienced and accredited by the Chartered Institute of Environmental Health (CIEH) UK (www.cieh.org) to run some of its quality related programmes. In view of this, the Quality Manager has run a series of programmes for the team, including, Basic Food safety, Intermediate Food safety, Advanced Food safety, Basic Health & Safety and Train the Trainer. The Operations Excellence Unit develops and implements policies and procedures for the entire group to ensure effective quality management in all Chicken Republic restaurants. QSR Managers are responsible for implementing the policies and procedures under the guidance and oversight of the Quality Manager.

Going forward, and as the company embarks on the backward integration exercise, Food Concepts will appoint a full-time dedicated and experienced EHS officer to be responsible for the overall E&S issues. This will include ensuring effective E&S assessment of projects – and action plans associated with those assessments, monitoring these action plans for effective implementation, delivering training programs on the E&S risks, carrying out monitoring and evaluation of its outlets, and reporting to senior management on the E&S performance of the company. Individual outlet managers will have responsibility for the E&S performance of their individual operation defined in their job descriptions.

Management Program and Training: The EHS officer will oversee the development and implementation of a robust environmental and social management system (“ESMS”) in line with ISO 14001 and appropriate to the operations. The system which will be integrated to the Quality Management System will comply with IFC Performance Standard 1 (PS1). The officer who will be qualified for this work, will obtain training as needed, and will manage the preparation of an annual environmental and social monitoring report (AMR) for IFC.

Monitoring: Food Concepts will be required to monitor its water use and quality for its group wide operations. To enhance its food safety management, Food Concepts will monitor the quality of water used for cooking at the restaurants against the WHO potable water standards. Monitoring will include reviewing operations, inspecting facilities and observing monitoring activities to assess the effectiveness of the company’s environmental management procedures and their implementation and, if appropriate, identifying potential improvements. Food Concepts will also monitor water quality and quantity in village drinking water boreholes. The monitoring results will be included in the AMR that will be submitted to IFC. Food Concepts will also be required to monitor, evaluate and report on its general E&S performance, including implementation of the ESAP.

Reporting: The company publishes an Annual Report which can be obtained by calling or emailing the head office for which the contact details are provided on the company website (www.foodconceptsplc.com). The report contains good aggregate information on corporate social responsibility and none on E&S; Food Concepts do not currently publicly report on the environmental and social aspects of its operations. As part of IFC’s investment, the company will be required to provide more information on E&S performance, including statistics of the OHS performance at the outlets, bakeries and FRF operations, in its Annual Report.

However, as statutorily required by the enabling laws of Nigeria and Ghana, Food Concepts makes statutory reports to various appropriate governmental bodies having oversight functions over its operations, such as Ministry of Health, Ministry of Environment, Environmental Protection Agencies, and National Agency for Food Drugs and Administration Control (NAFDAC) of Nigeria.

In future and for the purposes of IFC’s investment, Food Concepts will submit an AMR to IFC describing its environmental and social performance, including incidents and monitoring results, as appropriate.


PS2: Labor and Working Conditions

Human Resources: Food Concepts employs 1,446 people inclusive of management and 55% of these are female; 59 are based in Ghana and the remainder is based in Nigeria.

The Human Resources Department has compiled detailed policies that guide employment and performance in the company. These policies are summarized into a concise and simplified Staff Handbook which is issued to all staff members on engagement.

The FRF project will lead to the creation of 255 jobs over a four year period starting from 2012, and will provide opportunities for skills transfer. In addition to this, the proposed out-grower scheme described below will enhance incomes for the local communities who are targeted by this scheme. In comparison, the planned QSR and Bakeries expansion will create 1,214 new employment opportunities over a four year period starting from 2011.

Terms and Conditions of Service and Grievance Mechanism: The Staff Handbook specifies all the relevant terms and working conditions, including grievance mechanism. The terms and conditions comply with the respective labor laws of Nigeria and Ghana. The two countries ratified the International Labor Organization’s Core Labor standard and thus, by meeting applicable national law, the company will also be complying with the requirements of PS 2.

Occupational Health and Safety: Food Concepts has developed a detailed Health and Safety Policy for Chicken Republic. The policy stipulates that Chicken Republic will carry out its business at all times in such a way as to ensure the health, safety, and welfare of all its employees, customers, and other persons who may be affected by its activities. The policy which has sections outlining everyone’s specific responsibilities towards Health & Safety, requires each restaurant to have an accident book that is easily accessible to all staff and managers. All accidents are to be reported in this book as promptly and accurately as possible after which the manager or supervisor should complete Site Incident Report allowing them to make recommendations for improvements or changes to prevent similar accidents recurring. No recordable accidents were reported and recorded at the time of appraisal.

In compliance with its Health & Safety Policy, Food Concepts ensures that its employees are provided with appropriate personal protective equipment and occupational health and safety training for the type of work in which they are engaged. For all of its offices and QSRs, the company employs appropriate measures for life and fire safety (L&FS), as described below.

Food Concepts will also implement Occupational Health and Safety Management System in line with OHSAS 18 001 and integrated to the Quality management system. In addition, the company will include the requirement for a comprehensive environment health and safety plan, including an indication of how compliance is to be ensured, in tender documentation submitted to construction companies for FRF.

Workers’ Organization: The Staff Handbook does not contain information on workers’ organizations and collective bargaining, but staff members are free to join unions of their choice. Currently, none of Food Concepts employees are unionized. Membership in trade unions is entirely voluntary in both Nigeria and Ghana.

Supply Chain: No labor issues, including child/forced labor, were identified in the supply chain during appraisal. In Nigeria, the company purchases its chickens from reputable companies with whom a supply contract is signed. The supply contract which covers both dry and processed food products, allows Food Concepts to monitor its supply chain operations and business relations of its suppliers. The contract entails the company to check and ensure amongst other aspects, that all necessary statutory licenses, permits and approvals that may be required by the supplier to effectively engage in the supply chain business is obtained by the supplier. In Ghana, the company purchases its frozen chicken from Sucatrade Limited, who in turn obtains supply from chicken producers in the USA and Brazil. Due to the small scale nature of the business in Ghana, it is not yet possible to implement the supply contract.
PS3: Pollution Prevention and Abatement

Food Concepts understands and manages all its waste streams and the final disposal methods. The main broad waste streams from the QSR outlets are solid waste; whose bulk components include packaging material, paper, empty cans, plastic and glass bottles, and food waste; and liquid waste, which includes sewage and kitchen effluent waste, used oil from generators and storm-water runoff. Once the FRF operations come into production, the waste streams will significantly expand to include manure and carcasses from broiler houses, feathers and effluent water from the abattoir, and sharp and pungent odor from Ammonia gas (NH3) produced from manure.

Chicken manure is rich in nutrients, particularly nitrogen, phosphorus and potassium, and serves as a soil amendment by adding organic matter and increasing the water holding capacity of the soil. For this reason, chicken manure from FRF will be composted and used as fertilizer for the maize and soya farm sections in the integrated farm set up. Any chicken litter not used for fertilizer will be treated in the Rendering Plant together with other broiler house and processing plant waste which will include blood, feathers, rejects and heads. The Rendering Plant to be installed at FRF will process and turn these wastes into by-products that will be sold to fish and pig farmers.

The company subscribes to the regulatory requirements of government regulatory agencies, such as Lagos State Environmental Protection Agency (LASEPA), Lagos State Waste Management Authority (LAWMA) in Nigeria, and Accra Metropolitan Assembly in Ghana, and other accredited agencies responsible for the enforcement of compliance on environmental, health and safety issues in both countries.

Domestic Waste: Food Concepts solid waste is disposed through the use of plastic and steel/galvanized bins specifically designed and approved by LAWMA for Nigeria, with sizes ranging from 120 to 240 litres. The waste is carted off site on a daily basis at night or early in the morning before outlets open for business and deposited centrally at government landfills. This waste collection and disposal process is coordinated by LAWMA in collaboration with accredited agents referred to as Private Sector Participants (PSP Operators), whose role is to complement government in waste management. In Ghana, disposal is also performed by a professional waste management company, registered with the local authorities.

To improve its waste management and enhance proper re-cycling of wastes, the company recently introduced biodegradable paper packaging for take-away purchases in all its stores. Previously, the company used Polythene plastics and Styrofoam which are non-biodegradable. The company will review further opportunities for recycling of waste in its operations.

Sewage: Sewage is stored in underground reinforced concrete septic tanks and, once full, the tanks are evacuated into mobile tanks by private contractors and treated at government approved sewage treatment facilities. As with domestic waste, the operators are government-licensed to carry out these activities. These contractors are little more than transporters of the sewage from locations to approved treatment sites and final treatment is the responsibility of the respective state governments. Food Concepts will monitor and ensure that sludge collected from their premises is delivered to the respective government treatment facilities.

Effluent Waste: All Food Concepts QSR outlets are fitted with an external grease trap, which prevents oil or solids from the kitchen sink areas from entering the main drainage. The cake that forms in the fat traps is collected together with the sewage sludge for final disposal at state approved sewage treatment facilities, as noted above. The other waste stream containing non fat effluent such as normal wash water is directed into municipal drainage for further treatment at designated facilities.

FRF will implement a waste water treatment plant that takes into cognizance the Biological and Chemical Oxygen Demand permissible limits in Nigeria, and the applicable WBG’s wastewater guidelines, to treat its effluent and waste from its processing plant. Water will also be treated and recycled from FRF and processing plant to serve as irrigation for the maize and soya farm sections in the integrated farm set up.
Energy Use: Due to limited public supply of electricity in both Nigeria and Ghana, all of Food Concepts’ sites are designed to be self sufficient in electricity supply.

The company has step-down transformers (which feed from the national grid) installed in all its locations. The transformers step the voltage down from either 33KV or 11KV (depending on the location) to 220/415V needed in the stores. The company consumes an average of 1.6 million KW/HR per month from the national grid.

To back up supply from the grid, the company has installed a total of 61 generators with a combined capacity of 7,460KVA. The generators run on diesel and consume an estimated average of 3 million liters of diesel per year. All this fuel is stored in above-ground tanks at the different locations. As part of its Emergency Response and Preparedness Plan, the company will equip all its existing fuel and oil tanks with secondary containments to hold 110% of the tank capacity, and ensure all newly installed tanks are equipped with secondary containment at the time of installation.

Resource Conservation: Food Concepts is in the process of converting all light to energy saving bulbs; this activity has recently been completed at the head office in Nigeria while all the Ghana outlets have replaced the fluorescent tubes with energy saver bulbs. The lighting provided in its stores and bakeries will be changed to reflect the company’s drive for energy efficiency. The company also uses inverters in its stores to run essential equipments over-night rather than using generators. In addition, the company is considering the use of solar panels as alternative power supply and has started discussions with energy companies who are providing proposals on energy-saving initiatives.

As with energy and due to limited public water supplies, the sites are designed to be self sufficient in water provision. Domestic water for all operations in Nigeria is obtained from groundwater sources whilst this is supplied by a water vendor in Ghana. All the sites are equipped with overhead water storage tanks.

Water for the farm and chicken processing plant operations will be sourced from boreholes which will be drilled on site. Food Concepts will be commissioning a groundwater study to identify groundwater location and flows. This study will identify suitable borehole sites and sites for installation of monitoring boreholes, including village water resources. It will be critical to have sufficient water for the project and therefore groundwater potential in the area will be investigated to ensure sustainability of water abstraction such that community and FRF needs can be met. This work will also include preparation of a water balance to fully understand the interaction between ground and surface water resources, together with the FRF and community water needs.

The company accepted a recommendation from IFC to implement a cleaner production audit for water use in all its operations. As part of this audit, the company will develop a water balance for its FRF operations as stated above, to track the inputs and outputs of water in the operations. IFC will monitor the implementation of this audit and evaluate for the applicability and eligibility of the company to obtain Technical Assistance and financial resources from the IFC’s Cleaner Production Lending Facility.

Greenhouse Gas Emissions (GHG): GHG emissions from the various Food Concepts activities are currently not accounted for. IFC will require that the company account for and report its GHG emissions annually in the AMR.

For the electricity generation at FRF, the company will install generators which will be fitted with appropriate abatement equipment and whose exhaust emissions will be controlled according to combustion chamber temperature.

The company is committed to eliminating appliances that contain ozone depleting substances and will avoid using CFCs and other such substances for its refrigeration.

Pesticide Use and Management: From time to time, Food Concepts properties are fumigated for pests, namely rodents, insects and reptiles, and this is contracted out to government approved agents. Alpha-cypemethrin is used for the control of insects and reptiles whilst Brodifacoum is used to control rodents. Brodifacoum is a class Ia rodenticide (extremely hazardous) according to the WHO Recommended Classification of Pesticides by Hazards and the company will phase out this product and replace it with an acceptable rodenticide in compliance with IFC PS3, as required in the ESAP.

PS3 requires that every non chemical control means be exhausted prior to the implementation of a chemical control program. To comply with this requirement, Food Concepts will review and assess the applicability of such non chemical rodent control procedures. This will include daily inspections, filling up burrows with concrete and rodent proofing buildings at least twice per year, and more often if the situation warrants. Should there still be need for chemical control of rodents after implementation of the non chemical control; the company will use fumigants such as pyrethrum based compounds that comply with IFC PS3.

For its proposed feed cropping activities, FRF will develop an Integrated Pesticide Management Plan (IPM) in line with IFC guidelines on crop production and WHO pesticide classification system to ensure that pesticides used comply with international requirements.

PS4: Community Health, Safety and Security

The main potential risks related to the community from Food Concepts operations include those related to food safety issues, the spread of animal diseases at FRF, and life and fire safety in the QSR outlets, and traffic related with regards to the large transport fleet that will be required to transfer goods from source to processing points.

Food Safety: Food Concepts does not have in place a certifiable food safety system. However, several processes and documents have been put in place to ensure effective quality management in all Chicken Republic restaurants. This includes quality of receiving & storage of food items to preparation (finished products), food safety, operating systems & equipment management. In view of this, the company has recruited top quality staff with international experience and exposure to QSR businesses, such as McDonalds and Burger King, to implement its various operational processes thereby ensuring effective compliance.

Some tools and activities that the company use to achieve operational excellence and consistency include: operations audit, various training programs, operations manual, customer service process, staff certification manual, and daily cleaning checklist & a written HACCP policy. All these lend credence to effective quality management and proper monitoring.

To ensure quality of water used in the QSRs, Food Concepts has on-site water treatment plants consisting of filtration, UV-light and chemical dosing station. This treatment process is based on specified national standards of NAFDAC in Nigeria and the same concept was adopted for Ghana though it still has to be fully commissioned.

Similarly, the company quality checks in the Bakery Division can be grouped into three main steps, namely; raw materials, process and finished products. Standards are designed to conform to Nigeria bread standards and samples are taken on each delivery for Chemical/Microbiological confirmation by an approved Public Health Analyst. If there is any variance with the set standard, the raw materials are rejected. Expiry dates, best-before and batch numbers are other parameters that are used for quality checks.

The company monitors the quality of products from its suppliers and general contractors through use of internal policies, such as the Dry and Processed Food products policy. This policy, amongst other aspects, ensures that the products being procured comply with national approved standards as defined by the relevant authorities.

Further, to ensure that products are hygienic, Food Concepts conducts Food Handlers` Tests for all employees before being fully engaged into the system to work and thereafter biennially. The test will expose any staff that has any form of infection that may directly or indirectly negate the hygienic standard already attained by the company. Treatment is immediately administered to staff with inadequate medical status.

The company will also consolidate its quality management system and work towards implementation and certification of ISO 22 000 Food Safety Management Standard by the end of 2012, as committed to in the ESAP.

Life & Fire Safety: Food Concepts locations are all fully equipped with the use of Fire Safety appliances and requisite posters. These appliances are periodically serviced and maintained. All premises are inspected yearly and certified fit to operate by the State Fire Service Departments of the respective countries. The approval is issued through Fire Service Certificates that are renewable annually.

Bio-security: Bio-security which is mainly breached by trucks, people, feed and pests will be applicable at FRF. A Food Concepts technical partner, Innodis of Mauritius produces over five million broilers on farms located on the southern part of Mauritius. Innodis, whose poultry business is ISO 9001 and HACCP certified will bring the strict bio-security and hygiene measures on which its business thrives to FRF from design through construction to operation stages.

Site location and design, and density of poultry in a given geographical area are critical for bio-security. For this reason, the additional farmland Food Concepts is in the process of acquiring is situated 3 kilometers from FRF. Effective waste disposal and removal of litter from the site is equally essential. Areas around broiler houses will be constructed of materials and surfaces that can be cleansed and disinfected, to reduce transmission of organic material on vehicles, tires, boots etc.

In addition, site traffic will be controlled and kept to a minimum and only essential vehicles will have access, and no unauthorized personnel will be allowed in the broiler houses. Those vehicles which must enter the site will be subject at the site entrance to spray disinfection of wheels and wheel arches. All visitors will be required to observe standard operating procedures on vehicle cleansing and disinfection, and protective, farm only clothing will be provided to and used by drivers. All entry points will be equipped with regularly refilled foot dips, charged with a suitable disinfectant.

Fleet management: It could not be determined during appraisal how many, if any, transportation incidents and accidents involving communities had been recorded due to the movement of Food Concepts supplies and products. Going forward, the company will implement a system to check, review and record incidents and accidents associated with transportation of its supplies and products, including monitoring third party transporters.

Security personnel: Food Concepts locations are secured with the use of contract security guards and armed Police in some locations depending on risk. The activities of the security personnel are overseen and coordinated by internal security personnel.

Risk assessment is carried out on any location before business activities start. The assessment is carried out by the Security Company that will handle the location. The company also elicits the support and co-operation of the Police Force in the form of Police Community Relations (PCR). The co-operation from Police further strengthens the security of the business premises.

Cash evacuation which poses a security risk is done directly by Food Concepts bankers during the week while a dedicated patrol van is provided by the security company on a standby basis to cater for weekend cash evacuation from all stores and bakeries.

Apart from some minor thefts in a few locations, no major security related incidents have been recorded to date since start of the business.

PS5: Land Acquisition and Involuntary Resettlement

Food Concepts QSR outlets are located in urban areas where land ownership is clearly defined and title deeds are available. Land purchases are on a willing seller/willing buyer basis. In addition to this, the company has robust site selection criteria which it uses to identify properties for the QSR. Of the 63 QSR outlets, the company owns 11. The outlets are operated on long lease basis.

On the other hand, FRF intended operations in Abeokuta North local government area of Ogun State discussed above have triggered displacement of livelihood activities for the local communities of Isaga-Orile village. 129 farmers, croppers and families from the Isaga Orile and Ilewo Orile communities who were identified as previous occupants of the allocated land were compensated. An additional 20 families who were not fully captured in the initial exercise were also compensated. The monetary compensation was for either land ownership through inheritance or family ties, and/or crops grown on the 250 hectare site.

In acquiring the land, it is clear that the company followed a well defined, robust and auditable process which can be subdivided into three main components, pre-acquisition, acquisition and compensation payment.

The pre-acquisition process involved a due diligence by FRF to identify suitable area based on a number of factors including accessibility and suitable climatic conditions. Once suitable land was identified, a formal application was submitted to Ogun State Government for their consideration and approval. During this time, a formal presentation was also made to the Ogun State Agricultural Land Allocation Committee. Relevant documents and statutory and requisite fees were paid by the company to the State Government.

During the acquisition process, survey of the 250 hectares allocated to FRF was conducted by the Bureau of Lands and Survey of the State Government. The survey was undertaken to determine the actual boundaries of the allocated land. Once the boundaries were determined, crop enumeration of the 250 hectares farmland was undertaken. During this period, which took three months, sensitization, consultations, meetings and identification of each and every landowner, and farmer who had worked on the land and owned it by virtue of inheritance or family ties in the host communities was undertaken. Further, the two Monarchs who govern the area were also consulted to aid the process. All this is documented, including newspaper cuttings reporting on the issue. The crop enumeration exercise which was undertaken by the Ogun State Ministry of Agriculture took into account all cash and food crops on the allocated land.

A sum of N19.6 million Naira was paid to the 129 farmers and families identified above. The additional 20 families also identified above were paid a sum of N7 million Naira. Prior to the compensation exercise, public service announcements to sensitize the host communities and the general public were made via Ogun State radio and television stations 48 hours before the crop compensation payment ceremony on 18 May 2010.

The Ogun State government has also approved the allocation of additional 250 hectares of farmland around FRF to help with the construction of a Feedmill, Hatchery, Rendering Plant, and Processing Plant for production of patties, nuggets and strips, and grain farm to actively support the feed-mill. Also, the Oyo State Awe Local Government has approved 180 hectares for farming. The additional farmland is earmarked to kick-start a pilot program for the out-grower scheme which the company has identified as one of the vehicles through which it can achieve its Corporate Social Responsibility (CSR). The aim of this scheme is to fully integrate the remaining farmers who will not be accommodated as contract farmers on FRF from where they were originally relocated. This would ensure a full resettlement of farmers in and around the farm site and cement a long lasting partnership. The out-grower scheme is being implemented with the support and expertise of the University of Agriculture, Abeokuta, which has successfully implemented and executed a medium-scale poultry out-growers scheme before.

In addition to the proposed out-grower scheme and to ensure full compliance with PS5, Food Concepts accepted an IFC recommendation to commission an audit of the whole process to date against PS5, with recommendations, if any, that the company can adopt and implement for its future land acquisitions. The Terms of Reference (ToR) for this audit will be agreed upon with IFC, as outlined in the ESAP.

To strengthen the existing relationship with the communities, Food Concepts will formalize existing communication in a Stakeholder Engagement Plan (SEP). This will allow for regular information flow to the community about their needs and issues relating to the project. Food Concepts will also set up a grievance mechanism which will allow community members to express views directly. Progress in meeting the provisions of the ESAP will be made available to the communities on at least an annual basis. In addition to the consultation undertaken as part of the land acquisition process, Food Concepts recognizes that it has a Corporate Social Responsibility toward the communities in which it operates. A number of initiatives including sponsorship of a Family House of 10 children in the SOS Childrens’ Village, and title sponsorship for the Chicken Republic Under16 Junior Tennis Championship were undertaken in the last financial year and reported in the 2009 Annual Report. The company CSR project for the year 2010 includes provision of potable drinking water via the construction of a borehole at Akim Government Secondary School in Calabar, Cross River State to alleviate the living and learning conditions of the students. The company also plans to dredge and rehabilitate the seasonal stream that runs through the Isaga Orile village and adjacent to FRF farmland. All forms of CSR initiatives will be discussed with the relevant ministries and affected communities before implementation.

Inquiries and comments about the project can be made through the contact provided below. For inquiries and comments about Food Concepts Plc: Deji Akinyanju 2, Jagal Close, Off Ikosi Road, Oregun, Lagos Tel: +2348034020900 Fax: +234 1 2715307 E-mail: deji@foodconceptsplc.com For inquiries and comments about IFC: General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384