IFC’s environmental and social review reveals that the investment will have impacts that must be managed in a manner consistent with the following IFC Performance Standards on Social and Environmental Sustainability (the “Performance Standards” or “PS”): PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement The following PS’s were screened for but not found of direct relevance for the project: PS4: Community Health, Safety and Security since project operations will not have direct impact on communities as per provisions taken in the ESAP under PS3 to avoid impacts on soil, land, or water resources in use by communities; PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous People) and PS8 (Cultural Heritage) as the Company has no involvement in land acquisition, no impact on critical habitats or natural resource use. The current project is carried out in existing agricultural areas with no presence of indigenous peoples or cultural heritage.

Given the fact, that transportation and storage are carried out by Bayer’s contractors, the Project has limited environmental and social (E&S) adverse impacts that can be avoided or mitigated by adhering to national laws and regulations, generally recognized good industry practices and guidelines. Therefore, this is a category B project according to IFC’s Environmental and Social Review Procedures.

Main E&S aspects associated with Bayer Ukraine operations that have been reviewed within the appraisal include: i) Local QHSE Management System capacity to address potential direct and indirect E&S impacts associated with “crop protection products” (CPPs) transportation, storage, use and waste disposal; ii) Compliance with national laws and regulations; the International Code of Conduct on the Distribution and Use of Pesticides, the World Health Organization (WHO) Recommended Classification of Pesticides by Hazard; the Stockholm Convention on Persistent Organic Pollutants (POPs); iii) Human Resources policy and procedures; iv) Working conditions and terms of employment, including OHS; v) Awareness and training of farmers on implementation of Integrated Pest and Disease Management Plans ; vi) Waste disposal/ recycling of empty containers; vii) Emergency preparedness and response. The Company has presented plans to address environmental and social (E&S) impacts to ensure that the proposed Project will, upon implementation of the specific agreed measures included in the Environmental and Social Action Plan (the “ESAP”) attached to this summary, comply with the environmental and social requirements of host country laws and regulations; and IFC’s Policies, Performance Standards and WBG’s General Environmental, Health and Safety Guidelines (EHS). The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow. PS1: Social and Environmental Assessment and Management Systems CPPs imported by Bayer to Ukraine have been tested in compliance with the principles of Good Laboratory Practice during a long period to guarantee product safety for people and ecosystems. Additionally, in Ukraine an experimental product is passed through field-testing, including toxicity study and identification of maximum residue limits (MRLs) in vegetation tissues of tested crops and food products; and residue concentrations in soils, water, and air are required to meet national limits before the product can be launched to the market. Ukrainian legal framework imposes definite requirements for registration, certification and use of CPPs. Registration is applied for new products and renewal of registration is required. This comprehensive process, inter alia, includes expert reviews of the Environment Protection Ministry and the Health Care Ministry that consider negative impacts on environment and community health and safety. National classification of CPPs corresponds generally with the World Health Organization (WHO) classification of pesticides by hazard. Local regulations recommend avoiding use of class I products where feasible and, practically, authorities do not consider registration of class I products for use. Bayer strictly follows local requirements, including having licenses for CPPs import and trade in place. Going towards legal compliance, the Company is committed toward adopting a system approach through the development of a local formal legal compliance procedure. All Bayer’s manufacturing sites that supply CPPs to Ukraine have certificates of compliance with ISO 9001, ISO 14001 and OHSAS 18001 updated in 2010-2011. The local QHSE management system is being developed to effectively meet Global Bayer CropScience QHSE requirements. Specifically, ongoing process includes assignment of the qualified QHSE manager; initial review of relevant Bayer Global QHSE requirements and priority identification; development of the Manual for Safe Use of CPPs distributed in Ukraine in local language; development of local procedures for incident investigation and reporting; emergency communications; compliant CPPs handling and response; monthly and annual reporting to Global QHSE; development of emergency plans for the office and warehouse; development of training materials for personnel and farmers on step approach, including Integrated Pest Management/Integrated Disease Management (IPM/IDS) and safe use of PPCs. Global QHSE audit guidelines, applicable for all Bayer’s subsidiaries, describe planning, implementation and monitoring activities. According to the audit plan of subsidiaries, the Company will coordinate with Global Bayer QHSE the request to carry out the Global QHSE audit and will use corporate knowledge and expertise for improvement of the local QHSE management system. Based on the audit findings and recommendations, the Company will develop a management program that will cover, inter alia, revision of the organizational chart as outlined in the attached ESAP. Bayer Ukraine will develop a management system encompassing social, occupational health and safety and environmental affairs. The QHSE system will comply with IFC Performance Standard 1 requirements, and conform to Bayer’s Global QHSE. Bayer Ukraine will provide IFC with a copy of the internal memorandum covering responsibilities for implementing social and environmental managerial duties, and undertake the activities to implement HSE function at all levels of operations, and an organogramme showing this position reporting to Bayer Ukraine’s senior manager. Reporting to IFC on continuous improvement of the QHSE management system and its effective implementation will be provided within the context of the Annual Monitoring Reports (AMR). PS2: Labor and Working Conditions The Company enforces the implementation of corporate HR standards based on equal opportunities, non-discrimination principles and worker rights to participate in professional associations and trade unions and adheres to local labor laws that are generally consistent with the core requirements of the International Labor Organisation (ILO). Working conditions, including salary, working time, annual leave, obligatory and voluntary medical insurance are outlined in the internal regulations. The collective agreement defines terms of employment through stipulation of employee’s and management’s rights and responsibilities. Upon appointment, employees are given an initial induction training that facilitates employee’s familiarization and awareness of responsibilities, disciplinary requirements and rights, conditions of work, promotion and benefits, further OHS training opportunities, etc. Also, the Company offers additional social benefits, including corporate pension plan, and life insurance. The Company developed different communication ways for employees to raise their concerns on workplace and labour issues. An existing grievance process, consistent with IFC’s Performance Standard 2, provides protection of the confidentiality of the employee, raising concerns other than to immediate supervisors. Bayer Ltd. Ukraine employs about 430 staff of which 95 are engaged in the CropScience business. Less than 2% of total staff could be considered as “field personnel” that have direct contact with CPPs. To address occupational health and safety risks, a procedure for risk reduction and control measures was developed. Field staff was given specific training in specialized training centres; and regular medical examinations are mandatory. As per the ESAP, Bayer Ukraine will provide documentary evidence of the training of employees handling pesticides specifically in the use of adequate Personal Protection Equipment (PPE) based upon MSDS and/or ICSCs, and will fully integrate pest management procedures into the SEMS procedures manual. Bayer will continue monitoring the cholinesterase levels in employees applying pesticides, through implementation of the following steps: i) regular cholinesterase testing of employees to define if specific employees should be allowed to continue such practices and what specific levels dictate when employees should cease participating in such activities; ii) adoption and implementation of the policy for workers rotation to avoid chronic exposures to specific pesticides; iii) adequate training, Material Safety Data Sheets-based technical education for any chemical formulation employed, in the use of adequate Personal Protection Equipment (PPE); iv) inventory of available PPE and ensure availability of adequate PPE for employees exposed to contact with products. IFC will be updated on progress status through the AMRs. Incidents in relation to the Company activities are recorded, investigated and reported; corrective actions are implemented to prevent re-occurrence. Safety records indicate zero incidents since 2008. PS3: Pollution Prevention and Abatement Bayer CropScience products are supplied from Bayer AG manufacturing sites in Europe to distributors in Ukraine that deliver products to farms. CPPs are transported and stored by contractors using their own truck fleet and warehouses. Therefore, the project does not directly generate greenhouse gas emissions. The Company controls compliance of CPPs’ transportation and storage with international and local regulations. Local regulations stipulate specific safety requirements to prevent potential pollution, including transport safety measures; special permit for transportation of chemicals; authorization for a driver; exhaust ventilation installed at warehouses; temperature conditions for chemicals’ storage; limited access to the areas for hazard products; specialized fire safety; availability of emergency plans for warehouses. A distributor visited during the appraisal and having the license to sell CPPs allowed confirming availability of satisfactory warehouse, transport and personnel. To ensure product safety and quality throughout CPPs’ transportation and storage in terms of prevention of potential pollution due to accidental leakage, the Company will enhance the QHSE requirements for contractors. Bayer Ukraine will revise the HSE requirements for contractors (transport companies, warehouses) and distributors; incorporate requirements into the documents, where applicable, including availability of MSDSs for distributors and regular audits of distributor’s facilities. The Company will update IFC on progress status through the AMRs. Bayer CropScience Stewardship Policy, consistent with the International Code of Conduct on the Distribution and Use of Pesticides of the Bayer Group, communicates the principle to make reasonable effort to develop formulations, which are the least hazardous. Enforcing the stewardship principles, Bayer has committed to gradual replacement of WHO class I pesticides. According to the Sustainable Report 2009, Bayer has discontinued selling of seven active WHO class I ingredients, including methyl and ethyl parathion, monocrotophos, amitraz; and, the sale of products containing endosulfan (stopped in 2010 worldwide). Bayer Ukraine adheres to Bayer commitments and does not distribute products that fall in the World Health Organization Recommended Classification of Pesticides by Hazard Classes Ia (extremely hazardous) and Ib (highly hazardous). Currently, the Company has in its portfolio WHO Class II (moderately hazardous) and III (slightly hazardous). The Company only distributes products registered and certified by the local authorities and follows the local requirements for its distribution. Before the first guarantee is issued, the Company will provide an adequate policy statement to commit that Bayer Ukraine does not supply WHO Ia/Ib pesticide chemical formulations to the Ukrainian market. Bayer Ukraine will formalize and create guidelines and procedures to ensure implementation of the policy. Specifically, in relation to pesticide use and management, Bayer Ukraine will identify ways to promote the use of Integrated Pest/Disease Control Programs amongst its clients by developing and implementing integrated pest/disease management programs, making use of the Company’s own technical team or through the involvement of Bayer’s international/local advisers in entomology/plant pathology. Bayer Ukraine will formulate integrated pest/disease management (IPM/IDM) programs fully applying the requirements of IFC Performance Standard 3. The IPM/IDM Programs shall include crop management practices, insect/disease monitoring, pest/disease ecology, biological control, and other control components, and, as a last resort, pesticide chemical formulations to avoid unacceptable economical levels of pest or disease damage. If a pesticide chemical formulation is also required as part of the IPM, then this IPM component will aim to carry a less significant weight than the other components of the IPM/IDM programs. Bayer Ukraine will ensure compliance with the Food and Agriculture Organization’s International Code of Conduct on the Distribution and Use of Pesticides, or to other good industry practice. The Company provides regular technical assistance to its clients on how to apply the products, including the use of personal protective equipment (PPE). In addition to that, the Company will offer to farmers and the end users practical training that, among other measures, will include: appropriate and safe pesticide storage, handling in the field, and safe disposal of empty containers and residuals to prevent pollution risks to soil, groundwater, wildlife or livestock. The Company undertakes feasible efforts to keep its clients being aware of safety precautions and provides regular technical assistance to its clients. The Safe Use and Healthy Environment Global Project initiated by Bayer and implemented in Ukraine in 2006, was focused on educational and technical training of its clients on safe use of products. For this purpose, the Company engaged about 30 people in arranging visits to farms with series of seminars and meetings with farmers. Bayer Ukraine issues Agronomika quarterly magazine and product catalogues that include a “Safety Page” with general safety precautions, recommendations for personal protective equipment and rinsing/disposing of empty containers. The product catalogue posted on the local web site http://www.bayercropscience.com.ua/ua/catalogue.html allows copying a MSDS in English for each product and a product registration certificate. Additionally, information derived from MSDSs on class of products by hazard; fire safety; storage conditions first aid, personal protective equipment was translated in Russian and made available on: http://bayercropscience.com.ua/i_upload/file/Manual_SU_BCS_products_2010.pdf To ensure the use of Bayer’s original products, the Company issues a catalogue of product packages. Package labelling consistent with requirements of the International Code of Conduct on the Distribution and Use of Pesticides is translated in Ukrainian; it has essential safety instructions for users. Going further to protection of health and safety of communities and end-users, Bayer Ukraine is committed to use current options and investigate the new ones for improvement of package labels. In this case, the Company will revise information on safe and appropriate use to make it as comprehensive and clear as possible; will investigate options for adding labels translated in other languages used by population in Eastern and Western part of Ukraine. The Company provided emergency response training to its employees to minimize adverse impacts due to project activities on soil, water, and other natural resources in use by communities, and to react properly in case of accidental spills. All external accidents occurred with end users or throughout storage and transportation are reported to the Company’s designated managers directly or through distributors; comprehensive response and support measures are undertaken immediately.

The Company arranges series of local meetings, presentations and seminars for customers/ farmers, when launching a new product on the Ukrainian market. Actions focus on product characteristics, proper use and technical assistance to users. Also, the Company’s regional representatives maintain continuous communication with regular customers. Bayer prepared and held 18 “Field Days” on three demonstration facilities (BayerAgroArena) and invited about 1,000 people in 2010. "Field Days" comprised the presentation on crop protection techniques and demonstration the crop protection "in action" on the test fields. Bayer is committed to local disclosure E&S information related to the proposed IFC investment. Disclosure of information will be based on IFC’s findings on the project E&S aspects and will be done locally in an appropriate manner.

For more information about the project and local access of documentation, please contact: Mr. Tobias Menne, Managing Director Tel: +38-044-220-33-00 Fax: +38-044-220-3301 Address: Bayer Ltd. 4-B Verkhniy Val St. Kyiv, 04071, Ukraine Website: www.bayer.ua