While all Performance Standards are applicable to this investment, IFCs 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. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
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 above Performance Standards:

The following IFC Performance Standards do not apply to the project: PS6 (Biodiversity Conservation and Sustainable Natural Resource Management) did not apply as VGL’s project will not adversely impact natural and/or critical habitats. Land to be cleared for farming was previously used for agriculture. PS7: Indigenous Peoples and PS8: Cultural Heritage did not apply as there is no Indigenous Peoples and/or sites of cultural heritage in the project area.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because the limited number of specific impacts that may occur are generally site specific and those impacts can be avoided or mitigated by adhering to generally recognized performance standards, procedures, guidelines or design criteria.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Assessment. EHS Assessment of expected VGL project impacts has been the subject of several studies to date. For instance, VGL submitted an EIA report to the Millennium Development Authority (MiDA), the entity responsible for developing the Torgorme Irrigation Project, which will ultimately provide water to VGL operations. MiDA subsequently obtained a permit from the Ghana’s Environmental Protection Agency (EPA) which covers the construction of pipeline and canals for use by Vegpro and other smallholder farmers. VGL has recently initiated the process to obtain its own EPA permit for the large-scale production of horticultural crops and expects the issuance of the permit by EPA in early 2012.

As mentioned above, the scope of this appraisal included a review of Vegpro’s Kenyan operations. Interviews with senior management and document reviews, revealed that those operations develop and submit for approval EIAs as per the Kenyan’s regulation. Permit-related actions are subsequently implemented. Vegpro Kenya’s customers (especially United Kingdom supermarkets) also require E&S assessment, management and comprehensive audit of practices designed to avoid or minimize E&S risks and impacts. EHS, food safety, farming practices, social programs and community engagement activities are required by such customers. In addition to meeting these requirements, Vegpro’ Kenya operations maintains industry certifications, including GlobalGAP (for vegetables) and other flower-specific certification schemes, such as the Kenya Flower Council Silver Standard, the Milieu Programma Sierteelt or MPS (a Dutch floriculture environment program), Fairtrade at the Longonot and Liki River flower farms and also the British Ornamental Plant Processors (BOPP) standard for packhouses. VGL will implement and certify against similar standards to its vegetable operations in Ghana.

A key component of the VGL project is the purchase and processing of vegetables grown by small holders. The Vegpro Group has good experience in managing similar schemes within its Vegpro Kenya operations; for example, some 750 smallholders in Liki River supply peas for processing while another scheme in the coastal region of Kenya produces beans and peas. The first batches of smallholders in both areas are now GlobalGAP certified which includes measures with respect to labor in the supply chain and protection of the environment (as do other customer-derived standards mentioned above) which are required to be complied with by small holders and which are subject to internal (Vegpro Group) and independent third party audit.

Management Program and Organization

Adequate provision of management resources to avoid, manage or mitigate E&S risks and impacts is evident from Kenyan operations. For the last 4 years the Group has achieved full compliance with the British Retail Consortium (BRC) standard, grade green (highest grade) with respect to Sainsbury’s safety standards, blue (highest grade) with Tesco’s standards, achieved silver/bronze (the 2nd best level) for Marks and Spencer’s and have achieved compliance with the Government of Kenya’s (GoK) NEMA requirements as per permit conditions.

Food safety at the packhouses is ensured through permanent supervision by technical teams (covering two shifts). Each critical control point (CCP) has a dedicated person and a deputy. All quality controllers/supervisors are suitably qualified and/or trained; the internal audit function conducts cross checks both within the plants and on the farms. Daily shift reports detail any operations that are not running correctly; every two weeks a summary report is compiled and discussed with senior management.

Training

The Company requires quality controllers to have successfully completed the Hazard Analysis and Critical Control Program (HACCP) training. Other E&S related training included internal quality auditing training and environmental auditing (including issues of water use, waste generation, and NEMA-based requirements regarding energy use). Training on basic hygiene is facilitated through government extension services. Crop protection, including requirements for the safe storage and transport of pesticides is achieved through adherence to the British Agrochemical Standards Inspections Scheme ( BASIS). First aid training, fire fighting and safety are undertaken, as required by government regulation and customer requirements. Generic and job-based induction training is provided by the Human Resources (HR) Department. Company nurses are required to be registered and licensed with the Nursing Council of Kenya. Nurses are also trained in matters of health and safety (H&S).

Monitoring and Reporting

Vegpro Kenya conducts extensive E&S monitoring of its operations. For instance, the amount of water it takes to produce a kilogram of produce is measured and tracked between years; the latest data indicates a 33% decrease in water consumption between 2008 and 2010. Data on consumption of fuels, waste generated and electrical power consumed is also monitored.

The Group is proposing to work with a recognized worldwide expert in sustainability to partner for a three year period in a joint consultancy and software capacity. The project will focus on further data capture and reporting (including creating GRI Compliant Sustainability Reports). The planning, design and implementation of a comprehensive integrated E&S management system, incorporating such regulatory and self-assessed requirements in order to avoid, manage or mitigate E&S risks and impacts as described above will be developed for Ghana operations.

Human Resources Policy and Management

The Kenya Group HR manual (that contains an HR policy) was being revised at the time of the appraisal to ensure it is current with the requirements of the recently promulgated changes to the Constitution of Kenya. The new version will be translated into Kiswahili. The manual currently in force is comprehensive and deemed to meet the requirements of PS 2. Same process will apply for Vegpro’s Ghana operations. With regards to managing HR issues, a senior HR officer and 2 HR officers are engaged at the company’s packing plant. Every company farm has an HR officer, a nurse and a clinic; nurses are trained as noted above so as to perform the health and safety function at farms along with input from farm managers.

Worker’s Organization, Non-discrimination and Equal Opportunity

The Company’s policies respect a worker’s right to join a union and to collectively bargain; unions are present on site in Kenya. Policies include the company’s commitment to anti-discrimination and describe multiple related issues; for example, the employee grievance mechanism, conditions of pay and expectations of worker behavior and likewise the company’s responsibility in the employment process, the due process to be followed if termination is required, and issues related to occupational health and safety.

As is characteristic in farming operations, seasonal workers are used during busy times, such as harvests. They are termed ‘temporaries’ and can be employed between 1 and 8 months. Their employment is in compliance with Kenya labor law, for example, they do get benefits but not a pension. Everyone working for the Group, regardless of employment status, has access to Company clinics and is insured (worker’s compensation scheme). Both permanent and temporary workers receive contracts containing full details of their conditions of employment.

Retrenchment

No retrenchment is expected in conjunction with the proposed investment in Ghana; on the contrary, the expansion into Ghana will create employment, estimated to be between 500 and 1500 jobs at the time of full production. The project will provide a premium market for smallholders growing their own vegetables for input into the supply chain.

Protecting the workforce and OHS

Kenya operations have an OHS committee on each farm which meets quarterly. The equivalent committee meets monthly in the processing plant (as required under the company insurance policy). Hazard analyses are conducted by those trained in conducting such assessments, such as nurses, maintenance personnel and other staff from other departments as necessary. All staff is trained on every machine they use.

OHS audits are carried out as per regulatory requirements (using government-registered auditors). Audits focus on environmental issues, OHS, fire safety and exposure to noise. Such audits are coordinated by the audit function within the Group; the Group also conducts their own internal audits using 3 full time company auditors.

Global GAP has requirements for OHS matters related to pesticides. Every farm-based nurse is responsible for overseeing those requirements that apply to pesticides. Workers who will apply pesticides receive pre-employment induction and medical checks (including establishing cholinesterase baselines) to determine suitability to work with such chemicals. Individual’s records are maintained at farms and are reviewed in audits. Sprayers are examined by a doctor every 3 months; any abnormalities results in rotating workers to other non-exposed duties. Appropriate PPE is provided and a worker’s application methodology is checked to ensure correct practices are being followed. It is reported by the Group’s internal audit manager in Kenya that technical assistants and agronomists working in the fields with smallholders, also uphold the requirements of Kenyan Law as it applies to the prevention of harmful child labor and avoidance of environmental/biodiversity impacts.

Development and implementation of Labor and Working conditions that meet both IFC’s and the Ghanaian’s legal requirements, such as those described above, will be required of Vegpro operations in Ghana.

The proposed project in Ghana involves the following steps: land acquisition and development, installation of centre pivot irrigation infrastructure, farming of vegetables (on an industrial scale and by small holders), processing of vegetables and shipping them to Accra to connect with flights to UK and Europe. Each step will have actual and potential risks and impacts to the environment; these have been described in the EIA scoping report, included in the ToRs (for the permit application) and were considered in the broader Kpong Left Bank (Torgorme) Irrigation Project ESIA. Measures implemented in Kenya designed to minimize risks and impacts will be similarly implemented in Ghana. Specific measures employed in Kenya are described below; relevant measures, commensurate to the risks and impacts of the Ghana project will be required to be implemented by the Company.

Pollution Prevention, Resource Conservation and Energy Efficiency

The Company employed several measures to manage water and soil resources in Kenya. For example, production outputs per cube of water for every business unit are monitored and monthly performance reports allow for analysis of efficiency of application. Rain gauges, water diviners and weather stations are used to provide farming teams with information to guide irrigation frequency and volume application decisions. Soil moisture is measured and the principle of ‘filling to field capacity’ is followed. The Company intends to maximize centre pivot irrigation systems in Kenya; centre pivots will be solely employed in Ghana operations. Other water conservation measures have included significant investment in rain water collection systems on Kenyan flower farms; all future plans for growing flowers have rain water collection as an integral part of their water management strategy.

The amount of water required to run the irrigation system on the Ghana farm is not deemed to be an issue considering the rainfall in the project area. At present, the Company is drawing water for pilot operations through a pipeline connecting the cleared land to the Kpong reservoir. Eventually, water will be drawn from the Reservoir through an existing intake gate, into a system of canals currently being built by MiDA on the left side of the river and on to the location of VGL’s fields. A memorandum of understanding (MOU) has been signed to this effect. The MOU defined the roles and the range of services that MiDA will provide to the Company under the irrigation project and outlines the role and responsibilities of the Company to smallholder farmers. The Ghana Water Resources Commission has the ultimate responsibility to grant abstraction rights to water in Ghana; VGL will be required to submit proof of abstraction rights to IFC once received.

Water from the Kpong reservoir currently supports small scale fishing. In addition, a banana plantation is established on the other bank of the river as are paddy rice growing operations; the latter is approximately 1,636 ha in size and is supplied water through an established irrigation project of similar size and type to that proposed to supply Vegpro’s operations, i.e. abstraction occurs directly from the Kpong Reservoir through an intake gate to the right of the dam. The estimated maximum use of irrigation by the Company’s operations is estimated at 40,000 m3/day; peak demand will be of the order of 7 m3/sec. According to the Volta River Authority, the Kpong Reservoir has an average discharge of 1,093 m3/second or 94,435,200m3/day. As such, the extraction proposed to support Vegpro’s agricultural activities will not impact downstream flows or activities of those already drawing water from the reservoir. Regardless, efficient use of irrigation water in Ghana, in line with the Company’s practices in place in Kenya, will be implemented.

The Company currently monitors energy usage at every business unit in Kenya so as to produce a monthly consolidated resource efficiency performance report (analogous to that used to manage water). Results will allow for benchmarking and target setting.

Wastes and Hazardous Materials

The vast majority of organic waste generated in Kenya is returned to Vegpro farms to be composted and applied to the fields; a small percentage (approximately 5%) is given to charities in Nairobi or sent to nearby dairy farms for use as cattle feed. Similar practices are anticipated in Ghana operations, as local conditions allow.

Emergency Preparedness and Response

Current practice, as required to meet regulatory and insurance requirements, calls for twice yearly fire drills at the packing plant. All employees participate and assessments on the efficacy of the practice are undertaken. In addition, a security risk assessment is undertaken to understand possible emergency situations and interruptions to business activity.

Greenhouse gases

Estimation of the greenhouse gases associated with the proposed project in Ghana are based on the amounts of land to be cleared (previously used for crops), the type of agriculture to be undertaken (and the need for chemical inputs), the need for transport (trucks to take produce to Accra) and the activities and resources to be consumed during processing, including wastes expected to be generated (most of which will be composted and reapplied to the land). Summary estimates of CO2-equivalent tons is less than 20,000 per annum.

Pesticide use and management

Current practices for rodent control at the packing plant in Nairobi require the use of a licensed contractor. Application follows the completion of a risk assessment. On the farms, a microbiologist manages the overall Integrated Pest Management (IPM) plan. Certification and reference to regulation and customer-allowed pesticides provide guidance on what can and cannot be applied and how much (there is strict compliance with maximum residue limits or MRLs).

Community Health and Safety

Food safety is of paramount importance and subject to comprehensive management. Standard practices abound such as the requirements for every employee to undergo an in-depth medical screening and examination prior to beginning work that involves food processing (as per the requirement of the Kenya Ministry of Health). If employees fall sick, they must be retested prior to resuming work to demonstrate they are fit for duty.

Operations in Kenya exert control over truck operations, requiring vehicles to be well maintained, appropriately loaded, drivers to be licensed and that trucks are operated according to the law. Similar practices will be required of operations in Ghana.

Security is used to protect Company assets in Kenya; however, personnel are not armed. Training is provided to personnel to ensure appropriate behavior is exhibited in the course of their duties.

In Kenya, engagement is organized and managed through a variety of mechanisms. For example, the premium obtained as part of the Fair Trade certification in the flower business involves the community and funds initiatives driven by workers through elected joint bodies with guidance and support of Group management and local community leadership. Initiatives have included providing classes in IT, driving courses and secondary school education. Campaigns to create awareness and combat diseases, such as malaria, HIV and AIDS have been carried out through community seminars and the provision of bed nets. Neighboring medical centers have received donations and a day care centre was built to assist working mothers. A revolving fund has been set up to promote economic development for workers and improve the living standards in our communities. Workers in Naivasha will, through the fund, be assisted to own homes this year. As noted above, the company intends to make GRI compliant sustainability reports available by the end of 2011. Similar initiatives will be expected for operations in Ghana, commensurate with the magnitude of the business over time.

Disclosure and Enquiries:

Client Contacts:
Enquiries regarding the project should be to:
James Cartwright
Vegpro Group,
Cargo Village, Jomo Kenyatta International Airport
PO Box 19226,
Nairobi, Kenya
Tel: +25420822831/2/4
Fax: +25420352008

E-mail: mailto:james@vegpro-group.com
Web: http://www.vegpro-group.com

Local access to project documentation will be through:
Jagdish Patel
4th Floor, Total House
25 Liberia Road
P.O. Box PMB MD 210
Madina
Accra, Ghana
E-mail: mailto:jagdish@vegpro-group.com
Tel: +233549940606
Mobile: +233269547415

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
Plan an integrated Environmental and Social Management System (ESMS). Appoint suitably qualified person(s), or provide training to personnel if qualified candidates do not exist and then appoint them, to lead the development, implementation and maintenance of an ESMS. The ESMS should be based upon project environmental, labor, occupational health and safety (OH&S), and food safety and community-related risks and impacts (and extended to include small holders as appropriate it will include relevant policies and procedures so as to govern Ghana operations, including all aspects of water abstraction (farming, processing, transport, water and energy consumption, water and waste management, and management of small holders as their operations pertain to VGL, etc. Summary reports of annual ESMS activity should be integrated into the IFC Annual Monitoring Report (AMR).	01/31/2012 12:00:00 AM	Completed	Completed	03/31/2013 12:00:00 AM
Develop the Environmental and Social Management System (ESMS). As per the outline above so as to avoid, manage or mitigate the E&S risks and impacts of the project.	03/31/2013 12:00:00 AM	Completed	Completed	04/14/2014 12:00:00 AM
Implement the Environmental and Social Management System (ESMS). Continue with the implementation of the ESMS; the ESMS should be considered a ‘living system’ whose elements will evolve as needs are identified, such as employee training regarding environmental and social issues, engagement with the community, including those associated with ongoing implementation of the RAP, etc.	03/31/2013 12:00:00 AM	Completed	Completed	04/14/2014 12:00:00 AM
Obtain a project-specific permit from Ghana EPA	03/31/2013 12:00:00 AM	Completed	Completed	03/12/2012 12:00:00 AM
Develop a Ghana-specific HR Manual. Ensure that labor and working conditions, as included in Vegpro Group’s corporate HR manual and supplemented by additions to meet Ghanaian local and national labor law as applicable, meet IFC’s PS 2 and Ghana labor law.	12/31/2013 12:00:00 AM	Completed	Completed	01/01/2014 12:00:00 AM
Irrigation water abstraction rights Vegpro Ghana (VGL) will obtain a permit/right, or in the absence of a permit/right (such as may be due to bureaucratic delays) a formal written authority, from the Water Resources Commission that clearly states the right for VGL to abstract water from the Kpong reservoir/irrigation district (or other named entity, as applicable) in the amounts required to sustain agricultural activity foreseen by the project (such as are reported in the ESIA prepared for this project).	01/31/2012 12:00:00 AM	Completed	Completed	05/16/2012 12:00:00 AM
Pesticides. Vegpro Ghana will ensure pesticides used in all operations, including those by small holders) comply with the more stringent of national law (i.e. are allowable) and IFC’s requirements. Client will ensure no WHO Class 1a and 1b pesticides are used and only allow use of class II pesticides under specific conditions (i.e. that Class II pesticides are not in use if Ghana lacks restrictions on their distribution and use, or if they are likely to be accessible to personnel without proper training, equipment, and facilities to handle, store, apply, and dispose of these products properly.)	03/31/2013 12:00:00 AM	Completed	Completed	09/30/2012 12:00:00 AM
Community Grievance Mechanism. VGL will establish a formal grievance procedure for the project (to deal with non-RAP issues) and detail how the company will inform the community of this grievance procedure to address any community complaints going forward. This mechanism will remain in place and replace the RAP Grievance Mechanism once the resettlement is completed.	09/30/2012 12:00:00 AM	Completed	Completed	01/03/2013 12:00:00 AM
Update of the Resettlement Action Plan VGL will prepare an update of the December 2010 RAP, called the Supplemental RAP Report documenting any gaps between WB OD 4.12 and PS5 requirements as well as documenting the implementation of the project that has occurred over the past year. It will include socio-economic baseline information collected in a survey of the affected farmers in the two villages affected by VGL’s project as well as the entitlements and compensation due to the various affected groups (individual farmers, communities and traditional authorities) as per the requirements of PS5. It should also include a summary of all the community consultation, and disclosure of documents that have taken place since the initiation of the VGL project. Either as part of the supplemental RAP or as a standalone document, VGL will prepare a Livelihood Restoration Plan to address the economic displacement of the 106 affected farmers from the two communities and identify measures to replace lost incomes going forward.	12/31/2013 12:00:00 AM	Completed	Completed	01/01/2013 12:00:00 AM
Land Tenure and Rental Agreement with Stool Community Investment Fund: VGL will establish an Escrow Account for the annual rent due to the Traditional Authorities. This fund will be used for community investments in the VGL impacted villages, as per the Community Investment Strategy (see below).	07/08/2015 12:00:00 AM	In Progress	Due date revised as agreed with IFC client
Community Engagement Plan. VGL will complete a CEP for ongoing consultation with the 2 affected villages during implementation of the RAP and ESMPs and in coordination with the SME of the TIP if applicable. The CEP should also outline community engagement going forward through the construction phase of the VGL project and beyond during operations.	01/31/2012 12:00:00 AM	Completed	Completed	01/01/2013 12:00:00 AM
Community Investment Strategy (CIS) VGL will prepare a CIS outlining the company’s planned program for investing in the project affected communities. Once the project has completed construction in 2013, the CIS should be reviewed to address how VGL will address community investment in the wider TIP area including the Small Holders Scheme.	04/30/2015 12:00:00 AM	In Progress	Due date revised as agreed with IFC client
Monitoring and Evaluation: VGL will carry out Monitoring Reports (quarterly reporting) on RAP implementation, grievances and continuing community consultation/engagement of their project and its relationship with the larger TIP.	12/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client
Completion Audit. VGL will carry out a RAP Completion Audit to evaluate the implementation of the RAP and the livelihood restoration activities for the affected famers and communities in their project area.	08/08/2016 12:00:00 AM	In Progress	Due date revised as agreed with IFC client