The company has presented plans to address the environmental and social impacts to ensure that the project will, upon implementation of the specific agreed mitigation measures, comply with local laws and regulations, IFC’s Performance Standards on Social and Environmental Sustainability and IFC’s applicable Environmental, Health and Safety Guidelines. The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow. Social and Environmental Assessment The environmental and social assessment for any proposed new store or distribution center being developed by Lidl follows the legal requirements of the national and local authority in the country, including a disclosure and consultation process, as needed. Lidl Romania secures all the relevant building permits, before construction, including the regulatory requirement to obtain special permission to construct a store exceeding 1,000 m2 in area. Plans are submitted to and approved by the local municipalities and agencies, and present a detailed design for all utility connections, including water supply, wastewater and stormwater management, as well as interconnection with the public road system and access to the stores. Stores are designed to meet all applicable legislative requirements, ranging from those imposed by the EU to local bylaws. Designs generally are standardized, though adaptations are made to account for differences in legislative requirement or site-specific conditions. These designs are defined within country-specific design manuals, which are updated as legislative requirements change or environmental technology improves. One example is that Lidl stores in Romania will have larger staff areas than Lidl’s standard design, because Romanian stores have more employees than equivalent stores in other countries and to enhance employee comfort.
Lidl conducts its own environmental due diligence on prospective store sites ahead of acquisition, including analysis for possible land contamination. If prior contamination is identified, then remediation plans are included in the store development plans if this is economic, or an alternative site is chosen, depending upon the severity of contamination. Social and Environmental Management Lidl has assessed the environmental impacts of all of its operations and requires regular reporting from country operations to headquarters on a variety of key parameters, such as permitting process and permit compliance, waste management and recycling, energy efficiency, and energy and water consumption. Performance of each store is compared with specific annual targets, which are defined by in-house knowledge of best practice. Similar stores are compared, and trends for each store examined. Adverse monitoring results are investigated and corrective actions implemented. Occupational health and safety coordinators and auditing teams report to the Human Resources Director in each country.
The Company includes occupational health and safety requirements into construction contracts and closely supervises their implementation. Contractors with unsatisfactory safety performance have been dismissed.
Labor and Working Conditions The Group Supervisory Board defines company policy in many areas, of which Human Resources is one. Human Resources policy is implemented through a Human Resources director within Lidl International, and through a Human Resources director who reports directly to the Administration director in Romania. Lidl International defines the Human Resources policy framework which is implemented through country level operational procedures adapted to take into account both legislative requirements and local norms in the country of operation. The policies are communicated to employees through training and written materials presented at induction, and are displayed on notice boards in staff areas of every store and distribution center, regular meetings and in certain cases (explaining any changes to existing policies) through written material accompanying wage slips. Lidl Romania’s Human Resources policy does meet the requirements of Performance Standard 2.
Working Relationship With the exception of security personnel who are contracted, all Lidl Romania’s workers are direct employees of the Company. All employees, including short-term contract staff hired to meet demand peaks, are provided with written contracts that serve to document and communicate terms of employment. Working Conditions and Terms of Employment Working conditions and employment terms are based upon legislative requirements in Romania, as well as factors such as the cost of living and comparison with salaries paid by competing employers in the same local market. In Romania the standard work week is 40 hours; five 8 hour days, each with a 30 minutes rest period. Employees are permitted to work for up to 12 hours per day, but if they do there then must be a break of at least 24 hours before the next period of work. Overtime of up to 32 hours is permitted monthly. By law in Romania, if overtime is worked, then this is expected to be made up by less than nominal work at other periods in a two-month accounting cycle. If at the end of this cycle, the employee has worked more than nominal hours, then overtime is paid at double the nominal salary. Public holiday working is paid at double time. Working time is recorded by an electronic “swipe” system which is being installed throughout the Company: at present 64, the warehouses and headquarters have the system, with complete coverage expected by the end of 2012.
Salaries increase with increasing employee experience. Lidl advertises salaries when seeking to recruit, and pays around 1,700 RON monthly for a new recruit, increasing to 2,450 per month after three years. These salaries are considered generous in Romania, and Lidl has an explicit aim to seek to attract and retain high quality staff. Monthly staff turnover is around 3% of staff in stores and 1% in distribution centers.
Workers’ Organizations In Romania, the rights to freedom of association and collective bargaining are provided for in national legislation. Trade unions are not present in Lidl Romania’s stores though some employees of the distribution centers are members of the food producers’ union. The Company does inform its employees of their right to organize, as required by Romanian law, but this right has not been exercised by employees. Non Discrimination and Equal Opportunity Lidl International has an equal opportunity policy. Lidl Romania has relevant non-discrimination provisions in the country-level HR policies, and non-discrimination is also a requirement of Romanian labor law.
Retrenchment Since the Company is expanding, large scale retrenchment is not anticipated. Lidl entered Romania through acquisition of the Plus chain of 107 stores. Most Plus employees continued employment with Lidl, although a few did not.
Employee Grievance Mechanisms Lidl Romania employees have several available channels to air grievances, including contacts with a personal and social aspects (“M&S”) manager, by contacting the Human Resources representative in the region or at country headquarters, or by placing anonymous comments on Lidl Hotline (special line for the employees to contact directly the HR department at the HQ). Lidl Romania has a well developed “M&S” structure (“M&S” is an acronym from the German language – the M&S program responds to social needs of employees and functions as a grievance channel as described above). One employee has been designated the social representative of all employees: her name, photograph and cellular telephone number and email address are displayed prominently in the staff areas of stores. This person spends most of her time travelling to stores, and making staff aware of her role in accepting representations from staff on any matter, including grievances if any. Additional staff will be recruited to this role as the Company expands.
Protecting the Work Force The youngest employee is 18 years old. Age of potential recruits is verified upon taking up employment (by identity card). There is no suggestion of forced labor in either company. Occupational Health and Safety In 2008 an Occupational Health and Safety (OHS) department was established to better address accident trends at country level and to develop strategies to address them. An OHS coordinator, reporting to the Human Resource director, has been appointed and her contact details and role are described in a poster also prominently displayed in staff areas of stores. Safety statistics are collected, reported regularly and registered in a corporate database. Only one lost time accident, (a slip) has been recorded since the start of Lidl’s operations in Romania. Consistent with international good practice Lidl Romania has developed very comprehensive safety training materials, based on a risk assessment undertaken for its business and relevant OHS training is provided to each employee. Documentation and reporting of occupational accidents, diseases and incidents, accident investigation and corrective action identification are conducted consistent with good practice. Emergency response plans have been developed and are available for each store, including response measures for both internal and external emergencies. All contractor contracts, including contracts with construction contractors, logistic contractors, and personnel leasing contractors, have relevant and standard clauses that require compliance with the applicable legislation in terms of labor management and OHS protection and management. Periodic safety, security and hygiene audits are conducted for each operation by the internal auditing team. Supply Chain Lidl Romania aims to source the majority of its food and non-food products from Romania. It is part of the contract to supply goods to Lidl that the suppliers are held responsible for respecting the legal requirements, including relevant provisions for labor and OHS management. Supply chain monitoring mechanisms are being developed. A supplier self-assessment procedure on labor practices, covering forced and child labor concerns among others, has been recently established, in addition to supplier audits conducted by the quality control department, supported by TÜV Rheinland, a global leader in independent testing and assessment services. Lidl will maintain a consistent supply chain assessment and reporting mechanism, consistent with the requirement in Paragraph 18 of PS2, and following sectoral organizations’ corporate social responsibility initiatives. Pollution Prevention and Abatement Liquid effluents Sanitary waste water, process effluent arising from store operations and storm water run-off from paved areas is collected and directed to the municipal sewage systems, after the required pre-treatment including oil water separators (in the parking lots) and grease traps. Waste water discharge criteria are specified in the relevant store permit. If the Group builds stores in locations where municipal waste water treatment systems are absent or ineffective, waste water treatment systems will be installed to ensure that all effluent meets IFC standards before discharge to the municipal system and/or to the environment. Energy Efficiency and Greenhouse Gas Emissions Lidl’s store designs have evolved with time to be increasingly energy conscious. The stores feature high standards of thermal insulation, well insulated glazing systems, high efficiency condensing gas boilers and air conditioning systems for space heating and cooling and high efficiency fluorescent lighting systems with highly silvered reflectors. Lighting standards are carefully specified by area. Reflecting variable store occupancy throughout the day, store ventilation is based on carbon dioxide concentration in the store, and stores are actively ventilated only when CO2 levels exceed 1,000 parts per million (ppm). Air handling units recover energy (heat or cold) from exhaust air to the fresh air supply. Newer stores have building management systems (BMSs) which permit remote monitoring and control of stores and these BMSs are included in the standard specification of new stores. Lidl estimates that these features enable a reduction of 30% in energy consumption compared with a conventional store of this size.
Energy efficiency is similarly taken into account in the distribution center design. In addition to high insulation standard, space heating is by circulating water through coils embedded in the floor, this water being heated by heat recovered from refrigeration condensers, supplemented by natural gas fired condensing boilers. A two-stage ammonia-based refrigeration system provides cooling at the chilled and frozen temperatures required.
It is estimated that upon its full development, the greenhouse gas emissions of Lidl Romania will be some 51,000 tonnes per annum CO2 equivalent.
Refrigerant Selection and Use Lidl Romania uses refrigerant R404a, in its stores’ chill temperature systems and R410 in store air conditioning systems. Both are non ozone-depleting HFC refrigerants. R290 (propane) is used in small quantities in self-contained chest freezers used in the stores. Ammonia is used for process cooling systems in the distribution centers. Solid and Hazardous Waste Management The Company has policies in place committing to avoid and minimize waste generation, and implementing recycling of all recyclable materials, including glass, metal, paper/cardboard, and wood, following the provisions of the EU Council Directive on packaging and packaging waste. Batteries and electric and electronic appliances are recycled through authorized centers. Waste generation is monitored and recorded and all generated waste is disposed of at authorized facilities and using reputable contractors and enterprises licensed by the Romanian and Bulgarian authorities.
Some food loss occurs, caused by damage to packaging or expiry of the “sell-by” date. Lidl has very well developed systems, including progressively deeper discounts as the sell-by date approaches, to encourage sale of product. Suitable products close to the sell by date are donated to local charities, and in stores in Bucharest donated to the zoo for animal feed.
Community Health, Safety and Security Store Construction Lidl’s design processes require that stores are designed to the minimum of both German and local standards in the country of operation. Stores are relatively small and have well-designed emergency exits at the rear of the store, through the public entrance, and also via steps through the warehouse. All stores visited had unlocked and internally unobstructed exits from public areas. Fire protection is provided in the main area by portable extinguishers, though some stores that were purchased also have hose reels. All stores have smoke and fire detectors. All stores have first-aiders and a first aid room with stocked medical cabinet. Lidl will review goods storage practices in back-of-house areas to ensure that these exit routes are also unobstructed, and will also seek to eliminate steps from its emergency exit routes. Areas outside exit doors will also be reviewed and where necessary will be protected by a bollard. Lidl’s team is also reviewing emergency lighting provision in the stores and will upgrade as required to provide adequate lighting for emergency egress routes.
Romania is a seismically active country. All store and distribution center designs, including design of racking, make appropriate provision for this through design and construction standards.
