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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
IFC’s review indicates that the investment will have impacts that must be managed in a manner consistent with the above Performance Standards.

IFC’s support for Kenya Airways expansion program will be limited to aircraft purchase. While the program will entail construction of new facilities (hangars, training and maintenance facilities and office blocks), this construction will be confined to the Company’s existing properties that lie within, or adjacent to, JKIA. As such, the project will not result in adverse impacts related to PS5: Land Acquisition and Involuntary Resettlement, PS 6: Biodiversity Conservation and Sustainable Natural Resource Management; PS7: Indigenous Peoples or PS8: Cultural Heritage.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. Air transport is a highly regulated industry that has well established policies and procedures for managing the environmental, health and safety performance of accredited carriers such as Kenya Airways.

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. Potential environmental, social, health and safety risks associated with the airline industry include: environmental, health and safety management systems; aircraft operations safety, including training programs; aircraft maintenance and servicing, including handling and management of hazardous materials and wastes; environmental protection at ground sites; aircraft noise and emissions controls; employee health and safety, and fair terms of employment; safe and secure cargo handling procedures; and passenger health and hygiene conditions. Information on how these issues are addressed by the Company to comply with IFC’s Performance Standards and World Bank Group General and sector-specific Environmental Health and Safety Guidelines is contained in the following paragraphs.

IFC’s assessment considered: the Company’s management of its environmental, occupational health and safety performance in the establishment and operation of its facilities and aircraft; compliance with national and local permitting requirements; and public engagement and disclosure of information about its operations.

Environmental and Social Assessment/Audit. Kenya Airways has developed a comprehensive flight and ground operations safety, health and environmental management system to comply with the requirements of the Kenya Civil Aviation Authority and the International Civil Aviation Organization.

Kenya Airways has achieved and maintains certification of its operations in the air and on the ground from the International Air Transportation Association (IATA), the international body that promotes coordination among aircraft manufacturers and airlines with regard to operational safety, security and, more recently, environmental performance. As such, KQ is subject to biennial IATA Operational Safety Audit (IOSA) and IATA Safety Audit for Ground Operations (ISAGO), which are internationally recognized systems designed to optimize the operational management and control systems of an airline and ensure the safety and efficiency of operations.

IOSA is an ISO 9001 certified system that reviews an airlines overall corporate organization and management systems, flight operations, operational control and flight dispatch, aircraft engineering and maintenance, cabin operations, ground handling, cargo operations, and operational security. ISAGO applies IOSA standards and procedures to an airline’s ground operations including load control, passenger handling, baggage handling, aircraft ground movement, aircraft handling and loading, and cargo handling. Kenya Airways has obtained ISAGO certification for its ground operations in both its JKIA base in Nairobi and at Moi International Airport in Mombasa.

Kenya Airways maintenance operations at JKIA are also certified both by the Kenyan Civil Aviation Authority as well as the European Aviation Safety Agency, the latter of which is a requirement of all carriers servicing destinations in the European Union. In addition, KQ is a member of Sky Team, a global airline partnership that includes KLM, Delta Airlines and Air France, which maintains its own safety and service standards as a condition of membership.

In addition to regular health and safety audits to maintain its international aviation certifications, Kenya Airways is subject to annual audits by the Kenyan National Environmental Management Authority (NEMA) to ensure compliance with all statutory environmental requirements applicable to its operations including waste water discharge, and the management of solid and hazardous waste. Similarly, the Company is subject to annual workplace health and safety audits by the Kenyan Department of Occupational Health and Safety. Licenses issued to the Company by these regulating bodies are current.

Kenya Airways is also required by law to prepare an Environmental Impact Assessment for all major capital improvements that have a potential adverse impact on the environment. In the recent past, such improvements have included the construction of a new pilot training facility on the campus of the Company’s Pride Center, the upgrading of its office at the domestic airport in Kisumu, and the installation of a spray painting booth at its central maintenance facility at JKIA.

Management Program. Kenya Airways maintains a detailed Safety, Health and Environmental (SHE) Policy that represents the Company’s commitment to safe, secure and efficient service. The policy is reviewed by Senior Management at a minimum of every two years to ensure its effectiveness in achieving the policy’s three objectives: zero work-related injuries; zero damage to company property and equipment; and minimal negative impact on the environment. The program is implemented through a management framework based on IOSA, ISAGO and, ultimately, ISO 9001 and 14001 standard procedures for risk assessment, risk management, staff training and performance monitoring and reporting all aimed at promoting continuous improvement of performance.

The Company’s SHE policy is codified in its SHE Manual, which documents policies and procedures established by KQ in accordance with applicable standards, good industry practice and applicable legislative and regulatory requirements that relate to its operations. The SHE Manual provides policy and procedural guidelines for managing safety, health and environment so that potential health and safety risks to staff, contractors and visitors, to the natural environment and to property are minimized or prevented.

The Company has recently signed a Memorandum of Understanding with IATA to develop a pilot program that integrates ISO 14001 standards and procedures of environmental management with both IOSA and ISAGO auditing protocols.

Organization. Kenya Airways SHE policy and procedures are managed within its Industrial Safety & Environmental Section (IS&E Section) by an Industrial Safety and Environment Manager with the support of a Health and Safety Coordinator, an Environmental Coordinator, an Industrial Safety & Environment Officer in liaison with Company’s Head Medical Officer (an officer of the Company’s Human Resources Department who is responsible for employee occupational health). This team reports directly to the Head of Corporate Quality, Safety and Environment who, in turn, reports directly to Kenya Airways’ Chief Executive Officer and Group Managing Director.

Training. The Company’s IS&E Section provides general workplace safety and environmental awareness training as part of the safety induction of all staff. In addition, ISE provides specific awareness training to all the Company’s operational, administrative and support sections in collaboration with the Human Resources department’s Occupational Health and Medical Services on a regular and continuous basis (see the Occupational Health and Safety section of PS 2 below).

Monitoring and Reporting. The staff of IS&E Section continuously monitor the maintenance of SHE standards in all operations and the compliance of all staff with those standards. The IS&E Section maintains records of all inspections and audit checks along with corrective action implementation reports in accordance with procedures outlined in the Company’s SHE manual. Weekly and monthly reports are submitted to the office of the Head of Corporate Quality, Safety & Environment, which compiles the reporting from all the Company’s operations for reporting to Kenya Airways’ board of directors on a quarterly basis. In addition, the Company contracts third party auditors to inspect operations’ compliance with the requirements of NEMA and the Department of Occupational Health and Safety.

IFC’s review considered Kenya Airways’ operations with regard to fair, safe and healthy working conditions in its operations.

Human Resource Policy and Management. As of January 2012, Kenya Airways reports a total of 4,400 full time employees. The Company estimates that the number of employees will nearly double after five years. The Group HR Director oversees a staff of 40 to manage employee relations in accordance with the Kenya Airways HR policy. Employment terms and conditions meet, at a minimum, the wage scales and benefit entitlements established by the Kenyan Ministry of Labor the national Employment Act, Labor Relations Act and Regulation of Wages Act, which themselves are consistent with, at a minimum, the Core Labor Standards established by the International Labor Organization. These terms and conditions are codified in the Kenya Airway’s staff manual, which is provided to each employee on induction. The staff manual also describes the procedure by which employees can seek resolution to grievances internally and, ultimately, through the judicial system. The Company is currently conducting a wage and benefits survey of airlines operating in the region against which to benchmark is remuneration for management cadres. All KQ permanent employees are eligible for comprehensive medical coverage and pension benefits.

KQ outsources a number of key services, including catering, security, cleaning and baggage handling services. The HR department is responsible for ensuring that service contractors meet the terms and conditions established under the national labor law and regulations in the
employment of their workers.

Worker’s Organization. All non-management employees including administrative, customer service and engineering staff and cabin crews, are eligible for membership in the Kenya Aviation and Allied Workers Union (KAAWU), with which the Company negotiates a collective bargaining agreement every two years. The Company’s 380 pilots are represented by the Kenya Air Line Pilots Association, with which the Company also negotiates a collective bargaining agreement every two years. The Company’s cabin crew employees are currently negotiating for representation separate from KAAWU in an effort to establish separate wage and benefits package.

Occupational Health and Safety. Kenya Airways management of employee and contractor OHS is codified in its SHE Manual and its standard operating procedures governing OHS are disseminated through a General Safety Induction Handbook provided to all new employees and a Contractor Safety Handbook.

The Company’s HR department includes a Medical and Occupational Health Section (M&OH Section) under the leadership of a medical doctor. This section oversees a periodic hazard mapping of all KQ’s operations in Nairobi and all domestic stations by a qualified industrial hygiene specialist to determine employee hazard exposure of various tasks, determine requirements for Personal Protective Equipment (PPE) and ergonomic training, and consequent requirements for scheduled health screening and monitoring based on the level of risk associated with a given task. KQ engages a Designated Health Practioner certified by the Kenyan Department of Occupational Health and Safety (DOSH) to carry out annual inspections of the Company’s operations to determine compliance with DOSH regulations.

In addition to continuous monitoring of staff PPE use together with the IS&E Section, the M&OH section carries out a number of accident and injury prevention programs including: noise quality assessments and hearing conservation programs; workstation ergonomics assessment and employee training by a licensed physiotherapist; annual staff first aid training and life support training for all cabin crew; and post-Lost Time Incident assessment and corrective action.

The commercial aviation has one of the highest on-the-job accident rates of any industry. For example, 12 out of every 100 US airline employees in 2003 were injured on the job compared to an all-industry average of 2.6 injuries per 100 employees (US Bureau of Labor Statistics). KQ has averaged 0.7 injuries per 100 employees in the last three years and 30 Lost Time Incidents over the same period against an average of 767,000 man-hours worked – rates that are well below airline industry benchmarks.

Kenya Airways delegates responsibility for OHS through the management cadre. Every KQ Department Director chairs a Safety Committee or Safety Action Group. These Committees and Action Groups are made up of designated Health and Safety Representative who are responsible for holding monthly SHE staff meetings to maintain awareness among staff , disseminate audited performance results and address any SHE issues pertaining to that section’s function. Every department head is responsible for holding similar meetings every fiscal quarter. Any SHE issues that cannot be addressed at the section or departmental level are referred to the IS&E section for action.

In addition, any KQ employee responsible for hiring or overseeing the work performance of an independent contractor must ensure that contract documents incorporate applicable SHE requirements in accordance with Company SHE Policy. Each contractor must conduct a formal risk assessment of the services that it proposes to provide to the Company and submit a risk management plan for review by the IS&E Section.

Life and Fire Safety. KQ maintains a comprehensive life and fire safety management program for all its administrative, training and maintenance facilities. First Aid Champions and Fire Marshalls are appointed and trained in each department. The names and telephone extensions of these individuals are posted at the entrance to each department. Appropriate levels of fire detection, suppression and fighting equipment are maintained throughout all Kenya Airways buildings as well in areas dedicated for Kenya Airways use within the JKIA premises (including flight, ground and security operations offices, and staff and passenger lounges). This equipment is maintained by a government-certified contractor under the supervision of the IS&E section. Regular fire and emergency evacuation drills are held for all staff, special training is provided for aircraft and ground crews in fire prevention and fire fighting. Emergency response to aircraft accidents within the JKIA perimeter is managed by the Kenya Airports Authority in accordance with Kenya Civil Aviation Authority and ICAO requirements (see PS4 below).

IFC’s review considered the Company’s management of its operations, resource use and waste disposal procedures on the surrounding human and natural environment.

Pollution prevention and resource conservation & efficiency. The Company’s SHE Manual details standard operating procedures for the handling and disposal of all potentially polluting substances used in operations. The manual makes specific provisions for the procurement of “environmentally preferred” products for all operations, including products that are recyclable, energy efficient and/or certified by an accredited agency as having good environmental performance ratings (e.g., Forest Stewardship Council certification of paper products).

KQ sources water for all administrative, training and maintenance facilities from an on-site bore hole, which is metered by the municipal water authority. Average consumption of water at these facilities approximates 2100 m3 per month. Sanitary wastewater from these facilities is treated in an on-site waste water treatment plant before being discharged into the municipal sewer system.

KQ sources all electricity from the national grid and the use of its back-up diesel generators maintained on-site is negligible. Average consumption of electricity at the Company’s administrative, training and maintenance facilities approximates 510,000 units per month. The IS&E Section promotes energy efficiency awareness in all buildings, and mandates conservation of lighting and air-conditioning in all KQ offices.
Aviation fuel is the single highest operating cost for an airline and the market continues to pressure manufacturers for greater fuel efficiency. Kenya Airways’ policy is to procure the most energy efficient equipment on the market and to plan its routes and service to optimize fuel consumption. Current consumption approaches 386,000 metric tons per year, which is expected to increase to 1,215,000 metric tons per year in five years. Actual increase in consumption will depend on the actual pace of the Company’s expansion...

The Company sources its aviation fuel from a depot adjacent to JKIA operated by the National Oil Corporation of Kenya. KQ stores other operational fuels (diesel, petrol, acetylene) in secure and protected locations in and around its JKIA operations hub at Embakasi.

The Company’s transport department maintains a web-based vehicle tracking system for its fleet of more than 90 service vehicles. In addition to ensuring the safe operation of vehicles, the tracking system enables KQ to monitor and control fuel consumption by vehicle operators by eliminating non-operational vehicle movement.

Aircraft noise is managed in accordance with the operational procedures established by the Kenya Airports Authority and all maintenance and airside ground handling staff exposed to aircraft noise are required to wear hearing protection rated for the level of exposure.

Management of solid & hazardous waste. Solid waste generated in airline operations are limited to passenger and aircraft servicing waste, spare parts packaging and waste office supplies. Non-hazardous waste is removed from the airside in accordance with the requirements, and under the supervision, of the Kenya Airports Authority and disposed in NEMA licensed sanitary landfill. Waste tires, metal parts and wooden or plastic packaging are sold to recycling contractors.

The Company follows procedures laid out in the IATA Manual for Handling Dangerous Goods in all its cargo operations in coordination with the Kenya Airports Authority or the relevant authority at destination. The procedures for handling, storage and disposal of hazardous materials used in the routine maintenance of aircraft components (e.g., paints, solvents and metal plating agents) are detailed in the Company’s SHE manual and monitored by the IS&E Section. Waste from these operations is removed by NEMA-licensed contractors to a NEMA-licensed incinerator. KQ’s SHE procedures require a designated Company safety officer accompany the contractor during the removal of hazardous waste to the disposal site to confirm disposal.

Green House Gas Emissions. Aircraft operations represent a significant source of carbon emissions. Kenya Airways flight operations in 2011 generated an estimated 1.17 million tons of carbon emissions and this amount could increase to 3.24 million tons in five years. Operation of all ground vehicles is currently estimated to generate another 4,000 metric tons of carbon emissions per year.

Beginning in January 2012, Kenya Airways will be required to participate in the European Union’s Emissions Trading Scheme, which levies a carbon emissions tax on all airlines servicing airports in the EU. The Company is currently developing forest plantation projects in collaboration with Kenya-based NGOs to offset a portion of anticipated carbon emissions.

Emissions from ozone depleting substances used in routine aircraft maintenance (e.g., cleaning solvents and metal plating chemicals) is not significant and the Company has been phasing out air conditioning equipment using CFC refrigerants.

Pest management and control. KQ utilizes chemical fumigants for treating the cargo holds of all its aircraft and for the disinfection of passenger cabins for flights on specific routes. The IS&E Section ensures that all such chemicals meet World Health Organization standards for safe handling and exposure.

IFC’s review considered the Company’s capacity with regard to the management of the impacts of its operations on the health, safety and security of passengers and the general public.

Aircraft Maintenance. Kenya Airways Technical Department employs approximately 500 engineers and technicians in the maintenance and safety quality assurance of the Company’s fleet as well as other airlines serving JKIA in Nairobi. The Department utilizes the industry standard Open Aviation Strategic Engineering System (OASES) for tracking all scheduled aircraft component maintenance and inventory control. The Department carries our routine equipment integrity checks in accordance with IATA protocols for KQ’s entire fleet at the Company’s Embakasi maintenance facility. Heavy maintenance and engine overhauls are outsourced to major IATA and aircraft vendor approved facilities in Singapore and the United Kingdom. KQ’s expansion plans envision the establishment of a full fleet/full maintenance capacity by 2022.

Pilot and Crew Training. Kenya Airways maintains a highly competitive pilot recruitment program. Cadets are recruited from among recently matriculated Kenyan high-school students, subjected to aptitude and psychological testing and supported in two-years of specialized education at highly regarded flight training schools in South Africa. Graduates of the program are then enrolled in practical training at KQ’s new Pride Center, a modern facility that provides facilities for computerized flight procedures training and flight simulator training for two types of aircraft operated by the airline – all in accordance with the standards established by ICAO and the Kenya Civil Aviation Authority. (Training for other types of aircraft operated by KQ is outsourced to specialized facilities maintained by aircraft vendors (e.g., Boeing and Embraer)). Graduates of this training are given route training with experienced KQ pilots until they have accumulated the experience to assume the role of co-pilot. Experienced licensed pilots recruited externally by the Company are subjected to similar screening, as well as procedures and flight simulation training before assuming positions in the cockpit.

A Kenya Airways Flight Safety Manager, who is a technical pilot, supervises all flight training conducted at KQ’s Pride Center as well as a team of peer auditors who assess pilot skills and review/revise training procedures. This team promotes continuous improvement in flight operations through a routine of monitoring and reporting protocols including: offsite analysis of Flight Data Analysis recordings; pilot Air Safety Reports related to flight operations and airport conditions; Cabin Safety Reports submitted by crew members at the end of each flight; and confidential Hazard Reporting by pilots on the performance of their peers.

Kenya Airways has experienced two aircraft crashes (2000 and 2007), both of which resulted in passenger and crew fatalities. In the aftermath of both incidents, which involved different types of aircraft, KQ consulted with the aircraft manufacturers to review and clarify standard operating procedures, and to review, revise and strengthen pilot training procedures accordingly. In the aftermath of the 2007 incident, the Company made significant changes to management oversight of flight operations and flight safety. Since the 2007 accident, KQ has operated nearly 400,000 flight hours without incident.

Kenya Airways also provides four months of training for its cabin crews at its Pride Center. Crews are trained in hygiene (food handling), first aid, emergency response and security procedures.

As noted above, the Company’s Motor Transport Operations Section monitors the operations of its entire ground vehicle fleet to ensure safe and efficient operation within and around the JKIA and Moi International Airports.

Emergency Preparedness and Response. Emergency preparedness and response is managed by the airport authorities of each airport served by Kenya Airways. JKIA and Moi International Airport operations handling aircraft and related emergencies are managed, staffed and equipped by the Kenya Airports Authority in coordination with the Kenya Civil Aviation Authority. Kenya Airways liaises with these two agencies through its IS&E section to ensure a coordinated response to incidents involving KQ passengers, aircraft or ground handling equipment.

Security Personnel. The Company employs a security team that monitors the security of KQ airside operations at JKIA and Moi International Airport, and which liaises with Kenya Airports Authority security and the Airport Police to ensure the safety of passengers, flight operations and ground personnel. Access to all Company administrative, maintenance and training facilities is controlled by guards employed by a third party private security company.
KQ’s Quality Assurance Manager for Security Services is responsible for ensuring that all security personnel either direct employees or contractors, are appropriately credentialed, registered and trained to meet all contingencies. The Quality Assurance Manager reports directly to the Company’s Head of Corporate Security Services who coordinates security across all KQ’s national, regional and international operations.

As part of the statutory EIA process, NEMA requires public engagement through public meetings and stakeholder interviews at the draft and final stages of the EIA process as well as announcements in local newspapers. As such, the public has been made aware of any capital expansion of Kenya Airways. NEMA also requires formal engagement by mail with all stakeholders who may be affected by the environmental impacts of the Company’s operations through. Any stakeholder harboring persistent grievances with a business or industry regarding environmental nuisance may appeal to NEMA’s Public Complaints Committee. Complaints that cannot be resolved at this level are referred to an Environmental Tribunal and, ultimately, the Kenyan High Court.

Kenya Airways has an extensive Corporate Social Responsibility program that provides support for schools in disadvantaged and remote areas of the country, tree plantation in rural areas and career counseling for disadvantaged youth.

Ms. Jane Kiboi - Treasury Manager
Kenya Airways Headquarters and Base, Airport North Road, Embakasi
Land Reference Number 9042/7, P.O Box 19002 – 00501
Nairobi, Kenya
Tel.: +254-20 6422147 / 0737224918
Email: mailto:Jane.Kiboi@kenya-airways.com

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.