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
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This proposed investment is classified as a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects as the environmental and social impacts of the project are limited, site-specific and can be minimized, avoided or mitigated by adhering to generally recognized performance standards, guidelines, or application of good international industry practices.

The key environmental and social aspects of the project relate to IMC’s ability to establish and manage corporate and site level environmental, occupational health and safety, human resources and food safety impacts and risks; fire safety (including dust explosion measures for storage silos); energy and water efficiency; management of fertilizers, pesticides and chemicals (including handling, storage and disposal) and land acquisition process.

IMC will implement environmental, social and occupational health and safety management system as well as a food safety program and effective implementation of these management system and program, allied to the actions defined in the project Environmental and Social Action Plan (ESAP) will ensure environmental and social (E&S) risks and impacts are effectively mitigated.

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.

IMC has presented information on how its existing occupational health and safety management system addresses the identified impacts and risks as well as how it will ensure that the proposed project will upon implementation of the specific agreed measures; comply with the environmental and social requirements, which include the Ukrainian laws and regulations and IFC’s Performance Standards (dated January 01, 2012). The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow. Additional actions are summarized in the attached ESAP.



Environmental and Social Assessment and Management System, Policy and Identification of Risk and Impacts and Management Programs: IMC has a documented occupational health and safety management system (OHS). Management system consisting of a documented policy and procedures / instructions for safety working methods as required by Ukrainian Health and Safety Laws., However, environmental and social management is not covered by the existing system. Identification of occupational health and safety risks is not required by the existing OHS as well. IMC will be required to establish an integrated environmental, social and occupational health and safety management system as well as a food safety system in line with PS1 and internationally recognized standards requirements. As a part of the system, IMC will perform an environmental and social impact assessment and will analyze its operations health and safety risks and will provide a copy of the impact assessment and risk analysis to IFC.



In order to develop an environmental management system, IMC started to work with “University of Life and Environmental Science in Ukraine”. Appointed environmental consultant will evaluate IMC’s compliance to Ukrainian Environmental Legislation requirements and its management system compliance to internationally accepted management system standards such as ISO 14001 Environmental Management System Standard, OHSAS 18001 Occupational Health and Safety Management System Spec and ISO 22000 Food Safety Standard. Consultant will support IMC to develop and implement an action plan to fulfill the gaps (if any).



IMC doesn’t have a documented HACCP system in place. However, as IMC’s clients / customers have HACCP, and performed periodical supplier audits, IMC is aware of its requirements and full fills its requirements.



Organizational Capacity and Competency: There are 14 occupational health and safety engineers located in 3 regions, reporting to Directors of the Regions. There are approximately 40 agronomists in IMC, who are responsible for environmental issues. Agronomists are reporting to Directors of Region as well.



IMC provided trainings to its relevant staff including topics such as implementation of integrated crop protection, safe application of pesticides and its impacts on human health and on the environment, hygiene principles, occupational health and safety ru
les.



Emergency Preparedness and Response: IMC has a documented emergency response plan, including accidental realizes as well as firefighting. The plans cover communication with local authorities in line with Ukrainian Environmental Legislation requirements. There are dust proof lighting equipment in the silos. IMC will be required to conduct an explosion risk assessment in its silos by a third party expert acceptable by IFC to ensure that mitigation measures including static electrical discharge before entering into silos, dust monitoring in place, all electrical equipment including electrical panels are dust proof, good implementations such as periodical cleaning are in place.



Monitoring and Reviewing: IMC’s management reviews energy usage and fertilizer/pesticide/chemical usage on a monthly basis. IMC will incorporate waste amounts, incident statistics to the periodical management review process and will submit to IFC an Annual Monitoring Report on Environmental and Social Performance, including key performance indicators, prepared in accordance with the IFC’s Performance Standards and WBG’s EHS Guidelines requirements.



External Communications and Grievance Mechanism and Ongoing Reporting to Affected Communities: IMC will be required to develop a formal external communication and grievance mechanism where interested parties can raise and register their concerns.

Working Conditions and Management of Worker Relationship: The number of IMC employees has been increased from 2177 to 4070 by the end of 2012 as a result of new land leasing and operational expansions. 58.7 % of the work force is male and 41.3 % is female.



Trade union organizations operate in 4 enterprises of IMC. 247 employees are the members of these trade union organizations.



IMC has a documented Human Resources (HR) Policy and Procedures defining recruitment, enrollment, performance evaluation and orientation processes. There are HR managers in every region who are reporting to HR and Administrative Director, located at the head quarter in Kiev. Every employee has a “labor book”, which is Ukrainian equivalent for employee contract. Labor book refers to legal articles of the Labor Law and includes benefits, vacation, working hours, legal rights, etc. Terms of employment and harassment policy are covered by “IMC’s Corporative Codex”.



There is no discrimination on the basis of personal beliefs, sex or characteristics, and there is no prohibition or discouragement of freedom of association. IMC is not anticipating retrenchment. There is an internal grievance mechanism which has been defined in “corporative codex” where all employees can raise and register their concerns.



IMC is providing adequate facilities and amenities including potable water that meets national standards; toilets, washing and cleaning facilities and; locker/storage facilities.



Protecting the Work Force: In compliance with local labor laws, there is no child or forced labor.



Workers Engaged by Third Parties: During the potato storage period, 100-120 temporary workers are employed for jobs in the potato warehouses. For the temporary employees, OHS trainings are provided as a part of the orientation program. Personal protective equipment are provided by IMC. The same periodical health checks which are provided to IMC staff are also provided to temporary workers as well.



Occupational Health and Safety: IMC has a well-documented system for occupational health and safety. Mitigation measures related with most common occupational health and safety risks such as working at height, using lifting equipment, working with elevators and conveyors, hot works, confined spaces, electricity safety, chemical safety are defined in H&S regulations of Ukraine and IMC adapted those measures as working instructions. There is an incident investigation system in place.



All IMC employees, including temporary workers are required to undergo initial safety training prior to starting work.



IMC will develop a system to ensure that IMC management will also perform regular environmental, social, occupational health and safety spot checks, periodical site tours, toolbox talks, behavioral safety observations in order to monitor mitigation measures related with the workplace risks and environmental impacts will be implemented.

Resource Efficiency: Water is supplied from licensed wells and/or from the municipality’s grid and is being used for dairy cleaning and during fertilizer implementation.



Location and fuel consumption of the vehicles are monitored online by software known as IMC Compass. Online monitoring and application of no-till and mini-till agricultural technologies allow reducing fuel consumption by 30% per hectare.



Natural gas, which is used in dryers/silos, is the main energy source. Natural gas and electricity is supplied from the national grid.



Both water and energy (electricity and fuel) consumption will be monitored and reported internally, will be benchmark with the information on the related EHS Guidelines and IMC will provide the figures to IFC through the Annual Monitoring Report.



Greenhouse Gases (GHG): The main source for GHG is natural gas and electricity usage. GHG emission is estimated to be,217.840 tonne CO2 equivalent/year in 2012. IMC will provide GHG figures to IFC through the Annual Monitoring Report.



Waste Management: IMC’s wastes include manure from dairy operations, used tires, used batteries, waste oil, fluorescent lamps, chemical / pesticide / fertilizer containers, domestic wastes, scrap metal, cereal wastes, and office wastes including paper and glass. There is a waste segregation system in place and hazardous and non hazardous wastes are disposed / recycled by certified third party companies in line with Ukrainian Environmental Legislation. Dairy wastes and crop residues are used as soil enricher. IMC will report on associated waste amounts, information on disposal / recycle to IFC via the Annual Monitoring Report.



Hazardous Materials Management and Pesticides Use and Management: IMC’s hazardous materials include the chemicals that are used for maintenance and facility/equipment / cleaning purposes as well as fuels and oil used for the machinery and vehicles. Small amounts of oils, equipment cleaning sprays/ chemicals are stored on site. Pesticides/fertilizers/chemicals are purchased at the time of implementation in order to minimize the storage and are used completely. Pesticide/fertilizer residues are either disposed as hazardous wastes or returned to the suppliers. IMC will review the storage areas, including fuel storage tanks and improve them (where necessary) to ensure PSs and EHS Guidelines requirements such as secondary containment, impervious basement, emergency showers are in place.



In order to minimize pesticides and fertilizer usage, good agricultural practices (GAP) such as micro nutrient application on the leaves, use of crop residue/cattle waste as soil enricher for the reduction of nitrogen application are in place.



Dosage of fertilizer is adjusted according to the soil analysis. Pesticides are used only as needed, taking into account of the time of application, the period of plant development, whether conditions as well.



IMC regularly compares its pesticides/fertilizers in use a
gainst the Ukranian Agricultural Legislation’s “list of perticides and agrochemicals” to ensure that no prohibited and/or phase out fertilizer/pesticide in use. In addition, company has a policy to use pesticides with short half life time in water and soil.



IMC will review the pesticides/fertilizers/chemicals and ensure that the material safety data sheets are provided. IMC will also develop a check list of chemicals / pesticides / fertilizers versus material safety data sheet to ensure that EOHS requirements of MSDS are effectively implemented.



Emissions : IMC’s emissions, resulting from boilers are in in line with Ukrainian laws as well as emission limits set in General EHS Guidelines. Exhaust gases formed during operation of agricultural machinery and vehicles will also be monitored and IMC will provide information to IFC via Annual Monitoring Report.



Historical Contamination: As a part of land leasing process, soil analysis are performed before the lease decision is given and periodically once in every 5 years. The analysis provides information whether or not a previous contamination took place and whether or not crop production negatively affects soil quality. IMC will provide information the findings of the analysis to IFC through Annual Monitoring Report.

Community Health and Safety:IMC will develop documented procedures / instructions and train its employees for road safety and for defensive driving to minimize the traffic accident risk.



Security: IMC employed unarmed security forces at the gate of its dairies and storage facilities.

Ukrainian legislation do not cover “certification of crops” however, legislation has been recently revised to require a “crop rotation scheme” to be approved by local authorities. IMC will have an approved “crop rotation scheme” by the end of 2013 and will provide a copy of the scheme to IFC.



IMC is also using biological methods for pest control. However, biological agents are used with the recommendation and approval of local authorities and no alien species are introduced.



Ukrania banned used of GMO thus, IMC is not using genetically modified seeds for crop production.

IMC has a social support program, known as “IMC Help” to support local infrastructure development. IMC Help included the following projects in 2008-2012; :
reconstruction of schools, kindergartens ,village first-aid stations
reconstruction of roads, water supply systems provision of villages with electric light
acquisition of X-ray equipment and ambulance cars for the regional hospitals
financing of football teams
construction the monument to the participants of the Afghan war, construction of bridge
permanent sponsoring support of schools and kindergartens
sponsorship of regional cultural events, festivals, fairs, various holidays of village communities
IMC is working with the village councils where the company is doing business as to payment of a definite amount of money per a hectare of the leased land to be spent to solve social needs of a particular village.
In addition, IMC will develop a formal external grievance mechanism where all interested parties can raise and register their concerns. The information related to IMC’s grievance mechanism will be shared through its internet site and at the gates of its facilities.

This Environmental Review Summary and relevant action plan will be available at IMC’s Head Office, EIMC’s internet site and at facilities gates.

For more information please contact:

Name : Mr. Michael Petrov, CEO Deputy, Investments and Development



Address: Address: 4/10, Tbilisky Lane, Kyiv, Ukraine, 04116
Tel/fax:+380 44 238-96-89, 238-94-91
e-mail: mailto:m.petrov@imcagro.com.ua

http://www. imcagro.com.ua

1. Sumy clustera. PAC Slobozhanschyna Agro35 Molodizhna St, Kalynivka, Bilopolskyi district, Sumy region b. OJSC ''''Vyryvske HPP" 5 Pryvokzalna St., Bilopolskyi district, Sumy region
2. Poltava clustera. Burat-Agro Ltd. / Burat Ltd.43a Marshall Byryuzova St.,Poltava3. Chernihiv clustera. Chernihiv Industrial Milk Company Ltd. / PJSC Mlibor1 Elevatorna St., Chernihiv4. Nosivka clusterAgroprogres PE2 Zavodska St., Nosivka , Chernihiv region5. PJSC Bobrovitske HPP1 Horkogo St., Bobrovytsia, Chernihiv region

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
IMC to develop and implement; (i) Food Safety System in line with PS1 and internationally recognized standards (like ISO 14001, OHSAS 18001, HACCP/ISO 22000) requirements. Certification of the management system is not required.	06/30/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
IMC to develop and implement; (ii) Occupational Health and Safety (OHS) Management System, in line with PS1 and internationally recognized standards (like ISO 14001, OHSAS 18001, HACCP/ISO 22000) requirements. Certification of the management system is not required.	12/31/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
IMC to develop and implement; (iii) Environmental and Social, Management System, in line with PS1 and internationally recognized standards (like ISO 14001, OHSAS 18001, HACCP/ISO 22000) requirements. Certification of the management system is not required.	6/30/2015	In Progress	In Progress
Engage qualified environmental, social, occupational health and safety consultant (s) acceptable to IFC to perform environmental and social impact assessment and occupational health and safety risk analysis for the agribusiness, dairy, dairy processing and sugar manufacturing facilities and/or related tasks.	12/31/2013 12:00:00 AM	Completed	Completed	12/19/2013 12:00:00 AM
Provide a copy of the assessment and risk analysis to IFC and develop and agree on the corrective action plan with IFC to mitigate the impacts and risks with assigned financial and technical resources. IMC will implement any corrective action identified by the consultants within the agreed time-frame.	03/01/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
Engage a qualified explosion risk expert acceptable to IFC to conduct an explosion risk assessment in its silos,	12/31/2013 12:00:00 AM	Completed	Completed	12/18/2013 12:00:00 AM
Provide a copy of theexplosion risk assessment to IFC and develop and agree on the corrective action plan with IFC to ensure that mitigation measures including static electrical discharge before entering into silos, dust monitoring in place, all electrical equipments including electrical panels are dust proof, good implementations such as periodical cleaning are in place. IMC will implement any corrective action identified by the consultants within the agreed time-frame	03/01/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
IMC to review the storage areas, including fuel storage tanks, to deploy emergency prevention equipment, including emergency tank, secondary contention, proper warning signs, emergency showers and emergency equipment.	03/31/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
IMC to review the pesticides/fertilizers/chemicals and ensure that the material safety data sheets (MSDS) are provided and to develop a check list of chemicals / pesticides / fertilizers versus material safety data sheet to ensure that EOHS requirements of MSDS are effectively implemented	03/01/2014 12:00:00 AM	Completed	Completed	09/19/2014 12:00:00 AM
IMC to complete a land acquisition policy and framework for addressing future land acquisition as well as the affected people currently located on their lands, if applicable and include in ESMS as outlined in PS1.	03/01/2014 12:00:00 AM	Completed	Completed	12/18/2013 12:00:00 AM
IMC to develop and implement an approved “crop rotation scheme” by the end of 2013 and will provide a copy of the scheme to IFC.	03/01/2014 12:00:00 AM	Completed	Completed	12/18/2013 12:00:00 AM