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
The plant will be built on the runway area of an abandoned airport. This is a modified habitat, and no natural protected area or protected species were identified at or near the project sites. Indigenous Peoples were not identified in the project area. Cultural Heritage was not identified in the project area.

The proposed project site is located inside an abandoned airport within an area that has been designated an industrial zone by the local government. There is no farmland or residential area near the proposed project site. There are no areas of biodiversity value at or near the project site. The environmental and social impact assessment (ESIA) predicts that air emissions and wastewater effluents can meet both local regulatory requirements and World Bank Group (WBG) Environmental Health/Safety (EHS) Guideline limits upon successful implementation of the proposed mitigation methods. Mitigation measures for the potential environmental and social impacts have been identified and are incorporated into an attached Environmental and Social Action Plan (ESAP).

The potential adverse E&S impacts of this project are therefore few in number and limited to project site and may be readily mitigated. Thus, this is an E&S Category B project.

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. The main E&S risks/impacts of this project include the following:

- Historical operations at project site
- Wastewater treatment
- Occupational health and safety
- Air emissions and abatement
- Energy efficiency

SRF will establish all the necessary EHS procedures and train the employees before the projected trial production. SRF ensures that the proposed project will, upon implementation of the specific agreed measures with IFC, comply with the environmental and social requirements of the host country’s laws and regulations, IFC’s Performance Standards on Social and Environmental Sustainability, and the WBG EHS Guidelines. The information about how these potential impacts will be addressed by SRF is summarized in the paragraphs that follow. Further information is provided in the attached ESAP, which is agreed upon by IFC and SRF, and will address compliance gaps with IFC’s requirements.

Land and Natural Environment: The proposed project site is at the runway area of an abandoned airport within an area designed as an industrial zone by the local government. There is no farmland or residential area at or near the plant site. The nearest community is approximately 4 km away. The ESIA and the Integrated Biodiversity Assessment Tool search show that there is no biodiversity sensitive area at or near the proposed plant site.

Corporate Environmental and Social Management and Organization: SRF has a corporate policy for EHS management. It has a corporate culture of continuous improvement in all aspects of manufacturing including EHS. The project company, SRF Flexipak, has been incorporated. The environmental and social management in SRF Flexipak will follow the requirements of its parent company and local regulatory requirements. An EHS department, as may be required under local regulations, will be set up at SRF Flexipak, which will conduct inspections for each production line and issue/manage EHS operation permits. SRF is committed to setting up an EHS management system at SRF Flexipak plant within 3 months of the operation and meeting all requirement of IFC Performance Standard 1.

Environmental and Social Impact Assessment (ESIA): SRF contracted external experts to conduct an ESIA for the SRF Flexipak project. The ESIA shows that the SRF Flexipak project will meet both the local regulatory requirements and the WBG EHS emissions Guideline values upon successful implementation of the proposed mitigation methods.

Fire Prevention and Emergency Response (ER): BOPP is flammable and fire hazard will be the main operational risk at SRF Flexipak. Automatic fire detectors will be installed at high risk areas. Automatic sprinklers and foam firefighting equipment will be installed at flammable material storage area. There will be fire water storage tank on site. Each of the above would be complied with in line with local regulations. The local fire brigade is approximately 10 minutes from the site, and the nearby hospital is about 20 km from the site. SRF Flexipak will conduct fire drills and include the fire preventions in new employee induction training and required refreshers. As indicated in ESAP, SRF Flexipak will also prepare an ER plan prior to the production.

Training, Monitoring, and Reporting: SRF Flexipak will establish related programs that provide necessary E&S performance-related trainings for all of its employees, including through new employee inductions and annual refreshers. The company will conduct routine EHS monitoring of its operations and keeps its E&S performance records through its internal reporting structure. SRF Flexipak will also report the EHS performances to local regulatory agencies as may be required from time to time by the reporting agencies, and the reports will be public documents as may be required by local regulations. The local residents will have the access rights to these documents as per local regulations.

Corporate Human Resources Policy and Management: SRF has a corporate human resources (HR) policy that specifies the terms of employment and working conditions. These include procedures related to recruitment, probation, training, performance review, promotion, insurance, salary and compensation, resignation, lay-off and firing, vacation, other leave, and retirement. This corporate policy will be modified based on the local regulatory requirements and applied to SRF Flexipak. The HR policy on training is part of the new employee induction, and all employees at SRF Flexipak will have access to this policy. The HR department also works as a grievance mechanism for employees.

Working Conditions: Under the employment terms that strictly follow the national labor law, all workers will be employed on contract of employment which are in accordance with local laws and subject to satisfactory performance and availability of work. All employees will work a standard work hour week as per local regulations. Overtime work is uncommon and is usually only associated with emergencies. The overtime will be paid according to the local labor regulations. All the employees will also enjoy the insurance and pension funds required by the labor law.

Workers’ Organization: Workers will be free to join the national trade unions according to local regulations which SRF Flexipak is committed to comply with. SRF Flexipak management will not discourage workers from electing representatives and bargaining collectively. The workers union also acts as a grievance mechanism.

Non-Discrimination and Equal Opportunity: The HR policy will specify non-discrimination and equal opportunity. No procedures and/or practices have been identified as discriminatory. All the hiring and promotion will be merit-based. However, according to the labor pool plan, priority will be given to the local candidates from nearby communities if their skills are qualified.

Retrenchment: Retrenchment is not expected for this project. The company will hire approximately 150 employees on SRF Flexipak’s rolls and approximately 150 will be on contractual basis. Out of the 150 employees on the rolls, approximately 15-30 will be expats and all others will be locally hired. The expat employees mainly work as trainers for the locally hired. After the training is phased out, the expat employees will be around 10~15. An undetermined number of workers will be hired for construction through contractors.

Protecting the Work Force: SRF Flexipak will comply with national law and will not hire workers below the age of 18. HR will check the birth and school certificates during hiring process. No forced labor practices will be used by SRF Flexipak. Since SRF Flexipak suppliers are mostly large chemical companies who do not rely on low labor costs for competitiveness, the child or forced labor are not expected to be encountered among SRF Flexipak suppliers.

Occupational Health and Safety (OHS): Operation safety is highly emphasized at SRF. As required in ESAP, SRF Flexipak will develop the OHS operation procedures for the main operation positions and train all operators for their related OHS procedures before the trial production.

Raw Materials and Resource Efficiency: The major raw material used at SRF Flexipak is polypropylene chips, which will be procured locally / imported through Durban Port. After the project is put into operation, the annual resource consumptions at SRF Flexipak will be 29 MWh electricity; 1,200 ton furnace fuel for heaters; 108,300 m3 water. The electricity and water will be supplied by the municipal government. SRF Flexipak adopts liquid fuel for its boilers to reduce emissions. The energy consumption is mainly for extrusion and stretching of film and metalizing processes. The proposed energy consumption per unit product is 1.0 kWh/kg, which meets the energy efficiency benchmark proposed in WBG EHS Guideline for Metal, Plastic, and Rubber Products Manufacturing.

Corporate EHS Performance Management and Compliances: SRF Flexipak will establish EHS operation procedures for its different processes and operation positions. According to the ESIA, various air emission sources will meet both local regulatory requirements and WBG EHS Guideline limits upon successful implementation of the proposed mitigation methods. The main air emission source is the liquid fuel based heaters. The combustion controls are expected to maintain these emissions within WBG guideline values. SRF Flexipak will generate approximately 67 m3 wastewater per day, including 27 m3 sanitary wastewater. In the initial stages of operation, the wastewater will be trucked to municipal wastewater treatment plant (WWTP) for treatment before discharges. The effluent standards at the municipal WWTP meet WBG EHS guideline limits. SRF Flexipak will build its own WWTP in a later phase and try to recycle most of the treated wastewater.

Solid and Hazardous Wastes: The sanitary wastes will be collected by municipal contractors for disposal. The industrial solid wastes, such as packing materials, are recycled by the licensed industrial solid waste management company. Hazardous wastes, including onsite wastewater treatment sludge, will be sent to a local hazardous waste landfill for disposal.

Historical Pollution: The proposed project site is located at the runway portion of an abandoned airport. The ESIA confirms that there is no other manufacturing history at the proposed site. The underground fuel storage tank for the abandoned airport is located outside of the project boundary. There is no sign of historical pollution within the project boundary.

Greenhouse Gases (GHG): After the project commissioning, SRF Flexipak will generate approximately 31,000 tonnes of CO2-equivalent annually, mainly from electricity purchase and furnace fuel consumption.

Community Health, Safety and Security: There is no community near the proposed SRF Flexipak plant. The normal operations at SRF Flexipak have little impact to the communities 4 km away. The raw material will be imported from Durban Port directly. The products will be transported by road trucks. The proposed plant is adjacent to the road and the road conditions are satisfactory.

Emergency Preparedness and Response: SRF Flexipak will develop its ER plans and conduct routine drills for firefighting including those with local agencies as required by local regulations. In accordance with ESAP, SRF Flexipak will only contract transportation companies that are in accordance with local requirements.

Security Personnel: SRF Flexipak will hire an external agency for plant site security that conducts routine ID check at the gates and security monitoring. In accordance with ESAP, SRF Flexipak will develop a security personnel management plan.

SRF engages with its stakeholders including communities around the manufacturing plants through AIDS awareness, natural resource management programs, vocational training, etc. For SRF Flexipak project, SRF has identified the nearest community, which is approximately 4 km from project site, as a vulnerable community. SRF will engage the community through employment opportunity. SRF would also like to help the vocational training and AIDS awareness in the community at this early stage. However, SRF will assess the needs of the community in the future and propose a feasible community development plan.

SRF will disclose this document in local prevailing acceptable language at Cato Ridge eThekwini Municipality Public Library, located at 1 Old George Road Cato Ridge, Telephone / fax 031 7821632, in eThekwini Metropolitan Municipality, KwaZulu-Natal province, South Africa. For inquiries or concerns about the environmental and social impacts of this project please contact:

Mr. Guy Nicolson
6 Indwa Place Kloof 3610 South Africa
Telephone 031 7642515
Fax 031 7642515
Email : mailto:guyn@saol.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
Prepare an emergency response (ER) plan prior to production	06/30/2013 12:00:00 AM	Completed	Completed	01/28/2013 12:00:00 AM
Develop the occupational health/safety (OHS) operation procedures for the main operation positions and train all operators for their related OHS procedures.	07/31/2013 12:00:00 AM	Completed	Completed	09/24/2013 12:00:00 AM
Develop a security personnel management plan.	01/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client