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

This proposed investment is expected to have limited environmental and social impacts which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. This categorization is in accordance with other similar type of projects within the sector. The project is designed to avoid, minimize and manage E&S risks and impacts of the Company’s operations in compliance with applicable IFC’s Performance Standards and World Bank Group (WBG) General and sector-specific (Dairy Processing) Environmental, Health and Safety (EHS) Guidelines.

Key E&S issues applicable for this investment are: (i) operational licenses for the dairy processing plant; (ii) environmental, occupational health and safety (OHS), food safety and social management system and related procedures, including Hazard Assessment and Critical Control Point (HACCP) Principles and ISO 22000 certification; (iii) EHS organizational structure and internal capacity; (iv) adherence to Ethiopian labor law, working conditions, standards and OHS risk prevention and management, including employees, contractors and nearby communities; (v) Life and Fire Safety (L&FS) provisions and emergency preparedness and response; (vi) use of public utilities (water supply and energy), water and energy use efficiency through project design and adoption of best available technology, including equipment selection; (vii) wastewater collection and treatment, solid waste disposal, air emissions from generators and boilers, including greenhouse gas emissions, potable water quality, treatment and monitoring, hazardous material handling, management and control of pest and rodent; (viii) food safety, (ix) engagement with communities on traffic safety and social performance

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.

To ensure that VD complies with Ethiopia’s environmental, labor, OHS and social laws and regulations, IFC PSs and WBG EHS Guidelines, VD will implement the measures summarized below, and in the attached Environmental and Social Action Plan (ESAP) which has been agreed upon by the Company and IFC, and which will address any compliance gaps with PS requirements.



PS 1: Assessment and Management of Environmental and Social Risks and Impacts



Environmental and Social Risk and Impact Assessment. In accordance with Ethiopia’s Proclamation on Environmental Impact Assessment No. 299/2002 and related guidelines, VD has commissioned the preparation of an Environmental Impact Assessment (EIA) Report for the green field dairy processing plant in October 2011. This report has been reviewed and validated by the Oromia Regional Government and received approval to proceed from the Oromia land and environmental protection office, conditional of the implementation of pollution control mitigations measures outlined in the EIA’s Environmental Management Plan (EMP). Proposed control pollution measures include the following: construction and operation of a wastewater treatment plant, solid waste management, including use of sludge for agriculture fertilizers, air emissions control, dust control, odor management, energy and water consumption and efficiency, and development of OHS protocols and prevention through training. All these measures have been fully incorporated into equipment’s technical specification and selection, draft technical proposals with potential engineering firms and/or contractors (e.g. civil and electrical engineering firms – OHS clause during construction; processing equipment training; filling equipment training), and preliminary engineering design (e.g. wastewater treatment plant). Prior to commissioning of the dairy processing plant, the Sululta District Land and Environment Protection officer will undertake an inspection to ensure that the Terms and Conditions of the environmental license have been effectively implemented during the construction and commissioning phase, including technical specifications for the wastewater treatment plant (WWTP). VD will also successfully obtain the necessary and required regional and district certificates, permits and/or licenses (e.g. construction permit, including mechanical, electrical, structural and civil work, water extraction permit from the Regional (Oromia) Water Works Authority based on hydro-geological study and according to Proclamation No. 197/2000, article 13 and 14).



Management Program. Since this is a greenfield project, the Environmental, OHS and Labor management system and programs have not yet been fully defined. This being said, the EHS procedures are already in development stage. In addition, mainstreaming of good industrial EHS practices have been integrated into the plant’s technical drawings. As an example, for hygienic requirements and to ensure compliance with ISO 9001 (qualit
y assurance for dairy products) and ISO22000/HACCP certification (food safety management system), the dairy processing plant is divided into several sections. In the design, easy product flow, hygiene, bio-security, compactness and future expansion possibility have been taken into consideration. Going forward, as set forth in the attached ESAP, VD has agreed to develop and implement an Environmental, OHS and food safety management system, including policies, plans, manuals and procedures – consistent with ISO 14001, OHSAS 18001 and HACCP/ISO 22001 - into an Integrated EHS Management System. Further, this will in compliance with IFC’s PS1 requirements and applicable WBG General and Sector-Specific EHS Guidelines. This will be achieved by the time of plant commissioning which is scheduled in December 2014. Voluntary commitment by VD to achieve ISO 9001 and HACCP/ISO 22000 within 18 months of plant commissioning has been made. Food safety will be supported by a raw milk quality control laboratory and food safety standards through the milk collection value chain.



Organizational structure and capacity. Based on the Company’s draft organizational chart reviewed during the due diligence, a comprehensive plant-level EHS structure for the effective implementation of its EHS procedures and plans is being proposed. Under the overall responsibility of the Chief Executive Officer (CEO), two managerial positions will be established, one for the Quality Assurance, OHS and ISO 9001 / HACCP-IS0 22001 certification manager, while another will be for Human Resources Management. Each manager will receive the support of an assistant manager. Effective implementation of the Integrated EHS management system in all workplaces will be under the responsibility of line managers/supervisors and associated EHS committee, including the milk collection scheme manager (e.g. sustainable sourcing), the processing plant manager (e.g. OHS protocol and emergency preparedness and response), the quality control manager (e.g. HACCP) and the technical department manager (e.g. wastewater treatment plant, air emissions control). Draft job descriptions defining specific roles, duties and responsibilities, and supervisory and accountability framework has been drafted and reviewed during the due diligence. These will be finalized and approved three months before plant’ commissioning, in time for the recruitment process.



Training. Plant-level training programs have been defined and mainstreamed into the quotation of potential service providers, including processing and filling equipment providers , whereby technicians will train VD staff on processing equipment on a six month basis and on filling/packaging equipment for a 12 months basis. In addition, VD is planning to recruit for the first five years of its operational phase experienced processing and technical expatriates from Asia, including a technical manager, dairy plant manager, an assistant manager and 8 processing operators.
This experienced managerial framework will promote, in addition to training by services providers, best EHS practices to local Ethiopian assistants and staffs, including mentoring program. A plant-level training procedure will also be developed as part of the EHS management system mentioned above and be ready for implementation before plant commissioning. This will ensure continuous training of staff in order to improve operational efficiencies and accident and incident prevention. Among others, compulsory basic safety orientation will be provided to all employees during their induction training while supervisors will conduct daily refresher briefings on OHS and food safety measures before and after every shift. In addition, a Task Hazard analysis will be conducted for establishing specific training need assessment for machinery strapping, working in confined spaces, elevated work, chemical loading and handling, hot works areas, scaffold erection, excavation, heavy lifts, etc. Prior to performing work at the plant, contractors will be requested to attend a formal safety orientation on applicable Company’s EHS directives and procedures. A record of attendance will be kept by the EHS Plant Safety Committee. Lastly, plant managers will keep themselves up-to-date with best EHS practices through interaction with consultancy firms which will be responsible for the development and implementation of the ISO 9001 and HACCP/ISO 22001 management systems. Specific training on first aid will be conducted every six months, and emergency response (ref. fire drill) will be conducted quarterly, in coordination with the plant-level security team and district fire brigade.



Emergency Preparedness and Response. The dairies’ refrigeration systems, as it is typical in this industry, are based on ammonia refrigerant. Handling and storage practices will be in accordance with industry’s good practices, including the International Institute of Ammonia Refrigeration (http://www.iiar.org). The condenser and high pressure liquid receiver system will contain approximatively 440 kg of ammonia. As set forth in the ESAP, VD will commission an air dispersion model to assess the impact of a large scale refrigerant leak so as to determine the distance from the tanks at which hazardous ammonia concentrations could be expected under a variety of ambient conditions. If indicated necessary by this modeling, the Company will either define a different location for the tanks to limit the impacts or modify its emergency response to incorporate appropriate warning to the site’s neighbors in the unlikely event of such a leak. This will be taken into account during the detailed engineering study.



Monitoring and reporting. Velocity will adopt a structured EHS monitoring and reporting system on environmental and social impacts of its operations. Monitoring frequencies and methodology will be defined by the above mentioned EHS management system and monitoring data will be stored in a cent
ralized database for monthly and annual report production. As set forth in the ESAP, VD will define Key Performance Indicators (KPIs) in order to monitor the following EHS parameters: a) Safety – Lost Time Incidence Frequency Rate (LTIFR), Accident Free Days; b) Sustainability – Carbon (kg/ton), Water Usage (kiloliters/ton), Energy Usage (kWh/ton), wastewater monitoring effluents and air emissions parameters from boiler, genset, and on-site incinerator in line with WBG’s General and Sector specific EHS guidelines; c) Staff - Retention and training days. In addition, the QA/EHS/certification manager will define an integrated EHS report format and based on critical EHS key performance indicators (e.g. compliance with legal and regulatory requirements, EHS management system progress report and certification, including quality control and food safety management system (HACCP/ISO22000), energy and water consumption and efficiency; air emissions (Nitrous and sulfur oxides (NOx, SOx), particulates), including GHG emissions; noise levels and management, solid and hazardous waste management and disposal, effluent discharges from the WWT unit, compliance with national OHS requirements, including accident rates (lost-time accidents); customers and community complaints, supplier performance and community engagement activities). The Company will also report annually to relevant Ethiopian authorities and IFC as part of the Annual Monitoring Report (AMR). Sululta District Land and Environmental Protection Office as well as Department of Labor will also undertake annual monitoring compliance inspections.



Supply Chain Risk Assessment and Management. VD will be sourcing raw milk from local cooperatives and farmers. Specifically, the Company plans to set-up a comprehensive Milk Collection Scheme to collect good quality raw milk from 7,000 farmers with an average of 10Liters/farm/day. VD will be developing and facilitating a training program for farmers to improve raw milk quality, provision of technical assistance on animal feed and husbandry (semi-confined model), efficient veterinary services and an artificial insemination program. As identified in the US Department of Labor List of Goods produced by child labor and forced labor, harmful child labor is associated with the cattle industry in Ethiopia based on children involvement in herding activities, which may require them to work long hours. Site visits and discussion with local farmers have confirmed that most farmers own 1-2 cows, children involvement is part of the farm family activities, and that children attend schools, putting into perspective potential risk of economically exploitative child labor or forced labor in the raw milk supply chain. This being said, in order to prevent any incidence of harmful child labor in its supply chain, VD will adopt, as set forth in the ESAP, a management procedure for its supply chain, which will include the development and implementation of a Supplier’s Code of C
onduct which will be mainstream into its contractual agreements with dairy cooperatives. Effective implementation of this Code will be done through VD’s upstream team (more than 85 employees in year 1 with an increase to 310 staff in year 4). It is estimated that 20-25% of this extension services will be female.



Community engagement. Recognizing that the construction of the dairy plant has not yet started, a site visit during the due diligence has clearly demonstrate VD’s management’s pro-activeness and transparency on project information with surrounding communities and with potential suppliers of raw milk; the Company intends to work with more than 7,000 farmers families. Specifically, a public hearing has been conducted during the EIA preparation process with local communities. In addition, as further described under PS5 (Land Acquisition and Involuntary Resettlement), VD has strictly follow the Ethiopian’s compensation procedure for the 43 families which were negatively impacted during land leasing process. Meetings with communities leaders whom have been living on the land where VD is planning to build its plant has clearly demonstrated their satisfaction on the successfully completed financial compensation settlement process with each of the 43 household and of the positive local employment opportunities (with positive indirect impacts on health and education status) the plant will generate. In addition, VD will establish a potable water point access to surrounding communities outside of the plant premises which will be available at all times. In order to officialize positive and constructive community relationships, as set forth in the ESAP, a community grievance mechanism and emergency procedure will be developed and implemented as part of the above mentioned EHS management system. This mechanism will receive, if any, document and address any issues and/or complaints raised by surrounding stakeholders and end-customers resulting from production and transport activities as well as quality of VD’s products.

Human Resources (HR) Policy and Management. The Company will develop and implement a Human Resources (HR) Manual that will outline rights and responsibilities of the workforce and the Company. This manual will be in accordance with the Ethiopan Labor Proclamation No. 277/2003 and its amendment N. 494-2006 as well as IFC’s Performance Standard 2 requirements. The HR manual will be implemented by a HR Department, with the manager thereof responding directly to the CEO. The scope of the HR manual will encompass a policy and set of procedures, including recruitment and selection; admissions process and documentation; planning and approval of holidays and time off; attendance and working hours; payment processing, including benefits (e.g. pension fund, medical insurance, food allowance (canteen), transport allowance, mobile phone allowance); performance evaluation; training; access to grievance mechanism; disciplinary measures and cessation of employment, including severance pay (art. 40 of the Labor Proclamation No. 277/2003). The HR manual will be communicated to all new employees during the induction process and a signed acknowledgement of receipt from each employee will be requested. Certificate of Legality/Registration of VD’s HR manual will be validated by the Ethiopian labor authorities, before plant commissioning. The HR policy will explicitly outline VD’s commitment to non-discrimination, equal opportunity, strict compliance with minimum age and wage law, and prevention of harmful child and forced labor in its direct operations and its supply chain. The recruiting process will involve a background check of diploma’s and professional experience. In order to maximize local employment near the dairy plant, the Company has committed itself to preferentially recruit from surrounding communities, including from the 43 families whom were compensated as part of the land leasing process, and from people speaking the local language (Oromia). As part of the HACCP’s implementation process, VD will conduct employee health checks once a year for workers at critical control points. As set forth in the ESAP, VD will provide a copy of its approved HR manual and related policies/procedures to IFC, three months before plant commissioning.



As for the contractual firms recruited during the construction phase as well as service providers during the operational phase (canteen and rented transport), the HR management team will undertake a due diligence before establishing contractual arrangements with a contractor and/or service provider, including its registration to the Ministry of Labor and verification of effective payment of social benefits, including minimal age and salary.



Employment creation is estimated to 259 positions in the first year of operation, reaching 545 employees by year 4. No retrenchment is scheduled as VD will be significantly expanding its production overtime. Female employment is expected to reach 20-25% in year 4. Three shifts of 8
hours over 6 days are being scheduled at the plant, including 2 shifts of production (with a total of 80-90 tons of UHT milk and fruit juices) and 1 shift for preventive maintenance, cleaning and disinfection/sterilization of processing lines, filling lines and packaging lines, and re-stoking of packaging materials and ingredients. VD’s will respect Ethiopia’s minimum salary which is presently 450 Birrs/month. In fact, most of its employees will earn 10-20% more than this. In addition to payment of minimum salary wage (48 hours/week, 6 days/week) to its workers, other benefits depending on work assignment and responsibilities could enhance wages. Payment to the Social Security will be deducted from the workers’ monthly pay for the employees’ retirement plan in accordance with Ethiopia’s Provident Fund Proclamation No. 715/2011. In addition, VD will be required to pay workplace medical insurance to the Social Security, covering workplace accidents and family allocations, including pregnancy. Changing rooms, toilets and showers facilities will be available for workers and will respect gender sensitivities.



Working Conditions and Terms of Employment. Velocity will comply with Ethiopia Labor Code as it relates to freedom of association and/or collective bargaining of its employees. In fact, Velocity employees could be eligible to join the Oromia Regional State Labor Union, considering the location of the dairy processing plant.



Grievance Mechanism. Velocity will establish a structured grievance mechanism procedure which will meet IFC’s PS2 requirements and which will be included into its HR manual. This procedure will include steps to be taken for workers to manifest any concern, engage in a mediation process, contact responsible persons, and provide feedback. Awareness rising on the grievance mechanism procedure will take place during the worker’s induction session and/or workers’ associations. The scope of this grievance mechanism will also apply to contractors and service provider’ workers.



Occupational Health and Safety. As part of the Integrated EHS management system mentioned above in PS1, VD will define and implement an OHS management system procedures and monitoring/reporting plan in accordance with IFC’s PS2 requirements. This OHS protocol will be under the responsibility of the QA/EHS manager and implemented by line managers. A plant-level EHS Committee will be established, which tasks will be the following: task hazard analysis based on Standard Operating Procedures (SOPs) for each activity, enforcement of use of Personal Protective Equipment (PPE), safety recording, safety orientation during the induction/orientation program complemented by on-the-job training supervised by their immediate superior, contractor safety, plant emergency response organization (fire fighting equipment identification and mapping, emergency route identification and meeting points during evacuation, first aid and evacuation leader assignment), emergen
cy contact numbers (police, hospital, plant calling tree), weekly and monthly safety inspection, near miss management, incident investigation, fire drill, weekly and monthly meeting. VD will have an on-site medical clinic staffed with a nurse on 3 shift basis. In case of work accidents, VD will take the employee to a hospital and pay for emergency care expenses. As indicated under PS1 – Monitoring and Reporting, the Company will mainstream a Lost Time Injury Frequency Rate (LTIFR) into its monthly/annual KPIs which will allow for pro-active and continuous improvement. This will be reported to the local Ministry of Labor and IFC as part of the Company’s Annual Monitoring Report (AMR).



Introduction of pertinent OHS sections will be defined and mainstreamed into bidding documentation for the technical/financial proposal of the construction contractors, in order to ensure that all contractors and sub-contractors are in compliance with payment of workers’ legal benefits; timely payment of wages; OHS regulations, including personal protective equipment (PPE) and ILO Conventions 138 on Minimum Age. Specifically, all construction contractors being invited for the bidding process will be requested to include in their technical proposal a detailed OHS practice handbook that it will implement during construction, including policy, procedures and training requirements. Implementation of the requisite practices as defined in the Handbook will be effectively ensured through assignment of an OHS officer employed by the contractor, in addition to VD and Abba Architect’s own OHS supervision oversight person and inspection schedule. More than 300 workers are expected during construction peak. As set forth in the ESAP, prior to construction, VD will provide contractor’s OHS documentation to IFC for review and validation, including the Company’s and the Abba Architect’s own OHS supervision oversight responsibilities.



Life and Fire Safety. VD’s operations at the dairy plant could be associated with fire and explosion risks, including diesel containers for the genset and boilers and an unlikely ammoniac leakage from the refrigeration system. In addition to the preventive maintenance measures to prevent such risks, preliminary engineering drawings have planned the installation of a fire prevention system, including fire hydrant and hose and extinguishers as well as ammoniac sensors in accordance with German and Ethiopian standards. The fire fighting system will have a permanent water reservoir of 150 m³. The full efficiency of these systems will be assessed by the plant’s Technical Department Manager prior to plant commissioning with on-going monitoring during the operational phase. As part of the plant monthly EHS inspection, fire extinguishers, hydrants and the fire fighting system will be inspected. In coordination with local fire brigades, neighboring farmers and surrounding companies, the assigned Company’s security team will undertake semestrial fire dri
lls.

Velocity is planning to implement a state-of-the-art dairy processing plant, with equipment that will enable the Company to produce more efficiently, more flexibly and higher quality products than current local competitors. In addition, VD is presently reviewing its preliminary engineering drawings, including technical specification of equipment and associated facilities to comply with WBG’s General and Sector-specific EHS Guidelines.



Energy use. Provision of energy to VD will be provided by the Ethiopian Electric Power Corporation (EEPC). A request to access 3.2 MW has been made by the Company which was successfully confirmed by EEPC. In addition, VD will install two stand-by diesel generator sets for a total power generation of 3.2MW which will be used on an emergency basis only. VD has already paid EEPC for the relocation of the distribution line presently on its leased land. A 25,000 liter diesel tank will be placed underground with the tank house according to Ethiopian’s construction standards. The diesel reservoir will have secondary containment walls in case of leakage. For its upstream operations, VD will buy two (2) tankers of 25,000 liters, 5 pickups for VD staff involved in the milk collection scheme and 10 cars for its managerial team. In addition, for its upstream operations, VD will rent 45 pickups for transport of the milk cans from the milk collection points to the factory. For its downstream operations, VD will have 14 small trucks for product delivery. Based on the preliminary engineering assessment, energy efficiency performance (energy input per unit of product, KW/ liter of processed milk) is estimated at 0.086 for pasteurized milk, cream and butter and 0.117 for drinking yogurt. This expected performance is better than the industry benchmark (0.1 – 0.2). Further analysis will be done during the detailed engineering design. VD will establish a logbook for fuel consumption in order to calculate its GHG emissions.



Water supply and consumption. Sourcing of raw water will be from two deep boreholes down to a depth of 180 meters. Based on the hydro geological investigation, these boreholes are expected to provide a sustainable water volume to the plant which is estimated at 450,000 Liters/day at full production. Estimated water consumption from the plant is estimated at 70,000 liters/day during the first year, reaching 240,000 liters/day in year 4. Water extraction permit is delivered by the Oromia Water Works Authority based on VD’s hydro-geological studies. Water meters will be installed at each borehole. Analysis of the raw water has confirmed compliance with WHO’s water quality guidelines. A third party licensed provider will ensure continuous water quality analysis after plant commissioning. This being said, due to its hardness, the raw water will be softened before its use in the production process and cleaning. Water treatment units of daily capacity of 450 m³ with a peak load capacity of net 50-55 m³ per hour will
be placed in the steam boiler section while a reverse osmosis filtration unit for demineralized water (for production of juices) will also be installed with a net capacity of 20 m³ per hour. Total raw water consumption (in liters) used per liter of processed milk is presently estimated at 2.07 which is slightly above the industry benchmark (1.0-1.5). Further review to optimize water use will be taken place during detailed engineering study. As indicated under PS1, VD will adopt a specific KPI which will monitor this performance on a monthly basis. As part of the daily/weekly inspection carried by the EHS manager, water leakage will be incorporated into the Plant Walkthrough Inspection report.



Wastewater treatment. As part of the preliminary engineering design of the dairy processing plant, a WWTP will be constructed with a treatment capacity of estimated 300m³/day before plant commissioning. Treatment capacity will be further estimated during detailed engineering phase. Considering high concentration of biochemical and chemical oxygen demand (BOD & COD) of effluent inlets, treatment will include a dosing station (to adjust pH), dissolved air flotation, a blower station, biological phosphorus station, activated sludge basin and clarifier. As WBG’s effluents level parameters are more stringent than the Ethiopian’s effluents standards, VD has agreed to adopt WBG’s effluents treatment requirements as the technical specification for the WWTP. As indicated under PS1 – monitoring and reporting section, a strict monitoring system will be established for daily compliance of the effluents with WBG and Ethiopian’s effluents parameters and monthly reporting to local environmental authorities as per the EIA’s Environmental Monitoring Program. Effluents will be released in a small stream adjacent to the dairy processing plant. Reed bed in conjunction with septic tank will be installed at cooling centers. Dairy waste water effluents are estimated at 30,000 Liters/day in year 1 reaching 120,000 Liters/day in year 4. At this stage, there is no tertiary treatment of effluents being considered in order to re-use treated water for the factory. Estimated wastewater discharge (in liters per liters of processed milk) is estimated at 1.5 which is slightly above the industry benchmark (0.9-1.4). This will be taken into account during detailed engineering phase. Scope for anaerobic digestion and capture of methane production from the WWTP will also be analyzed during detailed engineering phase.

Management of solid & hazardous waste. Expected wastes at the dairy plant are characterized by non conforming products and products losses, grid and filter residues, sludge, and packaging waste (e.g. discarded cuts, spent ripening bags, etc.). Sludge from the on-site WWTP will be dried and distributed to surrounding farming communities for soil fertilizer. Solid wastes will be incinerated on-site. The incinerator’s technical specifications will meet emission guidelines out
lined in WBG’s general EHS guidelines. Hazardous wastes present in all operations will be minimal and characterized by used oils and used reagents from the laboratory’s product analysis. The former will be collected by authorized license providers for recycling while the latter are flushed into the effluent inlets stream and treated on site by the WWTP. Material Safety Data Sheets (MSDS) for laboratory reactants will be visible on products used, including the on-site registry, and stored safely in a separate and locked room.

Air emissions monitoring. Main source of air emissions are mostly from the diesel fired steam boilers (2) and large gensets (2x1.65 MW) that burn diesel to produce electricity, heat and hot water. Gensets will only used for emergency basis. Boilers and generators will comply with WBG’s air emissions guidelines and will undergo trimestrial maintenance inspection to optimize efficiency. Air emissions monitoring will be carried out every six months by an independent and certified laboratory from the stack and ambient quality outside and inside the plant. Results shall be within the permissible parameters outlined within the WBG EHS guidelines for point source emissions to air (PM10: 50mg/Nm³; NOx: 460mg/Nm³; SO2: 2,000 mg/Nm³). Odor emissions related to the WWTP should not represent an issue as the surrounding lands are inhabitated and used for pasture. This being said, the oil and grease trap at the WWTP will be emptied daily and cleaned weekly.



Pest management and control. Legally registered companies will conduct rodent control in the plant. Products used should not be listed under WHO Class 1a and 1b chemical formulations. Velocity will adopt a management procedure to require contractors and suppliers for mandatory training of workers and ensure provision of adequate PPE based upon MSDS and/or ICSCs for the materials used. This requirement will be added in employee’s OHS training programs.

Community Health and Safety. The dairy processing plant will be located in an agricultural area (with emerging commercial buildings) and next to the main road. As such, potential adverse impacts from its operations would be limited to induced increased traffic which should not represent a significant risk for the local population. Generally speaking, dairy processing plants do not pose any serious risks on the health, safety and security of surrounding communities. Only the liquid waste disposal, controlled by the WWTP operations, if not efficiently operated, can result in adverse water surface quality impacts on the stream located near the plant. Transport sub-contractors will be requested to produce a validated driver license. As set forth in the ESAP, the Company will develop and implement a safe driver and transport safety vehicle procedure, including training session for its own and third party haulage contractors. Forklift operators will be trained and certified by the Department of Labor. Copies of their certification will be provided. For product quality, corporate level consumer complaints call center will be established to address any issues.



Emergency Preparedness and Response. Velocity will adopt an emergency preparedness and response protocols, procedures and plans. The emergency plan will respond to the needs of accidents, fire, breach of security, and fuel spills. An emergency team will be established at the plant.



Community Grievance Mechanism. Velocity will adopt a formal Community Grievance Mechanism as part of its EHS management system as set forth in the ESAP. A specific management procedure will be develop and implement before construction phase. Its effective implementation will be assigned to the Plant’s General Manager.



Security Personnel. Velocity will recruit its own security personnel in order to support local employment. Staffs assigned to security purposes will be trained and equipped for defensive measures and will not be armed. VD will install a fence around its property to avoid any external intrusion.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. The Company will also be requested to place an advertisement in a local newspaper to inform the public that results from IFC’s environmental and social review (ESRS) and ESAP is available at public sites, such as municipality offices.

Name/ Address
Mr. Andy Frauenknecht, Velocity Dairy Plc, Chief Operations Officer
P.O. Box 12764, Addis Ababa, Ethiopia
Mob (Ethiopia): +251 921 405 414
E-mail: mailto:a.frauenknecht@velocitydairy.com

Broad Community Support is not applicable for this project

Task Title/Description	Anticipated Completion Date
Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
1) VD will design and implement an Integrated Environmental, Occupational Health and Safety (OHS), and Social Management System – consistent with ISO 14001, OHSAS 18001 and HACCP/ISO 22001 – in accordance with IFC PS1 requirements to be reviewed and approved by IFC, defining roles and responsibilities and manual procedures (to enable it to comply with Ethiopian laws and regulations, IFC Performance Standards and applicable WBG’s Environmental, Health and Safety (EHS) Guidelines). The Management System will include mechanisms for the QA/EHS/Certification manager to report monthly environmental and social (E&S) monitoring results to the CEO who will need to sign off on the reports.	a) Before recruitment, and ultimately 3 months before plant’s commissioning b) upon plant''''s commissioning
a) Finalize job descriptions defining specific E&S roles and responsibilities, including supervisory and accountability framework, satisfactory to IFC, including composition of EHS Committee
b) Evidence of complete and effective implementation of the Integrated EHS management system and procedures at the plant (e.g. final documentation of the ESMS, including policies, plans, manual procedures and programs, e.g. EHS training logs, EHS monitoring and reporting plan, emergency preparedness and response, community and suppliers grievance policy and mechanism, OHS policies and procedures implementation, plant’s key performance indicators monitoring record, including liquid, air and solid effluents, waste management, hazardous chemical, fleet efficiency and safety management plan, food security procedures, wastewater, solid plant, minutes of progress reviews).
2) VD will adopt Key Performance Indicators (KPIs) to mainstream EHS parameters, including:
a) Safety – Lost Time Incidence Frequency Rate (LTIFR - Number of injuries per million of hours worked); Accident Free Days ( Number of Days since last Lost Time Incident);	a) Six months after plant’s commissioning
b) Sustainability – Carbon (kg/ton - CO2 emitted / tons produced); Water Usage (kiloliters/ton) and Efficiency - Consumed versus tons produced; Energy Usage (kWh/ton) - Energy consumed/tons produced; Wastewater monitoring effluents and air emissions parameters;
c) Staff - Retention - Number of full time equivalents leaving in the period /Avg. full time equivalents - and Training days - Number of training days provided to new and existing employees.
Monthly and annual report will be reviewed during VD’s monthly EHS Review and annually during the Company’s planning and budgetary management review.
3) VD will prepare an integrated EHS report format based on critical EHS key performance indicators (e.g. compliance with legal and regulatory requirements, including the EIA’s Environmental Management/Monitoring Plan, EHS management system progress report and voluntary certification, including food safety management system (HACCP/ISO22000), energy and water consumption and efficiency; air emissions (NOx, SOx, particulates), including GHG emissions; solid and hazardous waste management and disposal, effluent discharges from the WWT unit, compliance with national OHS requirements, including accident rates (lost-time accidents); customers and community complaints, supplier performance and community engagement activities) and report annually to relevant Ethiopian authorities and IFC as part of the Annual Monitoring Report (AMR).	a) Yearly upon anniversary date of plant commissioning
4) As part of the development of its emergency preparedness and response procedure, the Company will commission an air dispersion model which will assess a large scale refrigerant leak, to determine the distance from the tanks at which hazardous ammonia concentrations could be expected under a variety of ambient conditions. If indicated necessary by this modeling, Velocity will modify its emergency response to incorporate appropriate warning to the site’s neighbors in the unlikely event of such a leak, or any other emergency impacts outside the site boundaries. VD will deploy emergency prevention equipment in the ammonia storage and refrigerating system, including leak detectors, emergency tank, secondary contention, proper warning signs, and emergency equipment. It will also deploy emergency showers close to the acid and soda ash storage.	a) Upon plant’s commissioning
5) As part of its overall ESMS (please refer to ESAP, Action Item 1), Velocity will develop and implement a specific management procedure for its supply chain, which will include the development and implementation of a Supplier’s Code of Conduct (including prohibition of harmful child/forced labor) which will be mainstreamed into contractual agreements with dairy cooperatives. Implementation of this Code will be done through Velocity’s upstream team and associated training.	a) Upon plant’s commissioning and report annually on implementation in the AMR.
Performance Standard 2: Labour and Working Conditions
6) Velocity will develop and implement Human Resources Policies and Procedures appropriate for its workforce that set out the approach to managing workers consistent with the requirements of Performance Standard 2 and the Ethiopian Labor Code. A grievance mechanism will be included as part of the procedure.	a) Three months prior to plant’s commissioning
a)       Provide a copy of the HR policies and procedures to IFC for review and approval.
7) Velocity will develop and implement Occupational Health and Safety (OHS) policies and procedures demonstrating compliance with WBG’s EHS requirements. The policies and procedures should include identification of managers responsible for OHS performance, on-going training, and a mechanism for reviewing deviations from procedures and improving performance both during construction and operational phase.	a) Upon plant’s commissioning; b) Before construction starts
a) Provide a copy of the OHS policies and procedures to IFC for review and approval.
b) Provide construction contractor’s OHS and EMP manual and contractual OHS requirements, consistent with EIA documentation to IFC for review and validation, including VD and Abba Architect’s own OHS supervision oversight responsibilities and inspection schedule. Assign a VD’s OHS construction supervisor.
Performance Standard 4: Community Health, Safety and Security
8) Velocity will develop and implement a safe driver and transport safety vehicle procedure, including training and monitoring program for its drivers and contractors (to the extent that it is commercially feasible, for the fleet of transportation sub-contractors) emphasizing the following: safety aspects among drivers, improving driver skills, licensing of drivers, provision of this procedure in contractual arrangements, and overall truck maintenance.	a) Upon plant’s commissioning b) Annually in the AMR
a) Provide IFC with documented evidence of the safe driver and transport safety vehicle training procedure and monitoring program;
b) Demonstrate full implementation
Performance Standard 5: Land Acquisition and Involuntary Resettlement
9) Velocity will conduct a) a socio-economic baseline survey of the 43 affected households which have been compensated for physical and economic displacement as part of the land leasing process, to ensure that affected households are not disadvantaged by the project during the time period while they wait for possible employment opportunities in the new operation, In addition; b) a resettlement audit of the 43 households, to assess if they have re-established their homesteads, and their livelihoods, including benefiting from employment opportunities at the plant, or have found other employment opportunities and re-established elsewhere, but have not been made worse off as a result of the project.	a) Undertake the survey by April 2013; b) the resettlement audit one year after plant commissioning