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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
Within the scope of this investment, potential adverse E&S impacts may arise at the level of the suppliers. While all IFC Performance Standards are applicable to this investment, IFC’s due diligence has focused on Rhodia’s systems to manage E&S performance of their suppliers; therefore the investment will have impacts which must be managed in a manner consistent with the following Performance Standard (PS):

PS1: Assessment and Management of Environmental and Social Risks

This review also considers aspects of the following two Performance Standards:

PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement

The key issue considered in IFC’s review was Rhodia’s management of E&S practices among its guar suppliers.

Guar is primarily grown in north-western India in semi-arid modified habitats not associated with ongoing loss of biodiversity. In addition, guar is not included in the US Department of Labor 2011 List of Goods Produced by Child Labor or Forced Labor. Rhodia’s guar suppliers are industrial companies processing guar to produce the derivatives at specific manufacturing locations, and includes the JV which is Rhodia’s main guar supplier.

It is therefore concluded that potential E&S risks, where encountered, are reversible, may be readily mitigated and are site specific. This is therefore considered to be an E&S Category B project in accordance with IFC’s Policy on Environment and Social Sustainability.

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. Measures that will be used in mitigation of these risks are now described.

Rhodia’s approach to social, economic and environmental sustainability is defined by “The Rhodia Way”. The Rhodia Way considers six types of stakeholders in Rhodia’s business, namely, employees, investors, customers, suppliers, the environment and communities.

In respect to the supplier relationship, the Rhodia Way establishes commitment objectives in three areas: (i) defining prerequisites and integrating them into the supplier selection procedure; (ii) assessing the buyer’s Corporate Social Responsibility (CSR) performance; and (iii) managing and assessing suppliers and optimizing relationships.

Supplier requirements are documented in the Rhodia Charter for Sustainable Development in Purchasing which forms guidelines for suppliers. This charter defines the Rhodia Group approach to sustainable development and describes the evolution of sustainable development within Rhodia and a series of public commitments to sustainable development that Rhodia has made, which have included in 1998 signature of the Responsible Care ® charter, a commitment for a 30% reduction in greenhouse gas emissions from 1990 to 2010, in 2003 signature of the UN Global Compact and in 2005 signature of a global social and environmental responsibility agreement with the international federation of chemical industry workers (ICEM). This agreement, the only one of its kind in the chemical industry, gives tangible expression to Rhodia’s determination to ensure that basic labor rights and the Group’s social standards in the areas of health, safety and environmental protection are respected on all its sites all over the world. This agreement applies to all Rhodia employees in the 80 countries in which the Group pursues its activities. These requirements are shared with suppliers in the form of an introduction to a supplier evaluation questionnaire. The questionnaire itself asks about the supplier’s occupational health and safety (OHS) policy, procedures and management, social and labor practices, business practices and environmental policy, practices and management.

Suppliers are to be evaluated on the basis of questionnaire replies, and follow-up audits. The less strong Suppliers may be identified as “failing suppliers” with whom corrective actions plans (CAP) will be agreed, or “non-reactive failing suppliers” with whom Rhodia may terminate commercial relationships. In cases where Rhodia anticipates significant CSR supplier risk, preventive progress plans will be agreed with suppliers and implementation monitored. Funding under IFC''s risk participation facility with BNP Paribas will be used by Utexam Logistics Limited to purchase guar from suppliers who have not been identified by Rhodia as ''non-reactive failing'' or worse, per the above evaluation process. For an identified “failing supplier” with whom a CAP has been agreed by Rhodia, IFC will consider for inclusion under its risk participation in BNPP’s facility on a case by case basis.

As the supplier relationship develops, there is a process of optimizing relationships through innovation partnerships for “Key Suppliers” and “Partner Suppliers”. In these, the purchasing Rhodia entity works with the supplier to select and implement projects, in partnership or through joint venture that reduce environmental, social and OHS impacts through attention to raw materials, technologies and their application and logistics.

Rhodia’s signature of the UN Global Compact commits the Company to support and respect the protection of internationally proclaimed human rights (Principle 1), and to support freedom of associated and collection bargaining (Principle 3), elimination of all forms of forced / compulsory labor (Principle 4), the effective abolition of child labor (Principle 5) and elimination of discrimination in employment and occupation (Principle 6). In addition, the Rhodia Way contains additional commitments and practices related to Employee stakeholders, to manage occupational health and safety risks and prevent accidents at work, to encourage direct expression by employees, to develop employees’ skill, and “getting employees involved” in developing business targets, promoting improvements and suggestion and through fair remuneration. These values are fully compliant with Performance Standard 2.

Rhodia’s commitments to the environment include deploying an environmental management system, complying with and anticipating regulation and recording and dealing with incidents. Rhodia also includes commitments to promoting resource efficiency through improving energy efficiency, reducing raw material consumption and controlling water use, and to protect biodiversity around its sites.

As mentioned above, Rhodia includes Communities as key Rhodia Way stakeholders, and includes community-related questions in its potential supplier questionnaire, asking about reintegration into the workplace, employment of disabled persons, and potential support by suppliers to local NGOs, community actions or sponsorship of local events.

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.