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
Impacts related to the following Performance Standards were not identified during IFC’s review: PS5: Land Acquisition and Involuntary Resettlement: existing facilities are to be found on undeveloped commercially demarcated land obtained through willing buyer/willing seller arrangements (or leasing arrangements with the city who are often the land owners) and are identified through the use of professional brokers to avoid any issue associated with historical title disputes. Proposed new stores are to be located adjacent to existing properties or on land obtained in a similar manner in areas advantageous to retail operations (i.e. in proximity to main roads and other transportation links) in the major population centers noted above. PS 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) does not apply due to the existing nature of the land being devoid of biodiversity of any conservation value; PS 7 (Indigenous Peoples) does not apply due to there being no indigenous persons on or near the project site and PS 8 (Cultural Heritage) is not applicable due to the lack of such cultural resources on project sites.

This investment is classified as a Category B project in accordance with IFC’s Policy on Environment and Social Sustainability. Based on information reviewed by IFC, this investment will have limited adverse E&S impacts that are few in number, are generally site specific, largely reversible and readily addressed through mitigation measures, as outlined in the Environmental and Social Action Plan (ESAP) attached to this ESRS. The main E&S issues include the management of impacts during construction (particularly protecting the occupational health and safety of those engaged in building the stores), the life and fire safety design of the stores themselves, the management of human resources and natural resources consumed in the operation of the stores.

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.

Environmental and Social Assessment: An Environmental Impact Assessment is not required for retail developments of this kind in Ukraine (i.e. where the land has an existing retail zoning). Specific environmental and social management actions are, however, required by regulation (e.g. oil water separators to treat parking lot storm water runoff prior to discharge, life and fire safety design and operational elements) which the company is incorporating into project designs.



A ‘Green Lease’ has been developed by Immochan. Immochan is Auchan’s Real Estate division and is responsible for managing the contracts governing tenants in hypermarkets including those in Ukraine. Such a lease includes consideration of E&S issues related to construction and tenant improvements, ventilation, raw water use, energy savings (heating, lighting), waste and waste water generation for the ‘galleries’ of hypermarkets. The need to ensure that Life and Fire Safety considerations, particularly from the operational perspective (ensuring tenants avoid uncontrolled storage of combustibles, their placing security over fire safety by inappropriate locking of fire escapes, etc) is addressed in the ESAP.



Management Program, Organization and Training: The EH&S function is organized at the Corporate Level in Kyiv with both a Director (who also acts as the country Sustainable Development Manager) and Technical Manager overseeing the programs as well individual project managers and others (in total 10) with specific roles (that have an E&S component) such as engineering, civil security and fire safety reporting to the Director.



Existing hypermarkets have managers and staff in place whose remit includes ‘back office operations’ such as engineers that are responsible for managing equipment (including electrical and refrigeration, etc.) and experienced personnel in roles such as food safety where food is prepared within the stores. Waste management, including recycling, is contracted out and personnel from those companies operate full time in the store waste management areas. As noted above, management of tenants, particularly from the perspective of life and fire safety is very important. In addition to well designed and maintained passive life and fire safety systems, it is imperative building management representatives engage with tenants to ensure that they operate their activities and premises in a manner that supports the overall intent to protecting the health and safety of staff and customers. Ensuring clear lines of responsibility exist for L&FS within the building’s management organization, and that tenants support and cooperate with the building L&FS management system, is addressed in the ESAP.



The construction project will be managed in the same way the other construction projects in Ukraine were managed, by a variety of professionals including Ukrainian architects working with these representatives of both Immochan and Auchan Ukraine. An engineering comp
any previously used by Immochan prepares project documentation which is used in a tender. Of the three companies selected in the tender one becomes the General Contractor. Additional contractors for earthworks, structure, façade, roof covering, HVAC, Life and Fire Safety, electrical and plumbing and others for specialty items then become involved as the job dictates.



Monitoring and Reporting: The parent company (in France) coordinates the collection of monitoring data from stores and aggregates and reports this data by country in an annual Sustainability Report. This report was initiated in 2010; the 2011 report was reviewed for this appraisal and selected results are presented below. The report, which includes a foreword by both the Chairman of the Board and the ‘Chairman of Sustainable Development Synergy’, states that Auchan has had a sustainable strategy since 2008. The report is intended for both internal and external audiences and provides details on a wide range of environmental issues and performance as is now the norm in the European retail sector.

Human Resources Policy and Terms of Employment: The parent company abides by the 1948 Universal Declaration of Human Rights, the ILO 1998 Declaration on Fundamental Principles and Rights at Work and OECD guidelines. The Ukraine corporate HR function has developed an HR Policy and manual. Employees are made aware of their rights and responsibilities as well as their benefits upon hiring which are contained in a contract and are in accordance with collective agreements as applicable. HR policies and procedures are posted in the back areas of stores for employees to see.



Employee Organizations: Unions are allowed under Ukraine law and the company complies with this requirement. Despite being allowed in stores, there are no unions at present in Auchan Ukraine operations.



Grievance Mechanism: Non Discrimination and Equal Opportunity and Retrenchment. The company uses a variety of mechanisms to provide employees with the opportunities to voice concerns. For example, a corporate wide survey (which allows for anonymous submissions) is used (in all 11 countries where Auchan operates) and in addition each store has a committee (made up of a representative sample of staff) that reviews issues with management on a monthly basis. Individual issues are reviewed and followed up by store HR managers and the Director of each site. With regards to non discrimination, Auchan Ukraine follows both corporate policy and national law; as an example of practicing non discrimination, during hiring reference to a skills matrix/job description is mandatory and a prospective hire must meet individually with three different recruiters. As another example of non discrimination in hiring, Auchan Ukraine currently exceeds the Ukraine legal minimum for the percentage of workers within a company’s workforce that have a disability (and leads Auchan Group in this measurement). Given the proceeds of IFC investment are targeted towards new stores, the emphasis will be on hiring and not retrenchment. Regardless, if retrenchment were to occur the company is bound by the terms negotiated in the collective agreement which comply with labor law.



Supply Chain: The Company utilizes a supply chain questionnaire that includes the issue of child and/or forced labor; suppliers have to commit to not using child or forced labor and also abide by Ukrainian law to this effect.



Occupational Health and Safety: A safety engineer works at each store operated by Auchan Ukraine. This person is trained in assessment and review of work practices and ensures required equipment can be safely operated.



The requirement to manage occupational health and safety of contractors involved in building the new projects is included in contractual documents; these requirements and norms describe the roles and responsibilities of those involved and make reference to applicable laws and regulations.



Records of absenteeism caused by accidents amongst staff (in effect measuring lost time incidents) are
collated and published in the Sustainability Report. For example, Ukraine operations demonstrated a 0.07% rate, a Group-wide leading result.



The combination of the above policies, procedures and actions demonstrates compliance with PS 2.

Pollution Prevention, Resource Conservation and Energy Efficiency. Data pertaining to consumption of natural resources is summarized in the Corporate Annual Sustainability report. Electrical consumption (presented as kWh consumed per m2 of shop/retail floor) for Ukraine was 549 (in 2010) and 500 (in 2011); these results are in line with other published results (such as that from the Chartered Institute of Building Service Engineers and US Department of Energy) which report figures of 500 kWh per m2 shop floor as a global benchmark. Recent energy savings within Auchan Ukraine operations are a result of detailed reviews of equipment and operations by store engineers in collaboration with store directors. Directors have autonomy to choose initiatives that contribute to energy savings within corporate guidelines, e.g. for lighting the retail area of the store and will continue to looks for ways to decrease energy consumption.



Partner stores (the aforementioned hypermarket galleries) are known to consume 20% to 30% of the overall energy consumption within a hypermarket development. As noted above, Immochan has included an environmental clause in its business leases with partner stores in an effort to drive reductions in overall energy consumption. These environmentally-related clauses have been in force in France since 2010; they have been rolled out in Ukraine in conjunction with the country’s CityPark expansion project.



Water consumption (expressed as liters/m2 of shop floor) is reported as being 1,405 (2010) and 1,294 (2011) for Ukraine operations; this represents a 9% decrease (compared with a country target of 5% reduction). By comparison, Group-wide results for 2011 were 1,762 l/m2.



Wastes and hazardous materials and Emergency Preparedness: The stores located in Ukraine separate and recycle wastes. Incoming product packaging and other non-hazardous solid wastes are separated by contractors working in the storage areas of the shops. Hazardous materials are separated and either recycled or picked up and disposed of by licensed contractors. Waste recovery rates (measured as the ratio of tons of waste recycled/tons wastes generated) for Ukraine as a whole are reported at 34% (2010) and 41% (2011). A target of 49% has been established for 2012. To further encourage recycling efforts the company has begun installing clearly marked recycling waste bins for customer use; new bins were observed in the parking lots of one of the stores visited. The company currently uses R404 and/or R507 refrigerants within its stores but is moving to replace them with R134; refrigerant equipment and operations are managed by experienced engineers. New technology (such as CO2 for freezing and cabinets using glycol) is also in use. Stores conduct fire drills as part of their emergency preparedness planning. Wastewater from the stores is drained directly to the municipal waste water treatment plants.



Greenhouse Gas Emissions: Auchan Ukraine country operations
(a total of 8 stores) are reported as follows: a total of 16,618,006 kg CO2 equivalent (for 2010) and 16,629,132 (2011). These results (equivalent to 172 kg CO2 equivalent/m2 of shop floor) are the second lowest amount group-wide and compare favorably with published industry norms. Based on the existing data above, the development of the new store under this IFC funded project will not result in more than 25,000 tonnes of CO2-equivalent emissions from these operations.



Pesticide Use and Management: The only chemicals used are minor off-the-shelf chemicals to control pests typically found in urban settings (vermin, etc.).

The company uses the services of three trucking companies to move goods between warehouses and stores or between stores. No incidents have been reported regarding these companies. Food safety in the supply chain is a concern within Ukraine; the company is currently working on this issue and is also in contact with IFC’s Advisory Services representatives to better understand how a Food Safety program currently underway in Ukraine may apply to them. Individual stores are responsible for all goods arriving at their reception areas. Appropriate equipment and training is provided to responsible staff and a risk based approach to establishing the program (to be established before years’ end) is being taken. Once internally defined, the program will work on relationships with suppliers so as to get them to understand what is needed and will include determining action plans to be implemented by suppliers and conducting audits. Auchan is a member of the European Business Association (an Organization for Foreign Business in Ukraine) and contributes to its work on Food Safety.



Life and Fire Safety: Life and Fire Safety (L&FS) in existing buildings was recently audited by the parent company’s insurance company who found the need for upgrades (to NFPA 13 for example which addresses the use of sprinklers). These retrofits are being undertaken at present. IFC will require that the L&FS Master Plan (AKA design) of all new buildings that will be in receipt of IFC funds are responsive to both Ukrainian and one internationally recognized Life and Fire Safety standard. That designs are responsive to these standards will be confirmed through a review of the design of proposed buildings by a qualified Life and Fire Safety expert who will either substantiate that the design is responsive to the relevant standards or will propose enhancements for it to be so. This is addressed in the ESAP. Further, once the design has been determined to be responsive to the relevant standards and then the project is constructed, a further review will be required and a determination made that the building was constructed, and the Life and Fire Safety Management System operates, according to the acceptable L&FS Master Plan. This second action is also addressed in the ESAP. This process will be required for each new development proposed by Auchan Ukraine that is funded in any part with IFC proceeds and is likewise addressed in the ESAP.



Security: Store premises are protected using contracted security. These individuals work inside the store (to prevent shoplifting) and also outside to protect assets including incoming supplies and are hired from reputable and licensed firms using trained individuals.



Consultation and Grievance Mechanism: The nature of large scale retail means that environmental and social impacts are limited in number and scope.

Risks and impacts associated with company operations are limited due to the nature of the operation. Stores are purposely located in areas suitable – and demarcated for - large scale retail development and are therefore not immediately adjacent to residential communities. Regardless, the company will make available the information contained in this ESRS on its Ukraine website.

Contact: Romain Le Roux
Address: 15A Moskovskiy Avenue
Tel: +38 044 391 38 25
Fax: +38 044 391 38 29
Email: mailto:rleroux@auchan.ua

Broad Community Support is not applicable for this project

Auchan Ukraine(32366) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1. Design certification of Life and Fire Safety Master Plan for each IFC-funded Facility to be built by Auchan Ukraine. Provide IFC certification by a qualified professional acceptable to IFC that the Life and Fire Safety Master Plan (identifying major fire risks, applicable codes, standards and regulations, and mitigation measures) for each facility to be funded by IFC complies with the Life and Fire Safety requirements of the WBG/IFC Environmental, Health, and Safety (EHS) Guidelines General EHS Guidelines, that the design is fully responsive to one international life and fire safety code and the host country life and fire safety code.	30-Nov-2013	Completed	Completed	7/30/2014
2. Construction certification of Life and Fire Safety Master Plan for each IFC-funded Facility to be built by Auchan Ukraine. Provide IFC certification by a qualified professional acceptable to IFC that the facility construction faithfully incorporates all elements of the previously certified Life and Fire Safety Master Plan.	30-Jul-2014	Completed	Completed	1/1/2020
3. Operation of Life and Fire Safety Master Plan for each IFC-funded Facility to be built by Auchan Ukraine. Incorporate into the overall management system of the facility a means (including designating roles, responsibilities and authorities of Auchan Ukraine facility management and staff) to ensure that facility tenants understand and abide by the operational requirements of the facility’s Life and Fire Safety Master Plan (for example, the need to prevent build up of combustibles, ensure fire escapes remain unlocked, fire escapes and other L&FS equipment remains accessible within gallery shops, etc.)	30-Nov-2014	Completed	Completed	6/30/2021