This is a category B project according to IFC’s Environmental and Social Review Procedure for projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, procedures, guidelines and design criteria.

Key environmental and social issues identified during the appraisal include adequate environmental and social management capacity in the current operations and in the new projects; labor and working conditions; fire safety protection; water, energy and resource efficiency; wastewater treatment and discharge; solid waste disposal; and management of contractors including occupational health and safety elements. As identified in the project Environmental and Social Action Plan (“ESAP”), the company will implement actions to address the identified issues.

Environmental and Social Assessment and Management Systems:  Ananta has a comprehensive labor compliance management system, which has incorporated required basic environmental and occupational health and safety elements. Ananta supplies products to recognized brands that require compliance with their codes of ethics and procedures.  Therefore the company has developed management systems; that include a policy book, procedures, monitoring systems, internal audits and reporting mechanisms. The company has in place policies on labor, environment, fire safety and business integrity which form the framework for Ananta’s environmental and social management of operations. 

Identification of Risks and Impacts and Management Programs :   Ananta’s risks and impacts for most of its operations are related to labor aspects, though the company’s washing processes for its denim operations do have potential impacts on the environment.  During construction of the new factory, Ananta has considered energy and water efficiency in the selection of equipment and in the design of the layout.  Ananta already is using machineries and processes in its washing facilities which help to reduce water and energy consumption and also reduce the usage of chemicals.  

Ananta has obtained the required local permits for the operation of their factories; these include environmental permits, fire safety permits and operational permits. For the new development, local authorities did not require an environmental license or similar, nor an environmental impact assessment. The company has proven experience on the expansion of its operations and has a dedicated engineering team which defines production layouts and selects the machinery to be used. The same team is in charge of selecting contractors and obtaining the required permits and licenses for the construction and operation of new facilities. 

Organizational Capacity and Competency:  Ananta has an extensive compliance team and welfare team both of whom report to the General Manager (GM) - Human Resources (“HR”), Compliance and Administration. To enhance EHS management at a corporate level the company has hired an EHS Specialist responsible for environmental and OHS elements at corporate level who will also be part of the compliance team and will support the compliance activities and reports to the GM - HR, Compliance and Administration.  Ananta has compliance officers/managers and welfare coordinators at each factory who are responsible for the day to day implementation of the internal policies. Compliance officers and managers perform internal audits regarding fire safety, labor conditions (e.g., working hours, supervisory relations, etc.) and verification of basic occupational health and safety (“OHS”) elements. Compliance officers and managers are also responsible to ensure that the facility complies with the various structural, electrical and fire (SEF) safety requirements of Alliance for Bangladesh Worker Safety (“ALLIANCE”) or Accord on Fire and Building Safety in Bangladesh (ACCORD). Welfare coordinators provide a link between workers and the management team by identifying workers needs, helping to solve issues, and facilitating overall communication among teams; they also provide training to employees. In the washing plant a dedicated EHS officer is responsible for the environmental aspects of the washing operations.  

All employees undertake a basic induction program upon recruitment. Basic training related to fire safety and emergency response has been provided. The company has made significant and satisfactory progress on implementation of required SEF safety measures as per ALLIANCE / ACCORD requirements; including ensuring that employees undergo specific training for fire safety, evacuation, first aid and use of emergency equipment. 

Monitoring and Review: Ananta has established procedures to monitor and measure compliance with its legal and contractual obligations including buyer requirements. The monitoring system includes internal and external audits and implementation of corrective measures. The company has well defined labor indicators which are monitored and reported to senior management. The company will expand the existing management system and reporting process to senior management to include in addition to labor indicators; environmental indicators, to take the necessary steps to ensure the that procedures, practices, and plans are being implemented and are effective. There are already some fire safety and occupational health indicators in the management monitoring system and are covered in the internal audits as well and reported on, but the company intends to augment and improve these significantly. The company retains records of the monitored parameters, fire drills, fire inspections and labor issues, including grievances.

Emergency Preparedness and Response:  Ananta has an emergency preparedness and response plan; the company performs periodic fire drills and ensures that sufficient exits are available. Ananta has in place internal fire brigades and at least 30% of the workers are trained on advanced fire safety along with rescue techniques and first aid and workers receive credits for this as well. This is a full 3-day course conducted by former fire service officials or by BGMEA (Bangladesh Garment Manufacturers and Exporters Association). The rest of the workers receive basic training on fire safety and evacuation. At the time of the initial appraisal, Ananta was required to provide third party certification by a qualified professional acceptable to IFC that the life and fire safety systems for each facility, including emergency preparedness and response systems complies with the host country life safety code and that the systems provide sufficient measures to prevent and mitigate any harm to workers or local communities and to provide a safe work environment. As needed, the recommendations will be implemented. However, subsequently, all of company’s facilities have been assessed for their compliance with respect to ALLIANCE/ACCORD’s SEF requirements. As per observations during the site visit, updates received by the company and status on ALLIANCE/ACCORD websites, the company has made significant progress in implementation of the required SEF safety systems. All of Ananta facilities have integrated fire alarm system, fire hydrant systems, fire extinguishers and sprinklers (in the areas required under the ALLIANCE/ACCORD requirements). The company is working with various buyer brands and ALLIANCE/ACCORD teams to ensure completion of the in-progress actions. 

Specifically, for the facility in downtown Dhaka (i.e. AAL-Elephant Road), the company has already implemented all the electrical safety related improvements. Regarding fire safety, all actions were completed except for (a) sprinkler installation work, which was in progress; (b) verification of alarm system by ACCORD; (c) sealing of unprotected openings at few locations in the facility. These actions are expected to be completed by June 2017.  

Lastly, as the productions lines at the facility have been reduced significantly since the appraisal (from 30 to 16 now), the load in the building has been reduced. The company has submitted a detailed engineering assessment of the building to ACCORD team and will implement the required structural safety modifications as suggested by ACCORD. The company will continue to implement the corrective actions required at all its facilities as per ALLIANCE/ACCORD requirements and also regularly report progress on these actions to IFC. 

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The new AEPZ facility has also been assessed by ALLIANCE and the company is implementing the required corrective actions. Relevant signage and reliable firefighting equipment were visible throughout the factories, emergency exits were observed to be free of obstacles and accessible.

 

External Communications and Grievance Mechanisms:  Ananta has a policy and procedure for local community emergency preparedness and local community grievance where elements of external communications are addressed. This procedure includes means to receive and register public concerns, and to determine the best approach to address them. All communications received are documented together with the corresponding responses and actions undertaken.  There have been minimal concerns for the communities regarding Anata’s operations.

Human Resources Policies and Procedures:  Ananta has well documented manuals with detailed policies and procedures regarding working conditions and these documents are available to all employees in the local language. When new employees are hired, such policies are communicated during the induction period. The manuals define the responsibilities at different levels of the organization. Specific policies regarding anti-forced labor, anti-harassment, gender inequality, anti-discrimination, communication and dialogue, under age and pregnancy in the workplace are in place. Policies are in compliance with local legislation and with the codes of conduct from Ananta’s clients. The company receives regular inspections by government officials as mandated by law and is audited at least twice a year by each of its buyers in each of the factories, regarding social/labor compliance; therefore a comprehensive compliance and follow up system is in place with corrective actions implemented. 

Ananta has about 6,700 direct employees (as at April 2017), of which around 60% of the employees are women; at production level female workers represent near 90% of the total workforce. Ananta’s workforce has grown significantly over the years. The new AEPZ facility employs about 1900 employees of which 1600 are women.  

As the initial plan was to shift the workers from Elephant Road facility to new facility, the company was expected to guarantee an open communication to the employees during the transition process to the new factory and offer alternatives to the employees to reduce the adverse impacts on workers. For those employees who decided not to move to the new factory, Ananta was required to compensate them according to the legal framework. The company had prepared and shared with its employees a relocation plan, explaining the support to be provided to workers ready for relocation and legal benefits to be provided for workers not ready to relocate. The company had communicated to the workers about the advantages of shifting to the new facility and additional benefits they would receive, however, the company faced a worker protest in June 2016 against relocation of the facility. In response to this and after discussions with the workers, the company decided not to close down the Elephant Road facility and still continue with the operation of the new AEPZ facility. 

Working Conditions and Terms of Employment:  Working conditions and terms of employment at Ananta are according to the Bangladesh National Labor Act. Conditions of employment are explained verbally and in written form to all employees upon assuming employment and conditions are defined in the contracts, including benefits, salaries and provisions for termination of employment. Contracts are in the local language and employees confirm acceptance of the conditions by signing acceptance. In addition, Ananta’s policy book contains chapters on compensation and benefits and administrative policies where conditions for leave, overtime, holidays and working hours are well defined. All employees receive a salary above the minimum national wage. As the new facility is in an EPZ, the minimum wage is generally higher than the facilities outside the EPZ. Ananta has a policy regarding working hours and an overtime policy. However due to strong peaks in production at certain times of the year, the overtime exceeds legal requirements in some sections. The company has a comprehensive tracking system and is working actively with buyers and the production and planning teams internally to  control overtime. Since 2013, as was agreed in the ESAP, Ananta had developed a detailed overtime reduction plan identifying root causes and key strategies to be implemented. The identified strategies were implemented and Ananta presented periodic updates to IFC on the progress toward achieving local compliance regarding overtime. As per recent updates, the company has demonstrated compliance with the legal requirements with respect to overtime.

Currently the Company does not provide accommodation for workers. In case the Company decides to provide accommodation, this will be provided in compliance with the requirements of IFC’s Performance Standard 2 which includes the provision of basic services, and the arrangements will not restrict freedom of movement.

Workers Organizations and Grievance Mechanism : The workforce at Ananta is not unionized and employees are not covered by collective bargaining agreement.  However, company management confirmed that they would not prevent employees organizing or participating in workers organizations, or collective bargaining. Mechanisms to raise employee concerns include a functional bipartisan (company-employees) committee:  “Workers Participation Committee”  (“WPC”) that meets at least once every month in each of the facilities with presence from the top management level, and this helps resolve employees’ concerns.  In addition,  the company has a worker grievance mechanism which offers several options by which grievances may be presented. Graphic illustrations of the grievance mechanism as well as a summary of key policies in the local language are displayed at the workplace. Records of WPC meetings, grievances and their resolution were reviewed during the appraisal.

Protecting the Workforce:  In compliance with Bangladeshi labor law, Ananta’s policy and Ananta’s client codes of conduct, no employee under 18 year of age is permitted to work at Ananta. Similarly, Ananta does not employ forced labor and has robust policies and compliance mechanisms in this regard.

Occupational Health and Safety:   Ananta has in place basic provisions regarding OHS, and specific programs are being implemented for electrical safety and handling of chemicals. Occupational monitoring for workplace noise has been undertaken in the production areas. The company performs internal audits which consider OHS elements, though the audits are focused mostly on fire safety. 

At the factory level the workplaces are well ventilated, usually by means of axial flow fans. Where specific risks have been identified, such as in the washing processes (e.g., application of chemicals, scrapping), forced ventilation has been installed and personal protective equipment is provided. The facilities were observed with good housekeeping, clean and ordered with emergency exits marked and fire extinguishers visible in the areas. Sufficiency of such measures will be confirmed by a Fire Safety Engineer. The facilities have an on-site medical facility and are equipped with first aid kits. The company has well documented fire drills, emergency procedures and performs periodic fire safety inspections. As part of the agreed ESAP, the company has undertaken detailed OHS risk assessment at all factories and implemented corrective actions as necessary. The OHS risk assessments includes ventilation requirements, use of PPE, machine guarding and the requirements for the storage and handling of hazardous materials.  

Workers Engaged by Third Parties:  All workers at the factories are employed directly by Ananta, the company uses contractors for construction of the expansion projects. As part of the ESAP, Ananta had formalized the labor requirements for contractors by including clauses relating to OHS and labor conditions to ensure that contractors operate in a manner consistent with the requirements of the Performance Standards (PS2). A formal safety plan defining responsibilities, OHS rules and monitoring of compliance was submitted to IFC and implemented during the construction phase which is already completed.  

Supply Chain:  Most of Ananta’s clients define the suppliers of raw material (textiles) which is usually imported. Suppliers providing goods to Ananta are formal established enterprises where the risk of child or forced labor is minimal. Ananta buys its fabrics mostly from India and Pakistan, this is highly driven by client requirements. Ananta’s clients participate in initiatives to minimize sourcing of cotton from regions with high risk of harmful child labor and/or forced labor, for example one of the key clients of Ananta is part of the Better Cotton Initiative. Ananta does not purchase cotton directly and is not involved in the sourcing thereof; there are multiple tiers to the direct sourcing of cotton and the company’s leverage and influence in the process is limited.

Energy and Resource Efficiency:  Ananta sources electricity from the national grid and has backup generators operated with diesel. Water is sourced mostly from wells located within the factory premises. Ananta, in recent expansion plans, has incorporated more efficient equipment; for example, new washers, engraving machines, steam presses and finishing and washing equipments with state-of-the-art technology. Suppliers of the equipment are mostly European brands which have already incorporated energy and water efficiency in their design. The company upgraded its boiler and installed an economizer thereby demonstrating its commitment to achieve greater energy efficiencies. Ananta is participating in its clients’ environmental program which includes monitoring utilities consumption and a commitment to reduce the consumption of energy annually. Most of the water consumption occurs on the finishing and washing process, current water use in the finishing process is estimated at 50.2 liters/piece. Ananta has implemented measures that integrate the principles of cleaner production into the design of the new factory and in existing finishing and washing process.  

Greenhouse Gases:  Greenhouse emissions of the operations are associated with the use of diesel and natural gas for boilers, curing ovens (for some finishing treatments), compressors and vacuum systems; and the use of electricity. The greenhouse gas emissions of the current operations have been estimated at approximately 62,000 tons of CO ₂ -equivalent annually, 92% of which is derived from fuel use and 8% from electricity. Increased emissions derived from the planned project are limited to the expansion of the sewing and packing finishing processes given. An increase of around 2,500 tons of CO ₂ -equivalent annually is expected from the proposed project bringing the total to 64,000 tons of CO ₂ -equivalent annually. 

Wastewater Management:  Process wastewater is generated only in the finishing plant (which is generally part of the washing facilities) where a wastewater treatment plant exists. The wastewater undergoes chemical and biological treatment whereby the liquid effluents are received in an equalization tank and then solids are removed by flocculation and clarification processes to be further treated in a bio-tower with active media; final clarification and chlorination takes place before final discharge. The treated water is discharged to an adjacent canal as authorized by the local authorities. As per documentation provided, the discharged effluents are in compliance with local requirements and those of the WBG EHS Guidelines. The company has provided a wastewater treatment plant at the new facility to support the expansion plans even though currently there are no washing plant has been installed.  Ananta will confirm full compliance with local and IFC requirements once the new washing plant at the facility is operational. Domestic wastewater from sanitary facilities is treated through septic tanks or is discharged into the municipal sewer in accordance with local regulations.  

Hazardous Materials Management:   Chemicals used for finishing processes are selected by Ananta’s clients and are aligned with good industry practices. Ananta strictly avoids the use of products on the suppliers restricted chemical lists; for example, the company does not use formaldehyde based products and the use of solvents and azo dyes are restricted.  Furthermore, resins used in the washing process are pre-approved by clients. The company has well designed areas for chemical storage with temperature control where needed; material safety data sheets (MSDS) are available in the local language and pictograms displayed to indicate the potential hazard of substances.

Community Health and Safety:   Ananta’s facilities are located at different sites in the area of Dhaka, Bangladesh.  One of the plants is located in an EPZ as is the new facility where most of the companies are in the garment sector and there are no local communities in the vicinity.  Another factory is located in an industrial area and one other is located in a commercial/residential area. Ananta has already reduced the operations at the Elephant Road facility and in addition, loading of materials and product is not undertaken during the day and vehicle size is also managed. As the operations are mainly sewing and packing,   noise external to the company boundary is considered limited. 

The company has open communication channels with its neighbors and has addressed queries when received. In addition, when the company performs fire drills it communicates to neighbors so they are aware that it is an exercise.

Ananta has a local community grievance policy and manages its external relations through a systematic process. Impacts to direct communities are limited; in particular, because most of the factories are located in industrial areas. The proposed project aims to relocate an existing factory from a commercial area to an industrial area which will reduce impacts on communities. As per local legislation and given the scope of the projects developed by Ananta, there are no disclosure requirements. This ESRS and the attached ESAP will be disclosed locally by the Company.

This ESRS, which constitutes IFC’s complete environmental and social disclosure for the project will be publicly disclosed locally at the following address: 

Ananta Apparels Limited

Plant 246-249

Adamjee Export Processing Zone (AEPZ)

Siddirganj 

Narayanganj-1420

Bangladesh 

To contact the project company, please write to: 

Mr. Sawasdee Kamal Chowdhury  

Ananta Apparels Ltd.

House 20, Road 99

Gulshan 2, Dhaka 1212

Bangladesh

Phone: +88-01755-02952

Fax: +88-02-8810656

Email:              sawasdee@ananta-bd.com