While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The proposed investment is expected to have limited environmental and social impacts which are site-specific, temporary and none are regarded 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 this sub-sector. The project is designed to avoid, minimize and manage environmental and social risks and impacts of the Company’s operations in compliance with national legal and regulatory requirements, especially Law N°49-99 relative to sanitary protection, production and sale of poultry meat (2002) and its Decree N°2-04-684 (2004), applicable IFC Performance Standards and World Bank Group (WBG) General and sector-specific (Poultry production and Poultry processing) Environmental, Health and Safety (EHS) Guidelines. IFC’s Good Practice Note on Animal Welfare and its applications to Zalagh’s operations has also been assessed during the appraisal.

Key E&S issues applicable to this investment are: (i) operational licenses of the Zalagh’s facilities; (ii) environmental, OHS, food safety and social management system and related procedures, including Hazard Assessment and Critical Control Point (HACCP) Principles and ISO 22000 certification as well as ISO14001 and OHSAS 18001 at feed mills; (iii) EHS management on contract farms with respect to EHS issues, including good animal welfare, and working conditions and terms of employment, including farm worker accommodations and assurance of fair, safe and healthy working conditions; (iv) organizational structure and internal capacity at corporate and operations; (v) adherence to Moroccan labor law, working conditions, standards and OHS risk prevention and management, including each facility’s employees, contractors and nearby communities; (vi) Life and Fire Safety (L&FS) provisions and emergency preparedness and response procedures; (vii) use of public utilities (water supply and energy), optimization of water and energy use through design and resource conservation measures and greenhouse gas emissions; (viii) wastewater collection and treatment, solid waste disposal, air emissions from generators and boilers, potable water quality, treatment and monitoring, hazardous material handling, management and control of pests and rodents; (ix) food and transport safety, and (x) engagement with communities on E&S risks.

Identified applicable performance standards
While all Performance Standards are applicable to this investment, IFC’s 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:

PS1: Assessment and Management of Environmental and Social Risks and Impacts
PS2: Labor and Working Conditions
PS3: Resource Efficiency and Pollution Prevention
PS4: Community Health, Safety, and Security

PS 5: Land Acquisition and Involuntary Resettlement does not apply to the current investment as none of Zalagh Holding’s upstream, midstream and downstream activities have and/or will not trigger involuntary resettlement and/or economic displacement. Land acquisition is done on a willing seller-willing buyer principle (preferred approach by the Holding) while land leasing is done through the “Agence de Développement Agricole – ADA” with well defined technical specifications (“Cahier des Charges”) to ensure, among others, the integration of former para-governmental employees (from SODEA and SOGEDA) into new operations. In addition, land leasing from local communities (“Joumou” – lands owned by local collectivities) is undertaken through joint agreement and payment of an annual rent which is used by the Ministry of Interior for investment in public buildings (ref. schools, health clinics). Zalagh has provided a consolidated land acquisition/leasing procedure to IFC during the appraisal. PS6: Biodiversity Conservation and Sustainable Natural Resources Management does not apply because Zalagh’s upstream operations (ref. hatchery, rearing, laying and broiler farms) are located within existing consolidated agricultural areas and are strictly respecting bio-security requirements defined by ONSAA, while downstream operations (ref. feed mills, slaughterhouse, food processing unit) are located in commercial/industrial areas. As such, there is no conversion of natural/critical habitats. Presence of Indigenous People (PS7) and Cultural Heritage (PS8) has not been identified in the existing footprint of Zalagh operations. In the event that issues anticipated by these PSs arise, Zalagh will promptly inform IFC. Screening and assessment of these issues against Performance Standards requirements will be done through each plant’s existing and/or planned environmental and social management system (ESMS).

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 Policies. Zalagh’s corporate commitment toward continuous EHS improvement is demonstrated by its engagement into the development, implementation and certification of internationally recognized EHS managements systems, above and beyond its strict compliance with Moroccan legal and regulatory requirements (all applicable legal and regulatory texts for the poultry sector in Morocco can be found on the website of FISA (“Federation Inter-professionelle du Secteur Avicole”). Specifically, Zalagh senior management has demonstrated significant leadership, and strong commitment in the development of corporate values towards continuous EHS performance improvement at operations level through on-going ISO9001 (quality management), ISO14001 (environmental management), OHSAS18001 (occupational health and safety) and HACCP/ISO22001 (food safety management) certifications at all facilities. Additional demonstration of this leadership is Zalagh’s adoption of EHS risk-based approach in the implementation of EHS management systems at facilities level, procurement of state-of-the-art equipment to ensure optimal resource efficiency against industry benchmarks, and assignment of competent professional management/oversight and technical team at the corporate and operations level respectively. This forms the foundation of Zalagh’s codes of practice which is being progressively rolled out across its operations, especially for operations that Zalagh recently took over management control. As set forth in the attached Environmental and Social Action Plan (ESAP), Zalagh will formalize its existing strong commitment and EHS requirements in developing and adopting corporate EHS policies while making a direct reference and a commitment to comply with IFC Performance Standards and relevant WBG EHS Guidelines at existing and planned operations going forward.



Environmental and Social Assessment and Management System: In accordance with Morocco’s Environmental Impact Assessment (EIA) Law (N°11-03) and its application Decree (2008), Zalagh Group commissions a systematic EIA Study for any new investments. Mitigation measures outlined in the Environmental Management Plan (EMP) are mainstreamed into infrastructure technical design/lay-out, selection of equipment based on best industry technical specifications, and management procedures during the construction and/or operation phase, including contractor’ OHS Handbook. A sample of EIA studies has been reviewed during the due diligence (e.g., poult broiler farm in Melk Bouline). Environmental impact diagnostic for feed mills (Elf Alf and AIA) conducted as part of the ISO 14001 audit has also been reviewed. As per its proposed expansion, Zalagh will pursue the undertaking of EIA processes for all new investments. Zalagh’s operations have successfully obtained construction/operation authorization for its two hatcheries, rearing, laying and broiler farms, its slaughtering facility and the processed and cooked me
at products facility from ONSAA. In addition, Zalagh’s operations has obtained all required permits and licenses from the Veterinarian Services of the Ministry of Agriculture, and chicks, broiler and animal feeds transport permits from the Ministry of Transport, etc. Copies have been provided to IFC.



Management Program. Zalagh Holding has not yet adopted a corporate Quality, Environment, Occupational Health & Safety, and Food Safety Management program per se as its main efforts have been dedicated to implement these at a facility level, especially in the context of operations which came under management control in October 2011. Specifically, as it related to the feed mills, El Alf has been certified under ISO9001 (March 2009) and OHSAS18001 (August 2010) while ISO22001, ISO14001 and ISO17025 (general requirements for the competence of testing and calibration laboratories) is in progress. On its side, AIA has been certified ISO22001 (July 2011), ISO9001 (July 2013), and is in the process of getting ISO 14001 and OHSAS18001 certifications. Zalagh Holding has committed itself, on a voluntary basis, to successfully achieve pending certifications processes for its feed mills by December 2014. As it relates to the meat processing unit (Banchereau Maroc), ISO22001 (March 2010) and Halal (January 2013) certifications have been obtained. As it relates to the slaughterhouse (Eldin), it is in the process of certification for ISO 22000 (scheduled by December 2013) while being in the process of certification for OHSAS18001 and ISO14001. Completion of these standards is also scheduled by December 2014. Finally, the hatcheries (Couvnord and Atlas Couvoirs) and broiler farms (UMA volailles) have completed the development and implementation of ISO9001 and 22001 procedures but no date has yet been defined to achieve third-party verification and certification. The Manual of Procedures has been reviewed during the appraisal. Going forward, as set forth in the attached Environmental and Social Action Plan (ESAP), Zalagh’s senior management will develop and integrate the Environmental, Occupational Health and Safety (EHS) and food safety management system elements – in line with ISO 14001, OHSAS 18001 and HACCP/ISO 22001 – into an Integrated Management System in compliance with IFC’s PS1 requirements and applicable WBG General and Sector-Specific Environmental, Health and Safety (EHS) Guidelines.



Organization. At a corporate level, Zalagh has changed its governance structure in December 2011 from a Board of Directors structure to a Supervisory Committee and an Executive Committee structure. Under the Executive Committee, a number of sub-committees have been established which comprise Internal Audit, Human Resources, and Risk, among others. As per its demonstrated commitment toward full integration of its numerous EHS managements systems, and as set forth in the attached ESAP, Zalagh will assign a corporate EHS coordinator to the Human Resources Sub-Committee,
whose functions will encompass overall EHS responsibilities, including the development of Zalagh corporate EHS policies and the Integrated EHS management system as mentioned above, as well as ensuring consistency on EHS management across the entire Group’s operations, including the corporate training program and Key Performance Indicators (KPIs) monitoring and reporting. This coordinator will report to Mr. Ali Berbich, President of the Executive Committee and Chairman of the HR sub-committee who will onward inform the Supervisory Committee on Zalagh’s overall EHS performance on an annual basis. At a plant level, as mentioned above, Zalagh is still in the process of upgrading (“mise à niveau”) existing and recently acquired operations. As such, most of the efforts are focused at this level where technical staff is being assigned for the development and effective implementation of EHS and bio-security management systems. In particular, overall management responsibilities for EHS are under the guidance of the plant’s technical director who is supported by assigned quality, OHS and food safety officers, as well as veterinarians which are defined in each plant’s organigram. Each operation is also calling upon independent consultancy firms to support standard’s audit, procedures development and implementation. An OHS Committee has already been established at El Alf (feed mill) and at Eldin (slaughterhouse), while it is in process of being established at AIA in the context of the regulatory labor requirement and on-going OHSAS certification process.



Training. In order to support the effective development and implementation of EHS managements systems mentioned above, comprehensive training programs have been defined at all plants, through; (i) on-going agreements with the Moroccan’s Vocational and Employment Promotion (“Office de la Formation Professionnelle et de la Promotion du Travail” - OFPPT); (ii) plant-level; and (iii) individual training programs, including staff’s training need assessment based on performance review. Comprehensive training workshops have been provided over the last years on a range of EHS issues, including life and fire safety, industrial risk assessment, first aid, the emergency preparedness and response plan, fire drills, good hygiene practices and food safety, including traceability, product recall program, OHS awareness and procedure for its contractors, etc. Delivery of annual training programs is under the overall responsibility of plant’s technical and human resources directors. Professional development of key EHS staff (e.g., quality officer at El Alf) on OHS certification audit has also been provided to strengthen internal audit capacity and support management system’s SOP development and implementation. Going forward, the corporate EHS coordinator mentioned above will consolidate the overall training program in order to support corporate coordination and efficiency, including assignment of corporate “champions” on
EHS issues throughout Zalagh’s value chain operations.



Emergency preparedness and response plan. Potential EHS incidents that could potentially result in emergencies have been identified at all Zalagh operations, especially through the on-going OHSAS diagnostic audit, and plans and procedures have been established to ensure that there is appropriate and adequate response to any emergency incident. Potential incidents include grain dust explosions at feed mills, poultry disease break-out at farms, leakage and spillage of fuels at all sites, ammonia leakage at slaughtering units, and fires, fatal or serious workplace accident, traffic accident and strike/riots and civil unrests. Fire prevention systems have been significantly strengthened at El Alf in the last years, as well as scheduling emergency drills twice a year at both feed mills, involving local fire brigades. Records of the fire drills are documented. In addition, internally assigned staff on emergency teams at both feed mills are well identified (with supporting pictures), and their roles and responsibilities explicitly defined. An evacuation/circulation plan has been posted at both sites. On-going agreement with medical transport services exist. All employees and contractors are responsible for reporting any emergency incident to the Technical Director and/or OHS supervisor.



Monitoring and Reporting. Considering the limited and site-specific environmental and social impacts from Zalagh operations and recent consolidation of operations, Zalagh has not yet defined a comprehensive corporate EHS monitoring and reporting system procedure, including report format. Commitment to achieve this has been confirmed during appraisal. This being said, through its strict compliance with Morocco’s legal and regulatory requirements and existing and on-going EHS management systems, Zalagh has provided to IFC comprehensive and detailed parameters measurements (waste water, air emissions, OHS accident rate) at different operations. Particularly, Zalagh is closely monitoring Lost Time Injury Frequency and Severity Rate (LTIFR/LTISR) as a key indicator of its EHS management system effectiveness. Though its existing and planned EHS systems, internal EHS inspections are performed twice a year while external audits (regular and follow-up certification audit) are performed annually and every two years by registered and accredited consultants. The audit reports, incorporating corrective actions, if appropriate, are submitted to relevant senior operations teams who are responsible for the implementation of the corrective actions. Moroccan authorities (Labor and OHS inspectors, ONSSA, etc.) receive annual updates on Zalagh’s EHS performance as well as undertake inspection visits in order to proceed with the renewal of their operational licenses. Finally, different Zalagh entities (e.g. Banchereau) are audited by its clients to assess strict enforcement of client’s technical/food specifications while others e
ntities (e.g., El Alf, AIA) conduct, as part of the ISO22001 standard, satisfaction survey to its customers. Based on information provided during appraisal, Zalagh Group did not incur over the last three years any material regulatory penalties, fines or sanctions for contraventions or non-compliance with statutory obligations, as well as not reported any fatalities on sites at any of its operations.



Going forwards, as set forth in the ESAP, Zalagh will define Key Performance Indicators (KPIs) in order to monitor on a monthly/annual basis 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 EHS coordinator 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, 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 (Eldin), 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 Moroccan authorities and IFC as part of the Annual Monitoring Report (AMR).



Supply chain. Cereals (corn, soya meal, wheat, sorghum) sourced through the trading operations by Graderco and Alimaroc are originated from North and South America, and Europe. Both operations are sourcing from major agro-commodities (e.g., Bunge, Louis Dreyfus, Noble, etc.) and traceability from primary producers is limited. Zalagh trading operations do not have any management control and leverage over above mentioned traders’ sourcing. As such, Performance Standard’s related supply chain requirements do not apply.



Community engagement. Zalagh’s farm operations are, for bio-safety reasons, isolated from communities in rural areas while its feed mills and slaughtering unit are located into industrial zones. Main E&S issues from surrounding communities could include induced traffic, odor (organic waste at slaughterhouse) and air emissions from boiler and gensets at all sites. Based on feedback received during the appraisal, only one grievance has been received in 2009 at the El Alf feed mill which was related to smoke from boilers. El Alf management took rapid corrective action to document this grievance, including establishment of an external multi-stakeholders committee, lab analysis of smoke and
assessment of height of the chimney for dilution. A Corrective Action Plan (CAP) was agreed upon, implemented and the case was closed

Human Resource Policy and Management. Zalagh operations employ more than 1,718 employees; including 400 temporary employees (mostly seasonal workers) who are contracted though Human Resources’ service providers. Zalagh subsidiaries undertake due diligence of these before establishing contractual arrangements, including its registration to the Ministry of Labor, review of contract provisions compliance with Morocco Labor Law (statement outlining number of employees, payment to the National Fund on Security and Health (“Caisse Nationale de Sécurité Sociale – CNSS) and health insurance (“Assurance Maladie Obligatoire”), etc. Contract examples of such services providers have been reviewed during IFC appraisal. Generally speaking, there is limited staff turnover in Zalagh entities (5-9% on a yearly basis) explained by the seriousness of Zalagh’s subsidiaries in fully respecting the provisions of its Internal Regulations (“Règlement Interieur”) and the Company’s salary scale and benefits. Only exceptions of this limited turnover are at Atlas Couvoir and CouvNord farms (especially parent farm) where contractual workers are isolated for 6-month period due to bio-security measures. The two feed mills (El Alf and AIA) have adopted a Human Resources Policy (“Règlement Intérieur”). This policy, in compliance with the national labor law (Law N°65-99) and Decree (Dahir N°1-03-194, 2003) and related provisions (non discrimination and equal opportunity), is developed in consultation with the plant’s employees and union delegates. Upon agreement by all parties, the policy is formally approved by the Ministry of Labor. The policy handbook is given to all employees, open-ended and fixed term, during the induction period as well as a copy of the Morocco Labor Code. Provisions in this policy include recruitment and selection, job category, probation period, confidentiality provision, access to workplace, working hours, payment schedule, annual leave and special family circumstances, occupational health and safety measures and use of Personal Protective Equipment (PPE), access to grievance mechanism, disciplinary measures and cessation of employment, etc. These provisions are operationally translated in procedures (e.g., communication, competency assessment, workplace accident, etc.) in order to ensure the effective implementation. These have been reviewed during appraisal by IFC. Eldin is in process of developing a Human Resources Policy. Finally, there are other entities of Zalagh which has not yet established such policy. In such case, contractual agreements with employees are done through individual contract agreements signed by employees and/or internal notes (written or electronic), all in compliance with labor law and regulatory requirements. These are mostly done in Zalagh entities which have a significant proportion of temporary/seasonal employees. Zalagh entities assess and report on individual employee performance annually. No work is undertaken in Zalagh s
ubsidiaries by child and/or forced labor. In addition, Zalagh subsidiaries has introduced pertinent sections in contracts with all their service providers to ensure strict compliance of all contractors with the national labor law, including payment of workers’ legal benefits, including CNSS, subscription to public health and OHS insurance, civil responsibility annual leave, etc. In compliance with provisions outlined in the Labor Law, Zalagh subsidiaries have established or are in process of establishing workers’ representation mechanism for its open-ended employees, including staff delegates, consultative committee, occupational health and safety committee, on-site medical services, unions, union delegates. Internal regulation for the Enterprise and OHS Committee for El Alf and supporting meeting’ minutes have been reviewed during appraisal.



Human Resources management at Zalagh is under the responsibility of the HR Director (under recruitment process) which reports to Mr. Omar Benayachi Lalami, General Manager. The main challenge of this HR Director will be to harmonize HR procedures across all Zalagh entities, labor audits and corrective action, if appropriate. In addition, to HR managers at El Alf, AIA and Eldin, Zalagh is committed to assign a HR coordinator at all its subsidiaries. In addition, an HR sub-Committee has been established under the Executive Committee, chaired by Mr. Ali Berbich, which main objectives are to define an Internal Labor Policy throughout all subsidiaries, including harmonizing the salary scale, working conditions, benefits and ensure effective operation of plant-level Enterprise and Occupational Health and Safety Committees.



In addition to the base salary payment (for industrial entities (El Alf, AIA, Graderco, Alimaroc, Banchereau, Eldin), the minimum salary wage is US$275 for 44 hours/week; for agriculture entities (CouvNord, Atlas Couvoirs, UMA volailles), the minimum wage is US$195 for 48 hours/week), other benefits are provided, including complementary pension funds (in addition to the CNSS), private health coverage, seniority, risk and performance bonus, extra hours payment, transport, subsidized meals, payment of school fees (primary and secondary level), special religious celebrations, etc. Salary payments are directly transferred to employee’s bank account (to an extent of 80%). Zalagh Group has also established agreement with commercial banks which allow its employees to access competitive credit arrangements for buying house and/or housing goods. Changing rooms, toilets and shower facilities are available for workers and respect gender sensitivities.



Grievance mechanism. All Zalagh subsidiaries have established a strong and consensual social dialogue with its workers to ensure stable and productive working conditions and performance. Grievances from workers are channeled through staff delegates at each plant. In addition, there is regular internal satisfaction survey in order to assess worker
satisfaction and to preempt any potential worker grievances. Lastly, each Zalagh entity has established preventive measures, including a suggestion box, posting board, and annual performance evaluation discussion. Going forward, Zalagh Group will develop and implement a formalized and structured grievance mechanism for its workers, in accordance with PS2 requirements, including steps to be taken for workers to manifest any concern, engage in a mediation process, contact responsible persons in each facility, and provide timely feedback. Employees’ awareness raising on the grievance mechanism procedure will take place during the induction session. This mechanism will also be accessible to temporary employees, contractors and service provider’ workers.



Workers Organizations. In accordance with Labor Law, Zalagh and all its subsidiaries explicitly support the freedom of association of its workers. Unions exist at some Zalagh subsidiaires, including El Alf (“Union Nationale du Travail au Maroc” - UNTM), AIA (“Union Marocaine du Travail” – UMT), CouvNord (“Union Generale des Travailleurs du Maroc” – UGTM ), Eldin (UMT and “Confederation democratique du travail”). Collective bargaining is done through the union delegates. There is no history of recent labor strikes among Zalagh’s subsidiaries.



Occupational Health and Safety (OHS). Zalagh Holding has made a strong commitment to ensure safe working conditions of all its workers. Using an OHS risk approach, Zalagh has committed itself to implement OHSAS18001 at its facilities representing highest OHS risks, namely its feed mills (El Alf and AIA), its slaughterhouse (Eldin) and its meat processing unit (Banchereau). As per the OHSAS process, OHS policy, workplace risk assessment, Standard Operating Procedure, workers prevention measures, including training and use of PPEs (helmet, ear plug, overall, safety boot, mask), organization oversight through the establishment of facility’s Committee on Hygiene and Security – four (4) scheduled meetings/year and extraordinary ones in case of serious accident -, assigned supervisory staffs and related training, and on-going monitoring and reporting, through the annual industry doctor, and auditing review per internal EHS officer and third-party entity for maintenance of the above mentioned standard are systematically implemented. El Alf and AIA provide an EHS handbook to contractors and ensures that contractor sign a contractor Safety Commitment as well as to complete EHS permits for high OHS risk work place (e.g. confined space, energized electrical work, excavation, hot work, lifting, work at height, etc.). Zalagh’s subsidiaries have established contractual agreement with a workplace place doctor in order to undertake health check-ups for all new employees and on-going supervision for all workers, including twice/year for hazardous workplace (e.g., drivers, workers exposed to high noise level at the feed mill), having an on-site pharmacy and established contr
actual agreement with ambulatory services. Use of PPE is strictly enforced and validation of such has been verified during appraisal. Based on annual workplace doctors reports reviewed during the due diligence for El Alf, AIA and CouvNord in 2011, Lost Time Injury Frequency/Severity Rate (LTIFR/LTISR) are respectively 6.51 and 0.45, 2.67 and 1.54, and 4.84 and 0.13, which is lower than the US LTIFR for these sectors. No on-site fatalities have been registered since the last three years. All Zalagh subsidiaries, including Eldin and Banchereau who have engaged into the OHSAS18001 certification process, has committed itself to report annually on their respective LTFR/LTISR which reflect the effectiveness of the OHS management system and procedures and plant-level OHS Committee work plan. Inspections by the Ministry of Labour also take place.



Life and fire safety. Zalagh feed mills and, to a lesser degree, its farming operations are associated with fire and explosion risks, including diesel containers in all operations for boilers and gensets, propane tanks at breeders’ farms, and potential explosive environment in feed mills silo due to dust accumulation. All entities are seriously taking this risk into consideration as required under the provisions of the Labor Law on this issue (ref. articles 281-291), and under the leadership of each plant’s OHS Committee, fire prevention policy, procedures and equipment (fire hydrant, extinguishers, water tanks) are being installed. Life and fire response teams are being established at all sites, trained, and fire drills conducted twice a year, in coordination with local fire brigades. Contracts with specialized service providers have been established to ensure maintenance of fire hydrants, pressure pumps and extinguishers on an annual basis. These have been reviewed and validated during the appraisal. To ensure strict application of the fire prevention measures, Zalagh entities conduct fire safety audits on a regular basis by reputable and independent consultancy firm. AIA undertook a fire audit in 2012 as part of the OHSAS 18001 audit and corrective measures are under implementation.



Biosafety and avian influenza preparedness and response (animal health program). Morocco is still free of the avian influenza (H5N1) infection. However, given the potential magnitude and unprecedented nature of the threat posed by the avian influenza and to protect its workforce, Zalagh’s farming subsidiaries, using good practices developed by ONSSA, has established a robust Avian Influenza Control and Action Plan, encompassing a pro-active control program that includes strict enforcement of bio-security measures, surveillance vaccination and eradication. The Group also has a Veterinary Disease Control Plan with well structured vaccination and treatment programs to cater for any outbreaks of more virulent strains for other diseases. Personnel responsible for the care and management of the chickens are continuously trained t
o identify normal health and behavior of the chickens in their care so as to be able to recognize poor health and welfare. Chickens are inspected regularly, at least daily, and more frequently during period of significant risk to health and welfare. Bio-security procedures include geographical isolation of the farms, limited controlled site access and suitable infrastructures (e.g., high concrete fences); entrance gates with vehicle disinfection areas, cleaning and disinfection procedures for visitors, materials and tools (e.g., foot disinfection at the entrance of sites/houses), control of pathogen vectors (rodents, insects), and organic waste management. Workers’ clothes are kept clean, shoes are scrubbed with disinfectant, and hands are washed. As part of its bio-security procedures, any sick or dead bird is removed and reported to the veterinarian. These procedures apply to the Group’s own and affiliated farms.

Zalagh’s senior management leadership and strong commitment towards continuous EHS performance improvement is reflected through the design and commissioning of state-of-the art facilities and procurement of best available equipment/technology to ensure optimal resource efficiency against industry benchmark. The applicable parameter requirements have been so far the Moroccan’s ones but Zalagh has demonstrated a full commitment to comply with the WBG EHS Guidelines, including air emissions and liquid effluents parameters.

Energy use and green house gas emissions. Provision of energy to Zalagh subsidiaries is provided by the National Office for Electricity (ONE) when distribution system exists, fuel (mostly for boiler at feed mills, slaughtering and meat processing units, transport fleet) and propane at farms. Emergency back-up generators are also used in case of power outage. Energy consumption is closely monitored at all sites. Zalagh has not yet undertaken an energy efficiency assessment against poultry production and/or processing as well as an assessment of its GHG emissions at facilities and Group level. Going forward, Zalagh will undertake such an assessment in order to assess energy (and water) use efficiency against industry benchmarks as outlined in the WBG’s EHS sector specific guidelines and to monitor its carbon footprint. Energy use should be expected to increase in the context of the proposed expansion plan. Zalagh has demonstrated excellent leadership in further assessing potential energy efficiency measures at all operations, including; 1) replacement of fluorescent tubes T8 by T5 at El Alf and CouvNord, resulting on average to a reduction of 40% of electricity costs, 48% of maintenance costs and 52% of CO2 emissions. Similar efforts are conducted at the other Zalagh entities; 2) compensation of reactive energy through the installation of variable capacity batteries for electrical engines using more than 37kW; 3) feasibility studies for promoting solar energy at feed mill and farms; iv) specific on-site energy efficiency measures, such as Banchereau (replacement of fuel-based boiler by propane, energy loss from vapor condensate, water loss from autoclave cooling process) and at Eldin (cooling production unit, freezing tunnel, new electrical system). Zalagh’s numerous entities have also more than 185 trucks under its ownership or through long-term leasing. Fuel used is closely monitored.

Air emissions monitoring. Main sources of air emissions are the feed mills, slaughtering and meat processing fuel fired boilers and large gensets that burn diesel to produce electricity, heat and hot water. Both boilers and generators undergo semestrial maintenance audits in accordance with regulatory requirements in order to optimize efficiency. Going forward, as set forth in the ESAP, Zalagh will monitor on an annual basis stack air emissions from its boiler and generators to ensure consistency with WBG EHS Guidelines for point source emission
s to air (PM10: 50mg/Nm³; NOx: 460mg/Nm³; SO2: 2000mg/Nm³) and will report them in the IFC Annual Monitoring Report. Dust management control in feed mills and silos are addressed through effective implementation of management system procedure.



Water use and efficiency. Water is sourced from municipal adduction system (for facilities locales in commercial/industrial zones) and underground wells. Total water consumption is well monitored at all sites through installment of water meters, especially facilities with high water needs (e.g., slaughterhouse, meat processing unit), as the water cost in Morocco is US$1.75/metric ton. Potable water is softened before its use at processing units while water from wells at farms is treated with chlorine, hydrogen peroxide and a softener to eliminate hardness. Water used for cleaning and fire prevention come from wells and do not undergo any treatment. In the context of the implementation of the food quality management system at plants producing human consumed products, regular analysis of water quality (chemical and bacteriological) are being conducted by certified service providers. Water analysis at the farm operations is also conducted in accordance to legal requirements outlined in Law N°49-99 (2002) and Norm 08.6.103. As mentioned above, all Zalagh entities will undertake a water efficiency assessment in order to assess efficiency against industry benchmark as outlined in the WBG’s EHS sector specific guidelines.



Wastewater Treatment. Wastewater from Zalagh facilities are mostly characterized by domestic waters from administrative offices, showers, toilets, purge water from boilers, and washing of vehicles. Some facilities (e.g., El Alf) are connected to the public sewage system in Fes where regular control is being undertaken by water authorities. On its side, AIA’s wastewaters are canalized toward septic tanks which are emptied every month by a licensed service provider. Wastewater from the hatcheries (cleaning and disinfection) is channeled through a drainage system towards the municipal sewage system. The highest challenge for the treatment of wastewaters is at Eldin, the slaughterhouse unit considering the heavy organic load of its wastewaters characterized with high BOD, COD, oil and grease. Mitigation measures have been established to reduce, as much as possible, organic waste and blood into the wastewater stream. In addition, a preliminary treatment takes place on-site with a grease remover and establishment of a screen to retain solid matters, including feathers. Residual waters from the pre-treatment plant are canalized in the industrial sewage system of the industrial estate (Had Soualem) and are treated in the public wastewater treatment plant of Berrechid. The pre-treatment wastewater unit has been conceived at its commissioning in December 2000 for 20 metric tons /day, in synchronization with the slaughtering capacity. This latter capacity has been increased to 60-100 mt/day which dr
astically overloads the unit resulting in a significant release of untreated effluents directly in the sewage system. In order to improve wastewater treatment on-site, Eldin has already established a partnership with RADEEC (“Régie Autonome de Distribution d’Eau et d’Electricité de la Chaouia”) to remedy this situation. Wastewater samples taken in February 2013 confirmed the significant exceedance in terms of BOD, COD, oil and grease, among others. Going forward, as set forth in the ESAP, Eldin will recruit an expert consultancy firm for an engineering design study for the construction and operation of a wastewater treatment plant whose performance shall meet all effluents parameters found in Table 1 of the WBG EHS Guidelines for poultry processing. As indicated in the ESAP, this study is required to be completed within 12 months of commitment while the commissioning of the WWT plant shall take place within 24 months.



Management of solid and hazardous wastes. Waste from Zalagh Holding’ industrial subsidiaries (El Alf, AIA, Eldin, Banchereau) are mostly characterized in domestic waste (30% paper and cardboard, 40% plastic, 10% wood, 10% organic wastes, 8% metal, and 2% rubber). Collection and sorting are located at site and ¾ of these wastes are valorized by licensed services providers while ¼ are disposed in licensed landfills. Hazardous wastes, such as used oils, chemical solvent used for cleaning, and computer items are recovered and disposed by licensed services providers. Ammonia is used at Banquereau’ cooling system and strict storage/security measures are applied as well as use of protective equipments to staff that have been trained. Procedures have been established for the management of solid and hazardous wastes. Going forward, Zalagh will ensure that appropriate secondary containment structures consisting of walls capable of containing more than 110 percent of the largest tank be installed for its diesel tanks at all sites. Solid wastes from farm operations (hatchery), 85% characterized by broken eggs, chicken embryo, and egg shells, are collected in water resistant plastic bags, stored in a locked area, and disposed at a licensed landfill. The manure is either given or sold to farmers located at a distance of at least 500 meters from the hatchery/farms for fertilizer use. Dead chicken carcass are collected every morning and immediately disposed in concrete-built anaerobic pit respecting environmental guidelines. Zalagh has taken a leadership role as part of its involvement in FISA (“Federation Inter-professionelle du Secteur Avicole”) in order to increase the valorization of the sub-products from the industrial chicken slaughterhouses in Morocco. There is presently no rendering plant in Morocco, including the three chicken slaughterhouses located in the Casablanca region. A study, prepared in partnership by the GoM and the “Institut Agronomique & Vétérinaire Hassan II” has been conducted in 2012. A consolidated feasibility study is
being considered under a private-public partnership in the next months. Collection and disposal of organic wastes from slaughterhouses represent a significant operational cost for all operators and establishment of a rendering facility should increase waste valorization and industry competitiveness.



Pest management and control. There is a specific procedure existing under IS022000 standard for pest management and control. As mentioned above, this management system is existing and/or under preparation at all Zalagh subsidiaries. At its grain terminals, Graderco used phosphine or hydrogen phosphate (PH3), as required under country regulations. Fumigation is carried out in the warehouses. At all sites, licensed service providers are recruited to conduct rodent control in all Zalag’s operations, including feed mills, slaughterhouses, meat processing units and poultry rearing farms (own and affiliated). Activities include inspection and maintenance.

Community Health and Safety. As Zalagh feed mills and slaughterhouses are located in industrial zones while its farming operations are isolated in rural areas in order to meet bio-security measures defined by ONSSA, there is potentially limited impacts on surrounding communities, aside from induced traffic. While there is a specific provision in El Alf’ Internal Regulations applying to its drivers (driver licenses, respect of Highway Code, etc.) which will be extended to all Zalagh subsidiaries involving transport fleet; there is also a control for drivers from the sub-contractors, including driver license verification. Preventive maintenance programs for transport fleet in all subsidiaries already exist as well as a requirement for annual medical health program for the drivers.



Emergency Preparedness and Response. As mentioned above (ref. PS2 – L&FS), all Zakagh subsidiaries are seriously considering Life and Fire Safety risks as required under the provisions of the Labor Law (ref. articles 281-291), and under the leadership of each plant’s OHS Committee. In addition, El Alf has adopted an Internal Operation Plan (IOP) in the context of OHSAS 18001 certification, which is presently under approval process by the fire brigade. Such IOP is under preparation at AIA, Eldin, and Banchereau.



Community Grievance Mechanism. All Zalagh subsidiaries are committed to harmonious relationship with surrounding communities and responsive to any grievances. In order to ensure a corporate responsiveness on such potential grievance, aside from handling customers complaints through its HACCP/ISO2200 process, Zalagh will define and adopt a community grievance mechanism, as indicated in the attached ESAP, to strengthen its consultation and responsiveness with any potential communities’ grievances on the E&S risks associated with its operations.



Security Personnel. All Zalagh subsidiaries contract licensed service providers for security purposes. These sub-contractors benefit of the same training of Zalagh staff as it relates to life and fire safety, including active involvement in the regular fire drills, emergency preparedness and response, first aid, etc. The contracted security officers are not armed and are trained for defensive measures.



Animal welfare. Breeders and broilers housing systems allow turkey poult and chicken to engage in natural behaviors. Well-maintained bedding, feed and water availability, disease control, adequate temperature, ventilation, and humidity are key parameters which are closely monitored. Broiler poults and chickens are controlled against diseases and vaccines are applied according to an agreed upon prophylaxis plan. For broilers, no antibiotic is provided after the 25th day in order to avoid drug residues in poultry products. No hormones are in use by Zalagh. Only certified providers and approved antibiotics are applied if a disease outbreak takes place. Overall annual mortality rates at the broiler rearing houses are
less than 6%, which is considered excellent. Poultry rearing practices comply with IFC’s Good Practice Note (GPN) on Animal Welfare. Broiler chickens are then sold to Eldin for slaughtering. An electrical stunning device is used to reduce pain before slaughtering.

Zalagh Holding has not yet established a structured Corporate Social Responsibility program. This being said, Zalagh, through its numerous facilities, is financing numerous social initiatives, including health and economic activities with local schools. Socio-economic (employment) and overall development impacts of Zalagh, especially at its farm operations, are significant.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. Zalagh will be requested to place an advertisement in a local newspaper as well as on its website (http://www.zalagh-holding.com) to inform the public of the results of IFC’s environmental and social review and ESAP’s corrective action items.
Name/Address: Mr. Ali Berbich,
President, Zalagh Holding
Tel : +212 (0) 5 22 20 11 09/13 ; Fax : +212 (0) 5 22 20 11 14 ;
E-mail : mailto:ali.berbich@zalagh-holding.com

Broad Community Support is not applicable for this project

	Description of the Action Item	Anticipated Completion Date
	Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
1	Zalagh Holding will define and implement a corporate Quality, Environment, Occupational Health and Safety (QEHS) and Social Policies which will apply to all its existing and future operations. These policies will make direct reference and a commitment to comply with Moroccan legal and regulatory requirements, IFC Performance Standards and relevant WBG’s EHS Guidelines.
	a)       Submission of the draft corporate QEHS policies for IFC review and approval;	a) June 2014
	b)       Adoption of the QEHS policies by Zalagh Holding’s Executive Committee.	b) September 2014
2	Zalagh Holding will design and implement a corporate Environmental and Social Management System (ESMS) – consistent with ISO 14001, OHSAS 18001, HACCP/ISO 22001 – applying to all its existing and new operations, to be reviewed and approved by IFC, defining roles and responsibilities, and other necessary elements (manual procedures) to enable it to comply with Moroccan laws and regulations, IFC Performance Standards and applicable WBG’s Environmental, Health and Safety Guidelines. The ESMS will include mechanisms for the corporate EHS officer to report trimestrial E&S monitoring results to Zalagh’s senior management who will need to sign off on the reports.
	a) ESMS design in place and approved by IFC	a) December 2014
	b) Evidence of complete implementation (e.g. draft documentation of the ESMS, plans, manual procedures and programs, e.g. training logs, monitoring records, minutes of progress reviews).	b) June 2015
3	Zalagh Holding will appoint a qualified EHS officer who will be responsible for implementing the corporate ESMS and fulfilling the ESAP conditions. This officer will report to the Chairman of the Human Resources’ sub-committee (under the Executive Committee)
	a)       Provide the Terms of Reference, C.V. and contract of the corporate EHS officer for IFC review.	a) June 2014
4	Zalagh Holding will review and expand its existing Key Performance Indicators (KPIs) to mainstream Environmental, Health and Safety 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); 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 (including VOC); 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 each Company’s Monthly EHS Review and annually during the Company’s planning and budgetary management review.	a) June 2014
5	Zalagh Holding will prepare an integrated EHS report format based on critical EHS key performance indicators (e.g. compliance with legal and regulatory requirements, EHS management system progress report and certification, including food safety management system (HACCP/ISO22000), energy and water consumption and efficiency; air emissions (NOx, SOx, particulates), including GHG emissions; noise levels and management, solid and hazardous waste management and disposal, effluent discharges from WWT unit, compliance with national OHS requirements, including accident rates (lost-time accidents); customers complaints, supplier performance and community engagement activities) and report annually to concerned Moroccan authorities and IFC as part of the Annual Monitoring Report (AMR).	a) June 2014
	Performance Standard 2: Labour and Working Conditions
	N/A
	Performance Standard 3: Resource Efficiency and Pollution Prevention
6	Zalagh will conduct air emissions measurements at stack for all its boilers and gensets and compare parameters with WBG General EHS Guidelines for ambient air concentrations (particulate matter limit (PM10) of 50mg/Nm³; NOx of 460 mg/Nm³; SOX of 2000 mg/Nm³, and submit a report to IFC. If measurements exceed WBG limits, Zalagh will propose corrective measures, and a schedule to bring all emissions into compliance with WBG limits.
	a) Provide air measurements results;	a) June 2014
	b) If measurements exceed WBG limits, Zalagh will propose corrective measures and a schedule to bring all emissions into compliance with WBG air emissions limits, including timetable.	b) December 2014 and annually thereafter in the AMR
7	Zalagh/Eldin will design and construct a Waste Water Treatment unit in compliance with Moroccan regulatory requirements and applicable WBG’s effluents guidelines, especially for pH, BOD, COD, total suspended Solids, Grease, total nitrogen and total phosphorus.
	a) Submit engineering design and procurement details documents to IFC;	a) June 2014
	b) Submit completion certificates and photo evidence to IFC	b) June 2015
	c) Report on wastewater monitoring program, including all parameters within WBG’s effluents guidelines	c) December 2015
	Performance Standard 4: Community Health, Safety and Security
8	Zalagh will develop and implement a community engagement procedure to be included into the ESMS, including a mechanism for receiving, addressing and resolving community grievances and complaints during the operational phase at all facilities. The content of this procedure shall be guided by IFC’s Good Practice Note on Stakeholder Engagement.
	a) Submit copy of the procedure for IFC review and approval;	a) June 2014
	b) Provide evidence of dissemination of the procedure in relevant public communication at each facility.	b) August 2014 and annually thereafter in the AMR in regard of treatment of the complaints received.