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 IFC's 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

The key environmental and social issues associated with the Project include: environmental and social assessment and management system of the Project, working conditions during construction and operation; resource efficiency of the Project (including energy, water, and other resources), pollution prevention and waste management, life and fire safety of the Project property during operations. The potential adverse environmental and social risks and impacts of the Project are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. It is therefore concluded that this is an Environmental and Social Category B project according to IFC’s Policy on Environmental and Social Sustainability.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Assessment and Management System:

Through IFC’s previous investment in 2009 in Rotana Erbil, the Sponsor’s environmental and social performance has been strengthened to meet IFC’s Performance Standards. The Sponsor’s existing Environmental and Social Policy is applied to the group companies, including the Company which will develop the Project. The Sponsor’s environmental management system (EMS) has been certified compliant since 1999 with International Standards Organization (ISO) requirements for ISO 14001. The Sponsor has a dedicated environmental manager who is responsible for implementation and maintenance of the E&S management system, conducting environmental monitoring programs, and leading environmental audit activities. In developing the Project, and for obtaining the necessary permits, the Sponsor reviewed the potential environmental and social risks of the Project and the proposed site. No cultural property has been identified on the Project site. Malia CTI will implement procedures which will be applied in the event that cultural heritage is discovered during the construction phase of the Project. The Sponsor works closely with Rotana of the existing hotel project to ensure that the operation meets the IFC E&S requirements. Rotana will be operating the new Project with similar environmental and social management system already established for the existing hotel project as described below.



Management Programs:

Rotana has its Environmental Policy addressing sustainable operation, water efficiency, energy efficiency, materials and resources efficiency, indoor environmental quality and innovation and design process. Rotana has its E&S Committee that is chaired by the operator’s General Committee and held twice a month to review the E&S performance issues. The E&S Committee’s objectives include (i) to ensure that all employees are provided with a safety and hazard free environment, through effective health and safety management, (ii) to ensure that all concerned staff are prepared to deal with medical emergencies, and (iii) to raise awareness on health and safety best practices. The operator of the existing hotel project has relevant E&S manuals in place. They include Health, Safety and Environment Manual covering food supplies and safety (including Hazard Analysis Critical Control Point – HACCP plan and implementation), and Fire Emergency Manual covering maintaining fire equipment and exits, evaluation planning, fire & emergency organization, fire testing and fire drills, lift emergency, chemical handling, guest and staff injury and sickness, terrorist and hostage incident, bomb threat, and bomb explosion.



Organizational Capacity and Competency:

The Sponsor has a dedicated Environmental Manager who looks after the overall E&S management system of the group companies. Malia CTI is providing environmental, health and safety related technical oversight to manage the Project. Rotana, through its
established E&S management system in line with IFC E&S requirements for the previous hotel project, will operate the Project in compliance with IFC E&S standards.



Emergency Preparedness and Response:

Rotana’s emergency preparedness and response system that has been confirmed satisfactory to IFC through the Rotana Erbil hotel project will be applied to the Project.



Monitoring and Review:

The EHS and Fire & Emergency systems of Rotana for the existing hotel project are being audited every year by independent auditors and certified. Rotana is reporting to Malia on a monthly basis on all aspects of its performance, including environmental, social and health and safety, and Malia is conducting regular inspections of the property to verify compliance. The same approach will be used for the Project.

Working Conditions and Management of Worker Relationship:

At present, the Sponsor has about 1,600 employees within its group companies. The existing Erbil Rotana Hotel has about 340 employees, of which about 50 % are Iraqi nationals. The Sponsor has a comprehensive Human Resources (HR) policy, approved by the Board of Directors, that covers all of its operations and which will be applied to Project in Erbil. Through IFC’s previous investment in the Sponsor’s hotel project in Erbil, the Sponsor’s HR Policy was further strengthened to incorporate all the PS2 provisions including the formal employee grievance mechanism. Malia is reviewing Rotana’s labor and working conditions performance and confirms that Malia’s HR policy requirements are also being met by Rotana’s operation. The Sponsor indicated that no major labor issues are pending within the group companies or at Rotana’s operation in Erbil.



Occupational Health and Safety:

The Sponsor’s HR policy requires induction training for all employees. It is Malia’s practice that appropriate personal protective equipment (PPE) is provided to anyone admitted on site during construction. The Sponsor’s current E&S Policy includes a point to “comply with current regulation for health and safety and strive to improve current practices”. Malia’s practice includes requirements in its construction contracts to ensure that activities carried out by sub-contractors comply with local standards. Rotana’s existing E&S management system has detailed procedures related to Rotana’s commitment to providing a safe and health work environment.

Resource Efficiency:

The Sponsor, together with the Sponsor’s group company, Malia for Construction, Trade & Investment Ltd (“Malia CTI”), evaluated the energy efficiency performance of their existing hotel operation in Erbil in 2012. Main energy consumption at the hotel consists of (i) power consumption for HVAC, lighting and machineries, and (ii) oil consumption for generators, steam boiler and hot water boiler. Their evaluation concluded that in total 15% of energy savings can be achieved through retrofitting VFD (Variable Frequency Device), VAV (Variable Air Volume), Heat & Light Reflective Membrane, LED and Motions Sensors. In 2013, the Sponsor is working with Rotana to achieve such saving opportunities at the existing hotel operation. This initiative was triggered as part of the Sponsor’s current E&S Policy which includes an element saying “To the extend possible, apply practices and control technologies that minimize pollution and energy use including water use”. For the new Project, the Sponsor and Malia CTI are working to finalize the design technical criteria, including energy and water performance, and they plan to achieve higher efficiency by applying best available technologies.



Water will be supplied through the existing water network of the Municipality. Adequate water treatment facility will be installed to meet the water quality requirements for the hotel/apartment operation. The operator of the new Project has a framework to improve hotel and apartment sustainability called “Rotana earth” providing their guests with options to help save water consumption by not requesting changes of towels and sheets on a daily basis. Adequate quantity of water will be stored for the fire system. The design of the water treatment system is still to be finalized, but is likely to include ultraviolet treatment for domestic use and a reverse osmosis treatment unit for potable water.



Pollution Prevention:

The details of the technical design of the new Project are still to be finalized as of April 2013. The new Project is likely to have its own back-up generators (either fueled by diesel oil or natural gas), steam and hot water boilers, and a wastewater treatment facility, to meet the local air emissions and liquid effluent requirements and IFC/World Bank Environmental, Health and Safety Guideline limits. The level of wastewater treatment (percolation, oxygenation, clarification, chlorination) will be determined by the local municipality’s treatment requirement. Adequate noise attenuators will be installed to ensure that occupational noise limits and the ambient noise limits are met. Stack height of the combustion facilities (back-up generators and boilers) will be determined to minimize air quality impacts on both occupational and ambient exposure. Diesel fuel oil will be stored in an storage tank with adequate bunds to capture unexpected leakage.

Construction wastes will be segregated by category and stored outside the
hotel premises. At present, there are no municipal regulations in place to ensure that wastes are handled and disposed of in a manner consistent with good industrial practice. Given this, Malia plans that construction waste be stored in designated areas on site, and to contract with the relevant municipal authorities for disposal in landfills permitted by local government authorities. Rotana will use the waste handling practice already established for the existing hotel operation for the new Project operation.

Community Health and Safety:

Design of life and fire safety (L&FS) aspects of the Project will be done in accordance with US National Fire Protection Association (NFPA) standards. Malia’s group company, Malia CTI, will finalize the design criteria, which will include full compliance requirements with NFPA standards. The Project’s outside designer and architect will design details of the building including the NFPA standards compliance. Malia will arrange a suitably qualified professional (Frontline UK, an international consultant) to certify that (i) the design meets the requirements of the NFPA standards and (ii) the constructed building meets the requirements of the NFPA standards.



As described above, the Company and the Operator have already established an adequate emergency preparedness and response arrangement for the existing hotel operation. The similar system will be implemented for the Project. Details of these emergency preparedness and response arrangements will be communicated to relevant communities around the Project site. The design of the Project will meet earthquake resistance standards of up to 7.5 degrees Richter and is consistent with accepted international standards. Regular testing will be carried out during construction, including the validation of the integrity of materials (cement quality, steel framing) through regular laboratory tests. 

Security Personnel:

Given the current security situation in Iraq, Malia will have security personnel equipped with firearms to secure their premises. As part of IFC’s requirements for the previous investment, Malia established a system that third party security forces adhere to PS 4 and a community grievance mechanism is put in place. This will be applied to the Project as well.

The Project site is located on the leased land on the new 100 Avenue in the Erbil City of Kurdistan, Iraq. The land was owned by the Erbil Municipality and was subsequently transferred to the Board of Investment, the Government of Kurdistan. The 2,300 sqm land, is next to the existing highway, and the Company has indicated that no resettlement or expropriation was necessary to secure the land. Through this process, the Company has conducted discussions with municipality authorities (including Ministry of Agriculture, Ministry of Municipalities, Ministry of Finance, Erbil Municipality) and other interested parties about the Project. The Company indicated that all necessary permits have been obtained, and has not faced concerns or oppositions against the Project.
Government requirements stipulate that local residents be given priority for hiring during both construction and operation: before any hiring can take place, the Company must notify the Ministry of Labor regarding the numbers and qualifications of all positions. Only if the authorities agree that the skills required cannot be found locally is Malia given permission to hire an expatriate. During construction, Malia will work with the company that will construct the property to ensure that adequate health and safety and skills training will be provided to construction workers. Through its operation of the existing hotel project, Malia and Rotana have established a hospitality training program to assist local employment in the hospitality sector, and this will continue to be used for recruiting new staff for the Project.

Malia Holding has carried out a number of corporate social responsibility (CSR) activities through establishment of the Jean & Chariotte Sarraf Foundation (JCSF) in 2006 to support and provide funding for programs that address the needs of disadvantaged groups by providing healthcare services and offering opportunities for further education for those in need. JCSF is currently focused on providing programs for Malia Group staff and families as well as to other nongovernmental and charity organization such as the Red Cross; Malia intends to develop similar JCSF-funded CSR programs in Erbil. Rotana, the operator of the existing hotel project, has been implementing its corporate social responsibility projects in the Erbil area including awareness program to promote female employment in the hospitality business sector in Erbil, and blood donation program by Rotana workers.

Further information about the Project can be obtained from the following:

In Lebanon: Malia HoldingZone Amaret Chalhoub, Sarraf Bldg, Jdeidet-el-Metn, LebanonContact person: Mr. Chakib ChehabTel: +961 1 881212Fax: +961 1 881313Email: mailto:chakibchehab@maliagroup.comIn Iraq:Malia CTI Ltd.Address : Gulan Street – Rotana Erbil Hotel siteContact person: Mr. Ibrahim FayadTel: +964750 4546719Email: mailto:ibrahimfayad@maliaholding.com

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.