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 projects within the sector. The project is designed to avoid, minimize and manage environmental and social risks and impacts of the Company’s operations in compliance with 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 CBH’s operations has also been assessed.

The key E&S issues applicable to this investment are: consistency of EHS management across the different operations; EHS management on contract farms with respect to their implementation of good animal welfare practices, and working conditions and terms of employment, including farm worker accommodations and assurance of fair, safe and healthy working conditions for all workers; food safety management system, including Hazard Assessment and Critical Control Point (HACCP) and ISO 22000 certification; use of public utilities (water supply and energy), optimization of water and energy use through project design and resource conservation measures and greenhouse gas emissions; wastewater collection and treatment, air emissions from generators and boilers; hazardous material handling, management and control of pests and rodents; and engagement with communities on E&S.

Environmental and Social Assessment and Management System: The Group recognizes that its activities have impacts on the environment and has adopted strategies to minimize these impacts by regularly reviewing its activities and by complying with all relevant legislation in the respective countries in which it has operations. To this end, the Group ensures that Environmental and Social Impact Assessments (ESIA) are undertaken, where required, in order to identify and assess positive and negative impacts and propose corrective measures as appropriate. Internal EHS inspections are performed regularly and external EHS legal compliance audits are performed as appropriate by registered and accredited consultants on an annual basis. The audit reports, incorporating corrective actions, are submitted to relevant operations senior management team. The senior management teams are responsible for the implementation of the corrective actions. CBH operations are required to obtain operational licenses on an annual basis. The underlying licensing process includes inspection visits by sector ministries and implementation of corrective EHS actions. CBH operations have successfully obtained these licenses and shared copies with IFC. CBH operations have environmental policies which are clearly articulated and implemented by management. All operations are expected to comply with these policies as well as all relevant environmental legislation.



Management Program: CBH has not yet adopted an integrated environmental, OHS, food safety and social management system. However, CBH has taken tangible and positive steps in order to establish solid foundations for such a system. All of Nutri Feeds plants in South Africa are both ISO 9001 and ISO 22000 certified, and have also attained OHSAS 18001 accreditation. Nutri Feeds South Africa, and recently Botswana, are members of the Animal Feed Manufacturing Association (AFMA). AFMA strives for the development of a sustainable industry that acts responsibly within the food chain by ensuring safe feed for safe food.



Supreme follows an accredited food safety system in the form of an HACCP system. All of the Group’s processing plants are certified according to the South African National Standard (SANS) 10330: 2007, which specifies requirements for an HACCP system. Various customer audits are done on an annual basis by Pick n Pay (one of Africa''s largest retailers of food, general merchandise and clothing) and KFC (Star audit). In addition, the Department of Agriculture conducts annual audits. All these audits have been passed during the current reporting year with scores of 85% and higher. KFC’s Star audit comprises two versions; the Food Safety and the Quality Systems Audits. Supreme had, at the time of appraisal, embarked on an ISO 22000 certification program for its processing plants. A gap audit was performed at the beginning of the year by Aspirata who will be assisting Supreme with the certification program. Certification
is scheduled to be completed by end of June 2014.



CBH, through its veterinary service provider, Avimune, has a contingency biosecurity protocol and action plan per each notifiable disease for the Group’s poultry operations in South Africa, Botswana and Zambia. The main diseases of concern include Avian Influenza (AI), Newcastle, Gumboro, Salmonella, and Infectious Bronchitis (IB). The Group has animal welfare policies in place that cover all its poultry facilities. These are strictly enforced by management and audited by many of its customers, including KFC. The Group has implemented Global-GAP (formerly EurepGAP) standards for animal welfare bringing the Group in line with the highest standards applicable both locally and abroad. Many facilities are also audited by the Society for the Prevention of Cruelty to Animals - SPCA, from who the Group routinely seeks advice on animal welfare matters.



To strengthen its existing systems and to ensure consistency across the different operations, CBH’s management has committed to further develop and integrate its existing corporate management systems into an Integrated Environmental and Social Management System (ESMS) in compliance with IFC’s PS1 requirements and applicable WBG General and Sector-Specific EHS Guidelines for all its operations. Specifically, CBH will ensure that its Oistins chicken processing facility in Botswana implements HACCP and the feed mill plants in Botswana and Zambia are upgraded and certified to the same standard as the plants in South Africa. Completion of the Integrated ESMS and certification of all CBH’s facilities with HACCP and ISO 22000 is expected by end of June 2014.



Supply chain/contract growers: Apart from the six broiler sites in Francistown, all of CBH’s chickens are produced via out-grower farmers. CBH provides working capital in the form of DOCs, feed, medication and vaccines, to be used during the raising of the broiler chickens for each growth cycle. CBH owns all the chickens produced from the DOCs that it delivers to the Outgrower/Producer and has undisturbed access to the premises, the broiler houses, the chickens and all components of the Producer’s infrastructure during the production cycle. The Producer is required to feed and care for the chickens as prescribed by the Southern African Poultry Association Code of Practice, and to abide by the Broiler Management Manual for Contractors which forms an integral part of the agreement. The Broiler Management Manual includes CBH’s policies on biosecurity, disease control, stocking density, animal welfare etc, and standard operating procedures and guidelines for chicken production.



CBH uses a systematic process to assess potential contract growers. This ranges from assessing a potential contract grower’s financial wellbeing, through inspection of facilities, broiler management knowledge, water availability and quality, proximity to abattoir, training needs etc. The contract growers are managed by CBH’s O
ut-grower Managers who are supported by an in-house Technical Specialist team. The Outgrower Managers and their teams oversee the production of chicken by the contract farmers throughout the entire cycle. They also conduct training as appropriate and as informed by training needs analysis. Outgrower farms are subject to unannounced and announced third party audits, including Food Safety Assessment and KFC’s Star audits.



The majority of CBH’s contract growers practice mixed farming – only 10% of the growers are broiler only farmers. The Group fully supports and understands the importance of broad-based black economic (B-BBEE) empowerment in South Africa. Eleven (11) percent of the live bird supply from contract growers in South Africa is from B-BBEE contract growers.



Organizational capacity and competence: CBH is in the process of establishing a stand-alone corporate EHS unit with managerial responsibilities, accountable to senior management, and with assigned responsibilities to General Managers in all CBH operations. In addition to this and as part of its Corporate Governance, the CBH board recently appointed a Social and Ethics Committee whose main functions include social and economic development; environment, health and public safety; labor and employment; and reporting annually to the shareholders at the company’s annual general meeting. A formal mandate and terms of reference for this committee are still to be approved by the board. To strengthen its EHS compliance, and as spelt out in the ESAP, CBH will complete the establishment of a corporate EHS unit through the recruitment of full-time and qualified EHS officers. The corporate EHS officers’ main responsibility will be to develop and implement the integrated management system appropriate for all of CBH’s operations which would ensure consistency of EHS management across the entire Group. Specifically, the officers will, in collaboration with respective operations, be responsible for the implementation of related corrective action plans arising from the various audits, continuous training of CBH employees on EHS issues, monitoring and reporting on resource efficiency through EHS key performance indicators (KPIs) for continuous improvement of EHS performance. The EHS officers will report to CBH’s Chief Financial Officer and will closely coordinate their works with CBH’s operational directors, and quality officers.



Emergency preparedness and response plan: Potential EHS incidents that could result in emergencies have been identified at all CBH operations and plans and procedures have been established to ensure that there will be appropriate and adequate response to any emergency incident. These potential incidents include grain dust explosions at the feed mills, poultry disease break-out, leakage and spillage of hazardous substances, ammonia incident, fires, fatal or serious accidents, and strike/riots/civil unrests. Emergency drills are scheduled regularly and conducted to iden
tify potential areas for improvement. The drills are also undertaken to ensure that all site personnel as well as neighboring organizations are conversant with the emergency procedures. Records of these drills are kept. All employees and contractors are responsible for reporting any emergency incident to their supervisor or the responsible person of the area.



Training: Training and skills development across the Group has the full support of management. CBH is committed to a learning culture and ensures that the process of learning, training and continuous development is based on a partnership involving management and employees, in which business goals, organizational and individual requirements are integrated with a view to improve skills and performance. Individual training and development requirements are identified by the active involvement of management, and the application and regular assessment of performance. As it relates specifically to EHS issues, a number of training programs are continuously being implemented at different operations of the group. EHS training needs analysis is performed with the assistance of EHS consultants. Legally related training, such as operating a Forklift and First Aid, are conducted by external accredited and certified companies whilst training that does not require to be certified is done in-house. Induction of new employees on EHS issues is undertaken. There is a strong emphasis to regularly train staff involved with the poultry operations on animal welfare and food safety issues. All contractors and farm employees receive training, initially for half a day using an Avimune operational manual for reference. They are required to visit at least 2 other farms during cleaning, chick introduction and for final dispatch of the birds. This training is undertaken via CBH’s in-house Technical Specialist team. To ensure consistency and coordination of the training programs across the entire Group, the corporate EHS officer, in collaboration with operational directors and operational HR managers and assisted by external EHS consultants will produce a comprehensive training manual for the Group. The training manual will consolidate training programs that have already been conducted at the different operations. In addition, the manual will include comprehensive training needs assessment linked to a robust schedule to deliver the identified programs. The manual will enhance the development and implementation of the integrated management system referred to above.



Monitoring and review: CBH has adopted the Global Reporting Initiative (GRI) guidelines for the reporting of sustainability issues during the preparation of its Integrated Annual Report. The integrated annual report incorporates the Sustainability and Governance reports. The current report covers 1 July 2011 to 30 June 2012. The Sustainability report documents and explains the management of material sustainability risks that the Group faces. The Sustainabi
lity report contains good aggregate coverage of key environmental, social, health and safety performance indicators such as water, electricity, coal, OHS statistics, including fatalities. Where information is not measurable, estimates and judgments are used, based on management’s best estimates and historical events. For example, in some instances boreholes are used and some of these do not have flow meters. It is the intention of the Group to install flow meters at these sites. The report also provides the number of permanent and non-permanent employees, number of employees covered by collective bargaining agreement, OHS statistics, programs relating to life threatening diseases, skills development, i.e. in-house and external training participation. According to the current (1 July 2011 to 30 June 2012) report, the Group did not incur any material regulatory penalties, fines or sanctions for contraventions or non-compliance with statutory obligations, and there were no fatalities



Stakeholder engagement: CBH has a Stakeholder Engagement Plan which it uses to identify sustainability risks, managing and mitigating risks that arise from stakeholders and for effectively informing stakeholders of major CBH developments. The plan, which is included in the Annual Report, identifies the major stakeholders, sustainability issue specific to each stakeholder, frequency of engagement and outcome of the engagement processes. The plan recognizes shareholders, government, utility providers, local municipalities, customers and suppliers as its key stakeholders. The Group has a comprehensive procedure for handling customer complaints to which all operations are required to comply.



Whilst all of CBH’s feed mills are located in designated industrial areas in the respective countries; a couple of the Group’s poultry operations are located close to communities. These are Tigane processing plant which is located in a designated industrial zone across from a school and residential area in Tigane; and Mimosa hatchery in Zambia which is located in close proximity to a residential area. Potential main EHS issues that could affect surrounding communities include odor, noise and air emissions, solid waste and effluent management and disposal. At the time of appraisal CBH operations visited reported that they had not received any complaints from surrounding communities in recent times. In the past – October 2010, and as noted in the Mangaung Local Municipality Directorate Community and Social Development report referred to under community health and safety below, there was bad odor from the Botshabelo Rendering plant. This issue was taken up with management and was solved though the report indicates that the problem recurs from time to time. To strengthen its consultation and communication processes with concerned communities on the E&S risks of its operations CBH will develop a formal system to deal with external queries, concerns, and grievances. CBH will also updat
e its existing stakeholder engagement plan to include local communities.

Human Resources (HR) Policy and Management: As of July 2012, CBH reports a total of 4 623 employees of which about 38% are women. The majority of these employees (approximately 73%) are assigned to the South African operations. Supreme Poultry has approximately 65%

(3 004) of the Group’s total employees.



CBH has a Group HR policy and procedure manual which provides a framework for continuity and consistency throughout the different operations, irrespective of geographic location. The Policy specifies the terms of employment and employees’ working conditions (e.g., training, and remuneration) and benefits (e.g. transportation, mobile phone allocation, pension and leave). The Company assesses and reports on individual employee performance on a regular basis. Each of CBH’s operations has a Human Resource Department which is headed by a manager. In all cases, this department is responsible for the development and implementation of a standard set of site operations specific policies, procedures and guidelines which are based on the corporate policy and procedure manual and ensure compliance with respective country labor laws. The individual operations follow these policies, procedures and guidelines during human resource management cycle, including recruitment and selection; admissions process and documentation; attendance and working hours; payment processing, including health insurance and benefits; performance evaluation; training; access to grievance mechanism; disciplinary measures and cessation of employment. All policies, procedures and guidelines are made available to employees. CBH does not make use of child labor and/or forced labor in its operations.



The Group is dedicated to equality and the removal of any discrimination due to gender, race, religion or disability. All of the Groups’ South African operations comply with the Employment Equity Act and submit annual reports to the Department of Labour. The main purpose of the Employment Equity Act is to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination and to implement affirmative action measures to redress the disadvantages in employment by designated groups to ensure their equitable representation in all occupational categories and levels in the workplace.



CBH occasionally uses casual workers which it sources from pools kept by the HR department for each processing plant. These short term contracts range from one day – three months in duration. In the sourcing of seasonal workers, CBH deploys a comprehensive identification checking system to ensure no workers are below the legal working age. All casual workers receive written contracts of employment with CBH and are managed in terms of CBH conditions of employment, including its grievance procedures. The Company, through contractual agreements, ensures that all contractors and sub-contractors are in compliance with payment of workers’
legal benefits; timely payment of wages; OHS regulations, including personal protective equipment (PPE) and Minimum Age.



Whilst CBH does not anticipate any retrenchment in the foreseeable future, the Company has a Retrenchment Policy whose main objective is to explain the company''s policy regarding retrenchment/redundancy of employees.



Workers’ Organization: There is no restriction on freedom of association – about 54% of employees from the South African operations (Nutri Feeds and Supreme Poultry), and about 42% from Master Farmer Botswana (Feed mill) are unionized. This represents a group total of about 40% unionized employees. The majority (about 78%) of the unionized South African employees are members of the South African Commercial, Catering and Allied Workers Union (SACCAWU), followed by Food and Allied Workers Union (FAWU), with about 13% representation, and Commercial Workers'' Union of South Africa (CUSA), with about 9% representation. Master Farmer’s unionized employees are members of the Botswana Commercial and General Workers Union (BCGWU). None of the employees from the Zambian operations are unionized. According to the current Sustainability report, 20% of the Group’s employees are covered by collective bargaining agreements, of which all are from the South African operations.



Occupational Health and Safety (OHS): The group complies with the Occupational Health and Safety Act of South Africa and other similar legislation in Zambia and Botswana. Nutri Feeds is OHSAS 18001 certified.



OHS risks of the South African operations and the effectiveness of the management systems are subject to continuous monitoring and review, on either an annual basis or following a change in conditions. The operations perform their own internal audits whilst external accredited companies conduct inspections to confirm compliance. In addition to this, the Ministry of Labor’s labor inspectors actively and routinely visit farms to assess employers’ provision of protective clothing, availability of clean drinkable water, and induction of workers on how to use machinery, and general health and safety, amongst other aspects. Noise, illumination, dust and ventilation assessments are performed by Department of Labor-approved OHS inspectors, and municipal Health & Safety officials. Work place incidents/accidents are recorded in accordance with the provisions of the Labor Relations Act and reported to the Department of Labor.



Similarly for the Botswana operations, inspections of OHS aspects such as noise, chemical hazards, dust particles, etc are undertaken on a monthly basis internally, and annually by external consultants. As noted under the Management Program section above, the feed mill in Botswana recently (June 2012) obtained AFMA accreditation after successfully implementing corrective actions to address deficiencies identified during the AFMA compliance audit undertaken in April 2012. The AFMA compliance audit assessed the feed mill for com
pliance with OHS safety, amongst other parameters such as biosecurity, pest control, Good Manufacturing Practice, and Food Safety Management. No OHS audit has been undertaken at the Zambian feed mill - the mill relies on an annual visual assessment of the boiler and dust emissions, and effluent by Zambia Environmental Management Agency. Thus, CBH will commission an OHS audit, based on OHSAS 18001, and consistent with PS2 requirements at its feed mill in Zambia, and develop and implement corrective action plans to address OHS deficiencies identified during the proposed audit.



Life and Fire Safety (LFS): Fire and explosion risks resulting from ignition of flammable materials or gases exist at the majority of CBH operations where diesel, ammonia and LPG are stored on site. Grain dust explosions could also occur at the feed mills where grain is stored in silos. Pressure tests for diesel, LPG and ammonia tanks are routinely conducted by Approved Inspection Authority in order to ensure early detection of any leakages and/or deterioration of the tanks. In addition to these preventive and control measures, the majority of CHB facilities are covered by contractual agreements with certified service providers for fire prevention and control, and regular inspection. Fire alarms and extinguishers are available and properly maintained at regular intervals. Fire extinguisher use training is progressively provided to all workers during regular trainings. As noted above, emergency drills are scheduled regularly and conducted to identify potential areas for improvement and emergency preparedness. Coordination with the local fire authorities also takes place. In addition to the OHS audit recommended for the Zambian feed mill, CBH will engage a suitably qualified consultant to undertake a complete and detailed analysis of the LFS systems against the Zambian standard. The consultant will also review the emergency response plan to evaluate its completeness for the feed mill and confirmation from the consultant on existence and adequacy of emergency response plan for the facility will be provided to IFC.



Biosecurity and avian influenza preparedness and response (animal health program): According to the “Highly Pathogenic Avian Influenza Surveillance Guidelines for the SADC Region with an Emphasis in Backyard and Free Range Poultry Farming Systems” report of 2009, it is acknowledged that the Southern African Development Community - SADC region is still free of H5N1 infection. However, H5N2 was confirmed in ostriches in the Eastern Cape Province of South Africa in 2004 (and again in 2011) and subsequently in Matebeleland Province of Zimbabwe in 2005. The report was produced by the Emergency Centre for Transboundary Animal Diseases (ECTAD), Southern Africa, Food and Agriculture Organization of the United Nations (FAO), in Gaborone, Botswana.



However, given the potential magnitude and unprecedented nature of the threat posed by avian influenza and to protect its
workforce, CBH has a robust Avian Influenza Control and Action Plan encompassing a pro-active control program that includes biosecurity, 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 to 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 periods of significant risk to health and welfare.



Biosecurity procedures include 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 to sites/houses), control of pathogen vectors (rodents, insects), and organic waste management. For its grandparent breeder farm in Zambia (Chainda Farm) a 13 week quarantine period for all stock from overseas is implemented and staff must stay on site for 8 weeks. Workers’ clothes are kept clean, shoes are scrubbed with disinfectant, and hands are washed. As part of its biosecurity procedures, any sick or dead bird is removed and reported to the veterinarian. These procedures apply to the Group’s own sites and outgrower farms.

Energy use and greenhouse gas emissions (GHG): All of CBH operations, including contract farms, tap their electricity supply from the respective national grids, i.e. Eskom in South Africa, ZESCO in Zambia, and Botswana Power Corporation in Botswana. Emergency back-up generators are installed at all CBH facilities and used only in case of power shortage. Electricity consumption is closely monitored at all facilities. Average monthly electricity consumption for the Group as reported in the current Sustainability report is 3 168 284 kW. This consumption is expected to increase significantly due to the proposed expansion. CBH also reported an average weekly coal use of 373 tons.



In South Africa, power factor correction is installed at all factories and is monitored daily by maintenance managers on site to ensure optimum performance. Processing equipment not being used is switched off; air conditioning and lights not being used are switched off during high energy demand periods from 06h00 – 08h00 in morning and 18h00 – 19h00 in the evening. The Group participates in Eskom energy saving programs in order to reduce power usage. All energy saving equipment that has been replaced was recommended and approved by Eskom. CBH estimates to save ± 48 KW to 50 KW per processing plant simply by changing all lighting. The Group constantly investigates other options in renewable energy like solar power panels and the processes to use chicken manure to generate energy. The investigations which are being performed by companies that specialize in solar energy and waste energy recovery are at feasibility stage. IFC will also require that the company account for and report its GHG emissions annually.



The company accepted a recommendation from IFC to implement a cleaner production audit for energy efficiency in all its operations. As part of this audit, the company will closely monitor its electricity consumption, particularly at its operations outside South Africa, and commission independent consultants to undertake energy audits at these operations. IFC will monitor the implementation of this audit and evaluate for the applicability and eligibility of the company to obtain Technical Assistance and financial resources from the IFC’s Cleaner Production Lending Facility.



Water use: At all CBH facilities, water is sourced from municipal adduction systems supplemented with boreholes in some instances. Water consumption is measured and controlled by plant, and reported in the Sustainability report. As reported in the current Sustainability report, the Group uses an average of 148 991 kiloliters of water per month. The Group’s target for its poultry operations is to use less than 15 liters per chicken processed and the Group has been achieving this target as per the performances provided in the Sustainability report. A number of initiatives to conserve water are being implemented across the Group’s operations. These include installation of water shut off valves in ar
eas where no processing is taking place; installation of flow meters in different areas in processing plants to balance water usage in the plants; installation of mist sprayers on equipment where permanent water was used previously; and use of squeegees for cleaning instead of water hoses. Given the focus on awareness to save water within the Group, CBH will commission the installation of flow meters at sites that currently do not have flow meters.



Cooling agents: CBH uses a combination of R22 and Freon in its refrigeration systems. Air is constantly bled out of the system by automatic air purger equipment thereby optimizing efficiency of refrigeration. The Group is committed to eliminating appliances that contain ozone depleting substances and will avoid using CFCs and other such substances for its refrigeration. Annual maintenance of the refrigeration system is done at all CBH’s operations.



Wastes: CBH produces a wide range of wastes. Some of the waste generated by Nutri Feeds includes hydrocarbons, disinfectant drums and rags, and plastic and cardboard paper. Waste produced from CBH’s poultry operations include manure, carcasses and hatchery waste, feathers and effluent water from the abattoirs, and sharp and pungent odor from Ammonia gas (NH3) produced from manure. Domestic waste and domestic sewage is also produced across the Group’s operations. As much as is possible, this waste is sent off for recycling, and what cannot be recycled is collected by registered companies and sent to registered landfill sites depending on facility location. The Company only uses licensed waste management companies for transfer of waste, and ensures, through waste collection contractual agreements, that all waste collected from any of its facilities is deposited at appropriate landfill sites. Waste and pollution issues within the Group are handled in accordance with relevant legislation in countries where it operates.



Chicken manure from CBH operations is sold to farmers who use it as fertilizer. CBH’s abattoirs in Botshabelo and Mafikeng have Rendering Plants installed on site. Tigane abattoir makes use of the Mafikeng rendering plant. Any chicken litter not used for fertilizer is treated in the respective Rendering Plants together with other hatchery/breeder farm and processing plant waste which includes blood, feathers, rejects and heads. The Rendering Plants process and turn these wastes into by-products that are sold to fish and pig farmers. Mortalities are frozen and supplied to lion farmers. Whilst no permits are required for this, discussions, and subsequently clearance, is sought from veterinarians to make sure diseased chickens are not fed to lions; if mortalities have disease problems then they are sent to the rendering plants at the abattoirs.



At the Oistins Hatchery in Francistown some broiler house and processing plant waste is transported to a municipal incinerator for treatment. Hatchery and breeder farm waste from Ross Botswana op
erations near Gaborone is treated via the local municipalities. In Zambia, hatchery and breeder farm waste, excluding manure, is disposed of in pits and composted.



In all cases, effluent water is treated via the existing municipalities’ sewerage systems. At plant level, however, wastewater management is done by continuous cleaning by dedicated cleaners in the wastewater sump and screen areas – collecting the solid waste and returning it to the rendering plants to be processed. In Francistown, Oistins were recently asked by the Francistown municipality to construct their own effluent treatment facility and stop releasing effluent into the municipality sewer system. Thus, CBH will commission an expert engineering consultancy firm to design and construct a wastewater treatment plant at Oistins. The treatment plant performance shall meet all effluent parameters found in Table 1 of the WBG EHS Guidelines for poultry processing. As indicated in the ESAP, the wastewater treatment plant should be commissioned within 12 months of commitment. Oistins will continue discharging its effluent to the Francistown sewer system until its plant is commissioned.



Air emissions monitoring: The main sources of air emissions are from boilers at all of CBH’s feed mills and processing plants, and large gensets that burn coal, diesel, and in some instances paraffin to produce electricity, heat and hot water. The Company has initiated a process to replace its paraffin and electrode boilers with coal-fired boilers to reduce the required electrical energy demand. The boilers and generators undergo regular maintenance inspection to optimize efficiency. CBH does not presently monitor its boilers and generators air emissions to ensure consistency with WBG EHS guidelines for point source emissions to air (PM10: 50mg/Nm³; NOx: 460 & 650mg/Nm³; SO2: 2,000 mg/Nm³). As set forth in the ESAP, CBH will monitor its air emissions and will report them in the Sustainability report.



Hazardous materials: The main hazardous materials in CBH operations include hydrocarbons, cleaning/disinfection products e.g. formalin, paint, LPG gas, liquid nitrogen, ammonia, and veterinarian products such as potassium permanganate for prevention and control of poultry disease. Transportation and disposal of any hazardous material associated with CBH’s operations is undertaken by certified contractors. Accredited waste removal companies issue CBH with safe disposal certificates. CBH’s South African operations comply with the South African Hazardous Substances Act (No. 15 of 1973) which provide for the control of substances that may cause injury or ill-health to, or death of human beings, including their importation, manufacture, sale, use, transport, application and disposal. Hazardous waste is further classified according to the South African National Standards - SANS Code 10228 which specifies minimum requirements for the handling, classification and disposal of hazardous waste. Likewise, the Comp
any is in full compliance with in-country regulations on hazardous materials in both Zambia and Botswana.



Pest management and control: Legally registered companies conduct rodent control in all of CBH’s operations in the three countries, including poultry rearing units (own and associated). Activities include inspection and maintenance; and rodent and pest are controlled and monitored constantly. The KFC’s Star audit which has been undertaken at CBH’s Tigane and Mafikeng abattoirs includes an assessment of pest management and control, amongst other parameters. However, some products for rodent control used (e.g. Difethialone and Bromadiolone) are listed under WHO Class 1a and 1b chemical formulations. CBH will prepare a management system procedure for pest and rodent management. The procedure will aim to eliminate the use of WHO Class 1a and 1b chemical formulations in their premises. CBH will modify service contracts to require contractors and suppliers for mandatory training to workers and ensure provision of adequate PPE based upon Material Safety Data Sheets - MSDS and/or International Chemical Safety Cards - ICSCs for the materials used. This consideration will be added in employee’s OHS training programs.

Community Health and Safety/Food safety impacts and management: The main potential risks related to the community from CBH operations include food safety issues, the spread of animal diseases at hatchery and breeder farms, effluent and air pollution from the processing plants, and traffic with respect to the transfer of goods from source to processing and to distribution points.



Antibiotic use for Supreme Poultry breeders and broilers is controlled by the Group’s Pharmaceutical Control Standard Operating Procedures. To control withdrawal periods, the veterinarians do not issue antibiotics close to slaughter. To further control residues in the meat product, samples are taken at the abattoir randomly and tested for a battery of antibiotics. Results of these tests indicate that Supreme Poultry products meet the maximum residue limits - MRLs recommended by WHO and FAO.



CBH injects its processed chickens with brine. This is standard practice in South Africa where levels of brine injected into poultry are reported to be as high as 30%. There is currently no legislation controlling the percentage of brine in chicken. However, the Department of Health, plus the departments of Agriculture, Forestry and Fisheries, and Trade and Industry agreed that it is important for consumers to be informed that the products offered for sale to them have undergone such processing. Thus this issue has been specifically addressed in the new Regulations Related to the Labelling and Advertising of Foodstuffs, (R.146 of 2010), which came into effect on 1 March 2012. CBH complies with this requirement and provides an ingredient statement on the front and back panel of its mixed portion packaging. This labeling complies with WHO/FAO’s Codex requirements for disclosing additives used in the food industry.



The bulk of CBH’s goods transportation needs is outsourced. Transport sub-contractors are requested to produce validated drivers licenses. A significant portion of the fleet, especially in South Africa and Botswana, is fitted with satellite tracking instruments. There is an in-house logistics department which manages the transport sub-contractors and in-house fleet.



Emergency Preparedness and Response: As noted under PS1 above, potential EHS incidents that could result in emergencies have been identified at all CBH operations and plans and procedures have been established to ensure that there will be appropriate and adequate response to any emergency incident. The site emergency preparedness and response plans allow for collaboration with local government and other relevant parties such as the local Fire Brigade, police, local farmers fire fighting teams, and local communities, depending on the nature of the emergency. For example, the Avian Influenza and Disease control Plans include corresponding action plans which specify communication with State Veterinarians and/or directors of Animal Health. No deficiencies were identified in the emergency preparedness plans
of CBH’s facilities visited during appraisal. However, as noted under PS2 above, CBH will commission a competent and qualified consultant to review the emergency response plan for the Zambian feed mill to evaluate its completeness and adequacy.



Security Personnel: Security personnel at CBH’s operations are sourced through licensed service providers in the respective countries. Staff assigned to security purposes are trained for defensive measures and are not armed. The operations are linked to rapid response security companies who can provide armed response if required.

CBH is involved in various initiatives aimed at community development in the countries in which it operates. The Company’s Corporate Social Responsibility activities are carried out under the “Love Chicken” umbrella. Supreme supports several institutions with monthly supplies of chicken and/or eggs, all of which are situated in the communities from which its staff are employed. Nutri Feeds launched an Adult Basic Education and Training (ABET) program during FY11, under which 75 adult employees of Nutri Feeds will receive training in numeracy literacy of 40 hours per employee. In Zambia, donations in the form of chicken, feed and eggs are made to a wide range of communities and local government organizations. Similarly, Ross Botswana supports several organizations in various forms, from cash donations to the supply of day-old chicks for community feeding schemes.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. CBH will be required to inform the public that results from IFC’s environmental and social review and ESAP are available for access on its corporate website or provide a web-link to IFC’s disclosed ESRS and ESAP.

For inquiries and comments about the project contact:

Country Bird Holdings Limited
269 Oxford Road
Illovo, Johannesburg
South Africa
2196

Attention: Mr. Jeff Wright – mailto:jeff@countrybird.co.za or Mr. Mario Le Roux – mailto:mario@countrybird.co.za
Tel: +27 11 268 5891
Fax: +27 11 268 5894
Website: http://www.cbh.co.za/
For enquiries and comments about IFC;

General IFC inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202 473 3800
Fax: 202 974 4384

Broad Community Support is not applicable for this project.

Title	Anticipated completion Date	Status	Comments	Completion Date
PS1: Assessment and Management of Environmental and Social Risks and Impacts: CBH will develop and consolidate its existing management systems into an integrated ESMS in compliance with IFC’s PS1 requirements and applicable WBG General and Sector-Specific EHS Guidelines. Specifically, CBH will ensure that; (i) Oistins chicken processing plant obtains certification for HACCP and ISO 22000; (ii) the feed mill plants in Botswana and Zambia are upgraded and certified to the same standard as the plants in South Africa. The ESMS will include mechanisms for the EHS officer to report monthly E&S monitoring results to CBH’s senior management who will need to sign off on the reports.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
PS1: Assessment and Management of Environmental and Social Risks and Impacts: CBH will appoint qualified EHS officers who will be responsible for implementing the ESMS and fulfilling the ESAP conditions. These officers will report to CBH’s Chief Financial Officer.	07/01/2013 12:00:00 AM	Completed	Completed	07/03/2013 12:00:00 AM
PS1: Assessment and Management of Environmental and Social Risks and Impacts: CBH will consolidate its existing training programs into a comprehensive training manual for the group. (i) the manual will include comprehensive training needs assessment linked to a robust schedule to deliver the identified programs. (ii) the manual will enhance the development and implementation of the integrated management system in 2) above.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
PS1: Assessment and Management of Environmental and Social Risks and Impacts: CBH will update its existing Stakeholder Engagement Plan to include local communities. The updated plan, which will be submitted to IFC for review, will include a formal system to deal with external queries, concerns, and grievances.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
PS2: Labor and Working Conditions: CBH will engage a suitably qualified consultant, acceptable to IFC, to undertake a comprehensive Occupational Health and Safety audit based on OHSAS 18001 for the feed mill in Zambia.	12/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client
PS2: Labor and Working Conditions: CBH will engage a suitably qualified consultant to undertake a complete and detailed analysis of the LFS systems at the feed mill in Zambia against both Zambian and LFS standard (as referenced in the General EHS Guidelines). The consultant will also review the emergency response plan to evaluate its completeness for the feed mill.	12/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client
PS3: Resource Efficiency and Pollution Prevention: CBH will commission the installation of flow meters at sites that currently do not have flow meters to measure water usage at these sites. CBH will continue to report its consumption against source, i.e. surface and groundwater, annually in its Sustainability Report.	12/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client
PS3: Resource Efficiency and Pollution Prevention: CBH will commission an energy audit for Ross Zambia and Ross Botswana with the view to implement an energy management plan to improve efficiency, through data collection, energy consumption/management reports and reduction targets.	12/31/2013 12:00:00 AM	In Progress	Under discussion with IFC client
PS3: Resource Efficiency and Pollution Prevention: CBH will account and report its GHG emissions on an annual basis in the Sustainability Report.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
PS3: Resource Efficiency and Pollution Prevention: CBH will commission an expert engineering consultancy firm to design and construct a wastewater treatment facility at Oistins chicken processing plant, in Francistown. The wastewater treatment facility should be designed and operated to achieve all effluents parameters found in Table 1 of the WBG EHS Guidelines for poultry processing.	12/31/2013 12:00:00 AM	Completed	Completed	07/03/2013 12:00:00 AM
PS3: Resource Efficiency and Pollution Prevention: CBH will conduct air emissions measurements 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.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
PS3: Resource Efficiency and Pollution Prevention: CBH will prepare a management system procedure for pest and rodent management. The procedure will aim to eliminate the use of WHO Class 1a and 1b chemical formulations in its premises. CBH will modify service contracts to require contractors and suppliers for mandatory training to workers and adequate PPE based upon MSDS and/or ICSCs for the materials used.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client