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

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The Company’s operations have limited environmental and social impacts, and these are site-specific, predictable and not significant. Impacts associated with Project construction and operations can be avoided or mitigated by adhering to recognized performance standards, operating procedures, guidelines and design criteria as described in the following sections.

Key risks and issues associated with this Project relate to the adequate mitigation of the social and environmental impacts of the Project during both construction and operations. Adequate mitigation includes, but is not limited to, compliance with applicable IFC Performance Standards and relevant national requirements for: environmental assessment; management of labor and working conditions, including health and safety during construction and operations; resource efficiency in the use of energy and water in the manufacturing process; maintenance of acceptable threshold values for emissions and wastewater discharges resulting from the manufacturing process; solid and liquid waste management; protection of the health and safety of communities surrounding project facilities during construction and commercial operations; and adequate consultation with Project stakeholders. Information on how these issues are addressed by the Company to comply with IFC’s Performance Standards and World Bank Group General and sector-specific Environmental Health and Safety Guidelines is contained in the following paragraphs.

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.

IFC’s assessment considered: the Company’s management of its environmental, occupational health and safety performance in the establishment and operation of its facilities; compliance with national and local permitting requirements; and public engagement and disclosure of information about its operations.



Environmental and Social Assessment. Midal has retained a reputable environmental consultancy – EIA & Services, LDA of Maputo – to prepare an Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) for the Project in accordance with the requirements of the Mozambique environmental authority MICOA for industrial projects. The Consultancy has undertaken a pre-feasibility scoping of the Project and its potential adverse impacts, and presented the findings of this scoping in two public meetings (Maputo and Matola) held in the first week of March, 2013. The scoping report identified no environmental fatal flaws that would prevent the Project from proceeding. The meetings were attended by a wide range of stakeholders including members of the communities surrounding the Beluluane Industrial Park, civil society organizations, representatives of industries operating in the industrial park and local government representatives. Public meeting participants were provided with a description of the Project and its likely environmental and social impacts, and were given an opportunity to raise questions and concerns about the project. Chief among these were: concerns about air pollution and impacts on public health from Midal’s operations; the amount and source of energy required for Midal’s operations; opportunities for local employment and contracts for local service providers with Midal, and benefits that will accrue to the local community in general.



The scoping report identified a number of technical studies to be undertaken to complete the Project’s EIA and inform the EMP. These studies include an analysis of the impacts of the Project’s construction and operations relative to: ground and surface water quality within the industrial zone; air quality within the industrial zone and among surrounding communities; wastewater and solid waste disposal; and health and safety risks to workers and surrounding communities. The Consultancy is expected to submit its completed EIA and EMP to MICOA for approval by the end of May 2013. IFC will require the EMP, complete with detailed implementation provisions for both construction and operations of the Project, as a condition of its financing in addition to a MICOA approval to proceed.



Environmental Management Organization and Program. Established in 1977, Midal Cables has maintained an ISO 9001 quality management certification since 1993 and, since 1999, an ISO 14001 environmental management certification for its Bahrain operations. In 2005, Midal became the first company in Bahrain to obtain an OHSAS 18001 certification and since 2007, the Company has maintained an integrated Q
uality, Safety, Health and Environment (QSHE) management system consistent with its overall QSHE policy. Responsibilities for maintaining quality, environmental and safety standards are clearly assigned from executive, senior management and line management levels in the Company’s Integrated Systems Manual. Fulfillment of those responsibilities is regularly monitored by the QSHE Manager via an on-line Information Management System. As with all ISO certified management systems, the Company commits to continuous monitoring and evaluation of process systems and work practices to achieve continuous improvement of performance.



Midal’s Bahrain organizational structure includes a QSHE department comprising 27 employees responsible for implementation of standard operating procedures for all production, maintenance and procurement functions associated with the Company’s operations. The QSHE department ensures day-to-day operational compliance with ISO procedures, national environmental and safety performance standards and a wide range of product quality standards required by Midal’s national and international clients through regular monitoring and reporting on performance to senior management, government regulators and clients. The manager of the QSHE department reports directly to the Midal Cable’s General Manager for operations.



Midal’s electrical conductor manufacturing facility in Turkey – Midal Kablo – was commissioned in February of 2012. The Company’s QSHE Manager oversaw the translation of all operations manuals into Turkish and the training of all local staff in the Company’s QSHE management systems. Within a year of commissioning, Midal Kablo achieved ISO integrated quality, environmental and safety management systems certification. Midal will follow the same procedure in establishing QSHE management in the operations of its proposed plant in Mozambique.



Construction Management. Midal has appointed a senior Projects Specialist to coordinate the construction of the proposed Mozambique and Australia rod and cable plants, both of which will have similar layouts, equipment and production capacity. The Projects Specialist will be represented on site by a Project Manager and a Project Safety Coordinator who, together, will be responsible for ensuring the implementation of the Project’s EMP and contractor compliance with national environmental and occupational health and safety regulations during construction of the plant. All contractors will be required to have their own safety officers who will report to Midal’s on-site Safety Coordinator.



Emergency Preparedness and Response. The Company maintains its own in-house fire prevention, firefighting and first aid capacity in Bahrain capable of handling any emergency related to its production lines. In addition, Midal coordinates its safety procedures with the neighboring Alba aluminum smelter to enable a cooperative response to potentially larger scale emergencies in either facilit
y. The Company also coordinates its emergency management with the local fire brigade, which services the entire Askar industrial complex.



As it has for Midal Kablo in Turkey, Midal’s QSHE management will establish similar collaborative emergency response arrangements between its Mozambique operation and the Mozal Aluminum Smelter as well as the fire brigade that services the Beluluane Industrial Park.



Training. Midal’s QSHE department, in coordination with the Company’s Human Resources (HR) Department, develops and annual Training Master Plan for all Company employees. The department’s goal is to inculcate QSHE among all staff and build capacity of line supervisors to improve QSHE in all process operations. The HR Department monitors employee achievement of training objectives as part its employee annual performance assessment. This QSHE training approach will be developed for the operations of Midal’s proposed Mozambique plant.



Monitoring and Reporting. In addition to its continuous reporting of achievement of key QSHE performance indicator reporting to management, Midal Cables submits to annual audits of its QSHE management systems by a third party (Bureau Veritas) to maintain its ISO certification. The Company is also subject to regular audits of its production processes against threshold emissions and waste water discharge values by the national Environmental Control Directorate, as well as to occupational health and safety audits by the national Directorate of Labor. A number of the Company’s customers also conduct periodic quality control audits. As with its Midal’s operations in Turkey, the Company will be subject to, and maintain, a similar level of monitoring and reporting in its Mozambique operations.

IFC’s review considered Midal’s operations with regard to fair, safe and healthy working conditions; and its procedures for replicating its established HR and occupational health and safety management systems in its offshore operations



Human Resource Policy and Management. As of March 2013, Midal Cables reports a total of 519 full time employees and 374 contract employees in its Bahrain operations. The Company’s Manager of Administration and Human Resources oversees a staff of six to manage employee relations in accordance with the Company’s HR policy and procedures. Employment terms and conditions meet, at a minimum, the wage scales and benefit entitlements established by the Bahrain Ministry of Labor in the national Labor Law, which themselves are consistent with the Core Labor Standards established by the International Labor Organization (although the Government of Bahrain has not ratified ILO Conventions on the protection of trade union rights as well as on equal remuneration and on minimum age). These terms and conditions are codified in the Company’s employment contract, which is explained to each employee at the time of hiring. The employment contract also describes the procedure by which employees can seek resolution to grievances internally and, ultimately, through the judicial system. All Midal permanent employees are eligible for comprehensive medical coverage and pension benefits.



The Company outsources a number of support services, including catering, cleaning, plant access security and casual labor. The Administrator and HR department is responsible for ensuring that service contractors meet the terms and conditions established under the national labor law and regulations in the employment of their workers.



As with its operations in Turkey, Midal will conform to all local labor laws and regulations in the hiring and employment of its staff and contractors in Mozambique as well as with the requirements of IFC’s Performance Standards. The New Labor Law, promulgated by the Mozambique Ministry of Labor in 2007, provides the general framework for labor regulation and working conditions. This law includes standards on working hours (including maximum working hours, overtime, night shifts, holidays, etc.); part-time work; breaks during the working day; annual leave; wages and remuneration (i.e. the minimum wage, methods of remuneration); and maternity, paternity and family leave.



Midal’s planned Mozambique operations will require up to 150 full time employees (of which approximately 38 will fill management positions) and an as yet determined number of contract workers. Contract workers will be engaged as operational requirements dictate.



Worker’s Organization. Midal Cables accommodates a chapter of the national General Federation of Bahrain Trade Unions on its plant premises. Currently, 165 Midal employees – approximately 40% of the non-management workforce – are members of this union. Inasmuch as the government
establishes wage rates and basic benefit entitlements, union activity in the Company is limited to negotiating allowances and working conditions. The Company is fully supportive of union representation and relations between management and union membership are positive. The Company has no history of labor disputes.



Midal will accommodate union representation in its Mozambique operations, consistent with the requirements of the national labor law. A number of trade unions representing industrial workers are active in Mozambique and have membership in the industrial units operating in the Beluluane Industrial Park.



Occupational Health and Safety. Midal’s QSHE department is responsible for maintaining safe working conditions for all employees, including the provision of job-appropriate personal protective equipment. As part of its OHSAS standard operating procedures, the department regularly undertakes a Hazard and Risk Assessment of work activities at all levels of operation to improve worker safety. These assessments may result in corrective actions such as re-design of a task, additional safety procedures or additional personal protective equipment being required for a specific task. In 2012, Midal Cables reported 111 lost workdays due to injury for a total of 2.998 million persondays worked and a rate of 2.3 lost time injuries per 100 workers – a rate well below that reported by the US Department Labor, for example, in the manufacturing industry.



A dedicated safety staff of five QSHE employees continuously monitors working conditions to ensure employee safety. This staff conducts daily workbox safety briefings and regularly organizes safety meetings and staff safety training related to their specific functions on the factory floor.



As with its operations in Turkey, Midal will establish a QSHE department to implement OHSAS 18001 standard operating procedures for hazard and risk assessment and ensure the protection of the health and safety of its workers in Mozambique.

IFC’s review considered the Company’s management of its operations, resource use and waste disposal procedures on the surrounding human and natural environment.



Resource Efficiency. In addition to oversight of offshore projects, Midal’s recently hired Projects Specialist is charged with improving the resource efficiency of the Company’s Bahrain operations. Midal’s rod, wire and cable manufacturing process at its Bahrain facilities utilizes natural gas to fire the various furnaces for maintaining molten metal for processing and ovens for curing cable to various specifications, and electricity sourced from the grid to power rolling and pressing mills, lighting, air conditioning, etc. Midal’s Mozambique operations will similarly use natural gas for its furnaces and ovens and grid-sourced electricity for its rolling and pressing machines. The Company’s annual energy requirements for its Bahrain operations in 2012 amounted to approximately 345 kWh of electricity and 2.9 million BTU of gas per metric ton of finished product. In the absence of industry benchmarking data, it is not possible to determine the efficiency of Midal’s manufacturing process. However, Midal’s Mozambique operations will utilize modern equipment sourced for its energy efficiency. As such, the Company’s Mozambique operations are likely to surpass those of its Bahrain operations in energy efficiency. Still, unlike its operations in Bahrain, where Midal offtakes molten aluminum from its supplier, Midal Mozambique will source virgin aluminum ingots from Mozal and re-melt these for casting aluminum rods. Midal estimates that the re-melting process will double the energy consumed by its furnaces per metric ton of product.



Pollution Control. Midal’s QSHE department monitors emissions from 12 separate furnaces on a continuous basis. Bahrain’s Directorate of Environmental Control has established threshold emissions limits for CO, SO2, NOx and Hydrogen Sulfide based on EU standards. Emissions from Midal’s operations are consistently well within the established limits. The Company is committed to achieving similar results in meeting MICOA threshold emission and wastewater discharge threshold limits, as well as limits prescribed in the World Bank Group Environmental Health and Safety (EHS) Guidelines, in its Mozambique operations.



Midal Bahrain sources water for all administrative, production and maintenance facilities from an on-site bore hole. This water is treated to potable standards via reverse osmosis. Process water used for cooling and curing product is recycled in a closed loop and losses due to steam and evaporation are periodically replenished. Sanitary wastewater from manufacturing facilities and is treated in an on-site waste water treatment plant before being discharged into the municipal sewer system.



Midal Mozambique will source and treat its process and potable water from an on-site borehole and establish a wastewater treatment plant within the perime
ter of its operations to comply with MICOA wastewater quality standards and those of the World Bank Group EHS Guidelines. Midal will also install a stormwater drainage system within its facility to ensure the collection, containment and proper treatment of potentially contaminated stormwater prior to discharge.



Management of solid & hazardous waste. The Company’s QSHE Integrated Systems Manual details standard operating procedures for the handling and disposal of all potentially polluting substances used in operations. Oil mixed with cooling water in the manufacturing process is separated and incinerated on site on a quarterly basis in accordance with the licensing provisions of the Bahrain’s Directorate of Environmental Control.



All aluminum process waste generated in Midal’s Bahrain facility is melted and recycled into finished product. Aluminum dross from furnace operations is collected an sold offshore as an additive for paints. Steel drums, wooden spools and waste plastic packaging materials are sold to a recycling facility situated in the industrial zone and regulated by the Directorate of Environmental Control.



Midal will establish similar systems for the management and disposal of solid and hazardous wastes from its Mozambique operations in collaboration with the management of the Beluluane Industrial Park management.



Green House Gas Emissions. In 2011, Midal Cables implemented a Greenhouse Gas / Carbon Footprint and Monitoring System to measure the direct and indirect GHG emissions associated with its operations. The incentive for developing this system was partly to identify areas of resource conservation and cost reduction in the wake of the 2008 global financial crisis; partly owing to pending government legislation that would provide financial incentives for emissions reduction; and partly to meet client demand for emissions accounting. To measure its carbon footprint, the Company uses a methodology developed by the EU Intergovernmental Panel on Climate Change Task Force on National Greenhouse Gas Inventories Programme. Midal issued its first monitoring report in March 2012 for the calendar year 2011. According to that report, Midal Cables generated direct and indirect emissions (chiefly from the consumption of natural gas-generated electricity) amounting to 32,000 tons of CO2 equivalent per year or approximately 178 kg per metric ton of finished product, which is well within the CO2 emissions benchmark value established by the European Pollution Control Commission for secondary aluminum processing and casting.



Although Midal Cables Mozambique will be smaller in capacity compared to the Company’s Bahrain operations (i.e., 50,000 tpy vs. 180,000 tpy), because the Mozambique operations will require remelting of processed aluminum ingots, these operations are estimated to release and estimated 26 tons of CO2 equivalent per year.

IFC’s review considered the Company’s capacity with regard to the management of the impacts of its operations on the health, safety and security of passengers and the general public.



The process of aluminum rod, wire and cable manufacturing does not involve any primary processing of metal and, as such, poses no more environmental health and safety risks than any other metal foundry and fabrication operation. Construction and operations of Midal’s Mozambique facility will be confined to the Beluluane Industrial Park, which is removed from human settlements and to which access is controlled by security personnel. Community health and safety risks associated with the Project will be limited to the movement of heavy vehicles to and from the project site during construction and operations along access roads to the Industrial Park. IFC will require Midal to prepare a comprehensive environmental, health and safety management plan covering the construction of its Mozambique facility to ensure contractor compliance with Mozambique requirements and the World Bank Group Environmental, Health and Safety Guidelines.



In its Mozambique operations, Midal will establish its own internal capacity for emergency preparedness and response consistent with ISO standards similar to that of it Bahrain operations. In so doing, Midal will coordinate its activities with the management of the Beluluane Industrial Park and the neighboring Mozal Aluminum Smelter.



In Bahrain, security functions are integrated into the overall functions of the QSHE department as part of its mandate to ensure employee and operations safety. A third party security company is contracted to control access to the plant but all internal security is managed by employees in the QSHE department. This system will be replicated in the Company’s Mozambique operation in coordination with the security operations of the Beluluane Industrial Park management.

Community engagement related to the Project has been limited to the public hearings associated with the Environmental Impact Assessment Scoping Study. Given the sensitivities of the communities surrounding the Beluluane Industrial Park related to the aluminum processing industry, IFC will require Midal to prepare a Stakeholder Engagement Plan in collaboration with the management of the Industrial Park to guide communications and engagement with these communities.

Mr. Orlando Marcus
Project Manager
Midal Cables International Lda.
Avenida Julius Nyerere, No. 3412
Cx. Postal 2830
Maputo, Mozambique
Tel: +258 8430 30777
Email: mailto:ompm@midalcables.com

Broad Community Support is not applicable for this project

Description	Anticipated Completion Date	Status
Stakeholder Engagement Plan	07/15/2013	Completed
Final EIA & EMP	07/15/2013	Completed
ISO Certification	07/15/2014	Completed
EHS Management Plan	07/15/2013	Completed