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
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category A project according to IFC’s Policy on Environmental and Social Sustainability. The Project’s cement grinding plant is situated within 10 kms of four other cement factories, including one integrated cement operation (i.e., combining clinker production and cement grinding in one locale). As such, the cumulative impacts of the cement manufacturing plant relative to the operations of the other cement plants in the area have been taken into consideration in IFC’s review. The construction and operations of the Project’s clinker production facility will have unprecedented and irreversible adverse impacts on the surrounding landscape and may have adverse impacts on the biodiversity of the area. IFC’s review considered environmental and social management plans for both components of the Project and potential gaps between the performance of both components and IFC requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed ESAP disclosed in this review summary. Through implementation of these management plans and the ESAP the Project is expected to be designed and operated in accordance with Performance Standards objectives.

Key risks and issues related to this Project include the Company’s capacity to manage the social, environmental, health and safety performance of its employees and contractors in accordance with national requirements, IFC’s Performance Standards and with good international industry practice as elaborated in the appropriate World Bank Group Environmental Health and Safety Guidelines. These requirements include: i) fair, safe and healthy working conditions during construction and operations for direct employees as well as for the contract workers; ii) proper handling of hazardous materials, and management of air emissions, wastewater, solid and hazardous waste during construction and operations; iii) proper management of the impacts of construction and operations for surrounding communities as necessary as well as management of the potential impacts on those communities of the influx of construction labor during construction; and iv) minimizing adverse impacts of construction and operations on the natural flora and fauna of the project area and surrounding habitat.

IFC’s review indicated that the investment will have impacts that must be managed in a manner consistent with the following 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; and
- PS 6:Biodiversity Conservation and Sustainable Management of Living Natural Resources

NCCL purchased the 42 ha site of its Lukenya cement grinding plant from a private owner in 2007 and commissioned its first cement processing line in 2010. The site is reported by the EIA authors to have been uninhabited and unutilized for agricultural or animal husbandry purposes. The site is reported to have been purchased by the previous owner for the development of a housing estate that did not materialize. Subsequently, NCCL purchased the land for its clinker production from seven private land owners on a willing seller/willing buyer basis and leased an additional 1,600 acres bordering that land that is collectively held by the Mbirikani Group Ranch (MGR) in 2012 for limestone mining based on a negotiated agreement with MGR leadership. As such, neither of the Project components has resulted in adverse impacts related to PS5: Land Acquisition and Involuntary Resettlement.

The Mbirikani Group of Maasai comprises 4,627 households (approximately 15,000 people) of predominantly semi-nomadic pastoralists widely scattered over the Group’s holding. These households are collectively represented by the ten-member Mbirikani Group Ranch Management Committee, which is elected by the Group’s membership every five years. The Management Committee represents the interests of the Mbirikani Maasai community to local government and private interests, and allocates revenue from land leasing (e.g., for tourism and wildlife conservation purposes) to a variety of developmental projects that benefit the MGR membership. The lease agreement between NCCL and the MGR represents a concurrence by a majority of the Mbirikani households to use Group land for limestone quarrying. The clinker production facility construction and operations will not have significant direct impacts on the livelihoods or the cultural heritage of the Mbirikani Group members. As such, the Project component will not result in adverse impacts related to PS 7: Indigenous Peoples or PS 8: Cultural Heritage.

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 environmental and social assessment of the proposed Project, 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 stakeholder engagement and disclosure of information about its operations.



Environmental and Social Assessment. In accordance with the requirements of the National Environmental Management Agency (NEMA), NCCL retained the services of a Kenyan expert accredited by NEMA to undertake EIAs for both its cement manufacturing plant (2007) and its clinker production facility (2012). Each EIA provides a detailed description of proposed project activities and likely impacts on the surrounding human and natural environment, an account of the public consultation convened to review the EIA findings, and a general environmental and social management plan to guide the Project proponent in mitigating adverse impacts. In the case of the clinker production facility and limestone mining, a draft EIA was submitted to NEMA for review in May 2011. NEMA requested additional information, including the results of air pollution modeling, noise modeling, and details on quarry rehabilitation, wildlife management and project alternatives. This information was provided by the EIA expert in an addendum to the original ESIA in March 2012. NEMA granted an environmental license for the Project’ clinker component in May 2012. There is no record of NEMA seeking additional information following its review of the cement manufacturing facility before awarding a license for the facility in 2008.



Subsequent to its review of Project documentation, IFC required the Company to commission a supplementary review of the clinker production facility EIA and the social and environmental management plan (ESMP) with reference to IFC’s E&S Performance Standards and World Bank Group Environmental Health and Safety Guidelines (WBG EHS Guidelines) to strengthen the assessment of a number of potential Project impacts and to strengthen the ESMP accordingly. This supplementary review included separate studies related to the clinker production component in the following areas: water balance (i.e., the water requirements of the Project compared to the water resources available in the Project area); ambient air quality; transport; terrestrial ecology; waste management; and workers’ accommodation. A supplementary study for the Lukenya cement grinding facility assessed the cumulative impacts of the fully commissioned facility on ambient air quality, noise and traffic within the facility’s area of influence. Copies of these studies and the revised ESMP are included in the documentation disclosed by IFC for this Project.



Environmental Management Organization and Program. NCCL does not have a formal environmental and social management system in place governing its operations. The Company’s Human Re
lations Manager has, until recently, overseen the compliance by NCCL’s operating units with statutory requirements related to environmental performance, health and safety established under the Kenyan Environmental Management and Coordination Act of 1999 as administered by NEMA. In January 2014, NCCL has recruited a full-time Corporate EHS Program Manager. The EHS Program Manager will have authority and adequate budget and resources to effectively implement the Project ESMP with adequate quality assurance and control.



Both the cement manufacturing and clinker production components of the Project were granted environmental licenses by NEMA subject to the Company meeting a number of conditions, including the establishment of an environmental management system, and an organizational structure and allocation of resources sufficient to achieve compliance with statutory requirements. These requirements include adherence to national air quality (draft) and waste management standards, and noise and vibration control parameters. With regard to the clinker production component, NEMA specifically required the Company’s adherence to restrictions on blasting and quarry rehabilitation as referenced in the Mining Act, traffic management, emergency preparedness and response, and coordination with Kenya Wildlife Service for the management of potential impacts on wildlife from the construction and operation of the component. Unlike its Lukenya operations, the Company has yet to put in place a formal site-specific environmental management system at Merrueshi and environmental matters are managed on an ad hoc basis by the Company’s site engineers and its construction contractor supervisors. As such, as part of the Action Plan associated with this proposed investment, IFC will require the Company to develop an Environmental, Health and Safety Management System Plan that includes an implementation framework for the Project’s Environmental & Social Management Plan (ESMP) governing the construction and operations of the Project. This implementation framework will specify the roles and responsibilities that NCCL personnel will exercise to ensure that the ESMP and associated environmental, health safety, safety and social provisions are implemented in accordance with NEMA requirements and the applicable provisions of IFC’s Performance Standards and WBG EHS Guidelines. IFC has identified the capacity gaps and NCCL/Devki Group will take necessary action to fill the gaps through its Corporate EHS Program Manager and/or by engaging any agency/person, following a competency assessment, subject IFC approval and on a competitive basis.



Monitoring and Reporting. Under the terms of the national Environmental Management and Co-ordination Act (1999), NEMA requires industrial units be inspected annually to assess compliance with national statutory environmental, health and safety requirements. Project proponents are required to engage NEMA-accredited expert consultants
to carry out these audits and to assess the proponent’s implementation of the Environmental Management Plan that was required for obtaining NEMA approval for industrial unit construction and operations. In addition, NEMA officers carry out unannounced site inspections of industrial units at least once per year.



NCCL’s Lukenya cement plant has undergone two Annual Environmental Audits since commissioning in the last quarter of 2010. The consultants’ audit report from 2011 reports material compliance with national environmental, health and safety requirements with the exception of dust levels at a number of areas in the plant (e.g., bulk loading area, bagging area). The 2012 audit report concludes that the Company is in full compliance with both the construction and operations environmental management plan approved by NEMA as part of its licensing requirements in part because of improved dust control systems. No independent audits have yet been undertaken of the Merrueshi clinker production construction site.



Emergency Preparedness and Response. The annual Statutory Safety and Health Audit report of the Lukenya plant undertaken in December 2012 describes a rudimentary Emergency Preparedness and Response capability that is coordinated through the Company’s private security contractor. The Company has responded to the audit with a commitment to develop a formal evacuation procedure in the event of fire, explosion or collapse of structures while it reports that it has implemented all required fire detection and suppression equipment throughout the facility. IFC has included in the attached Project Action Plan a requirement for the Company to develop comprehensive Emergency Preparedness and Response procedures addressing emergency events for workers, communities and the environment associated with both the Lukenya and Merrueshi Project sites.



Stakeholder Engagement. NEMA requires a formal stakeholder engagement process be undertaken by industrial units to obtain - and maintain - their environmental license. At the EIA stage, consultants preparing assessments for their industrial clients are required to identify and interview a sample of potential stakeholders who may be directly or indirectly affected by the project being assessed. Reports of these interviews are included in the draft EIA submitted to NEMA for approval. In addition, the EIA consultants facilitate a public meeting – notification of which is posted in local and national newspapers – to present their preliminary findings for information and discussion. The minutes of this meeting are included in the draft EIA submitted to NEMA. Details of the public meeting held to review the findings of the Merrueshi clinker project EIA are included in the copy of the EIA attached to IFC’s review. Additional project information has become available as a result of the supplementary EIA studies required by IFC. As such, IFC has included in the Project’s Action Plan a requirement for t
he Company to: i) undertake additional public consultation to update stakeholders on the overall E&S impacts of the clinker production component; and ii) establish a Stakeholder Engagement Plan that provides for regular formal engagement with Project-affected stakeholders and coordination of Project activities(e.g., wildlife management; emergency preparedness and response; and traffic safety) with the Kenya Wildlife Service and other wildlife conservation advocacy groups operating in Mbirikani, neighboring group ranches and the surrounding national parks.



Stakeholder meetings are also undertaken by consultants during the Annual Environmental Audit of all industrial units described in the Monitoring and Reporting section above. Successive audits of the NCCL cement plant have included reports of meetings with representatives of surrounding industrial units, and other stakeholders within the wider area of the plant’s influence. These reports have been generally favorable because of the employment opportunities offered by plant’s operation.



External Communications and Grievance Mechanisms. NCCL has no formal external communications capacity apart from the public access afforded through the Company’s internet website and the annual environmental audit stakeholder interviews. As such, IFC has included in the Project’s Action Plan a requirement for the Company to establish within its stakeholder engagement plan a formal grievance redress mechanism to facilitate resolution of public concerns and grievances about the client’s social and environmental performance and that of its contractors. Company management maintains communications with the membership of the Mbirikani Group Ranch through regular contact with the Group Ranch Management Committee. NCCL management keeps the Management Committee updated on the clinker processing project development and related benefit sharing arrangements (e.g., management of the borehole supplying water for Group Ranch members’ livestock; distribution of scholarship funds). However, the Company maintains no formal structure for communicating project information to other stakeholders, including the wildlife conservation advocacy groups that maintain programs within the Mbirikani and neighboring group ranches, and the Amboseli National Park.



Kenya’s Environmental Management and Co-ordination Act (EMCA) provides two avenues for resolving environmental disputes to complement the ordinary courts of law: the Public Complaints Committee and the National Environmental Tribunal. The Public Complaints Committee was established to carry out investigations either on the request of any person or on its own initiative, relating to cases of suspected environmental degradation much like an ombudsman. Its aim is to determine the scope of facts on an environmental issue and recommend public action to redress the complaint. The second dispute resolution body is the National Environment Tribunal (NET), which was established to
hear technical disputes relating to the administration of the EMCA. The NET is chaired by a person qualified to be appointed Judge of the High Court of Kenya and it hears appeals relating to decisions of the NEMA. NET, despite its limited mandate, provided avenues for expeditious and cost-effective resolution of environmental disputes.

IFC’s review considered NCCL’s operations with regard to fair, safe and healthy working conditions; and its procedures for replicating its established human resources (HR) and occupational health and safety (OHS) management systems for its clinker and quarrying operations



Human Resource Policy and Management. NCCL currently employs 385 people including a number of expatriate staff overseeing the construction and outfitting of the new cement grinding lines. The Company’s Human Resources Manager oversees a staff of two to manage employee relations in accordance with the Company’s HR policy and procedures, which are contained in the NCCL Employee Handbook. Employment terms and conditions meet, at a minimum, the wage scales and benefit entitlements established by the Kenyan Ministry of Labor and Human Resources Development in the national Labor Act of 2007. This Act provides the general framework for labor regulation and working conditions including: standards for 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. Consistent with the ILO Core Labor Standards, the Act also prohibits harmful child labor, forced labor, discrimination in employment practices and sexual harassment (although Kenya has not ratified the ILO Conventions on workers Freedom of Association and Right to Organize).These terms and conditions of employment 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 NCCL permanent employees are eligible for comprehensive medical coverage under workmen injury benefit act and termination benefit under the employment act.



The Company outsources a number of support services, including catering, cleaning, plant access security and casual labor. The 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.



Worker’s Organization. NCCL has a collective bargaining agreement with the Kenya Quarry and Mining Union, which is renewed every two years. Sixty-six percent of the Company’s rank and file workers are members of this union. The Company is also a member of the Federation of Kenya Employers, which ensures parity of wages and benefits within specific sectors among all member Companies. The Company is fully supportive of union representation and relations between management and union membership are positive. NCCL has no history of labor disputes.



Occupational Health and Safety. NCCL has a written safety and health policy, the implementation of which is the resp
onsibility of the managers of each operational department. This responsibility extends to worker safety awareness and training, equipment maintenance, use of appropriate personal protective equipment by all operations employees and investigation of lost time incidents and near-misses to determine and take appropriate action to prevent their recurrence. NCCL applies this policy to its suppliers and contractors.



A standing seven-member safety and health committee comprising NCCL management and workers conducts monthly inspections of the Lukenya plant to identify workplace hazards and workers’ safety concerns, and to make recommendations for their redressal to management. The Company has not experienced a lost time incident since the plant was commissioned in the last quarter of 2010.



All new employees are provided a mandatory general safety induction and further briefed on risks associated with their particular area of operations. No worker is allowed to undertake any task for which he has not been trained. Material Safety Data Sheets are available and accessible to all workers handling hazardous chemicals and an emergency response plan for fires, explosions and collapse of structures is in place. All heavy equipment (e.g., cranes, gantries, boilers and air compression equipment) are inspected for integrity on an annual basis by the relevant regulatory agency.



As noted in the Monitoring and Reporting Section of PS 1, industrial units must submit to annual inspections by a Health and Safety Advisor approved by the Directorate of Occupational Health and Safety, a division of the Kenyan Ministry of Labour and Human Resources Development. These Statutory Health and Safety Audits inspection includes measurement of workplace noise, illumination and air quality in various locations within the plant against threshold values established by the OHS Directorate, which are generally consistent with the WBG EHS Guidelines. NCCL’s Lukenya plant has undergone two such inspections since commissioning and the results of both have been satisfactory.



Construction of the Company’s clinker plant started in 2012 but standards of OHS maintained by the construction contractors at the site fall short of those practiced at the Company’s Lukenya plant and other Devki Group operations. While NCCL will extend its HR and OHS policy and practices to the operations of the clinker plant and limestone quarrying, the Company will need to apply additional effort to the construction phase of the Project to ensure worker health and safety and adequate levels of environmental oversight. As part of the Action Plan associated with this proposed investment, IFC will require the Company to develop and implement an Environmental, Health and Safety Management System that includes an implementation framework for the Project’s Environmental & Social Management Plan (ESMP) governing the construction of the project. This implementation framework will specify the roles and re
sponsibilities that NCCL personnel will exercise to ensure that the ESMP and associated health and safety provisions are implemented in accordance with NEMA requirements and the applicable provisions of IFC’s Performance Standards and WBG EHS Guidelines.



Worker Accommodation. The fully operational cement grinding plant at Lukenya is expected to employ 470 people. The Company already provides housing to senior expatriate construction and operations management in an onsite staff colony. The majority of staff resides locally and commutes to the plant from their residences.



The clinker plant construction at Merrueshi is expected to employ up to 1,000 people during construction of which an estimated 500 local and national skilled, semi-skilled and unskilled workers will be employed over a two year period and another 400 national and expatriate workers employed in the electro-mechanical outfitting of the plant. The Company estimates that an additional 300 people will be employed in the clinker production operations.



A supplementary study was undertaken by consultants to assess the impacts of an influx of construction workers to the Merrueshi clinker plant site, identify the provisions that NCCL has planned to manage that influx and incorporate additional mitigation measures into the Project’s ESMP. The Company will establish a colony adjacent to the plant site to accommodate up to 500 construction workers. Construction contractors will recruit casual laborers from the two nearest population centers Emali and Mbirikani. According to the study, these accommodations will meet the guidelines for worker accommodations developed by IFC and EBRD. All residents of the colony will be subject to a code of conduct that, among other things, promotes respect for the surrounding Maasai communities. On completion of construction, the colony will be retrofitted to accommodate the permanent plant operations staff and provide temporary accommodation for transport workers and parking for their vehicles.

IFC’s assessment considered the Project’s compliance with environmental requirements, optimization of resource inputs, including energy efficiency and waste minimization practices, as well as the storage and handling of hazardous materials used in the construction and operations of facilities.



Resource Efficiency. The existing and new cement grinding lines and the proposed clinker production facility have been designed for low energy consumption, good emission controls with continuous monitoring of key pollutant emissions (particulate, nitrogen oxides, and sulfur dioxide). The limited amounts of waste water generated at both facilities will be treated and used for irrigating greenery around the plants, and no significant amount of solid or hazardous production waste, except for broken cement bags, canteen, office and laboratory waste, and maintenance wastes (used refractory bricks, lubricants, etc.), will be generated.



The Merrueshi clinker plant will consume up to approximately 144,000 tons/yr of coal sourced from South Africa. Coal will be consumed exclusively in the calcining process – no coal will be used for electricity generation. All electricity required for the plant’s operations will be sourced from the grid. The plant is to be equipped with a six stage preheater/pre-calciner having a predicted thermal energy efficiency performance of 760 Kcal/kg of clinker/3.2 GJ/ton of clinker, which is within industry standards established by the European Union. The Project includes financing for the installation of a 36 km, 132kV power line from the Emali substation to the Merrueshi plant site within the right-of-way of the Emali-Oloitoktok road. IFC has reviewed this Project component as an Associated Facility. The national utility Kenya Power and Light Company (KPLC) is in the process of installing this power line. IFC has reviewed the EHS procedures of KPLC and found them in alignment with IFC’s Performance Standards. The clinker plant will also be equipped with emergency backup diesel generators with 2 MW capacity.



The Project’s cement grinding plant will source approximately 10 MW of electricity from the national grid to power the plant’s three grinding mills and bagging operations. The Company estimates that the combined electricity consumption per ton of bagged cement, including clinker production, grinding, blending and bagging will be 87 kWh per ton of cement, which compares favorably to an industry standard of up to 100 kWh/ton cement.



A Supplementary Water Balance study was undertaken for the NCCL clinker production facility. The study estimated water demand – for clinker production, dust suppression and staff colony service –at 400 m3 per day. Water required for clinker production equipment cooling will be recycled within a closed system thus reducing water demand, while that used in the emission gas conditioning tower will evaporate as part of its emission control function. Approximately 200 m3per day of wat
er will be required to suppress dust emanating from the quarry works and transport of limestone to the plant area. NCCL plans to use concrete paving bricks on all access roads within the limestone quarry site used by trucks to reduce fugitive dust generated by truck movement thereby reducing water demand. The balance of water requirement will be dedicated to servicing of an on-site staff colony that is planned to accommodate up to 500 people. A sewage treatment plant will be constructed to receive waste water produced by the plant and the staff facilities to be established at the site. This sewage treatment plant will treat the waste water to be suitable for use as greenbelt irrigation or release to an evaporation pond. There will be no external discharge of wastewater.



The same study has verified the availability of a sufficient supply of good quality groundwater located within two separate aquifers to meet the facility’s demand, and that the required water abstraction will not result in the depletion of groundwater resources. NCCL has drilled two boreholes, to a depth of 130 m and 155 m respectively, within the Merrueshi site with authorization of the Kenyan Water Resources Management Authority. These boreholes have a combined capacity of more than 800 m3 per day. One of these boreholes has been situated to provide a dedicated source of water to surrounding Maasai communities for their domestic livestock. The Company has established a community water management committee to oversee the management of the borehole and prevent conflicts arising over water access, especially during the dry season.



Pollution Control. Particulate emissions will be controlled at the quarrying sites and in the general material handling systems by designs requiring minimal material drops during handling, fully enclosed conveying systems with bag filters installed at transfer points. Water- based dust suppression will be used where evacuation and filtration systems are not practical, such as the road transport within the quarry operations or between the quarry and the crusher located at the plant site. The supplementary Waste Study provides a description of the mitigation measures that the Company will follow in the management of fugitive dust emissions at the clinker plant and quarry sites.



IFC required NCCL to commission a supplementary Air Emissions Baseline study in and around Lukenya cement grinding plant to determine the cumulative impacts of the plant’s expansion on the surrounding airshed quality. NEMA’s air quality standards are currently in draft, so the study used the guideline values established by the WHO and adopted by the WBG EHS Guidelines for Cement and Lime Manufacturing. Beyond a radius of 0.8 km from the plant, ambient concentrations of particulate matter (PM) were found to be within the WHO PM guideline value of 50 µg/m3, which suggests that the cumulative impact of the plant’s expanded operations will not result in a deterioration
of airshed quality. However, although NCCL has installed dust control measures throughout the plant (e.g., bag filters at materials transfer and loading points, covered raw materials storage areas, and covered conveyors), and installed filters are designed for maximum emissions of 30 mg particulate/Nm3,all air quality samples taken during the study exceeded the WHO guideline value. The study attributed this exceedence, in part, to construction of a cement tile factory within the plant premises and dry season conditions that prevailed during the time of sampling, as well as fugitive dust from other cement plants operating in the Athi River area. However, with the establishment of an ambient air quality baseline, IFC will require NCCL to monitor PM emissions from the plant as part of its Annual Environmental Monitoring reporting requirements to determine if additional dust mitigation measures are required.



Apart from particulate emissions, other major point source pollutants in the cement manufacturing process are Sulfur dioxide and nitrogen oxides, which are related to the operation the clinker kiln. Sulfur dioxide emissions will be low, as the alkaline conditions in the clinker kiln will result in the absorption of the majority of the sulfur entering the systems either through the raw materials or the fuel. The sulfur dioxide emissions will not exceed WBG EHS Guidelines value of 400 mg/Nm3.



Formation of nitrogen oxides (NOx) is caused by fuel burning at high temperatures in the kiln. To minimize the formation of nitrogen oxides, the kiln will be operated following advanced combustion principles, including the use of low-NOx burners, which by controlling the flame shape are able to ensure a relative low core flame temperature. By applying these techniques the NOx emissions will be kept below the 600 mg/Nm3, as stipulated in the WBG EHS Guidelines. NCCL has committed to install Selective Non Catalytic Reduction (SNCR) of NOx if the burner optimization has not been able to achieve these results within six months of plant commissioning. However, good international industry practice is to achieve the NOx limit without the use of SNCR because the SNCR process requires the injection of ammonia or similar reagents, which must be transported to site and, thus, would require the implementation of appropriate risk mitigation to ensure public safety. The raw materials from the limestone quarry and the clay quarries have been analyzed to ensure all potential contaminants have been considered. These tests have confirmed that all contaminants, including Mercury, are very low. The Company will carry out continuous emissions monitoring to ensure compliance with NEMA threshold limits as well as those stipulated in the WBG EHS Guidelines (dust, NOx, and SOx), while other including possible Mercury emissions will be tested for periodically and at least once per year.



A study of the impact of the clinker production operations on ambient air quality in
the project area was undertaken to supplement the findings of this Project component’s EIA. Baseline ambient values for suspended particulate matter, PM10, SOx and NOx were established and air dispersion modeling was applied to the combustion gas emissions from the kiln stack and particulate emissions from the kiln, clinker cooler and coal mill. As there is no industrial or manufacturing activity within a 100 km radius of the site, the baseline concentration values of all tested parameters were below detection limits, which is typical of undisturbed natural environments. Based on the performance specifications of the plant equipment provided by NCCL, the study concluded that the plant, with the designed operation performance levels and the pollution abatement measures installed, will operate well within the threshold limits established by the WBG EHS Guidelines for the cement industry and calculated ground level concentrations at the point of maximum impact are predicted to be well below the applicable WHO ambient air quality guidelines.



Noise and Vibration. Blasting, stone crushing and vehicle movement will be the main sources of noise and vibration from the quarry and clinker manufacturing operations. Quarrying operations, which are set back far from the Emali-Oloitoktok highway, will be restricted to daylight hours and blasting will typically be restricted to two events weekly in one location Sirens will be employed to warn humans and wildlife in the vicinity of quarry operations of imminent blasting and to indicate the completion of blasting. Crushing, loading of clinker and dispatch of trucks will run up to 16 hrs per day. Apart from the resident workforce, the nearest receptors to operations noise and vibration – residents of the Merrueshi trading post –are 2 km distant from the site. As such, no significant adverse impacts from noise or vibration are anticipated on human populations. A supplementary study of noise emissions from the Lukenya cement grinding plant found that mitigation measures to reduce noise emission are fully developed within the plant, and that registered noise levels from sampled locations within the plant boundary and nearby receptors meet WBG EHS guidelines for industrial and commercial areas that noise levels do not exceed 70 dBs



Management of Solid and Hazardous Waste. The solid and hazardous waste generated by clinker plant operations will either be recycled (e.g., used refractory bricks) or removed and disposed by authorized waste management contractors. Ordinary domestic waste (including damaged cement bags) will be disposed of in approved landfill operations within the limestone quarry based on agreement with the local authorities. Waste rock will be segregated and stored for subsequent use in quarry reclamation. Hazardous materials generated from the operations of both the cement and clinker plant operations will be stored in accordance with NEMA requirements and removed by licensed operators to
NEMA approved hazardous waste disposal sites.



Quarry Management and Reclamation. As indicated in the proposed Project’s Action Plan, NCCL will prepare a detailed Quarry Reclamation Plan that will be kept current during the lifetime of the project. The plan will include the contouring of the quarry landscape, to be developed as part of the quarry operation and replanting activities with local plant species. As the landscape is relatively flat and the final quarry contours will lie below horizon level, the visual impact of excavation will be minimal from a distance. The Quarry Reclamation Plan will be linked to the Project’s Wildlife Management Plan to ensure that wildlife, as well as herders with their cattle are prevented from entering active quarry areas or areas under reclamation, and that systems are in place for rescuing animals that wander into these areas.



Green House Gas Emissions. NCCL plans to produce cement with an average clinker content estimated at 63.4% blended with 31.6% good quality pozzolana and 5% gypsum. As such, the specific CO2 emission from NCCL’s annual cement production is expected to reach a low 570kg/ton cement. With an annual production of 1.65 million tons of cement. After factoring in coal requirements for firing the kiln, the grid-sourced electricity needed to run operations and fuel consumed in the transport of materials, the annual CO2 emissions from the Company’s cement production is estimated at 971,000 tons. Low sulphur coal imported from South Africa via Mombasa will be used for firing the clinker kiln as no other fuel source is reliably available to the Company.

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 the general public.



The most significant adverse impact of the Merrueshi clinker production component of the Project for the local population will be the significant increase in road traffic on the 35 km stretch of the Emali-Oloitoktok road (C102) between the clinker project site and Emali, located at the junction with the Nairobi-Mombasa highway. The supplementary Transport Planning study undertaken for this component estimates that once the clinker facility is fully operational, heavy vehicles (25-30 ton trucks) delivering coal from Mombasa and other materials to be blended with limestone, and removing clinker for delivery to the Lukenya cement grinding plant, will account for approximately 390vehicle (round) trips per day or one truck nearly every four minutes arriving or departing from Merrueshi. This amount of traffic represents an 80% increase in the number of heavy vehicles moving between Emali and Merrueshi on a daily basis. The C102 road was upgraded and repaved in 2012 and the Transport Planning study estimates that the road can support this increase in vehicular traffic, although the road may require more frequent maintenance than originally planned by the National Highways Roads Authority.



There are no significant population settlements between Emali and Merrueshi along C102 but there is stop-and-go traffic by local taxis and regular crossing of livestock from grazing areas to watering holes along the perimeter of the Emali-Oloitoktok road. The Project’s ESMP will have provisions for driver training and conduct vehicle maintenance and local road safety awareness-raising to reduce the risk of road accidents involving Project vehicles and collisions with domestic and wild animals. Should it be determined that Selective Non Catalytic Reduction (SNCR) needs to be installed in the plant, the Company will be required to commission a risk assessment of the transport of SNCR reagent (e.g., Ammonia) to the plant site and include appropriate measures in the Project’s Emergency Preparedness and Response Plan.



The Company will fence the entire clinker plant site, including workers’ colony and vehicle parking areas as well as active quarry sites and access roads to those sites. Fencing will restrict public access to these areas and protect Maasai herders, their cattle and any stray wildlife from blasting within the quarry, collisions with vehicles moving between the quarry and the crushing plant, and falling into active quarry phases. Unarmed security guards will monitor the entire project site during construction and operations to further control public access.



As noted in the discussion of Labor Accommodations above, NCCL will conduct cultural sensitivity training for all construction and operations personnel to safeguard against potential conflict with local Maasai communities an
d a grievance mechanism will be established to enable local communities to raise and seek resolution to concerns about the Company’s activities. The Company will also engage the National AIDS Control Council to support HIV/AIDS awareness and prevention among construction workers, staff and, especially, the many transport workers who will be congregating at the project site throughout the day and night.

IFC’s review considered NCCL’s capacity to manage the anticipated impacts of the Project on the natural environment, including conservation of biodiversity, maintenance of ecosystem services and balancing conservation requirements with development priorities.



NCCL’s Lukenya cement grinding plant is situated near the intersection on the Nairobi-Mombasa highway with the Athi River, and the Nairobi-Namanga highway junction. Because of its convenient road access to Nairobi, Mombasa and population centers in Tanzania, the area has in the last two decades developed into an industrial zone with six separate cement manufacturing units and a number of supporting mining and logistic operations. As such, for the purpose of this review, the Company’s cement plant is considered a brownfield project within a natural landscape that is highly modified.



In contrast, the Company’s Merrueshi clinker plant and limestone mining operations will be one of the first industrial developments within the Amboseli Ecosystem, a relatively undisturbed landscape that covers an area of approximately 5,700 km² stretching between Mt. Kilimanjaro, Chyulu Hills, Tsavo West National Park and the Kenya/Tanzania border. The area is generally arid to semi-arid with a very small variation in its agro-ecological zones and is more suitable for pastoralism rather than cultivation with a high potential for conservation of wildlife and tourism enterprises. The Amboseli Ecosystem encompasses the Amboseli National Park and the surrounding six Maasai group ranches, including the Mbirikani Group Ranch, and 48 individual ranches located at the foot of Kilimanjaro that are now under rain-fed crop production. The Amboseli Ecosystem is recognized by the United Nations Educational, Scientific and Cultural Organization (UNESCO) as a unique Man and Biosphere Reserve.



Wildlife is found generally within Amboseli and Tsavo West National Parks and the dispersal areas that surround these parks. The ecology of the area favors game and livestock cohabitation and sparse human settlement. By and large, the wildlife found in the dispersal areas are migratory species, and includes elephant, cape buffalo and wildebeest. Other animals found in the dispersal areas include impala, Grants gazelle, Thompson''s gazelle, oryx, topi, cheetah, hyena, zebra, giraffe, leopards and lion. Of the various fauna that have been recorded in the area, the famous Amboseli Elephants have been studied for more than 30 years. The Amboseli Ecosystem has an elephant population of approximately 1,400 individuals. This population has been a major influence in the ecology of the Amboseli Ecosystem and is closely associated with habitat changes in the Amboseli National Park. Amboseli National Park is also one of the 60 Important Bird Areas in Kenya and thus it is recognized as globally significant for bird conservation. Many local bird species as well as migrant birds have been recorded. The ecosystem has a rich birdlife, with
over 400 species recorded, of which 40 are birds of prey.



The Amboseli National Park is not fenced – animals take refuge in the park during the dry season and disperse into the ranches during the wet season. According to the Supplementary Terrestrial Ecology Assessment undertaken for the NCCL Project, the construction and operation of the clinker plant and limestone mining are not expected to disrupt common wildlife habitats and dispersal areas around Amboseli National Park or Chyulu Hills because the quarry and clinker plant is situated over 70 kms from established wildlife dispersal corridors, with the bulk of the Mbirikani Group Ranch serving as a buffer between them. NCCL will fence the clinker plant area and active limestone mining sites to prevent wildlife from straying into these areas but there remains the risk of adverse impacts on wildlife due to collisions between vehicles and wildlife during construction and operation, especially on quarry roads, as well as poaching of animals for bush meat and trophies by construction workers and operations staff.



As part of the clinker project EIA approval process, NEMA sought the advice of the Kenya Wildlife Service (KWS), the Kenyan state corporation established in 1990 to conserve and manage the country’s wildlife. KWS is directly responsible for the management of the national park system and protection of the wildlife inhabiting those parks. KWS collaborates with a wide range of stakeholders, including the Maasai group ranches, safari lodge owners and a number of wildlife conservation NGOs to fulfill its mandate in and around the parks – maintaining and protecting wildlife migration routes and dispersal areas that link the parks. In response to a KWS request, the Company was required to prepare a wildlife “integration” plan outlining the threats to wildlife posed by the project and activities to mitigate those threats. Although KWS gave its approval to this plan, the plan itself does not provide sufficient detail on the structure and method of its implementation. As such, IFC has included in the Project’s Action Plan a requirement for the Company to revise the “integration” plan as a Wildlife Management Plan (WMP). The WMP will provide a work plan, assign implementation responsibilities, identify performance indicators consistent with the requirements of IFC’s PS 6 and makes provisions for monitoring and reporting in collaboration with KWS and other reputable wildlife conservation groups. The Supplementary Terrestrial Ecology Assessment provides a framework for a WMP.



The Emali-Oloitoktok road, on which clinker plant site and limestone deposits are situated, is one of the access routes to Amboseli National Park although the site is far from the boundaries of the park itself – at least 70 kms from the Erimito gate of the park or the closest access point to the park from Merrueshi. The clinker plant structures (40 m high stack, 36 m clinker cooling tower and 110-120 m pre-heater
tower) will not be visible from within Amboseli park. The far eastern boundary of the project’s limestone concession is 30 kms from the boundary of Chyulu Hills National Park. The clinker plant structures will not be visible from the within that park although dust and smoke plumes from plant operations and blasting of limestone deposits may be visible from the upper elevations of the park on occasion, depending on weather conditions (e.g., wind intensity, haze and humidity). Similarly, noise from operations and blasting will have limited disturbance impact as it will be attenuated by weather conditions and distance to receptors. Noise from plant operations, vehicle movements and blasting, along with the illumination of nighttime operations will discourage wildlife from congregating in the immediate vicinity of the project site. However, as noted above, the construction and operation of the facility will not have impacts on the major wildlife migration corridors that link the Amboseli and Tsavo national parks that are far removed from the site.

In addition to the annual lease payments and mining royalties paid to the Mbirikani Group Ranch (MGR), NCCL contributes KSH 2m directly into a scholarship fund for MGR membership. The MGR Management Committee also contributes to this fund from revenues generated from other land leasing. The scholarship fund is overseen by a Committee that includes representatives of NCCL management. NCCL has also provided cattle watering points to local Maasai herders.

NCCL will establish a committee of community members and other stakeholders to monitor issues related to the construction and operations of the clinker plant. A Company manager will serve as liaison between this committee, Company personnel, contractors and workers to address issues that arise.

Copies of this ESRS, Action Plan and other related documentation are available for review at National Cement Company Ltd, Project Site Office, Merrueshi, Emali – Loitoktok Road, Kajiado County.

For further information, please contact:

Mr. Tito Kodiaga
Corporate EHS Program Manager
Devki Group
P.O. Box 33319, 00600
Nairobi, Kenya
Tel: 20-2511902/3/4/5 Mob: +254722579272
Email: mailto:ehs@nccke.com

Broad Community Support is not applicable for this project

Task Description	Anticipated Completion Date
1. Develop an Environmental, Health and Safety Management system that includes an implementation framework for the Project’s Environmental & Social Management Plan (ESMP) governing the construction and operations of the Project. This implementation framework will specify the roles and responsibilities that NCCL personnel will exercise to ensure that the Project ESMP and associated health and safety provisions, including emergency preparedness procedures and traffic safety measures for both the Lukenya and Merrueshi sites are implemented in accordance with NEMA requirements and the applicable provisions of IFC’s Performance Standards and World Bank Group Environmental, Health and Safety General Guidelines.	31 May 2014
2. Undertake a public consultation on the findings of the supplementary ESIA studies and draft ESMP. The outcomes of this consultation will be incorporated into the final ESMP.	15-Mar-14
3. Develop and implement a stakeholder engagement plan that provides for regular formal engagement with Project-affected stakeholders and coordination of Project activities (e.g., wildlife management; emergency preparedness and response; and traffic safety) with the Kenya Wildlife Service and other wildlife conservation advocacy groups operating in Mbirikani, neighboring group ranches and the surrounding national parks. This plan will also establish a formal grievance redress mechanism to facilitate resolution of public concerns and grievances about NCCL’s social and environmental performance and the performance of its contractors during construction and operations.	31 May 2014
4. Develop and implement a Quarry Reclamation Plan to manage the sequencing of quarry closings, contouring of landscape, drainage and re-vegetation. The Quarry Reclamation Plan will be linked to the Project’s Wildlife Management Plan to ensure that wildlife, as well as herders with their cattle are prevented from entering active quarry areas or areas under reclamation, and that systems are in place for rescuing animals that wander into these areas.	31 May 2014
5. Determine requirement for installation of Selective Non Catalytic Reduction (SNCR) of NOx in clinker plant if the burner optimization has not been able to achieve NOx emissions below the 600 mg/Nm3 limit stipulated in the WBG EHSGs within 6 months of plant commissioning.	30 June 2015
Installation to commence within 12 months of plant commissioning and be completed within 16 months of plant commissioning.	(only if NOx limits are exceeded)
6. Prepare and implement a Wildlife Management Plan for the Merrueshi clinker production component of the Project in consultation with the Kenya Wildlife Services and in collaboration with one or more reputable wildlife conservation groups with experience in the Amboseli Ecosystem.	31 May 2014