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 because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environmental and social (E&S) issues associated with this Project include: development and implementation of Environmental, Health and Safety (EHS) management systems, health and safety; assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant Performance Standards; resource efficiency of the operations (mainly energy efficiency); monitoring and management of air emissions, wastewater treatment and discharge, solid waste disposal; life and fire safety management including emergency preparedness and response; and the grain supply chain.

No new land acquisition is envisaged for any of the activities in the Project and PBIL has already acquired 11,600 m2 (124930 Sq. feet) land between 2009 and 2012 on a willing buyer-seller basis. Thus PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Similarly, the type of impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management) do not apply, and this similarly applies to PS7 (Indigenous Peoples), and PS8 (Cultural Heritage).

IFC’s assessment considered PBIL’s management of its EHS performance in the establishment and operation of its facilities and compliance with national and local permit requirements. Based on the assessment and discussions, the Company has presented plans to ensure that its operations will, upon implementation of the specific agreed measures outlined in the attached Environment and Social Action Plan (ESAP), address its environmental and social impacts and comply with environmental and social requirements including: all applicable host country laws and regulations; IFC’s Performance Standards; and the World Bank Group (WBG) EHS Guidelines. The information about how these potential impacts and risks will be addressed is summarized in the paragraphs that follow. Further information is provided in the attached ESAP.

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

Environmental & Social Assessment: PBIL’s facility at Birgunj has been in existence since 2000. As part of the initial permitting process, PBIL completed an Initial Environmental Examination (IEE) Report which was approved by Department of Industry (dated 2065/02/02).



The proposed project involves installation of new low-impact equipment and machinery within the existing facilities and the already acquired land (adjacent to PBIL’s existing facilities), and minor construction activities. As such the environmental and social impacts of the Project will be minimal and a formal Environmental and Social Impact Assessment (ESIA) of the project is not required as part of permitting process. PBIL will however obtain all necessary permits as per the regulatory requirements and ensure that the preventive and mitigation measures and monitoring plan as identified in the initial IEE report (on emissions control, wastewater treatment, solid waste management) are implemented for all operations, including the additional activities.



Policy, Management Systems and Organization: The Company has implemented ISO 9001:2000, a certifiable quality management system (QMS). However, there is no documented EHS policy or formal EHS management system. PBIL will develop a formal integrated system for EHS management, expanding upon its quality management system experience, with IFC’s Performance Standards appropriately incorporated therein. The systems will be developed and implemented within a time frame agreed with IFC as defined in the project ESAP.



Currently the Administration Head is responsible for management of EHS aspects including labor relations in the factory. However, to further support the EHS system to be developed and an increased focus on these issues, PBIL will implement an EHS organizational structure with clear roles and responsibilities for environmental, social and occupational, health and safety (OHS) management within the Company.



Fire safety and emergency response: The fire safety system at the PBIL facility is based on the provision of portable fire extinguishers. Currently the factory has not documented an emergency response plan and does not have a practice of evacuation drills. As a priority matter, PBIL will commission an appropriately qualified fire safety engineer to review fire protection in the facility, advise on their compliance with relevant local regulation and also develop an emergency response plan which will consider, inter alia fire prevention (especially considering the solvent extraction where hexane is used), evacuation, detection and alarm systems, compartmentalization, fire suppression and control, and fire emergency response planning. Based on the findings of the review, the Company will agree with IFC on a corrective action plan and associated implementation schedule.



Supply Chain: The basic raw materials for the PBIL’s products are grains and other agricultural inputs such as maize, wheat, soya seeds, broken
rice and rice bran. Maize is sourced both from Nepal (about 25%) as well as imported from India (75%) from many different states like Bihar, Madhya Pradesh, Maharashtra, Karnataka and Andhra Pradesh). Soya seeds are imported from India. Wheat, rice by-products and mustard cake are sourced locally from Nepal.



PBIL sources the grains through a number of traders which includes 10 major traders as well as a number of smaller traders. Many of these traders are based in Nepal whereas some are based in India as well. At certain times, the Company also buys through large agri-commodity trading companies.



In terms of supply chain risks, the risk was evaluated using the Global Map of E&S Risk in Agro-Commodity Production (GMAP) for the country-commodity combination (of India and Nepal) with various agri-commodities sourced by PBIL and based on this assessment, the probability of harmful labor practices or significant conversion of critical or natural habitats in the supply chain is very low. Also, considering that the Company is buying from a number of traders who are in turn buying from a network of traders and aggregators and considering Company’s sourcing volumes, PBIL is expected to have no or very limited leverage on practices in the supply chain.

Human Resource Policies and Procedures: The Company has a number of documented policies related to Human Resources (HR) practices including a manpower recruitment policy, advance policy and a leave policy at the corporate (Nimbus Holdings) level which are also applicable to PBIL. However, as discussed below, the policies and procedures on contract workers management, the grievance mechanism, wages and benefits to semi-permanent and daily workers etc., need strengthening. Also, there are no documented policies on non-discrimination, retrenchment and prevention of child and forced labor.



Therefore, to further strengthen its HR systems, PBIL will internally review existing policies and procedures and, as required, develop and implement additional policies/procedures to ensure compliance with the local law and PS2 requirements.



Freedom of Association / Grievance Mechanism: PBIL has signed a collective bargaining agreement with the permanent workers. The agreement covers provisions on various allowances (night allowance, medical allowance, attendance allowance), advance fund (from which workers can take loans and advances), picnic fund, uniform and shoes, annual medical check-up etc. The agreement is negotiated every two years.



Regarding the grievance mechanism, the permanent workers can raise their grievances through the collective bargaining process. However, other workers i.e., semi-permanent workers, daily workers and contract workers (discussed below under “workers engaged by third parties”), do not have an available mechanism. PBIL will therefore develop and implement a grievance mechanism for all its workers and communicate this accordingly.



Working conditions and terms of employment: The terms of employment including wages, overtime pay, leave, various allowances, and other benefits are agreed with permanent workers as part of the collective bargaining process. All the legal wages and benefits are paid to the permanent workers.



PBIL signs a contract with the worker at the time of hiring as a daily worker. The same workers are promoted to semi-permanent and permanent positions based on the number of months they have worked.



Certain gaps were noted with regards to the payment of social security benefits to semi-permanent and daily workers and working hours for all workers vis-à-vis the legal limits. Therefore, as a priority, to ensure compliance with PS2 and legal requirements, PBIL will review the social benefits payment structure for its semi-permanent and daily workers as well as ensure working hours are in accordance with the legal limits for all workers.



Non-discrimination and Equal Opportunity: No instances of discrimination were noted; however currently there is no documented policy on non-discrimination at PBIL. Thus PBIL will develop an associated policy.



Workers Engaged by Third Parties: The Company’s Administration Head manages contractors and thus compliance related to the workers hired by the contract
ors. While the Company is committed to ensuring contractors’ compliance with local labor laws, some gaps were identified during the appraisal with regard to contractors’ wages and working hours.



The Company will conduct an internal review of contract labor practices and develop and implement a Contract Labor Management System to ensure contractors’ compliance with the requirements of local laws and PS2 requirements.



Occupational Health and Safety (OHS): PBIL has not undertaken a formal OHS risk assessment of its facilities, and manages safety matters on the basis of its managers’ and supervisors’ industrial experience. The plant visit did identify a number of areas in which safety should be improved and PBIL has undertaken to implement these improvements in the context of its EHS management system.



As part of development of its EHS management system, a comprehensive OHS risk assessment will be undertaken by a suitably qualified independent specialist. This risk assessment /audit will define corrective actions and form the basis upon which the OHS system is developed including various management programs, monitoring and evaluation systems etc.



Further, in the interim and in parallel with the risk assessment/audit process referred to above, several areas for improvement will be addressed by PBIL on a priority basis especially guarding/covering of moving parts, electrical safety and reduction of dust levels in the plant. Development and implementation of a system for investigating and documenting accidents/incidents/near-misses; mapping/re-engineering of dangerous work practices; and implementation of an emergency response plan will also be undertaken within the management system context.

- Pollution Prevention: Air Emissions

The main source of air emissions are the boilers which are fueled on husks and four diesel generators (100 KVA, 600 KVA and 2 x 500 KVA) for standby power. PBIL currently does not monitor stack emissions or ambient air quality. However, PBIL will monitor stack emissions, ambient air quality and noise to assess compliance against the WBG EHS Guidelines and local requirements (currently only notified for ambient air quality). Based on the findings thereof, the Company will agree on corrective actions if necessary with IFC.



- Pollution Prevention: Water and wastewater (including Stormwater)

The main source of water is the on-site borewell. The average daily water consumption is approximately 25 m3. As the production operations are mainly a dry process, the water consumption is limited and there is no wastewater generation from the operations. The only wastewater generation is sewage from toilets, washing areas etc.



Stormwater is drained off-site through stormwater drains. Due to the lack of secondary containment on diesel tanks (discussed below under “hazardous materials management”) and rice bran oil tank, there is potential for stormwater quality to exceed the wastewater discharge limits.



The Company will improve chemical management practices (as discussed below under “hazardous materials management”) to ensure that the stormwater quality is within the discharge limits. Sewage generated is treated via septic tanks and monitoring will be undertaken to confirm compliance with the legal discharge limits and WBG EHS Guidelines. .



- Pollution Prevention: Waste Management



The major waste generated at the site is boiler ash. Other wastes generated on-site include packaging wastes (cartons, plastic bags), paper wastes, empty bags for grain and other inputs etc. The current waste management practices have scope for improvement as solid wastes are noted to be burnt on-site. Boiler ash was earlier being disposed off-site adjacent to the company’s boundary wall, however, the practice has been changed and now ash is disposed of via a contractor who uses it to backfill his own land.



PBIL will upgrade waste management systems in accordance with good industry practices and the WBG EHS Guidelines on wastes management. In particular the Company will, as part of the environment management systems; (a) identify all hazardous and non-hazardous wastes generated; (b) label, segregate and store all hazardous and non-hazardous wastes; (c) dispose of hazardous wastes through authorized entities only; and (d) maintain records of all wastes disposed from site. The waste management plan will be reviewed and agreed upon by IFC as defined in the ESAP.



- Pollution Prevention: Hazardous Materials Management



PBIL stores hexane and diesel on-site. Hexane is stored in an underground storage tank with a capacity of 80 kiloliters (kl). Diesel is stored in two 20 kl aboveground storage tanks (ASTs) and 3 smal
ler service tanks (a 1350 liters and 2 of 500 liters each) in the diesel generator rooms.



Currently the ASTs for diesel and service tanks have not been provided with secondary containment and thus leakage/spillages were noted on the ground/floor around these tanks.



PBIL will ensure that the storage, handling and use of these hazardous materials on-site is in accordance with good industry practices and the WBG EHS Guidelines on hazardous materials management including but not limited to: (a) secondary containment for all the aboveground storage tanks; (b) regular integrity testing of the underground storage tank; (c) spill prevention and control; (c) labeling of storage tanks; (d) provision of personal protective equipment (PPE) and training of all workers involved in storage, handling and use of these chemicals.



- Resource Efficiency



Some opportunities to save energy were identified by IFC during the appraisal mainly related to condensate recovery and preventing steam leakages. Also, there is an opportunity to convert the husk based boiler to a cogeneration plant and eliminate the diesel based back-up power generation. PBIL will undertake an internal evaluation of these opportunities, share the findings with IFC and agree on an implementation plan. Based on the current boiler usage, electricity supplied from the national grid and fuel from mobile and stationary sources the Company’s greenhouse gas emissions on account of its current operations are about 1300 tCO2e per annum.

The proposed project involves installation of new low-impact equipment and machinery within PBIL’s existing facility, and minor construction activities. The facility is located just off the main highway connecting Nepal to Raxaul border of India. Therefore, the additional activities are not expected to have major impact on the traffic in the area. The facility hires unarmed private security guards. No impacts are thus expected on the community, health, safety and security.

Considering that PBIL facility is located in a predominantly industrial area and that the impacts from its operations are limited, The Company has had very limited engagement with the communities around the facility. Previously, the local community has had some discussions with PBIL regarding it’s ash disposal off-site, which was later on corrected by PBIL by hiring a contractor to dispose of the ash who utilizes this ash to backfill his own land. However, these discussions were not handled as part of any structured or documented process.

Commensurate to its risks and impacts, PBIL will develop a documented community grievance mechanism which will include a method of receiving, handling grievances and providing feedback on them. The information will be communicated to the local community through appropriate means.

PBIL will locally disclose this ESRS at its website: http://www.nimbusnepal.com, as well as locally at the following addresses:
Probiotech Industries Limited
Lipani Birta -8,
Parsa
Birgunj, Nepal.

Tel :+977-51-522336


Any queries and/or comments about the project may be directed to:

Mr. Dinesh Kumar Gautam
KUK Building, 3rd Floor
Sinamangal
Kathmandu, Nepal.
Tel : +97714467791
Email:mailto:dinesh.gautam@nimbusnepal.com

Broad Community Support is not applicable for this project

Task Title/Description	Anticipated Completion Date
1. Develop and implement Environmental, Health and Safety (EHS) organizational structure with defined roles and responsibilities for environmental, social and OHS management within the Company.	November 2013
2. Develop and implement an integrated management system consistent with ISO 14001 and OHSAS18001 and aligned with IFC’s Performance Standards and the World Bank Group (WBG) EHS Guidelines appropriately incorporated including following specific components:
(a)   EHS policy;	(a)   November 2013
(b)   Identification of EHS risks and impacts (including a comprehensive OHS risk assessment) by a suitably qualified independent specialist	(b)   November 2013
(c)   Objectives, targets and a time-bound management plans to mitigate risks and impacts;	(c)   January 2014 2013
(d)   A comprehensive environmental (air, water, noise, wastewater quality) and OHS (e.g. ,workplace air quality, noise,) monitoring program specifying theparameters and frequency of monitoring to ensure compliance with local requirements, as well as the relevant WBG EHS Guidelines;	(d)   March 2014
(e)   Procedures inclusive of associated roles and responsibilities for implementation, monitoring and review of the management systems.	(e)   May 2014
3. Review the existing Human Resource (HR) policies and, as required, develop and implement additional policies/procedures to ensure compliance with the local law and PS2 requirements. This will at least include but not be limited to:	September 2013
(a)   Non-discrimination policy
(b)   Grievance mechanisms for all workers
(c)   Hiring system and wages and benefits for semi-permanent and daily workers
(d)   Prevention on child and forced labor.
(e)   Retrenchment policy and procedures
4. Implement an agreed contract labor management system to ensure contractors comply with the requirements of local laws and PS2 requirements.	September 2013
5. Undertake a review of the operations and the emergency response plans by qualified life and fire safety against national requirements and those defined in the WBG EHS Guidelines and agree with IFC on a corrective action plan as necessary.	Nov-13
6. Develop and implement an emergency response plan included a training program thereon for workers.	December 2013 (and thereafter)
7. As part of the development of management system, undertake an occupational health and safety audit against national requirements, industry best practice and the WBG EHS Guidelines. Based on the findings thereof, agree with IFC on a time based corrective action plan.	January 2014
Guarding/cover moving parts, assess and improve electrical safety and reduce dust levels in the plant to align international recognized standards.	January 2014
8. Develop and implement an environmental monitoring program (air, noise, waste water including storm water).	March 2014
Based on the monitoring results, agree with IFC on a corrective action plan to align with the WBG EHS Guidelines.	May 2014
9. Develop and implement wastes management practices at the facility in accordance with good industry practices and relevant WBG EHS Guidelines including:	August 2014
(a) Identification of hazardous and non-hazardous wastes;
(b) Labeling, segregation and storage all hazardous and non-hazardous wastes;
(c) Disposal of hazardous wastes through authorized entities only; and
(d) Maintenance of records of all wastes disposed from site.
10. Improve hazardous materials management practices at the facility in accordance with good industry practices and relevant WBG EHS Guidelines including:	August 2014
(a) Secondary containment for all the aboveground storage tanks;
(b) Regular integrity testing of underground storage tank;
(c) Spill prevention and control provisions;
(d) Labeling of storage tanks; and
(e) Provision of personal protective equipment (PPE) and training of workers as required involved in the storage, handling and use of hazardous and non-hazardous materials.
11. (a)   Undertake an internal evaluation to:	June 2014
·         Recover condensate and limit steam leakages.
·         Assess the feasibility of conversion of the husk based boiler to a cogeneration plant and eliminating the diesel based back-up power generation.
(b)   Submit the findings to IFC and agree on an implementation plan.	August 2014
12. Develop a documented community grievance mechanism including a method of receiving, handling public grievances and providing feedback on them. The information to be communicated to the local community through appropriate means.	November 2013