While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFC's investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards.

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security

This proposed repeat project is being developed in accordance with national regulatory requirements by an experienced sponsor committed to good environmental and social management. With no material changes to earlier identified E&S impacts, which are all readily mitigated environmental issues under Performance Standards 1 through 4, this is a Category B project.

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.

Policy:

The Group has not developed a sustainability policy statement. However, the Group’s operational activity is guided by applicable laws and regulations of Belarus. To maintain continuous compliance with local E&S requirements, Rubliovskiy has developed and implements a number of operational procedures in the field of waste management, hazardous materials management, food safety, occupational health and safety, and fire safety. These documents were reviewed as part of the existing investment and found to be consistent with the principles of the Performance Standards and the requirements of the WBG EHS General Guidelines.



Social and Environmental Assessment:

Land acquisition for new premises construction in Belarus is possible through long-term lease from the state only and is strictly regulated. New land plots with designated zoning are offered through bidding procedures, carried out solely by the state authorities. Local authorities are responsible for initial assessment of the land plots before offering them for bidding, including environmental and social screening. Based on the results of the screening specific requirements could be applied on future land developer (e.g. in case the land is contaminated by the past activities, etc.). Belarusian regulation prohibits development of agricultural land in use or protected forestry. Local authorities are also responsible for organizing consultations with stakeholders potentially affected by the new development.



Project developers are responsible for carrying out environmental and social impact assessment (ESIA) study of the proposed development and for designing environmental management plans for the construction phase. The ESIA outcomes are reviewed for E&S compliance with Belarusian law by the state responsible agencies. Their positive opinion is required to commence the construction.



The Group’s engineering arm is responsible for the design and construction of all new developments. The ESIAs for new projects are carried out by the design contractors as part of their design assignment and supervised by an environmental specialist of the Developer-group.



Management Programs:

Compliance with environmental management plans for construction is contractually required in the construction contracts. These plans typically include proper stormwater management, dust control, and waste management practices. Environmental management responsibility during construction is borne by a construction contractor with oversight from the Rubliovskiy’s project manager, who is in charge of monitoring the contractor’s compliance with the contractual responsibilities and local regulations.



Operational environmental, health and safety risks and impacts of Rubliovskiy’s operations are limited. To provide continuous management of the E&S matters, the company employs the designated full time OHS, fire protection and power engineers.

In addition to the regulatory requirements, the client’s E&S Manag
ement system covers requirements to conform to appropriate IFC’s PSs. The latter mainly relates to labor and working conditions, where in addition to the existing trade union structure the Group has implemented alternative means for workers to express their grievances and have interests represented. Presently, the Group labor terms are consistent with PS2, with several areas of best practice that exceed IFC’s requirements.



Similarly, the Group has increased emphasis on life and fire safety matters. A knowledgeable fire safety engineer is responsible for ensuring an appropriate level of life and fire safety through regular checks of the stores, training of personnel, and implementation of the improvement program agreed with IFC in 2011. Operational efficiency of installed L&FS systems is regularly checked by the third-party contractors.

In addition to local regulatory requirements, the Group is successfully implementing energy efficiency program for its retail chain.

At present, the entire Group employs approximately 5,800 people, including almost 2,700 people working in the Group’s retail chain. The retail stores range in size from 183 workers to 25. All employees in the group are covered by the same human resource policies.

At the request of IFC, in March 2010, RTL commissioned a consultant to conduct an independent labor assessment to determine the extent to which the Group’s operations comply with the IFC’s PS2 in the specific context of Belarus. The scope of assessment included a site visit to the Group’s head office in Minsk and review of relevant management systems, as well as site visits to retail stores and other facilities in the logistic business in Minsk.

Several areas of best practice were observed, including a strong program for training and proactive efforts to conduct surveys on worker satisfaction at the Group level, as well as some worker improvement surveys conducted at store levels.

There was no evidence of discouragement of the development of worker organizations. There is a trade union activity in two legal entities of the Group only– the Belintraproduct company, which operates 11 stores, and newly acquired Nevel company, but this does not appear to be a result of any restrictions on freedom of association.

For the rest of its workers, the Group has implemented alternative means for workers to express grievances and have their interests represented: RTL has elaborated its procedure on receiving grievances and expanded it to all employees in the holding company. Presently the procedure envisages a formal response from management within a defined time period; and provides for a defined time and place where workers can gather to discuss labor-related matters. Workers are also eligible to select a representative to communicate and discuss labor-related matters with senior management. Thus, all labor-related requirements agreed in the ESAP under the first project have been successfully met.

Health and safety conditions are strictly regulated by national legislation. In 2012, the Group had 1 minor lost-time accident, which represents creditable performance.

Stores are located in or close to established residential areas and are connected to electricity, central heating (except for the 3 stores that are equipped with gas-fired boilers for water and space heating), municipal water supply and sewage utilities. If required to comply with the sewage authority’s acceptance criteria, RTL’s stores are installing fat traps to pre-treat wastewater from in-house cooking facilities before its discharge to the municipal sewage network.

Several types of solid waste, mainly packaging materials, damaged goods and expired food products are generated in the stores. Paper, cardboard and plastic packaging materials are collected and sold for recycling. Damaged goods are collected and disposed of by an authorized waste management company. Used fluorescent lamps are collected separately and removed from stores by the licensed company.

The Group continues to improve energy efficiency of its operations.

Refrigeration is the largest single element of stores’ energy use. Approximately 20% of refrigerators are represented by built-in cold equipment. Its operation in a trade area requires quite intensive air conditioning load to compensate for the heat produced. To reduce energy consumption, Rubliovskiy is replacing built-in cold equipment with central remote cold supply. This replacement, which has been done in 9 stores, helped to save up to 380,000 kWh per year. In parallel, the company is converting from R-22, which is currently prevailing in the existing systems (111 units out of 126), to ozone-safe R 404A Freon.

Other resource conservation and energy use improvement measures include installation of water meters, which already resulted in 2,700 m3 of annual water savings; insulation of walls to prevent heat losses in winter time; and replacing of fluorescent lamps in trade areas with the light emitting diodes.

The Client will be working with IFC’s Green Building Specialist to identify opportunities for further energy use reduction through the inclusion of efficiency measures into the design and operation of new properties.

GHG emissions from the expansion project, when in operation, are estimated as 4,900 tons of CO2 equivalent.

RTL’s management acknowledges Life and Fire Safety (L&FS) of store visitors and personnel as one of the key E&S priorities. RTL has developed a corporate L&FS Policy and engages a knowledgeable fire safety representative.

Detection, alarm devices, fire hose reels and fire extinguishers are available in all shops. The larger supermarkets are equipped with a sprinkler system.



In December 2010, RTL engaged an independent international L&FS consultant, who made further recommendations on how to better structure L&FS management on a policy, technical and organizational level. Key recommendations included better L&FS management control and less dependency on third parties for the supermarkets that form part of a larger shopping mall area; better LFS monitoring by consolidation of information from individual stores on a corporate level; motivation of store officials to become more actively involved in fire prevention and maintenance; full fire drills together with occupants and the local authorities every year; technical solutions to ensure that doors are always accessible in case of emergency without jeopardizing security; and others.



The client achieved good progress in implementing these recommendations in practice. As the result, Rubliovskiy is now conducting regular recorded "check-list type" inspections of the stores, and keeps a trace of any abnormal situation such as housekeeping problems, unusual occupancy, excessive storage, inaccessible fire exits.



For existing stores, the client will continue to take measures to ensure that all emergency exits are immediately accessible in case of emergency; and doors between public areas and back of the house are kept closed.



Expansion project envisages construction of 16 new stores, including 5 supermarkets with floor area ranging from 1,690 to 6,453 sq.m.

To ensure that the design of new supermarkets, as they represent highest L&FS risks due to their larger area and fire load, is consistent with the requirements of WBG/IFC L&FS Guidelines, the client will engage qualified professionals, acceptable to IFC, to verify key L&FS design criteria and inspect the supermarkets on completion of construction. This will include a confirmation that all new properties will be properly equipped to ensure that (i) exit doors are always accessible in case of emergency without the intervention of staff in case of an accident; and (ii) proper compartmentation is secured between public area and back of the house in case of emergency.



Upon completion of construction, the client will provide third-party certification that properties construction faithfully incorporates all elements of the engineering design.

Operation of new stores will be covered by the existing L&FS Management system.

Members of the public can express their concerns and grievances, also about RTL’s environmental and social performance, through an established grievance mechanism - the “Book of Suggestion and Complaints”, which is held in each store. These comments are studied and acted upon by RTL’s senior management. In addition, concerns and grievances can be received through the Rubliovskiy’s web-site http://www.rublevski.by.

The Group will inform the local community on E&S aspects of the planned development through local disclosure of the ESRS, which will be published in Russian at the Group’s website http://www.rtl.by in April 2013.

For further enquires about the project, please contact:
mailto:s.bushin@rublevski.by
+375 17 284 -67-88 (ext.237)

Broad Community Support is not applicable for this project.