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 8 – Cultural Heritage
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 (“E&S”) Sustainability because a limited number of specific and reversible environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key E&S issues included the following: environmental and social management system of Yoma; waste and hazardous material (e.g. asbestos) management and resource efficiency (demolition, construction and operation); life and fire safety (construction and operation); and labor and working conditions including the protection of workers during all phases of the Project.

The 2 land leases of the 10-acre Project site were acquired by SPA in two separate transactions, the first instance in 1993 directly from the land owner, i.e. Myanmar Railways ofthe Ministry of Rail and Transportation; and the second transaction in 1995 from an independent developer which previously acquired the land lease from Ministry of Rail Transportation, Myanmar Railways. IFC’s due diligence finds no issues related to land lease acquisition and no concerns expressed by local residents near the site. The Project is located in a central Yangon location, and IFC’s review has not identified any adverse impacts of the Project on ethnic minority persons or biodiversity. Issues contemplated by PS5, PS6 or PS8 were not therefore identified during IFC’s review.

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.

Identification of Risks and Impacts:

As per regulatory requirements set out by the Yangon City Development Committee (?YCDC?), the Company is required to submit an Environmental Impact Assessment (?EIA?) for the Project. The Company is working with a consultant and a first draft of the EIA is expected in early 2014.

Demolition of the GMER building is expected to commence by first half of 2014 and will be implemented in two phases. The demolition processes will not involve the use of explosives. Yoma will require demolition contractors to strictly observe requirements and procedures related to dust and noise control, and to health and safety impacts.

The Company has commissioned a consultant firm to undertake a hazardous materials assessment of the Project site. The scope included identifying hazardous materials (HAZMAT) on site (including asbestos which were commonly used in older buildings in Myanmar) to compile an updated HAZMAT register, and to make recommendations regarding ongoing HAZMAT management. The HAZMAT assessment has found limited quantities of asbestos in the GMER and FMI Center buildings. During demolition, contractors will be required to strictly follow Yoma procedures to curtail any potential spread of asbestos dust and to prevent workers? exposure to asbestos dust. The Company will undertake monitoring to ensure compliance ? refer to the ESAP for details.

Organizational Capacity, Monitoring and Review:

Yoma which will be a major shareholder in the Company has developed and implemented an Enterprise Risk Manual (?ERM?) framework in order to identify, assess, treat and monitor potential risks. At Yoma?s corporate level, the Director of Risk Management and Assurance, who reports to the Chief Executive Officer of Yoma, is responsible for overall risk management and oversight as well as conducting risk based reviews across the Yoma group (otherwise known as Risk Based Internal Auditing) to provide assurance to the board that risk management processes are managing risks effectively, in relation to the risk appetite (or identify exceptions when it is not).

The Director of Risk Management and Assurance reports the improvement opportunities identified during the reviews and provide recommended action plans to management members including the CEO of Yoma. As part of this process, Standard Operating Procedures (?SOP?) are developed to address improvement opportunities identified in the report.

In addition, Yoma is in the process of developing an Environmental and Social Management System (ESMS) Manual in accordance with relevant IFC Performance Standards which will be endorsed by the CEO and adopted at working entity level.The Manual will include:

a) an E&S policy and mission statement; b) specific Standard Operating Procedures on but not limited to the following: E&S screening and due diligence of potential projects; labor and working conditions; key occupational health and safety risks; land acquisition, resettlement, and livelihood restoration; stakeholder engagement and community grievance mechanisms; emergency preparedness and response; E&S requirements on contractors, sub-contractors, and primary suppliers; biodiversity management; resource efficiency and waste management; c) relevant key performance indicators, training programs, and corporate monitoring and reporting programs; d) mechanisms to regularly review ESMS implementation effectiveness by internal (and external as needed) experts; e) assignment of an appropriately qualified staff member as overall E&S coordinator at the Yoma group level.

Refer to the ESAP for details.

External Communications:

The Group office at FMI Centre and security station at the front entrance of the Project site are the key local public interfaces to receive external communications including grievances from the public. At each of the Group?s business or real estate sites, the main office or project management office and the front entrance security stations serve as the point of contact to receive public enquiries.

During construction, the project management and technical team is expected to consist of 60 staff members. At this point, there is no estimate of the total number of contractor staff and workers, but over a thousand workers can be expected at site at the peak of construction.

Working Conditions and Management of Worker Relationship:

The Group?s Human Resource (HR) Policies and Procedures are detailed in its HR management SOP and an employee handbook. Terms of employment as well as rights and responsibilities of employees are formalized into employment contracts and an employee manual. Hiring and employment practices recognize the principles of non-discrimination and equal opportunity.

The Group states that all relevant national labor laws are fully complied with. All contractors will be required to detail arrangements made for staff in terms of working hours and relevant aspects of working conditions. No on site housing is expected at the Project site. Construction contracts between the Company and contractors and sub-contractors will require that all employees be provided with housing of appropriate quality, as well as requiring submission of regular housing inspection reports and giving the Company access to conduct random audits. All contractor workers will be required to sign employment contracts. Through its labor and working condition assessment (refer to end of the PS2 section and ESAP), the Group will verify the above.

Workers? Organizations and Grievance Mechanism:

The Myanmar Government has ratified 19 International Labour Organization Conventions and these include Conventions related to workers? organizations. The Group confirmed it will ensure the right of all employees to form and join trade unions or other representative organizations of their choice and to bargain collectively.

Various staff communication channels and grievance mechanisms are in place e.g. weekly and monthly one-on-one and Group staff meetings during which employees could express views and concerns. At construction sites, regular worker safety meetings and direct communications with sub-contractors are the key means of worker communications.

Retrenchment:

GMER closed down in October 2013 in preparation for its demolition. The Company arranged two job fairs during which each business within the Company interviewed GMER staff for potential re-employment. Some of the 134 GMER staff have taken up offers with various Group entities while the rest decided to pursue other opportunities. For those who chose not to stay with the Group, a severance package equal to six months of pay (1 month notice and 5 months of severance) was provided in line with national labor regulations.

Protecting the Work Force:

The Company is working to continually improve work force protection measures. As part of its E&S management system and SOP development process (refer to PS1), the Group will update its HR policy documents and employee manual, to ensure that its labor practices and that of its contractors and sub-contractors comply with work force protection related requirements described in PS2. Refer to the ESAP for details.

Occupational Health and Safety (?OHS?):

The Company confirms that there have been no lost time accidents or fatalities at businesses operating at the Project site. There was a vehicle collision incident on the road to one of the Group?s real estate project construction sites in August 2012 which resulted in a contractor worker fatality. In January 2013, a contractor worker was injured from a fall while working on site, and was admitted to hospital for treatment immediately. The worker died a few days later. The Group is awaiting the final cause of death report from the hospital. Both incidents occurred at construction sites which are not part of the scope of this Project. At another construction site, a number of workers operating at heights without harnesses and walking around bare-footed were observed.

Before the start of the demolition of GMER, Yoma will develop and adopt formal OHS policies at the group level consistent with good international industry practice and with requirements listed in the OHS section of PS2. To this end the Company has recently recruited a construction site OHS manager to drive the process of procedural and system development. Refer to PS1 and the ESAP for details.

The Company, as part of its ESMS development process, will undertake an overall labor and working condition assessment against PS2 requirements, with a strong focus on worker housing conditions, oversight of contractor and sub-contractor labor practices, workforce protection, and occupational health and safety. Follow-up assessments will be performed when demolition and construction activities commence, e.g. to verify construction worker housing conditions. Results from the assessments will provide input into the Company?s ESMS development process.

Pollution Prevention:

Contractors commissioned to undertake demolition work of GMER and FMI Center will be required to reuse as much of the generated solid waste as feasible, or sell some of the waste to recyclers. Limited waste water will be expected during the demolition processes. Contractors will be required to follow Yoma?s requirements and procedures on dust and noise control, and contractor candidates will be required by the Company to submit demolition environmental management plans during the work tendering process. The Company will exercise oversight on the E&S performance of contractors during the construction phase of the Project.

During operation, waste water generated at the Project site will be processed by an on-site Waste Water Treatment Plant (?WWTP?) based on membrane bio reactor and nano filtration treatment processes. Based on Project schematic designs, all treated waste water is expected to be completely re-used within the Project site with no external discharge. Small quantities of sludge are expected from the BBR Building-based waste treatment process and will be taken to a local landfill. A storm water drainage system separate from the WWTP drainage will be provided for the buildings and the site drainage. Storm water from buildings will be collected by roof gutter and drain pipe, while storm water from landscape areas will be collected by open gutter. Storm water will drain by gravity to site drainage manholes and will be discharged into local waterways.

Centralized stations using heat pumps will generate hot water for the business hotel, while the residential tower and the retail mall food and beverage outlets will use hot water supply from standalone hot water storage tanks or electric water heaters. Waste heat from four centralized chiller plants will be used for hot water preheating. A LPG or diesel boiler will be installed for the business hotel?s centralized laundry area. The Company will ensure that design specifications of the boilers meet World Bank Group Environmental Health and Safety Guideline air emission values before finalizing detailed designs of the Project.

Resource Efficiency and Greenhouse Gas Emissions:

The Project is expected to consume 69,200MWh of grid electricity annually, with the four centralized chiller plants expected to be key users. The estimated water consumption for the Project will be 370,000 m3 per annum. The primary water source will be groundwater extracted from local boreholes. The Company commissioned a technical institute to assess groundwater availability; number of boreholes needed; and appropriate locations of boreholes. Water will be treated to World Health Organization standard, then pumped to water tanks at the basement or roof tanks to ensure storage volumes for at least 24 hours. Some of the treated waste water from the WWTP will be reused for site gardening, be diverted to the fire-fighting system, to the cooling towers, and/or to office tower toilet flush tanks.

A variety of measures to promote resource efficiency have been proposed by the Mechanical & Electrical (?M&E?) engineering consultant of the Project. This includes measures such as: variable speed pumping; pre-heating of hot water system by waste heat from chiller and condenser water systems; recycling of waste water for irrigation; installation of flow regulators at wash basins, sinks and non-guest showers; installation of water meters at key usage locations to monitor consumption and locate water leaks; low flow sanitary fittings; motion sensor controlled lighting for unoccupied areas; LED lamps; PV cells for some landscape lighting; installation of a grey water recycling system; use of appropriately located shading elements to decrease heat load; recycling of treated waste water for use in cooling towers; reuse of building materials (e.g. teak frames) from the to-be-demolished FMI Centre and GMER to the extent possible.

The Group commissioned a resource efficiency consulting firm from Singapore to facilitate a workshop in August 2013 whereby Yoma senior managers, and M&E and other engineering consultants discussed resource efficiency options such as daylight and glare management, ventilation systems, and chiller configurations. The synopsis report has been shared with IFC. The Company and its M&E engineering consultant will develop a list of final resource efficiency options to be adopted, after taking into consideration output from the August workshop and from recommendations by the M&E engineering consultant. Related to this, the Company will also provide estimated annual energy and water consumption data and benchmarking performance data (as per Table 1 of the WBG EHS Guidelines for Tourism and Hospitality Development) specifically for the business hotel. On the basis of the performance data and other relevant information, the Company will develop and implement technically and financially feasible measures for improving resource efficiencies of the business hotel. Refer to the ESAP for details.

The Project?s annual total greenhouse gas (?GHG?) emission is estimated at 21,000 tons CO2-equivalent, attributable to consumption of grid electricity, fuels and the use of chillers.

Hazardous Materials Management:

During demolition, contractors will be required to strictly follow Yoma?s procedures to curtail any potential spread of asbestos dust during demolition. The Company will undertake monitoring to ensure compliance ? refer to the ESAP for details.

The Project M&E engineering consultant submitted its design summary report to the Company in March 2013. The report states that fire services installation will comply with local codes and be based on an applicable international standard, such as U.S. NFPA 10, NFPA 13, NFPA 14, NFPA 20, NFPA 24, American National Standard Institute, American Society of Mechanical Engineers, American Society of Testing Materials, Underwriter?s Laboratories, Inc., and Factory Mutual. The final choice of international codes to be adopted for the Project?s Life & Fire Safety (?L&FS?) systems will be confirmed during the detailed design stage, based on a review together with the Project architect on compatibility of the various passive and active codes.

As per WBG EHS guideline requirements on L&FS (and in concert with the above mentioned work to determine the final proposed choice of international codes), the Company will provide to IFC a ?L&FS Master Plan? (i.e. a set of documents including detailed design, specifications, and narrative descriptions) prepared by a qualified fire safety professional. The L&FS Master Plan will demonstrate that building design is consistent with requirements of local fire codes and one internationally accepted life and fire safety standard and which will identify major fire risks, applicable codes, standards and regulations, and mitigation measures. The Company will undertake post-construction L&FS completion audits, prepared by a qualified fire safety engineer/auditor, to verify that buildings have been constructed in compliance with the L&FS Master Plan. Refer to ESAP.

The designs of Project building structures will comply with the YCDC requirement of withstanding earthquake level 2B (UBC 97 seismic zoning system) and wind speed of up to 120mph which reflect local extreme wind conditions. Buildings have been designed in accordance with engineering and design criteria mandated by site-specific seismic risks of Yangon.

There have been no reported security incidents at FMI Centre and GMER. During construction, unarmed security personnel will be deployed at the construction site. Construction related impacts (e.g. noise) on local residents are expected to be limited. To minimize potential impacts on tenants of FMI Centre prior to its demolition, the project manager will ensure regular site cleaning, and locate noise generating activities away from FMI Centre as much as possible.

The provision for future installation of bulk LPG storage tanks will be provided as part of site design, to supply anticipated LPG consumption areas of the Project, including hotel laundry steam generation, kitchens and food and beverage outlets. Gas detector and alarm systems will be provided at the gas storage areas. A bulk diesel storage tank facility will be installed on site which will include containment for spillage and setbacks. A system comprising copper conductors and ground rods will be installed to protect the public areas from lightning strikes.

The Company will commission regular legionella tests of the hot water systems at Project facilities.

The Project will be co-located within the same site as the British Burma Railway Company (the “BBR Building”, first built in 1877), which is to be restored and converted into a Peninsula-branded hotel. While the BBR Building is not part of the scope of this Project, it can potentially be impacted by the Project’s demolition, construction, and operational activities due to proximity to each another within the same site. The Company: i) has engaged an architectural research and restoration firm from Singapore (a UNESCO/ICOMOS member) which has undertaken detailed research and site survey work to document the history and unique architectural features of the BBR Building, based on which restoration and conservation related recommendations have been made to the Company; ii) has been in liaison with the Yangon Heritage Trust, a Yangon-based Non-Governmental Organization focused on promoting the preservation of historical buildings in Yangon, and which has been in active contact with the Government of Myanmar cultural heritage departments; and iii) has emphasized its intention to ensure careful restoration of the BBR Building given its historical significance. IFC concludes that the Company has demonstrated due care towards the goal of restoring and protecting the BBR Building, and it can be expected to ensure that Project activities will pose minimal impacts on the BBR Building.

The Group as a Myanmar conglomerate is committed to local development and has supported community initiatives in the past years. For instance, the Group supported disaster relief efforts in 2008 in the aftermath of Cyclone Nargis by providing monetary support and by sending staff to disaster struck areas. During construction and operation, this Project will generate a large number of local jobs directly or through supply chains and procurement activities. IFC’s review did not find concerns by local residents regarding the Project. At the corporate level, Yoma will, as part of its ESMS, develop SOPs on stakeholder and community engagement (including grievance mechanisms) appropriate to the scale and complexity of the E&S risks and impacts associated with its business activities.

For more details on the Project, please contact:

Mr. JR Ching
FMI Centre, Level 10 & 11
380 Bogyoke Aung San Road
Pabedan Township
Yangon, Myanmar
Tel: +95 1 240363
Fax: +95 1 246881
http://www.yomastrategic.com
http://www.spa-myanmar.com

The Group will place a bilingual English and Burmese language advertisement in a major local newspaper in Yangon to inform the public that results from IFC’s E&S due diligence is available for access. It will also post the English and Burmese language ESRS and ESAP at conspicuous locations outside the main entrance of the Project site and at the front entrance of FMI Centre; and the same on its corporate website or provide a web-link to IFC’s disclosed ESRS and ESAP.

Broad Community Support is not applicable for this project