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 B project according to IFC’s Policy on Social and Environmental Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

The key E&S risks associated with the Company’s retail store operations are fire safety management; safe and healthy working conditions; resource efficiency; management of emissions, wastes and discharges. Other operations, such as the VPU/FPU, the distribution center and the collection centers pose occupational health and safety risks related such as exposure to cold, cut injuries and physical and chemical hazards arising from material handling.

The Project retail stores are developed in existing buildings leased from landlords, or on land acquired on a willing buyer – willing seller basis and there is no indigenous people or cultural heritage in the vicinity of any of the Project sites. Accordingly, the findings of the Project review indicate that there are no impacts related to Land Acquisition and Involuntary Settlement (PS5), Indigenous Peoples (PS7) or Cultural Heritage (PS8).

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:



The retail business expansion will involve the opening of new stores with an average area of 3000 sq ft in rented or leased premises in semi urban or urban commercial areas. No formal environmental and social impact assessment (ESIA) is required for this purpose. However, the local permitting process which includes requirements to obtain the trade license, hold a valid lease, and possess certificates of structural completion and a fire No Objection Certificate (NOC) ensures that the major risks in the new stores are subject to risk assessment and mitigation.



In addition to the retail store expansion, the Company is constructing a new FPU and will subsequently shift the fish processing operations to the new location.



The current system of assessing and documenting E&S risks and impacts is geared towards meeting the statutory requirements of various agencies, such as the municipal council, the environment agency, the fire department and labour department.



- Management Programs:



At present the Company has corporate-wide procedures and practices in place for the day-to-day operations, which include an Occupational Health and Safety policy and manual covering almost all aspects of retail operations including work ergonomics, fire safety, physical, chemical and biological hazards arising from handling of various products and accident reporting procedure. For fire safety, the local fire department gives recommendation on the design layout of the facility, which includes type and number of fire fighting equipments, exit points, evacuation markings etc. Based on completion/ installation audit of these, the fire department issues a fire certificate. The Company does not have any E&S related performance agreements with the third party service providers.



As part of IFC investment, as set forth in the ESAP, the Company will enhance its EHS policy to specify that the Company’s proposed operations will comply with the applicable national laws and regulations and the IFC Performance Standards. The policy will indicate who, within the organization, will ensure conformance with the policy and be responsible for its execution at operational level as well as at the corporate level. The Company will also develop an integrated EHS management system and procedures for prior E&S risk screening of any new business acquisition or new business activity.



For existing operations, the Company will expand upon its OHS management to be capable of certification to OHSAS 18001 in order to ensure systematic management of environmental and other social issues, and an environmental management system capable of certification to ISO 14001 or equivalent will be developed. This will include the development of environmental key performance indicators (KPIs) and preparation of updated training calendar to address related training requirements. The Company will then communicate the new policy, management system and procedure
s to all levels of its organization and other relevant stakeholders.



In the event the Company’s agribusiness strategy expands to selling seeds and agrichemicals, the Company will undertake an impact assessment study of its agribusiness strategy with key focus on agrichemicals and hybrid seeds and associated environmental, health and safety, and social impacts.



- Organization:



The Company organizational structure broadly has two verticals- i) Retail Operations and Distribution which is managed by the Chief Executive Officer (CEO) who reports to the Group Managing Director (MD), and ii) Retail Procurement and Agri Development managed by General Manager- Procurement (GM) who also report to the CEO. Under the CEO and GM there are Senior Operation Managers and Operation Managers, and Managers/Assistant Managers.



General management functions, such as Marketing, Finance and project development (developing new facilities) are managed by respective GMs functioning under the MD. IT and HR services are shared at the group level.



The responsibility of implementing all Company procedures, including the OHS policy manual and workforce related issues is entrusted upon the Supermarket (retail outlet) Managers. For processing units and the distribution center the same is entrusted to the Operation Manager. The Company has accident reporting procedures under which the outlet manager is responsible for immediate informing the Operation Manager of any accident.



To ensure adequate monitoring at corporate level, as set forth in the ESAP, the Company will designate a senior officer as management representative at the corporate level, who will oversee and coordinate the E&S and corporate social responsibility (CSR) functions with the help of respective operational teams.



- Emergency Preparedness and Response:



The Company’s OHS procedures do not have specific guidelines on emergency preparedness and response planning and action. To ensure these are adequately covered in the OHS procedures, as set forth in the ESAP, the Company will develop and implement an emergency response plan for each category of operational and planned assets. The Company will further ensure that relevant staff is adequately trained on these procedures.



- Monitoring & Reporting:



The Company’s corporate office compiles the information related to Human Resources, operational aspects and commercial aspects. At present, there is no formal system for assessing the EHS/OHS performance at individual employee, department or division level.



As part of EHS reporting, and as set forth in the ESAP, the Company will develop procedures for monitoring and reporting on key indicators, such as fire and occupational safety related incidents, water and energy conservation, solid waste management, reporting and compliance. These Key Performance Indicators will then be made part of employee and/or suppliers performance evaluation. The summary reports coming out of this exercise shall a
lso be submitted to management representative on regular basis.



- Stakeholder Engagement:



Due to the nature of the Company operations, the key stakeholders are suppliers across various categories of commodities and these include local community - farmers and fisherman. Being a retail business and as the Company is sourcing some products from auction mechanism, the engagement with these stakeholders is limited.



- Managing Supply Chain:



The Company has a supplier registration process, which ensures that it engages only with registered suppliers. As set forth in the ESAP, the Company will develop and implement a Supplier’s Code of Conduct. These will be added as contracts are renewed. The Company will also develop and implement supplier review checklist to ensure that the suppliers do not pose any labor issues such as child and forced labor.

The Company has 5072 employees of whom 80% are below the age of 25. 70% of the staff in retail stores is sourced from the regional province itself. The human resources (HR) function is centralized at the holding company (CCPLC) level. Further down, the respective managers who handle employee relations on a day to day basis have been trained on HR functions.



- Human Resource (HR) Policy, Management:



The Company’s corporate HR department oversees HR management across all its businesses and facilities. The Company’s administrative procedures and policy manual is available to all employees.



For the retail business, the store manager is responsible for managing the sales staff in each store. The store manager is also responsible for ensuring the compliance with applicable labor laws for these employees.



- Workers’ Organizations:



Management has no restrictions on unions, and unions exist in other group companies. However the retail business does not have any employee union.



-Non-discrimination and Equal Opportunity



The Company does not have explicit policies against discrimination, though IFC’s review found no evidence of such practices in the Company’s diverse workforce. As set forth in the ESAP, the Company will develop and implement explicit policies on equal opportunity and non discrimination.



-Employee Grievance Mechanism



The human resources team makes regular visits to each retail outlet and has direct interactions with employees to understand any concerns or grievances. Further down, the respective managers who handle employee relations on a day to day basis have been trained on HR functions. Currently, employees can raise grievances verbally or through written complaint to their direct supervisors (Supermarket Managers) and through quarterly employee dialogue by the corporate team.



- Child and Forced Labor:



Child or forced labor is not employed in any manner in Company’s direct operations. There was no evidence of child or forced labor during the visits to various facilities. Further, as set forth in the ESAP, to ensure that no child labor is employed by any of its contractors and suppliers, relevant clauses will be issued in these contracts as well as in the Supplier’s Code of Conduct.



- Training and Human Resources Development:



Training programs are developed and delivered by the corporate HR team throughout the year. All the new employees undergo a week long company orientation which is organized every month. The Company shall also include OHS and fire safety training module into its annual training calendar.



- Occupational Health and Safety:



The retail stores present limited occupational health and safety risks for the employees. Loading/unloading of some heavy material may result in limited ergonomic impacts on the workers.



Processing centres and distribution units pose additional OHS risks including physical hazards such as slip/trip/falls, electrical shocks, cuts and wounds; and chemi
cal and biological hazards on account of material handling such as meat products, fruits and vegetables. Adequate personal protective equipment (PPE) such as shoes and gloves are provided to the workers as needed, especially in the collection and distribution centers. Incident reporting system has been put in place which requires detailed accident reporting within 24 hours.



- Construction Safety:



Some of the new retail stores will require construction, whereas most will be leased / rented in existing buildings. The Company site supervisors under the project development team undertake periodic onsite meetings and random checks to ensure construction quality.



The Company will, as a standard requirement, require each contractor to manage onsite health and safety aspects as well as in accordance with the EHS guidelines. For this the key requirements of the guidelines will be included in the contract documents. The current system of onsite supervision will be enhanced to include checking contractors’ performance on safety aspects and taking necessary actions.

IFC assessed the Company’s operations with regard to resources consumption and waste minimization and management practices and additional measures that need to be put in place.



- Resource Efficiency and Greenhouse Gas Emissions:



The Company uses electricity in its retail and fish and vegetable processing operations, while these processing operations are also large users of water. In addition, the Company makes significant use of refrigeration, and refrigerant loss forms part of its greenhouse gas (GHG) emissions footprint. The Company shall develop energy and water management systems throughout its operations, with the intent to use these to direct energy and water savings measures, which will range from no or low cost management actions to cost-effective capital investment (to be determined). The energy management systems shall start with consumption measurement by unit operations (e.g. a store, or a major consumer at a processing operation), calculation of benchmarks (e.g. kWh/m2 of store space, water consumption per unit fish processed), comparison of similar operations and evaluation of consumption trends. When the measurement system is in place, resource efficiency audits shall be undertaken at locations indicated by measurement to be likely to have savings opportunities with the audit program progressively extended throughout the estate.



New store design shall seek to incorporate resource efficiency measures during project design as shown to be effective in retrofit.



Electricity is the key resource for Company’s operations, which has an impact on its operating costs and is sourced from the national grid. Most stores have small capacity diesel generators as backup source.



The GHG footprint of the Company has been estimated to be around 22,400 tonnes CO2 equivalent per annum (tpa CO2 eq) from direct and indirect emissions sources and is expected to increase to 23,400 .tpa CO2 eq from direct emissions at the conclusion of the expansion program in 2018.



- Emissions and Waste Management:



Wastewater from stores and VPU is discharged into the municipal sewerage system, and is further treated in the municipal treatment system.



Liquid waste arising from the FPU is stored in underground collection tanks and then collected by the municipality for disposal.



Solid waste from the Company operations (primarily domestic waste, perishable items and packaging materials) is disposed through municipal waste management services. Company will look into ways of reducing, recycling and reusing the waste to the extent possible.



Air emissions are primarily from backup diesel generators. These will be monitored and managed in accordance with environmental permit conditions.



Pesticides:



The Company will not promote any chemicals which are banned either internationally or under the national legislation. If the company undertakes to provide seeds and agrichemicals to its farming suppliers, the company will impart training on sa
fe handling of agrochemicals as part of the package.

IFC’s assessment considered the Company’s operations with regard to the impacts of the construction and operations of facilities, noise and other nuisance factors, Life and Fire Safety and potential EHS risks arising from logistic operations by third party. The Company uses contract employees sourced through employment service agencies.



- Impacts on Communities:



Development of new retail stores and facilities will entail new construction. However, there will be no significant impacts on the nearby communities. Similarly, traffic related impacts are also expected to be limited.



Other impacts due to construction of new stores will be related to noise and dust. However, these will be temporary in nature and will be limited to the project site and will be managed by observing good construction safety practices as outlined in the WBG EHS General Guidelines.



- Life and Fire Safety of Public Access Buildings:



In order to ensure minimum common fire safety design standards across all its existing stores and facilities consistent with national legal requirements, all local building codes and fire department regulations, one internationally accepted fire safety standard and the WBG EHS General Guidelines, as set forth in the ESAP, the Company will commission a fire safety professional to undertake an independent review of fire safety systems for a sample of its existing stores, collection/ distribution centers and processing units. Based on this review, the professional will recommend enhancements, if any, which are necessary to meet the standards. Recommendations, if any, will be implemented according to a timetable agreed with IFC.



For each new store and any other facility, the Company will develop a Life and Fire Safety (L&FS) Master Plan identifying major fire risks, applicable codes, standards and regulations, and mitigation measures that is compliant with all local fire safety standards and an internationally-accepted life fire safety code. The Master Plan will be prepared by a suitably qualified professional, and will adequately cover - fire prevention, means of egress, detection and alarm systems, fire suppression and control, emergency response plan, and operation and maintenance. IFC will review the first three LFS Master Plans of the Company. The professional will represent to IFC that each Master Plan is compliant with the standards described. Following construction, each new facility will be inspected by a fire safety professional who will confirm that the building is designed and constructed in full compliance with the LFS master plan, or alternatively will identify corrective measures to comply with the plan.



- On-site Emergency Response Plan:



The Company has clear policy and guidelines on security of personnel and property, which covers business risk aspects such opening and closing procedures for the stores, key handling, fire emergency, riot and civil commotion, tsunami and other natural disasters and external th
efts.



As an outcome of systematic life and fire safety risk review above, as set forth in the ESAP, the Company will develop and implement an Emergency Management Plan, for its retail operations and related facilities too. This will represent the procedures from the administrative manual and be made easily accessible at each store in form of an emergency handbook.

The key aspect of PS-6 is related to the prospective agribusiness plan of the Company as well as its supply chain with farmers and fisherman. The Company will ensure that any planned seed promotion will be done in a manner which ensures that invasive alien species or new pests are not introduced. For this, the Company will discuss the business plan with the National Plant Quarantine Service (Department of Agriculture) or any other relevant government authority to ensure that the Company is not introducing any alien species.



In addition, the Company procures its fish stock from open auction markets, and/or directly from the fishermen. The Company does not procure any banned species. This supply arrangement means that the Company does not have influence over the actions of the fishermen. However, the Company will coordinate pro-actively with Sri Lanka’s fisheries authorities on efforts to reduce harvesting pressures on certain species and review any role it can play as a stakeholder. The Company will not source any fish species whose conservation status is of concern.



At national level, Sri Lanka has become a party to the United Nations Convention on the Law of the Sea, the UN Fish Stocks Agreement and the FAO Port State Measures Agreement. The country has also become a member of Indian Ocean Tuna Commission (IOTC). Sri Lanka has also developed a National Plan of Action to Prevent, Deter and Eliminate Illegal Unreported and Unregulated Fishing (SLNPOA-IUU) following the FAO guidelines.

Under its agribusiness procurement vertical, the Company also provides extension services to the farmers to help increase their productivity, thereby ensuring access to quality raw materials. Some of the activities include training farmers on best practices in agriculture, providing inputs, transport and infrastructure for farmers and cooperatives, establishing fair and transparent pricing policies and increasing access to markets.

The Company has also initiated farmer community development funds which reward the village for vegetables purchased from the farmers. This fund is used to provide scholarships for needy children from the community, to provide resources for learning and advancement, to meet basic community needs such as utility connections.

For addressing community grievances, the Company will utilize the network of its collection centers to record, and address grievances related to any activity undertaken by the Company. For this a grievance recording mechanism will be developed and implemented and a quarterly review of grievances will be done at the corporate level.

Imtiaz Abdul Wahid
Managing Director,
Cargills (Ceylon) PLC
No. 40 York Street, Colombo 01.
Tel: +94 112 005101
Fax: +94 112 338704

Broad Community Support is not applicable for this project

Cargills Retail(33477) Supervision Disclosure Snapshot – Version 3
Description	Anticipated Completion Date	Status	Comments	Completion Date
The Company shall establish an overarching E&S policy on environmental and social parameters with clear articulation about compliance to applicable E&S laws of the country and IFC Performance Standards.	31-Dec-2013	Completed	Completed	3/7/2014
The Company shall also develop a management system and procedures for prior E&S risk screening of any new business acquisition or new business activity.	16-Oct-2018	In progress	Due date revised as agreed with IFC Client
For existing operations, the company shall expand upon its OHS management system to develop an environmental social and safety management system capable of certification to ISO14001 and OHSAS 18001. The management system shall require compliance with Performance Standards	31-Dec-2014	Completed	Completed	6/30/2017
Commission a Social and EHS review of agribusiness strategy for handling and distribution of agrichemicals and high yield variety of seeds.	31-Mar-2015	Postponed	Changed project circumstances mandated a delay of this task
Develop Standard Operating Procedures (SOPs) for monitoring and reporting on E&S KPIs for entire Company	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
Designate a senior officer as management representative for E&S at Corporate level with clear roles and responsibilities	30-Sep-2014	Completed	Completed	10/31/2014
Revise contract documents for new stores/facilities construction, and ultimately all suppliers to require the suppliers’ compliance with IFC requirements on avoidance of forced or child labor and occupational health and safety (for suppliers).	01-Oct-2014	In progress	Under discussion with IFC Client
Commission a fire safety review of sample of facilities including the large medium and small stores, and collection and distribution centers. Based on the review, agree a time-bound Action Plan with IFC	30-Sep-2014	Completed	Completed	6/30/2017
If shown necessary by Item 8, implement the Action Plan according to the agreed time line	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
For new stores/facilities, the Company will develop Life and Fire Safety Master Plan and submit first three master plans to IFC for review.	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
Develop an onsite emergency response plan for operating and proposed facilities on basis of fire safety review and existing procedures in the current administrative procedures.	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
Enhance the training calendar to include trainings on key E&S aspects such as fire and OHS safety, new KPIs, onsite emergency response plan, waste minimization, energy efficiency and agribusiness strategy review etc.	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
Develop and implement a supplier Code of Conduct, which will also have a review checklist to ensure its suppliers do not engage any child and forced labor in its operations.	30-Jun-2019	In progress	Due date revised as agreed with IFC Client
Undertake targeted resource efficiency audits throughout the estate, prioritized by the resource efficiency management KPIs developed as part of Item 5 above.	30-Jun-2019	In progress	Due date revised as agreed with IFC Client