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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The proposed investment is expected to have limited environmental and social impacts which will be project site-specific with none anticipated to be significant. Further, the impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy.

Key environmental and social issues applicable for this investment are: (i) environment, health and safety (EHS) organizational structure and internal capacity to manage environmental and social issues in accordance with national legislative requirements and the Performance Standards; (ii) labor and working conditions during construction and operations including that related to occupational health and safety (OHS); (iii) management of sewage; and (iv) supply chain issues related to palm oil.

The soap pressing and packaging plant will be constructed in a designated industrial area without proximity to any communities. In addition to this, finished soap will mostly be collected from the plant warehouse by individual retailers. Thus PS4 does not apply. PS 5: Land Acquisition and Involuntary Resettlement does not apply to the investment as the designated 1.5 ha site has not triggered involuntary resettlement and/or economic displacement and has been leased from the Government for 80 years. PS6: Biodiversity Conservation and Sustainable Natural Resources Management does not apply because no conversion of natural/critical habitats will take place. There is no presence of Indigenous People, PS7, and no Cultural Heritage, PS8, issues have been identified.

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: MM’s approach to sustainability is set out in its Sustainability Strategy which is based upon the eight Principles and Criteria developed by the Roundtable on Sustainable Palm Oil (RSPO). These Principles and Criteria include themes on environmental responsibility and conservation of natural resources and biodiversity, compliance with applicable laws and regulations, responsible consideration of employees etc. The Sustainability Strategy is supported by a series of standard operating procedures (SOPs) which set out minimum EHS requirements across all MM operations.



Identification of Risks and Impacts: An environmental impact assessment (EIA) in accordance with the Ethiopian regulatory requirements has not been undertaken for the proposed soap pressing and packaging plant. While the project is not expected to generate any significant impacts, as stipulated in the ESAP, MM will engage a suitably qualified consultant, acceptable to IFC, to undertake an EIA prior to construction. The EIA should identify and tabulate potential risks and impacts associated with the project, and for each impact, develop a series of mitigation and/or recommendations to avoid, reduce and compensate for the impacts. This will be captured in an Environmental Management Plan (EMP) which will cover all phases of the project. Potential risks and impacts to be expected from the implementation and operation of the project include noise and dust emissions during construction, labor and working conditions during construction and operations including that related to OHS, waste management particularly related to sewage treatment.



Management Programs: MM will implement mitigation measures identified during the EIA to be undertaken for the project to ensure impacts do not exceed those expected and identified within the EIA during all phases of the project. In addition to this, and as stipulated in the ESAP, the Group will design and implement an environmental, health and safety management system appropriate to the nature and scale of the soap processing and packaging plant and will include provisions for assessment and management of any expansions. The EHS management system will be based upon MM’s SOPs as far as possible, adapted to local Ethiopian environment and organization size, and will be aligned with IFC’s Performance Standards and the requirements of ISO 14 001 and OHSAS 18001.



Organizational Capacity and Competency: Consistent with MM’s operations elsewhere, a committee responsible for Safety, Health and Environmental Quality (SHEQ) will be set up for the project to enforce the protocols and standards for SHEQ. The main tasks of this committee are to identify potential EHS and quality risks and ensure availability of equipment and tools to respond/address the identified risks. In addition to this, MM will appoint a technical representative to lead the development, implementation, and maintenance of the EHS management system referred to above. The EHS managem
ent system will encompass the roles and responsibilities required to effectively implement the system and identify the need for senior management and staff training in order to fully execute the EHS, and it will include reporting to MM group level.



MM will mostly be responsible for the design of the facilities in Ethiopia. The Group has a dedicated Project Management and Engineering team to service and partner with selected technology providers. Construction of buildings, boundary wall, water reticulation etc. will be done by a local construction contractor to be identified. MM will require the contractor to provide a detailed method statement identifying all the EHS risks associated with specific works and define all measures proposed to address such issues prior to commencement of works. The contractor will be required to develop an EHS plan and retain a copy of same for inspection by MM and their representatives for the duration of the contract. The contractor’s EHS plan will be developed taking into account the construction phase EMP to be developed as part of the EIA.



Emergency preparedness and response: The safety design of the factory will be based on MM’s Fire Protection Framework, adapted to the local Ethiopian environment. MM’s Fire Protection Framework is based upon the US National Fire Protection Association (NFPA) fire protection standards. The Fire Protection Framework include the following elements: construction of plants using non-combustible material; site layout and spacing, isolating high hazard process/storage areas; isolation and containment of highly flammable goods/material; appropriate fire protection based on fire load; principles of early detection (smoke/heat detectors) and quick response and appropriate response (foam or gas for special types of fire) in high risk areas, per insurers recommendations/NFPA guidelines; rated/approved fire pumps; and adequate water storage for 2-hours firefighting, etc. MM will also comply with local standards for fire and safety. In addition the Group will establish plans and procedures to ensure that there will be appropriate and adequate response to any emergency incident. Subsequently, emergency drills to identify potential areas for improvement will be scheduled and conducted regularly. The drills will also be undertaken to ensure that all site personnel as well as relevant government organizations are conversant with the emergency preparedness and response procedures. Records of these drills will be kept.



During construction the site will be fully fenced to prevent unauthorized access by the public. Unarmed security personnel will be outsourced through private security contractors and will be provided on a 24 hour basis.



Monitoring and Review: Once developed and implemented, the effectiveness of the EHS system including procedures and programs, will be subject to continuous monitoring and review, in response to changing circumstances as well as internal practices. This wi
ll include regular internal EHS inspections performed by the appointed technical staff; regular management operational review meetings; incident and accident reporting; physical monitoring (potable water quality and quantity, noise, and waste generation); and EHS legal compliance audits performed as appropriate by various government departments. The audit reports, incorporating corrective actions, if any, will be submitted to the SHEQ committee which will be responsible for implementation of all corrective actions.



Stakeholder Engagement, External Communications and Grievance Mechanisms: The Duukam industrial area where the soap processing and packaging plant will be located is not in close proximity to any stakeholders, except other users of the industrial park.



Supply chain: The Group has received the RSPO Grower Certification on all of its six palm oil plantations with 8 palm oil mills and is waiting for RSPO approval on another. The Group has also received the RSPO Supply Chain Certification in eight companies. In addition to this, MM operates an International Sustainability and Carbon Certification (ISCC) Palm Methyl Ester (PME) plant integrated with palm oil mills. ISCC covers topics such as reduction of Green House Gas (GHG) emissions, sustainable use of land, protection of natural biospheres and social sustainability. As such, MM’s facilities are regularly audited by independent professional auditors. The RSPO and ISCC certificates are considered proxy for Performance Standard 2 and Performance Standard 6 related supply chain requirements.

Human Resources (HR) Policy and Management: As noted under the project description section above, during operations the project will have a staff compliment of about 100 employees. The majority of these employees will be local Ethiopians and will be full time employees. There are no plans to employ contract workers during operation phase. Depending on labor market conditions, should contract workers be employed, MM will apply the same HR policies for these workers.



The Project will be governed by the Group’s Human Resources Policy and Procedures. The Policy and Procedures, which form part of MM’s Sustainability Strategy, commits the Group to ensure that its pay and working conditions for workers must always meet at least legal or industry minimum standards and are sufficient to provide a decent living wage. All employees are provided with written agreements/contracts which specify the working conditions (e.g., recruitment, training, remuneration, termination, hours of work, etc.) and benefits (e.g. medical, life and disability). MM is committed to a ‘zero’ tolerance stance against any forms of discrimination. The Group does not make use of forced or trafficked labor and does not employ child labor in its operations. All workers are free to form and join trade unions, as well as to bargain collectively.



As stipulated in the ESAP, MM will develop an HR Policy and Procedure manual specific to its operations and taking into account all of the above and local labor rules and regulations. Subsequent to the development of the policy, MM will conduct training for its employees to raise awareness on the HR Policy and the grievance mechanism (its use and applicability). In addition to this, MM will include contractual provisions for contractors to comply with Performance Standard 2 in applicable contracts, particularly during the construction phase, for the Project. Thereafter, MM will develop and implement a procedure to ensure contractor labor and working conditions (inclusive of health and safety) comply with Performance Standard 2.



Occupational Health and Safety (OHS): Potential OHS risks related to the soap processing and packaging operations mainly include those related to slipping on floors and minor cuts. However, these are limited and usually minor because the plants are almost fully automated. MM has a well-established safety policy framework contained within the Sustainability Strategy. The Group strives to foster a workplace culture that is sensitive to safety. This is achieved by conducting regular training and drills, and instilling adequate use of Personal Protective Equipment (PPE) such as gloves, helmets, boots, masks and safety clothing. The plant will also be supplied with first aid kits for which training will be provided. All of MM’s factories are equipped with early warning and firefighting systems regular training is conducted. These principles will be applied at the operations in Ethiopia. MM reported a limited number of
minor injuries related to cuts based on its bigger operation in Indonesia.



MM, as far as possible within local Ethiopian practices and through contractor agreements, will ensure that comprehensive procedures for workplace OHS conditions are implemented and meet both Ethiopian requirements and MM’s standards during the construction phase. OHS aspects will be mainstreamed into the plant’s operations through employee induction and training program and assigning responsibilities as appropriate.

Resource efficiency: The Project will be connected to the national grid and will use about 450 kWh for the two unit finishing line, warehouse and office. Two emergency back-up generators will also be installed and used only in case of power outages. The soap machine (plodder) to be installed will use variable frequency drives which will consume electricity more efficiently. The drives are essentially electronic motor controllers that can adjust the frequency and voltage of power supply in line with process requirements.



Water for the Project will be sourced from a borehole to be sited within the facility. The estimated water consumption is 310 m3 per month. The water will mainly be used in the plant for service and firefighting purposes and for potable use. As stipulated in the ESAP, the project will implement a water quality monitoring program for potable water and ensure that it meets the WHO drinking water quality standards. MM will also install flow meters, as appropriate, in different areas on site to monitor water usage.



Pollution prevention: Potential pollution issues during the construction phase include waste management and use of chemicals, and nuisance impacts (e.g. noise, dust and air emissions from construction equipment) on sparse existing tenants in adjacent buildings. However, these issues are expected to be minor and will be limited to the immediate vicinity of the project area. Despite this, MM will ensure that the EHS plan, especially sections covering waste management under contractor obligations, chemicals, materials and products requiring special care are fully implemented during the construction phase.



Limited amounts of waste will be produced during the operational phase of the Project. This includes solid waste such as paper and packaging material, and liquid waste, which is mainly sewage and limited amounts of storm-water runoff. Solid waste will be collected on a regular basis by the municipal services and disposed at a designated landfill site. Given that there is no municipal sewerage system MM will identify and install an appropriate sewage treatment facility which will be operated to meet the WBG EHS Guidelines for discharge of wastewater. This requirement is stipulated in the ESAP.



Except for diesel fuel, there will be no hazardous material and/or waste that would be used and/or generated from the project implementation. The diesel fuel will be stored in a dedicated storage tank. The storage tank, which will be fitted with secondary containment, will be installed according the MM’s standard operating procedure for constructing fuel tanks.

The Duukam industrial area where the soap processing and packaging plant will be located is not in close proximity to any stakeholders, except other users of the industrial park.

Inquiries and comments about the project can be made through the contact details provided below.

Contact: Ataklti Yihdego
Address: PO box 11176 Addis Ababa, Ethiopia
Email: mailto:luxurypopular@ethionet.et
Tel: +251 - 115508902



Contact: Hadi Sofian
Address: 150 Beach Road, Gateway West, Singapore #16-01
Email: mailto:hadi@icofgroup.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Engage a suitably qualified consultant, acceptable to IFC, to undertake an Environmental Impact Assessment (EIA) for the Project in compliance with national regulations and IFC’s Performance Standards and incorporate the mitigation measures, as appropriate, into the design, implementation and operation of the soap processing and packaging plant. The EIA is to include an Environmental Management Plan for the construction phase.	12/31/2014
Design and implement an environmental, health and safety (EHS) management system appropriate to the nature and scale of the soap processing and packaging plant consistent with the Group’s Standard Operating Procedures and IFC Performance Standard 1 requirements. This should define roles and responsibilities, and other necessary elements (manual procedures) to enable the project and operations in Ethiopia to comply with applicable national laws and regulations, IFC Performance Standards and the applicable Word Bank Group EHS Guidelines. The system will include mechanisms for the EHS representative to report monthly EHS monitoring results to the Safety, Health and Environmental Quality committee which will need to sign off on the reports.	12/31/2015
Designate an individual to be responsible for the development and implementation of the EHS system defined above.	12/31/2015
Develop and submit a Human Resources Policy and Procedure manual specific to the Ethiopian Project and compliant with IFC Performance Standard 2. Subsequent to the development of the Policy: Conduct training for employees to raise awareness on the HR Policy and the grievance mechanism (its use and applicability).	12/31/2014
Include contractual provisions for contractors to comply with Performance Standard 2 in applicable contracts for the Project to the extent practicable in Ethiopia.	09/30/2014
Ensure that a comprehensive environment, health and safety plan (incorporating procedures, work instructions etc.) appropriate for the project, (including an indication of how compliance is to be ensured), is included in the final construction contract. Develop and implement a procedure to ensure contractor labor and working conditions (inclusive of health and safety) comply with Performance Standard 2. This procedure is to identify roles and responsibilities for monitoring contractor performance.	09/30/2014
Implement a water quality monitoring program for the project and ensure that potable water meets the nationally legislated drinking water standards and WHO Guidelines for Drinking Water Quality.	12/31/2015
Commission a suitably qualified engineering consultancy firm to identify, design and construct an appropriate sewage treatment facility that will comply with the requirements of the WBG EHS Guidelines for discharge of wastewater.	12/31/2014