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

The Project will be developed within long-established agriculture and processing sites, as such, there will be no conversion of natural/critical habitats leading to biodiversity loss; land used for the project is current agricultural and/or industrial land with no presence of indigenous people or prior cultural asset history. Therefore, PS5, PS6, PS7 and PS8 are not applicable to this project. Screening, early identification, assessment and mitigation/ prevention of potential impacts and risks associated with further expansion of agricultural and industrial activities planning in the framework of this Project are implemented by Mriya through established and enforced environmental, occupational health and safety and social management system (ESMS). Corrective measures required of the client are addressed in the attached Environmental and Social Action Plan (ESAP).

This is a category B project according to IFC’s Environmental and Social Sustainability Policy because the Project will generate limited and site-specific E&S impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The Project is designed to manage and reduce social and environmental risks and impacts in the Companies’ operations in compliance with IFC Performance Standards, national regulations, and WBG General Environmental Health and Safety (EHS) Guidelines and EHS Guidelines for Annual Crop Production and Sugar Manufacturing.

The key environmental and social issues related to this proposed project related to the agricultural operations and processing activities are the following: (i) the upgrade and implementation of a corporate environmental, OHS, and social management system in compliance with PS1, (ii) labour and working conditions, including occupational health and safety considerations, (iii) pollution prevention due to effluent management and pesticide use, and (iv) potentially affected community grievance mechanisms.

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 Company has adopted a corporate policy which describes its approach and framework to environmental, occupational health and safety (OHS), and social issues and management process. The policy specifies that Mriya complies with the applicable laws and regulations of Ukraine and is consistent with IFC Performance Standards. The approach is based on continuous improvement of E&S performance and application of internationally recognized voluntary standards (ISO 14001, OHSAS 18001).



As set forth in the ESAP, the OHS policy statement will be enhanced to be consistent with IFC Performance Standard 1. Mriya shall revise and strengthen the Company’s Occupational Health and Safety (OHS) policy that will guide the scope, content and focus of the OHS management program, and indicate who will ensure conformance with the policy and procedures, and be responsible for its effective implementation and monitoring/reporting. Additionally, Mriya will provide evidence to IFC that the OHS policy has been communicated to all levels of the organization; modify the OHS Policy Statement to include Corporate commitment to placing the management of OHS as a prime responsibility with line managers, from the most senior executive down to first-line supervisors; and, commit to ensuring that the OHS policy is understood, implemented and maintained at all levels in the organization.



Environmental and Social Assessment, Identification of Risks and Impacts



Ukrainian legislation requires all greenfield projects and new developments to carry out an environmental impact assessment (EIA) study and evaluate potential negative impacts on environmental and social conditions. Depending on the significance of the impact (e.g. scale, intensity and duration), a company has to develop and implement an Environmental and Social Management Plan (ESMP) which outline mitigation measures to avoid, mitigate or compensate identified adverse impacts. Relevant Ukrainian authorities review the project documentation, including EIA for compliance with national laws and regulations and issue construction and ultimately operating permits.



Mriya is planning the construction of new and already has commenced initial consultations with IFC and EBRD and preparatory studies for comprehensive EIA consistent with Ukrainian regulations and IFC PS1. ESMP’s implementation progress will be shared with IFC in the context of the Annual Monitoring Report.



To mitigate and avoid potential impacts on natural resources, including natural habitats, water resources, soils and nearest settlements, Mriya developed and implemented an internal E&S screening of new potential sites for early identification of E&S risks and impacts and to establish an E&S baseline for assessing the effectiveness of the proposed ESMP’s mitigation measures, if needed, and to continuously monitor E&S conditions.



Mriya has in place procedures for regular identification of impacts and risks developed in the framework o
f its existing E&S management system which is aligned with ISO 14001, OHSAS 18001 and PS1.



Management Program and Organizational Capacity



Management programs based on the above mentioned corporate EHS policy commitments are developed annually. Environmental and social risks and impacts arising from the ongoing operations are managed by Mriya’s EHS team, together with the engineering teams. This organizational structure is sufficient to identify and address adequately E&S impacts and risks; E&S responsibilities are defined and delegated throughout relevant functional levels, including environmental, occupational health and safety and operational personnel; and it includes senior level staff overseeing environmental matters, OHS management, community liaison and public relations management, and management of human resources. Operational supervisors are in place at the different clusters. In addition, working groups on energy efficiency, waste minimization, and water savings have been established. Food safety and product quality is supported by quality laboratories. The Company has routine internal auditing of E&S issues based on established procedures.



The Company has obtained certification for ISO 22000 (food quality) for its sugar plants. Mriya does not carry out regular third-party environmental audits and such audits are not required by national law. Mriya has an operating environmental and social management system (ESMS) at the corporate level. The system and procedures apply to all Mriya operations, to manage environmental and social performance, including design, construction, operation and decommissioning. As described in the ESAP, Mirya will undertake a self-assessment of its ESMS using the IFC ESMS tool to evaluate the degree of compliance with the required elements of IFC Performance Standard 1 (PS1). If there are any gaps, Mriya will provide to IFC a corrective action plan and timeline to reach full compliance. In addition, as set forth in the ESAP, to demonstrate compliance with this task, the Company will provide to IFC the following documents, namely the Procedures Manual including operating procedures for (i) identification of E&S risks and impacts; (ii) management programs; (iii) organizational capacity and competency; (iv) emergency preparedness and response; (v) stakeholder engagement; and (vi) monitoring and review. When the task is completed, Mriya shall provide a letter to IFC from Mriya senior management confirming that the ESMS is in compliance with PS1 requirements.



Training



The Company has a routine training program to ensure skills needed for their specific work responsibilities, which includes EHS issues on labor protection issues of workers involved in hazardous work environments, build in-house capacity for crop management, agrochemical use, use of Personal Protective Equipment, E&S information; emergency conditions-fire safety, legal regulatory framework for EHS, agrochemical management, waste manage
ment of all sources, water management, general EHS training for top management, and others. Mriya has established and operates for years an agribusiness school, which serves as an effective tool to develop students and new employees into qualified professionals.



Monitoring and Review



Mriya has established comprehensive systems for monitoring and reporting E&S impacts of its operations to higher management staff. This is defined in its management system, and content of these reports include accident and lost time due to accidents, water and energy savings, and waste discharges. Parameters such as energy use and water use, lost time due to accidents, and discharges are monitored and quarterly/annually reports are provided. In addition, the Company will enhance its process for periodic monitoring and reporting to senior management of activities that have been identified to have potentially significant E&S risks and impacts during its normal operations and upset conditions, as set out in the ESAP. This will ensure continuing EHS performance review and realignment of Mirya’s sustainability priorities through adoption of Key Performance Indicators (KPIs) to mainstream Environmental, Occupational Health and Safety and social parameters, including a) Safety – Lost Time Incidence Frequency Rate (LTIFR - Number of injuries per million of hours worked); Accident Free Days ( Number of Days since last Lost Time Incident); b) Sustainability – Carbon (kg/ton - CO2 emitted / tons produced); Water Usage (M3/ton processed) and Efficiency; Energy Usage (kWh/ton processed) - Energy consumed/produced; Wastewater monitoring effluents and air emissions parameters; c) E&S Staff retention and number of training days provided to new and existing employees.



Stakeholder Engagement and Emergency Preparedness



Mriya provides employment to populations from neighboring communities in all its 14 clusters. Communities are not immediate neighbors, and are usually located some 2 km away from the Company operations. Mriya has developed and implemented a formal community grievance mechanism to receive and respond to community concerns. The Company has appointed a Community Liaison and Public Relations manager that oversees all engagement with local authorities, manages the external communications and issues that may arise from Mriya operations and their neighbors. Directors appointed to each of the clusters work in addressing community concerns. Some impacts for example are related to transport (traffic of heavy vehicles and machinery). To address this issue, Mriya has established speed regulations to contracted truck services to avoid noise, dust, and accidents.

Human Resources Policy



Mriya has adopted a Code of Conduct and Human Resources Policy that has a number of management procedures available for administrative and human resources affairs, consistent with national regulatory requirements in Ukraine. The key element of labor and human resources (HR) policy is appointment and retention of competent personnel and its continuous development. Mriya is an equal opportunity employer. No identity documents of workers are ever deposited with the Company during employment for any reason. Mriya communicates the Code of Conduct and Corporate Human Resources Policy to all workers at the time of recruitment. The policy outlines rights and responsibilities of the workforce and the Company. This policy observes ILO Conventions 138 on Minimum Age and 182 on Worst Forms of Child Labour, and includes freedom of association, and employee grievance mechanism, all in line with PS2 requirements.



Non- Discrimination



Discrimination in employment based on gender, race, age, ethnic and religious association, or nationality principles is prohibited by the HR policy; and this is important in Western Ukraine where there are multiple religious affiliations.



Working Conditions and Terms of Employment



Mriya has 5,591 employees as of December 2012. Some of these (2100) are temporary workers employed on a seasonal basis depending on availability of produce. Seasonal personnel are usually involved from April until October-November. Written contracts provided to permanent staff set up terms of employment consistent with national labour laws, including hours of work, wages and benefits, leave for illness, maternity, vacation or holiday, etc. The Company believes that motivated and skilled staff is a key element in its success and that competitive remuneration and potential for professional development is an important aspect of employee retention, shown by the very low staff turnover, which stood at 3 per cent in 2012. At the same time, Mriya has a relatively young profile and the average age of employee in the Company is 39 years.



Workers Associations



Freedom of association is guaranteed at all Mriya operations following Ukraine’s national law.



Retrenchment



No retrenchment is expected given the rate at which operations are increasing at Mriya.



Grievance mechanism



Human resources procedures include an employee grievance mechanism that allows for workers to express their concerns and also to provide suggestions for improvement with line management staff or directly to the Human Resources supervisors. The Grievance mechanism can receive individual or collective concerns and allows for anonymous grievances.



Occupational Health and Safety



Due to the wide geographical distribution of Mriya operations, OHS management was recently decentralized to accommodate the agricultural operations clusters. The due diligence review found that OHS aspects are managed at different levels throughout Mriyas’s opera
tions, and has room for improvement. Field visits to Khoroskiv, and in particular at the sugar operation indicated significant deficiencies in OHS management, life and fire safety, occupational safety of the workforce during operations, and in the use of personal protection equipment (PPE) by the employees. As set forth in the ESAP, Mriya will conduct an independent third party OHS Audit at the Khoroskiv and other sugar facilities based on OHSAS 18001 and the WBG EHS General and Sector-Specific (Sugar Manufacturing) Guidelines, identifying fire prevention and control needs, housekeeping, physical hazards at workstations, use of PPE, investigate costs to the Company for liability insurance and compensation payouts, lost time accidents; fatalities and other preventable accidents, including fires, materials spills, transport, project potential reductions in insurance premiums, etc. This audit will propose a Corrective Action Plan (CAP) that the Company will share with IFC for review and approval, including technical and financial requirements for its implementation and with allocated responsibilities that defines required tasks, actions and procedures needed to close all observed gaps. The CAP will include a schedule for addressing deficiencies, improved working procedures, meeting life and fire safety requirements as outlined in the WBG EHS General Guidelines, and provide training to all current and new employees on OHS. The Company will further update and fully implement OHS Management System Procedures based on OHSAS 18001 and the WBG EHS General Guidelines, and will inform IFC annually in the AMR of OHS statistics and progress in its direct operations using the OHS audit as a baseline.

Resource Efficiency



Ukrainian laws and regulations dealing with environmental protection are currently subject to frequent amendments and are becoming more stringent. The Company pays attention to resource efficiency, through continuous improvement of their processes, and selection of equipment and fuels. For example, during 2013, increasing number of energy efficient equipment for sugar beet processing has being installed at the Khoroskiv sugar facility, following IFC’s resource efficiency audit. The seed plant built during 2011-2012 is equipped with machinery that delivers efficient and controlled technology processes, while focusing on increasing quality and energy efficiency and improved cost effectiveness. The Company is also active in water conservation at operational level. Water consumption at the Khoroskiv sugar plant stands at 1.64 m3/t of beet during 2012, which is still above the WBG EHS Industry Guideline for sugar manufacturing benchmark for water consumption of 0.5 m3/ton of beet processed.



During 2012, sugar plants (responsible approximately for 90 % of total energy consumption at Mriya) consumed 50 million m3 of gas, or about 450,000 MWh of energy. Mriya completed an independent energy, water efficiency and cleaner production audit of two selected sugar plants, with support of IFC’s Advisory Services. Upon implementation of the agreed actions, Mriya targeted an improvement from 16% to 30% savings through measures related to automation of the boiler equipment and water supply systems, as well as the upgrade of production processes.



Greenhouse Gases and Emissions to Air



Mriya has implemented a GHG Emission Program that provides an integrated approach of energy and heat consumption efficiency for reduced emissions. Mriya continues its commitment towards the reduction of fuel consumption. For example, new wide-agricultural machinery has been acquired, which in one pass across the field performs several tasks, such as soil preparation, sowing crops, etc. All machinery is equipped with a GPS system and fuel flow rate control sensors meters that decreases the level of engine emissions. Nutrient and manure management is aimed to improve nitrogen-use efficiency, reducing volatilization, leaching, and offsite N2O emissions.



Mriya is currently in material compliance with applicable national environmental laws and regulations governing air emissions and the use, storage, treatment and disposal of hazardous materials. Emissions from silos are limited to organic dust released from grain refiners and dryers and captured in cyclones. Monitoring of point source air emissions and its compliance with national limits are undertaken by supervisory authorities on a regular basis.



Effluent Treatment

The wastewater discharge at the Khoroskiv and Zbarazh sugar plants is in compliance with WBG General EHS Guidelines. Mriya has recognized the need for further improvement of sugar plant’s wastewater treatment systems and is committe
d to mobilize its in-house expertise in improved wastewater treatment activities at all sugar facilities. As set forth in the ESAP, the sugar plants at Borschiv, Buchach, Lanivtsi and Kosova require improvement of their effluent management and quality, and Mriya will provide to IFC an action plan to reach compliance with WBG General EHS Guidelines.



Waste Management



Waste minimization and control is one of the key corporate objectives of Mirya’s environmental activities. The Company is continuously updating a comprehensive waste management system. Ongoing process includes the development of the Waste Management Program that covers inventories of all waste sources and types; collection methods; appropriate disposal; management responsibilities and proper staff training, including disposal of empty pesticide containers in a manner consistent with IFC’s EHS Guidelines and the FAO’s International Code of Conduct on the Distribution and Use of Pesticides. Beet pulp waste at Mirya from the sugar plants (about 450,000 tons of beet pulp per season) is traditionally used as animal feed. Due the decline of livestock production in the areas where Mriya’s operations clusters are located, during 2013 the Company is exploring alternatives for disposal of the waste.



Pesticide and Fertilizer Management



The Pesticide and Fertilizer Application Management at Mriya is based on the provisions of the FAO’s International Code of Conduct on the Distribution and Use of Pesticides, the WHO’s recommended Classification of Pesticides by Hazard, WBG’s EHS Guidelines for Annual Crop Production; the EU Integrated Pollution Prevention and Control, reference Document on Best Available Techniques in the Food, Drink and Milk Industries. Mriya adopted and enforces a corporate pesticide and fertilizer application management plan. The Plan covers pesticide and fertilizer selection and handling, application and storage, staff training, safety requirements, and disposal of empty containers. Further, Mriya does not apply the pesticides that fall in class 1a/1b under the World Health Organization Recommended Classification of Pesticides by Hazard Classes and avoids the use class 2 chemical formulations. Where applicable, Mriya favors integrated pest and disease management approaches. The Company will continue to promote internally the use of adequate PPE based upon MSDS and/or ICSCs for the chemical materials used. Mriya will continue monitoring the cholinesterase levels in workers applying pesticides and report annually in the AMR.

Company production operations do not have significant adverse impacts on communities in its direct area of influence. Nevertheless, there are a number of existing households located near Mriya operations in rural areas, with whom the Company has been interacting over time. Should an emergency occurs, response actions are coordinated with appropriate authorities and communities by resident directors allocated at each land cluster. Risks associated with crop production are mainly associated to pesticide spraying, and the transit of trucks and machinery.



Community Grievance Mechanism



As indicated under PS1, communities are not in the near vicinity of Mriya, and any concerns from the communities are being addressed by the Community Liaison and Public Relations office and by resident Directors allocated at each land cluster, on a per case basis. Yet, Mriya has developed and implemented a formal grievance mechanism to receive and respond to community concerns to enhance communications. As set forth in the ESAP, Mriya will formalize its Community Grievance Mechanism to achieve consistency with PS4. The external communication of the grievance mechanism shall indicate how individuals may register grievances publicly or anonymously with Mriya.



Emergency Preparedness and Response



Prevention of potential risks to community health and safety associated with crop/grain quality is provided by strict enforcement of proper handling, processing and storage of crops at silos. Crop quality is analyzed at different phases of grain processing and storage including protein, fiber, moisture, and before transportation for sale by the on-site laboratory and state specialized analytical centres. For instance, each lot before transportation to customers is analyzed for radionuclides (Cs-137, Sr-90), heavy metals (Cu, Pb, Cd, Hg), pesticide residue levels, mycotoxin, genetically-modified organisms, etc. Mriya has well established procedures for control of safety procedures for food safety. Procedures are based on the ISO 22000 framework mentioned under PS1. The due diligence reviewed the results and found that the procedures were implemented effectively. Communities are not immediate neighbors, and are usually located some 2 km away from the Company operations. Therefore, risk of life and fire safety is expected to be minimal.



Security Personnel



The security personnel at Mriya is not armed and no incidents with workers or the community have been reported.

PS6 does not apply in the context that there is not disturbance to natural habitats by Mirya operations. However, Mriya Group is focused on large-scale cultivation of wheat, rapeseed, corn, sugar beet, potatoes and, to a lesser extent, barley, buckwheat, and soybeans and engaged in the primary production of living natural resources, including agriculture and is committed implement sustainable management practices. As defined in PS6, there is a need for Mriya to certify its agricultural activities against a recognized standard for sustainable management of their field activities. Thus, as set forth in the ESAP, within an agreed time-frame Mriya will certify their field operations against the Global Gap Standard and/or equivalent credible standards (e.g. Bonsucro).

Mriya intends to continue to maintain strong relationships with local communities by sponsoring schools and other services within its area of operations. Management believes that the Company’s unique local support program benefits not only the community but also Mriya.

The Company’s social programs are driven by a manager designated for community engagement and communications, his activity is supported by resident directors located at each operational cluster. Mriya maintains and expands its social projects through support and finance contributions to economic vulnerable groups, children, and veterans to address immediate social and economic problems and improve the infrastructure within rural districts where Mriya operates.

For more information about the project and local access of documentation, please contact: Mriya - HQ68-a Nezalezhnosti StreetVasilkivsty, Gusyatin DistrictTernopil Region, Ukraine, 48257Tel/Fax: +380-3557-27076http://www.mriya.netMriya
19-21(a) Bogdana Khmelnytskogo StreetKyiv, Ukraine 01030Tel/Fax: +38- 044-220-1370

Broad Community Support is not applicable for this project

#	Task Title/Description	Anticipated Completion Date
	PS1 - Assessment and Management of Environmental and Social Risks and Impacts
1	Undertake a self-assessment of Mriya E&S management system (ESMS) using the IFC ESMS tool to evaluate the degree of compliance with IFC Performance Standard 1 and provide to IFC an action plan and timeline to reach compliance	30-Jun-14
2	Enhance existing ESMS based on outcomes of self-assessment using IFC ESMS tool and revise the ESMS Manual to include all operating procedures required to fully achieve and implement the following elements:(i) identification of E&S risks and impacts; (ii) management programs; (iii) organizational capacity and competency; (iv) emergency preparedness and response; (v) stakeholder engagement; and (vi) monitoring and review. When the task is completed, Mriya will provide the revised Manual and a letter to IFC from Mriya senior management confirming that the ESMS is in compliance with PS1 requirements.	30-Nov-14
3	Strengthen Occupational Health and Safety (OHS) policy and management system. Through the ESMS enhancement described under task 1, Mriya shall revise and strengthen the Company’s OHS policy statement that will guide the scope, content and focus of the OHS management system, procedures and annual program. The policy may be a component of the existing corporate E&S Policy. The OHS Policy shall be in agreement with PS1/2 and include Mriya commitment to: providing adequate resources for effective implementation; establish OHS as a prime responsibility for line managers (most senior executive to first-line supervisors); guarantee that the OHS policy is understood, implemented and maintained at all levels in the organization; allocate the management position in Mriya’s organizational structure that will ensure conformance with the policy and be responsible for its implementation, monitoring and reporting to senior management	30-Jan-14
4	Demonstrate that active senior management reporting and monitoring of E&S programs, issues and activities is fully institutionalized. Mriya will review and expand its existing Key Performance Indicators (KPIs) to mainstream Environmental, Health and Safety parameters, including a) Safety – Lost Time Incidence Frequency Rate (LTIFR - Number of injuries per million of hours worked); Accident Free Days ( Number of Days since last Lost Time Incident); b) Sustainability – Carbon (kg/ton - CO2 emitted / tons produced); Water Usage (kiloliters/ton) and Efficiency - Consumed versus tons produced; Energy Usage (kWh/ton) - Energy consumed/tons produced; Wastewater monitoring effluents and air emissions parameters (including VOC); c) Staff - Retention - Number of full time equivalents leaving in the period /Avg. full time equivalents - and Training days - Number of training days provided to new and existing employees. The format of the report will be provided to IFC. Monthly and annual report will be reviewed by Mriya senior management monthly during EHS Review and annually during the Company’s planning and budgetary management review	30-Oct-14
	PS2 - Labor and Working Conditions
5	Update and fully implement OHS management system procedures at the affiliated sugar plants, worked during the season. Present a signed contract for professional services to perform the third party OHS Audit consistent with OHSAS 18001 and PS related OHS requirements as basis for the Audit - investigate costs to the company for liability insurance and compensation payouts, lost time accidents; fatalities and other preventable accidents including fires, materials spills, transport, project potential reductions in insurance premiums, etc.	30-Jun-14
6	Prepare and submit to IFC an OHS Corrective Action Plan including technical and financial requirements for its implementation and with allocated responsibilities that defines required tasks, actions and procedures needed to close all observed gaps based on OHSAS 18001 and PS related OHS requirements. The Corrective Action Plan will include a schedule for addressing deficiencies, improved working procedures, meet life and fire safety requirements outlined in the WBG EHS General Guidelines, and provide training to all current and new employees on OHS to reduce the risk of injuries	30-Sep-15
	PS3 - Resource Efficiency and Pollution Prevention
7	Improve effluent management and quality of wastewater treatment facilities at Borschiv, Buchach, Lanivtsi and Kosova sugar plants and provide to IFC programs to reach compliance with WBG General EHS Guidelines	30-Mar-14
	PS4 Community Health, Safety, and Security
8	Formalize Community Grievance Mechanism to achieve consistency with PS4 and provide to IFC a procedure	30-Mar-14
	PS6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources
9	Develop a program for certification field operations against the Global Gap Standard and/or equivalent credible standards (e.g. Bonsucro) and submit it to IFC	30-Jun-14