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

This is a category A project primarily due to the likelihood that potentially significant and diverse impacts could be associated with the exploration and development activities in both managed and non-managed assets. In the non-managed assets, the number of which will steadily increase during the current farm-out program of exploration blocks in Indonesia, Trinidad and Tobago and Madagascar, Niko has and will have limited control and/or influence over its partners’ decisions.

The Performance Standards that are relevant to this corporate investment are:

-PS1: Assessment and Management of Environmental and Social Risks and Impacts; and
-PS2: Labor and Working Conditions.

The processes of how Niko will address Performance Standards 3 through 8 is described within the detailed PS1 narrative below and represents the framework (hence its presentation under PS1) that will be applied by the company at corporate level as the use of proceeds is determined on an asset-by-asset basis. As noted earlier, actions in this ESRS and ESAP are limited to areas within Niko’s management control – namely at corporate level and for the managed assets.

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.

Environmental and Social Management System and Policy



At the corporate level, Niko established a Safety, Health, Environment and Social Program Policy and Vision Statement in 2007. The policy commits Niko to comply with all applicable environmental laws and regulations, implement and keep current a corporate Safety, Health, Environment and Social Responsibility Management System (SHESR MS or the “corporate management system”) and adopt best industry practice. The policy sets out requirements for company responsibility, accountability and performance. However, mechanisms to ensure the implementation and monitoring of these policies still need to be put in place.



Currently, Niko devolves environmental and social management responsibility to its operating companies at the asset level and does not maintain oversight on alignment with corporate policies. Niko India has an operating Safety, Health and Environment Management System that is certified ISO 14001 and OHSAS 18001 by DNV, and Niko Indonesia is currently developing its own Health, Environment and Safety Management System. Relevant procedures have been developed by Niko and Diamond Offshore (Niko’s drilling contractor) in Trinidad and Indonesia to properly bridge and interface their management systems, to ensure coordination on matters of health, safety and environmental protection. In Bangladesh, the environmental management system for the Bangora facility is certified ISO 14001 and a gap analysis against OHSAS 18001 requirements was undertaken by Tullow Bangladesh in January 2012. These systems are asset-specific and sufficient linkages to corporate management system and organization need to be established. Niko has also committed to/will address these management system needs to ensure sufficient provisions for management of social aspects, both at corporate level and asset level.



Niko has committed to adopt IFC Performance Standards to ensure that assets are developed in a socially responsible manner and reflect sound environmental management practices meeting good international industry practice (GIIP) and the 2007 World Bank Group EHS General Guidelines and Oil and Gas Onshore/Offshore Guidelines. The current corporate SHESR MS will be upgraded to be consistent with GIIP and effectively and consistently implemented in all managed assets. At the corporate level, this will include appropriate risk identification and assessment procedures, appropriate staffing and the training of management personnel (corporate and operating companies) in the IFC Performance Standards. The Corporate SHESR Program Manager will be provided adequate budget and authority to determine and implement policies, supervise assets and establish monitoring and reporting protocols including corporate audit programs. The revised system will include structures to ensure the accountability of Niko senior management for environmental and social risk mitigation. Key components of the corporate management system will
include the development of specific policy frameworks, to meet IFC Performance Standards. Social policy and management plans will be developed and implemented through the management system.



Existing asset-specific management systems will be integrated with the upgraded corporate management system.



The company process for screening of potential new minority non-managed investments is mainly based on technical and commercial considerations. It is expected that, as part of its corporate management system, the company will develop an environmental and social risk screening procedure, which considers the capacity of the operators of prospective assets to manage risks and impacts and the role of third parties in meeting Niko’s corporate policy objectives. This procedure will provide inputs to the decision whether to pursue the opportunity. The corporate management system will also include monitoring of the existing portfolio of minority stake non-managed interests, from data available to Niko.



Identification of Risks and Impacts and Management Programs



Niko’s process for identifying risks and impacts of prospective operated assets includes the development of EIAs in compliance with national laws. EIAs carried out by the company in India, Bangladesh, Trinidad and Tobago, Madagascar and Indonesia have been provided. Drill mud and cutting dispersion modeling and oil spill trajectory modeling reports for a number of well sites offshore Indonesia and Trinidad have also been provided.



IFC undertook a review of the above mentioned EIA documents provided by the company. These reports are of variable quality and do not cover all requirements under IFC Performance Standards. As part of the ESAP, the company will develop a consistent corporate Environmental and Social Impact Assessment (ESIA) procedure, according to GIIP, to ensure a comprehensive identification of environmental and social risks and impacts. The ESIA procedure will spell out commitments in terms of minimum corporate requirements for primary and secondary data collection and analysis, risk and impact identification and assessment, mitigation, development of project-specific environmental and social management plans, public consultation, local and international disclosure, and stakeholder engagement. Going forward, the ESIAs will conform to the requirements of the host country’s laws and regulations, as well as those of IFC’s Performance Standards. The procedure will include technical specifications to ensure consistent development of drill mud and cutting dispersion modeling and oil spill trajectory modeling for all managed (current and prospective) assets. Quantitative oil spill modeling will continue to be developed based on worst case scenarios and maximum credible accident scenarios.



As part of its review on how Niko addresses issues relevant to Performance Standards 3 through 8, IFC has assessed a set of the management programs implemented in Niko’s managed assets.



PS
3 (Resource Efficiency and Pollution Prevention). The review carried out by IFC identified inconsistencies in the implementation of pollution prevention and control measures between managed facilities. Particularly, venting of gas from flash gas separator, wastewater management, including both produced water and sewage management, drill cutting disposal pit management, and solid waste management, including on-site waste incineration, are areas of improvements identified at Bangora facility (Block 9). A set of corrective actions have been identified by Tullow Bangladesh, including (i) process modification to use gas from flash gas separator for heating, (ii) flare installation, (iii) upgrade of produced water disposal system through injection into a shut-in well, and (iv) drill cutting disposal pit remedial plan. Niko will ensure that the corrective actions are implemented and that monitoring is carried out on potential contamination receptors, according to good international practice. To address potential impacts related to PS3, through the upgraded management system, Niko will take into consideration, for all managed assets, the application and implementation of technically and financially feasible and cost effective measures for reducing the consumption of energy, water as well as other resources and material inputs, avoidance of venting and reduction of flaring and greenhouse gas emissions. Additionally, Niko will review and update, as needed, its drilling, production and maintenance Standard Operating Procedures, among others, in order to develop a corporate-level Pollution Prevention, Waste and Hazardous Material Management Plan. For all managed assets which are at the end of their production and to be relinquished, Niko will develop and implement a corporate procedure that requires surface and subsurface soil and water contamination investigation, risk assessment and definition of a remedial action plan if needed, following good international practice and consistent with World Bank Group EHS Guidelines.



PS4 (Community Health, Safety and Security). Niko’s approach to community health, safety and security for the managed assets include actions to minimize risk to communities. Niko trains its drivers in defensive driving and road safety, and as needed, undertake equipment transport risk assessment and develop safe transport plans to minimize risks from traffic and equipment transport. After the blowouts in Chattak gas field in 2005, the company has revised its drilling and workover manuals and well control procedures to enhance safety of operations. A gap identified in India and Bangladesh is the lack of provisions for building awareness of neighboring communities on emergency response. Quantitative Risk Assessment, Fire and Explosion Analysis and Occupied Building Study were recently carried out as part of the Phase 3 upgrade work for the Bangora facility in Bangladesh. The studies were focused on quantification of the potential risk
to personnel present at the facility or within the exposure zone and they informed the design and ongoing upgrade of safety systems and measures at the facility. Niko will ensure that the managed asset-specific safety measures and Emergency Response Planning procedures are reviewed and upgraded, addressing safety and emergency preparedness and response, based on a rigorous assessment of risk to the health and safety of affected communities / external receptors from Niko’s activities. The asset-specific plans will be reviewed and upgraded in close collaboration with local authorities and in consultation with potentially affected communities.



Unarmed security personnel are hired through private security service providers. There is a security procedure in place, which describes key steps to be followed in various emergency or security related situations. Corporate procedures or training on prevention of abusive conduct by security personnel need to be developed. While there are informal channels for receiving and redressing grievance at asset level, there is no formal procedure to investigate and address valid complaints against security personnel. As part of its corporate management system upgrade, Niko will revise the Security Manual and develop a Code of Conduct for security personnel consistent with the requirements of PS4 and incorporating the relevant guidelines of the Voluntary Principles on Security and Human Rights.



Niko’s upgraded corporate management system will include a framework for the development of a labor influx management plan, including procedures to minimize the risk of incremental/accidental community exposure to disease and other potential host community impacts due to influx of labor.



PS5 (Land Acquisition and Involuntary Resettlement). Niko needs to develop a corporate land acquisition, resettlement, livelihood restoration and compensation policy. Concerns have been raised by communities in relation to compensation for land use and land acquisition at Block 9 (Bangladesh) facilities. At Block 9, land needed for the Bangora gas plant and wells was taken on a “requisition basis” (long term leases from farmers were taken by district authorities and handed to PetroBangla, the Bangladesh Oil & Gas Corporation). Petrobangla allowed Block 9 joint venture to develop the Bangora facility on these lands. In 2008 the joint venture acquired the land where the Bangora gas plant facilities are located. Compensation rates for loss of income are set by the district authorities and payment is done by joint venture via the authorities for distribution to farmers. Tullow Bangladesh reported that a number of protests by farmers related to compensation issues occurred up to 2010. The process has since improved, but it remains an area of potential risk.



In Surat, India leasing agreements were negotiated and signed by landowners. Agreements have clauses that allow Niko to unilaterally renew the lease on a yearly basis at the orig
inal leasing fee. Some agreements have been in place for 10 years and have not been adjusted so far to reflect current prices in the leasing fee and account for inflation. However, this asset will be relinquished by the company and a restoration fund is available to address potential social and environmental liabilities.



At the corporate level, Niko will develop land acquisition and livelihood restoration policies and procedures in line with IFC PS5 and ensure implementation of these for all assets with majority working interest.



PS6 (Biodiversity Conservation). A proportion of Niko Indonesia’s exploration activities to date have been focused in an area of high biodiversity value, known as the Coral Triangle, hosting 76% of the world’s coral species. The Coral Triangle is a marine region that spans eastern parts of Indonesia, particularly West Papua and Halmahera, Malaysia, Papua New Guinea, the Philippines, the Solomon Islands and Timor-Leste. The center of the Coral Triangle is the Bird’s Head Peninsula of Indonesian Papua where a number of Niko’s exploration activities have been carried out. Within the Bird’s Head Peninsula, the Raja Ampat archipelago, in which the Kofiau Block is located, is a sensitive marine biodiversity area. The Environmental Baseline Assessment for Kofiau PSC Block in West Papua identified mega fauna migration routes through the block, extensive mangrove, coral reef systems and sea grass meadows. Environmental sensitivity area mapping were also developed. Niko will review and update its site-specific drilling emergency preparedness plans, with site-specific oil spill contingency actions (including guidance on use of dispersants, access time to maximum mechanical recovery option, environmental lead as part of the response team, escalation of response effort based on biodiversity sensitivity, responder training and implementation exercises), based on existing oil spill modeling, environmental baseline assessments and sensitivity area mapping for all managed assets in the region, per guidance available from IPIECA, NOAA and others. Seasonal or distance-based restrictions and best practice measures to prevent / minimize impacts related to underwater noise during exploration / development activities will be implemented in areas of likely noise impacts on marine mammals, especially whales and dolphins. Niko will seek to engage with relevant conservation organizations, experts and managers and with partners ahead of future exploration campaigns to proactively establish support networks/capacity at sensitive sites as part of the Well Control Emergency Response Plans. At the corporate level, Niko will develop a biodiversity protection and mitigation strategy in line with PS6 which commits the company to identify and assess habitats according to IFC PS6 criteria, and to adopt the principle of ‘no net loss’ in natural habitats and ‘net positive gain’ in critical habitats. As part of this, Biodiversity Action Plans that co
mplement ESMP will be required at some sites of greater sensitivity.



PS7 (Indigenous Peoples). Indigenous Peoples (IPs) with customary rights to marine resources were identified in the Environmental Baseline Assessment of the Kofiau PSC Block in West Papua, Indonesia. At the corporate level, Niko will develop policies and procedures in line with IFC PS7 to assess whether exploration activities affect IP communities and ensure implementation of these for all assets with majority working interest. If affected IP communities are identified within the area of influence of a managed asset, Niko will comply with the requirement of PS7.



PS8 (Cultural Heritage). There are no identified risks to cultural heritage associated with Niko’s present operations. Niko will ensure the assessment of potential risks and impacts on cultural heritage as part of the ESIA procedure, in line with PS8, and will develop and implement a chance find procedure to minimize impacts to cultural heritage.



Organizational Capacity



Niko’s Corporate SHESR Program Manager reports to the Chief Operating Officer (COO). Health, safety and environmental staff at country level report to their Country Managers, which in turn, report to the regional Vice Presidents.



The Corporate SHESR Program Manager requires more dedicated support beyond reliance on country manager’s communication and on country-level HSE personnel for relevant HSE reporting to corporate. As part of the corrective actions identified for the strengthening of corporate environmental, health, safety and social management system and organization, Niko will ensure that the Corporate SHESR Program Manager has the needed competence, authority and budget to efficiently perform its tasks with adequate quality assurance and control of the country-level programs.



At country level, Niko needs to extend HSE teams for all of their operated assets. HSE training is provided including to contractor workers. Safety tool box talk process is implemented and there is a requirement for permit to work system and job safety analyses for non-routine tasks.



The team working on the Hazira gas field in India consists of 5 technicians including a principal HSE coordinator, reporting to the Senior Head Assets Hazira and Surat, with direct access to the VP South East Asia. The social corporate responsibility programs are managed by the Human Resources and Administration team.



In Bangladesh Niko has a team located in country comprised of about 25 persons with 1 HSE person. The HSE and public relations organization at the Bangora field is provided by Tullow Bangladesh.



In Indonesia, the HSE team is comprised of 11 persons, based out of Niko Indonesia’s head office in Jakarta, along with four staff being located in the field assisting ongoing rig operations. The HSE function is split in two parts, namely a corporate business unit function, and a second drilling department HSE team. IFC’s review of the HSE function
within Niko Indonesia identified that it is managed from within the drilling operations unit which were established in 2011. Niko Indonesia has established an external relations and CSR function.



As part of the strengthening of the corporate management system, Niko will ensure that, while country managers will continue to be the operators of the management system with responsibility at country level, all HSE staff, including personnel directly involved in supervision of core functions, such as drilling operations, will have an independent functional reporting line to corporate HSE.



Emergency Preparedness and Response

Niko’s managed assets have established emergency preparedness and response plans and procedures, including oil spill contingency plans. The procedures developed in Indonesia for the exploration activities carried out by Niko in their managed assets address various well control scenarios, ranging from routine well control operations to situations involving a total loss of well control necessitating the immediate mobilization of intervention equipment and personnel. Well Control Emergency Response Plans (WCERP) are developed for each drilling operation. The WCERP defines procedures that are designed to: (i) protect the personnel at the site in the event of a well control emergency, (ii) define the notification protocols and methods, (iii) prevent further environmental or facility damage or personnel injury while adequate equipment and personnel are being mobilized, (iv) define the critical information that is required to determine the appropriate response level and strategies, (v) organize personnel and provide guidelines for their role in the emergency response and subsequent management, and (vi) preselect sources and develop mobilization plans for personnel, equipment, material, and services typically required for implementation of well control procedures. Well design is emphasized as the first line of defense.



Niko Indonesia drilling operations are supported by a floating logistics base, with oil spill response capacity, that is located within 5km of a drilling operation. Each drilling operation is able to access a regional OSCT (Oil Spill Combat Team, the Indonesian oil spill response group) supply base located in Sorong for West Papua operations. Niko has also access to centrally held OSCT resources which are deployed via a C-130 aircraft on permanent standby. “Wild Well Control” based in Houston are on a retainer to assist well response planning.



As part of the activities carried out at Bangora field in Bangladesh for the Phase 3 upgrade work, a review and updating of the crisis management plan have recently been carried out (see PS 4 above for community safety considerations), providing adequate procedural requirements for responsible parties within the operator’s organization.



In India, managed assets have emergency response plans. The company carries out training and conducts drills, in coordination
with local authorities and industries located in the vicinity of the Hazira facilities. Small businesses attracted by the construction of Adani Port were observed near the boundaries of the Hazira gas plant, which is adjacent to main construction areas. As part of the committed actions, Niko will review worst case emergency scenarios and, if needed, will coordinate actions with the regional authority and the port developer to prevent illegal encroachment in the potentially affected area.



As part of IFC’s investment, Niko will review and update (i) corporate-level procedures for well proposal / drilling program review, including provisions for review by third party competent well design expert, and (ii) corporate-level Emergency Response Plan ensuring consistency throughout managed assets, outlining emergency scenarios, and including blowout prevention and control, response actions, key contacts, and responsible staff. Niko will conduct training to employees and contractors to ensure consistent and effective implementation of corporate standards at managed asset level.



Monitoring and Review



Niko operating companies in India and Indonesia and Tullow Bangladesh, as operator of the Bangora facility conduct monitoring, collecting key performance indicators (KPIs) to track information on environmental, health and safety management, training, incidents and spills. These operations have an internal audit process in place. This is supported by a Corrective Action Tracking and Close Out process for corrective actions that are identified as part of the internal audits, hazard and near miss monitoring procedures. KPI reporting is extensive within Niko Indonesia’s assets, including collection and analysis of proactive and reactive indicators, formalized in monthly reports. Drilling contractor (Diamond Offshore) KPIs have been required, collected and analyzed by Niko Indonesia.



At the Hazira facility, monitoring of noise, stack emissions, ambient air quality, and treated produced water effluents is undertaken in compliance with national regulatory requirements. Monitoring data reviewed are in compliance with relevant national permissible limits and consistent with relevant World Bank Group EHS Guidelines.



At the Bangora facility, monthly/quarterly monitoring includes ambient air quality, ambient noise, surface water quality, produced water quality and sewage treatment and gray water effluent discharge. Monitoring data reviewed for produced water quality showed exceedances at some of the sampling locations for a range of parameters (electrical conductivity, dissolved oxygen, total dissolved solids, biochemical oxygen demand, chemical oxygen demand, iron, sodium and phenolic compounds) to national standards. Sewage effluent discharges were also exceeding a number of national standards (electrical conductivity, dissolved oxygen, biochemical oxygen demand, chemical oxygen demand, sodium, ammonia, anionic detergents, and total coliforms). As no
ted earlier, corrective actions have been identified by Tullow Bangladesh to address produced water and wastewater effluent quality issues.



As part of the development and implementation of the corporate management system, a monitoring, inspection and audit program will be developed together with KPIs to track information on environmental, health and safety and social management. Niko will also develop a Corporate Environmental Monitoring Plan to establish standardized and well documented monitoring requirements for each type of activity (i.e. exploration, development and/or production) throughout all its managed assets, consistent with relevant World Bank Group EHS Guidelines.

Human Resources Management



Niko currently employs a total of approximately 350 direct and contracted employees throughout its operations including 28 based in the corporate office in Calgary. Globally, approximately 70% are country nationals. India has the largest work force of Niko managed assets with 152 employees, all national staff with the exception of the VP for South East Asia. In July 2013 Niko India suspended its operations in the Surat Block and closed its office in Mumbai. As a result 56 people were released. The retrenchment process included providing notice of three months and payment of benefits in accordance with the Human Resources (HR) policy and local regulations. Indonesia has 114 employees of which 84 are local staff and 30 expatriates. Trinidad and Tobago has 27 local employees and 5 expatriates for a total of 32 employees and Bangladesh has 25 employees. Niko maintains a small group of three people in Madagascar.



Niko has a number of policies that deal with issues related to HR at the corporate level including a Code of Conduct and Business Ethics, and a Whistleblower Policy. Personnel are required to participate in training sessions at country level to become familiar with Niko’s Code of Conduct and Business Ethics. Country specific HR manuals have been developed by Niko’s operating companies in India, Indonesia, Bangladesh and Trinidad and Tobago. These manuals describe working conditions, benefits, discipline and disciplinary actions that are in compliance with local labor regulations. According to the HR manuals, all personnel are required and entitled to sign a contract that clearly describes wages, benefits and working conditions.



Niko is expected to develop corporate-wide HR Policy and procedures, clearly identifying its commitment to PS2. Niko will review and revise as appropriate the HR manuals of the operating companies at asset level to fully comply with the corporate HR Policy and local regulations, including the development of programs to implement corporate compliance audits for verification of adequate working conditions in line with the corporate HR policy. Due to the potential for future retrenchment, Niko will develop a corporate Retrenchment Policy and a Retrenchment Framework to provide guidelines and procedures to be implemented by the operating companies at asset level, as required.



As part of the upgraded HR procedures, there will be a requirement for Niko’s operating companies at asset level to include provisions in their contractor agreements to comply with Niko’s HR policies, and to establish a compliance verification mechanism.



At the Bangora facility, where Niko has majority working interest, the company will monitor the HR management of the operator, ensuring that it complies with national regulations, and apply procedures that are consistent with Niko’s HR policy.



Grievance Mechanism



At the corporate level Niko provides an avenue for reporting of misconduct and ensur
es that concerns regarding questionable business practices, unethical or illegal activities can be raised without fear of discrimination, retaliation or harassment.



Grievance mechanisms currently available for employees at asset level are not fully formalized.



The corporate HR Policy and procedures to be developed will provide the framework to establish and strengthen comprehensive grievance mechanisms for employees at asset level, in accordance with PS2. Grievance mechanisms will establish procedures for logging and resolving grievances. Procedures to inform and train the employees on the availability and use of this mechanism will be developed and implemented by the operating companies at asset level. The policy will recognize the rights of employees to access other judicial or administrative remedies available under the law.



Occupational Health and Safety



Safety procedures covering permit to work, energy isolation, working at height, lifting operations, excavations, confined space entry, process safety, driving safety, hazardous materials, contractor management, environment management and health and hygiene are applied to operating sites visited by IFC. Use of personal protective equipment is generally adequate. Visited managed assets have hazard identification, near miss, accident, incident recording, incident investigation and reporting, corrective action and closeout processes in place.



Safety performance is reportedly satisfactory for Niko’s managed assets: for example at Bangora field there has been only one lost time incident (LTI) reported in last three years; there are no LTIs reported in Niko Indonesia’s operating history (1.2 million hours worked) and Hazira facility has reported reaching 8.6 million LTI-free hours worked. Detailed journey management plans are prepared for staff transport, drivers are trained in defensive driving, and vehicle safety features have been augmented. Niko’s operating companies at asset level implement Permit To Work (PTW) systems, with job safety analyses undertaken prior to issue of PTW on a case by case basis. Emergency drills are undertaken periodically.



Hazira operating facility is equipped with safety features, including firefighting systems, flame sensors, gas sensors, alarms, and emergency shut-down systems. Areas of improvement in terms of layout and safety systems have been identified at Bangora facility and are part of the upgrade work being implemented by the operator.



Facilities visited by IFC are equipped with medical professionals or paramedics, first aiders, medical rooms, and ambulances. Medical examination is carried out for employees and contract workers. Hygiene is generally adequately maintained at the facilities visited by IFC.



As indicated above under PS1, existing asset-based occupational health and safety management systems will be integrated with the upgraded corporate management system.

According to information provided by Niko, consultation is conducted as required by local regulations at country-level. Disclosure of Environmental Impact Assessments where required is also conducted in compliance with regulations of the jurisdiction where the project is implemented. In addition some CSR activities are being done as described below. However, stakeholder engagement and local disclosure conducted to date does not meet the requirement of PS1.

Niko undertakes social actions in cooperation with local communities such as immunization and health services campaigns, environmental awareness, and local social infrastructure repairs among others. Niko Indonesia has established an External Relations and CSR function within the business group. Niko Indonesia reported undertaking consultation ahead of each exploration campaign.

In Bangladesh, Tullow Bangladesh conducted some engagement activities with the six neighboring villages through a CSR program, and the Public Relations Manager is the point of contact for individuals as well as community representatives. Tullow Bangladesh has commenced to document follow up actions, closure of grievances, expectations and demands from members of the neighboring villages.

In India community engagement is managed by the head of human resources and administration. CSR programs have included health immunization initiatives, support to education, and provision of drinking water to nearby communities.

IFC review found that community engagement plans or formal community grievance redress processes are not in place in any of the managed assets visited. As indicated above, there is a regular informal engagement with the neighboring villages through the implementation of social programs by Niko India and Tullow Bangladesh. Interviewed community members indicated that Niko India engage with local stakeholders on a regular basis. At Block 9 in Bangladesh, Tullow Bangladesh management and the PR manager emphasized that there is a fairly high level of informal engagement with the neighboring six villages through extensive CSR programs.

At the corporate level Niko will develop a Stakeholder Engagement Framework (SEF) to ensure that public disclosure of relevant project information and consultation are consistently conducted throughout its operations and managed assets, in accordance with IFC PS requirements. The SEF will include guidelines for stakeholder identification and the development of a Stakeholder Engagement Plan (SEP) for each prospective or existing managed assets with potential impacts on local communities. This will include the development of a SEP for Block 9 in Bangladesh, to ensure to a comprehensive consultation process involving the active and Informed Consultation and Participation of the Affected Communities.

Stakeholder identification and analysis will ensure that project-affected communities and vulnerable groups within the communities are identified and engaged in an adequate way. The SEP will be context and culturally appropriate to ensure that affected communities are provided with information and consulted on the risks, impacts and opportunities presented by each project and remain engaged on ongoing basis. Grievance management mechanisms for affected communities will be developed and implemented as part of each SEP and in accordance with IFC PSs. Engagement will be practiced commensurate with the identified risks and impacts to the affected communities through a process of information disclosure of assessment documentation, and informed consultation and participation.

Name: William Hornaday
Title: Chief Operating Officer
Company: Niko Resources Ltd.
Address: 4600, 400-3rd Avenue SW, Calgary Alberta, T2P 4H2 Canada
Tel: 403-262-1020
Mail to: mailto:Hornaday@nikoresources.com
Website: http://www.nikoresources.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
Niko will appoint a full-time Corporate SHESR Program Manager. The manager will have authority and adequate budget and resources to effectively implement the SHESR MS with adequate quality assurance and control of the country-level programs.	04/30/2014 12:00:00 AM	Completed	Completed	02/24/2014 12:00:00 AM
Niko will upgrade the corporate Safety, Health, Environment and Social Responsibility Management System (SHESR MS) to be consistent with good international industry practice and effectively and consistently implemented in all managed assets. Key components of the management system will include the development of specific policy frameworks and plans, to meet IFC Performance Standards. Niko will develop a corporate Stakeholder Engagement Framework including provisions for the development of asset-specific Stakeholder Engagement Plans (SEPs) including grievance mechanisms, in accordance with IFC Performance Standards.	3/31/2015	In Progress	In Progress
Niko will develop and implement a training plan for management personnel (corporate and operating companies) on the IFC Performance Standards.	06/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop corporate-wide Human Resources (HR) Policy and procedures, clearly identifying its commitment to Performance Standard 2. Niko will review and revise as appropriate the HR manuals of the operating companies at asset level to fully comply with the corporate HR Policy, including the development of a grievance mechanism. Procedures for compliance audit to their operating companies and managed assets, and to their contractors, will be included.	08/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop and implement a Stakeholder Engagement Plan for Block 9 in Bangladesh to ensure to a comprehensive consultation process involving the active and Informed Consultation and Participation of the Affected Communities.	08/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will review and update its corporate Emergency Response Planning procedures, addressing emergency preparedness and response, based on the assessment of risk to the health and safety of affected communities / external receptors from Niko's activities. Niko will implement the corporate procedures at all managed assets and conduct training to employees and contractors.	08/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will review and update its corporate-level procedures for well proposal / drilling program review, including provisions for review by third party competent well design expert.	08/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will upgrade its site-specific drilling emergency preparedness plans, based on environmental sensitivity area mapping and high value biodiversity habitats, for their managed assets, especially exploration activities in the Coral Triangle (offshore Indonesia). Other actions will include definition of seasonal or distance-based restrictions and best practice measures to prevent / minimize impacts related to underwater noise during exploration / development activities, and engagement with conservation organizations.	09/30/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop and implement a corporate procedure on remedial investigation, risk assessment and remediation actions for managed assets, including assets at the end of production life and/or to be relinquished. The procedure will be consistent with good international practice and World Bank Group EHS Guidelines.	10/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop a corporate Environmental & Social Impact Assessment (ESIA) procedure to ensure a consistent and comprehensive identification of environmental and social risks and impacts for its managed assets. The ESIA procedure will detail minimum corporate requirements for primary and secondary data collection and analysis, risk and impact identification and assessment, mitigation, development of project-specific environmental and social management plans, public consultation, local and international disclosure, and stakeholder engagement.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop a corporate-level Pollution Prevention, Waste and Hazardous Material Management Plan. Niko will implement the corporate plan at all managed assets.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will ensure that pollution prevention and control corrective actions identified at Bangora facility are implemented and monitoring is carried out on potential contamination receptors.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop an environmental and social risk screening procedure, which considers the capacity of the operators of prospective assets to manage risks and impacts and the role of third parties in meeting Niko's corporate policy objectives. This procedure will provide inputs to the decision whether to pursue the opportunity. The corporate SHESR MS will include monitoring of the existing portfolio of minority stake non-managed interests.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will revise the corporate Security Manual and develop a Code of Conduct for security personnel consistent with the requirements of IFC Performance Standard 4 and incorporating the relevant guidelines of the Voluntary Principles on Security and Human Rights. Niko will apply the corporate manual and code of conduct at all managed assets.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop corporate-level land acquisition and livelihood restoration policies and procedures in line with IFC Performance Standard 5 and ensure implementation of these for all assets with majority working interest.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop a corporate-level biodiversity protection and mitigation strategy in line with IFC Performance Standard 6 which commits the company to identify and assess habitats according to Performance Standard criteria, and to adopt the principle of ‘no net loss’ in natural habitats and ‘net positive gain’ in critical habitats.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client
Niko will develop corporate policies and procedures in line with IFC Performance Standard 7 to assess whether exploration activities affect Indigeous Peoples (IP) communities and ensure implementation of these for all assets with majority working interest. If affected IP communities are identified within the area of influence of a managed asset, Niko will comply with the requirement of Performance Standard 7.	12/31/2014 12:00:00 AM	In Progress	Under discussion with IFC client