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 IFC's 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

This is an environmental and social (E&S) Category B project according to IFC’s Policy on Environmental and Social Sustainability.

The key social and environmental issues associated with the project relate to impacts on employment of transfer of production from the existing Esenyurt site to Çerkezköy and stakeholder engagement and control of emissions to air and water at the new Çerkezköy site. These are all issues that are site specific and limited in scope and may readily by addressed through mitigation measures.

The proposed project’s location within COSB, a long established industrial zone dating from 1976 and hosting other pharmaceuticals, textile dye, print and finish operations, a medium density fiberboard and plastics operations among others, means that risks and issues relevant to Performance Standards 4, 5, 6, 7, and 8 are not expected to arise with this project.

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 Assessment and Management System

Recordati Ilaç has a well-established and resourced environmental and social management system as is described in the following sections.



The policy foundation is two-fold. Recordati Group has an Ethics Code which is applied to all companies within the group. While wide-ranging this code has a number of requirements related to environmental and social matters including compliance with the law and codes of conduct, human resource management principles, workplace safety and hygiene and environmental protection. This group wide ethics code is complemented by the Recordati Ilaç 10-point Environment and Health and Safety Policy which has objectives around legal compliance, continuous improvement, risk assessment, safety, resource efficiency and waste minimization and the supply chain.



Recordati commissioned an internationally-active consulting firm with engineering and pharmaceutical practices to support its E&S assessment for the new facility, and this company has also undertaken design of the proposed new facilities. The preliminary E&S assessment considered potential environmental impacts arising from emissions to air and water, solid wastes and noise, and the land, water and energy use of the project, and reviewed these potential impacts. It was concluded that the expected impacts were not sufficient to require completion of a comprehensive assessment for compliance with Turkish law.



Identification of Risks and Impacts

Recordati and their consultants are highly experienced in the pharmaceutical industry and familiar with typical sectoral risks. Such risks have been considered in the design of the new industrial facility and a risk-based approach has been taken in the design of the industrial facilities, for example in specification of process exhaust filtration requirements and systems to protect against risks of explosive atmospheres.



Recordati Ilaç’s environmental and occupational safety teams have identified E&S risks related to air emissions, particularly of volatile organic compounds (VOCs) and combustion products, water and waste water management, waste management, hazardous materials, and fire and noise; have developed procedures, and audit compliance with procedures to manage these risks.



Management Programs and Organizational Capacity

Recordati Ilaç expects significantly to duplicate existing E&S management practices when it transfers to the new operation. Overall responsibility for E&S management rests with the Factory Manager who has two full time specialists with responsibility for environmental and occupational health and safety (OHS) issues.



Health and safety management is responsive to Recordati Ilaç’s policy, and drives legislative compliance through measures such as monthly environmental health and safety (EHS) committee meetings, risk assessments, maintenance of health controls, OHS and fire-fighting training, contractor and supplier contr
ols, recording of dangerous situations and near misses, as well as workplace injuries, development of standard operating procedures related to OHS management, emergency planning and response and supply and enforcement of appropriate use of personal protective equipment. A culture of continuous improvement is developed through EHS committee meetings, chaired by the factory manager, with other members including the environmental and OHS specialists, the company doctor, human resources manager (safety meetings) and production representatives.



Training in EHS issues is built into induction training for new employees. Standard training requirements for each work task have been defined, and pre-start training records for new or newly-reassigned staff were shared with IFC.



Monitoring and Review

Regular (twice monthly) environmental monitoring of waste water emissions and discharges to air are undertaken so as to demonstrate regulatory compliance. Similarly, regular OHS reporting is made to the Ministry of Labor. Recordati Ilaç also closely monitors transfer of hazardous wastes from its premises to the authorized disposal facility.



Recordati Ilaç also has a comprehensive system to monitor workplace conditions. Monitoring covers light, temperature, noise, particulate matter, VOCs, personal VOC and noise exposure and vibration, at over 100 monitoring points.

Human Resources Policies and Procedures

The Recordati Group ethics code forms a Human Resources policy framework for all group companies. The code states that human resources management is based upon the fundamental principles of equal opportunity and non-discrimination, ensuring fair treatment according to merit, promoting and consolidating a safety culture, and respect for employee privacy. The code also states that the Company undertakes to respect fundamental human rights, to prevent the exploitation of children and not to use forced or slave labor. This ethics code is very closely aligned with Performance Standard 2.



An employee handbook, which was updated in 2013 is provided to all employees and to new recruits at induction. It covers, among other things working conditions, the company mission, vision and ethics code, recruitment policy, how to resign, annual leave and disciplinary procedures.



Working Conditions and Terms of Employment

It is Recordati Ilaç’s aim that all workers are employees, but on rare occasions contract workers are employed to meet production demand peaks. Normal working hours are 07:30 to 17:00 Monday to Friday with one hour of breaks daily, though overtime is worked during the normal working week and on Saturdays and is paid at double time. The factory is closed on Sundays. Sample records reviewed by IFC showed overtime working well within the monthly maximum that is legally permitted in Turkey. Recordati Ilaç has a minimum salary for an inexperienced worker in a basic job that exceeds the Turkish minimum wage.



Workers’ Organizations

One of the Recordati ethics code requirements is that human resource management offers equal opportunity without discrimination on grounds of trade union membership. Some of the company’s employees are members of the chemicals sector trade union, but at the overall company level the membership is below the level required for the establishment of a collective bargaining agreement.



Retrenchment

The new factory site in Çerkezköy is around 80 km from the existing site at Esenyurt, a journey time by road of over one hour. While there will be a period of transfer of production from old to the new factory, eventually Recordati Ilaç’s production and employment will cease at Esenyurt.



In consultation with the existing Esenyurt workforce, Recordati Ilaç will develop and implement plans to manage this transfer with minimum adverse impact on employees. These plans will consider options, for example company-provided transport, to enable employment of existing employees at Çerkezköy should employees wish this. Where job transfer is not possible or desirable, Recordati Ilaç will develop and implement plans to minimize adverse impacts on those existing workers who do not transfer to Çerkezköy.



Grievance Mechanism

Employees are instructed that their first recourse in the event of a grievance is to make representations to line management, though where this option is n
ot suitable, grievances may be made through a suggestion / complaints box or directly to the human resources department. Grievances are investigated and investigation outcomes discussed with staff.



Occupational Health and Safety

Policy statements and management program actions to promote occupational health and safety were described earlier in this review summary. Where workplace injuries occur, the cause is identified and actions to be taken to prevent recurrence are developed.



In 2013, three workplace accidents causing injury were recorded: of these two each caused two lost workdays, while the third did not cause lost work time beyond immediate treatment. This is equivalent to approximately 3 lost time accidents per million hours worked which is in line with international benchmarks for this sector.



Site safety, health and environmental requirements, including references to accident reporting, inspection and certification of equipment, training, electrical safety, working at height, confined spaces and use of personal protective equipment, and requiring the contractor to include a safety management plan with the bid will be appended to requests for proposals for construction work.

Resource Efficiency

Recordati and its consultants have considered resource efficiency issues in the design of the new facility. For example, variable speed drives have been specified for variable flow pumps and fans, high efficiency fluorescent lighting is specified, air compressors will have variable speed drive capacity control, electrical submetering will be installed and automatic boiler blowdown controls will also be specified. IFC and Recordati have discussed early-stage, outline designs for air conditioning chillers and air handling units (AHUs), which left opportunity for further refinement to achieve higher energy efficiency levels. Recordati will consider system and chiller designs further, and will include energy efficiency among the tender evaluation criteria when bids are requested for these items.



Greenhouse Gas (GHG) emissions

IFC estimates that the annual greenhouse gas footprint of the new facility will be in the region of 6,500 tonnes CO2 equivalent (tCO2eq).



Air Emissions

Recordati Ilaç has comprehensive monitoring records that show that process and combustion product emissions from the existing facility consistently meet Turkish regulations and World Bank Group (WBG) EHS Guideline values. Similarly compliant performance is expected at the new facility. Natural gas will be the fuel of choice, while process emissions will be filtered, with filtration standards selected according to a risk assessment based on the products to be handled in each process area.



Wastewater treatment

The existing facility has chemical and biological pre-treatment of its process waste waters to standards meeting the acceptance criteria of the Istanbul Water and Sewage System Administration. At the new facility similar pre-treatment will be installed, to treat liquid effluents to meet the acceptance criteria of COSB. The zone has further treatment of liquid effluents from all its tenants’ operations in a large treatment facility located some 5 km outside the zone itself.



Solid waste management

Solid wastes are categorized by Recordati Ilaç as hazardous or non-hazardous and separately collected in color-coded bins. Non-hazardous wastes are also segregated according to type, household waste, paper/card, plastics or glass. All wastes are stored temporarily in the Waste Collection Center. All except household non-hazardous wastes are sold for recycling, while household wastes are disposed to the authorized landfill. Hazardous wastes are transported by an authorized handler to an authorized destruction facility. Recordati Ilaç reviews waste receipts from its premises to the point of final destruction showing that its wastes are indeed destroyed or disposed of by these authorized facilities.

Recordati Ilaç will establish and publicize a means to receive comments from the public, screen and assess issues raised, provide and document responses and act upon these as necessary.

A Turkish language version of this ESRS will be made available for public review at Recordati Ilaç’s Esenyurt site and in the vicinity of the future site at COSB.

For further enquiries and comments about the project please contact:
Elisa Crivello
Group Treasurer
Recordati S.p.A.
Via Civitali, 1
20148 Milano, Italy
Tel. +39 02 48787523
Fax +39 02 48787014

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
Recordati Ilac will, in consultation with existing employees, develop and implemement plans to minimize adverse effects upon these employees of the transfer of manufacturing.	01/31/2015 12:00:00 AM	Completed	Completed	11/28/2014 12:00:00 AM
Recordati Ilac will establish and publicize a public communication channel and document communications received from the public and responses provided.	06/30/2014 12:00:00 AM	Completed	Completed	11/04/2014 12:00:00 AM