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
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 8 – Cultural Heritage

This investment is classified as a Category A project in accordance with IFC’s Policy on Environment and Social Sustainability. Based on information reviewed by IFC, including that contained in the client’s ESIA of 2014, the proposed project has potential significant adverse environmental and social risks that are diverse, irreversible or unprecedented. These risks and impacts, which are both environmental and social in nature, are centered on the farming operations; the mill has a lesser E&S risk profile being primarily related to worker’s occupational health and safety, food safety and resource (electrical power) consumption and efficiency. Impacts associated with the farming operations are broader in scope and significance and include those associated with aspects of industrial farming (large scale and long term leasing) and preparation, and associated economic displacement of communities’ members, use of agri-chemicals and OHS related risks associated with use of heavy machinery, such as tractors and combine harvesters). Of particular importance is the Company’s commitment toward pro-active engagement with stakeholders and the establishment of relations with local communities within the context of this investment. Whereas these have seemingly been adequately addressed to date, potential risk remains; this is especially true as the farm continues to grow in size to occupy the full area of the concession.
Risks/Impacts related to PS7: Indigenous Peoples (IPs) were not identified during IFC’s review. No IPs are present in the area of the farms or where the mill is located.

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. The farm has been in operation – albeit at a much smaller scale to that currently under production – since 2006. The operation was subject to an initial Environmental and Social Impact Assessment (ESIA) conducted in 2010 by a local consulting company and designed to comply with national environmental legislation. Since then, the operation has continued to expand; at the time of the IFC visit in February 2014 the Company was farming on approximately 1150 hectares. Whereas the operation can be considered to be ongoing, the Company commissioned a comprehensive ESIA in the context of its farming expansion. This decision was taken as the scope of the initial EIA was known to be limited, particularly with respect to matters of stakeholder engagement and community involvement, so some risks and impacts of the project were not originally assessed - and therefore not addressed - at that time or in the time that has elapsed since project inception. For example, the ESIA preparation process involved significant efforts to engage with local communities to determine their opinion of the project as of late 2013/early 2014. It also included a broader range of potential project impacts and used this assessment to inform elements of management plans and programs, some of which were already in place – but needed upgrading – and others that are to be put in place for the first time. Specific impacts – and details contained within such management plans – are provided in relevant sections below.



The ESIA also lists assumptions and limitations related to developing the assessment; it further includes the expectation that these limitations be recognized by the Company and that the Company will address them as the project continues to develop and expand. Notable limitations include the four month period available for developing the bio-physical and socio-economic baseline, developing associated risk and impact assessments and thereby fully developing associated management plans outlined in the Environmental and Social Management Plan (ESMP) section. The authors conceptualized the ESIA as a preliminary point of assessment and management against international standards (primarily IFC’s Performance Standards and EH&S Guidelines as well as recognized international certification schemes relevant to large scale farming); they describe it as a living document and expect it to continue to be updated and mitigation programs integrated into the Company processing and farming operations. The Company will be required to provide adequate financial and human resources to address the limitations and gaps so as to be able to comply with the Performance Standards within a reasonable period of time. Relevant sections below provide details on the gaps in both the assessment and the current and proposed management programs

Policy. The Company (specifically the milling operation) has a draft food safety management policy in pl
ace which also references a commitment to implement ISO 22001, to target some specific impacts (noise, dust, etc.), makes a commitment to training of employees, to providing resources and that the policy will be communicated to all who work for the Company and will be reviewed and updated. As set forth in the ESAP, this policy should be reviewed and updated, to guide the overall intent of the environmental management program within the Company (both the milling and farming operations). Specifically, the client will develop, approve and implement EHS policies which will include i) reference to performance-based requirements based on DRC’s laws and regulations, IFC Performance Standards, applicable WBG EHS Guidelines, food safety and standards relevant to primary production certification requirements and schemes; ii) defining an accountability framework (ref. E&S team) in its organizational structure for its effective implementation; iii) ensuring a communication strategy to all employees, suppliers and partners (e.g. contractors and, when applicable, out growers); and, iv) ensuring internal/external audit for assessing their effectiveness, including meeting quantifiable performance targets and indicators. Regarding farming operations and the community, the Company has already developed a community policy which promotes positive relationships with stakeholders and supports the development of sustainable benefits for the local communities in the area in which the company operates.

The Company has developed a timeline by which it expects to implement ISO 22000 (food safety standard) at the milling operation; current estimates are that it will take 12-18 months from the beginning of production at the mill to complete the necessary steps so as to become certified by a recognized third party. In addition, the Company intends to implement a management system in conformance to the Occupational Health and Safety Assessment Series (OHSAS) 18001. A timeline for this has not yet been developed. The completion of a policy – and these management programs themselves – is addressed in the ESAP.

Identification of Risks and Impacts. Upon seeking finance from IFC, the Company embarked upon the development of the ESIA. This was developed by a reputable consulting company using the IFC Performance Standards and WBG general and sector-specific EHS Guidelines, working closely with senior management from the Company, and drew upon the work previously done in the ESIA of 2010. Section 7.0 of the 2014 ESIA describes the impacts associated with a farming operation of this type and ranks the risk of such, both before and after actual and/or recommended management measures to be implemented. Environmental impacts considered are as follows: installation of infrastructure typical of a project of this type (and associated impacts upon land, including loss of soil, land capability and use); spills of chemicals (fuels, oils, agro-chemical inputs) upon soils and land use; impacts
upon biodiversity both terrestrial and aquatic (including fragmentation and alteration of surface and sub-surface hydrological regimes); introduction of invasive plants; increase in the likelihood of flooding due to alteration of land cover; sedimentation due to increased erosion; impacts upon natural systems from runoff of excess nutrients from farm land; contamination of natural systems (particularly waterways, including groundwater) from excess crop protection products (CPPs) and fertilizer application and seepage or runoff of unused pesticides from farm land; noise; impacts upon visual character; waste management; and, traffic. Socioeconomic impacts considered are as follows: land acquisition and associated physical or economic displacement; loss of ecosystem services; influx and spontaneous settlement; increase in social pathologies and communicable diseases (especially during construction) and also associated impact on current natural resources and social services and infrastructure; positive impact of increased local employment; positive impact upon infrastructure due to social investment by the company; impacts upon cultural heritage; increased traffic; and, impacts upon health from noise and dust. At this point in time the Company is focusing on its own primary production; as such E&S risks in the local supply chain are not relevant. If, and when, the Company engages with small holders to supplement the supply of maize to the mill the Company will assess its supply chain for additional E&S risks and extend the management system so as to avoid, manage or mitigate such risks. Purchase of imported maize, and the requirement to assess suppliers, is addressed elsewhere in this document.



Senior management stated that risks associated with the milling operation were considered during the design process. The choice of the latest milling equipment – and its ability to all but eliminate dust hazards – is one example. It was stated that the Company worked hand-in hand with the original equipment manufacturer, using their expertise to inform the layout of the equipment so as to enhance the process flow, thereby minimizing the amount of energy it will consume while also providing for a safe environment for workers. Workplace risk assessment will be undertaken upon commissioning of the mill and training plan developed and implemented. The aforementioned OHS management system requires a comprehensive assessment of hazards and risks in the workplace, incorporating the input from both management and staff employed in jobs associated with hazards and risks. The need to implement the OHS management system, based upon a comprehensive workplace risk assessment at the mill, is addressed in the ESAP.



Management Programs. Section 8 of the ESIA details the management plans that will be required to avoid, minimize or mitigate identified risks and impacts. Reference is made to plans that have been included with the narrative of the ESIA: Preliminary Environ
mental Awareness Plan (to be developed further by the Company); Construction and Site Clearing Control Plan; Community Health and Safety Plan (CHSP); Emergency Preparedness and Response Plan (EPRP); Cultural Heritage Management Plan and Chance Find Procedure; Influx Management Plan; Contractor Management Plan; Employment and Capacity Plan; Biodiversity plan, as well as Hazardous Materials Management, Transport Management, Security Management and, Water Management Program. In addition, two stand-alone plans have also been developed: a Stakeholder Engagement Plan (SEP), incorporating a stakeholder grievance mechanism; and, a Land Acquisition Policy Framework and procedures, Livelihood Restoration and Compensation Plan. Programs that need to be enhanced and further developed (for example, in the case where current plans are high level and lacking in details) are referenced in the relevant sections of this document and the need to update them within the overall ESMP summarized in the ESAP.



Training. The mill has developed a training outline to promote competency among management and staff; given that the mill is not yet commissioned, this outline is currently in draft. The document references training to be provided on HAACP, ISO 22000, Good Hygiene Practices and also Good Manufacturing Practices and details the length of training to be given to individuals depending on their position and role within the Company. It is expected that as the programs to implement these various management initiatives grow, that the associated detail contained within training documentation will likewise be expanded. The provision of resources and training so as to avoid, minimize and manage residual risk, the need to communicate elements of the system to workers and to develop practices to review incidents and accidents and to strive to prevent their re-occurrence are all key elements that will be required to be addressed during the implementation of an OHS management system. Lastly, the requirement to engage with senior management, to ensure they actively participate in system review and provide direction as necessary will need to be met if the system is to be certified. As noted earlier, this action is addressed in the ESAP.



Training requirements for those working on the farm will be based upon relevant requirements contained in the WBG EHS Guidelines and those of a recognized international certification scheme for primary production (such as the Global GAP standard for Combinable Crops). As in the mill these requirements will be integrated into the overall management system to be put in place.



Organization Capacity and Competency. Current capacity to further develop and implement the necessary management plans and programs referenced in the ESIA (i.e. to address farming related impacts) is limited. Of particular importance is the need to manage and staff the stakeholder engagement function, to include the refinement of the program and its implementation so
as to ensure the project suitably engages with interested and affected parties. This requirement to ensure adequate resources are in place at the farming operation is addressed in the ESAP.



Management at the mill is experienced (the Chief Miller is a 12 year veteran from Ethiopia and the Chief Engineer a 22 year veteran from India) and based upon discussions held with them are well aware of, and judged to be capable of managing, the limited E&S risks therein. What will be challenging to the Company, however, is the provision to management and staff the time and resources to complete the assessment of OHS risks and then implement actions required to protect workers. At this point in time, it would be expected that the emphasis will be on getting the mill up and running; senior management must ensure time and resources are provided to those who will be designing and implementing the food safety and OHS management systems so as to meet the aggressive deadlines they have set themselves as spelt out in the ESAP.



Emergency Preparedness and Response. Potential emergency situations that could arise at the mill include fire and explosion if dust control measures are inadequate. Given the state-of-the-art equipment, which includes a differential pressure system to retain dust within the milling equipment itself and then exhaust it away from operational areas, this risk is all but eliminated if routine maintenance is effectively implemented. Regardless, the mill manager will oversee and ensure the integration of mitigation measures in routine operations that look for and, where necessary, control dust accumulation so as to avoid the possibility of fire and explosions. Such measures to control dust in the warehouse will also be implemented.



Emergency situations that may arise at the farming operation include oil or fuel leaks and spills, uncontrolled fires, sewage and CPP spillage, and damage to community property. These issues have been identified and included in the above referenced 2014 ESIA E&S management plans. In addition, situations involving transport of hazardous materials and/or waste is also a concern; this is further discussed in relation to Community Health, Safety and Security in PS4 section below. Awareness of these emergency situations will be integrated into induction programs that all workers (including temporary and seasonal workers) will receive upon being hired by the Company. The Company will use collected data (as part of the management system) to determine, and provide, additional training (such as annual refresher training). Compliance with measures to prevent emergency situations – and measures to undertake if they do occur – will be the responsibility of an emergency coordinator to be appointed at the farm as per the ESMP.



Monitoring and Review. The Company will implement the monitoring of its E&S performance using the programs included in the ESMP of the ESIA. The Company will reference the WBG EHS Guidelines (Gener
al, Annual Crop Production and Food and Beverage Processing) and benchmark their performance against good international industry practice performance for inputs (water, energy, etc.) and outputs (effluent quality and amount of waste produced, as applicable). For example, the use of electrical power in milling will be tracked and used to drive energy efficiencies. The amount of bran used to generate energy and the amount of energy produced in this process will also be recorded. In addition, in order to further benchmark operations, specific indicators for health and safety will be tracked, specifically Lost Time Incident Frequency Reporting (LTIFR); by way of comparison, industry averages for LTIFR in crop production is 8.0 (i.e. 8 days lost to occupational illness and injuries per million hours worked) and 6.0 for grain milling. Lastly, the Company will utilize IFC’s Carbon Equivalent Estimation Tool to calculate the equivalent tons of Greenhouse gases produced by the project and report to IFC using the Annual Monitoring Report.



External Communication and Grievance Mechanism

A grievance procedure is referred to in various parts of the ESIA; for example, a grievance mechanism is mentioned within the SEP. However, this is only a brief description of an ‘interim grievance mechanism’, which states that Terra has developed a grievance mechanism that ‘systematically records, negotiates and resolves disputes between Terra and the complainant.’ However, the grievance mechanism is not actually provided or further described. The SEP goes on to state that community leaders were informed about the grievance procedure, however, no further information is provided about the actual project-specific components and functioning of this mechanism. The Contractor Management Plan also refers to the grievance mechanism and requires that this ensures that community members can report offenses by contractors and that contractors can report offenses by communities. It should furthermore ensure that contractor employees can have full access to it to enable a confidential feedback process to Terra itself. Whereas it was stated by several community members during the site visit that they felt they had access to the Company to discuss issues, the requirement to formalize a grievance mechanism is addressed in the ESAP.

Human Resources Policies and Procedures. DRC labor law is comprehensive and is informed by International Labor Organization (ILO) provisions. The Company is in compliance with those requirements that pertain to the employment at both the mill and the farm; they are regularly audited and compile and also submit the required annual reports to the Labor Inspector and the National Labor Office. IFC reviewed and discussed the most recent audit reports with the Company and found no material issues outstanding.



Specifically, the Company has developed human resources policies and procedures as per the requirements of this Performance Standard. (In addition, there is an Employment and Capacity Plan referenced in the ESIA). They have provided specific documented information to those working at the Company, informing them of their rights as they relate to employment. For example, several documents pertaining to employment were provided to IFC, including the Company’s “Business Rules and Labor Code” (based on the DRC Labor Code of 2002). This document contained the following sections: general provisions, details on hiring, obligations of the worker and obligations of the employer, provision of vacation and public holidays, details on salary, bonuses and social benefits, information on wealth management, details on the process associated with disciplinary matters and final provisions.



Other documents reviewed included an example offer letter (for an executive within the HR department). The letter stated the position on offer, the remuneration (including payment of local tax) and other benefits to be provided by the Company (furnished housing, local allowance, medical expenses, holiday allowance, provision of local transport) and described (in general terms) the conduct expected of employees. Another example contract for locally-hired staff was also seen. This was for a position at the mill and also one at the farm. Both contracts included details on the base salary to be paid and also the family allowance per child, housing and transport compensation, provision of medical, dental, pharmacy and hospital benefits (borne by the employer and as prescribed by the Labor Code and the terms of the Collective Bargaining Agreement or CBA), provision of severance pay (after one year of employment) and included a copy of the aforementioned Business Rules and Labor Code.



Worker’s Organizations. The DRC has ratified ILO Conventions 87 and 98. The Labor Code permits workers to form and join trade unions without prior authorization.



Retrenchment. No retrenchment is expected as a result of this proposed investment. Instead, projections from the Company show employment increasing. At the farming operations, it is expected that an increase from 13 to 37 ex-pats and 38 to 80 local nationals (plus an increase in seasonal labor from 100 to 500 will be required for land clearing). Numbers at the mill show a similar picture of increased permanent employment opportuni
ties (with ex-pats growing from 13 to 25 and local nationals from 34 to 100).



Worker’s Grievance Mechanism. Provision of a formal and robust grievance mechanism for all workers will be required, as set forth in the ESAP. Both the proposed operational structure at the mill and that at the farm will be reviewed by the Company to ensure all workers have a mechanism to raise an issue, including the provision to do so anonymously. The Company will ensure it extends this opportunity to temporary and casual workers at the farm who may only be employed during periods of harvest. The mechanism will be designed to include appropriate levels of management and will address concerns promptly. Procedures used will be understandable and transparent and will preclude retribution. See below for comment on provision of a grievance mechanism to contracted labor.



Protecting the Workforce. The Business Rules and Labor Code document stipulates that employees must be at least 18 years of age. Proof of age – thorough review of an individual’s papers/identification is sought as part of the application process; as such, children are not employed by the Company.



Occupational Health and Safety. Provision of a healthy and safe workplace is addressed in the ESMP for those aspects of farm work that contain hazards and risks. Jobs at the mill will be assessed for hazards and risks as part of the development of the OHS management system, including the workplace risk assessment. This is referenced – and addressed in the ESAP – elsewhere in this document. Construction of the mill involved use of third party contractors; oversight of their operations was the responsibility of mill management. No incidents during construction were reported by management. Observations of those engaged in final construction made during IFC’s visit provided evidence of a well-run site with workers utilizing appropriate personnel protective equipment (PPE) and exercising necessary precautions when undertaking jobs with inherent hazards (e.g. working at height and carrying out welding, etc.). Such requirements are integrated into contracts signed between the Company and its contractors.



The Company provides drinking water (as well as water for washing, laundry, etc.) to those working and living on the farm. They have previously monitored the quality of the drinking water at the farming operations; the 2014’s ESIA compared these results against World Health Organization (WHO) drinking water standards. The water is of a good quality with the exception of slightly elevated levels of iron (levels recorded between 1.4 and 2mg/l as compared to WHO standards of 0.3mg/l). This level of iron is not deemed a health hazard; however, the Company will continue to monitor drinking water quality as part of its overall monitoring program to ensure the water provided is of drinking water quality.



Workers Engaged by Third Parties. As noted above, the Company employed contractors to construct the mill. W
hereby this work is almost complete – and the mill will be commissioned in July 2014 – the Company will further develop procedures as part of its overall compliance to PS 2 that will ensure any further third party-led work (to include farming activities), meets the requirements of PS 2. Specifically, the need to ensure third party workers have access to a grievance mechanism, either provided by the contractor company, or in its absence, provided by Terra themselves is required. If the need for Terra to provide a grievance mechanism arises, then the Company will publicize its availability in a culturally appropriate language and manner. This element is addressed in the ESAP.



Supply Chain. Matters of local supply chain (i.e. from small holders) are not applicable at present given the Company grows all the maize itself. If, however, the Company moves in the future to take maize grown by small holders within DRC, they will ensure that such a supply is free from child and/or forced labor and work with such suppliers (through outreach programs, for example) to ensure the supply is absent of significant safety issues. Compliance with this element of this Performance Standard is referenced in the investment agreement. The Company will develop and implement a supplier code of conduct (to be applied in the event of importing maize from Zambia, for example); such requirements are included in relevant international standards to which the Company is committed to achieving.

Resource Efficiency. As the farming operation is rain fed (with an average rainfall of 1200mm per annum) , the project will not be a significant consumer of water. Water for domestic use – for the workers housed on the farm, for example – will, however, continue to be required and its supply increased as per the expansion of the farming operation. The ESIA details two boreholes currently used to provide drinking water. Whereas given the rainfall in the region, it could be expected that natural recharge will be sufficient to provide for this continued supply. Hydrogeological census outlined in the ESIA’s bio-physical baseline did not include this level of assessment. The ESMP calls for the Company to monitor community boreholes to ensure that their rates of extraction and quality control are not being impacted by the Company boreholes and/or farming operations.



In order to minimize the need for agricultural inputs, the Company has undertaken soil analysis and uses this as a basis to determine the most appropriate application rates for fertilizers. As an example, a normal maize crop removes approximately 27kg N per ton, 5kg P per ton and 20kg K per ton. Given the 8t/ha expected from the current crop, the application rates as applied on the Lubanda block (400kg/ha of NPK 10:15:15, 390 kg/ha of urea and 50kg/ha of foliar NPK 19:19:19. reported by the agronomist) have been carefully calculated to provide just enough to maximize the crop while avoiding over-application. Avoidance of over application not only controls costs but, from the perspective of resource protection, greatly minimizes the possibility of excess nutrient loading in any run-off from the cultivated areas creating problems with respect to water resources. In addition to this management practice, the Company has created drainage ditches and other physical barriers to run-off so as to ensure that nutrients designed to be used for increasing production remain within the boundaries of the farm.



The ESIA references the burning of waste material left in the fields after harvest (Section 4.5.4). The Company will review this practice to determine the best approach to avoiding weed growth post-harvest (this is why burning is currently undertaken) that will also maintain soil integrity/quality and prevent the loss of valuable topsoil. The Company will work to implement good international industry practice (GIIP) as referenced in the WBG EH&S Guidelines on Annual Crop Production as well as certifying their sustainable agricultural management practices against a Voluntary Agro-Commodity Standards, such as Global Gap and Rainforest Alliance. The issue is addressed in the ESAP.



Resource efficiency in the mill cannot be determined at this point in time as the mill has yet to begin operations. Ostensibly a dry process, upon commencement of operations, mill management will still design and implement procedures (and provide for their monitoring and measurement with the results to be included
in the company’s AMR) to ensure milling operations are conducted as efficiently as possible. Of importance here is the fact that the Company has invested in state-of-the-art equipment so the expectation is that operations will be able to achieve maximum efficiencies and will perform well against other aging milling operations as can be found in Katanga and those in Zambia from where flour is currently imported. Also, as noted elsewhere, the Company intends to construct a facility to turn bran into energy, potentially making the operation self-sufficient in its energy needs – and possibly even a net energy provider to the grid. Approximately 60 tons/day of bran will be produced by milling and it is estimated that 85-90 tons/day is required to generate enough power to run the milling operation. A feasibility study will be undertaken to further assess energy generation from bran. By comparison, it is understood that 90 tons of bran can generate about 2.5MW of power using the type of technology being envisaged. Diesel-powered back-up generators may be used to power the mill in the event of a power cut to avoid shut down. A small generator to power the office may also be contemplated. This further drives the need to develop the waste-to-energy initiative so the mill can be kept operational even in the face of power loss from the grid, without incurring excessive costs associated with diesel powered generators. The requirement to develop a monitoring and measurement program to target resource efficiency is addressed in the ESAP. Subsequent results will be reported to IFC in the PS1 KPI’s related requirements under the ESMS’s monitoring plan and reported in the annual AMR.



Pollution Prevention. Other opportunities for minimizing resource impacts were discussed during the appraisal. The use of expanded soil sampling as the farm area grows, and then using such information to inform nutrient application (using GPS controlled spreaders) was suggested. The careful use of disc harrows in combination with rippers that will help avoid soil compaction was also discussed; this could be enhanced through the use of a Controlled Traffic Farming system, for example, that further reduces movement of heavy vehicles so as to minimize soil compaction. It was suggested that future purchases of tractors should target higher horsepower vehicles which are overall more efficient and therefore use less diesel per hectare (50 liters per hectare as compared to 90 liters for smaller vehicles). Introduction of a second crop (such as soy) as an intercrop (thereby moving away from the monoculture cropping currently practiced) would help maintain the current low disease and pest pressures thereby continuing to minimize the need for pesticides.



The only wastewater generated in any quantity at the farm is that of sanitary waste from ablution blocks in the housing area. This is channeled to, and treated in, a septic system. Solid and hazardous wastes (from vehicle servicing, fo
r example) are managed in a rudimentary manner at present, although they are protected from rain water both directly and run on. The need to better manage both solid and hazardous wastes is described in the ESIA and included in the ESMP.



Pesticide Use and Management. A pest control inspection plan for the mill has been developed, as part of the ESMP. This is a high level document at present and should be reviewed to ensure it contains, or at least makes reference to, practical procedures and steps (including the identification of roles and responsibilities, provision of resources, and highlights the training required and equipment needed to carry out actions safely so as to protect worker safety and includes actions to monitor their health) and provides access to records that, once complete, will demonstrate implementation of the plan. A review of the records will, in time, allow the Company to determine the effectiveness of the plan and whether changes or updates are required to ensure it is achieving its objectives. This is addressed in the ESAP.



The ESIA briefly mentions the application of techniques that could form part of an Integrated Pest Management (IPM) program. This requirement to formulate and implement an IPM and/or integrated vector management (IVM) approach targeting economically significant pest infestations will be more fully developed and integrated into farm operations as per the ESMP.



As part of the existing approach to weed and pest control, the Company utilizes several herbicides and pesticides on the Lubanda farm (see section 4.5.2). The pesticides, based on cypermethrin, Lambda-cyhalothrin and Pirimiphos-methyl are all Class II pesticides according to the World Health Organisation Recommended Classification of Pesticides by Hazards. Herbicides being used on the farm are as follows: Callisto (with a mesotrione active ingredient) unclassified; Nucomax (sulphonyl urea) not listed in the WHO Classification; Dual Gold (metalachlor) also not listed, Gesaprim Super (atrazine) – atrazine based pesticides are Class III; and, glyphosate (Class III). The Company will review all chemicals being used and ensure they are all in compliance with the requirements of PS 3, which prohibit the use of Class Ia (extremely hazardous); or Ib (highly hazardous) pesticides. This Performance Standard further requires that the client will not purchase, store, use, manufacture or trade in Class II (moderately hazardous) pesticides, unless the project has appropriate controls on manufacture, procurement, or distribution and/or use of these chemicals. These chemicals should not be accessible to personnel without proper training, equipment, and facilities to handle, store, apply, and dispose of these products properly. As such, the Company will ensure compliance with the proper training, equipment, and facilities to handle, store, apply, and dispose of the above Class II pesticides and keep records accordingly. This is addressed in the ESMP; it
will, however, be enhanced to include all of the above provision as per the attached ESAP.

Infrastructure and Equipment Design and Safety. Potentially negative community health impacts may stem from dust and noise related to the movement of equipment, materials and project personnel during land clearing and facilities construction. During operations, trucks transporting raw and processed materials may affect the population of rural villages and settlements located within a few kilometers of the project, and also along nearby roads including the N5 between Lubumbashi and Kasenga. Community safety risks will also result from a marked increase in vehicular traffic during both the construction and operational phases and the concomitant potential for accidents involving both humans and domestic animals. Whereas the ESIA provides an assessment of the impact of traffic on utilization capacity of the N5 (deemed to be of medium significance, reducing to low significance after mitigation), it does not provide a specific assessment of project impacts upon community safety. Currently, a high level Community Health and Safety Plan is provided in the ESIA, including guidance on Transport and Traffic Safety Management. This needs to be further developed into a Traffic Safety Management Plan based on an assessment of real risks and impacts to the communities, and appropriate management and mitigation measures. This requirement is addressed within the ESAP.



Hazardous Materials Management and Safety. Transport of hazardous materials (including herbicides and pesticides) to the farm from Lubumbashi will entail potential risks. The Company will actively manage these traffic operations either through commercially reasonable efforts to control the safety of deliveries (for example by incorporating contractual requirements into agreements between Terra and the licensed service provider for the transport and additional audits and checks of contracted vehicle operations) or, if trucks are company-owned, by direct command and control of truck operations. Such measures will be designed to manage normal operations and also encompass potential emergency situations. This requirement is addressed in the ESAP.



Ecosystem Services. The communities in the area of the farm are reliant on provisioning and regulating ecosystem services. Natural resources regularly used by local residents include land for agriculture, firewood, thatching grass, fish from the streams and Lubanda Lake, wild animals for bushmeat, building materials, medicinal plants, grazing for livestock and potable water. Many of the resources in the area are being depleted due to the combined pressure from small scale unsustainable (subsistence) agricultural practices. According to the ESIA, the impact on these ecosystem services will be of medium significance during both construction and operation of the farm, reducing to being of low significance during construction, if management measures are implemented. However, during operation this is expected to remain as a medium impact. The mitigation measu
res proposed include the undertaking of a detailed assessment of the current ecosystem services available in the concession areas and the extent to which these are utilized by the local community; to allow households to access portions of the concession to continue to use certain ecosystem services; and to compensate households and develop livelihood restoration initiatives should loss of income/ effect on livelihoods occur. Other broader recommendations include provision of alternative roofing materials to households if thatching grass is impacted, compensation for medicinal plants and continued provision of safe access to Lubanda Lake. Reference is made to all of these being included in the Land Acquisition and Compensation Policy Framework (LACPF). Any impacts on ecosystem services and associated mitigation measures must be developed and integrated into the Biodiversity Action Plan (BAP), Social Development Plan (SDP) and Livelihood Restoration Plan (LRP). This is addressed in the ESAP.



Community Exposure to Disease. The project may contribute to the spread of communicable diseases, such as HIV/AIDs, sexually transmitted diseases (STIs) and Tuberculosis(TB) as a result of the presence of additional workers for bush clearing and the in-migration of men into the project area in search of employment. According to the ESIA, the increased prevalence and spread of communicable diseases will be an impact of medium significance prior to mitigation, reducing to low impact with implementation of the mitigation measures. Proposed measures include working with local government and implementation partners to support an integrated HIV and TB prevention and management program for both workers and the communities; support for intensive awareness raising campaigns and capacity building for local government, NGOs and community partners and financial support for local clinics. There is also an emphasis on implementing and enforcing measures in the Influx Management Plan, Contractor Management Plan and Community Health and Safety Plan. These plans are still at a very high level and must be further developed and designed to meet the project-specific impacts and risks, including those associated with communicable diseases.



Security Personnel. The Company utilizes some employees as guards to prevent theft of maize from the fields and also to protect the administrative offices and equipment yards. Similarly, the milling compound is protected by a wall and manned entry booth. In compliance with DRC law, such guards are not allowed to be armed. Going forward, as set forth in the ESAP, the company will develop and implement a Security Management Plan based upon the Voluntary Principles on Security and Human Rights to include training on defensive use of force by its own and (if applicable) outsourced security personnel. In addition, the Company has established well defined corridors for passing through its farms by surroundings communities (such as to access th
e lake) and communicated its existence to the local communities.

General. The 2014 ESIA is based on an update of the 2006 GAC Report and includes minimal additional baseline surveys, limited to a few days of cursory field survey, supported by a literature review and community interviews. The area of the TERRA concession is however characterized as a degraded savannah/dry forest area with low fauna and flora diversity. This is corroborated by third-party reports by international NGOs of neighboring areas, including within national parks located in the region. Local external experts were consulted for the ESIA but a number of minor gaps exist, such as spelling, and out-of-date or unidentifiable scientific names. As set forth in the ESAP, this suggests the need for further development and review by a credible biodiversity expert; a number of NGOs are known to be recently active within the region, focusing on the neighboring national parks who could fulfill that role (such as Wildlife Conservation Society, Frankfurt Zoological Society, and Biodiversité au Katanga ASBL (BAK)).



Habitat Characterization. The current ESIA describes the project area as a matrix of Miombo woodland, scrub, cultivation, and wetland habitat. Land use is characterized by livestock farming, shifting cultivation and rural settlement. These activities combined with existing hunting, charcoal production, regular burning and confirmation of extremely low species diversity dominated by widespread species suggest a mix of Modified and Natural Habitat. The exact extent of this Modified/Natural Habitat mix is however unclear at present and so the potential impact on Natural Habitats as a result of planned clearance remains unclear in the current ESIA. The recommended further development of the ESIA should definitively map the extent of Natural versus Modified habitats, as per IFC definitions, and describe relevant impacts and suggested mitigation (including avoidance of natural habitats) within an enhanced ESMP, as necessary. Completion of this activity should address impacts from habitat loss and fragmentation.



Critical Habitat

Based on the current description, the TERRA concession is unlikely to hold any Critical Habitat values. The updated ESIA, however, should make a definitive statement on the likelihood of Critical Habitat.



Other Biodiversity values

Fauna and flora diversity is low in the TERRA concession and surrounding area. Two threatened species (Endangered: Egyptian Vulture, Neophron percnopterus; Vulnerable: Southern Ground Hornbill, Bucorvus leadbeateri) are however listed within the updated baseline (Table 5-10). The ESIA updates the reference, as made in the GAC report to mammals in general and possible occurrence of Lycaon pictus in particular, by stating that “No Red Data mammals were recorded within the TERRA concession during the faunal surveys. “Occurrence of these mammals is limited by continued habitat disturbance and loss regionally. In the GAC report the Lycaon pictus species was listed. However feedback from Prof
essor Amisi Mwana from the Lubumbashi University confirmed that this species does not occur in the region. SRK also checked the IUCN Red Data List (sic IUCN Red List of Threatened Species) or Encyclopedia of Life and confirmed that this species does not occur in the region. However this will be further verified in the comprehensive ESIA



The region falls within the Miombo-Mopane Woodlands and Savannas of Southern Africa, one of Conservation International’s 5 High Biodiversity Wilderness Areas that also include the Amazon, Congo and New Guinea tropical forests. This broader wilderness spans much of Central and Southern Africa. Given the general importance of Miombo, the ESIA recommends efforts should be made to rehabilitate important areas of remaining Miombo within and around the concession (ESMP B1 and B3). This should be extended to any areas identified as having special importance, such as riparian or wildlife corridors, that could be set-aside from planned clearance. Staged clearing (ESMP B1), to allow wildlife to escape is only useful if efforts are made to conserve areas into which they might re-establish. This could be targeted towards important wildlife, if these occur, and implemented in the context of planned set-asides and/or rehabilitation efforts.



Aquatic and wetland habitats are identified as sensitive areas by the ESIA. These may be impacted by run-off and pollution (as noted elsewhere in this document). This will be managed by a Storm Water Management Plan, to be fully developed within the comprehensive ESIA, and appears sufficient as described (ESMP B2). Generally low diversity of species will be addressed by control of hunting by staff on the TERRA concession (ESMP B6). This should be extended to include hunting by any persons on the concession and include all areas targeted for set-aside/rehabilitation.



The comprehensive ESIA should confirm the status and impacts, if any, on priority biodiversity, such as the IUCN Endangered and Vulnerable species listed in the ESIA. Where important species or biodiversity values are found to be impacted, they should be subject to appropriate mitigation as applicable. In addition, the comprehensive ESIA should map out important areas of Miombo, such as riparian or wildlife corridors, for potential set-aside or rehabilitation. Management of hunting should be extended to include all persons on the concession (not only staff) and applied to any areas targeted for set-aside/rehabilitation.



Legally Protected Areas and Internationally Recognized Areas

The TERRA concessions area is located 80 km south of Kundelungu National Park. No impacts are expected.



Ecosystem Services

This issue is addressed elsewhere in this document (PS 4 and 5.)



Invasive aliens

Alien invasive and weedy plant species occur throughout the TERRA concession, but are primarily associated with disturbed/transformed areas such as along roads and around fields and villages. Systematic removal of aliens, planting
of indigenous species and preventative cleaning of machinery to prevent further spread is recommended with the ESIA and the ESMP and appears sufficient as described (ESMP B5).



Sustainable Management of Living Natural Resources

TERRA is not currently managed under a third-party sustainability certification. This issue was discussed with company management during the site visit and is also included in the ESIA (which recommends that a certification process for the TERRA project will be initiated as part of the future development of the ESIA/ESMP, as referenced on p.248). As set forth in the ESAP, the Company will determine the most applicable credible certification scheme (e.g. Global GAP, Rainforest Alliance or its equivalent) and will work towards achieving independent verification or certification.

To date, no sites of cultural heritage have been found in the land developed in the Lubanda concession area. Despite this, the issue of disturbing sites of cultural heritage remains especially as the farm expands into the rest of the concession area. The issue is assigned a medium level risk, reducing to a low level upon implementation of the both a Cultural Heritage Management Plan and a Chance Finds procedure (Section 8.9.) The management plans seek to avoid impacts upon grave sites, recognizes the role of contractors in implementation of such a plan and includes reference to the role of a company employee in its implementation (a generic Health, Safety and Environment officer). The Chance Finds procedure provides details on the steps to be taken should cultural heritage sites be discovered.



The Company has undertaken measures related to corporate social responsibility (CSR.) For example, two boreholes have been provided to surrounding villages. Regular donation of medicines to local clinics as a contribution to health and family welfare of the surrounding villages is made. Installation of 10 and 50 watt solar street lights at several locations in the adjacent villages has been completed. The Company has plans to continue such engagements and will incorporate such measures into the overall stakeholder engagement program as that is formalized.

Stakeholder engagement was undertaken in 2010 as part of the initial ESIA process, and again by SRK during the update of the ESIA between December 2013 and March 2014. This engagement took the form of public meetings, focus groups and key informant meetings, where stakeholders were provided with information about the project and invited to provide comments, concerns and expectations. Focus group meetings were held with groups of women, youth and men. Stakeholders included representatives from local government, Ministry of Environment, Ministry of Agriculture, traditional authorities, community leaders and community members from surrounding villages. Meetings and presentations were held in Swahili and French, and in addition to responding verbally during these meetings, stakeholders could also provide written responses to questionnaire (translated into French).

Public disclosure of the ESIA was undertaken through the distribution of a Background Information Document (BID) (in French). Copies of the BID together with the notification letter (in Swahili and French) and comment form were delivered to the relevant authorities in Lubumbashi, the Territory Office in Kasenga and Kipushi, as well as to traditional authorities and community leaders in the project area, for distribution to community members. The BID provided a description of the project and summary of the key findings and recommendations of the specialist studies. It also described where to find the ESIA reports and how to comment. Stakeholders had the opportunity to comment either by completing the comment form available with the BID or writing a letter or sending an email by 20 March 2014 to the contact details provided.

Stakeholder comments received during consultation and in response to the BID indicated a positive perception about the project, with perceived benefits and requests including provision of job and business development opportunities for the local communities, particularly for the youth; support to the local farmers; reduced reliance on charcoal-making which impacts on the environment, and alcoholism linked to unemployment. Poverty reduction, promotion of education, improvement to infrastructure (notably roads and electricity) and health facilities and associated reduction in reliance on charcoal-making, as well as increased social mobility being major themes. Government officials responded favorably in terms of expectations of macroeconomic benefits and improved availability, as well as pricing of maize in DRC. Opportunities for collaboration between TERRA and the local nongovernmental and government (including police) structures were also noted. Concerns raised included concern about perceived low salaries, limited availability of potable water for both communities, loss of agricultural land from the project footprint, as well as air pollution and dust impacts from the project. Since the GAC ESIA in 2010, TERRA has addressed some of these issues by complying with the DRC Labor Code on salaries. Furthermore, two boreholes have been installed in the surrounding villages as part of TERRAs corporate social responsibility.

An initial, high level Stakeholder Engagement Plan (SEP) has been developed for ongoing engagement across the project lifecycle. At this stage, besides providing an overview of engagement undertaken to date, this is essentially a guidance document, with very limited project-specific information. This plan must be further developed such that stakeholders are identified and analyzed and a plan is put together for engaging with these stakeholders in an appropriate manner and on a regular basis. The initial grievance mechanism as mentioned above will be developed and applied such that it ensures that issues are effectively dealt with as issues arise, and any trends in issues arising are monitored and proactively addressed. The SEP must be developed with a view to review and revision by Terra on an annual basis to ensure that the strategy continues to be appropriate over time.

Notwithstanding the need to evolve the SEP, IFC appraisal findings considers that the stakeholder engagement demonstrated by the Company thus far has been appropriate considering the risks and impacts of the proposed farming and mill operations. Summary reports received during field appraisal validated this informed consultation and participation (ICP) from project affected peoples.

Project information has already been disclosed to local communities as part of ongoing stakeholder engagement.

Broad Community Support is not applicable for this project

Terra AMC(34451) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Design and implement to the point of self certification a management system (at both the mill and the farm) based upon ISO 14001	31-Dec-2015	Cancelled	Changed project circumstances mandated cancellation of this task
Design and implement to the point of self certification a management system (at the farm and the mill) based upon ISO 22001	31-Dec-2015	Cancelled	Changed project circumstances mandated cancellation of this task
Design and implement to the point of self certification a management system (at the farm and the mill) based upon OHSAS 18001 or its equivalent	31-Dec-2015	Cancelled	Changed project circumstances mandated cancellation of this task
Completion of Assessment and Management Plans.The company will provide sufficient financial and human resources (either internal or external through the use of qualified consultants) in order to finalize the preliminary assessment and management plans identified in the ESIA as requiring completion and incorporate them into the overall ES management system to be implemented at both the farm and mill (including but not limited to the development of an over-arching policy, Preliminary Environmental Awareness Plan, Construction and Site Clearing Control Plan, Community Health and Safety Plan (CHSP), Emergency Preparedness and Response Plan (EPRP), Cultural Heritage Management Plan and Chance Find Procedure, Influx Management Plan, Contractor Management Plan, Employment and Capacity Plan, Biodiversity plan, Hazardous Materials Management Plan, Pesticide Management Plan (to include monitoring the health of those working with pesticides), Transport Safety Management, Security Management Plan (based upon the Voluntary Principles on Security and Human Rights) and a Water Management Program. The company will also further develop and finalize the Stakeholder Engagement Plan (SEP), incorporating a Community Grievance Mechanism. A Livelihood Restoration and Development Plan will be developed as part of the Social Development Plan (to also include consideration and use by communities of ecosystem services as identified in the ESIA). Also a Land Acquisition Policy Framework and Livelihood Restoration Plan and/or Resettlement Action Plan (if physical resettlement is required) will need to be developed should any further land acquisition take place that will, at a minimum outline the type of social due diligence and possible census/socio-economic studies that Terra will undertake prior to acquiring land, to ensure that the land is not occupied, or to potentially resolve land tenure issues prior to or during the land acquisition/leasing process. As per the ESIA, the completion of these plans will be informed by, and responsive to, the requirements of the IFC Performance Standards and GIIP such as included in applicable WBG EH&S Guidelines including objectives and performance targets/limits therein.	31-Jul-2014	Cancelled	Changed project circumstances mandated cancellation of this task
Worker's Grievance Mechanism. Develop, publicize and implement a worker's grievance mechanism (at both the farm and the mill) that meets the requirements of PS2. If contracted labor does not have access to a worker's grievance mechanism, make the mechanism available to them and publicize its availability.	31-Dec-2014	Cancelled	Changed project circumstances mandated cancellation of this task
Review of farming practices (burning of waste following harvest). Following the 2014 harvest, in keeping with GIIP the company will review the practice of burning of waste to determine viable alternatives so as to maintain soil quality and avoid impacts associated with burning.	31-Dec-2014	Cancelled	Changed project circumstances mandated cancellation of this task
Design and implementation of an energy monitoring and measurement program at the mill. The company will monitor and measure energy consumption at the mill and benchmark performance against industry standards (such are contained in the EH&S Guidelines of their equivalents) and use results to promote efficiency throughout the milling operations.	31-Aug-2015	Cancelled	Changed project circumstances mandated cancellation of this task
Certification of primary production practices. Obtain independent verification or certification to a globally recognized standard relevant to the production of maize in comlpiance with the requirements of PS 6.	31-Dec-2015	Cancelled	Changed project circumstances mandated cancellation of this task
Supplier Code of Conduct. Develop and implement a supplier code of conduct in compliance with the requirements of the Performance Stanadards (PS 2, paragrphs 27 - 29; PS 6, Paragraph 30)	31-Dec-2014	Cancelled	Changed project circumstances mandated cancellation of this task