While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of projects because it may create a limited number of specific environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance specifications, guidelines, or design criteria. Key environmental, health and safety, human resources and social issues that were reviewed included the following: environmental and social management system; emissions to the environment – air, water and subsurface; solid, and hazardous waste and materials management, including transportation; community and occupational health and safety; energy use and efficiency; community engagement; and land acquisition.

- PS4: Community Health, Safety and Security is not applicable since the facilities are all located within well managed industrial zones. As such risks and impacts to community health, safety, and security that may arise from project related-activities are minimal.
- PS5: Land Acquisition and Involuntary Resettlement is not applicable since all facilities are existing and located on land that has been acquired commercially through ''willing buyer-willing seller'' arrangements.
- PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable since the company’s activities do not impact biodiversity resources or negatively influence sustainable use of natural resources.
- PS7: Indigenous Peoples is not applicable. No Indigenous People are known to have been in the area or affected by the project.
- PS8: Cultural Heritage is not applicable. The projects being considered for IFC financing are not located in areas of known historical or cultural significance.

Because IFC’s proposed corporate investment in MAS may be used to support future but, as yet, undefined projects in addition to the existing project, the principal Performance Standards (PS) to be applied to this investment are those listed above. A condition of IFC’s investment going forward will be that the company shall adopt IFC Performance Standards as part of the applicable legal and other requirements in all of its operations, and consider the issues identified in PS1 through PS8 when it is assessing any new business opportunities, acquisitions or mergers, or business models.

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.

MAS places a high priority on product quality, environmental management, and worker health and safety performance, and has demonstrated strong environmental and social performance since beginning its operations in 1986. Whilst MAS is privately held by the Amalean family, the company’s operation is run by a professional management team. MAS’ operations are ISO 9001 (Quality) and ISO 14001 (Environmental Management) certified, with certification provided by international certification agencies. Additionally, the company complies with stringent environmental and social performance requirements of its key clients such as Victoria’s Secret, Lululemon and Nike.



MAS has a robust corporate management system which provides oversight of environmental, social, health and safety (ESHS) issues consistently across its distributed operations. The Company’s management program includes operational policies and procedures that are implemented at the facility level by supervisors who report to management on an as needed basis. Policies and procedures comply with applicable local regulatory requirements for operation of these facilities including those for human resources and labor, occupational health and safety, and environmental compliance. Responsibility for the management of environment, health, safety and social performance is currently assigned to senior level staff within the company reporting to the CEO. These individuals have overall responsibility for strategies, policies, standards, compliance, and management initiatives related to environmental and social matters, and for ensuring adequate resources are made available, and applied to all project activities.



Engineering controls and staff training are provided to mitigate risks and issues associated with chemicals and hazardous materials transport, storage and use. Chemical storage areas provide for adequate containment and neutralizing systems to minimize the impact of release. The company has emergency prevention and control plans which specify responsibilities, ensures appropriate response equipment and materials are in place, and detail a set of procedures to be followed to minimize the harm of any potential accident. Staff are routinely trained and drills conducted to ensure effective emergency response at all facilities.



The company’s management system provides adequate oversight of sub-contracted operations such as construction activities, transportation and handling of raw materials and finished products, security services etc. Security at the company is provided by well trained and professional unarmed guards.



The Human Resources department has responsibility for overseeing matters related to labor, working conditions and health and safety. The company provides training to all staff and sub-contractor personnel to ensure they have relevant skills and adequate training to perform their work. Training of staff is done on a routine basis in compliance with local workplace regulations
. Supervisors monitor that standards are met and any reportable incidents are reported and follow up action taken when required. Training, monitoring and reporting framework is established as per ISO certification requirements. Implementation of the framework complies with applicable national regulations, and is consistent with IFC PS1 requirements.

MAS is the largest private sector employer in Sri Lanka and employs about 66,000 workers across all its facilities. Housekeeping and security services are outsourced. The company has a human resources policy that is consistent with Sri Lankan labor laws, and this policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is also provided in the form of an employee handbook at the time of induction into the company. Subcontractors, including housekeeping staff are required to comply with all MAS labor requirements specified in contractual arrangements. The company is in compliance with national regulatory requirements, and has not been the subject of any violations of applicable labor laws, or labor strikes or disputes.



As per applicable local labor laws, the minimum age requirement for employment at MAS is 17 years. MAS ensures that child labor or forced labor is not employed directly or by subcontractors through verification of relevant documents. Hiring practices and employment relationships recognize the principals of non-discrimination and equal opportunity, freedom of association and grievance redress. Employees are aware of their right to freedom of association and have the opportunity to collectively represent to the management any issues or grievances that they may have. The workforce at any of the MAS facilities is non-unionized. Employees have the right to be part of a trade union, and may choose to do so at any time during their employment with MAS. Wages paid by MAS are above prevailing minimum wage requirements in Sri Lanka, and working conditions are considered to be above those of the market and competitors.



There is a plan for accident prevention and worker safety in compliance with national regulatory requirements, and for international standards for health care facilities. The company has developed standard operating procedures (SOP) to ensure safe and healthy working conditions for its employees. These include SOPs to handle fire safety and hazardous waste management, which are consistent with national regulatory requirements and international best practices. There are SOPs for fire prevention and containment, spills of hazardous materials, though the risk is minimal as only small quantities are stored at facilities in dedicated and secure storage areas. To further enhance its performance, the company will undertake a review of life and fire safety on a programmatic basis that identifies major fire risks, applicable codes, standards and regulations, and mitigation measures for all facilities, as described in the ESAP.



Occupational health and safety (OHS) is managed by designated health and safety staff at each facility. All employees in the company have to undergo a full training program at induction and subsequently on worker health and safety relevant to their job activity. The company monitors workplace noise and air quality in all de
partments regularly, provides all requisite personal protective equipment (PPE) and ensures that the use of PPE is stringently enforced. Human Resources department maintains permanent records of participation to ensure compliance. Facilities are audited annually by regulatory and insurance agencies. No fatalities or serious injuries have been reported at any MAS facilities. Facilities are subject to annual audits by regulatory agencies to monitor compliance with labor regulations, and also by audits from international clients. The company has been in compliance with regulatory requirements for occupational health and safety requirements and has recorded no significant lost time incidents or fatalities in its operational history. The company provides annual medical checkups for all its employees. All MAS facilities are adequately equipped and professionally staffed to provide on-site medical treatment, and evacuation to nearby hospitals if needed. Labor and working conditions at all MAS facilities are in compliance with IFC Performance Standards and applicable World Bank/IFC guidelines for the sector.

Water for plant operations is drawn from underground sources for which the company has obtained permission from the relevant authorities. MAS uses in excess of 2,000,000 cubic meters of water per day in all its facilities. Groundwater extraction by MAS facilities at different locations in Sri Lanka is from deep wells, and has no material impact to either availability or quality of groundwater. MAS has in place an ongoing water conservation program to reduce specific water usage, and monitor results on a monthly basis. Wastewater generated at MAS facilities consist of process wastewater, utilities blow down such as those from cooling towers, boilers and water softening operations, and sanitary wastewater from housekeeping, toilets and cafeterias. Process operations at some MAS facilities generate a complex and difficult to treat wastewater, such as those from production areas that use dyes and other bio recalcitrant agents. Wastewater is treated to meet applicable discharge quality standards for disposal to either surface water or centralized wastewater treatment plants where available. Treated wastewater from MAS facilities comply with regulatory requirements and applicable World Bank Group General and sector specific guidelines for the parameters monitored. Storm water discharge is not regulated by local regulatory agencies and is presently disposed to the environment without treatment. As agreed in the ESAP, MAS will review and validate the adequacy of wastewater treatment systems (and recommend ameliorative measures if needed) to meet consistent compliance with local regulatory requirements and WBG EHS Guidelines for the discharge of treated effluents to surface water. Additional to parameters explicitly listed in WBG EHS Guidelines for Textiles and Printing sectors, the effluent must meet or exceed acceptable (consistent with good international industry practice) toxicity standards as measured by Whole Effluent Toxicity tests (acute and chronic).



Hazardous materials such as percholoroethylene, dyes, etc. are managed in compliance with local regulatory and consistent with good industry practice. All hazardous materials are stored either in bulk tanks in the processing areas, or in a controlled storage area (for smaller volumes). Waste water collection channels have been installed near the small volume chemicals storage area, in the event of a leak or spill. MAS will undertake a review of operating procedures associated with the use of percholoroethylene with the objective of reducing employee exposure, and monitoring potential long term health impacts from exposure, as described in the ESAP. MAS’ policy is to minimize the use of hazardous substances in its operations, and is working toward ensuring all its products are free of any harmful chemicals to human health. All dyes and chemicals are supplied from producers with operations consistent with EU good practice (such as Responsible Care principles). Types and quantities of all wastes -
as well as means of recycling, reuse and disposal - are closely tracked by MAS. Hazardous and non-hazardous wastes are appropriately segregated, stored and disposed of when recycle or reuse is not practicable. Certified vendors are used by the Company for disposal of wastes in accordance to applicable local regulations. A limited amount of general waste is also generated from its operation and maintenance, such as packaging, metals, plastics, filters, oils etc. These wastes are disposed by certified vendors in accordance to applicable local regulations. Sludge generated from wastewater plant operations is incinerated at third party cement manufacturing facilities.



Electric power for all operations at MAS in Sri Lanka is drawn from the national grid. As contingency, some facilities have captive power plant for standby generation (using natural gas where available, and diesel elsewhere). Use of standby generators is limited to a few hours a month. Limited quantities of diesel are stored on site with adequate secondary containment. The company has also a small solar energy generation program to offset its energy usage sourced from fossil fuels.



Principal energy usage includes electricity procured from the grid (estimated to be about 115,000 MWh per year). Net greenhouse gas (GHG) emissions attributable to MAS’s annual consumption of electricity are estimated to exceed 95,000 metric tons of carbon dioxide equivalents per year. Since the level of GHG exceeds 25,000 tons of carbon dioxide equivalents per year, MAS is required to evaluate technically and financially feasible and cost-effective options to reduce or offset project-related GHG emissions during the design and operation of the project. Further, consistent with IFC PS3 requirements on GHG emissions, MAS will monitor and quantify GHG emissions as well as those avoided, in accordance with internationally recognized methodologies.

MAS has contributed significantly to local communities, and has a long history of involvement in the local communities in which it operates. The company has an effective community engagement program with full time dedicated staff, and has been a signatory of the UN Global Compact since 2003. As the largest employer at many of the locations where it has facilities, it has actively supported surrounding communities in areas of healthcare, education, women''s empowerment, and funding numerous community development initiatives.

No local community have been significantly affected by environmental risks or impacts from MAS’ ongoing operations, and has not been the subject of any public complaints or litigation with respect to its environmental, social or health and safety performance. In Sri Lanka, dialogue and communication with affected communities including public consultation and disclosure of environmental and social impact assessment occurs through procedures established by local authorities. Additionally, as the company''s operations do not have any negative impacts on the surrounding community, no formal community engagement plan on MAS'' environmental and social performance has been undertaken by the company to date. As part of its environmental and social management program, MAS will establish methods for communicating environmental and social aspects to stakeholders and maintain procedures for receiving, documenting and responding to stakeholder concerns and grievances relating to their activities, in full collaboration with local authorities.

MAS will disclose project documentation on its web site and locally at its corporate office and those of the co-borrowers/subsidiaries.

Natasha Silva
Corporate Finance, Treasury & Strategy
MAS Capital (Pvt) Ltd
10th Floor, Aitken Spence Tower II
315, Vauxhall Street
Colombo 02, Sri Lanka
Mobile: +94777135720
Telephone: +94114796454

And on the company website at http://www.masholdings.com

Broad Community Support is not applicable for this project