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

The most significant potentially adverse environmental and social issues associated with the project relate to labor and working conditions, including occupational health and safety and satisfactory treatment and discharge of sanitary waste water. The short-lived construction phase of the project has elevated occupational health and safety risk. These issues carry limited potential for adverse environmental and social impacts, which are site specific impacts and may be readily addressed through mitigation measures. This is therefore an E&S category B project according to IFC’s Policy on Environmental and Social Sustainability.

The project will not require acquisition of land, therefore issues associated with PS5 are not expected. Due to the location of the project in heavily modified habitat, that was previously farmland, issues associated with PS6 and 8 are not expected. The project does not impact indigenous peoples, therefore issues related to PS7 are absent..

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Policy

Grupo M has a long established Environmental Policy, signed by the company president. It commits the company to comply with applicable laws and standards, to acquire knowledge and technologies to mitigate significant environmental impacts, and to develop plans and processes to control and prevent contamination of air, water or ground, and to minimize wastes, all based on a continuous improvement approach. In terms of occupational health and safety, more recent material on Grupo M’s website states that Grupo M provides “safe and healthy workplaces striving to ensure no risks to our employees, contractors and visitors.”



Identification of Risks and Impacts

As a long-established textile and apparel manufacturer, risks in apparel assembly are well known to Codevi. Appropriate mitigation measures such as sewing machine drive belt guards and needle guards are in place, workplaces are generally well lit and emergency exit routes are clear and well marked. Codevi has successfully constructed many industrial buildings, and will act as its own main contractor in the forthcoming construction.



Organizational Capacity and Management Programs

Codevi has three complementary but overlapping strands to sustainability management, each headed by a Manager reporting to the Sales Director. These areas are “Sustainability” which drives issues such as energy efficiency in process, waste management and social engagement and environmental projects outside Codevi’s boundary, “Compliance” whose focus is on social compliance standards such as Better Work Haiti and also meeting international customers’ sustainability requirements, and Occupational Health and Safety. Employment issues are managed by the Human Resource department. As described below, Codevi has established a suite of policies and procedures, and has developed training to manage environmental and social issues in accordance with the frameworks provided by Better Work, customers, applicable legislation and the collective bargaining agreement (CBA) with the union.



Emergency Preparedness and Response

The most serious risk relates to fire. Response is based on rapid building evacuation which is facilitated by unobstructed exit routes and doors, and emergency lighting.



Codevi has an in-house medical center which provides first aid in the event of a work place injury but which also acts as the primary care health facility for employees and their families, in the absence of such infrastructure in Ouanaminthe.



Monitoring and Review

Codevi is in the process of establishing a key performance indicator (KPI) based management system for many parameters include environmentally related issues such as energy use. In labor matters, Codevi manages its labor force in accordance with the requirements of its suppliers, Better Work and its collective bargaining agreement (CBA), and is subject to regular audit and establishment and delivery on Corrective Action Plans all in a continuous impro
vement context. Codevi undertakes regular review of occupational health and safety statistics and workplace conditions, which are reviewed by senior management and incorporated into an annual report sent to IFC.

Codevi currently has around 7,000 employees and employment is expected to increase to around 11,000 on completion of the proposed project. Codevi has in place human resources policies and procedures to manage its labor relationships in compliance with the requirements of its customer brands, many of which have specific requirements in this area. In common with other Haitian apparel companies, Codevi participates in the Better Work Haiti program and is subject to six-monthly Better Work Haiti audits. Two of Codevi’s production buildings were awarded a Worldwide Responsible Accredited Production (WRAP) Gold certificates in October 2013, which are valid for one year.



All Codevi’s workers are employees of the company: Codevi does not provide employment through third parties.



Codevi’s compliance with PS2 requirements is summarized in the following paragraphs.



Human Resource (HR) Policies and Procedures

Codevi has in place a suite of HR policies and procedures covering a variety of issues including: prohibition of forced labor, work by minors, harassment, abuse or corporal punishment, pregnancy testing and discrimination. Codevi also has policy statements on compensation and benefits, an open door policy for employees, working hours, maternity rights and confirming the right of workers to freedom of association without discrimination, and a procedure on communication of complaints and suggestions.



Upon taking up employment, the employee is provided a written contract that defines the terms of employment, rights under the law and the CBA, hours of work, wages rates, overtime arrangements and other customary conditions. In accordance with the CBA, the normal work week is 5 nine hour days, for basic pay of 240 Gourdes/day with an opportunity to increase earnings through piecework.



Codevi does not use migrant workers, nor does it provide accommodation services to its employees.



A recent Better Work Haiti audit identified allegations of sexual harassment and bullying by supervisors, which were investigated by Codevi. In one case the allegation was substantiated and the supervisor was dismissed. In response, Codevi has stressed that such behavior is not acceptable and in breach of both Codevi’s own policy statements and the CBA. Codevi has with a Better Work team delivered training to line supervisors and middle management to reinforce its policies on this matter.



Workers’ Organizations

Codevi’s workforce has been unionized since 2005, with employees belonging to the union Sokowa (Le Sendika Ouvriye Codevi Wanament / Syndicat des Ouvriers de Codevi à Ouanaminthe). Codevi has negotiated a CBA with this union since 2005.



Codevi management has no role in appointing union representatives who are elected by their members every two years. Each factory building within the zone has a committee for the purpose of liaison between the union representatives and factory management. Codevi has appointed one member of its staff to
the permanent role of union liaison, with formal meetings scheduled on a weekly basis, but in practice held almost daily.



Working conditions and terms of employment are documented in the CBA.



Non-discrimination and Equal Opportunity

Both the CBA and Codevi’s own human resources policy framework prohibit discrimination on grounds unrelated to inherent job requirements.



Retrenchment

Retrenchment is not expected, since Codevi has an established track record of expansion and will expand further with project implementation.



Grievance Mechanism

Codevi has several grievance mechanisms.



The union plays an active role and regularly communicates worker grievances to company management on behalf of the workforce.



The company also has several mechanisms for direct communication of grievances by staff (without union intervention) and a formal procedure around grievances and suggestions. These may be communicated by staff by personal communication with line managers or the HR department or through suggestion boxes located within the factory which are checked on a weekly basis by the HR department. When making a complaint, the complainant has the right to be accompanied. Complaints are investigated promptly, feedback provided and records kept of the nature of the complaints. Codevi’s records show that the most common subjects for complaint relate to salary levels and that the refrigerated drinking fountains can become overloaded (hence supply warm instead of cold water) when workers go to or return from collective breaks (such as lunchtime). Complaints have also been made about working temperatures within the factory buildings which are well ventilated but not air conditioned.



Protecting the Workforce

Codevi has policies that prohibit use of forced or child labor. In the case of child labor, although the minimum working age in the country is 15 years, it is the policy of Codevi not to employ persons younger than 18 years. The age of prospective employees is checked by reference to identity documents.



Occupational Health and Safety

Codevi’s operations consist of apparel assembly. Fabric cutting is undertaken in Santiago. Production takes place in single level purpose-built buildings which provide for a relatively low risk workplace in safety terms, particularly with reference to structural robustness and ease of exit. The lost time incident frequency rate (LTIFR) in 2012 was around 4.2 per million hours worked, which exceeds an international benchmark for the sector of 3.5 LTIs/million hours worked. However Codevi’s performance has improved markedly over the last three years in which time the LTIFR has been halved.



Most injuries are needle-stick incidents. First aid is provided by Codevi’s on-site medical center. Accidents are investigated, and followed up with the relevant production manager. While workers tend to push needle guards aside to provide clearer visibility at the workstation, Codevi continually stre
sses to employees the need to use these guards for eye protection;. Other personal protective equipment is provided and staff are trained in its use.



Codevi undertakes regular monitoring of noise, illumination, workplace air quality and temperature in its workplaces. Codevi’s own monitoring, and a recent Better Work Haiti audit have identified a need to reduce workplace temperatures; Codevi is evaluating how best to do this. Clean drinking water is provided to workers, but limitations on supply of chilled water have been noted and are being addressed by Codevi through ongoing replacement of water coolers. Other issues identified through Better Work Haiti audits such as the need for chairs with backs, more secure chemicals storage and provision of a missing material safety data sheets (MSDS) and ongoing upkeep of washrooms have been addressed or are being corrected through a rolling upgrade program.



Codevi’s buildings have emergency lighting, unobstructed exits routes and well-spaced exit doors on both sides of the buildings. Fire alarms have recently been upgraded

Resource Efficiency

Codevi’s operations have relatively low resource consumption. All manufacturing processes are dry, while the main users of electricity are sewing machines, lighting, ventilation and air compressors.



Codevi has established an energy committee with representation from its sustainability team and each manufacturing building to work on energy efficiency issues. Meters are read daily, and consumption is discussed on a weekly basis and continuous improvement targets are set. Recent improvements have included sewing machine motor change to high efficiency electronic units, lighting control, enhanced air compressor cooling and adoption of variable speed drive air compressors. A program of lighting replacements with LEDs and installation of a large photovoltaic system are under consideration by Codevi. These efficiency measures will be replicated in the new buildings.



Water is drawn from wells, and treated by reverse osmosis to a quality suitable for drinking and for sanitary purposes. Codevi is starting to plan a water efficiency campaign: an early measure is to install timers on faucets in washrooms.



Greenhouse (GHG) gas emissions

Codevi’s GHG footprint is caused by its use of electricity as described above, fuel for fork lift trucks, and some refrigerant losses. IFC estimates annual GHG emissions will be well below 10,000 tonnes/year CO2 equivalent upon project completion.



Pollution Prevention

Codevi’s operations have no material emissions to air.

All production processes are dry, so there are no process effluent emissions. Future site development may include garment washing operations, in which case an appropriate waste water treatment plant would be built.



Codevi’s workforce generates sanitary waste water, which is managed as described. Each factory building has several septic tanks which receive waste water from the sanitation blocks. Liquid discharges from these tanks are directed to a large common tank, from where they are disposed of to a 5 m deep injection well. Analysis has shown that the COD, BOD, pH and total suspended solids in this effluent are within World Bank Group Environmental Health and Safety General Guidelines’ guideline values for these parameters. Monitoring for additional parameters will be undertaken to demonstrate compliance with WBG EHS Guidelines, or alternatively to understand needs if any for further treatment which shall be developed by Codevi. Solids are periodically removed from these tanks by a licensed contractor and disposed to landfill.



Solid wastes are collected in separate bins for paper and cardboard, plastics and “common waste.” Cardboard is returned to Santiago, DR for recycling, but other waste is currently landfilled in Ouanaminthe.



Hazardous Materials

Some of Codevi’s operations require use of hazardous materials such as ink or adhesive. Better Work Haiti audits have identified the need for enhanced chemicals storage and to ensure that material s
afety data sheets (MSDSs) are available for all materials used. Codevi is in the process of implementing improvements.



Hazardous wastes such as oil or used fluorescent light bulbs are returned to the DR for disposal by a licensed contractor.

Codevi has its own security service of forty persons which guards the estate perimeter, controlling ingress to an exit from the site and also provides security within the factory buildings. All guards are screened during the recruitment process, police background checks are made and prospective guards undertake psychological tests. Guards are un-armed, except for those controlling access to the Codevi site over the Rio Masacre from Ouanaminthe. Regular training is provided to the guards on rules of engagement, but in summary Codevi’s guards provide internal security (such as resolving disputes between employees) and will call upon police in the event of a major issue

Codevi established a process of consultation around its establishment in 2002, which was documented at that time. Ongoing risks arising from Codevi’s operations are limited, and for that reason Codevi’s stakeholder engagement has focused on community development and employee initiatives, and Codevi’s communication has been with community leaders and elected officials (such as the mayors of Ouanaminthe and Dajabon (the closest town in the DR)), rather than communicating around the its operations with members of the general public. Codevi will establish a general communications channel accessible to the public.
Some of Codevi’s social programs are described below:
“Vouchers” program: This is a program designed to teach and reward family financial planning among employees. It is launched with a survey about the family’s circumstances, for which the employee is paid 40 Gourdes. The employee is then encouraged to take basic courses on financial literacy and family budgeting. A financial savings target is then set (e.g. to save 50 Gourdes) with employee savings matched by Codevi in the form of vouchers that can be used in Ashoka programs (see below) or exchanged for cash. Additional modules follow, which work in the same way. This program was devised following a survey of employees’ financial literacy. Codevi now estimates that 470 of its employees ride motorcycles. Motorcycle helmets will be offered under the savings program.
Health Education: Codevi has recently launched a joint program with Levi Strauss and the NGO Share Hope, to provide education on avoidance of water-borne diseases and value of personal hygiene and good nutrition. The work will focus on diseases common in Ouanaminthe, as identified by Better Work Haiti, which include HIV/AIDS and malaria. Codevi has also made a donation to the Ouanaminthe hospital to be used to purchase beds and medical equipment.
Ashoka Initiatives: Codevi has partnered with the NGO Ashoka and IFC to assist in the dissemination throughout Ouanaminthe of solar lanterns, water filters, efficient cooking stoves, solar chargers for cell phones and other devices. These devices which either use renewable (solar) energy or are more efficient than existing options all have a rapid payback for users. Codevi is providing access to its employees as a target market for these devices and is facilitating purchase by deductions from salaries. Ashoka also has other initiatives in Ouanaminthe to provide reading glasses, basic medicines and small quantities of seeds, fertilizer and advice in cultivation. A small scale agriculture component is currently in the design phase.
Cookers: Daily during the lunch break, many of Codevi’s employees cross the river to buy food from the many informal vendors who congregate in this area. An initiative is under implementation, by Codevi in partnership with an NGO, the Ministry of Commerce and others to establish more formal and sanitary food provision.

This ESRS and Environmental and Social Action Plan will be translated to Creole, and posted at the entrance to Codevi at the Rio Masacre bridge.

For further information about the project please contact:

Mr. Limber L. Cruz López,
Administrative Director
Building Corporate I
Industrial Park, Caribbean Industrial Park,
Ave Hispanoamericana, Santiago DR
Telephone: (1) (809) 755 3583
Facsimile: (1) (809) 755 3543
Email: mailto:lcruz@grupom.com.do

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Codevi shall measure the phosphorus, nitrogen and coliform content of sanitary waste water at the discharge point.	06/30/2014
If Item 1 shows that effluents do not meet WBG EHS General Guideline values for sanitary waste water, then Codevi shall develop and implement measures to being about this compliance.	12/31/2015
Codevi shall implement a procedure to receive, screen, and address communications from the public, document responses, and adapt its community engagement accordingly	07/31/2014