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
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

While all Performance Standards (“PS”) are applicable to this investment, IFC’s environmental and social review indicates that the investment will have impacts which must be managed in a manner consistent with PS 1-4. IFC’s due diligence did not identify project issues related to matters covered by PS5-8. There is no expected land acquisition or involuntary resettlement, conversion of natural and/or critical habitats leading to biodiversity loss from direct operations and/or supply chain, indigenous populations or known cultural artifacts. Operations will be continued within the footprint of the existing facilities. The proposed investment is expected to have limited environmental and social impacts; as such, this is a Category B project according to IFC’s Environmental and Social Sustainability Policy.

Main environmental and social risks associated with Soufflet operations are: (i) ability of the corporate environmental and social management system to identify and control environmental, social, occupational health and safety issues throughout all its facilities; (ii) internal technical capabilities to enforce the Group''s environmental due diligence procedures within its subsidiaries; (iii) human resource policy, including working conditions and terms of employment, occupational health and safety, labor issues; (iv) rational use and storage of fertilizers and pesticides, solid waste and wastewater management, air emissions from the malt processing plants, energy and water use and efficiency, (v) contingency planning and emergency response, including security and health issues related to the agro-chemical exposure, life and fire safety, traffic and transport, and (vi) stakeholder engagement plan and community grievance mechanism.

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 Systems

The Company has effectively developed and implemented a corporate Integrated Quality, Environmental, Health and Safety (QHSE) management system compliant with international standards such as ISO 9001, ISO 14001 and OHSAS 18001 and which scope applies to all its core businesses, including the targeted agricultural and malting divisions. All malting plants are certified in compliance with these standards. All silos are ISO 9001 certified and met corporate EHS policy and procedures. The Company initiates Environmental Impact Assessment (EIA) as well as additional studies in cases involving expansions and/or the deployment of new equipment to achieve compliance with local regulations. The Company typically conducts a gap analysis against national regulations and follow-up of the compliance with local regulations in case of new acquisitions. Assessment against the IFC’s performance standards and the WBG guidelines is made within the existing QHSE management system followed by development of the corrective action plans, if any deficiencies are found.



Policy

The Company has adopted an overarching corporate QHSE policy which is translated in local languages in each country where Soufflet operates. The policy defines goals in three key areas: staff safety; environmental performance and resource efficiency; and quality, hygiene and health. Corporate social responsibility (CSR) policy that covers most aspects of food quality and food safety, environmental protection, occupational health and safety (OHS), resource efficiency, greenhouse gas emissions, social and ethical values and other labor aspects has also been established.



Identification of Risks and Impacts

EHS risks and impacts are identified according to the procedures developed within the QHSE management system of the malting division. EHS risk assessment is the foundation on which management programs are established and reviewed annually. This approach is implemented in the agricultural division as well. Soufflet’s scope of risk assessment also covers risks associated with contractors’ operations, including development of corrective measures, and checks their enforcement by contractors performing works at the Company sites.



Management Programs

Management programs and plans of the individual sites are based on QHSE policy commitments, outcomes of risk identification process and effectiveness of management programs, and findings of internal audits and authorities’ inspections. Plans are developed or updated annually. Moreover, the Company adopted corporate plans and programs for environmental protection, reduction of greenhouse gas emissions, pesticide and fertilizer use, waste management. Currently, Soufflet has being improved its key performance indicators, including but not limited to water and energy consumption, solid waste recycling or reuse, and lost time accidents.



Organizational capacity, competency and trai
ning

Soufflet has a well-established and formalized QHSE corporate and country level organizational structures at the agricultural and malting divisions. Group CSR director and Group safety manager are delegated responsibility for environmental and health and safety matters correspondingly. Coordination of the E&S aspects of the agricultural and malting divisions of the ECA region is assigned to a malting QSE manager and an international E&S coordinator respectively. E&S matters at each individual facility are coordinated by the respective EHS departments/services and plant-level managers as part of their direct responsibilities.



Training

Soufflet Group has a training program that encompasses an induction on EHS for new workers and an EHS training retreat week at the plants and discussion with workers main environmental health and safety issues. The Company implemented a job coaching program in ECA countries, in which local EHS teams are supervised by senior specialists from its headquarters to share the existing expertise across the Company. Soufflet also implemented EHS training briefing for all contractors.



Emergency Preparedness and Response

Emergency response plans (ERRs) appropriate to potential risks, including life and fire safety, are documented and maintained in accordance with local laws at each individual plant. ERRs are, typically, a combination of procedures for using, inspecting, and maintaining emergency response equipment; notification of the public and emergency response agencies; training programs. Specific training on requirements of the EU (ATEX) directives, describing equipment and safe work operations for a potentially explosive atmosphere, is also scheduled.



The silos in Kazakhstan, Poland and Serbia are equipped, where appropriate, with dust suppression systems and safety devices; life and fire (L&FS) equipment, including fire alarm systems, fire hoses, fire extinguishers and detached fire water tanks. Silos are inspected on a regular basis, including status of gas cleaning equipment and aspiration systems. The Company has completed an explosion risk assessment of its silos in Ukraine and Russia and is currently implementing a more efficient dust control and suppression, including improvement of lightning protection, electrical equipment, dust monitoring, installation/ renovation of the aspiration systems, production equipment overhaul/ refitting, and enforcement of the procedures for periodical cleaning. Investment programs are in progress at the silos in Romania.



Monitoring and reporting

There are various types of internal QHSE audits conducted at the Soufflet individual sites. Senior management and QHSE managers conduct equipment and staff safety audits of selected facilities. Further responsibility for these annual audits will be delegated to the site managers. Hygiene, cleanness and safety audits are conducted by the Soufflet audit department depending on site performance monitored within an agreed
upon schedule outlined in the QHSE management system framework. The Company continues further enhancement of the monitoring and reporting systems by focusing on key performance indicators related to resources efficiency, environmental protection, reduction of greenhouse gas emissions, pesticide and fertilizer use, waste management. Senior management of the malting division review EHS performance on a quarterly and annual basis. The same approach is being implemented in the agricultural division. The external reporting of individual facilities is carried out in accordance with local legal EHS requirements. Reporting to IFC on continuous improvement of EHS performance and the EHS management system is provided within the context of the Annual Monitoring Reports (AMR).



Stakeholder engagement and Community grievance mechanism: Soufflet proactively started the development of a Stakeholder Engagement Plan (SEP), as indicated in the attached ESAP, to strengthen its consultation and communication processes with affected communities on the environmental and social risks, that may include traffic, noise and dust emissions, to ensure stakeholder engagement is an ongoing process. The SEP consistent with PS1 provisions and good international practices will involve the following elements: stakeholder analysis and planning, disclosure and dissemination of information, consultation and participation, and ongoing reporting to affected communities. Soufflet developed and implemented a grievance mechanism to receive and respond communities’ concerns.

Human resources policies and procedures, terms of employment, non-discrimination and equal opportunity

Soufflet has adopted and implemented a human resources policy and supporting procedures that cover non-discrimination, underage workers, working health and safety conditions, transparency, governance and compliance with local legal labor requirements. Soufflet follows applicable national countries’ labor regulations, which are consistent with ILO standards. General terms of employment are established by national labor regulations and outlined in more details in either the contract with employees or internal regulations at each of Soufflet facilities. Although workers are in general familiar with the national terms of employment, the Company also informs them during the recruitment process about the specific terms of the job position and additional benefits, including salary, working time, leave on maternity, illness and vacation, overtime payment, safe working conditions, promotion and bonuses. Upon appointment, personnel are also provided initial induction training that facilitates employee’s familiarization and awareness of responsibilities, disciplinary requirements and rights, conditions of work and further OHS training.



Protecting the Work Force; supply chain

Facilities enforce the implementation of national labor laws. Individuals below the age of 18 years are not employed and no forced labor is used. The Company pays the social security, provides a personal insurance and transport and food to workers during the working periods. Personnel departments of individual facilities are responsible to review data provided by potential candidates during the staff selection process. The risk of forced and /or child labor in Soufflet primary supply chain is unlikely in the ECA region operations.



Workers’ Organizations

Despite the fact that there is presently no union in any of individual facilities, Soufflet does not restrict the freedom of workers to associate. Management encourage workers to establish local worker committees at each site to discuss labor and OHS aspects of their operations. This provision is well defined in Soufflet’s HR policy.



Retrenchment

The Company informed that there are no plans to reduce the size of the workforce in their sites in ECA countries.



Grievance Mechanism

A formal corporate worker’s grievance mechanism procedure provides alternatives for employees to raise concerns other than to immediate supervisors and allows grievances to be presented without the risk of oppression, in line with IFC’s Performance Standard 2.



Occupational Health and Safety (OHS)

Formal procedure for OHS risk identification and assessment was formalized at the malting and agricultural divisions. Management programs are developed on the basis of this risk assessment, local legal regulations and internal audits, as indicated under PS1 section. HSE corporate and country level organizational structures at the agricultural an
d malting divisions are formalized, structured and governed by the Group safety manager. Specifically, the Malting Division has conducted an assessment of the OHS risks at its plants located in the ECA region and undertaken improvements to promote safer workplace conditions. Agricultural division completed the assessment of the OHS risks at its facilities financed by the existing IFC Project in Ukraine, Russia and Serbia and implemented corrective measures to reduce the potential risk of fire and dust explosion, including replacement of outdated machinery, refitting/repair of electrical equipment and connections and dust suppression systems. Soufflet completed the inventory of confined spaces at these facilities, delivered additional training, amended safety operational procedures and posted warning signs. Procedures for work at confined spaces and with electrical components as well as processes for permit-required works and accident investigation are formalized and enforced by the individual facilities. Moving parts of mechanical machinery are equipped with passive protection screens, where appropriate, at the visited facilities.



Employees are obliged to wear appropriate personal protective equipment (PPE) inside the silos and malting plants, including helmet, safety shoe, facial mask, ear plugs depending on particular OHS risks. Workers at the malting plants are provided with individual gas detectors while working in the specific workplaces where carbon dioxide is released. The Company developed a job observation program with routinely site inspections to improve the enforcement of the use of the PPEs and implementation of its policies and procedures. Employee medical examinations are undertaken at the time of employment and, after that, examinations are repeated according to a regular schedule based on the specific working conditions under which employees operate.



Lost time injury frequency rate (LTIFR) per million man-hours for the facilities in ECA region is 7.6 which is below 8.5 of LTIFR benchmark in agriculture private industry sector. All incidents have been investigated and corrective actions were defined to prevent reoccurrence.

Resource and Energy Efficiency

Soufflet undertakes continuous efforts to promote pollution prevention and energy efficiency systems and is fully committed to continue working towards efficiency of energy and water consumption as well as resources / material inputs. The Company has a program of water and energy conservation that includes, among other measures, investments in improvement of energy efficient processes employed in the ECA region. Soufflet malting division reports a 2% reduction of energy consumption in 2012-2013; the target remains the same for the facilities being beyond the goal.



In 2012-2013 a feasibility study was completed for installation of a biomass facility in Slavuta, Ukraine. The plant of 6.5 MW capacity is designed for the potential consumption of the 13,500 tons of waste generated at the cereals and malts cleaning process annually. Estimated annual potential savings are over 10,000 tons of CO2 equivalent. Gas consumption is to be reduced by 40%. Commissioning is scheduled for 2015. Individual facilities implement ongoing projects including water recycling, energy saving devices; heat insulation of premises, production and auxiliary equipment.



Power for local operations is sourced from public distribution grid. Water is supplied from own water wells and/ or from mains of the nearest towns/ settlements. Physical, chemical and microbiological water quality is monitored regularly at each individual site by local agencies or supervisory authorities.



Greenhouse gas emissions

Soufflet quantifies emissions of greenhouse gases (GHGs) following EU regulations. Based on the 2010-2011 data, all Soufflet operations generated 13,201 tons of CO2 equivalent in direct emissions and 5,180 tons of CO2 equivalent in indirect emissions. Biogas facility in Ukraine will provide average GHGs avoidance of 10,000 tons of CO2 annually according to the Company’s estimations.



Air Emissions

Point sources’ air emissions of silos, including grain dryers, are equipped with various combinations of cyclones and bag filters for dust capture. Monitoring and control of compliance with national limits are in place. Air emissions from boilers meet local and the WBG EHS Guidelines thresholds, except the Tekeli malting plant, Kazakhstan. In Tekeli, emissions of nitrogen oxides, sulphur dioxide and particulate matters generated from combustion of heavy oil align with local regulation but exceed WBG EHS Guidelines thresholds. The Company has initiated and implemented feasibility and investment studies to reduce emissions, including reduction of heavy oil consumption, replacement of heavy oil with alternative fuels, and improvement of fuel combustion process within the framework of the corrective action plan. The study will be finished in Q3, 2014. As indicated in the ESAP, Soufflet will ensure compliance with the WBG thresholds and finish implementation of the investment plan based on a final decision that may include retro-fitting the boile
r, installation of exhaust gases’ cleaning equipment and/or other sufficient measures within a reasonable timeframe acceptable to IFC.



Wastewater treatment

Wastewaters are mainly generated by malting plants. Two malting plants (Slavuta, Ukraine and Buzau, Romania) in ECA region have onsite wastewater treatment plants (WWTP); after treatment water compliant with the WBG thresholds is discharged to local rivers. The Company is finishing the reconstruction of the WWTPs in Ukraine and Romania which should be commissioned in June 2015 and December 2014, respectively, to enhance quality of water discharged to the local rivers.



Wastewaters from other plants including Poland, Serbia, Russia and Kazakhstan are delivered to local public sewage systems for further treatment. Soufflet has proactively started implementation of a wastewater management program in Serbia that included assessing potentials for reduction of water consumption by Soufflet malting plant, engaging with the local municipality on its plans to put the municipal wastewater treatment plant back into operation as well as engaging with the two neighboring factories with regard to the feasibility and development of a common WWTP. Soufflet compliance with the WBG EHS guidelines will be achieved according to the deadlines indicated in the ESAP.



Solid waste management

The main process’ solid wastes are the dust collected in the cyclones or filters from the dust suppression systems, and the sludge from on-site wastewater treatment stations. The sludge is used as a fertilizer and the collected dust is used for animal feed to cattle and/or recycled for biofuel pellet production. The office’s wastes are collected and disposed by the local public systems.



Hazardous materials management, including pesticide storage, handling and use

The Tekeli plant in Kazakhstan has an underground storage diesel tank (UST) in concrete and piping system for unloading heavy oil delivered to the site by railroad tanks. Two above ground storage tanks are used for onsite storage of heavy oil burnt in the boiler. Tekeli has implemented successfully mitigation measures to improve unloading operations, including feasibility studies for alternative fuel replacement; reduction of fuel consumption; ceased fuel delivery by rail and launched fuel receiving by trucks. The Company plans to finish piping system refurbishment at the unloading area by the end of 2014. As indicated in the ESAP, a progress report on accomplishment of refurbishment will be shared with IFC.



The Agriculture Division stores and sells fertilizers and crop protection products (CPPs), including pesticides, mostly to pre-financed farmers. Soufflet operates warehouses in Kazakhstan, Poland and lease ones in Russia, Ukraine and Romania. The Company conducted an assessment of existing warehouses consistent with EU safety requirements for pesticides warehouses and implemented mitigation plans to bring these warehouses into compliance. Storag
e areas for CPPs, including fertilizers and pesticides of the agricultural division, completed necessary improvements and comply with local requirements and EU standards. Seeds treatment plants were renovated with new equipment to reduce the workers exposure to pesticides in addition to enforcement of the proper use of personal protective equipment (PPE). Also safety operation procedures for pesticides transport, storage and distribution were adopted and implemented, including warning signs, PPEs use, training, product segregation and handling. Moreover, facilities accept empty containers for pesticides from farmers; arrange proper temporary onsite storage and disposal according to EU regulations and the International Code of Conduct on the Distribution and Use of Pesticides. Soufflet also developed and implemented a pesticide selection procedure and currently doesn’t purchase, use and trade in products that fall in Class Ia/ Ib of World Health Organization (WHO) recommended classification. The Company has agreed to update its policy and procedures to meet IFC’s PS3, Edition 2012 requirements on store, use or trade in WHO Class II (moderately hazardous) products. As set forth in the ESAP, Soufflet will undertake the inventory of class II pesticides and provide to IFC a report on outcomes of inventory, available controls on use of these chemicals including proper training, equipment, and facilities to handle store, apply and dispose, and, if needed, corrective actions to reduce trade in Class II chemical formulation in its agricultural operations in the ECA region to the extent economically viable.

Some of Soufflet facilities, including the malting plants in Poland and Serbia, are located in the outskirts or close to villages, small towns and urban or semi urban areas. The main expected impacts of their operations are related to wastewaters, air emissions and trucks traffic. Monitoring of wastewaters discharged after treatment to local rivers is conducted and reported to local authorities according to approved schedules. Improvement actions have been or being undertaken where needed as discussed in the PS3 section.



To ensure potential risks to communities’ health associated with ambient air quality are addressed timely and properly, Soufflet has agreed to elaborate a consolidated approach to the facilities in six countries of the ECA region. The Company will identify facilities that may impact ambient air quality of nearby communities; arrange, if needed, monitoring of ambient air; and, finally develop and share with IFC an action plan to meet EU, WBG air emissions thresholds as well as local regulations of Ukraine, Russia and Kazakhstan.



Emergency response plans appropriate to specific potential risks, including life and fire safety, are developed in accordance with national laws as described in the PS2 section.



Security Personnel

The Company employs either contracted from private companies or its own security personnel. In both cases, security guards are unarmed, trained and certified as per the local regulatory requirements.

Soufflet, as mentioned above, implements a community grievance mechanism and will develop a formal stakeholder engagement plan, as per the ESAP. Information on Soufflet performance including EHS aspects is also available in the annual sustainable reports issued since 2011 and posted on the website: http://www.soufflet.com/en/Commitments/CSR-Policy.

For more information, inquiries and comment about the Project please contact:
Mr. Bruno Cothenet, Corporate Social Responsibility Director
Address: Quai du General Sarrail, 10400 Nogent sur Seine Cedex, France
Tel: +33 3 2539 41 11
Email: mailto:bcothenet@soufflet-group.com
Website: http://www.soufflet.com

Broad Community Support is not applicable for this project

Soufflet 2(34759) Supervision Disclosure Snapshot – Version 3
Description	Anticipated Completion Date	Status	Comments	Completion Date
To receive and facilitate communications with affected communities about Soufflet’s environmental and social performance, the Company shall develop and implement a corporate Community Grievance Mechanisms which will then implemented at the malting plant in Poland and at the Jashkov silo in Ukraine	30-Jun-2015	Completed	Completed	6/30/2017
To strengthen consultations and communication processes with affected communities on the environmental and social aspects of its operations in the ECA region and ensure stakeholder engagement is an ongoing process, Soufflet shall develop and implement a Stakeholder Engagement Plan (SEP) for Soufflet’s operations in Kazakhstan, Ukraine, Russia, Serbia, Romania, and Poland. The SEP shall be consistent with PS1 provisions and good international practices and will include the following elements: stakeholder analysis, means of communications with surrounding communities, measures of communication	30-Dec-2016	Completed	Completed	12/30/2016
To meet the WBG thresholds for air emissions from the boiler at Tekeli malting plant, Kazakhstan, the Company shall provide to IFC a final investment plan on malt kilning system, including refurbishment of the boiler on the basis of gas pipeline availability or biomass plant	30-Jun-2019	Completed	Completed	6/30/2019
Implementation of the investment plan decided in the action item 3	30-Jun-2019	Completed	Completed	4/30/2021
Refurbishment of the piping system at the unloading area at Tekeli malting plant, Kazakhstan	30-Dec-2014	Completed	Completed	12/30/2016
Soufflet will engage discussions with the local municipality of Ba?ka Palanka, Serbia to look for solutions to re-commission the existing waste water treatment plant of the industrial zone where the Sladara malting plant is located or will explore other potential options to ensure compliance with the WBG thresholds for wastewaters being released to surface water. Soufflet will also contact its neighbor companies at the Sladara malting plant to seek joint action on the re-commissioning of the WWT plant. Soufflet shall provide supporting evidence of its actions to improve the situation	30-Sep-2014	Completed	Completed	8/30/2019
Provide a final corrective action plan to bring the Sladara malting plant in compliance with the WBG thresholds for wastewaters being released to sewage system or surface water, as applicable	30-Dec-2016	Completed	Completed	11/15/2019
(i) Provide integrated pest management (IPM) plan and crop production products (CPP) impact/usage training to Soufflet’s salesmen and employees in Serbia, Romania, Poland, Ukraine, Russia, and Kazakhstan, including on the risks associated with WHO Class II products. (ii) Implement an IPM plan in Serbia, Romania, Poland, Ukraine, Russia, and Kazakhstan leading to the optimal utilization of CPP product with a particular focus on aiming to reduce the use of WHO Class II products to the extent economically viable; (iii) Perform an inventory of WHO Class II products and provide to IFC a report on outcomes of inventory, and yearly tests of economically viable and less hazardous products from referenced suppliers at Soufflet’s operations in Serbia, Romania, Poland, Ukraine, Russia, and Kazakhstan.	30-Dec-2015	Completed	Completed	12/30/2016
Soufflet will elaborate a proactive and consolidated approach to the facilities in Kazakhstan, Russia, Ukraine, Serbia, Romania, Bulgaria and Poland that may affect ambient air quality. The Company will identify facilities that may impact ambient air quality of nearby communities; arrange, if needed, monitoring of ambient air; and, finally develop and share with IFC an action plan to meet EU, WBG air emissions thresholds as well as local regulations of Ukraine, Russia and Kazakhstan	30-Dec-2015	Completed	Completed	12/30/2017