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
The company follows the principle of leasing vacant land and/or existing industrial land and/or buildings based willing-buyer willing-seller transactions. There has been no physical or economical displacement in the past associated with existing operational facilities and no involuntary resettlement is expected for the future assets to be developed under the project. PS5: Land Acquisition and Involuntary Resettlement is therefore not applicable.

All the facilities being developed or acquired under the project will be located in well-developed urban commercial / industrial / urban areas and there is no material risk of significant conversion of natural and/or critical habitats. Thus PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable. No indigenous peoples are affected and there are no expected impacts on any cultural heritage resources. Hence, PS7 – Indigenous Peoples and PS8 – Cultural Heritage do not apply.

The company shall however consider all relevant social and environmental risks and impacts, including the issues identified in PS1 through PS8 while assessing any new business opportunities.

The proposed manufacturing facility will be located in an existing industrial park with process wastewater either treated or recycled in the process and non-process related waste water such as sanitary sewage from on-site restrooms treated at the wastewater treatment plant in the industrial park. In respect to air quality, the modelling indicates limited potential impacts to nearby communities and there is also limited economic displacement as a result of establishment of the facility.

The key E&S risks and issues relate to the following; i) wastewater treatment and recycling; ii) air emissions and dust controls; iii) occupational health and safety during construction and operations; iv) energy efficiency; v) the management of operational hazards, vi) fire prevention, and emergency response and community engagement and livelihood restoration as a result of establishment of the industrial park.

The project will be built in an established industrial area on land previously used for agriculture thus. PS 6: Biodiversity Conservation and Sustainable Management of Living Resources is not applicable. Indigenous Peoples were not identified in the project area and no issues related to cultural heritage were equally identified in the area; thus PS7: Indigenous Peoples and PS8: Cultural Heritage are not applicable.

Mitigation measures for the potential E&S impacts have been identified and are incorporated into an Environmental and Social Action Plan (ESAP) for the project. Taking into account the above allied to ABG and Columbian Chemicals (Jining) experience in such operations, the potential adverse E&S impacts of this project are few in number and limited mainly to the project site and may be readily mitigated. This is therefore an E&S Category B project.

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

Assessment and Management of Environmental and Social Risks and Impacts

Corporate Environmental and Social Policy: Birla Carbon has a corporate E&S
policy and this focuses on resource efficiency for energy and water
consumption, minimization of emissions and waste generation, and promotion of
responsible sourcing and consumption. The policy also mandates the
Environmental Health and Safety (EHS) department in each subsidiary to enforce
EHS operational procedures at all levels. Birla Carbon also requires its
subsidiaries to maintain strong relationships with the nearby communities and
contribute to the continual development of communities through skills and
capability building, providing communities with reliable infrastructure, and
helping establish effective governance mechanisms. Columbian Chemicals (Jining)
will adopt the corporate E&S policy which will be included in the new employee
orientation and induction program.

Identification of Risks and Impacts: Birla Carbon contracted external experts
to conduct the EIA and the SIA for the proposed Columbian Chemicals (Jining)
project. Cumulative impacts are considered in the EIA to evaluate the overall
environmental impacts from the current and proposed production activities at
the industry park. Quantitative risk assessments with dispersion and explosion
models are also included in EIA and SIA. The assessment documents provide
adequate information on the background E&S situation, project concept,
manufacturing process, potential impacts and mitigation methods with both
qualitative and quantitative analyses. Based on the EIA and SIA the project
will meet all local regulatory requirements upon successful implementation of
the proposed mitigation methods as described in the EIA and SIA. Birla Carbon
is committed to ensuring the operations meet local regulatory requirements, IFC
Performance Standards, and applicable World Bank Group (WBG) EHS Guidelines
through proper engineering design, safe construction, efficient operation,
proper community engagement, and implementation of the ESAP.

Corporate Environmental and Social Management and Organization: There is a
Chief EHS manager at Birla Carbon while each subsidiary plant has an EHS
manager. The plant EHS managers report to both the plant manager and the chief
EHS manager. The EHS department at Columbian Chemicals (Jining) will be staffed
by full-time environmental and safety engineers and at each process unit there
will be part-time EHS coordinators. The EHS manager will report to the plant
General Manager and the Chief EHS manager at Birla Carbon.

At all Birla Carbon’s subsidiaries there are comprehensive EHS management
programs and procedures for each manufacturing process, including EHS operation
procedures for each operational position, air emissions and fugitive dust
control, wastewater treatment/recycle, ambient environmental monitoring,
hazardous material management, industrial solid/hazardous waste management,
equipment operation safety procedures, emergency response, supplier EHS
management, EHS requirements for onsite contractors, etc. The proposed
Columbian Chemicals (Jining) project will adopt similar EHS management
procedures.

Birla Carbon encourages all its subsidiaries to obtain certification against
ISO 14000, OHSAS 18000, and SA 8000, environmental, health and safety and
social accountability standards respectively. Columbian Chemicals (Jining) will
also strive to adhere to the requirements of these standards. Employee
training will be formalized including new employee training, annual refreshers
and training according to the differing employment positions.

Emergency Preparedness and Response: Fire hazards and potential toxic chemical
releases (mainly carbon monoxide) will be the main operational risk at
Columbian Chemicals (Jining). Birla Carbon has stringent management procedures
to control fire hazards and prevent chemical leaks which will be applied to the
proposed project. There will be fire and toxic gas sensors at all high risk
areas and the sensor systems will be connected to a central control room. There
have been no major operational incidents reported at any Birla Carbon plants.

Sufficient firefighting water and foam will be stored on site to sustain
6-hours of firefighting. Sprinkler systems and foam firefighting equipment will
be installed at the tank farm and other potential fire sources. All
firefighting equipment will be routinely inspected by the EHS department. There
are hospitals and a fire-brigade within 10 minutes from the proposed project
site. As with other Birla Carbon subsidiaries, Columbian Chemicals (Jining)
will convene two plant-wide ER drills per year in which the local fire-brigade
will join at least once. Columbian Chemicals (Jining) also plans to hold joint
ER drills with nearby plants inside the industrial park.

Monitoring and Review: At the Birla Carbon subsidiaries there is an EHS
briefing before and after each shift and the EHS department conducts routine
inspections. Safety briefings are required at all levels of business meetings.
Monthly EHS performance reports from each subsidiary are submitted to the chief
EHS manager and shared among the subsidiaries; Columbian Chemicals (Jining)
will adopt similar monitoring/review procedures. Birla Carbon conducts
comprehensive biannual EHS audits for each subsidiary. The EHS audit team
consists of internal EHS staff and external EHS experts from recognized
international EHS consulting firms are also commissioned to participate in the
audits. Non-compliances identified at the audits are recorded and reported to
the chief EHS manager with corrective actions being required for non-compliance
and implementation progresses of the corrective actions reported in the monthly
EHS reports. A summary of each audit is sent for Birla Carbon senior management
for review. Birla Carbon also publishes an annual sustainability report to
engage with broader stakeholders.

Stakeholder Engagement
Stakeholder engagement was undertaken as part of the EIA for the project and
equally as part of the land acquisition process (further information is
provided below). While the plant is located in an industrial park, Columbian
Chemicals (Jining) will develop and implement a grievance mechanism as part of
the EHS management system to allow for the general public and nearby community
to raise issues and concerns if necessary, and ensure such are readily
addressed.

Labor and Working Conditions　
Corporate Human Resources Policy and Management: Birla Carbon requires all its
subsidies to establish a functional human resources (HR) policy that fully
meets local regulatory requirements. The HR policy and associated documentation
at Columbian Chemicals (Jining) will specify the terms of employment and
working conditions and include procedures related to recruitment, probation,
training, performance review, promotion, insurance, salary and compensation,
resignation, lay-off and dismissal, vacation, other leave, and retirement.
Training on the HR policy and documentation will also be included in the new
employee induction and all employees will have access to the documentation.
Besides the HR policy to satisfy the local regulatory requirements, Columbian
Chemicals (Jining) will also adopt Birla Carbon’s best HR practices, including
employee professional development programs and grievance procedures.

Working Conditions: Majority of workers will be on Columbian Chemicals
(Jining)’s payroll as term employee and temporary labor would be hired for jobs
which are not of permanent nature or to accommodate variations in operating
levels. The management of both term and temporary labors will strictly follow
the national labor law. Term workers will be employed on fixed term contracts
which are renewable subject to satisfactory performance and availability of
work. Staff will receive time-off or cash compensation in lieu of any overtime
work at rates regulated by the national labor authority. Overtime work during
holidays will be compensated as per labor law. All employees will have access
to the insurance and pension funds as required by labor law. For employees of
construction or other contractors who may work at the Columbian Chemicals
(Jining) plant site, the contractors will be required to fully comply with
national labor laws and IFC Performance Standard 2 requirements and the company
will conduct periodic inspections to confirm compliance. The labor camp
accommodation requirements for construction contractors labors will follow IFC
Performance Standard 2 requirements; this requirement is defined in the project
ESAP. .

Workers’ Organization: Birla Carbon requires all subsidiaries to strictly
follow local labor laws for worker organization. In case that the national law
does not require mandatory labor union, Birla Carbon management will not object
to the formation of a labor union if employees would like to set up one.

Non-Discrimination and Equal Opportunity: The HR policy will specify
non-discrimination and equal opportunity and hiring and promotion will be
merit-based. When candidates have similar qualifications, preferences of hiring
will be given to local residents and females. Columbian Chemicals (Jining) will
support the gender equality and strive to hire more female employees. The
company is also committed to hiring residents whose lands are acquired by the
industry park if they are qualified for the work and fit in the company’s
requirements.

Retrenchment: This is a greenfield project and there is no retrenchment. The
company will hire approximately 140 new employees for the Phase I project. An
undetermined number of employees will be hired for construction through
contractors and the number of job opportunities associated with Phase II is
still to be defined. .

Grievance Mechanism: Birla Carbon’s grievance mechanism will be applied at
Columbian Chemicals (Jining) whereby employees can report their grievances to
either the HR manager or through plant manager’s open email account for
anonymous grievances. All the grievances and the mitigations will be recorded.
The HR manager will report to the senior management if they are unable to solve
a grievance.

Protecting the Work Force: Columbian Chemicals (Jining) will comply with
national law and will not hire workers below the age of 18 years. HR will
check the birth and school certificates during the hiring process. No forced
labor practices will be used by Columbian Chemicals (Jining). The company will
implement a labor audit program for its major suppliers to ensure no child or
forced labor is used by suppliers and the occupational health/safety
performances of the major suppliers meet all local regulatory requirements;
these are national requirements. .

Occupational Health and Safety (OHS): All Birla Carbon subsidiaries have
established OHS procedures and routine OHS training, including new employee
training and annual refreshers. All employees have to pass exams at induction
and undertake annual refreshers to be able to work at the plants. Columbian
Chemicals (Jining) will implement similar OHS procedures and training programs
including job hazard analysis (JHA) for critical positions, recordable accident
reporting/statistics, personal protective equipment (PPE) procedures, toxic
chemical handling, heat protection, confined spaces, etc. The company will also
conduct workplace air quality/noise level monitoring to ensure the working
conditions meet both local regulatory requirements and good international
industry practices (GIIP) which is standard practice in all Birla Carbon
subsidiaries. Birla Carbon has established several greenfield plants in Asia
in recent years and a review of its construction workers OHS management
confirms compliance with IFC’s requirements.

Resource Efficiency and Pollution Prevention
Raw Materials and Resource Efficiency: The major raw materials to be used at
Columbian Chemicals (Jining) are creosote oil and other heavy oils supplied
through a pipeline from the adjacent plant of Jining Carbon Group. With the
completion of both phases of the project, Columbian Chemicals (Jining) will
consume approximately 490,000 tonnes/year water after completion of Phase II
which will be supplied by the industrial park. However, the majority of the
water will be used in the co-generation process to generate steam for supply
the adjacent plants in the industrial park. Natural gas will be the main energy
source for the process startup and once operational, co-generation will
generate 25 MW of power after Phase II which the project will consume 14 MW and
the remaining power being used to supply other plants in the industry park.

The latest technology from Columbian Chemicals (US) will be adopted and the
energy consumption rate of the plant is 320-340 KWh/ton carbon black which is
significantly lower than the 430-550 industry benchmark as defined in the WBG
EHS Guidelines. With the new co-generation capacity at Columbian Chemicals
(Jining) some coal-based boilers and steam turbines in the industry park will
be phased out which will improve the overall energy efficiency of the
industrial park.

Pollution Preventions and Compliances: The manufacturing processes will
generate a limited amount of wastewater and the process wastewater will be
treated onsite and recycled back to the processes; thus there is no process
wastewater discharge. Sanitary and other non-process wastewater will be
discharged to the wastewater treatment plant in the industry park for treatment
before being discharged. Based on the EIA all the point source emissions will
meet both local regulatory requirements and applicable WBG EHS Guideline limits
More specifically, the dispersion modelling in the EIA indicates that the
ambient air quality for nitrogen oxides (NOx), sulfur oxides (SOx), non-methane
hydrocarbons (NMHC) will meet local regulatory requirements In terms of
cumulative impacts, the modellings also indicates that there is sufficient
capacity to accommodate NOx, SOx, and NMHC emissions of other new plants
planned in the industrial park.

The ambient background levels of particulate matters (PM10) at the project area
are 0.188-0.215 mg/Nm3, which exceed the regulatory standard of 0.15 mg/Nm3 due
to coal-based heating and other industry. However, the dispersion modelling
indicates that PM contribution from the project are very limited (<0.0008
mg/Nm3). With the steam and electricity supplies of this project, some major PM
pollution sources in the industrial park such as coal-based boilers will be
phased out; as such it is expected that the ambient PM levels associated within
the industrial park will remain the same, or likely be reduced.

The fugitive PM emissions are the major environmental issue in carbon black
manufacturing and to mitigate fugitive PM emissions the whole process is closed
to prevent fugitive PM emission. The packaging area will be provided with good
quality valves for positive shutoff and a vacuum system with the proper number
and hose design to control dust on loading. There will be vacuum around the
loading spout controlling any fugitive emission release from the package and
minimizing exposure to the employees. The packing and storage areas will be
frequently cleaned. Continuous emission monitoring system will be installed on
main stack and connected to Control room. Monitors will also be installed on
individual filter for monitoring condition of filters. All the trucks with
carbon black loads will be inspected before leaving the plant.

The EIA noise modelling shows the noise levels at residential areas will meet
local regulatory requirements. In line with the ESAP Birla Carbon will further
improve the noise control design to ensure noise levels at residential areas
meet both local regulatory requirements and WBG EHS Guideline limits.

As the major raw material supplier, Jining Carbon Group’s plant adjacent to the
project site was initially built in 2003. The E&S operations at this plant meet
all local regulatory requirements including that related to wastewater
discharge, air emissions, waste management, noise control, and labor related
issues. Furthermore, Jining Carbon also applies nitrogen blankets to the
storages of volatile/semi-volatile chemical materials to prevent fugitive
emissions. There has been no fatal accident or serious injury in the
operational history of Jining Carbon Group’s plant adjacent to the project
site.

Solid and Hazardous Wastes: The sanitary solid wastes are collected by
municipal contractors for disposal. The industrial solid wastes will be sold
for recycle to other local industries. The only hazardous waste, waste oil
sludge, will be sent to a certified hazardous waste management company in
Qingdao, China for treatment and disposal.

Hazardous Materials and Operation Hazard: Columbian Chemicals (Jining)’s main
raw materials are hazardous materials and the manufacturing processes will also
generate hazardous gases. Detailed procedures will be drafted to handle these
hazardous materials and all hazardous liquids will be stored in above ground
tanks with proper secondary containment. The tank farm base will consist of
impermeable composite layers, including HDPE, to prevent potential
contamination of soil and groundwater. Once the detailed design data is
available, the EPC contractor will conduct quantitative hazard operability
studies (HAZOP) for all processes and Columbian Chemicals (Jining) is committed
to updating the HAZOP following each process modification, and improve process
safety management based on the HAZOP results.

Greenhouse Gases (GHG): With Phase I completion, Columbian Chemicals (Jining)
will generate approximately 172,000 tonnes of CO2-equivalent annually. With
Phase II completion, the project will generate approximately 344,000 tonnes of
CO2-equivalent annually, mainly from tail gas combustion for heating and
co-generation.

The project will supply 25 MW of power and significant amount of steam to the
industrial park. As a result, some coal-based boilers/steam turbines will be
phased out and at least 148,000 tons of CO2-equivalent annually will be avoided
by other plants in the industry park with the operation of this project.

Community Health, Safety and Security
Community Health, safety and Security: The communities are located some
800-1000m from the plant and based on the EIA modelling calculation and
additional proposed mitigation methods, the normal operations at the plant will
have limited impacts to the communities outside of the industry park. The
primary raw materials will be transferred to the plant through a pipeline from
the adjacent plant and the carbon black manufactured will be transported by
vehicles designed for such. Most of the transportation routes are
access-restricted highways and there are no communities along the main
transportation routes. Columbian Chemicals (Jining) will only contract
transportation companies that have defensive driving programs, acceptable safe
driving records, and sufficient emergency response methods.

Emergency Preparedness and Response: As other Birla Carbon subsidiaries an
emergency response plan will be drafted for the facility before operations
commence. Routine drills for firefighting and potential chemical releases will
be conducted with other industries in the industrial park and the local fire
brigade and communities will be informed of the drills.

Security Personnel: Columbian Chemicals (Jining) will hire an external agency
for plant site security that conducts routine ID checks at the gates and
security monitoring; all guards will be unarmed.

Client’s Community Engagement:
The industrial park has engaged the nearby community for the EIA process and the draft EIA was disclosed at each village council for public comments and opinions for revision. The final EIA was also disclosed at each village council. For land acquisition purposes the township government held public consultation meetings at each village and negotiated directly with each family for compensation packages. The final land acquisition plan with each compensation package was also disclosed locally.

ABG has its own CSR program handled by Aditya Birla Centre for Community Initiatives and Rural Development, which focuses on the all-round development of the communities around ABG plants. Accordingly, Birla Carbon works to deliver long-term socio-economic benefits to the region and support local communities in the fields of health, education, etc. Birla Carbon also publishes an annual sustainability report to engage broad stakeholders.

With the further expansion of the current industry park in Jining there will be no immediate neighboring community when the project is put into operation. However, Columbian Chemicals (Jining) will work with the industrial park management to reach out to the key stakeholders, including communities adjacent the industry park. Columbian Chemicals (Jining) will communicate with the local community directly or through the industrial park and will develop and implement a grievance mechanism as referenced above. Under the framework of ABG’s CSR program, the potential CSR focus at Columbian Chemicals (Jining) will be via vocational trainings for the local community. As indicated in the ESAP, Columbian Chemicals (Jining) will hold a commissioning ceremony and public consultation event before the full project production.

Birla Carbon will disclose this document in Chinese at the local public library or government bulletin board located in Jining, China. For inquiries or concerns about the environmental and social impacts of this project please contact:

Mr Han Chun
Birla Carbon
1428, Hongxing International Building, Jining City, Shandong Province, China
Zip 272000
Phone: +86 139 13549600
Email: mailto:chun.han@adityabirla.com
Ms Chitra Krishnamurthi
Birla Carbon
1800, West Oak Commons Court
Marietta, Georgia 30062-2253 USA
Phone (1) 770 792 9538
Fax: + (1) 770 792 9623
Email: mailto:birlacarbon.communications@adityabirla.com

Broad Community Support is not applicable for this project

Birla Carbon PRC(34941) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1. Hold a commissioning ceremony with further production information disclosure and participation of community	31-Dec-2016	Postponed	Changed project circumstances mandated a delay of this task
2. Develop and implement a grievance mechanism as part of the broader EHS management system.	31-Dec-2016	Completed	Completed	5/25/2017
3. Conduct periodic inspections to ensure construction contractors’ compliances with national labor laws and IFC Performance Standard 2 requirements	31-Dec-2015	Completed	Completed	12/22/2015
4. Ensure labor camp accommodation for construction contractors labors aligns with IFC’s worker accommodation guidelines.	31-Dec-2015	Completed	Completed	12/2/2015
5. Confirm the noise control design to ensure noise levels at residential areas meet both local regulatory requirements and World Bank Group EHS Guideline limits	31-Dec-2015	Completed	Completed	3/1/2016