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
IFC’s review finds that all land sites in Myanmar are ultimately owned by the Myanmar state therefore all land sites on which Company facilities are located are state-owned. The use rights of sites were obtained by the Company through willing-buyer-willing-seller transactions from private business entities, and after such acquisition, the Company continues making annual lease payments to the authorities. IFC’s review, including interviews with local residents near the sites, did not find material PS5 issues or concerns.

The workforce at Project construction or refurbishment sites in Myanmar consists mainly of the mainstream Burman ethnic group while some workers are from ethnic minority groups. IFC’s review has not identified any adverse impacts of the Project on ethnic minority workers. Project activities are not expected to have an impact on local biodiversity or any local cultural properties such as temples and pagodas. The Company’s Project Manager indicates that if any items of cultural or spiritual significance were found on construction sites, for example large Banyan trees believed by local communities to be spirited, prior to commencing any construction, due respects would be paid in consultation with local communities, and the items would be preserved and protected. Based on the above, PS6 is not triggered by this Project, and impacts associated with PS7 and PS8 are considered to be limited and adequately addressed.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific and reversible environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key issues reviewed were: environmental and social management system; construction impacts particularly in relation to waste management and occupational health and safety (OHS); waste water and solid waste management; life and fire safety and emergency preparedness and response; water and energy use and efficiency; and community engagement.

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.

Identification of Risks and Impacts:



At present, approval of the draft Myanmar Environmental Conservation Law and associated implementation regulations by the National Parliament is ongoing. Related to this, the Ministry of Environment Conservation and Forestry is also in the process of drafting Environmental Impact Assessments (EIA) implementation procedures. The Foreign Investment Law (Union Parliament Law No. 21, November 2012), the related Foreign Investment Rules and the Myanmar Investment Commission Notification issued in August 2014, contains ESIA requirements for projects in a number of sectors which do not include retail facilities. Given evolving national requirements, the Project has not undertaken an EIA.



At both corporate and facility levels, there are basic procedures in place such as emergency response in case of earthquakes or flooding. The Company is in the process of developing a centralized, group-level risk identification and management system with a focus on life & fire safety, land acquisition, labor and working conditions (including that of key contractors), waste water management, and resource efficiency, which will be broadly commensurate with the types and levels of risks associated with the Project.



The Company states that there have been no known food safety incidents such as food poisoning associated with Company operations. On a daily basis, large quantities of different types of perishable and non-perishable food products and ingredients from a large number of suppliers are shipped to CMHL stores, and some are shipped to its two product distribution centers for further processing and packaging before reaching its stores. The Company has plans to develop a food safety management system by 2016 based on principles of Hazard Analysis Critical Control Point (HACCP). It will provide a status update on this - refer to the ESAP for details.



Management Programs, Organizational Capacity and Monitoring and Review:



The group shopping center manager oversees operating facilities including aspects related to waste collection, sewage facilities, fire safety, and emergency response. For construction of smaller scale new properties, the Project Manager (PM) leads a project management team overseeing the entire construction cycle including the work of contractors and sub-contractors. The group PM reports to the Project Director, and is responsible for all new projects. A maintenance manager at the group level is responsible for overseeing management of electricity supplies to facilities, diesel generators, and other moveable assets. Waste removal, water meter readings, government electricity meter readings, and diesel consumption are monitored by each shopping center supervisor who reports such information to the group accounting team and shopping center manager. Work safety accidents are reported by construction and operational site managers to the group human resource department.



The Company is in the process of
transitioning to an arrangement for larger scale greenfield projects, whereby it would bring in an experienced external project management entity to manage the construction process including waste management and safety aspects. For example, at the Monywa site, an international engineering and project management firm commissioned by CMHL has personnel stationed on site to manage contractors, with Company personnel co-located on site, and the group PM regularly visiting to monitor progress. Weekly construction meetings are held to discuss any issues identified for follow-up. The Company is currently making preparations to hire a dedicated OHS officer to oversee all OHS related issues of group assets, and who will report to the PM. Preparations are underway for CMHL’s Yangon distribution center to attain ISO9001 certification.



CMHL has basic emergency preparedness and response (EPR) procedures in place describing a number of potential emergency scenarios. Properties visited during IFC’s review are in the process of refining their procedures to identify and manage key E&S related risks. The Company will refine its E&S management system (ESMS) which will consist of: i) the Company E&S policy; i) appropriate Key Performance Indicators (KPI); ii) standard operating procedures (SOP) on pre-construction site E&S due diligence, life and fire safety, land acquisition and involuntary resettlement, EPR; labor and working conditions; contractor and supplier labor management; resource efficiency including refrigerant selection; and waste management; iii) a monitoring and reporting system whereby each property will regularly report performance data (according to aforementioned KPIs) to responsible E&S staff at the head office; iv) a mechanism to regularly review ESMS implementation effectiveness (based on regular reporting from individual stores to headquarters on a variety of key parameters) and modify as needed. Refer to the E&S Action Plan (ESAP) for details.

The Company has a workforce of 5,200 direct, full-time employees, of which female workers make up about 60%. About half of the workers at Yangon stores came from other parts of the country. The turnover rate for front line workers in the past 12 months was about 38%. At a construction site, typically the Company engages up to 10 contractors with a total contractor workforce of up to 150 persons at the peak of construction.



The Company has corporate human resource policies and procedures in place applicable to all its properties. Terms of employment as well as rights and responsibilities of employees are formalized into employment contracts in accordance with national labor requirements in Myanmar. Employees are covered by the nationally mandated social insurance scheme, and are each provided an annual health subsidy which increases according to years of service. Store workers typically work 48 hours a week with one day of rest per week, and up to about 40 hours of overtime per month paid accordingly. Hiring and employment practices as written into the Company’s code of conduct and human resource procedures recognize the principles of non-discrimination and equal opportunity.



CMHL provides housing free of charge to about 150 Yangon-based workers from out of town, mainly by renting apartments at various locations throughout the city in proximity to its stores. The Company is looking to expand worker accommodation units, and at cities where rented units are not available it may construct its own worker apartment buildings. IFC visited one apartment shared by eight workers which was in a reasonable and clean condition. The Company expects that housing will be provided for about 300 employees in total. No accommodation is provided on site at construction site for Company workers or contractor workers.



Workers’ Organizations and Grievance Mechanism:



The Myanmar Labor Organization Law (The Pyidaungsu Hluttaw Law No. 7 / 2011) which came into effect in March 2012 specifies provisions for workers to establish and join a labor union, and finalization of the implementation timeline is pending. Company representatives state that freedom of association is ensured and will not stop any efforts by employees to set up or join labor unions should they wish to. Various staff communication channels and grievance mechanisms are in place including weekly and monthly one-on-one and group staff meetings, bulletin boards, and drop boxes and they are consistent with PS2 requirements. At construction sites, regular worker safety meetings and direct communications with contractor team leaders are the key means of worker communications.



Protecting the Work Force:



IFC’s review found no instances of forced/indentured or child labor practices at construction sites. Company personnel on site visually inspect workers and if a work appears underage, s/he would be asked for identification documents to verify age information. The Company has a policy permitting
only workers over the age of 18 to enter construction sites, and contractor agreements have a clause prohibiting contractors from hiring persons below 18 years of age. At a visited supplier of dried fish products who employed 45 workers, there was one worker who appeared under age but her age could not be verified. Given the very large number of local suppliers that CMHL works with, the Company will set up a practicable system as part of its E&S management system (refer to PS1 and ESAP) to screen primary suppliers for potential child and forced labor practices, and for potential impacts on biodiversity (primarily in relation to farms located in ecologically sensitive areas which may potentially entail significant conversion of natural or critical habitats), and address issues if found, to the extent that the Company has commercial leverage over those primary suppliers.



Occupational Health and Safety (OHS):



The Sponsor confirms that there have been no fatalities or major lost time accidents in 2013 at construction sites and operating facilities. In 2014, two road accidents during work hours resulted in 2 fatalities and 3 workers injured. Workers at construction sites attend regular work safety training sessions. IFC noted that workers on site were mostly using personal protective equipment (e.g. helmets, harnesses, work boots), but several contractor workers at the expansion area of the Yangon distribution center were not (e.g. a worker without hand and eye protection while using an electric saw to cut up wood blocks; another worker in flip flops using his feet to anchor materials on the ground while hammering it). Commercial accident insurance is not provided by contractors to their workers as this is not common practice. Instead, contractors opt to pay for treatment should an accident occur.



The Company is in the process of hiring a dedicated safety officer at the group level to be responsible for OHS oversight at all properties including oversight of contractor and sub-contractor OHS performance. In connection with this, it will review and refine its OHS related policies, and implement a system to monitor safety performance (including that related to road safety), conduct root cause analysis of accidents, and take corrective actions. Refer to the ESAP.

Pollution Prevention:



Waste water (primarily from supermarket food sections, from restaurants, and sanitary wastewater at shopping centers) after pre-treatment with grease traps is processed by on site sedimentation tanks followed by a soakaway. Outgoing waste water at Yangon stores is discharged to the city sewer which then undergoes secondary treatment by the Yangon City Development Council (YCDC) Wastewater Treatment Plant (WWTP) before being discharged to surface water i.e. the Yangon River or Bago River. There is no separate storm water discharge system at the product distribution centers.



Sludge from on-site sedimentation tanks at Company facilities and solid wastes are collected by local contractors and taken to local landfills, while some solid wastes with re-use value such as packaging cartons are collected by third parties for recycling. Food wastes are collected by YCDC licensed collectors. None of the properties have on-site boilers, while all have backup generators which use diesel during electricity outages to provide backup power.



IFC noted that at the Yangon product distribution center, on-site waste water pipelines are not sealed, and as a result moderate flooding which occurs during rainy seasons could potentially carry wastes to surface water.



For properties which discharge directly to surface water, and those that discharge into the sewer system of cities/towns which do not have a municipal WWTP, the Company will commission tests of waste water levels (parameters: BOD, COD, oil and grease, total suspended solids, and coliform bacteria) by a qualified testing entity and include results in Annual Monitoring Reports submitted to IFC. It will propose corrective actions (including equipment/facility retrofit as needed, such as ensuring that sewers are sealed and putting in place separate storm water discharge systems where technically and financially feasible) should results exceed WBG EHS General Guideline levels.



The Company will also undertake a review of the types and quantities of solid wastes (including food wastes) generated at its facilities including mapping of their destinations and handling methods in the form of an audit trail, and based on review results, develop a technically and financially feasible plan to reduce, reuse, and recycle solid wastes, in order to meet food processing industry waste generation benchmark levels (refer to Table 2 of the WBG EHS Guidelines for Food and Beverage Processing). For more details of the above actions refer to the ESAP.



Resource Efficiency and Greenhouse Gas Emissions:



Together, the annual grid electricity consumption of Project properties are expected to be 377kWh/square meter floor space, while the total water consumption is estimated at 3.3 cubic meters/m2 floor space, and a total of 264,000 liters of diesel will be used by backup generators. Where available, a shopping center obtains its water supply from the municipal water supply company, while some cent
ers abstract ground water from boreholes. The Company takes measures such as incorporating design features that maximize use of natural sunlight, creation of shaded sections in common areas of its shopping centers to reduce the need for air conditioning, and using water rather than air cooled A/C systems. All shopping centers have air conditioning and refrigeration units and none has heating installed. Based on data submitted by each facility manager, the head office accounting department compiles a monthly report on energy and water consumption which compare actual consumption against budgeted levels.



CMHL will undertake an energy and water efficiency review at its product distribution centers and several other representative properties, and based on review results, identify technically and financially feasible options to meet industry resource efficiency benchmark levels (refer to Table 3 of the WBG EHS Guidelines for Food and Beverage Processing). Refer to the ESAP.



The annual total greenhouse gas (GHG) emissions of Project properties is estimated at 220,000 ton CO2-equivalent, attributable mainly to the use of air conditioners, chillers, and refrigeration units; and secondarily to consumption of grid electricity. Refrigeration units use either R22 or R404A as the refrigerant. The Company will use an internationally recognized methodology to annually quantify total GHG emissions from its operations. It will also explore technically and financially feasible options for GHG reduction e.g. using refrigerants with a lower global warming potential, and also develop a corporate SOP on refrigerant selection which takes GWP into consideration as a selection factor. Refer to the ESAP and PS1.



Hazardous Materials (HAZMAT) Management:



HAZMAT used by CMHL’s operations mainly consists of small quantities of cleaning agents, and Liquefied Petroleum Gas at restaurant kitchens and supermarket food preparation areas in the shopping centers. LPG cans are stored outside buildings in locked and access-controlled sheds.

Most Yangon facilities are located in densely populated downtown locations, some adjacent on three sides to other buildings, streets, and local houses; while there are some stores in peri-urban areas and in second tier cities and towns. Unarmed security guards are employed to secure Project properties, and there have been no past security incidents.



There have been no fire incidents at any Company facilities since start of operation. The Company states that each of the Project properties is or will be designed (or refurbished) and operated to comply with national fire safety requirements, and each center has a fire fighting water storage tank installed which can hold at least 5,000 gallons of water on site, deemed as the minimum volume needed to put out a potential fire. There is no arrangement to formally audit and verify fire safety compliance. Fire-fighting equipment is checked by in-house engineers to ensure proper functioning. Smoke detectors have been installed in a number of shopping centers. Fire drills are conducted by the local fire departments but these do not always simulate real fire hazard situations. The Company and its various facilities are in the process of developing life and fire safety (LFS) policies and procedures with an aim of standardizing them across all properties. Facility back of house offices visited by IFC have central fire panels installed, but at one facility fire alarms in the supermarket section is not connected to the fire panel, and LFS procedures found at the back offices were either not available or lacking in details.



The Company will develop a corporate level Fire Directive and Master Plan which specifies minimum LFS requirements to be adopted by all new Project designs. The Master Plan will identify major fire risks, applicable local and international fire codes, and mitigation measures, and will address the following LFS elements: fire prevention; means of egress; detection and alarm systems; compartmentation; fire suppression and control; emergency and response plan; and operation and maintenance. It will be reviewed and verified by a qualified LFS engineer, and its content will be consistent with the requirements of the local fire code and one internationally recognized LFS code (e.g. U.S. National Fire Protection Association or NFPA codes).



Within three months of construction/refurbishment completion of the first two upcoming new projects, the Company will commission L&FS post-construction completion audits by qualified LFS engineers, to verify that buildings have been constructed or refurbished in compliance with the Corporate Fire Directive and Master Plan.



The Company will also develop and implement standardized LFS policies and procedures across all facilities (refer to PS1). This will include an appropriate system to regularly monitor potential fire risks. Refer to the ESAP.



Refer to PS1 for discussion of food safety.

Before construction activities commence at a new facility site, Company project management team members would visit neighboring community members to understand their views and any concerns they may have e.g. potential noise impacts during construction. The Company would then discuss ways to address those concerns. For example, at the Monywa site, the Company limited noisy work streams to day time hours only; and at the Ocean center in Yangon, the Company worked out an arrangement for the benefit of nearby residents whereby Yangon City Development Council refuse collection trucks would also pick up garbage from community collection points. City development councils in Yangon and Mandalay also require written consent from neighboring residents to indicate their acceptance of measures to address their concerns, before a construction project can commence. The security pouches and information counters at the properties are the key local public interfaces to receive external communications including grievances from the public. The Company also supports local development activities through its corporate social responsibility program e.g. through the Mobile Soup Kitchen program, efforts to help victims of flooding, etc. During construction and operation, this Project will generate local jobs directly or through its supply chains and procurement activities.

For more details on the project, please contact:

Mr. Ronald Lee
Project Director
CMHL
Tel: +95 1 508460
Fax: +95 1 512019
http://www.cmhl.com.mm

CMHL will place a bilingual (English and Burmese) newspaper advertisement in a major local newspaper in Yangon. This will inform the public that results from IFC’s E&S due diligence are available for access. It will also post the bilingual language ESRS and ESAP at conspicuous locations outside the main entrance of all its major facilities in Myanmar, and the same documents at its corporate website (http://www.cmhl.com.mm/) or provide a web-link to IFC’s disclosed ESRS and ESAP.

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
The company will provide a status update on its initiative to develop a food safety management.system based on principles of HACCP.	05/31/2016
The company will refine its E&S management system (ESMS) which will consist of: i) the company E&S policy; ii) appropriate Key Performance Indicators (KPI); iii) standard operating procedures (SOP) on pre-construction site E&S due diligence, life and fire safety, land acquisition and involuntary resettlement, EPR; labor and working conditions; contractor and supplier labor management; resource efficiency including refrigerant selection; and waste management; iv) a monitoring and reporting system whereby each property will regularly report performance data (according to aforementioned KPIs) to responsible E&S staff at the head office; v) a mechanism to regularly review ESMS implementation effectiveness.	03/31/2016
The company will set up a practicable system as part of its ESMS to screen primary suppliers for potential child and forced labor practices, and for potential impacts on biodiversity (primarily in relation to farms located in ecologically sensitive areas which may potentially entail significant conversion of natural or critical habitats), and address issues if found, to the extent that the company has commercial leverage over those primary suppliers.	03/31/2016
The company will review and refine its OHS related policies, and implement a system to monitor safety performance (including that related to road safety), conduct root cause analysis of accidents, and take corrective actions.	01/31/2016
For properties which discharge directly to surface water, and those that discharge into the sewer system of cities/towns which do not have a municipal WWTP, the company will commission tests of waste water levels (parameters: BOD, COD, oil and grease, total suspended solids, and coliform bacteria) by a qualified testing entity. It will propose corrective actions (including equipment/facility retrofit as needed, such as ensuring that sewers are sealed and putting in place separate storm water discharge systems where technically and financially feasible) should results exceed WBG EHS General Guideline levels.	03/31/2016
The company will undertake a review of the types and quantities of solid wastes (including food wastes) generated at its facilities including mapping of their destinations and handling methods in the form of an audit trail, and based on review results, develop a technically and financially feasible plan to reduce, reuse, and recycle solid wastes, in order to meet food processing industry waste generation benchmark levels (refer to Table 2 of the WBG EHS Guidelines for Food and Beverage Processing).	03/31/2016
City Mart will undertake an energy and water efficiency review at its product distribution centers and several other representative properties, and based on review results, identify technically and financially feasible options to meet industry resource efficiency benchmark levels (refer to Table 3 of the WBG EHS Guidelines for Food and Beverage Processing).	03/31/2016
The company will use an internationally recognized methodology to annually quantify total GHG emissions from its operations, and explore technically and financially feasible options for GHG reduction.	03/31/2016
The company will develop a corporate level Fire Directive and Master Plan which specifies minimum LFS requirements to be adopted by all new project designs. The Master Plan will identify major fire risks, applicable local and international fire codes, and mitigation measures, and will address the following LFS elements: fire prevention; means of egress; detection and alarm systems; compartmentation; fire suppression and control; emergency and response plan; and operation and maintenance. It will be reviewed and verified by a qualified LFS engineer, and its content will be consistent with the requirements of the local fire code and one internationally recognized LFS code (e.g. U.S. National Fire Protection Association or NFPA codes).	03/31/2016
Within three months of construction/refurbishment completion of the first two upcoming new projects, the company will commission L&FS post-construction completion audits by qualified LFS engineers, to verify that buildings have been constructed or refurbished in compliance with the Corporate Fire Directive and Master Plan.	03/31/2016
The company will put in place an appropriate system to regularly monitor potential fire risks. Completion indicator: annual internal monitoring reports available included in the AMR.	03/31/2016