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
Impacts related to the following Performance Standards were not identified during IFC’s review: Land Acquisition and Involuntary Resettlement (PS5): existing owned facilities are mainly located on previously undeveloped land obtained through long term leasing arrangements with municipalities. There was no cases of involuntary resettlement or economic displacement, and the company intends to follow this practice in future. There was only one case, in the city of Mogilev in 2014, when people were resettled by the municipality from a substandard housing prior to land allocation for the construction of a store. Resettlement was carried out by the responsible governmental agencies following legal process, and people were moved to the apartments of higher living standard and market value. If any future land plot will be associated with government-managed physical relocation or economic displacement, the company will undertake its best effort to ascertain that the outcome of the government-managed resettlement will meet the requirements of the Performance Standard 5.

Proposed new stores are to be located in areas advantageous to retail operations (i.e. in proximity to main roads and other transportation links) in large population areas. Hence, risks and issues relevant to biodiversity and natural resources (PS6), indigenous peoples (PS7) or cultural heritage (PS8) are not expected to arise with this project.

This potential investment is classified as a Category B project in accordance with IFC’s Policy on Environment and Social Sustainability. Based on information reviewed by IFC, this investment will have limited adverse environmental, health and safety (EHS) impacts that are few in number, are generally site specific, largely reversible and readily addressed through standard mitigation measures. The main environmental and social risks of the project include human resource management of the company’s workforce which accounts for more than 25,000 people; provision of adequate and uniform level of life and fire safety in Eurotorg’s chain, which is large in number and has a wide geographical spread; a systematic approach to food safety; and efficient use of energy in the stores, which currently produce around 90,000 tons of CO2 eq per year.

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

The company’s operational activity is guided by applicable laws and regulations of Belarus, including protection of environment, health and safety. In addition, the company adopts internal policy in the area of occupational health and safety, which is consistent with OHSAS 18001 principles.



Environmental and Social Assessment and Management System

Land acquisition for new premises construction in Belarus is possible through long-term lease from the state only and is strictly regulated. New land plots with designated zoning are offered through bidding procedures, carried out solely by the state authorities. Local authorities are responsible for initial assessment of the land plots before offering them for bidding, including environmental and social screening. Specific requirements could be applied on future land developer (e.g. in case the land is contaminated by the past activities, etc.). Belarusian regulation prohibits development of agricultural land in use, or protected forestry. Local authorities are also responsible for organizing consultations with stakeholders potentially affected by the new development.



Project developers are responsible for carrying out environmental and social impact assessment (ESIA) study of the proposed development and for designing environmental management plans for the construction phase. The ESIA outcomes are reviewed for environmental and social compliance with Belarusian law by the state responsible agencies. Their positive approval is required to commence construction.



Operational environmental, health and safety (EHS) risks and impacts of Eurotorg’s operations are limited. To maintain continuous compliance with local EHS requirements, Eurotorg has developed and implements a number of operational procedures in the field of waste management, hazardous materials management, food safety, occupational health and safety, and fire safety. These documents were reviewed as part of the existing investment and found to be consistent with the principles of the Performance Standards and the requirements of the World Bank Group (WBG) EHS General Guidelines. However, visits to existing stores during IFC’s appraisal identified areas, where management system’s efficiency could be further improved. With this purpose, as agreed in the Environmental and Social Action Plan (ESAP), Eurotorg will engage experts with international experience to further improve its life and fire safety (LFS) and food safety practices according to internationally recognized standards. The PS4 section provides further details.

Compliance with environmental management plans for construction is contractually required in the construction contracts. These plans typically include proper air emissions control (dust, noise), stormwater and waste management practices. Environmental management responsibility during construction is borne by a construction contractor with oversight from the Eurotorg’s project manager, who is in charge of mon
itoring the contractor’s compliance with the contractual responsibilities and local regulations.



Organizational Capacity and Competency

To provide continuous management of the EHS matters, the company employs designated full time occupational health and safety, fire protection and power engineers.

Eurotorg is one of the largest employers in Belarus. The company’s personnel accounts for more than 25,000 people. Almost all employees are directly engaged by the company.



Policy.

The elements required by PS2 are covered in a series of documents that are presented to new employees at the time of hire through an induction or adaptation process. They are cross-referenced with the national Labor Code of Belarus, which guarantees core labor rights to employees in consistence with PS2. Individual contracts serve as another means to provide staff with information on their terms and conditions. Workers are provided with a signed copy of their contract at the time of hire.



Workers’ Organizations.

A standard contract includes an explicit right to join trade union and collective bargaining. There is an internal trade union operating within Eurotorg’s chain, which was formed in 2015. The percentage of union members in Eurotorg’s stores is approximately 75% (19,774 people). Collective bargaining agreement was signed in December 2015 and is valid for the next 2 years.



Employees of the company’s subsidiaries (Techno Plus chain and e-commerce) are not unionized yet.



Non Discrimination and Equal Opportunity.

The Constitution and Labor Code of Belarus include provisions for equal protection of rights and interests without discrimination. Management commitment to comply with these principles is included in the company’s Procedures for Hiring. Workers recruitment is conducted through various means. There is no preference on age or nationality in hiring practices. There were no reported complaints in relation to discrimination against the company.



While there are reportedly 67 disabled persons employed in the company and there are no specific legal requirements related to the employment of disabled persons, the company will follow good practice and update its HR Policies with elements related to the protection of employment rights for disabled persons.



Protecting the Work Force.

There are reportedly no workers below the age of 18 at any stores of Eurotorg – minimum hiring age, which is stated explicitly in the Procedures for Hiring. Passports are required for all workers and date of birth is recorded for all employees. The Constitution prohibits forced labor and no evidence was identified that this is a problem in existing operations. All overtime, according to management, is undertaken on voluntary basis.



There are 640 migrant workers employed by Eurotorg. Migrant workers are covered by the same HR policies and receive similar training in occupational health and safety as citizens of Belarus.



Retrenchment.

The company commits to apply non-discrimination and equal opportunity standards in relation to any potential retrenchment, as it’s mentioned in collective bargaining agreement. The similar standards will be introduced in HR Policy of company’s subsidiaries (Techno Plus chain and e-commerce) as defined in the ESAP #2.
Retrenchment management plans will be developed in accordance with national law and in consultation with the workforce. Eurotorg’s collective bargaining agreement defines concrete measures to avoid or mitigate negative measures of a retrenchment on the employees.



Grievance Mechanism.

Work-related concerns can be raised with the Director of each store or HR managers. However, no formal grievance mechanism that would meet PS2 requirements is currently available. The procedures related to a worker’s right to make claims are largely the responsibility of the government, which is included in the Labor Code. All employees understand their right to turn to authorities if they wish to file a formal claim. However, the company recognizers a benefit of creating an internal grievance procedure. As agreed in the ESAP, the company will develop and implement a grievance mechanism in line with PS2 requirements and will make it available to its own and, if needed, third party employees. The grievance procedure will be explained at the time of hire. Grievance mechanism will be also provided through Eurotorg’s collective agreement. The company will ensure a regular reporting schedule to the central personnel office on grievances received as well as how grievances are resolved.



Occupational Health and Safety (OHS).

Health and safety issues are strictly regulated by national legislation. The company implements a single consistent Health and Safety Policy at all stores, all workers receive information on health and safety at the time of hire and are required to sign off when they have sufficiently reviewed and understood their role and responsibilities. Each hypermarket has a designated safety engineer. There is also a safety manager hired at a corporate level who oversees health and safety conditions at stores. Risk factors for each job are assessed, employees are trained in mitigation of health risks at work and provided with personal protective equipment.



Individual stores are responsible for reporting occupational accidents and incidents and all serious accidents are required by law to be reported to the government. There was only 1 accident with 7 lost days in 2015 associated with all the individual stores which demonstrates good OHS performance.



Supply chain.

There are no existing references to managing supply chain labor risks in Eurotorg’s human resources documents. This question is not regulated by the Labor Code. However, IFC’s desktop research does not indicate that child or forced labor are key risk areas in Belarus, the origin of the vast majority of products sourced to the company’s stores.



Workers engaged by Third Parties.

There is a standard text provided in legal agreements that informs contractors of their responsibility to comply with national labor legislation, including health and safety. In addition, the company will ensure that contracted workers have access to a grievance mechanism. In cases where the third part
y is not able to provide a grievance mechanism the client will extend its own grievance mechanism to serve workers engaged by the third party. These requirements are defined in the project ESAP.



The combination of the above policies, procedures and actions demonstrates material compliance with PS 2.

Resource efficiency.

Stores are located in established residential areas and are connected to the national grid and use central heating or gas-fired boilers for water and space heating. Water is supplied via the respective municipality and sewage is disposed of via the municipal systems.

As of January 1, 2016 Eurotorg operated approximately 256,500 sqm of trade area, which required consumption of 134,100,000 kWh of electricity, 36,180 Gcal of heat and 1,171,000 m3 of natural gas in 2015.



To minimize energy consumption, Eurotorg is implementing a number of energy efficiency measures in its stores, such as recuperation of the heat from the cold storage chambers to heat the water needed in the store; use of curtains in the display cabinets to limit air exchange between the display cases and warmer exterior during closed hours; replacement of old refrigerator compressors; information campaigns to raise awareness among the staff; and others.



Electrical consumption in 2015 was approximately 547 kWh/m2 of shop floor. These results are in line with published data (such as that from EnergyStar (http://www.energystar.com) which reports average values of electrical consumption in US supermarkets of 544 kWh/m2.



GHG emissions.

Presently GHG emissions produced by the company’s operations have been estimated by IFC as 90,000 tons of CO2 eq per annum (tpa). Upon completion of expansion total GHG emissions are estimated to be around 122,000 tpa of CO2 eq. The company will undertake its best effort to manage and ultimately reduce these emissions in a cost-effective manner. As the first step in this process, the company will quantify its direct (combustion of fossil fuel) and indirect (purchases of heat and electricity) GHG emissions annually and report to IFC in the Annual



Monitoring Report.

The company will work (possibly with IFC’s Green Building Team) to identify opportunities for further energy use reduction through the inclusion of efficiency measures into the design and operation of new (and existing) properties.

Wastewater treatment.Sanitary waste water and process effluent arising from store operations (after pre-treatment with grease traps) are discharged to municipal waste water treatment systems. Storm water run-off from paved areas is collected and directed to oil water separators, before discharge to local storm water sewage system or environment. Waste water discharge criteria are specified in the relevant store’s permit.



Solid Waste Management. The stores’ recycling effort is limited to separate collection of cardboard packaging, paper and plastic. These materials are collected and sold for recycling.



Hazardous Materials.

Hazardous wastes (e.g. fluorescent lamps, oils) are collected separately and disposed of by licensed contractors. The company mainly uses R404a refrigerants, a non ozone-depleting HFC refrigerant within its stores; these operations are managed by experienced engineers to minimize refrigerant
leaks, and a service team is available 24/7 in case a pressure drop in the system is detected.

Community Health and Safety.

Life and fire safety (LFS) provisions at Eurotorg’s stores, both owned and leased, are regulated by local building codes and fire regulations. Eurotorg established a group of 11 people working on fire and industrial safety on the company level. The group is responsible for developing and implementing fire safety measures at the company’s stores and training of personnel.



During site visits to the company’s supermarkets, it was confirmed that stores are equipped with an automatic fire detection and alarm, means of egress with evacuation signage; emergency power; smoke extraction and firefighting provisions. The control panels are installed in the premises supervised by safety personnel. To further minimize LFS risks at Eurotorg stores, both owned and rented, the company will engage a LFS professional acceptable to IFC to conduct a review of Eurotorg stores, develop a risk-based upgrade program and further strengthen the company’s internal control related to fire prevention and safety systems (e.g. checklists, internal audits, etc.). This is defined in the ESAP.



Managers of the stores are legally liable for compliance with regulations. Each store has hazard and evacuation management procedures in place. An intervention team is formed from employees; they are trained and are taking part in periodical evacuation exercise. A plan of presence per activity zone is posted for these teams.



For all new stores to be constructed and owned by the company as part of IFC’s project, Eurotorg will submit to IFC the design and post-construction professional certifications to confirm that stores are built in full compliance with local building code and fire regulations, and in accordance with an internationally recognized LFS standard (e.g. US NFPA 101 Life Safety Code), as required under the LFS section of the WBG General EHS Guidelines (section 3.3).



Currently Eurotorg offers cooked food in its 114 stores. Managers of the stores are the guarantors for compliance with sanitary rules and regulations of Belarus. To further strengthen its food safety management system according to HACCP principles and continuously control foodborne illness risks, the company will work with food safety professionals (possibly IFC’s food safety advisory team) as defined in the ESAP.



Security Personnel.

Store premises are protected using contracted unarmed security. These individuals work inside the store (to prevent shoplifting) and also outside to protect assets including incoming supplies and are hired from licensed firms using trained individuals. Security personnel are also trained to assist Eurotorg in evacuation of people in case of emergency. Level of security risks at the company’s stores is estimated as low.

Members of the public can express their concerns and grievances, also about Eurotorg’s environmental and social performance, through an established grievance mechanism - the “Book of Suggestion and Complaints”, which is held in each store. These comments are studied and acted upon by the company’s senior management. In addition, concerns and grievances can be received through the Eurotorg’s hot telephone line 8 017 289-00-00 advertised on the company’s website http://www.evroopt.by

Contact Person: Andrei Matsiavin
Company Name: Eurotorg LLC
Address: 220019, Republic of Belarus, Minsk, Montazhnikov str., 2
Email: mailto:matyavinA@eurotorg.by
Phone: +375 44 7 888 880

Facsimile: +375 17 201 16 46

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Develop and implement a robust grievance procedure aligned with the requirements of IFC’s Performance Standard 2: Labor and Working Conditions to provide all company’s employees with an opportunity to have their opinions heard and interests represented. . Ensure effective communication of the procedure to existing and new employees alike, and third party employees, if needed.	12/31/2016
Ensure that the human resource policy applies non-discrimination and equal opportunity standards in relation to any potential retrenchment and also that the company commits to developing retrenchment management plans in accordance with national law and aligned with IFC’s requirements; and in consultation with the workforce.	12/31/2016
Include text related to the protection of employment rights for disabled persons in the Human Resource Policy	12/31/2016
Engage suitably qualified LFS expert(s) acceptable to IFC to conduct a LFS review against internationally accepted Life Safety standard (e.g. NFPA 101) at a representative number of portfolio stores. Findings of the review will be used to: (i) determine a scope of LFS improvement plan to mitigate LFS risks at individual stores and introduce systematic improvements at the company’s level; and (ii) agree with IFC on a time based action plan for implementation of the plan.	12/01/2016
Engage suitably qualified Food Safety expert(s) acceptable to IFC to conduct Food Safety review against internationally accepted standard (e.g. HACCP) at representative number of portfolio stores. If needed, findings of the review will be used to:(i) determine a scope of food safety improvement plans to mitigate risks at individual stores and introduce systematic improvements at the company’s level; and (ii) agree with IFC on a time based plan for implementation of the plan.	01/01/2017