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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category B project according to IFC’s Environmental and Social (E&S) Review Procedure. The potential E&S risks and impacts of the project are expected to have a limited number of adverse E&S impacts that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Key E&S issues related to the project are: i) assessment and management of the impacts of the company’s acquisition activities; ii) the company’s social, environmental, occupational health and safety and food safety management system and performance as well as capacities to manage the impacts according to IFC Performance Standards and applicable guidelines, which include assurance of fair, safe and healthy working conditions; utilization of equipment and operational practices that maximize conservation of energy and water and process materials, including recycling and reuse initiatives; and management of emissions and wastes and their impacts on ambient environment and nearby communities.

The project involves three new developments in China which are expected to be established through joint venture (JV) with local companies. Each development will be a typical of 3,000 m2 floor areas located in well-developed industrial areas and most likely built in existing industrial buildings. The project does not involve any new land acquisition and involuntary displacement. Future land purchases, in the event they take place, are expected to occur through a willing-buyer-willing-seller open market transaction or through leasing of industrial land from government agencies in China. The project does not have the potential for sourcing of materials or products from ecologically sensitive regions. There is no potential of presence of indigenous peoples or cultural heritage in the project areas. Therefore, impacts related to PS4: Community Health, safety and Security, PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this 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.

Management System and Program: As a holding company, Atopco will have limited involvement in subsidiaries’ operations. However, in order to achieve sound environmental and social performance across the company and align E&S performances between subsidiaries, as set forth in the Environmental and Social Action Plan (ESAP), Atopco is required to establish an overarching corporate sustainability policy and an ESMS and food safety manual consistent with ISO 14001, ISO 22000 and IFC Performance Standard 1 and customizing the good international practices as found at New Hope Group and KPC which can be then further customized into facility level manuals. Atopco will define, through the corporate ESMS manual, E&S roles and responsibilities, performance benchmarks along with monitoring and reporting mechanisms to ensure the compliance with Chinese E&S laws and regulations and alignment with World Bank Group (WBG) EHS Guidelines. All subsidiaries will be required by Atopco to assign their own qualified E&S managers and develop, through customizations and localizations of the company’s corporate ESMS manual, their own operational policies, manuals, control procedures, management plans, staff training programs and emergency management procedures.



For operation licensing, all the Chinese facilities will be subject for complying with Chinese regulatory food safety requirement Quality and Safety (QS) Mark for Food, Beverages and Other Products. Under Australian Food Production (Safety) Act 2000, KPC has obtained a Food Safety Accreditation issued by Safe Food Production Queensland. Moving forward as will be described in aforementioned Atopco’s corporate food safety manual, all subsidiaries will be required to comply with local legal requirements on food safety and be consistent with good international food safety practices.



Assessment: Atopco’s E&S due diligence (ESDD) for acquisition is managed by NH Fund according to NH Fund’s ESMS which complies with IFC PS requirements. Atopco outsources legal due diligence which consists of E&S legal compliance review against applicable law and regulation. The ESDD is to be conducted by either NH Fund staff or external E&S consultants depending on the complexity of the risk associated with the acquisition target. The ESDD will cover all key aspects of human resource (HR), occupational health and safety (OHS), effluent and air emission, solid waste, hazardous materials and wastes and emergency preparedness.



Organization and Capacity: Atopco intends to leverage the expertise of KPC in Australia to its Chinese operations. Productions of Chinese facilities will be set up and run by a team of KPC staff for process managements, quality controls as well as EHS managements. In addition to hiring a qualified E&S manager at each subsidiary which will be required by Atopco, and as set forth in ESAP, Atopco will be required to dedicate qualified personnel at the corporate level to oversee the development of corporate
sustainability policy and the ESMS and to monitor the company’s E&S performance across the subsidiaries.



Emergency Preparedness and Response: Atopco intends to replicate applicable aspects of KPC’s operational model into the Chinese operations. The emergency managements of the Chinese facilities are expected to generally follow KPC’s practices. For example, KPC has developed an Emergency and Dangerous Goods Management Plan for prevention of and dealing with identified emergency scenarios primarily consisting of fire, gaseous releases and medical and nature disasters. KPC’s fire emergency management seeks to comply with Australian standards and regulations (including Australian Standards AS 3745-2002, Workplace Health and Safety Act Q 1995, Workplace Health and Safety Regulations Q2008 and Australian industrial good practices), which will be customized to Chinese fire safety regulations for the Chinese facilities. Emergency training is part of regular training program provided to staff members and contractors at KPC. Semi-annual emergency drills are organized for key emergency situations. Workplace hazards, control measures and emergency response plans are described in details in the Staff Handbook which will be used as a basis for documentation at the Chinese operations.



In summary, as part of aforementioned corporate ESMS, all subsidiaries will be required by Atopco to develop, prior to operation, their own documented emergency preparedness and response plans commensurate to the potential emergencies customizing the relevant good international practices as found at KPC.

HR management: The main workforces of Chinese processing facilities will be hired locally; some are expected to voluntarily transfer from existing JV companies. The estimated total number of employees of the three Chinese facilities is 291 with male and female ratio expected to be 67% and 33%. Employment will be created through this project; no retrenchment is therefore anticipated.



As set forth in ESAP, Atopco will be required to establish an overarching corporate HR policy and manual including procedures customizing the good international practices as found at New Hope Group and KPC, which can be then further customized and localized into the facility level manuals. All subsidiaries will be required by Atopco, prior to operations, to define their own HR policies and manuals through customizations and localizations of the company’s corporate HR policy, manual and procedures to ensure the compliances with local labor regulations. The HR policy and manual will be consistent with applicable local labor laws and regulations and cover the labor management aspects contemplated by this PS, including: employment contract, working terms and conditions, social benefits, non-discrimination and equal opportunity as well as a staff grievance mechanism to address workplace concerns including anonymous complaints.



Occupational Health and Safety (OHS): Construction activities exposed to the project involve mostly equipment fitting and interior renovations of existing industrial buildings; as such no significant construction related OHS risk is expected for the project. The Chinese facilities’ activities will be mostly manual tasks but with less labor intensive than slaughtering operations since the tasks of further processing will predominantly involve handling of smaller pre-cut meat supplied from the slaughtering houses. The expected main activities of the Chinese facilities will involve further meat cutting, marinating and pre-market packaging.



The production operations of Chinese facilities are expected to generally follow the applicable aspects of KPC’s operation. KPC has a full scale OHS management system, namely Work Health and Safety Management System (WHSMS) which is developed based on Australian OHS regulatory requirements and standards covering activities carried out by both own staff members and contractors. KPC’s WHSMS manual defines a comprehensive set of OHS aspects primarily including responsibilities, training, risk identification and management, inspection and audit, and incident and emergency management. Control measures established address identified work hazards such as manual tasks (e.g. repetitive or sustained application of force, awkward posture and movement and handling unstable loads and etc.), fit for duty, workplace noise, zoological diseases, hazardous substances and dangerous goods and workplace bullying and sexual harassment.



As will be described in Atopco’s ESMS, all subsidiaries will be required by Atopco to e
stablish, prior to operations, their own OHS management practices or systems customizing the company’s corporate OHS manual and procedures to comply with applicable local OHS legal requirements and consistent with WBG EHS Guidelines.

The meat processing within Chinese facilities is not expected to be energy, water and/or material intensive. The main energy inputs for the Chinese facilities will be electricity to be used for refrigeration and cooling systems, and which will be supplied from national or local grids. The facilities will not have any boilers, generators or other systems generating air emissions. Water will be primarily used for defrosting and cleaning and will be sourced from local city water networks. Wastewater generated from the productions will be most likely small on qualities and not heavily polluted due to the process involved. The wastewater where generated will be delivered to property lessor’s common wastewater treatment plants for pre-treatments, in the case of effluent is connected to government wastewater treatment plants, or treatments, in the case of effluent is allowed to be discharged to environment mediums in accordance with local legal requirements. Solid wastes generated will be mostly packaging wastes which will be collected for either recycle or off-site disposal. No hazardous materials neither hazardous waste are expected except for small amounts of cleaners and/or sterilizers for hygiene controls. Small amounts of construction wastes generated from equipment fitting or interior renovations will be disposed by the contractors in accordance with local regulations.



The environmental managements of the Chinese facilities are expected also to follow the applicable practices of KPC. KPC manages its pollution issues seeking to comply with relevant national and provincial/State (Australian) environmental legal requirements. For example they have obtained an Environmental Registration Certificate which authorizes KPC to undertake fuel burning, meat processing and sewage treatment at the properties. KPC’s environmental management approach will be customized to comply with Chinese environmental legal requirements for the Chinese facilities. KPC has in place a regularly updated Environmental Management Plan outlining the projects or major items of its environmental program and a monthly schedule listing environmental management tasks.



As will be described in Atopco’s ESMS, all subsidiaries will be required by Atopco to develop, prior to operations, their own environmental management plan customizing the company’s corporate ESMS manual outlining key environmental initiatives such as energy and water conservations, wastewater discharge management, waste recycling and where appropriate, air emission control and hazardous material and hazardous waste managements to comply with applicable local environmental legal requirements and align with WBG EHS Guidelines.

All activities supported by the project are or will be located in well-developed industrial areas and have little to no potential of exposure to the environmental or social sensitive areas. However in order to deal with all eventualities, and as set forth in ESAP, Atopco will be required to develop a grievance mechanism at both corporate and facility levels to manage and monitor the E&S feedbacks from external stakeholders including the general public.

Atopco will disclose this ESRS locally at the following address:
Suite 2508, Twin Towers（West）,
Jianguomenwai Avenue
Beijing, 100022


All inquiries and comments may be directed to:

Telephone: +86-10-58287196
Telefax: +86-10-65676087
E-Mail: mailto:brian.tang@hosencapital.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Dedicate a (part time) sustainability manager at corporate level to oversee the development of corporate sustainability policy and ESMS and monitor the subsidiaries’ E&S performances.	01/30/2015
Review (with the help of external consultant, as needed) KPC’s existing environmental, occupational health and safety (OHS) and food safety management policies, manuals, plans, procedures and programs (including emergency management and staff E&S training) and revise and incorporate them into an overarching corporate sustainability policy and environmental and social management system (ESMS) including food safety manual and procedures which can be further customized and localized into the facility level manuals. The ESMS system will define roles and responsibilities of corporate and facilities, consists of necessary elements including operational manuals and procedures consistent with ISO 14001, ISO 22000 and IFC Performance Standard 1 to enable Atopco to comply with Chinese environmental, social and food safety laws and regulations, IFC Performance Standards, and applicable aspects of World Bank Group (WBG) EHS Guidelines and regularly monitor the compliance of the subsidiaries activities. The ESMS will define roles and responsibilities of subsidiary EHS manager and require all subsidiaries to establish, prior to productions and through customizations of the company’s corporate ESMS and food safety manual and procedures, their own environmental management plans, OHS management practices or systems, emergency preparedness and response plans and staff E&S training programs to comply with applicable local environmental, OHS and fire safety legal requirements and applicable aspects of WBG EHS Guidelines; and for food safety, their own food safety manuals to comply with local food safety legal requirements and align with good international practices including Hazard Analysis Critical Control Points (HACCP) and Codex Alimentarius.	06/30/2015
Establish an overarching corporate HR manual and procedures which can be further customized and localized into the facility level HR manuals. The HR manual and procedures will comply with labor legal requirements covering all relevant aspects contemplated by IFC Performance Standard 2, including: employment contract, working terms and conditions, social benefits, non-discrimination and equal opportunity as well as a staff grievance mechanism to address workplace concerns including anonymous complaints.	06/30/2015
Define corporate Key E&S Performance Indicators (KPIs) along with necessary monitoring and reporting mechanism to mainstream EHS and HR parameters, such as : i) Safety – Lost Time Incidence Frequency Rate (LTIFR - Number of injuries per million of hours worked); Accident Free Days (Number of Days since last Lost Time Incident). ii) Environmental – Carbon (kg/ton - CO2 emitted / tons produced); Water Usage (kiloliters/ton) and Efficiency - consumed versus tons produced; Energy Usage (kWh/ton) - Energy consumed/tons produced. iii) HR - Retention - Number of full time equivalents leaving in the period /Avg. full time equivalents - and training days - Number of training days provided to new and existing employees.	06/30/2015
Define and implement corporate level and facility level grievance mechanisms to collect and handle feedbacks raised by external stakeholders including the public.	06/30/2015