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
Land plot for the hotel development (with existing buildings) was acquired from the Municipality of Tbilisi through an open electronic auction in 2014. Two buildings were occupied by the state Institute of Metallurgy and Materials Science, which also used to host the State Military Scientific-Technical Center “DELTA”. The Government is responsible for relocation of the state Institute to the building of its state-owned parent company. Relocation shall be completed by the end of November 2015. These two buildings and other currently unused ones will be demolished. There are two privately owned businesses located at the project territory: car wash station with tyre repair and a supermarket. Both private objects remain unaffected as their location at the furthest corners of the development area doesn''t trigger any changes for the project.
Land plots for existing and ongoing AFH projects have been acquired either from the Municipality of Tbilisi through open electronic auctions or from private owners on a willing-buyer, willing-seller basis. No physical or economic displacement was caused by these transactions, meaning that Performance Standard 5 was not found relevant to the completed and on-going developments. The company intends to follow this practice in future. It is not expected that any involuntary resettlement will be carried out for the purpose of this project. However, 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 is likely to meet the requirements of Performance Standard 5. This may include review of public consultation process, compensations paid and the final resettlement of the affected households. In the opposite case, and where the company is unable or not permitted to fill the gaps required to meet PS 5 requirements, the company will give consideration not to proceed with the acquisition.

The monument in front of the Institute of Metallurgy will be preserved at the site (brought back after completion of construction) or, if authorities request, handed over to the respective public agency. There are currently no other known cultural heritage objects either at the visited site on Kazbegi street or at other land plots currently possessed by M2RE and, thus, Performance Standard 8 was not found applicable. During construction works all contractors are required to apply a “Cultural Heritage Procedure” developed by M2RE to minimize potential risk of damaging any historical objects or archeological artifacts during demolition of existing buildings or earthworks.

Neither Performance Standard 6 nor 7 was found to be relevant to this project.

Going forward, prior to any new land acquisition, AfH SPV will conduct a social and environmental due diligence to ensure that risks and impacts, if any, will be adequately identified and managed in a manner compliant with IFC’s Performance Standards 2-8.

This proposed investment is an E&S Category B project according to IFC’s Policy on Environmental and Social Sustainability, because potential adverse environmental and social risks are limited, reversible and may be readily mitigated.

Key environmental and social project issues include control of dust, noise and workplace safety during construction, labor and working conditions during both construction and operation (hotel), buildings’ energy efficiency and water consumption efficiency, and fire and structural safety aspects of the buildings’ design, construction and operation.

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:

During the construction phase the project will be bound by the EHS requirements of the project sponsor, which are consistent with IFC’s requirements. Those are defined in the Environmental and Social Management Plan, Health and Safety Management Plan and Cultural Heritage Procedure, and are applicable to all M2RE construction projects in Georgia.



The sustainability policy will be developed by Ramada Encore SPV for operation of Ramada Tbilisi in line with Wyndham’s corporate sustainability policy, which declares “a commitment to conserve resources, preserve natural habitats and prevent pollution, to act with integrity and improve customers’ lives, and to support the communities around the world in which we work, live and play”. Wyndham’s corporate policy focuses on energy efficiency, water conservation and waste recycling, as well as working with local communities. Sustainability is supported through design choices, procurement programs and operational policies.



Social and Environmental Assessment:

Formal environmental and social impact assessment for housing or hotel construction projects is not required by the National Environmental and Planning Agency. However, the E&S due diligence for the hotel project has been undertaken by an environmental consultant on behalf of the company and presented to IFC. It does not indicate any significant adverse E&S impacts on neighboring residents.



The AFH SPV will conduct Environmental and Social Due Diligence (ESDD) for each construction subproject to be financed by IFC. Since most of the AFH projects are developed within established residential areas, the ESDDs will focus on potential adverse E&S impacts on neighboring residents, like change in solar insolation, construction impacts, traffic impacts, and others, and will propose according mitigation measures.



Management Program:

As described above, standard environmental, health and safety management plans for the construction phase have been developed by M2RE, and compliance with these plans is contractually required in the construction contracts. These plans include good management practices such as erosion and sediment control, dust control through irrigation, formal waste management practices, and occupational health and safety provisions.

Implementation of these management plans by contractors is overseen by the sponsor’s site supervisors. Their responsibility is to monitor the general contractor’s compliance with the contractual (including environmental and OHS) responsibilities, including local regulations and the requirements of the M2RE. Compliance monitoring and reporting is included in construction coordination meetings. In case of any non-compliance, the sponsor has the right to stop works and/or penalize the construction companies. The same EHS management practices will be implemented on the project’s construction sites.



The hotel property will be managed by Sophos in compliance with the Wyndham’s social and en
vironmental requirements, IFC’s Performance Standards and the World Bank Group Environmental, Health and Safety Guidelines (General; Tourism and Hospitality Development). These requirements will be incorporated into the Management Agreement.



The sponsor will ensure that the Sustainability Coordinator is appointed for Ramada Tbilisi to determine (in conjunction with the chief engineer) specific targets in the area of pollution prevention and resource conservation; oversee long-term sustainable practices; and raise sustainability awareness among employees of the hotel. Ramada Tbilisi performance will be measured in terms of energy and water consumption and waste recycling, and compared with global and regional benchmarks.



Community Engagement:

Based on the outcomes of the ESDD, AFH SPV and Ramada Encore SPV will provide relevant project information to affected people and, if needed, undertake the process to consult with affected people on environmental and social impacts and proposed mitigation measures. The SPVs will make communities aware of the grievance mechanism as part of the engagement process and will ensure timely and transparent recording, tracking, resolving and reporting on grievances. The SPVs will consider constructive comments from the public received in the course of pre-project consultations, construction and operation and will adjust the design or management program, where appropriate.



M2RE has a formal external grievance mechanism where neighboring communities can raise and register their concerns. There were no concerns raised previously for the completed and ongoing projects. The interested parties can also share their concerns with the local authorities where the local authorities will follow up and provide feedback. The information related with M2RE’s grievance mechanism is shared at the gates of the project sites.

It is expected that the hotel will create 40-45 new jobs. Around 300 employees will be hired for each subproject by construction contractors. Construction force is represented by local employees.



HR issues at the hotel will be managed in compliance with the national labor requirements and consistently with Wyndham Global Code of Conduct for Employees. These principles serve as human resources policies and procedures and are very closely aligned with the requirements of Performance Standard 2.



These statements affirm Wyndham’s support for the elimination of discriminatory practices, support for diversity and freedom of association and elimination of all forms of forced, bonded or compulsory labor. Wyndham does not employ children. Salaries and other benefits are set on the basis of Wyndham salary scales and local salary surveys and are aimed to be locally competitive.



The Guarantee of Fair Treatment / Open Door Process together with a WYNtegrity Line serve as an employee grievance mechanism.



Protecting the Work Force: In compliance with local labor laws and the sponsor’s policy, M2RE does not use child or forced labor. Contractors are also required to hire only employees older than 18 year of age, which is confirmed through verification of documents and controls during the daily inspections and at construction site gates. Workers Engaged by Third Parties: M2RE verifies that companies/personnel contracted to do the construction work are legal entities with a Certificate of Registration and a labor license issued by the statutory authorities. M2RE has included in the contracts with construction companies explicit clauses regarding labor, occupational health and safety, conditions for worker’s accommodation, access to grievance mechanism and reporting in case of finding historical artifacts.



Occupational Health and Safety:

OHS is an issue of concern primarily during the construction phase of the project.



The contractor will have responsibility for ensuring safety on the worksite, including noise protection (ear-plugs, etc.), dust protection (goggles, etc.), personal fall protection (life-lines, harnesses, etc.) and other more general protective equipment (steel toe boots, reflective vests, hard helmets, gloves, etc.). Fulfilment of OHS requirements will be overseen by the sponsor’s site supervisors and an independent engineer.

All project sites will be connected to the city electricity grid, supplied with water from the water supply system of Georgian Water and Power (GWP, a local natural monopoly), connected to the sewage system of GWP. Rainwater will be diverted to the city drainage system.



Apartment buildings are designed to be efficient users of energy. Energy efficiency measures incorporated into the building design include a well-insulated building envelope with double glazed windows and energy efficient lighting. For 25 Kazbegi Avenue subproject, at least 23 percent reduction in the building’s use of energy has been achieved when compared to local benchmarks.



The sponsor will continue to incorporate resource efficiency measures into design as it guarantees reduced utility bills for future residents. The sponsor and IFC’s Green Building Specialist are working together to identify whether technical solutions to increase resource efficiencies qualify for IFC’s green-building EDGE certification.



Beside energy efficient measures, the design for the hotel will envisage water saving features, including low flow fittings and dual flash toilets.



The annual greenhouse gas emissions of the hotel are expected to be around 800 tonnes of CO2 equivalent/year.



Emissions to Air:

Air emissions will arise from the small gas-fired boilers used to heat water: these will be insignificant. The hotel will not have a dry-cleaning facility. Zero–ODP refrigerant (R410A) will be adopted in air conditioning systems.



Emissions to Water:

Sanitary waste water, laundry and kitchen effluents will be discharged to the city sewer for further treatment and disposal.



Hazardous Materials

Fuel storage for the emergency generator will be in a double-walled above ground tank. The generator itself will be placed within a containment pond to catch fuel leaks if any.



Solid and Hazardous Wastes:

Demolition wastes during construction will be disposed to authorized municipal landfill.

Wastes generated during hotel operation will include food residues, and paper and plastic wastes, and maintenance residues such as used lubricants, oils and paints. These will be disposed to authorized municipal landfill and hazardous waste management contractors.

Community health and safety:

The hotel and AfH will be built within established residential area. To minimize noise and air pollution impacts from construction on the local residents, the company will stipulate its standard and additional mitigation measures through construction contracts. These include dust control through water spraying during demolition of existing buildings; sheeting of construction areas; reduction in vehicle speed; added noise screening; preferred working hours identified in consultations with local residents; silenced equipment; and a systematic noise monitoring program.

The company will announce schedule for construction works associated with exceeded levels of noise and dust to local residents. Construction works will be ceased during night time, Sundays and public holidays.



If needed, geotechnical monitoring of the nearest buildings and structures will be conducted to identify potential subsidence.



Infrastructure safety:

The sponsor has retained professional advice to design the life and fire (L&FS) safety systems of the hotel to be fully compliant with US National Fire Protection Association (NFPA) Life Safety Code requirements, as required by Wyndham and meeting IFC requirements in this respect.



Wyndham’s engineering team reviews the designs of the hotels and conducts a post-construction but pre-opening check to confirm the correct installation and functioning of all fire protection equipment, and that the as-built property is compliant with the fire safety and structural design requirements. The company will keep required documentation confirming these reviews by Wyndham at design and post-construction stages for the hotel.



After the start of hotel operations, the hotel maintenance team will regularly test fire protection equipment and provide on-going training to its staff to ensure safe evacuation of guests and personnel in case of emergency.



For AfH, the M2RE will engage professional services of a qualified Life and Fire Safety professional, acceptable to IFC, to confirm that residential buildings are designed to meet minimum life and fire safety requirements, based on good international practice for this type of occupancy, including presence of alternative escape routes, smoke detection and alarm system in common areas. Upon completion of construction, a qualified L&FS engineer will confirm that building faithfully incorporates all elements of L&FS design, and that all systems are installed and tested properly.



Previous IFC’s project with the sponsor included a similar review. Based on the opinion of L&FS professional, the sponsor has introduced additional safety features in the AfH building design and construction.



Tbilisi is located in a seismically active zone. Soil samples will be taken for each subproject to conclude that no liquefaction is expected in the event of an earthquake. The buildings will be designed to resist an earthquake with magnitude 8.0 on the Richter scale an
d comply with Eurocodes. Structure stability of two first AfH subprojects will be confirmed by an independent structural engineer.





Water and food safety:

The hotel’s water carrying systems, including firefighting systems (sprinklers, storage tanks, and others) will be treated and monitored to prevent growth of legionella bacteria, and regular testing will be undertaken to confirm the effectiveness of these treatments.



The hotel will receive city water which is potable, though regular testing will be undertaken according to World Health Organization standards to provide ongoing assurance of water quality for drinking, bathing and food preparation.



Food safety will be provided by strictly adhering to local and best international food hygiene standards for handling, preparation and storage.

M2RE has a formal external grievance mechanism where neighboring communities can raise and register their concerns. There were no concerns raised previously for the completed and ongoing projects. The interested parties can also share their concerns with the local authorities where the local authorities will follow up and provide feedback. The information related with M2RE’s grievance mechanism is shared at the gates of the project sites. Before start of construction, the company will announce schedule for construction works associated with exceeded levels of noise and dust, inform about additional protection measures during this period, and, if needed, undertake a consultation process with local residents.

For future subprojects, based on the outcomes of the site-specific ESDD reports and where appropriate, AfH SPV will provide relevant project information to affected people (if identified) and undertake the process to consult with affected people on environmental and social impacts and proposed mitigation measures.

M2RE will publish this ESRS and ESAP on its website in local language along with the site-specific ESDD.

E&S related inquires could be sent to:
Giorgi Vakhtangishvili, CEO: mailto:gvakhtangishvili@m2.ge

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
1. Adoption of the formal Environmental and Social Management System for Ramada Tbilisi, including: (i) Environmental and Social Policy (ii) Appointment of the environmental officer	11/30/2017
Adoption of the formal Environmental and Social Management System for Ramada Tbilisi, including: (iii) Inclusion of the WBG’s EHS Guidelines (General, Tourism and Hospitality Development) requirements and thresholds into the hotel’s Management Agreement. (iv) Management program for pollution prevention and resource efficiency during operation of the hotel	06/30/2018
2. Development and implementation of a Stakeholder Engagement Framework (SEF) for project construction and operation, including crisis communication plan.	07/31/3015
3. Conducting of the Environmental and Social due diligence (ESDD) for each new subproject to be financed by IFC.	03/31/2015
4. Obtain certifications from a suitably qualified third-party specialists acceptable to IFC to ensure that the project design and construction: (a) Meets internationally recognized life and fire safety standards	07/31/2015
4. Obtain certifications from a suitably qualified third-party specialists acceptable to IFC to ensure that the project design and construction:(b) Seismic design meets local and internationally recognized design code, given the risks implied by its location.	11/30/2017