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 IFC's 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
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources

Of the existing olive oil production, which is bottled and sold by CHO, 70% was pressed and procured from over 200 third-party local oil mills. The relationship between CHO and these mills is based on yearly procurement contracts, without provision of any financial assistance although CHO provides technical advice on equipment and process improvements. As this contractual relationship is short-term, not exclusive and does not involved direct financial assistance, it is judged that CHO does not have reasonable commercial leverage over the operations of these third-party mills. Therefore, the 200 oil mills cannot be classified as “associated facilities” and for the purpose of this review, these will be considered as primary suppliers for which PS2 and PS6’s related supply chain requirement applies.

Issues related to PS5: Land Acquisition and Involuntary Resettlement are not expected as the Company has no plans to acquire more lands for olive tree cultivation or additional plant/operations. Issues related to PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this investment for the following reasons: there is no presence of Indigenous Peoples or known cultural artifacts within the Company’s operational footprint. In the event that issues anticipated by these PSs arise, CHO will promptly inform IFC. Screening and assessment of these issues against PSs requirements will be done through the Company’s E&S management system (ESMS).

This proposed investment is expected to have limited environmental and social impacts which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. The project is designed to avoid, minimize and manage E&S risks and impacts of the Company’s operations in compliance with Tunisian legal and regulatory requirements, IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Vegetable Oil Production and Processing) Environmental, Health and Safety (EHS) Guidelines.

Key E&S risks associated with this investment are: (i) incomplete management plans and procedures for all the E&S risks and impacts identified throughout all of the Company’s operations (including those related to the environment, food safety, and occupational health and safety); (ii) incomplete and decentralized monitoring process to assess the management effectiveness related to environmental, food safety, and occupational health and safety issues across all operational units and reporting to senior management for follow up action in case additional resources are needed; (iii) incomplete HR policy and procedures manual to manage HR practices across all its operations including seasonal employees; and(iv) absence of a supply chain verification mechanism to assess the occupational health and safety practices of third-party mill operations.

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.

Environmental and Social Assessment and Management System. To manage the environmental and social risks across all of its operations, CHO has developed an integrated strategy and framework for addressing environmental, health and security, food safety and quality (EHSQ) issues across its operations, which is reflected in the Integrated Management Manual (created in April 2006 and last revised in September 2014).The specific elements of the framework are described in further detail in each of the sections below. The framework can generally be considered to be consistent with the requirements of this Performance Standard and by addressing the action items as outlined in the ESAP, CHOs framework, moving forward, can be expected to be in compliance with this Performance Standard.

Furthermore, CHO has received/is in the process of receiving the following certifications at the level of individual production units: 1) ISO 14001:2004 for the environmental management system of the bottling facility is pending as of 4 February 2015 (and CHO anticipates to roll this out to all other sites by 2019); 2) ISO 9001:2008 for the quality management system is valid until 12 July 2016 for the oil press and until 22 July 2016 for the bottling and refining facility, the soap manufacturing facility as well as the extraction processing facilities at Chrarda and El Amra; 3) ISO 22000:2005 for the food safety management system is valid until 30 October 2016 for the bottling facility; 4) BRC Global Standard for Food Safety for the food safety management system is valid until 5 November 2015 for the bottling facility; 5) IFS Food for the food quality and safety standards of the bottling facility is valid until 9 November 2015; and 6) IFS HPC for the cosmetic manufacturing practices of the soap manufacturing facility is valid until 24 June 2015. CHO is in the process of expanding the scope of the existing certifications in a phased approach over the next five years.

As part of the ESAP, CHO shall expand the systems currently already in place such that these function as an overarching framework for managing the environmental and social aspects across all CHO sites. This will ensure that CHO activities are undertaken in compliance with the requirements of National Laws, internationally recognized standards and certifications (ISO 14001, ISO 9001, ISO 22000, BRC, IFS Food and IFS HPC, and certificates for the organic production of olive oil and soap), and any additional aspects as contemplated under the principles of IFCs Performance Standards (for example as related to CHOs supply chain and stakeholder engagement), as well as that any new risks and impacts that are identified through implementation of the framework are addressed by developing the necessary management programs to mitigate these.

Policy. CHO has established: 1) an environmental policy, which reflects the Companys commitment to meet Tunisian legal and regulatory requirements and to implement an environmental management system that currently meets ISO 14001:2004 for the bottling facility (pending as of 4 February 2015); and 2) a quality policy, which reflects the Companys commitment to implement practices that ensure product quality (ISO 9001:2008 for the quality management system for the oil press, bottling and refining facility, soap manufacturing facility as well as the extraction processing facilities at Chrarda and El Amra; ISO 22000:2005, BRC Global Standard for Food Safety and IFS Food for the food safety management system for the bottling facility; and IFS HPC for the cosmetic manufacturing practices of the soap manufacturing facility). CHOs policy also includes a commitment to product quality as demonstrated through various product certifications (certificates for the organic production of olive oil and soap). Both policies were signed by the CEO and communicated to the employee.

Identification of Risks and Impacts. In accordance with Tunisian law, CHO completed separate Environmental Impact Assessments (EIA) for each of the operating facilities, which were approved in 2006 and 2010 by the Tunisian National Agency for Environmental Protection. The EIA approval process also entailed issuance of a certificate demonstrating operations safety, dated 1 November 2006, which was renewed on 9 January 2015. As part of this process, CHO completed a Job Hazard Analysis by job function and by incident (fire or explosion) at the facility level. As required under National Law, the certificate is valid for two years and CHO has already initiated the review process across its operations, which is due to be completed by the end of 2015.

CHO undertook additional identification of risks and impacts as part of the process for obtaining various certifications for the following operational units: 1) at the bottling facility and refinery plant (ISO 14001, review undertaken in 2013 and revised in 2014; ISO 22000, BRC, and IFS Food including a Hazard Analysis Critical Control Points (HACCP) review in 2010 and revised in 2014); and 2) at the soap processing facility (IFS certification for the manufacturing of cosmetics, review conducted in 2014). CHO has also started the process of reviewing its current health and safety practices against the requirements of the OHSAS 18001 standard on occupational health and safety. As noted above in the Environmental and Social Assessment and Management System Section, CHO is in the process of expanding the scope of the existing certifications, which will entail additional identification of risks and impacts at each of the operational units over the next five years.

As part of the ESAP and based on a risk-based approach, CHO shall revise the order of priorities for undertaking the additional review of risks and impacts as required under the different certification schemes to address: 1) environmental risks and impacts associated with the physical and chemical extraction plant at Chrarda; the soap processing facility; the physical extraction plant at El Amra; the oil press; and the warehousing facility; and 2) risks related to food safety practices (HACCP) at the warehousing facility; the refinery; and the oil press.

Management Programs. As part of the EIA approval process, CHO was required to implement specific Environmental Management Plans to manage environmental aspects related to operations as well as Improvement Plans related to operations safety operations. CHOs Integrated Management Manual lists Standard Operating Procedures that apply to all operations and include the following: Hygiene, Hazardous Waste Management, Chemical Materials Management, Emergency Preparedness/Response and Product Recall, Consumer Feedback, and Internal Audit. CHO has developed additional management measures for the bottling facility and refinery plant as well as the soap processing facility to address additionally identified impacts as noted above in the Identification of Risks and Impacts Section. These include an Environmental Management System for the bottling facility and refinery plant as well as a stand-alone HACCP Plan and Manual (created in September 2014), which lists preventive measures specifically for managing food safety risk at the bottling facility.

CHO also has in place a Suppliers Evaluation Survey to assess on an annual basis quality, quantity, timeliness of delivery, and compliance with food safety requirements. This includes questions related to the suppliers system for managing environmental risks as well as on traceability.

As part of the ESAP, CHO shall ensure full implementation of the tasks as identified for each site in the EIA Environmental Management Plans and operations safety Improvement Plans as well as those stipulated in various certification schemes (ISO 14001, ISO 9001, ISO 22000, BRC Global Standard for Food Safety, IFS Food, and IFS HPC, certificates for the organic production of olive oil and soap),any additional aspects as contemplated under the principles of IFCs Performance Standards (for example, as related to CHOs supply chain and stakeholder engagement), and on a continual basis, develop the necessary management programs for addressing new risks and impacts as these are identified during the implementation of CHOs framework for managing the environmental and social aspects across all CHO sites. CHO shall identify potential gaps in existing management measures, such as Standard Operating Procedures that describe the measures and actions taken by CHO, in relation to the environmental and social risks identified. CHO shall present to IFC a consolidated plan reflecting a timetable for development and implementation of Standard Operating Procedures, including designated responsibilities and budgetary allocations, if necessary, for all sites. CHO shall also develop a Supplier Code of Conduct to apply to its primary suppliers of olives and pressed olive oil, which should operate in compliance with Tunisian legal and regulatory requirements as well as ensure workplace safety at milling operations (see Supply Chain section below).

Organizational Capacity and Competency. CHO has established an organizational structure that defines roles, responsibilities and the necessary authority for implementing CHOs EHSQ risk management system across all operations. To this end, CHO has designated three employees to perform the function of Quality Manager, Environmental Manager, and OHS and Security Manager at the CHO group level; their job responsibilities are described in a Company procedure and they report as a working group on EHSQ issues on a regular basis to the CEO. The CEO approves all policies and procedures as well as requested budget allocations related to the EHSQ aspects of Company operations. Furthermore, the Quality Manager participates in meetings of the Board of Directors and provides input on budget allocation and financial planning related to EHSQ risk management across Company operations.

At the individual site level, Plant Managers are accountable for the implementation of the annual improvement plan, which also includes EHSQ action areas; 1-2 staff at these plants are responsible for the day-to-day implementation of these actions and report to the Quality Manager, Environmental Manager, and OHS and Security Manager at the CHO group level. During IFCs site visit and based on discussions with key individuals at individual sites, staff were generally found to be competent and knowledgeable of plant operations.

As part of the onboarding for all new employees, CHO provides an overview of the Companys commitment and approach to managing EHSQ issues across its operations. Production supervisors provide feedback on the need for refresher training as they observe recurring non-compliances by employees. As new procedures are introduced, the Quality, Environmental, and OHS and Security managers identify the need for awareness training and communicate this to relevant key staff. Training is coordinated through the Human Resources unit, which maintains an annual training plan and records of attendees.

As part of the ESAP, CHO shall update the description of responsibilities document in terms of EHSQ issues to include Plant Managers and site level staff. Upon completion of additional Standard Operating Procedures to address all the environmental and social risks identified across operations, CHO shall develop a comprehensive training plan to ensure effective implementation of the Companys Integrated Management Manual and to be updated periodically and as required, based on management review reflecting satisfactory management of material risks and impacts across Company operations.

Emergency Preparedness and Response. As required under National Law for obtaining a certificate demonstrating operations safety, CHO completed a risk hazard assessment of potential incidents such as a fire, explosion or pollution/spill at each facility, for which scenarios are described ranked by likelihood of occurrence and identified by location within the facility. To date, CHO has developed an Internal Operations Procedure for three out of the five sites and is in the process of developing one for the remaining two sites, summarizing the key risks and specifying procedures for addressing these risks, including evacuation plan, roles and responsibilities including the local fire brigade and other relevant authorities, record-keeping as well as training. As required under National Law, the risk hazard assessment is to be undertaken every two years (the next one is due to be completed by the end of 2015). All sites were equipped with the necessary fire prevention system, including alarms, a combination of fire extinguishers, and hydrant/hose/dedicated water reservoir in accordance with Tunisian standards. CHO undertakes regular inspections of the fire extinguishers and with assistance from an external contractor and the local fire brigade, emergency training once per year.

As part of the ESAP, CHO shall formalize into written Standard Operating Procedures the regular inspection and verification of the integrity of the fire prevention system at all sites.

Monitoring and Review. CHO has established procedures for monitoring EHSQ aspects of operations as required under Tunisian law and the various certifications that currently apply to its operations: ISO 14001 at the bottling facility and refinery plant; ISO 22000, BRC, and IFS Food at the bottling facility; and IFS certification for the manufacturing of cosmetics at the soap processing facility. This includes a clearly defined plan for regular monitoring of all sites, which entails: inspection of hygiene conditions of all sites and employees at every critical control point as well as overall conditions of the buildings and equipment at least once per week. CHO has also defined reduction targets such as reducing energy and water consumption by 2% at the refinery and product waste as defined by input (packaging and product)/output (finished goods) ratios at the bottling facility to exceed 90%.

The EHSQ working group meets with management on a monthly basis at a minimum throughout the year to discuss EHSQ issues on an on-going basis. A comprehensive EHSQ report, reflecting issues such as progress made with respect to implementation of the integrated management system across sites and indicator performance, is prepared at least once a year and shared with management. In cases of regulatory non-compliance, CHO reports to the relevant Tunisian authorities.

As part of the ESAP, CHO shall develop additional monitoring procedures that are implemented with those already in place, to assess the effectiveness of the management plans that are already implemented or pending development across all its operations. To this end, CHO shall define a comprehensive set of corporate EHSQ indicators to record performance and track changes on a monthly/annual basis, including: i) energy and water consumption and efficiency; ii) air emissions (NOx, SOx, particulates, and hexane), including GHG emissions; iii) noise levels and management; iv) solid and hazardous waste management and disposal; v) wastewater volume; vi) compliance with national OHS requirements, including accident rates (lost-time accidents and accident free days); and vii) customer and community complaints. CHO shall use this data to assess progress made toward achieving targets for improvement and, as necessary, identify the need for revising the management plans already in place to demonstrate continuous improvement in EHSQ performance, productivity and resource efficiency (water and energy) across its operations. CHO shall integrate this information into the existing EHSQ reporting process such that senior management can ensure the on-going effectiveness of its environmental and social risk management framework in meeting the commitments as set out in CHOs overarching ESHQ policy.

Stakeholder Engagement. CHO has developed an External Communication Plan, which identifies the Companys stakeholders (clients, suppliers, contractors, regulatory and government agencies, and certification organizations), the designated point of contact within the Company, how and the frequency with which to engage, and the purpose for engaging. CHO holds almost weekly meetings with the mayor of Sfax. Considering the risks and impacts of CHO operations, this level of stakeholder engagement can be considered to be appropriate. However, CHO needs to formalize its current approach and develop a Stakeholder Engagement Plan to ensure on-going strong and responsive relationships with all stakeholders.

As part of the ESAP, CHO shall develop a Stakeholder Engagement Plan to include identification and analysis of all stakeholders, determination of their level of interest and influence (by importance and relevance) in CHO, establishment of appropriate methods for engaging each group (see section on External Communications) including a grievance mechanism and responding in a timely manner, and designation of a point of contact at each operational site.

External Communications. CHO has developed an External Communication Plan (see section on Stakeholder Engagement) to receive feedback from clients (both buyers and end-consumers), review supplier performance, retain the services of contractors, assess changes in regulatory requirements, and remain updated on certification requirements as well as request technical assistance, if needed. CHO has implemented a software system to track feedback from clients based in France and the respective account managers are responsible for overseeing the necessary follow up.

As part of the ESAP, CHO shall: i) revise the External Communication Plan to ensure that it is comprehensive (to include surrounding communities) and applies across all its operations; ii) inform all stakeholder groups on the available communication channels for providing feedback to CHO; iii) implement a tracking system for receiving and registering all feedback received; and iv) assign responsibilities for screening and assessing issues raised and how to address them.

CHO directly employs 404 employees (in addition to 40 in the farming operation), including 282 men and 122 women, and of which approximately 300 are fulltime (bottling and refinery plant, group administration, storage/warehousing, and soap plant), the rest being seasonal (olive oil press, extraction processing plant, and farm) given the nature of CHO’s operations and the seasonality of harvesting and processing olives (November to March). All employees are hired from the surrounding regions.



Human Resources Policies and Procedures. Although CHO currently does not have a stand-alone HR policy and procedures manual, principles related to the management of employees are stated in the group’s overarching Quality Policy; CHO has a recruitment procedure; and CHO HR practices adhere to the requirements (related to hours of work, wages, overtime, compensation, and benefits for transportation and health care) as stipulated in the Collective Bargaining agreements, which the Company has signed. HR issues are currently overseen by the Human Resources Manager. CHO is also subject to regular inspections by the Ministry of Labor and no non-conformities have been noted. The HR practices of the bottling and refinery plant were reviewed in December 2012 against the SA 8000 standards, which confirmed compliance with national labor code and welfare requirements including remuneration, working hours, disciplinary practices, discrimination, freedom of association and right to collective bargaining, health and safety, forced and compulsory labor, and child labor. However, the review noted the lack of worker committees to interact with senior management, lack of sufficient documentation, and the need for improvement in areas related to health and safety. While CHO made progress in addressing issues related to the latter (see section on Occupational Health and Safety), there is no documented and comprehensive HR manual including all procedures for managing all HR aspects of CHO’s operations.



As part of the ESAP, the HR manager shall be responsible for developing and formalizing CHO’s existing HR practices into a comprehensive HR policy and procedures manual that fully responds to the requirements of both Tunisian labor law and Performance Standard 2 to apply across all operations including seasonal employees, reflecting: values of diversity and dignity at work, code of conduct, term of employment and recruitment, hours of work, pay/salary grid, benefits and pensions, sickness pay provision, leave arrangements (annual, maternity), non-discrimination and equal employment opportunity, freedom of association, disciplinary and grievance mechanism, occupational health and safety, training and development, and separation/retirement. CHO shall ensure that these are communicated in a clear and understandable manner (in French and Arabic as necessary) to ensure that employees understand their rights under national labor and employment law.



Working Conditions and Terms of
Employment. CHO respects the requirements of the Collective Bargaining agreements, which the Company has signed and that apply to the following two sectors: 1) soap processing, refinery and oil extraction and 2) wholesale and trade. These specify wages and benefits; wage deductions; hours of work; overtime arrangements and overtime compensation; breaks; rest days; and leave for illness, maternity, vacation or holiday. Employee recruitment involves verification of identity and minimum age (18 years old), medical health check to confirm fitness to work, and absence of a criminal record. All employees receive a written contract and are declared to the national labor authority.



Workers’ Organizations. CHO supports the rights of employees to form or join workers’ organizations including unions, if they chose to. Currently, only one union is active at one of the oil extraction processing sites because employees at this site were interested in joining. CHO management and HR representatives meet with union representatives on a regular basis. Employees at the other sites have the possibility to express their concerns at any time to CHO management or the HR representative who frequently visits all sites.



Grievance Mechanism. CHO currently does not have a formal grievance mechanism to raise workplace concerns. Instead, small conflicts are resolved on the spot by supervisors and managers and if an issue persists, the HR representative gets involved. The most frequent complaints are typically around salary increases, currently set at 6% to keep up with Tunisia’s inflation rate.



As part of the ESAP, CHO shall establish and implement a grievance mechanism to raise workplace concerns and which is easily accessible to all employees. This will entail: i) involvement at appropriate level of management; ii) addressing concerns promptly; iii) understandable and transparent process that provides timely feedback to those concerned, without any retribution; iv) allow for anonymous complaints to be raised and addressed; v) not impede access to other judicial or administrative remedies that might be available under Tunisian law or substitute for grievances mechanisms provided through collective agreements.



Occupational Health and Safety. CHO is committed to ensuring that all facilities are operated in a manner that is safe and healthy for all employees, although this is currently not reflected in a formalized policy. To this end and as required under National Law, CHO completed a Job Hazard Analysis by job function for each facility (see section on Identification of Risks and Impacts) to assess the physical, chemical, and biological risks that are inherent to the activities undertaken at each site. Based on the outcomes of the assessment, CHO has either eliminated, substituted, provided controls (including warning signage), and as required issued Personal Protective Equipment (PPE) so workers to that they are not exposed to unnecessary risk. CHO is currently
in the process of reviewing its current health and safety practices against the requirements of the OHSAS 18001 standard on occupational health and safety. This will be undertaken in a phased approach over the next five years, starting with the bottling facility and refinery plant; followed by the soap processing facility; then the physical and chemical extraction plant at Chrarda; then the warehousing facility and oil press; and finally the physical extraction plant at El Amra.



CHO has a process in place for recording and tracking work-related accidents and injuries as required under Tunisian law. All such cases are communicated directly to the HR unit but the OHS and Security Manager is responsible for analyzing all occurrences and determining the need for mitigation measures to address root causes and prevent re-occurrences. However, the data is currently only centralized for the bottling facility and refinery plant (16 recorded accidents and 193 lost work days in 2014), and no process is in place for systematically reporting the information from each operating site to aggregate it at the CHO group level.



As part of the ESAP, CHO shall complete the review of its health and safety practices across all operating sites and develop the necessary Standard Operating Procedures reflecting the OHS measures in place including training (to be led by a competent individual and include employees who are directly affected by jobs that have inherent hazards associated with them) for effectively addressing identified physical, chemical, and biological risks across all sites. CHO shall centralize data collection of work-related accidents and injuries, aggregate data across all sites for analysis and follow up action, and consolidate data for integration into CHO group’s annual EHSQ performance report.



Supply Chain. CHO purchases pressed olive oil from a network of over 200 third-party mills and relies on external farmers for olive production for most of the needs of its own mill. There are no known cases or practices of child or forced labor in the olive sector in Tunisia. The occupational health and safety risks associated with mill operations are generally considered to be low as the moving/grinding parts of most modern equipment is typically enclosed. While CHO does not currently have a process in place for verifying the occupational health and safety risks and tracking the performance of all the mills in its supply chain, CHO typically visits at the beginning of the milling season most of the 200 mills that represent its primary supplier base to ensure good operating conditions and may provide advice on equipment improvements.



As part of the ESAP, CHO shall also incorporate a review of the occupational health and safety practices of the mills that represent its primary supplier base (as part of the CHO Supplier Code of Conduct, as noted above in the Management Programs Section).

Resource Efficiency. CHO operations are primarily powered by electricity from the national power grid and the largest energy needs (more than 50% combined) are for the refinery and the extraction processing plants (which operate seasonally (November to March). However, natural gas and diesel are also used, and biomass (from the olive residue extraction process) is used for heating boilers at the different sites. Water is sourced primarily from the municipal grid and the largest needs (more than 50% combined) are used as part of the process at the extraction processing plant and for washing olives at the Company operated oil press. However, overall, the largest water usage is at the farm, which is under drip irrigation and supplied from an on-site borehole (see Section on Water Consumption). Data on energy consumption (in kWh) by fuel type and water (in l) broken down by processing plant were not available during appraisal. To date, CHO has not benchmarked its energy and water consumption data against those of other similar industries to determine how efficiently the various processing plants within its operations are performing. CHO has undertaken a cleaner production audit of the refinery and established indicators to reduce energy and water consumption by 2% by the end of 2015.



It is recommended that CHO benchmark the energy and water consumption data of all processing plants within its operations against those of other similar industries to determine how efficiently operations are performing in order to establish energy and water consumption reduction targets. Furthermore, it is also recommended that CHO also undertake a cleaner production audit of the extraction processing plant at Chrarda as this also accounts for CHO’s largest energy and water needs.



Greenhouse Gases. CHO is effectively implementing the use of alternative fuels to reduce greenhouse gas emissions by powering boilers at the oil extraction processing plants and the Company owned oil presses with biomass (dried organic matter from olive residue). CHO does not have a systematic monitoring process in place for quantifying reductions in greenhouse gas emissions as a result of this.



As part of the ESAP, CHO shall monitor quantity of biomass used to track reductions in greenhouse gas emissions.



Water Consumption. The most significant water consumption is at the farm, which is under drip irrigation (the most efficient type of water delivery system) and supplied from an on-site borehole, for which CHO has received the necessary authorization by the Ministry of Agriculture (to extract 19,000 m3 per year). As part of the process for granting the permit for the borehole, a water feasibility study was undertaken to ensure that sufficient ground water is available to support the farm’s irrigation practices without adversely impacting other users. Water consumption is monitored through a meter at the borehole as well as separate meters for each of the farm’s three sectors. Wate
r consumption is recorded each month and reported to the local authorities in Sfax (for bill payment).



Pollution Prevention. The various production processes across CHO’s operations generate the following pollutants in the form of air emissions (from operation of 9 boilers; and fugitive emissions of hexane at the chemical extraction processing plant, which were estimated to be 110 mg/Nm³); and a fleet of 18 trucks and tractors) and wastewater (from washing olives and decanting pressed olive oil; olive residue extraction process; process water from centrifuging refined oil; periodic cleaning of oil storage tanks; and regular cleaning and washing of equipment and floors of processing facilities). To avoid the potential impacts associated with improper management of these sources of pollution, CHO has adopted the following measures across its operations to avoid or reduce negative impacts: 1) all boilers undergo an annual maintenance inspection to ensure that they are operating efficiently and safely; 2) air emissions were tested at the chemical oil extraction processing plant once to review effectiveness of air emissions control system; 3) given the wastewater characterization, on-site wastewater storage tanks have been installed at all sites, which is periodically collected by a licensed contractor and disposed at an authorized processing facility for further treatment; and 4) on-site wastewater treatment facilities have been installed at both oil extraction processing plants for chemical (neutralization), physical (decanting and sand filter) and biological treatment prior to reuse in the extraction process or discharge to retaining ponds. Consequently there is no discharge of wastewater to surface waters and CHO complies with all local regulations on wastewater management and disposal.



As part of the ESAP, CHO shall establish a monitoring procedure to periodically measure: 1) air emissions from the two boilers at CHO and those at the chemical oil extraction processing plant at Chrarda to ensure consistency with Tunisian national legislation or WBG EHS Guidelines for point source emissions to air (PM10: 50mg/Nm³; NOx: 460mg/Nm³; SO2: 2,000mg/Nm³) whichever one being the most stringent and fugitive emissions of hexane at the chemical extraction processing plant to ensure consistency with WBG EHS Guidelines for hexane emissions (100 mg/Nm³); and 2) volumes of wastewater generated and disposed by each processing plant.



Wastes. The various production processes across CHO’s operations primarily generate the following non-hazardous waste streams, which are typically characterized as organic waste: i) olive residue after the first pressing, ii) remaining olive residue and pit after the second pressing (physical or chemical extraction process), iii) olive oil sludge after undergoing refining, and iv) burned biomass (dried olive residue used to power boilers). The olive residue undergoes further drying and is then used as a source of biofuel eith
er directly in CHO’s operations or sold for export. The olive oil sludge is used as a key ingredient in the soap making process. Burned biomass residue is disposed at municipal landfill.



Additional forms of non-hazardous waste include: i) defective glass, metal and plastic food packaging containers from the bottling plant; ii) general packaging materials such as cardboard, plastic film and crates; iii) office waste such as paper and printer cartridges; and iv) household waste from on-site kitchen. These wastes are collected by a licensed contractor and disposed at an authorized landfill in Sfax.



CHO operations also generate limited quantities of hazardous waste, which entail: i) chemical products and residues from the on-site laboratory for product quality testing; ii) machinery maintenance products, containers, and contaminated rags; and iii) process by-products such as acids. These wastes are collected and stored on site at designated processing plants until an adequate disposal solution is found as currently there is no authorized facility for disposal in the area. For the chemical products and residue from the quality testing lab, the necessary documentation is completed to track the waste from the point of origin to storage. Currently, the Company stores 262 liters of such wastes and has a total storage capacity of more than 1000 liters, which is sufficient until an alternative solution is found, which is anticipated in 2016 when it will be possible to send these by-products for treatment by a specialized center managed by the National Agency for Waste Management.



As part of the ESAP, CHO shall formalize waste management procedures for all waste streams including proper handling and storage, record-keeping on quantities, and work to identify alternatives for disposal such as recycling (for example, for glass, metal, plastic and paper) and distillation or neutralization for certain chemicals.



Hazardous Materials Management. CHO uses the following types of hazardous materials in its operations: i) diesel used for back-up generators (when required); ii) sodium hydroxide (soda), phosphoric acid, and sulfuric acid used in the soap manufacturing and refinery processes; and iii) hexane(highly flammable), which is reused in the process after condensation at the chemical extraction processing plant. Diesel was stored in above-ground storage tanks with appropriate secondary containment structures consisting of walls capable of containing more than 110 percent of the tank volume in the event of a leak. However, instances of poorly maintained secondary containment structures or that they contained discarded materials were observed. Soda and acids are delivered by suppliers in bulk containers and the transfer of products into the processing circuit is undertaken via dosing pumps to reduce the likelihood of spills. Hexane is delivered in container trucks and transferred to on-site storage tanks, according to required industry safety procedur
es.



As part of the ESAP, CHO shall formalize hazardous materials management procedures for all materials including proper handling, labeling, and storage including good maintenance of secondary containment structures and integrity of storage containers; spill prevention and steps to follow in case of an accidental spill; record-keeping on inventory; and availability of Material Safety Data Sheets.



Pesticide Use and Management. CHO has in place the basis of an integrated pest management (IPM) approach at the olive farm. The application of pesticides at the CHO farm is rarely undertaken (if at all) and the farm has not experienced any cases of pest infestations. While insect pests do occur in Tunisia, outbreaks typically appear to be infrequent given arid growing conditions of olive trees. This reduces the need for wide-scale pesticide application and if it is required, it strictly regulated and entails the use of crop protection products that have been approved by the Tunisian Ministry of Agriculture (and Tunisia subscribes to the standards of the FAO/WHO Codex Alimentarius (Codex) since 1965). In the event wide-scale pesticide application is required (only in extreme cases where there are threats of large infestations), representatives from the Regional Centers of the Agricultural Development visit the olive orchards to inspect the insect traps that are located around the orchard and to estimate the damage threshold, which is used as a basis for deciding whether to apply treatment or not. If there is a need to treat, aerial spraying campaigns are launched (at the expense of the state), while avoiding those parcels that are listed as organic producers. For these parcels, biological treatment is undertaken.



There is a big push in Tunisia for organic production, where currently around 285,000 ha are already organically certified land. According to government plans, targeted support was to raise this figure to 500,000 ha by 2014, with olive plantations being a major portion. Already over 40% of organic land is planted with olive trees with 100,000 trees being certified organic by certification organizations like BCS, Ecocert, ICEA or Lacon, and around 115,000 ha of olive plantations (in 2008) were no longer treated with chemical fertilizers and pesticides. This is generally the case for 90% of all of Tunisia’s olive orchards. As part of its procurement process, CHO systematically tests all olive oil for pesticide residue and phthalates and would reject any such contaminated product.



CHO has retained the services of an external contractor (Pest Control) approved by the Ministry of Health to apply preventive treatment against potential insect or rat infestations across processing plants. This entails monthly inspections and setting up UV lights and traps. CHO has a list and the Material Safety Data Sheets for the products used to fight insects, cockroaches, and rats.

Food Safety Impacts and Management. As stated in the section Identification of Risks and Impacts, activities at CHO’s bottling facilities are performed in accordance with the principles and practices of Hazard Analysis Critical Control Points (HACCP).This reduces risk related to hygiene and food safety and mitigates potential impacts to the community. As part of HACCP requirements, the design of the bottling facility is organized such that products move from “dirty” to “clean” areas to avoid contamination and is undertaken by pumping olive oil stored in bulk tanks to automated bottling machines, thus removing the potential for contact between workers and the finished product. Procedures are in place for ensuring daily cleaning of equipment and removal of solid waste. All staff have received training on food safety issues and have been issued the necessary work clothes (clothes, gloves and hair coverage) commensurate with the extent of contact with the finished product.



Emergency Preparedness and Response. CHO facilities are located in industrial zones or in isolation from human settlements. For each of the facilities, CHO has undertaken a review of significance of risk and likelihood of occurrence, and for three out of five sites (the bottling facility and refinery plant, the chemical extraction site at Chrarda, and the soap manufacturing plant), CHO has already developed specific procedures for responding to emergencies under various scenarios.



Security Personnel. CHO employs its own guards to monitor unauthorized access to CHO operational units, fully in compliance with Tunisian National Law.

Sustainable Management of Living Natural Resources. CHO owns a 100-hectare parcel of land, which was previously unused land purchased as four separate parcels from private owners in an agriculturally zoned area in El Aitha (Mahres-Sfax), and which was planted with olive trees in 2011. The farm follows sustainable agricultural practices: it was set up with a drip irrigation system and currently the only form of fertilizer that is applied is organic waste. As is generally the case for olive orchards across Tunisia, application of pesticides is rarely undertaken (if at all as noted above) and only as necessary based on the detection of pests in traps set up around the orchard. Although CHO is committed to applying good international industry operating principles and the farm is already implementing sustainable management practices, this has not been certified by an independent accredited third party.

As part of the ESAP, CHO shall undertake a review by an independent accredited third party of its agricultural management practices at the Company owned and operated farm in accordance with organic agriculture requirements and receive independent verification or certification.

Supply Chain. Tunisia’s olive resources are estimated at over 65 million olive trees, grown on 1 800 000 ha (accounting for 34% of Tunisia’s total cultivated land) and of which 75 000 ha is dedicated to certified organic crops. Close to 90% of cultivated olive acreage is located in the central and southern regions of Tunisia. All olive plantations in Tunisia are located on consolidated agricultural lands and agricultural zoning as well as the cultivation of olive tree are strictly regulated under Tunisian law. Tunisia’s current agricultural expansion strategy is based on the following priorities: renewal of unproductive, senescent plantations; changes in the tree density of plantations under rainfall watering regime; increase in the share of irrigated plantations; and introduction of new, more productive local varieties adapted to soil and climactic conditions. In the event of additional expansion of olive plantations, this would take place on existing agricultural and/or degraded lands rather than into natural/critical habitats, which are managed and protected under Tunisian law.

CHO annually purchases olives (34,752 tons, equivalent to 7,872 tons of pressed oil)and pressed olive oil (34,668 tons) from approximately 400 oil presses from across all olive-producing regions of Tunisia of which a core of about 200 presses supply 70% of CHO’s total need for pressed olive oil. CHO maintains a procurement log book (for olives at the olive press and for olive oil at the warehousing facility) identifying regions of origin and for certified olives and olive oil, a system is in place allowing for traceability all the way back to the farm of origin. However, CHO has not adopted as best practice a Responsible Sourcing Policy.

As part of the ESAP, CHO shall adopt as a best practice a Responsible Sourcing Policy and seek to purchase an increasing amount of its olives and olive oil from certified suppliers.

CHO has developed an External Communication Plan, which identifies the Company’s stakeholders (clients, suppliers, contractors, regulatory and government agencies, and certification organizations), the designated point of contact within the Company, and how and the frequency with which to engage (including receiving feedback from both buyers and end-consumers, reviewing supplier performance, retaining the services of contractors, assessing changes in regulatory requirements, and remaining updated on certification requirements). CHO holds almost weekly meetings with the mayor of Sfax. Considering the risks and impacts of CHO operations, this level of stakeholder engagement can be considered to be appropriate. CHO has implemented a software system to track feedback from clients (based in France) and the respective account managers are responsible for overseeing the necessary follow up.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. The Company will also be requested to place an advertisement in a local newspaper in Sfax as well as its website (http://www.terradelyssa.com) to inform the public from IFC’s environmental and social review (ESRS) findings and ESAP’s corrective action items is available at public sites

Name and Address.
Mr. Abdelaziz Makhloufi, CEO
C.H.O. Group
Road Mahdia, km 18
Sfax 3066, Tunisia
E-mail: mailto:abdelaziz.makhloufi@cho.com.tn
Phone : +216 74 447 677
Fax : +216 74 447 678

Broad Community Support is not applicable for this project

CHO Tunisia(36202) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Environmental and Social Assessment and Management System. CHO shall expand the E&S management systems currently in place to provide an overarching framework for managing the environmental and social aspects across all CHO sites. CHO shall ensure full implementation of the tasks as identified for each site in the i) EIA Environmental Management Plans, ii) operations safety Improvement Plans, iii) existing and future certification schemes, and iv) as per the principles of IFC’s Performance Standards, as required. On an ongoing basis, CHO shall develop the necessary management programs to address new risks and impacts as these are identified during the implementation of the framework. Based on a risk-based approach, CHO shall revise the order of priorities for undertaking the additional review of risks and impacts under the different certification schemes: 1) ISO 14001 at the physical and chemical extraction plant at Chrarda; the soap processing facility; the physical extraction plant at El Amra; the oil press; and the warehousing facility; and 2) risks related to food safety practices at the warehousing facility; the refinery; and the oil press. CHO shall identify potential gaps in existing management measures, such as Standard Operating Procedures that describe the measures and actions taken by CHO, in relation to the environmental and social risks identified. CHO shall also develop a Supplier Code of Conduct to apply to its primary suppliers of olives and pressed olive oil, which should operate in compliance with Tunisian legal and regulatory requirements as well as ensure workplace safety at milling operations. CHO shall develop additional monitoring procedures that are implemented with those already in place and define a comprehensive set of corporate environmental, health and security, food safety and quality (EHSQ) indicators to record performance and track changes on a monthly/annual basis for each site, including: i) energy and water consumption and efficiency including biomass consumption; ii) air emissions (NOx, SOx, particulates, and hexane), including GHG emissions; iii) noise levels and management; iv) solid and hazardous waste volumes and disposal; v) wastewater volume; vi) compliance with national OHS requirements, including accident rates (lost-time accidents and accident free days); and vii) customer and community complaints. CHO shall include EHSQ indicators into the existing EHSQ reporting process such that senior management can ensure the on-going effectiveness of its environmental and social risk management framework in meeting the commitments as set out in CHO’s overarching ESHQ policy.	31-Dec-2016	Completed	Completed	8/24/2018
Organizational Capacity and Competency. CHO shall update the description of responsibilities for overseeing implementation of EHSQ procedures at all sites. CHO shall develop a comprehensive training plan to ensure effective implementation of the company’s Integrated Management Manual and to be updated periodically and as required, based on management review reflecting satisfactory management of material risks and impacts across company operations.	30-Sep-2015	Completed	Completed	8/24/2018
Emergency Preparedness and Response. CHO shall formalize into written Standard Operating Procedures the regular inspection and verification of the integrity of the fire prevention system at all sites.	30-Nov-2015	Completed	Completed	8/24/2018
Stakeholder Engagement and External Communications. CHO shall develop a Stakeholder Engagement Plan to include identification and analysis of all stakeholders, level of interest and influence (by importance and relevance) in CHO, appropriate methods for engaging each group including a grievance mechanism, and designation of a point of contact at each operational site. CHO shall: i) revise the External Communication Plan to ensure that it is comprehensive (to include surrounding communities) and applies across all its operations; ii) inform all stakeholder groups on the available communication channels for providing feedback to CHO; iii) implement a tracking system for receiving and registering all feedback received; and iv) assign responsibilities for screening and assessing issues raised and how to address them.	30-Sep-2015	Completed	Completed	8/24/2018
Human Resources Policies and Procedures. CHO shall formalize its existing HR practices into a comprehensive HR policy and procedures manual to apply across all its operations including seasonal employees, reflecting: values of diversity and dignity at work, code of conduct, term of employment and recruitment, hours of work, pay/salary grid, benefits and pensions, sickness pay provision, leave arrangements (annual, maternity), non-discrimination and equal employment opportunity, freedom of association, disciplinary and grievance mechanism, occupational health and safety, training and development, and separation/retirement. CHO shall ensure that these are communicated in a clear and understandable manner (in French and Arabic as necessary) to ensure that employees understand their rights under national labor and employment law.	31-Dec-2015	Completed	Completed	8/24/2018
Occupational Health and Safety. CHO shall complete the review of its health and safety practices across all operating sites and develop the necessary Standard Operating Procedures reflecting the OHS measures in place including training (to be led by a competent individual and include employees who are directly affected by jobs that have inherent hazards associated with them) for effectively addressing identified physical, chemical, and biological risks across all sites. CHO shall centralize data collection of work-related accidents and injuries, aggregate data across all sites for analysis and follow up action, and consolidate data for integration into CHO group’s annual EHSQ performance report.	31-Oct-2015	Completed	Completed	8/24/2018
Occupational Health and Safety. CHO shall complete the review of its health and safety practices across all operating sites and develop the necessary Standard Operating Procedures reflecting the OHS measures in place including training (to be led by a competent individual and include employees who are directly affected by jobs that have inherent hazards associated with them) for effectively addressing identified physical, chemical, and biological risks across all sites. CHO shall centralize data collection of work-related accidents and injuries, aggregate data across all sites for analysis and follow up action, and consolidate data for integration into CHO group’s annual EHSQ performance report.	31-Dec-2015	Completed	Completed	8/24/2018
Non-Hazardous and Hazardous Wastes. CHO shall formalize waste management procedures for all waste streams including proper handling and storage, record-keeping on quantities, and work to identify alternatives for disposal such as recycling (for example, for glass, metal, plastic and paper) and distillation or neutralization for certain chemicals. Hazardous Materials Management. CHO shall formalize hazardous materials management procedures for all materials including proper handling, labeling, and storage including good maintenance of secondary containment structures and integrity of storage containers; spill prevention and steps to follow in case of an accidental spill; record-keeping on inventory; and availability of Material Safety Data Sheets.	30-Sep-2015	Completed	Completed	8/24/2018
Sustainable Management of Living Natural Resources. CHO shall undertake a review by an independent accredited third party of its agricultural management practices at the company owned and operated farm in accordance with organic agriculture requirements or their equivalent and receive independent verification or certification.	31-Dec-2016	Completed	Completed	8/24/2018
Supply Chain. CHO shall adopt as a best practice a Responsible Sourcing Policy and seek to purchase an increasing amount of its olives and olive oil from certified suppliers.	31-Dec-2015	Completed	Completed	8/24/2018