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
Issues related to PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resources Management, PS7: Indigenous Peoples and PS8: Cultural Heritage are not expected with this investment for the following reasons: Anova Feed mill operations are located within existing industrial areas and leased on willing lessor / willing lessee for a 50-year period. Anova Feed is not directly involved in agricultural primary production and does not have any management control over the sourcing of its raw materials. 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, Anova will inform IFC. Screening and assessment of these issues against PSs requirements will be done through its Quality, Environment, Health and Safety (QEHS) management system.

This proposed investment is expected to have limited adverse 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 EHS risks and impacts of Anova Feed’s operations in compliance with applicable Vietnamese’s legal and regulatory requirements and IFC’s Performance Standards (PSs).

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. Key E&S issues associated with this investment are: (i) compliance with applicable national laws and regulations; (ii) validity of licenses; (iii) implementation and progress status of EHS, and social (labor) management systems for feed mills and warehouse operations, including QEHS organizational structure; monitoring and reporting of the company’s QEHS management system and overall QEHS performance; (iv) safe and fair working conditions meeting Vietnamese’s labor laws and PS2 requirements for permanent, casual employees and contractors; (v) Emergency Preparedness and Fire Safety provisions; (vi) water and energy use efficiency; (vi) solid/hazardous waste disposal, effluents, and air emissions from boilers

Environmental and Social Risk Assessment and Management System. In accordance with Vietnam’s 2005 Law on Environmental Protection and its Decree N°29/2011/ND, Anova Feed has conducted an Environmental Impact Assessment (EIA) study for its Long An operations in 2009. IFC reviewed the content of this study during appraisal and discussed the implementation progress status of the agreed upon mitigation measures documented in the environmental license delivered by the Provincial Department of the Ministry of Natural Resources and Environment (MONRE). These measures related to, among others, energy and water consumption, solid and hazardous wastes, air emissions and effluents treatment, noise, occupational health and safety measures, emergency preparedness, including life and fire safety. An EIA Study is under preparation for the Dong Nai feed mill and should be available by mid-September 2015. Upon its completion, this study will be shared with MONRE for review and approval. A decision memo will then be delivered to Anova Feed. The MONRE decision memo is required to apply for the feed mill’s business license and construction permit to the Department of Planning and Investment (DPI) of Dong Nai, and for the finalization of the technical design, including life and fire safety provisions, to be approved by the Department of Planning and Investment. Same process will take place for the Hung Yen feed mill.



Environmental and Social Policies. In addition to the quality and food safety policies developed during the ISO 9001 and HACCP/ISO 22001 standard certification for Long An’s feed mill in 2013, Anova Feed has defined a comprehensive set of policies outlining its commitment to manage Quality, Environment, Occupational Health and Safety, and Social issues applying to its operations. The same set of QEHS policies will be applicable for the proposed Dong Nai and Hung Yen’s feed mills and the Long An’s warehouse operations. Anova Feed is monitoring and reporting on its QEHS policies through MONRE’s quarterly reports. Going forward, Anova Feed will disclose its QEHS policies on its website (http://www.anovafeed.vn) and ensure communication of its QEHS’s quarterly and annual performance to all employees, contractors and stakeholders through awareness-raising during staff induction, board posting, and training.



EHS Management System & Programs. Anova Feed has demonstrated significant management commitment to establish an effective QEHS management system for its Long An milling operation since June 2013. IFC’s appraisal findings revealed the adoption of a comprehensive EHS manual of procedures encompassing all mitigation measures agreed upon in its environmental license as well as detailed OHS prevention measures. Specifically, EHS management programs and training plans are being prepared at the plant-level and then cascaded to each department (production, warehouse, quality control, administration and human resources, maintenance). Budgetary requirements
for the implementation of these programs and training plans are being submitted by the factory manager to the Anova Feed’s CEO for his review and approval. Site visits confirmed measurable and effective implementation progress (e.g. workplace risk assessment and on-the-job OHS workers training, provision/enforcement of PPE (boot, helmet, glove, masks, ear plugs), fire hydrant systems and extinguishers, dust collector, wastewater treatment, air emissions pollution system, lighting and temperature control, noise and vibration control, solid and hazardous waste management). Effectiveness of these measures are further discussed in PS2/OHS and PS3 sections. The EHS manual of procedures is reviewed annually based on new legal and regulatory requirements, EHS performance review and lessons learned and best practices. In the context of the construction of its new feed mill in Dong Nai, Anova Feed has already adopted a specific EHS policy and standard operating procedure for the feed mill construction phase. Based on the above, IFC considered that Anova Feed have met IFC’s PS1 requirements for its Long An operation and will be able to replicate such management system at the planned Dong Nai and Hung Yen operations. Anova Feed has committed to achieve ISO 9001 and ISO 22001 certification for its new mills in 2017 and 2018.



Organizational structure and capacity. Anova Feed’s organigram at Long An identified a QEHS function in its Human Resource and Administration Department. This EHS Committee is composed of 17 representatives from different mill’ departments and meet on a monthly basis. This Committee is supported by two additional sub-committees, including an Environmental (3 staffs) and an OHS Committee (5 staffs). The mandate of this Committee is to review progress status of Departmental EHS management programs, training plans and resulting EHS performance, and review and update EHS Manual of Procedures, including compliance with legal and regulatory requirements. Similar EHS Committees will be established at Dong Nai and Hung Yen mills.



Training. Detailed training plans for 2014 and 2015 have been provided during IFC’s appraisal. Among other subjects, training on environmental management, first aid and safety, emergency preparedness, use of fire extinguishers and fire drills, waste/air emissions management is being provided. Based on Lost Time Injury Frequency Rate (LTIFR) statistics and PS3 measurements results, EHS staff training is considered effective.



Monitoring and Reporting. Through its quarterly monitoring/reporting requirements defined in MONRE’s environmental license, Anova Feed has established a structured QEHS monitoring/reporting system for its feed mill operation to demonstrate effectiveness of its EHS management programs and overall EHS performance. Specifically, comprehensive information on energy usage and water consumption (feed mill processing being a dry process, water requirement is minimal), solid and hazardous wast
e characterization, volume and treatment, accident free days and LFITR at plants and warehouses), ambient air quality, noise level and air emission measurements was made available during IFC’s appraisal. The documentation control system was considered excellent. Daily and monthly site-level inspection is carried out by workers, supervisor, Departmental EHS representative and plant-level EHS Committee. Considering the usefulness of its existing EHS reporting format, Anova Feed will use the same format to report to IFC as part of the Annual Monitoring Report (AMR).



Emergency Preparedness and Response. Anova Feed has adopted an Emergency Preparedness and Response procedure in case of fire and explosion. Evacuation plan has been observed during the Long An site visit and there is a Notice Board of what to do in case of accident. The Factory Manager is accountable for the effective implementation of this procedure. Posting of “no smoking” signs, availability of fire extinguishers at all critical points, positive verification of extinguishers maintenance, and first aid pharmacy were sighted at the existing mill. A bi-annual fire drill checklist has been provided as well as training documentation done in July 2015 in case of a dust related explosion, boiler explosion, and fire of raw materials. An identical procedure will apply at Dong Nai mill. Fire system inspection of the feed mill and warehouse is done on a quarterly basis by the Fire Division, Public Security Department. Reports and minutes of such inspection were made available during IFC’s appraisal.



Stakeholder Engagement Plan. Both existing and planned Anova Feed operations are located in industrial zones. As such, there are no communities that may be adversely impacted by Anova Feed’ operations. In order to prevent any community complaint, especially at Long An where communities are located within a 100 meter range from the mill operation, Anova will develop a Community Grievance Mechanism to manage any potential community grievances (ESAP).



Supply chain Risk Assessment and Management. Anova Feed is sourcing numerous agro-commodities products for its operations, including corn from North (USA) and South America (Argentina and Brazil), soybean from South America (Brazil), cassava (Vietnam), fish meal (Peru) and fish oil (Vietnam). All these sourcing transactions are short-term base (spot purchasing), done through international and local traders, and based on technical quality specifications (e.g. humidity, protein content, fiber content). As Anova Feed has not management control over the agro-commodity primary suppliers, Performance Standard’s related supply chain requirements are not applicable.

Human Resource Policy and Management. Anova Feed’ Long An has presently 300 permanent employees (85% male and 15% female), including 50 employees under probation, while the new mill at Dong Nai is scheduled to have 98 permanent employees. Anova Feed has adopted in 2013 an Internal Labor Regulation which take into account the new Vietnamese labor regulatory requirements (Labor Code) which took effect in May 2013. The scope of the regulation is applicable to all permanent employees with indefinite term of contract. The intent is to extend application of this regulation’s requirements to casual and contractual workers. The general provisions outlined in the Internal Labor Regulation and standard operating procedures (SOPs) cover: (i) wages, including deductions; (ii) hours of work; (iii) overtime arrangements; (iv) leave, (v) benefits, including public health insurance, pension schemes, (vi) right to organize and bargain collectively, (vii) disciplinary procedures, (viii) termination procedures and rights, (ix) conditions of work, (x) safety, hygiene, emergency aspects, (xi) promotion criteria, (xii) training, and (xiii) other requirements according to national law, e.g. labor outsourcing. In addition, disciplinary and worker/community grievances procedures, contacts are outlined in the Appendix. The staff HR Handbook will be made available to all employees by end of August 2015 and each employee will have to sign a confirmation form of receipt. A Collective Bargaining Agreement (CBA) has been successfully agreed upon in 2013 and is applicable for a period of three-year. This agreement complements Anova Feed’s Internal Labor Regulation and related procedures. Non-discrimination and equal opportunity are fully recognized. Minimum age of employment is 18 years of age. Screening of health assurance card during the recruitment process indicating birth date is used to enforce this provision The Regulation and procedures are communicated during job induction session, at meetings and posted on notice boards. No children were seen working at Anova Feed operations during site appraisal.



Anova Feed also recruit temporary/seasonal staff through a human resource agency. Due diligence of this service provider is not carried out, including compliance of Vietnamese Labor Code (2013), including payment of minimal salary, social benefits, OHS training and provision of PPEs. Going forward, as set forth in the ESAP, the Human Resources Department will undertake such annual due diligence of any third-party service provider.



Salaries provided to permanent employees are approximatively 10% above the minimum national salary. No strike and/or labor issues have been encountered since 2012. Both mills will be running three 8 hour shifts / 6-day week schedule. Human Resources management department at Long An is presently under the responsibility of a manager and six HR officers who will provide HR support at both mills.



Based on the review of the Anova Feed’s poli
cy and procedures applying to third-party contractors, labor and OHS provisions are present from contracts with companies involved in the construction of the proposed new Dong Nai and Hung Yen mills and Long An warehouse. Anova Feed’s construction engineer is responsible to ensure the enforcement of such contract’s provisions and EHS management plans in compliance with Vietnamese labor/OHS requirements. As a good practice, Anova Feed will require all its contractors to have a stand-alone EHS programs in place prior to the commencement of construction and the Anova Feed engineer will have monitoring oversight for ensuring effective implementation of these programs.



Grievance Mechanism. Anova Feed is fully committed to establish a strong and consensual social dialogue with its workers to ensure stable and productive working conditions and performance. A formal and structured HR procedure for workers’ grievance mechanism is not yet reflected in its Internal Labor Regulation and/or its Collective Bargaining Agreement. As set forth in the ESAP, Anova feed will develop such procedure which will be available for its permanent, casual and contractual workers. This procedure include steps to be taken by workers to manifest any concerns, engage in a mediation process, contact responsible persons, and provide timely feedback. Awareness on the grievance mechanism procedure take place during staff induction session.



Workers organizations. As per the provisions of the Vietnamese Labor Code, workers have the right of joining a union. This provision is explicitly reflected into Anova Feed’s Internal Labor Regulation and its existing Collective Bargaining Agreement. All employees who signed a permanent contract with Anova Feed joined, by default, such union. Key labor issues raised to Anova Feed’s senior management included salary increase expectations (considering high inflation rate), availability of loan program, educational subsidies program, and opportunities for professional development (e.g. training).



Life and Fire Safety. Fire hydrants and extinguishers have been sighted at the mills and warehouses. Mills and warehouse storage are well ventilated. Evacuation plan and fire accident meeting points have been identified at all locations. Company’s fire brigade has been established at Long An mill. As mentioned above, fire system inspection of feed mill and warehouse is done on a quarterly basis by the Fire Division, Public Security Department. Reports and minutes of such inspection was made available during IFC’s appraisal.



Occupational Health and Safety. Anova Feed has adopted an Occupational Health and Safety (OHS) policy in 2013 (only available in Vietnamese) based on the 5 S approach (sorting, straightening, systematic cleaning, standardizing, and sustaining a safety workplace). This approach is commensurate with the limited EHS risks of a feed mill. As indicated under PS1, a structured and formalized OHS management system, including a Man
ual of Procedures, OHS management programs, OHS resource-person and/or Committees, and annual documented OHS training and monitoring/reporting plans were available for review during site visits. OHS procedures are being reviewed periodically. In recent months, sub-contractor OHS, boiler explosion drill, fire prevention and dust suppression procedures have been updated. Workplace risk assessment has been conducted – noise, excess dust and use of forklifts being the highest OHS risk hazards while physical hazards (e.g. cuts, falls, rotating/moving equipment, vibration, electrical hazards, ergonomic issues (e.g. lifting, repetitive work, work posture injuries) and working at heights - and training and provision of Personal Protective Equipment (PPE) – boots, helmets, dust masks, ear plugs, and cloths – provided accordingly. As an example, corrective OHS measures (e.g. guarding protection for moving parts, airbag filter maintenance, elevators/conveyors maintenance, and forklifts) have recently been implemented. The EHS Committee is composed of representatives from 17 mill’ departments, supported by a full time OHS sub-committee, and undertake monthly occupational hazards and industrial health training, unannounced inspection on PPEs use and compliance with safety signs boards and instruction, and coordinate annual health check-ups (e.g. ECG, X-Ray) and maintenance of medical records. OHS accident logbooks at the Long An mill was available for review. Statistics on accidents at Long An mill indicated occurrence of four minor accidents since 2013 resulting in 7 lost working days. Since the beginning of 2015, Long An has had only one minor accident (no loss day) and has 112 safety days since then. Investigation of near misses or minor incidents is carried out by the OHS Sub-Committee. No major accident and/or fatality at work have been registered since the commissioning of the Long An mill in 2012. Anova Feed’s employees have insurance for work-related accidents with the Social Security Board (under Ministry of Labor). Evidence of such coverage was provided during IFC appraisal. Changing rooms and toilets are available for workers at the plants and respect gender sensitivities.



As a good practice, each Anova Feed employee should be required to sign an Occupational Health and Safety Staff Acknowledgement Form in order to confirm that he/she has received, read, and understood the OHS policy during the induction workshop. In order to ensure same level of OHS management practices at the proposed Dong Nai, experienced personnel from Long An mill will be temporarily transferred to develop and implement good OHS practices and to train newly hired personnel.



Ambient air quality is monitored on a quarterly basis within Anova Feed’s milling premises. Results of ambient air quality, as of July 2015, confirm compliance with Vietnamese requirements and WHO Ambient Air Quality guidelines. MONRE, Public Health and Labor authorities undertake annual audit of An
ova Feed’s mill. Findings and corrective actions resulting from these audits were not available during IFC’s site visit.

Energy use and greenhouse gas emissions. Being located inside an industrial area, electrical energy for both Anova Feed’s mill operations come from the national grid. In case of energy shortage, on-site generators, are available. Anova Feed does not own a transport fleet. Average annual CO2-equivalent (CO2-Eq) emissions from electric energy consumption and direct fuel use for all operations (e.g. diesel for forklift and trucks, lubricants for machinery and rice husk for boiler) is estimated at 130 MT CO2 eq. / year (2014). Energy use should be expected to increase over time in the context of the new Dong Nail mill. Anova Feed will report on its carbon footprint through IFC’s Annual Monitoring Report.



Air emissions monitoring. Main source of air emissions are at the boiler (2,500 kg/hour) at the mill operations and the genset at all sites. Gensets are only used for emergency basis as power outage seldom happened. Boilers and gensets undergo bi-annual maintenance inspection to optimize efficiency. Anova Feed’s Long An mill monitored boiler air emissions as per Vietnamese regulations. Data provided confirm that Long An’s stack air emissions from boilers are in compliance with local regulations and WBG EHS Guidelines for point source air emissions to air. Anova Feed’s generators are all less than 3MWth in installed capacity and not considered a significant source of air emissions. Air emissions monitoring is thus not required.



Noise monitoring. All mill and warehouse sites comply with Vietnamese regulation for noise and WBG’s noise level guidelines.



Water use and efficiency. As Anova Feed mill operations is a dry process, water supply is mostly required for steam generation (cooking raw materials) and sanitary purposes. Small amounts of water are used for cleaning purposes. Water supply for cleaning process is sourced from industrial zone entities and on-site tube wells. Water volume is monitored and is estimated at 1,652 m³/month on average. Drinking water for employees is provided daily by a service provider. Analytical results confirmed that drinking water comply with WHO’s potable water parameters.



Wastewater Treatment. Wastewater generation comes mainly from sanitary facilities. It is treated on-site through a 20m3/day aerobic/anaerobic treatment system. Results from effluents measurements demonstrate compliance with Vietnamese Class B effluents. All effluents are then collected in order to undergo a second treatment process at the Industrial zone level before release to surface waters.



Management of solid and hazardous wastes. Wastes from Anova Feed are characterized mostly by organic waste (from cafeteria), cardboard and paper, bottles, empty plastic bags, and rice husk ashes. Licensed service providers collect and dispose these wastes in licensed sites. Hazardous wastes, such as used oil, batteries, and light bulbs are collected by a service license provider and disposed in a government managed landfill site. During IFC’s
site visit, secondary containment for the diesel tank at Long An has been observed but retaining walls are not capable of containing more than 110 percent of the tank volume for above-ground diesel. These walls shall be heightened in order to manage any potential leakage and prevent soil contamination.



Pest control. The only chemical used at the mills and warehouses are those to control rodents. These are installed by licensed service providers.

Community Health and Safety. Anova Feed’s existing and planned milling operations are located in industrial zones while Anova Feed does not own a distribution transport fleet. As such, there are no communities that may be adversely impacted by Anova Feed’ milling and warehouse operations. This being said, a few houses are located close from the Long An operation. Anova Feed will develop and implement a Community Grievance Mechanism to pro-actively manage any potential community grievances on E&S risks and impacts of its operations.



Security Personnel. Anova Feed is recruiting local license security agency which assigns security guards on a 24 hours basis at all sites. Considering low security status in Industrial Zones, the guards are not armed.



Local Access of Project Documentation. The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. Anova Feed will place an advertisement in a local newspaper at its new feed mill covered by this loan investment as well as on its website (http://www.anova.vn and anovafeed.vn) to inform the public of IFC’s environmental and social review (ESRS) and ESAP’s corrective actions.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. Anova Feed will place an advertisement in a local newspaper at its new feed mill covered by this loan investment as well as on its website (http://www.anova.vn and anovafeed.vn) to inform the public of IFC’s environmental and social review (ESRS) and ESAP’s corrective actions.

Name and Address
Cong Huyen Ton Nu My Lien
Chief Financial Officer
Anova Corporation
315 Nam Ky Khoi Nghia St, Ward 7
District 3, Ho Chi Minh City, Vietnam
Tel: (848) 3846 6888 - Ext. 215
Fax: (848) 3848 1998
E-mail: mailto:lien.my@anovacorp.vn

Broad Community Support is not applicable for this project

Anova(36286) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Anova Feed will prepare and implement an EHS Management System Procedure (ref. Community Grievance Mechanism) complying with PS1. Provision of a grievance mechanism for the communities in the vicinity of Long An’s operations;	31-Oct-2015	Completed	Completed	3/1/2016
Anova Feed will prepare and implement an EHS Management System Procedure (ref. Community Grievance Mechanism) complying with PS1. Provision of a public dissemination plan (on Anova Feed’s website)	30-Nov-2015			11/1/2017
Anova Feed will develop and implement a Worker Grievance Mechanism, including steps to be taken, mediation process, assigned responsible persons, publicizes the procedure, response time, record keeping, and how feedback will be given. The Employee Grievance Mechanism will be disseminated to employees as part of the induction process, will be accessible to seasonal and contractual workers, and will be posted on Anova Feed’ internal website. Provision of a copy of the Employee Grievance Mechanism procedures for IFC review.	31-Dec-2015	Completed	Completed	5/1/2016
Anova Feed will develop and implement a Worker Grievance Mechanism, including steps to be taken, mediation process, assigned responsible persons, publicizes the procedure, response time, record keeping, and how feedback will be given. The Employee Grievance Mechanism will be disseminated to employees as part of the induction process, will be accessible to seasonal and contractual workers, and will be posted on Anova Feed’ internal website. Confirmation of the dissemination of the mechanism to all employees (permanent and contracted or temporary workers), including inclusion in the HR policy and procedures, Staff HR Handbook and Anova Feed’s intranet website.	29-Feb-2016	Completed	Completed	5/1/2016
Anova Feed will develop and implement a due diligence procedure to undertake labor and OHS due diligence of Human Resources Agency for its seasonal workers. Provision of the due diligence procedure	31-Dec-2015	Completed	Completed	11/1/2017
Anova Feed will develop and implement a OHS management procedure for warehouse safety storage guidelines. Warehouse Safety Guidelines	31-Oct-2015	Completed	Completed	1/1/2016