While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
Both existing warehouses and future DCs are located in designated industrial zones with direct exit to the main roads, and, thus, IFC’s appraisal identified no PS4 impacts on communities arising from company’s business activity. Existing warehouses are rented and future one will also be rented, therefore, PS 5 was not found to be applicable.

Considering that the main activity of the company is internet retailing and delivery through its warehouses, no significant impacts are expected related to the other Performance Standards.

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 applicable IFC’s Performance Standards and World Bank Group (WBG) General Environmental, Health and Safety (EHS) Guidelines.

Based on the findings of the appraisal visit, key E&S issues related to this project encompass the following: the company’s EHS management system, procedures and technical capacity for its effective implementation and continuous monitoring/reporting; labor and working conditions, energy efficiency, solid waste management and disposal, fire safety, and management of sustainability issues in the supply chain of products sold by the company.

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, Policy and Organization

HB complies with regulatory requirements in terms of Turkish environmental and OHS legislation and addresses and documents environmental and social issues. Nevertheless, Environmental and Occupational Health and Safety (EHS) Management System is not formalized.

The company will implement a systematic EHS management system that covers its existing operations and future expansions in line with IFC Performance Standard 1. The company will start with establishing an EHS policy in accordance with the scale of its operations and in line with WBG EHS Guidelines. As part of EHS management system, environmental procedures and instructions will be prepared and management programs will include objective settings, and monitoring of environmental key performance indicators like waste amounts.



The company has an EHS (Environment and Occupational Health and Safety) Coordinator who is well experienced and certified by Ministry of Labor and Social Security, and hires consultants when required. The company also employs a dedicated HR specialist.





Emergency Preparedness and Response.

The Company has an up to date emergency preparedness and response plan and team. Emergency signage, evacuation routes, fire extinguishers and emergency lighting are in place and detection system is installed in the offices and warehouses. As the warehouse is to be moved, EHS Coordinator participates in technical design meetings for the new DC and ensures fire safety installations and other requirements are in place. The new DC is designed according to state of art fire safety requirements including sprinkler system.



Monitoring and Review

Energy consumption, near miss and lost time accidents are among regularly monitored parameters. Thermal camera measurements are performed regularly for electrical installations. For occupational health and safety, lost-time accidents have to be reported on-line whereas there are no requirements for environmental reporting to authorities.





Supply Chain

The company has wide range of products and reported that more than 50% of the sales are composed of electronics. Most of the products sold by HB are supplied by wholesalers or traders. Nevertheless, where the company has direct contacts with producers, the company will undertake a mapping of their direct supply chain to identify potential risks of child and forced labor and prioritize the supplier by level of risk. The client will develop and implement supply chain management procedure related to prevention of harmful child and forced labor use by direct sellers of goods and products. The client will designate budgetary/staffing resources and implement contractual, monitoring and compliance mechanisms to address risks of inappropriate forms of labor in its direct supply chain. Tracking of suppliers’ performance will be integrated into the overall management system. Going forward, the company w
ill monitor its supply chain on an ongoing basis in order to identify any significant changes in its supply chain.

The company will also ensure that products listed in IFC’s exclusion list will not be sold.

Working Conditions and Management of Worker Relationship



Human Resources Policies and Procedures. HB has well-established local staff rules book with various internal regulations and procedures that cover core HR issues, including recruitment, training, working conditions, performance evaluation, social benefits, disciplinary actions and dismissal in line with Turkish labor code and PS2. All legal registrations & procedures of employment contracts, social security & income tax are issued and executed legally up to date.



Working Conditions and Terms of Employment. HB has standardized employment conditions, with written contracts of employment for each employee. These contracts describe the working conditions, terms of employment and benefits provided, including probation period, wage calculation, leaves etc. meeting the legal requirements in Turkey. HB currently employs 472 workers as well as 184 third party employees and will plan to hire an additional 115 workers and 31 third party employees after moving to the larger new DC. More than twenty percent of total workforce is women but a large percentage of employees working in warehouses are male. All employees are registered under national security system according to Turkish legislation. The base salary payment for the company is above the national minimum wage. Other benefits are provided, including transport, subsidized meals, etc.



Workers’ Organizations. Currently there are no worker’s associations or trade unions established in HB. However, the company stated that it does not prohibit establishment of such associations which is in line with Turkish legislation. Non-discrimination, equal opportunity, worker’s grievance mechanism is integrated in to HR policy.



Non-Discrimination and Equal Opportunity. There is no discrimination on the basis of personal beliefs, sex or characteristics unrelated to inherent job requirements.



Retrenchment. HB does not anticipate a reduction in the current workforce; in fact the project will create new employment opportunities and, thus, will increase the overall employment figure by approximately 20 percent. However, if becomes necessary in future, HB will prepare a retrenchment plan based on consultations with the affected workers, in accordance with local Labor Codes and IFC’s PS2 requirements.



Grievance Mechanism. The company have a formalized worker’s grievance mechanism which allows employees to raise and register their concerns with the management team. Suggestions and Complaint Boxes (orange box) are visibly located and in many places at the facility separately for general issues and OHS (near misses).



Protecting the Workforce.

The minimum age of employment is 18 at the plant. There is no use of child labor and/or forced labor.



Occupational Health and Safety (OHS):

HB has adopted OHS procedures and instructions for its operations, and has developed an OHS training program to cover regulatory requirements, duties and respons
ibilities, and job-specific risks of employees in line with the local legislation requirements. Periodical OHS meeting are held with the participation of EHS coordinator, worker’s representatives, representatives from HR department and technical staff, to identify risks and to continuously improve workplace OHS conditions. Outcomes of the workplace incident evaluation forms are also discussed during these meetings which result in a time bound action plans.

A medical examination is required for all workers including third party workers upon their recruitment.

First aid kits are available for easy access, where needed. Personal Protective Equipment (PPE) is available for all employees and properly used. Use of safety shoes is mandatory. Technical team is responsible for proper operations of equipment using an established preventive maintenance program. Number of lost time accidents for last 12 months was 5 with 41 lost days. HB performs risk assessments and weekly site inspections to reduce the risk of accidents. HB has 13 forklifts and lifting equipment. The battery charging zone is properly isolated from the working area and is well ventilated.

Workers Engaged by Third Parties:

Third party workers receive OHS trainings and benefit food and transport services as well as worker’s grievance mechanism. HB’s grievance mechanism cover third party workers as well. PPE is provided by HB.

Resource Efficiency

HB targets optimizing the use of the electricity. In the offices, the departments use energy efficient lighting solutions. The new DC has incorporated the use of natural lighting to reduce the use of electricity.



Greenhouse Gases.

Primary source of greenhouse gas emissions is transport of goods. As in current operations, goods delivery will remain the duty of the supplier and order fulfilment will remain contracted out to independent cargo/courier companies which have their own CO2 emission reduction strategies (Yurtici and Aras). The GHG emissions originated from electricity consumption are estimated as 180 tons CO2 equivalent per year.



Pollution Prevention:

Water and Wastewater. For both offices and warehouses, water is used only for domestic purposes and for canteen facilities and is provided by the municipality. Waste water is directly discharged into the municipal waste water treatment plant. The future DC is connected to the industrial zone utilities for water and electricity.



Solid Wastes. Domestic wastes are collected and disposed in an assigned landfill by the municipality. Packaging waste is originated from bulk deliveries to warehouses and is collected for recycling under contract with the municipality. Hazardous waste like fluorescent lights, printer cartridges, are collected separately and disposed by a licensed company.



Air Emissions. Electricity is supplied from the grid and generated by 3 generators with the total capacity of 596 KVa. The generators are maintained regularly. The headquarters has an annual electricity consumption of approximately 80,000 kWh, warehouses use a total of approximately 302,000 kWh.

Given the limited potential for social and environmental impacts arising from the project and its location, community engagement is not required by the Turkish authorities for a company like HB. As an online retailer, the company has an effective website and social media accounts for any communication or grievances. The company will supplement the existing communication channels with an External Communication Procedure to receive, screen and address EHS-related communications from the public and to document responses and adjust the management program accordingly as per the attached ESAP.

The publication of this ESRS and associated ESAP, in local language, constitutes the client’s community engagement related to its project’s expansion plans.

Mr. Can Dedeoglu
The Abraaj Group
Visnezade Mahallesi,
Suleyman Seba Caddesi,
B2 Blok No:32, 2nd Floor
Akaretler, Besiktas 34357,
Istanbul, Turkey.
Tel +90 (212) 381 4800

Broad Community Support is not applicable for this project

CI Hepsiburada(36641) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
The Company will have a systematic Environmental and Occupational Health and Safety Management system in line with PS1 and internationally recognized standards. Supply chain management and communication procedures will be integrated into the management system.	31-Dec-2015	Completed	Completed	10/8/2019
The Company will develop and implement supply chain management procedure related to prevention of harmful child and forced labor use by direct sellers of goods and products	31-Dec-2015	Completed	Completed	10/8/2019
Develop an External Communication Procedure to receive, screen and address EHS-related communications from the public and to document responses and adjust the management program accordingly	31-Dec-2015	Completed	Completed	10/8/2019