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
No additional land is required for the project and there will be no resettlement or economic displacement; thus PS5: Land Acquisition and Involuntary Resettlement does not apply. For this reason and given the land itself and the surrounding areas and the immediate surroundings are not host to any endangered or threatened species of flora or fauna, PS 6: Biodiversity Conservation and Natural Resource Management does not apply. There are no indigenous peoples in the area and thus PS7: Indigenous Peoples does not apply and equally PS8 Cultural Heritage also does not apply given the areas is largely already developed.

This is a category B project according to IFC’s Environmental and Social Review Procedure given it is a brown field upgrade of an existing plant based on known technologies that will result in potential environmental impacts that can be mitigated by proven mitigation measures that are included in the project design. In addition, the upgrade will result in improvements in environmental performance of the plant allied to compliance with the requirements of the Performance Standards and the World Bank Group (WBG) Environmental Health and Safety (EHS) General and sector specific Guidelines. The project will be undertaken within the confines of the existing cement plant, and the quarry operations will be undertaken within land under the company’s control.

Key issues to be addressed relate to; i) improvements in environmental and social management systems to align with HeidelbergCement’s standards and those of the Performance Standards; ii) labor and working conditions and notably occupational health and safety (OHS) during both construction and operations; iii) emissions controls, and solid and liquid waste management; iv) quarry management and effective rehabilitation of this area; and v) community health and safety. To address these issues project specific management plans will be introduced allied to specific actions also defined in the ESAP.

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.

As determined via appraisal for the exiting investment in HeidelbergCement’s Africa operations and for purposes of ongoing supervision of these activities, the company has robust corporate expertise and systems for; i) human resource management; ii) occupational health and safety; and iii) environmental and social management. HeidelbergCement will now, with full management control over the DRC operations, align the systems at the CILU plant with the company corporate systems and key performance parameter controls, as well as ensure compliance with all local regulations and the IFC Performance Standards.



Policy

At the corporate level, HeidelbergCement has a clear commitment to sustainable environmental and social performance which is articulated primarily through its Environmental Policy. The company is also an active member of the Cement Sustainability Initiative (CSI) which includes cement companies who are also members of the World Business Council for Sustainable Development (WBCSD); HeidelbergCement’s policies and principles will apply to the CILU plant.



Identification of Risks and Impacts

CILU Lukala was required under the DRC’s Mining Code of 2002 to develop and submit an Etude d’Impact Environnemental (or Environmental Impact Assessment, EIA) and a Plan de Gestion Environnemental du Projet (PGEP, or Environmental Management Plan) as part of the process for gaining the permission to construct the new clinker line and other upgrades. These documents provide satisfactory evidence that the proposed replacement and upgrade plans can bring the full operation to compliance with the Performance Standards. While the local approval procedure has included public disclosure and consultation, this has been limited to stakeholders identified according to the mining code i.e. communities under which the quarry site land is registered. Thus to ensure the public disclosure includes all relevant stakeholders and specifically those living in the adjacent residential areas, CILU Lukala will undertake additional disclosure meetings in Lukala; this requirement is defined in the ESAP.



There are no other significant industries in Lukala and the closest other major industrial project is the PPC Barnet Cement plant being constructed west of Kimpese approximately 20 kilometers distant; there is also a third single line integrated cement plant being constructed some further 20 kilometers distant from the PPC plant. With no current cumulative effect anticipated between the three cement operations, except for all of these using the National Highway 1 for their product dispatch, and the current emissions from the CILU Lukala plant being largely unchanged despite the increased capacity, no negative cumulative effect between CILU Lukala and other air emission emitters in Bas Congo are anticipated.



Management Programs

As noted, at the corporate level Heidelberg Cement has well-established corporate-level environmental, health
, safety and social management programs with a detailed set of standard operating procedures applicable to existing manufacturing operations internationally. As these will be applied in the DRC as well, taking into account whatever relevant practices are required by national legislation and IFC Performance Standards.



At the project level, CILU Lukala is to implement HeidelbergCement’s standards for environmental and social management system (ESMS) covering labor, environment, health and safety, and stakeholder engagement including grievance management. Action items in the ESAP is for Heidelberg Cement to complete the development and implementation of a comprehensive ESMS for its CILU Lukala operations aligned with the requirements of this Performance Standard. In stating this it should be noted that CILU Lukala also intends achieving certification against ISO 14001, an environmental management system, by the end of 2015.



Organizational Capacity and Competency

CILU Lukala has employees trained by HeidelbergCement for the relevant management streams (process, environment, health and safety). These individuals have worked at several international (primarily European) HeidelbergCement owned and operated facilities for extended periods. As such, they are well versed in the requirements so as to ensure the plant operates to international requirements and those associated with the Performance Standards.



Training

At a corporate level Heidelberg Cement has a well-developed program for training staff in occupational health and safety and an across-the-board procedure for contractor site induction, including training on relevant health and safety issues for contractors and subcontractors. CILU Lukala will adopt a similar approach including the requirement for the EPC contractor so as to ensure there is a mandatory induction training program for all construction workers, including sub-contractors.



Emergency Preparedness and Response (EPR)

CILU Lukala has emergency management plans that are limited to impacts on their own site. They also have a hospital unit located in the adjacent residential compound that can provide emergency services.



Monitoring and Review

CILU is monitoring Key Performance Indicators (KPI) as defined under the HeidelbergCement corporate systems. These include energy and production efficiency parameters, health and safety performance parameters, and environmental parameters. As defined in the ESAP, CILU Lukala will ensure its updated management system is able to ensure adherence to the Performance Standards including monitoring of necessary (KPI’s).



External Communications and Grievance Mechanisms

CILU Lukala does not currently have a systematic process for receiving and resolving grievances raised by stakeholders, but it seeks to open up communication and dialogue with key groups through appropriate stakeholder forums at the corporate and operational levels. As per the ESAP, CILU Lukala will develop and
implement an effective external grievance mechanism.

Working Conditions and Management of Worker Relationship

Currently CILU Lukala has around 410 direct employees and some 140 full time subcontractors; the latter are used during operations for cement bagging, truck loading, internal transport and logistics, security, catering, housekeeping, and similar functions. The number of women in the workforce is traditionally low in this sector in DRC and there are currently 5 women employed at the facility. As a matter of company policy, CILU Lukala does not employ persons under the age of 18.



CILU Lukala is in the process of upgrading the internal Human Resource (HR) management systems to be in accordance with the HeidelbergCement corporate procedures and monitoring systems which are aligned with the requirement of this Performance Standard. These include a comprehensive approach to recruiting, training, developing, and managing the workforce at all levels, including worker rights to form organizations for purposes of collective bargaining. As per the HeidelbergCement requirements, this also includes commitment to transparent human resource policies, equal opportunity, non-discriminatory principles and a grievance mechanism.



The requirement for the CILU Lukala operations for permanent employees and subcontractors alike to align with the company human resource requirements and those of this Performance Standard is defined in the ESAP.



The CILU plant has a tradition of good social performance insofar as support for employees and their families is concerned and this policy has continued under HeidelbergCement. This includes provision of accommodation for all families with employees at the facilities, free water and electricity for same, provision of free health care, including access to a medical clinic, hospital and maternity clinic services, and schooling from pre-school classes through to high school at a nominal subsidized fee. Based on management discretion these services can be extended outside of the scope of direct employees.



Workers Engaged by Third Parties

CILU Lukala will ensure contract workers at its facilities adhere to health and safety rules that are similar to those for permanent employees. CILU Lukala will also ensure accident statistics for contractors are included in its overall safety performance recording.



For purposes of construction the EPC contractor will source all skilled workers internationally, with unskilled functions being carried out by local day laborers under the supervision of the EPC contractor. A temporary workers’ camp will be built for housing the international workforce hired by the EPC and as per the ESAP, this will align with IFC’s guidance note on the requirements for workers accommodation. Unskilled workers will be sourced from the Lukala village so as to maximize employment opportunities during this phase for the local communities.



CILU Lukala will require that the EPC contractor abide by its corporate policies and practices for workin
g conditions and OHS which are based on HeidelbergCement’s corporate standards. So as to confirm this and in accordance with the ESAP, CILU Lukala will conduct a third-party labor and OHS audit of the EPC contractor’s practices 6 months after the start of civil works to ensure consistency with this Performance Standard. CILU Lukala will also conduct a third-party audit of labor practices, including those related to OHS, for subcontractors by the end of 2015 to ensure conformity with the IFC’s Performance Standard 2 and to identify any gaps that CILU Lukala need to address.



Occupational Health and Safety

While HeidelbergCement has corporate policies, systems, and procedures in place to ensure that worker activities occur within safe and healthy work environment, this was not the case at the CILU Lukala plant at the time of the takeover. The current CILU Lukala management has therefore progressively been implementing OHS improvements (including ensuring appropriate provisions and consistent use of personal protective equipment machine guarding, illumination etc.) and the accident frequencies have decreased from high levels in 2010 to levels in 2014 that are marginally higher than international benchmarks. With implementation of an OHSAS 18001 management system as is CILU’s intention by end 2015 allied to the plant upgrades it is anticipated that the accident frequency will align with international benchmarks in due course.



While CILU Lukala is to implement OHSAS 18001 management system, as defined in the ESAP, they are required to develop and implement an OHS management system aligned with the HeidelbergCement corporate standards and the requirements of this Performance Standard.

IFC’s assessment considered the project’s compliance with environmental requirements, optimization of resource inputs, including energy efficiency and waste minimization practices.



Resource Efficiency

Potential pollution issues as identified during the construction phase are those typically associated with construction sites and include, amongst others, the discharge of contaminated (high silt loads / oil and grease) stormwater and diesel and oil spills. In addition, there is the potential for nuisance impacts allied to safety issues associated with communities. However, these impacts may be adequately managed with the effective implementation of an Environmental Management Plan (EMP) for the construction phase which is defined as a requirement in the ESAP.



The proposed clinker production and cement grinding facilities that will replace the current facilities have been designed for low energy consumption and emission controls with continuous monitoring of key pollutant emissions of the kiln process (particulates, nitrogen oxides, and sulfur dioxide). The limited amounts of wastewater generated will be treated and used for irrigation and no significant quantity of solid or hazardous production waste, except for unusable cement bags, canteen, office, domestic and laboratory wastes, and maintenance wastes (used refractory bricks, lubricants, waste oil etc.) will be generated.



The clinker production plant will be designed for a thermal energy consumption of 760 kcal/kg of clinker in contrast to the existing plant consumption of 940 kcal/kg and this will be achieved by including an extra pre-heater stage and a pre-calciner in the new design. This energy will be provided by burning imported coal, though no coal will be used for electricity generation as all electricity required for the plant’s operations will be sourced from the grid. The thermal energy efficiency performance of 760 Kcal/kg of clinker is within industry standards established by the European Union. By replacing the clinker line and crushing and grinding equipment the electrical power consumption will also be lowered from 130 kWh/ton currently to 100 kWh/ton; this compares favorably to an industry standard of up to 105 kWh/ton cement.



The project will not require any new power transmission lines to be constructed as the increased capacity of the production lines will be satisfactorily offset by the increase in power efficiency.



The plant is based on a dry process with water only needed for cooling purposes, dust suppression on roads, and domestic water usages. This consumption can be met by water pumped from the quarry sump and will therefore not cause any aquifer drawdown or impact on flows in the local river.



Potable water is, like all other water for the operations being sourced as collected rainwater and seepage water from the quarry low point and is being treated onsite before usage; as pre the ESMS to be implemented this water quality will be monitored t
o ensure it is of an acceptable quality. All domestic sewage is currently being treated in septic tank systems followed by seepage lines, and it is anticipated to continue this practice in the future. Therefore, there will be no discharges to open water bodies / rivers.



There is currently no formal approach to stormwater management onsite. In accordance with the ESAP a storm water management plan for full operation will be prepared as part of the new project design.



Pollution Control

Particulate emissions will be controlled at the quarrying sites and in the general material handling systems by design requiring minimal material drops during handling and covered conveying systems with bag filters installed at all transfer points. Water-based dust suppression will be used where evacuation and filtration systems are not practical, such as road transport within the quarry operations or between the quarry and the limestone crusher located at the plant site.



The plant is located in an area with minimal industrial activity and the ambient air quality has therefore been deemed good and it is unlikely to be impacted by the plant operations beyond that defined as satisfactory by the World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines



Plant units will have dust control measures installed at all emission points (e.g., bag filters at all emission points, except for the clinker cooler, where ESP filters will be used). These filters are all designed for maximum emissions of 30 mg particulate/Nm3.



Apart from particulate emissions, other major point source pollutants in the cement manufacturing process are sulfur dioxide and nitrogen oxides which are related to the operation of the clinker kiln. Sulfur dioxide emissions will be low as the alkaline conditions in the clinker kiln will result in the absorption of the majority of the sulfur entering the systems either through the raw materials or the fuel; sulfur dioxide emissions will not exceed the WBG EHS Guidelines value of 400 mg/Nm3.



Formation of nitrogen oxides (NOx) is caused by fuel burning at high temperatures in the kiln. To minimize the formation of nitrogen oxides, the kiln will be operated following advanced combustion principles, including the use of low-NOx burners, which by controlling the flame shape are able to ensure a relative low core flame temperature. By applying these techniques the NOx emissions are planned to be below the 600 mg/Nm3, as stipulated in the WBG EHS Guidelines. CILU Lukala will use all efforts to optimize the burner operations and achieve these results within six months of plant commissioning. An alternative way of lowering the NOx emissions is through the application of Selective Non-Catalytic Reduction (SNCR). However, this technology requires a supply of concentrated ammonia, and the transport of concentrated ammonia on the roads of DRC is not considered a safe practice at this time. Should the plant therefore experience difficult
ies in achieving the 600 mg/Nm3, the first corrective actions will be to explore further burners and staged-combustion optimization, followed by ambient air quality studies to confirm the acceptability of the achieved emissions; only as a last resort would the inclusion of SNCR be considered.



IFC will require CILU Lukala to continuously monitor main emissions from the kiln process, namely particulate, sulfur oxides (SOx), and nitrogen oxides (NOx), while other pollutants from the kiln process including possible mercury emissions will be tested for at least once per year. In accordance with the ESAP, an ambient air quality monitoring program will be developed and implemented with a specific focus on communities. The results of the monitoring will be included in the Annual Monitoring Report submitted to IFC.



Noise and Vibration

Blasting, stone crushing and vehicle movement will be the main sources of noise and vibration from the quarry and clinker manufacturing operations. Quarrying operations will be restricted to day time operation, and blasting will typically be restricted to 1-2 occurrences per week. Blasting will be set in sequences that include micro-delays between the blasting of the individual charges thereby reducing vibration.



Most of the noise sources that are difficult to control like blasting and crushing are located away from the nearby Lukala village, while the closer noise emitters, like the grinding units are designed with noise reduction in the form of heavy enclosures. As such, no significant adverse impacts from noise or vibration are anticipated on human populations.



Quarry Management and Reclamation

CILU Lukala has presented plans that ensure the overall extraction of limestone can continue within its existing areas for in excess of 50 years at the planned capacity. CILU Lukala is developing alternative end use plans for the quarry area which could potentially include allowing parts of the quarry to be naturally flooded for the creation of a lake. For purposes of finalizing these plans, CILU Lukala will prepare a quarry management and rehabilitation plan reflecting this new usage pattern, including the following distinct items; a) a tentative full quarry utilization plan including indicative final contours, with overburden and top soil application and vegetation; b) an overburden and top soil storage and reapplication plan for the full operational life of the quarry; c) a five-year rolling quarry management and rehabilitation plan including quarry contours, overburden reapplication and top soil needs, and replanting goals; and d) one-year rolling detailed quarry utilization, contouring, overburden and top soil application plans, including re-vegetation details and targets. These requirements are defined in the ESAP.



Solid Waste and Hazardous Materials Management and Safety

The operation only produce minimal amounts of solid waste and the cement production plant will not generate hazardous wastes diff
erent from those already experienced in relation to vehicle operations (used oils, oil filters, etc.), and the plant will not use hazardous chemicals in its processes. CILU is currently sorting waste according to types and ability to be recycled, either at site (for example as fuel in the kiln or as general recycling) or by delivering back to the original supplier for recycling. Waste that cannot be recycled or utilized in the kiln is packed safely and store on site. The quarry operation will require the use of explosives. Explosive usage is strictly regulated by the authorities, and CILU Lukala will follow all rules in this respect. The storage for explosives is in a remote location to avoid any interference with operations and any risk of accidental impact from e.g. passing vehicles.



Green House Gas Emissions

CILU Lukala plans to produce cement with an average clinker content estimated at 73% with the use of gypsum and limestone as additives. As such, the CO2 emission from CILU Lukala’s annual cement production will be around 610 kg/ton cement or a total of 450,000 tons CO2 from annual production of 750,000 tons of cement. Coal imported via the port of Matadi will be used for firing the clinker kiln as no other fuel source is available. Electricity generation in the DRC is dominated by hydropower which has a positive effect on the CO2 emissions due to only 3g CO2 being emitted per kWh generated.

The CILU Lukala plant and adjacent quarry operation is located adjacent to the National Highway 1 and just east of the village of Lukala. On the opposite side of National Highway 1 from the plant are the residential areas for CILU Lukala employees. These areas are the closest residences to the plant. The center of Lukala village is nearly 2 kilometers to the west of the new clinker line, and residential areas for non-employees are, except in a few instances, located more than 1 kilometer from the kiln line. There are no other industrial activities near CILU Lukala. The final product i.e., cement, is primarily transported to Kinshasa and thus this activity is not via the National Highway 1 through the Lukala village.



Infrastructure and Equipment Design and Safety

Potentially negative community health impacts stem from dust and noise due to the movement of heavy equipment, materials and project personnel during construction. During operations transport of cement will affect the population residing in the vicinity of the National Highway 1, which will also be an important conduit for importing raw materials and exporting finished product for the project. So as to limit the impacts of traffic on this route, CILU Lukala has already introduced speed reducing bumps on the National Highway 1 in the vicinity of the Lukala village.



With regard to potential negative social impacts of the increased trucking capacity for cement, CILU Lukala will include in its new plant layout an internal staging area sufficiently large to accommodate 40 vehicles. As defined in the ESAP, this area will be secure and adequately provisioned with ablution facilities so as to minimize if not eliminate the need for waiting truckers to enter nearby villages for such services.



Security Personnel

DRC law prohibits the arming of private security personnel. CILU Lukala has therefore hired a local unarmed security provider, for access control, patrolling perimeters, and surveillance within its facilities. This security provider can request back up from the local police should the need arise.

CILU Lukala’s most relevant stakeholder are worker families who occupies the nearby residential areas. As previously noted, CILU Lukala provides support to these workers and their families e.g., the education support.

The EIA prepared for the rehabilitation and upgrade project has already been disseminated in surrounding areas during 2014 as required by the mining regulations of DRC. As noted previously though, CILU Lukala will undertake additional disclosure of the ESIA including public meetings to ensure the findings on potential impacts are distributed to nearby residential areas.

Cilu Lukala Cement
Lukala
Bas Congo
DRC
Contact persons are:
Melchior BUHENDWA mailto:melchior.buhendwa@heidelbergcement.com Tel: +32475913206
Philippe ESPINASSE mailto:philippe.espinasse@cilurdc.com Tel: +243 972 604 800
Jean-Pierre YALA jeanmailto:-pierre.yala@cilurdc.com Tel : +243972604800
Maurice MAKANZU mailto:maurice.makanzu@cilurdc.com Tel : +243810000000
Ephraim CHILEYA mailto:ephraim.chileya@hcafrica.com Tel: +228 99900006
Rob Huydts mailto:Rob.Huydts@heidelbergcement.com Tel: +32475682076

Broad Community Support is not applicable for this project

S.no	Description	Anticipated Completion Date	Status
1	Further develop and implement an Environmental and Social Management System (ESMS) to be fully aligned with the requirements of Performance Standard 1 and Heidelberg Cement’s international standards. This system will include key performance indicators for mainstream environmental, health and safety (EHS) including those related to; i) workplace safety; ii) resource efficiency; iii) community engagement; and iv) monitoring parameters relative to potable water and air and water emissions. The due date mentioned is the certification date of the system.	12/31/2016	Completed
2	Publicly disclose in Lukala the Environmental and Impact Assessment required for obtaining of the operational permit ahead; in doing include public meetings to which all relevant stakeholder are invited.	07/31/2015	Completed
3	Develop and implement Stakeholder Engagement Plan inclusive of a grievance mechanism; this is to apply to the construction and operational phases	09/30/2015	Completed
4	Develop a quarry management and rehabilitation plan reflecting the new usage pattern, including a tentative full quarry utilization plan with tentative final contours, with overburden and top soil storage and application and vegetation. A detailed action plan should be established for the implementation of the rehabilitation plan. Where feasible, progressive rehabilitation should be included within the quarry working plan, including quarry contours, overburden reapplication and top soil needs, and replanting goals.	06/30/2016	Completed
5	Develop and implement a human resource policy for the plant including procedures and documentation aligned with HeidelbergCement’s international standards, Performance Standard 2 and national legislation. The latter is include by not be limited to requirements related to equal opportunity, non-discriminatory principles, a grievance mechanism including that for anonymous reporting and mechanisms for collective bargaining.	12/31/2015	Completed
6	Conduct a third-party labor and occupational health and safety (OHS) audit of the EPC contractor’s practices 6 months after the start of civil works to ensure that the EPC contractor’s labor practices are in conformity with the IFC’s Performance Standard 2. If necessary, agree with IFC on a time based corrective action plan.	03/31/2016	Completed
7	Conduct a third-party audit of labor practices, including those related to OHS, for all subcontractors to ensure conformity with the IFC’s Performance Standard 2 requirements. Where gaps are identified, agree with IFC on a time based action plant to address these.	12/31/2015	Completed
8	EPC contractor to abide by the requirements of the IFC’s and European Bank for Reconstruction and Development Bank’s Guidance Note on “Workers’ Accommodation: Processes and Standards	10/31/2015	Completed
9	Confirm designs associated with the upgrade require all raw material and product transfer lines are equipped with enclosures/covers as appropriate and dust suppression systems at transfer points; all dust emission bag filters for the transfer lines are to be designed for 30 mg particulate/Nm3 or less. For dedusting of the clinker cooler an electro static precipitator designed for dust emission level of 50 mg particulate/Nm3 or less will be used.	12/31/2015	Completed
10	Construct the staging area for at least 40 vehicles such that this is a secure area adequately provisioned with sanitation facilities and other amenities.	12/31/2017	Completed
11	Establish a storm water management plan for the full operation as part of the new project design which is to be aligned with accepted international standards for such.	12/31/2015	Completed
12	Develop and implement an Environmental Management Plan for the construction phase.	10/31/2015	Completed
13	Develop and implement an emissions monitoring program for point source and ambient air quality aligned with accepted industry standards. That is to include continuous monitoring systems for nitrogen oxide, sulphur dioxide and particulates in the kiln emission stack. Following 6 months of operations, agree with IFC on a time based action plan to address emission that exceed the requirements as defined in the World Bank Group Environmental, Health and Safety General and sector specific Guidelines.	06/30/2018	Completed