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
Performance Standards PS5 –PS8 are not applicable to the Project. Manufacturing of enriched products to treat child malnutrition is not associated with processing of living natural resources. Nonetheless, the potential E&S risks in Insta’s primary supply chain will be addressed, as part of the E&S management system, to verify that production of raw materials are not associated with conversion of natural or critical habitats, if any. The existing facilities are located in the Export Processing Zone (APZ) and set aside for industrial purposes. Therefore, there are no Indigenous Peoples and Cultural Heritage within the EPZ.

This is a Category B project according to IFC’s Environmental and Social Sustainability Policy because the limited number of specific impacts and risks are limited and generally site specific. The Project is not associated with involuntary resettlement, impacts on indigenous peoples and cultural heritage since the existing facilities are located in the Export Processing Zone (EPZ), a designated industrial area, created in 1995 and Insta leases the land from the EPZ owned by the Government of Kenya. Manufacturing of enriched products to treat child malnutrition is not associated with processing of living natural resources. Nonetheless, and as noted above, the potential E&S risks in Insta’s primary supply chain of agro commodities will be addressed through adoption of practices to verify that production is not associated with conversion of natural or critical habitats, child and forced labor, if any. Feasible measures consistent with the Performance Standards and applicable to primary suppliers will be implemented as part of the Environmental, Health and Safety (“EHS”) management system.

The key E&S risks and impacts include EHS management system capacity; food safety including Hazard Assessment and Critical Control Point (HACCP) principles; water and energy consumption and efficiency; waste and wastewater management; labor conditions including OHS; management of agro-commodities supply chain risks related to child and forced labor, significant OHS risks leading to life threatening situations, and potential conversion of natural and/ or critical habitats; emergency preparedness and response.

Those impacts and risks can be avoided or addressed through implementation of the mitigation measures being in place and the supplemental tasks included in the E&S Action Plan (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.

Environmental and Social Assessment, Identification of Risks and Impacts and Management Programs

All organizations are subject to annual Environmental and Occupational Health and Safety Audits according to Kenyan laws. Local experts certified by the National Environmental Management Agency (NEMA) conducted the latest audits of Insta in November 2015. The environmental audit report focused on CSB production site. It included assessment of baseline environmental data, site history, interviews of selected representatives of neighboring communities and identified improvement actions to achieve compliance with environmental statutes so as to address the main EHS risks and impacts associated with operations. Audit findings, assessment, and improvement actions are applicable to both production sites.



Insta is developing an Environmental Management Plan (EMP) for RUTF and CBS production including timeframe for implementation, deliverables, responsibility, and resources for implementation. The company has agreed to enhance the EMP by incorporation of the supplemental actions based on IFC EHS General and Industry Sector Guidelines and an E&S Management System self-assessment tool available publicly. Those actions will include but not be limited by tasks related to timely environmental audit of RUTF production, documenting roles and responsibilities, development of environmental training programs, finalization of emergency response plan, documenting the mitigation measures in place, organizational and technical arrangements for monitoring of air emissions, arrangements for monitoring and recording of water and energy supply and efficiency, wastewater and waste treatment. The EMP will be shared with IFC for review as specified in the ESAP.



Kenya is a non-GMO country, so domestically grown products are assumed to be free of GMO products. In order to obtain the necessary quality of raw materials for its RUTF production, Insta sources most of the ingredients from outside of Kenya. A comprehensive Quality Assurance system is implemented throughout the entire value chain, from raw materials received to end-product and suppliers are provided with Insta’s required specifications. Insta will enhance identification of potential E&S risks and impacts from its primary suppliers to verify that the production of raw materials is not associated with child labor, forced labor, significant safety issues related to supply chain workers (Performance Standard 2), and significant conversion of natural and/or critical habitats (Performance Standard 6), as part of the EHS management system.



As specified in the ESAP, the company will gradually incorporate simplified practices into its quality and food safety systems and implement mitigation measures depending on Insta leverage on its suppliers. Specifically, the company will enhance procurement procedure by adding the questions about the origin of primary production, and availability of internationally agreed certifi
cation (for instance, Chain of Custody, Bonsucro, Roundtable on Responsible Palm Oil, Round table on Responsible Soy Association) in its suppliers’ checklists. For agro-commodity suppliers that didn’t demonstrate traceability systems and credible certification in place, the company will screen the risks through engagement with those suppliers and publicly available databases and tools, for instance, a Global Map of Environmental and Social Risk in Agro-Commodity Production (GMAP). If “high-risk” primary suppliers are identified, Insta will undertake corrective measures. The company will share with IFC a database of agro-commodity suppliers, risk rating (low – medium - high).



E&S Management System, Policy, Organizational Capacity, and Competency:

The company implements well-defined practices and procedures for food safety and occupational hygiene that contribute to its E&S sustainable operations. Voluntary ISO 22000 (Food Safety - HACCP) certification covers the RUTF production. In addition, Insta has committed to a further voluntary certification of its quality management system to verify compliance with the standards of the Kenyan Bureau of Standards (KBS). These management systems plus existing supporting documents, such as EHS Policy and operational safety procedures, constitute a solid foundation for full integration with the EHS management system, where applicable. The integrated system will be based on the ISO 22000 standard, consistent with the ISO 14001, OHSAS 18001 international standards, the national laws, and compliant with IFC’s PS1 requirements and the applicable World Bank Group General and sector-specific EHS Guidelines. Progress on improvement of the integrated management system will be reported to IFC through the Annual Monitoring Reports.



EHS responsibilities are shared between the management team commensurate to their direct duties for the effective implementation of Insta procedures and programs. The managing director has the overall authority for operational and EHS matters. Day-to-day EHS responsibilities are delegated to the plant manager, chief engineer, heads of human resources service and laboratory, and shift supervisors respectively, as part of their responsibilities. In addition, as spelled out in the ESAP, Insta will employ a full-time coordinator for further design and continuous improvement of its certified management systems including EHS to be developed.



Emergency Preparedness and Response:

The company achieved good progress in documenting of its Life and Fire Safety (L&FS) and emergency response plan since the last IFC review. As spelled in the ESAP, Insta will finalize the plan consistent with PS 1 that will cover repair of a fire alarm system, evacuation plans, emergency drills, maintenance, and inspections of fire extinguishers and hoses, etc., and share the plan with IFC for review. Special attention will be given to areas of dust generation and measures for dust suppression and preventio
n of potential dust explosions. Site observations indicated that essential L&FS equipment including fire extinguishers and hoses are available in production premises.



Monitoring and Review:

Monitoring and review of operational/ production performance are frequent and done in formal and informal manner. This also includes discussions of EHS related issues. A Health and Safety Committee is being arranged in addition to the HACCP Committee that is already in place. Insta will also develop a simplified list of key performance indicators (KPI) to measure its EHS performance. KPIs will include safety statistics, water and energy consumption, waste generation per unit of products manufactured; air emissions parameters; labor conditions, trainings. Corresponding tasks are included in the ESAP.

Human Resources Policies and Procedures, Non-discrimination and Equal Opportunity:

Protection of the work force in Kenya is provided through national Employment Act 2007 that specifies core rights and responsibilities of an employer and employees, prohibits discrimination in employment based on gender, race, age, ethnicity, religion or nationality and describes basic terms of employment. The company adheres to the national laws and its HR policy and practices align with national labor laws. The existing HR policy will be amended to include the following topics: management commitments to employees’ rights for labor protection; right /freedom for professional associations and/or trade unions; voluntary medical insurance for core permanent staff and a grievance mechanism as described below and specified in the ESAP.



Grievance Mechanism:

For Insta employees, there is an employee grievance procedure implemented by the company, which consists of dialogue between the employees and their supervisor; if the dialogue fails to resolve the issue then it is referred to the Human Resources Manager to assist. Monthly or bimonthly staff meetings are held for workers to raise concerns, discuss solutions, and provide feedback. An option allowing permanent and contracted workers to raise concerns anonymously without the risk of oppression will be developed to complement this process and to ensure compliance with the requirements of this PS. The new grievance procedure will be made available to all employees and added to an existing Workplace Induction Checklist for temporary and permanent staff.



Working Conditions and Terms of Employment:

Insta employs 48 people, about 50% of Insta staff are permanent employees. The other half are long term contract workers recruited via a local recruitment agency. This arrangement allows for flexibility at times where orders are lower (the agency then re-deploys workers elsewhere for these downtime periods). Employment terms for permanent and temporary employees at Insta include equal rights and benefits, in conformance with the labor laws of Kenya. Insta will ensure that all workers are aware of the new grievance mechanism thorough slight modification of labor contracts. Under normal operation conditions, the company runs two shifts, which include regular short breaks and a lunch hour. All employees are entitled to vacation of 21 days, seven sick leave days with full pay and thereafter a maximum of seven days sick leave with half pay annually. Conditions of eligibility are defined in the labor laws. Maternity leave is 3 months at full pay, and pregnant women are taken off night shift for 3-6 months. Male employees can take 2 weeks fully paid paternity leave.



Workers’ Organization:

Insta employees are not members of trade unions. Though, they are not restricted by Insta from freedom of association. Moreover, these rights will be documented in the new human resources policy, as indicated above.



Protecting t
he Work Force:

The minimum working age in the East Africa region is 18 years of age, which is strictly applied. Insta adheres to the national laws and does not hire workers below the age of 18 years.



Occupational Health and Safety (OHS)

The OHS management system is being developed and improved, core procedures and monitoring are implemented in accordance with the Kenyan regulations and the food safety management system. OHS matters are delegated to the human resources specialist reporting to Managing Director. Independent experts on an annual basis, as part of Insta permit requirements, conduct Occupational Health and Safety audits. The latest audit was in November 2015. Insta has been developing OHS management plan to address audit findings. The final version of OHS management plan will include actions to address audit findings and mitigate risks in its chemical laboratory (remove portable gas bottles from laboratory premises to outside shelter, and equip proper storage area for chemicals, finish replacement of chamber’s hood for acid fumes). In addition, the final version of OHS management plan will include actions to improve Insta management system on the basis of ESMS self-assessment tool.



Insta will develop a program for workplace monitoring at production zones (filling and packaging rooms) and mitigation measures to reduce vibration and noise risks, as specified in the ESAP. Currently, employees are provided with personal protective equipment (PPE), depending upon their job descriptions.



The company reports zero incidents in 2015. In the past four years, accidents have been rare and minor.



Employees health monitoring is compulsory in Kenya. Food handlers are subject to medical tests twice a year. Insta employees are tested when they commence employment at the company and then on a bi-annual basis. Certificates confirming that an employee is eligible to work are issued upon successful completion of medical testing.

Resource management:

The site has reticulated (municipal) sewerage connections, water supply and electricity. The EPZ receives its electricity from the municipal grid, and usage is primarily associated with manufacturing machinery, refrigeration and lighting. The physical infrastructure in the EPZ is well developed, with tarmac access roads, storm water drainage and electric street lighting. The site has a single gate, with traffic and access control.



The company has installed a Clean In Place (CIP) system using approved chemicals and detergents. The CIP reduces water and energy consumption. Insta has agreed to improve its monitoring program for water and energy consumption, the amount of wastewater it creates, and develop an energy and water efficiency program based on monitoring data. Such a program may consider feasible actions for optimization of energy used in cooling of final products after pasteurization, potential re-use of water condensate for steam generation and other measures. Despite this, energy (electricity and diesel fuel), water and waste management and conservation is emphasised in the factory and throughout Insta’s operations, along with materials quality management. Strict inventory control is implemented, and the production process is consistently modified to yield more products and less waste. Materials are ordered, and products manufactured, are shifted and adjusted according to specific orders from customers.



An above ground tank for industrial diesel oil of 20,000 l capacity – used for steam production in RUTF pasteurization – is allocated on outdoor storage area, which is funded for purposes of secondary containment. There is a scheduled maintenance program in place to ensure that all equipment is operating at optimum efficiency, and when new equipment is purchased, the procurement guidelines require energy efficiency to be a material consideration.



Process water quality:

The process water used for equipment cleaning is tested weekly for microbial contamination (total microbial count, yeast and moulds, and coliforms). Municipal water in Kenya is suitable for potable use and compliant with WBG EHS Guideline drinking water parameters.



Air, greenhouse gas (GHG) emissions:

A boiler of approximately 1.5 MWth capacity fired by industrial diesel is below threshold established for small combustion facilities of 3-50 MWth capacity for air emissions monitoring. GHG emissions are calculated as 303 tons of carbon dioxide equivalent per annum, which is below the IFC’s reporting threshold.



Management of solid & hazardous waste:

Insta has in place records on waste generation and disposal. Solid waste containing food components are collected and stored separately. A licenced contractor removes wastes for incineration or further disposal. EPZ authorities under relevant permits operate an incinerator available for all tenants. Solid waste generated from the production floor, laboratory and maintenance area is
collected and stored at a designated waste yard. Paper is sent to a Kenyan company for recycling, while scrap metal and waste oil is handled by a NEMA-licenced contractor. Hazardous wastes present in Insta’s operations are minimal and characterized only as used reagents from laboratory’s product analysis. Small quantities of chemicals (less than 1L) are purchased at a time for the quality-testing laboratory. These are stored in a locked cupboard and are strictly controlled and handled by trained laboratory technicians (there is also restricted access). An inventory is maintained in the factory with supporting risk documentation (Materials Safety Data Sheets); laboratory waste is collected by NEMA-approved Kenyan service providers. Insta has agreed to improve its comprehensive waste management system by introducing chain-of-custody practice which will include obtain chain of custody documentation to the final destination from its contractors. This is addressed in the ESAP.



Wastewater management:

Volumes are not measured by Insta, however wastewater discharge is minimal as the manufacturing process is predominantly dry. The only stage when wastewater is discharged from Insta is when the factory floor and equipment is cleaned periodically. All wastewater effluents are managed by the EPZ; there is a wastewater treatment plant to service all industries in the EPZ and wastewater is sampled before discharge to the public sewer via the EPZ to the city treatment plant. Storm water management and drainage is in place on the existing site. All washrooms utilise biodegradable detergents.



Pest management and control:

Fumigation is outsourced to a local contractor. Food-grade fumigant (the list was obtained and verified during the IFC visit in 2014) is sprayed outside the factory on a two monthly basis, fumigation is implemented inside the factory in the grain storage area every month, and bait stations for rodents are put in place. The pest control and management procedure that are implemented is consistent with the WBG General EHS Guidelines.

Community Health and Safety



Food safety: In relation to food safety, all Insta products are quality tested in an on-site laboratory. Insta applies HACCP (Hazard Analysis Critical Control Points) systems through the manufacturing process, monitoring product quality. Throughout the factory, hygienic practices are enforced. The factory requires a permit from the national health authorities in accordance with the Food Safety and Food Handling regulations. Employees working directly with product in the factory are trained in food safety issues and follow established procedures for hand washing, working attire (clothes, shoes, gloves and hair coverage), and how to handle injuries and diseases. The relevant government departments (i.e., that are associated with matters of health and labor) in Kenya undertake regular inspections to assess food handling procedures, certification of food handlers and to test if product quality meets legal requirements. The shelf-life of all final products is 24 months. As part of the ISO 22000 management system, there is a procedure for product coding and traceability.



The RUTF product is manufactured under strictly controlled hygienic conditions. The company adopted high hygienic standards implemented with a “clean room” type. The RUTF factory is accredited by Kenya Bureau of Standards to sell products within the country. It is also ISO 22000 certified by Bureau Veritas. On top of that, its key customers UNICEF, USAID, and MSF audit the plant on a regular basis.



When raw materials arrive at the factory site, they are not cleared for entry until random samples are taken from each lot or consignment and tested for aflatoxin, foreign matter, pests and moisture content. Any raw materials, ingredients, packaging materials and detergents which do not meet Insta specifications are rejected before being received into the store. Any materials supplied that may require more than 9 hours for analysis to be completed are quarantined and, if later accepted, taken into the store. If rejected, goods are returned to the supplier within 48 hours. At every stage of the production process, Quality Assurance personnel sample and test or check for contaminants, unusual odor, moisture content, fat, protein, fatty acids (in the case of oils), aflatoxin (no raw material with aflatoxin levels in excess of 5ppb is accepted), microbial growth and evidence of infestations, in the quality control laboratory (Staphylococcus and Salmonella tests are outsourced). All orders receive a certificate of analysis, and these are compared with independent testing which is done by the customer. All raw materials are identified by name, supplier, date and batch/lot code, supply date, and quantity. A special code is assigned to each batch and displayed onto the final product so that origins can be traced, should there be a complaint or quality problem identified later in the process.



Any products that do not meet the specifications are removed from s
tores within 24 hours for further disposal. An internal laboratory processes the samples, which are also periodically sent for testing by an accredited external laboratory to verify whether the internal quality control methods are accurate and appropriate.



Insta does not own trucks for delivery; freight trucks contracted by the customers collect products. Trucks are visually inspected for odours, cleanliness and presence of pests, maintenance and roadworthiness. If they are deemed unsuitable for the transportation of the product, the client is notified and they are turned away until the condition of the trucks are acceptable so as to maintain the integrity and quality of the product leaving the factory. Trucks are loaded to within their capacity and loads are inspected to ensure that they are secure.



Security:

Insta has a contract with a private security firm, whose role is to control access, patrol, identify hazards and coordinate fire safety. They are registered with the appropriate security authority and have certificates of compliance. In addition, EPZ Management employs a security company for specific emergency situations (armed response), advice or audits and identification of security weaknesses. Investigations are undertaken in cooperation with the police.



Community complaints/grievance procedure:

Complaints are received through telephone, mail, customer visits, internal and external audits and are directed to the Managing Director or Factory Manager. The Managing Director responds immediately and initiates a corrective action (depending upon the nature of the complaint). If the complaint is product related, the Factory Manager and QC Manager is informed of the complaint and an investigation takes place to assess the severity of the issue. The investigation into the root cause may include retesting of retained samples, assessing storage conditions, re-evaluation of test methods, checking the calibration of equipment, effectiveness of reagents etc. A Corrective Action Plan is implemented to take remedial action if necessary. Feedback is given to the complainant and a discussion is held to resolve the matter. This is further subject to an audit and verification, and the experience is added to a Preventative Action List to avoid recurrences.

The company operates in an Export Processing Zone (EPZ), which includes several other manufacturers. Contact with surrounding companies is coordinated by the EPZ Manager, who is also the contact point for any complaints within the zone. Government departments (Treasury, Customs and Public Health) do regular inspections; and clients (donors) such as UNICEF, USAID, MSF, and World Food Program test samples; all of these stakeholders give regular feedback.

As Insta provides products directly to its donor customers who occupy a particular niche and, as the products are not destined for the retail market, there is no need for a website marketing of Insta goods. The office number, batch numbers, dates and an email address are clearly displayed on all goods, which is the channel for complaints or comments.

The company has a small Corporate Responsibility program whereby 350 students attending a school in the Masai Mara have been provided with donated food for the past 5 years. The company has also assisted with an extension to the school, the provision of rainwater collection tanks and other items

For further details about the project, please contact

Rolf Campbell
Managing Director
Export Processing Zne
Twiga Close, Athi River, Kenya
Tel: +254 707 650 400
Email: mailto:rolf@instaproducts.co

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Develop the Environmental Management Plan that will include actions to address ESMS self-assessment findings, environmental audit findings, documenting the mitigation measures in place, organizational and technical arrangements for monitoring of air emissions, monitoring and recording of water and energy consumption, wastewater and waste treatment	12/31/2016
Implement actions to verify risks related to primary agro-commodity supply chain: (i) add the questions about the origin of primary production, and availability of internationally agreed certification (for instance, Chain of Custody, Bonsucro, Roundtable on Responsible Palm Oil) in its suppliers’ checklists; (ii) revise a database of agro-commodity suppliers with their risk rating (low – medium - high); (iii) corrective plan for “high-risk” primary suppliers, if needed	03/31/2017
Employ a full-time coordinator for further design and continuous improvement of certified food safety management systems including further incorporation of EHS matters CV and documents on hiring	11/30/2016
Develop emergency response plan consistent with PS 1 that will cover repair of a fire alarm system, evacuation plans, emergency drills, maintenance, inspections of fire extinguishers and hoses, measures for dust suppression and prevention of potential dust explosions, training and procedures for substance handling in the event of accidents or spills	12/30/2016
Develop a simplified list of key performance indicators (KPI) to measure EHS performance: safety statistics, water and energy consumption, waste generation per unit of products manufactured; air emissions parameters; labor conditions, trainings	12/30/2016
Revise human resources (HR) policy by including (i) management commitments to employees’ rights for labor protection; (ii) voluntary medical insurance for core permanent staff; (iii) and right /freedom for professional associations and/or trade unions; (iii) grievance mechanism including an option allowing to raise workers’ concerns related to labor conditions to be presented without the risk of oppression	09/30/2016
Develop an OHS management plan to include actions to address audit findings and mitigate risks in the chemical laboratory	11/30/2016
Insta will develop the program for workplace monitoring at production zones (filling and packaging rooms) and mitigation measures to reduce risks	11/30/2016
Amend labor contracts with permanent and temporary workers by adding information on access to the grievance mechanism	09/30/2016
Develop an Energy and Water Monitoring and Efficiency program	06/30/2017
Introduce chain of custody documentation from local contractors to the final destination of solid wastes	09/30/2016