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
The project is in the initial stages of construction in a designated and established industrial area which is some 35 km away from Indore. There are no communities in the vicinity of the project and, as such, impact on the communities due to increased vehicular traffic related to project operations are expected to be minimal. There is no farmland or residential area near the project site and neither are there any ecologically sensitive areas nor indigenous people in the vicinity of the project. Accordingly, the findings of the project review indicate that there are no impacts related to Community Health, Safety and Security (PS4), Land Acquisition and Involuntary Settlement (PS5), Biodiversity Conservation and Natural Resources Management (PS6), Indigenous Peoples (PS7) or Cultural Heritage (PS8).

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. This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Key environmental and social (E&S) issues and risks related to project include: i) the company’s capacity and commitment to manage its social, environmental, health and safety performance in accordance with IFC’s Performance Standards and applicable guidelines; ii) assurance of fair, safe and healthy working conditions; utilization of equipment and operational practices that maximizes conservation of energy, water and process materials including recycling and reuse initiatives; management of wastes including emissions and discharge; iii) handling and management of hazardous materials; and iv); the potential impact of operations on local ambient environment.

The company has presented the information about how the E&S issues and impacts are being addressed, to ensure that the project complies with the E&S requirements including: the host country laws and regulations; IFC’s Performance Standards; and the relevant World Bank Group (WBG) EHS guidelines. This information is summarized in the paragraphs that follow.

- Environmental and Social Assessment and Management Systems:



Assessment:



The company has received approval for establishment of the project from the State Pollution Control Board (SPCB) and does not require a separate environmental clearance and associated Environmental Impact Assessment (EIA) as per the applicable local legislations; the project is located within an industrial area and is not listed under the schedule of industries required to obtain an environmental clearance. The company is in the process of obtaining all the required regulatory permits from the relevant authorities. Electricity will be provided via the industrial area and there is an established road network in existence. Typically though SRF would engage external consultants to conduct an EIA study and develop an environmental management plan (EMP) covering both the construction and operational phases for the development of any new facility as per the local regulatory requirements. A Hazard Identification and Risk Assessment (HIRA) will though be developed for the proposed project in line with the corporate requirements. This will cover aspects such as the identification of Occupational Health and Safety (OHS) hazards and risks, assessment of OHS risks and identification of risk control measures and a register of OHS risks and hazards.



Management Systems:



SRF has a corporate EHS policy in place which is followed and adopted at all the operating sites. The EHS policy reiterates SRF’s commitment to provide its employees with an appropriate work environment, provision of training to perform work safety and integration of EHS aspects into its business planning including employing processes that foster safety, prevent pollution and conserve resources. SRF has developed an EHS manual which is customized for each business unit and comprises EHS procedures and an EHS organizational structure along with roles and responsibilities. Thus for the project an EHS manual will be developed and this will include related procedures such as that associated with the storage of material, material handling, incident reporting, safe work permit, environmental management and monitoring, amongst others.



All of SRF’s operational manufacturing facility have implemented certified management systems for quality (ISO 9001), environmental management (ISO 14001) occupational health and safety (OHSAS 18001), social accountability SA 8000. In addition, the packaging film units are certified to food safety standard (ISO 22001). The company plans to implement and certify similar management systems for the proposed project after it becomes operational in March 2017. SRF has published a sustainability report for its chemical unit at Bhiwadi (compliant with Global Reporting Initiative G3, Application level: A+) for 2013 and is in the process of finalizing the report for 2013-15. SRF plans to initiate the sustainability reporting for the proposed project once it becomes operational.



- Organiza
tional Capacity and Competency:



The company has a well-articulated detailed organization chart with clearly defined roles and responsibilities and reporting lines for staff managing the EHS issues with the ultimate oversight by an EHS Director at the Board level. A senior official (usually a department head) is designated as management representative and is responsible for EHS management systems at unit level, together with the core EHS team. A steering committee comprising of all department heads guides the EHS activities and management systems at the unit level, with oversight from the unit leadership team and the business leadership team.



At SRF’s existing facility in Indore, a team of three EHS professionals undertake day-to-day activities related to EHS aspects who in turn report to the Safety Manager; every facility has a Safety Manager who reports to the plant head. Standard Operating Procedures (SOPs) and work instructions have been prepared and are displayed at prominent locations in the existing facility. It is expected that similar EHS organizational structure will be in place for the proposed project once it becomes operational.



- Emergency Preparedness and Response:



Based on the identified hazards and risks, an on-site emergency response plan is prepared for each of the operating facilities and the structure is defined in the corporate EHS manual. At SRF’s Indore facility when visited, potentially hazardous areas have been identified and evacuation routes and assembly points have been designated and clearly marked. There has not been any incident at this facility involving any employee in the last 10 years. The proposed project is located in a designated industrial area and there are no communities in the vicinity of the project. As such, impacts on communities including increased vehicular traffic due to project operations are expected to be minimal. However, in line with its corporate safety policies and practices, SRF shall develop an ERP and conduct regular mock drills once the project is operational. The company will hire an external agency for plant site security that conducts routine ID check at the gates and security monitoring. The guards will not carry firearms. Further SRF has agreed that the EPC contractor for the proposed project will prepare an Emergency Response Plan (ERP) for the construction phase covering various emergencies such as natural disasters like floods and earthquakes and specific hazards like fire, chemical spill, electrical shock and other environmental pollution incidents.



- Monitoring & Review:



Environmental monitoring at all operations is governed largely by the permit requirements and is undertaken for ambient air quality, stack emissions, ambient noise levels and wastewater quality. In addition, water and energy consumption are regularly monitored for internal benchmarking and reporting. Each of the operating facility reports on standard safety related key performance indicators
(KPIs) such as (lost time accidents, recordable injury, first aid cases, etc.) and safety inspections are done on a monthly basis. The same monitoring protocol will be replicated for the proposed project once it becomes operational.



In addition to environmental and safety monitoring program at unit level, an elaborate corporate level monitoring and reporting system is in place whereby the EHS performance of the unit is reviewed monthly at the business level. The company publishes the information on various KPIs for EHS indicators such as energy and climate change, health and safety, community development, responsible resource management and employee development amongst others as part of its sustainability report which is presently published for the chemical business.



Based on the approach as outlined above related to E&S management which will be similarly applied to the proposed project, it is expected that project will be consistent with the requirements of PS 1.

The proposed project expects to recruit 103 regular and 81 contract employees (the latter being for non-core activities such as housekeeping, gardening, security, canteen and loading/unloading etc).



- Human Resource (HR) Policy and Procedures



SRF has in place a documented HR manual which includes SOPs on non-engagement of child labour and forced labour, non-discrimination, working hours and a grievance redress procedure. In addition, SRF has a policy on prevention of sexual harassment and internal complaint committee (ICC) exists for all its operating facilities which are responsible for receiving all complaints pertaining to sexual harassment. A policy for dealing with death/disability of employee is also in place. SRF has a company commitment on non-employment of child and forced labour and which is also included in the standard terms and conditions for its contractors.



At SRF, the HR function is structured at three levels: i) corporate HR responsible for defining overall HR policies and procedures; ii) business HR which comprises of business-level corporate resources responsible for managing and driving the HR processes for each business unit; and iii) unit HR which is the front-end HR arm responsible for HR and administrative related processes at the unit locations. Apart from the corporate level policies (which act as guiding policies), each unit has a detailed structured process for recruitment, contracting procedures, collective bargaining agreement, grievance mechanism for staff / workers etc. All new employees receive a copy of the HR manual at the time of joining, together with their appointment letter and contract.



The proposed project will have HR policies and procedures in line with the corporate requirements and aligned with the associated business and unit level requirements. The EPC contract issued for the proposed project requires the contractor to adhere to statutory labour acts and regulations (including amongst others requirement of minimum wages, non-deployment of child and forced labour and workmen compensation).



Overall SRF’s HR policies and procedures are consistent with the requirements of PS2 and similar will be applied to the proposed project.



- Freedom of Association, Grievance Mechanism



SRF respects the staff’s freedom of association, and, hence does not prevent formation of employee unions. As part of its HR policies, an open communication policy is in place which emphasizes two way communication between management and the employees. In addition, company has established another channel i.e., the red book complaints procedure, whereby employees can share their grievances with the management through various channels such as verbally, by email, during HR sessions or through a worker representative. A documented procedure is in place to address and resolve such grievances, which also includes an oversight by the senior management. The grievance mechanism is open to the contract workers also and
allows for anonymous reporting of the grievance as well. Similar grievance mechanism will be implemented for the EPC contractor as well.



- Training and Human Resources Development



SRF has an extensive human resource development and training program for its employees, managed by the HR department. Several structured training programs are developed for different levels of employees which include training on aspects such as awareness on human rights, technical training, soft skills development, health and safety, grievance redress and special policies. Similar training calendar, as per needs, will be implemented for the new project, once it becomes operational. EHS is an important component of induction training as well as in the ongoing training calendar.



- Occupational Health and Safety



SRF has an elaborate safety management system at the corporate level. Workers’ safety is of prime importance for SRF, which is evident from the fact that there is a Director at Board level to oversee safety and environmental issues. There are three operational EHS committees: i) apex EHS committee having members from senior management and which meets once in 6 months; ii) statutory EHS committee headed by head of the works and which meets once in 3 months; and iii) area EHS committee headed by respective head of the department and meeting once in 2 months.



In line with the corporate commitment on safety, an elaborate safety management system was observed at the company’s existing facility in Indore. The company has conducted a detailed job safety analysis for all the key jobs and accordingly has developed risk mitigation measures including appropriate personal protective equipment (PPE) and training. These have been documented through work instructions and SOPs and are prominently displayed throughout the facility – with a strong emphasis on visual communication (illustrations, photos etc). PPEs such as gloves, safety shoes, masks and glasses is provided to all the workers on the shop floor, which is commensurate with the nature of operation and potential safety hazards. A similar approach is applied to regular and contract staff alike.



Adequate fire detection and suppression equipment was noted at the Indore facility in accordance with the potential fire risks. Fire exits and the locations of fire extinguishers are clearly marked. Firefighting training is provided to the employees and fire drills are regularly conducted.



At the Indore facility, there is an incident reporting mechanism in place which records all reportable injuries, first aid cases, near misses and lost time accidents along with cause of accident, immediate action taken and correction actions required. Regular health check-ups are conducted for all its employees, in accordance with their job. Regular workplace monitoring is done for key hazards such as noise and chemical exposure to ensure the respective engineering controls are appropriate and occupational exposure limits w
ere observed to be within the values as specified in the national guidelines. At this facility a major accident involving any employee has not occurred in the last 10 years and those that have occurred, relate to minor incidents involving first aid and limited lost time injuries. Eighteen incidents have been recorded in the period April’15 to December’15 (this includes first aid and near misses; there were no lost time incidents). A similar approach as defined above will be applied at the new project.



All shop floors are neatly organized following Kaizen 6S principles and all the KPIs, work instructions and SOPs are displayed on the shop floor. Regular EHS trainings are conducted on various aspects including on process safety management, transport safety, firefighting, first aid, emergency response, behavioral based safety and Hazard Identification and Risk Assessment (HIRA). Similar OHS procedures will be replicated for the proposed project and as previously indicated, the facility will be certified against OHSAS 18001.



The OHS procedures are applied to the contract workers as well. For the proposed project, a safety manager has been designated who will oversee the EPC contractor and ensure that the relevant safety requirements are implemented. A clause on safety stating implementation of safe work practices by the contractor has been included as part of the contract issued to the EPC contractor.

IFC’s assessment considered the company’s operations with regard to resources consumption (water, energy), efforts to optimize resource inputs, waste minimization and management practices as well as the storage and handling of hazardous materials and wastes.



- Resource Efficiency:



The manufacturing process for the proposed project is not resource intensive and the primary inputs are PET chips which will be sourced from the existing operating facility which is located about 2.5 km away. The other raw materials include aluminum wire and ceramic boats which will sourced from local suppliers.



After the project is fully operational, the annual resource consumptions will be 29.7 MWh ~ 5 MW per day electricity, 331 m3/day of water and 16 tonnes per day of pet coke for use as fuel in thermos pack heaters which will be equipped with a waste heat recovery boiler. Energy efficiency is listed as one of the KPIs and the company has set target of reducing absolute energy consumption by 3% for FY 13-15 and another 2% for FY15-17. Reducing carbon footprints, energy conservation, water conservation, replenishment of groundwater and resource conservation are some of the areas where the company has been working proactively to minimize waste and enhance resource efficiency.



- Water and Wastewater:



Water for the project will be sourced from the local authorities and will have a Sewage Treatment Plant (STP) of 15 KLD capacity for treatment of domestic effluent and an Effluent Treatment Plant (ETP) of 15 KLD capacity with provisions for tertiary treatment. The industrial wastewater will be generated primarily from cooling tower blowdown and reject from De-mineralization (DM) plant. Treated wastewater from both the STP and ETP will be used for horticulture purposes; a similar practice as is being followed at the existing facility in Indore. Monitoring of treated wastewater will be undertaken to ensure its compliance with the national requirements as well as with WBG EHS Guideline values.



- GHG Emissions:



The energy consumption will mainly be for extrusion and stretching of film and metalizing processes, and required electricity shall be procured from the national grid along with pet coke/furnace oil/high speed diesel for heating. A diesel generator (DG) of 6000 kWh capacity will be installed on site as backup generators for use in the rare case of a power failure. The GHG emissions of the project are therefore dominated by those due to the electricity consumption, with a small contribution from loss of refrigerant from HVAC systems. The project’s estimated annual GHG emissions are expected to be around 21,000 t CO2e once fully operational at full capacity.



- Air emissions and Ambient air quality:



For the proposed project, the main source of air emissions will be the thermic fluid heater and DG sets which will be used only in case of power failure. Pollution control equipment to be provided includes a stack with a height of 58 m for the t
hermic fluid heater, electrostatic precipitator and provision for waste heat recovery boiler. Based on monitoring data reviewed for the existing facility in Indore it is observed that emissions values are maintained within the WBG EHS guideline values and it is expected that same will be maintained for the proposed facility. Monitoring data to confirm compliance will be submitted to IFC on a regular basis via the Annual Monitoring Report.



-Noise:



The source of noise would include various equipment such as the extruder, metallizer and winder. Ambient noise monitoring and workplace noise monitoring is done on monthly basis in line with the permit requirements for the operational facility and were observed to be within the permissible limits. The noise monitoring protocol will be replicated for the proposed facility along with a continuous monitor display for workplace noise records.



-Solid and Hazardous Waste:



Solid waste will be segregated and collected in designated bins and sent for disposal to municipal operated facility. The hazardous wastes generated (such as used oil, ETP sludge and process waste) will be stored in designated hazardous waste storage area and sent for disposal to authorized contractor as stipulated by local regulations. Transfer records and chain of custody records will be maintained as is being done at the facility in Indore. Pet coke to be used as fuel will be stored in covered shed and will be transferred through conveyor to the thermic fluid heater.



- Storm water:



For the proposed project storm water/ surface runoff water from areas not considered to be contaminated, including the building roofs, will be collected in on-site storm water drains and discharged to the main storm water drain of the industrial area. Storm water from potentially contaminated areas such as that associated with hazardous storage areas will discharge via an oil water separator, and then into the ETP.

SRF has identified four areas for its community partnership program: viz. education, community health, women empowerment and natural resource management. SRF delivers its community engagement and partnership activities through SRF foundation and respective business units. In line with the corporate philosophy, SRF organizes activities to engage with the local communities on a regular basis. The CSR activities undertaken by SRF’s existing facility in Indore included creating drinking water facility in nearby village, organizing kidsmart learning programme for 400 students and organizing spoken English classes in nearby villages.

SRF has published a sustainability report for its chemical unit at Bhiwadi and plans to initiate the sustainability reporting for proposed unit once it becomes operational.

SRF will disclose this ESRS locally at the following address:

SRF Limited
Packaging Film Business
Plot No 675, Sector 3,
Industrial Area,
Pithampur,
Bagdoon, Distt- Dhar,
Madhya Pradesh- 454775
India.

All inquiries and comments may be directed to:

Mr. Rahul Jain, Vice President- Corporate Controller & Treasurer
SRF Limited
Block C, Sector 45,
Greenwood City,
Gurgaon – 122003 INDIA
Telephone : +91 124 4354734
Fax: +91 124 4354500 / 4264500
http://www.srf.com

Broad Community Support is not applicable for this project