While all Performance Standards are applicable to this investment, IFC’s 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.

PS1: Assessment and Management of Environmental and Social Risks and Impacts
PS2: Labor and Working Conditions
PS3: Resource Efficiency and Pollution Prevention
PS4: Community Health, Safety and Security
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

PS 5 – Land Acquisition & Involuntary Resettlement is not considered applicable for this investment as none of The Companies’ livestock operations have and/or will trigger involuntary resettlement and/or
economic displacement. All of the land required for The Companies’ operations is acquired through a willing buyer/ willing seller process through a negotiation process with villages’ farmer committee. PS7 - Indigenous Peoples is not considered applicable for this project as Indigenous peoples have not been identified and PS8 - Cultural Heritage have also not been identified as being applicable to this project as there are no known groups of indigenous persons in the project area and no items of cultural heritage were suspected or identified in the project area.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The proposed investment is expected to have limited environmental and social impacts, which are site-specific, temporary and none is expected to be significant. Projected impacts can be avoided or mitigated by adhering to applicable performance standards, procedures, guidelines and design criteria as described in the following sections.
The project is designed to avoid, minimize and manage environmental and social risks and impacts of operations to comply with national laws and regulatory requirements, and applicable IFC Performance Standards. The main environmental, social, occupational health and safety risks applicable to this investment are: (i) obtaining relevant environmental licenses for the Companies’ facilities; (ii) appropriate environmental, including biosecurity and disease prevention, occupational health & safety (OHS), and social management system development and its effective implementation; (iii) terms of employment and working/living conditions for farm workers, including at contracted farms; (iv) animal husbandry provisions and emergency preparedness and response procedures, including those related to livestock diseases; (v) prudent and efficient use of public utilities (water supply and energy); (vi) management of wastewater and solid wastes; (vii) treatment, supply and monitoring of potable water;(viii) hazardous material handling, and management of pest infestations; (ix) occupational health & safety of all workers; and, (x) engagement with communities and exposure to potential E&S risks.

IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s 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 implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
IFC’s appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFC 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 the Performance Standards objectives.

IFC’s assessment considered documentation of the Group’s management of its environmental, safety and health performance; compliance with Malagasy permitting requirements; and stakeholder engagement and
disclosure of information about the project and its operations.
Policy: The Group has a corporate Quality, Safety and Environmental Policy, which describes the Companies’ commitment to the protection of the environment and people and the safety of its employees. The policy requires compliance with applicable national laws and relevant health, safety, and environmental international standards. The corporate policy applies to all aspects of its current business operations – construction, operation and maintenance; and is communicated to employees and other stakeholders. The scope of the policy shall encompass the activities covered under this investment. The Companies will adopt the Group’s policy ensuring all environmental & social aspects for its operations are addressed. This policy will be communicated to all workers and other relevant stakeholders (ESAP #1).
Identification of Risks and Impacts: In line with the Malagasy environmental regulations, an Environmental and Social Impact Assessment (ESIA) was conducted for the project as required by the Madagascar National Environmental Agency (ONE). An Environmental Management Plan (EMP) was prepared alongside the ESIA and submitted to ONE for approval (Environmental Authorization). ONE issued an Environmental Authorization for the project on March 21st, 2017. The ESIA covered the relevant local environmental and social regulations relevant to the project. The ESIA covered the project design, construction, operations and decommissioning. The ESIA addressed project alternatives; identification and assessment of environmental and social risks and impacts; and measures to avoid, mitigate or offset the impacts identified. The potential impacts identified and assessed include: air quality; hydrology and water quality; occupational health and or new safety (OHS); waste; noise; traffic and visual impacts; and geology and topography. The ESIA also included a socioeconomic baseline and impact assessment of the communities around the project site. However, issues related to supply chain assessment were not addressed in the ESIA and these have been addressed in the ESAP (ESAP #3). The project EMP identified measures to minimize and mitigate the impacts associated with the project. In
addition, stakeholder engagement was also undertaken as part of the ESIA process. In relation to the companies’ primary supply chain (cattle and goats) they will continuously assess the risks of impacts on biodiversity and more information is included under the PS6 section. For any expansions or new operations, the companies shall undertake an environmental and social impact assessment of such new developments.
Management Program. The Group has an environmental and social management system (ESMS) for managing the E&S risks of its current corporate business operations. As this is a greenfield project, the Group’s ESMS does not cover the activities under the companies’ operations as required by PS1. However, the companies have taken tangible steps in order to establish solid foundations for such a system. In particular, the slaughterhouse is being developed for high value export markets and as such, is required to comply with international standards. The companies have made a commitment to ensure that the slaughterhouse will be ISO 22000, HACCP certified and EU accredited once operational. The companies will develop and implement an ESMS to manage the E&S risks of their operations and will integrate the project EMP into the system. The ESMS and associated documents will cover the construction phase and the operational phase of the project.
As set forth in the ESAP (ESAP #1), the companies’ management has agreed to further develop and integrate these Environmental, Occupational Health and Safety (EHS), livestock and food safety management system elements – in line with ISO 14001, OHSAS 18001, HACCP, and ISO 22001 – into the Group‘s ESMS that will therefore comply with IFC’s PS1 requirements including applicable WBG General and Sector-Specific Environmental, Health and Safety (EHS) Guidelines.
Organizational Capacity and Competency: SMTP Madagascar has an E&S officer for the Group’s operations based in Antananarivo. As part of this investment and as set forth in the ESAP (ESAP #2), the companies will appoint a dedicated Health, Safety and Environmental (HSE) Officer at Fort Dauphin to oversee the implementation of the ESMS and the associated procedures for the construction phase of the project and will ensure implementation and monitoring during operation. The companies’ EHS officer will report to the Managing Director and will closely coordinate his/her works with the Group’s EHS officer. In addition, the companies will ensure that its subcontractors appoint EHS personnel for the construction phase. Emergency Preparedness and Response (EPR): To comply with Malagasy laws, the companies are required to develop occupational health and safety plans and procedures applicable to their operations which include emergency preparedness and response covering disease outbreak, accidents, fires and leaks of hazardous chemicals and fuels. The emergency preparedness and response plans include such aspects as coordination with external entities; use of EPR response equipment; emergency contacts; training; and response procedures. As part of this investment, the companies will develop and implement emergency preparedness and response plans (ESAP #3) for all its facilities. Emergency plans will respond to the needs of life and fire safety requirements and include training on emergency evacuation, use of fire equipment, and other applicable aspects identified by experienced emergency planning specialists. It will implement a training plan to ensure that all workers are knowledgeable of existing emergency procedures and emergency contingency plans, including evacuation routes. It will perform fire drills in all operating facilities.
Monitoring and Review: During construction and operations, all parameters that require monitoring in line with local regulations will be monitored, as defined in the project EMP. Bovima-Agrifeed shall develop well structured monitoring and reporting procedures, consistent with IFC PS1 requirements. E&S monitoring activities should focus on: the quality of effluents, air emissions, generation of solid non-hazardous wastes, and OHS. The monitoring and review plan shall include frequent effluent monitoring for all relevant parameters as described in the WBG industry specific EHS Guidelines, for example: pH, biochemical oxygen demand (BOD), chemical oxygen demand (COD), oil & grease, total suspended solids, sulfides, fecal coliform, and surfactants. Additional information about effluent and emissions performance is described under the PS3 section of this summary.
The corporate ESMS management team conducts audits of all existing Group facilities based on an audit plan and these internal audits focus on the commitments of facilities with local regulators as defined in the EMP. The companies shall ensure the audit plans includes all its new activities. The companies’ EHS officer will monitor and report on key EHS performance indicators, including food safety, energy and water consumption and efficiency; air emissions (NOx, SOx, particulates and GHG emissions); noise; solid and hazardous waste management and disposal; effluent discharges; OHS; customer complaints; supplier E&S performance; and community engagement activities. The companies will report annually to Malagasy authorities and to IFC as part of this investment.
Training. The Group adopted a corporate training procedure to ensure continuous OHS and biosecurity trainings for its existing poultry operations, to staff at all levels in order to improve operational efficiencies. The companies will need to ensure that E&S risk management training is provided for all staff at operation. In addition, the companies are required by regulation to train their employees on life and fire safety (L&FS), including first aid. The objectives of this training are to prevent fire hazards and to learn how to control fire events should that be necessary. As set forth in the ESAP (ESAP #4), and as part of the ESMS, the companies’ Human Resources (HR) Director and the EHS officer will undertake a comprehensive training needs assessment to complement any planned training program.

During the construction phase, it is expected that the total workforce on the project will be approximately 80. It is also expected that a substantial number of workers will be recruited from the local community within a reasonable distance from the project site. There will be no workers’ accommodation created on the project premises. The Companies will arrange for transportation and workers from the nearby communities will be transported to and from the project site. When operational, Agrifeed is expected to have 95 employees and Bovima approximately 80 employees. As the market fully develops, the companies expect this staffing level to increase.
Human Resources Policies and Procedures: The Companies will be utilizing the existing HR policies of the Group. The Group has a Human Resource Department which comprises a Manager and supporting assistants. This department is responsible for the development and implementation of a standard set of labor procedures (Internal Regulation), that govern the following actions: recruitment and selection; admissions process and documentation; planning and approval of holidays and time off; attendance and working hours; payment processing, including health insurance and benefits; performance evaluation; training; access to the employee grievance mechanism; and, disciplinary measures and cessation of employment. The Internal Regulations are communicated to all new employees during the induction process and a signed acknowledgement of receipt from each employee is requested. As part of IFC’s investment in the SMTP Madagascar project (project #36704), the Internal Regulation was reviewed and updated in order to meet all the necessary requirements in IFC’s Performance Standard 2, especially as they relate to formalizing the training plan, including OHS provision based on job risk assessment, freedom of association, and the grievance mechanism. The Internal Regulation is in compliance with Malagasy Labor Code (“Code du Travail”), including procedures for nondiscrimination
and equal opportunity. The minimum age of employment is 18 years old and no forced labor is accepted. In addition to salaries, other benefits are provided, including: health coverage, performance and sale bonuses. The Group’s salary scale is above the minimum threshold in Madagascar. In all the Group facilities,changing rooms, toilets and showers facilities are available for workers and respect gender sensitivities. As part of this investment and as included in the ESAP (ESAP #6), the companies will adapt the Group’s HR policies and procedures and implement at the new operations.
Workers’ Organization: Due to the stage of the project, there is no indication as to the number of unionized employees expected to be involved in the project. However, the Group’s Internal Regulation allows freedom of association.
Non-discrimination and Equal Opportunity: The Group is committed to the principles of employment equity, equal opportunities and empowerment, regardless of gender, race, color or creed. These principles will be implemented through the HR policy at the companies.
Grievance Mechanism: The companies will develop and implement a structured grievance procedure for its workers, in accordance with PS2 requirements, including steps to be taken for workers to manifest any concern, engage in a mediation process, contact responsible persons at each facility, and provide feedback. Employees’ awareness raising on the grievance mechanism procedure will take place during the worker’s induction session.
Occupational Health and Safety: As this is a greenfield project, the companies will develop appropriate OHS procedures for the construction and operation phases which are consistent with the requirements of this Performance Standard and Malagasy laws and regulations, including the Occupational Health and Safety Act and Construction Regulations. This requirement has been included in ESAP (ESAP #7) for this project. Key performance indicators (KPIs) for this project will include OHS indicators such as Lost Time Incident Frequency Rates (LTIFR) compared to sector guides that will be documented as part of the project improvement process. The companies will conduct job hazard analyses and reduce or eliminate risks through engineering controls and employee training. Residual risks that cannot be adequately reduced through engineering modifications, will result in specification of appropriate personal protective equipment (PPE), and employee training for all staff and project workers to ensure that staff and project workers conduct their work following the OHS procedures. The companies will also ensure that sub-contractors follow the company’s OHS policy and procedures, including assessment of job hazards and providing appropriate PPE and training, in compliance with all the requirements of local Malagasy laws and regulations and this Performance Standard.
Workers Engaged by Third Parties: During the construction and operational phases, the companies will make use of service providers for security and maintenance activities. As set forth in the ESAP (ESAP #6), the company shall develop and implement a procedure to ensure contractors’ labor and working conditions comply with the requirements of this Performance Standard and Malagasy laws and regulations, including a fully functional, workers’ grievance mechanisms for third party workers.

Energy and Resource Efficiency: No connection to the national grid exists at the project location. Energy will be provided from one 400 KVA generator during evening hours and from a 1.5 KW photovoltaic solar field during daylight hours. Expected energy demand per annum is anticipated to be approximately 1,000,000 kWh per year for the Companies. Specific energy conservation measures have not yet been identified by the project (e.g. energy efficiency monitoring system, LED and solar lighting). The client shall identify specific measures to maximize energy efficiency and implement wherever feasible as set forth in the ESAP.
Water Consumption: The project is in the Fort Dauphin area of Madagascar. A hydrogeology study was completed in January 2015. The study showed that there is adequate resource to meet the projects’ water demand for the long term without having a negative effect on other users of the aquifer. The primary source of water for the companies is from 5 ground water bores on the project site. The bulk of water consumption is expected at the abattoir for hygiene and work areas wash down. The estimated water demand for these activities is 1000 litres/head/day for cattle and 100 litres/head/day for goats. These consumption estimates total an annual water demand of 115 megaliters water usage for the feedlot and 40 megaliters for the abattoir.
Water for human consumption and sanitation needs is considered minimal, and is estimated to amount only to 10,000 litres for 150 persons per day. The client will develop a comprehensive water management plan as part of its PS1-compliant ESMS. The water management program will include management of wastewater to meet World Bank Group industry specific EHS guidelines as set forth in the ESAP (ESAP #9).
Wastewater Treatment: The principal source of industrial wastewater emanates from cleaning in the abattoir and livestock yard, with minimal amounts contributed from staff showers and toilets. The planned wastewater treatment system will include a Dissolved Air Flotation (DAF) system to remove solids, oil and grease, and a 3-pond system to treat operations’ effluent. The system will be designed to manage an estimated 200 m3/day flow. Treated effluent is projected to meet national requirements. This will allow water to be re-used for wash-down of the abattoir. The planned system is modular and will allow for later addition of an expanded biological treatment system that may yield water fit for human consumption provided it is adequately disinfected and continually monitored. This biological treatment system is not currently envisioned as a unit process in the treatment works for cost reasons.
Adjacent downstream communities rely heavily on surface water and groundwater for personal consumption,irrigation and other uses. There are also a number of sensitive habitats (e.g. in-stream aquatic habitats, wetlands, estuaries and coastal marine systems) present. The client shall implement the supplemental biological treatment unit process if planned system components do not deliver water quality suitable for surface water discharge in accordance with WBG EHS Guidelines for this sector. Moreover, the client will implement downstream monitoring to determine discharge impact on the receiving water body and allow timely planning and construction of supplemental treatment systems to reduce or prevent surface water impact and harm to downstream communities. These measures and others to mitigate potential impacts from wastewater on downstream users will be integrated into the comprehensive water management plan described above and incorporated into in the ESAP (ESAP #10).
Solid Waste Management: Primary solid waste is animal manure, estimated at 10kg/head/day. Management for this is still be developed but proposals include donation to adjacent agricultural development projects and communities for use as organic fertilizer. The project will develop a comprehensive waste management plan as part of a PS1-compliant ESMS set forth in the ESAP (ESAP #10).
Hazardous Materials Management: Primary hazardous materials expected at operations are diesel for vehicles and generators, pesticides, supplementary feed materials, and fertilizers. The project will integrate measures to manage hazardous wastes into the waste management plan described above and set forth in the ESAP (ESAP #12).
Pesticide Use and Management: A legally registered company will be contracted to undertake rodent infestation prevention and, as needed chemical controls in all the Companies’ operations. The terms of reference for this service shall stipulate that external control activities may use chemical controls provided these are deployed in sealed boxes. Control methodologies closer to food processing activities will be required to rely on mechanical and/or electrical devices exclusively. The Companies shall develop a procedure to implement pest and rodent management by third party service providers that shall stipulate that non-chemical control methodologies are preferred and that chemical controls shall be inaccessible to humans and non-target species. The procedure will prohibit the use of WHO Class 1a and 1b chemical formulations on their premises. The companies will modify service contracts to require contractors and suppliers to provide training for workers, ensure that supervisors and
workers are equipped with material safety data sheets (MSDS) and/or International Chemical Safety Cards (ICSCs) to facilitate understanding of chemical hazards and the provision of specific personal protective equipment (PPE). These requirements will be included in employee’s OHS training programs.
Greenhouse Gas Emissions (GHG): GHG emissions are estimated at 7,000 tonnes of CO2 equivalent per year.
Livestock Disease preparedness and response. As part of its operational procedures in the Companies, a biosafety protocol shall be adopted to include strict measures to (i) improve and monitor livestock hygiene and health according to the risk and occurrence of diseases during the production process, (ii) establish a traceability system, (iii) ensure livestock products quality for customers. The companies shall ensure standardized sanitation and disinfection procedures exist and their use is systematically enforced at the facilities. Bio-safety procedures at the companies should include limited controlled site access and suitable infrastructures (e.g. high fences); entrance gate with vehicle disinfection area, cleaning and disinfection procedures for visitors, materials and tools (e.g. foot disinfection at the entrance to sites/houses), control of pathogen vectors (rodents, insects), and organic waste management. Given the potential magnitude and unprecedented nature of the threat posed by livestock diseases such as foot and mouth disease, and to protect its workforce, the companies will develop and implement a procedure for livestock diseases preparedness and response, including a training plan to ensure that employees are knowledgeable of the preparedness plan for such diseases and emergency contingency plans. The plan will include: (i) preparedness and prevention, (ii) outbreak response, and (iii) recovery, as set forth in the ESAP (ESAP #8).

Community Health and Safety: As the companies’ operations are isolated from human settlements for biosafety considerations, traffic does not present a significant risk for the local population. The Companies will be required to implement Operator Safety Training Programs for its drivers and contractors. As set forth in the ESAP (ESAP#13), transport sub-contractors will be required to provide validated driver licenses, insurance and vehicle maintenance reports.
Biosafety: The companies’ meat processing plant will include biosafety measures such as installation of sanitation barriers at entries and exits with non-contact hand washing, sanitizing equipment in all processing rooms, and improved refrigeration equipment. For their operations, the Companies will ensure that drug residues in meat products meet the maximum residue limits (MRLs) recommended by WHO and FAO.
Hazardous Materials Management and Safety: The project will require the use of limited quantities of hazardous materials such as cleaning chemicals, herbicides, pesticides, fuels and oils. As discussed under Performance Standard 3, the quantities are limited, the materials will be purchased and stored in appropriate, secure facilities with strict protocols for issue. The companies’ agronomists will be responsible for determining and specifying the specific compounds that will be issued for defined purposes and managed to eliminate the possibility of community exposure to these materials.
Security Personnel: Site security will be managed by a private security firm who will provide trained armed security personnel. The companies’ will assess the risks posed by their security arrangements to communities near the project site and ensure that the security contractor operates in a manner which meets the requirements of this Performance Standard. In making such arrangements, the Companies will be guided by the principles of proportionality and good international practice in relation to hiring, rules of conduct, training, equipping and monitoring of such workers, and by applicable Malagasy law. The Companies will make reasonable enquiries to ensure that security provider staff are not implicated in past abuses and will train them in appropriate conduct toward workers and affected communities. The project grievance mechanism will be deployed to communities to allow for submittal of information about issues that arise between communities and security personnel.

Protection and Conservation of Biodiversity: Lands acquired for the project are considered Modified Habitat with no significant biodiversity values identified to date. The lands currently purchased consist of near monoculture of alien tree species used for forestry purposes (e.g. Grevilia spp.). This assessment was based on review of desktop review of available assessments; screening using IBAT, Google Earth Engine time-lapse tool, and Global Forest Watch; and a site visit by IFC Biodiversity Specialist. Trees cleared during ongoing land preparations are being offered to local communities as free charcoal and other uses.
Sustainable Management of Living Natural Resources: Livestock husbandry is focused on cattle (zebu) and goats. Zebu cattle are considered an indicator of traditional wealth by local communities and raised primarily as draught animals. They are only offered for sale and slaughter once they reach the end of their productive lives. These sales are made at weekly village markets where prices are negotiated between buyers and sellers. The project livestock procurement process entails purchasing these excess zebus for fattening in the Agrifeed feedlot on site for about 90 days before being transferred for slaughtering at the abattoir. No livestock will be raised by the project exclusively for meat production. Given current community practices, it is considered unlikely that
community members will begin to raise zebu cattle exclusively for meat production. This should however be monitored in the event the project creates sufficient demand to drive changes in community views on zebu value. Unlike zebu, goats are raised and sold specifically for meat and milk production. As with zebu, goats will be purchased at village markets.
Supply chain: Southern Madagascan landscapes are heavily modified but still support fragments of extremely important biodiversity likely to meet thresholds for Critical Habitat. This includes some protected areas and key biodiversity areas. As such, there is a risk of sourcing primary production (i.e. livestock) that is associated with conversion of Natural or Critical Habitat within the region. This risk is however considered low because goats tend to be maintained within modified areas near to existing villages, while zebu are raised primarily as draught animals or traditional wealth and it is currently unlikely that purchase of old/end-of-life animals for slaughter will create a new or direct driver for adding new livestock and stimulating associated conversion of Natural or Critical Habitats for grazing. Existing tracing systems (e.g. village-specific branding and ear notching) and regulatory methods (e.g. veterinary and police permits, village market association review, record-keeping and
sign-off) are in place to reduce livestock theft and veterinary risk and were observed during appraisal, including interviews with regulators, NGOs, police and veterinary staff. Livestock with required documentation and approvals fetch higher prices. Local NGOs have also been involved with cost-effective micro-chipping of goats to improve traceability for disease controls. These offer an initial framework for supply chain monitoring which could be scaled up or adapted to manage supply chain risks. As set forth in the ESAP (ESAP 15), the companies will implement a procurement policy and monitoring procedures to ensure livestock is sourced from areas not at risk of natural or critical habitat conversion. The client will build on existing measures used by regulators (e.g. police, veterinarians) to monitor this sourcing and areas of origin of livestock that are purchased. IFC will provide support to review and, where needed, improve these supply chain systems, including mapping overlap between source areas and sites of high biodiversity risk.

Stakeholder Engagement. For biosafety reasons, the proposed companies’ facility is isolated from communities and located in a rural area. Based on the ESIA process, the main E&S concerns from surrounding communities include traffic, solid waste management and disposal, odor, noise and air emissions. As indicated in the ESAP (ESAP #5), and to ensure a proactive engagement with communities and other relevant stakeholders is implemented, the companies’ will define a Stakeholder Engagement Plan, manage external communications using a community grievance mechanism, and where necessary, report on performance commensurate to the issues raised. This community grievance mechanism will be available for communities to raise any concerns related to E&S risks and impacts associated with its operations.

Contact Person: NALIHARISON ONJATAHINA
Company Name: SMTP GROUP
Address: 01 A AMBOHIBAO
Email : ehsofficer.dev@groupe-smtp.com
Phone : +261321137063
Facsimile:
Please note project documentation will be available on site once the base camp is operational. Until then,
please find below the administrative address in Madagascar:
Company Name: SMTP Bovima and SMTP Agrifeed
Address: Provide address in Madagascar Lot 01 A AMBOHIBAO ANTEHIROKA, Antananarivo 101,
Madagascar

Broad Community Support is not applicable for this project.