Regarding PS 5, 6, 7 and 8, the majority of land plots are rented by Viva Fresh. Land which is owned by Viva Fresh currently has been acquired through willing buyer-willing seller transactions, which did not result in any physical or economic displacement. All owned sites are located on commercially demarcated land in developed urban areas, and it is therefore highly unlikely that issues related to biodiversity conservation, indigenous peoples or cultural heritage will arise. Going forward, prior to any significant expansion and in particular those requiring land acquisition, the Company will conduct social and environmental due diligence to ensure that risks and impacts, if any, will be adequately identified and managed in a manner compliant with IFC’s Performance Standards 1-8.   

    This project is categorized as B according to IFC’s Policy on Environmental and Social Sustainability as the E&S impacts are expected to be mostly site specific and localized and can be avoided or mitigated by adhering to the performance standards, guidelines or design criteria and adequately managed through the implementation of a project specific Environmental and Social Management Plan.

Specific key environmental and social issues reviewed include: i) project sponsor’s corporate environmental and social management capacity to operate in a manner consistent with IFC Performance Standards; ii) labor and occupational health and safety aspects of the operations; iii) efficient use of energy and water in operational phase; iv) life and fire safety (L&FS) conditions of the project; v) solid waste management;  vi) customers health and safety issues such as potable water, food safety and emergency response; vii) supply chain elements related to potential risks of child or forced labor; and viii) transport management. Land acquisition for new stores and warehouses in Kosovo and the region were reviewed and a contextual risk analysis completed.  

   Environmental and Social Assessment: The regulatory requirements of Kosovo stipulate conditions and procedures for Environmental Impact Assessment (EIA) including a definition of projects that are subject to EIA’s. In accordance with the national legislation the EIA is not required for any of Viva Fresh facilities.

Viva Fresh mainly rents land and buildings for its operations (in total, less than 15% of land and 40% of buildings are owned by the Company). Selection of sites is based on a result of alternative site analysis including access to the site and availability of infrastructure (water supply, wastewater discharge, electricity). Viva Fresh has completed the process for all of its allocated land and has obtained the necessary leases. As part of the selection of new sites, going forward, the company will develop and implement a procedure (or checklists) to screen for potential environmental and social elements such as potential for involuntarily resettlement, availability of proper waste and wastewater management, adequate facilities for Life and Fire Safety protection, potential for energy and water efficiency and others while acquiring new land or entering into a lease contract as per ESAP (action # 1).

E&S Assessment and Management System: Currently, Viva Fresh does not have a formal environmental and social management system but will develop one as per ESAP (action # 2). Viva Fresh operates to a food safety and traceability regime. The company plans to start the certification process for ISO 22,000 (Food Safety Management System) in the coming months. The specific elements of the E&S management system are described in further detail in each of the sections below.

Policy: Viva Fresh has an overarching policy defining environmental and social objectives, however, as part of the ESAP (action #2), Viva Fresh will revise the policy to reflect the company’s commitment to comply with all applicable laws and best practices, minimize its impact on the environment and promote good occupational health and safety practices. The policy will be applied to Viva Fresh’s operations in the Republic of North Macedonia.

Identification of risks and impacts: Viva Fresh has a limited overview of occupational health and safety risks of workers and plans to develop this further by undertaking a job risk analysis as well as assessing the environmental risks of its operations. As part of the ESMS and as per ESAP (action #2), Viva Fresh will assess the environmental, occupational health and safety, and social risks of its operations and develop the necessary corrective actions to mitigate these risks through implementation of management programs following the mitigation hierarchy of avoiding, minimizing, rectifying, reducing, and offsetting worker exposure to such risks. The risk assessment will also be carried out at the store in the Republic of North Macedonia and any future stores and operations.

Management Programs: Viva Fresh manages E&S risks during the selection and opening of new stores and during routine operations. During the selection and opening of new stores, the Company’s construction quality assurance team is responsible for the concept and construction of all new facilities, if not rented; external experts are contracted for the development of design documentation (e.g. sections on life and fire safety, heating, ventilation, water supply and sewage). In accordance with the national legislation the project developer is responsible for the submission of design documentation to the state committee for review. Based on the review, a building permit is issued to the project developer. As per ESAP (action #1) further procedures will enhance the verification that E&S risks are considered during the initial stages of development. To achieve a uniform degree of fire safety across its portfolio and impose internationally recognized life and fire protection requirements to new stores, Viva Fresh has developed a corporate fire safety directive (more details are provided in Performance Standard 4 section). Additional measures to be taken in this respect are described in the paragraphs that follow and detailed in the ESAP.

During Operations the Company has developed basic Occupational health and safety and food safety procedures, but these don’t cover all aspects of the operations such as resource efficiency and management of solid wastes.  As part of the ESMS, the Company will develop operational procedures on environmental health and safety as described in the ESAP (action # 2). The management programs will address identified risks and will provide adequate EHS oversight for its growing portfolio.

Organizational Capacity and Competency: The Chief Operations Manager and Human Resources Manager are overall responsible for EHS and OHS management of the stores. Individually at each store, the store manager and her/his team assume responsibility on a day to day basis. As the Company is expanding, management recognizes the need to increase organizational capacity to ensure the stores are operating to an international standard. The Company therefore invest in continuous training of the staff and develop new procedures to reflect the need of the operations. Store managers report on a weekly basis to senior management and issues related to EHS and OHS are discussed in senior management meetings. EHS meetings are held at the senior management level where they discuss immediate and long-term goals. During IFC’s site visit and based on discussions with key individuals, staff were generally found to be knowledgeable of health and safety aspects of operations.

Training: A comprehensive training program has been developed for all members of staff. An onsite training centre is used to conduct practical and theoretical training. This includes training on life and fire safety and occupational health and safety. Additional training will be provided to familiarize staff with the E&S management system and standard E&S requirements as per ESAP (action #2).

Emergency Preparedness and Response: Viva Fresh Stores are located mainly in urban locations on or close to main roads. Residential communities are close to other stores. Emergency preparedness and response (EPR) is governed by national legislation and the company’s commitment to safe working practices.  Fire is the key emergency scenario and Viva Fresh has an Emergency Preparedness and Response Plan which will be updated as per ESAP (action # 3). The company will review and update the EPR procedures for the stores and the distribution center to identify worst-case scenarios, identify responsibilities, define evacuation plans, define fire safety equipment availability and identify staff training including fire safety drills. These procedures should be applied to new stores. As part of the company’s occupational health and safety procedures, the following measures have been put in place: emergency exits and instructions for evacuation including smoke detectors and fire alarms, a designated assembly point, visibly posted emergency phone numbers, and training on First Aid. The stores are equipped with fire extinguishers located in strategic places, which undergo monthly servicing through an external service provider. Currently, no emergency evacuation training exercises are being undertaken, but the company plans to start conducting these annually.

Monitoring and Review: An internal audit team of six people visit different stores daily to check that the Standard Operating Procedures related to OHS and food safety are being followed. The audit teams address issues on the ground as they see them and also send a monthly report to management. If systemic issues are discovered, procedures are developed in order to address these throughout the Company. Regular control measures, such as store opening EHS checks to be conducted by the responsible staff and periodic audits by regional store managers will be introduced as per ESAP (actions # 1 and 2). The Food and Veterinary Agency inspectors visit the stores twice per year and also conduct drop in visits more regularly. Inspectors check for issues with food safety such as expiry dates, storage, refrigerator and freezer temperatures and traceability. No known non-conformities were reported during the last year.  

   Human Resource Policies and Procedures: Protection of the workforce in Kosovo is specified in the national Labor Law which 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 including minimum age (18 for full-time work). The Company has internal procedures specifying employee rights under national law on hours of work, compensation and wages which are approved by the Ministry of Labour. Discrimination in employment and occupation is prohibited in Kosovo and regulated by national law. Individual contracts provide staff with information on their terms and conditions and are presented to employees at the time of hire. The Group has established a grievance process to provide alternatives for employees to raise concerns other than to immediate supervisors; once established, this process was formally communicated to all employees. Similar procedures are available to the workforce in the Republic of North Macedonia in line with the labour law there. No retrenchment is planned by Viva Fresh in relation to the project realization although staff turnover is generally high in retail.

Working Conditions and Terms of Employment: Currently, Viva Fresh employs approximately 3000 employees and more than 50% are female. During peak times, such as national holidays, some temporary positions are available, and contracts and benefits are in line with the law. The Company will create more direct employment as new stores are opened. Hiring is conducted in accordance with the national labor law.  The working conditions are explained fully in the employment contract. All workers are provided with the code of business conduct and employment specific information that documents their rights, hours of work, benefits and other employment aspects in their contracts.  New recruits enter on two months probationary period. Salaries are based and above minimum wage for Kosovo. Viva Fresh deducts from the salary the required contribution to the national insurance and pension fund for all employees and provides paid and maternity leave in accordance with national law. Viva Fresh employees work in different shifts depending on the business area in which they work (administration, store floor, drivers, food preparation, etc.). According to the internal code of conduct, any workday beyond 8 hours in duration is considered to be overtime and paid accordingly.  Workers are required to have a day off after 6 consecutive days of work. Viva Fresh recently changed the work week from 6 to 5 days. There are on-site bathrooms with changing room and lockers, separated for men and women. Transport to and from the site is offered.

Workers Organizations: Viva Fresh staff is not part of a worker’s organization however, there is no objection from management if workers wish to join one or form one or engage in collective bargaining. There are regular team meetings and management maintains an open-door policy to meet with workers.

Non-Discrimination and Equal Opportunity: More than 50% of the workforce are women and woman are eligible to apply for all roles/tasks. Viva Fresh operates on the policy of nondiscrimination and equal opportunities which is included in the Code of Ethics. The HR policy will be updated to include language on the client’s approach to sexual harassment in the workplace as per ESAP (action # 4).

Grievance Mechanism: A formal grievance mechanism is in place and new employees are notified of the process. The mechanism is also available to contractors. Employees submit a complaint to the Human Resources department either by name or anonymously. The HR department deals with each complaint accordingly and usually within 5 days.

Protecting the Workforce: The minimum age of employment at Viva Fresh is 18, apart from the students who are enrolled in the student work experience program and work part time during the summer months. This scheme is approved by the government in coordination with schools and the German Development Agency (GiZ) in order to provide opportunities for school students to gain experience in the work place before they leave school and to increase their employability. All 16-18 years old work a maximum of 4 hours per day or 20 hours per week according to the law. The contract states these workers are only allowed to conduct light work. 

Occupational Health and Safety: An Occupational Health and Safety (OHS) Policy has been developed and is included in all work contracts, however this will be revised in line with the Performance Standards. Each store has a designated safety engineer. No formalized OHS risk assessment nor procedures have been implemented. As per the ESAP (action #2), a job hazards analysis will be conducted, and relevant Occupational Health and Safety procedures will be developed to ensure all workers are aware of how to stay safe during operations, such as when working at heights, lifting heavy goods and operating machinery. Health and safety training is provided to employees and contractors upon induction and thereafter on a monthly/refresher basis. All employees are provided appropriate personal protective equipment (PPE) which is used consistently. The company tracks accidents and incidents. Viva Fresh indicated that in 2018 there were no incidents or accidents. There are trained first aiders at each store and first aid kits are provided. The company has developed and is implementing an accident reporting procedure consistent with good practice. Environmental, health and safety management responsibility during construction is borne by a construction contractor with oversight from Viva Fresh, who is in charge of monitoring the contractor’s compliance with the contractual responsibilities and local regulations. Regular checks are conducted by the Ministry of Labor and have not resulted in any non-compliances.

The stores activities include the processing of raw meat and fish into fresh meat/fish cuts and cooked chicken. Staff are involved in a variety of operations from handling raw meat/fish to packaging the finished product. This includes working in cold storage (fridges and freezers) meat/fish cutting room and packaging department. To prevent accidents, proper tools such as appropriate knives, tables and machinery where possible are available. Personal Protective Equipment (PPE) is also provided, such as gloves and rubber boots. Some signage related to quality and food safety (such as use of required PPE, hand washing, and prohibited behaviors) was noted around the stores. This is further supported by regular internal inspections to verify the cleanliness and good functioning of the work environment so that any potential risks related to the quality of the products as well as to workers can be addressed right away. Health and safety training are provided to employees and contractors upon induction and thereafter on a monthly/refresher basis.

Workers engaged by Third Parties: Third party employees include contractors, drivers and guards. When selecting third party employees such as to renovate stores the company ensures they comply with the labor laws and regulations and have management systems in place with respect to occupational health and safety and environmental protection. Viva Fresh will establish policies and procedures for managing and monitoring the performance of such third-party employers in relation to the requirements the Performance Standards as stated in ESAP (action # 5).

Supply Chain: The company has introduced private label goods, and overall products in the stores are not considered to be at high risk from child labor, forced labor or significant safety issues. Nevertheless, a full screening has not been conducted. Viva Fresh as per ESAP (action #6) will develop and implement supply chain due diligence and management procedures which can identify high risks of child or forced labor for private brand suppliers, over which the client exercise high leverage or management control. If such risks are identified, the client will develop processes to prevent and remediate harmful child and forced labor in its supply chains. These processes will include allocation of budgetary/staffing resources and implementation of contractual, monitoring and compliance mechanisms. The system will prohibit child and forced labor all backed by contractual obligations to suppliers to comply with these conditions.  

   Resource Efficiency: Viva Fresh maintains records of energy, water and other resource use for the store. Electrical energy consumption (presented as kWh/m2 of sale area per year) for Viva Fresh stores is around 290 kWh/m2 in hypermarkets and 336 kWh/m2 in supermarkets. These results do not exceed publicly available benchmarking data for supermarkets (ranging from 130 to 380 kWh/m2 per year as per the UK Building Energy Efficiency Survey). Water consumption per store is around 7,000 m3/year. Electricity is sourced from the grid with some coal and wood is used in winter to heat 16 stores, but this practice is being phased out. The main use of energy is lighting and refrigeration. Viva Fresh regularly monitors electricity and water consumption in its stores and promotes efficient use of utilities. Cleaner production measures are integrated into design and operational processes with the objective of conserving energy and water. Individual stores report to headquarters on energy and water consumption, and performance of similar stores is compared. Adverse monitoring results are investigated and corrective actions are developed. Viva Fresh operates about 30 trucks which run on diesel fuel. These are all maintained off site.

The annual greenhouse gas emissions associated with Viva Fresh operations are estimated 18,800 CO2eq/yr. This is mainly due to the use of electricity from the grid. The company ensures that standard environmental control and resource efficiency measures are introduced in stores’ design, including using efficient cooling and heating system and LED lights. These requirements are included in the procurement documents of the construction contractor. There is a master plan for construction including materials for construction, cladding and windows etc., so that all stores are constructed to the same specifications. 

Pollution Prevention:

Liquid and solid waste management:  The company has a waste management plan in place. Solid waste from the stores (primarily domestic waste and waste packaging materials) is collected by a contractor for further treatment and disposal. Cardboard is separated, but not recycled in Kosovo. The company collects from the stores, makes bails and sends them to Turkey for further processing. Any goods that will go out of date within 45 days are sold to a contractor. Food that has already expired is disposed of through the regular waste system or returned to the supplier for a store credit. Wastewater from the stores is discharged into the municipal sewerage system, which is further treated in the central treatment plant.

Hazardous Materials Management: Stores use few materials that are considered hazardous such as refrigerants, diesel and other cleaning agents. The main refrigeration system at the stores and the distribution center uses 404A gas which is stored securely. This gas will be phased out by 2021 and replaced with zero global warming potential gases as per local and European requirements and as per ESAP (action # 7).  Generators are located at each store in case of prolonged power outages. Fuel is stored in the generator. Secondary containment will be installed as per ESAP (action # 8). 

     Viva Fresh stores are located in urban settings. Viva Fresh ensures that the stores are designed, constructed, operated, and decommissioned in accordance with good international industry practice (GIIP), taking into consideration safety risks to third parties.

The Company has procedures for product coding and traceability to quickly identify and recall a product in case it does not comply with Company’s standards. The Food and Veterinary Agency conducts announced (4-6 per year) and unannounced visits regularly to check on food safety and sanitary practices. The Agency identify issues or areas for improvements and then revisit to ensure actions have been completed.

Transportation Safety: Vehicle traffic to and from the warehouse and stores involves the daily movement of Viva Fresh’s own trucks (thirty) as well as those of contractors. Viva Fresh has written contracts in place with contractors that include the code of conduct and trucks used by contractors are visually inspected for safety functions (condition of tires) and cleanliness (condition of truck bed). If the trucks are deemed unsuitable for transporting the products, the contractor is notified, and the trucks are turned away. Viva Fresh has a procedure in place for ensuring the safe operation of vehicles (for example, screening drivers and providing formal training on safe driving) and for documenting incidents and accidents. The procedure includes a process for screening drivers prior to hiring including verification of valid driver license and past driving record; providing driver safety training to respect speed limits, not use a cell phone while driving, use of a fire extinguisher, and vehicle maneuvering skills; procedures for limiting trip duration, duty roster to avoid overtiredness, avoiding dangerous routes and times of day to reduce the risks of accidents, use of speed control devices on vehicles; inspection of vehicles at the processing facility after each delivery for any evidence of having been in an accident; and overall truck maintenance to ensure good working conditions. The same requirements apply to contracted drivers.

Security Personnel: Viva Fresh stores have security personnel which is hired through an external company. Guards are not armed, and their security protocols are verified by Viva Fresh. Security protocols are based on principles of proportionality and good international practice, there are defined criteria for hiring, there is a code of conduct, training is provided, and proper monitoring is in place.  Guards undergo training before being mobilized to the stores. In case of incidents, a procedure is in place and the security forces inform the police who treat each situation in line with local regulations.

Life and Fire Safety (L&FS): Viva Fresh follows local fire safety regulatory requirements across all its stores. Each store is equipped with extinguishers, hydrants, smoke detectors and emergency exits. A local fire safety company has been contracted to maintain the firefighting equipment across all the stores. Smoking is not allowed close to any buildings and signs are displayed to that effect. Since the company’s stores are all refurbished buildings, accessible to the public, the buildings have been renovated and are being operated in compliance with local building codes, local fire department regulations and insurance requirements including materials used such as cladding and insulation.  New stores shall be designed and built to comply with local and an internationally acceptable L&FS standard, as a described in the L&FS section of the WBG General EHS Guidelines. For this purpose, as per ESAP (action # 9), a qualified L&FS professional will revise the Life and Fire Safety directive, master plan and procedure (including checklists) for the construction, remodeling and maintenance of new stores (depending on the size and whether the store is owned or rented), it will include emergency planning and response. The procedure will consider local legal requirements, and aspects such as occupancy levels, means of egress and systems for fire prevention, detection and suppression, as per the L&FS section 3.3 of the General EHS Guidelines. Viva Fresh will ensure that requirements of a corporate L&FS directive will be translated into design and construction of new stores, and those will be operated in full compliance with this requirement. In order to ensure continuous compliance with the directive Viva Fresh will commence internal life and fire safety audits.

In addition, as per ESAP (action # 10) the fire safety expert will conduct a L&FS review of a sample of stores to verify compliance with the L&FS section 3.3 of the WBG General EHS guidelines and local requirements. Based on the review, recommendations on corrective measures for existing stores will be made and these will be implemented according to a timetable agreed with IFC.

While water for stores’ operations is mainly provided by municipal water suppliers, there are stores which are equipped with own underground wells and underground water is primarily used by these stores. Viva Fresh will review and verify that water used for drinking and cooking in such stores meets legal requirements on the quality of water intended for human consumption as per ESAP (action # 11). 

   Viva Fresh has community grievance mechanism, community members might raise concerns to the store manager either during operations or remodeling of the stores, who then reports the issue to top management. The mechanism works as follows: i) the store receives and registers external communications from the general public and potentially affected communities; ii) screens and assesses the issues raised and determines how to address them; iii) provides, tracks, and documents responses, if any; and iv) adjusts aspects, as appropriate, of company operations. There have been some complaints regarding noise from refrigerators, and this was resolved appropriately

Viva Fresh also has a dedicated call center to receive feedback from members of the public or they can contact the company via its website. All comments are discussed, and solutions offered by the company’s senior management.

Publication of this ESRS and associated Environmental Action Plan constitutes the client’s first community engagement related to its project plans. 

   The ESRS and the attached ESAP will be made available via the World Bank Group’s website and will be published in local language on the corporate web-site of Viva Fresh [www.vivafresh-rks.com]. The Company will also make IFC’s environmental and social review summary (ESRS) and ESAP available for consultation at their office in Pristina. Furthermore, the company will display contact information at sites during construction activities.

Korab Hoxha

Viva Fresh Sh.P.K

Head Office

Veternik P.N

10 000 Prishtine Kosovo

Tel +383(0)38408888

Fax + none

besnik.sylejmani@vivafresh-rks.com