Novare has secured the land for its project on a willing-buyer-willing-seller commercial basis, and has paid market-related rates. The land was composed of two plots. Plot 1 is occupied by a filling station (<3 years old), with 5 underground fuel tanks (2 diesel, 2 unleaded petroleum and 1 kerosene of 23000 m³ each), and a brick manufacturing operation which were sub-letting from the filling station management; Plot 2 had buildings owned by the seller which housed a church, small shops (selling mattresses; hardware; a computer repair shop; tuck shop and an office for the land owner) and a brick-making facility. No physical or economic displacement was required as all tenants were given 6 months’ notice to vacate the property as per Zambian Law, and as per their lease/sub-lease agreements. Once the tenants had vacated, Plot 1 was sub-divided and the area which was not occupied by the filling station was sold to Novare as Stands No 21875(A&B) and 37503 of Great North district, City of Lusaka. The Filling station was retained by the seller, and remains as a going concern. All of the above were concluded amicably. Thus, PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resource Management; PS7: Indigenous Peoples; and PS8: Cultural Heritage are not currently considered applicable to the project.

The project is a “category B” project according to IFC’s Policy on Environmental and Social Sustainability because potential adverse environmental and social risks are limited, reversible and may be readily mitigated, through the implementation of the Environmental and Social Action Plan (ESAP).

The key environmental, health and safety issues associated with this project include: i) adequacy of environmental and social assessment and management systems (ESMS), including Occupational Health and Safety (OHS) management especially during construction phases; (ii) adherence to local labor laws, and the application of policies to contractors; (iii) Life and Fire Safety (L&FS) provisions and emergency preparedness and response; (iv) optimization of water and energy use through project design; solid waste disposal; waste water treatment; potable water quality, treatment and monitoring; management and control of pests; (v) third party contractor management ; (vi) security arrangements; (vii) traffic safety and  (viii) stakeholder engagement.

E&S Policy and Management Programs: Novare has implemented an overarching Environmental, Social and Governance (ESG) policy with a formal Environmental and Social Management System (ESMS) that puts effect to the policy. There is a commitment to responsible operational practice, and the Fund has a mandate to implement policies and procedures to meet IFC Performance Standards. To effectively manage ESG risks and impacts, NAPF II implements a rigorous environmental and social management system (ESMS), and ensures that ESG risks (and opportunities) are considered at each stage of the Novare investment process. The ESMS was designed to be based upon the requirements of the IFC Performance Standards and the World Bank General Environmental, Health and Safety Guidelines, and as such, it incorporates policies, organizational capacity, procedures, reporting and review. The ESMS this is managed by NAPF II through the fund manager (i.e. Novare Fund Manager Limited (Mauritius)).  Post-investment, comprehensive quarterly and annual E&S reports are completed by project management teams. This allows Novare to closely monitor the ESG performance of projects and ensures that ESG risks and impacts are identified and appropriately mitigated as soon as the issue arises.

Identification of Risks and Impacts: The due diligence processes that are followed by Novare include a number of ESG aspects (as per the policy and ESMS above), and where information is not able to be acquired, issues are followed up with specialist reports or investigations. A consultant with extensive ESG and transactional support experience has been retained for the purpose of supporting all of NAPF II’s proposed transactions.

In terms of the Second Schedule, regulation 7 (1) of the Environmental Impact Assessment regulations, statutory instrument No. 28 of 1997 and listed under the category of Urban Development: (d) “commercial centers with 10,000m² or more floor area”, the Great North Mall was eligible for a full Environmental and Social Impact Assessment (ESIA), which was submitted and achieved approval from the Zambia Environmental Management Agency (“ZEMA”) in August 2016. Subsequently, the Road Development Agency (“RDA”) granted full access approval for the access to the Mall as well as the expansion of Great North Road, signalized junction and other improvements; ZESCO (Stated owned electricity company) has given approval for the electrification strategy; the Lusaka Water & Sewerage have issued approvals for both sewerage and water strategies; and the full building plans have received approval from Lusaka City Council (which included approval to commence earthworks). The above approvals are for the entire project and not only first phase.

Organizational structure and capacity: Novare has a dynamic team with experience in finance, retail, construction, and legal areas. Novare has no permanent Environment, Health and Safety (EHS) person on its staff, but retains the services of a reputable EGS consulting company (based in Cape Town) to implement the ESMS, as well as manage local project requirements. The consultant is also responsible for implementing the conditions of the ESAP and World Bank Group EHS General Guidelines, as well as the Novare ESG policies. The managing director of the Novare Fund Manager Limited (Mauritius) has the role of overseeing ESG issues at fund and project level (the ESG consultant reports to the managing director and the Board of the NAPF II).

Monitoring: As per the IFC Performance Standards, specific EHS key performance indicators will be monitored and reported upon, for annual reporting (to IFC) as follows: compliance with legal and regulatory requirements, including status of permits and certification (where applicable); energy and water consumption (municipal water and groundwater); water quality; waste water volume, and treatment/or disposal; solid and hazardous waste management and disposal; hazardous substances and pest management; compliance with national OHS requirements, including incident/accident rates; emergency/Life and Fire Safety (L&FS) management; customer and community complaints/grievances; and stakeholder engagement/grievances, as per  ESAP 1#. During operations, the EHS responsibilities of employees at the Great North Mall will be supported by the appropriate training, to include monitoring as well as the continual assessment of priority risks and impacts. Weekly ESG checklists are required to be completed and submitted by the Mall Manager to Novare (this is a requirement at all of Novare’s other developments). In the event of any future construction/renovation projects, contractors will be required to provide regular EHS monitoring reports to the EHS consultant and Mall manager, who will ensure adherence to local regulations and the policies of the company. No company-wide training is typically given on EHS to tenants or outsourced services, although this is a recommendation to be added to the “House Rules” which are provided to all tenants (the House Rules contain relevant policies and SOPs), as this is an issue affecting all operating on the site.

Emergency Preparedness, Life and Fire Safety and Response: Novare has several policies and procedures in place for emergency preparedness – a Fire Safety Policy; a Fire and Emergency Evacuation Policy; Safety and Security Policy and Procedure as well as a Code of Conduct that includes responsible (safe) behavior.  The building designs are in compliance with the Zambian Building Codes and the South African Fire Standards, and both phases will comply with the WBG LFS requirements articulated in section 3.3 of the General EHS Guidelines; this has been verified by a reputable Fire Engineering firm who has designed the systems. Once constructed, the building will also be inspected and approved by the Lusaka Fire Department. Before commissioning, the WMZL will develop and implement a comprehensive (site-specific) Emergency Preparedness and Life & Fire Safety Policy and Plan for the Mall; such a plan will be coordinated with the participation of with neighboring stakeholders, and include a two-way communication mechanism, in particular with the adjacent filling station. All tenants and contracted services (security, cleaning, maintenance etc.) will participate in basic training and comply with the Policy and Plan as a condition of their rental agreement, and before the official commercial launch (ESAP #2).

Human Resources management: The Novare Human Resource (HR) policies and procedures are numerous and comprehensive, and are modeled on the South African labor regulations. These include: a Code of Conduct; recruitment and employment policies (including employment equity), working conditions (probation, working hours, leave, absence, remuneration, overtime, promotions, benefits, retirement, retrenchment, disciplinary procedures, performance reviews), confidentiality, copyright, employee relations and communications policies; occupational health and safety policy and emergency procedures policy, as well as training and development policies and procedures. These are communicated to staff via their contract, and during induction. All local employees are subject to Zambian legal requirements concerning working hours, minimum wages, overtime compensation, benefits, sick leave etc.

The various policies emphasize non-discrimination and respect; the use of child labor, forced labor or harassment is not tolerated. The company does not restrict any employee’s choice to belong to a union or associating freely with any lawful worker’s association or collective bargaining association of their choice. A formal documented grievance policy and mechanism is in place for all employees and contracted staff. For all local employees, the Zambian labor standards are strictly applied and reported to the Department of Labor. The Novare HR policies and procedures are compliant with PS2.

During the construction phase, only two employees will be directly employed by the Project company (WMZL) – a Project Manager, and a Country Manager. Indirect employment by the EPC contractor will be approximately 350 to 500 during peak time (predominantly locally sourced male employees). During the operational phase, WMZL will appoint a center manager (mall manager), accountant/assistant, and an operations/maintenance manager. No contract staff (other than outsourced services) are envisaged.

Contractor management: Novare has standard Service Level Agreements (SLA) which are adopted by the Mall management for contracted or outsourced parties (cleaning, pest management and security). At this stage, a review is not undertaken to ensure compliance of outsourced services to the labor law, minimum wages, etc. WMZL will ensure compliance with Performance Standard 2 for third party contractors involved in facilities management, and ongoing regular services (operational phase) (ESAP #3). Equally, all contract or outsourced staff will be included in an induction session, with training on OHS, personal protective equipment (PPE), security, access control, appropriate behavior and emergency procedures, as well as access to a fair grievance procedure.

Occupational Health and Safety (OHS): The ESMS includes a detailed Occupational Health and Safety Policy, which directs employees to nominated Health and Safety representatives (H&SRep) who are permanent staff. The policy outlines the responsibilities/functions of the H&SRep as follows: identify potential hazards and risks at the workplace; identify Critical Control Points (CCP’s); in collaboration with a manager, examine the cause of incidents at the workplace; monitoring health or safety at work; make representations to a manager on general matters affecting the health and safety of the employees at the work place; inspect the workplace, including any article, substance, plant, machinery or safety of equipment at the workplace with a view to the health and safety of employees, at such intervals as may be agreed upon; and verify and review the effectiveness of the health and safety management system. An appropriately qualified OHS officer will therefore need to be contracted to represent WMZL, from the time construction commences, who will be on site daily to liaise with the EPC’s HSE officer. Once the Mall is operational, at least one employee will be identified as the H&S Rep, with the responsibilities as specified in the Novare OHS Policy (ESAP #4).

Novare ensures adherence to the legal aspects of OHS in their Projects by incorporating statutory and company policy compliance into bidding documents (for construction contractors), and for the employees of each Project.  The EPC’s employees are provided with OHS training in accordance with the contractor’s Health, Environment and Safety Handbook, and PPE is issued according to job profile. This is enforced by WMZL, the contractor, and the Zambian authorities who can inspect the site at any time. The EPC is required to have at least one permanent Health and Safety Officer on site, to provide induction for new employees or visitors, and to observe and correct unsafe behavior as well as to prevent, manage or report on OHS incidents, and the EPC provides monthly reports to management. Any person sustaining injuries is taken to the local hospital and treated at the company expense. Incidence registers are maintained during construction and operational phases, and all are investigated and reported to Novare, via WMZL management. The Mall manager will be responsible for OHS during the operational phase, however daily operational Safety and Security functions will be the responsibility of the operations manager.

HIV/Aids Policy: The company has an HIV/Aids Policy which undertakes to deal with HIV infected employees and/or employees with AIDS in the same manner as with employees suffering from any other life-threatening and transmittable diseases with due consideration for the interests of fellow employees.

Resource management (energy, water, waste water):

Energy: Novare is committed to resource efficiency, and is exploring ways to optimize energy efficiency, as well as install renewable energy systems and water conservation measures. Security of electricity supply in Zambia has necessitated the installation of diesel generators (gensets) at each facility. There will be two gensets of 800 kVA each plus one of 600 kVA (paid and maintained by the anchor tenant). An above-ground diesel tank (capacity 15,000L) will supply the generators, and will be bunded and designed to comply with the WBG EHS General Guidelines. Novare monitors its monthly fuel and electricity consumption which is projected to be within the range 326 000 kWh - 395 000 kWh per month. In Zambia, which is a projected energy intensity value of 180-182 kWh/m², and when compared to international benchmarks (175 kWh/m²) demonstrates alignment with good practices.  Temperatures can frequently rise above 35 degree Celsius in summer; thus, air-conditioning and refrigeration will be the primary consumer. Given the current constraints on the supply of energy in Zambia (which is likely to get worse over time), WMZL will submit an energy management plan (including energy efficiency initiatives as well as possible alternative energy sources) for the Mall, for the lifespan of the Project (ESAP #5).

Greenhouse gases: The projected energy consumption for the Mall equates to approximately 2029 tons of CO_2e per annum. This is below IFC’s reporting threshold of 25,000t CO_2e per annum, and it is unlikely that the company’s planned expansion will exceed this threshold.

Water: The ESIA describes the design of a conventional medium pressure water reticulation network, where the Project will install a 110mm diameter water connection onto the existing 160mm diameter water mains (supplying water from the Lusaka Water and Sewerage Company) to the east of the development. Water storage facilities (300,0000L) will be provided to boost water supply for fire-fighting as well as to alleviate water disruptions. Additional water will be supplied from a possible 3 boreholes (installed by the previous owner) to supplement interruptions in municipal supply. The borehole testing at all three showed that the water quality at two (old brick factory and old center) complied with WHO standards, but the borehole providing water to the filling station showed poor water quality and would need to be treated. Thus, a water quality monitoring plan will need to be implemented to ensure that the water supplementing municipal water to the Mall (particularly for cooking and hygiene purposes) remains potable. As the region has recently experienced the most severe drought in over a century, WMZL will submit a water quality and consumption management plan for the Project to mitigate future water scarcity in the region (ESAP #6). The water consumption for GNM is projected to be approximately 64 300 L/day (23,469,500 L per annum) pa), that is equivalent to 0.90 m³/m²/year, which is a typical value for shopping malls.

Sewerage/waste water: the EPC will construct a pump station on the Mall site with a rising main. The rising main will pump in a southerly direction, parallel to the Great North Road, for approximately 550m to connect to the existing 160mm diameter sewer main (parallel to Kasangula road, gravitating in an easterly direction) toward the Lusaka sewerage treatment works, where the waste water will be treated. The estimated sewerage generation from ablution facilities within the Mall is estimated at 51 440 L/day (18,8MLpa). Waste water outlets arising from the kitchens of the Food Court restaurants will be fitted with grease traps before connecting them to the drainage system and/or the sewer reticulation system. Mall maintenance will be responsible for ensuring that these are cleaned weekly.

Waste management: As part of the ESIA approval, the ZEMA requires the company to implement a waste management plan to minimize, separate and dispose of waste appropriately during both construction and operational phases. During construction, the waste management plan will specify the following: collection and disposal of mobile sanitation units; collection and disposal of general waste at ZEMA approved disposal sites; transportation and disposal of building waste and rubble; and collection and disposal of used oils / lubricants. Restaurants, offices and shopping complexes generally do not give rise to hazardous or toxic wastes. The management of these waste categories are monitored by the local authorities and require manifestos, permitted/certified waste handlers and transporters.

During the operational phase, facilities will be provided by the Mall/center management for the separation of waste for recycling, and storage will be in enclosed and caged skips to prevent materials from being blown around or off the site. Waste will be collected regularly by an approved contractor for disposal in compliance with section 10 of SI No. 112 of 2013. Materials that cannot be recycled will be taken to council-designated landfills by certified municipal service providers. Waste volumes are not monitored at present. The primary generator of solid waste from shops and offices in the development will be waste packaging and delivery materials (e.g. cardboard and plastics) and waste paper. Shoppers will also generate litter. Mall management will undertake to train tenants and outsourced cleaning services on basic waste management and recycling, and the health and safety implications which may arise from poor housekeeping.

Storage and handling of hazardous substances: During construction, and due to the site’s close proximity to approved suppliers of fuel within the vicinity, the diesel for operation of plant equipment and machinery will not be stored on site. Diesel for the operation of machinery will be delivered to the site as and when required, and all routine maintenance of machinery will be carried out as per the contractor’s HSE Manual and in a designated area away from any surface and ground water sources.  During operations, diesel will be stored in two large generators (2x800kVA, and 1 x 600kVA) which may be classified as hazardous, however these are not stored for any extended period. Each generator is housed in a protective casing to prevent spillage, accidents or tampering, and a formal monitoring and maintenance plan is strictly adhered to and tracked by the Mall management. Before commissioning, the WMZL will confirm that all generators comply with the WBG EHS Guideline emission standards and the required approach to secondary containment of fuel storage tanks, if applicable (ESAP #7).

Pest management: Pest management (rodents, bird control, cockroaches, flies, and mosquitos) will be outsourced to a reputable pest control company. Before commissioning, the WMZL will confirm, in line with the ESMS and EHS monitoring plan (ESAP#1), that the pest management program is compliant with the WBG EHS Guidelines (specifically the usage of Class 1a and 1b Highly Hazardous substances).

Storm water management: The proposed storm water system will be designed to cater for both  minor and major storm water events and will be designed for low flows (1:5 year event) as well as high flows (1:50 year event). The system will consist of surface drainage to the northern boundary of the site, where the drainage will be split to the north eastern and north western corners respectively, towards the existing open earth channels. Where no channels exist, new channels will be created to cater for the calculated run-off. Upgrading of the existing channels will be undertaken where required.

Dust and Noise management: Dust suppression with water is of utmost importance during the construction phase, as there is a housing development on one boundary and a hospital on another which will be adversely impacted. On the day of the site visit this was not being implemented and the dust levels were unacceptably high. This is one if the items to be enforced, as per the EPC’s EHS Handbook, and as per Novare’s ESG Policies. Noise during construction will be managed in accordance with the Zambian legislation, and as per the conditions of the ESIA (and Environmental Management Plan), embedded in the ZEMA permit. Acceptable levels of noise are regarded to be 40 dB(A) during the night and 55 dB(A)- during the day. Construction will take place during the day, and given the fact that the project area is already traversed by a busy road (Great North Road), noise from the site will pose little nuisance to the local communities.

Emergency Preparedness and Life and Fire Safety (L&FS): As indicated in PS1 there is a strong emphasis on Emergency Preparedness and Life and Fire Safety. Security and other employees operating in the Mall will be trained in First Aid; First Aid boxes, emergency procedures and phone numbers will be the responsibility of the Mall manager. Fire extinguishers and other equipment will be easily accessible by tenants of the stores; directional signage and evacuation points will be clearly marked for the public accessing the Mall. Before commissioning, a suitably qualified specialist will review the Project’s life and fire safety (L&FS) design to confirm compliance with L&FS requirements articulated in section 3.3 of the WBG General EHS Guidelines, which include compliance with local regulations and an internationally accepted L&FS standard (e.g. South African Standards) as per ESAP #8. In the event of the use of liquefied petroleum gas in the Project (e.g. for cooking food in the Food Court), the WMZL will confirm the design standards and protocols which will be applied to the storage of and use of LPG (this component is to be included in the independent LFS audit defined above).

Security Personnel: Novare employs reputable (registered) third-party companies for the security of their shopping malls. Personnel are accredited with the appropriate security association, are suitably trained, equipped, and identified by uniform and ID cards. They are unarmed and follow a Standard Operating Procedure prescribed by the company who employs them. Additional security measures also include security gates/booms; security lighting; 24 hour monitored CCTV cameras throughout the closed pedestrian walkways inside the Mall and at access points; clear signage; and access to armed police in the case of an emergency. Before commissioning of the Project, WMZL will design and implement an integrated Security Management Plan for the Mall to ensure ongoing safety and security of tenants and customers, the plan should consider the principles described in PS4. The plan should be aligned with the Emergency Preparedness Plan discussed in PS1 (EASP#9).

Traffic management: During construction, the increased number of construction vehicles accessing the site is likely to increase the risk of accidents.  Road signs will be erected on the Great North Road to indicate construction activities and, where necessary, there will be specific interventions using traffic management officers. To reduce the risk of collisions, due to reduced visibility, construction vehicles will have reflective marking and beacons, and the EPC will ensure that all construction vehicles respect traffic rules and where necessary, use reflective flags. The access point will have speed limit indicators of 20km/hour.

The Project (WMZL) has approval from the Zambian Roads Authority to finance road improvements on the Great North Road, in order to maintain the free flow of traffic (the Great North Road is currently a very busy single-lane road). The upgrade will include road widening to two lanes, two traffic roundabouts, and an intersection which will serve as the entrance to the mall and a bypass.  Adequate parking spaces will also be provided within the complex to discourage roadside parking.

A public consultation process is required as part of the Zambian ESIA Regulations, and were conducted and stakeholder consultations will continue throughout the implementation of the project (the ESIA has a record of public meetings and stakeholders that were consulted). There are various platforms through which the public can reach the company or have access to management, should they have questions, concerns or grievances. The most commonly used one is the Novare company website, Mall Management Office, and the facebook pages of anchor stores. WMZL does not have a specific stakeholder grievance procedure, which will be developed and applied to Mall operations, as ESAP #10.

Contact Person: Pieter de Wet

Physical Address: Plot 6458, Los Angeles Boulevard Road, Lusaka, PO Box 30279, Zambia

Postal address: Suite 510, 5th Floor Barkly Wharf, Le Caudan Waterfront, Port Louis, Mauritius

Email address: pieter@novare.com

Telephone no: +230 263 3062 or +27 21 914 3944