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

Novare has secured the land for its project on a willing-buyer-willing-seller commercial basis, and has paid market-related rates, which were concluded amicably with no removal of tenants or persons using the land. 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 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 OHS management, especially during construction phases, as construction will be taking place while the existing mall will continue operations; (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) tenant management and outsourced services;
(vi) security arrangements; (vii) traffic safety and (viii) stakeholder communication and safety, particularly during construction.

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.

E&S Policy and Management Programs: Novare Equity Partners (NEP) 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, the 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 the NAPF II through the fund manager (i.e. Novare Fund Manager Limited (Mauritius). Postinvestment, 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 Twin Palms Mall was not required to submit a full Environmental and Social Impact Assessment (ESIA). Instead, an Environmental Brief was submitted for the extensions to the existing Mall development and achieved approval from the Zambia Environmental Management Agency (“ZEMA”) in April 2017. Subsequently, the Road Development Agency (“RDA”) has granted approval for traffic and road access; 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 are approved by Lusaka City Council (earthworks will commence in May 2018). The above approvals are for the entire project and not only first phase.

Organizational structure and capacity: NEP 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 Johannesburg) to implement the Environmental and Social Management System (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). The owner of the existing mall will be available to assist the Novare team during the transitional phase.

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#.

The EHS responsibilities of employees at the Twin Palms Mall will be supported by providing appropriate training, to include monitoring as well as the continual assessment of priority risks and impacts. During construction, 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. As Twin Palms will be extended while the current tenants are operating, this is of particular importance.

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 TPSM will develop and implement a comprehensive (site-specific) Emergency Preparedness and Life & Fire Safety Policy and Plan for the Mall. 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 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; a health and safety policy, 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 Novare 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 – a Project Manager, and a Country Manager. Indirect employment by the EPC contractor will be approximately 250 to 500 during peak periods (predominantly locally sourced male employees). It is anticipated that TPSM will create an additional 60 permanent jobs for Zambians indirectly, in addition to directly employing a permanent Centre 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., and TPSM has agreed to ensure compliance in future with Performance Standard 2 for third party contractors involved in facilities management, and ongoing regular services (operational phase). Equally, all contract or outsourced staff will be included in an induction session, with training on OHS, PPE, security, access control, appropriate behavior and emergency procedures, as well as access to a fair grievance procedure (ESAP #3).

Occupational Health and Safety (OHS): The ESMS includes a detailed Occupational Health and Safety Policy, which directs employees to nominated Novare Health and Safety representatives (H&SRep). 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 H&SRep will need to be appointed/selected for TPSM, 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&SRep, 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 will be provided with OHS training in accordance with the contractor’s Health, Environment and Safety Handbook, and personal protective equipment (PPE) is issued according to job profile. Due to the safety risks to tenants and retail customers which will be identified during the construction phase, TPSM will ensure that specific plans are in place to include: clear hazard signage which is very visible to all on site; screening/enclosure of work areas including a materials storage and safe loading area; dust suppression and dust barriers; certified scaffolding structures; strict access control; display emergency/life and fire safety procedures and emergency numbers, as well as channels for complaints/grievances/reporting of incidents; strict working hours and noise buffering. All aspects of OHS will be enforced by TPSM, 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 the Fund, via the TPSM management. The Center 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 lifethreatening 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 store. There will be two Gensets of 400 KVA each plus one of 600 KVA (paid and maintained by the anchor tenant). Before commissioning, the TPSM will confirm that all generators comply with the WBG EHS Guideline emission standards (ESAP #5).
Novare monitors its monthly fuel and electricity consumption which is projected, for this project, to be within the range 326 000 kWh - 395 000 kWh per month. In Zambia, 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), the TPSM 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 #6).
Greenhouse gas emissions: The projected energy consumption for the Mall equates to approximately 1,546 tons of CO2e per annum. This is below IFC’s reporting threshold of 25,000t CO2e per annum, and it is unlikely that the company’s planned expansion will exceed this threshold.

Water: Water is supplied via a conventional water reticulation network, from the Lusaka Water and Sewerage Company. Water storage facilities (180,000 L) will be provided to boost water supply for fire-fighting as well as to alleviate water disruptions. Additional water will be supplied from 1 borehole (installed by the previous owner) to supplement interruptions in municipal supply. The borehole water tested showed that the water quality complies with WHO standards, with no need to be treated.
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, the TPSM will submit a water quality and consumption management plan for the Project to mitigate future water scarcity in the region (ESAP #7). The water consumption for TPM is projected to be 40,000L – 60,000L/day, depending on the season (14.6-21.9 ML pa).

Sewerage/waste water: A sewerage line has been installed by a USAID project, and will service the Mall and direct sewerage to the Lusaka sewerage treatment works. The estimated sewerage generation from ablution facilities within the Mall is estimated at 40,000 L/day (14,6MLpa). Restaurants, offices and shopping complexes generally do not give rise to hazardous or toxic wastes other than grease/fats. Waste water outlets arising from the kitchens of the Food Court restaurants will therefore be fitted with fat 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 (ESAP #8).

Waste management: As part of the ZEMA approval, the company is required 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; collection and disposal of used oils / lubricants.

During the operational phase, facilities will be provided by the Mall/center management for the separation of waste for recycling, and storage is currently in enclosed cages and skips to prevent materials from being blown around or off the site. 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. The management of these waste categories are monitored by the local authorities and require manifestos, permitted/certified waste handlers and transporters.

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. Mall management will 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. 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 TPSM will confirm that the above-ground diesel tank (capacity of 10,000L to 15,000L) which supplies the generators, is bunded and designed to comply with the WBG EHS General Guidelines (ESAP #9).

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 eastern boundary of the site, towards the existing storm water channels. Where no channels exist, new channels will be created to cater for the calculated runoff. 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 the existing retail shops and restaurants will continue to function which will be adversely impacted.
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 Environmental Management Plan, embedded in the Environmental Brief and the ZEMA permit. Acceptable levels of noise are regarded to be 45 dB(A) during the night and 50-85 dB(A)- during the day. The project area is surrounded by some busy roads, so noise from the site may pose little nuisance to the local communities, although construction vehicles may cause additional congestion.
Emergency Preparedness and Life and Fire Safety (LFS): As indicated in PS1 there is a strong emphasis on Emergency Preparedness and Life and Fire Safety. Before construction, all security personnel and other employees operating in the Mall will be trained in basic OHS, emergency evacuation, incident management and risk identification, First Aid, emergency procedures and phone numbers. 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 audit the Project’s life and fire safety (LFS) design to confirm compliance with IFC’s Life and Fire Safety requirements (South African standards) and the LFS requirements articulated in section 3.3 of the WBG General EHS Guidelines, as per ESAP #10. In the event of the use of liquefied petroleum gas in the Project (e.g. for cooking food in the Food Court), the TPSM 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). This is ESAP #11.

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 during construction will include security gates/booms; visible security personnel; security lighting; 24 hour monitored CCTV cameras throughout the pedestrian walkways inside the Mall and at access points; clear pedestrian signage and demarcation of construction areas; and access to armed police in the case of an emergency. Before commissioning of the Project, the TPSM will design and implement an integrated Security Management Plan for the Mall to ensure ongoing safety and security of tenants and customers, allied to the Emergency Preparedness Plan discussed in PS1 (EASP#12).  

Pest management: Pest management (rodents, bird control, cockroaches, flies, and mosquitos) will be outsourced to a reputable pest control company. Before commissioning, the TPSM will confirm that the pest management program is compliant with the WBG EHS Guidelines (specifically the usage of Class 1a and 1b Highly Hazardous substances) (ESAP #13).
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 all access roads bordering the site 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 use reflective flags. The access point will have speed limit indicators of 20Km/hour.

A public consultation process is required as part of the Zambian ESIA Regulations, and stakeholder consultations will continue throughout the implementation of the project (the Project will keep a record of consultations and meetings with stakeholders for the full duration of the construction phase). 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. The TPSM does not have a specific stakeholder grievance procedure, which will be developed and applied to Mall operations, as ESAP #14.

Contact Person: Pieter de Wet
Physical Address: Novare Fund Manager Limited, Perrieri Office Suites, C1-401, 4th Floor La Croisette,
Grand Baie, Mauritius
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 +230 5442 3911 or +27 21 914 3944.