PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage are not applicable to this project, for the following reasons: Haid Intl has been buying existing feed mills from other mill operators located in industrial parks and plan to continue to do so for future expansion needs. For the new mill under construction and the new fish/shrimp hatcheries to be built in India, the company either leased the land from a state industrial park or purchased existing agriculture land on a willing-buyer-willing seller basis. Haid Intl is not directly involved in agricultural primary production. There are no indigenous people within the project’s area of influence who might be negatively affected by the project therefore PS7 is not applicable. No known cultural artifacts and/or property was identified as being impacted by the project’s operational footprint in a manner which would trigger PS8.

The Project has limited potential adverse E&S impacts. The main E&S risks and issues include the management of solid and liquid wastes and air emissions; resource efficiency; assurance of fair, safe and healthy working conditions for all workers during construction and operations; and sustainable management of living natural resources related to the supply chain of fish and shrimp feed. All these risks can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. As such, this project is classified as a Category B project per IFC's Policy on Environmental and Social Sustainability.

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, 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.

Environmental and Social Policies : Haid Intl presently doesn't have an E&S policy. As required in PS1, the company will establish an overarching policy that defines its environmental and social objectives and provides a framework for the assessment and management of risks and impacts as part of their ESMS. Policies will be available on its website ( http://www.shenglongbt.com/en ) and posted throughout its operations. This is addressed in the Environmental and Social Action Plan (ESAP) under ESAP item #1.

E&S Risks Identification and Assessment:  Following Vietnamese regulatory requirements, Haid Intl hired a consulting firm to conduct an Environmental Impact Assessment (EIA) prior to its operations. Based on the EIA report, an environmental monitoring plan was developed and quarterly reports have been carried out following the requirement of the environmental license approved. IFC reviewed sample monitoring reports from 2016 and found that environmental issues related to dust, odor, noise, air emissions, and solid and liquid wastes, typical of an aqua feed mill operation, were properly identified and monitored, and mitigation measures put in place. In India, Haid Intl has received consents from the State Pollution Control Board to establish its operation and to implement specific environmental mitigation measures (bag filter with stack for air emission from the boiler, acoustic enclosures for noise, sewage and effluent treatment plants for wastewater, etc.). The operations of the new mill will only start after the State Pollution Control Board inspects and verifies that the prescribed environmental conditions are met. 

Management programs, organizational capacity and competency:  Haid Intl currently doesn't have an integrated environmental, social and occupational health and safety (ESHS) management system and program, although elements of such a system are present and managed by different parts of the company management team, including operations (related to environmental monitoring, and OHS) and Human Resources (HR) (related to labor and working conditions). In addition, through various certification process, including ISO 22000: 2005 for food safety management, Hazard Analysis and Critical Control Points (HACCP, for aquatic feed processing and cold storage services provision), GlobalGAP (Compound Feed Manufacturing), and Best Aquaculture Practice (BAP, for feed mill), the company has established a functional system encompassing most of the ESHS aspects required by PS1 with procedures in place to monitor, report and control risks identified. Going forward, Haid Intl will be required to formalize an EHS system and program with focus on 1) installing organizational capacity and competency, including the appointment of an EHS officer to ensure EHS policy and procedures are implemented at all operations, especially at its Indian operations; 2) emergency preparedness and response. This will be addressed in ESAP #2 and 3. 

Emergency Preparedness and Response:  Haid Intl currently doesn't have an emergency preparedness and response plan, besides some provisions for fire hazard such as sprinklers, extinguishers, smoke detectors and fire drills. Going forward Haid Intl will develop an emergency preparedness and response plan as part of the ESMS, covering all emergencies including fire, explosion, flooding and chemical spills that are common in its geographic location for a feed mill operation. This will be addressed in ESAP #3. 

Monitoring and Review:  As mentioned in the E&S risks identification and assessment section, Haid Intl conducts regular environmental monitoring (through retaining the service of a consulting firm) and sends quarterly reports to the local authority at the industrial park. The parameters monitored include: raw material input and resources consumption, nature and quantities of liquid waste, solid wastes and hazard wastes, noise level as well as workplace air quality, and air emission level at the boiler exhaust pipe. On OHS, Haid Intl keeps records of workplace accident/incidents, although no loss of time was recorded. This will be further discussed in relevant PS2 section.

Supply Chain Risk and Assessment and Management:  fishmeal and fish oil are key ingredients of aqua feed, accounting for approximately 20% of feed raw materials used at Haid Intl's Vietnamese operations. The raw material procurement is centralized at headquarter level. Haid Intl consumes about 20,000 MT fishmeal a year for its Vietnamese aqua feed operation, with ¾ of these sourced from Vietnam and India, and the rest from South America and West Africa. In addition, they use 2400 MT fish oil with ¾ sourced from Vietnam, China and India, and the rest from Chile. Haid Intl has a procurement policy stating its commitment to purchase only from legal and environmentally responsible sources. It is GlobalGap and BAP certified for its Vietnamese operations, and currently participates in a Fishery Improvement Project (FIP) in Vietnam that aims to have local fisheries involved reach 100% compliance with International Fishmeal and Fish Oil Organization Responsible Supply (IFFO RS) requirements by 2022.

To ensure that the risks related to its supply chain be effectively managed in the face of the planned expansion, Haid Intl will be required to obtain credible certification to standards pertaining to sustainable management of living natural resources for its Indian operations. This will be addressed in ESAP #4. 

Human Resources Policy and Management: Haid Intl currently employs a total of 839 workers in Vietnam, with 74% being male, and 26% being female. All employees are directly hired by the company and there are no contractors or temporary workers. Most of the workers are local Vietnamese, with the management team and some senior technical leaders being from Taiwan and mainland China. Indian operation currently has a total of 63 employees with11 hired recently and on their 3-month probation phase. With the planned expansion, Haid Intl expects to add 132 new hires in Vietnam and 144 in India. 

In accordance with Vietnamese labor code , Haid Intl entered a Collective Labor Agreement (CLA) signed by the CEO of the company (as the representative of the employer) and the union chairwoman (as the representative of the workers). The CLA, dated May 2015 and in both Vietnamese and Chinese, serves as the written Human Resources (HR) policy and contract between Haid Intl and its employees. IFC reviewed this document, and found it in compliance with Vietnamese Labor Law (i.e., Labor Code adopted by the National Assembly of Vietnam on June 23, 1994, and subsequently amended in 2002 and 2006), and largely consistent with the requirements of PS2. It covers the following: 1) working conditions and labor contract, including probation and termination of contract; 2) hours of work including overtime arrangements, leaves and absence from work; 3) wages, including minimum wage, subsidies, bonus and deductions; 4) social benefits and labor protection, including health insurance, unemployment insurance and pension; 5) disciplinary procedures; and 6) labor dispute settlement procedures. Where a specific issue is not explicitly mentioned in the CLA, it defers to the provisions of the Labor Law. These include aspects such as the minimum working age, non-discrimination/equal pay, and workers' rights to unionize, collectively bargain and to strike. 

The review of HR policies for Indian operations found similar provisions in leaves, hours of work including overtime arrangement, terms of termination including severance pay, performance review, pension, and labor dispute resolution processes. However, these policies lack coherence and some of them lack clarity as well. Going forward, Haid Intl will be required to form a group HR policy stating its commitment to adherence to national labor laws where it operates and its commitment to IFC Performance Standards on Labor and Working Conditions. It will formalize its HR policies and management in India. This will be addressed in ESAP #5. 

Haid Intl provides accommodation services for workers including cafeteria and dormitories at its operations in Vietnam. During the site visit the cafeteria was observed to be clean and in good order, and the dormitories met PS2 requirements (2-4 persons a room with separate bed, shared toilet and provisions of hot water, with air conditioning and fan, and areas to store personal belongings). There is also a medical clinic onsite staffed with a nurse. 

Workers' organization:  Vietnamese labor law protects the rights of employees to establish a union affiliated with the Vietnam General Confederation of Labor (VGCL), and mandates contribution from the company to support the union operations within the enterprise. Haid Intl has a labor union with voluntary participation from the workers, and with 58% of the workers being union member. The union represents workers in wage and other labor negotiations, organizes cultural and enrichment activities, and is part of the labor dispute resolution process. 

In India, the Trade Unions Act 1926 provides for formation and registration of trade unions. Workers have the right to form a union or refuse to be a member of any union. Currently there is no union in Haid's Indian operations. 

Grievance mechanism:  The CLA doesn't have any provision on this, except that “In the case of a labor dispute, (Haid Intl) will follow the procedures as stipulated in Chapter 14 of the Labor Code”. During the site visit, IFC was informed that there is a suggestion box next to the security guard at the company entrance, and there has been no suggestion received via the suggestion box to date. 

Going forward Haid Intl will be required to have a written procedure on an employee grievance mechanism and to communicate to all workers the existence of such a procedure. This will be addressed in ESAP #6. 

Protecting the Work Force:  The minimum working age in Vietnam is 15, and 14 for India. Haid Intl does not hire anyone under 18. 

Occupational Health and Safety (OHS):  The CLA recognizes that it's both the employer's and employees' responsibilities to follow the OHS procedures and to ensure the health and safety of workers. Haid Intl has standard operational procedures (SOPs) on OHS that are reviewed every three years. The procedures are based on an initial risk assessment and follow the hazard control hierarchy of elimination, substitution, engineering controls, administrative controls and personal protection equipment (PPE). Workers must go through pre-job training within the first 1 to 3 months and pass a vocational test before they can sign a formal labor contract with Haid Intl. Workers operating special machinery must possess appropriate job certificates and the company pays for them to attend annual refresher training. During the site visit it was observed that the safety procedures, instructions and signs were properly posted around the mill, the floors were kept clean and without obstruction, and no visible dust accumulation in the work area.

The company has a fire prevention committee and organizes fire drills once a year in collaboration with the local fire brigade. Fire extinguishers, sprinklers and fire detectors are properly located and regularly inspected with inspection records readily available. 

IFC reviewed the incident/accident records of Long An feed mill. Overall the lost time injury frequency rate is within industry average. In 2016 one workplace accident was reported in which one worker lost a finger because of not following safety procedures. Although an investigation was performed, corrective measures implemented only included posting safety instructions on the wall. The accident record only showed the loss in monetary terms (medical expenses and compensation paid to the worker involved in the accident), not in terms of time loss, suggesting that an improvement in accident/incident monitoring is needed. Going forward Haid Intl will be required to strengthen its OHS management and to follow international standards in accident/incident recording and monitoring. This will be addressed in ESAP #7. 

Noise/vibration, lighting level and ambient air quality are measured on a quarterly basis through the Environment Monitoring Report. Results from April 2016 monitoring report confirmed compliance with Vietnamese requirements and WHO Ambient Air Quality guidelines. 

Third party workers : OHS issues during the construction phase are well managed. For the construction of the new feed mill in India, the company required contractors to provide evidence of appropriate OHS performance to qualify for bidding. OHS requirements for contractors during the construction are clearly laid out and appended as part of the contract. These requirements included the following: nationally recognized qualification, fully developed OHS management system and site supervision management capacity and qualification, provision of safety awareness and Personal Protective Equipment (PPEs) as well as enforcing PPEs use and completion of the work on time with the required technical specifications. A 3 ^rd  party project supervisor is engaged to inspect both construction quality and contractors' adherence to OHS requirements. The company maintains an on-site presence. Detailed reports on work performed, including number of workers on site and video clip of construction site, are sent to the headquarter daily for close monitoring. 

Resource Efficiency:  All mills including the one under construction, are located in industrial parks, with electricity coming from the national grid. Backup diesel-powered generators are available onsite in case of power outrage. Boilers are fueled by biomass/rice husks at 8,000 metric tons a year. Annual electricity usage for 2016 was 18.3 million KWh for 210,000 metric tons (MT) of total feed produced, with specific energy consumption being 87 kw/MT.Diesel usage in 2016 was 11,000 liters. Diesel tanks at all mills are located in a separate and isolated building with controlled access. The company doesn't own any transportation fleet.  

Annual CO2-equivalent emissions from electric energy consumption and direct fuel use for all operations are therefore estimated at 17,391 metric tons (MT) a year (2016). 

Pollution prevention: T he main environmental risks associated with aqua feed mill operations are related to dust, odor, and noise. All these can be mitigated and controlled with good engineering design and by adopting best industry practices. For odor control, airflows from the dryer are treated with ozone reactor before they are discharged. For dust control, filtered ventilation and enclosed transport systems are utilized. To minimize noise, equipment is placed inside the production building with proper  isolation, and regularly checked and maintained. Dust and odor levels are regularly monitored in the quarterly Environmental Monitoring Report sent to the local authority. 

Air emission parameters of the boiler exhaust are regularly monitored in the quarterly report, and in compliance with Vietnamese regulatory requirements and World Bank EHS guideline levels. 

Water use and efficiency:  As feed mill operations is a dry process, water supply is mostly required for steam generation (cooking raw materials or conditioning feed) and sanitary purpose. Water volume is monitored and reported in the quarterly reports. Water usage in 2016 was reported at 89,000 m ³ . 

Wastewater treatment:  Wastewater generation mainly comes from boiler exhaust steam (estimated flow being 10 m ³ /week), domestic wastewater (3 m ³ /week), and production wastewater (13 m ³ /week). The feed mill at Long An has an onsite wastewater treatment facility for domestic wastewater. Results from effluents measurements demonstrate compliance with Vietnamese regulatory requirements and World Bank Group EHS guideline levels. All effluents are then collected in a retention pond to undergo a second treatment process at the Industrial Park treatment facility before discharging into surface waters. 

Management of solid and hazardous wastes: S olid wastes from Haid Intl's operations are categorized as the following: domestic waste (estimated in the quarterly report at 25kg/day), non-hazardous industrial waste including packing materials (estimated at 120 kg/month) and ash from the boiler (31245 kg/month). Hazardous wastes include grease wipes (1 kg/month), used fluorescent light bulbs (1 kg/month), used oils from machinery maintenance (20kg/month), lubricating oil (10 kg/month), and used print cartridge and batteries (1.5 kg/month). All wastes are collected and disposed of by licensed and qualified service providers.

Pest Management:  Haid Intl retains the service of a professional pest management company for rodents control. 

Community Health and Safety:  both existing mills and the feed mill under construction in India are in industrial parks. As such, there are no communities that may be adversely impacted by Haid Intl's operations. The Company doesn't own any transportation fleet and rents a parking lot in Long An Industrial park to ease the traffic flows to and from the mill.  

Security Personnel : Haid Intl hires a local licensed security agency for mill access control. The guards are not armed.

Stakeholder Engagement:  Haid Intl has identified its stakeholders and engages with these mainly through regular reporting to local authorities, through commercial activities with its distributors network, and through its extension services provided to farmers. Feed mills are in industrial parks with no residential community adjacent.Individual complaints, if any, from the public would be directed to the industrial park's management team, who in turn engages with the enterprises in the park and local authorities. Haid Intl has not received any complaints related to its operations to this date. It will analyse any complaints brought to the industrial park's management for its relevance and respond if relevant.

www.shenglongbt.com