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: Social and Environmental Assessment and Management Systems;
PS2: Labor and Working Conditions;
PS3: Pollution Prevention and Abatement;
PS4: Community Health, Safety and Security;
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

PS5 on Land Acquisition and Involuntary Resettlement is not applicable to this proposed investment as there is no resettlement that has taken place with the newly acquired lands in Toushka. The lands were given to the company by the Government of Egypt (GoE) under a leasing agreement. The company is currently undertaking an assessment of the land provided under this agreement and has determined that it has no people leaving in the land, nor people making use of the land, nor people going through the land to access any type of resources. As part of this investment, the company will develop and implement a land acquisition procedure to ensure any newly acquired lands follows the requirements under PS5. As part of the initial assessment, no indigenous peoples nor cultural heritage have been identified in the areas to be developed or affected by the project; for this reason, PS7 and PS8 are not expected to be applicable. To ensure a systematic approach in future projects, the company will develop a Chance Finds Procedure for the identification of cultural/archeological resources in the area.

Environmental and Social Assessment and Management System.In order to respond to customer demands, the Wadi Group has adhered to different QHSE certification schemes. All of the group’s operations have obtained ISO 9001. In addition, 4 operations (Wadi Poultry, Wadi Feed, Wadi Food Industries, and Haditha) are OHSAS 18001 certified. Wadi Food Industries operations in Sadat City maintain Hazard Analysis and Critical Control Point (HACCP) and ISO 220000 certification for food safety. These certifications are audited on a bi-annual basis.

Since 2013, Wadi’s grape and olive farms obtained organic certification in accordance with European Standard EU 20092/91, which provides guidelines for all agriculture products imported into or grown in the European region in a bid to protect consumers from fraud. Additionally, Wadi has obtained National Organic Program (NOP) certification, which is under the direction of the Agricultural Marketing Service (AMS) of the United States Department of Agriculture (USDA) for grape and olive plantations. The NOP certification extends to two of their operations including Rula and Wadi Food Industries. Since 2010, Wadi is certified by the internationally accepted Good Agricultural Practices (Global GAP) program for its farms at Rula, given that a big percentage of its produce is exported to European markets.

Wadi will begin outsourcing much of its fresh produce and olive consumption from smallholders. In order to do so, they will implement a policy for smallholder farmers to grow agriculture products in accordance with Wadi certifications and standards. Implementation of this policy will be rolled out through a training program to smallholders in 2017. In accordance with the E&S Action Plan (ESAP), Wadi will establish a supply chain management system, including monitoring and traceability systems, to ensure compliance of suppliers with IFC supply chain requirements (ESAP #1). In addition, Wadi will certify all its farms by Global GAP within a scheduled time period, as well as ensure that all farms in its supply chain commit to a process to obtain Global GAP certification (ESAP #2). Trainings and workshops on the relevant international standards will be provided to all employees including suppliers.

Organizational Capacity and Competency. Wadi is undergoing a restructuring process which started in January 2017. Its Health, Safety and Environment (HSE) division and the Quality Assurance (QA) division merged in January 2017 to become the Quality, Health, Safety and Environment (QHSE) department. This Group level department is headed by a QHSE Manager based in their Headquarters, with a dedicated QHSE Manager for each business unit (poultry, processed foods, agriculture farms, feed mill, soybean crushing, etc.), as well as a QHSE Manager at each facility. Overall, the QHSE department has 42 dedicated staff across 3 business operations including the poultry, agro-food, and industrial sectors.

Identification of Risks and Impacts. Due to Wadi’s expansion projects both within Egypt and regionally, the client will strengthen its overall management system and include specific procedures to address the impacts and risks related to land acquisition, biodiversity, indigenous peoples, and cultural heritage aspects. As a first step, Wadi will update its QHSE policy and summarize its commitment to manage the additional E&S aspects highlighted above (ESAP #3). Specifically, Wadi will develop and implement an E&S assessment checklist to be performed upon entering into new investment/acquisition and/or future expansions (ESAP #4). The land acquisition procedure will include details regarding the risk assessment required, the stakeholder engagement to be undertaken and the mitigation measures to be implemented in case of new acquisition of land (ESAP #5). For cultural heritage, Wadi will develop and implement a chance finds procedure for new expansion projects (ESAP #6). Wadi will annually report the E&S performance of all operations through an Annual Monitoring Reports (AMR).

Monitoring and Review. As stated above the company maintains multiple certifications and has an exhaustive internal and external audit system. The company reports consolidated QHSE performance on a monthly basis, including Occupational, Health and Safety (OHS) statistics, as well as water and energy consumption, waste generation, and food safety compliance. On a quarterly basis these information is reviewed and actions taken by senior management and the QHSE management team. As an IFC repeat investment, Wadi has a wellestablished Environmental and Social Management System (ESMS) in line with IFC’s PS1

Human Resources Policies and Procedures. Wadi is currently in the process of hiring a new HR Manager, as well as in the process of updating its employee handbook and HR policies and procedures. The current HR policies and procedures address the requirements under this performance standard. However, due to the outcome of an internal audit, Wadi decided to include additional details with regards to travel and accommodation policies. Wadi will implement these updated policies and procedures through broad communication and training to all workers. (ESAP #7).

Wadi currently employs 3034 workers on a full time basis, and 330 workers for casual/seasonal work (i.e. picking of agriculture products). 2% of these workers (62) are female and are all employed at Wadi headquarters. This constitutes a significantly lower percentage than the average 17% for female employment in the MENA region. Wadi management will explore alternatives to increase percentage of female employees at their operations, specifically at its packing facilities.

Working Conditions and Terms of Employment. Workers terms of employment have been reviewed for the previous projects and have been found to be in compliance with IFC PS2. Worker’s employed at broiler plants are accommodated on site for biosecurity reasons. Currently there are 6 worker accommodation sites which consists of housing units in close proximity to the plant. Wadi will undertake an assessment against the requirements of the IFC’s Worker Accommodation Guidelines and ensure that mitigation measures are implemented accordingly (ESAP #8).

Workers’ Organizations and grievance mechanism. Labor unions are present at two facilities in Noubariya (Wadi Foods and Wadi Feed), with approximately 210 members from the 701 total persons employed in Noubariya representing 30% of the total workforce at these facilities. Wadi is enhancing its workermanagement relationship through opening additional communications channels and improving its grievance mechanism with a new program entitled, “Come and we’ll listen to you”, which started as a focus group and on a quarterly basis allows worker representatives and management to address grievances. In addition, and on an annual basis, Wadi commissions a third party to undertake an employee engagement survey. The 2016 survey conducted by ‘Benchmark’ recorded an overall satisfaction index of 68 vs. a regional average of 77 (based on 56 studies in the Middle East and North Africa). Wadi scored above the regional average and has a key strength in the ‘direct management’ category and its significant area for improvement is in the ‘Job satisfaction’ category. This may be driven by the restructuring agenda that has been underway since 2014 and the accompanying uncertainty and changes in the day-to-day operations that usually impacts this category.

Resource Efficiency. Water consumption amounted to approximately 14,150,000 m3 in 2016 while energy consumption amounted to approximately 46,800,000 KWH in 2016, which has driven different programs to implement resource efficiency measures. With increasing oil prices, Wadi assessed different options, including solar powered pumping stations, to reduce its dependency on fuel and has decided to change its pumping stations from diesel to electrical power. By using electrical power stations, Wadi will reduce the cost of fuel by 50% as well as emissions. Conversion to electricity will be finalized at all operations by end of 2018.

Wadi is implementing a new IT system to support the Company’s program on resource efficiency and reduce energy and water consumption across its operations. The current annual target is to save 11.6 million Egyptian Pounds (EGP) in energy consumption at the farms and hatcheries, and 900,000 EGP in water consumption savings annually. If these targets are achieved, this IT system may be rolled out to all Wadi operations. This IT system is also a platform which allows clients, vendors, and regulators to access Wadi’s real-time data allowing better monitoring and reporting.

Pollution Prevention. The industrial plants are located in a designated industrial zone, and the agro-foods and poultry farms are located on farm lands where power, water and sewerage systems are provided by government utilities. The farm lands however have additional water sources from groundwater wells that are licensed by the Ministry of Water Resources and Irrigation (MWRI) for irrigation purposes. In addition, most facilities are equipped with standby diesel generators and two facilities have boilers. The company has provided recent air monitoring reports which indicate that all point source emissions comply with both Egyptian limits and IFC EHS guidelines. Fuel at all facilities is stored appropriately in shaded areas, and equipped with secondary containment structures in the event of a spill or leak.

Greenhouse Gases. GHG emissions from all Wadi facilities in Egypt amount to 54,532 tonnes CO2eq/yr, with 61% from Scope 1 emissions and 39% from Scope 2 emissions.

Water Consumption. On agricultural farms, Wadi uses groundwater wells for irrigation purposes. All wells have been provided with an extraction and use permit by the Ministry of Water Resources and Irrigation (MWRI). Level of extraction is monitored at each well through meters. Average irrigation needs vary from 8- 10 mm of water/day in winter to 12-13 mm of water/day in summer which is aligned with benchmarks for the sector. Pumping rates are usually around 120 m3/hr. Wadi uses drip irrigation systems at all its farms to optimize water use, as well as utilizing tents and covers were possible to retain humidity levels in plants and soil. Wadi monitors water irrigation levels and through the new IT system may begin monitoring soil moisture and temperature to optimize water use. Wadi uses a Reverse Osmosis (RO) desalination at its Wadi Natron facilities and uses this water for domestic uses and for poultry facilities. Potable water test results at Wadi Farms show water quality limits exceeding WBG/IFC EHS guidelines for total bacterial plate count, TDS, alkalinity, and coliform. As a result, Wadi will assess the root causes for the contamination and implement mitigation measures as required to meet IFC EHS guideline limits at all its facilities (ESAP #10).

Wadi Group will conduct a comprehensive assessment of water availability, quality and consumption patterns at all its operations including potential impacts of suppliers. This water baseline will allow for targeted water efficiency and mitigation measures. In addition, Wadi will establish a water monitoring program at all operations (ESAP #11). If water quality results are not in line with IFC EHS guideline limits, or availability levels are decreasing, Wadi will take specific actions and implement mitigation measures (ESAP #11).

Community Health and Safety. Wadi’s agro-industrial operations are predominantly situated on large plots of isolated land or in industrial parks (e.g. Sadat City) separated from residential communities. Wadi assesses the potential for community impacts associated with its ongoing operations on a regular basis, including consideration of infrastructure and equipment safety, and human exposure to animal diseases. Wadi has a continuous external communication procedures and communicates to communities the nature of the operations and pollution control mechanisms in place to avoid negative impacts to nearby community.

Biosecurity and physical security at Wadi’s poultry and farming operations is provided by unarmed employees. In accordance with accepted international good practice, Wadi’s biosecurity measures include vehicle and passenger shoe and hand disinfection at all points of entry and transfer points to individual farms to prevent the spread of microorganisms and release to non-farming areas. Wadi poultry operations are surrounded by physical barriers to prevent entrance of dogs and other animals.

Emergency Response and Preparedness. Wadi has developed and implemented its Emergency Response and Preparedness (ERP) plan at all its facilities. Fire drills are undertaken at all facilities 1 to 2 times a year. The corporate ERP plans and procedures cover all risks that may be present at its operations, including Avian Influenza, gas explosions, and life and fire safety