The land required for the project (about 28,300 sqm) is leased from the Thilawa SEZ authorities, located in Zone A of the SEZ, spread over about 400 hectares which became operational in 2015. The land occupied by Metro Myanmar is less than 1 percent of the total SEZ area.

Acquisition of Zone A land was undertaken by the SEZ Authorities, with the actual detailed measurement surveys as part of the SEZ’s Resettlement Work Plan (RWP) commencing in June 2013 i.e. about 5 years prior to Metro’s planned leasing of land for this project and before the Metro project was conceived. At that time, Zone A land acquisition affected a total of 81 households (of which 65 households physically displaced, and 16 households economically displaced). The RWP was drafted in accordance with the Japan International Cooperation Agency (JICA) requirements.

As per the RWP, the PAPs were provided with compensation and livelihood support assistances that included: (i) a replacement land plot in the new place; (ii) replacement housing of better condition than PAPs’ original houses; (iii) cash assistance for crop losses; (iv) another cash payout equaling 6 years’ worth of prevailing crop value; (v) additional cash assistance for vulnerable groups (such as elderly people, students, widows, etc.); (vi) a relocation transition allowance payment; and (vii) preferential recruitment of PAPs for SEZ jobs.

As of now, physically displaced PAPs have moved into replacement housing units, and the income restoration program has been implemented for several years. In order to track the progress of RWP implementation, the SEZ authorities conducted three sets of socio-economic-surveys (SES) and has published results on its website. Key findings from the third SES (dated October 2016) were as follows: (i) 99% of surveyed PAPs had formal or informal employment; (ii) compared to the pre-RWP baseline level, the annual average income of PAPs have increased by 62.8% at the time of the 3rd SES; (iii) the level of indebtedness among PAPs have been reduced substantively between the time of the 1st and 3rd SES; (iv) there has been a notable increase in movable assets owned by PAPs; (v) as reported by PAPs, there has been continued improvement in housing condition, toiletry facilities, access to water, and local road conditions, and all PAPs have access to electricity; (vi) a very high (94%) level of sense of security reported by PAPs at their replacement houses reflected security of tenure. The SEZ Authorities have also been conducting regular local stakeholder engagement activities, and stakeholder feedback are taken into account in RWP and income restoration program implementation and improvement.

Based on the above, IFC concludes that Zone A resettlement and land acquisition has been conducted in a robust manner, and the livelihoods of PAPs have been restored. This is in view of the fact that land acquisition impacts from the Metro project on Zone A PAPs were indirect, transpired in 2013 i.e. several years before the Metro project was conceived, and the Metro project footprint takes up less than 1 percent of the Zone A area.

The project site is in a highly industrial peri-urban area. No new adverse impacts related to biodiversity, sustainable natural resource management or Indigenous People are expected. Similarly, no evidence of the presence of any cultural heritage was identified. Accordingly, the findings of the project review indicate that there are no impacts related to Biodiversity Conservation and Natural Resources Management (PS6), Indigenous Peoples (PS7) or Cultural Heritage (PS8).

Environmental and Social Assessment and Management System

As articulated by its management board, Metro aspires to create added value for its customers while also caring for the environment. To accomplish this, the theme of sustainability is anchored in its policies, guidelines, and operational procedures. Sustainability management is also closely connected with Metro’s risk and opportunity management by systematically identifying, assessing and controlling potential risks due to deviations from sustainability targets and opportunities.

Accordingly, policies and procedures, manuals and operational guidelines have been developed to guide the operational, food safety and sustainability issues. Extensive organizational structure of trained professionals has been put in place for day to day operations at the store level, backed by a robust monitoring and reporting framework.

Through the visits to the operational store and as reported in the Metro Group’s Corporate Responsibility Reports, it was evident that sustainability has been well internalized in the day to day operations; and the company has been making concerted efforts across the business lines worldwide, to continually improve its operational and sustainability metrics. Some of these management programs related to resource efficiency have been further discussed under PS3 sections.

The company, and the project in Myanmar is being developed as per these management systems’ requirements and the necessary documentation is being developed and customized for the local situation in Myanmar (and in local language as needed). The same will be implemented for all the elements of the project, as the project becomes operational.

Policy

As part of its sustainability efforts, Metro has developed a suite of policies to meet the different requirements of its business lines, operations, stakeholders as well as international standards it subscribes to.

Metro Environmental Policy serves as a framework for all its sales lines; accordingly, specific measures and programs will be implemented by the sales lines independently according to their business relevance. Metro expects other stakeholders including its partners and suppliers to act in accordance with this policy.

The suite of other policies and related documents include:

• Human Rights Policy
• Policy for Social Standards
• Business Principles
• Metros carbon footprint - Methodology
• Code of Conduct for Business Partner
• Policy for Sustainable Sourcing
• Approach for Sourcing of Agricultural Raw Materials,
• Principles on Fair Working Conditions & Social Partnership
• BSCI Code of Conduct 2014
• Metro Cage free egg Policy
• Procurement Policy for Sustainable Fish Purchasing
• Health Nutrition Policy
• Purchasing Policy for Palm Oil
• Packaging Policy
• Position on Genetically Modified Organisms (GMOs)
• Metro Cash & Carry Quality Policy

These requirements (and policies) are developed based on materiality assessment, and the progress against these is reported through the Corporate Responsibility Report.

The proposed project in Myanmar will be developed within the responsibility framework, defined by the above policies and management systems, including the reporting mechanisms.

Identification of Risks and Impacts

Over the years Metro has expanded its operations in more than 25 countries. Based on this extensive experience, and in the spirit of continual improvement, Metro has developed standard operating procedures for screening risks and impacts for its new developments. This covers financial, E&S, regulatory, market, supply chain and food safety issues as part of the risk and opportunities framework described earlier.

For the proposed project in Myanmar, in addition to an extensive internal vetting process, the company, developed an Environmental Conservation and Prevention Plan as part of Thilawa SEZ’s internal single window approval process. This plan presents the site-specific E&S impacts of the project and the proposed mitigation measures and other requirements specific to the operations of the business. The company will conduct studies and management plans for the warehouses and docking platforms, if/as required by the local regulatory requirements.

Supply Chain

In 2013, Metro introduced a Policy for Sustainable Sourcing  and in 2015, Environmental Guidelines, which apply to all own brand food and non-food products and cover all steps in the supply chain (Tier1, Tier 2 and all prior process steps). Further, Metro Code of Conduct for Business Partners sets forth the fundamental key principles it expects its business partners and their subcontracted companies to adhere to, and covers issues such as: human rights, labor (no child/forced labor, non-discrimination, freedom of association, safe and fair working conditions), environment, and business principles (Anti-corruption & bribery, Antitrust & competition).

To ensure the compliance with fundamental social principles, Metro was involved in the founding of the Business Social Compliance Initiative (BSCI) in 2004 – which is a leading supply chain management system that supports companies to drive social compliance and improvements within the factories and farms in their global supply chains. BSCI applies the principle international labour standards protecting workers’ rights such as International Labor Organization (ILO) conventions and declarations, the United Nations (UN) Guiding Principles on Business and Human Rights and guidelines for multinational enterprises of the Organization for Economic Co-operation and Development (OECD). Metro is striving to adhere to the Guiding Principles in the supply chain in its operations across the world.

Metro’s umbrella policies and principles are further elaborated by product and commodity specific guidelines and standards, viz.:

• Meat, poultry and eggs; Animal welfare: Cage free egg policy,

• Fish and seafood: Procurement Policy for Sustainable Fish Purchasing
• Palm oil: Purchasing Policy for Palm Oil
• Fruit & Vegetables
• Soy
• Cocoa

Metro Myanmar has started registering the suppliers in preparation for its October 2018 launch. Metro Myanmar will have its staff on the ground to monitor the suppliers vis-à-vis its quality, food safety and sustainability requirements. 

Organizational Capacity and Competency

At the corporate level, Sustainability Board provides the strategic direction for the group’s sustainability agenda, and relevant performance targets. The Board consists of the director responsible for sustainability, the CEOs of the sales lines and the sustainability managers from Metro AG and the sales lines. The sustainability managers are responsible for making sure that sustainability is integrated into the business at the level of the sales lines and the group. This is done by rolling out this concept in the various corporate divisions and taking it into account during decision-making.

The Roundtable on Corporate Responsibility acts as an interface between the strategic and operational dimensions of sustainability. This body prepares decisions to be approved by the Sustainability Board and coordinates the action plans for the individual sales lines that contributes to achieving Metro’s sustainability targets.

The sales lines are responsible for defining specific targets and measures at the operational level, acting on them in day-to-day business and ensuring that goals are met in a sustained fashion. They inform the Sustainability Board about their progress via the round table.

As the project becomes operational, the company and its organization structure will become an integral part of the Metro’s sustainability organization.

Emergency Preparedness and Response

All Metro facilities (stores, warehouses, transport infrastructure) are required to comply with Metro’s stringent operational and design requirements, where safety and security aspects are of prime importance at every stage.

Accordingly, the warehouse under construction in Thilawa SEZ is being designed and built with the highest standards of safety, following the Singapore life and fire safety code. Once the facility becomes operational, training of its employees in emergency response and regular emergency response drills will be conducted as per Metro’s standard operational requirements. Relevant requirements will also apply to the LSPC and its staff working for Metro in warehouse as well as on the delivery vehicles.

Monitoring and Review

As part of its sustainability approach, Metro has developed a robust monitoring and review framework, taking into account its various requirements/commitments. This includes a range of key performance indicators (KPIs) developed as a result of a systematic materiality analysis including an extensive stakeholder survey, and taking into account the guidelines of the Global Reporting Initiative (GRI), the requirements of the Dow Jones Sustainability Index (DJSI), market research studies, UN Sustainable Development Goals, Metro’s existing strategies, commitments and policies as well as competitors’ materiality analyses.

These KPIs provide information about Metro’s sustainability performance i.e. economic performance, staff-related KPIs, key indicators regarding the “sustainable operations” area of responsibility, which covers the responsible use of resources, key indicators for the “sustainable procurement and assortment” area of responsibility, and KPIs on sustainable consumption. Metro regularly publishes these KPIs through its sustainability report and also through its corporate website:
http://reports.metrogroup.de/2015-2016/corporate-responsibility-report/key-performance-indicators-and-goals/key-performance-indicators.html.

Once the project is operational, Metro Myanmar will start monitoring the relevant KPIs for its operations, according to Metro’s monitoring framework, and shall report to Metro for compilation, internal benchmarking and public dissemination.

In addition, Metro operates based on a large number of legal provisions and self-imposed standards of conduct. Since 2007, it passed a group-wide Compliance Program to ensure compliance with these rules in its day-to-day business practice. The program draws together all the measures needed for compliance with the rules. Implementation of the compliance measures is coordinated by Metro’s Compliance Officers; and is also audited by external auditors, with the results disclosed publicly.

Working Conditions and Management of Worker Relationship

Metro’s Principles on Fair Working Conditions and Social Partnership apply to all employees who work in or on behalf of any Metro company worldwide. Through these principles Metro commits itself to fair and just working conditions around the world, including the fundamental principles of the ILO: Freedom of Association and the right to collective bargaining; Elimination of all forms of forced or compulsory labour and disciplinary measure; and Abolition of child labour. It also articulates Metro’s principles related to remuneration, working hours and workplace health and safety.

Following the decentralized management model of the group, the local management is responsible for the social dialogue with the employees and employees’ representatives, and ensuring fair working conditions in each country within the scope of these principles.

Metro has entered into an agreement with Uni Global Union (formerly Union Network International - a global union federation for skills and services, gathering national and regional trade unions) wherein Metro acknowledges the worker’s rights to union membership and collective bargaining. Further, as per this agreement, Metro and Uni Global Union management representatives enter into a structured dialogue every year; and maintain close communication on an ongoing basis.

The Project is expected to create more than 200 jobs during operations as well as many indirect jobs in the services sector. A formal organizational structure with job levels and rewards structure has been developed for Metro Myanmar, which is benchmarked with the local market in Myanmar by an international HR firm.

All employees are given 2 years term contract as per standard legal requirement, which can be renewed.

Building upon Metro’s global policies, guidelines and internal requirements, specific HR policies and procedures are being finalized by the company for the project in Myanmar. All policies and manuals to be made available in electronic form for all staff.

Grievance Mechanism

Metro has established a grievance mechanism and whistleblowing system as a part of Metro’s compliance system to receive reports about observed compliance violations within Metro Group (including any non-compliances and grievances related to HR matters). This system is accessible to Metro’s employees as well as external third parties, e.g. customers or business partners via internet. The system allows for the anonymous reporting of incidents, though Metro prefers reporting persons to identify themselves for fast and efficient handling of investigations. All reports are treated with the strictest confidentiality, and whistleblowers are protected as a matter of course.

In addition to Metro’s corporate level grievance / whistleblower mechanism, the company is also establishing a grievance mechanism for the project in Myanmar, which would also accept anonymous grievances and shall be available to the employees of the LSPC.

Workers Engaged by Third Parties

An international project management company (PMC) is responsible for managing and overseeing the construction of the warehouse. Metro Myanmar, through this company ensures that the contractors involved in the construction and equipment commissioning activities comply with all the applicable labor and safety standards on site. During the site visit, an excellent site management including a robust safety management was observed. There has not been any reportable accident during the construction, and there is no labor camp, as all the workers come from local areas.

As mentioned earlier, warehouse management and delivery services will be outsourced to the a LSPC, who will have about 140 of their staff working exclusively for Metro Myanmar on full time basis. While they will be employed by the LSPC, and will be subjected to its own HR policies and procedures, several specific requirements regarding labor law compliance and Metro’s Principles on Fair Working Conditions and Social Partnership are being included in the contractual agreements. Moreover, benefits are being aligned for Metro Myanmar’s own staff and the LSPC’s staff working for the company. As mentioned earlier, the employees of the LSPC will have access to Metro’s and Metro Myanmar’s grievance mechanisms.

GHG Emissions and Resource Efficiency

Metro established its climate protection target to reduce core CO2 emissions on group level by 20% compared to its 2011 levels by 2020. However, it was already achieved in 2015; and hence, Metro as per its revised targets, plans to achieve the reduction of core CO2 emissions on group level by 50% compared to 2011 levels (i.e. reduction from 330 kg CO2e/m2 in 2011 to 165 kg CO2e/m2 in 2030).

To achieve the target, Metro is working on the following four areas:

-          Reduction in electricity consumption compared to the reference year 2011,

-          Reduction in climate-damaging refrigerant emissions by 95 per cent by 2030 compared to the reference year 2011 by using natural refrigerants,

-          Generation of renewable energy, for instance by using photovoltaic systems in wholesale and department stores, and

-          Implementation of certified energy management systems according to ISO 50001 or energy audits according to EN 16247 at all locations in the EU.

Metros carbon footprint methodology provides the standardized basis for its climate change related disclosures. With its comprehensive disclosure of data relating to climate change, GHG emissions and reduction efforts, Metro ranked among the top ten companies in the German-speaking region (Germany, Austria, Switzerland) in the climate performance ranking 2013 viz. "Climate Disclosure Leadership Index (CDLI) DACH" conducted by the independent international non-profit organization CDP.

For new stores and related facilities (such as warehouses) Metro has developed the sustainability catalogue which spells out minimum technical requirements that must be implemented by every store. The proposed project design is thus aligned with corporate resource efficiency requirements and targets, and will be developed in accordance with GIIP. Moreover, as per Metro’s carbon disclosure requirements, the company will calculate the GHG emissions annually for reporting to Metro and other external stakeholders.

For the proposed project in Myanmar, GHG emissions will be dominated by electricity consumption for the operations (lighting, refrigeration and other utilities), with a small contribution from fugitive refrigerants. Considering project’s limited footprint (warehouse and satellite facilities), these emissions will be less than 25,000 tons of CO2e.

Pollution Prevention

Electricity and water for the project will be supplied by Thilawa SEZ. The water will be further treated in-house in the reverse osmosis (RO) based water purification system.

A total of about 30 cu.m./day wastewater is expected to be generated from the project once it is fully operational. This will include wastewater from the processing of ultra-fresh products, canteen, office and RO rejects. A biological wastewater treatment system is being installed at the central warehouse, which will comply with the discharge standards established by Thilawa SEZ management company, before discharging into the centralized sewage treatment system.

Other solid waste such as ultra-fresh processing waste, used paper, boxes, cartons and other domestic office waste will be disposed of through the waste management contractors and Thilawa SEZ as per the environmental permit conditions.

The fleet of distribution vehicles (mostly 2-ton trucks, both refrigerated and ambient) will be procured and managed by the LSPC as part of their services. All vehicles will be left hand drive brand-new Japanese marques that meet all ASEAN and Myanmar standards (regarding emissions as well as refrigerant use). The trucks will undergo regular preventive maintenance and monitoring of emissions to minimize the environmental impacts due to vehicular emissions.

Main component of the proposed project, the central warehouse, is located inside the Thilawa SEZ, surrounded by industrial and commercial installations and facilities; with restricted access to the public inside the SEZ. The nearest residential communities are several km away from the project.

The warehouse operation is quite low risk and will not involve storage or handling of any hazardous materials or such.

The warehouse will include three main areas of operations namely; (i) a refrigerated area for all in-bound and out-bound deliveries, (ii) meat, fish, and fruit & vegetables processing areas, and (iii) cold storage rooms for both chilled and frozen products. The warehouse has been designed as per Metro’s stringent requirements related to food safety, and hygiene and to avoid in cross-contamination. Strict access control procedure and protocols for storage and handling of products (including receiving raw materials and delivering products) will be in place, which will prevent any community exposure to diseases. A sophisticated monitoring system for warehouse operations will be implemented to ensure the food safety on an ongoing basis.

The company will deploy special vehicles for the delivery through the LSPC, mostly 2-ton trucks suitable for the Yangon traffic conditions, and the highest standards of transportation safety will be implemented by the LSPC for the delivery operation aided by sophisticated route planning software, GPS tracking and constant online monitoring of each vehicles, thus the transportation impacts due to the delivery operations are expected to be minimal.

As described earlier, Metro closely engages with its stakeholders in various ways; elaborate policies and procedures have been developed for the same. Under its responsibility and transparency framework, it extensively undertakes public disclosures related to sustainability issues through its corporate responsibility reports compliant with global reporting standards on its website, https://www.metroag.de/en/company/responsibility; where anyone can post any questions regarding sustainability and responsibility.

Contact Person:  Ms. Tipayarat Kaewsingarm (Director)

Company Name:  METRO Wholesale Myanmar Ltd

Address:   

Wing-B, Ground Floor, Building-A3

Star City, Kyaik Khauk Pagoda Road

Thanlyin 11291, Yangon, Myanmar

Email:

t.kaewsringarm@metro-wholesale.com