The Tororo grinding plant site is 41 acres and was purchased in 2014 from seven families on willing buyer willing seller basis. The land is on plot 217, block 6 along Tororo - Mbale road. The land has been idle and was previously earmarked for agroforestry which failed. The neighborhood comprises plantation forest and a few residential settlements. The competitor’s Tororo cement plant is 6km from the site. The pozzolana mine site is 30 acres and was bought by NCCL from Kapchogo village in Kapchorwa, Uganda. The Nakuru grinding plant site in Kenya is 50 acres and is located northwest of Njoro Town along Nakuru – Eldoret Highway in Nakuru county. The site belongs to the sponsor who purchased the land on a willing buyer willing seller basis in 2016. The site location was originally zoned as agricultural but the sponsor obtained a change of use to industrial site. The second clinker line will be constructed next to the first clinker line within the existing Merrueshi Plant site. As no involuntary displacement was associated with any of the land required for the project, PS5: Land Acquisition and Involuntary Resettlement is not applicable.

PS6: Biodiversity Conservation and Sustainable Management of Living Resources does not apply. The grinding plants sites in Tororo and Nakuru were on plots that have previously been agricultural land so no vegetation or fauna of conservation interest were encountered. The pozzolana mine site in Kapchogo is located on a vacant site characterized by sparse vegetation, rocks and hilly terrain with the neighborhood hosting Tororo cement pozzolana quarry, Kyekwanda stream, a banana plantation and a few scattered homesteads. According to the Environmental Impact Assessment (EIA), the vegetation on the mine site serves no significant ecological value except for carbon sequestration, erosion control and a natural habitat for common small animals in the area such as snakes, squirrels and rats. Findings of the due diligence confirmed no presence of indigenous people or cultural heritage and hence PS7: Indigenous Peoples and PS8: Cultural Heritage do not apply.  

  This project involves construction of 2 grinding plants in Uganda and Kenya and one clinker line (with a roller press and 5,500 tons per day kiln) and 8 MW WHR based power plant next to the first clinker line in Merrueshi, Kenya. Grinding plants are relatively simple operations and do not present significant E&S issues. The clinker production facility is more complex, but will be part of an existing well-designed operation where its addition was already anticipated, and infrastructure to support it was included, when the first line was recently build. The project will therefore have potential limited adverse social or environmental impacts that are few in number, site-specific, largely reversible. The impacts can be avoided or mitigated by adhering to recognized international standards for design and operational performance of cement production plants in accordance with the World Bank Group (WBG) Environmental Health and Safety (EHS) guidelines for cement and lime manufacturing. Thus, this is a Category B project as per IFC’s Policy on Environmental and Social Sustainability.

Key E&S issues and risks related to this project include; the Company’s capacity to manage the social, environmental, health and safety performance of its employees and contractors in accordance with national requirements, IFC’s Performance Standards and good international industry practice as elaborated in the appropriate WBG EHS Guidelines. These requirements include: i) fair, safe and healthy working conditions during construction and operations for direct employees as well as for the contract workers; ii) proper handling of hazardous materials, and management of air emissions, wastewater, solid and hazardous waste during construction and operations; iii) proper management of the impacts of construction and operations on surrounding communities as necessary, as well as management of the potential impacts on those communities because of the influx of construction labor during construction; and iv) minimizing adverse impacts of construction and operations on the natural flora and fauna of the project area and surrounding habitat, including the adherence to continuously updated quarry management and rehabilitation plans.

In accordance with the national regulatory requirements, NCCL retained the services of environmental experts accredited to the National Environmental Management Authority (NEMA) Uganda in 2015 and NEMA Kenya in 2017 to undertake an Environmental Impact Assessment (EIA) for the grinding plants in Tororo and Nakuru respectively and the EIA for the pozzolana mine site in Kapchogo Village, Kapchorwa, Uganda in 2016. The EIA for the Tororo grinding plant and the pozzolana mine site was submitted to the respective NEMAs for approval in 2015 and 2016 respectively.

Human Resources Policies and Procedures

NCCL has Human Resource (HR) policy and procedures which are contained in the Employee Handbook. The company has a HR Manager assisted by assistant HR Managers for each plant to oversees and manage employee relations in accordance with the company policy and procedures. The employment terms and conditions stated in the handbook are in compliance with Kenyan labor laws and regulations. According to ESAP 6, the company will review and update the HR policies, procedures and employee handbook to cover Uganda operations as well as any changes that have occurred in Kenyan legislation since 2013 (when the manual was written). The company will appoint a HR officer or assistant to oversee employee relations for the Tororo grinding plant and the Kapchogo pozzolana mine site as well as the Nakuru grinding plant when commissioned.

Working Conditions and Terms of Employment

NCCL currently employ 689 staff (119 direct and 570 contract laborer). The Tororo plant plans to initially employ 150 staff upon commissioning and reduce the head count to approximately 140 staff once operations stabilize. The number of staff for the Nakuru site is estimated to be the same as Tororo during operations phase. Around 83% of the staff in Lukenya and Merrueshi are subcontracted from a labor contractor and carry out skilled, unskilled and general work. 

The full-time employees which comprise about 15% of the workforce hold employment contracts which are renewed periodically. The Contracts specify the terms of employment and employee working conditions (e.g., rights of the employees, training, remuneration, termination, working hours, allowances and compensation scheme, etc.) and benefits (e.g. loans, medical cover and insurance etc.). The contracts are consistent with host country national labor laws and aligned generally with the Internal Labor Organization (ILO).

Workers’ Organizations

NCCL has a collective bargaining agreement with the Kenya Quarry and Mining Union, which is renewed every two years which applies to NCCL workers are members of this union. The Company is also a member of the Federation of Kenya Employers, which ensures parity of wages and benefits within specific sectors among all member Companies. The Company is fully supportive of union representation and relations between management and union membership are positive. NCCL has no history of labor disputes. Similar arrangements are expected for the workers in Uganda.

Non-discrimination and Equal Opportunity

The Company is an equal opportunity employer and makes employment decisions on the basis of merit. The Company states in the HR handbook that it does not discriminate, and does not permit its employees to discriminate against other employees or applicants. Equal employment opportunity is extended to all persons in all aspects of the employer-employee relationship, including recruitment, hiring, upgrading, training, promotion, transfer, discipline, layoff, recall and termination. The Employment and labor laws in Kenya and Uganda prohibit discrimination in the workplace.

 Grievance Mechanism 

The company has an Employee Grievance Procedure as part of the HR policy. Any staff with a grievance writes to the HR Manager who discusses the complaint with the staff and either offers counseling or conflict resolution guidance. The procedure has established a mechanism where anonymous complaints can be submitted and resolved by management through suggestion boxes or secret box at strategic locations in the workplace. The company commits to immediate investigation of grievances whilst maintaining confidentiality to the extent possible. This procedure does not cover sub-contracted staff. NCCL will extend the grievance mechanism to the labor contractor and amend the contract to allow workers to access both the formal and anonymous complaints mechanism provided in NCCL’s HR Manual (ESAP 7).

Protecting the Work Force

Following the labor laws in Kenya and Uganda which prohibit child labor, the company does not employ young persons under the age of 18 years. The Employment Act in both countries also prohibits forced labor. Newly recruited staff undergo pre-employment medical examination and induction training prior to assignment of duties.

Occupational Health and Safety

 NCCL has a written safety and health policy and a policy on use of appropriate personal protective equipment (PPE policy), the implementation of which is the responsibility of the managers of each operational department. This responsibility extends to worker safety awareness and training, equipment maintenance, use of appropriate PPE by all operations employees and investigation of lost time incidents and near-misses to determine and take appropriate action to prevent their recurrence. NCCL through the Lukenya plant is developing a health and safety management system (HSMS) to formalize the OHS standards, guidelines and procedures of the company. Once completed in Q4-2018, the HSMS will be adopted by the Merrueshi and Tororo plants and the same will apply for the Nakuru grinding plant. 

In compliance with the OSHA laws, safety and health committees comprising NCCL management and workers have been established in Lukenya and Merrueshi plants. The committees conduct monthly inspections of the plants to identify workplace hazards and workers’ safety concerns, and to make recommendations for their redressal to management. The same requirements will apply to the Tororo and Nakuru plants. 

All new employees are provided a mandatory general safety induction and further briefed on risks associated with their particular area of operations. No worker is allowed to undertake any task for which he has not been trained. Material Safety Data Sheets are available and accessible to all workers handling hazardous chemicals and an emergency response plan for fires, explosions and collapse of structures is in place. All heavy equipment (e.g., cranes, gantries, boilers and air compression equipment) are inspected for integrity on an annual basis by the relevant regulatory agency.

The accident records and statistics for the last 3 calendar years indicate Lost Day Accidents per Million Man Hours worked (LDA/MMH) in the range of 10.4 – 10.8 for all NCCL facilities. This is considered high. The company has developed an annual OHS training program where a series of safety campaigns, training on incident prevention, reporting and investigation are planned. This is part of the company’s zero incident campaign and it is expected that the incidence rate will reduce significantly. Unfortunately, the clinker production plant experienced a maintenance procedure related accident that resulted in a fatality in early 2018. This accident has been thoroughly investigated, and it included a violation of entry rules. As a result, NCCL is currently carrying out a full series of extra accident prevention training programs for all workers on site. It is IFC evaluation that this accident type can be prevented with the training instigated by NCCL.

According to the national OSHA laws, all industrial units must submit annual inspections by a Health and Safety Advisor approved by the Directorate of Occupational Health and Safety Services (DOHSS), a division of the Kenyan Ministry of Labor. These statutory OHS audits and inspection includes measurement of workplace noise, illumination and air quality in various locations within the plant against threshold values established by the DOHSS, which are generally consistent with the WBG EHS Guidelines. Both Lukenya and Merrueshi plants had annual statutory health and safety audits in 2017.

Workers Engaged by Third Parties

83% of NCCL’s current workforce are sub-contracted or engaged by third parties. The HR department is responsible for ensuring the contracted firm meets the terms and conditions established under the national labor law and regulations and the company HR policies in the employment of their workers. Going forward, NCCL will develop and implement procedures for managing and monitoring the performance of third party contractors vis-à-vis local regulations and PS2 with well-defined roles and responsibilities and shall incorporate these requirements in contractual agreements with these labor contractors (ESAP 7) specifically with respect to PS2 for labor rights and duties as well as health & safety. 

Resource Efficiency

The existing Lukenya grinding plant, Merrueshi clinker production plant and the new grinding plants in Tororo and Nakuru have been designed for low energy consumption, good emission controls with continuous monitoring of key pollutant emissions (particulate, nitrogen oxides, and sulfur dioxide).

The new clinker line is expected to have a 6-stage preheater and achieve an energy efficiency of around 700kcal/kg clinker. This compares to the existing line 730-760 kcal/kg clinker efficiency, based on achieved and expected level after full stabilization of operation. The second line is also expected to achieve a power consumption in the order of 60kWh/t clinker (up to 7-8% better than the current clinker line). A further 35kWh/t cement is being used for grinding, packing, and other activities before the cement is ready for delivery.

The company will build a 8MW Waste Heat Recovery (WHR) based Power Generation unit and it is expected to generate about 25kWh/t clinker. The anticipated WHR unit will be the first of its kind in Kenya and will move NCCL to be a leader in climate responsibility for an African cement producer.

GHG Emissions

GHG emissions from the proposed clinker grinding facilities are limited to the indirect emissions caused by the electricity used at the facilities.  At the clinker manufacturing plant GHG emissions are related to both power production (captive power plant), grinding of raw materials, fuel burning in the kiln(s), and calcination release of CO2 during the production.

At project completion NCCL will have an estimated cement production of nearly 3.2M tons/year, and a minor sale of excess clinker. This will, including the emission contributions of the excess clinker sales and the CPP power production will result in a preliminary estimated total GHG emissions, as CO2 equivalent, just short of 2.1 M tons/year.

It must be noted that this is for the total NCCL group operations in both Kenya and Uganda for a total production and sale of about 3.2 M tons of cement per year. It is therefore a low emission, achieved by introducing the first two 6-stage preheater cement kilns in Kenya (one was part of the previous IFC investment package), introducing roller press grinding, installing a new Waste Heat Recovery for power generation covering both the existing kiln and the new kiln as part of this investment, and a low clinker to cement factor. With the clinker factor in the final cement expected to remain low in the order of 0.60-0.62 (due to product mix and improved cement quality), it is expected that the resulting cement under the Simba brand can achieve a very low unit CO2 emission of about 550 kg CO2eq/ton cement (due to the factors described earlier and by using electricity partly produced by the new Waste Heat Recovery for power generation system).

Air Emissions and Pollution Prevention

All electricity required for the grinding plant operations will be sourced from the national grid while the existing clinker plant has its own coal-fired 15 MW captive power plant. In addition, after commissioning of second kiln, 8MW (or 50 % of the new clinker plant’s additional power demand) will be met by WHR, using air-cooled condensers to minimize water consumption. Moreover, to meet any remaining electricity requirement after the expansion project, Merrueshi clinker plant is likely to be connected to the national grid (by installing a 36km transmission line). As such, the project does not envisage any further capacity expansion for its coal-fired captive power plant.

NCCL has installed dust control measures at Lukenya, Merrueshi and Tororo plants e.g., bag filters at materials transfer and loading points, covered raw materials storage areas, and covered conveyors. The installed filters are designed for maximum emissions of 30 mg particulate/Nm3 with pressure drop alarm systems to alert the plant operators when maintenance or replacement is required. The bag filters at Lukenya grinding plant were replaced in June 2017. The Merrueshi clinker production plant is using a mix of bag filters and electrostatic precipitators (ESP) as means of controlling dust emissions to within the World Bank Group guidelines of 30 mg/Nm3 and 50 mg/Nm3 respectively according to equipment types.

Community Health and Safety

The most significant adverse impact of the project for the local population will be the increase in road traffic on the Tororo-Mbale road in Uganda and the Nakuru – Eldoret Highway in Kenya. Both sites are located in peri-urban locations and the influx of truck drivers and transporters in the area may cause some social impacts to the community. NCCL has allocated land for truck parking for both Tororo and Nakuru sites. The Lukenya plant is developing a Transporters Management Program (TMP) which will be rolled out across all company operations including the Tororo and Nakuru grinding plants. To facilitate the development of the TMP for the new grinding plants, a supplementary site-specific Transport Planning study, and labor accommodation study for Tororo and Nakuru will be undertaken by NCCL (ESAP 9) and the recommendations included in the Transporter Management Program.

Security Personnel

NCCL has a workplace security policy which commits the company to providing a workplace that is free from acts of violence or threats of violence. In keeping with this commitment, the company has established a policy that provides zero tolerance for actual or threatened violence against co-workers, visitors, or any other persons who are either on their premises or have contact with employees in the course of their duties.

In addition, the company employs private security personnel at each site. All the sites including Tororo and Nakuru grinding plant sites are fenced with concrete walls and access is controlled via the gates. The security personnel are trained and vetted. Security personnel in Kenya are not armed however in Uganda, most security firms provide firearms to their personnel. In line with ESAP 10, the company will assess risks posed by its security arrangements to those within and outside the project sites and create a Security Management Plan (SMP), including a training module for management and security personnel at each location. This SMP shall be aligned with the Voluntary Principles on Security and Human Rights and with the requirements of Performance Standard 4 (paragraphs 12, 13 & 14).

As part of the EIA processes in Kenya and Uganda, public consultations were carried out with various stakeholders. Discussions were held with groups and individuals in the vicinity of the project sites, local government authorities, Government Departments and other interested parties. Concerns raised by those consulted included air quality impacts, pollution of land and water resources from solid and liquid waste disposal, noise and vibration, public health and safety, influx of strangers into the local community and traffic disruption. The Merrueshi plant has a community liaison officer who is responsible for continuous engagement and community relations.

The company, in line with the ESAP 11, will develop a Stakeholder Engagement Plan (SEP) for Tororo and Nakuru plants that identifies key stakeholders and provides a procedure for external communication. The SEP will include a grievance redress mechanism (GRM) to address any concerns that people living in the vicinity of the project may have. The main objective of the GRM will be to provide a mechanism to mediate concerns. The SEP will be reviewed periodically during implementation and will be updated as necessary to ensure effective ongoing engagement with stakeholders. Appropriate channels will be used to inform the stakeholders of project issues and will be part of the SEP.

Mayuram S Sriram

Group Finance Director

Devki Group of Companies

Off Thika Road, RuiruTown

P.O. Box 33319, Nairobi 00600, Kenya

DL: +254 756 020 157, Mob +254 733 330 025

Email: cfo@devkisteel.com