The land for the proposed facility is located on the Dhaka – Mymensingh highway distant from nearby residential communities. and No significant traffic related impacts are expected due to the proposed project. Unarmed security guards are employed at the existing facilities and similar security arrangements will be made for the proposed facility. The manufacturing process and related storage will not have any significant risks and impacts on the community health, safety and security, Therefore, PS4 is not applicable for this investment.

The land for the proposed facility has already been purchased by EKCL through willing buyer-willing seller transactions between 1996 and 2015. Plot-1 of the land (~12.62 acres) was purchased between 1996 and 2010 whereas the Plot-2 (~5.42 acres) was purchased between 2010 and 2015. The land is non-agricultural land and free from any settlers. Thus PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Also, the type of impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage) are not present as the land parcels are located in the well-developed peri-urban/industrial areas, and hence PS6-8 are not applicable.

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social (E&S) impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. 

Key E&S issues associated with this project include: company’s staffing, systems and procedures to assess and manage E&S risk and impacts of the project during both construction and operations; assurance of fair, safe and healthy working conditions in compliance with the local regulatory requirements and relevant Performance Standards during construction and operation of the proposed facility; resource efficiency of the operations (energy and water); monitoring and management of air emissions, wastewater treatment and discharge, solid waste disposal; life and fire safety management including emergency preparedness and response, structural and electrical safety for the existing and proposed facility, and engagement with the local communities and other stakeholders in compliance with PSs.

Environmental & Social Impact Assessment (ESIA): As per the requirements of the Bangladesh Environment Conservation Rules 1997 (ECR 1997), the company will ensure completion of an ESIA and Environmental and Social Management Plan (ESMP) as part of the process of obtaining the Environmental Clearance Certificate (ECC) for the proposed facility from the Department of Environment (DoE). The company will implement the ESMP for the facility as well as obtain other required EHS permits (factories license, fire no-objection certificate) as per the applicable requirements.

E&S Policy, Management Systems, Identification of Risks and Impacts: EKCL has Environmental as well as Occupational, Health and Safety (OHS) Policies. The company has implemented quality, environmental and OHS management systems as per the requirements of ISO 9001, ISO 14001 and OHSAS 18001, respectively.

EKCL also has a Business Social Compliance Initiative (BSCI) certification and has undergone SEDEX Members Ethical Trade Audit (SMETA) – a 4-pillar audit which covers Labor Standards, Health & Safety Standards, Environmental Standards and Business Ethics. Further, as EKCL supplies products to recognized global retailers (Bestseller, Next, Esprit, etc.) that require compliance with their respective supplier codes of conduct, the company’s procedures and systems are also reviewed during independent assessments required by the buyers against their requirements on fire safety, environment, OHS, labor and working conditions. The policies, procedures and compliance standards will also be similarly applied to the proposed facility. 

Organizational Capacity and Competency: Head of HR is overall responsible for managing the EHS issues and risks at EKCL and is also the Management Representative (MR) for the environment and OHS management systems. The Manager-Compliance who is responsible for implementation and monitoring of various compliance systems reports to Head-HR. The compliance team has two senior executives one of whom is responsible for training and documentation whereas the other is responsible for environmental and chemical related compliance matters. Additionally, there is a safety executive responsible for overseeing safety matters. To ensure labor compliance, HR team has 23 executives and eight welfare officers responsible for both the operating facilities. Similar team structure will be replicated at the proposed facility in due course.

Emergency preparedness and response: As discussed in the section on OHS under PS2 below, the visited facilities were noted to have fire detection and firefighting systems, which included centralized smoke detection and alarm, fire hydrant and fire extinguishers.

An emergency response plan was available for the visited facilities and the instructions are displayed at the entrance of various floors. The assembly points are generally identified and marked. At the visited facilities, emergency exits and evacuation routes were noted to be clearly marked and having a provision of emergency lighting. An occupational health center (OHC) is provided which has a nurse available 24 hours and doctor visits regularly. There is also an ambulance for medical emergencies.

Additionally, a number of workers are trained in fire safety and operation of fire safety equipment. Refresher courses on fire-fighting are run as part of the monthly training calendar. Regular mock drills are conducted to assess the preparation of the teams. The company does not report any major incidents/accidents in last 3 years.

The emergency response processes are also reviewed as part of the third-party compliance assessments of various buyers and Accord on Fire and Building Safety in Bangladesh (ACCORD). Similar emergency response infrastructure, documentation and training processes will be applied by the company to the proposed facility.

Monitoring and review: EKCL undergoes internal and external audits (by its own compliance teams as well as by third parties representing the buyers) and implements corrective measures as necessary. In addition, as explained in the section on OHS under PS2 below, the company records lost time accidents and incidents. The existing facilities have undergone independent structural, electrical and fire safety assessments and the corrective action plans are being implemented.

In addition to OHS, at the visited facilities, monitoring data was available for stack emissions, workplace air quality (for dust) and noise. Also, the effluent quality is regularly tested internally (as explained under PS3). However, there is no defined frequency for environmental monitoring. To strengthen the monitoring processes, as per the ESAP, the company will develop and implement a specific EHS monitoring procedure for the proposed facility which will; (a) specify key performance indicators (KPIs) on OHS (e.g., accidents, incidents, lost time injuries, first-aid cases), labor compliance, EHS training, energy efficiency along with the frequency of their monitoring; and (b) specify monitoring parameters (with applicable limits) and frequency for ambient air quality, stack emissions (from boiler, gas generators, back-up diesel generators), ambient noise, work area air quality and treated effluent quality monitoring in line with the applicable legal requirements as well as WBG EHS guidelines. Regular monitoring will be conducted as per the procedure at existing and proposed facilities and reports will be generated with a summary of these indicators vis-à-vis applicable requirements. Any corrective actions as required based on the monitoring results will be implemented.

Currently about 5800 employees work at EKCL, most of them in the cutting, knitting and stitching operations. Overall, the female employees form 46% of the workforce, however, in the stitching operations (accounting for about 2600 employees), the female employees constitute about 82% of the workforce. All the employees are employed directly by the company and there are no third party workers. For the proposed facility, EKCL expects hire an additional 8,000 workers with similar arrangements.

Human Resource (HR) Policies and Procedures, Working Conditions and Terms of Employment: EKCL has documented HR policies on recruitment, working hours and overtime, prohibition of child labor, forced labor, sexual harassment and abuse, non-discrimination, freedom of association, worker participation etc.

A written contract is signed with every worker at the time of employment. The contract describes the working conditions and terms of employment. Also, induction training is provided to new workers explaining the HR policies and procedures. The policies are also displayed on the notice boards at the entrance of various floors in local language. Monthly training programs on HR policies like grievance handling, leave, holiday and overtime, maternity leave and benefit, responsibilities of participation committee and harassment and abuse are also conducted. The same policies and procedures, which are consistent with local regulatory requirements and IFC PS2 requirements, will be implemented at the proposed facility.

Based on review of available wages and working hour records, all employees receive a salary above the minimum national wage and premium compensation for any overtime. The company has policies on working hours and working extra hours. The working hours at the existing facility need to be rationalized to align them with applicable limits and legal requirements. Accordingly, the company is working to develop a detailed plan to optimize their working hours. The company will share quarterly working hour updates with IFC. The company will also ensure through the HR policies and procedures for the new facility that the working hours at the proposed facility are aligned with the legal requirements from the start.

Non-discrimination and Equal Opportunity: EKCL has a documented non-discrimination policy. As mentioned above, the company’s workforce includes a significant proportion of women workers especially in stitching operations, and the workforce for the proposed facility will also include similar proportion of women workers. 

Freedom of Association: EKCL has a documented policy on freedom of association. Though the workforce is currently not unionized, a workers’ participation committee (WPC) has been formed at the facilities which has elected worker representatives. The committee meets on a regular basis to discuss issues related to workplace and improvement of facilities. A similar WPC will be formed at the proposed facility.

Prevention of Child Labor and Forced Labor: The company has documented policies for the prevention of child labor and forced labor. Accordingly, age proof documentation is collected at the time of recruitment of the worker and company employs workers above 18 years of age.

The company provides loans to its workers with repayment deductions from their salaries on monthly basis. As set forth in the ESAP, the company will document a loans policy which would specify the maximum amount to be given to any worker (with respect to the salary) and maximum reasonable deduction in line with the applicable labor law requirements. No cases of forced labor were noted during the appraisal.

Grievance mechanism: EKCL has a documented grievance policy. The same is also displayed at various locations in the facilities. Under the policy, the workers can raise their grievances either in verbal or written form. The verbal grievances can be raised through the immediate supervisor/admin department head and in case not resolved then through the Welfare Officer; whereas the written grievances can be submitted through the complaint/suggestion boxes. The procedure describes the process of resolution of the grievances and covers the aspect of confidentiality of the grievances.

Additionally, considering the significant workforce of women employees, the company has documented a harassment and abuse policy and also conducts regular awareness trainings on the same for workers and supervisors. However, the policy does not clearly specify the methods of investigation and resolution of such complaints. As set forth in the ESAP, the company will strengthen the policy implementation by specifying clear procedures of investigation and resolution of such complaints including specific provisions of anonymity for the complainant/victim and preventing any retribution against them. The same will be communicated in a refresher training for workers and supervisors.

Occupational Health and Safety (OHS): The company identifies machine specific safety risks. The risk assessment and safety instructions are displayed on the respective work areas. During the visit, knitting machines were noted to be adequately guarded and needle guards were also provided at the stitching machines. Training is provided to workers on usage of personal protective equipment (PPE) and usage of PPE was noted to be adequate (for example at the fabric cutting area, generator and boiler rooms, dispensing area for dyes and pigments). The visit did not indicate any unmitigated safety hazards. The compliance team of the facilities is responsible for routine inspections and monitoring.

The company records lost time accidents, however, there is no accident-incident investigation process. As set forth in the ESAP, the company will develop an accident-incident investigation process which will include identification of root cause analysis and documented corrective and preventive actions. The procedure will be implemented at the existing as well as proposed facilities.

The facilities also have a health and safety committee (having equal representation of workers and management) which meets regularly to discuss the OHS issues. Similar OHS systems and processes will be implemented at the proposed facility.

Regarding life and fire safety (L&FS), the visited EKCL facilities were noted to have fire detection and fire fighting systems included centralized smoke detection and alarm, fire hydrant and fire extinguishers. Being a high-rise building, the EKCL facility also has sprinklers throughout the building.

Both the existing facilities have undergone the structural, electrical and fire safety assessments conducted by ACCORD. As per the update from EKCL, most of the corrective actions have been completed except few which are in progress/to be verified by ACCORD and expected to be completed by June 2018. No fire incidents have been reported at the facilities. For the proposed facility, the company’s internal compliance team will coordinate with ACCORD and ensure that structural, electrical and fire safety designs are compliant with ACCORD standards. Any modifications suggested by the ACCORD will be included in the respective designs. In case external support is required, the company will hire consultants.

Third-party Workers: All workers are employed directly by EKCL. However, for the construction of the proposed facility, the company will hire construction contractors.

As set forth in the ESAP, the company will prepare an EHS manual for construction activities as well as a monitoring procedure and check-list which will include:

(i)            clear EHS and working conditions requirements (in line with IFC PSs and legal requirements) to be implemented at the site;

(ii)         clear roles and responsibilities of company and contractors’ personnel for implementation and monitoring on-site aligned with the ESIA and ESMP; 

(iii)       consequences of non-compliance for the contractors and their method of implementation; 

(iv)        requirements on labor law compliance including prevention of child labor;

(v)          labor camp guidelines in line with the IFC guidance note on workers’ accommodation; and

(vi)        construction management practices to minimize the impact on neighboring communities.

The manual will also describe specific processes on dust control and waste management. The clauses related to the EHS manual will be included in the contracts signed with the contractors to ensure that the contractors act in a manner consistent with the requirements of the PS2.

Workers’ Accommodation: No worker accommodation is provided at the existing facilities, however, a dormitory is proposed in the new facility designs. As set forth in the ESAP, the company will ensure that adequate facilities and amenities are provided in the labor accommodation including: adequate living/sleeping facilities and space per person; life and fire safety; potable water that meets national standards; toilets, washing and cleaning facilities; locker/storage facilities; and facilities for management and disposal of garbage, sewage and other waste.

Resource Efficiency:  For its existing processing operations, EKCL has undergone a CP assessment (in June 2015) as part of PaCT – an IFC Advisory program. The assessment identified several water and energy efficiency initiatives. Post the assessment, the company reports to have implemented metering systems (energy and water flow), waste heat recovery from boilers, water trigger nozzles to reduce wastage of water (for general cleaning) and other initiatives to recover yarn and fabric dyeing wastewater. The company is also currently reviewing zero liquid discharge (ZLD) discharge system i.e. tertiary wastewater treatment system to reuse wastewater. Also, the company is participating in zero discharge of hazardous chemicals (ZDHC) initiative of its buyers and has undertaken an efficiency study by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

The proposed facility will be a green building and company proposes to design and construct with the required resource efficiency features to meet the requirements of USGBC’s LEED Platinum certification.

Power Supply and Air emissions: At the existing facility, the main source of power are the gas generators. The facility has also provided diesel generators for power back-up and gas boilers (for generation of steam used in various operations). For Unit-1, the main source of power is grid electricity. For the proposed facility, the main source of power will be grid supply. Though the company has also applied for a natural gas connection and will install gas generators based on availability of gas. The other sources of air emissions will be the diesel generators and gas boilers.

The available emissions monitoring reports indicated compliance with the national standards as well as WBG General EHS Guidelines. However, currently the monitoring is not conducted regularly and no ambient air quality monitoring is conducted, therefore, as set forth in the ESAP, as part of the EHS monitoring programs (discussed above), the company will periodically monitor the stack emissions and ambient air quality to ensure compliance with the applicable national standards and/or WBG EHS guidelines. 

Water Supply and Effluent management: The main source of water at the existing facilities is the on-site borewells and the main water usage is for fabric and yarn processing. However, as the proposed facility will only have cutting, sewing and finishing operations with only limited printing operations, the main water usage for the proposed facility will be for domestic purposes. The source of water will be the on-site borewell. For drinking, the EKCL purchases packaged drinking water (in 20-liter jars) and similar arrangement will be continued at the proposed facility.

EKCL has provided an effluent treatment plant (ETP) (with a capacity of 100 m3/hour) at its existing facility. Based on preliminary assessment undertaken as part of the CP assessment, the ETP was reported to be needing additional capacity. The company will undertake an ETP efficiency assessment through an external consultant and, in case any remedial measures are required, the company will implement an improvement plan.  

The effluent quality from the ETP is tested internally on a daily basis except bio-chemical oxygen demand and chemical oxygen demand, which are tested once/twice a week. The results indicated compliance with the national standards as well as WBG EHS guidelines for Textiles Manufacturing.

A similar ETP with secondary treatment will be provided at the proposed facility.

Solid and Hazardous Waste: The main waste streams generated at the proposed facility will include packaging wastes (e.g., cartons, paper, and polyethylene), waste fabric, used oil and batteries (from diesel generators) and ETP sludge. At the existing facility, the ETP sludge is stored in a concrete pit as there are no centralized waste disposal facilities. The recyclable waste is sold to external agencies for recycling. Used batteries are exchanged at the time of purchase of new batteries. Similar processes will be implemented at the proposed facility. Further, as set forth in the ESAP, the company will prepare a waste management procedure with specific guidelines on storage, handling and disposal of waste streams expected to be generated at the proposed facility (especially hazardous waste).

Hazardous materials management: The hazardous materials stored at the facility will include pigments and chemicals (for printing) and diesel. EKCL has a chemical management system and standard operating procedure (SOP) for chemical storage and handling. The procedure covers instructions on labelling, storage, handling and mixing of chemicals. During the site visit, it was noted that the chemical storage area had secondary containment, labelling and material safety data sheets (MSDSs) displayed. The same systems and procedures will be implemented at the proposed facility.

Greenhouse Gas (GHG) Emissions: The GHG emissions at the proposed facility will be from consumption of electricity (from the grid) and fuels – natural gas and diesel.  The estimated GHG emissions from the facility operations are estimated to be approximately 58,000tons CO2/annum (28,000 tons direct and 30,000 tons indirect).

The company discloses sustainability related information to BSCI, IPE and ZDHC and is expecting to be a member of Higgs index, which is an apparel and footwear industry self-assessment standard for assessing E&S sustainability throughout the supply chain.

Also, as per the ESAP, the company will develop a community grievance mechanism for the existing and proposed facilities to receive and respond to grievances from the local communities.

The company will disclose this ESRS and ESAP locally at the following addresses:

 Proposed Facility

Esquire Knit and Composite Limited

Jamirdia, Valuka

Mymensingh.

Corporate Office

Esquire Knit and Composite Limited

Ideal Trade Center

102, Shaheed Tajuddin Ahmed Sarani

Tejgaon I/A, Dhaka – 1208.

All inquiries and comments on the project may be directed to:

Mr. Kamal Munasinghe

CEO - Textile Division

Ideal Trade Center

102, Shaheed Tajuddin Ahmed Sarani