PS5: Land Acquisition and Involuntary Resettlement is not applicable as Pasabahce Egypt acquired an existing operational plant on a willing seller willing buyer basis. The land where the plant is located also includes an empty lot which can be used for any expansion in the future. The factory site is located in a well-developed industrial zone, which is a modified habitat for several years, and with no known cultural / historical heritage present, and no significant excavation work is expected. Thus PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources and PS8: Cultural Heritage do not apply. There are no indigenous people in Egypt thus PS7: Indigenous Peoples is not triggered.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability. Key E&S issues and risks associated with the proposed investment include enhancement of risk and impact analysis to cover all operations and activities, further improve E&S performance including lost time incidents and use of personal protective equipment and resource efficiency.

Environmental and Social Assessment and Management System and Policy:

As a long term IFC client, Sisecam has a corporate level E&S policy and a documented management system in line with IFC’s PS requirements. Pasabahce Egypt has adopted corporate level E&S policy to its operations and started development of the operational procedures, safe working instructions and emergency response plans. The corporate level policy and management systems are also implemented at Pasabahce business segment level.

Pasabahce Egypt certified its existing E&S management systems in line with the international management system standards, with ISO 9001 Quality Management System, ISO 14001 Environmental Management System, OHSAS 18001 Occupational Health and Safety Management System, and is in the process of fully aligning its policies and procedures with Sisecam’s corporate level system.

Identification of Risks and Impacts/Management Programs:

As a part of its existing management system, Pasabahce Egypt identifies risks and environmental and social impacts of its operations and projects and develops mitigation plans where necessary. Though the risk analysis is comprehensive and includes the key risks associated with the plant operations, it does not cover entire company operations such as risks and impacts in the social building containing locker rooms, cafeteria, and prayer rooms transportation etc. As per ESAP item #1 Pasabahce Egypt will revise their risk and impact analysis to cover all the company operations and provide a copy of the updated analysis to IFC.

The environmental impact assessment (“EIA”) was conducted prior to the plant construction, which has been approved by Egyptian Ministry of State for Environmental Affairs in November 2011 under the previous owner. It did not identify any significant E&S risks associated with the glass manufacturing operations. Pasabahce also provided the EIA for adding a surface treatment unit of glass forming molds to treat the imported glass molds if needed. The study concluded that the additional surface treatment unit led to limited environmental impacts and only prescribed ongoing monitoring of working environment and solid wastes.

Based on the discussion with Pasabahce Egypt, the proposed capex plan and cold repairs under the project do not require additional EIA and regulatory approval as the same will be implemented within the existing approved footprint of the facility inside an industrial zone.

Organizational Capacity and Competency:

Sisecam has a corporate level E&S organizational structure consisting of a corporate level environmental management department and an occupational health and safety (“OHS”) department. The corporate structure is responsible for the coordination of E&S management system implementation across all the Sisecam plants and monitoring and reporting the performance to Sisecam’s senior management. At business division level, Pasabahce has a team of nine people including two quality managers at head office directly reporting to the quality directorate. There are quality managers at each plant level to whom plant’s environmental engineers are reporting. Occupational health and safety engineers are reporting to HR.

Pasabahce Egypt, like other Sisecam plants, has its own E&S organization. Quality manager is responsible for the environmental management system, HR manager is responsible for safety management. There are one environmental engineer, one quality engineer and two quality technicians, reporting to quality manager. In addition, one OHS engineer and two OHS technicians and one fireman are reporting to HR Manager. Pasabahçe Egypt’s quality and HR department is responsible for performing the E&S impact and risk assessments, providing feedback to management on E&S performance and supervising the employees, contractors and operations. The environmental and OHS engineers also provides E&S training to staff as a part of the orientation program and the training program  

There are two directorates at the corporate level dealing with labor and working conditions; (i) the Human Resources Directorate (“HRD”); and (ii) the Industrial Relations Directorate (“IRD”). The HRD handles recruitment, performance evaluation, salary, career planning, organizational capability, personnel development and training, whereas the IRD is responsible for collective bargaining, relations with employee organizations and E&S. In addition to the Group level HR organization, Sisecam’s companies have their own HR Director responsible for both HR and Industrial Relations, reporting to corporate level HRD. Likewise, Pasabahce Egypt has its own HR organization.

Emergency Preparedness and Response:

Pasabahce Egypt has documented emergency preparedness and response plans including fire prevention, first aid, evacuation and response to spills. State fire audits are conducted yearly. Fire training was initially provided to more than half of the workers by the government and yearly firefighting and first aid training is conducted for the emergency teams. There are 70 trained first aiders and a training for an additional 30 people is planned by the Company. Mobile fire extinguishers are inspected monthly by E&S team and five water tanks of a total 1500-ton capacity are in place for emergency. Informed fire drills are conducted regularly, and evacuation plans are visible plant wide. The facilities are equipped with smoke detectors, and fire hydrants. Water based sprinklers are installed at admin building, warehouses and packaging areas. There are automatic cooling systems built-in the hydrogen unit while the oxygen unit is barricaded at almost six meters for fire hazards. The technical firm has provided training on setting up the hydrogen and oxygen units to all relevant staff and Pasabahce Egypt has a plan to install an alarm system to these units in 2019.

Monitoring and Review:

Si?ecam has a system in place to monitor and review key performance indicators, where plants provide data including air emissions results, noise levels, waste amounts, waste water quality, external grievances and fines incurred. In line with the existing management system, Pasabahce Egypt has been providing data on each indicator to Sisecam on a yearly basis and the ongoing compliance with corporate and national limits is monitored and controlled. Four OHS audits were conducted to date by Sisecam at Pasabahce Egypt to identify the E&S risks and an improvement plan has been prepared and being implemented. As a part of Sisecam’s Annual Sustainability Report (http://www.sisecam.com.tr/en/sustainability/reporting/sustainability-report), E&S performance of the Group is communicated to shareholders and interested parties.

At Pasabahce Egypt, the E&S team conducts daily and monthly site inspections. Improvement plans are developed based on the findings whenever necessary. Progress on the improvement plans and E&S performance is reviewed during monthly E&S committee meetings. As a part of the existing management system, annual management reviews are conducted.

Working Conditions and Management of Worker Relationship / Human Resources Policies and Procedures:

?i?ecam has documented corporate human resources (“HR”) policy and procedures, which is implemented in Pasabahce Group operations, including Pasabahce Egypt. The company’s HR procedures are generally consistent with the requirements of IFC Performance Standard 2, and those include the recruitment and selection procedures, terms of employment, working conditions, working hours, payment processing, wage rating; performance evaluation; trainings.

Working Conditions and Terms of Employment/ Workers’ Organization: Sisecam employs approximately 22,000 people worldwide across manufacturing operations in 13 countries. Pasabahce has over 7,000 employees in their factories and stores across the world, where 3750 of them are represented by employee organizations/unions. Pasabahce Egypt employed about 500 people as of December 2018, of which four are females (including the HR manager was hired in January 2019), excluding contractors. Only one female worker was employed at the time of acquisition which the group aims to increase by selectively hiring female staff, including managerial positions, and in contractor workers as will be detailed under “Workers Engaged by Third Parties” section below. Administration staff work during the day time, five days a week and other employees are working in three shifts. Though there is no restriction and freedom of association is explicitly stated in Code of Conduct, currently there is no worker’s union present in Pasabahce Egypt.

As per all legal agreements, contractors are required to adhere to Pasabahce Egypt’s HR and E&S Policies (covering child/forced labor, access to grievance mechanism, risk assessments, trainings, mitigation measures such as PPE, health screening) as further discussed under “Grievance Mechanism” and “Workers Engaged by Third Parties” section below.

Non-discrimination and Equal Opportunity: Pasabahce Egypt’s Code of Conduct has a section against discrimination based on personal beliefs or other characteristics unrelated to a person’s ability to perform his/her duties including but not limited to ethnic origin, gender, age, sexual orientation, diseases etc., in line with Sisecam’s corporate ethical values.

Retrenchment:

At the time of acquisition, the plant employed 173 workers and there was no retrenchment during or after the acquisition. In fact, following the establishment of Pasabahce Egypt the number of employees increased considerably, and no retrenchment is expected in the foreseeable future.

Grievance Mechanism:

Pasabahce Egypt’s employees and contract workers can raise their concerns in written form to the management and/or by use of suggestion/complain boxes which allows for anonymous reporting. All grievances are reviewed by the HR department and ethics committee. The actions taken to manage complaints are posted on a board in the plant. The locker rooms, and food services were improved in 2018 as a result of the grievances raised through the system.

Following the acquisition of the plant, the company has renovated the social area including locker and prayer rooms and built a cafeteria for workers. Pasabahce has also started food service for workers which was not in place under the previous owner. 

Protecting the Work Force:

The minimum age for employment by Pasabahce Egypt workforce is 16 years and there is special protection for young workers who are less than 18 years old. Contractors are required, as per contract requirements, to follow Pasabahce Egypt’s E&S management system requirements, including child labor and forced labor.

Occupational Health and Safety:

Pasabahce Egypt’s existing E&S management system is certified according to OHSAS 18001, and is generally in line with IFC’s PS requirements. After plant acquisition, Pasabahce conducted a risk assessment of plant operations and improved the OHS practices through proper use of personal protective equipment (“PPEs”), lifeline for working at heights in the storage area, and regular training to workers on OHS.

Workplace noise measurements occasionally exceed the local limits and WBG's related EHS Guideline values (85 - 102 dB(A) measured vs 85 and 90 dB(A) as per WBG and local limits respectively) at some points, including crusher area and production areas, and near the forming machines. As there are mitigation measures including isolation of the noise source and the areas are marked with proper warning signs and PPEs including ear plugs are provided and in use, no further action is required.

There is a nurse in the plant during each shift and a medical doctor is available three days a week for two hours. Health tests are done yearly for the staff and include respiratory and skeletal system control, visual and audiometry checks depending on the risks associated with work stations.

As a part of new employee induction and periodic refresher training, E&S training including topics such as site safety rules, emergency plans, confined spaces, crane lifting and working in heights, chemical hazards, mechanical hazards, and electrical hazards is provided.

Pasabahce Egypt’s lost time injury frequency rate (“LTIFR” - number of lost time injuries per million hours worked) is around six which is less than Sisecam’s internal target (10) but higher than good international industrial practices (GIIP) data (3.5 for glass manufacturing – www.bls.gov). Injuries are mainly related to falls and root causes included behavioral safety, however, no specific behavioral safety program, other than awareness training was initiated. Thus, as per ESAP item #2, Pasabahce Egypt shall develop and agree with IFC on a time based OHS improvement action plan to ensure that the LTIFR will be improved.

Workers Engaged by Third Parties:

Pasabahce currently employs approximately 120 contractor workers from five companies for security, cleaning, transportation, sorting and packaging, and food services. The company also employed 30 contractor workers from two companies during plant expansion. The sub-contractors for sorting and packaging was selected as over half of their workers were female. Contractual requirements include clear covenants to ensure that contractors will follow Pasabahce Egypt’s E&S management system requirements. Compliance is monitored by document control for medical checks and social security, and by the E&S team during their daily site tours.

The contractor workers employed in sorting and packaging area were observed to be not regularly wearing safety shoes whereas there are forklift operations in the area. In addition, goggles are not generally in use where broken glass pieces might result in eye injuries. As per ESAP item #3 Pasabahce Egypt shall review its PPE requirement matrix and ensure that all necessary PPE, in line with the potential risks, are provided and ensure that contract workers wear the same PPE as their staff in production, sorting and packaging areas.

Supply Chain:

Pasabahce has three Egyptian suppliers for sand and one supplier for limestone, where other main raw materials, including the soda ash, are obtained from other Sisecam plants. Supplier selection is based on raw material quality and price. All suppliers are required to sign and comply with Pasabahce’s supplier code of conduct. The cullet used in production is fully derived from Pasabahce Egypt’s production.

Resource Efficiency / Energy and Material Efficiency Projects:

Pasabahce Egypt plant has one cross fired recuperative furnace working at approximately 150% capacity, with a significant production efficiency increase after acquisition. Production started in January 2018 where the upgrade in production lines were completed in April after which the plant started operating at full capacity. The cullet ratio is 37%.

Based on energy consumption data available until August 2018, Pasabahce Egypt’s average natural gas consumption at full capacity is 7 GJ/t melted which is within the suggested limits in WBG EHS Guidelines for Glass Manufacturing (3.9 to 9 GJ/ton melted). The average consumption since the beginning of year is showing increased efficiency after April 2018. Pasabahce Egypt’s average electricity consumption is 572 kWh/t melted, including all electricity usage for the plant.  The company’s capex plans include energy efficiency measures which is expected to decrease this value. Furthermore, Sisecam will conduct an energy audit in Pasabahce Egypt and will developed an improvement plan as needed. As per ESAP item #4 Pasabahce Egypt will provide a copy of the energy audit findings to IFC and agree on an improvement plan as needed.

Water: Pasabahce Plant is connected to industrial zone’s network and is also using the wastewater treated in the plant for production. Pasabahce’s water consumption since January 2018 and after April 2018 where the plant was in full capacity is 1.61 and 1.74 m3/ton glass melted respectively, well below the GIIP value of 4 m3.

GHG Emissions:

The main source of greenhouse gas (“GHG”) emissions are natural gas and electricity consumption. GHG emissions are estimated to be about 29.000 ton per annum (“tpa”) Carbon Dioxide (“CO2”) equivalent, by assuming the August 2019 consumption and output values to be valid for the remaining of the year. The emissions are expected to increase to about 34.000 tpa CO2 equivalent after the production increase per cold repair at the end of year 2020.

Air Emissions and Ambient Air Quality:

Air emissions measured at stack for nitrogen oxide (“NOx”) and sulfur dioxide (“SO2”) are in line with WBG’s applicable EHS guideline values and Egyptian regulatory limits (125.1 and 52.1 mg for NOx and SO2 measured vs 700 and 1000 mg both WBG and local limits) for the furnace. At the time of the visit, décor line was being installed and no emission measurement was conducted. Going forward, Pasabahce Egypt will provide the emission report to IFC annually, including WBG’s EHS guideline for glass manufacturing stack emission parameters, such as hydrochloric acid, fluorides, lead, cadmium, arsenic and other heavy metals once the décor line is operational in 2019. As the company is targeting to use organic and cadmium and lead-free paint for the décor line no cadmium and lead emission is anticipated.

Wastewater Treatment:

After acquisition, Pasabahce installed a wastewater treatment plant to be able to reuse the treated wastewater as backup water for cooling purposes. The excess effluent wastewater is discharged to industrial zone’s sewage network. The effluent values analyzed (pH, total suspended solid, chemical oxygen demand, oil & grease, total hardness, cadmium, copper, lead, nickel) are all within national and WBG EHS Guideline values whereas the phenol concentration was found to be above the strict Egyptian limits (0.8 mg/l measured vs 0.05 mg/l limit)– whereas there is no guidance value for glass in related WBG EHS Guideline. The company identified soap to be the source of phenol levels and is currently assessing the strategies to decrease phenol concentration within national limits. This includes replacing of the high phenol containing soaps. The wastewater analysis did not include antimony, arsenic, fluorides, boric acid and temperature increase values which should be analyzed once the décor line is introduced in 2019. Going forward, Pasabahce Egypt will provide a copy of the effluent wastewater quality data to IFC through annual reporting, including all missing parameters such as antimony, arsenic, fluorides, boric acid and temperature increase, in line with WBG’s General EHS guideline once the décor line is operational in 2019. The other wastewater source in the plant is domestic water which is discharged to the municipal network.

Solid Waste Management:

There is a waste segregation system in Pasabahce Egypt, where cardboard, paper, plastic, metals are recycled through licensed third-party suppliers. The cullet is fully used in production. Other wastes, including used oil and medical waste from the on-site clinic are either disposed and/or recycled by certified companies, in line with local legislation requirements.

Hazardous Materials:

Hazardous materials include raw materials like soda ash, sodium sulfate, cerium oxide, zinc selenite, cobalt oxide, some maintenance and cleaning chemicals as well generator fuel, grease, lubricants and oils. Hazardous chemicals are stored in well ventilated areas, generally within secondary containment and material safety data sheets and safe working instructions are located in the plant.

Community Health and Safety:

Pasabahce Egypt’s production activities are expected to have minimal impact on its neighboring communities and the facilities are located with due respect to industrial zoning requirements. Its main impacts to community health and safety might relate to the transportation of raw materials, hazardous chemicals and final products. For its transport operations, Pasabahce Egypt has agreed with a sub-contractor company that is required to comply with Pasabahce’s E&S policies and procedures, including safety instructions for material transportation and accidental release.

Security:

Pasabahce Egypt works with a sub-contractor for plant security, employing 16 contractors working in two shifts. The security personnel are unarmed and required to have a medical check to receive relevant certification, which includes criminal records controls and physical exam.

As part of its E&S management systems, Sisecam has established an external grievance mechanism to address community concerns about the possible adverse impacts of their operations which is available online (http://www.sisecam.com.tr/en/contact-us/contact-us ) and accessible to all parties.

Pasabahce Group Sustainability Report (http://www.pasabahce.com/en/sustainability/sustainability-reports) forms an important part of the Group’s non-financial performance communications to its stakeholders. The report covers those businesses the Group’s approach to sustainability risks and communication with different stakeholders.

Contact Person: Hashem Abdelkewe (QA & QC Manager)

Company Name: Pasabahce

Address: Pasabahce Egypt, 6th of October Organized Industrial Zone

Email: habdelkewe@sisecam.com

Phone: + 20 109 8595900

Facsimile: +20 238284700

Contact Person: Sally Ahmed (HR Manager)

Company Name: Pasabahce

Address: Pasabahce Egypt, 6th of October Organized Industrial Zone

Email: sallyahmed@sisecam.com

Phone: +20 100 6522267

Facsimile: +20 238284700