The land for the project was acquired by KTDA several years ago with no displacement or resettlement, as such, PS5 – Land Acquisition and Involuntary Resettlement is not considered relevant for this project. In addition, PS6 – Biodiversity Conservation and Management of Living Natural Resources, PS7 – Indigenous Peoples and PS8 – Cultural Heritage have not been identified as relevant to the IFC project.

This project has been categorized as a category B project in accordance with IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

The main environmental and social risks for this project relate to KTDA’s management of environmental and social impacts in line with applicable laws in Kenya and IFC Performance Standards; including, (i) labor and working conditions of employees and contract workers, including occupational health and safety standards during construction and operation; (ii) efficient use of resources and management of pollution issues; and, (iii) community safety, particularly in relation to the movement of vehicles during construction and operation.

IFC’s assessment considered KTDA’s management of environmental, safety and health at KTDA-MS and CTCL; compliance with applicable local laws; and stakeholder engagement and disclosure of information about the project and its operations.

Identification of Environmental and Social Risks and Impacts: In line with local regulations in Kenya, an ESIA covering construction, operation and decommissioning was conducted for the project and an Environmental Management Plan (EMP) was also developed. The ESIA assessed the key E&S impacts of the project including health and safety, pollution management, ecological impacts and socio-economic impacts.  In addition, the EMP identified applicable mitigation measures for addressing the environmental and social risks and impacts. Approval for the project was granted by the National Environmental Management Agency (NEMA) on in November 2018.

Environmental and Social Assessment and Management System (ESMS):  KTDA ICD is a greenfield venture and whilst KTDA Group has an overarching ESMS and policy documents covering the environmental and safety aspects of its activities, there is no formal ESMS in place for the ongoing assessment and management of environmental and social risks and impacts associated with KTDA ICD operations.  To manage these risks and impacts, as indicated in ESAP action item #1, CTCL shall develop an ESMS suitable to the scale of its activities, which meets the requirements of applicable local laws and the IFC Performance Standards.  The ESMS shall include policies, plans, and procedures to manage the identified risks and impacts. The ESMS shall also incorporate relevant aspects (such as occupational health and safety) covered in the WBG General Environmental Health and Safety (EHS) Guidelines. 

During the construction, E&S issues will be managed by Arcon Works Ltd with oversight from KTDA-MS.  KTDA-MS manages all construction projects for the KTDA subsidiaries. KTDA-MS monitors the projects to ensure compliance with local laws and regulations as well as the conditions outlined in the approval granted by NEMA. Environmental and social requirements have been included in the contract with Arcon Works Ltd and the contractor is required to implement the measures in the EMP.  Arcon Works Ltd has a good track record of managing E&S issues across its projects and the company has developed a Work Health and Safety Management Plan for the KTDA ICD project. This plan covers the health and safety requirements for Arcon Works Ltd as well as its sub-contractors, including requirements for workers, risk identification and roles and responsibilities. To meet IFC’s requirements, the Arcon plan needs to be enhanced to include specific procedures/plans for managing the E&S risks and impacts of the construction phase. This plan will be developed in line with the guidelines specified in the WBG General EHS Guidelines and this Performance Standard and will also incorporate the EMP developed for the project. This is included in ESAP action item #2.

Policy:  As part of the ESMS for the operation of the ICD, CTCL shall develop an E&S Policy. This policy will be applicable to CTCL and its contractors and shall be communicated to all relevant stakeholders.

Management Programs: As indicated above, Acorn Works is responsible for implementing appropriate management programs including the EMP. ESAP action item #2 covers the development of appropriate management programs. As a greenfield, KTDA ICD currently has no management programs in place for managing the environmental and social aspects of its activities.  As indicated above, CTCL shall develop and implement a management system; this ESMS shall cover management programs for environmental and social aspects of the company’s activities during operation.

Organizational Capacity: KTDA-MS has an EHS Manager with oversight for E&S issues across all KTDA projects.  In addition, Arcon Works Ltd has two health and safety officers responsible for managing E&S issues on the ICD project. Initial site safety training has been provided to the Arcon Works workers currently on site and ongoing training will be provided to Arcon Works’ employees as required and this shall be monitored by KTDA-MS.  During operations, CTCL shall appoint a health, safety and environment officer who will be responsible for the implementation of the ESMS. Other roles critical to the management of E&S issues will also be identified and the responsibilities will be indicated in the ESMS.  In addition, E&S training requirements shall be identified for all employees and appropriate training provided.

Emergency Preparedness and Response: Emergency preparedness during construction shall be managed by Arcon Works Ltd.  An Emergency Response Plan which covers emergency scenarios and responses has been developed by Arcon Works. As part of its oversight role, KTDA-MS shall ensure that this plan is adequately implemented.  In addition, as part of its ESMS for the operation of the ICD, CTCL shall develop an emergency preparedness and response plan to manage potential emergencies associated with the ICD’s operations.  The plan shall identify emergency scenarios and the required response mechanisms for addressing these emergencies. All emergency procedures and communication protocols shall be documented in the plan.

Monitoring and Review: During construction, Arcon Works will provide monitoring reports to KTDA-MS on the management of health and safety risks on site, including information on incidents and implementation of the EMP.   As covered in ESAP action item #1 for this project, CTCL shall define key performance indicators (KPIs) in order to monitor E&S parameters such as lost-time incidence frequency rate and accident free days; compliance with regulatory requirements; and resource consumption. These KPIs shall be reported to senior management as part of the company’s monitoring and review process for E&S risk management.

External Communications and Grievance Mechanism: Arcon Works shall be responsible for managing any grievances during the construction phase.  A grievance mechanism has been developed by Arcon Works for the construction phase and this will be incorporated into the ESMS.  For the operations phase, as covered in the ESAP for this project, CTCL shall develop an ESMS which includes an external communication mechanism.

IFC’s review considered KTDA’s activities with regards to fair, safe and healthy working conditions and is based on an assessment of the practices in place and a review of the documents and information made available during due diligence process.

KTDA Holdings has a total of 756 employees, out of which 127 are CTCL employees. Approximately 200 contractor employees will work at the ICD during construction and approximately 38 CTCL workers during operations.

Human Resources Policies and Procedures: All KTDA subsidiaries are covered by the KTDA Holdings Human Resources Policies and Procedures.  The policies and procedures cover amongst other aspects, recruitment; remuneration; employee benefits and entitlements; staff rules; training and development; leave; disciplinary and grievance procedures; staff welfare; and separation. The terms and conditions of employment covered in the KTDA policies and procedures meet, at a minimum, the wage scales and benefit entitlements established by the Kenyan Ministry of Labor and Social Protection; the National Employment Act; Labor Relations Act and Regulation of Wages Act, which themselves are consistent with core labor standards established by the International Labor Organization.

To ensure that its contractors’ labor standards meet the requirements of Performance Standard 2 and national labor laws, KTDA shall develop a procedure for managing the labor standards of its contractors.  In addition, KTDA will include specific labor requirements in third party contracts going forward. This is included in ESAP action item #4.

Workers’ Organization: There are no restrictions to forming or joining workers’ organizations at KTDA. CTCL has unionized employees and there is a collective bargaining agreement in place between the company and the union. CTCL’s management meets regularly with the union representatives and the terms of the agreement are applicable to unionized and non-unionized workers.

Non-Discrimination and Equal Opportunity: KTDA is an equal-opportunities employer. The company does not discriminate against any group and its recruitment process is documented in the HR policies and procedures document. In addition, KTDA has a policy against sexual harassment as well as procedure for reporting and managing sexual harassment.

Grievance Mechanism: The management of grievances and harassment is covered in the HR policies and procedures document.  KTDA shall ensure that its third-party workers also have access to appropriate grievance mechanisms (ESAP item #4).

Occupational Health and Safety: The potential occupational health and safety (OHS) risks related to the construction phase of the ICD include – working at height, use of heavy equipment, exposure to electricity cables, exposure to dust and noise and traffic management on site. The typical OHS risks during operations include working with machinery, noise, and lifting of heavy materials. Arcon Works’ safety plan for the project includes OHS requirements for its workers and sub-contractors. In addition, the company has a permit-to-work procedure and OHS training has been provided to the initial group of workers on site. Ongoing training will be provided to Arcon Works’ employees as required and this shall be monitored by KTDA-MS.  As part of its oversight role, KTDA-MS shall ensure Arcon Work’s EHS Plan includes appropriate additional OHS procedures and that these procedures are implemented accordingly.  In addition, CTCL shall develop OHS procedures which are consistent with the requirements of this Performance Standard and local laws for the operation of the ICD.   This has been included as action item #5 of the ESAP for this project.

Furthermore, KPIs for this project will include OHS indicators which will be documented as part of the E&S improvement process and management programs. In addition, CTCL shall provide appropriate protective equipment for all its employees and provide the required training to ensure that its employees work in a safe manner.  

Workers Engaged by Third Parties: Arcon Works complies with Kenyan labor laws and its terms of employment are documented and included in employee contracts.  Arcon Works also has an employee grievance mechanism which is available to its workers and sub-contractors. In addition to construction workers, during operations, it is expected that CTCL will engage some third-party employees.   As indicated in ESAP action item #4. CTCL shall develop a policy and a procedure for managing and monitoring the performance of such third-party employers in relation to the requirements of this Performance Standard, including consideration for worker grievance mechanisms and fair working conditions.

 IFC’s review considered KTDA’s management of resources, wastes and pollution aspects and the impacts on the surrounding human and natural environment.

The construction activities will include excavation, minimal blasting, drilling, and crushing of aggregates, brickwork and erection of structures. Potential pollution issues during construction will be those typically associated with construction sites including – the discharge of contaminated soils, diesel and oil spills, dust and noise emissions, water pollution etc. During operations, the issues include management of waste oil and other fluids, energy consumption and noise emissions.

Pollution Prevention: Air emissions will primarily be dust/particulates from the construction phase and fugitive emissions from equipment during construction and operations.  Noise pollution is expected during construction especially during excavation, blasting and drilling. KTDA-MS needs to ensure that Arcon Works and other sub-contractors implement dust suppression measures and that appropriate measures are taken to minimize noise emission from the site. To manage emissions from generators and fugitive emissions from vehicles, adequate maintenance programs for vehicles and equipment will be implemented.  As indicated under Performance Standard 1, KTDA-MS shall ensure that Arcon Works implements an adequate EHS Plan which includes appropriate procedures/plans for managing pollution issues. 

Noise pollution during operations will be mostly limited to vehicular movement and operation of backup generators.  These impacts are expected to be localized and all employees will be provided with adequate ear protection to minimize noise impacts. 

Resource Efficiency: Energy and water for the construction phase will be provided by on-site generators and boreholes respectively. The enhanced EHS Plan for construction described in ESAP item #2 shall include measures for resource efficiency. In addition, the warehouse design shall incorporate resource efficiency measures such as natural ventilation, natural lighting, spatial considerations, and shatterproof construction materials. 

Greenhouse Gas Emissions: Greenhouse gas emissions directly associated with the construction and operation of the ICD are not expected to be significant as the activities are not energy intensive.    The project will therefore not be required to quantify and report on the CO2-equivalent emissions as required under this Performance Standard for projects with emissions exceeding 25,000 tCO2eq/annum.

Solid Wastes: Construction wastes are expected to include inert waste (rubble, spoil), recyclables (plastics, paper, metals), domestic waste, and small quantities of oil and oil-contaminated materials.  KTDA-MS shall ensure that Arcon Works adheres to the waste management measures indicated in the EMP for the project.  During operations, solid wastes will be collected by NEMA-approved waste collectors. A Waste Management Procedure will be developed and implemented by CTCL; this has been included in the ESAP as action item #6.

Pesticide Use and Management: Pest control measures will be required at the warehouse section of the ICD.  It is expected that non-chemical methods such as traps and electric insectocutors will be used at the warehouses.

Hazardous Materials Management: The hazardous materials associated with this project include fuels and lubricating oils. Petrol/diesel for generators will be stored in above-ground storage tanks fitted with containment bunds.  Any other hazardous chemicals used during construction will be stored in small quantities on site and the measures identified in the EMP will be implemented to minimize any impacts.

IFC’s review considered the potential impacts of the ICD’s activities on the local community in the ICD area.  

Community Health and Safety: The ICD is located in a commercial area with no direct impacts on residential communities.  Influx of migrant workers will be limited as most of the workers are expected to be recruited from within Nairobi. Traffic impacts during construction and operation could constitute a nuisance to neighboring facilities.  Impacts on community safety and traffic safety during construction shall be addressed through the mitigation measures identified in the project EMP and included in the EHS Plan.  For the operations, the movement of trucks may have impacts on neighboring facilities. As indicated in ESAP action item #7, CTCL shall establish preventive and control measures for traffic safety consistent with the section on traffic safety in the WBG General EHS Guidelines.

Security Personnel:  During construction and operation, site security will be managed by private security firms; these firms will provide trained and unarmed security personnel.   CTCL shall ensure that the security contractors comply with local regulatory requirements as well as the requirements of this Performance Standard.

Stakeholder engagement was included in the ESIA conducted for the project. As indicated above, the project is located in a commercial area as such there is no direct impacts on communities. Other stakeholders such as neighboring facilities and municipal authorities were consulted during the ESIA.  For the operations phase, as covered in the ESAP for this project, CTCL shall develop an ESMS which includes an external communication mechanism.

Name: Wilson Muthaura Mathiu

Address: P.O. Box 30213, KTDA Farmers Building, Nairobi, Kenya

Email: info@ktdateas.com ,Tel: +254-020-3227000,2221441-2