The proposed brownfield expansion at Banmore and Laksar Tyre Plants do not need additional land resources as the existing land area is adequate and activities associated with the project will occur within the existing building infrastructure available at the plants. The Company established its first tire plant at Kankroli in Rajasthan in 1976 followed by Banmore Plant in 1991. The Chennai plant was established in 2012 while the Vikrant Tyre Plant (3 Plants) in Mysore was a brownfield acquisition completed in 1997. These 6 plants are operated under JK Tyre & Industries Limited (JKTIL). The subsidiary Cavendish Industries Limited at Laksar in North India (3 Plants) was also a brownfield acquisition from Birla Tyres in 2016. In Mexico, company acquired the tire plants from Tornel in 2008 and these plants were operational for several decades prior to the acquisition.  The JK Tornel plants are in the suburban areas of Azcapotzalco, Tultitlan and Hidalgo in proximity to Mexico City. Given that all the Company’s manufacturing operations are many decades old and are in industrial zoned land, it is assessed that no risks and impacts are anticipated for this project which must be managed in accordance with PS5: Land Acquisition and Involuntary Resettlement; PS7: Indigenous Peoples and PS8: Cultural Heritage.

The Company has established plant level environmental and social management systems (ESMS) that are accredited to ISO 14001, ISO 45001, and SA 8000 standards (environmental, occupational health and safety and social standards respectively) across all its manufacturing plants in India and Mexico. The established ESMS is appropriate to the nature and scale of the Project and commensurate with the level of its environmental and social risks and impacts. The company generally has standardized manufacturing operations and rolled out a uniform ESMS across all its plants in India and Mexico. In its updated Health, Safety & Environment Policy as published in January 2021, the Company commits to design, manufacture and distribute products in a manner that protect the environment; comply with legal and other EHS requirements applicable to products, processes, and services; prevent work related injury and ill health; and prevention of pollution. The policy also commits to continually improve on occupational health, safety, and environmental performance. In addition, the Company has promulgated multiple E&S related policies such as biodiversity protection, energy, greenhouse gas (GHG) emissions, renewable energy resource and water, sustainability, corporate social responsibility (CSR), and employee well-being.

The Company’s plant operations have valid and current E&S related permits and clearances that are managed through regulatory permit and compliance management systems. The brownfield capacity expansion proposed at Banmore and Laxar Plants will require consent to establish (CTE) and amended consent to operate (CTO) as per prevailing consent regulations of respective local State Pollution Control Boards (SPCB). The Company proposes to engage an accredited consultant for undertaking environmental and social impact assessment (ESIA) study prior to seeking the CTE. As part of IFC’s investment requirement and agreed environmental and social action plan (ESAP) #1, the Company will undertake individual ESIA study for each of the proposed brownfield expansion project locations based on a term of reference agreed with IFC to comply IFC PS 1 requirements and will implement the risk mitigation and management plan arising out of the ESIA in accordance with an agreed time-based action plan.  This ESIA  will include assessment  of the cumulative risks and impacts and incorporate the following key environmental & social issues:  a) relevant environmental and social issues  identified via stakeholder consultation; b) air emissions and ambient air quality; c) ambient noise levels; d) water demand and availability taking into account competing users; e) traffic and transportation; f) resource efficiency and greenhouse gas (GHG) emissions; g) waste disposal and the associated infrastructure requirements; and h) the increased labour workforce and impacts on the local community due to migration of workforce.

Aligned to multiple E&S related policies, the Company has established and maintains management programs consisting of documented manuals, operational procedures, training management systems, reporting templates, checklists, audits, monitoring and reporting mechanisms integrated to its ESMS. At the corporate level, the ESMS is maintained and monitored by Total Quality Management (TQM) department. Corporate environmental management function is led by the Corporate Manufacturing Director. At the plant level, the environmental management responsibility lies with engineering and utility maintenance head while the health and safety functions are entrusted to qualified health and safety department staff within the human resources department.

Supply Chain Risk Assessment and Management:  The supply chain management process is addressed in PS2 and PS6 sections.

The Company’s plant level ESMS has established and documented emergency preparedness and response systems that are appropriate to manage accidental and emergency situations associated with the project and mitigate any harm to people and/or the environment. The emergency management system element of ESMS also cover life and fire safety (LFS) aspects adequately. Being the Tier 1 supplier of tires to global automobile manufacturing companies, LFS management systems are also updated, audited, and maintained as per client requirements. The LFS infrastructure at each plant is maintained as per factory regulation and Indian National Building Code requirements that are applicable to Industrial buildings. Every plant prepares and maintains an updated list of emergency response team and on-site emergency management plan in compliance of local regulations. Every plant undertakes regular testing of crisis/emergency management plan through periodical mock and LFS drills.

The Company has established systems and procedures to monitor and measure the effectiveness of its management program at plant level, as well as compliance with any related legal/ regulatory requirements on environmental quality and pollution monitoring. The auditing framework is aligned to British Safety Council - Five Star Audit process. The monitoring and review elements comprise of periodical external and internal reporting on E&S performance, monitoring of performance through inspections and audits, periodical senior management reviews and the annual sustainability reporting.

As of April 2022, the Company’s India operations have a workforce of about 11,502 workers, of whom 5,141 are direct, production floor workmen; 4,688 are direct, workers of office staff, marketing, administrative, and managerial staff cadre; and 1,673 are short term temporary workers known as “Badlis” (sourced either from labour intermediaries or through a reserve group of experienced Badlis). Badlis take up work on the production floor during temporary absence of permanent workers. In addition, the company contracts 4,717 workers hired through third party contractors to perform supplementary jobs such as loading/unloading workers, cleaning service, canteen service workers and security guards. Contracted workers are subject to the HR requirements of their home Company.  Out of the total on-roll workforce, 49 workers are female. In its Mexico operations, the Company employs 1,546 full time workers and 368 third party contract workers.

Company engaged an independent labour consultant to evaluate its human resources management systems (HRMS) and its performance based on a term of reference agreed with IFC. The labour consultant undertook the independent evaluation through labour and working conditions assessment using IFC PS2 standards and guidance as the framework standard. The labour consultant conducted the audit in May 2022 and the Company is currently engaged in reviewing the draft labour and working conditions audit report including the corrective action plan recommended in the report to strengthen its HR management systems and procedures. Summary findings of the labour audit include the need for the Company to i) review and strengthen the Company's HR management systems with regard to contractors/3rd party worker management elements including exclusive distributors; ii) ensure regulatory compliance by contractors, manpower suppliers and exclusive distributors; iii) review scope and coverage of existing labour welfare measures such as canteen facilities such that it is uniformly applied across all plants and every employee & contractor staff gets maximum benefits; and iv) sensitize and train staff and workers on gender based violence and harassment. As per agreed ESAP#2, the Company agreed to finalize the audit report in consultation with IFC and commits to implement the recommended corrective action plan (CAP) presented in the audit report within the agreed timelines specified in the CAP.

The Company’s HR practices in India are defined in a set of HR Policy and Procedures such as corporate ethics and employee code of conduct, social accountability policy, recruitment, compensation, and benefits, working hours and leave, social security, and performance evaluation that applies to the entire workforce at the corporate and manufacturing sites. As reported, no retrenchment or collective dismissal occurred at any of the company’s operations sites in the past 3 years and has no such plans in the future as well. As such, the company has yet to develop a retrenchment or lay-off policy. Per ESAP#2 and as part of labour audit CAP, the company agrees to review and update its HR Policies and Procedures, as well as its applicability for the various categories of employees (across its operations, as applicable) consistent with applicable national regulations and IFC PS2 requirements on aspects including but not limited to child labour, forced labour and modern slavery, retrenchment and lay off, non-discrimination, communication and documentation, etc. Further, the company commits to develop Corporate HR Manual by keeping workmen as focus in line with PS2.

Non-discrimination policy that shows the company’s commitment to provide free of discrimination workplace and equal   in all areas of employment is in place. The company has also established Sexual Harassment and Workplace (SHAW) policy and procedure that guide the organizational practice of a safe working environment free from harassment, including sexual harassment and gender-based violence. The Policy also includes a SHAW committee that plays a vital role in building workforce awareness on SHAW, leading activities to eliminate sexual harassment and violence at the workplace, as well as handling and managing sexual harassment-related grievances. Per ESAP#2 and as part of labour audit CAP, the Company agrees to update its non-discrimination and equal treatment policy, as well as gender policy. The updated policy will also be extended to contract and third-party workers.

The company has a commitment to prevent child and forced labour. As reported, the company does not employ child labour or trafficked workers. Per ESAP#2 and as part of labour audit CAP, the company will update its HR policy to clearly mention prevention of forced labour and child labour practices. The updated policy will also be extended to contract and third-party workers.

Functioning affiliated or non-affiliated trade unions are in place in the company. Based on information reviewed for India operations, all existing trade unions are free to conduct their activities including regular meetings. In addition, there are several worker-management committees in place. Per ESAP#2 and as part of labour audit CAP, the company commits to develop a comprehensive freedom of association and collective bargaining policy.

The Company has established various channels to collect and address employee grievances at the Plant level in its India operations: grievance boxes, grievance register, communication with direct supervisors, and communication with the existing worker committees. The Company establishes a grievance committee to manage grievance and a designated Human Resources and/or Industrial Relations manager maintains records of all grievance’s intake and resolutions.

Per ESAP#2 and as part of labour audit CAP, the company agrees to develop and adopt a grievance redressal policy in line with IFC PS2 requirements including provision for anonymous grievances and accessible for all category of employees including contract and third-party workers.

Workers engaged by third parties: The Company hires third-party contractor services to perform supplementary work. Workers engaged by third-party employers/contractors are on the rolls of the home Company. The employment relationships between contractors and their workers are established based on the employment/service contract between contractors and the workers. As such, the Company has no direct employment relationship with contracted workers. Typically, the Company policies at the manufacturing site, such as working time and OHS requirements, are also applied to contracted workers. One of the key findings of labour audit has been to the strengthen company’s HR management systems with regards to third party contractor engagement and related regulatory compliance. Per ESAP#2 and as part of labour audit CAP, the Company will develop an overarching and detailed contractor management and oversight system that will serve as guidelines for the operations of contractor management and monitoring practices at all of their plant/manufacturing sites. The company has about 650 exclusive tire distributors (such as JK Tyres Truck Wheels, JK Tyre Steel Wheels, Xpress Wheels and retread centers) and as per IFC PS2 requirements, the workers working at exclusive dealers and distributors are also considered as third-party workers. Per ESAP#2 and as part of labour audit CAP, the Company commits to continue working with its exclusive distributors to improve their PS2 performance.

Occupational Health & Safety Management Systems (OHSMS): The Company has established Occupational Health & Safety (OHS) Management System certified to ISO 45001 at all plants.  This consists of OHS policies and safe work procedures, workplace OHS risk identification, risk assessment and mitigation procedures, machine safety, accident and incident analysis, and emergency management amongst other. The implementation of the OHSMS at the plant level is entrusted to the Health & Safety team. To evaluate the performance of the OHS management system, the Company conducts regular monthly and annual audits. The audit team issues a corrective action plan, and the concerned department is responsible to immediately rectify any issue detected during monthly and annual OHS audit. Further, all annual audit records are maintained at the corporate office for 3 years.

As reported in the past 3 years, there was no fatal workplace accident or incident at any of the Company’s plants. All accidents and incidents are analyzed by the designated OHS team to identify the root causes and the appropriate action plan to mitigate as a result. The result of the analysis is included in the Company’s annual safety report. Reportable incidences have been reduced from 27 in FY’18 to 4 in FY’21. The Company conducts OHS trainings at least annually or as per the frequency stipulated by the regional regulations. Fire and emergency preparedness training, and first aid training are at least conducted annually at any of the operational sites. In FY’20-21 all manufacturing plants in India have been awarded the Sword of Honour by the British Safety Council (BSC), United Kingdom, after due verification and audits recognizing the OHS performance of the plants. In addition, the company has initiated a Globe of Honor program by BSC in its Indian operations which is expected to be completed by FY22-23.

The Company also monitors work zone indoor air quality as per its ESMS procedural requirements. Indoor air quality monitoring comprises of measuring and monitoring parameters such as: relative humidity, temperature, CO2, CO, PM2.5, oxygen levels, noise levels and specific chemicals used as raw materials. The work zone environmental quality results are compared with NIOSH/OSHA standards for respective short term exposure levels (STEL), time weighted average (TWA), lower explosive limits (LEL) for respective chemicals and are found to be compliant. The company undertakes work zone quality monitoring at half yearly frequency and the volatile organic compound monitoring is undertaken once in a year using authorized third-party labs. In the workplace, based on the indoor work zone noise level monitoring results, appropriate PPE is enforced through stringent monitoring, training, and awareness building among workers. Every manufacturing facility has an Occupational Health Center (OHC) with adequate doctor and nursing staff and a 24 hour ambulance facility. The OHC undertakes health management activities such as preventive health (vaccination), regular health check-ups of workers, maintains hygiene conditions (hygiene audits), and provides training & awareness building.

Supply Chain: The Company procures raw materials such as carbon black, synthetic rubber, sulphur, rubber process oil, silica, stearic acid, wax, zinc oxide, reclaimed and crumb rubber, nylon fabric, bleed yarn, bead wire and other chemicals as raw material inputs.  Almost 55% of raw materials are sourced from India and the balance are imported. About 146,000 tons of coal requirement per annum is sourced equally from India and overseas through approved coal vendors. To be an approved supplier of the Company, supplier/vendor shall pass the vendor profiling and pre-qualification process that include, amongst other, review of the supplier / vendors sustainable procurement practices, management system, social accountability, and human rights requirements. Only if minimum requirements are met is a supplier / vendor approved by JK Tyre. Further, the Company include contractual obligation in the supply/business contract that requires approved vendor/supplier to comply with national labour regulations. A supplier performance evaluation system is also in place. The Company regularly audit their supplier performance and provide feedback for continuous improvement.

Another critical raw material is the natural rubber procured from both India and south-east Asia (Malaysia, Indonesia, Thailand, and Vietnam). In India, the NR traders and farmers are regulated by the Rubber Board of India which manages a registry of rubber plantation workers across India for the purpose of administering and implementing labour welfare measures. There are many active rubber and other plantation workers unions active in India in the regions such as Kerala -a southern state in India – where 90% of India’s NR is produced. There have been no contextual risk reports highlighting labour and working condition related issues in Indian NR plantations. However, IFCs contextual risk screening analysis indicates risks associated with child/forced labour and safe working conditions in rubber plantations especially in Indonesia, Thailand and Vietnam.  To mitigate these risks in the NR supply chain, Company procures NR from suppliers who are certified to one or more international sustainability certifications covering their operations. Certifications such as Global Platform for Sustainable Natural Rubber (https://sustainablenaturalrubber.org/); Forest Stewardship Council (FSC) certification (https://fsc.org/en); and PEFC - Programme for the Endorsement of Forest Certification (https://pefc.org/) address child or forced labour and safe working condition risks in the supply chain. Going forward, as part of ESAP#3 (discussed in more detail under PS6), the Company will review and strengthen its existing natural rubber supplier selection, management and monitoring procedures to provide for: a) an ongoing review of the labour & working conditions of suppliers and their primary supply chains i.e. natural rubber growers/farmers and take appropriate management action; and b) integrate labour and working condition related audit protocol in the existing supply chain auditing systems undertaken from a quality perspective.

Covid-19 Management: The Company has a Covid-19 Prevention and Mitigation Policy in place. Some of the measures to address Covid-19 related challenges include JK Cares (Covid-19 Assistance Relief and Support for worker’s family), Covid task force and 24x7 helpdesk that provides information for workers. The Company also established a ‘Mission Critical’ with objective to provide 100% Covid-19 vaccination for workers and their families covering their India and Mexico operations.

Resource Efficiency: In line with its Sustainability Policy published in Jan 2021, the Company has published its “Sustainability Targets 2030” which are aligned to PS 3 requirements on resource efficiency. The Company has evaluated its sustainability performance with globally available benchmarking data for tire manufacturing sector industries (Refer to Tire Industry Project - https://www.wbcsd.org/Sector-Projects/Tire-Industry-Project). The Company’s raw water consumption at 1.87 kilo liters per ton of product and energy consumption at 8.92 Giga Joules per ton of product is comparable to some of the best-in-class global tire manufacturing companies. The Company’s power consumption assessed at 0.810 kWh/kg of product and specific steam consumption rate at 1.74 kg of steam used per kg of product in 2020-21 and has demonstrated a positive trend on resource efficiency in the last 3 years. On water conservation, the Company has achieved a reduction in consumption by over 60% from base year (2013-14) to 2020-21. The Company also consumes coal at the rate of 0.32 to 0.47 ton per ton of product manufactured as on 2020-21 and in CIL plants at Laksar the coal consumption rate is higher at 0.76 ton per ton of product manufactured as on 2020-21. In the last 6 years the Company: a) increased purchase of renewable electricity that stands at 55% of power requirements in 2021; b) initiated fuel switching investments for its coal -fired boilers by use of agriculture biomass; and c) completed installation of 14.7 MW solar roof or ground projects in four plants in India. Due to such activities the GHG emission intensity has been improved by 54.71% compared with 2014 at JKTIL operated plants. In CIL operated plants at Laksar, the GHG emission intensity improved by 29.45% since 2017-18.

GHG Emissions: JK Tyre’s GHG policy was published in Jan 2021 and the Company has been publishing a GHG Emission Annual Report since 2013-14 that is independently audited and certified. The Company's operations use fossil fuels such as coal, diesel, light diesel oil, furnace oil and petrol (gasoline). Coal is the primary fuel source for 24 process steam boilers across all the plants and for one 7.5MW captive power plant (CPP) at Laksar Tire Plant.

In 2021, total Scope 1 GHG emissions was 271,187 tCO2e/year and Scope 2 GHG emissions was 139,406 tCO2e/year from its India operations (total GHG emissions of Scope 1 and 2 is 410,593 tCO2e/year). The coal usage alone contributed to 64% of total GHG emissions. For its Mexico operations, the total GHG emissions (Scope 1 & 2 emissions) was 32,469 tCO2e/year. The GHG emission (Scope 1 and 2) intensity for JKTIL operations in India has decreasing trend from 1.84 tCO2e/ton in 2014 to 0.83 tCO2e/ton in 2021. In CIL plants at Laksar, the GHG emission intensity has been decreasing from 2.22tCO2e/ton in 2018 to 1.55 tCO2e/ton in 2021. The GHG emissions (scope 1 & 2) intensity for operations in Mexico in 2021 was 0.73 tCO2e/ton of product which is comparable to the best-in-class global tire manufacturing companies.

The company’s project expansion activities in two plants in India will result in an estimated increase in GHG emissions of 58,700 tCO2e/year based on FY21 GHG emission intensity values.  In the next 3 years the Company plans to implement the following  decarbonization activities in order to offset this projected increase: 1) installation of 6MW solar plant at Laksar; 2) undertake boiler retrofits to feed high quantity of biomass based on availability and reduce coal consumption across all its Indian plants; 3) complete stoppage of furnace oil usage and replacement by natural gas in dip units; 4) converting the tire curing process in the last remaining plant to nitrogen-based technology to reduce the need for steam; 5) replace existing steam-based chillers with more energy efficient equipment; 6) field trials with concentrated solar power (CSP) for boiler feed water heating; 7) waste water recycling through zero liquid discharge in last remaining facility; 8) Digitalization of plant manufacturing process for efficiency improvement; and 9) continue to fine tune energy requirements to keep creating newer milestones in energy efficiency by implementing regular energy conservation projects like variable frequency drives (VFD's), waste heat recoveries, optimization of heat insulation etc. As a result of which, it is expected that by FY2025, the total GHG emissions will be further reduced by a minimum of 50,000 tCO2e/year which could offset the increase in GHG emissions due to production expansion to some extent.

The Company will continue with the practice of annual quantification of GHG emissions (Scope 1&2) using internationally recognized methodologies. 

Water consumption: Under the renewable energy resource and water policy published in Jan 2021 the Company commits to conserve natural resources and water through enhancing utility efficiency, increase recycling and minimize generation of waste. The Company commits to continuously benchmark its performance to reduce water resource consumption and become water positive. As part of the ESMS, the Company has established an operational procedure on management, control and minimisation of water use and discharges. JK Tyre has identified water availability as a critical business risk in the long term and focused on proactive assessment and planning for water security at all its manufacturing locations.

In the Chennai and Kankroli plants that are in the water scarce regions of the Country, the entire process water demand is either met through recycled municipal wastewater (in Chennai) or by achieving complete water circularity (in Kankroli). The manufacturing plants primarily source water from industrial estate utility agencies or municipal water supply utilities in the region. In Chennai, the plant sources its entire process water requirement from Chennai Municipal Corporation’s common sewage treatment plant utility which supplies tertiary treatment reverse osmosis (TTRO) water. Few plants such as Mysore and Chennai also tap ground water resources with due permits for meeting their domestic (drinking and sanitary) water demand in the plants. Groundwater is also tapped at Laksar plant after due regulatory clearances.

Air emissions: The Company's ESMS has a defined operational procedure on management and minimisation of other non-GHG gaseous emissions. Point source emissions in every plant comprise the process boiler stack, power boiler stack (only in Laksar tyre plant), diesel generator sets for power back-up, nylon textile dip units (if installed) and the banburry raw material mixing area.  The coal handling process areas are also a source of fugitive emissions. The Company has installed appropriate air pollution control equipment such as electrostatic precipitators (ESP) for all the boiler stacks and bag filters and fume extractors in banburry raw material mixing areas. The coal yard fugitive dust is managed through frequent water sprinkling, mechanization of coal handling and storage of coal in a covered shed across all the plants. The coal yard handling and maintenance is awarded to specialized third party service providers who follow stringent operational management systems and procedures in controlling the coal yard fugitive dust emissions. As stated earlier, the point source air emissions and ambient air quality are monitored through continuous emission monitoring systems and third party authorized labs in compliance to permit conditions. Company has been able to achieve compliance to local permit norms and IFC EHS guidelines on air emission standards at the facilities in India and there has been no regulatory action or community complaints against the Company operations in the last 3 years.

The Company has established ambient noise level monitoring, DG set noise level and indoor work zone noise level monitoring procedures and the performance is in line with permit condition requirements and local factory regulations.

Wastewater: The Company has installed zero liquid discharge (ZLD) treatment systems across all its plants except Mysore where ZLD systems will be installed in in FY22-23. Treated wastewater from STPs are largely consumed in horticulture, floor and road washings, as fire water, boiler ash quenching, coal yard sprinkling and other fugitive dust control purposes within the plant premises. The Chennai tyre plant ZLD system has been independently audited and certified as effective ZLD system by an independent 3rd party agency. The Company has established independent monitoring of inlet and outlet water quality of ETPs and STPs using third party authorized labs in line with permitting conditions. Company has been able to achieve compliance to permit norms on wastewater discharge standards and there has been no regulatory action or community complaints against the Company operations in the last 3 years.

Wastes: The waste management strategy published in April 2020 commits to: reduce all types of waste (solid, liquid and gaseous) by 3-5% every year; zero waste to landfill certification for all plants by 2022; plastic waste reduction in packaging and banning single use plastic by 2021; achieving and maintaining zero liquid discharge by all plants before 2021; upgrade bag filters and ESP to reduce gaseous waste emissions at regular intervals; become water positive across all plants by 2021; improve life of tires by adopting Smart Tire technologies; and collaborate for innovative recycling of used tire wastes such as in footwear industry.

Company operations generate non-hazardous wastes such as metal scrap, plastics, process rubber scrap, used drums and cans, wooden scrap, jumbo and chemical bags, used conveyor belts and e-wastes which are sorted, segregated and reused at on-site if feasible or recycled off site using authorised agencies. The coal fly ash and boiler bottom ash is sent to authorized brick manufacturers. Used batteries are recycled with a buy back arrangement with original battery supplier. As of FY20-21, the British Standards Institute – an independent auditor - has certified that all Indian manufacturing plants at five locations of JK Tyre are Zero Waste to Landfill plants.

Company operations generate hazardous wastes such as used oil, waste oil and chemical ETP sludge. From the process areas hazardous wastes such as silicon paint waste sludge, paint waste, dip unit sludge mixed with latex and ammonia, dust seal sludge, banbury mixer sweeping waste including chemicals, cotton waste with sludge is generated. These hazardous wastes are collected, stored on-site in a segregated manner, transported, and disposed through authorized hazardous waste agencies that have approved disposal (TSDF) facilities in line with permit conditions. The biomedical waste is handled as per permit conditions and disposed through authorized central BMW management facility.

Hazardous Materials Management: The Company's ESMS has established an operational procedure pertaining to management, control and minimisation of use of hazardous substance/chemicals. The key performance criteria defined in the procedure includes undertaking Control of Substances Hazardous to Health (COSHH) assessment, incidents due to handling and use of hazardous substance/chemicals and compliance to regulations. Company's OHSMS has established procedures for handling and storage of chemicals/hazardous substances such as: sulfur, corrosive chemicals, gas cylinders, ammonia, and bulk LPG storage bullets.

Sulphur is a highly regulated chemical under the arms and ammunition regulations in India. Sulphur is classified as inflammable and requires stringent quarterly licensing and permitting from district administration and local fire department. The Company is handling sulphur in compliance to regulations and permit conditions. Sulphur sourced from India and abroad is transported by trucks in powder form and in small 25kg bags and is stable in ambient conditions. Ammonia is stored in small quantities inside a pool of water to maintain its stability in ambient conditions. Nitrogen is an inert chemical and is stored at high pressure in liquid form. Besides, Company operations also involves handling and use of naphtha, LPG, diesel which are stored and handled as per regulatory permit conditions. Other raw materials such as natural rubber, carbon black, silica, oils and petro chemical-based rubber are non-hazardous and are transported by road.

All the manufacturing plants are located inside industrial zoned land, however over time residential neighbourhood communities have developed closer to plant premises. Almost all the plants have the nearest residential neighbourhoods located within 1km radius of the plant premises. The Company has established an infrastructure and equipment testing regime in compliance to local factory regulations. A testing inventory is maintained for various industrial equipment along with a testing schedule and the most recent copies of independent certification at each plant are available. The testing and examination of pressure vessels are maintained in line with Factory regulations including hydrostatic testing once every 4 years.

All the manufacturing plants have adequate access roads and are typically located close to the highways/wide roads with basic infrastructure available for attending to emergency scenarios. Each plant has dedicated and adequate parking space for transport fleet operators to park their vehicles inside the plant premises.  The Company tracks vehicle kilometres travelled by each vehicle operated by its fleet operators that are engaged for raw material and finished goods transport. As per the data available with the Company with regards to its India operations, in FY20-21 the cumulative vehicle kilometres travelled by transport fleet engaged by the Company in its supply chain is around 68 million kilometres and no road accidents or incidents involving Company fleet vehicles has been reported in the last 3 years. 

The Company’s onsite emergency management plan is well aligned to corresponding district disaster management plan that is prepared by the district administration. The Company engages with emergency management authorities routinely for training the workforce and shares its emergency management infrastructure and manpower resources with other industries and district administration as and when required. There has been no historical catastrophic incident or accident inside the plant premises. The Company’s risk assessment indicates that none of the emergency scenarios envisaged will affect the neighbourhood communities. Nonetheless, as part of the emergency management plans, community stakeholders are engaged through mock drills to disseminate information and train them for different emergency scenarios. Training related to life and fire safety is also given to all stakeholders periodically by the fire safety team of each plant. A public awareness campaign is regularly organized in the neighbourhood township, nearby village communities, and at nearby schools.

Largely unarmed security personnel have been deployed across all manufacturing plants through third party security vendors authorized by government in both India and Mexico and limited number of armed guards have been deployed at specific plant locations (Banmore, Kankroli and Laksar). The Company briefs security personnel about policies on prevention of child labour to be verified among contractor/transport fleet workers at gate and provides training on basic safety, first-aid, fire safety and emergency response. The security team is led by Company chief security officers who are on-roll staff and having a defence service background. All armed guards are ex-defence personnel and are periodically trained to safely handle arms & ammunitions and on behavioural aspects by competent security experts.  Company reports no security incident in the past involving armed/unarmed security guards and local community members. However, as part of IFC investment and as per ESAP#4, the Company will review and strengthen its security management plan in line with para 12 of IFC PS 4. This plan will be guided by the principles of proportionality and good international practice and include procedures to: assess risks posed by  security arrangements especially armed guards; ensure hiring, rules of conduct, training, equipping, and monitoring of security workers; provide for background verification on security personnel’s individual character with no incidents of past abuses; train armed guards in the use of force and firearms; train security guards to exhibit appropriate conduct towards plant workers and neighbourhood communities; and to receive and resolve grievances about the security arrangements and acts of security personnel.

The Company procures about 150,000 tons of natural rubber (NR) out of which 60% is sourced from India and the balance 40% is imported from Malaysia, Indonesia, Thailand, and Vietnam. In India, the Company procures NR from traders licensed and authorized by Rubber Board of India that has put in place a stringent regulatory and reporting regime controlling the NR growers, plantation habitats, NR buyers and sellers. IFCs contextual risk analysis indicates high risks associated with labour & working conditions and biodiversity aspects in rubber plantations especially in Indonesia, Thailand and Vietnam.

To mitigate these contextual risks in the NR supply chain, the Company has promulgated specific E&S related policies and mission statements recognizing the risk. In its mission statement on sustainable growth, company commits to adopt green purchase policy and as part of sustainability policy published in Jan 2021, company commits to work with suppliers that promote best environmental and sustainable practices. More specifically in biodiversity protection policy, company commits to reduce adverse impacts on biodiversity by own operations and the supply chain by a) minimize biodiversity risks in business operations; b) consider the impact on biodiversity due to business decisions; c) encourage relevant stakeholders to support biodiversity management; and d) establish a system of monitoring and reporting on progressive steps taken towards protection of biodiversity.

Currently, JK Tyre purchases its overseas natural rubber procurement (~60,000 TPA) consistently from four suppliers in the last 2-3 decades who are based out of Singapore and Thailand. All these four suppliers are established and regulated business entities having their own E&S management systems, sustainability policies & procedures and sustainability reporting which are published on their websites.  IFC assessed the reputational risk screening of each of these suppliers of the company and did not find any legacy incidents of non-compliance with regards to biodiversity and labour aspects in their operations. In addition, all the four suppliers have more than one or more sustainability certifications or supply chain tools covering their operations including Global Platform for Sustainable Natural Rubber (https://sustainablenaturalrubber.org/); Forest Stewardship Council (FSC) certification (https://fsc.org/en); PEFC - Programme for the Endorsement of Forest Certification (https://pefc.org/); Ecovadis (https://ecovadis.com/); and Rubberway (https://rubberway.tech/).

The Company has instituted risk mitigation procedures for screening, selection, monitoring, and periodical auditing of natural rubber suppliers essentially from quality control perspective. Going forward, as per ESAP#3, the Company will review and integrate the following aspects into its existing natural rubber supplier selection, management and monitoring procedures in relation to PS6: a) update policy on the management of the supply chain to reduce risks to conversion of natural/critical habitats; b) undertake a supply chain mapping exercise to identify probable areas of supply and the extent of deforestation and hence risk of natural/critical habitat conversion; c) work with both new and existing suppliers to limit procurement to those suppliers that can demonstrate that they are not contributing to significant conversion of natural and/or critical habitats; and d) within a reasonable time period shift to suppliers, if required, that can demonstrate that they are not significantly and adversely impacting these habitats; and e) develop an assurance program to periodically verify and certify that the natural rubber supplied by suppliers to the Company

JK Tyres considers the neighbourhood communities, statutory authorities, suppliers, employees, contractors and transporters as key stakeholders. Community stakeholders are engaged through corporate social responsibility (CSR) programs. Community engagement is undertaken through various social research mechanisms like participatory rural appraisal, focused group discussion/group discussion, personal interviews, and secondary/primary data analysis. The Company also engages with competent grassroots NGOs, government agencies and other stakeholders to design and deliver its CSR programs effectively. All stakeholders are encouraged to have regular dialogue with the Company through a structured formal engagement process. Impact assessment studies are also conducted regularly to know the ground reality, short-term and long-term impact of social interventions on the lives of people. Public awareness campaign is conducted regularly in the neighbourhood township, nearby village communities, and at nearby schools.

A stakeholder engagement and community grievance mechanism are in place. At every plant, the HR head and corporate social responsibility (CSR) program co-ordinator is responsible for community engagement and addressing grievances. The members of security and administration teams are trained to engage with neighbourhood communities. Every plant maintains a community grievance register at main entrance gate where any community member can raise or record their concern. As part of the stakeholder engagement strategy, Company is publishing its annual sustainability reports since FY16-17. The reports are published on its website - https://www.jktyre.com/Sustainability-Report.aspx.

Company             JK Tyre Industries Limited

Point of Contact Mr. Sanjeev Kumar Aggarwal

Title                         Chief Financial Officer

Telephone Number +91 99112 99761

Email                         sanjeev.aggarwal@jkmail.com

Mailing Address Patriot House 3,Bahadur Shah Zafar Marg,New Delhi – 110 002

Website             https://www.jktyre.com/