The land for the proposed facility was purchased by the Group through a willing buyer-willing seller transaction. The land was non-agricultural land and free from any settlers. Thus PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Similarly, the type of impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage) 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 impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. 

Key environmental and social (E&S) issues associated with this project include: development and implementation of EHS management systems, assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant Performance Standards during construction and operation of the proposed facility; resource efficiency of the operations (mainly energy); 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 proposed facility, and engagement with the local communities in compliance with Performance Standards.

Environmental & Social Impact Assessment (ESIA): As per the requirements of the Bangladesh Environment Conservation Rules 1997 (ECR 1997), the company has applied for a site clearance (expected before the start of the construction). The company has selected the consultant for 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).

E&S Policy and Management Systems: Epyllion has a Group Environmental Policy as well as Health and Safety Policy. The Group also has a Corporate Governance policy which also explains the Group’s approach on environmental sustainability, social responsibility, community responsibility, stakeholder communication and approach to new investments. Epyllion is also a member of United Nations Global Compact (UNGC) since 2012. Though no certified EHS management systems have been implemented at the company or at the Group level, the company has EHS management procedures on waste management, construction safety, fire safety, basic EHS training, internal audit as well as a labor compliance management system which has incorporated basic occupational health and safety (OHS) elements. The policy referenced along with the EHS management procedures will be applied to the proposed facility.

EKWL has a Business Social Compliance Initiative (BSCI) certification since 2014. The facility has also undergone a SEDEX Members Ethical Trade Audit (SMETA) 4-pillar audit in Feb 2018 which covers 4 pillars of Labor Standards, Health & Safety Standards, Environmental Standards and Business Ethics. Further, as Epyllion supplies products to recognized global retailers (C&A, G-star, M&S, etc.) that require compliance with their codes of conduct, EKWL’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. Similar management systems and processes will be extended by the company to the proposed facility.

E&S Organization: Responsibility and authority for managing the EHS issues and risks are defined and communicated within the Group. The Group has a Corporate HR, Admin and CSR (and Compliance) team which is further divided into HR and Compliance, Admin and CSR. Manager – HR has the overall responsibility for EHS compliance. At the facilities level, EKWL have a Manager and AGM - HR, Admin and CSR. The HR, Admin and CSR team have environmental, compliance, fire safety and welfare officers.

Similarly, the proposed facility will have a dedicated team for EHS compliance, energy and sustainability and CSR activities, which will be part of the HR, Admin and CSR organization.  

Emergency response: As discussed in the section on occupational health and safety (OHS) under PS2 below, the visited EKWL facilities were noted to have fire detection and fire fighting systems included centralized smoke detection and alarm, fire hydrant and fire extinguishers. Fire doors are provided on exits and utility area doors.

An emergency response plan was available for the visited facilities.  The roles and responsibilities for various teams responsible for exit control, rescue, fire fighting, first-aid, security and central team are defined and are displayed at the visited facilities. The assembly points are identified and marked. At these facilities, emergency exits and evacuation routes were noted to be clearly marked and having a provision of emergency lighting. The facilities were noted to have an occupational health center (OHC). There is also an ambulance for medical emergencies.

Additionally, in each facility a number of workers are trained in fire safety and operation of fire safety equipment. Refresher courses on first-aid and fire fighting are run as part of the monthly training calendar (discussed below). Regular mock drills are conducted to assess the preparation of the teams. The emergency response processes are also reviewed as part of the compliance assessments of various buyers. Similar emergency response infrastructure, documentation and training processes will be applied by the company to the new facility.

Monitoring and review: Epyllion has established procedures to monitor and measure compliance with its legal and contractual obligations including buyer requirements. The monitoring system includes internal and external audits (by compliance teams/third parties representing the buyers) and implementation of corrective measures. In addition, as explained in the section on OHS under PS2 below, Group facilities have undergone independent building, electrical and fire safety assessments and the corrective action plans are being implemented. Regular environmental (stack emissions, ambient noise), indoor air quality and indoor noise monitoring is conducted at facilities including at EKWL. Incidents/accidents are also recorded.

Annual and monthly training calendars are prepared covering relevant E&S topics including new workers induction, first-aid, fire safety, security awareness, chemical handling, waste management, housekeeping, environmental impact and energy saving, grievance mechanism, harassment and abuse etc. Training records were noted to be maintained at the EKWL facilities.

Similar monitoring, review and training activities will be conducted at the proposed facility. Any corrective actions as required based on the monitoring results will be agreed and implemented.

 Epyllion Group employs about 17300 workers in its group entities including about 2100 in EKWL facilities (1700 in cutting, stitching and packing; 400 in printing and embroidery). All the workers in Epyllion are employed directly by the company and there are no third-party workers. For the proposed facility, Epyllion will hire an additional 5,950 workers (50 lines).

Human Resource (HR) Policies and Procedures: Epyllion Group is a member of United Nations Global Compact (UNGC) since 2012 and has thus committed to adhere to the principles of UNGC including abolition of child labor, elimination of forced and bonded labor, non-discrimination and freedom of association and collective bargaining.

Epyllion has documented policies and procedures for the Group applicable to staff and workers including operational issues like recruitment, compensation, performance evaluation, transfer, training and development and grievance redressal. Additionally, the Group has a code of conduct and business ethics through which the group commits to prohibition of child labor, forced labor, sexual harassment and abuse; non-discrimination and equal opportunity; freedom of association; health and safety; and environmental compliance. In line with the Group’s policies, all Group entities like EKWL have documented policies on these subjects and this will similarly apply to the new facility. 

Working conditions and terms of employment: A contract is signed with every worker at the time of employment. The contract describes the working conditions and terms of employment. In addition, each worker is provided with an employee handbook explaining the provisions of Bangladesh Labor Act, working conditions and benefits provided at including probation period, wage calculation, festival bonus, leaves etc. and basics on OHS.  Also induction training is provided to new workers explaining the HR policies and procedures. The same policies and procedures and those discussed below, consistent with IFC PS2 requirements, will be implemented at the proposed facility.

All employees at Epyllion receive a salary above the minimum national wage. Also, in addition to the salaries, the company has been providing group life insurance for workers, nutrition allowance to pregnant women workers and educational assistance to employees (based on certain guidelines). A child care center is provided at EKWL facilities and the same will be provided at the proposed facility. Further, fair price shop (RENU) is provided at some of the Group facilities for workers to buy subsidized groceries (still to be made at EKWL facilities and proposed facility) and career counselling is provided to workers’ children.

In the last 2-3 years, the company has taken a number of initiatives to improve its planning and efficiency in order to reduce overtime hours. Central planning has been strengthened at the Group level and marketing team receives order after confirmation from planning. Also, new planning tool like Fast-react has been rolled out which are also connected with the ERP systems. All pieces of a product are tracked through a bar code system. These initiatives have helped EKWL achieve compliance with overtime limits. The company will also ensure that the working hours at the proposed facility are compliant with the legal requirements from the start. No accommodation is provided to workers at Epyllion facilities and same would be applicable for the proposed facility.

Non-discrimination and Equal Opportunity: Epyllion has a documented prohibition of discrimination policy. Also, non-discrimination is referenced in the Group’s recruitment policy. EKWL’s workforce includes 50% women workers, and the workforce for the proposed facility will also include similar proportion of women workers. 

Freedom of Association: Being a member of UNGC and in line with its code of conduct and business ethics, Epyllion recognizes workers’ right to form and join government registered trade unions and other labor associations. Though the workforce is currently not unionized, a workers participation committee (WPC) has been formed at all Group entities which has elected worker representatives including at EKWL. 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.

Child Labor and Forced Labor: In line with its code of conduct, the Group and EKWL have documented prevention of child labor and forced labor policies. To prevent use of child labor, age proof documentation (e.g., National Identity Card) is collected at the time of recruitment of the worker. In absence of age proof documentation, age of the worker is verified through a doctor’s examination.

Grievance mechanism: Epyllion has a documented grievance procedure. The same is also displayed at various locations in the EKWL facilities. Under the procedure, 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 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. The facilities have a grievance committee, which meets at a regular basis as well.

Additionally, considering the significant workforce of which majority will be women, the company has a prevention of sexual harassment mechanism and conducts regular awareness sessions about it among the workforce. Although the process exists,

Occupational Health and Safety (OHS): EKWL identifies process/machine specific safety risks. Based on this risk assessment, the safety instructions are displayed in the respective areas. During the visit, needle guards were also observed to be provided at the stitching machines. Pigments and chemicals were stored in the printing facility for screen printing and material safety data sheets (MSDSs) and safety instructions were displayed in the storage and handling area. 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 pigments and printing operations). The visit did not indicate any unmitigated safety hazards. The compliance team of the facilities is responsible for routine inspections and monitoring. At the visited facilities, regular monitoring is conducted for workplace air quality (in the printing section and generator and boiler areas) and workplace noise (in finishing, sewing and embroidery sections and generator areas). The facilities also record the number of accidents and injuries. No fatalities, fire incidents or lost time injuries have been reported in any of the EKWL facilities. EKWL facilities have a health and safety committee (having equal representation of workers and management) which meets monthly to discuss OHS issues. Similar OHS systems and processes will be implemented at the proposed facility.

Regarding life and fire safety (L&FS), the visited EKWL facilities were noted to have fire detection and fire- fighting systems included centralized smoke detection and alarm, fire hydrant and fire extinguishers.

EKWL facilities have undergone the building, electrical and fire safety assessments conducted by the Accord on Fire and Building Safety in Bangladesh (ACCORD). As per the update from ACCORD website, most of the findings have been corrected on fire and electrical safety and few are pending verification. All structural findings have been corrected. As per the company, all corrective actions have been completed from their side and they are awaiting the verification by ACCORD on the remaining fire and electrical safety findings. No fire incidents have been reported at the facilities. For the proposed facility, the company is ensuring that structural, electrical and fire safety designs are compliant with ACCORD standards. Any modifications suggested by ACCORD will be included in the respective designs.

Workers engaged by third parties: All workers are employed directly by Epyllion. However, for the construction of the proposed facility, the company has hired construction contractors. The company also has its own engineers and project managers who supervise the contractors’ work. The company has a documented construction safety policy which covers key aspects of safety organization on-site, new worker training, general safety, electrical and fire safety, dangerous works (e.g. working at heights, welding, excavation, covered under safety during construction), vehicle movement, storage of materials, accident/incident investigation and record keeping etc. During the visit, the construction workers were noted to be using appropriate PPE (safety shoes, luminescent jackets, helmets and safety belts (as required)).

Safety induction was noted to be provided to all new workers. Also, regular tool box talks are conducted where safety awareness is provided. As per the available records, there have been five accidents at the site –three fire incidents and two injuries to workers. However, no accidents/incident investigation has been completed for these accidents. The safety inspections or audits are not recorded and thus there is no formal communication to the contractors about the findings of these inspections/audits. As per the ESAP, the company will improve implementation of the construction safety policy by specifying; (a) clear roles and responsibilities of company personnel for implementation on-site including communication to the contractors; (b) consequences of non-compliance for the contractors and their method of implementation; (c) clear accident/investigation procedures; and (d) documented internal safety inspections and audits.

Accommodation for production management: As discussed above, a dormitory will be constructed (with six floors) near the site of the proposed facility which will be used to provide accommodation to production management staff (~40 to 50 people). The company shall ensure that the facilities provided in the dormitory meet good international industry practice and life and fire safety systems (including fire extinguishers, adequate emergency exits) are in line with the Bangladesh National Building Code.

Supply Chain: Currently Epyllion sources yarn and knits the fabric in-house. Except a few specific fabric types, close to 90% of the fabric is produced in-house. Even after establishment of the proposed facility, it is expected that 80% of the fabric will be sourced from within the Group and the rest sourced from knitting factories outside the Group. For the Group facilities, as discussed above, these facilities undergo independent assessments required by Epyllion’s buyers against their code of conduct compliance requirements on fire safety, occupational, health & safety, labor and working conditions. Also, as Epyllion has implemented same HR policies, harmful labor practices (child labor, forced labor and serious safety hazards) are not expected.

Regarding the facilities outside the group, fabric is mostly from China and Yarn is mostly from India, Indonesia and China, however, these suppliers are nominated by the buyers (and thus monitored for their compliance by the buyers). Epyllion has a process of supplier evaluation under which the supplier facilities are audited by the compliance team through a checklist covering legal compliance, transparency, workers’ compensation, benefits and documentation, workers’ welfare (covering child labor and forced labor), fire safety, building and electrical safety.

Resource Efficiency:  Epyllion constructed a new extension building in one of its companies - ESL in May 2014 which was done so as a Green Building and the company has applied for LEED Gold certificate of the United States Green Building Council (USGBC). Similarly, the proposed facility will also be a green building and will be designed and constructed to meet the requirements of LEED Gold.  Therefore, the proposed facility will include the following key efficiency features:

(a)   Passive design features: building orientation to utilize the natural wind flow and light and to create a cool environment. Natural ventillation will be enhanced through a low cost exhaust system.  Also, the high warehouse will cast shadow on the plaza which will lessen the heat island effect;

(b)   Green roof and terrace: to reduce heat island affect, green roof and green terrace will be provided. Local plants will be used for landscaping which need less water;

(c)   Efficient plumbing and rainwater harvesting: efficient fixtures will be used to reduce water consumption such a return duct to facilitate the hand wash water to be reused in the water closet for toilet flushing. Rainwater harvesting will also be implemented and rain water will be used in toilet flushing and gardening with excess rainwater to be recharged into the groudnwater;

(d)   Energy efficiency: exterior lighting will be powered through a built-in solar panel. LED lights will be provided inside. Automated light sensitive dimmers will be used to adjust lumen intensity according to day light condition and the energy performance of the building wil be tracked through building management system (BMS).

Further, the facility will use chlorofluorocarbon (CFC) free refrigerants and for comfort of workers, maintain indoor air quality, temperature and lighting levels to their optimum levels. 

Air Emissions: The main source of electricity is going to be captive gas generators. Electricity from the grid and diesel generators will be the back-up sources. Also, for steam, the natural gas based boiler will be used with diesel boiler as a stand-by.

 The main source of air emissions at the facility will be two gas generators (1250 kW capacity each), two back-up diesel generators (1250 kW capacity each), and gas boiler (4500 kg/hour). As part of the EHS monitoring programs (discussed above), the proposed facility will regularly monitor the stack emissions and ambient air quality to ensure compliance with the applicable legal requirements and WBG EHS guidelines for Textiles manufacturing.  

Water and wastewater (including Stormwater): The main water usage for the proposed facility will be for domestic purposes. The main source of water at the facility will be the on-site borewell.  The water will be treated in the Water Treatment Plant (WTP).

Domestic sewage will be treated through the on-site STP. Limited quantities of wastewater will be generated from screen printing operations and an effluent treatment plant (ETP) with secondary treatment (through a biological process) provided at the proposed facility to ensure compliance with the applicable legal requirements and WBG EHS guidelines for Textiles Manufacturing.  The facility will also conduct regular testing to confirm the same. The facility will also have a rainwater harvesting system with groundwater recharge.

Waste Management: The main waste streams generated at the proposed facility will include packaging wastes (e.g., cartons, paper, and polyethylene), waste fabric, used oil, used batteries and ETP sludge.  Epyllion has a waste management manual which covers processes on classification of waste, inventorization and disposal of waste. However, it does not provide any guidelines on storage within the facility, handling and disposal of waste (especially hazardous waste). Therefore, as per the ESAP, the company will strengthen the waste management manual with specific guidelines on storage, handling and disposal of waste streams expected to be generated at the proposed facility (especially hazardous waste).

Greenhouse Gas (GHG) Emissions: The GHG emissions at the proposed facility will be from consumption of natural gas (for electricity and steam generation) and diesel (for back-up power generation).The estimated GHG emissions from the facility operations are estimated to be approximately 22,000 tons CO2/annum (mainly direct emissions).

The site for the proposed facility is located on the Dhaka – Chittagong highway and thus no significant traffic related impacts are expected on the neighboring community. The land purchased by the company extends beyond the canal (located on two sides of the site). However, the company is planning to construct only upto the canal, therefore, there will be no impact on the canal.  With implementation of company’s construction safety policy, the construction related impacts are expected to be mitigated.

As regards security, the company plans to have private unarmed security guards for the proposed facility, when it is operational. As per the ESAP, the company will document a specific security policy/code of conduct in line with the PS4 requirements which will include behavior with the community, workers, recording and investigation of any security related incidents, community grievance mechanism and clear guidelines on use of force. The policy will be communicated to the security guards as part of the induction, as well as refresher training.

 Epyllion undertakes a number of CSR activities in the area of environmental awareness, education, supporting the disabled or under privileged and sports development. The Group has supported a number of campaigns//initiatives to raise environmental awareness which include, for example, (a) environmental olympiad and awareness campaigns in schools in education institutions (b) a “Tree for Free” 2014. The Group has also organized International Women’s Day to honor deserving women as well as a under-15 football competition. In the area of education, the Group provides scholarships to deserving students. The Group has received the Standard Chartered Financial Express CSR Award in 2016 and CSR Contributor Award by Uttara in 2018.

The company has put a complaint/grievance box at the construction site to receive and respond to grievances from the local communities.

Epyllion will locally disclose this ESRS at the following address:
 

Epyllion Group

Nina Kabbo, 227/A

Gulshan-Tejgaon Link Road

Tejgaon, Dhaka-1208, Bangladesh.

Any queries and/or comments about the project may be directed to:

Mr. Arshad Ali Chowdhury, FCA

Epyllion Group

Nina Kabbo, 227/A

Gulshan-Tejgaon Link Road

Tejgaon, Dhaka-1208, Bangladesh.

Tel: 0088-02-9840223

Fax: 0088-02-9855293

Mobile: 0088-01730-725925

arshad@epylliongroup.com