The expansion will mainly be undertaken within the food park. Any new Aadhaar wholesale center  will be operated from leased facilities. No land acquisition is thus planned or expected under the project which may result in involuntary displacement or resettlement. Therefore, PS 5: Land Acquisition and Involuntary Resettlement is not applicable.

No significant direct primary production of living natural resources is involved in the project and there is no material risk of significant conversion of natural and/or critical habitats in the supply chain. Thus PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable. Also, the type of risks and impacts envisaged in PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not applicable.

Screening and assessment of these issues against PSs requirements for any future developments will be done through FCL’s ESMS. 

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability as it is expected to have limited environmental and social impacts which are expected to be site-specific, none are expected to be significant, and can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections.

Key E&S risks and issues associated with this investment are: (i) company’s and each of its subsidiary businesses’ capacity and systems to manage E&S aspects (e.g. processing facilities, warehouses); (ii) emergency preparedness and response, including life and fire safety (LFS) and ammonia-based refrigeration system; (iii) assurance of fair, safe and healthy working conditions for its workforce (including company employees, contractors and third party workers); (iv) resource efficiency (energy and water), and pollution prevention and control (e.g. solid wastes and wastewater); and, (v) labor practices within direct operations and some private label supply chains in line with PS2 requirements.

E&S Impact Assessment (ESIA): The proposed expansion under the project (i.e. expansion within the food park or new warehouses) do not require any ESIA or environmental clearance as per applicable legal requirements. As per the procedures developed under the ESMS (discussed below), for any proposed greenfield operations, the company will complete preliminary screening and depending upon the screening results (e.g. for high risk projects) and applicable legal requirements, an ESIA will be completed in line with IFC PSs requirements.

Identification of E&S risks and impacts: As part of the development of ESMS, a macro level E&S risk assessment has been completed for all businesses/subsidiaries of the company which covers environmental, occupational, health and safety (OHS) and social risks and impacts. A detailed environmental aspect-impact and hazard identification and risk assessment (HIRA) is under progress for all businesses/subsidiaries which will be completed by March 2020, and regularly updated as part of the ESMS.

E&S Policy, Management Programs and Organization Capacity: Future Group has adopted policies on environment care, OHS, human rights, corporate social responsibility (CSR) and suppliers code of conduct. Similar policies have been adopted by FCL and included in its ESMS, which cover IFC PSs requirements.

In line with the policies and under the agreed ESAP for the previous investment, the company has developed an ESMS both at the corporate level and at the level of subsidiaries, including for Nilgiris, food park, COP, agri-product sourcing and private label products.

The ESMS covers all E&S aspects at corporate level and includes the following key procedures: (a) risk and impact assessment of new projects and acquisitions; (b) land procurement; (c) stakeholder engagement; (d) emergency preparedness and response; (e) reporting, monitoring, verification and review. Also, it describes the institutional structure and training needs for ESMS implementation across the company.

Similarly, each business/subsidiary level ESMS has key procedures on (a) conducting risk assessment of operations; (b) EHS management programs on applicable risks and impacts; (c) emergency response; (d) monitoring and review; and, (e) training and competence. Also, the ESMS includes various formats/check-lists for day-to-day implementation of these procedures.  

The company has formed a corporate level ESMS committee which includes the Head of Manufacturing, Manager – EHS, Head of HR and representatives of various businesses/subsidiaries. The committee is responsible for ensuring ESMS implementation and reviews progress on a quarterly basis. Similarly, ESMS implementation teams have been formed at each of the business/subsidiary. The company has hired an external consultant to support implementation of the ESMS by providing training to these teams, customization of documentation as needed, and conducting regular implementation audits. A detailed ESMS implementation plan has been prepared and agreed with IFC, as per action#1 of the ESAP. The ESMS will be implemented within the agreed timelines and consultant’s implementation audit reports will be shared with IFC on a regular basis. 

Emergency Preparedness and Response: The food park and Nilgiris have documented on-site emergency response plans. Also, regular training and drills are conducted at the facilities. The food park has a fire hydrant system for the whole park while fire extinguishers are found in each of the facilities. Also, an alarm system has been installed in part of the park and its implementation is under progress for the complete park. The park has a central hooter, which can be used for complete evacuation of the park. Sprinklers have been installed on the ammonia tanks (for leakages) and a detection system will be implemented by July 2019. Similar detection system is installed at Nilgiris. Emergency exit and route markings have been provided for the food park and Nilgiris. The visited COP facility was also noted to have fire hydrant, fire extinguishers and alarm system. The emergency response procedures will be strengthened for all businesses/subsidiaries and additional necessary equipment installed as part of the ESMS implementation.  

Monitoring and Review: The food park and Nigiris facilities conduct regular monitoring of effluent quality, stack emissions, ambient air and ambient noise. The results indicated compliance with the national standards and World Bank Group (WBG) EHS guidelines. Also, accidents and incidents are recorded at the facilities. To strengthen the monitoring and review processes, detailed reporting, monitoring, verification and review procedures have been developed as part of the ESMS implementation. The procedures include internal tracking of key performance indicators (KPIs) and reporting from subsidiaries to the corporate ESMS committee, internal inspections and audits, external inspections and management review. The procedures will be implemented for all businesses/subsidiaries as part of the ESMS implementation.                                                   

For Disclosure

FCL has an employee strength of approximately 2200 (as of February 2019) with a large proportion of its employees involved in agri-sourcing (around 1000) and Nilgiri’s facilities (about 180). The food park operations have 20 employees. In addition, more than 2,600 contract workers are engaged across various businesses of FCL mainly in grading, sorting, packing operations, loading/unloading, housekeeping and security  (e.g. at food park, COP).

HR policies, procedures, working conditions and terms of employment. Future Group has adopted a suite of HR policies (effective May 1, 2015) which are then adopted/adjusted for each of the group companies, including FCL, depending on the nature of the operations. Since the previous investment, Niligiri’s policies have been harmonized with FCL. Also, as part of the Group sustainability guidelines/policies and the ESMS, the company has adopted a specific human rights/resources policy, which includes commitment to compliance with labor laws, no child labor, no forced/bonded labor, non-discrimination and equal opportunity and opportunities to employees to express their concerns through forums and representation. 

All HR policies are available on the intranet and accessible to all employees. All employees receive a written appointment letter explaining the terms of employment and working conditions. Communication of these policies and procedures at the food park and Nilgiris is being strengthened. As set forth in the ESAP (action #2), FCL shall ensure formal communication of its HR policies and procedures at its operations (Nilgiris, food park, COP, Aadhaar) to its employees and all workers through induction sessions, HR handbooks or Board displays.

Freedom of Association: As mentioned above, at the group and FCL level, there is a commitment to principles of freedom of association and collective bargaining. Currently, the employees at FCL are not part of a union. 

Non-discrimination and equal opportunity. The group and FCL have documented policies on diversity and equal opportunity which commits to provide a work environment free of discrimination.

Grievance mechanism. The group has a documented policy on redressal of employee grievances.  As per the policy, any employee can raise a grievance to his/her immediate manager and then to the People Office representative at each unit. In case the grievance is not resolved  or if it is to be kept anonymous, this can be escalated to the next level i.e. the unit head and, if not resolved there, to the Head of People Office who will form a corporate grievance committee. The timelines for processing of grievances is defined within the policy.

As per the previous ESAP, FCL has already implemented a grievance redressal mechanism at the food park (applicable for contract workers), wherein workers can approach with a grievance to HR representative, who shall in turn record the same in a log book and ensure its resolution via escalating to appropriate authorities. As per the ESAP (#2), the company will extend the grievance mechanism for all other operations (at COP and Aadhar facilities) for all employees and workers.

As per applicable legal requirements, the company has formulated and implemented a prevention of sexual harassment policy and constituted an internal complaint committee (ICC) including female employees and an external member.

Protection of workforce. The group HR policy includes a policy on prevention of child labor which prohibits employment of anyone younger than 18 years. Age proofs are collected for employees and contract workers prior to employment. No specific instances of child labor or forced labor were noted during appraisal site visits of the facilities.

Occupational, health and safety (OHS): As mentioned above under PS1, the group has adopted policy OHS and a similar policy has been adopted by FCL and included in its ESMS, which cover IFC PSs requirements.

A macro level risk assessment has been completed for each of the subsidiaries as part of the ESMS development. A detailed hazard analysis and risk assessment (HIRA) process for all subsidiaries and training needs is completed as part of the ESMS implementation.

The ESMS for all subsidiaries include requirements on various aspects including job hazard analysis, safety induction, safety instruction for dangerous works (e.g. work at height, confined spaces, hot work), electrical safety, machine guarding, permit-to-work, usage of personal protective equipment and general housekeeping and hygiene. The  risk assessment and training needs identification has been completed for the food park and relevant OHS procedures will be implemented as part of the ESMS.

During site visits, workers were noted to be using appropriate PPE. Basic safety awareness and training was noted to all workers. The food park has a safety committee made up of safety representatives from the food park management and the subsidiaries. Similar safety committee is in place at Nilgiris. Accident investigation processes have been implemented at the food park and Nilgiris.

Third party workers. Contract workers are employed at the food park, Nilgiris and COP for the manufacturing operations as well as housekeeping hired through various contractors. The HR personnel at both FCL and subsidiary facilities review contractors’ documentation to ensure compliance with national labor law, including wages (i.e. at least minimum wage), working hours, and benefits. As part of the ESMS, a specific contractor management policy has been developed and is being implemented at all facilities. Specific  HR policies and procedures for contract workers will be reviewed and adjusted.

For construction contractors (hired at any subsidiary), as part of the ESMS implementation, FCL includes various EHS compliance requirements in the contract signed with the contractors. The EHS team of the subsidiary is responsible for monitoring the implementation of these requirements. The ESMS implementation will further formalize the monitoring and reporting of contractors’ performance and reporting.          

Supply Chain Risk Assessment and Management. Sourcing of various food products and agri commodities including F&V, cereals (rice, wheat), pulses, dry fruits, oils, flours, etc. is led by respective sourcing teams of FCL.

The COP business has over 40 sourcing hubs/processing centers and distribution centers. Among agri commodities (like spices, dry fruits), most of them are sourced from either traders or millers in bulk while certain agri commodities are sourced from farmers on a spot basis without long term contracts.

The F&V are sourced both from farmers as well as from traders at local agricultural produce markets (mandis). These transactions are spot market based and there is no long-term management relationship between buyers and sellers. The company has a sourcing team in each of its seven farm collection centers and over 18 distribution centers. Currently the company is directly sourcing from nearly 1,700 farmers, however, they do not have any long-term contracting relationship with the company and are free to sell their produce to anyone. The company is not selling them any inputs or provide any financing support to the farmers.

For FMCG products (Processed Foods and HPC business), FCL has a network of over 100+ suppliers. The suppliers are selected through a pre-assessment audit process from FCL. The audit focuses on quality and food safety (ref. Food Safety and Standards Authority of India). Most of the suppliers for FCL have food safety and quality certification.

In accordance with the United States Department of Labor’s (DoL’s) list of goods produced by child or forced labor, high risk of child labor and forced labor (relevant for a business like FCL’s) in India is present in rice, sugarcane and garment production. In this case, the rice and sugar are sourced from mills. Thus, FCL does not have any direct relationship with the rice and sugarcane smallholders and have no significant control or leverage on the millers.

The group, in its sustainability guidelines, as well as the company, as part of the ESMS, has developed a suppliers’ code of conduct which covers applicable supply chain requirements in the IFC PSs. The code of conduct requirements has been included in the audit check-list for new suppliers. As part of the implementation of the ESMS, this will be initially implemented for all FMCG suppliers for which, FCL will (a) include specific requirements of the code of conduct in the contracts signed with suppliers.; and (b) complete sample audits of these suppliers based on a risk assessment of these suppliers with respect to potential of child labor, forced labor and significant OHS issues. In case any changes are needed in the supply chain risk management processes of the company, the same will be implemented for example, increasing the frequency of monitoring, adding more suppliers to the sample, need for additional detailed assessments, etc. . The company will also follow the oversight monitoring and review processes as per the requirements of the ESMS.

In case there are changes in the sourcing arrangements of the F&V or other commodities, the same code of conduct will be applied for their suppliers.                                                   

Power supply and air emissions: The main source of power at all FCL facilities i.e. the food park, Niligiris, COP is grid electricity. All facilities have diesel generator (DG) sets for power back-up used only in case of power outages. Also, there are briquette fired boilers at food park and Nilgiris, respectively.

The emissions from the boilers and DG sets are tested regularly at Nilgiris and food park and emissions were noted to be in compliance with national standards as well as WBG EHS guidelines except for Particulate Matter (PM) emissions in the boiler at the food park, which was noted to be exceeding the WBG EHS guideline. As per the ESAP#4, the company will review the root causes for the exceedance in PM emissions and implement required corrective actions within agreed timelines.

Water and wastewater management: Main source of water supply for operations at the food park is via KIADB water supply and groundwater (based on requirement) is abstracted through on-site wells. For Nilgiris, the source of water was groundwater, however, in line with recommendations of the hydrogeological study and groundwater sustainability plan (completed as per ESAP of previous investment), the company reduced use of groundwater on-site and started purchasing water through tankers from areas which were marked as safe for groundwater use. Also, with outsourcing of some of the products, the water consumption of the facility has been reduced. The COP facilities typically have dry operations (as they process spices, dry fruits, etc.) and do not have significant water consumption. 

For wastewater treatment, a common effluent treatment plant (CETP) has been provided at the food park, which is maintained by IFPL. Domestic sewage generated at the food park is also treated within the CETP. On-site ETPs is also present at Nilgiris’ facility for treating process effluents whereas the domestic sewage is discharged in the septic tanks on-site. Treated effluent from the CETP (at food park)/ETP (at Nilgiris’ facility) is reused on-site for gardening.

The food park has also implemented a rainwater harvesting (RWH) system wherein all the rooftop as well as surface rainwater runoff is collected in RWH pits. Part of the rainwater is reused (after treatment) whereas part of it is used for recharging the groundwater.

The effluent quality is regularly tested at both the food park and Nilgiris and the results were noted to be in compliance with the applicable national/state standards as well as WBG EHS Guidelines.

Resource Efficiency: The company has initiated few resource efficiency initiatives at the food park: (a) completing a water mass balance study to identify facilities with high water consumption; (b) installation of water flow meters to record consumption for each of the facilities; (c) reuse of RO reject water for toilet flushing and for boiler feed; (d) proposals to revamp the RWH system to reuse the rainwater for washing of F&V; and (e) various measures to reduce energy consumption in the refrigeration section of the F&V.

The approach on resource efficiency will be further structured by implementation of the resource efficiency framework, which is part of the ESMS.

Management of solid and hazardous waste. At the food park operations, the main waste streams generated are organic waste (cooked food, F&V, especially waste generated from mango and tomato pulping) and recyclable - plastic, metal and packaging waste (cardboard, paper). Waste are collected in separate bins of organic and other wastes, placed at a number of locations. Currently organic waste is being composted and the compost produced is given to the local community (as part of the CSR) and also utilized in the green house on-site. Also, mango stones are used as feedstock for the biomass boiler. The recyclable waste is sold to external waste management service providers. Same process is followed at Niligiris.

Hazardous waste generated at the food park and Nilgiris includes used oil (used for initial firing of the briquette boiler or given to the authorized vendor), used batteries (returned to the vendor), electronic waste and ETP sludge (disposed of through authorized vendors). Disposal records are maintained.                               

Greenhouse gas (GHG) Emissions: Based on available data, the GHG emissions from the project are expected to be about 6,000 tons of CO2 equivalent.                  

Though new facilities will become operational in the food park in the future, the park is located in an industrial area within 1 km of a national highway. COP facilities are also typically located in industrial areas close to highways. Therefore, traffic related impacts are expected to be limited. No expansion is expected in Nilgiris’ manufacturing operations as a result of the project. The new warehouses of Aadhar will be on leased facilities in rural/semi-urban areas, however, their size and operations are limited in scale.

Security forces. Unarmed private security guards are employed at all manufacturing facilities and warehousing facilities. As indicated above, as the manufacturing facilities are located in industrial areas, no specific community related impacts are expected.

Transportation safety. As regards to transportation, all vehicles used for transportation by FCL are hired through external transport service providers. As part of the ESMS implementation, driver training, awareness and control systems are being implemented to minimize risks to safety of communities from vehicles plying to and from the warehouses/facilities.                                                       

As per applicable legal requirements, FCL has set up a CSR Committee at the Board of Directors level and documented a CSR policy. Annual Report of the company includes a section on CSR which describes CSR policy, committee, initiatives undertaken by company, and CSR spend during the financial year.

Various brands/subsidiaries of FCL have undertaken a number of CSR initiatives in the year 2018-19, for example: (a) supporting vocational education of youth and based on performance giving them opportunity to promote certain products at stores of one of the Group companies; (b) supplying ration and providing mid-day meals to children’s homes; and (c) educating children of marginalized communities (with support of an NGO).

Specifically, for the food park, the corporate CSR team has conducted a survey and identified CSR activities to be undertaken in the nearby villages focussing on construction of toilets; access to clean drinking water especially at Anganwadis (i.e. government day-care) and promoting fitness in community.

There was a dispute for 12 acres of land plot (originally acquired by KIADB in 2011 and allotted to FCL in 2014) with few villagers at one of the village near the food park. The dispute was about access to the main road and grazing land due to the construction of the boundary wall. However, the dispute was amicably resolved with the company agreeing to support the community development efforts and widening of the alternate road. As part of the ESMS, the company has developed a specific stakeholder engagement and grievance redressal framework, which will be implemented at all its facilities/subsidiaries.                                                   

Considering the corporate nature of the investment, FCL will disclose this ESRS and the ESAP at the following address:

Future Consumer Limited

Future Retail Home Office

Tower C, 8th Floor, 247 Park

LBS Marg, Vikhroli (W)

Mumbai – 400083, India.

Phone: +91 22 61994108

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

Mr. Manoj Gagvani

Company Secretary & Head Legal

Future Consumer Limited

Future Retail Home Office

Tower C, 8th Floor, 247 Park

LBS Marg, Vikhroli (W)

Mumbai – 400083, India.

Phone: +91 22 61994108

Email: manoj.gagvani@futuregroup.in