The construction and refurbishment of the hotels (current and future) are likely to be undertaken within existing footprint (which is either owned or leased by JKH). The new stores and DC will be developed in urban and sub-urban areas in commercial spaces which are leased. No land acquisition is thus expected for the project and therefore, PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Similarly, no impacts are expected on indigenous peoples or cultural heritage and therefore, PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are also not applicable.

 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.

E&S Impact Assessment (ESIA): As per applicable legal requirements, the company has completed an Initial Environmental Examination (IEE) for refurbishment projects at Bentota Beach (in December 2017) and Dhonveli (in Apr 2019) as well as an Environment Impact Assessment (EIA) for Hakurra Hurra (in March 2019).

Based on review of company’s IEE and ESIA reports and development plans, the company has received the required clearances for the project. Also, the company has documented an environmental and social management plan (ESMP) for each of the hotels in the IEE/ESIA, which will be implemented. The ESMPs will be reviewed and, if required, updated by the company to ensure compliance with IFC PSs, including any measures that may be required as per PS6 (discussed in the relevant section).

E&S Policy, Management Programs: JKH has Group level sustainability policies on environment, occupational health and safety (OHS), biodiversity conservation, social responsibility, energy management, waste management, hazardous waste, human rights as well as supplier code of conduct. All Group companies/businesses develop their procedures and management systems in line with these policies.

As regards Leisure business, all JKH hotels have implemented environment, OHS management and food safety systems in line with requirements of ISO 14001, OHSAS 18001/ISO 45001 and ISO 22000. All hotels document an OHS and Environmental (OHSE) management manual which describes various procedures such as on risk assessment, chemicals management, electrical safety, permit to work, accident/incident investigation, solid waste management, internal audit, performance measurement, and objectives and targets. The implementation of the procedures was noted to be adequate (except for the areas of improvements identified in this summary). In addition, all resorts (including the hotels under refurbishment) have implemented systems to achieve Green Globe and Travellife certifications for their operations. Green Globe is in an international standard which has requirements for sustainable management, socio/economic development, cultural heritage and environment (including biodiversity conservation). Similarly, Travel Life standards have requirements on sustainability management systems, labor and human rights, environmental management, community integration and sustainable supply chain.

For retail stores, the company has implemented quality management systems as per the requirements of Sri Lanka Standard SLS 1432: Requirements for Good Practices for Supermarkets (covering good management practices for food and non-food items). Also, the retail business has a separate OHS management policy and an OHS management program with basic procedures.

The DC has also implemented environment and OHS management as per ISO 14001 and OHSAS 18001 requirements.   

E&S Organization: JKH has a sustainability structure with oversight from the Group Executive Committee (GEC). The GEC formulates the Group sustainability strategy which is implemented out by the Sustainability and Enterprise Risk Management (ERM) Division, which is headed by Executive Vice President – Head of Sustainability, Enterprise Risk Management ERM & Group Initiatives. This division is responsible to develop Group level policies, governance and reporting framework and monitor implementation of all group sustainability policies in JKH businesses. Also, it identifies significant stakeholders, materiality issues and global benchmarks, shares best practices, conducts risk reviews and the overall review and monitoring of the sustainability initiatives. Management committees of the business can adapt the policies for their respective operations.

Sustainability and risk management at each business is the responsibility of the head of the respective business. Also, each business unit has a dedicated Sustainability Champion responsible for sustainability initiatives and the overall sustainability performance, under the supervision of their respective Sector Heads and Heads of Business Units. The Sustainability Champion is also responsible to report on sustainability performance to the Group Sustainability team at decided frequencies.

There are dedicated sustainability personnel for leisure and retail business. For leisure business, the sustainability and EHS teams report to the Vice President – Engineering and Projects and they are responsible for implementation of EHS and sustainability at all hotels. At hotel/resort level, chief engineer is typically responsible for implementation of E&S procedures and sustainability initiatives and is supported by a cross-functional EHS team. For stores, the Head of Productivity Improvement is responsible to monitor implementation of EHS procedures and store managers are responsible for their implementation.  

Emergency Response: The LFS systems provided at the hotels and stores are discussed under PS4.

The JKH’s resorts in Sri Lanka (as noted in the visited hotels) are typically low-rise buildings (maximum G+1 or G+2) and were noted to have multiple staircases adequately marked with signages. Maldives resorts generally have all facilities on one floor. All visited hotels were noted to have an emergency response plan and regular emergency drills were noted to be conducted.

The visited stores and DC were noted to be provided with multiple exits which were identified with photoluminescent marking. Also, stores and DC had provision of emergency lighting with back-up.

At the stores, a standard emergency response procedure has been rolled out through a virtual training module. However, no specific emergency response plan is prepared for each of the stores i.e. a plan explaining procedure, emergency contacts, roles and responsibilities for that specific store in various emergencies. Also, the training is through the portal and no documented emergency response drills were noted to be conducted at the visited stores. Similarly, at the DC, though a fire safety awareness training is conducted, the emergency response plan and drill records were not available. As per the ESAP, the company will develop a template for emergency preparedness and response plan for stores and DC and share it with IFC. The plan should consider all potential emergencies e.g. fire, earthquake, bomb threat, disturbance by a customer, missing child, and medical emergencies; and will respond to the needs of life and fire safety requirements and other emergencies and include training on emergency evacuation, use of fire equipment, evacuation procedures, roles and responsibilities, and other applicable aspects identified in the planning process. All stores/DC shall then develop and implement their own emergency preparedness and response plan within reasonable timelines. Regular classroom training and mock drills shall be conducted for all stores/DC.

Monitoring and Review: At the Group level, JKH has developed a standard operating procedure to ensure uniformity in sustainability integration and performance measurement, tracking and reporting, in line with the requirements of GRI standards (2018). As per the SOP, Sustainability Champion of each business is expected to monitor relevant key performance indicators (KPIs) for their respective operations and report them through the Sustainability IT system on a quarterly basis. Based on this reporting, quarterly reports and dashboards are circulated to Heads of Businesses, the Group Operating Committee, GEC and the JKH Board by the Sustainability and ERM Division which provide trends of the Group’s sustainability performance for each sector. Also, quarterly presentations on business sustainability performance are made by the Sustainability Champions to the management committee of the respective business.

Further, an annual report is published and disclosed by JKH which also describes sustainability performance for all its businesses (https://www.keells.com/annual-reports and https://www.keells.com/resource/annual-report/John_Keells_Holdings_PLC_AR_2018_19_CSE.pdf). Additionally, leisure business publishes and discloses an annual report including its sustainability performance (https://www.keells.com/resource/other-group-company-financial-reports-2018-19/John-Keells-Hotels-PLC.pdf). Some of the key E&S KPIs disclosed are related to energy consumption, water consumption, effluent generation, waste reuse/recycling/disposal, accidents and injuries, carbon footprint, compliance incidents and community investments. Also, the reports describe Group’s activities on biodiversity conservation and human rights awareness. The data is reviewed on-site by Group Sustainability team on a sample basis. Also, as part of the assurance of the reports, a third-party assurance company (DNV) conducts sample audits at a few sites.

In addition to regular monitoring and reporting of KPIs, the EHS team for Leisure conducts regular internal audits for all hotels/resorts with respect to EHS procedures. Also, audits are conducted by certification agencies periodically as part of the management system certification/surveillance protocols (e.g. ISO 140001, ISO 45001, Green Globe, Travellife) for hotels/DC.

For the stores, an internal audit is conducted by the store manager on weekly basis, which includes a check on fire safety. Also, regular audits are by corporate quality teams which cover facility management as well as HR aspects.

JKH employs about 4,600 employees (~50% female) in its retail and 4,400 employees (~10% female) in its leisure business. Each new store developed under the project is expected to employ about 45 employees.

HR policies, procedures, working conditions and terms of employment. JKH has a Group level Human Rights Policy, which is guided by the principles of the Universal Declaration of Human Rights, the International Labour Organisation’s Declaration on the Fundamental Principles and Rights at Work, and United Nations Global Compact. Through the policy, which is currently being updated, the Group (and its businesses) have committed to:

• Freedom of association and effective recognition to right of collective bargaining;
• Elimination of forced and bonded labor;
• Child Protection;
• Elimination of discrimination and Equal Opportunity;
• Fair Wages and Benefits;
• Safe and healthy workplace; and
• Stakeholder Engagement.

Separately, specific policies have been documented at a Group level on equal opportunity and non-discrimination, child labor, forced or compulsory labor, against sexual harassment and health and safety. the Group has a code of conduct which also prohibits any harassment and discrimination. The policies are thus in line with PS2 requirements.

All HR policies are available on the intranet/mobile application and are accessible to all employees. All employees receive a written appointment letter explaining the terms of employment and working conditions. Also, employees are provided a handbook and given an induction where key HR policies are explained.

All employees are provided festival holidays and statutory leaves. As the stores and hotels operate 7 days a week, weekly offs are provided on a rotational basis. All stores/hotels prepare a shift roster and the attendance is monitored through a biometric attendance system. The DCs operate in single shift.

Protection of workforce. The group policies prohibit employment of anyone younger than 18 years and any form of forced or compulsory labor. 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.

Freedom of association: As per the human rights policy, the group has an explicit commitment to respects its employees’ right to freedom of association and collective bargaining without fear of reprisal or harassment. Also, it has committed to constructive engagement and dialogue with such workers’ organization. The group has collective bargaining agreements with 1,152 employees covering its leisure and food processing businesses. All hotels in Sri Lanka have a workers union. However, none of stores or Maldives hotels were noted to have a union and as per discussions, there have not been any request from employees to form workers’ organizations.

Grievance Mechanism: JKH has multiple grievance channels for its employees. The Group has developed a standard grievance procedure guidance under which all businesses are expected to develop their own procedure with escalation levels from immediate manager to HR and finally to a grievance committee. For the hotels, the company has included escalation upto five levels (immediate manager, hotel HR, hotel General Manager, functional head and sector head) in the grievance procedure.

Additionally, a separate email address has been created for the employees to report any violation of Group values to the Chairman and has been included in the code of conduct itself to make employees aware about it.

Lastly, the Group has an Ombudsperson policy under which an external independent person is appointed as Ombudsperson for the group. A dedicated email address is available to employees to report their grievances related to legal and ethical violations vis-à-vis the Code of Conduct of the Group when a satisfactory outcome using existing procedures and processes is not received OR when the complaint is against the top management of the Group. Although no anonymous complaints are allowed to be submitted, the policy assures confidentiality of the complainant to be maintained. The policy describes a clear process of investigation by the Ombudsperson and providing feedback to the complainant.

Non-discrimination and prevention of sexual harassment: JKH has a Group level policy and guidelines on equal opportunity and non-discrimination. Under the policy, the Group has committed to maintain a workplace free from discrimination, on the basis of race, religion, gender, age, nationality, social origin, being differently abled, sexual Orientation, gender identity, political affiliation and opinion. Discrimination is considered an act of misconduct. In line with the Group policy, the businesses have policies on non-discrimination.

The gender-based violence (GBV) screening as per IFC’s internal tools shows Sri Lanka and Maldives are not high-risk countries for GBV. The Group (and the businesses) have documented policies on prevention of sexual harassment. The policy describes the process of raising such complaints, escalation mechanism and roles and responsibilities. As per the policy, each business is expected to have a sexual harassment committee in place to receive and investigate such complaints. The complaints can also be made to the Group Ombudsperson (discussed before) or through available legal mechanisms under the relevant laws. The policy includes provisions of maintaining confidentiality of the complainants and the investigation process. Additionally, the employees have a choice of referring a matter relating to sexual harassment either to the Ombudsperson or to the internal committee appointed for this purpose.

Although training on prevention of sexual harassment were noted to be conducted at the visited hotels and stores, they are not part of the annual training calendars or basic modules (applicable for retail). As per the ESAP, a training on prevention of sexual harassment and grievance mechanism should be included in the annual training calendar as well as basic modules to be completed for retail.

JKH has been running a long-term CSR project called Project WAVE (Working Against Violence through Education) aimed at combating issues of gender-based violence and child abuse through education and awareness creation among Group employees, strategic external groups and the general public. As part of the project, general awareness sessions have been conducted for all companies in the Group and company has initiated training for supervisory staff in some of its hotels. Other campaigns like Glass Bottle with “Zero Tolerance - I stand against violence” have also been run in the past years. As part of the CSR efforts, JKH has been running public awareness campaigns on prevention of sexual harassment since last three years targeting commuters of public transport in few busy bus depots in Colombo.

Occupational, Health and Safety (OHS): In addition to the Group policies, both the retail and leisure businesses have their own OHS policies.

Considering the nature of operations, the retail operations have limited OHS risks (except LFS and emergency response, discussed in other sub-sections). A basic OHS program has been developed for the stores which includes guidelines on manual handling, use of equipment (e.g. band saw, mincer), injury prevention (trips, falls, cuts and burns), work at height, use of trolley/roller cages, hoists, electrical safety, eye protection, and emergency preparedness. The guidelines have been converted into video-based training modules and employees access them through a mobile application. Similarly, basic OHS procedures have been developed for the DC operations and during the appraisal, OHS awareness session were noted to be conducted.

As mentioned under PS1, all hotels have an OHSE manual which includes OHS procedures including on electrical safety, chemical handling and work at heights. Regular trainings and internal audits are conducted at the hotel to ensure improvement of these procedures.

Workers Accommodation: The hotel business has developed a specific policy on change room and workers accommodation. The policy describes entitlements (for various staff levels) and standards of accommodation to be provided. During the site visit, the accommodation provided at the hotels was noted to be meeting good industry practices. Accommodation provided for construction workers at Maldives hotels was also noted to be adequate. No worker accommodation was provided for construction workers at Bentota Beach as the workers were from the local area. No additional workers accommodation will be required for this project.

Third Party Workers: The hotels typically hire outsourced workers for kitchen stewarding, gardening, engineering. The stores hire them for security and housekeeping. The HR department reviews contractors’ compliance against their contractual commitments.

The company has hired contractors for civil work, electrical, mechanical-engineering-plumbing (MEP) and finishing work. During the site visit to the hotels, it was noted that contractors had safety personnel on-site. Basic safety induction was provided to their workers and regular tool box talks were conducted. Also, at Bentota beach, an EHS manual was prepared by the contractors. However, areas of improvements were noted in implementation of EHS practices at all visited hotels under refurbishment, mainly in the areas of (a) use of personal protective equipment (PPE) by workers including safety shoes and helmets; (b) incident-accident monitoring procedures; (c) regular awareness training for workers; (d) barricading of dangerous areas; (e) working at heights; and (f) waste management. Further, considering the sensitive locations of these hotels with respect to biodiversity (as explained under PS6), awareness and implementation of biodiversity safeguards is also required. Therefore, as set forth in the ESAP, the company shall ensure that all contractors have a documented EHS manual for construction activities as well as a monitoring procedure and check-list which will include:

(i)            clear EHS and working conditions requirements (in line with IFC PSs and legal requirements) to be implemented at the site;

(ii)         clear roles and responsibilities of company, project managers and contractors’ personnel for implementation and monitoring on-site; 

(iii)       incentives and consequences of non-compliance for the contractors and their method of implementation; 

(iv)        requirements on labor law compliance including prevention of child labor;

(v)          labor camp guidelines in line with the IFC guidance note on workers’ accommodation;

(vi)        specific processes on dust control and waste management; and

(vii)     specific requirements for construction phase as required under the biodiversity management plans.

A similar manual appropriate to the level of risks for development/construction of stores shall also be developed. The clauses related to the EHS manual shall be included in the contracts signed with the contractors for any future refurbishment or store developments and company to ensure that the contractors act in a manner consistent with the requirements of the manual. The implementation shall be reviewed through regular site inspections and audits.

Supply Chain: The Group has a supplier code of conduct (SCoC) as per which significant suppliers are expected to comply with specific requirements on wages, working hours and other conditions and work in line with applicable laws; freedom of association, no child labor, no forced or bonded labor, non-discrimination, harassment and abuse. All suppliers bidding for Group’s centrally sourced goods and services are expected to follow the SCoC. Annual supplier forum is organized for Group sourced suppliers in Sri Lanka as well as significant suppliers in the Maldives, which are used to create awareness and disseminate knowledge on sustainability best practices. Based on the SCoC, standard clauses are included in the contracts signed with all suppliers.

For the retail operations, fruits and vegetables (F&V) are mainly sourced locally through a network of seven collection centers. The company does not have any contracting relationship with the farmers (~800.) and they are free to sell their produce to anyone. However, at each collection center, the company has few employees who monitor the crop production in the area, maintain rapport with the farmers in the area and provide extension services. JKH is also supporting farmers obtain Good Agricultural Practices (GAP) certification through training programs which cover post-harvest best practices, protected agriculture best practices, crop planning, pest management, plant diseases and GAP trainings. Programs are conducted either by extension officers or technical experts from relevant institutes. The company works with 139 unique GAP certified farmers. The Some of the F&V are also imported or bought through traders and wet markets. Fish is sourced from traders and poultry is sourced from large reputed companies.

Regarding other fast-moving consumer goods (FMCG) items, the company ensures that the suppliers follow good manufacturing practices (GMP) standards and add standard compliance clauses in their contracts. As most of these items are supplied by large multi-national corporations, for smaller companies, audits are conducted on a sample basis (25-30/year) to assess their compliance against contract conditions.

The company also has private labels in grocery, beverages, chilled and frozen meat, household and homeware. Beef, pork, beverages and ice-cream are sourced from sister/Group companies. Other products are sourced from about 60 suppliers. These suppliers are audited by the quality assurance team of retail business and by external companies on an annual basis. However, these audits are focussed on GMP/quality or food safety requirements. As per the ESAP, the company should include requirements on child labor, forced labor, OHS and basic EHS permits in their checklist for these audits.

For the hotel business, the EHS team conducts sample audits of their suppliers (e.g. food, laundry) for their compliance against SCoC requirements. 

Resource Efficiency:  The company has designed the Bentota Beach hotel to obtain LEED Platinum certification. The key resource efficiency features included in the design are:

• Energy Efficiency: Installation of magnetic bearing chillers and energy efficient machineries such as pumps and air handling units (AHUs); variable frequency drives (VFDs) for all main pumps; LED lights for all areas; heat pump water heaters for hot water used in rooms; and installation of 300kW solar PV system.
• Water Efficiency: Usage of water efficient fixture (e.g. low flow rate taps) and dual flushing for water closets (WCs), rain water harvesting system connected with flushing system.

Similarly, following resource efficiency features are included in the design of Hakura Hurra and Dhonveli hotels:

• Energy Efficiency: Installation of 300kW solar PV system; installation of inverter AC units and energy efficient pumps; VFD operated booster pumps for flushing and fresh water supply; LED lights for all areas (at Hakura Hurra) and LED lights for most areas with continuous replacement of CFL by LEDs (at Dhonveli);
• Water Efficiency: Usage of water efficient fixture (e.g. low flow rate taps) and dual flushing for WCs, rain water harvesting system connected to the reverse osmosis (RO) plant.

Additionally, two solar heating units (1500 liters x 2) for Executive quarters and bio-gas plant will be installed at Hakura Hurra.

For retail, the company has installed solar panels installed on the roof of 43 of its outlets and the same has been included in the standard design of the store. Also, a standard store has eight sky lights and the same have been installed in most of its outlets which help in reducing electricity consumption for lighting. All new stores have LED lights and efficient air conditioning system. Lastly, seven stores have been provided with remote monitoring facility for electrical energy consumption and the shop floor ACs are all automated to switch on and switch off at set times through digital timers and contactors.

All businesses (retail and leisure) have targets to reduce energy, water and carbon footprint and undertake improvement projects.  

Pollution Prevention: The main water source in Bentota beach is the public water supply with borewells used as back-up. The Maldives hotels have RO/desalination plants for water supply. No change in water supply or expansion of desalination is expected as part of the project.

The company provides a sewage treatment plant (STP) (as at Maldives hotels) or where available, discharges in the sewage system connected to the central sewage treatment (as is the case for Bentota Beach). For Bentota Beach, the company has obtained relevant permission from Sri Lanka Tourism Development Authority to discharge additional wastewater from the proposed hotel to the sewage system and treatment in the central treatment plant operated by them. For Maldives hotels, the treated sewage is reused and any excess sewage as well as reject from desalination is discharged in the sea with permits from relevant authorities. The effluents comply with IFC requirements defined in the WBG EHS Guidelines.

As the number of rooms being added at Bentota Beach and Dhonveli is not significant, the same wastewater treatment arrangements with be adequate and no additional wastewater treatment capacity is required. Currently effluents are in compliance with local standards and WBG EHS Guidelines . For Hakura Hurra, the company has planned an expansion of the STP as part of the project, which as planned will ensure compliance with WBG EHS Guidelines and the company will submit results to IFC through the annual monitoring reports.

No changes are expected in the major utilities of the hotels (e.g. diesel generators) as part of the project. 

Regular environmental testing is conducted at the hotels including for wastewater quality, stack emissions and ambient noise. The results were noted to meet the applicable national standards and WBG EHS Guidelines.

For the stores, any location which doesn’t have central sewage or waste disposal line and has a hot kitchen, a waste water treatment plant is provided to ensure any wastewater is treated as per applicable environmental standards. Otherwise, wastewater is discharged in the public sewage system. Septic tanks have been provided at DCs for wastewater disposal.

During construction, environmental controls are implemented as per the management plans and as described before as per the ESAP, the EHS manual for construction will enhance implementation of such controls. .

Waste management: A waste segregation and disposal procedure is implemented at all hotels. All waste is segregated and stores in marked areas. All waste is disposed of through the municipal waste disposal systems and recycling vendors. The EHS team has conducted assessment for waste disposal agencies to ensure appropriate disposal process.

For the stores, the waste is disposed of through the municipal waste disposal system. The company currently has a no-returns policy with its suppliers and thus damaged or expired products and food waste are also disposed of through the same system. The company shall evaluate alternate options for disposal of food waste (e.g. composting).

Retail business of the Group has made a pledge to reduce single use polythene bags and single use packaging for fresh food (by ensuring they are reusable, recyclable or compostable) by 50% by 2025. Also, the company will help our customers to use less polythene and dispose of it responsibly whenever possible. The company has introduced range of reusable bags, removed plastic straws and forks and changed it to compostable bags at the meat counter.

Greenhouse Gas (GHG) emissions: The GHG emissions from the project have been estimated to be around 39000 tonnes CO2 equivalent per annum (tpa CO2 eq) from direct (11,000 tonnes) and indirect (28,000 tonnes) emissions sources.

Life and Fire Safety (LFS) Systems: As mentioned above, all resorts are low-rise buildings. The LFS systems provided at the operational hotel visited during the appraisal were fire extinguishers, fire hydrant and hose systems, fire doors (on emergency exits), dedicated fire water storage and pumping systems, smoke detection and alarm systems. Similar systems have been provided at the Bentota Beach hotel as part of the refurbishment. The Maldives hotels have all rooms and facilities on ground floor except a few buildings which have first floor. The LFS systems provided at the hotels are Fire hydrant and hose systems, portable fire pumps (which use sea water for fire-fighting), dedicated fire water storage and pumping systems, smoke detection and alarm systems were also provided at the visited hotels. 

As per the ESAP, for future refurbishments, once the design is completed for each hotel, the company will commission a qualified LFS professional, to review the site specific architectural brief and confirm that all the LFS-related aspects of design are consistent with an internationally recognized LFS code (e.g. US NFPA, British Code), as required under the LFS section of the WBG General EHS Guidelines. Following construction, the LFS consultant will inspect the newly constructed building and submit to IFC, a professional certification that the hotel is constructed in full compliance with previously approved engineering design, and that all LFS systems were installed as designed and tested in accordance with international requirements. Any remedial measures needed to bring the building into compliance with IFC guidelines will be completed within a timeframe agreed with IFC. For any future acquisition of a hotel, the company shall conduct LFS review to ensure that LFS systems comply with WBG EHS Guidelines covering the different LFS components (e.g. compartmentation, detection, suppression systems) and as needed, implement the required corrective actions. For flood and earthquake risks, the company will ensure compliance with the applicable national building code requirements for the design of the buildings.

For the stores, the company has a standard design for an average size store and selling areas of all stores are only on the ground floor with small storage area and office on a mezzanine floor. During the visit, it was noted that all stores as well as the DC are provided with fire hose systems, dedicated fire water storage and pumping systems, smoke detection and alarm systems. However, typically, the mezzanine floor only has one spiral staircase, which is not adequate for emergency evacuation. As per the ESAP, the company should review the standard design specifications/criteria to consider LFS to be consistent with the local legal requirements, and aspects such as occupancy levels, means of egress (including type of stairs) and systems for fire prevention, detection and suppression, as per the LFS section 3.3 of the General EHS Guidelines. The standard design should be shared with IFC. Also, for the existing stores, the company should look for feasible ways to provide emergency staircases and ensure their implementation within reasonable timelines.

The LFS systems at visited hotels, stores and DC were noted to be adequately maintained. Also, a number of employees were noted to be trained on fire fighting and first-aid.

Security forces: Unarmed private security guards are employed at all stores/hotels/DCs.

Transport: For supporting the retail operations, JKLL has an owned fleet of trucks (16) and hires another 58 trucks from contractors. The drivers and helpers are provided by the contractors as part of the contract. All trucks are fitted with global positioning system (GPS). JKLL organizes road safety awareness training for drivers which is provided by external trainers.  

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JKH has a group level policy committed to enhancing biodiversity through the adherence to national laws and implementation of best practices relating to conservation of biodiversity in areas of Group operations. Biodiversity conservation is part of the certification requirements for Green Globe and Travellife, all hotels (certified to these standards) monitor ongoing actions related to biodiversity. As part of the CSR activities, JKH has undertaken a number of projects linked to biodiversity conservation (e.g. Coral propagating program in Dhonveli). However, to strengthen its biodiversity conservation policy implementation, in line with PS6 requirements, as per the ESAP, the company shall update the policy to describe company’s processes on assessment and management of future developments or acquisitions.

Biodiversity aspects related to the hotels under ongoing or future refurbishment were reviewed by IFC based on review of project IEE/EIA, IBAT review, desktop review and stakeholder consultation.

Type of Habitat:

Maldives Hotels (Hakura Hurra and Dhonveli)

Both hotels are in the Maldives-Lakshadweep-Chagos Archipelago ecoregion. The ecoregion is composed entirely of low atolls, associated coralline structures and sandy beaches.  Little vegetation is extant on coral atolls and what remains is heavily degraded by human habitation.  Species of higher conservation interest in the Maldives are sea birds, corals, invertebrates, reptiles and turtles. The hotels are located on two atolls, namely Hakuraa (Hakura Huraa resort) and Kanuhuraa (Dhonveli Resort). Both resorts are on the eastern side of the atolls along a thin sandy strip of land surrounded by coral reefs.  Seagrass beds also exist within the atoll and at the channel entrance.  Seagrasses are considered to be natural habitats.  The resorts have been established for some time and the hotel area is considered to be modified habitat whilst the surrounding coral reefs approximately 50-100 m from the surrounding beach would be considered to be natural habitat. No CH values were identified during screening and consultation with stakeholders (IUCN Maldives) is ongoing regarding local biodiversity values. As part of the ESAP item to develop BMPs for these hotels, the company will scope and implement additional conservation actions to benefit priority biodiversity values associated with the site (e.g. corals and sea turtles).

The activities proposed are upgrading of existing facilities and the construction of new guest facilities. Impacts from the refurbishment/construction activities on these values are considered to be limited and no significant residual impacts are expected after on-site mitigation. Impacts are likely to include dust during construction activities and runoff from construction sites. Permanent impacts will include increases in visitors having potential impacts from tourism activities (swimming, snorkeling) and increasing in lighting at night around resort facilities.  The use of natural resources such as sourcing local seafood may also increase.  These issues will be mitigated by applying best practices to reduce dust and runoff during construction and education programs for tourists on appropriate behavior when undertaking leisure. The Project owner will also be required to source seafood from accredited suppliers. As mentioned under PS3, existing wastewater treatment facilities are sufficient for the upgrades and no additional impacts are expected.

For Hakura Hurra, the removal of sea grass, maintenance dredging of channel and snorkeling area has been assessed in detail under the EIA and relevant permits have been obtained. Potential impacts to sea turtles may occur as seagrasses are used for foraging, however the area dredged is relatively small (1 ha).  The EIA concluded that no impacts were expected on the corals as the areas where these activities are undertaken had no coral cover and locations were away from the reef. The key impact is expected to be sedimentation.

Given the potential for impacts due to run-off and sedimentation from construction activities, as per the ESAP, the company shall include measures to limit the potential for runoff and sedimentation from construction sites entering waterways in its EHS manual for construction (discussed under PS2). Similarly, to reduce risks on surrounding coral reef and seagrass habitats and other priority biodiversity values, as per the ESAP, JKH shall develop a biodiversity management plan (BMP) for its Maldives hotels which among other actions will include conservation of corals, education of guests, residents and the workforce on protecting coral reef habitats.

Other hotels reviewed during the appraisal - Cinnamon Trinco Blu and Cinnamon Bentota Beach (Sri Lanka)

Other Both hotels are located within the Sri Lanka south-western rainforests ecoregion.  This ecoregion has a high endemism and consists of coastal and mid slope rainforests up to 2000m ASL. Most of the remnant forests are mostly degraded. Trinco Blu is located within the urban area of the township of Trincomalee and thus the hotel area itself is modified habitat. Bentota Beach hotel is located within the urban area of Aluthgama adjacent to the Bentota Ganga estuary. These hotels are located in modified habitats. There are however beach, estuary and lagoon natural habitats approximately 100 m from the hotels Trinco Blu and Bentota Beach. CH values that are likely to inhabit these areas include sea turtles and potentially sawfish in estuarine channels.  No CH values that are likely to occur within the resort area were identified during screening. None of the hotels Neither Trinco Blu nor Bentota beach are located within or in close proximity (<10 km) to Protected areas or Key Biodiversity Areas. 

All refurbishment work at Bentota Beach has been confined to the existing boundary and same will be the case for other hotels . Potential impacts due to the refurbishment/construction activities will be restricted to the existing boundary and are likely to include disturbance and displacement of local fauna during construction caused by noise/light and also the potential for contaminated runoff polluting waterways. As per the ESAP, the company shall include measures on sediment and erosion control measures, management of noise and dust and wastewater treatment/management will be required to reduce risks on nearby beach, estuary and lagoon habitats in its EHS manual for construction (discussed under PS2).

Cinnamon Citadel (Sri Lanka)

This hotel is also located within Sri Lanka montane forests ecoregion, known for high endemism. The hotel has been existence for some time and is within the Kandy township urban area, adjacent to the Mahaweli Ganga (River), and thus considered modified habitats. No CH was identified; however, endemic species (including freshwater crustaceans, reptiles and frogs) may be present within natural habitats.  

these hotels are located within or in close proximity to any Key Biodiversity Areas.  Two Protected Areas are located within 10 km of one of the hotels.to the east. These include the Udawattekelle Reserved Forest (4km east) and Victoria Randenigala Rantambe Sanctuary (7km east).  No contiguous habitat or wildlife corridors were identified that coincide with the hotel area and link to these sanctuaries as the hotel is within an urban area.  No NH is within the hotel area, however the adjacent river Mahaweli Ganga would be considered to be NH. 

Potential impacts are likely to be minor due to disturbance and displacement of resident fauna during construction caused by noise/light and dust; potential for the worker force conducting hunting/poaching and contaminated runoff polluting waterways.             

As the refurbishment of hotels from the Cinnamon portfolio  will be undertaken from time to time , as per the ESAP, the company will agree with IFC on a specific terms of reference (ToR) for biodiversity review and include the same in the scope of IEE/EIA completed for these refurbishment projects. Any specific actions identified in the IEE/EIA will be implemented by the company. Additionally, as mentioned above, biodiversity related safeguards will be included in its EHS manual for construction (discussed under PS2).

Management of Ecosystem Services:

No impacts on priority ecosystem services are expected at any of the sites, noting that tourism values of the areas are based on natural habitats and presence of biodiversity.

Invasive Alien Species

Under the revised biodiversity policy (developed as per the ESAP), the company will avoid the use of any invasive alien species and promote use of native species in site landscaping and restoration at all sites under their management control.

JKH undertakes a number of corporate social responsibility and stakeholder engagement activities. They are described in annual reports disclosed on its website https://www.keells.com/annual-reports, https://www.keells.com/resource/annual-report/John_Keells_Holdings_PLC_AR_2018_19_CSE.pdf).