SFPL has purchased processing plants through brownfield acquisitions, and no new land is required for their development. For hatcheries/farms, SHPL/SFPL has already leased/purchased private land on a willing buyer-willing seller basis as noted at the visited facilities in India and Bangladesh. No involuntary resettlement as part of asset or land acquisition is thus expected for the project and therefore, PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Also, considering the locations and size of the facilities, no biodiversity-related impacts are expected due to the project and thus PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not applicable. As there is no land acquisition and considering the nature of the operations, 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): Development of hatcheries, poultry sheds or processing plants does not require an ESIA or environmental clearance as per applicable legal requirements in India. For proposed operations in Bangladesh (feed mill and breeder farms), the Group will complete an initial environment examination (IEE) and obtain the required approval from the Department of Environment (DoE) prior to start of construction/production, as per applicable legal requirements. A similar process will be followed for proposed operations in Kenya as per applicable legal requirements. Also, Suguna will obtain necessary permits as per the regulatory requirements and ensure that the preventive and mitigation measures and monitoring plan as identified in the IEE reports (on emissions control, wastewater treatment, solid waste management) are implemented for all operations.

E&S Policy, Risk Assessment, Management Systems and Programs: SFPL has documented Environmental and OHS policies. Also, basic procedures have been developed for all its operations (hatcheries, breeder and layer farms, feed mills, stores) on electrical safety, road safety, chemical safety, dust safety and farm safety. Also, work permits have been prepared for hot work, work-at-height, confined space, electrical isolation and excavation. Additionally, basic EHS guidelines (Do’s and Don’ts), self-audit checklists, preventive maintenance checklists and monthly reporting formats have been prepared for all operations. All documents are shared with various facilities through intranet portal.

However, SFPL has not completed a documented comprehensive risk assessment for its operations. Also, the procedures, guidelines and checklists do not cover all E&S aspects as expected under IFC PSs. Therefore, as set forth in the ESAP, SFPL will develop a corporate-level E&S management system (ESMS) which will cover all elements of IFC PS1 and will be commensurate to the risks and impacts of the operations (e.g. hatcheries, breeder farms, processing plants). Some of the key elements in the ESMS (as applicable for the nature of respective operations) will include: (a) Risk assessment and screening of new projects (either greenfield or brownfield acquisitions) to identify any E&S risks or impacts with respect to IFC PSs and legal requirements; (b) preparing and implementing E&S management plans; (c) Life & Fire Safety (LFS) management programs for all facilities; (d) Emergency preparedness and response; (e) Contractor management programs to supervise their compliance with legal requirements and IFC PSs (as discussed under PS2); (f) Pollution prevention processes including chemical management, solid and hazardous waste management plans (as discussed under PS3); (g) OHS management programs commensurate to the risk posed by the activities (as discussed under PS2); (h) Resource efficiency program with specific commitments (as discussed under PS3); (i) Monitoring and reporting (internal and external) framework including key E&S performance indicators for effectiveness and compliance status of all businesses with respect to corporate EHS commitments and management systems and periodic review by senior management/board; (j) Community grievance mechanism; (k) Training plans with roles and responsibilities for its staff (permanent and seasonal) and contractors; and, (l) screening of land for proposed facilities with respect to IFC PSs especially any involuntary resettlement.

As part of implementation of the ESMS, a risk assessment will be completed for all its operations which will be shared with IFC and required preventive and mitigation measures will be implemented at all facilities within agreed timelines.

As set forth in the ESAP, for the development of the risk assessment and corporate ESMS, SFPL will engage a qualified consultant (that is acceptable to IFC). The ESMS will be developed and implemented with the timelines discussed and agreed as part of the ESAP. The terms of reference (ToR) for the consultant will also include conducting regular reviews based on a pre-determined plan to review implementation progress and effectiveness at corporate and facilities level.

E&S Organization Capacity: The Group has a corporate level EHS team (three people) based in the SFPL corporate office in Tamil Nadu who report to the head of HR. In addition, there are around 20 personnel (assistant manager/executives) responsible for EHS management at facilities across India. As Suguna has a big footprint and new facilities (in India and overseas) will be made operational, the E&S organization needs to be strengthened. As per the ESAP, the Group will appoint an appropriately qualified professional at the corporate level, who will be responsible for the development and implementation of ESMS and monitoring its effectiveness at facilities covered under the Project. Additionally, E&S staff will be appointed at all facilities covered in the project including in Bangladesh and Kenya.

Emergency Preparedness and Response: The fire safety system at the visited facilities was mainly based on fire extinguishers except at the processing plant where a fire hydrant/hose system has been installed. Areas of improvements were noted at the visited facilities with respect to marking of emergency routes and exits, identification of assembly points, and development and implementation of emergency response plans.

As per the ESAP, Suguna will assess the fire safety systems required for proposed facilities especially feed mills and processing plants to ensure their adequacy with respect to the risks and applicable legal requirements. The systems should be implemented within reasonable timelines. Furthermore, as per the ESAP, Suguna will develop an emergency preparedness response plan template for the various operations (hatcheries, processing plants, poultry EC sheds and feed mills) and share it with IFC. The plan should consider all potential emergencies (e.g. fire, earthquake, bomb threat, medical emergencies) and describe detailed roles and responsibilities for relevant personnel (as well as their back-up), training needs and their frequencies. All facilities 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 facilities.

Monitoring and Review: It was noted that all facilities conduct monthly internal audits which cover electrical safety, road safety, fire safety, housekeeping, waste management, pest control, health checks, and air and dust pollution. Also, incident/accident reports are prepared at the facilities. These reports are regularly submitted to the corporate EHS team. However, areas of improvement were noted in the following areas: (a) regular environmental monitoring to ensure compliance with applicable national standards (e.g. on air quality, stack emissions and effluent quality); (b) specifying corporate/facilities level objectives and targets on EHS parameters; (c) reporting to corporate EHS team being manual and making analysis difficult (considering the number of facilities); (d) regular review by senior management. Therefore, as set forth in the ESAP and as part of the ESMS development and implementation, Suguna will develop a monitoring and reporting framework at both corporate and facilities levels. The monitoring and reporting framework will describe: (a) key performance indicators (KPIs) on E&S compliance and performance as well as objectives and targets on sustainability (resource efficiency); (b) monitoring processes (e.g. corporate audits, internal/external audits); (c) reporting requirements in specific formats; and (d) process of regular management review for all facilities by senior management. The framework will specify KPIs to be monitored at the facilities, monitoring frequencies, type of monitoring and the definition of thresholds that signal the need for corrective actions. In addition to applicable legal requirements, the monitoring thresholds will include thresholds specified in the WBG EHS Guidelines (both general as well as sector specific).

Suguna currently employs about 8,500 employees. It is estimated that an additional 4,700 employees will be hired at project facilities across the three project countries.

HR policies, procedures, working conditions and terms of employment: Suguna has documented HR guidelines which are revised every three years), which cover policies on talent acquisition, performance management, career progression, transfers, service conditions, leaves and holidays, allowances, learning and development, employee welfare and general administration. The corporate social responsibility (CSR), code of conduct and policies on grievance mechanism, prevention of sexual harassment are also covered in the HR guidelines. However, no specific policies on prevention of child and forced labor, and freedom of association have been included in the HR guidelines. As per the ESAP, Suguna shall document and ensure communication of policies on prevention of child and forced labor, and freedom of association. HR guidelines are communicated to all employees through induction.

During the appraisal, it was noted that the processing plant and feed mills operate in two shifts whereas most other facilities (hatcheries, poultry EC sheds) operate in single shifts. All employees work as per their shift roster and mark their attendance through a biometric system. Written appointment letters are provided to all employees. However, areas of improvement were noted in issuance of appointment letters and inclusion in social security schemes for workers.

Specifically, areas of improvement were noted with respect to applicable legal requirements on (a) contracting structures and inclusion in social security for employees in GP poultry EC shed and visited Bangladesh operations; (b) wage structure for female employees (and contract workers) at processing plant and GP farm; (c) overtime recording and compensation; (d) wage structure for contract workers (at most of the visited facilities) (as discussed below under third party workers). As per the ESAP, Suguna will develop specific policies on all these aspects. These policies will be adopted by the Suguna board and will be shared with all workers and IFC. Also, Suguna will implement required corrective actions with respect to these areas as identified through the IFC appraisal at all Project facilities. Furthermore, Suguna will commission regular internal reviews for a sample of Project facilities with respect to these policies and other applicable legal and IFC PS2 requirements. Results will be reported to senior management and corrective measures implemented, if necessary.

Protection of workforce: Age proofs were noted to be collected for employees and third-party workers at all visited facilities. No instances of child labor or forced labor were noted at any of the facilities.

Freedom of association: As discussed above, a specific policy on freedom of association will be implemented and communicated by Suguna.

Grievance Mechanism: Suguna has a grievance mechanism in place documented in the HR guidelines. The mechanism includes clear procedures to receive, register, and address grievances and allows employees to submit grievances anonymously. To further strengthen implementation of this policy, as per the ESAP, Suguna will ensure that regular training is conducted on grievance mechanism at all project facilities.

Non-discrimination and prevention of sexual harassment: Suguna has committed itself to be an equal opportunities employer and has specific requirements in the code of conduct that no applicants are discriminated due to their race, caste, religion, gender, marital status, colour, age, sexual orientation, etc. Apart from the corporate office, female workers (mainly contract workers) were noted to be employed in the hatchery, farms and processing plant. Wage structure for female workers at the visited processing plant and GP farm needed improvement to meet applicable legal requirements and Suguna’s own policies. Therefore, as per the ESAP, Suguna will revise the wage structure for female workers at the facilities.   

As per applicable legal requirements, Suguna has formulated and implemented a sexual harassment policy, which explains procedures of enquiry of such complaints through designated teams. However, implementation of this policy was noted to have scope for improvement in the forming of a regional complaints committee and raising awareness on sexual harassment. As per the ESAP, Suguna will form a complaints committee in all of its regions with majority female employees (in order to cover all project facilities) and ensure that regular training is conducted on prevention of sexual harassment at all project facilities.

Occupational Health and Safety (OHS): As discussed above under PS1, SFPL has documented procedures for all its operations (hatcheries, breeder and layer farms, feed mills, stores) on electrical safety, road safety, chemical safety, dust safety and farm safety. Also, work permits have been prepared for hot work, work-at-height, confined space, electrical isolation and excavation. Additionally, basic Do’s and Don’ts, self-audit checklists, preventive maintenance checklists, accident/incident reporting and monthly reporting formats have been prepared for all the operations. However, during the appraisal, areas of improvements were noted in implementation of these procedures and guidelines. It was noted that no OHS risk assessment has been completed for operations. Also, no safety induction is provided to employees and contract workers and use of personal protective equipment (PPE) by contract workers was not adequate. Lastly, although regular self-audits are completed, follow-up corrective actions were not completely implemented.

As per the ESAP, SFPL/SHPL will complete an OHS risk assessment for all types of operations (e.g. hatcheries, poultry EC sheds, feed mills and processing plants) at the project facilities. Based on the risk assessment, required preventive and mitigation measures will be implemented at all facilities within agreed timelines. Also, as discussed above under PS1 and as per the ESAP, an OHS management program will be developed and implemented as part of the ESMS. The program will be supported by regular training and communication covering all employees and contract workers.  

Third Party Workers: Third party workers are employed at all facilities for security, housekeeping and for supporting the operations. Based on the appraisal, Suguna needs to strengthen review of contractors’ compliance with applicable legal requirements (e.g. on wages, working hours and benefits). Therefore, as per the ESAP and as part of the ESMS development, the Group will put in place procedures on contractor management to supervise and review compliance with applicable legal requirements and IFC PSs for third party workers. The same will be reviewed as part of the regular reviews discussed above for a sample of Project facilities.

Suguna has a contract broiler farming operation with typically smallholder farmers. Suguna provides Day Old Chicks (DOCs), feed, vaccinations and medicine while farmers provide the facilities (or sheds), power costs and are paid growing charges/fees. Additional terms cover incentives and penalties, with a goal to minimize price fluctuation and reduce risk for all parties. The full-grown broilers are returned to Suguna, which mostly sells them into wet markets and is gradually transitioning toward its own processing plants. Suguna also provides technical knowledge through its extension services to the farmers. Currently, Suguna has 40,000 contract farmers in India (average 6,000 birds) and their number is expected to increase further to 60,000 as a result of the proposed project. Similarly, currently SFFBL is working with 300 farmers in Bangladesh and is expected to increase the number to about 900 as a result of the project.

Based on observations during the visits, typically for 6,000 birds, farmers manage the sheds on their own or with their family support and thus only a few farmers have larger sheds (with 20,000 birds) for which they may hire one/two persons as support. Also, considering the growing charges and average number of batches in a year, the compensation is significantly more than the minimum wages. Suguna has a basic safety management checklist which is filled up before placement of a batch.   

Worker Accommodation: Worker accommodation is provided at some of the Suguna facilities. Out of the visited facilities, worker accommodation was provided at the hatchery, GP farms and processing plant. Areas of improvement were noted in the accommodation in provision of toilets, segregating cooking and living areas, provision of additional facilities (e.g. beds) and adequate space for the workers in the room.  

Supply Chain: Based on the operations being financed, the supply chain will include Suguna’s own feed mills, which are covered under the systems described above and thus will prevent risks of child labor, forced labor or significant safety hazards.

For feed production, Suguna currently procures 1.5 million MT of grains (maize, broken rice, wheat and bajra). These are procured through farmers as well as traders. However, the farmers do not sign any contracts and are free to sell anywhere and thus there is no control or leverage for Suguna. While procuring from traders, Suguna will not have any visibility (or control or leverage) on the source of commodities. Similar to that is the case for rice bran, which is sourced through traders.

Further, Suguna procures soya bean meal, meat bone meal and de-oiled rice bran from suppliers. Though the quality team conducts visits to a sample of these suppliers, no specific requirements are communicated from Suguna to these suppliers on child labor, forced labor or significant safety hazards. Therefore, as per the ESAP, Suguna will:

(a)   Map its supply chain and identify key suppliers based on E&S risks or mutual dependence;

(b)   Document a supply chain compliance procedure which will describe Suguna’s processes of communicating E&S compliance requirements, screening of new suppliers with respect to these requirements, incorporating compliance requirements in the contracts, regular monitoring and verification of compliance, frequency of audits, rating system for suppliers and consequences of non-compliance;

(c)   Prepare a plan for auditing key identified suppliers through implementation of the supply chain compliance procedures; and

(d)   Complete the audits and implementation of the plan within reasonable timelines.

Resource efficiency: Currently the Group has not specified any energy/water efficiency goals or prepared any improvement plans. Therefore, as set forth in the ESAP and as part of the ESMS development and implementation, Suguna will develop a resource efficiency framework under which all Project facilities will fix resource efficiency targets and implement improvement plans to achieve this.

Energy use and air emissions: Typically, the main power source at the Suguna facilities is the national grid. In addition, back-up diesel generators (DG) are provided at the facilities. The other sources of air emissions at the facilities are coal/wood fired boilers, and rendering plants (provided at the processing plants and hatcheries). It was noted that the ambient air quality and stack emissions monitoring was not conducted regularly at the visited facilities. Also, the air pollution control systems for boilers and rendering plants had scope for improvement.

As per the ESAP, the Group will identify air pollution control systems needed for the utilities for the proposed facilities and ensure their implementation within the required timelines. Also, as part of ESMS implementation (covered under PS1), regular air quality and stack emissions monitoring will be conducted at the project facilities to ensure their compliance with applicable national and local standards (in India/Bangladesh/Kenya) and WBG EHS guidelines. Summary of these reports will be shared as part of the annual monitoring reports submitted to IFC.

Wastewater Treatment: No industrial effluents are generally generated at the poultry EC sheds or feed mills. Industrial effluents are generated at processing plants and hatcheries. During the appraisal, wastewater treatment plants were noted to be provided at the visited facilities. Suguna will provide appropriately designed wastewater treatment plants at the project facilities as required to ensure compliance with national/local standards and WBG EHS guidelines.

Areas of improvements were noted at the visited facilities with respect to regular testing of effluents for ensuring their compliance with national standards and WBG EHS guidelines. As part of ESMS implementation (covered under PS1), regular effluent quality monitoring will be conducted at the project facilities to ensure their compliance with applicable national and local standards (in India/Bangladesh/Kenya) and WBG EHS guidelines. Summary of these reports will be shared as part of the annual monitoring reports submitted to IFC.

Domestic sewage is disposed of from the facilities and workers accommodation in septic tanks and soak pits at the facilities.

Management of solid and hazardous waste: The main waste generated from the poultry EC sheds is litter (organic waste), which is collected through conveyor belts and provided to neighboring farmers for use as manure.   

At the hatcheries, the main waste generated is infertile eggs, fluff, broken egg shells and fluids, dead embryos and chicks. These wastes are processed in a rendering plant on-site and the processed materials is provided to meat bone meal suppliers for use in preparation of animal and aquatic feed. Similarly, at the processing plants, the main wastes are blood, viscera, feathers, carcasses and other rejects from the slaughterhouse, which are processed in a rendering plant and by-products are sold for use in preparation of animal and aquatic feed. The feed mills mainly generate non-hazardous waste including packaging wastes (cartons, plastic bags), paper wastes, empty bags for grain and other inputs, etc., which are sold to external vendors.

Also, boiler ash is generated at the visited facilities and normally used for backfilling of land (either on-site or provided to neighboring farmers). Hazardous waste is generated at the facilities mainly from the utilities (e.g. used oil and filters from the DG sets) and empty containers of hazardous chemicals, which are disposed of through authorized vendors.

Management of waste at the visited facilities needed significant improvement in terms of segregation, collection and storage at designated places. Therefore, as per the ESAP and as part of ESMS development, Suguna will upgrade waste management systems in accordance with good industry practices and the WBG EHS Guidelines. In particular, all project facilities will (a) identify all hazardous and non-hazardous wastes generated; (b) label, segregate and store all hazardous and non-hazardous wastes; (c) dispose of hazardous wastes through authorized entities only; and (d) maintain records of all wastes disposed from site. The waste management plan will be reviewed and agreed upon by IFC as part of the ESMS review.

No complaints/issues have been reported due to odor.

Chemicals management: Chemicals are mostly used for cleaning / floor washing in hatcheries and processing plants. Also, fuel (like diesel) and oils are used in utilities and stored on-site at all facilities.

As per the ESAP, and as part of ESMS development,  Suguna will upgrade the chemical management system at all project facilities to ensure that the storage, handling and use of these hazardous materials on-site is in accordance with good industry practices and the WBG EHS Guidelines including but not limited to: (a) secondary containment for all the aboveground storage tanks; (b) regular integrity testing of the underground storage tank; (c) spill prevention and control; (c) labelling of storage tanks; (d) provision of PPE and training of all workers involved in storage, handling and use of these chemicals.

Animal Welfare: Suguna has procedures on animal welfare for its operations (including its contract broiler farms / hatcheries / GP farms / breeder farms) and it follows guidelines circulated by the Ministry of Animal Husbandry, government of India. Suguna does not use any cages for transport of broilers. The density, feed and water mechanisms in the farms were noted to be in line with the procedures. Also, the operations of the processing plant had adequate animal welfare standards.

Areas of improvement were noted in the hatcheries on handling of weak chicks and this will need to be corrected as part of the implementation of the ESMS.   

Greenhouse Gas (GHG) emissions: The GHG footprint of the Project is estimated to be around 350,000 tons CO2 equivalent per annum (tpa CO2 equivalent) including from 330,000 tons from chicken production (direct) and 20,000 tons from electricity use (indirect).                                          

Security forces. Unarmed private security guards are employed at all facilities.

Transport: Suguna uses its own fleet or contract vehicles for transport of DOCs (from hatchery to broiler farms), feed (from feed mills to various regions) and grown broilers (from contract broiler farms to processing plants). A specific procedure has been prepared for road safety. However, as described under PS2, training and implementation needs to be strengthened as part of ESMS development and implementation. 

Biosecurity: Engineering controls and staff training mitigate risks of transmission of avian influenza or other related communicable diseases. Suguna has a biosecurity program covering all its operations including contract broiler farmers. Workers at farms/hatcheries are required to follow strict quarantine procedures governing their access to and ready movement to and from the farms, with these requirements becoming progressively more severe in moving from hatcheries to breeder farms (parent and grandparent). All vehicular access to and movement within farms requires passage through dips.

Suguna as a CSR guidelines included in the HR guidelines. Regional teams plan and implement CSR activities based on the guidelines. The key activities in the past years have been on tree plantation and blood donation camps.

In terms of disclosure of E&S information, the publication of the ESRS and ESAP will be Suguna’s first disclosure of such information. As per the ESAP and as part of development of ESMS, Suguna will develop a Community Grievance Mechanism for all project facilities.

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

Suguna Holdings Pvt. Ltd.

1020, Avinashi Road, II Floor

(Above AUDI Showroom)

Coimbatore – 641018

Tamil Nadu, India.

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

M. Deepak Row

Vice President – Finance and Strategy

Phone: +91 (0)422 – 4346939

E-mail: deepak@sugunaholdings.com