PS5: Land Acquisition and Involuntary Resettlement is not applicable since all contracted farms have legal land ownership documentation and no encumbrances at the time of agreements with Twiga, and IFC is not aware of any disputes, outstanding legal challenges or legacy issues related to land or property where the farms or other facilities are located. . PS7: Indigenous People – At the time of the E&S assessment, no indigenous people were known to have been affected by the project or contracted farms in the project. PS8: Cultural Heritage – At the time of the E&S assessment, Twiga operations and contracted farms did not affect areas of artefacts of known historical or cultural significance.

 This is a Category B project in accordance with IFC’s Policy on Social and Environmental Sustainability. It is expected that this project will have a limited number of specific environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance specifications, guidelines, or design criteria. The identified key E&S risks of the project relate to: environment and social risk management process, including due diligence of qualifying farms and risk assessment and management against PS2 and PS6 related supply chain risks, labor and working conditions for both direct staff, contracted workers and farms under contract with Twiga, cumulative greenhouse gas emissions and water abstraction from the contracted farms, community health and safety for communities around the contracted farms and on transportation routes, and stakeholder engagement, especially at the farm level.

 Environmental and Social Assessment and Management System:

Twiga Foods has subscribed to the Global Good Agricultural Practices (GAP) Standards, the worldwide standard that sets voluntary standards for the certification of agricultural products to assure safe, sustainable & responsible farming practices. To implement the Global GAP standard requirements, the company has already developed the 22 requisite farm management policies and 25 standard operating procedures that cover key risk areas in agricultural production, including; water use, waste and wastewater, health and safety, supplies, pesticides and fertilizer use; transport and energy efficiency. Twiga is currently onboarding the contracted firms, individually, into the Global GAP certification process. The Global Gap standards are aligned to IFC PS in most of its management requirements. Twiga has already developed the HR Policies to meet IFC PS2 requirement, once the additional recommendations indicated under PS2 section below are implemented. Other relevant requirements to meet IFC Performance Standards are included in the following sections.

Twiga has also committed to implementing the Food Safety Management System (FSSC 22000) Standards and has embarked on implementing requisite improvements in the packhouse and its processes in readiness for the certification audit. IFC has an ongoing advisory support to Twiga to achieve certification status for both the Global Good Agricultural Practices (GAP) Standards in all contracted farms and Food Safety Management System (FSSC 22000) Standards for the packhouse.

This integrated EHS and FS management system will cover the newly contracted firms under this project.

Policy

Twiga has a number of topical policies for both the operations and production departments. Key among them are the Food Safety Policy and the EHS Policy, which outline management commitments to ensure the highest standards of food safety in produce handling, little or no negative environmental impacts arise from its operations and safeguard health and safety of the workers and community. The other main complimentary topical policies include water conservation policy, farm health and safety policy, waste and pollution prevention policy, energy conservation policy and integrated pest management (IPM) policy. These policies, together, offer adequate guidance to the company’s operations and production departments – and all contract farms are required to customize and implement these policies as part of the onboarding process towards Global GAP certification.

Identification of Risks and Impacts:

Twiga conducted multi-stage risk assessments on the farms that were shortlisted into the program. The first level of risk assessments done is the agricultural site risk assessment. Standard templates have been developed for this process. The output from this activity forms the baseline for the detailed farm evaluation. Once the farms have been formally contracted, the company undertakes the second assessment – farm evaluation – that includes agronomical and financial feasibility assessment by subject matter experts to understand the viability of each farm to achieve a continuous safe food supply to Twiga Foods in its quest to deliver traceable and safe food to households. For each farm, the team conducts a detailed due diligence on suitability and availability of land; planting materials and seeds, water quality and quantity, power needs, labor needs and crop management practices. The findings of this assessment inform the farm-level improvement plans to be implemented by the farm managers supported by Twiga agronomists, over time.

In this project, about 43 farmers have been already contracted. Most of these farms have undertaken risk assessments and developed individual farm improvement plans. Through the implementation of these risk assessment measures, all key E&S risks will be managed in line with the local law, Global GAP and IFC PS requirements.

Management Programs:

Twiga implements two sets of management programs, food safety and quality management program and the Global GAP program. In line with the Global GAP requirements, Twiga implements series of 25 standard operating procedures to manage various aspects of environment, health and safety and social risks in the farm management and produce handling activities. The procedures are developed by the company and owned and implemented by each contracted farm. As part of the FSSC 2200 certification process, Twiga has also developed various food safety risk management procedures for implementation throughout the produce handling processes. These procedures address the key E&S risks in the packing, storage and transportation of produce and goods. The company plans to have the packhouse FSSC certified by end of 2020.

Organizational Capacity and Competency:

Twiga has two main departments; the production and operations departments. The Chief Production Officer (“CPO”) is responsible for all farm production operations and leads E&S risk management and compliance in this department. The compliance and agronomy teams report to the CPO. The compliance team is charged with overseeing compliance of the farms with both Global GAP and FSSC 2200 and local legal requirements while the agronomists support the farms with information, expert advice and general crop husbandry. The compliance officers and agronomists also support farms in implementing identified improvement measures and complying with Twiga policy requirements. They are based in the regions with farms and keep continuous engagements with the farm managers, who are responsible for implementing the Twiga procedures [per the offtake agreement]. The farm managers are not Twiga employees; In some cases farm managers are also farm owners, in other cases they are employed by farm owners. The operations department is headed by the Chief Operations Officer (“COO”), and oversees the routine business operations, packing, storage and transport of produce and other goods to clients. The Food Safety Manager reports to the COO and leads the implementation of FSSC 2200. He also coordinates the food safety training program.

Twiga conducts periodic trainings and sensitization sessions with staff and farm management teams. Training of staff includes induction EHS and food safety training, routine task-based training and sensitization sessions. Twiga has a training schedule for all farms and conducts periodic training of farm managers and their workers on E&S, food safety and quality management, to ensure that all farmers apply GAP principles and provide fully traceable products. The program started with 8 pilot farms being onboarded to achieve Global GAP certification by end of 2020, undertaken by Twiga’s field-based agronomists and other subject matter experts and documented appropriately. The newly added contract farmers under this project will undergo these trainings to build their technical capacity to meet Twiga policy requirements.

Emergency Preparedness and Response:

As stipulated in the Twiga HSE Policy, the company commits to develop and implement emergency procedures across the business and ensure that all workers are aware of these procedures. To implement this commitment, Twiga will conduct emergency risk assessments at the company’s offices and warehouse locations and develop emergency response procedures for each site. Further, the company will require each contracted farm to develop site-specific emergency response procedures. The procedures will outline; emergency risk identification process, internal and external parties at risk, resource and equipment allocation, designated responsibilities, internal and external communication, collaboration and training protocols, mock drills, and the site emergency layout map. The procedures will be communicated to all the workers and reviewed periodically to address any emerging needs (ESAP #1).

Monitoring and Review:

Both the Global GAP and FSSC 2200 standards provide measures for efficiency monitoring and periodic or risk-based reviews. Since Twiga is just rolling these standards out, the monitoring system is still nascent and will be firmed up in the course of the year. Twiga has recruited compliance officers who will, in addition to monitoring progress with implementation of farm-level improvement plans, conduct regular audits of farm performance against the standards, and compile reports with action points. These are reviewed by management and discussed with respective farm management teams. For food safety in product storage and handling, a safety team has been formed at the packhouse and regular food safety audits are undertaken, and requisite improvement measures implemented. As part of the Global GAP and FSSC 2200 roll-out process, KPIs of specific designated officers and staff are being revised to ensure that their performance with respect to observing standard requirements is measures and reviewed.

For the contracted farms being onboarded for Global GAP certification, the audits to be undertaken in this process will inform appropriate review of their respective performance and of the efficacy of the designed procedures.

 Human Resources Policies and Procedures, and Working Conditions and Terms of Employment:

Twiga retains around 1,000 staff in the business, including permanent staff, contracted staff and third-party staff. Following IFC’s requirement in the first investment, the company has updated the human resources policy and an Employee Handbook that both outline all human resource management procedures. The Handbook outlines company policies on position allocation, contract conditions, compensation amounts and structure, hours of work, training and performance management, staff welfare, grievance redress mechanisms, sexual harassment, OHS and leave policies. To ensure that the policies in the handbook are consistent with the requirements of PS 2 and Kenyan labor laws, Twiga will further design retrenchment procedures in line with PS 2 requirements and local labor laws, and include these in the Employee Manual (ESAP #2). The procedures will be adhered to in case of any planned retrenchment of workers on formal contracts by the company and contract farms.

At the company offices and warehouses, Twiga has provided adequate working offices and spaces, and sanitation facilities. The company employs the workers on formal contracts. The contract farms engage some contract staff and others as casual laborers. Twiga will oversee the contract farms to ensure that their labor policies are consistent with the company policies. Currently none of Twiga’s employees belongs to a workers’ union. However, employees are aware of their right to freedom of association and can collectively represent to the management any issues or grievances that they may have. All employees have the right to be part of a trade union or collectively organize and may choose to do so at any time during their employment with the company. Wages paid are above prevailing minimum wage requirements, and working conditions are similar to others in the same business in the country of operation.

Grievance Mechanism:

Twiga has implemented a grievance management mechanism for direct employees that provides channels for grievance registration, processing and feedback. The mechanism will be revised to provide an alternative process for anonymous complaints and feedback. The company will also develop a grievance handling guide to farms, to be implemented consistently across all contracted farms (ESAP #3).

Protecting the Workforce:

Twiga, as well as the contracted farms, observes Kenyan legal requirements in recruitment of workers, for any direct and contracted workers. No child or forced labor has been reported in the business. However, there is some degree of likelihood of child labor in contracted farms if preventive measures are not in place. Twiga will include child labor risks in the farm compliance audit questionnaires to ensure regular audit of the status of child labor in each farm (ESAP #4). The company will also plan regular sensitization sessions with contract farmers to build their awareness and capacity to avoid child labor in their farm operations.

Occupational Health and Safety:

The Twiga EHS Policy outlines the company’s commitment to limit OHS risks due to the business. In line with the Global GAP requirements, OHS-related standard operating procedures (“SOPs”) have been developed for use at the contracted farms, and cover chemical handling and storage, Personal Protective Equipment (PPE) use, pesticide spraying and fertilizer application protocol, hygiene management and waste management. The notable accident risks include falling objects and collision during packing and unpacking work and traffic accidents. Twiga agronomists engage farm management regularly on food production and OHS issues and conduct regular training on key risk areas to enhance the OHS capacity of the farm workers. Twiga will design a farm-level OHS incident reporting template and roll this out to all farms. The company will regularly consolidate reports on OHS incidents, review and oversee corrective measures where required (ESAP #5).

Workers Engaged by Third Parties and Supply Chain

Twiga primarily engages contractors mainly in transportation, equipment installation or maintenance, waste management, other ready produce suppliers and now the contracted farms. These contractors have signed agreements with Twiga, including on transport safety. The contracts require that these contractors adhere to local legal requirements, especially on labor and OHS risks and, for the contract farms, implement measures that comply with Global GAP requirements at their farms. Twiga is working with all contract farms to achieve Global GAP certification.

 Resource Efficiency:

Energy: In line with the Global GAP requirements, Twiga has developed a template for energy reporting, to be completed by each contracted farm and consolidated regularly to indicate energy use and management by the contracted farms. The template includes details on source of energy; date of purchase; quantity purchased (L); total stock (L); and quantity used (L). Once this energy reporting regime is fully rolled out across all farms, Twiga will prepare annual energy consumption reports and explore opportunities for efficient energy management in the business.

Water: Similar to energy, a water use template has been designed, and now being rolled out to all contracted farms. The template will be used to record water use at each farm and consolidated by Twiga to track water use and guide exploration of efficiency measures. Further, Twiga has partnered with a telecoms company to deploy real-time soil moisture measurement tool, which will enable precision and efficiency in water use at the farms once fully implemented.

Greenhouse Gas (GHG) Emissions: Once energy reporting regime from the contracted farms is fully rolled out, Twiga will consolidate energy consumption related to production and report on corresponding annual GHG emissions.

Wastes and wastewater management:

At Twiga offices and products storage and packing house, solid waste primarily comprises discarded packaging materials and fresh fruits and vegetables waste. The packaging materials are disposed to local recyclers while food waste is collected and recycled by a competent Firm. Non-recyclable wastes are disposed by waste transport companies in a manner consistent with local regulatory requirements. Minor vehicle and equipment maintenance and associated activities from routine operations produce limited quantities of hazardous waste which include used batteries, equipment parts, motor oils and grease. These wastes are disposed by licensed waste transport companies in a manner consistent with local regulatory requirements. Effluent generated at these facilities include sanitary wastewater from toilets and food preparation areas, and limited quantities of wastewater from cleaning activities in the container storage areas. All wastewater is discharged to the warehouse zone sewer which connects to the municipal sewer.

The farms handle varying quantities of hazardous materials, mainly comprising fertilizers and pesticides. Guidance protocols have been provided on their sourcing, use, personal protection and hygiene requirements and disposal of packaging materials. Reporting templates have been shared with each farm, to track the use and management of these materials and associated wastes. The company will develop farm waste management SOPs and reporting templates (for both general wastes and hazardous wastes) in line with the commitment in the water management and pollution policy; and all contract farms will consistently report on their waste types, quantities, and management methods (ESAP #6).

Pesticide Use and Management:

To optimize productivity, most contracted farms already use pesticides. Twiga has designed chemical handling, storage and disposal procedures, and related personal protection equipment and hygiene protocols – that also cover risks related to pesticides. Twiga will revise the Integrated Pest Management (“IPM”) policy to raise company commitment threshold to (i) ensuring that pesticides are handled, stored, applied, and disposed of in accordance with the Food and Agriculture Organization’s International Code of Conduct on the Distribution and Use of Pesticides or other Good International Industry Practice (GIIP); and (ii) prohibit purchase, storage, use, manufacture, or trade in products that fall in WHO Recommended Classification of Pesticides by Hazard Class Ia (extremely hazardous); or Ib (highly hazardous), and purchase, storage, use, manufacture or trade in Class II (moderately hazardous) pesticides, unless the project has appropriate controls on manufacture, procurement, distribution and/or use of these chemicals. The company will also design IPM Procedures to provide sufficient guidance on purchase, storage and use in line with the above international requirements (ESAP #7).

 Community Health and Safety:

Ecosystem services: Water is a critical ingredient in farm production, and some of the contracted farms sources water from natural springs, streams or rivers, while other have own boreholes. Possible impacts exist on access, quality, quantity, and availability of water sources shared with the communities, and the water management may result in health-related risks and impacts. In the water management policy, Twiga commits to have all farms design water management plans. The farms have drip irrigation SOPs to guide appropriate and efficient irrigation process. The company will ensure that each farm conducts a water resource use risk assessment encompassing both on-farm risks and external risks, and design appropriate water resource management plans (ESAP #8).

Community exposure to disease: Wastes from farm activities, pesticides and fertilizer use and disposal may pose risks to local communities, especially if such wastes are not adequately managed and excesses of fertilizers and pesticides find their way out of the farms and contaminate waters, air or soils. Implementation of the waste management SOPs, together with the procedures related to pesticide handling, use, waste disposal and hygiene protection activities; and the IPM Procedures, will be supervised to ensure that no or limited impacts extend beyond the farms.

 General: A comparative analysis between the IFC PS and the Global GAP requirements was undertaken, and the two standards are aligned on key biodiversity risk areas in the project, including sustainable management and use of natural resources, habitat/eco-system restoration/ rehabilitation, impact assessment policy for new production and risks and impacts on ecosystem services.

Supply Chain Risk Assessment and Management. Some of the contracted farms are located in areas with known nature and wildlife reserves and parks and close to natural habitats (e.g. Narok, Rumuruti and Nanyuki). From the 43 farms already contracted by Twiga, a few are within 5km from some of these areas as identified through the Integrated Biodiversity Assessment Tool (IBAT). Twiga conducts due diligence on farms before executing contract agreements. Given that the company will progressively recruit more farms into the supply chain and that some farms may expand geographically over time, the risk of conversion of some natural and critical habitats exists now and in future, and potential for natural resource-based conflicts exists in some of these farm locations. Twiga will conduct a contextual biodiversity risk assessment of the contract farms program, develop a corrective action plan, and include key identified risks into the pre-contract risk assessment forms, farm evaluation questionnaires and in the compliance monitoring process for existing farms (ESAP #9).

 Twiga Foods has a documented corporate stakeholder engagement process, but all contracted farms will design their individual ways of engaging external parties. At farm level, the contract farms have customer complaints investigation and reporting forms and complete these for any external grievances related to their products, as defined in the Global GAP Standards and ISO 22000. To streamline the stakeholder engagement process at the corporate level and across all farms and ensure consistency in nature of engagement at each level of the business, Twiga will undertake a comprehensive stakeholder mapping exercise and develop commensurate corporate stakeholder engagement procedures, for adoption at each of the contracted farms. The stakeholder engagement procedures will be consistent with PS 4 requirements and will include an external grievance redress mechanism and a communications procedure (ESAP #10). The procedure will ensure transparency and efficiency in information sharing, grievance redress and feedback to local communities and aggrieved parties.

 Contact Person: Dr Rachel Kabuyah (Twiga Production Department – Business Development and Partnership Manager)

Company Name: Twiga Foods Limited

Email: rachel.kabuyah@twiga.com

Phone: +254 709 258000