Impacts related to the following Performance Standards were not identified during IFC’s review: PS5: Land Acquisition and Involuntary Resettlement is not applicable as the farmlands leased by the Company which are either privately or State owned (for use in both crop production and the farms) are leased through willing lessor/willing lessee transactions. Land transactions can be summarized as follows: land availability is tied to each village with each hectare of land being valued by the Regional State at a maximum price of 35,000 Hryvna or UAH (approximately US$1,308). Agricultural land can only be leased whereas industrial land can be bought. This practice is set by Ukrainian law. The land for the two new farms (26 ha each), being agricultural land, is leased from several owners. For farm #13, negotiations are in its final stages and for farm #14, the leases have been signed. When the land is State owned, an amount of 8% of the maximum land value is paid as annual rent for the land, and when it is privately owned the rental price is currently negotiated up to 11% of the maximum land value (3,850 UAH). Current lease agreements for farmland run between 5-10 years, which the Company is trying to extend to 7 – 12 years upon renewal (7 years now being the legal minimum); land used for the pig farms (and therefore built upon) is for up to a 49 years’ lease, which used to be the maximum length of time allowed under law. Lease agreements up to 99 years can now also be negotiated. Payment for the use of land for pig farms is required to be paid as a lump sum (i.e. the valued amount), up front at the time of signing the lease; PS7: Indigenous Peoples (IP’s) and PS8: Cultural Heritage do not apply as IPs are not present and the land used are consolidated agricultural areas and does not contain any cultural heritage.

Environmental and Social Risk and Impact Assessment and Management System (ESMS). The Company has implemented a process for continuously identifying and managing the E&S risks of its existing and planned operations. An EIA is required to be developed (known as OVNS in Ukrainian) and submitted to the State Authorities for approval in order to obtain an operating permit for each pig operation. All new Company’s facilities will be assessed by the competent authorities prior to the start of construction, as part of the permitting process. The Company completed the required EIA of the rendering facility, including public consultations, and shared the documents with IFC for review, which were found satisfactory. The preparation of the EIA study for the new meat processing facility, which is scheduled to start in 2021, will include cumulative risks and impacts as it will be adjacent to existing Nyva operations (i.e. concrete plant, wastewater treatment facility, meat processing facility and the feed mill). Nyva started the EIA process in November 2020 with the project notification on the State authorities website (http://eia.menr.gov.ua/uk/case/id-6949). The preparation of an EIA in Ukraine is not only a requirement for greenfield projects, but also for existing brownfield operations and are now valid for 10 years. The reports showed that existing operations are in compliance with all regulatory requirements. The Company uses qualified consulting companies that are licensed by the Ministry of Environment to conduct the EIAs. Subsequently, the E&S risk assessments and management plans are used to inform and update Company policies, Manual of Standard Operating Procedures (SOPs), yearly EHS management programs, EHS training plans, and EHS monitoring and reporting requirements.

Policy. The Company has established an overarching EHS policy that defines its environmental, (including occupational health and safety) and social objectives and principles. It includes the commitment to comply with applicable Ukraine laws and regulations and be consistent with the principles of the IFC Performance Standards (PS) and the applicable WBG General and sector specific EHS Guidelines.

Management Programs. The Company has developed an Integrated EHS Management System which incorporates a variety of procedures and management practices that are operationalized by managers and staff throughout the organization. The slaughterhouse, meat processing and feed mill operations are certified to ISO 9001, 14001 and ISO 22000, incorporating a Hazard Analysis and Critical Control Point (HACCP) program. The new slaughtering and meat processing facility will also be certified for these ISO certifications, when commissioned. In 2019, the grain production was certified under the ISCC scheme (refer to PS6 for further information). The management system requirements are implemented at the start of construction of each new operation. Nyva has a workplan by which, in approximately 2 months, the ESMS is implemented when operations are commissioned, such as at the rendering facility. The same approach goes for the two new pig farms.

Organizational Capacity and Competency. The cultivated lands (23,000 ha) are under the responsibility of the Chief Agronomist and good agricultural practices (GAPs) are implemented (e.g. safe application of pesticides, manure application) by his team of agronomists. They work alongside the Group-wide Environmental Manager and Occupational Health and Safety (OHS) Manager. Group-wide Human Resources are managed by a manager and her team. At the construction site for the rendering facility, a fire safety specialist, labor safety engineer and environmental engineer are overseeing the works. The HR team includes a community liaison officer responsible for regularly visiting the communities as part of Nyva’s CSR programs, and stakeholder engagements and grievance mechanism. Nyva’s CEO is also actively involved in public consultations and stakeholder engagements for the new operations. The maintenance of the ISO management systems is the responsibility of the General Manager at the meat processing facility. The Company interfaces with regulators (including those responsible for environmental oversight) through the Group’s Environmental manager. Her duties include, among others, maintaining permits and licenses (ref. legal registry), overseeing the air emissions and wastewater monitoring program and ensuring proper waste collection and disposal. As part of the HACCP program, biosecurity measures are in place for the feed mill, slaughterhouse and meat processing plant. In addition, all pig farms have stringent biosecurity measures in place (refer to PS6 for more detail). Access to all operations are controlled by security guards and secured entry (i.e. authorized personnel only with key cards).

Training. All employees receive an annual OHS training and there are specific trainings for high-risk jobs (e.g. electrical works, welding, working at height, crane operators, applying pesticides and working in the cold storage). Due to the nature of these jobs, the head of the relevant department, in cooperation with the Group-level OHS manager, also provides every 3 months a safety instruction as a refresher. The risks of these high-risk jobs are assessed by both workers, OHS manager and the plant’s managers in a collaborative process. Safe working procedures, including work permit system, are then developed and documented. Specific examples of this practice are provided below in the PS2 section describing the Company’s OHS management practices. In addition, specific job training is provided for those employees engaged in jobs that are related to food safety, environmental and occupational health, and safety hazards and risk identification.

Emergency Preparedness and Response Plan. Emergency Preparedness is required by the State Fire Security Department (under the auspices of the Ministry of Extraordinary Situations). The plans developed for all facilities were done in collaboration with this Department, reviews and clears by this same Department, and then adopted by the Company. These plans are part of the Integrated EHS Management System. Required work permits also address possible sources of accidents that may lead to emergencies, e.g. those that pertain to the management of hazardous materials. Annually, the Company holds quarterly evacuation drills for all its operations.

Monitoring and Review. The above EHS management programs incorporate performance indicators; for example, wastewater is treated to meet effluent standards (refer to PS3 below for more details) and occupational health and safety is judged against lost time injury frequency rate (LTIFR) – refer to PS2 section below. Internal EHS audits are performed across all operations by the Group-level Environmental and OHS manager on annual basis. Both managers and the Heads of Departments in all operations are part of the Safety Committee which holds monthly safety meetings. As per the certified ISO management system requirements and the internal Integrated EHS management system, senior management receives periodic performance reviews on the effectiveness of those systems by class of assets. Annual key E&S performance indicators (KPIs) and targets applies for operations level management (labor protection, fire safety, environmental regulations and industrial sanitation). Plant-level Safety Committee, in cooperation with the HR department, reviewed management performance against these KPIs, on an annual basis. For the past three years, the KPI targets, if successfully met by management and staff, leads to a monthly bonus. Such bonus may represent 20-30% above worker’ base salary. Between 80 – 90% of the workers receive this monthly bonus.

Human Resources (HR) Policies and Procedures. The Company has adopted and implemented human resources policies and procedures that are either in compliance with or exceeding the requirements of Ukrainian labour law. As part of 2014 IFC investment, HR policies and procedures were enhanced, including the establishment of a Workers’ grievance mechanism – including the ability to internally record complaints anonymously – and this was communicated to the entire workforce in accordance with the requirements of this PS2. When applicable, such mechanism is also available for contractors. During recent regulatory audits, the Company’s labor practices demonstrated compliance to the requirements of Ukrainian labor law.

Working Conditions and Management of Worker Relationship. There is a total of 1 711employees of which 399 (23%) are women (who mostly work in the meat processing operation). They are all permanent employees and there are no part time or temporary workers. As part of the new farms #13 and 14, and rendering facility, an increase of the workforce by 400 employees is expected in the operational phase. Given the competition among companies in the region, the new hires may come from other parts of Ukraine as it is already the case. For these employees, the Company will be constructing a dormitory where employees can stay for free. The design of this dormitory was an ESAP item under the 2018 investment. IFC already validated that the design of this worker accommodation would meet the IFC/EBRD guidelines. The construction is planned for summer 2021. When a worker assigned to a specific workplace does not have sufficient work, he/she is re-assigned to another job within the organization. Also, to accommodate the seasonality of the farming operations, the Company allows flexible working hours (as per Ukraine labor law for agricultural workers) so longer hours when needed are balanced with shorter hours when the work is less intense.

The minimum age for full time employment in Ukraine is 18; although the law allows apprentices/ trainees to be hired at 16. During the summer, the Company has approximately 20 trainees, who can only work 7 hours a day and are prohibited from undertaking hazardous work or working overtime or night shifts. These trainees are paid an above minimum wage salary that ranges between 50-70% of what a full-time employee performing the same job is paid. Proof of identification – and age – is required as part of the recruitment process. The current minimum wage in Ukraine for all workers is 4,723 UAH/month (US$203/month); however, the Company’s minimum salary paid is approximately double of this amount.

Workers’ Organization. Within the Company there is an internal commission of employees, formed by employees who are elected every 3 years. This body provides a variety of functions including that of a social organization (that provides support to worker’s families with funds provided by the Company for example) and does collective bargaining as required under the labor law for better wages and other benefits. Unlike a trade union, no dues are required to be paid to this commission. Company management stated that if the commission wanted to become part of a larger trade union, they would not prevent this from happening.

Working Conditions and Terms of Employment. General terms of employment are contained in a collective contract as part of the employment book, which is registered with the state, and that every worker receives from the Company upon being hired. This document includes details on terms of employment, such as pay and working conditions and overall benefits. An individual’s specific job requirements are communicated during the interview process and are also contained in a written offer letter. The Ukrainian constitution contains provisions for non-discrimination in hiring and promotion which is included in the HR policy. Jobs are advertised based on the skills and experience required. Equal opportunity (regarding promotion) is achieved by internally posting the job requirements for new positions as well as advertising them externally. Bonuses are paid annually to all employees which is calculated individually based on Company financial performance.

Gender and Gender Based Violence (GBV). Completing the Contextual Gender and GBV risk tool resulted in a medium risk for agribusiness in Ukraine. As part of the HR policy, any form of harassment is not tolerated, and this is communicated to all employees. Recently, the HR Department completed an employee survey that included questions about harassment within the Company. The results were used to develop a Company Code of Conduct, addressing different forms of harassment which was implemented in August 2020. Currently, all employees are being trained.

COVID-19 Measures. Nyva continues to implement strict quarantine measures at its farms, slaughterhouse, and feed mill and limits the number of workers during shifts to ensure social distancing. Meat processing, canteen, drivers, office workers, security, feel mill employees and managers are PCR tested every 2 weeks and Nyva’s own construction workers for the rendering facility before they start their 21-day working day period. During this period, they will stay at a worker’s accommodation at the site for which stringent COVID-19 measures are in place. Workers having tested positive can only return to work after a quarantine period of 14 days and/or a negative test. Recently, Nyva also started testing for antibodies. Canteen, drivers, managers and office workers, security and feel mill workers are temperature screened 3 times a day. Commuting transport is still offered with limited people on the bus and meals are provided with all precautions (social distancing and full cleaning). It does not allow any third parties to its premises. Nyva has had a limited number of positive COVID cases. There will be no lay-offs and, in case of workers getting sick they will be offered paid vacation. Management has daily calls to discuss the status and department heads check in with their workers on their well-being.

Retrenchment. As the Company has been expanding its operational footprint over the last years (by building new pig farms and downstream processing facilities), there has been no retrenchment; this trend will continue as the Company will expand its operations in 2021. No retrenchment is considered due to the COVID-19 crisis. It was stated that if retrenchment was to be required, then the Company would follow the provisions of Ukraine labor law which are aligned with PS2 requirements and include: at least two months' notice, one average monthly salary, compensation for unused vacation and their employment book. A written resolution (order) should be issued by the Company's director or chairman, which contains certain information, such as the reasons and date of termination.

Grievance Mechanism. The Company has a worker’s grievance mechanism, which includes the ability to receive and record complaints anonymously. It was reported that this mechanism is presented at the job interview as part of the rights and duties of employment. In addition, the State’s labor department can also receive complaints directly from employees, including those posted anonymously. They will then visit the Company and review the issue. No grievances were lodged recently.

Occupational Health and Safety. Jobs that involve hazards and risks (e.g., welding, working at heights and in confined spaces, construction workers, those working in grain elevators, those operating heavy farm equipment and applying pesticides, using vertical saws in the meat processing plant) are subject to written work instructions that describe the hazards and risks and the mitigation of those risks. Measures, based on the risk assessment, follow the mitigation hierarchy and include risk avoidance measures, such as safety devices and machine guarding on equipment in the processing facility, and mechanical loading of the boilers. Administrative controls include limiting the hours that individuals work on those jobs and making line supervisors and managers responsible for the behaviours of those who report to them. Engineering controls include preventative regular cleaning of the workplace to prevent dust build up, the maintenance of cranes and other equipment, and use of personnel protective equipment (PPEs, such as hard hats, boots, dust masks or respirators, safety glasses and/or full-face masks, gloves and coveralls, as appropriate). Those who conduct such work are trained and only upon completion of such, and the subsequent receipt of a worker’s card permitting them to undertake such work, can they carry out those tasks. Provision of EHS and the Permit to Work System training is the responsibility of the respective Heads of Department.

All workers undergo mandatory periodical medical examination specific for their job. When an accident occurs, an Accident Committee, including the State Authority, is formed to investigate the accident and mitigation measures are developed to address root-causes. These are communicated to all employees and employees doing a similar job are retrained. The Company has not reported any lost time injuries (LTI) since 2017. Overall safety awareness is high, including strict use of PPEs, in the Company and this was noted during the last IFC SSV in November 2019. Housekeeping has improved considerably. The safety awareness was improved through strengthening workplace organization, regular inspections (including cross departmental), reviewing training effectiveness and holding daily safety talks. Furthermore, the introduction of the aforementioned OHS KPIs’ monthly bonuses to management and staff also catalysed behavioural change. The Company only uses a limited number of contractors. For example, the grain storage silos installed in 2018 were constructed by a contractor and specialist repairs to equipment (cranes, combine harvesters, etc.) are carried out by outside service providers. Contracts with these service providers contain requirements on strict compliance with local labor and occupational health and safety regulatory requirements. Such companies are required to provide supporting evidences of current licenses and permits prior to the commencement of work. General awareness of hazards and risks (e.g., fire prevention and protection) and specific working instruction based on risk and job type are also reviewed with the contractors before work can commence. The Company has strengthened its OHS monitoring program to ensure that contractors adhere to its contractual OHS requirements and the Company’s OHS procedures. Currently, with the COVID-19 restrictions in place, no third-party workers are allowed on to the Nyva premises.

Fire Safety. Sufficient fire safety equipment is present to prevent and manage fire incidents. The Company’s fire safety plan includes periodic fire and evacuation drills. A management system exists to ensure that corrective measures are implemented. This includes measures for prevention of dust explosions at the feed mill. The Company conducts drills for all their operations as per its fire safety plan and the regulatory requirements. Drills are analysed and corrective measures implemented accordingly.

The main environmental risks associated with the Nyva vertically integrated operations are related to solid waste management, wastewater management, air emissions and resource consumption. 

Resource Efficiency. Water for crop production: Crops (corn, canola and rape) are rain fed and do not require irrigation. Given that the region experiences between 500-700mm of rainfall per annum, this element of the vertically integrated production system is not a significant consumer of water. Water at pig farms and meat processing operations: Raw water needs for the pig farms are met from permitted groundwater sources. The State’s geological department conducts quarterly monitoring of these wells to ensure the extraction levels do not exceed the sustainable volume approved in the permits and to ensure water quality is not deteriorating. The farms can extract a maximum of 300 m3 of groundwater per day. On average, water consumption at pig farms are estimated at 159 m3/day. Monthly consumption of water use for the pig farms and for the meat processing plant is reported to the authorities, as part of the ESMP defined in the facilities’ ESIA study. The water consumption per pig reared is 1.47 m3/pig/180 days. Whereas on the higher end, it is still within the range of consumption reported in the literature on pork production the United States (i.e. an average of 7 liters/day throughout the entire life cycle of the pig). The annual water use in the slaughterhouse is 3.5 m3/ton carcass. For the expanded capacity of the new slaughterhouse this will be 4.2 m3/ ton carcass. Both are within the EU benchmark of 1.6-8.3 m3/ton carcass. Water meters are in place to monitor water use. For the rendering facility the water consumption is 0.5 m3/ton raw material process, which is within the EU benchmark of 0.5 – 1 m3/ton raw material. A competition is held among the pig farm managers to conserve water, where possible, and the results are compared periodically. The Company will look for further opportunities to implement water conservation practices and report targets on an annual basis.

Energy. The meat processing operation uses steam generated by a recently installed biomass-boiler. This boiler also provides steam for use in the feed mill. The capacity of the boiler is 2.5 ton of steam/hour (which equates to 2MWth). Each farm (and the concrete (cement) plant and the area used to service agricultural machinery) is equipped with a smaller biomass boiler of 0.75MW capacity (approximately 1.2MWth) to produce hot air and water – to keep both employees and pigs warm in winter. As per environmental regulations, the use of each boiler is subject to an assessment prior to its use. This assessment takes into consideration the proximity of any communities; for biosecurity reasons, Nyva’s pig farms are located away from communities (at least 1.5km buffer zone from the nearest settlement). Each boiler is equipped with a 100m3 capacity water tank. The size of these boilers precludes the need for point source air emissions monitoring under the General EH&S Guidelines (as less than 3MWth); however, every 3 months monitoring is undertaken to satisfy Ukraine regulations (under Ukraine Standard 201-97). Review of the last monitoring reports show that the Company is in compliance with the requirements contained therein.

The meat processing operation has six cold storages and the refrigerant used in the meat processing operation is R407C and R404A, a non-ozone depleting substance. For the new meat processing plant, an ammonia refrigeration system will be installed. Risk and impacts of ammonia use will be included within the scope of the required EIA as required under the 2018 investment ESAP.

The biomass-boilers at the twelve pig farms operational in 2020, year to date (ytd) consumed a total of 14,856 tons of straw. The Company is self-sufficient in straw production. The State issued an operating permit for the biomass-fired boilers. The Company is in compliance with all operating local air emissions parameters and limits. The grain dryers at the feed mill use natural gas as fuel source and the ytd consumption was 685,600 m3. Electricity consumption was 21,123,905 kwh ytd.

Greenhouse Gas Emissions. Scope 1 greenhouse gas (GHG) emissions from the raising of pigs and combustion of the above amounts of straw, and the natural gas consumed in the meat processing facility and the feed mill resulting from the two new farms pig heads produced equated to 13,480 tons of CO2 equivalent. Scope 2 emissions (from electricity consumption) added a further 1848 tons. Given that the above estimated emissions do not exceed the 25,000 tCO2eq reporting threshold as defined in PS3, no further reporting is required.

Pollution Prevention. The farms utilize forced ventilation (mechanical) for odor and ammonia control at the pig housings. In the meat processing plant, the cooking and smoking of meats only occurs to a small proportion of the products. The process was not noted to be inherently odorous during the IFC visit. There have been no complaints from the local village situated about 250-300m at the closest point. At the feed mills, all 10 elevators are equipped with dust aspiration systems. The unloading station is an open dump pit which is covered when it is raining. The Company stated that they measure dust emissions at fixed points and measurements do not exceed the regulatory limit of 50 mg/m3. However, there are nearby residents (approximately at 200m distance) that could experience nuisance due to dust releases. The Company has not received any complaints. Annually, the Company reports all dust measurements benchmarked against the Ukraine regulatory limit and WBG EHS guideline levels. Review of recent monitoring results demonstrate compliance with both limits. Mitigation measures are taken if the limit is exceeded. As agreed in the 2018 investment ESAP, the Company will build a fixed roof and install ventilation at the pit level to prevent dust releases at four unloading areas. The design was reviewed by IFC and found satisfactory. One unloading area was refurbished in 2020, but the remaining 3 stations will be completed when COVID-19 restrictions are lifted to allow the contractor to come back. Nyva expects to have this completed in 2021.

Wastewater Treatment. Wastewater from the meat processing plant is treated in an on-site WWT plant that also treats the sanitary wastewater (approximately 20% of the total treated volume) from the nearby community. Monitoring results regarding effluent quality has been recorded quarterly and is annually reported to the authorities. Monitoring results reviewed indicated compliance with WBG EHS Guidelines for meat processing. The WWT plant has sufficient capacity to treat the wastewater from the planned new meat processing plant. At the rendering facility, Nyva will install a biological WWT plant designed to treating the effluent to local and WBG EHS Guideline limits based on the EIA review. The effluent will be used for irrigation of the Company’s crop fields. Wastewater from the pig farms is discharged to the closed manure storage at the farm. The slurry is discharged to the Company’s own fields twice a year (70 tons/ha).

Integrated Pest Management. In principle, preventative measures are taken first before pesticides are used as per the Company’s Integrated Pest Management (IPM) Plan. Only those crop protection products that are allowed to be used by law in Ukraine are utilized. The Company cross-listed the chemicals that they use against the World Health Organization (WHO) Recommended Classification of Pesticides by Hazard (2009). Nyva, through its Chief Agronomist, provides specific training for handling and applying CPP to its staff. All products in use are Class III. Pest control is in place at the feed mill and at meat processing plant as part of the food safety management system (ref, ISO 22001).

Solid Waste Management. The amount of solid waste generated by all Company’s operations is estimated as part of the EIA required by the State prior to the commissioning of the facilities. Data on the actual amounts generated are maintained and submitted to authorities to demonstrate compliance with these expected norms. Records (manifests) of final disposition of hazardous wastes (e.g. spent fluorescent tubes, plastic, paper, glass, protective clothing, lead acid batteries, oils and lubricants and used tires) are also maintained by the Company; wastes are removed and transported by licensed contractors and are either recycled or disposed of in licensed landfills. Management of pig carcasses from farms (i.e. pigs that die prior to reaching the age to be slaughtered) are transported to a third-party rendering facility by a dedicated vehicle. A washing and disinfection protocol is followed. The wastes from the meat processing plant follow a similar process of transport and washing protocol. With the planned rendering facility there will no longer be the need for the third-party rendering plant. Nyva’s rendering facility will be using state of the art technology producing bone meal and fat.

Hazardous Materials. Hazardous materials (e.g. cleaning chemicals) are kept under lock and key in central locations in each pig farm and at the feed mill. The Company has completed an asbestos survey and now has an asbestos management program in place, including replacement of roofing plates at the flat storages and insulation materials. All asbestos materials disposed of by a licensed Company for landfilling. Going forward, as per ESAP#1, Nyva will conduct an independent audit of the landfill site to ascertain that the site is operated to acceptable standards by April 2021. If this is not the case, Nyva should consider an alternative disposal site.

The Company operates seven diesel fuelling stations in its operations with single walled above ground storage tanks of various volumes with a fuelling pump. The Company installed secondary containment holding 110% of the tank volume and a liquid tight floor for fuelling as well as provision of spill response materials and equipment.

Community Health and Safety. Adverse impacts on the health and safety of communities located nearby Nyva operations could result from practices associated with farming, such as inadvertent exposure to land application of manure (used as fertilizer), exposure to agrochemicals (e.g. pesticides), inappropriate operation of Company trucks in populated areas or exposure to excess noise and/or inappropriate disposal of effluent to surface water bodies from the meat processing facility, and odor and ammonia releases. In addition, risk of possible outbreak of diseases in the pig population that could transfer to human populations could also occur.

Measures have been taken at the pig farms to minimize odor and ammonia releases. Odor nuisance was not noticeable during the site visit to the pig farm visited. Covered manure lagoons are built where they are least likely to cause annoyance to sensitive receptors, considering the distance to receptors and prevailing wind direction. The Company ensures the good management practices currently implemented on existing farms land are extended to the new farm and lands acquired. For example, the application of manure to crop lands, for the summer and winter crops, is generally limited to areas close to pig farms. Furthermore, spreading is done during the day, and weekends and public holidays are avoided. Attention is paid to wind direction in relation to neighbouring houses and weather forecast is taken into consideration (avoidance of rain after application to avoid leachate). As noted above, due to biosecurity reasons, the pig farms are located at least 1.5km away from populated areas. Through their community liaison officer, the Company informs in advance the local villages of the intention to apply the manure and/or application of agrochemicals.

Trucks (for moving pigs and feed between operations and other agricultural raw materials to and from operations) are maintained by the Company; the garage and chief mechanic are required to review and sign off on a vehicle after maintenance and before it can be used to ensure it is roadworthy. All truck drivers are tested every day for alcohol and blood pressure before being allowed to drive; they also undergo a comprehensive annual health examination. The Company reports that there have been no accidents involving their trucks since 2014. The Company should be cognizant of all impacts that may occur due to truck traffic moving through local villages (such as dust, vibration and noise) and ensure that all trucks are driven per local laws and that they are not overloaded.

Separation of the public from Company operations is achieved by maintaining the 1.5km sanitary protection zone (SPZ) and their pig farms being surrounded by 2.7m high concrete walls as part of the biosecurity measures. The exception is farm 4, where the distance to the community is 900m. There are no inhabitants in this community and the Company has received an exception permit from the government. The chance of inadvertent access to the farms (and exposure to any kind of transmissible disease) is further minimized as measures regarding limiting access to authorized personnel only by having on-site, unarmed security guards. The rendering facility under construction has a 2km sanitary protection (buffer) zone.

Nyva’s current operations are located in consolidated agricultural lands, and as such represent no adverse biodiversity impacts in those locations. This habitat mapping has been validated during the EIA study for each new farm and other operations (i.e. feed mill and rendering facility). In 2019, the Company’s grain production (corn, canola and rape) was certified against the International Sustainability and Carbon Certification (ISCC) which ensures that i) Biomass is not produced on land with high conservation value (HCV) areas and high carbon stock (HCS); ii) Good agricultural practices protecting soil, water and air are applied; iii) Human rights, labour and land rights are respected; iv) Sustainable material is traceable throughout international supply chains; and v) Greenhouse gas reduction targets are met (e.g. for European biofuels markets). ISCC is a globally leading certification system for sustainability, traceability and greenhouse gas emission savings. ISCC certifications are conducted by independent third-party Certification Bodies cooperating with ISCC. Review of the 2019 audit reported demonstrated compliance against the standard with no non-conformities.

In accordance with the IFC Good Practice Note (GPN) on Improving Animal Welfare in Livestock Operation (2014), Nyva completed the IFC Biosecurity, Animal Welfare and Antibiotics (BAWA) questionnaire for this appraisal. Pig farms have very strict biosecurity in place due to animal disease control (i.e. African Swine Fever (ASF). Following a biosecurity audit undertaken by representatives of the United States Department of Agriculture and the Association of Ukrainian Pig Breeders in relation to ASF in 2016, Nyva strengthened its strict quarantine rules. The following measures, among others, are in place: separate entrance gates used for staff, pigs and feed; entrance gate for staff has a double entry system to further enhance biosecurity; only essential visitors are allowed onto pig farms; all personnel shower on entry to the farm and are provided with clean clothing and footwear; staff are not shared across units to prevent disease transfer; initial stock for new units comes only from other Nyva farms ; and dead pigs, afterbirth and other biological waste is removed in a sealed concrete storage container which is emptied regularly and taken to the for now third-party rendering facility. The BAWA assessment uses European Union Animal Welfare Directives pertaining to matters of animal housing and other conditions. Overall, animal welfare at Nyva’s pig farms were judged to be of a high standard in line with the EU Animal Welfare Directive starting from pig farm #9 and the existing slaughterhouse. The following measures are in place: group housing for sows and piglets; toys to play with; and smaller groups of pigs held for 2 hours in a holding area at the processing plant. For killing the pigs, CO2 is used instead of an electrical shock. Nyva has taken a number of measures to supplement or eliminate antibiotics on farms including changes in nutrition – use of enzymes, prebiotics, probiotics, improved management systems – cleaning & sanitation, improved biosecurity, genetic improvements in immune responses and environmental management such as controls to prevent fluctuations in temperatures. In summary, the Company has a written corporate policy or statement covering the responsible use of antibiotic in livestock production and the responsible use of antibiotics is required within the Company’s operational standards. The Company has a veterinary health plan for all livestock production units, part of which focuses on strategies to reduce use of antibiotics. Going forward, as set forth the in the ESAP#2, Nyva will complete an independent verification audit of its animal husbandry/welfare management practices for farms built after 2016 (starting from pig farm #9, and once farms #13 and #14 are commissioned) against a credible international standard and, as needed, will develop corrective action plans.

External Communications and Community Grievance Mechanism. Current means of community engagement with communities include consultations through the EIA process (therefore driven by regulation which includes a public disclosure element) and through engagement activities related to the Company’s recently updated Stakeholder Engagement Plan (SEP) and community grievance mechanism. The SEP was updated after a complaint was lodged by the village Peremoha and the NGO “Stop Corruption” regarding the construction of pig farm #11 financed by EBRD which referred to 1) Nyva not following the EIA process and 2) not meeting the sanitary zone. During the IFC SSV in November 2019, Nyva admitted having started the construction of the pig farm before the EIA approval was granted. Regarding the second allegation, this was sufficiently addressed in the EIA and in place for the new farm. After the complaint, the construction of the pig farm #11 stopped until EIA approval was granted. All points of the complaint were sufficiently addressed by Nyva in the EIA. The EIA was approved by the regulators. An independent EIA review of pig farm #11 requested by IFC confirmed that the EIA did meet all regulatory requirements, including adhering to the sanitary zone. IFC requested Nyva to strengthen their stakeholder engagement to ensure that all stakeholders were involved in the consultation of the EIA process and not to start any construction before EIA approval was obtained for pig farm #12. This means that not only the communities in those municipality where the project is located are involved in the consultation, but also other communities in the project area of influence. For pig farm #11, the village Peremoha was not invited to the public consultation by the regulators as they belong to a different municipality.

Nyva developed a Stakeholder Engagement Plan (SEP) covering both existing operations and new projects on an annual basis. The 2020 SEP was reviewed by IFC and found satisfactory. The SEP foresees in proactive communication on plan to expand the Company’s operations in the local newspapers and informing all communities in the area of influence of the planned farm. Furthermore, they will ensure that all communities will be invited for the public consultation of the EIA study and not only the community located in the same municipality as the proposed farm. Reporting on the implementation of the updated SEP, and a synopsis of activities of ongoing reporting to affected communities, will be reported on an annual basis.

Contact name: Oleksandr Kucher

JV LLC Nyva Pereyaslavschyny

2 Pryvokzalna St.

v. Pereyaslavske

Pereyaslav-Khmelnitskiy district

Kyiv oblast, Ukraine