Land Acquisition and Involuntary Resettlement is not applicable as HSA Foods currently have no plans to acquire more land for the expansion of the plants/operations targeted by this loan; PS7: Indigenous Peoples is not applicable as no Indigenous Peoples have been identified within HSA Foods’ operational footprint; and PS8: Cultural Heritage is not applicable as there are no cultural sites within HSA Foods’ operational footprint.  

  This proposed investment is expected to have limited environmental and social impacts, which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s 2012 Policy on Environmental and Social Sustainability. The project is designed to avoid, minimize and manage E&S risks and impacts of HSA Foods’ operations in compliance with Yemeni legal and regulatory requirements, IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Dairy Processing, Sugar Manufacturing, and Food and Beverage Processing) Environmental, Health and Safety (EHS) Guidelines.

The key E&S issues associated with this investment include: i) energy consumption and related GHG emissions; ii) water consumption; iii) wastewater management; iv) continuous engagement with employees and worker representatives (including women); v) dissemination and communication of HR policies and procedures, including employee grievance management; and vi) the dynamic nature of the ongoing conflict within Yemen.

   Environmental and Social Assessment and Management System. As part of HSA Yemen Region’s transformational strategy, which was rolled out in 2018, a focus on health, safety, and environmental (HSE) issues was identified as a strategic pillar for success. To this end, HSA Yemen Region recently developed a new HSE strategy across Yemen companies, which was endorsed by Yemen Managing Director and the Steering Committee in July 2019. The focus of the HSE strategy is to transform HSE practices in Yemen companies across operations to a world-class level through implementation of the HSE road map over 2019-2023; the focus in the first year was on establishing H&S standards, metrics, and programs; resources planning and budget; building capacity; and developing risk mitigation plans for priority areas. The environmental component will follow, starting the last quarter of 2020, and as per ESAP #1. HSA Yemen Region has been in the process of reviewing and enhancing the existing HSE management framework through centralization and standardization of functions. The HSE management framework can generally be considered to be consistent with the requirements of this Performance Standard and by addressing the action items as outlined in the ESAP, HSA Yemen Region’s framework, moving forward, can be expected to be in compliance with this Performance Standard.

To date, the existing HSE management framework has been certified at the level of HSA Foods, which include: ISO 14001:2015 (valid until December 2021) and ISO 9001:2015 (valid until December 2021) certifications at Aden Mills; ISO 14001:2015 (valid until February 2022) and ISO 9001:2015 (valid until February 2022) certifications at Hodaida Mills; ISO 14001:2015 (valid until January 2022), ISO 9001:2015 (valid until January 2022), and OHSAS 18001:2007 (valid until January 2022) certifications at Nadfood Taiz; and ISO 14001:2015 (valid until January 2022) and ISO 9001:2015 (valid until January 2022) certifications at Yemen Sugar. The companies have also been audited against ISO 22000:2018 and ISO 45001:2018 in January 2020, which concluded compliance and certification with both standards (valid until April 2023). As Nadfood Hodaida operations started only in mid-2018, full implementation of the HSE management framework is still pending. Furthermore, the Covid-19 pandemic has also delayed the audit process against the requirements of ISO 14001:2015, ISO 9001:2015, ISO 22000:2018, and ISO 45001:2018, which had been included as part of the company’s annual objectives for 2020 and to inform IFC as per ESAP #1.

Policy. HSA Yemen Region is committed to addressing the quality and safety of its products, protecting the health and safety of its workers, and reducing impacts on the environment across its operations. This is articulated in an HSE Policy, which is pending dissemination across all operations. HSA Yemen Region is guided by its values, which are consistent with its Code of Conduct. Furthermore, HSA Yemen Region is committed to a vision for sound health, safety, and environmental practices that extends to it contractors, suppliers, customers, and local communities. To this end, senior managers at each facility are responsible for ensuring that this policy is effectively communicated and implemented across operations and are provided the appropriate resources to implement HSA Yemen Region’s HSE management system (HSEMS).

Identification of Risks and Impacts. In Yemen, the Environmental Protection Law (Law 26) of 1995 references the need for undertaking an Environmental Impact Assessment (EIA) for industrial projects but is not specific in terms of applicability to agro-processing operations such as those of HSA Foods. A process for obtaining an environmental permit from the Ministry of Water and Environment’s Environment Protection Agency is in place; a permit is granted as long as operations are in compliance with environmental regulatory standards, which are not specifically stated. Regulatory inspections are conducted at random intervals as a function of which the environmental permit is renewed. HSA Yemen Region prepared EIAs for Hodaida Mills (June 2013), Nadfood Hodaida (June 2014), and Yemen Sugar (June 2010) prior to construction. No EIAs were prepared for Aden Mills and Nadfood Taiz; however, for Aden Mills, the Ministry of Water and Environment conducted an environmental compliance inspection in 2014 and issued a certificate of compliance with the environmental regulations and for Nadfood Taiz, the authorities conducted an inspection of the site in 2019, which noted some areas for improvement (related to the discharge of wastewater to adjacent land north of the facility, which received a community complaint) but nonetheless issued an environmental permit. As an environmental permit was granted for both operations, HSA Yemen Region considers to be in compliance with the Environmental Protection Law. All HSA Foods’ operations have been granted environmental permits, which are valid for one year (until 31 December 2020).

Furthermore, in the context of the ISO certification processes (ISO 14001 and ISO 45001), HSA Foods undertook internal assessments of aspects and impacts of all HSE issues across its operations, including a comprehensive Job Risk Analysis across all jobs (including risks related to machinery and equipment, electricity, and fire protection). As per ESAP #2, HSA Yemen Region shall undertake an environmental review (by a qualified consultant) of HSA Foods against the requirements of IFC’s Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Dairy Processing, Sugar Manufacturing, and Food and Beverage Processing) Environmental, Health and Safety (EHS) Guidelines.

Management Programs. As part of the existing HSE management framework, which is pending further revisions, HSA Foods are implementing measures for managing HSE aspects of operations in order to reduce impacts related to occupational health and safety, security, traffic safety, wastewater, air emissions, noise, hazardous materials, and traffic safety (described in further detail in each of the sections below). These are implemented in the form of procedures and work instructions, which are pending further development and streamlining across operations. A process is also in place for setting annual HSE objectives and targets, establishing KPIs for monitoring the HSE performance (also described further in the section below), and implementing a standardized IT-based reporting platform across all operations. Finally, to assess the effectiveness of these management programs, HSA Yemen Region is in the process of developing an internal HSE audit protocol (already in place for H&S since the end of 2019 and to be completed for environment by the end of 2020) to undertake standardized annual compliance assessments across operations to use as the basis for continuous improvement.

Organizational Capacity and Competency. In the context of its new HSE strategy, HSA Yemen Region created a new organizational structure with a centralized HSE function located in Cairo, which entails a Chief HSE Officer (appointed in June 2019) responsible for overseeing the phased roll out of the HSE strategy in the region, including resource planning; a Technical H&S Director who oversees the development of plans and procedures to address operational H&S risks (such as life and fire safety) and leads the risk assessment process across all facilities; an Environmental Compliance Lead (position has been offered to a suitable candidate but onboarding has been delayed to October 2020 due to the Covid-19 pandemic) who oversees the development of plans and procedures to address environmental risks and ensures that these comply with established standards; and an HSE Compliance and Capability Manager who oversees HSE compliance audits and leads an internal team of HSE auditors, which undertake compliance assessments of facilities to identify areas for continuous improvement as well as the need for specialized technical training. Based on discussions with key individuals during IFC’s appraisal, staff were knowledgeable of HSE aspects of HSA Foods’ operations.

HSE Managers located in Aden, Hodaida, and Taiz are responsible for overseeing the implementation of the HSE management framework and ensuring that sufficient resources are available for doing so across operations including HSA Foods, at which HSE Section Heads have been appointed. At each facility, the HSE Section also entails a number of HSE supervisors and inspectors with clearly defined roles and responsibilities to enable delivery against HSA Yemen Region’s HSE vision. All these positions have been filled or are pending to be filled based on planned timelines; a comprehensive HSE training plan has been developed to ensure that staff have all the relevant technical and leadership capabilities for performing their duties effectively.

The HSE Compliance and Capability function includes a dedicated team, which is responsible for overseeing the roll out of a risk-based training matrix across all operations. Training needs and plans were developed based on the outcomes of HSE competencies assessments undertaken across HSA Foods’ operations as well as H&S risk assessments (including an analysis of incidents and near misses, findings from OHSAS management system audits, and outcomes of Job Risk Analysis undertaken across operational jobs) and the findings from ISO 14001 management system audits. Topics include H&S (confined spaces, work at heights, electrical and machinery/equipment safety, and industrial powered trucks/forklifts); food safety; environmental monitoring; as relevant, first aid and fire safety (see section below on Emergency Preparedness and Response); NEBOSH training in HSE practice and management for HSE Section Heads and Managers; and HSE training for senior managers, including CEOs to ensure full awareness and support of the HSE agenda. The number of hours of HSE training provided by worker is monitored as a KPI across HSA Foods. The 2020 training plan was put on hold in mid-March 2020 in light of the Covid-19 pandemic but is scheduled when public health conditions allow.

Emergency Preparedness and Response. An emergency preparedness and response plan is in place at all HSA Foods’ operations; it addresses all types of emergencies (such as a fire, explosion, chemical leakage, hazardous materials spills, and natural disasters) and outlines the necessary response procedures as well as designated roles and responsibilities. However, the scope does not include evacuation procedures and protocols to follow in case of security threats and earthquakes, which will need to be addressed as per ESAP #3. A stand-alone emergency and fire safety team (including an average of 20 people and one or more fire trucks) is present 24/7 at each site to respond to any emergency issue; as part of HSA Yemen Region’s risk-based training matrix, these teams receive specialized fire safety training through an external contractor. Drills against various emergency scenarios (such as a small-scale fire, chemical leakage, and hazardous materials spills) are conducted once a year to evaluate the effectiveness of the response plan and identify the need for corrective actions, as necessary.

The emergency preparedness and response plan of each facility was recently reviewed in the context of third-party audits undertaken against ISO 45001 and OHSAS 18001 and deemed to be satisfactory. However, for facilities such as Aden Mills, Hodaida Mills, and Nadfood Taiz, which are surrounded or in proximity to both residential and commercial developments (see section below on Community Health, Safety and Security), there has been no consultation around potential emergency scenarios, which could have an impact outside the facility, which will need to be addressed as per ESAP #3. Nonetheless, each facility’s emergency and fire safety team is available to respond to an emergency outside the facility, if necessary.

Each facility is equipped with a fire protection system, which entails an automated fire suppression system (combination of sprinklers and FM200 fire suppression gas, alarm, and smoke detectors), a network of water pumps and hydrants, and fire extinguishers (different types by specific use); in the case of Aden Mills and Hodaida Mills, all equipment in high-risk explosion areas meets the international standards for explosive atmospheres. The components of the fire protection system are tested regularly by each facility’s on-site fire safety team. There is no requirement under national law to obtain certification of the fire protection system; however, there are regular inspections by the insurance provider and by the civil defense authority in the case of Aden Mills. Furthermore, the national labor office inspects all fire extinguishers to ensure that these have been serviced. In 2019, HSA Yemen Region contracted an NFPA-certified consultant to review the existing fire system design at all facilities against the international NFPA standard and to develop a plan for upgrades. HSA Yemen Region has allocated the necessary budget for doing so across HSA Foods, which is expected to be completed by the end of 2020 and to inform IFC as per ESAP #3. As soon as the upgrades will have been completed, HSA Yemen Region will roll out a training on all fire systems to all concerned teams.

In response to the Covid-19 pandemic, HSA Yemen Region responded as early as March 2020 by first setting up a dedicated crisis management team for Yemen (headed by the Yemen Managing Director, and comprising the Chief HSE Officer and the Heads of all functions) and then developing and implementing a crisis management plan to mitigate health risks on workers and potential business impacts. The plan defines three levels in terms of the crisis management approach (yellow, orange, and red—being the most stringent) as a function of the spread of the pandemic and application of corresponding infection control and protection protocols. Following WHO recommendations, the plan included, at a minimum, a ban on international travel, suspension of the biometric fingerprinting system, suspension of face-to-face meetings and trainings, home-based work or leave for vulnerable groups (those over 60, with chronic disease, respiratory issues, and high blood pressure), and suspending access to HSA operations by all external visitors. Any symptomatic employees were advised not to come to work and to contact the on-site clinic or online medical service or to notify HR. Furthermore, HSA Yemen Region commissioned its own testing equipment and lab instrumentation for the medical clinic within the Nadfood Taiz site for testing of employees and rapid response to suspected cases.

By mid-March 2020, HSA Yemen Region made the decision to apply the ‘yellow’ crisis management protocol across all operations in Yemen. This included the additional mobilization of crisis management teams at each facility, increased frequency for disinfecting high-traffic areas including vehicles accessing the site, provision of hand sanitizer and face masks, requiring social distancing, scheduled pre-shift Covid-19 awareness raising sessions, display of WHO infection control guidelines on screens (in the cafeteria, at the entrance of the facility, and in work areas); and temperature screening for workers at all entry points to the facility. In May 2020, HSA Foods, except for Aden Mills, were escalated to the ‘red’ crisis management protocol, which remained in effect for six weeks. This included a complete lockdown of operations with approximately 50-60% of the workforce remaining within the confines of the site to continue operations and avoid any risk of exposure to people from the outside (see section below on Working Conditions and Terms of Employment). At Aden Mills, the decision was made to continue to operate under the ‘orange’ protocol rather than go to full lockdown in order to avoid the potential risk of infection from workers who had just returned to work after Eid celebrations. As part of this protocol, any worker identified as having a temperature above 38 degrees Celsius is denied access and referred to the medical clinic for further monitoring. The ‘red’ crisis management protocol was lifted after the pandemic peak was reached in Yemen; as of August, HSA Foods are back at operating under the ’yellow’ protocol with 100% of the workforce (excluding those over 60 and with serious health conditions). 

Furthermore, to mitigate the impacts of Covid-19 on workers and their families, HSA Yemen Region provided 20,000 rapid test kits for early detection, contracted with a virtual diagnosis and treatment service (“Call a Doctor”) for access by all workers and their families, medical consultants for following up on suspected cases, mobilized field doctors to provide home-based care as necessary, availed HSA Foods’ ambulances for transport to hospitals, signed agreements with hospitals in several cities to set aside for HSA Yemen Region a certain number of beds in medium and intensive care units, and rented a hospital in Sanaa specifically for workers and their families in case they required medical treatment related to Covid-19. To date, there have been no cases of Covid-19 among workers at HSA Foods. Nonetheless, some cases (26 to date) have been reported among workers who were not part of the lockdown or while on leave during Eid celebrations.

HSE Monitoring and Review. In the context of its new HSE strategy, HSA Yemen Region developed a new set of HSE performance indicators (KPIs); as part of the Group’s overall HSE road map, H&S KPIs (entailing recordable occupational incidents, lost time injuries, lost days from work, and cost of injury) were rolled out first (January 2020) across all operations to standardize performance monitoring and reporting across Group operations. These are grouped into leading and lagging KPIs and include annual objectives to ensure proactive management of H&S risks; a monitoring procedure is in place, which defines each of the KPIs in line with international standards, such as OSHAS, the process for data collection/measurement and frequency, the rate calculation methodology, and the roles and responsibilities for doing so. Moving forward, HSA Yemen Region will develop an IT-based platform for tracking HSE metrics as well as compliance and incidents across operations; data will be used as the basis for implementing practices for continuous improvement.

An H&S compliance monitoring program is in place and includes compliance targets for HSA Foods as well as tracking KPIs in terms of percentage closure of any outstanding corrective action plans. Furthermore, the KPIs have been incorporated into each facility’s scorecard and are reported to HSA Yemen Region’s management on a quarterly basis. The development and implementation of the environmental compliance monitoring program is currently pending kick off, which will need to be shared with IFC as per ESAP #4. To date, HSA Foods have been tracking separately data related to air emissions, fuel and oil consumption, water consumption, as well as volume of waste and wastewater generated.

   In Yemen, HSA Foods employ a total of 5,112 people (12% at Aden Mills, 13% at Hodaida Mills, 13% at Nadfood Hodaida, 47% at Nadfood Taiz, and 12% at Yemen Sugar), comprising direct employees (88%) and contracted through third parties (12%, see section below on Workers Engaged by Third Parties). Women, who due to cultural norms only make up 2.3% of all direct employees, are typically employed in administration, customer service, marketing, purchasing, accounting, and human resources’ functions. Skilled employees (which include office-based, management roles) represent 19% of direct employees (of which 5% are women) while unskilled employees (production, maintenance, warehousing, merchandising, and distribution) make up the remaining 81% of the workforce.

Human Resources Policies and Procedures. HSA Yemen Region’s Human Resources (HR) function is centralized and managed by a Chief Human Resources Officer based in Dubai, supported by an HR director assigned to each business unit as well as operational-level HR managers. HSA Foods each have an HR support team of 14-16 employees on site who are responsible for support functions, such as payroll, learning and development, employee relations and recruitment. There is an HSA Yemen Region HR policy, which applies to all HSA Yemen operations, including HSA Foods; as per the requirements of the Labor Code in Yemen, this stipulates working hours, shifts, leave (annual, maternity, paternity, pilgrimage, marriage, funeral, and bereavement), wages, recruitment, employment equity, grievance management, and the prohibition of employing anyone under the age of 18.

HSA Yemen Region’s Compliance and Ethics Department is in the process of launching its Code of Conduct, which includes topics, such as ethics in the workplace, relationship management with managers and subordinates, confidentiality, harassment, non-discrimination, health and safety, violence, environmental protection, quality, safety and hygiene, fair and equitable employment practices, anti-bribery and corruption, conflict of interest as well as behaviors that could result in disciplinary action. Yemen is considered a high-risk environment for gender-based violence; however, given HSA Yemen Region’s commitment to identifying and managing incidents related to discrimination and harassment, the risk within the workplace is largely managed but nonetheless remains outside the workplace, within the local communities. Further rollout and education at HSA Foods has been delayed temporarily due to the Covid-19 pandemic. HSA Yemen Region will set up gender-specific reporting lines to manage complaints related to the Code of Conduct and employee grievances, as per ESAP #5.

HSA Yemen Region’s HR policies are disseminated in Arabic across HSA Foods through electronic screens located visibly in public areas (such as corridors and cafeterias) and through bulletin boards to orient employees on these policies. HSA Yemen Region’s HR function periodically reviews and updates these policies to promote best-in-class practices and address emerging employee needs.

As per HSA Yemen Region’s policy, all employees are provided with written contracts (in Arabic), which as per local legislation, are drawn up in three copies (the original being given to the worker, a copy kept by HSA Foods, and a copy sent to the relevant Ministry). All copies are signed by both parties. Direct employees are provided with either open-ended or term contracts. Employees on term contracts are typically recruited on a short-term basis to provide additional support during busy periods, such as Ramadan and Eid or for specific support (including security guards) or consulting work. As per the policy, should an employee with a term contract work for HSA Foods for more than 12 months, this will automatically be converted to an open-ended contract, except for security guards directly employed by HSA Foods (see section below on Security Personnel). Contracts stipulate the date of employment, job title and expectations, leave, health care, probation period (six months), and terms of termination. Most employees reported that they did not have a copy of their employment contract, which will need to be addressed as per ESAP #6. Currently, there are no collective bargaining agreements (CBAs) in place at any of HSA Foods’ operations (see section below on Workers’ Organizations).

In the context of its new HSE strategy, HSA Yemen Region developed a balanced scorecard to assess and monitor the performance and implementation of HR policies and processes. HR targets include job tenure, ratio of managers to workers, employee turnover rate, employee engagement rate, and level of satisfaction.

Per the Labor Code, the Ministry of Labor has reviewed and approved HSA Yemen Region’s HR employment practices in Yemen (including the HR functions, contracting, workplace conditions, occupational health, and disciplinary rules and penalties). The Ministry of Labor periodically verifies all aspects of employment and to date, HSA Foods have been deemed to be in full compliance with relevant legislative requirements. The HR policies and procedures of HSA Foods can be considered to meet the requirements of this Performance Standard once the action items as outlined in the ESAP have been addressed.

Working Conditions and Terms of Employment. Working hours at HSA Foods comply with the Labor Code, which stipulates a maximum of 48 hours per week. HSA Foods operate on three eight-hour shifts per day and workers are allowed to work a maximum of 44 hours per week. Employees who work additional hours are entitled to days off in lieu of pay; hours worked are tracked through a biometric fingerprint attendance system, which has been temporarily suspended in the context of HSA Yemen Region’s crisis management response to the Covid-19 pandemic. Employees are granted a one-hour break for lunch in addition to breaks for daily prayers. All HSA Foods’ sites are equipped with on-site cafeterias as well as toilets, showers, and locker rooms, which are separated by gender and managed in a hygienic manner. There are also on-site mosques to cater for daily prayers.

HSA Foods pay about four times more than the national minimum monthly salary of 20,000 Yemeni Riyals (equivalent to US$ 80). HSA Foods’ employees are granted 30 days of annual leave in addition to 18 national holidays per year.

Overall, there is inconsistent understanding of HR policies and practices among employees across HSA Foods. As per ESAP #6, HSA Foods will need to conduct dissemination and information sessions for workers pertaining to HR policies and procedures, terms of employment, the management of grievances, and training opportunities.

The majority of HSA Foods’ workers reside in nearby communities and commute to work on a daily basis. HSA Foods own and/or contract approximately 110 buses that provide a pickup and drop-off service to all workers at the end of each shift. HSA Foods do not provide accommodation to workers; however, in order to continue operations at reduced production rates during the Covid-19 pandemic, HSA Foods operated with reduced capacity (approximately 50-60% of the total workforce) under lockdown conditions (except for Aden Mills) and workers were provided with temporary on-site accommodation to prevent the risk of exposure to potentially infected people on the outside (see section above on Emergency Preparedness and Response). Lockdown procedures were communicated to all workers prior to implementation and the option to continue working during this period was voluntary, based on each worker’s particular circumstance. Due to the cultural context, female workers were not given the option to remain on-site during the lockdown but to do home-based work, as feasible. Workers involved in the lockdown were paid 300% of their regular salary during the duration of the lockdown as well as provided three meals per day. Workers not involved in the lockdown were required to use up their annual leave to cover part of this duration while continuing to be paid their full salary. To date, HSA Yemen Region has not implemented any salary cuts or retrenchments due to the Covid-19 pandemic. The lockdown period will be continually reassessed and extended dependent on the Covid-19 situation in the country

Workers’ Organizations. The Yemeni Labor Code does not explicitly require the establishment of a workers’ organization; however, workers have the right to freely establish and join organizations with the aim of protecting their interests and to do so in total freedom without any interference or outside influence. Currently, Nadfood Taiz is the only one of HSA Foods’ operations with a workers’ organization that represents the majority (80%) of unskilled workers. The workers’ organization was established following the Arab Spring in 2011 when employees at Nadfood Taiz requested a representative body, which was supported by the company’s management. Members of the workers’ organization have elected representatives who engage with Nadfood Taiz’ Employee Relations Manager. Women are not restricted from joining the union; however, currently there are no women in the workers’ organization. A two-way engagement process is in place through open-communication channels (telephone calls, emails, and WhatsApp messaging) that facilitate direct communication between the worker representatives and Nadfood Taiz management. Although other HSA Foods’ operations do not have workers’ organizations, the Employee Relations Manager at each site performs the role of a liaison between management and workers through regularly scheduled meetings.

Non-discrimination and Equal Opportunity. As reflected in its HR policy and Code of Conduct, HSA Yemen Region is an equal opportunity employer, and all hiring decisions are based on functional competence and expertise. Each year, the organizational structure is reviewed in order to assess the resource requirements for each function. Women are provided the same terms of employment as their male counterparts for work under the same conditions and specifications.

Retrenchment. HSA Foods have not undertaken any retrenchment, nor are there any plans for retrenchment in the immediate future. Despite a challenging economic climate created by the ongoing conflict and exasperated by the Covid-19 pandemic, HSA Yemen Region strongly advocates for the wellbeing of its employees and strives to provide secure employment. HSA Foods experience a total annual employee turnover of approximately 2% of the workforce (including retirement, voluntary exit, dismissals, absenteeism, and conclusion of term contracts less than 12 months).

Grievance Mechanism. HSA Yemen Region’s employee grievance management mechanism, as detailed in its HR policy, entails an open-door policy whereby all employees can report any concerns and grievances without fear of retaliation. Information related to the mechanism is communicated to all employees through postings on electronic screens, bulletin boards, and employee Whatsapp groups. Relevant HR managers at HSA Foods are also responsible for further discussions and dissemination regarding the mechanism. The mechanism also allows employees to raise concerns and complaints related to unethical behavior, illegal action, discrimination, harassment, victimization, wages, career progression, and performance. The most common employee grievances involve issues around salary increases, discrepancies in terms of benefits and entitlements, and benefits. HSA Foods maintain a log at each site of employee grievances and employee grievances are monitored on a quarterly basis by each HSA Foods’ HR Department to identify trends, ensure ongoing improvement, and successful resolution and closure.

The process encourages the employee to discuss the grievance with their manager or alternatively to escalate the grievance to a more senior manager or a member of the employee relations team. This process does not allow for the submission of anonymous complaints or grievances, nor does it cater to gender-specific concerns. It typically takes two weeks to provide feedback from the date of the complaint. HSA Yemen Region has recently launched an ‘Ethical Line,’ which enables employees to submit a complaint or grievance over the phone or via email in a confidential and anonymous manner. Additionally, HSA Yemen Region is in the final stages of approving a Whistle Blowing Protection Policy that will be managed by the Compliance Team based in Cairo. HSA Yemen Region will need to provide training to employees on the grievance mechanism as per ESAP #6 and set up gender-specific reporting lines as per ESAP #5.

Protecting the Work Force. HSA Yemen Region has clear guidelines in compliance with national law related to child labor and prohibits the employment of anyone under 18 years of age. HSA Foods currently do not employ anyone under the age of 18; age is verified as part of the hiring process.

Occupational Health and Safety. HSA Foods’ operations are fully automated and entail for the most part enclosed processes. The packaging and loading areas are typically the most labor-intensive aspects of operations. The majority of occupational health and safety risks can be mitigated through effective implementation of management programs. In the context of the new HSE strategy for Yemen, the management of workers’ occupational health and safety (H&S) is integrated as part of the overarching HSE management framework, including an H&S organizational structure at each site; H&S objectives were recently rolled out across operations including allocation of the necessary resources for meeting these objectives. To this end, HSA Yemen Region undertook H&S risk assessments and a Job Risk Analysis by job type at each facility; the necessary controls and equipment are being implemented following a hierarchy of controls to avoid and mitigate risks, including training, signage, and use of Personal Protective Equipment (PPE). General housekeeping across all sites appeared to be good based on the virtual site visit.

Although it is not required under national law, H&S committees have been established at some facilities (Aden Mills, Hodaida Mills, and Yemen Sugar) and are pending establishment at the remaining ones; these are made up of representatives of various functions (including HR, H&S, maintenance, and quality) and help support the roll out of the H&S strategy. HSA Foods’ HSE Section Heads conduct monthly self-assessments of H&S performance against standardized HSA Yemen Region protocols; compliance audits are also undertaken on a quarterly basis by HSA Yemen Region’s HSE Compliance and Capability function to assess progress toward H&S objectives. In Yemen, there is no regulatory requirement for undertaking H&S audits of facilities by relevant authorities. HSA Yemen Region’s approach to H&S management was recently reviewed in the context of third-party audits undertaken against ISO 45001 and OHSAS 18001 and deemed to be satisfactory.

HSA Foods’ sites are equipped with an on-site clinic including a pharmacy and medical laboratory, and staffed by qualified physicians, nurses working in shifts, lab technician, pharmacist as well as several ambulances. First Aid kits are also available in key locations around the facilities. Workers undergo regular medical check-ups; auditory, vision, and pulmonary function tests are undertaken randomly to verify potential worker exposure to occupational hazards. Each on-site clinic maintains a register of all health consultations and care provided to workers, including injuries and accidents, which are reported to the HSE Section Head and used as KPIs (number of injuries, lost time, etc.). Accidents and injuries are most frequently related to improper handling of equipment and slips/falls associated with spills. In 2019, the Lost Time Injury Frequency Rate (LTIFR) across HSA Foods was 27 (3 at Aden Mills, 23 at Hodaida Mills, 32 at Nadfood Hodaida, 35 at Nadfood Taiz, and 16 at Yemen Sugar) compared to LTIFR reference rates in the US of 5.5 for grain and oilseed milling, 9.0 for dairy product manufacturing, and 6.0 for sugar and confectionary product manufacturing in 2013. Aden Mills experienced one fatality associated with a worker being trapped in a silo; the risk of recurrence was addressed by implementing tag-in/tag-out procedures.

As part of the crisis management plan to mitigate the impacts of Covid-19 and continue business operations, all workers have been provided with masks and hand sanitizer, which is also made available at key locations. All work areas, offices, cafeterias, on-site worker accommodation, and ablution facilities are continually disinfected; information signs detailing the required safety measures are posted across facilities. A quarantine room has been established at all on-site clinics for the rapid isolation of suspected cases prior to a medical diagnosis.

Workers Engaged by Third Parties. HSA Foods engage third-party service providers to provide services, such as cleaning, food provision and preparation, and landscaping. Contracts include HSA Yemen Region’s HSE requirements as well as clauses related to working conditions and terms of employment (wages, working hours, medical insurance, leave, and labor rights) and compliance is monitored by the Procurement Department throughout the contract period. All service providers are vetted on HSE and labor issues prior to procurement. The procurement process and compliance are overseen at the site level by an internal committee, which audits the practices of third-party providers against contractual terms and the national labor law.

Supply Chain. HSA Foods purchase the following raw materials: i) raw sugar predominantly originating in Brazil and India for Yemen Sugar; ii) skimmed milk powder, full cream milk powder, butter milk powder, green peas, kidney beans, and canned legumes (green peas, kidney beans, and broad beans), limited quantities of palm oil, and limited quantities of fruit concentrate for Nadfood Hodaida and Nadfood Taiz; and iii) bulk wheat, predominantly originating in France, Russia, and Ukraine for Aden Mills and Hodaida Mills.

HSA Yemen Region does not have a procurement policy for the responsible sourcing of raw materials, which will need to be developed as per ESAP #7. HSA Foods purchase sugar (for Yemen Sugar) and wheat (for Aden Mills and Hodaida Mills) via Midstar, an HSA Group affiliate based in Dubai and imported into Yemen; raw material (except for palm oil) for Nadfood Hodaida and Nadfood Taiz is purchased directly from reputable suppliers and via Longulf, an HSA Group affiliate based in London and imported into Yemen. All raw materials are sourced from large international agro-commodity trading companies based in France, Hungary, the Netherlands, Singapore, Switzerland, United Kingdom, and the U.S according to quality requirements and technical specifications. However, traceability to primary producers is limited and HSA trading operations do not have any management control and leverage over the sourcing practices of these trading companies.

Palm oil is procured directly from another HSA Group affiliate, Pacific Inter-Link (PIL Group), which is a member of the Roundtable on Sustainable Palm Oil (RSPO). The PIL Group is committed to promoting sustainability within its procurement practices as reflected in its Sustainability Policy, which applies to both its own practices as well as those of third-party suppliers; this includes a transparent, traceable, and responsible supply chain, which entails no deforestation, no peatland planting, and no exploitation of local communities and workers in palm oil plantation. To this end, a traceability system is in place, which allows the PIL Group to trace palm oil back to the mills from which it was sourced, and to discontinue procurement from those that do not comply with its Sustainability Policy. Palm oil is currently not traced to the level of the plantation to confirm compliance with PIL Group’s Sustainability Policy; however, the PIL Group plans to implement this process by the end of 2021.  

      Aspects of HSA Foods’ operations that have a risk of negatively impacting the environment are related to water extraction, the discharge of untreated wastewater (high loads of dissolved solids from the water purification process, Biochemical Oxygen Demand (BOD) and Chemical Oxygen Demand (COD) from process water, and bacteria from sanitary effluent), air emissions from on-site power generation (diesel and coal), and possible diesel and oil spills from on-site storage of large quantities. These impacts can be mitigated through effective implementation of management programs. With regards to the consumption of natural resources, HSA Yemen Region does not yet measure its efficiency in the use of energy or water but plans to do so in the future and to benchmark itself against the performance of other similar companies in the sector. Annual production associated with HSA Foods’ operations is not expected to change significantly under the proposed scope of the project.

Energy Consumption. Production processes across HSA Foods entail milling dry material, mixing dry and wet ingredients, high-heat treatment as well as evaporation, cooling, and packaging. HSA Foods rely on self-generated electricity at all sites to meet their annual production needs as well as those of HSA affiliates located at the same site. None of the sites are connected to the national electricity grid.

Electricity is generated on-site from diesel-powered generators (combined capacity of 10 MW at Aden Mills, 14 MW at Hodaida Mills, 5.5 MW at Nadfood Hodaida, 23 MW at Nadfood Taiz, and 4.5 MW at Yemen Sugar operated only 1.5 months per year during the regular shut down of the cogeneration plant) and a coal-fired cogeneration (combined heat and power) system (14 MW at Yemen Sugar). Electricity consumption is monitored on a monthly basis; the total annual consumption for 2019-2020 was approximately 221,426 MWh across HSA Foods (29% at Aden Mills, 28% at Hodaida Mills, 8% at Nadfood Hodaida, 12% at Nadfood Taiz, and 23% at Yemen Sugar). HSA Foods have yet to undertake an energy efficiency audit across all operations, which will need to be undertaken as per ESAP #8.

Air Emissions. The main sources of air emissions across HSA Foods are from the operation of on-site diesel-powered generators and boilers (at Nadfood Hodaida, Nadfood Taiz, and Yemen Sugar with a combined capacity to produce 168.5 tons of steam/hour), a coal-fired cogeneration (combined heat and power) system (at Yemen Sugar only with an annual coal consumption of 52,800 tonnes), and a fleet of diesel-powered vehicles and forklifts.

Decree 148/2000 Article No. 41 air emissions standards for Carbon Monoxide (CO), Nitrogen oxide (NOx), Sulphur oxide (SOX), and Particulate Matter (PM) but no air emissions permit or monitoring is required under law in Yemen. At Nadfood Taiz and Yemen Sugar, stack air emissions monitoring is periodically undertaken at boilers, generators, and the cogeneration plant; air emissions monitoring of the generators is undertaken at Hodaida Mills; air emissions monitoring is currently not undertaken at Aden Mills; and at Nadfood Hodaida, contracting with an external service provider is underway. Measurements are primarily undertaken for Nitrogen oxide (NOx) and Sulphur oxide (SOx) and in some cases for Carbon Monoxide (CO) and are used for detecting fluctuations in gas emissions from generators and boilers in order to implement the required maintenance to ensure optional operations. Particular Matter (PM) emissions are only monitored for the cogeneration plant at Yemen Sugar where the stack is equipped with an electrostatic precipitator to reduce PM emissions. For the most part, the findings for NOx and SO2 comply with those of the WBG EHS Guidelines for air emissions. In the context of the new HSE strategy and as per ESAP #9, HSA Yemen Region has prioritized the monitoring of air emissions across its operations to track carbon and GHG emissions and put in place the necessary controls for minimizing impacts on the environment and communities. Estimated GHG emissions are calculated as 294,738 tonnes of carbon dioxide equivalent per annum under current production levels of HSA Foods.

Decree 148/2000 Article No. 41 stipulates ambient air quality standards for Carbon Monoxide and Dioxide (CO and CO2), Nitrogen oxide (NOx), Sulphur oxide (SOX), Ozone (O3), Particulate Matter (PM), and Lead (Pb) and is generally consistent with those of the WBG EHS Guidelines for ambient air quality. However, ambient air quality is not systematically monitored across operations, which will have to be undertaken as per ESAP #9.

Ambient Noise, Temperature, and Dust. HSA Foods undertake periodic monitoring of noise levels at various points across operations; these were found to be within acceptable norms of 50-65 dB(A) for light industry and 85 dB(A) for heavy industry in areas entailing activities such as filling and packing, where workers are required to use hearing protection and limit exposure to 8 hours. Noise levels exceed 85 dB(A) at locations such as the generators, boilers, milling operations, and production lines where workers are not expected to spend extended periods of time and if they do, they are expected to use hearing protection.

The average high temperature in Aden is 37 degrees Celsius, 39 degrees Celsius in Hodaida, and 33 degrees Celsius in Taiz; inside ambient air temperature is not systematically monitored, especially at those locations where workers spend extended periods of time, which will need to be developed as per ESAP #10. Only offices and control rooms as well as the quality laboratory are air-conditioned while filling and packing areas are equipped with fans. Potable water dispensers are located throughout multiple locations.

HSA Foods’ operations have the potential to generate dust at different points of the process; however, all production processes are enclosed and where filling and packing activities occur, the area has been equipped with fans. Dust levels are not systematically monitored, especially at those locations where workers spend extended periods of time, which will need to be developed as per ESAP #10. However, during the virtual site visit, there did not appear to be significant levels of dust.

Water Consumption. Yemen is located in a dry and semi-arid region of the Middle East, where the average annual rainfall ranges from 500 to 800 mm in the western highlands (location of Taiz) and less than 50 mm in the coastal areas of the Red Sea and the Gulf of Aden (locations of Aden and Hodaida); unlike other Middle-Eastern countries, Yemen has no rivers and entirely depends on rainwater and groundwater. Yemen is considered to be one of the world’s most water-stressed countries with its consistently arid climate and low rainfall; furthermore, climate change is further contributing to decreasing water availability due to erratic and/or reduced rainfall and declining groundwater resources, which are considered to be overexploited particularly around fast-growing urban areas, such as Aden, Hodaida, and Taiz. Although the Water Law (Law 33) of 2002 dictates that only the government may drill and maintain water wells, a landowner who drills a well on his private land owns the well according to traditional customs and it is estimated that 99 percent of extracted groundwater in Yemen is from unlicensed wells.

Production processes at Aden Mills and Hodaida Mills are dry and water is only used for cleaning, as drinking water (once treated), on-site sanitation, the canteen, and for landscaping. Additionally, at Nadfood Hodaida and Nadfood Taiz where production processes are wet, water is used as a main product ingredient and for periodic flushing out of production lines, while at Yemen Sugar, water is used as part of the manufacturing process for refining raw sugar as well as for cooling. Raw water is treated on-site at all locations through reverse osmosis; HSA Foods have a written procedure for regular testing of water quality to meet potable water standards in Yemen. At Nadfood Hodaida, Nadfood Taiz, and Yemen Sugar, clean-in-place (CIP) processes are used in production lines and a closed-loop process for cooling at Yemen Sugar is in place to reduce water consumption. HSA Foods have yet to undertake a water efficiency audit across all operations, which will need to be undertaken as per ESAP #11.

Water is sourced from wells at Nadfood Hodaida (4 wells on-site, which also meet all the water needs of Hodaida Mills), Nadfood Taiz (2 wells located 3 km from the facility, which meet 20% of operational needs and the remainder is purchased from external providers), and Yemen Sugar (5 salty water wells on-site); a permit was issued for Nadfood Hodaida in 2014 but not for Nadfood Taiz as the permit requirement only came into effect after the wells were dug in 1985 and there is no permit requirement for salty wells at Yemen Sugar. Water for Aden Mills is sourced directly from the sea to treat to potable water standards for which a permit has been granted although water may also be sourced through the municipal system depending on availability. Water consumption is monitored on a monthly basis; the total annual usage (including pre-treated raw water) for 2019-2020 was about 2,539,813 cubic meters across HSA Foods (8% at Aden Mills, 4% at Hoidada Mills, 24% at Nadfood Hodaida, 24% at Nadfood Taiz, and 40% at Yemen Sugar).

Wastewater Treatment. At HSA Foods, wastewater is generated primarily from the on-site desalination process for treating raw water as well as from activities such as workers’ sanitation blocks and the canteen. Stormwater run-off drains and discharges off-site but there is no dedicated on-site drainage system and some of the facilities (Aden Mills and Nadfood Taiz) periodically experience flooding during heavy rainfall. Additionally, at Nadfood Taiz and Nadfood Hodaida, wastewater is generated from periodic flushing out of production lines and cleaning; at Yemen Sugar, wastewater is generated as a by-product of the manufacturing process.

Municipal wastewater systems and treatment facilities are virtually non-existent in Yemen; although these exist in Aden and Hodaida, the capacity with which they were initially designed has been exceeded resulting in overflow (especially during heavy rains) and parts of the associated infrastructure (collection network of pipes, pumping stations, equipment at wastewater ponds, and flushing trucks) have sustained severe damage during the armed conflict. At Aden Mills, sanitary waste is discharged directly to the Aden municipal wastewater system, while reject water from the desalination process is discharged directly into the sea. At both Hodaida Mills and Nadfood Taiz, sanitary waste is collected in underground pits, which are regularly emptied by an authorized contractor for disposal. Reject water at Hodaida Mills is collected in on-site pits and mixed with raw water and used for landscaping purposes while at Nadfood Taiz, it is mixed with process water and undergoes primary and secondary treatment (sedimentation and aeration) prior to being discharged to vacant land to the north of the facility. At Nadfood Hodaida, all types of wastewater (sanitary, reject, and process) is collected in on-site pits prior to being discharged directly into the sea and sludge is collected on a regular basis by an authorized contractor for disposal. At Yemen Sugar, sanitary waste is collected in an on-site pit for primary treatment (sedimentation) and discharged to a 30-m deep pit while sludge is collected on regular basis by an authorized contractor for disposal; both reject and process water are collected for pretreatment (neutralization) prior to being discharged to a 100-m deep, on-site pit from where water diffuses underground to the sea, located approximately 3 km away. The Water Law 33 of 2002 stipulates that a permit is required for the discharge of wastewater to surface water (defined as freshwater only) and ground water. Although Decree 148/2000 stipulates standards for the discharge of industrial and commercial wastewater into the public sewage network, there are no standards for wastewater discharged directly to the environment. HSA Foods currently do not have a process for regular monitoring and testing of wastewater quality although testing has been undertaken at Nadfood Hodaida, Nadfood Taiz, and Yemen Sugar; measurements for BOD, COD, total suspended solids, oil and grease, and total nitrogen exceed WBG EHS Guidelines for effluent discharged to surface waters.

In the context of the new HSE strategy and as per ESAP #12, HSA Yemen Region recently reinitiated the process for addressing wastewater treatment at Nadfood Hodaida, Nadfood Taiz, and Yemen Sugar, which was stopped after 2012 due to the security situation in Yemen. HSA Yemen Region has set aside capex for the installation of the required infrastructure and equipment and has already commissioned studies to characterize wastewater primarily from industrial processes (options may also include effluent from the raw water treatment process) but excluding sewage. HSA Yemen Region has solicited and received proposals for developing the technical design; this process is the most further along at Nadfood Taiz, where civil works are intended to be completed by the end of 2020 and this would also serve the wastewater treatment needs of other HSA affiliates present at the same location (see section below on Community Health, Safety, and Security). Technical designs currently under consideration include a combination of different advanced water and energy recovery systems, such that reject water can be treated to meet potable water quality standards for reuse (which would be within the WBG EHS Guidelines for effluent discharged to surface waters) or to meet the discharge limits for irrigation water quality in Yemen for discharge to evaporation ponds. Furthermore, it is also intended that the technical design would minimize the production of sludge (given constraints in Yemen for adequately disposing of sludge) but rather to produce biological waste sludge that can be used in land applications (as fertilizer) as well as recover the significant quantity of biogas produced, which could be used in boilers or generators instead of diesel.

Solid Waste Management. HSA Foods generate the following waste streams across operations: used and defective packaging (plastic, paper, and cardboard), wood pallets, empty 200-liter drums, used oil (from operation of the on-site generators), used/broken machinery parts, metal scraps and waste, tires and car batteries, product and food waste, ashes (from burning coal in the cogeneration system at Yemen Sugar only), limited broken glass, and limited medical waste (from on-site clinics). As Yemen Sugar purchases only processed raw sugar as the main ingredient, there is no biomass waste stream and the molasses produced as a by-product of the refining process is sold to other industrial processors. The servicing of all vehicles is undertaken off-site by authorized concessionaires and consequently no additional hazardous waste (used oil and used oil filters) is generated. 

In the context of the new HSE strategy, HSA Yemen Region has established solid waste management objectives, which include active waste minimization at the source, minimizing or eliminating the generation of hazardous wastes at all sites, promoting beneficial re-use of wastes where possible, and sending zero waste to landfills. Waste management procedures are in place at each facility, which detail the collection and disposal process for each waste stream as well as tracking on a monthly basis the quantities generated. All waste is collected in a designated area and disposed as appropriate through authorized external contractors with which HSA Foods have contracts. Depending on the characterization of the waste stream, waste is sold to contractors for recycling/reuse, collected by contractors for disposal at an authorized landfill, or incinerated at an authorized facility. As per ESAP #13, these procedures will need to be revised to better address the collection and disposal of clinical waste.

Hazardous Materials Management. HSA Foods primarily use the following hazardous materials in their operations: i) diesel (for generators and to power vehicles); ii) oil (for generators); iii) cooling agents (primarily for air conditioning and refrigeration but also as part of the production process); iv) caustic soda and nitric acid for the clean-in-place (CIP) processes (at Nadfood Hodaida, Nadfood Taiz, and Yemen Sugar); v) calcium oxide, sodium hydroxide, and sodium chloride (used in the refining process at Yemen Sugar); and vi) limited quantities of chemicals (in the quality assurance laboratory).

The total annual diesel consumption in 2019-2020 for generating electricity and operating boilers for HSA Foods’ operations is estimated to be 58,212,462 liters (21% at Aden Mills, 28% at Hodaida Mills, 9% at Nadfood Hodaida, 40% at Nadfood Taiz, and 1% at Yemen Sugar) and for operating vehicles and buses (including those of contractors at Nadfood Hodaida and Nadfood Taiz) to transport raw materials and finished product as well as workers to and from HSA Foods’ sites is estimated to be 8,638,607 liters (<1% at Aden Mills, 12% at Hodaida Mills, 13% at Nadfood Hodaida, 63% at Nadfood Taiz, and 12% at Yemen Sugar). Diesel is stored on-site in above-ground, steel storage tanks of varying capacity, which are all equipped with secondary containment structures. Each site is also equipped with a fuel dispensing pump for vehicles, which typically does not entail a concrete or paved ground where filling activities take place, which will need to be addressed as per ESAP #14. The total annual oil consumption in 2019-2020 for the operation of generators is estimated to be 217,593 liters. Oil is stored in above-ground, steel storage tanks, which are all equipped with secondary containment structures. As part of the HSEMS, HSA Foods undertake periodic inspections of all tanks and undertake a test for detecting corrosion every 6 months; furthermore, visual checks for any evidence of leakage is done on a daily basis by warehouse supervisors and on a weekly basis by the H&S Officer as stipulated in the on-site inspection protocols. As per ESAP #14, HSA Yemen Region will have to develop a hazardous materials management plan including the provision of secondary containment structures for all storage points and procedures for handling and preventing spills.

HSA Foods use relatively small quantities of cooling agents (R-11, R-22, R-134A, R-404A, R-407, R-410A, and R-600A) for air conditioning and refrigeration at all sites, which are stored in designated sites; ammonia is also used for cooling as part of the production process at Nadfood Hodaida and Nadfood Taiz and is replenished as needed by an external contractor. As per ESAP #14, the use of R-11, which has been banned under the Montreal Protocol on Substances that Deplete the Ozone Layer as well as R-22, which has a high ozone depletion potential will gradually have to be phased out. Caustic acid is stored in a dedicated storage area with appropriate secondary containment. Small quantities of chemicals are stored in locked cabinets with controlled access and handled by trained laboratory technicians. HSA Foods maintain a list of all hazardous materials used on site including a register of all Material Safety Data Sheets (MSDSs), safety instructions to users (use of gloves, goggles, masks, and coveralls), labeling and storage instructions, and warning signs.

Pesticide Use and Management. All HSA Foods’ sites entail a clean environment inside processing facilities and product/raw material storage areas (no accumulation of waste, in particular organic material); entrance points (doors and windows) are equipped with a combination of closing doors, air curtains, and screens (as appropriate) as well as UV lights. The exterior walls of processing facilities and storage areas are kept clear of vegetation and equipped with traps. Each site’s overall maintenance program includes a process for periodic monitoring and repairing of all potential cracks in walls.

In addition, HSA Foods (except for Nadfood Hodaida and Nadfood Taiz) have a pest management procedure (targeting cats, rats/mice, flies, and other insects), which is implemented by designated employees, who have received the necessary training on proper handling and storage of chemicals. Each facility maintains a list of nationally approved chemicals and associated Material Safety Data Sheets for the products (pesticide, insecticide, and bait/traps) used including relevant concentrations; however, the list of products may potentially include chemicals that are rated as Class Ia (extremely hazardous) or Class Ib (highly hazardous) according to the WHO Recommended Classification of Pesticides by Hazard Class, which would need to be verified per ESAP #15.

Both Nadfood Taiz and Nadfood Hodaida have retained the services of external contractors (one for production and inside areas, and one for warehouses and external areas). These service providers undertake regular fumigation and trap inspections, and report on any unusual occurrences for immediate remediation.

    Yemen Sugar is located on a 52.5-hectare site (occupying 35 hectares of the site), approximately 80 km northwest of Hodaida, which is shared with one other HSA affiliate (in the packaging sector); the site is isolated on a peninsula with no immediate residential and industrial neighbors except for a settlement to the northeast, at a distance of approximately 1 km. Nadfood Hodaida is located on a 37.3-hectare site (occupying 44.8 hectares of the site), approximately 17 km north of the outskirts of Hodaida, which is shared with one other HSA affiliate (involved in producing potable water, packaged in bottles); the site is isolated along the coast (to the west) with no immediate neighbors except for residential settlements to the northwest and northeast, at a distance of approximately 1 km and 1.5 km, respectively. Neither site is expected to pose a direct risk to communities due to operations.

Nadfood Taiz is located on a 58.5-hectare site (occupying 24.4 hectares of the site), approximately 10 km northeast of the outskirts of Taiz, which is shared with three other HSA affiliates (involved in producing various types of food, packaging materials and labels, and cigarettes); the site is along a main thoroughfare running northeast-southwest to Taiz International Airport, with scattered structures to the southwest and vacant land to the east and north, potentially used for small-scale farming and grazing. There are extensive developments along the thoroughfare in both directions. Given the nature of company operations and distance from settlements, the site is not expected to pose a direct risk to communities.

Aden Mills is located on an 8.2-hectare site, in the port zone of the Aden peninsula (al-Ma’Ala area); the site is along a main thoroughfare running east-west, and is completely surrounded by industrial operations along the northern and eastern sides and extensive mixed-used development along the southern side. Hodaida Mills Limited and Hodaida Mills are co-located on a 27.7-hectare site (occupying 23.5 hectares of the site) approximately 1.5 km east of the Hodaida seaport and 1 km north of the outskirts of Hodaida, which is shared with three other HSA affiliates (involved in storage and distribution of packaging materials, and concrete mixing); the site is along a main thoroughfare running north-south with no immediate neighbors except for scattered structures to the north, at a distance of approximately 200 m, and extensive residential development across the road 250 m to the east, and potential urban encroachment from the south. Given the nature of milling operations and extensive generation of dust, there is a risk of explosion if not managed properly (see section above on Life and Fire Safety).

Food Safety Impacts and Management. HSA Foods’ operations (except for Nadfood Hodaida) were recently audited against the requirements of ISO 22000:2018 for food safety management and certification is pending finalization after the Covid-19 pandemic. As Nadfood Hodaida operations started only in mid-2018 and the HSEMS was still pending full implementation, the audit process against the requirements of ISO 22000:2018 was also delayed due to the Covid-19 pandemic.

Activities at all HSA Foods’ processing facilities are performed in accordance with the principles and practices of Hazard Analysis Critical Control Points (HACCP). This reduces risks related to hygiene and food safety and mitigates potential impacts to the community. As part of HACCP requirements, the design of each of the processing lines at the facilities is organized such that products move from “dirty” to “clean” areas to avoid contamination; the storage, transfer, and processing of all raw materials including packaging of the finished product is undertaken through enclosed and automated processes, thus removing the potential for contact between workers and the finished product. Procedures are in place for ensuring daily cleaning of equipment and removal of solid waste. All staff have received training on food safety issues and have been issued the necessary work clothes (clothes, gloves, and hair coverage) commensurate with the extent of contact with the finished product.

Procedures are in place at all sites for testing the quality of raw material received. All HSA Foods’ sites have an on-site laboratory for undertaking daily microbial and chemical analyses of product samples, which are logged according to batch code numbers and kept in case of a product recall. Within the existing HSE framework and in compliance with the requirements of ISO 22000:2018, there is a procedure for product traceability to quickly identify and recall a product in case it does not comply with HSA Foods’ quality standards, is unsafe for human consumption, or is past its use-by date. The procedure is tested at all HSA Foods’ sites once a year in the event that a product recall might be required and such that the issue can be fully contained within a 4-hour timeframe.

Transportation Safety. Vehicle traffic to and from HSA Foods’ processing facility involves the daily movement of HSA Foods’ own trucks and those of contractors to transport both raw materials and finished products for distribution, buses for transporting workers, and passenger vehicles; forklifts for moving material are used only on-site. HSA Foods currently own a total of approximately 268 medium- and large-sized trucks, 116 buses, 175 passenger vehicles, and 41 forklifts. In addition, the transportation of goods and materials as well as of workers is also undertaken by third-party service providers (except at Yemen Sugar); there are no fixed contractual arrangements in place for doing so as arrangements vary based on the availability of vehicles in other HSA affiliates.

HSA Foods directly employ drivers to operate company-owned vehicles. In the context of the new HSE strategy and as per ESAP #16, HSA Yemen Region is in the process of developing an integrated road safety management program. This will include the following components: driver screening process (including medical check, drug and alcohol test, and verification of driver license for vehicle class), training on defensive driving for high-risk drivers (identified based on monthly performance reports, incidents, and complaints), monitoring driver behavior (through use of speed trackers and cameras installed in vehicles, third-party audits observing movement of vehicles, and any reports to a company hotline on unsafe driving behavior), and tracking road safety KPIs (number of driving violations, rewarded /penalized drivers, and vehicle collisions). In 2019, HSA Foods experienced 14 road-related incidents resulting in injuries; road-related accidents are currently tracked as part of the site-level H&S KPIs only if they involve injuries (see section above on Occupational Health and Safety), which will need to be addressed as per ESAP #16. There have also been accidents involving only material damage, but these are currently not tracked.

All vehicles undergo a weekly visual check to confirm they are in safe working condition (verification of lights, breaks, and tread on tires). Trucks used by contractors are visually inspected for safety functions (condition of tires) and cleanliness (condition of truck bed) and if they are deemed unsuitable for transporting the product, the contractor is notified, and the trucks are turned away.

HSA Yemen Region does not currently have a policy regarding road safety for transportation undertaken by third-party service providers nor a procedure for screening drivers and vehicles or tracking incidents, which will need to be addressed as per ESAP #16.

Forklift operators are required to have received training and be qualified although there is no certification for this in Yemen; once they are hired by HSA Foods, operators receive additional training through the logistics and safety supervisors. HSA Yemen Region will also roll out a comprehensive forklift drivers management program.

Security Personnel. HSA Foods’ sites are surrounded by 3-5-meter high, concrete perimeter walls, equipped with electric wiring and CCTV cameras and strict access control for all employees, visitors, and suppliers. HSA Yemen Region’s Head of Security, a government liaison, is responsible for overseeing security across all HSA operations in Yemen; at HSA Foods, security officers, also government liaison, are responsible for managing all security issues including a team of security supervisors and guards. The Head of Security and the security officers are government employees assigned to HSA Foods by the government. HSA Foods (jointly with other HSA affiliates, as relevant) directly employ a total of 437 security guards and supervisors (18% at Aden Mills, 17% at Hodaida Mills, 19% at Nadfood Hodaida, 25% at Nadfood Taiz, and 20% at Yemen Sugar). Security guards and supervisors are either employed through open-ended (46%) or term contracts (54%), and are responsible for access control, perimeter security, and internal security 24 hours/7 days a week. Security guards with term contracts are not eligible for open-ended contracts after 12 months as their role, numbers, and necessity is largely determined by the nature of the security challenges at a given time. In addition, at Aden Mills there is an agreement with the local police to provide 40 police officers for additional security support.

All security guards and supervisors (typically ex-police or military personnel) are vetted by HSA Yemen Region’s Head of Security, Head of Administration and the site-level HR Manager. As per the recent corporate restructure, security now falls under the administration division of the Group. HSA Foods have a Security Management Plan that details security infrastructure, roles and responsibilities of security personnel, rules of engagement, access control, and training requirements, however these Security Management Plans are not currently informed by an annual security risk assessment, which will need to be addressed as per ESAP #17.

Perimeter guards are armed (as a show force and deterrent rather than to defend HSA Foods’ operations) and weapons are stored in dedicated safes between shifts. In the past five years, HSA Foods have not had any incidents requiring the use of a weapon. Should a situation arise that cannot be managed by on-site security, such as riots, bombing, military attacks, or car hijacking, HSA Foods will call on government police to provide support. The most frequent on-site security incidents relate to theft, fights and arguments among employees.

All security guards and supervisors (typically ex-police or military personnel) have received extensive prior security-related training, HSA Yemen Region provides high-level security training to all security personnel via an accredited third-party security provider. The training includes the use of weapons, proportional use of force, and self-defense. As the training is based in Sanaa, there has been limited access to training since the start of the armed conflict in 2014. Furthermore, training does not include human rights considerations, which will need to be addressed as per ESAP #17. 

HSA Foods also have an on-site, 24-hour centralized operations team that monitors locally and regionally all notices pertaining to shootings, bombs, fires or explosions via a dedicated hotline; the on-site security officers are notified and inform HSA Yemen Region’s Head of Security for advice, guidance, and further instructions.

    Aden Mills, Hodaida Mills, Nadfood Hodaida, and Yemen Sugar are located within the Southwest Arabian coastal xeric shrublands Ecoregion, whilst Nadfood Taiz is located within Southwestern Arabian Escarpment shrublands and woodlands Ecoregion. Both Ecoregions are characterized by sparse desert and xeric shrubland vegetation types.

Legally Protected and Internationally Recognized Areas. Yemen Sugar is located within the Bahr Ibn Abbas - Ra's Isa Important Bird Area (IBA). The IBA is designated due to its populations of five IUCN Least Concern water bird species, including White-eyed Gull (Larus leucophthalmus) and White-cheeked Tern (Sterna repressa). Although Yemen Sugar is located in the IBA, no significant impacts to the IBA water bird populations are likely. There will be no expansion of the existing site footprint and the site is located more than 1 km from the nearest coastal area that could support the IBA water bird species. Nonetheless, as per ESAP #19, stakeholder engagement activities with Bird Life International, local conservation NGOs, and ornithological experts will be required with regard to the Bahr Ibn Abbas - Ra's Isa Important Bird Area (IBA) around potential impacts, if any, on water birds and other biodiversity values.

All the sites entail existing industrial compounds that are Modified habitat, although terrestrial and marine Natural Habitats occur in relatively close proximity beyond the sites’ boundaries. Three IUCN Endangered migratory bird species have the potential to overfly all five of the sites: Egyptian Vulture (Neophron percnopterus), Steppe Eagle (Aquila nipalensis), and Saker Falcon (Falco cherrug). A single range-restricted bird species, Yemen Serin (Crithagra menachensis - IUCN Least Concern), could occur in the vicinity of the Nadfood Taiz site. However, the modified industrial character of all of the five sites means that they are unlikely to support any threatened or range-restricted species and the risk of impact to biodiversity is considered low. However, HSA Yemen Region will be required to develop a Biodiversity Protection Policy to mitigate the risks to, and potential impacts on, terrestrial and marine biodiversity arising from its operations as per ESAP #18.

Sustainable Management of Living Natural Resources. Project activities do not entail the primary production of living natural resources as all raw materials are sourced from large international agro-commodity trading companies and imported into Yemen (see section above on Supply Chain).

   As articulated in HSA Yemen Region’s Environmental, Health and Safety Policy, HSA Foods are committed to engage with a wide range of stakeholders including third-party contractors, suppliers, customers, local communities, and civil society groups on a daily basis to ensure they are informed and consulted on all corporate developments as well as to inform them on the relevant environmental, health and safety impacts of daily operations, technology, and products. In addition, HSA Foods also engage with government, academia, nongovernmental organizations, business associations, and other interested stakeholders to develop effective and sustainable solutions to environmental, health, and safety challenges.

All external engagement is managed at the Group-level through the centralized Public Relations Department based in Dubai, which is responsible for managing and disseminating any information related to potential environmental and/or community risks. In addition, there is a dedicated Area Manager in each city of HSA Yemen Region’s operations who is responsible for relationship management and communications. HSA Foods currently do not have a specific stakeholder engagement strategy or approach, and community engagement is generally undertaken in a reactive and ad-hoc manner. HSA Yemen Region is in the process of employing a Chief Communication Officer who will be responsible for developing a more coordinated engagement process, which will need to be done in line with ESAP #19.

HSA Yemen Region donates 10% of its annual profits to its foundation, which is dedicated to community development and focuses on providing support to education, health care, infrastructure, and community-based projects. In April 2020, in response to the Covid-19 pandemic, the foundation convened a group of private-sector partners and multinational organisations, including UN agencies, to establish a non-political coalition—the International Initiative on Covid-19 in Yemen (IICY)—focused on supporting the efforts of international authorities to tackle the Covid-19 pandemic including the WHO to deliver healthcare services and the provision of medical and laboratory equipment for distribution by UN agencies across the country.

External Communications and Grievance Mechanism. HSA Foods have an informal process for managing grievances and community complaints; engagement with local communities occurs on an ad-hoc basis and is reported internally from HSA Foods to HSA Yemen Region although there is no written record; if any issues are raised by stakeholders, HSA Foods internally review the issue to understand the concern and provide the appropriate response.

However, the process for submission and recording of grievances, and resolution is not clearly documented, nor is their evidence of how this process is managed or communicated to communities. As per ESAP #19, HSA Yemen Region will need to develop a written procedure to include the steps for receiving grievances in a confidential and anonymous manner, processing, documenting, and addressing all external grievances, from all members of the community; the timeframe for doing so; and the assigned responsibilities for doing so.

  Contact Person: Firas Al Hammadi

Company Name: Yemen Headquarters

Address: Taiz-Al Houban, HSA manufacturing Complex, Yemen 

Email: alhammadi@hsa.com.ye

Phone: +967 777 795 657

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