Given the nature of the business activities under this proposed investment, no impacts are expected in the project which must be managed in a manner consistent with PS 5: Land Acquisition and Involuntary Resettlement; PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS 7: Indigenous Peoples and PS 8: Cultural Heritage.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with the Performance Standards.

 This is a Category B project, according to IFC’s Policy on Environment and Social Sustainability (2012). The project is expected to have limited adverse environmental and social risks and impacts, short-term and site-specific, and can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections.

The e-platform sector is fast evolving and interpretation of applicability of contractual and legal frameworks, especially in relation to treatment of gig-economy workers, is also evolving. Key E&S issues associated with this proposed investment are: (i) Toters’ capacity to manage the E&S aspects of its operations (sourcing, warehousing and delivery); (ii) labor management, including working conditions for direct employees, couriers and workers engaged by third parties and supply chain workers; (iii) road safety, fire safety and emergency preparedness and response; (iv) waste management; and (v) security management.

 Environmental and Social Assessment and Management System

The company will undertake a structured review of the E&S risks related to its operations as required under IFC PS 1. The risk assessment coverage will include third party operations including fleet and courier operations and the primary supply chain for Toters Fresh. The findings will also be used by Toters to develop and establish the company’s E&S policies and Environmental and Social Management System (ESMS), commensurate with the level of its environmental and social risks and impacts. The ESMS will include procedures to ensure oversight over company’s contractors and suppliers and procedures relevant to the couriers as independent contractors, including occupational safety and health, engagement and consultation, compliance with national law, non-discrimination, and harassment (ESAP#1).

The ESMS will include a corporate level procedure for screening and assessment of warehouse sites to ensure compliance with the applicable local standards and IFC PS requirements, including alignment with good international industry practice as per WBG Environment Health and Safety (EHS) guidelines, to cover pollution prevention, health and safety, including life and fire safety, and security management.

As part of the ESMS under ESAP#1 and based on the E&S risk assessment, the company will establish and implement management programs which will define E&S risk mitigations. Areas of focus will include labor management, health and safety including road safety, waste management, fire safety, risks related to security arrangements.

Organizational Capacity and Competency

As a relatively recently established company, a formal E&S management organization is still to be developed. At the time of the appraisal, the operations and logistics manager was in charge of EHS management related to the warehouses and the company fleet. The Head of HR is responsible for labor management at the corporate level while the Chief Technical Officer (CTO) manages the quality assurance team, including data security management.

As part of ESAP#2, Toters will appoint an E&S manager at the corporate level. The designated personnel will be supported by the company’s senior management and will be in charge of the development and implementation of the company’s ESMS. As needed, the company is committed to engage external consultants to support the internal team as appropriate on the development and implementation of a PS-compliant ESMS.

The E&S manager will conduct monitoring of E&S performance and report to Toters’ management team.

Emergency Preparedness and Response

Toters will develop and implement a corporate level emergency preparedness and response plan (EPRP) as part of ESAP#3, for adoption at the facilities operated by the company, covering emergency scenarios and relevant responses, in line with IFC PS 1 requirements. The plan will include safety training program for workforce including couriers and will define the requirements in terms of relevant emergency response organization, roles and responsibilities of health and safety staff, fire marshals, first aiders and road safety response teams. The organization will be staffed and structured accordingly.

Monitoring and Review

Toters will develop procedures for internal monitoring, auditing, recording, performance review, identification and implementation of eventual corrective actions and related periodic review, amendments and updates of management plans and programs as part of the ESMS developed under ESAP#1. The monitoring and evaluation program will be overseen by the E&S manager.

The E&S manager will ensure allocation of clear roles and responsibilities for the implementation of ESMS and eventual corrective actions and will ensure that any amendment to policies and procedures is established with appropriate dissemination and reporting lines to the staff.

The company will also ensure that a legal register is maintained with relevant records regarding compliance with national laws and permits.

 Toters has 210 direct employees in Lebanon and Iraq on employment basis or short-term contracts covering operations and logistics including IT support, business development with a small proportion as couriers and shoppers. By June 2021, the bulk of the couriers were independent contractors in Lebanon and Iraq, of which less than 1% are women.

Operations roles covered by direct employees include fleet managers and team captains that have responsibility of conducting quality checks within the courier network. Grocery and warehousing operations for Toters Fresh includes warehouse supervisors, pickers and grocers. While some pickers are directly employed, others are engaged as independent contractors.  Other roles are outsourced or filled by independent contractors including security, maintenance, cleaning, and some IT services.

Human Resources Policies and Procedures

Toters has a dedicated human resources (HR) department with staff in both Lebanon and Iraq. Strategic HR decisions originate from the team in Lebanon and are cascaded to Iraq. Toters has indicated that it plans to expand its HR team in terms of both administrative and strategic capacity.

The company issues formal contracts that provide information on recruitment, salary payment, discipline, confidentiality, overtime, leave (annual and maternity), performance, deductions, benefits, non-compete requirements and termination. Employees sign a code of conduct which outlines Toter’s principles and behavior in relation to harassment, discrimination, dress code and respectful workplace conduct. Toters indicated that no employees are represented by a trade union or covered by a collective bargaining agreement.

Toters will review and upgrade its labor management documentation and develop overarching corporate level human resources policies and procedures (or an employee handbook), which will include (i) policy commitment addressing freedom of association, overtime policies (specifically for workforce in Iraq), (ii) a policy on organizational expectations regarding non-discrimination and equal opportunity across all aspects of the employment relationship (e.g. recruitment, hiring, compensation, and, where relevant, addressing both direct staff and independent contractors), (iii) a policy commitment on child labor and young workers with particular attention to contexts where risks may be higher (e.g. within warehouses), (iv) a policy commitment on forced labor, and (v) a policy commitment on retrenchment. The policies and procedures will be cascaded to all Toters sites and supported by training and awareness raising with all staff, including the management team, and, where relevant, contracted workers/independent contractors (ESAP#4).

Toters indicates that it operates according to an open-door policy. Employees can refer labor-related grievances or complaints to line managers who can attempt resolution. If the issue cannot be solved by line managers, escalation to HR or senior management if necessary. During appraisal interviews it was indicated that no major issues have arisen, and that most complaints have been addressed at line manager level. Toters undertakes forms of employee engagement, including staff surveys that allow for employees to speak up anonymously. However, a formal workers grievance redress mechanism, that fully meets IFC’s PS2 requirements, needs to be put in place. Toters will develop a written grievance procedure that formalizes the grievance management practices already in place, including a clear articulation of how complaints are filed and received, timelines for responses, routes for escalation, options for anonymous complaints, and commitments to non-retribution. The grievance procedure will be communicated to direct and contracted workers and to independent contractors and supported by grievance logging or recording mechanisms (ESAP#5). This mechanism will not impede access to other judicial or administrative remedies that might be available under the law.

Occupational Health and Safety (OHS)

Toters has a mechanism for reporting incidents and accidents arising from office related OHS risks. In case of security concerns, staff are asked to work from home or remotely and safe temporary accommodation is provided when the commute to their homes is not possible.

The company is in the process of reviewing the existing mechanisms and developing OHS policies and procedures with the support of an external party. Toters will develop a formal OHS program (ESAP#6) to cover direct staff, contracted workers and independent contractors. The program will include: mechanisms for identification OHS risks covering Toters’ offices, warehouses as well as courier and in-house transportation fleet operations; mechanisms for preventive and protective actions commensurate to identified hazards; staff training mechanisms; incident reporting and investigation; applicable permits to work; fire safety measures; emergency preparedness and response; performance measurement and monitoring; organization, roles and responsibilities; and internal and external reporting mechanisms.

As part of ESAP#6, Toters will review, update and as needed upgrade fire safety management measures for both warehousing and office facilities. These measures will include: (i) periodic fire evacuation drills; (ii) provision, testing and inspection of firefighting equipment and fire warning systems; and (iii) provision of adequate fire safety training to employees. Toters will also secure applicable local building and fire permits for the warehousing facilities.

In response to COVID-19 related risks, the company instituted a policy and protocols to manage the spread of the virus for direct employees and couriers including: (i) daily screening of couriers through temperature checks; (ii) development and implementation of work from home policies to support social distancing at work and a reduced office capacity of 50 percent; (iii) requirement of use of masks in the offices; (iv) issuance of and requirement for couriers to use masks and gloves; (v) introduction of contactless delivery protocols; (vi) provision of testing for office staff and random testing for couriers; (vii) provision of vaccines for direct workers and their relatives.

Ongoing communication to staff and independent contractors on company expectations and policy on OHS management (including COVID-19 response) is undertaken through emails, mobile-phone based group chats and internal meetings.

Independent Contractors (Couriers)

Majority of Toters couriers are engaged as independent contractors (on a freelance basis) with targets to complete specific tasks with the rest being directly employed by the company as contracted workers. Independent couriers provide their own vehicles and decide their own working hours and schedule. Average independent courier earnings exceed minimum wage in both countries. The courier service agreement specifies that, as independent contractors, couriers are not subject to provision of general medical insurance, welfare provisions, pension nor benefits from the company. However, some couriers purchase health insurance on their own and Toters provides its couriers in Lebanon with private workman’s compensation insurance and pays for the entirety of the premium. The insurance covers, among other things, medical treatment and compensation if the courier is unable to work. A similar insurance scheme is being established in Iraq.

Discussions on the labor status of independent couriers in Lebanon and Iraq continues to evolve within the context of both countries’ labor laws as independent couriers’ responsibilities tend to lie outside the traditional employee/employer and even independent contractor/employer relationships. The company is aware of the evolving legislative framework on this subject and monitors the situation through its in-house counsel with support from external counsels as appropriate, to ensure that the company is up to date with any changes of the legislation regarding the status of couriers as independent contractors and relevant labor complaints and disputes. Toters will develop and implement corporate procedures to monitor and report on labor law updates, cases and disputes in relation to independent contractors in the various jurisdictions where it operates (ESAP#7).

Prior to engagement, couriers are expected to provide valid identification, driving license, proof of residence, work permits (as applicable), vehicle license, vehicle insurance, annual vehicle maintenance and repair fees and criminal records. Fleet managers are responsible for onboarding and training of approved applicants, management of the relationship with couriers and offboarding when needed. The service agreement also communicates the commitments and requirements on commission earnings, monthly fees to Toters, deposits on work materials issued to couriers, couriers’ responsibilities on management of road safety risks, conduct when interacting with clients and cases of misconduct that would lead to termination of the agreement.

The company will develop and implement policies and procedures specific to screening of applicants, contracting, induction, engagement with supervisors and managers, disciplinary measures and termination of services, grievance management, non-discrimination, freedom of expression and collective bargaining appropriate to the courier’s independent contractor status. (ESAP #8).

As discussed above, health and safety policies, procedures, and emergency plans are being developed, and health and safety policies will cover both staff and couriers. Although formal policies and procedures are currently not in place, there are existing safety measures and practices, which apply to couriers, including, as discussed above, measures relevant to COVID-19 protection. Geo-fencing technology is used to limit orders coming from areas that pose a safety risk to couriers. Couriers are trained and instructed to wear helmets, use smartphone holders on their bike, and abide by traffic laws. Although there are no formal standards for the reliability and safety of vehicles, fleet managers are meant to be aware of potential issues and can identify them during courier training.

As part of the OHS program to be developed under ESAP #6, Toters will finalize the development of health and safety policies covering couriers and will continue with planned expansion of workman’s insurance schemes to Iraq. The health and safety policies and procedures will formalize: (i) standards on reliability, maintenance, and effectiveness of courier vehicles; (ii)  tracking of courier time-on-app as part of safety measures, to ensure that their safety and that of the general public is not jeopardized due to long working hours; (iii) health and safety assessments addressing risks particular to couriers, including road related accidents as well as the risks of theft related to holding and transferring cash; (iv) use of existing courier onboarding and regular training to train couriers about Toters’ updated safety protocols and expectations; and (v) specific risk assessment and mitigation approaches needed (including risks of gender-based violence and harassment) for female couriers.

Complaints from couriers are received through app based group chats or conversations with team leaders during routine street checks. When team leaders cannot resolve raised issues, couriers can escalate them to fleet managers who in turn discuss them during operational meetings for resolution. Toters will extend the formal grievance redress mechanism developed under ESAP #5 to couriers.

Workers Engaged by Third Parties

Outsourcing is managed by Toters’ purchasing department. Toters assesses the reputation and trustworthiness of its contractors, although a defined procedure is not available.  Labor-related requirements are not incorporated into contracts, and labor audits are not currently conducted on contractors or suppliers.

Toters will review and update its contracts with contractors and service providers (including private security contractors) to ensure that compliance with its policies and IFC PSs is incorporated as a contractual requirement. As part of the ESMS, the company will also develop and implement contractor management and supplier management procedure which will (i) include mechanisms for screening suppliers or contractors, (ii) define labor-related and OHS-related expectations which are reinforced through contractual clauses, and (iii) define a program of E&S compliance audits (ESAP #1).

The company operates from leased offices and warehouses. Power and water consumption is generally limited to cater for routine office administrative, operation of the warehouses, and sanitation purposes.

The company recently started a pilot program with an e-bikes company to test and support the roll-out of electric-powered bikes. The company plans to review the outcomes of the pilot program to set targets for electric bikes as a percentage of the total fleet.

Waste management for the office facilities is generally integrated into the service agreements as the landlord’s responsibility, while pest control, sanitation, waste collection and disposal activities at the warehouse facilities are contracted to third parties. Packaging materials such as carton boxes are collected by a recycling company on a daily basis from all warehouses. The company issues bags made of recyclable or biodegradable materials to its customers.

Toters will communicate its policy expectations to contractors on handling and management of hazardous chemicals including disinfectants and other cleaning agents while they operate at the warehouses, as part of ESAP #1.

 Road Safety

As indicated above, all couriers are instructed to wear helmets, use smartphone holders on the bike, and abide by traffic laws. Couriers report accidents to the office through the team leader, after which a two-member response team is mobilized to the accident scene to assist with reporting and engagement with the police. Records are kept and shared with the workmen insurance provider to facilitate coverage of medical costs and compensation payments for work-injury related income loss.

Toters will update its health and safety policies and develop and implement a road safety procedure defining company and courier responsibilities including: (i) Toters management roles in  monitoring courier working hours; (ii) communication and support mechanisms to support couriers work in risky areas and work at night; (iii) courier and Toters management responsibilities in response to incidents and accidents; (iv) collaborative actions with relevant local government agencies and other emergency response personnel, including measures to adopt in the event that couriers are incapable of applying the emergency response procedures; (v) periodic review and evaluation road safety policies and procedures (ESAP#9).

Food Safety

Food safety is managed by Toters as per requirements and according to established processes. Food in the dark stores (warehouses) consist of fresh meat or chicken, dairy items and dry foods. All goods are stored under dry conditions with no humidity, leakage and controlled temperatures. Expiry dates of daily delivery items are checked each morning while expiry dates of the rest of the products are checked weekly. Pickers also check the expiry dates before sending goods to the customers. Orders of hot foods are delivered in durable thermal bags to preserve heat, while orders containing iced beverages, frozen food, seafood or dairy products are delivered using portable coolers and suitable holders.

Security Personnel

Security is managed by private security firms under contract. Where necessary, escort services by armed security are provided to staff on commute.

Toters will develop a corporate Security Management Plan compliant with the requirements of IFC PS4 and will communicate this plan to its security service providers. The Security Management Plan will include: (i) a security risk assessment to determine the risks associated with security arrangements for company’s facilities, its fleet and for vehicle recovery, (ii) requirements for screening, hiring and equipping security providers, (iii) training requirements for security personnel on human rights issues, proper use of force, and appropriate conduct towards workers and other stakeholders, (iv) auditing procedures of the security service providers, and (v) a grievance mechanism for communities and workers to express concerns about the security arrangements and acts of security personnel (ESAP#10). As part of the security review under ESAP#10, the company will integrate requirements for background checks and conduct of security staff when undertaking their duties, including application of human rights principles when responding to security breaches at the warehouse facilities or security threats for staff on commute.