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 Environmental and Social Sustainability. The E&S risks and impacts associated with this project are limited, site-specific, and can be readily addressed through generally accepted mitigation measures described in this document and the attached Environmental and Social Action Plan (“ESAP”).

Key E&S issues associated with this investment are: (i) TradeDepot’s EHS/labor management systems and organizational capacity; (ii) occupational health and safety and emergency preparedness and response plan,; (iii) solid waste management; (iv) community safety / traffic safety (and management of risks associated with the operations of the vehicle fleet by contracted drivers); and, (v) pollution prevention and control associated with the vehicle fleet operations.                                               

 Performance Standard 1: Environmental and Social Assessment and Management System

While there are no requirements for E&S assessments of the warehouse operated by the company, the company is required to obtain and maintain a fire safety certificate, issued by Lagos State Fire Service, at their warehouse. For the renewal of such certificate, periodic inspections are scheduled twice a year by the regulatory agency, which may also perform unannounced visits for inspection.

TradeDepot internally identifies, reviews and manages the E&S risks and impacts associated with its operations through compliance with applicable national standards and regulatory permit requirements. The company has conducted its own risk assessment at the start of its warehousing operations. The outcome of the assessment is a risk matrix which is reviewed annually to update the company’s risk management. On the risks associated with movement of goods, there is a Goods-In-Transit insurance policy in place to cover that as part of the fleet agreement.

Currently the company has stand-alone corporate policies and related plans and procedures, which include an HSE&Q policy, emergency response management plan, fleet management policy and HR management policies. Each policy entails a set of procedures which are yet to be fully formalized into an E&S Management System (“ESMS”). As per the ESAP (#1), TradeDepot will develop an overarching Environmental, Health, Safety and Security (“EHSS”) policy and the various E&S procedures will be compiled under an ESMS, commensurate to the E&S risks and impacts.

While additional warehousing space is provided by nine partners at the moment, the company is looking at expanding its network to additional partners in the future. Upon selection of a warehousing partner, TradeDepot carries out the screening of the potential partner before signing the SLA. The screening involves a review of the partner’s polices and practice against company’s policies and standards, including HSE&Q. This includes assurance that the partner practices the required safety measures. Under the SLA, once every quarter, an inspection visit of partner warehouses is conducted by the head of logistics, facilities, and infrastructure department at TradeDepot. The visit frequency is determined by the size and percentage of occupancy of the partner warehouse. The company conducts quarterly reviews of all its partners where various aspects are discussed by management including E&S. The company selects partners who are typically active internationally in multiple countries and are characterized by the implementation of international standards in terms of labor and health and safety management. The ESMS, developed under ESAP #1, will formalize the screening and review process with respect to E&S, labor and health and safety performance of the partner companies. 

Organizational Capacity and Competency

The Logistics, Facilities and Infrastructure manager is responsible for compliance with E&S requirements and for E&S management. Under his supervision, there are selected staff members who are acting as safety champions at each department, deployed based on safety risks and number of personnel. The safety champions receive trainings and are responsible for the implementation of the company-wide safety system within their own departments. There is a total of 21 safety champions at TradeDepot. They report their feedback and observations to logistics, facilities, and infrastructure management during scheduled meetings. They also fill out the incidents log, alert external parties like the fire safety department in case of an emergency and participate in the organization of fire drills.

The company will identify and appoint a competent E&S officer with the following responsibilities: implementation and co-ordination of the ESMS; management, monitoring and reporting on Environmental, Health & Safety (EHS) performance; coordinating investigations of workplace injuries and incidents and corrective actions and reporting; and managing health and safety training (ESAP #2).

Emergency Preparedness and Response

TradeDepot has developed and maintained an emergency management plan that outlines procedures on life and fire safety (LFS) and the management of other emergencies. In addition, the company carries out fire drills and fire safety audits to maintain the relevant certification in compliance with the local regulatory requirements for warehouses and the warehousing complex they operate within. There is a designated assembly point outside the warehouse, an evacuation plan that outlines escape routes and fire extinguishers distributed around the warehouse. The company will review, as per good international industry practice, the fire safety system in the warehouses it utilizes and will install the necessary systems, including fire alarms at its own warehouse (ESAP #3). As for the delivery vehicles, each is equipped with a fire-extinguisher. The emergency management plan will be updated to include emergency preparedness and response for scenarios involving the vehicle fleet and the transportation activities (ESAP #4).  

Monitoring and Review

The company has implemented a computer-based performance management system which captures a number of key safety performance indicators (KPIs). These KPIs are monitored at the department level on weekly basis and are reported to management. Specific performance issues that need to be addressed are shared with the head of the relevant department. As part of the ESMS to be developed under ESAP #1, monitoring and reporting procedures will be upgraded to monitor performance indicators relevant to transportation and driving / road safety.

 At the time of IFC’s review, the company had about 208 direct employees (33% female). Similarly, females represent 30% of senior management. In addition to its direct employees, TradeDepot currently has 353 contracted workers through an outsourcing agency and service providers, which include drivers, cleaning personnel and security guards.

HR Policies and Procedures, Working Conditions and Terms of Employment

TradeDepot has documented HR policies and procedures including recruitment, code of conduct, compensation and benefits (including medical insurance). During recruitment, the company performs relevant screenings, including employee’s age verification and it ensures that there are no other discriminatory or exploitative practices. All employees are given written appointment letters which explain their employment terms and conditions. Nigeria is signatory of the ILO Conventions listed in IFC PS2. In accordance to requirements of IFC PS2, provision relevant to protecting the workforce from child and forced labor will be incorporated into the HR policies and the policy will be communicated to the outsourcing agencies and its warehousing partners (ESAP #5). Freedom of association is explicitly mentioned in the code of conduct.

There is an anti-sexual harassment policy in place and a disciplinary policy that all employees including drivers are informed of upon hiring. As per ESAP # 6, the company will develop and implement an annual training plan in line with PS 2 requirements on promoting the fair treatment, non-discrimination, and equal opportunity of workers and safe and healthy working conditions and to ensure that HR personnel, employees and contractors including security personnel, understand the company’s expectations of conduct, behaviors and anti-sexual harassment practices as well as promoting awareness of grievance mechanism.

Grievance Mechanism

There is a computer-based employee grievance mechanism and it allows for reporting anonymous concerns. Drivers have the system downloaded as an application on their phones. The data, collected through these systems, are then analyzed by HR, which maintain a grievance register.

Occupational, Health and Safety (OHS)

The company maintains a management system that covers occupational health and safety for warehouse employees. Warehouse staff are provided with personal protective equipment (PPE) which entails safety boots, overalls, gloves, helmets and masks. There is an incident reporting system and the statistics of incidents are on display at the warehouse. There is also a warehouse safety checklist used for weekly inspections to ensure the integrity of the workplace and safety of the employees as they fulfill their warehouse-related duties. Drivers receive induction training upon arrival at TradeDepot on safety measures and road safety. They have access to report accidents to the company and are covered by the same medical insurance as direct employees.

For every employee, including drivers, there are induction and refresher trainings provided. Induction trainings include safety awareness training and operational safety hazards which are specific to each job. Each employee receives training twice a year in the form of refreshers or when the need arises. In terms of LFS training, all employees are included in the fire drills every month and it primarily involves warehouse staff. Warehouse evacuation is simulated on monthly basis during the fire drills conducted for warehouse employees. Drivers receive their own fire safety training and certification in addition to the defensive driving training that is part of their induction.

In response to COVID 19 pandemic, the company has provided appropriate PPE to all full-time employees and contracted workers, including drivers. Salaries were not reduced during lock-down periods, and the medical insurance applies to all staff and contracted workers, including drivers, and covers treatment of COVID19.

Workers Engaged by Third Parties

Contracted workers include drivers, cleaning personnel and security guards. Drivers are hired through an outsourcing agency. The company has a private security service provider that provides security guards. In addition, TradeDepot contracts cleaning services through specialized agencies. The company provides all contracted workers with medical insurance and PPE. It further requires its contractors and outsourcing agency to follow the company’s EHS policies and procedures, including compliance with labor law. Drivers, hired through the agency, receive the same benefits, training and follow the same procedures as direct employees of the company.

 Electricity for the company’s facilities is provided by the national grid, with a back-up diesel generator installed at the warehouse. Project-related greenhouse gas emissions from fuel consumption due to the operation of the vehicle fleet and electricity consumption are estimated at 1,000 tonnes of CO2-equivalent annually.

Going forward, the company will ensure that all newly purchased vehicles pass the air emissions tests at licensing stage and that vehicle models with lower emission rates are selected at procurement by the fleet operator they partner with. Vehicle maintenance is carried out by the fleet owner. As part of the ESMS, developed under ESAP #1, the company will develop and implement a procedure to monitor vehicle maintenance according to the fleet agreement. 

In terms of resource consumption, there is minimal use of water inside the warehouse and minimal wastewater is generated. The only source of waste based on the nature of business is packaging material and solid waste. Based on the solid waste management plan, all waste is segregated at source. A licensed waste disposal contractor is responsible for final disposal and recycling of the waste generated from the warehouse facility.

 Community Health and Safety

The company ensures that all drivers are legally licensed to operate their vehicles. All driver employed have driving and vehicle licenses checked and are subject to drug tests prior to being employed by the company. Upon hiring, drivers receive defensive driving training. During their career with TradeDepot, they are subject to periodic medical checks and required to maintain a safe driving record. The drivers are instructed to abide by all transportation laws, adhere to the speed designation of the road they travel on and to drive within reasonable and safe limits. Accidents involving the company’s fleet are logged and are subject to internal root cause analysis. The company will develop and implement a road safety plan, as part of the ESMS. The plan will include appropriate tools and procedures to monitor and mitigate risks associated with driving behavior and traffic / road safety, including training and monitoring of speed limits and working hours of drivers (ESAP #7).

Security Personnel

TradeDepot contracts a private security provider to protect its facilities. The security contractor provides the company with guards providing access control oversight and patrolling security services. The guards are not armed and are trained by the service provider.