PS7: Indigenous Peoples is not applicable as no indigenous are impacted by the project.  PS8: Cultural Heritage is not applicable as cultural heritage and sacred sites are not impacted.                                                  

 This is a Category A project as per IFC’s Policy on Environmental and Social Sustainability as the company's business operations have the potential to cause significant adverse E&S risks and/or impacts. Key E&S risks are: (i) identification of E&S risk and mitigation measures, including conducting an updated Environment and Social Impact Assessment (ESIA) for the subsequent phases of the project as per IFC Performance Standards (PSs) requirements; (ii) company’s E&S organizational capacity and management systems for the zone operations and monitoring of its tenants E&S performance in line with country requirements and IFC PSs; (iii) resource (energy and water) use/efficiency and management of solid, liquid and hazardous wastes;, (iv) stakeholder engagement and community grievance mechanism; (v) management of any residual risks associated with the past resettlement of the Alasia community; and (vi) labor and construction management.                                                  

Environmental and Social Management Systems: LFZC’s Environmental and Social Management System (ESMS) for the zone contains a Sustainability Policy focusing on the environment, social and people’s aspects.  It details E&S policies and procedures using the ISO 14001 standard as a benchmark for: risk assessment, legal and compliance, audits and inspections, and reporting.  In line with IFC PSs, LFZC will update its ESMS to strengthen document control mechanisms, monitoring procedures, clear organizational arrangements, E&S responsibilities, and management and monitoring of E&S performance of tenants in line with national regulations and IFC PSs (ESAP #1a).  As the overall zone management, LFZC will include monitoring of shoreline and biodiversity aspects. 

Identification of Risks and Impacts: An Environmental Impact Assessment (EIA) was undertaken for the entire LFZ (842ha) in 2020 and 2021, and selected biodiversity-related studies were updated in 2015, 2019 and 2020 - 2021.  The key potential E&S impacts identified included: change in land use, loss of habitat, noise, surface and groundwater pollution, noxious emissions and generation of solid, liquid and gaseous wastes. The main positive impact identified was the employment of workers from host communities.  In relation to the already developed Phase 1, LFZC will assess the following key impacts to complement the existing EIA: (i) confirming the existence of natural habitat for the zone; (ii) water consumption; and, (iii) community health and safety (please see below under PS6, PS3 and PS4 for details).  For the development of Phases 2 and 3, LFZC will update the ESIA to assess the potential impacts related to: (i) surface, drainage or wastewater discharge; (ii) determining critical habitat in relation to mangroves; (iii) water consumption and sustainability; and, (iv) in-migration in accordance with IFC PS requirements (ESAP #1b).

Management Programs: The LFZC ESMS contains management plans for stakeholder engagement, emergency response, biodiversity management, supplementary resettlement action, waste and water management, carbon and energy management and community development.  LFZC will update existing E&S management plans to reflect E&S risk management practices in Phase 1 operations (and subsequent activities for Phases 2 and 3 as part of the updated ESIA).  The management plans will be updated to include the following key aspects: i) clear E&S roles, responsibilities, and organization arrangements; ii) a management plan to address biodiversity impacts as identified in ESIA; iii) surface, drainage or wastewater discharge across LFZ with appropriate control of emissions and residues (ESAP #1c).

Monitoring and Review:  LFZC developed a procedure for E&S auditing and reporting of its operations at the zone level.  As per the ESMS ESAP requirement above, LFZC’s monitoring of E&S activities and performance indicators (in accordance with LFZ regulations, NEPZA Act and tenant agreements) of its tenants will be specified and responsibilities for E&S auditing and reporting procedure (for both LFZ and its tenants) strengthened.  Monitoring of E&S performance of tenants will include the following key indicators, among others, as per national regulations: i) waste (including hazardous waste) management; ii) energy consumption; iii) employment and working conditions; iv) labour grievances; v) water consumption and groundwater quality management; vi) air quality; vii) GHG emissions (ESAP #1d).

Organizational Capacity and Competency:  The LFZC sustainability function is led by the General Manager (GM). Sustainability. Environment, social, safety, occupational health, horticulture and community engagement aspects are managed by the Sustainability Department.  To support the monitoring of tenants’ E&S performance across the zone, LFZC will engage relevant personnel to support this function.  LFZC will also engage a community liaison officer to lead and manage stakeholder engagement, grievance mechanism and community development aspects as this is currently a shared responsibility between the sustainability department and security team. LFZC will also engage biodiversity expertise to manage risks and impacts related to marine turtle management, invasive species management and mangroves. (ESAP #1e).  Training on E&S risk management has been conducted with all staff on sustainability, health and safety, human rights, first aid and cardiopulmonary resuscitation (CPR), job safety, among others. 

Emergency Preparedness and Response: LFZC has developed an Emergency Response Plan for its operations. Monthly emergency drills are conducted by LFZC safety officers to test emergency scenarios as per the Plan. LFZC operates an onsite Fire Station with a fully equipped (32-man) fire team operating on a 24-hr basis. Firefighting equipment include: i) 2 fire trucks; ii) 3 mobile foam generators; iii) fire water hydrants, and; iv) a network of portable fire extinguishers.  LFZC has an onsite medical facility equipped with consultation rooms, an X-ray and imaging room, a pharmacy, a phlebotomy room, procedure rooms and a 4-bed emergency ward. The medical facility focuses on treating minor cases and stabilizing serious cases (before referral to a main hospital) and is open to all LFZC staff, tenants’ staff and community members for emergencies. 

LFZC employs a total of 614 employees, of which: 161 are permanent, 37 are fixed term employed by third party agencies and    416 casual workers. 161 workers, both national and expatriate, are based in Lagos corporate offices. The majority of the casual workers (47%) come from the neighbouring communities.

Human Resources Policies and Procedures: LFZC’s Employee Handbook covers human resources (HR) policies and procedures for permanent and fixed term employees in line with PS2 requirements. It includes LFZ HR policies on i) human rights and dignity at work; ii) minimum age requirement; iii) provisions against child and forced labour in the workforce; iv) compensation and leave requirements; iv) grievance management and v) disciplinary procedures. The Handbook also includes a procedure for termination without cause (retrenchment). The HR department, composed by two HR specialists, and the Sustainability department. LFZC will enhance the HR department with adequate staffing commensurate to the size of future operations and manage labour aspects according to national and PS requirements (ESAP #2a).

Working conditions and terms of employment: The contracts for both direct and third-party employees detail nature and the category of employment, wages and benefits, working hours including overtimes, leave (sick and parental), employee rights and obligations in accordance with the LFTZ regulations and in line with PS requirements.  The basic wages are above the statutory minimum, and they are reviewed annually based on inflation and performance. Additional benefits package includes transport, housing, wardrobe, and meal allowances. While on site, expatriate and corporate staff are accommodated in apartments located in the LFZ.

LFZC currently engages casual workers from the surrounding communities for horticulture, waste collection and construction. No formal contract is issued for casual employment and line managers are responsible for communicating terms of employment and workers’ rights verbally to the employees.  Casual workers have access to LFZC’s medical clinic and pharmacy and are able to request unpaid leaves for medical and educational purposes. LFZC began a process of converting casual workers into a fixed-term employment based on i) business needs; ii) past work performance; iii) competences, and, iv) years of experience.  LFZC will formalize this employment transition process in line with national and PS2 requirements (ESAP #2b).

Freedom of Association: LFZC’s Employee Handbook allows workers to bargain collectively and join/form unions or staff association after clearance from HR on a conflict-of interest clause.  Country laws and regulations do not prohibit freedom of association within the Lagos Free Zone and the LFZ enterprises (LFZC tenants). Currently, there are no employee groups or associations in LFZC. 

Grievance Mechanism: The Employee Handbook includes LFZC’s grievance procedures for both direct and contracted employees. It also includes a whistle blower procedure whereby LFZC employees can raise anonymous grievances directly to the Sustainability General Manager. The procedure lacks specific provisions for non-retaliation and gender-based violence and harassment (GBVH). Some complaint boxes are located in the LFZ but they are scarcely used or known by the employees.  LFZC will update and operationalize the labour grievance mechanism in line with LFZ regulations and PS2 requirements. The mechanism will be disclosed and be accessible to all LFZC employees (ESAP #2c).  Additionally, at the zone level and according to LFZ regulations, LFZC is required to establish a Dispute Resolution Board to receive and manage labour grievances from the tenants’ workers.  LFZC will establish a labour grievance mechanism at the zone level to address and manage any unsolved disputes between tenants and employees in coordination with the Nigerian Ministry of Labour (ESAP #2d).

Occupational Health and Safety (‘OHS’):  LFZC has a “Stop Work Policy” for the prevention of incidents and elimination of risks at the workplace. Daily safety toolbox talks are held by the Sustainability Department with the support of respective EPC contractors' EHS officers. Both direct and third-party workers are given training and annual refreshers on OHS, including training in handling high risk materials or working at height. LFZC also developed an EHS Code of Conduct (CoC) setting EHS behaviour for all staff and contractors at zone level, in line with the LFZ regulations. A procedure for reporting accidents and near misses is in place.  This will be strengthened to require recording of incidents and documentation of any corrective actions carried out as part of the monitoring requirements under the ESMS (reference to ESAP #1a).

Workers engaged by Third Parties: As per the LFZ regulations, all contractors and tenants are required to meet provisions in compliance with national labor law. LFZC will develop and implement procedures to monitor contracted labour and working condition requirements for contractors engaged by LFZC in line with the Nigerian legislation and PS (reference to ESAP #1d). 

Contractor Management: LFZC developed an ESG filter to assess contractors’ E&S performance of construction projects covering topics such as pollution, water and energy consumption, management of hazardous waste, policies against forced/child labour and appointment of health and safety officers on site. Additionally, LFZC requires contractors to submit an EHS Manual aligned with LFZC CoC and submit weekly EHS reports. For future operations, LFZC will extend the EHS monitoring requirements also to sub-contractors operating in the LFZ (reference to ESAP #1a).

Greenhouse gases (‘GHG’): LFZ’s Greenhouse Gas Emissions (GHGs) are primarily from fuel consumption i.e. from diesel and petrol fuel generators and vehicles. In 2022, LFZC emitted approximately 1495 tonnes CO2e and 1296 tonnes CO2e from January to August 2023.  LFZC has plans to reduce its GHG emissions further by: i) conversion of selected energy consumption sources from diesel to gas; ii) generation of more energy from renewable sources, such as solar power, and iii) offsetting GHG emissions with maintenance of natural forests within the LFZ area.

Energy Consumption: The LFZC is not connected to the national grid. Power for the zone (including LFZC tenants) is supplied by a third-party power supplier through gas generators fuelled by Compressed Natural Gas (CNG). The approximate gas consumption of the CNG gas plant is 48000 scf/day. Alternative power is supplied to LFTZ through backup diesel generators onsite.

Air Quality:  Sources of potential air quality pollution include diesel generators and vehicles, especially trucks. LFZC regularly measures and reports on the following Air Quality (AQ) parameters in 12 locations across the zone – VOCs, Temperature, Humidity, CO2, H2S, SO2, CO, NOx, NO2, O3, NH3, PM2.5 and PM10. AQ monitoring reports reviewed (for Jan-June 2023) showed that all AQ parameters were within regulatory limits, except for PM2.5 and PM10, on few instances due to ongoing construction activities. The zone is required to maintain compliance with Nigerian national environmental monitoring standards, and LFZC conducts monitoring of its tenants of air quality through a third-party entity.  In line with LFZC’s contractual pollution management requirements, tenants are required to ensure their operations comply with applicable national E&S requirements. Quarterly Environmental Compliance Monitoring (ECM) reports are prepared by tenants and are provided to LFZC.

Noise: Sources of noise within the zone are from generators and operation of industrial machinery by tenants. As part of its ongoing AQ monitoring process driven by a third-party consultant, LFZC regularly monitors and reports on noise levels across the zone.

Water consumption: The total water demand (for all 3 phases) for the zone will be approximately 33,000 cubic meters per day.  Phase 1 water demand is estimated at around 12,793 cubic meters per day. The total daily water demand for the zone (including all current tenants) is approximately 900m3/day.  Water is currently supplied to the zone through: i) 30 borewells in various locations within LFTZ, and; ii)a burrow pit dug at varying depths of up to 15metres within a 22ha coverage area (which collects stormwater through a network of drainage channels).  The borrow pit and borewells provide water for domestic, logistic and construction purposes for LFZC. LFZC also has a rainwater collection system for horticultural purposes.  Tenants have separate dedicated sources of water supply also from boreholes.  LFZC will construct a water treatment plant to supply water at the zone level and to tenants, and has commissioned a feasibility study for such purpose.  LFZC will assess surface and groundwater at the site to determine potential impacts and propose measures for the sustainable use of water resources in line with PS3 requirements (ESAP #3a).

Wastewater Management: Sewage from LFZC’s direct operations seep to groundwater through septic tanks and soak away pits located across LFZ.  LFZC also has a network of drainage channels draining into the Lagoon. LFZ tenants manage their waste through individual septic tanks located within their premises. Some tenants have installed dedicated effluent treatment plants, which treat effluent before discharge into LFZ’s drainage network.  LFZC monitors water quality at designated locations across the zone, through a third-party consultant. LFZC plans to build a central Sewage Treatment Plant (STP), for collection treatment of sewage across the Zone. On completion of the STP, sewage across the zone will be transported to the STP for treatment. LFZ tenants will have the option of being connected to the STP. LFZC will build a sewage treatment plant for treatment of sewage across the zone, in line with PS requirements (ESAP #3b). LFZC will develop and implement procedures i) for tenants to submit periodic pollution management reports; and, ii) for LFZC to sample treated industrial effluent released into its drainages by tenants (ESAP #1d).   LFZC currently does not generate or treat industrial effluent. LFZ tenants generate liquid effluent from respective industrial processes.  LFZC has long-term plans to build a central industrial effluent treatment plant, for treatment of effluent across the Zone in anticipation of higher volumes of effluent from tenants.

Solid Waste Management:  LFZC constructed a 450sqm materials recovery facility (MRF) for the segregation, recycling and reuse of waste materials generated in the zone.  Solid waste (including plastics, wood, paper and metals) is collected at the MRF before being segregated and compressed using a bailing machine. Paper and paper waste is sold by weight to private waste collectors, and electronic waste is sold to State-registered waste management operators. The MRF runs on solar power generation and has a processing capacity of approximately 15 tons of solid waste per month. LFZC tenants operate independent solid waste management and evacuation processes but have the option of having their solid waste processed through the MRF.

Hazardous Materials Management: Hazardous wastes (medical waste, hazardous chemicals and expired foods and medicines) are generated within the zone. Diesel fuel (used for LFZ-specific back-up generators) is stored in 1 tank of 35000 liters, 1 tank of 12000 liters, and 1 tank of 5000 liters, installed within bund walls with the capacity to hold 110% of tank volume.  LFZC and its tenants manage and evacuate hazardous wastes on an individual and decentralized basis. The State-owned LAWMA operates a specialized collection process for medical waste through various licensed vendors. LFZC will develop a monitoring procedure for off-site hazardous waste processing facilities operated by LAWMA to ensure waste is treated, destroyed and/or disposed of and includes the appropriate control of emissions and residues resulting from handling and processing in line with IFC PS requirements (ESAP #3c).

Community Health and Safety: The LFZ is located within an industrial zone and has seen rapid urbanization following the expansion of other industrial developments for the past 15 years. The key community health and safety risks associated with the LFZ are i) increased traffic during construction of facilities in Phase 2 and 3 and activities associated with tenants; ii) gender-based violence and harassment (GBVH) issues associated with increasing number of trucks and people seeking jobs; iii) the continuous influx of people in the area putting additional pressure on community infrastructures and resources. To address and mitigate these risks, LFZC will prepare and implement a community health and safety plan, addressing key risks related to i) road safety and traffic management; ii) GBVH, iii) influx in line with IFC PS requirements (ESAP #4a).  The plan will integrate the health and safety risks on communities from tenants’ activities and will define clear responsibilities for implementation with other relevant stakeholders.

Security Personnel: A permanent fence is erected around the perimeter of Phase 1 site and will be also established for Phase 2 and 3.  There is one entry and exit point for both workers and vehicles.  Three layers of security are implemented within the LFZ: i) a Police command, the state-owned intelligence services (DDS) and mobile armed police; ii) private security guards manning gates and access points; and, iii) internal patrolling.  The Community Affairs and Security Manager oversees the implementation and supervision of the LFZC’s security management system, including a new Artificial Intelligence (AI) motion detection system. All personnel dealing with security have received training on Voluntary Principles on Security and Human Rights (VPSHRs) during the onboarding sessions with refresher sessions taking place each year.  LFZC will undertake a security risk assessment and update the current security management plan for each phases as per PS4 requirements (ESAP #4b).

Protection and Conservation of Biodiversity: Clearing for the LFZ project began in 2015. A habitat determination study conducted for LFZ concluded that, prior to project land clearing, vegetation within the zone could be categorized as a naturally wetland ecosystem with some dry arable land utilized for farming, characterized by the presence of swamp forest (in the northern and eastern sections) and marshy land with sparse and short vegetation (in the southern section). GIS analysis conducted during the Study also concluded that there was an absence of endemic and/or threatened species according to international/global or national/local Red Lists) associated with the natural habitat of the zone. LFZC will implement recommended mitigation measures aimed at incorporating retained natural vegetation into green spaces in the zone and restoring habitats with native species (ESAP #6a).

Important biodiversity values (e.g. the existence of sea turtles, mangroves) occur within the potential area of influence. Lekki Port, an anchor LFZC tenant, has completed baseline assessments as part of an ESIA and confirmed the existence of marine turtles in the port’s area of influence. The port ESIA recommended construction and operation phase mitigation measures and the development of a management plan to address impacts on marine turtles. LFZC has engaged the Nigerian Conservation Foundation to implement a marine turtle management and monitoring program. The project will develop a Biodiversity Management Plan to address impacts to biodiversity values (e.g. Sea turtles, mangroves) as per ESAP #1a.

Management of Invasive Species: The LFZC has earmarked a 44ha area for greening across the LFZ, of which 27ha has been planted. There are different foreign plant species imported into the LFZ for landscaping and beautification purposes. GIS analysis conducted during the habitat determination study confirmed the planting of indigenous ornamental and non-native plants in the northern section of the zone. LFZC will develop an invasive species management plan to identify and characterize the potential for invasive behaviour of alien species imported into the Zone and detail measures to avoid spread of and, if necessary controls to remove invasion (ESAP #6b).

In 2008, LFZC established a Memorandum of Understanding (MoU) with 8 communities (Okesegun, Megbon, Segun, Idoke, Okunraye, Lujagba, Lekuru and Idotun) around the LFTZ formally registered as TOLIM.  Through its representatives, TOLIM engages with LFZC on CSR-related projects and employment opportunities. LFZC keeps records of community engagements through minutes and attendance. LFZC has a stakeholder engagement plan (SEP) in line with PS requirements to guide its engagement with communities through i) ad-hoc meetings in villages to maintain project presence and address concerns, and; ii) bi-annual community town halls to discuss the status of CSR projects, employment and other development projects.  The key issues raised by communities relate to employment opportunities and additional community development support. LFZC has also developed a Grievance Redress Mechanism (GRM) which will require updating it to indicate clear roles and responsibilities of LFZC staff in the implementation of the mechanism.  The GRM will be broadly disseminated to communities, particularly in utilizing the various alternative communication channels available to all communities (i.e. hotline and email) to reach LFZC (ESAP #1f).       

 Vishal Shah

Chief Sustainability Office

+234 8081832611

Kolawale Mate

Manager – Sustainability

+234 9120824705