This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will have limited adverse E&S impacts that are few, site specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP). 

Key E&S issues and risks associated with the project include; i) management and monitoring systems to assess and manage construction and operational E&S risks and impacts; ii) management of labor and working conditions in alignment with national regulations and PS2: Labor and Working Conditions including occupational health and safety (OHS);  iii) resource efficiency measures; iii) management of air emissions, solid waste, wastewater and hazardous materials; iv) emergency planning and response, including for the COVID-19 pandemic; and v) stakeholder engagement.

M&J Group’s environmental and social (E&S) policies, management systems, and organizational capacity reflect the company’s corporate sustainability commitments and strong international garment sector buyer certification requirements (ex: Higg Index, Better Work, etc.). The Columbia Washing Plant is (LEED) Platinum and International Organization for Standardization (ISO) 140001 certified.  The company has adopted robust policy statements on business ethics, environmental management, occupational health and safety, among others, that are well aligned with the objectives of IFC’s Performance Standards. The Group also recognize that diligent adherence to local and international E&S standards confers their corporate brand an important competitive advantage in the garment export sector.  The EIA disclosed with this ESRS effectively identifies and assesses the E&S impacts and risks for the new project activities.

Based on the scope of IFC’s review, the M&J Group E&S management systems and implementation capacity are commensurate with the scale of the E&S risks and impacts of the proposed project.

M&J’s main E&S-related responsibilities are assigned to the Engineering and Sustainability, and the Human Resources, Administration & Compliance teams. Together, these teams plan, implement, monitor, and report on the company’s E&S commitments and results at the corporate and individual facility levels. As part of corporate E&S management, the Sponsor monitors key performance indicators (KPIs) such as record of injuries, usage of personal protective equipment (PPE), energy and water consumption, waste generation, etc. covering construction and operations. These KPIs are reported on a trimester basis to the Administration and Compliance Management team. Incidents are summarized and discussed in management meetings, and the team analyses the root causes and implements corrective actions.

As part of corporate E&S management, the Sponsor monitors key performance indicators (KPIs) such as record of injuries, usage of personal protective equipment (PPE), energy and water consumption, waste generation, etc. covering construction and operations. These KPIs are reported on a trimester basis to the Administration and Compliance Management team. Incidents are summarized and discussed in management meetings, and the team analyses the root causes and implements corrective actions.

M&J Group has documented an emergency response plan for its operations. The roles and responsibilities for staff in evacuation, rescue, firefighting etc. are displayed at various prominent locations across the facilities. Fire alarm call points, evacuation route maps and hose reels have been placed at many locations. The Administration and Compliance team conducts internal audits to ensure implementation of fire safety measures. Workers are trained in fire safety and operation of fire safety equipment every month. A 2019 independent audit report by Amfori BSCI for the Genesis Washing Plant confirmed the adequacy of the approach to life and fire safety for this facility.

 The Group has documented Human Resources (HR) policies and procedures that are consistent with the national labor regulations and IFC PS 2 requirements and apply to all employees. The three facilities identified as the Borrower for this project have a combined total of 5601 employees of which 3149 are male and 2452 are female. The Company does not use labor contractors. Every worker receives a written contract that describes their working conditions and terms of employment. These terms and conditions are explained to newly recruited workers during induction training, and to existing staff through refresher courses. The company has adopted several initiatives to prevent the spread of COVID-19 in the workplace, including paid sick leave, free health care, enhanced sanitation, mask mandates, and public health awareness campaigns. As a result, the company did not terminate, retrench or suspend any workers because of the COVID19 pandemic.

Each plant has Participation, Safety, and Grievance & Harassment Committees with worker and management representation to improve worker-management relationships. The Sponsor’s policies encourage non-discrimination and equal opportunity for all staff and suppliers. M&J’s HR policies prohibit sexual harassment and engagement of child, forced or bonded labor practices. The Sponsor’s Grievance Redress Mechanism (GRM) includes clear options for submitting grievances anonymously, a fair review and appeal process, and follow-up communication of changes made and/or resolutions.  The Company does not prohibit workers’ freedom to associate and join workers organizations, however no employees are unionized to date.

The Group have adopted several policies and programs directed at the needs of the female workforce. These include HR tools and training programs to identify, evaluate, and retain female talent and promote career-progression opportunities for women. The company has a zero-tolerance policy against sexual harassment and provides ongoing counselling and support to female staff on family planning, childcare and women’s health, among others.

Two areas of HR policy performance identified as in need of enhancement in previous third-party compliance assessment reports include overtime and social security payments. Overtime work is monitored and, despite some documented cases, does not normally exceed two hours per day per worker, as per national regulations. Some employees were also reported to be not enrolled or aware of their eligibility to participate in the mandatory national social insurance scheme. To further strengthen its’ labor and working conditions, M&J will provide training to all workers on overtime and social insurance schemes as per ESAP#1.

The company has formulated a health and safety policy and has developed its health and safety procedures based on appropriate risk assessments. The Group have a documented Occupational Health and Safety (OHS) policy that is signed by top management and consulted with the members of safety committee. The OSH policy includes continual improvement aimed at elimination of work-related injury and illness; compliance with legal requirements pertaining to OHS in detail; measurable objectives and improvement targets. M&J’s health and safety experts are assigned to the company Administration and Compliance Department and use a series of tools including engineering and design solutions, health and safety monitoring checklists, periodic training, and simulations, among others, to promote healthy working conditions. For example, Columbia Washing Plant injury analysis records for 2021 confirm that only four minor cut injuries occurred during the 12-month period. No machinery injuries, no burns, or any other type of workplace injury occurred during this time.

M&J Group have assigned a senior officer to implement the company’s Code of Conduct in their factories and with their vendors, contractors and suppliers. This staff member is responsible for selecting current and future business partners based on E&S performance including no bonded labor, no child labor, fair renumeration, etc. in addition to price-quality calculations.  M&J Management are actively involved in overseeing the planning, design and construction of their factories. This is apparent from the various industry and trade certifications the Group have achieved, including Leadership in Energy and Environmental Design (LEED) and Worldwide Responsible Accredited Production (WRAP). M&J Group.

Despite the widespread adoption of good Occupational Health and Safety (OHS) practices, third-party audits for chemical hazards, workplace noise, task lighting and indoor air quality identified limited inconsistencies with applicable World Bank Group (WBG) Environmental Health and Safety (EHS) Guidelines. To further strengthen their OHS performance, the company will contract an independent assessment of OHS compliance with WBG EHS Guidelines, and implement appropriate corrective measures in agreement with IFC to ensure continued OHS compliance as per ESAP#2.