Impacts linked to PS8: Cultural Heritage are not expected since there is no presence of known cultural assets or artifacts within the Group’s operational footprint. BAF will assess and manage any issues related to PS8, as needed, as part of its Environment and Social Management System (ESMS).                                                  

 The proposed investment is a Category B project in accordance with IFC’s 2012 Policy on Environmental and Social Sustainability. Key E&S risks and impacts from this project are limited, site-specific, and can be readily addressed through generally accepted mitigation measures described in this document and the attached ESAP. The E&S risks and issues are: (i) existence and effectiveness of BAF Group Environmental, Health and Safety (EHS), Human Resources (HR) and Food Safety (FS), and Product Safety management systems at its farms, feed mills, slaughterhouse/meat processing, including legally required environmental permitting and mitigation measures for solid, liquid (manure/organic wastes/waste water), hazardous and packaging waste; (ii) organizational capacity for implementing, monitoring and reporting on BAF ESMS at corporate and plant-level; (iii) labor and safe working conditions of direct employees, including oversight on management on Occupational Health and Safety (OHS) standards (including contracted and outsourced labor); (iv) Emergency Preparedness and Response (ERP); (v) monitoring of EHS parameters (atmospheric and point source air emissions, effluents, noise), including water and energy use; (vi) sourcing of raw material inputs for feed mill operations; (vii) land acquisition and related impacts; (viii) animal welfare management practices in pig farms; and (ix) stakeholder engagement and Community Grievance Mechanism (CGM).                                                 

Environmental and Social Assessment and Management System: BAF Environmental and Social (E&S) policy is currently focused on compliance to E&S laws and regulations in Vietnam. BAF farms apply VietGAP in eight (out of 13) of pig farms with plans to adopt internationally recognized standards and systems for the existing and planned feed mills. Food Safety (FS MS) is also planned for slaughterhouse and meat processing plants by 2024. To support its commitment towards IFC PS requirements for this investment, BAF will upgrade its E&S policy, as part of its E&S Management System (ESMS), to meet Good International Industry Practice (GIIP) and by extension of this commitment will define its E&S performance against these PS’ benchmarks for the operations being financed by IFC (ESAP#1).

Identification of Risks and Impacts: BAF has been adhering to the Vietnamese regulatory requirements for new feed mills and pig farms constructed so far. This process involves engaging a qualified consultancy to undertake the Environment Impact Assessment (EIA) study (with dedicated internal resources to oversee) and having this verified by the regulatory authority (Provincial Department of Natural Resources and the Environment - DONRE) that issues the environmental permit prior to construction. Based on the identified E&S risks from the proposed operations, BAF is required (at each site) to submit periodic (semestrial) environmental monitoring reports. The EIA reports for all farms typically assess the impacts from construction and operation phase and include: (i) use of natural resources (energy/water consumption and management of wastes); (ii) odor management and mitigation of GHG emissions from animal waste through the application of on-site biogas capture systems, including proposed use of methane gas for energy generation; (iii) wastewater 100% treated and recycled into a closed water management system (for new sites being financed by this investment). Review of sample EIA reports for pig farms and feed mills confirm appropriate mitigation measures set out to address the key E&S risks and impacts. The EIAs, however, fall short in the assessment of impacts on biodiversity, community health and safety and social impacts including land acquisition and resettlement, impacts on ethnic minorities, and stakeholder engagement. With regards to the 11 assets where EIAs have been developed, the EIAs will be updated with a supplemental ESIA to comply with PS1 requirements. Based on the supplemental ESIAs, recommended mitigation measures will be implemented (ESAP #2).   Going forward, as part of its ESMS (ref. ESAP #5), BAF will also develop an E&S impact assessment and management procedure (including relevant Terms of Reference) to conduct IFC PS compliant ESIA for the future assets where IFC’s use of proceeds will be utilized. 

BAF engagement process with rental farms and acquisition of existing operations includes a legal due diligence (at point of engagement with landlord) requiring the proposed partner to verify its legal/permit documentation. This legal documentation includes land title/lease, relevant business, environmental permits, and proof of environmental monitoring. In cases of rental farm engagement, BAF evaluated the wastewater treatment system, and if necessary, invest in closed wastewater treatment and recycling. BAF   currently does not have its own centralized system, albeit sharing the same legal department with Tan Long Group, to track legal and regulatory compliance of all entities , particularly of rental farms. Going forward, as set forth in ESAP #3, BAF will develop a consolidated legal/regulatory (permits) register, as part of its ESMS, for applicable EHS requirements for all current and planned pig farms operations under this project which will include (i) all existing environmental permits received for existing operations; (ii) provide proof of annual monitoring report submission in accordance with national regulations, including effective implementation of mitigation measures identified during environmental risk screening process; and (iii) demonstrate compliance to all terms and conditions of the environmental licenses. These reports shall meet applicable Vietnamese legal and regulatory requirements, IFC PSs and WBG EHS Guidelines, including guideline levels for air emissions and effluents. Any deviations will require a Corrective Action Plan (CAP), including timeline and assigned CAPEX/OPEX resources.

BAF develop each project with a project team which comprises operational and technical members and one Environmental Specialist (who reports directly to BAF Board of Directors) who is tasked with the oversight of the EIA Study and community engagement/outreach process. This role is mainly focused on new projects to ensure compliance to environmental permit issuance. There is no on-going scope of E&S monitoring for this role. Nor is it clear how the scope of this environmental specialist role is extended to include feed mills, farms and future slaughterhouse and meat processing operation. As set forth in ESAP #4, BAF will further consolidate its EHS function through recruitment of an E&S Technical Director and increased number of qualified EHS staff to further develop the corporate EHS/FS management systems and oversee the E&S performance of all BAF facilities (one full time Technical Director and four full time competent EHS officers at corporate level is expected, including a dedicated social personnel responsible for land management and community aspects).

At time of this appraisal, BAF had four new pig farms under construction and six rental units under consideration. All proposed and constructed pig farms are within rural locations with secondary data highlighting the likelihood of impacted stakeholder groups, ethnic minorities, risks associated with land acquisition/compensation, and potential biodiversity (ref. PS5/PS6 section below). The anticipated expansion in pig farm capacity with this IFC investment will significantly increase the footprint of the pig farm operations. Although BAF has developed a site selection checklist that analyzes key criteria, including biosecurity considerations, distance from local communities, access to transportation, water and electricity availability, verification of legal ownership of seller and land use designation classified as agricultural, this checklist does not include any screening on land acquisition approaches taken by the proposed lessors or presence of ethnic minority groups in the area. Going forward, as set forth in ESAP #5, BAF will upgrade its Site Selection Checklist to ensure that IFC PS5, PS6, and (as applicable) PS7 risks and impacts are timely addressed during the due diligence process. This site screening will include a commitment to exclude projects with potentially significant E&S impacts (i.e., areas where significant involuntary resettlement would be required, or lands to which ethnic minorities maintain collective attachment and would trigger free prior and informed consent (FPIC) or sites that are within critical habitats).

All farms apply strict biosecurity protocols, with eight farms being VietGAP certified with a plan in place to certify all  farms to Global GAP by end of 2024. Feed mill operations stated that it maintained standardized OHS approaches which include work permit system, such as working at height, confined space, hot works, and good housekeeping guidelines to reduce dust related risks. BAF plans to develop and achieve FS MS certification linking slaughter, processing and retail JVs. BAF have no formal process for oversight of existing farm operations, rented and contracted construction operations, while documented proof of feed mill corrective actions provided is not considered as meeting IFC expectations (see PS1. Management section below). As set forth in ESAP #6, BAF will further establish its corporate level ESMS to include the full scope of E&S risks across its farms, feed mills, and slaughter operation in accordance with IFC PSs, WBG EHS Guidelines, and relevant GIIPs.

Management Programs: BAF current focus is to achieve compliance to prevailing Vietnamese regulations within each division (farms, feed, slaughter). As mentioned above, there is no overarching EHS MS installed at corporate and operational level that helps each entity achieve a demonstrated standard of GIIP. All BAF farms have wastewater treatment (WWT) system. BAF farms apply zero discharge approaches to WWT facilities in all new farms with all water recycled back into the farms. This is only applied to new facilities with existing facilities discharging treated wastewater to the natural environment with water quality parameters aligned to GoV requirements. Feed mill operation focus on regulatory compliance. Future slaughterhouse and meat processing plant will incorporate a FS MS aligned to EU standards. Although it is recognized that these approaches address some PS1 elements, the process does not include active E&S monitoring and review of the operations, nor alignment towards GIIP performance-based requirements. To ensure greater E&S monitoring oversight and prepare BAF for its proposed expansion, a BAF level ESMS needs to be established based on its updated corporate policies (ESAP#6), and to apply IFC PSs and GIIP requirements (ref. ESAP#3) defining expected E&S performance benchmarks for the operations proposed under this financing.

Organizational Capacity and Competency: At BAF corporate level, there is a Project Team (overseeing new farm development) which includes an environment personnel that directly manages all E&S issues, including engaging with consultants for the EIA Study and overseeing minimum specifications for compliance to agreed environmental permit’ Terms and Conditions (T&Cs) and stakeholder engagement (mainly during the environmental permitting process). The internal control division and the respective subsidiary director are in charge of supervising EHS compliance at each facility (including OHS management). Within the feed mill operations, all E&S monitoring is currently managed by the general manager.  With the planned expansion including the future development plans of slaughterhouse and meat processing plant, increased in compliance, and expectations of meeting GIIP needs, BAF will require significant additional human resources to support and guide this implementation. This additional resource is required to manage the operational E&S needs, including land management and community aspects, and ensure that all new projects and actions under BAF expansion plan, are developed in a manner aligned to IFC PS requirements (Ref. ESAP#4).

Emergency Preparedness and Response: BAF feed mills have in place firefighting and rescue plans based on the local government regulatory requirements. Existing operating feed mills are supported with firefighting drills and annual fire drill testing.  However, the Rico feed mill in Tay Ninh no longer had in place valid firefighting/emergency response plans upon its reopening after 5 years hiatus. As set forth in ESAP #7, BAF shall develop a risk assessment matrix that will be applied across farms, feed, and slaughterhouse businesses and operations to define ERP needs. As applicable this risk assessment shall consider risks to livestock, employees, environment, and stakeholders in an emergency event. It shall also assess the risks from climate related events on infrastructure such as excessive rainfall, drought, or fire. Management of potential wastewater treatment plant accidents and liquid waste release from farms. It shall also include evaluation of explosive dust risks from mill operations especially from sites in proximity to stakeholders.

Farm operations include ERPs for the management of biosecurity related needs. For the slaughterhouse and meat processing facilities, there is a plan to install a FS MS which will include recall procedures. There are currently no ERP plans for the pig farms, especially in case of WWT plant spillages that could result in accidental discharge to surface water bodies or the natural environment. BAF stated that all WWT systems are designed with standby storage ponds that can be used to temporarily hold wastewater in emergency cases (ref. ESAP#6).

Monitoring and Review: There is no E&S monitoring and review at BAF level for each business segment. At the facility level, as required by the environmental permits, WWT plant discharge will be monitored for the farm operations by third party consultants and submitted to the DONRE. Monitoring of BAF feed mills is in accordance with the environmental permits. For new pig farms, all WWT plants will recycle 100% of treated wastewater. Proposed slaughterhouse and meat processing plant monitoring will be required to submit periodic reports in compliance with EIA. Responsibilities for EHS monitoring rests with the internal control division and with the respective subsidiary director to supervise compliance. Going forward, corporate and plant-level EHS/social Key Performance Indicators (KPIs) will be developed by class of assets to demonstrate meeting performance-based requirements as defined in WBG EHS General and Sector Specific Guidelines (ref. ESAP#6).

Supply Chain Risk Assessment and Management: Raw materials sourced for the feed mill are broadly sourced from a combination of the BAF Holding Company (Tan Long Group - TLG) and from local suppliers. The main product sourced domestically is wheat bran, mostly sourced from local mills using imported raw materials. Once the expansion of the four mills is completed, production capacity will increase to 600,000-1,000,000 MT capacity. At the time of the appraisal, BAF had not adopted a Supplier Code of Conduct for its sourcing operations, including defining a sustainable sourcing plan to supply these facilities. To manage the E&S related risks of its sourcing operations against PS2/PS6 supply chain requirements, BAF will be required to adopt such Supplier Code of Conduct and define risk-based approach to sourcing material inputs for its feed mill operations. Going forward, BAF shall develop a Sourcing Policy, including establishing supplier database/mapping, developing supplier evaluation criteria for IFC PS2 and PS6 supply chain requirements to qualify its raw material suppliers and ensure independent verification. The implementation of this Supplier Code and management procedures will be done through EHS corporate function and/or sourcing team. (ESAP#8)

 As of January 2022, BAF has 705 employees, out of which 80 work at the feed mill, 514 at the farms and 111 work at different functional departments at the head office. The total employee ratio is 70% male and 30% female.

Human Resources Policies and Procedures. BAF applies the labor law of Vietnam which was confirmed by the review of the BAF HR policies and procedures. This review confirms general consistency with IFC PS2 objectives, including, among others, working hours, overtime limits and payments, annual and maternity leave, salary and benefits, social insurance, health insurance, accident insurance, and resolution of labor disputes. All BAF recruitment is centralized at the head office, which is controlled by a HR Director with eight supporting staffs. In turn each facility’s responsibility for HR management is under the facility’s director with support from the administration teams.

Working Conditions and Terms of Employment. For BAF operations, terms of employment and the rights and responsibilities of workers are formalized into employment contracts and communicated to all direct employees along with the Salary and Welfare Policies. Under the employment terms (that strictly follow the national labor law), workers employed within BAF companies are on full time contracts. Workers are paid in accordance with the labor law. Working hours are per national labor law requirements, i.e., not more than 48 hours a week. Employees are enrolled in social insurance, covering pension, unemployment, medical, injury, and maternity. Employees are covered with accident and medical insurance. In addition to basic salary, facility employees are provided with various allowances, including hazard pay, allowances for workers in the pig farms (living-away-from-home allowance, meal allowance, etc.), mid-shift meal allowance, per diem, fuel, telephone, and parking allowance. Employees also receive annual health check. Going forward, as part of its updated HR policies and procedures (ref. ESAP #10), BAF will define and implement a worker health check and medical screening policy consistent with applicable national occupational health and safety laws. The policy shall explicitly identify medical tests associated with occupational health risks in the workplace, and where urine test is required, the testing shall not constitute any forms of pregnancy and proxy-pregnancy-tests.

Given biosecurity concerns and lengthy quarantine periods associated with gaining access to and working in the pig farms, the workers are provided with living accommodation on the farm and meals in the canteen. While strict biosecurity protocols are required there are no undue restrictions placed on employees’ freedom of movement with scheduled time off consistent with labor law requirements. Based on a limited review of video information, the observed workers’ accommodation appears to be generally consistent with IFC/EBRD Workers’ Accommodation Guidelines. Sampled labor agreements reviewed for BAF defined terms and conditions, hours and location of work, benefits and entitlements all aligned to the national labor code. 

Workers’ Organization. As per the provisions of the Vietnamese Labor Code, workers have the right for freedom of association and collective bargaining. At the time of appraisal, BAF did not have a Trade Union. BAF workers utilize the Trade Union of Tan Long Group (BAF HoldCo). BAF is committed to complying with relevant laws of the country related to employees/workers unions/organizations. Going forward, as set forth in ESAP #9, BAF will update its HR policy and procedure to include freedom of association and right to collective bargaining and will advertise it internally to ensure that all employees are fully aware that they can feel comfortable forming or joining a Worker Representative Organization of their choosing.

Non-discrimination and Equal Opportunity. There is no clearly defined policy on Non-Discrimination and Equal Opportunity. All the hiring and promotions are merit-based and centralized at the BAF head office. There is no difference in terms of salary for female and male employees with the same experience for the same type of jobs. BAF maintains a Code of Conduct on respectful workplace and relations between company and its employees and among employees in accordance with Vietnamese laws and regulations, however BAF does not have a documented process for anti-sexual harassment policy nor any mechanism to receive allegations of sexual harassment in the workplace (ref. ESAP #10).

Worker and Contractors’ Grievance Mechanism. Employees can raise their grievances through hotline, face-to-face meeting, or by talking to HR department. No channel is available for anonymous filing of grievances or concerns nor responses to anonymous grievances. (ref. ESAP #10).

Protecting the Work Force. BAF states that all BAF workers exceed the minimum age of 18 years with records of proof of age are kept. The site visits did not identify forced or under aged labor practices. However, there is no explicit policy and process related to child and forced labor (ref. ESAP #10).

Going forward, as set forth in ESAP #10, BAF shall update its employment policies and procedures to include avoidance of child and forced labor, non-discrimination and equal opportunity, employee grievance process including anonymous options for receiving, management and responding to grievances; workplace sexual harassment based on a victim centered approach.

Workers Engaged by Third Parties: BAF stated that the new project unit responsible for supervising the quality control for construction of new sites was responsible for OHS and labor compliance of construction contractors. No documented process nor sample construction contracts were provided during this appraisal to confirm that understanding. Site visits and images shared by BAF did highlight that no formal process was in place for defining minimum standards for OHS and labor, enforcement, oversight, nor monitoring of construction contractor operations was conducted. BAF currently engages with a third-party slaughterhouse to cull and process its pigs, as such shall have labor practices evaluated as a provider of core business services (ESAP#11).  

Occupational Health and Safety: BAF feed mill operation have in place an OHS function reporting to the HR and Administration department with specific OHS requirements for maintenance teams as overseen by the head of maintenance. Specific procedures include: (i) Working at Heights; (ii) Hot Work; (iii) Confined Space, and (iv) Lock Out Tag Out. The review of the procedures highlighted a general set of the principles for working in such hazards. However, no detailed procedural provision (i.e., permit to work system, PPE and training etc..) were included. BAF farms have appointed an OHS function at the site level with generic OHS procedures for work operations that is filled by the head of Biosecurity. At farm level, the Biosecurity Officer is responsible for ensuring compliance to OHS needs. It is noted that there is no hazard and risk identification assessment process in place, and it is unclear how the OHS needs for all the BAF operations are identified, other than applying a national regulation compliance-based approach. As set forth in ESAP #12, BAF shall take an internal review of its current OHS policies and procedures against relevant industry GIIP, with the results of this feeding in the final organizational structure and processes for the E&S oversight on operations. The scope of this review will include owned and operated facilities as well as ongoing and planned construction activities and future operations OHS management plans (i.e., slaughterhouse and meat processing).

COVID-19 Impact: There has been no significant health impact due to COVID-19 on the workforce at BAF. The Group approach has complied with the Governmental requirements, including regular monitoring of the workforce, and isolation protocols. As stated by BAF, there is no deduction in payment of wages for workers sent home to quarantine due to illness or exposure as long as they provide verification papers (including COVID-19 test results or notice of isolation from the local wards/communes). The medical treatment of those infected by the pandemic is covered by the state budget.

 Energy and Material Efficiency Projects. BAF expansion plan for farms, slaughterhouse and meat processing unit is anticipated to increase finishing pig stock to [655,000] head per year with [13] additional farms planned by 2023 (~80 farms by 2032). BAF provided energy consumption data for 2021 for its existing 13 farms, and Phu My mill, which total to 17.7 GWh.  No information was provided for anticipated energy use for the proposed slaughterhouse and meat processing operation. Comparison data for slaughterhouses with similar capacity (2,000 head per day) ranged between 5,000 to 7,500 megawatt hours of energy use per annum. Rice husk consumption of Phu My mill in 2021 was 466 tons and it is used as feedstock for boiler.

BAF stated that all new farms will be equipped with WWT having 100% closed systems with all treated wastewater achieving a quality of QCVN 62-MT:2016/BTNMT for wastewater from husbandry and the effluent is further treated to meet QCVN 01-1:2018/BYT for water quality for domestic uses and reused back into the production areas for both animal drinking water, operations and wash down. At these farms, water from onsite wells is used to supplement the recycled wastewater only. The company has a verbal commitment to apply renewable energy. (Ref. ESAP #1/#6).

Water. BAF farm operations use tube wells at site for production and domestic usage with basic pretreatment/filtering. Farm groundwater extraction is permitted and licensed by the provincial authorities with registered number of wells and water volume (in accordance with regulations should be reflected within the site environmental permit). The extracted water is used for pig bathing, pen cleaning, and waste treatment, together with the water recycled from the wastewater and water treatment process. No data has been provided by the company and reportedly the farms do not track groundwater extraction volume.

Based on the design, all new owned (future rented) BAF farms will use closed WWT systems that will allow to reuse 100% of water treated for the production. At the time of the appraisal, it is not possible to estimate how much benefit this contribute to water saving as the company does not track volumes of recycled water (Ref. ESAP #6). BAF stated that it will be able to track the volumes for the operation of the new farms. The proposed slaughterhouse and meat processing facility shall source water from the Industrial Park utilities provider treated with reverse osmosis prior to use in cleaning on the meat processing lines. Wastewater will be preliminary treated to meet the requirement of the industrial park and then discharged to the wastewater drainage system for further treated at the centralized wastewater treatment system of the industrial park.

Drinking water for worker (farms and mills) is provided in bottled and containerized form. Water used for other domestic purposes at the farms (including the dormitories) are from the onsite wells which are treated to meet Vietnamese standard for domestic water.

GHG Emissions. The projection for GHG emission from pig production of BAF in 2023 is 532,000 tCO2 (this includes emissions from energy consumption, manure management and embedding in feed). As such BAF will be required to report its GHG emissions through IFC’s Annual Monitoring Report (AMR).

Pollution Prevention. BAF shall apply a standardized animal waste management system by site for the treatment and management of waste (manure). For rented farms, BAF stated that all environmental permits and business licenses are confirmed as part of the legal due diligence at point of engagement. Future slaughterhouse and processing plant will dispose of all waste to the industrial park operator and in accordance with national regulations.

Wastewater Treatment. Vietnamese environmental permits and prevailing regulations require all pig farms to have in place sufficient WWT capacity and comply with minimum standards for pollutants at points of discharge. For new farms, BAF will install 100% water WWT and recycling to have a zero-discharge management system. For rental and older farms  the process of standard pig manure treatment is described as follows: (i) the pig manure and wastewater from the pens go through three sedimentation tanks (clarifiers) to remove heavy solids by settling and separating from the liquid; (ii) the separating screens between the sedimentation tanks is removing the solid waste; (iii) this solid waste is pumped to a dehydrator (dewatering separator); (iv) the dehydrated manure is then bagged and stored in the manure storage house and is sold to third parties for use as organic fertilizer; (v) the remaining liquid effluent is then pumped to the biogas digester (a pond with a HDPE membrane to trap CH4 and N2O); (vi) material is stored in this digestor estimated for a period of 8 weeks before being pumped to HDPE lined settlement ponds, then treated in an aerobic treatment system, and filtered through a sand filter, and finally discharged back to a holding pond. As included in ESAP #13, BAF shall undertake an internal assessment of all farm WWT facilities to determine compliance to relevant environmental permit and, compliance to the IFC PSs and WBG EHS Guidelines (as applicable) for facilities that discharge treated wastewater into the natural environment. The most stringent parameters guidelines between Vietnamese standards and WBG EHS Guidelines will apply. As part of ESAP #13, all pig farms located in Key Biodiversity Areas and Biosphere Reserve (ref. ESAP #15) will have closed water systems, recycling of wastewater, with zero discharge to the environment, and lined slurry lagoons.

Site visits to three operating BAF farms revealed that the old wastewater treatment systems lacked sufficient capacity to treat the wastewater generated at the farms, and expansion of the treatment system was undergoing at the time of visit at Tay Ninh 1 and Daklak 1 farms (expansion was completed at Hoa Binh farm). Expansion includes construction of larger biogas digestors, larger holding ponds as well as new aerobic treatment system. As the expansion is still undergoing at Tay Ninh 1 and Dak Lak 1, no treated wastewater quality monitoring of the expanded system has been conducted, therefore the effectiveness of such expansion cannot be assessed at the time of visit. The monitoring reports for BAF farms wastewater have been sighted confirming compliance to national regulations and WBG EHS Guidelines, except for nitrogen, phosphorus and coliform bacteria. (Ref. ESAP #3/#6/#13). 

Feed Mill wastewater is discharged to municipal and industrial park systems respectively. 

Air Emissions and Odor. Air emissions at feed mill operation are generated mostly from boiler emissions while dust is generated from machine activities. BAF stated that all facilities complied to prevailing Vietnamese regulations. Monitoring data of Phu My Mill and Rico Mill confirms compliance with applicable Vietnamese standard for air emission. (Ref. ESAP #3/ESAP #6).

Air emissions at farm operation are generated from breakdown of manure, feeding system and also from biogas operated incinerators for pig carcasses. Farm odor from existing farm facilities was flagged as an issue, reportedly at Daklak 1 and Hoa Binh 1 farms, and subsequently resolved. As no monitoring reports for the remaining sites are available at the time of the appraisal, it was not possible to confirm that odor was being managed in accordance with its environmental permit (Ref. ESAP #3/ESAP #6).

Solid and Hazardous Waste Management. Planned BAF slaughterhouses and meat processing facilities’ organic waste will be managed in accordance with the environmental permit and Industrial Park operator licenses. From communications with BAF farms managers and observation at the visited feed mill, hazardous waste storage areas are properly roofed, partitioned with waterproofed flooring. Hazardous wastes include chemical containers, medicine packages, used syringes, used light bulbs, oil absorbent rags. Hazardous waste is collected, treated and disposed by environmental service providers through valid contracts. Daily waste from workers’ activities and used packages is treated as non-hazardous solid waste and gathered in containers of various sizes equipped in sanitary facilities, production areas, kitchen, and domestic waste storage house and disposed of in accordance with the environmental permit and prevailing regulations. Dead carcasses are considered as Hazardous Wastes and are disposed of by incineration in onsite incinerators that operate on diesel and/or biogas (generated from the wastewater treatment system). (Ref. ESAP #6).

Hazardous Materials. BAF farm operations hazardous materials consist of veterinary products and other materials such as insect and pest repellents, lubricants, petroleum products and cleaning agents. Cleaning agents are required for the purpose of pig stall and vehicle disinfecting. All hazardous materials are properly labelled and stored in the designated room in the sites as per the permit conditions. Future slaughterhouses and processing plant, hazardous materials will include cleaning agents, diesel fuels (sufficient to maintain backup generator systems), refrigerants (R404A). Feed Mills use diesel fuel (backup generator), cleaning agents. Feed Mills use pest control chemicals, these are administered by a registered pest control business. All handling and management of hazardous wastes is as per national regulations. (Ref. ESAP #1/#6).

 Community Health and Safety. Access to and from the farms uses public roads. All new farms are required to have a minimum of two-kilometer buffer zone with closest local communities and generally located on former agricultural land. Feed mills are in industrial zones. Future slaughterhouse and meat processing plants will be within existing industrial parks.

Security Personnel. BAF signs contracts with security service providers for its facilities that it controls. Reviewed contracts include clear provisions on the responsibility of the security guards and requirements of the qualifications. None of the security guards carry firearms. All security guards are licensed by the local police authority.

Community Health and Safety: For the farms visited, one to two trucks / day on average arrive to the facilities (feed is delivered weekly, manure is picked up bi-monthly). Transport of materials to the mills are managed by the suppliers.

BAF has put in place measures to avoid the risk of groundwater contamination by lining the WWT ponds with HDPE.  Groundwater contamination was reportedly found at Hoa Binh 1 farm, but the source of contamination has since been eliminated. (Ref. ESAP #3/ ESAP #13).  

Existing feed mills and future slaughterhouse and meat processing plants are located within urban centers, industrial parks or rural areas which would be considered to be modified habitats. Note that all new projects are to be screened against PS6 values to avoid areas of natural and critical habitats, including Key Biodiversity Areas and Protected Areas. BAF will incorporate the screening approach within its ESMS (ref. ESAP #5 #6).

A review of all the farms associated with this investment identified two farms (Tan Hop Farm and Giai Xuan farms) that are planned to be constructed within the boundaries of the Western Nghe An United Nations Man and the Biosphere Reserve (UNMAB) which has populations of threatened mammals and birds. These farms are located in areas of terrestrial modified habitat located within a degraded area of the Reserve. These two projects are subject to ESIA and hence will be required to assess biodiversity risks and mitigations. Additionally, the UNMAB Secretariat is to be consulted on the biodiversity values of the sites and contributions to the ongoing management of these sites is to be undertaken (Ref. ESAP #2)

Sustainable Management of Living Natural Resources. In accordance with the IFC Good Practice Note (GPN) on Improving Animal Welfare in Livestock Operations (2014), IFC shall only engage with clients that are compliant to OIE (World Organization for Animal Health) Guidelines and have a commitment and plan to remove use of gestation crates, moving to group housing as part of a defined commitment to adhere to the GPN (no retrofitting of existing farms is expected). IFC’s scope of appraisal included verification of compliance of BAF animal welfare management practices with the OIE Guidelines. BAF complies with these guidelines. BAF has in place protocols on biosecurity, as well as defined guidance on the use of antibiotic treatments. Within the procedures, it is clearly stated that these chemicals shall only be administered by a qualified person. Going forward, BAF will undergo a comprehensive IFC’s HACCP-methodology based Biosecurity, Animal Welfare and Use of Antibiotics (BAWA) Audit Protocol leading to the development of BAWA management system at corporate and farm-level (ESAP #15). BAF shall certify its animal husbandry/welfare management practices against a recognized certification standard benchmarked against GIIP for all farms going forward (e.g., Global GAP for Livestock) (ESAP #16).

 As described under PS5 above, Giai Xuan and Tan Hop projects involve land acquisition causing economic displacement of households belonging to Tho ethnic minority group in Vietnam. The Tho are primarily located in the West of Nghe a province with the population of 59,579 people, or 80% of the total Tho population in Vietnam and constitute 70% of the Giai Xuan and 90% of the Tan Hop communes. It was determined that Tho people have ancestral presence in the project’s area and meet the definition of indigenous people, as per PS7 definition. Nevertheless, given that the project impacts were limited to individual household-level land use, as opposed to collectively held or used land under traditional ownership or customary use, the impacts will be mitigated in accordance with PS5, taking into consideration their vulnerability and any cultural differences. (Ref. ESAP #14).

During the preparation of the LRP and CDP (ref. ESAP #14), BaF will ensure that the households receive copy of all relevant documents in the corresponding language and will further assess if any of these households require any additional support considering that they are vulnerable and will ensure that livelihood restoration measures, communications and information are provided in a culturally appropriated format and language. 

For future land acquisition, any potential impacts on ethnic minorities will be assessed and managed in accordance with PS5 and PS7 per the Group’s LAPP (ref. ESAP #14). It must be noted that PS7 application by IFC discussed above does not affect the legal status of the relevant ethnic minorities in the country.