Kamal Steel’s Dar es Salaam asset is located in an industrial area. Since no expansion is planned outside the existing asset footprint and operations will be limited to the existing asset footprint, no land acquisition is expected. Therefore, PS5 (Land Acquisition and Involuntary Resettlement) is not expected. Similarly, PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not triggered.

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 areas of E&S focus include: (i) development and implementation of a corporate E&S management system (ESMS) and relevant procedures and plans to assess and manage the E&S risks and impacts applicable to the business of the company in line with IFC’s PSs during operations & maintenance (O&M); (ii) HR policies and procedures, labor and working conditions, worker grievance redress, occupational health and safety (OHS) management during planned upgrades, O&M of its assets; (iii) emergency preparedness and response and life and fire safety; (iv) air and noise emissions;, (v) waste and hazardous materials management; (vi) community health and safety including motor vehicle safety; (vii) security management; and (viii) stakeholder engagement and community grievance redress.

E&S Policy and Management Systems - At the Group level, Kamal Group has established, amongst others i) occupational health and safety, ii) environmental conservation and protection, iii) ethics, and iv) child protection policies. At the asset level, Kamal’s Tanzania plant has established a health, safety and environment policy. As per ESAP#1a the company shall augment existing policies to apply specifically to the Kamal Steel business, defining the company’s E&S objectives and principles, to ensure consistency with the principles of the Performance Standards.

The Kamal Tanzania plant has number of OHS procedures including induction, the usage of personal protective equipment and standard operating procedures relating to the acceptance of scrap and security. Kamal Group operates several assets across its businesses, one of which has established an integrated occupational, health safety (OHS), health, environment, risk, and quality management system organized to meet the requirements of ISO45001:2018, ISO14001:2015 and ISO9001:2015.

To operationalize its revised E&S policy commitments [ESAP #1a], the Company will augment and build upon other existing asset level management systems to develop an overarching corporate environmental and social management system (ESMS) to apply to the asset in Tanzania aligned with PS1 per ESAP #1b. The ESMS [ESAP #1b] shall define requirements for the development and maintaining of a permitting register to further formalize the existing tracking of host nation licensing and permitting requirements. To support the development of the corporate ESMS, Kamal Steel will engage a qualified consultant acceptable to IFC.

Management programs – The corporate ESMS [ESAP #1b] will draw upon wider asset management programs within Kamal Group and develop the following which will apply across the Kamal Steel business and as required be tailored for specific asset needs, the scope of which shall include contractors and primary suppliers: i) identification of E&S risks and impacts, ii) emergency preparedness and response (see below), iii) community grievance redress (see stakeholder engagement section below), iv) E&S training (see PS2 below), v) occupational health and safety management (see PS2 below), vi) contractor assurance, audit and management (see PS2 below), vii) waste management (see PS3 section below), viii) monitoring and reporting (see below), ix) community health and safety (see PS4 below), x) security management (see PS4 below), and xi) hazardous materials management, including radioactive screening of scrap metals arriving on sites (see PS2 below), xii) training (see PS2 below), xiii) GHG emissions monitoring, measurement and management (see PS3 below), xiv) fire detection and alarm system standard including inspection and maintenance procedures (see emergency preparedness and response below).

Organizational Capacity & Competency - Kamal Steel’s board is ultimately responsible for the oversight of E&S matters. Kamal Steel’s Tanzania plant has roles assigned for both a safety manager and safety officer. As part of IFC’s financing safety, health and environmental officers will be appointed in each production area of the plant along with first aiders and fire-fighting equipment inspectors per ESAP #3c. A training procedure shall be developed, including provisions for certification consistent with the corporate level ESMS, per ESAP #1c.

To strengthen the E&S organization further, as per ESAP #3a, Kamal Steel shall retain an appropriately qualified E&S manager who shall report directly to the nominated ExCo member who shall oversee the development and implementation of the corporate ESMS, supported by appropriate resources per ESAP #3b. The ESMS shall define and strengthen the asset level E&S resources to ensure that the corporate ESMS is operated in a manner consistent with PS1 requirements, per ESAP #3c.

Emergency Preparedness and Response - Kamal Steel’s ESMS [ESAP #1b] shall prepare emergency preparedness response plan requirements which shall be developed to ensure consistency with the provisions of PS1 and PS4. The plan will be prepared to respond to accidental and emergency situations associated with the assets in a manner appropriate to prevent and mitigate any harm to people and/or the environment. Roles and responsibilities for relevant personnel training needs and their frequencies shall also be defined. Consistent with PS4, the plant level ESMS will define requirements for assisting and collaborating with affected communities, local government agencies, and other relevant parties, in preparations to respond effectively to emergency situations, especially when asset participation and collaboration are necessary to respond to emergency situations.

As part of the ESMS development [ESAP #1b], the company will upgrade its fire detection and alarm system standard to be applied across the business and will include a procedure on fire safety system inspection and maintenance to ensure systems are appropriately maintained.

Monitoring and Reporting – Kamal Steel has developed a draft performance measurement and monitoring procedure at separate assets. The draft management program defines responsibility and timeframes for completion to achieve defined objectives and targets. The draft program defines requirements to undertake monthly review of progress on objectives, targets and programs/ action plans. In turn, the draft plan defines management review requirements to determine the effectiveness of completed effort-based objectives. Amongst others, the draft monitoring program includes, i) safety (including working at heights, driving safety, emergency preparedness, COVID-19, PPE, gap assessment requirements resulting in corrective action requests), ii) occupational health (including noise, dust, fitness to work, biological and radiation), iii) environmental (including emissions, dust, noise, water usage and effluent discharge, energy usage, raw materials consumption, and waste generation and segregation).

As part of the ESMS development [ESAP #1b], Kamal Steel will develop a monitoring and reporting framework, per ESAP 4b, building upon the draft monitoring plan. The monitoring and reporting framework will describe: (a) key performance indicators (KPIs) on E&S compliance and performance as well as objectives and targets on sustainability (resource efficiency); (b) monitoring processes (e.g. corporate audits, internal/external audits); (c) reporting requirements in specific formats, including routine reporting via the corporate risk register [ESAP# 4a] to the Kamal Steel/ Group board; and (d) process of regular management review for all plants by senior management. The framework will specify KPIs to be monitored at the plants, monitoring frequencies, type of monitoring and the definition of thresholds that signal the need for corrective actions. In addition to applicable legal requirements, the monitoring thresholds will include thresholds specified in the WBG EHS Guidelines (both general as well as sector specific).

As of August 2022, Kamal Steel employs 377 direct employees at the Dar es Salaam of which 22 are female employees.

HR Policies, Procedures and Terms of Employment - Kamal Group has in place a corporate level human resources (HR) function, headed by an HR manager and supporting staff. The Kamal Group HR function reports to the group CEO and has functional oversight of the Tanzanian asset for HR matters. A Kamal Group level HR policy and procedures manual has been established. The manual includes policy statements and articulates supporting procedures on i) hiring and induction, ii) categories of employment, iii) employee records, iv) inductions, v) ethics, vi) discipline, vii) equal opportunities and non-discrimination, viii) gender, and ix) staff welfare. Additional policy statements include x) occupational health and safety, xi) child protection, and iv) sexual harassment. The HR policy and procedures manual are consistent with host nation legislative requirements.

As part of IFC’s investment, Kamal Steel shall augment existing Group level HR policies [ESAP #1a] and procedures manual [ESAP #5a] either at the Kamal Group level or as a standalone Kamal Steel set of policies and procedures to apply across the Kamal Steel business. The revised documents will ensure consistency with Tanzanian regulatory and PS 2 requirements. The HR policies and procedures shall define commitments to freedom of association and shall apply to direct, contracted and third-party workers. The procedures shall be provided to workers at the point of engagement, to communicate to all employees the organizational HR policies and procedures effectively and appropriately (direct, third party and contracted), per ESAP #5b. Similarly, these shall be included in employment contracts for all employees directly under Kamal Steel’s purview and address working conditions, terms of employment, leave, wages and benefits, per ESAP #5c.

Grievance mechanism – The Kamal Group HR procedures describe a structured grievance mechanism and redress process, defining the submission of complaints through an employee’s line supervisor, and defines processes for subsequent escalations as required. Regular worker meetings at the Tanzanian asset indicate that workers can raise workplace issues or concerns.

As part of the augmented corporate procedures [ESAP #5a], Kamal Steel shall augment the existing worker grievance mechanism in a manner consistent with the provisions of PS2. The grievance mechanism will apply to all company workers and contractors including Kamal Tanzania asset workers. The grievance mechanism will include procedures to address gender-based violence complaints and include mechanisms for the submission of anonymous complaints. The grievance mechanism will be clearly communicated to workers and employee contracts will include reference to the mechanism. The grievance mechanism will not impede workers access to existing judicial or administrative remedies, per ESAP #5d.

Worker accommodation – Purpose built worker accommodation is provided adjacent to the Kamal Steel’s Dar es Salaam site, developed in 2018. The accommodation houses up to twenty workers, who are based at the site on long term expatriate contracts. Rooms are single occupancy with accompanying private washrooms, of approximately 250 square feet (23 m2) per room which is aligned with IFC/EBRD’s guidance note on workers accommodation.

Occupational Health & Safety (OHS) – The Tanzania asset has established a number of OHS controls, including the provision of personal protection equipment and a health and safety induction program. Kamal Group HR procedures indicate medical checks should be undertaken per the guidance of the Tanzanian occupational health and safety authority. At the group level an occupational health and safety policy has been developed, which describes the Kamal Group’s commitments toward the protection of its workers. As described in PS1, assets within the Kamal Group have established an OHS management system, organized to meet the requirements of ISO 45001:2018. This includes a draft OHS management plan and has initiated a hazard identification and risk assessment (HIRA) process to inform the development of the OHS plan. The performance monitoring procedures of the sister asset (described under PS1) include monitoring of incidents/accidents, usage of personal protective equipment (PPE), occupational noise, dust and medical monitoring.

As part of the ESMS development, Kamal Steel will augment its existing OHS planning to develop and implement the following OHS elements either as part of the corporate ESMS, or as a standalone corporate safety management system, to apply to all aspects of the Kamal Steel business, including: i) OHS risk assessment requirements, ii) OHS training, including emergency preparedness and response, for Kamal Steel staff and its contractors and service providers to operate in a manner consistent with Kamal Steel’s ESMS requirements; iii) an audit, monitoring and reporting program consisting of the collection of key OHS statistics including near misses, accidents/incidents and root cause and trend analysis, verification of implementation of corrective actions, and other relevant components covering Kamal Steel staff and contractors; iv) standard operating procedures; v) life and fire safety, vi) hazardous materials handling, including radioactive materials handling management plan, and vii) formalized COVID-19 safety protocols, tailored to the company’s operations, in compliance with relevant requirements as defined by host nation health authorities per ESAP #1c.

Third-party Workers - Kamal Steel engages contractors, suppliers and service providers who provide the business with a range of products, services and support. As part of the Kamal Steel corporate ESMS development [ESAP #1b], Kamal Steel will develop a ‘Client’s E&S Standards’ document defining E&S requirements for all contractors and service providers per ESAP #1d. The document will reflect the requirements set out in Kamal Steel’s ESMS and will consider risks associated with contractors engaged by Kamal Steel in recommissioning activities and operation of its assets. Assurance of these standards will be achieved via monitoring and review of contractor’s, supplier’s and service provider’s compliance to the company’s standards as part of the Kamal Steel ESMS [ESAP #1b].

Supply Chain - The Tanzanian asset procures from entities licensed by the National Environment Management Council, with direct purchases also made from large established industrial companies. Kamal Group has established a child protection policy, which defines a child being less than 18 years. The policy describes Kamal Group’s commitments to ensuring there is no child labor across Kamal Group operations, the scope of which applies to direct employees, contractors, consultants and vendors working within Kamal Steel assets.

In view of contextual risks which may exist within the supply chain for child labor, as part of its ESMS development Kamal Steel will in a manner consistent with PS2 requirements: i) define clear compliance requirements for its suppliers, b) define screening procedures of its primary supply chain partners, c) define standard compliance requirements to be included within contracts signed with supply chain partners, and d) establish monitoring and inspection requirements of supply chain partners to ensure ongoing compliance per ESAP #5e.                                                   

Greenhouse gases (GHG) emissions - Kamal Steel’s electricity needs are primarily sourced from the public grid for its operations. The GHG emissions for the Kamal Steel business in 2023 is estimated to be approximately 34,500 tons CO2eq per annum. As part of the corporate ESMS [ESAP #1b], Kamal Steel shall establish scope 1 and scope 2 GHG emissions quantification requirements along with an energy efficiency and GHG management plan to identify efficiency improvement and GHG reduction opportunities.

Air Emissions and Ambient Air Quality - Electrical power is sourced from the national grid and services approximately 90% of the production line. The remaining energy demand is serviced by natural gas to the reheating furnace. In the event of power supply interruptions from the grid, production is limited commensurately to the reheating furnace only with the wider plant going offline. The Kamal Tanzania asset undertook an ambient air quality study in 2022. The results of the study found ambient air quality to be generally within national standards with the one exceedance of particulate matter (PM10) in an area where elevated truck movements were noted. Point source air emissions monitoring was not undertaken as part of the study.

As described in PS1, the corporate ESMS [ESAP #1b] will define air quality monitoring standards to ensure consistency with national emissions standards for both assets. The standard will include regular ambient air quality, stack emissions and fugitive emissions monitoring and define a reporting framework. Point source emissions monitoring for the plant will be prioritized. Based on monitoring results, any corrective action plans to achieve compliance with national standards and shall be prepared and implemented per ESAP #2a.

Noise - Kamal Steel’s Tanzania plant has undertaken ambient noise monitoring outside the plant. Ambient noise levels were within the national standards and WHO guidelines, as expressed in the WBG EHS general guidelines for industrial areas.

Water Supply and Wastewater Treatment - Kamal Tanzania sources water from the municipal supply and via borehole. The borehole was installed in 2005 prior to Tanzanian groundwater abstraction regulations coming into effect in 2013. Total monthly average water usage is ~285,000 liters, of which 85,000 liters is for industrial use (primarily cooling). The delta (200,000 liters) is utilized for domestic use, facilitated by a reverse osmosis plant to produce potable water. Kamal Steel provides staff to free access to potable water to take home as desired. Regarding wastewater, the Tanzanian asset is not connected to the municipal sewerage system and has contracted a third-party contractor for collection and transport of septic wastewater to a Dar es Salaam Water and Sewerage Authority treatment facility. There are no industrial effluents arising from the operation.

As part of the ESMS development [ESAP #1b], wastewater quality monitoring shall be conducted under an environmental monitoring and reporting standard.

Hazardous materials management - Hazardous materials are limited to heavy fuel oil (HFO) and scrap metal. The scrap metal materials received at the sites has the potential to have been exposed to radiation sources during previous use. As part of Kamal Steel’s ESMS development [ESAP #1b], a radiation screening standard will be developed to apply to the asset to ensure appropriate screening, segregation and handling procedures are determined and implemented.

The asset was developed and have operated in periods where asbestos containing materials were available in its local market. Kamal Steel will undertake an asbestos survey to confirm presence/non-presence of asbestos containing materials, and where identified an asbestos management plan will be developed, per ESAP #2b.

Management of Solid Waste and Hazardous Waste - The key waste streams generated at the Tanzania plant include plastic and paper waste, steel waste, slag, and filter dust, hydrocarbon waste such as used oil and used oil drums.

As part of the corporate ESMS development [ESAP #1b], hazardous and non-hazardous waste management requirements will be defined, requiring asset level development of waste management plans. The corporate waste management requirements will define waste sorting requirements, reuse and storage of waste in appropriately designed areas, and handling and disposal of hazardous and non-hazardous waste in line with WBG EHS general guidelines.                                                   

Transport and traffic safety – Kamal Steel’s Dar es Salaam plant relies on transport services to both deliver scrap and export of product to market. Scrap is received by licensed scrap vendors to the respective sites, with third party contractors being retained to export the final products. The Tanzania asset transports the final reinforcement bar products to market. As part of its corporate ESMS development [ESAP #1b], Kamal Steel will develop and implement a transport management standard to be applied as a transport management plan for direct staff, contractors, and primary suppliers.

Security Personal – The facility has retained licensed external security providers to provide access control and security services. Security oversight is provided at the Kamal Group level for the facility with a security standard operating procedure having been developed. The company’s ESMS [ESAP #1b] will require Kamal Steel undertakes appropriately scaled security risk assessments defining requirements for security service providers and security personnel, per ESAP #2c. As defined in the corporate ESMS [ESAP #1b], the findings of this security risk assessment will be articulated in a revised site level security management plan to be developed by either Kamal Steel or its contractors consistent with both national legislation and the requirements of PS4.

Emergency preparedness are response – as discussed in PS1 section above, Kamal Steel’s ESMS [ESAP #1b] shall define emergency preparedness response plan requirements which shall be applied to the Kamal Steel business.

Kamal Steel’s Tanzanian asset is in an industrial area that has long been designated for industrial use. No community complaints/ grievances have been received for the asset.

As part of the ESMS development, Kamal Steel will develop a corporate stakeholder engagement procedure, meeting the requirements of IFC PS1 per ESAP #6a. In view of the industrial context of the Tanzanian asset, the procedure will develop an appropriately scaled stakeholder engagement plan per ESAP #6b. The respective stakeholder engagement plan will inform and be informed by a community grievance mechanism, aligned with IFC PS1 per ESAP #6c. The implementation of the stakeholder engagement plan will be overseen by the retained Kamal Steel E&S manager and implemented by asset level management.

Address:

Kamal Steel

Plot 188/2, Mwakalinga Road

Changombe, Industrial Area,

P.O. Box 10392

Dar es Salaam,

Tanzania

Attn: Mr Gagan Gupta (Director)

 Mr. Sameer Gupta (Director)

 Mr. Anand Sankaran (CEO)

Telephone: +255-658 334 515

    +255-767-624-571

    +255 -767-412-131

Email:

chairman@kamal-group.co.tz

md@kamal-group.co.tz

anand@kamal-group.co.tz

Website: http://www.kamalsteel.co.tz/