The proposed project site is a well-developed industrial area located within the secured premises of City Economic Zone (CEZ).  Land parcels for the establishment of the CEZ were procured by the Group from private landowners in 2002-03 on willing buyer-willing seller basis, which did not result in any involuntary physical or economic displacement. The license to operate the CEZ was granted by the Bangladesh Economic Zone Authority (BEZA). Procedural scrutiny prior to issue of license involved issuance of public notice (published in newspapers on October 17, 2017) by BEZA, seeking objections to declaration of private economic zone, if any. The license was accordingly granted through a gazette notification published on January 18, 2018. Accordingly, PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) or PS8 (Cultural Heritage) are not applicable.

This is a category B project according to IFC’s Policy on E&S Sustainability (2012). The key E&S risks and issues associated with this project include: (i) adequacy of the E&S management system allied to that associated with food safety and capacity to support; (ii) labor and working conditions and occupational health and safety (for direct and outsourced labor); (iii) water supply and management/monitoring of wastewater and solid waste (including food waste); (v) energy consumption from processing; (vi) life and fire safety (L&FS) and emergency response procedures; (vii) use of refrigerants; and (viii) supply chain related aspects.

Identification of Risks and Impacts: RFL developed an Environmental Management Plan (EMP) which identifies the key environmental impacts of the project during construction and operations and defines mitigation measures as applicable. Based on this EMP, RFL has obtained an Environmental Clearance Certificate for the manufacturing facility from the Department of Environment as per the applicable local legislation. As the project is in CEZ (owned and operated by the Group), RFL will obtain an approval from BEZA before starting its operation as per the regulatory requirements.

E&S Policies and Management System: The Group has a documented Environmental Health and Safety Management Policy to ensure safe and healthy working conditions among its Group workers. The Group’s subsidiaries / manufacturing facilities are typically certified with to Food Safety Management System Certification (FSSC 22000) and Hazard Analysis Critical Control Point (HACCP). RFL will also manage food safety practices in accordance with FSSC22000 and HACCP management systems once it becomes operational.

RFL has yet to develop its own E&S management system (ESMS) while adhering to the Group’s policies and procedures. As per ESAP #1, RFL will develop and implement an ESMS to provide consistent oversight of environmental, social and health and safety aspects of its operations. Performance-based requirements applying to the ESMS will include Bangladesh’s applicable legal and regulatory requirements and IFC Performance Standards (IFC PS). The ESMS will be communicated to all staff and contractors through various channels including RFL’s intranet, induction session and staff training. The ESMS will incorporate elements including but not limited to: (i) policy; (ii) identification of risks and impacts; (iii) management programs (e.g., food safety management, supply chain management); (iv) organizational capacity and competency (e.g., E&S staff assignment, training programs); (v) emergency preparedness and response (e.g., L&FS); (vi) stakeholder engagement; and (vii) monitoring and review as described in respective sections.

Organizational Capacity and Competency: RFL has yet to establish a formal E&S function to oversee daily operations as RFL is still in early developing stage where only a limited number of staffs are currently employed. E&S is currently overseen by the Group’s group level Environmental Health Safety & Sustainability (EHSS) team. The team is headed by General Manger (Group Head) EHSS under which sustainability staffs, health & safety coordinator and environmental coordinator are in place to oversee each business unit (e.g., flour mill, oil refinery, sugar). A Group-level organization chart has been shared during the appraisal which show reporting mechanism between the corporate level E&S function and RFL to be established. As per ESAP #2, RFL will define its E&S functions including recruitment of an E&S coordinator(s) and definition of responsibilities for its E&S management systems. The defined E&S function will also include compliance with the Group’s policies and procedures, Bangladesh legal and regulatory requirements and IFC PS’s to ensure consistency with good international industry practice (GIIP) performance.

Emergency Preparedness and Responses: The proposed RFL manufacturing facility has been designed in accordance with Bangladesh National Building Code and approved by BEZA. A fire license will be acquired before commercial operations commence. As per ESAP #3, RFL will obtain the necessary approval from the local regulatory body on fire safety and share a copy of the approval with IFC. As the RFL manufacturing facility is still in construction stage, an emergency preparedness and response plan (EPRP) has not been developed. The Group explained during the appraisal that working areas at RFL manufacturing facility will be adequately equipped in accordance with National Fire Protection Association Codes and Standards including fire extinguishers, sprinklers, water sprays, signages, emergency lights, evacuation routes, emergency contact, and others.

As per ESAP #4, RFL will develop and implement an EPRP which will consider all potential emergencies such as combustible dust explosion, fire, oil & gas leakages, refrigerant leakages, natural disasters, medical emergencies, and others. The ERRP will also describe roles and responsibilities of relevant personnel, training needs and their frequencies and emergency drills.

E&S Monitoring and Review: The Group complies with the legal E&S and human resources (HR) regulatory requirements through application of a legal register at its subsidiaries, including RFL. To extend this E&S/HR monitoring program to cover all E&S aspects internally against performance-based requirements, such as IFC PS, applicable WBG EHS Guidelines and GIIP, RFL will develop a standard operating procedure (SOP) for quarterly/annual E&S monitoring and reporting of key leading and lagging performance indicators (KPI) as part of ESAP #1 (ESMS development). Monitoring based on this SOP will be submitted to the group-level management team for review and corrective actions, as needed.

Supply Chain Risk Assessment & Management: The Group procures raw material (e.g., wheat, raw sugar, milk) as required for RFL from international suppliers on a spot purchase basis: wheat from USA/Canada/Australia; raw sugar from India/Brazil; milk from Australia. Wheat production in these origins is based on consolidated agricultural lands and mechanically harvested, hence, supply chain risks are insignificant. On the other hand, GMAP lists sugar cane as a commodity associated with E&S risks in agro-commodity primary production, in particular the supply chain-related requirements of PS2 (child/forced labor).

As per ESAP #5, the Group/RFL will update its current procurement policy to make sure that the policy is aligned with the relevant Bangladesh labor regulations and IFC PS2 & PS6 supply chain requirements (e.g., prohibition of child and forced labor, prevention of significant safety issues) throughout supply chain. The updated policy will be communicated to all the Group’s staff interacting with suppliers and displayed at all locations providing channels for workers to register any treatment that violates this policy. The requirements included in the updated policy will also be incorporated into supplier contracts and to the existing supplier screening procedures.

The Group employs approximately 25,000 employees across its 40 subsidiaries. RFL currently has a workforce of 13 employees (all direct and male employees) and is planning to hire approximately 500 workers during operational phase where 15-20% (i.e., ~100 workers) are expected to be female employees. RFL will follow and implement the Group-level HR policies and procedures which are generally consistent with IFC PS2 requirements.

Human Resources Policies and Procedures: The Group has adopted HR policies and procedures applicable to its staff, covering recruitment and selection, compensation and benefits, performance evaluation, transfer, training and development, disciplinary action, grievance redressal, restriction of forced labor and anti-discriminatory and equal opportunity policy. The policies are aligned with the objectives of IFC PS2 on labor and working conditions. The Group has adopted a HR Policy Manual and “Employee Code of Conduct” through which the Group commits to prohibition of child labor, forced labor, bullying, sexual harassment, racial and religious vilification, occupational health and safety (OHS), grievance handling and redressal.

Working Conditions and Terms of Employment: A contract is signed with every worker at the time of employment. The contract describes the working conditions and terms of employment. The worker is also provided with a copy of the contract. In addition, regular training is conducted explaining the provisions of Bangladesh Labor Act, working conditions and benefits provided during probation period, wage calculation, festival bonus, leaves etc. and basic instructions on OHS. Induction training is provided to new workers explaining the HR policies and procedures.

All employees of the Group receive a salary above the minimum national wage. The temporary workers are paid according to the contractual agreements (e.g., piece rate, hourly wages) which are as per the industry standards. The attendance is recorded through biometric system. In the Group’s subsidiaries, working hours are 8 hours per day (6 days a week), and 3 shifts per day. Based on attendance records reviewed during appraisal, overtime hours at subsidiaries-level are within the legal limits and overtime is paid as per the legal requirements.

Going forward, as per ESAP #6, RFL will provide a childcare facility in line with the requirements of Bangladesh Labor Act when RFL is hiring more than 40 female employees.

Non-discrimination and Equal Opportunity: The Group has a documented non-discrimination policy stating its commitment to non-discrimination based on gender, caste, religion, social status, and disability. The Group has zero tolerance policy for any form of sexual harassment in the workplace. The policy requires that all incidents and allegations of sexual harassment are treated seriously, and prompt investigations are conducted. RFL will adhere and implement the Group’s policy on non-discrimination and equal opportunity. RFL explained that there has been no major labor related disputes or legal cases in the recent years.

Worker’s Organization: While there are no labor unions in the Group and/or subsidiaries, the Group does allow workers to establish worker organizations. Worker’s participation committees (WPC) have been formed at each subsidiary, which has elected worker representatives. These committee meets on a regular basis to discuss issues related to workplace conditions and improvement of facilities. Collective bargaining agreements are also discussed in these committees. As a subsidiary of Group, WPC will be also formed at RFL.

Retrenchment: The Group has established a policy on retrenchment where the Group commits to avoid layoffs, suspension or termination and consider alternative measures as much as possible. The policy stipulates procedures to be followed when employee separation is undertaken such as notice period, exit interview, salary adjustment, etc. In addition, the Group has not undertaken any collective dismissals in recent years due to the COVID-19 pandemic. All possible alternatives to retrenchment are considered in coordination with WPC, if any retrenchment is unavoidable.

Grievance Mechanism: The Group has a documented worker grievance procedure. Workers can raise their grievances in writing to immediate supervisor / Head of the Department regardless of employment type, and grievances can be escalated to the management if not resolved. Anonymous grievances are also facilitated through the mechanism such as complaint/suggestion boxes where employees can drop their complaints. Grievances related to sexual harassment are also facilitated through this mechanism. The Group strictly commits to prevention of sexual harassment via the non-discrimination policy as well as the anti-harassment policy.

Protecting the Work Force: In line with its Code of Conduct, the Group has documented policies for prohibition of child labor and forced labor in its workforce. To avoid any use of child labor, verification procedures, such as age proof documentation (e.g., copy of National Identity Card) is collected at the time of recruitment of the worker. In absence of age proof documentation, age of the worker is verified through medical examination.

Workers Engaged by Third Parties: The Group has hired construction contractors for the construction of RFL manufacturing facility. The Group has its own engineers and project managers who supervise the contractors’ work. RFL construction workers are provided with personal protective equipment (PPE) and relevant government regulations such as Bangladesh Labor Act are being followed. As per ESAP #7, the Group will however develop and implement a policy and procedures on third party workers aligned with IFC’s requirements. This will include taking commercially reasonable efforts to ascertain that the third parties who engage such workers are reputable and legitimate entities and have an appropriate ESMS and ensuring compliance with applicable Bangladesh labor and OHS requirements. In addition, the Group will need to regularly manage and monitor the performance of such third-party employers as may be associated with the project’s construction and operation phases.

Occupational Health and Safety (OHS): The Group has developed documented procedures for all its operations on electrical safety, chemical safety, dust safety in accordance with ISO 45001 which is still in the draft stage. Additionally, basic Do’s and Don’ts, Material Safety Data Sheets (MSDSs) and safety instructions, self-audit checklists, preventive maintenance checklists, accident/incident reporting formats have been prepared for all the operations, including the construction phase, which is in the draft stage. As per ESAP #8, RFL will undertake an OHS risk assessment for the operational phase of RFL manufacturing facility. Based on this workplace risk assessment, RFL will prepare a comprehensive OHS management plan with preventive and mitigation measures for the operations including workplace monitoring requirements. In addition, the Group has established procedure to monitor OHS statistics (e.g., the number of accidents and injuries, fire incidents). The Group explained that no such OHS incidents have been reported during the construction of the RFL manufacturing facility to date.

Worker Accommodation: Accommodation is not provided to RFL’s workers.

Impact of COVID-19 Pandemic on Workforce: COVID-19 has not significantly disrupted the Group’s business operations as the Group’s subsidiaries are considered essential food commodity manufacturer. The Group has not implemented any changes in terms of reduction of personnel, salary and benefit cuts, or changes to vendor contracts. Support is provided to employees through regular briefings and contingency measures for preventing COVID-19 risk in accordance with the Ministry of Health’s instructions and in allowing employees to work from home or remotely. Employees entering the factory premises are screened with infrared thermometers and provided with necessary personal protective equipment (PPE), such as face masks, gloves and sanitizers at their respective workplace. Employees who live in workers’ accommodation is also provided with PPEs and sanitizers.

Resource Efficiency: CEZ provides electricity, gas and water. RFL is committed to promoting resource efficiency through adopting GIIP to achieve energy and water efficiency and promoting climate smart interventions in its business operations. To reduce overall energy consumption, RFL will undertake resource efficiency measures including use of LEDs, improvements to equipment efficiency, rain harvesting, and others.

GHG Emissions: GHG emissions will be from consumption of electricity from the captive gas-fired power plant within CEZ. The estimated GHG emissions from the RFL manufacturing facility operations are estimated to be approximately 61,000tCO2/annum (mainly direct emissions). As per ESAP #9, RFL will institute a program of independent GHG calculation covering RFL manufacturing facility. Quantification of GHG emissions will be conducted by RFL annually in accordance with internationally recognized methodologies and good practice.

Air Emission: According to the EMP developed for the project, air pollution associated with RFL’s operation is mainly due to emissions of volatile organic compounds (VOCs), odor, milling dust, and refrigerant agents. VOCs can be released in operational processes including yeast fermentation, drying processes, combustion processes, waste treatment systems, and packaging manufacture. The milling dust comes from the leakage of flour powder. The refrigerants are released in case of leakage from cooling or refrigeration systems. Use of measures such as filters (including biofiltration for VOCs) and scrubbers are to be installed as pollution prevention measures. Hydrofluorocarbon (HFC) is to be used as refrigerants which is a widely used chemical with less ozone depletion potential and without exposures risk compared with ammonia refrigeration.

Noise Impact: Main sources of noise are compressed air and the running machines impacting on OHS of workers. Nosie control measures will be defined based on the workplace monitoring requirements and may include use of PPE, acoustic enclosures around noise sources, proper maintenance of machineries, noise impacts on neighboring communities are expected to be minimal considering that the RFL manufacturing facility is located within CEZ.

Water and Wastewater: Wastewater is primarily generated from cleaning operations including equipment cleaning and floor washing. which can be characterized as high loading, fluctuating flow and contains rich oil and grease. Flour, sugar, oil, grease, and yeast are the major components in the waste. Wastewater arising from cleaning and spillages contain suspended solids, fats, oils and greases which if discharged without treatment will potentially pollute watercourses. The liquid and sanitary waste from the project will be treated by a central effluent treatment plant operated by CEZ and thereafter by the common CEZ sewage treatment plant to meet the water quality standards in Bangladesh (Environment Conservation Rules 1997); thereafter it is discharged to public sewer.

Solid Waste Management: Solid wastes generated from RFL’s operations will include bakery solid (e.g., stale bakery products, dropped raw materials such as dough), flour dust, sugar dust, burnt biscuits, broken biscuit, burnt loaves, papers, and domestic solid wastes (e.g., poly bags, water bottles, electrical and mechanical wastes). Bakery and biscuit solids will be disposed through landfill and or incineration which are operated by the by the municipality, or used as animal feed. Electrical and mechanical wastes will be collected and stored in locked storeroom and will be disposed through approved waste disposal agencies.

Hazardous Materials and Waste Management: RFL will use hazardous material in the form of lubricants, fuels, etc., and there are standard operating procedures available to manage potential spills. Any hazardous materials to be transported to or from the project site will include suitable protection (in the form of manufacturer / supplier recommended packaging or as stated in the relevant MSDS) to mitigate against any accidental release. Spill kits will be available to contain any accidental release of hazardous materials (including within vehicles when transporting hazardous materials). All materials recovered during clean-up operations will be stored in labelled and secured containers for further disposal to authorized agencies. There are no hazardous materials used in the food process operation.

Community Grievance Mechanism: The proposed RFL manufacturing facility is located within the secured premises of CEZ. CEZ is situated in north corner of Rupshi Mouza (land revenue unit equivalent to village) where it is bounded on the east by Naogaon Mouza, on the west by Gandhabpur and Char Gandhabpur Mouza, on the west by Shitalakhsya river and to the south by Rupshi Mouza. However, the Group/RFL does have a grievance mechanism aligned with IFC’s requirements. Adverse impacts to surrounding communities are relatively remote, aside from induced increase in traffic.

Security Personnel: All security personnel are the Group’s employees. The security officers are not armed and are trained for defensive measures.