This is a Category B project according to IFC’s 2012 Policy on Environmental and Social Sustainability as this investment will have limited adverse E&S risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures, as described in the sections below. The key E&S risks and issues associated with this investment are: (i) implementation effectiveness and funding for the corporate E&S management system, including the preparation of an E&S Impact Assessment (ESIA) study for the expansion of the WTE; (ii) MHP’s management capacity/competency, including assignment of E&S CAPEX/OPEX; (iii) assurance of fair, safe and healthy working conditions (iv) resource efficiency and management of air emissions, odor, noise, wastewater, solid waste and hazardous materials; (v) emergency preparedness and response plan, especially Life and Fire Safety;  (vi) stakeholder engagement and community grievance mechanism; (viii) traffic safety and security management; (ix) animal welfare practices and bio-security controls

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 Environmental and Social Policies. MHP’s E&S policy of 2020 is consistent with IFC PS requirements. The Policy emphasizes preventative safety measures, training and awareness, emergency response, monitoring and documenting performance and effective communication with employees and contractors concerning health and safety matters. The implementation of this policy is supported by training programs for management and employees. MHP’s Board monitors E&S policy implementation progress and effectiveness.

MHP’s corporate sustainability policy framework, including Environmental Policy, OHS Policy, Personnel Policies and Procedures, Land Use Policy, Animal Welfare, Code of Ethical Conduct, Community Engagement Procedure, Procedure on Engagement with NGOs, OHS, Industrial and Transport Safety Policy, Remuneration Management Policy are all consistent with IFC PSs’ requirements. The Environmental and OHS Policies applying to MHP’s operations commit MHP companies to compliance with country-level E&S legal and regulatory requirements and IFC’s Performance Standards, including WBG EHS Guidelines. All policies can be found at the following link: https://mhp.com.ua/en/pro-kompaniu/stalyy-rozvytok. The Carbon Trust Accreditation process is ongoing with an aim for MHP to be carbon neutral by 2030.

Identification of E&S Risks and Impacts. MHP has adopted a manual of EHS procedures in 2017 for the identification and assessment of risks and impacts such as those related to value chain, business conduct, workforce, environmental and OHS management, resource efficiency and pollution prevention, product quality & safety, land acquisition, third party contractors, animal welfare and stakeholder engagement. In addition to the above, MHP maintains a legal EHS registry of the applicable Ukrainian laws and regulations to carry out ESIA for all greenfield projects leading to the development of an E&S Management Plan (ESMP) outlining needed mitigation measures. MHP’s existing procedure for the identification of E&S risks and impacts is largely aligned with PS1. However, the client will conduct a water resources assessment of all MHP assets and prepare a management report on sustainability of the water resources management. The assessment will evaluate, among other issues, the availability of groundwater in the long term and the risk of site flooding, taking into consideration climate change impacts in line with international reporting standards. (ESAP#1). MHP contracted an E&S consultancy for the preparation of the ESIA study for the waste-to-energy plant to produce electricity, industrial steam, and heating in the Vinnytsia poultry complex.

MHP has four tanks for temporary liquefied biomethane gas (LBG) storage with a capacity of 98 m³ each. MHP has Hazard and Operability study for the liquefaction unit. The company will also conduct Workplace Risk Assessment regarding the presence/absence of harmful factors affecting the health of workers after the equipment is installed and put into operation which is a legal requirement according to Ukrainian legislation. The ESIA is under development and MHP will submit the final ESIA and the Workplace Risk Assessment for the WTE plant in line with local regulations, IFC PSs requirements, and Good International Industry Practices (GIIPs), once completed for IFC quality review (ESAP#2). As part of the ESIA, MHP will prepare an Environmental and Social Management Plan (ESMP) related to the construction/operation of its WTE plant. The ESMP will document mitigation and monitoring measures for ambient air quality, point source air emissions, odor, effluent parameters, solid and hazardous waste management, workplace leading and lagging indicators and noise monitoring. In addition to the above, MHP maintains a legal EHS registry of the applicable Ukrainian laws and regulations to carry out ESIA for all greenfield projects leading to the development of an ESMP outlining needed mitigation measures.   

E&S Management System and Programs. MHP has developed and implemented a Group-level E&S Management System (ESMS) in accordance with Ukrainian legal and regulatory requirements and IFC PS1 requirements. MHP’s enterprises have implemented these requirements at all its facilities. The occupational health and safety (OHS) management system is developed and implemented separately by the OHS manager. MHP has a well-established HR department at the corporate level and community relations officers in each region responsible for engagement with communities and overseeing the community grievance mechanism.   

E&S Organizational Capacity/Competency. MHP’s Board of Directors is responsible for meeting its environmental, OHS and human resource (HR) policy requirements. There is a corporate organizational structure with overall responsibility and authority for MHP EHS issues with the CEO having delegated oversight authority. MHP has decentralized its EHS organizational structure where EHS management at each individual facility is coordinated by the respective EHS departments and plant-level managers as part of their direct responsibilities. The WTE plant has a full-time environmental officer who oversees the environmental performance and reports to MHP’s Chief Environmental Officer at Group-level.

E&S Training. Specific EHS courses required by local regulations are systematically delivered and continued in 2022 despite Russia’s invasion of Ukraine. 574 employees received professional and technical training in labour protection, fire safety, electrical safety etc. during 2022 averaging 28 hours per participant (up 50% compared to 2021). MHP has developed and implemented a competency matrix and training schedule of its cadres at different levels. MHP recently introduced a new system of comprehensive competency assessment which resulted in individual professional development plans. MHP will extend the training program and initiatives to include workers at the WTE plant and contract workers.

Emergency Preparedness and Response. MHP has documented emergency preparedness and response plans (EPRPs) at each production plant, including appropriate fire safety equipment and systems in line with local/national regulatory and PS2 requirements. The EPRPs and Emergency Action Plans include response to fire and explosions, chemical spills, hazardous goods incidents, with clear roles and responsibilities assigned within the organization. Plans cover communication with local authorities and municipal rescue services in line with legal requirements. The silos and the sunflower crushing plant are equipped with dust suppression systems; explosion safety devices; life and fire (L&FS) means, including fire alarm systems, fire hoses, fire extinguishers and detached fire water tanks. The ammonia refrigeration system installed at the meat processing plant is subject to multistage inspections and approvals by relevant supervisory authorities. The Emergency Preparedness and Response Plans (EPRPs) for the WTE plant will be updated to incorporate management of emergency situations associated with operational hazards of methane purification, handling and use of fertilizer (as by-product of biogas production) (ESAP#3). Since Russia’s invasion of Ukraine in February 2022, MHP has been focusing on the protection of its workforce and facilities, including building of shelters for employees. The response plan includes equipping the facilities with fire alarms and security systems, detailed contingency plans designed to respond to cyber-attack and unavailability of IT systems.

E&S Monitoring and reporting. MHP has developed a monitoring and reporting framework (dashboard) on its EHS performance at its operations, including compliance with legal and regulatory requirements, IFC PSs requirements and WBG EHS Guidelines. This monitoring and reporting framework verifies the implementation of corrective actions as defined in ESMP and/or external/internal audit. MHP’s Internal Audit and Risk Committee is responsible for monitoring the effectiveness of E&S risk management and control systems by means of regular updates to Management, reviews of external and internal auditors, and an annual review of the E&S risk management process. Results are reported annually to MHP’s Board, which has overall responsibility for risk management. Regular external audits stopped following Russia’s invasion of Ukraine; however, regular internal cross facilities audits were completed in 2022. The external reporting is carried out in accordance with local legal EHS requirements and applicable WBG EHS Guidelines. Reporting to IFC on continuous improvement of E&S performance and the EHS management system will be provided within the context of MHP’s Sustainability Report.

MHP has an antimicrobial use policy and is implementing an antibiotic-reduction program and has been audit verified and permitted to label its products as antibiotic-free “Class A”. MHP has a documented Veterinary Health Plan that includes a vaccination program against pathogens in poultry. In addition, all MHP’s facilities and management practices have rigorous controls for the prevention of Avian Influenza and other harmful pathogens and are supervised by an appointed official veterinarian at enterprises. MHP’s facilities also undergo periodic inspection by the State Service of Ukraine on Food Safety and Consumer Protection. In 2022, MHP had 89 inspections in total and no non-compliances were recorded. MHP continues to implement strict biosafety procedures with sanitation and disinfection procedures in place and their use is systematically enforced at all MHP poultry rearing units.

Supply chain management system. MHP has two corporate policies in place that include supply-chain requirements applied to its grain sourcing operations. The first is the “Corporate Sustainable Environmental Policy”, which defines provisions to assess E&S risks related to raw materials sourcing for production of compound feed” in Myronivska and Vinnytsia facilities. Accordingly, for each product to be purchased, an internal risk assessment is conducted to inform a decision of “acceptance of the supplier”. For soy and soy products, MHP’s risk assessment includes a traceability requirement so that the product’s country of origin is checked for level of deforestation/land conversion and the European Compound Feed Manufacturer’s Federation (FEFAC) standards, which aim to ensure consumption of products from deforestation-free supply-chains in Europe, are applied. Policy of Responsible Selection of Suppliers and Purchase of Agricultural Ingredients for the Production of Combined Feeds sets forth the principles and standards that all MHP suppliers must follow. Accordingly, agricultural products are required to be grown without deforestation or land conversion, where suppliers are expected to follow the “No Deforestation, No Peat, No Exploitation” principle. Suppliers are also required to have all their supply chain partners, including the primary production level, to comply with MHP’s policy and principles to ensure traceability at all stages. MHP plans to have an independent audit conducted to evaluate their compliance with these policies and the audit’s results will be reviewed during supervision. The results of this audit will demonstrate that MHP’s suppliers are buying no deforestation/no-habitat conversion verified or certified products that meet the FEFAC and other applicable criteria. MHP will address auditor’s findings in implementation of supply-chain requirements and close any existing gaps with respect to compliance.

PS 2 – Labor and Working Conditions

As of 31 December 2022, MHP employs around 28,250 employees in Ukraine (approximately 39% of which are female) with 72 workers employed at the WTE plant (14% of which are female). Less than 5% (1282 workers) of the total workforce are temporary workers. 99% of employees out of the total workforce are employed full-time while only 1% work part-time. MHP also hires about 1,900 employees via third-party contractors to work in poultry breeding and meat processing operations as well as in construction and maintenance.

Human Resource Policy and Procedures. MHP’s HR practices are consistent with Ukrainian labor laws and generally align with PS2 requirements. MHP has developed appropriate HR related policies and procedures which also apply to the WTE plant. MHP informs employees of these policies and procedures during onboarding. MHP has developed Rules for Observing the Requirements of Industrial Sanitation, Labor Protection and Environmental Protection for its contractors/subcontractors to ensure they comply with MHP’s EHS/labor requirements and Ukraine’s legislation (ref. Third Party Workers section below). MHP terminates the contract if it detects three cases of violations of the Law on labor protection.

Working Conditions and Terms of Employment. Law of Ukraine allows for both written and oral forms of contract. The terms of the employment contract are stipulated in the local acts of the enterprise (regulations, instructions, rules of the internal employment contract etc.) and are determined and agreed upon in the employee's application and are regulated in the employee's hiring order. Thus, the order to hire an employee is a fact of concluding an employment contract. MHP will update the written job offer of employment to include notice periods and employee rights and obligations as per applicable Ukrainian labor laws and IFC PS2 and provide a copy to employees. (ESAP#4). Since Russia’s invasion of Ukraine, MHP’s employee welfare measures have included relocating staff and their families from dangerous locations to 'hubs' in safer areas, providing assistance packages to employees who have suffered from the military action, full health coverage for employees injured during the military action, psychological support and the establishment of children’s centers to enable employees to go to work. MHP continues to pay wages to all employees (up to 2,000 people) drafted to the Ukrainian Army.

Non-discrimination and Equal Opportunity. The company’s Code of Ethics and Personnel Policy sets out MHP’s commitments to gender equality, non-discrimination, and rights of freedom of association. The policies also state that MHP complies with the Ukrainian labor law for minimum wage, working hours, overtime, holidays, probation period, employment contracts etc. MHP developed a Diversity Statement in 2021 which briefly outlines MHP’s commitment to equality, diversity and inclusion.

Workers Organization. There are no trade unions at MHP enterprises. However, MHP employees exercise their right for freedom of association and form informal workers’ organizations through which employees participate and consult with the management at each MHP facility.

Protecting the Workforce. The Ukrainian Ministry of Labor has provisions on prohibition of child labor and forced labor. Furthermore, the minimum age of employment at MHP is 18 years. All potential employees are required to present proof of age in the form of a birth certificate or an identification card. Corporate personnel departments at the HQ and individual facilities are responsible for reviewing data provided by potential candidates during the staff selection process.

Grievance Mechanism. MHP has a functioning grievance mechanism Ethics Hotline/Helpline which allows for anonymous reporting. The written grievance procedure is explained at the time of hire. MHP has not developed a grievance policy and procedures specifically for addressing sexual harassment, therefore they will revise their existing worker’s grievance mechanism (WGM) and implement it, in accordance with PS2. The WGM will include specific considerations related to harassment/gender-based violence (GBV) grievances. This should include multiple entry points to raise and address allegations including options to report anonymously if preferred. MHP will train the grievance officers to manage and process GBV and harassment grievances and make sure it is accessible for direct and contracted workers (ESAP#5).

Workers Engaged by Third Parties. MHP has specific requirements for contractors covering labor and OHS requirements. These stipulate that workers engaged by third parties are covered by health and safety; fire safety; labor protection; industrial sanitation, and environmental protection in accordance with the local laws, emergency preparedness and response, MHP’s procedures, management plan and best practices. Contractor compliance with the MHP Code of Conduct forms an integral part of the contract requirement. All contractors must undergo an induction briefing before performing work and are obliged to familiarize themselves with safety requirements and comply with MHP’s mandatory security requirements. Managers at respective facilities are responsible for monitoring compliance with the above requirements with the support of relevant departments including the Recruitment Department, Security Service, medical center etc.

Occupational Health and Safety (OHS). MHP has an OHS policy disclosed on its website and an OHS management system which is managed by the OHS Manager and OHS officers at each facility. The system includes a documented workplace risk assessment procedure and a risk mapping/register. Project specific hazard identification/assessments are conducted for operational activities including the waste to energy plant. Since 2019, MHP has focused on improving OHS by increasing training; increasing PPE expenditure; increasing internal audits; training collaboratively with state emergency service; and increased periodic inspections of fire-fighting facilities. MHP monitors working conditions at the workplace, including noise and dust, and ambient air quality to safeguard workers' health at each facility. MHP will update procedures and implement management controls to limit noise exposure of workers to acceptable limits as defined in WBG EHS Guidelines and evaluate implementation effectiveness against GIIP’s guidelines (ESAP#6).

MHP has documented procedures for the reporting and investigation of incidents; occupational accidents; diseases and emergency prevention, preparedness, and response arrangements in compliance with Ukrainian regulations on labor protection and IFC PS2. Personal protective equipment (PPE), OHS on-boarding and training are provided to all workers, commensurate with the job hazards and risks. However, based on incidents reports, there is non-compliance with safety procedures, use of incorrect tools or non-use of PPE that implies a safety culture that needs improvement. Due to increased fatal road accidents (RTAs) in 2022, as part of strengthening safety management practices, MHP is working towards establishing and developing driver training and awareness courses. MHP currently reports Fatal Accident Rate (FAR). In 2022, 2021 and 2020, FAR was 0.14, 0.03 and zero respectively which is lower than EU average (4.2; UK 8.61). MHP does not track lost time incident frequency rate (LTFIR) as part of its OHS lagging indicators. MHP will include this indicator in its monitoring report and further focus on reporting and analyzing leading indicators of unsafe working conditions and near-misses as part of its KPIs. Targets will be set, measured monthly and reviewed by MHP management (ESAP#7).

PS 3 - Resources Efficiency and Pollution Prevention

Resource Efficiency. MHP monitors its water and energy consumption in line with GIIP and identifies areas for improvement. A corporate initiative on increasing alternative energy sources is in progress including the expansion of the waste to energy facility. The waste ash from the facilities is then used as mineral fertilizer on MHP’s farms. MHP plans 4 projects (including 2 projects targeted by this investment mentioned earlier in Project description) for production of biomethane with total capacity of 53,000 tons by 2027. Two facilities have already operational WTE plants in place (the ongoing WTE project in Ladyzhyn area and another operating WTE plant in Dnipro area). The WTE plant to be expanded through this IFC investment has a capacity of 14,000 tons of liquified biogas (LBG) providing annual GHG emission savings estimated at 128,800 tons CO2-eq compared to equivalent emissions of fossil fuels, according to the RED II methodology. Chicken farms and the slaughterhouses use technologically advanced energy saving equipment and a vast majority of operations are fully automated. In previous years, average water consumption in poultry production (64.5 l/bird place/year) and average water consumption in poultry processing (14.9 l/kg of slaughtered poultry) were within the applicable range of WBG EHS Guidelines for Poultry Production. Reported water consumption in slaughterhouse and meat processing plants was within the applicable range of WBG EHS Guidelines for Poultry Processing. Average energy consumption in slaughterhouse and meat processing plants of 0.6 kW/hour/kg of slaughtered poultry was within the applicable range of WBG EHS Guidelines for Poultry Processing and MHP is planning to further increase energy efficiency according to ISO 50001.

MHP seeks to reduce its water footprint by promoting water-saving practices, such as recirculation and adopting water-efficient technologies and equipment. Individual facilities implement closed water cycle at poultry processing operations; installation of nipple-shaped water supply systems at rearing sites; heat recovery systems at meat processing and meal production operations; and heat insulation of premises. Power for local operations is sourced from the public grid. Physical, chemical and microbiological water quality is monitored regularly at each individual site by MHP’s ISO 17025 certified laboratories. It is supported by annual monitoring from local authorities. In 2021, an update of records on groundwater wells was completed to ensure accurate monitoring of the groundwater flow rate and water intake. MHP reportedly adheres to national legislation on water consumption. For 2021, MHP reported a total water consumption of 14,541,825 m3 for its Ukrainian operations.

Greenhouse Gases. MHP reports its gross greenhouse gas (GHG) emissions in the annual report, following local regulations and internationally recognized methodology. In 2022, MHP reported that direct emissions (scope 1) from poultry operations and biogas production amounted to 483,758 tons of CO2 equivalent, while indirect emissions (scope 2) from purchased electricity amounted to 220,985 tons of CO2 equivalent. To reduce its GHG emissions in the future, MHP plans to collaborate with its partners on the implementation of decarbonization measures.

Air Emissions.  Main sources of air emissions include boilers, backup power generators, biogas combustion plants, vegetable oil processing plants and fodder plants. Silos and the sunflower crushing plant in the Vinnytsia region are equipped with dust suppression and aspiration systems. Mironivsky poultry processing plant in Cherkasy region, is equipped with gas emissions abatement equipment, such as cyclones and filters. A similar abatement system is installed at the facilities in Ladyzhyn, Vinnytsia region. The fodder plant in Mironivsky uses state-of-the-art equipment such as filters and closed circuits. Best available technologies (BAT) are employed for reduction and control of air emissions, including a 3-stage desulphurization process. The WTE plant is a completely closed cycle system preventing air emissions from occurring once the manure is in the system. MHP has developed a detailed five-years monitoring plan for point source air emissions for all identified emission sources. MHP reports compliance with regulated national limit values, with no exceedances reported for 2022, and results were within the applicable levels of the WBG EHS Guidelines. MHP performs ambient air quality monitoring and results indicate compliance with the national legal requirements and were within the WHO Ambient Air Quality Guidelines values. MHP regularly monitors ambient air, noise and groundwater specifically within the Sanitary Protection Zone (SPZ) of the WTE Ladyzhyn facility, extending 500 m from the source emissions as defined in line with regulatory requirements.

Water treatment. MHP reported total wastewater discharge after treatment of 5,414,492 m3 in 2021 for its Ukrainian operations. Main sources of wastewater from its operations are from poultry breeding / rearing farms,  poultry slaughterhouses and meat processing. Slaughterhouses have on-site wastewater treatment that includes mechanical treatment by flotation and biological treatment at aeration tanks. Poultry farms with smaller slaughterhouses discharge wastewater via pipes to the municipal wastewater treatment plant after primary screening. Wastewater generated by poultry breeding/rearing farms with high concentrations of organics are treated through mechanical separation systems. Liquid effluents are discharged to receiving ponds and sludge is delivered to sedimentation ponds. After a period of settling (natural biological aeration), the sludge is used as fertilizer in MHP farms. Myronivska and Vinnytsia slaughterhouses established advanced on-site wastewater treatment plants (WWTP), employing separation from grease and floatable solids, anaerobic and aerobic processes and mechanical treatment. Finally, liquid effluents are disinfected at the ultraviolet unit and discharged to surface waters. Vinnytsia WWTP receives wastewater from poultry breeding/rearing farms, slaughterhouse and meat processing plant. MHP’s monthly effluent monitoring reports confirm compliance with effluent levels given in WBG EHS Guidelines for poultry processing.  For the monitoring of the impact of treated effluent discharged to surface water bodies, MHP engages with the accredited third-party laboratory, which reported that the quality of effluent complies with the national standards and WBG General EHS Guidelines for wastewater and ambient water quality. The water used at the WTE complex goes through recirculation of 80% of the digestate liquid phase. The remaining 20% is discharged into a lined lagoon, located within the WTE complex site, and then used as fertilizer on MHP agricultural fields. The controlled parameters covered are pH, TSS, COD, total N, and BOD5. The efficiency of wastewater treatment systems are audited as part of the corporate audit program. MHP will continue to monitor effluent management and comply with the local and WBG EHS guidelines levels.

Waste Management. MHP has a waste management procedure and accounting system in place including the disposal of hazardous waste (such as wastes from veterinary treatment) which are aligned with GIIP, including WBG General EHS Guidelines for waste management and WBG EHS Guidelines for poultry production and poultry processing. MHP implements corporate waste management procedures for core businesses, including grain handling, poultry production and processing operations. The procedure includes methods for collection and temporary onsite storage of biological wastes prior to appropriate disposal; proper monitoring of finished compost composition to ensure it is uncontaminated; management responsibilities and staff training programs. Mironivska and Vinnytsia facilities employ advanced technologies for recycling of biological waste from the slaughterhouse and poultry farms. Waste processing/ rendering facilities are located remotely in stand-alone buildings where different types of waste are treated with heat and/or solvents to promote deep decomposition. The rendering facility of Vinnytsia poultry complex is designed to produce animal proteins and animal fats from waste streams generated by hatchery, rearing sites, slaughterhouse, and meat processing plant. Some chicken farms maintain biothermal composting pits (Bekkari pit) constructed of moisture- and thermo-resistant material with a hermetic cover and a ventilation system. Odorless and sterilized compost is used as fertilizer. Livestock litter is collected, composted and used either as fertilizer on their own farms or sold to farmers. Licensed waste operators are under contract to collect and dispose of hazardous waste and other sorted wastes. MHP regularly checks the status of the waste operators published on regulator’s website to ensure their appropriate certifications by competent authorities. The WTE Project has been developed to produce biogas from wastes from existing facilities (70-85% own manure and flotation sludge, 15-30% from other streams). Biogas is used as an alternative energy source for the WTE facility to produce heat and power for MHP’s facilities. Benefits of the Project are associated with the reduction of GHG emissions through better chicken litter management and capturing methane gas through anaerobic digestion to substitute natural gas combustion at the existing slaughterhouse in Ladyzhyn.

Pesticide Use and Management. MHP developed a pesticide management plan in 2012 which covered pesticide handling, application and storage, staff training, safety requirements, and disposal. In 2013 the Company adopted a policy statement to commit MHP to prohibit use of WHO Class Ia and Ib chemical formulations in its farm operations. MHP formalized procedures for implementation of this policy, and through the Business Partner Code of Conduct extended it to third-party suppliers. In relation to pesticide use/management, MHP implements integrated pest/disease management (IPM/IDM) programs consistent with PS3 objectives and WBG EHS Guidelines. IPM/IDM programs include crop management practices, insect/disease monitoring, pest/disease ecology, biological control, and, as a last resort, pesticide chemical formulations to avoid unacceptable economical levels of pest or disease damage. The crop treatment plan covers the use of pesticide, chemicals and fertilizer/manure (corporate plan to minimize any potential adverse effect to community due to pesticide, chemicals and fertilizer/manure use). Plan includes available controls on use of chemicals including proper training, equipment, and facilities to handle store, apply and dispose, and, if needed, corrective actions to reduce application of WHO Class II chemicals. MHP will continue to update its Fertilization and Nutrient Management Plan in line with good management practices to reach optimized plant yields while reducing the amount of nutrients lost to the environment, where they can impact greenhouse gas emissions and air and water quality.

Asbestos Management. MHP does not use asbestos-containing materials; however, asbestos roof materials can be found on the poultry houses. MHP will remove asbestos-containing material present in the facilities in line with the waste management procedure.

PS 4 - Community Health, Safety, and Security

Community Health and Safety. No significant risks or impacts on community health and safety are expected as result of the  the project. Regarding the WTE plant, to r reduce any risks, biogas is transported exclusively through a pipeline in accordance with the Ukrainian laws. Community grievances related to odors reportedly generated by the facility (particularly the bio-composting facility) and impacting local residents were filed to the CAO and the European Bank for Reconstruction and Development’s (EBRD) Independent Project Accountability Mechanism (IPAM) in 2018. MHP will continue to proactively engage with affected communities regarding issues related to odor to address issues.

Acknowledging that the WTE plant is in the vicinity of settlements, MHP complies with the regulatory Sanitary Protection Zone (SPZ) requirements. The WTE plant’s SPZ extends 500 m from the source emissions and the nearest residential house after WTE’s expansion is expected to be located 852 m away from the site boundaries and no sensitive receptors are located within 500 m radius. As part of the ESMS, MHP will arrange noise, vibration and odor monitoring of the nearest houses to identify actual impacts from noise, vibration and odor generated by the facilities in full operation. A copy of the monitoring report will be provided to IFC together with a correction plan, if needed, that will include organizational and capital investment measures for minimizing/ avoiding negative impacts to nearby communities.

Road Traffic Safety. MHP operates a total vehicle fleet of 690 lorries. In 2022, seven road traffic accidents (RTAs) have been reported, three of which were fatal accidents. MHP does not have a Transport Policy. MHP has not developed a Traffic Management Plan for its operations. Driver road safety training courses are planned to start in 2023. A driving skills center is currently in the planning stages and will commence its activities in 2024. The center will be used as a practical training ground to enhance driver skills. In 2014, MHP built a new access road designed so that project traffic partly bypasses communities to mitigate road traffic-related risks. MHP is also considering the implementation of ISO 39000 (road safety) at the corporate level. MHP will (i) develop a Transport Policy, (ii) conduct a traffic risk assessment and implement measures to minimize risk of road traffic related incidents, (iii) implement traffic safety awareness programs along key transport routes to the site in areas identified as having high risk of road traffic incident, such as local schools and heavily populated areas, and (iv) develop/implement vehicle management, driver management and journey management policies and procedures to reduce traffic related incidents (ESAP#8).

Security Personnel. MHP employs its own security personnel or contracts staff from private companies. In both cases security guards are unarmed, trained and certified as per the local regulatory requirements.

PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources

MHP has established several group-level policies, procedures and plans focused on environmental protection including biodiversity, such as the Sustainable Environmental Policy; Policy of Responsible Selection of Suppliers and Purchase of Agricultural Ingredients including related procedure; Biodiversity Action Plan; Land Policy; and Carbon Certification (ISCC) Policy and procedure.

The project is proposed for existing facilities in consolidated agricultural areas with no overlap with priority biodiversity values, Legally Protected or Internationally Recognized Areas. The project facilities located in Myronivska and Vinnytsia both fall within the East European Forest steppe which is part of the temperate broadleaf and mixed forests biome (as designated by WWF).

Biosecurity and Animal Welfare. MHP’s approach to product quality and safety is guided by its Product Quality and Safety Policy which applies to all its businesses. MHP's approach to animal welfare is governed by its animal welfare policy. This Policy approved by MHP Board of Directors, regularly reviewed, and communicated to all employees, adheres to “The Five Freedoms” contained in the European Council Directive concerning the protection of animals kept for farming purposes and refers to the World Organization for Animal Health’s (OIE) Guiding Principles for Animal Welfare and IFC’s Good Practice Note on Improving Animal Welfare in Livestock Operations. The Five Freedoms are aligned with actions to improve animal welfare on farms, in transit, at markets and at a slaughtering place. These actions guide the welfare assessment and define the steps for effective welfare management. Since the start of their export to EU in 2014, MHP’s slaughtering processes has been in line with the European Council Regulation on the protection of animals at the time of slaughter. MHP has completed Animal Welfare audits and is certified against Global Good Agricultural Practices (Global GAP.)’s Integrated Farm Assurance (IFA) standards for 85% of its operations including two poultry farms and three fodder plants. Acknowledging the situation on the ground, MHP will complete an external independent verification against relevant and credible standards for all poultry operations as soon as the security situation allows. (ESAP#9).

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MHP (through its Charity organization – MHP – Gromadi) is implementing its community grievance mechanism (CGM) to receive and respond to communities’ concerns. Stakeholders can express their concerns and grievances via MHP’s helpline, a dedicated telephone line and email advertised on MHP’s website. MHP produces a summary of all complaints and their analysis on a quarterly basis. MHP has seven dedicated regional representatives overseeing the implementation of its CGM. Since it developed its first comprehensive Stakeholder Engagement Plan (SEP) in 2013, MHP conducts regular consultations related to its greenfield projects, reports on EHS matters through local communication, holds public hearings and organizes excursions to MHP’s facilities. The latest SEP (2021) is disclosed on MHP’s website. In addition to the SEP, it has developed a Community Engagement Procedure and a Procedure of Engagement with NGOs which are all disclosed on their website. The SEP and the CGM are consistent with PS1. However, public consultations have become digital due to Russia’s invasion of Ukraine in February 2022. The final ESIA for the WTE project cannot be publicly disclosed due to the ongoing martial law in Ukraine. MHP will look for other ways to engage with stakeholders. MHP’s various social projects have been adapted to the circumstances of Russia’s invasion of Ukraine. Its charitable organization “MHP Gromadi Foundation” has supported the local community through its regional recruitment program, medical assistance in the villages and investment in public infrastructure in partnership with local stakeholders. MHP’s community support activities included business grants for start-ups and re-location, building bomb shelters and putting up tents, providing access to social services, healthcare and counselling, providing poultry and grain etc.

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 The ESRS will be made available via IFC Project Information Portal and on MHP’s website.

For more information, inquiries and comment about the Project please contact:

Mrs. Anastasiya Sobotyuk

Head of IR and Communications

Tel: +38 050 339 29 99

Email: a.sobotyuk@mhp.com.ua

Website: www.mhp.com.ua

Address: 158, Ak.Zabolotnogo St, Kyiv, 03143, UKRAINE