The proposed debottlenecking based capacity expansion project at the Hassan campus does not require any additional land resources as the existing ~400 acres of land area are adequate. The Karnataka Industrial Area Development Board (KIADB) - a State Government authority - developed and promoted the textile industries special economic zone (SEZ) at Hassan. In 2002, KIADB acquired non-agricultural lands that were not used for any other productive purposes to establish the textile SEZ. In 2004-05, the Company leased about 74 acres of land from KIADB for setting up the linen sheeting plant within the SEZ and the plant was commissioned around 2006-07. In 2007, Company leased an additional 27 acres of land from KIADB to establish a 12.5MW captive power plant (CPP). In 2015, another 300 acres of lands were purchased from KIADB to establish terry towel unit, spinning unit, cotton godown, treatment plant, utilities etc. As per statutory requirements, 30% open space is being maintained and about 50% area is occupied by buildings. Hassan plant has about 80 acres of land parcel available for future expansion and thus no additional lands are required at this stage. Currently, the company operations do not come under SEZ scheme.

The Dodaballapur Plant is spread over 27.12 acres of land purchased from KIADB in 1985. The Company undertook expansion at the site in 1996 within the existing premises. There are no expansion proposals at the Doddaballapur plant under the IFC funded project. Given that the Company’s manufacturing operations are more than a decade old now and are in an industrial zoned land, it is assessed that no risks and impacts are anticipated for the plant which must be managed in accordance with PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7: Indigenous Peoples and PS8: Cultural Heritage and hence the requirements of these performance standards are not applied on the Project.

This is a Category B project as per IFC’s Policy on Environmental and Social sustainability. Key E&S risks include: 1) the Company’s capacity to establish and maintain integrated E&S management systems compliant with PS1 requirements; 2) assurance of fair, safe, and healthy labor working conditions including that related to occupational health and safety (OHS), life & fire safety risks and gender-based violence and harassment (GBVH) in compliance to local regulations and PS2 requirements; 3) resource efficiency, greenhouse gases, pollution prevention, hazardous materials and waste management in compliance with PS3 and applicable WBG EHS Guidelines; 4) community health & safety risks including risks due to transport fleet operations and domestic migrant labor population; and 5) stakeholder engagement and community grievance mechanism.

The Company has established an integrated Himatsingka Business Management Systems (HBMS) and procedures that are independently verified and certified as compliant to ISO 14001 and ISO 45001 standards (environmental management and occupational health and safety respectively).  In addition, HSL has multiple (20-odd) certifications and audits applicable to the textile industries sector such as Oeko-Tex 100, Zero discharge of hazardous chemicals (ZDHC), Better Cotton Initiative, SEDEX SMETA and the Business Social Compliance Initiative (BSCI) amongst others. The HBMS incorporates management system elements that are in line with PS1 requirements such as relevant policies, organizational structure, identification of risks and impacts, emergency preparedness and response, performance evaluation, management review and continual improvement. The Company is operating both the Hassan campus and Doddaballapur plant with current and valid permit documents renewed periodically from the regulators. The Company has adopted a regulatory compliance approach to manage E&S risks and impacts by straightforward application of regulatory requirements. The plant management maintains a regulatory register comprising an annual compliance monitoring plan, permit renewal calendar and applicable list of legal regulations.

The Company has developed an E&S aspect-impact matrix for all the key departments to identify and assess E&S risks and impacts. Based on the matrix, the Company has developed a management systems manual that comprises operational control procedures, risk control procedures, standard operational procedures, emergency preparedness and response procedures and training management systems. Management targets are defined annually, and the significant aspects and unacceptable risks are considered as targets when framing the annual E&S objectives.

Under the IFC financing, the debottlenecking-based capacity expansion is expected to increase HSLs terry towel production by 1.6 times the existing capacity at the Hassan plant. Additional resources consumption (coal, water, steam, electricity) estimations are discussed under PS3 below. As part of IFC’s investment and as per the agreed E&S Action Plan (ESAP) #1, the Company will undertake an E&S impact assessment (ESIA) of the Project based on terms of reference agreed with IFC and agrees to implement the risk mitigation and management plan arising out of such an ESIA study. This ESIA study will include the potential for cumulative risks and impacts and focus on the following key environmental & social issues:  a) the air emissions and ambient air quality; b) ambient noise levels; c) surface water availability taking into account competing users in the region; d) traffic and transportation; e) greenhouse gas (GHG) emissions; waste disposal and the associated infrastructure requirements; supply chain; and the increased labor workforce and impacts on local community due to migration of workforce.

The Company has established an E&S organizational structure wherein E&S management is decentralized to the plant level management structure. At the plant, environment and health & safety management roles are allocated to engineering and human resources management teams respectively with dedicated teams instituted with defined roles, responsibilities, and authority to implement the E&S elements of the HBMS. The Company has established and maintains documented onsite and offsite emergency preparedness and response (EPR) systems. The Company also prepared an onsite EPR plan in 2021 which is subject to revision and update as & when required. The plant buildings and life & fire safety (LFS) infrastructure are designed, constructed, and operated & maintained as per factory regulations and the Indian National Building Code requirements on LFS aspects. The LFS infrastructure and management systems are operated by a Fire Safety Officer. Fire, mock and emergency scenario drills are periodically organized as per regulatory requirements. Fire risk at the cotton storage warehouse has been specifically addressed through isolated location of the building, adequate spacing between buildings, no electrical connection to the warehouse, restricted access control and ensuring it is operational only during daylight hours.

The Company has established systems and procedures to monitor, measure and report the effectiveness of its management systems at the plant level, as well as compliance with any related legal/ regulatory requirements. The monitoring and review elements comprise of periodical reporting on E&S performance, monitoring of performance through inspections and audits, and periodic senior management reviews.  As part of regulatory compliance, all the plants monitor air emissions through continuous emission monitoring systems and share the data with local pollution control board. Besides, a 3rd party lab authorized by the KSPCB monitor ambient environmental quality as per permit conditions. As the Company is certified to about 20 textile sector standards and audit protocols discussed earlier, it is subjected to various standard audits and external 3rd party audits as commissioned by Company’s customers/clients and other interested stakeholders.

As of April 2022, the Hassan plants has a total employee strength of around 7,000 (36 percent female representation), while the contracted workforce is around 1500 (11 percent female) in addition to 42 interns (36 percent female). The  Dodaballapur Plant has an employee strength of 403 (4 percent female), while the total number of contract workers is around 60. The Company shares the same contractors at both the plants. The Company has around 15% attrition rate and has an active worker recruitment program. The sourcing of the workers for Hassan plants is done through the Company’s own recruitment program (direct outreach in the nearby villages), and incentivized worker referral program (almost 80%-90% of hiring of new workers). Additionally, contract workers are hired through manpower agencies or are engaged by the third-party vendors through service contract such as for housekeeping, security, transport, food & beverage services. These workers are hired from different states as per the job description shared by the Company.

Human resources (HR) organization instituted at the Company is headed by President HR and Group Corporate HR Officer. At the Hassan Plants, the HR and Administration department are headed by Senior Vice President & Campus Head – HR & Compliance. The Unit HR heads for the respective plants and 3-6 Unit People Officers (UPOs) manages the daily HR affairs. The HR and Administration department at the Hassan Plant has around 65 staff including that for payroll processing, Deen Dayal Upadhyaya Grameen Kaushalya Yojana (Youth Employment Scheme of Government of India) scheme implementation team, safety, compliance (including environment compliance, social compliance, ISO certification, housekeeping), call center, learning academy (separate soft skill and technical training), administration (including security, food & beverage, travel desk, transport) etc. The Dodaballapur unit has a small HR team of 3-4 people.

HR Policies: The Company has HR policies and procedures compliant to Indian labor regulations and aligned to the eight principles of the ILO core conventions that define workers' rights, obligations, and working conditions and are applied consistently across its units. These policies and procedures cover key PS2 principles such as child labor, forced labor, non-discrimination, and equal opportunity. The HR policies and procedure also cover terms of employment, hours of work, wages and benefits (including leaves, provident fund, employee state insurance, bonus & gratuity), workplace behavior, overtime (OT), skill levels, talent management, performance assessment, promotion, collective bargaining agreements, remuneration, termination, committee election procedure, transport policy Information Technology (IT) including data usage and protection, Prevention of Sexual Harassment (POSH) etc. The Company has employed domestic migrant employees (both male and female workers) from the states of Bihar, Orissa, Chhattisgarh, Uttar Pradesh, and other states.

The employees are guided by the HR policies at both the locations. At the Hassan plants the workers are guided by the approved employee standing order (including some of the overarching HR policies). The employment provisions as per the standing order are consolidated in an employee handbook available in English, Hindi and Kannada. The employee handbook is provided to all the workers and is regularly updated to align with any changes in the employee standing order or any regulatory change. At the Dodaballapur plant, the union agreement in addition to the employee standing order guides the terms and condition of employment. As part of ESAP #2, the Company will further review and update, as required, the HR manual to include and/or strengthen aspects related to the retrenchment policy, grievance redressal mechanism, vendor/ supplier code of conduct and the contractor management system.

Terms of Employment: Workers are informed about terms and conditions through their employment contract. A copy of the appointment letter and identity card (ID) card is given to all workers immediately upon joining (including the employee handbook). The Company has biometric attendance system for direct workers as well as third-party workers. Employee wages are calculated based on a monthly rate basis and paid once in a month on or before the 10th working day of the following month after expiry of the previous wage period. Pay-slips are distributed to all employees and no illegal or unreasonable deduction is done by the Company. The Company does not encourage overtime (OT); however, if required, OT is voluntary and, as far as possible, advance information is given to the workers about the expected duration of OT and does not exceed the stipulated hours specified in the applicable act. Limited OT undertaken is recorded, reflected in the payment slip, and is paid at double the normal wages as per law.

The Company does not discriminate based on women’s reproductive health conditions (pregnancy, lactating mother) nor use invasive medical testing practices on women workers. At the Hassan plants, the Company has currently around 12 differently abled workers. The Company undergoes regular certification audit through Sedex SMETA audit as well as Amfori BSCI audit. The Company treats apprentices and trainees as regular workers (from the beginning) and pays them wages and other benefits like other workers, complying with statutory norms.

Training: The Company has a detailed onboarding and induction plan (including detailed understanding of HR policies) followed by classroom training and on the job training (relevant to the skill level of the employee) which may be extended based on the desired skill level and type of work (such as stitching, weaving, process, spinning & other skills required to run operation). Company has 5 satellite training centers which are connected to Himatsingka Learning Academy, a facility that can train about 500+ operators every month in various skills. Company also facilitates structured upskilling programs as part of an employee's career progression. Every year the company trains about 3000 operators through the upskilling program.

Grievance Redressal Mechanism: The Company has grievance redressal mechanism accessible for the direct workers as well as contract workers, which allows staff and third-party workers to report potential or alleged violations against the Company's Code of Conduct and raise employment-related complaints. Both the facilities have work committees (mandatory in industrial establishment with 100 or more workers) which has elected representative from the workers. This committee primarily looks after the interest of the workers and are normally concerned with the problems arising in the day to day working of the grievance of the employees; securing and preserving amity and good relations between the employer and workers; and comment upon matters of their common interest or concern and endeavor to compose any material difference of opinion with the management. The induction program as well as frequent skilling program is used as an opportunity to ensure workers are familiar with the available grievance channels. As per ESAP #2, the Company will revise the existing internal grievance handling policy per IFC's PS2 to; (a) clearly define the principles of anti-retaliation and identity protection; (b) include multiple grievance access points to raise and address allegations anonymously if complainants prefer.

Freedom of association & collective bargaining: Concerning freedom of association, there is a trade union and collective bargaining agreement at the Doddabalapur plant, while the Hassan plants do not have any union. The Company does not oppose workers' rights to establish/join trade unions and collective bargaining. The union at Dodaballapur unit (with regular election after every 3years) represents all the 343 direct workers and has operated successfully since getting registered and recognized in 1987. The Union records and consultation with union members indicate regular dialogue/consultation process between management and union. At Dodaballapur unit, during COVID-19, the union in discussion with the company avoided layoff by mutually agreeing to time limited pay cut (back to normal now). In addition to the existence of union at Dodaballapur, other initiatives related to worker involvement or engagement include multiple channels to support robust workplace communication between management and employees including monthly Townhall meetings; whistle-blower mechanism; and multiple committees including health & safety committee, work committee, grievance committee, food and beverage committee, transport committee, and prevention of sexual harassment committee (POSH). The Company has developed election procedures for committee members under various committees. The prevention of sexual harassment and abuse committee is established to discuss the workplace related issue with respect to harassment, abuse, and discrimination. Meetings take place at regular intervals once a month.

Third Party Workers: In relation to third party workers, the Company ensures that the third parties who engage these workers are reputable and legitimate enterprises and have appropriate systems in place to manage working conditions in line with local regulations and the relevant aspects on PS2 including child and forced labor, non-discrimination, freedom of association, grievance mechanism, and OHS.  However, this needs to be reviewed and strengthened and hence as part of ESAP#2, the Company will develop a contractor management system including review of the existing contractor management practices to cover manpower service providers and service based contractors: (a) updating the existing screening process to include working conditions and OHS related risks, track record or standing of contractors; (b) contractual obligations on contractors or intermediaries; (b) regular supervision of their performance vis a vis the Company’s labour and working conditions, HBMS requirements including  unannounced visits and visual inspections at the core business processes, as applicable; (c) auditing the relationship and type of contract between third party and workers; (d) training for all third party workers to explain labor and working conditions for activities as applicable; (e) regular monitoring of the contractor’s legal compliance, and EHS requirements; and (d) ensuring corrective actions (in case of any identified gaps), are agreed with the vendors/suppliers/contractors and implemented in a time bound manner.

The Company follows Ethical Trading Initiative (ETI) code of conduct that covers labor and working conditions, including child and forced labor, freedom of association, and non-discrimination. The ETI code of conduct is signed by all the contractors. HSL uses a vendor registration platform on SAP and has a process for vendor screening. The Company, as part of ESAP #2, will develop a comprehensive supplier/ vendor code of conduct including existing ETI requirements in addition to environment, health and safety requirements, regulatory compliance, whistleblower provisions and grievance redressal mechanism, supplier and Company responsibility, disciplinary and investigation mechanism, and a monitoring mechanism.

Occupational Health & Safety (OHS) Management: The Company has established a documented Occupational Health & Safety Management System (OHSMS) that is certified to ISO 45001 and integrated as part of its HBMS. A dedicated health & safety team including fire safety is housed under compliances division of the HR department. A plant level EHS Committee has been instituted that meets monthly and the meeting minutes are maintained. A workplace environmental quality monitoring program is in place to monitor indoor air quality (PM10, PM2.5, SOx, NOx), workplace lighting and noise levels using the Company’s internal resources and 3rd party laboratories. Based on the monitoring, a PPE protocol has been designed and implemented. The Hassan plant reports zero lost time injuries and zero fatalities in the last 3 years. The Company also monitors and reports first aid incidents, medical treatment injury which requires outside support in medical treatment at hospitals. Every quarter, near miss reports are sent to the HSL Board. In line with factory regulations, an Occupational Health Center (OHC) has been set up with adequate doctor and nursing staff and round the clock ambulance facility. OHC at the Hassan campus is a 11-bed facility. The Company has also arrangements with private and government hospitals in Hassan located at about 7km distance.  OHC conducts basic medical check-up for new staff and annual medical check-up for all staff.

COVID-19 Management: The Company has adopted procedures to minimize the risk of Covid-19 at the workplace, including training, testing, treatment centers, PPE supply for office and field employees, contact tracing, sanitation, and decontamination, quarantine supports, and home isolation package, etc. The Covid-19 procedures are continuously reviewed and updated per the latest Government guidelines and orders. Due to the pandemic, the Company has not and does not plan to lay off any staff. The Company shifted to a ‘Work from Home (WFH)’ operating model during the periods of lockdown imposed by the Government and health authorities (approximately five months, across two separate instances) to curb the spread of COVID-19. 

Supply Chain: Company operations depend on supply chain to source imported coal, cotton, and textile processing dyes and chemicals. About 350-400 tons per day (TPD) of coal is purchased from authorized coal vendors operating out of the Mangalore port and they deliver coal to the Hassan plant gate. The Company uses REACH certified dyes and chemicals that it procures from the US and Germany. As for cotton, the Company consumes about 50 TPD depending on market demand. Since 2018 and to meet specific customer or client requirements for its linen plant, the Company has started using around 65% cotton as Pimacott, Organicott and Home Grown cotton sourced from California, US and 5% is Giza cotton procured from reputable traders in Egypt.  Company’s lone cotton supplier from US has instituted appropriate management systems and is committed to addresses child labor and forced labor issues in its cotton supply chain. The supplier partners with the Better Cotton Initiative (BCI), the International Labour Organization (ILO), the Association of Cotton Merchants in Europe (ACME) and Cotton Made in Africa (CMiA) to address the labor risks in its supply chain. In Egypt, the company procures cotton from traders that are approved by Cotton Arbitration and Testing General Organization (CATGO), which is affiliated with the Government of Egypt.

The balance of 30% is Indian cotton procured through traders that are certified by BCI for its terry towel plant. DNA tagged premium cotton sourced from US and Egypt is entirely processed internally in the HSL spinning plant that has a capacity to spin 40TPD of cotton. Balance cotton is either spun at 3rd party spinning plants that are taken on short lease for a period of 3-6 months or purchased as spun yarn spindles from the market. The sourcing department along with quality and compliance team of HSL screen, select and monitor the performance of 3rd party spinners through the lease period. As part of IFC’s project and per ESAP #3, the Company will update HBMS elements to include a supply chain management procedure that incorporate the elements of policy and procedures, supply chain mapping, risk assessment and management, corrective measures, training, monitoring, and reporting. The updated procedure will provide for: a) an ongoing review of child labor, forced labor and OHS risk issues: at 3rd party captive spinning plants taken on short lease; in raw cotton suppliers and their primary supply chains (i.e. cotton growers/farmers); and at spinning plants from where spun yarn is purchased in open market; b) integrate labor and working condition related audit protocol in the existing supply chain auditing systems undertaken from a quality perspective; and c) based on the review and audit findings take appropriate management action in compliance of Para 29 of PS 2 requirements.

Resource Efficiency: The Himatsingka plant at Hassan consumes resources such as: electricity, coal, water, steam, cotton, and textile processing dyes & chemicals. Himatsingka has instituted continual improvement element in managing the resource efficiency aspect as part of its HBMS which drives the plant management to continuously explore technically and financially feasible and cost-effective measures for improving resource efficiency. The Company has adopted digital manufacturing technology that enables easy generation of resource consumption data. Based on that the Company has been estimating key resource consumption indicators for benchmarking its performance.

The company has implemented resource efficiency measures in the past to reduce energy consumption, waste generation, usage of hazardous chemicals, wastewater recycling and GHG emissions. Together, these sustainable initiatives have led to the reduction of approximately 100,000 tons of CO2 emissions; 22% reduction in annual energy footprint; 40% renewable energy component out of total energy demand; 10,000 trees planted; and 99.1% water recovery achieved at its Zero Liquid discharge (ZLD) facilities.

In FY21-22, Hassan Plant consumed 223.55 million units (1 unit = 1 kWh) of electricity. The proposed terry towel plant capacity expansion will require an additional power of around 45 million units per year. Current steam consumption is around 53 TPH and the additional steam required for the terry towel debottlenecking-based expansion is around 23 TPH. The current boiler capacities available is around 122 TPH (including power boilers of 2 x 38TPH). Expansion in terry towel production capacity will not require new boilers as the existing boiler capacities are sufficient. The Company uses coal in the process steam boiler (46 TPH), 12.5 MW captive power generation boilers (2 x 38 TPH) and thermic fluid heater. The CPP is of the co-generation type plant whereby the steam generated is used to produce power and then used in the process. The current coal consumption is around 400 tons per day (TPD) and additional coal required for terry towel plant expansion will be about 185 TPD. However, the Company plans to decarbonize its operations to large extent by 2030 and reduce coal consumption by replacing it with alternate fuel sources. As noted below, the Company will phase out the CPP by 2025.

GHG Emissions: Company estimates annual GHG emissions based on resources consumption data. In FY21-22, the scope 1 emissions are estimated at 298,827 tCO2e/year and scope 2 emissions are estimated at 64,754 tCO2e/year from Hassan plants. Total GHG emissions (Scope 1 and Scope 2) from Hassan plants in FY21-22 is 363,581 tCO2e/year. In FY21-22, key GHG contribution comes from consumption of 150,277 tons of coal, 133 KL of high-speed diesel and 422 tons of liquefied petroleum gas. Total power sourced from grid is 137.840 million units per annum out of which renewable sources is 71.084 million units per annum (52%) and public utility grid is 66.756 million units per annum (48%). More than 50% of power sourced from grid is from renewables in the last 3 years. Product specific GHG emission is showing a reducing trend from 12.3 MT of GHG emissions per MT of product (Linens and Terry Towels) in FY20-21 to 10.5MT per MT of product in FY21-22. Using the product specific emissions of FY’22, the proposed Project (15,000 tons of terry towels) will generate an additional GHG emissions of 157,500 tCO2e/year under the business-as-usual scenario.

However, in line with Clause 7 of PS3, the Company has proposed to implement technically and financially feasible and cost-effective options to reduce project related GHG emissions under IFC project. The key decarbonization proposals to achieve company’s goal of becoming carbon neutral by 2030 includes: a) reducing the purchase of electricity from public utility and sourcing more electricity from renewable sources. HSL has achieved 50% renewable energy sourcing in FY21 and will increase it gradually in the coming years; b) phase out 12.5MW CPP plant on or before FY27; c) augmentation of the existing switchyard from 66 kV to 220 kV to meet the future capacity enhancement through third party renewable energy procurement; d) fuel feed design modifications of all boilers for accepting 100% biomass; and e) gradual increase in use of biomass as fuel in boilers to reduce or replace 100% coal by 2027. As a result of which, it is expected that by FY2027, the total GHG emissions will be further reduced by a minimum of 290,000 tCO2e/year which could offset the increase in GHG emissions due to production expansion. The Company will continue with the practice of annual quantification of GHG emissions (Scope 1&2) using internationally recognized methodologies.

Water Consumption: Company operations currently consumes water at a rate of 41.74 kilo liters (KL) of water per ton of product per year at its Linen plant, 38.61 KL of water per ton of product per year at its Terry Plant and 7.51 KL per ton of product per year at its fiber plant. For proposed expansion in terry towel plant, the additional water demand under the project will be around 1.6 million liters per day (MLD).

The water supply to the Hassan plants is provided by KIADB from Gorur Dam on the Hemavathi River. As per agreement, KIADB is committed to supply 5 MLD of water, however the plant consumes only around 30% of that due to pipeline capacity issues and manages with 98% of recycled treated wastewater from the installed zero liquid discharge (ZLD) based effluent treatment plant that achieves this high recovery rate. In FY21-22, the total water consumption was around 5.3MLD out of which 1.2 MLD is sourced from the KIADB and the balance of 4.1 MLD is recycled from treated wastewater. Over the last few years, the Company has reduced water consumption in the sheeting unit from 50 liters of water per kg of fabric sheeting to 42-43 liters per kg of fabric produced. Company estimates that recycled water from the effluent treatment plant will largely meet the 1.6 MLD additional project water demand and additional fresh water from KIADB will be periodically required to meet the evaporation and consumption losses. The Company is also planning to implement an integrated campus-wide rainwater harvesting (RWH) system based on a recently completed study. The study proposed to construct a 20,000 cum capacity RWH storage tank which can be filled 5 times in a year. The Company estimates that reusing stored RWH water could meet 6% of the plant’s current annual water demand.

Pollution Prevention: The Hassan Plant has point sources for air emissions from the 45 TPH boiler for steam generation, 3 DG sets, 2 numbers of 38 TPH boiler for 12.5MW power generation at the CPP and thermic fluid heaters. The air emission points at the power plant (CPP) are installed with continuous emission monitoring systems and connected to KSPCB server for real-time monitoring of air emissions. Besides, a 3rd party lab authorized by KSPCB monitors point source emissions and ambient air quality periodically as per permit conditions. Electrostatic precipitators (ESP) have been provided for all coal fired CPP and process boilers and thermic fluid heaters. The DG sets have been provided with stack heights as per permit conditions. Air emissions are controlled by ESPs which have a 96% air pollutants removal efficiency. In the process areas that generate fugitive emissions such as near sizing machines and weaving machines exhaust, bag filters have been provided to arrest the fugitive emissions. Review of air emission monitoring results indicate compliance to permit conditions, national ambient air quality standards and WBG General EHS guidelines.

Company has established a noise pollution monitoring program comprising of ambient noise level monitoring, plant level monitoring, DG set noise level and indoor workplace noise level monitoring procedures that are in line with permit condition requirements and local Factory regulations. Review of noise level monitoring results indicate compliance to industrial zone category of national ambient noise level standards and WBG General EHS guidelines. The noise pollution monitoring program covers high noise emanating process or machineries.

Company has installed ZLD based effluent treatment plant that is operational since 2007. The Company has an old ETP of 3 MLD capacity and a new ETP of 8 MLD capacity installed at the Hassam campus and the entire treated water is recycled and reused in the process. Under the project, no new ETP expansion or augmentation is envisaged as the current ETP capacity is adequate to meet the increased effluent generation. A sewage treatment plant of 100 KLD capacity has been set-up. Treated sewage is used for gardening and irrigation purposes in the 400-acre campus. The influent and treated effluent quality monitoring regime using in-plant laboratory and authorized 3rd party lab is in place as per permit conditions and the testing reports are shared with local pollution control board periodically. Review of treated wastewater quality monitoring results indicate compliance to permit conditions. Biological sludge generated post treatment and drying is mixed with coal and used in a thermic fluid heating boiler as fuel in line with special permit conditions issued in June 2015. In wastewater management, Company operations comply to textile sector certifications such as DETOX TO ZERO by OEKO-TEX. HSLs effluent quality and sludge is monitored for toxicity. Company ETP and STP operations also comply to certification such as ZDHC.

In line with Clause 11 of PS3 that requires to address potential adverse project impacts on existing ambient conditions, as discussed under PS 1 and as per agreed ESAP #1, the Company will undertake an ESIA of to assess impacts associated with the project on air quality, noise and water availability amongst others.  This will also include an assessment of cumulative impacts associated with the relevant issues.  Based on the ESIA findings the Company will implement mitigation measures as deemed applicable.

Wastes: The Company's HBMS has formulated waste management specific policies and operational control procedures for hazardous wastes, e-wastes, and plastic waste management in the operations. Under these policies, the Company commits, among others to proactively implement 3-R (Reduce, Recycle and Reuse) principles. Company operations generate four types of waste streams such as hazardous, non-hazardous, biomedical and e-wastes. All the waste streams are collected, stored on-site in a segregated manner, transported, and disposed through authorized waste agencies in line with permit conditions. About 6% of coal usage results in fly ash generation from the boiler operations which is sent to brick manufacturing industries for reuse purposes in line with local regulations.

Hazardous Materials Management: A 20KL above ground diesel storage tank and 2 x 7.5 ton capacity each LPG storage tanks are maintained as per PESO permit conditions. Caustic is stored in metal silos adjoining the processing units with a dyke wall and 110% capacity secondary containment facilities. There are bulk acid storage areas for storing acetic acid, hydrochloric acid, sulfuric acid, and hydrogen peroxide with similar dyke walls and 110% capacity secondary containment facilities. Ammonia is not used anymore at the plant. All the chemicals used are REACH certified and handled as per respective material safety data sheets. Chemical safety is the responsibility of trained staff in the production department.

Company has designed, constructed, operating, and maintaining the plants in accordance with relevant factory regulations. The Company has established infrastructure and an equipment safety related testing regime in compliance to local factory regulations. The transport of coal, raw materials, and finished goods at the Hassan plants is by road and sea.  About 100 trucks ply daily to the plants bringing raw materials, coal, spares, and export finished goods including 20-25 coal laden trucks. The Hassan plants are well connected by road network comprising state and national highways. The Company has outsourced fleet operations to 5-6 transport contractors. The logistics department manages the outward supply fleet while the sourcing department manages the inward fleet. Fleet operations especially the export cargo is strictly monitored using global positioning system-based devices affixed on the trucks and radio frequency identification tags on the cargo. Any accident enroute are mandatorily informed to HSL’s Logistics department. There have been no major accidents involving HSL fleets except for one non-fatal accident before COVID pandemic involving a fleet vehicle. The transporters and Company train the fleet operators on safe driving techniques and road behavior.  Each vehicle on every trip to the plant must confirm compliance to local transport regulations and provide driver documents at the security gate.  There is no child labor engaged in transport fleet operations of HSL as it is subject to verification at the plant gate every time. The logistics team conducts an annual audit of the transporters using a checklist tool.

The Company does not provide any hostel accommodation for the migrant employees and the workers are staying in rented accommodation facilities available around the community neighborhoods of Hassan plant. The region has a good private housing stock with water and sanitation facilities. Health infrastructure is well developed with government and private healthcare facilities available in and around Hassan. The risk of transmission of communicable diseases with the influx of temporary or permanent project labor is assessed to be low.

The plant is located within designated industrial area and considering the nature of operations inside the plant, there are no major risks and impacts anticipated to neighborhood communities due to onsite accidents and emergency situations. The nearest community settlements are located at Hanumanthapura and Kokkanagatta which are located at about 200-500m distance from the plant boundary. The integrated campus is almost 2-3 kms long and the hazardous material storage sites are in the middle of the campus or in isolated location (cotton warehouse) to safeguard onsite staff and neighborhood communities in the event of emergency scenarios or situations.

The multi-facility integrated campus at Hassan is spread out over an area of around 400 acres of land and it has one single entry and exit gate for easy surveillance and security purposes. Security organization at the plant is led by on-roll Company staff comprising a chief security officer and six additional security officers. The Company has retained a licensed, security services contractor to provide security services at the Hassan plant who has deployed around 60 unarmed security guards (men and women guards). The contractor trains new guards in their own training center before deployment and then provides on the job weekly and fortnightly training. Security guard related grievances are addressed by client relationship officer from the contractor team. The Company facility is audited as per the requirements of US Customs-Trade Partnership Against Terrorism (CTPAT). Hence CTPAT aligned SOPs and security protocols are followed at the plant.

Stakeholder engagement, including the local community and other external stakeholders is undertaken by the HR department. The Company regularly engages with the local community representatives (from the two nearby villages- Kokangatta and Hanumantpura) especially pertaining to the CSR and other welfare activities in the village. The Company regularly engages with the local administration, KIADB, labour department, police authorities, NGOs etc. As part of ESAP #4, the Company will develop a stakeholder engagement plan (SEP), including (i) stakeholder identification, profiling, and analysis, (ii) disclosure and dissemination of information including engagement methods and frequency of engagement, (iii) development of an effective community grievance mechanism, and (iv) ongoing reporting to affected communities and stakeholders; and (v) documentation of stakeholder engagement records, in a manner aligned with IFC PS1 requirements)

Himatsingka Seide Limited

Registered Office: 10/24, Kumara Krupa Road,

High Grounds, Bengaluru - 560001, India

Email: hslblr@himatsingka.com

Phone: +91 80 2237 8000