All land plots necessary for new stores and DCs are leased or acquired through willing-buyer-willing-seller transactions, with no physical or economic displacement, as such PS5: Land Acquisition and Involuntary Resettlement, has not been triggered. The companies’ existing properties are in modified urban environments therefore it is not anticipated that Korzinka’s activities to trigger PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources . There is no indigenous people and/or known cultural heritage within the vicinity of the project location, and thus PS7: Indigenous Peoples and/or PS8: Cultural Heritage is not considered to be applicable.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability.

Key E&S issue and risks associated with the project are expected to include:

• client’s E&S capacity and competency to develop and implement an E&S management system in line with IFC’s PS requirements;
• labor and working conditions, including contractors and supply chain;
• contractors’ management;
• construction safety;
• life and fire safety at the stores and warehouses.

 Policy and Environmental and Social Assessment and Management System:

Korzinka has corporate E&S and OHS policies, as well as an HR policy.

Establishment of a corporate and facility level E&S management system (ESMS) is ongoing. Company has certified its existing management system per ISO 9001 (quality management) and ISO 22000 (food safety management) in 10 stores.

As per ESAP #1, Korzinka will develop an environmental and social management system (ESMS) to manage environmental and social impacts of its retail and distribution operations in line with IFC PS requirements, as presented in particular PS sections below.

The company’s General manager is currently responsible for overseeing E&S performance. The company does not currently have any internal environmental & social expertise. There are two technicians, focusing on E&S trainings and development and implementation of procedures. HR department reports to Chief Executive Officer (CEO). As per ESAP#2, the company will designate an E&S officer, at corporate level, to oversight the establishment and implementation of ESMS and the company will identify roles and responsibilities, for E&S and OHS, for day-to-day implementation of the ESMS at retail and distribution operations.

Identification of Risks and Impacts:

The company identifies and manages E&S risks and impacts mainly in line with national E&S regulatory permits and requirements. According to Korzinka’s management, all stores and facilities are in compliance with national regulations.

Environmental impact assessment (EIA) is conducted for any new building construction, in accordance with regulations. New Distribution Center will be subject to national EIA procedure.

The company’s current screening process for potential new retail store or warehouse location is limited to evaluation of the condition of the building and legal requirements and does not include all the E&S aspects and impacts for the proposed new development as envisaged by IFC PSs. As per ESAP #1, Korzinka will develop and implement a documented screening / assessment procedure to assess potential E&S risk and impacts of the existing and new retail stores or warehouses, in line with IFC PS 1-8 requirements.

Management Programs:

Korzinka will develop E&S Contractor Management Plan (CMP) (ESAP #3) to manage E&S performance of its contractors, subcontractors, and other third parties working for the construction of the new DC.  CMP will summarize the general expectations and monitoring procedure in terms of occupational health and safety, labor and E&S requirements for its contractors and subcontractors.

Emergency Preparedness and Response Plan (EPRP):

There is an EPRP developed at corporate level. On-boarding and refreshment trainings are provided for all employees and emergency drills, with participation from police and local brigade as needed, are performed once a month in one store.

As per ESAP #1, Company will develop an individual store and warehouse level EPRP template to cover different types of emergencies (e.g. earthquakes, natural calamities, terrorism etc.) and will include measures specific to retail stores such as emergency evacuation, assembly points, emergency contact numbers etc., with special attention to children, elderly and disabled.

Monitoring and Review:

Company has environmental monitoring procedure in place. Korzinka will review environmental monitoring procedure in line with local regulatory requirements as well as WBG General EHS Guidelines in terms of scope, roles, key performance indicators (KPI), reporting and improvements/mitigants proposed based on findings. (ESAP #1).

 Human Resource Policies and Procedures:

Corporate level HR policies and procedures are in place, covering recruitment, working conditions, training, etc. in compliance with national labor code. The HR policy is communicated to employees via corporate labor management system (LMS) and Intranet. HR policies and procedures in place included:

• Code of corporate ethics,
• Anti-harassment and non-discrimination policy,
• Grievance policy,
• Rules of the internal labor schedule,
• Recruitment and selection policy.

Korzinka will develop overarching HR policy inline with IFC PS2 requirements as further discussed through the paragraphs below (ESAP #4).

Workers’ Organizations:

There’s no active union in the company. As per ESAP #4, Korzinka will review its HR policy in accordance with IFC PS2.

Non-Discrimination and Equal Opportunity:

Korzinka’s Code of Ethics is applicable for all personnel matters through all processes, including recruitment, hiring, employee training, pay and career development, and it prohibits distinguish on the basis of gender, age, race, skin color, language, national or social origin, religion, sexual orientation, marital status, property status. There were no reported complaints against the company that relates to discrimination, including gender-based violence and harassment.

Grievance mechanism:

There is an internal grievance policy, that is communicated to employees via corporate LMS and Intranet. Per the policy, the complaint could be initiated through several channels: (i) direct communication with Personnel Inspection; (ii) dedicated hotline via phone call or Telegram, or (iii) communication with psychologist via phone call or specific Telegram channel. The cases are registered in a journal and assessed by Personnel Inspection in confidential manner. Grievance on sensitive issues is investigated by the head of inspection unit. No cases on harassment and discrimination were reported. The grievance mechanism can be used anonymously, and contractors has access to it.

Workers engaged by Third Parties:

Third-party services are mainly based on maintenance of the equipment and facilities, transport, etc. Systematic approach for managing and monitoring workers engaged by third parties will be improved going forward by implementing ESAP #1 as explained earlier in PS 1 section.

Occupational Health and Safety:

There is an ongoing OHS risk assessment as required by the national legislation, by use of the external consultant. Based on risk assessment findings, as per ESAP #5, Korzinka will develop an OHS improvement plan, to be agreed with IFC, to fulfill the gaps versus local regulatory requirements and WBG EHS general guidelines (if any), per the external consultant’s OHS risk assessment findings.

Company is keeping the records and statistic on work related accidents and injuries and there is no fatality and/or lost time injury in last three years. Workplace monitoring (indoor, in terms of noise, temperature, light, particulate matters, etc.) results, conducted in May 2022, was in line with local legislation requirements.

COVID-19 Response:

During Covid-19 pandemic, company practiced social distancing in stores, temperature measurements at entrance, facial masks and gloves distributed to the clients, disinfection of stores performed twice a day. Personnel was provided with masks, gloves, disinfectant, free vaccination and testing, and their temperature was monitored while working. Company enabled some of stores to be organized as vaccination checkpoints for public. 

Supply Chain:

Korzinka developed a supply chain management methodology, including annual supply chain audits, focusing on textile products suppliers with respect to child labor (CL) and forced labor (FL) and agriculture products suppliers to check working conditions of their employees (contracts, payments, accommodation).

Per ESAP #1, in order to further monitor its suppliers’ labor management, including contractors’ labor forces, Korzinka will establish a procedure to conduct regular labor audit to all of its suppliers.

 Resource Efficiency and Green House Gas (GHG) emissions:

Electricity, provided from national grid. Water is provided by municipal network and used mainly for cleaning purposes.

Although there was an energy consumption assessment, in 2019, which resulted with improvements such as replacement of bulbs with more energy efficient ones, stores windows toning to reduce the heat from the sunlight, there is no systematic approach for energy and water consumption monitoring as well as GHG estimations. Although it is expected that the GHG to be lower than 25.000 ton equivalent carbon dioxide emission per annum, and as per ESAP #1, the company will develop a procedure to monitor its resource consumption and efficiency and estimate its GHG emissions.

Non-ozone-depleting refrigerants (i.e. HFCs 134a and 404 a) will be used in the new facilities’, including the new DC’s refrigeration systems. Company will also review its existing refrigeration systems in the existing stores and warehouses and prepare a phase out plan for existing cooling agent R22, if any. (ESAP#6)

Pollution Prevention:

Third party is engaged for monitoring and preparing the report on emissions to air from boilers and stand-by generators. Existing distribution fleet consists of forty distribution vehicles.

There is no regular noise monitoring program in place, due to the nature of the operations. According to Korzinka’s management, the company procures low-noise equipment and install noise barriers as needed.

Waste water, which is generated from cleaning operations and from the toilets of the warehouses and stores, is discharged to the municipal sewage network. New DC will be designed and operated in compliance with the sewage authority’s acceptance criteria, WBG General EHS Guidelines and Good International Industry Practice (GIIP) requirements of the wastewater collection, treatment and discharge. Korzinka will provide new DC’s technical design to IFC, showing that it will be equipped with fat/oil traps and/or other pre-treatment equipment, especially in case of centralized butchering section (ESAP #7). 

Although waste, including expired products/food are segregated and delivered to the licensed company for disposal, there is no waste management procedure in place to manage solid waste streams, including cleaning material and maintenance chemicals containers, packaging material and other solid wastes. As per ESAP #1, Korzinka will develop a waste management procedure for segregation, storage, recycling and disposal of all solid wastes, including damaged or expired products/food, packaging material, chemical containers to define practices and obligations of suppliers and Korzinka.

Hazardous materials are limited to cleaning chemicals and the ones used for maintenance such as solvents, grease and oil. The chemicals used for pest control are applied by third party certified companies and selected from the food facility compatible ones. As per ESAP#1, Company will prepare a Hazardous Materials Management and Safety procedure, for safe usage, storage, and handling which will also promote the selection of environmentally friendly and non-hazardous materials.                                                  

 Life & Fire Safety:

New DC are expected to comply with the national construction and fire code of Uzbekistan, and the technical specifications for the LFS systems and emergency planning are confirmed by the local Fire Authority during the certification and permitting process of the facilities.

The visited stores and warehouses have portable fire extinguishers, partially provided sprinkler protection, fire water pumps, hose reels, warning signage, alarm systems, smoke detection and CCTV systems which are monitored 24 hours. During the site visit, some improvement opportunities, that relate to the electrical systems, fire separation walls, housekeeping and additional emergency exits, were noted.

The company, as part of the ESAP #8, will engage with a competent LFS expert to review of the LFS status of all existing stores and warehouses. The audit process will assess the level of compliance with local regulatory requirements, and assessment criteria to include an internationally recognized LFS standard (such as United States National Fire Protection Agency Codes, British Standards, and so).

As per ESAP #9, Korzinka will develop a corporate “Life and Fire Safety (L&FS) Master Plan” (Corporate Design Manual) for the construction and remodeling of the DC’s (and new stores, if any, in the future), that will form part of the “corporate store and warehouse design manual”.

Transport / Road Safety:

The logistic services are mainly outsourced. There is no documented procedure in place to address potential road safety risks to communities. As per ESAP#1, Korzinka will develop a transport safety program which will include guidelines for drivers on traffic safety and defensive driving to minimize risks to safety of communities from vehicles plying to and from the DCs.

Food Safety:

The company has a food safety policy and program in place with a dedicated food safety team which entails hygiene procedures, internal audit, traceability, training.

Security Personnel:

Company’s security team is unarmed. Korzinka developed working instructions for security personnel and security staff is trained for communication and defensive use of force. There is CCTV monitoring in addition to other electronic security system, including alarms, especially for night shifts.