IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Assessment and Management System: The company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements but lacks documented corporate E&S policies and a systematic way of managing E&S risks and impacts. To appropriately define its E&S commitment and address the risks posed by the current operations and proposed expansion, Melcom will develop a corporate level E&S management system (ESMS) aligned with IFC PSs. Specifically, the ESMS will include the following elements: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement community grievance mechanism; and (vii) monitoring and review (ESAP#1). The E&S management procedures to be developed and implemented as part of the ESMS will include (but not limited to): (i) E&S risk screening procedure for new projects and suppliers, in line with all IFC PS requirements, (ii) occupational health and safety (OHS); (iii) emergency preparedness and response procedure, including L&FS; (iv) stakeholder engagement procedure and community grievance mechanism; and (v) a community health and safety procedure.
Organizational Capacity and Competency: At the corporate level, Melcom’s E&S compliance is coordinated by the COO for the store’s operations and new projects manager for the expansion and greenfield projects. To systematically coordinate EHS compliance and management of EHS risks and impacts, Melcom will designate an EHS manager to oversee the ESMS implementation, E&S / sustainability initiatives across the company operations and new projects. (ESAP#2).
Emergency Preparedness and Response: Melcom’s crisis management handbook has a list of crisis management team, and contact information, including national police, fire emergency contacts and nearest hospitals. The roles and responsibilities for various teams responsible for evacuation, rescue, firefighting etc. are defined and displayed at various locations across the facilities. Fire alarm call points, evacuation route maps and hose reels have been placed at many locations. As part of ESAP #1, Melcom will review the crisis management handbook to develop an operational emergency preparedness and response procedure, with response and engagement plans. The EPRP will be guided by a risk assessment of Melcom’s operations to include other risks (such as flood, earthquake, evacuation, injuries) in addition to life and fire safety.
Monitoring and Review: Melcom conducts internal and external audits for all its operations. As statutory requirements, labor, environment and OHS are periodically audited by relevant government compliance departments. Melcom’s internal audit focus on security, OHS and solid waste management. The Company monitors and records injuries, L&FS suppression equipment functionality, usage of personal protective equipment (PPE), energy consumption, waste generation from all stores. The KPIs are reported on monthly basis to the management team. All incidents are summarized and discussed in the quarterly management meeting and the team analyses the root causes and implements corrective action.
PS2: Labor and Working Conditions
Melcom has approximately 5000 workers in retail stores, warehouses, security guards, drivers, and back-office operations. About 50% of the workers are direct workers and 41% are female. Thirteen workers are differently abled. The Project is expected to generate an additional approx..1000 job opportunities.
Human Resources Policies and Procedures: Melcom follows the national labor legislation and adheres to the human resources (HR) principles outlined in comprehensive Collective Bargaining Agreement (CBA) that applies to all workers. The CBA is managed by a competent Group HR and Administration Manager who reports directly to the Chief Operating Officer at the corporate level. The Group HR manager is assisted by HR Officer in operations where there are many workers like bigger stores and the warehouse. Melcom will consolidate and documented existing HR principles into a set of formal HR Policies and Procedures addressing working conditions and terms of employment, working relationship, worker organizations, non-discrimination and equal opportunity, prevention of child and forced labor, worker grievance mechanism (WGM), prohibition of sexual harassment and abuse, occupational health and safety, workers engaged by third parties, retrenchment, and supply chain. These policies will be communicated to all Melcom workers induction, regular training, and sensitization activities such as toolbox talks and bulletin boards (ESAP #3).
Working Conditions and Terms of Employment: Working conditions and terms of employment are stipulated in the CBA including overtime. Other benefits include health insurance and free medication, loan provisions and educational scholarship for worker families. Workers have fixed term formal contracts (annual or bi-annual) explaining working conditions including salary and deductions, working hours, leave entitlement, period of notice and job title. ESAP #, worker contracts will refer to the company’s HR policies and procedures including the available worker grievance procedure and CBA arrangements.
Workers’ Organizations: Most of the workers employed at Melcom are unionized with the “Industrial and Commercial Workers Union” (ICU). CBA agreement has been active and renewed biannually and ongoing for over 20 years and applies to all employees. As per the national requirement, there are nine executive committee members (6 males and 3 females) who have their own platform to discuss worker affairs and communicate to the national chairman once a year. The executive committee has received orientation and training on the national labor law from the mother union and no disputes exist between the union and the chairman. As part of ESAP #3, the company will develop a clear freedom of association policy and procedure and communicate it to the workers in alignment with IFC PS2.
Workers Grievance Mechanism: The CBA outlines a four-step grievance process where grievances are escalated from the immediate supervisor up to the National Labor Commission and no log is kept for grievances. Going forward, and as part of ESAP #3, Melcom will develop a formal Worker Grievance Mechanism (WGM) in alignment with IFC PS2 ensuring anonymity if required and clear statements of anti-retaliation. The procedures will also specify the timeline for responding to complainants and a staff member will be appointed as a custodian of the procedure and will regularly update the grievance log. All workers, third party workers, will be trained on this procedure through induction and regular training and multiple channels for communicating grievances will be provided.
Retrenchment: Historically, the Company has carried out a retrenchment exercise in one of its retail stores, affecting 0.3% of its workforce. While the company followed national labor law and provided some of the workers options of relocating to other stores, 4 of the workers were unable to relocate and were left out of work. No ongoing open legal case exists that relate to this previous retrenchment. As part of ESAP #3, Melcom will develop a retrenchment policy and procedure aligned to IFC PS2.
Third Party Workers: Melcom hires 51% of its workforce through labor agents. Contracts with labor agents restricts workers from going on strikes and does not pay for absenteeism. Going forward, Melcom will communicate its new HR Policies and Procedures, including supplier code of conduct and freedom of association, and contractually ensure labor agents are committed to these policies and procedures and supplier code of conduct. The contracts will also include audit rights for Melcom to their service providers and termination of contract if the issues will not be addressed in line with IFC PS2 and good international industrial practices. (ESAP # 4)
Supply Chain: Melcom adheres with the Ghanaian labor laws prohibiting child and forced labor. Under ESAP #3, Melcom will develop an additional Child Labor and Forced Labor policy and procedure to ensure no children are employed in Melcom premises and the policy will be applicable to third party workers and the supply chain. Suppliers undergo a process for registration as vendors however, contracts do not include E&S considerations. Melcom will develop a supplier code of conduct including clear prohibition of child labor and forced labor in all its purchasing procedures and defined actions to inform and require primary suppliers to implement the code requirements in line with IFC PS2. The Company will incorporate contractual clauses in agreement with its primary suppliers requiring them and their suppliers to comply with its Supplier Code of Conduct which prohibits Child Labor and Forced Labor and includes OHS requirements in the suppliers’ own operations. ESAP# 5
Contractor Management: For the construction of its stores, Melcom relies on a few construction and design companies from which it seeks bids. A third-party company is hired to oversee the implementation the construction projects. Melcom will develop a contractor management plan in alignment with IFC PS2 and the Good Practice Note for Contractor Management. (ESAP #6)
Occupational Health and Safety: Melcom OHS incidents are regularly registered and reported to senior management. The safety department conducts regular safety inspections using a checklist and all major incidents go through an investigation. Every store has a staff member responsible for safety, around 70 HSE leads in total, and training is regularly provided. As part of ESAP #3, Melcom formulate and implement a corporate OHS policy and procedures. Key OHS leading and lagging KPIs (e.g., recording and investigation of incidents, provision trainings, enforcement of use of PPEs, temperature & noise workplace measurements) will be part of the OHS management system. in line with IFC PS2 and the WBG General EHS Guidelines.
Workers Accommodation: As of November 2023, 150 workers are accommodated in accommodation facilities that are managed by the HR and Administration manager. Melcom will develop an accommodation management plan which will include principles of non-discrimination and equal opportunity, freedom of movement or of association, line with IFC/EBRD Guidance Notes for worker accommodation: processes and standards https://www.ifc.org/content/dam/ifc/doc/mgrt/workers-accomodation.pdf. (ESAP #7)
PS3: Resource Efficiency and Pollution Prevention
Resources Efficiency
Electricity is sourced from the national grid for all facilities, and there are no major air emissions / pollution from the company’s operations. The diesel standby generators are used rarely, and they are less than 3 MWh. The Company use R406a as a refrigerant and does not use R22 or other refrigerants that have been phased out.
All the stores are connected to Ghana water supply system. The Company harvest rainwater from warehouse roof and directs to underground storage tanks. Water is used for fires suppression equipment and general washing. Grey waste is connected to the municipal sewerage system. All kitchen facilities in the stores have grease traps which are cleaned regularly.
Melcom is implementing initiatives on energy and water sustainability. The Company will expand its existing rooftop solar PVC initiatives cladding of warehouse and new stores roofs to reduce heat, use of electric vehicles and forklifts. 24 retail stores will be installed with rooftop solar PVC and the fleet will be expanded with electric vehicles (EVs).
Green House Gases:
Current GHG emissions from the existing operations (based on electricity and fuels consumption) have been estimated to approximately 11,529 tons carbon dioxide (CO2) equivalent per year. Additional GHG emissions due to the proposed expansion are not expected to be significant and will be well below 25,000 tons of CO2-equivalent per year. The Company calculates GHG offsets based on energy generated from solar.
Pollution control
The Company has hazardous and non-hazardous waste management procedures including a system of appropriate sorting, handling, storage, and disposal which are consistent with applicable legal requirements. Non-hazardous wastes mainly cartons, and plastic wrapping materials are collected from all the stores to a central sorted area and sold to third-party vendors for recycling. The main hazardous waste is used oil from servicing generators and vehicles. There is a system in place, for the used oil, to be properly labelled and stored in the designated area and collected by a licenced third-party vendor.
PS4: Community Health, Safety and Security
Life and Fire Safety: Melcom is following Ghana National Fire Service Regulations on Fire Precaution (Premises) regulations of 2003 LI 1724 regarding life and fire safety (L&FS) design and installations for the warehouses and retail stores. The Company commissioned a local expert with international L&FS standards to review the design an expert to verify that the L&FS systems are installed in accordance with Ghana requirements and those of an international L&FS code (such as NFPA 101 of the National Fire Protection Association). The Company has annual inspection certificates for all the warehouses and retail stores and has operational and maintenance guidance, such as the schedules for mandatory regular maintenance and testing of life and fire safety systems and regular fire drills.
Traffic Management: Melcom manages a fleet of approximately 100 trucks for distribution of goods. The Company also hires some vehicles and relies on e-commerce platform transport for the delivery of its goods for the e-commerce business. The Company will develop a Fleet Management Plan in line with IFC PS4 and WBG EHS General Guidelines. The plan will ensure contracts with car rentals will include monitoring and audit rights to avoid and manage worker safety risks. The plan will include gender-based violence (GBV) provisions, driver training and worker safety measures for different modes of transport used (ESAP #8).
Security Personnel: Melcom maintains approximately 200 security guards, mainly unarmed, from own employees and from reputable third-party security contractors who report to Melcom’s security manager. Security contracts include a requirement for the company to regularly assess the security risks and provide management with recommendations, but they do not include requirements for security training, regular audits or to comply with supplier code of conduct. Going forward, Melcom will develop its own security management procedure and plan considering the nationwide outreach of its operations. The plan will be based on a security risk assessment and will ensure screening private security providers based on a valid business license, corporate history as well as company and employee background checks. Contracts with security service providers will be revised to provide for training and compliance with Melcom code of conduct and will provide access of security workers to Melcom worker grievance procedure. (ESAP #9)
