Phase-I land is part of Tatu City for which 5000-acre land was acquired in 2008 by the developers. Tatu City planning started in 2010 and significant part of the infrastructure has been developed within the last few years. The plot being leased by Zhende Kenya is part of the industrial plots developed by Tatu City. Therefore, no involuntary resettlement is expected due to Phase-I. Therefore, PS5 (Land Acquisition and Involuntary Resettlement) is considered not applicable for the project.                  

Phase-I land is already part of a mixed-use development and therefore, the type of risks and impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management) and thus PS6 is not applicable for the project. Also, given the location and expected operations at the proposed plants, no impacts on indigenous peoples and cultural heritage are expected. Therefore, PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not applicable.

For the Phase-II site, Zhende will complete E&S due diligence (before acquisition) including examination of site alternatives and the ESIA (before construction) in line with IFC PSs to systematically assess potential E&S risks and impacts and define a set of E&S mitigation and management measures to be taken during the implementation of the project to avoid, minimize or compensate/offset for risks and adverse E&S impacts. ensure that the potential site do not have any risks and impacts that cannot be managed in line with IFC PSs. Based on such assessments, the applicable PSs may differ from those currently selected above. 

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability (2012) as the project is expected to have limited adverse environmental and social risks and impacts that are few, short-term and site-specific, and can be avoided or mitigated by adhering to recognized performance standards, good international industry practice (GIIP) procedures, guidelines and design criteria as described in the following sections.

Key E&S risks and issues associated with the project are: (a) the company's management and monitoring systems to assess and manage E&S risks and impacts from construction and operation of new plants, as well as those related to the supply chains; (b) assurance of fair, safe and healthy working conditions for direct and contracted workers ; (c) monitoring and management of air emissions, waste, hazardous chemicals and effluents; (d) management of life and fire safety and emergency preparedness and response; (e) community health, safety including potential impacts from security personnel; and (f) stakeholder engagement and grievance mechanism.  

E&S Policy, Management Systems and Programs: Zhende has a documented corporate EHS policy under which Zhende has committed to compliance with the respective national legal requirements on EHS and fire protection, implementation of EHS management systems and provide a safe and healthy work environment. Zhende also, has a social responsibility policy, which has commitments on compliance with respective national legal requirements on wages, working hours, prevention of child and forced labor, freedom of association, non-discrimination and contractor management.

Zhende has established corporate level EHS management system as per ISO 14001 (Environment) and ISO 45001 (Occupational Health and Safety). The company started with ISO certification process and as of today completed for on facility in in China. Relevant EHS procedures have been documented under the management systems including on identification of risks and impacts, hazardous material management, waste management, emergency response preparedness, internal EHS audits, inspections, accident-incident investigation and reporting. 

To ensure implementation of corporate level policies and procedures, as per ESAP#2, Zhende Kenya will adopt the EHS and social responsibility policies. Also, site- specific EHS procedures aligned with the Zhende corporate EHS management system, programs will be developed for Zhende Kenya operations and cascaded down to both plants within agreed timeline as per the ESAP.

E&S organization capacity: At the corporate level, Zhende’s HR department and EHS department are respectively responsible for implementation of the social responsibility and EHS policies management systems. Similarly, Zhende Kenya will establish EHS organisational structure with HR and EHS Managers, which already have been identified from the Zhende corporate teams. Additionally, the Kenya plants will have a safety committee to review implementation of OHS risk management at the plant.

For managing the construction phase of the Project, a project management organization has been formed by Zhende, which will also be responsible to implement the applicable E&S requirements in line with the IFC ‘s Performance Standards (PSs).  

Identification of E&S risks and impacts: Zhende has corporate EHS management procedures on identification of risk and impacts - hazard source identification, evaluation, and control (mainly focussed on OHS risks) and environmental factor identification and risk assessment control (focussed on environmental aspect-impacts). As per the ESAP(#2), Zhende Kenya will complete an environmental and OHS risk assessment for construction and operation of the two manufacturing facilities funded under the Project.

E&S Impact Assessment (ESIA): Tatu City, within which the Phase-I plot is located, has completed a strategic environmental assessment (SEA) in February 2020 and has identified general set of environmental mitigation measures to be integrated in the design and construction within the spatial planning zone of the city. In addition, all the sub-projects (like Zhende’s plant) are required to complete an environmental impact assessment (EIA) in line with the applicable national legal requirements and obtain license from national environmental management authority (NEMA) before commencement of any construction. Zhende Kenya has complete an EIA for the Phase-I plant and has obtained the required NEMA license. As per the ESAP(#1), Zhende Kenya will complete the ESIA reports for Phase-II site in line with national legal requirements and IFC PSs.  The client will, based on the ESIAs develop and implement a suite of the E&S management plans (ESMPs) for construction and operations of both facilities.

Apart from applicable national legal requirements and standards, the Phase-I plant will need to comply with the Tatu City’s guidelines and standards (e.g. on architectural, fire safety, environmental, development, landscaping). All designs will be reviewed by the Tatu City’s Development Control Committee and approved. Also, Tatu City has a contractors’ code of conduct which is applicable to all contractors working within the city. 

Emergency Response: Zhende has corporate EHS management procedure on emergency preparedness and response management. As per the procedure all plants are expected to prepare a plant level emergency response plan as well as specific plans on fire, chemical spills, electric shock, hazardous chemicals (ethylene oxide, ethyl acetate) related fire accidents and mechanical injuries. Also, emergency response drills are carried out at the plants in China according to the procedure.

Therefore, for construction phase, as per the ESAP#4, emergency response plans will be included in the EHS manual for construction (discussed under PS2). For the operation phase, as per ESAP, Zhende Kenya will develop site specific emergency response plans considering all potential emergency scenarios, which will be followed at both Phase-I and Phase-II plants. Specific emergency response plans will be prepared for Ethylene Oxide (EO) (used for sterilisation ) leakage or fire, hazardous chemicals spills and fire. The emergency response plan will include frequency of training and drills as well as provision of required fire safety and emergency response equipment. Regular training and drills will be conducted to train direct, contracted and third-party workers.

Lastly, as per the ESAP, Zhende Kenya will ensure that required fire detection alarm and suppression systems are design, constructed, operated and maintained in full compliance with local building codes, local fire department regulations.

Monitoring, review and reporting: Zhende has corporate EHS management procedures on internal EHS audits and inspections. As per these procedures, regular inspections and EHS audits are conducted in addition to the external certification audits and government inspections. Additionally, accident-incidents are reported and environmental monitoring is conducted at all plants. Further, Zhende has a management review procedure under which EHS key performance indicators (KPIs) (e.g. fire and other accidents, waste disposal, energy saving, environmental training, occupational diseases and health examination) is reviewed. Zhende prepared a internal sustainability reports for 2020 and 2021.  

Specifically, for the Kenya plants, Zhende Kenya will develop similar EHS audit, inspection and management review procedures as part of EHS management systems under ESAP. Also, an environmental and workplace monitoring procedure will be developed as part of the ESAP(#2) to specify the key parameters to be monitored, type and frequency of monitoring to be conducted at the plants as per applicable local standards, ESIA/ESMP requirements and relevant and applicable World Bank Group (WBG) Environment, Health and Safety (EHS) Guidelines.

Zhende employs a total of about 6300 people globally (as of March 2023). The current male-to-female ratio is 21% : 79% for operational staff and 51% : 49% for other staff.

HR policies, procedures, working conditions and terms of employment: Zhende has a documented HR management system which describes processes to be followed by the HR department on staff recruitment/resignation/retirement/reemployment, labor contract signing, salary management and performance management. As mentioned under PS1, Zhende has a social responsibility policy, which has commitments on compliance with legal requirements on wages, working hours, prevention of child and forced labor, freedom of association, non-discrimination, anti-harassment, women's right protection, anti-trafficking, and contractor management. These commitments are in line with the PS2 requirements. To implement these policies, Zhende has developed a corporate social responsibility management system which has detailed procedure under each of these commitments. Zhende plans to implement the management system at all plants including plants in Kenya and, get the system implementation audited.

Zhende has an employee handbook which is provided to all employees and explains company’s policies and working conditions. All employees sign a labor contract which also explains their working conditions and terms of employment, for example - type of contract, term, work location, working hours, remuneration, accommodation, social insurance and welfare benefits etc. The HR department conducts internal HR audits on a quarterly basis to review the implementation of relevant HR policies and procedures for various plants.

Similar HR systems are expected to be implemented for the plants in Kenya. Zhende is reviewing the applicable national labor requirements and  requirements of PS2 and will augment its HR policy and procedures as needed. Currently, as the plants are yet to be constructed, no specific HR policies have been developed or implemented for Zhende Kenya. As per the ESAP(#2), Zhende Kenya will adopt the social responsibility policy. Also, as per ESAP(#3), Zhende Kenya will document and implement HR policies and procedures in line with the national legal requirements and the requirements of PS2 .

Non-discrimination: As mentioned above, Zhende has a corporate commitment on non-discrimination (based on race, gender, social class, origin, religion, disability, union membership or political affiliation), providing equal opportunities, and creating a workplace free of harassment. 

Freedom of association: Zhende, in its  social responsibility policy,  has made commitments on freedom of association under which employee has the right to associate freely, join trade unions, organize collective bargaining and there will be no discrimination with the employee representatives.

Child and forced labor: Under its social responsibility policy, Zhende has made commitments on no use of child labor and not hiring or supporting forced labor. Zhende collects identity cards to verify the age of the employees. Also, as per policy, no deposits or identity documents are withheld by Zhende.

As mentioned above, HR policies and procedures will be developed for Zhende Kenya on non-discrimination, freedom of association, child and forced labor.

Grievance mechanism: Zhende has a grievance mechanism for its employees. Grievances can be filed by the employees through complaint boxes, internal email address or the hotline. The mechanism allows employees to file anonymous complaints. HR investigates the grievances and provides the response to the complainant.

As per the ESAP(#), Zhende Kenya will develop a grievance mechanism for workers  aligned with the corporate procedure and PS2 requirements. The mechanism will include provision of anonymous complaints and no retaliation/retribution for the employees who raise the grievances. Within the mechanism, specific procedure will be included to handle any complaints related to sexual harassment with adequate safeguards to ensure confidentiality of the complainants. Zhende Kenya will ensure communication of grievance mechanism to all employees and document/track the received grievances. Finally, training will be provided to staff on prevention of harassment and abuse.

Occupational, health and safety (OHS): Zhende’s corporate EHS policy includes commitments on providing safe and healthy working environment, providing training, eliminating, and reducing EHS risks. Zhende has relevant procedures on identification of potential OHS risks, provision of preventive and protective measures, training and monitoring and reporting or work-related injuries.   As per the ESAP(#2), Zhende Kenya will complete the facilities  level  OHS risk assessments and develop and implement  OHS management plans.

Third-party workers: Zhende has specific EHS management procedure on contractors’ management (Related Party EHS Management System), which include contractor EHS qualification requirements, contractors preparing construction safety plans for risks and conducting training disclosures and permit system for any hazardous operations. As per the procedures, the relevant department signs a contract which includes required EHS requirements and a Safety and Environmental Protection Management Agreement with the contractors. All third-party workers are required to receive an OHS and E&S induction training before working on the site. Zhende also has supplier and subcontractor assessment procedures, which include social responsibility requirements for suppliers/subcontractors and monitors their compliance.

For Phase-I plant, Zhende Kenya will need to manage contractors in line with Tatu City’s contractors’ code and guidelines. As per the ESAP(#4), Zhende Kenya will develop EHS procedures for  contractors management.  Also, specifically for construction, the EHS requirements will be included in the contract signed with the construction contractors which will at least include:

• clear EHS and labor and working conditions requirements (in line with IFC PSs and legal requirements) to be implemented at the site;
• clear roles and responsibilities of the developers/contractors’ and project management company personnel for implementation and regular monitoring on-site; 
• requirements on labor law compliance including prevention of child labor;
• labor camp guidelines in line with the IFC and EBRD guidance note on workers’ accommodation (2009);
• specific processes on environmental and community impacts management (e.g. dust and noise control, traffic, security and waste management); and
• requirements on fire safety and emergency response measures.

Supply chain: Zhende has a specific procedure on supplier and subcontractor assessment, on social responsibility policy commitments. Zhende also encourages its suppliers to join Sedex (global supply chain audit database) and undertake Sedex Members Ethical Trade Audit (SMETA) (lp.sedex.com )  and monitor the implementation of corrective actions in case there are non-compliances.

The main raw materials to be used for the production will be the PP resin and cotton. Zhende imports all of its cotton from a number of countries through international traders or bonded warehouses. Zhende has included traceability requirements in the cotton contracts.

As per the ESAP(#4), Zhende Kenya will develop a social responsibility code of conduct for all suppliers and include the same in the contracts signed by the suppliers that explicitly prohibits child labor and forced labor and includes safeguards against significant health and safety issues. Zhende will contractually require its adoption by suppliers and will inform and train its suppliers for compliance. Also, Zhende Kenya will include in its social responsibility management system a process to monitor periodically the compliance of its suppliers against its code of conduct. It will also include a system to collect information from the suppliers on region of production of cotton to evaluate risks of forced labor and child labor in the supply chain and implement required corrective actions based on any identified risks.

Power Consumption: The annual power consumption of the plants is expected to be approximately 7.5 million kWh. The main source of power for the plants will be the national grid power. Tatu City already has a power infrastructure and the Phase-I plant will be connected to the same infrastructure. Diesel generators will be provided at the plants only to cover lighting needs in the power outages.

Air Emissions: The main source of air emissions at the plants are expected to be the boilers. Zhende Kenya will conduct regular air emissions monitoring and ambient air quality in line with national legal requirements and applicable requirements addressed by the WBG EHS General guidelines.   

Water Supply: The water consumption of the plants is expected to be 1300 m3/day. Tatu City already has a bulk water supply line from the city and the Phase-I plant will be connected to the same infrastructure.

Wastewater Treatment: Considering the operations, the wastewater generation is expected to be limited. Also, sanitary wastewater will be generated from the toilets and kitchens. As per Tatu City SEA, every industry is expected to have its own wastewater treatment plant (WWTP) for effluent waste before being discharged into the main sewer line of the city. For Phase-I plant, in case required, WWTP will be designed and provided accordingly.

Waste Management: Considering the operations, the waste expected to be generated from the operations will include packaging waste (paper, cartons, plastic), scrap equipment and materials, empty barrels (plastic and waste). The hazardous waste streams are expected to include used engine oil and waste chemicals.  As mentioned under PS1 section and under ESAP (#2), Zhende Kenya will prepare a specific waste management procedure for its plants as part of the EHS management system. The procedure will include collection, sorting storage and disposal guidelines for each waste streams including identification of a suitable specialised and licensed agencies for disposal of expected waste streams. Temporary waste storage areas will be included in the plant design.

For the construction waste, for Phase-I plant, Tatu City has a requirement for contractors to prepare a site -specific waste management plan. Similar plan will also be needed for Phase-II plant. Therefore, a waste management plan will be included in the E&S manual for construction, as mentioned under PS2 and ESAP(#4).

Hazardous Chemicals Management: The plants are expected to utilize hazardous chemicals including Ethylene Oxide (EO) (for sterilization). EO is a toxic and flammable gas and will be stored in cylinders. As mentioned under PS1, Zhende has a chemicals management plan, which includes guidelines line on storage, use, transport and disposal of hazardous chemicals. As per ESAP(#2), Zhende Kenya will prepare a chemicals management procedure for its plants aligned with the corporate procedure. Also, emergency response plans will be prepared for chemicals spills and any leakage/fire emergencies associated with chemicals. 

Greenhouse Gas (GHG) Emissions: Based on estimated electricity and fuel consumption, the expected GHG footprint of the project is estimated to be around 4000 tons CO2 equivalent per annum (tpa CO2 equivalent) .                                                   

Resource efficiency: Zhende has corporate plans to reduce its carbon emissions. Zhende plans to measure and reduce carbon emissions and implement energy efficiency activities. As per the sustainability reports, some of the activities Zhende has implemented in its plants in China are LED lighting and waste heat recovery for hot water generation/office heating. Zhende Kenya will refer to applicable legal requirements,  Tatu City’s sustainable materials and energy protection standards  and WBG EHS guidelines when evaluating and selecting resource and energy efficiency techniques for the new plants as part of the technical design.

Security forces. Unarmed private security guards will employed at the proposed plants. Since Phase-I plant is located within Tatu City, there will be a common security from the City and Zhende Kenya will provide security for its plant. Since this plant is located within a larger development but in a designated industrial area, the interaction with the community is limited. The Phase-II plant may be located in land converted to industrial use but there can be community around the plant.

Therefore, as per the ESAP(#1), Zhende Kenya will complete a security assessment for its plants, document a specific security policy/code of conduct (applicable to all plant) which will include guidelines on engagement with the community and clear guidelines on use of force as well as processes on background checks of the security personnel . The policy will be contractually binding for the private security provider and communicated to the security guards as part of the induction, as well as refresher training. In addition, the community grievance mechanism (discussed under stakeholder engagement) will also allow for complaints related to security forces.

Ethylene Oxide (EO) handing:

Considering that the EO is a toxic, flammable and reactive gas, as per the ESAP, Zhende Kenya will ensure that EO related fire safety passive and active systems are provided at its plants in Kenya including adequate EO receiving and unloading containers, storage  leak detection, passive and active fire safety and emergency response systems which meet national standards and fire code, as well as good international industry practice (e.g. China standard YY/T 0822-2011.Ethylene oxide liquefied gas for sterilization ) aligned with ISO ISO:11135 Sterilization of health-care products.

Transport: Considering that there can be traffic related impacts on local communities due to movement of raw materials, finished goods and construction materials, as per the ESAP (#2), Zhende Kenya will develop and implement a traffic safety management plan to minimize risks and impacts on the communities from the plants.  

Other construction impacts: There can be other community impacts due to construction activities. As mentioned under PS2 and ESAP (#4), relevant measures to minimize impacts on community will be included in the E&S manual for construction.  

As per the applicable legal requirements for the ESIA process, Zhende Kenya will complete public participation activities.

In terms of disclosure of E&S information, the publication of the ESRS and ESAP will be Zhende’s first disclosure of such information. As per the ESAP(#2) and as part of the ESMS, Zhende Kenya will develop a community/stakeholder grievance mechanism i.e. a process to receive and respond to the grievances from neighboring communities and stakeholders (even anonymously).

Zhende Kenya will disclose the ESRS-ESAP at the following addresses:

Tatu City, Ruiru Town

Kiambu county, Nairobi

Kenya.

Any queries and/or comments about the project may be directed to:

Mr. JIANG Jiuqiang

richardjiang@zhende.com