Sunda's assets within the borrowing base are located within zoned industrial areas. Since no expansion is planned outside the existing asset footprint and operations will be limited to the existing asset footprint, no land acquisition is expected. Therefore, PS5 (Land Acquisition and Involuntary Resettlement) is not expected. Similarly, PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage) are not triggered.                                                  

 This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will have limited adverse E&S impacts that are few, site-specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP).                                                  

 E&S Policy and Management Systems - At the Group level, Sunda Group has established (i) health and safety, (ii) environmental, (iii) occupational health and hygiene, and (iv) human resources policies. As per ESAP #1a, the company shall augment existing policies to ensure consistency with the principles of the PSs.

Sunda Group operates several assets across the Africa region, five of which form part of the borrowing base for the proposed investment. Sunda has established both a corporate environmental and social management system (ESMS) and asset-level environmental and social management systems that present Sunda’s approach to managing E&S risks and impacts throughout the project lifecycle. The asset-level ESMSs include policies, procedures, and guidelines that cover a wide range of E&S issues, such as health and safety, community engagement, labor and working conditions, and environmental management. Sunda's asset-level ESMSs are broadly aligned with the requirements of PS1 and include several measures to manage and mitigate potential E&S risks and impacts associated with the proposed investment.

To operationalize its revised E&S policy commitments [ESAP #1a], Sunda will augment and build upon its existing corporate ESMS to develop an overarching corporate ESMS aligned with PS1 per ESAP #1b. The corporate-level ESMS [ESAP #1b] shall also define requirements for the development and maintenance of permitting and risk registers, further formalizing the existing tracking of host nation licensing and permitting requirements and emerging E&S risks. To support the development of the corporate ESMS [ESAP #1b], Sunda will engage a qualified consultant acceptable to IFC.

Identification of Risks and Impacts - The existing corporate ESMS outlines Sunda's approach to identifying and assessing potential environmental and social impacts associated with its operations. The approach includes a risk assessment process that considers both the direct and indirect impacts of Sunda's operations, as well as provisions for completing regulatory Environmental Impact Assessments (EIAs). Regulatory EIAs have been undertaken and approved for all assets in the borrowing base. The existing corporate ESMS mandates that Sunda identifies potential impacts, both positive and negative, on the environment and surrounding communities. The identification of potential impacts is commensurate to the size, nature, and location of the operation, as well as local regulatory requirements.

Sunda's ESMS requires regular monitoring and reporting of environmental and social performance to ensure that any identified impacts are managed in a timely and effective manner (see monitoring section below). The ESMS references air and water quality, soil and land use, waste management, and social impacts.

As part of its enhanced corporate ESMS [ESAP #1b] development, Sunda will ensure the corporate ESMS [ESAP #1b] and risk assessment process fully integrates the requirements of paragraphs 7-12 of PS1, including the explicit reference to the PSs as a governing framework, per ESAP #1b.

Management Programs – Sunda’s existing ESMSs outline monitoring and measurement requirements aimed at ensuring the management and reporting of E&S performance. Responsibilities and authorities are stated, with the E&S Manager and relevant department manager responsible for ensuring that monitoring and measuring are controlled within their areas of responsibility. They are also responsible for bringing trends or results that may potentially lead to an E&S impact to the attention of the management team. The asset-level ESMSs outline management programs and procedures for the general environmental and safety aspects associated with asset operations, including air emissions, wastewater, solid waste, hazardous materials, and safety management.

As part of Sunda’s enhanced corporate ESMS [ESAP #1b], Sunda will strengthen the mechanisms for oversight, training, and enforcement of the ESMS [ESAP #1b] requirements at the asset level. This will involve conducting regular internal audits, providing additional resources, and ensuring that all personnel are adequately trained and equipped to meet the ESMS [ESAP #1b] requirements. The corporate ESMS [ESAP #1b] will enhance the following elements, which will apply across the Sunda business and, as required, be tailored for specific asset needs while fully integrating the requirements of the PSs and WBG EHS Guidelines. The scope of these elements shall extend to contractors, contracted labor, and primary suppliers as applicable: (i) identification of E&S risks and impacts, (ii) emergency preparedness and response (see below), (iii) community grievance redress (see stakeholder engagement section below), (iv) E&S training, (v) occupational health, safety, and hygiene management (see PS2 below), (vi) assurance, audit, monitoring and reporting, (see below), (vii) waste management (see PS3 section below), (viii) community health and safety (see PS4 below), (ix) security management (see PS4 below), (x) hazardous materials management (see PS2 below), (xi) GHG emissions monitoring, measurement, and management (see PS3 below), and (xii) fire detection and alarm system standard, including audit inspection and maintenance procedures (see emergency preparedness and response below).

Organizational Capacity & Competency - Sunda’s board is ultimately responsible for the oversight of E&S matters. Sunda has established an HSE organizational structure at the regional level, which reports up to the corporate level in Guangzhou. The regional HSE manager, located at Sunda’s Accra asset, has established an organizational structure to support the Ghana business. Similarly, an HSE manager, covering the East Africa assets, reports to the regional HSE manager. At the Ghana asset, the plant has clearly defined HSE roles assigned, including responsibilities for operations managers. Fire safety teams are established at each asset (see emergency response below).

As part of Sunda’s enhanced ESMS [ESAP #1b], the ESMS shall define and strengthen the asset-level E&S resources to ensure that the corporate ESMS [ESAP #1b] is operated in a manner consistent with PS1 requirements, per ESAP #3a. These shall include, where not currently in place, the appointment of appropriately qualified and experienced health and environmental supervisors for each asset, supported by the appointment of HSE representatives in each production area of the plant along with first-aiders as required by the outcomes of the defined risk assessment process per ESAP #3b. A training procedure shall be developed, including provisions for certification consistent with the revised corporate-level ESMS [ESAP #1b], per ESAP #1c.

Emergency Preparedness and Response - A dedicated section of the existing ESMS establishes requirements for emergency preparedness and response (EPR), mandating that Sunda assets develop and implement comprehensive emergency response plans covering a variety of potential emergency scenarios. The existing ESMS outlines procedures for responding to emergencies, ensuring that all personnel receive appropriate training and equipment to effectively manage emergencies. The existing ESMS also requires Sunda to form emergency response teams, conduct regular drills and exercises, and maintain and provide easy access to emergency response equipment and facilities. Furthermore, the existing ESMS stipulates reporting and investigation requirements for emergencies and incidents to identify root causes and prevent recurrence. These corporate requirements aim to ensure that Sunda's emergency response plans and procedures are robust, effective, and consistent across all assets.

As described in the management programs section above, Sunda’s enhanced corporate ESMS [ESAP #1b] will enhance emergency preparedness and response plan requirements, which shall apply to all assets in the borrowing base. This enhancement will necessitate the development or augmentation of existing practices to ensure consistency with the provisions of PS1 and PS4. As required, asset-level EPR plans shall be revised to ensure responses to accidental and emergency situations associated with the assets are appropriate to prevent and mitigate any harm to people or the environment. Roles, responsibilities, and training needs for relevant personnel, as well as the frequency of training, shall also be revised accordingly.

Monitoring and Reporting – As part of its existing ESMS, the company has defined performance measurement and monitoring required to be utilized at the asset level. The management program defines responsibility and timeframes for completion to achieve defined objectives and targets. The program outlines requirements for undertaking monthly reviews of progress on objectives, targets, and programs/action plans. Additionally, the ESMS delineates management review requirements to determine the effectiveness of completed effort-based objectives. Among other elements, the ESMS monitoring requirements encompass (i) safety (including working at heights, driving safety, emergency preparedness, COVID-19, PPE, gap assessment requirements resulting in corrective action requests), (ii) occupational health (including noise, dust, fitness to work, biological and radiation), (iii) environmental (including emissions, dust, noise, water usage and effluent discharge, energy usage, raw materials consumption, and waste generation and segregation).

To enhance the existing ESMS [ESAP #1b], the company will develop a monitoring and reporting framework per ESAP 4b, building upon the draft monitoring plan. The monitoring and reporting framework will detail: (a) key performance indicators (KPIs) on E&S compliance and performance, as well as objectives and targets on sustainability (resource efficiency); (b) monitoring processes (corporate audits, internal/external audits); (c) reporting requirements in specific formats, including routine reporting via a corporate risk register [ESAP# 4a] to the company board; (d) a process of regular management review for all plants by senior management; and (e) the development of a corrective actions register to capture, track, report to management, and ensure closure of corrective actions.

The framework will specify KPIs to be monitored at the plants, monitoring frequencies, types of monitoring, and definitions of thresholds that signal the need for corrective actions. In addition to applicable legal requirements, the monitoring thresholds will incorporate thresholds specified in the WBG EHS Guidelines (both general and sector-specific).                                                  

 As of March 2023, Sunda employs 5,210 direct employees across the borrowing base assets, of which 1,816 are female employees.

HR Policies, Procedures, and Terms of Employment - Sunda has established Human Resources Policies and Procedures at the corporate level, outlining the corporate requirements to be applied across all assets. These policies and procedures address various issues related to human resources, such as recruitment and selection, employee training and development, compensation, performance management, harassment and discrimination, health and safety, and worker grievance mechanisms.

As part of IFC's financing, the company will assess the compliance and effectiveness of its HR policies and procedures concerning the Performance Standards and host-nation laws and regulations for all assets within the borrowing base, per ESAP #5a. The assessment will ensure the consistent implementation of HR policies and procedures across all operations, identifying and addressing any gaps. Sunda's revision of its HR Policies will incorporate explicit references to workers' organizations, collective bargaining, and the right to unionize, along with statements on child and forced labor in a manner consistent with the provisions of PS2.

Sunda shall develop and implement a corporate requirement for engaging casual and contracted labor across all operations within the borrowing base, ensuring that all workers, including casual and contracted labor, receive written terms and conditions of employment in a language and manner they understand, in compliance with Performance Standard 2, per ESAP #5b. Sunda will enhance its existing HR Policies to ensure alignment with the requirements of PS2 regarding collective dismissals, as specified in ESAP #5a.

Worker’s Grievance Mechanism – Sunda has developed a worker grievance mechanism as detailed in the company's HR policy manual, which includes principles for managing grievances, procedures for addressing them, and provisions for maintaining confidentiality and protecting employees from retaliation. The grievance mechanism is broadly consistent with the requirements of Performance Standard 2.

To ensure that the grievance mechanism fully meets the requirements of paragraph 20 of PS 2 and the worker grievance mechanism is effectively communicated and implemented across all assets within the borrowing base, including contracted (casual) labor, Sunda will undertake the following actions, as outlined in ESAP #5c: i) revise the grievance mechanism to explicitly include contracted (casual)labor, ensuring that all workers are afforded the same protections and rights to raise grievances, ii) provide training on the grievance mechanism to all employees, including contracted (casual) labor, and establish a system for tracking and reporting grievances to monitor the effectiveness of the mechanism, iii) ensure the grievance mechanism is clear and easy to understand for all employees and that it is consistently implemented across all operations. Sunda will report back to IFC on the implementation of the revised grievance mechanism as part of its annual monitoring requirements.

Occupational Health, Safety, and Hygiene – Sunda has established an Occupational Health and Safety (OHS) Management System that outlines requirements for managing occupational health and safety risks across all assets. The management system covers various issues related to occupational health and safety, including risk assessment, hazard identification, and control measures. Complementary procedures and an employee production safety manual have also been developed for workers.

To ensure the OHS Management System aligns with good international industry practice, the requirements of PS2 and WBG EHS guidelines (general and sector-specific), and is consistently implemented across all assets, including casual labor, as part of IFC’s financing, Sunda shall, as outlined in ESAP #1c:  i) strengthen the OHS aspects of the ESMS, ensuring that OHS policies and procedures are consistent with good international industry practice, the requirements of PS2, and WBG EHS Guidelines, ii) enhance internal audits to comprehensively assure compliance with Sunda's management system, expanding the focus on casual labor, iii) revise and enhance occupational health and safety training for all workers, including casual labor, by tailoring it to each asset's specific hazards and risks, and incorporating comprehensive induction, proper use of Personal Protective Equipment (PPE), and training on workplace risks such as working at heights, confined space entry, and chemical exposure pathways and hazards, iv) strengthen emergency response procedures to ensure that adequate procedures are in place and workers, particularly casual workers, are aware of them, including conducting regular emergency response drills to test the effectiveness of the procedures, ensuring the inclusion of casual labor, v) ensure the provision of adequate gender-differentiated sanitation facilities at construction and existing facilities. To assist in the implementation of the enhanced corporate requirements, Sunda shall engage a qualified independent consultant, acceptable to the IFC, to conduct an occupational health and safety, and occupational hygiene assessment covering all assets within the borrowing base, identify and address risks for assets within the borrowing base, per ESAP #2a.

Sunda will report back to the IFC on the implementation of these corrective actions as part of its annual monitoring requirements.                                                  

 Resource Efficiency and Greenhouse Gas (GHG) Emissions - Sunda's operations primarily rely on electricity from the national grid and diesel for power backup. Fuel oil is used for heating in the production of washing powder. In accordance with paragraphs 6, 7, and 8 of Performance Standard 3, Sunda will develop and implement energy efficiency targets for all borrowing base assets, incorporating cleaner production principles and focusing on core business activities. To further identify greenhouse gas (GHG) emissions reduction opportunities, Sunda will explore technically and financially feasible options, such as alternative energy sources and sustainable practices. As the project's annual GHG emissions are expected to exceed 25,000 tonnes of CO2-equivalent, Sunda will quantify direct and indirect emissions following internationally recognized methodologies, as outlined in ESAP #1b, and use these data to promote further efficiencies across the operations of the borrowing base assets.

Air & Noise Emissions - Sunda adheres to host nation law and environmental licensing requirements for the measurement and monitoring of air and noise emissions. To further enhance Sunda's management system in line with PS3, Sunda's management system shall establish explicit requirements for noise and air emissions monitoring across all assets, per ESAP #1b. This will include using suitable monitoring equipment and techniques, as well as implementing clear procedures for reporting on air emissions performance ensuring alignment with good international industry practice and World Bank Group Environmental, Health, and Safety Guidelines.

Water Supply and Wastewater Treatment – Sunda sources water for its assets from both municipal supply and boreholes, with industrial water usage primarily for the washing powder business. The company has implemented a water recycling program at the Ghana asset, which has led to the establishment of a zero-discharge washing powder facility. In terms of wastewater management, Sunda's assets are not connected to the municipal sewerage system; instead, a third-party contractor is engaged to remove wastewater to treatment facilities, ensuring responsible wastewater treatment. As part of the ESMS enhancement [ESAP #1b], wastewater quality monitoring shall be conducted under an environmental monitoring and reporting standard, promoting optimal resource efficiency and minimizing environmental impacts in line with the requirements of PS 3.

Hazardous Materials Management - Sunda employs hazardous materials in the production of its washing powder business, including bulk liquid and solid chemicals with high and low pH values. To ensure the safe handling and storage of these materials, Sunda will strengthen its ESMS [ESAP #1b] requirements to include comprehensive provisions for hazardous materials management. In line with Performance Standard 3 requirements and per ESAP 1b, the ESMS will define i) risk assessment requirements for the production, transportation, handling, storage, and use of hazardous materials for project activities, ensuring appropriate management and control measures are in place, and ii) establish and maintain clear procedures and guidelines for the management of hazardous materials, including staff training on safe handling, storage, and disposal practices.

Management of Solid Waste and Hazardous Waste - The key waste streams generated across Sunda's businesses, including diaper and sanitary product production, washing powder production, and hardware factory operations, encompass non-hazardous wastes such as plastic and paper packaging, production waste, fabric scraps, and metal shavings, as well as hazardous wastes including dust, hydrocarbon waste (e.g., used oil), and used chemical drums and bags previously containing hazardous materials. As part of the corporate ESMS enhancement [ESAP #1b], hazardous and non-hazardous waste management requirements will be defined, necessitating asset-level development of waste management plans. The corporate waste management requirements will outline waste sorting, reuse, and storage in appropriately designed areas, along with the handling and disposal of hazardous and non-hazardous waste in accordance with the World Bank Group Environmental, Health, and Safety (WBG EHS) general guidelines. To ensure effective implementation and continuous improvement, Sunda will establish a waste management audit process, which will involve regular internal and external audits, verifying compliance with the waste management plans and identifying areas for improvement. This audit process will be integrated into the ESMS [ESAP #1b].                                                  

 Transport and Traffic Safety – As a fast-moving consumer goods operator, Sunda relies on host nation environmental impact assessment processes for manufacturing facilities to evaluate potential risks and impacts on public health and safety associated with its operations. The primary risks to communities stem from truck traffic for raw material delivery and finished goods transportation, as well as associated fugitive dust.

To address these risks and ensure a consistent and proactive approach to community health and safety, Sunda will strengthen its corporate ESMS [ESAP #1b] by incorporating risk controls for trucking operations, both for its own fleet and third-party contractors. These risk controls will include a requirement and framework for assets to develop traffic management plans, outlining routing, scheduling, and driver training requirements to minimize potential community impacts. The measures will be in line with good international industry practice (GIIP) and the World Bank Group Environmental, Health, and Safety Guidelines (EHS Guidelines).

Security Personnel – Sunda engages a range of security personnel, including direct employee security staff, contracted private security providers, and host nation security forces, to ensure the safety of its personnel and property. In order to align its security practices with Performance Standard 4, Sunda will develop security standards within its corporate ESMS [ESAP #1b], defining its security management practices, policies, and procedures as guided by paragraphs 12, 13, and 14 of PS4.

The security standards, as defined in the corporate ESMS [ESAP #1b], will require assets to conduct security risk assessments, to inform the development of appropriate security management plans. These plans will outline the necessary security measures, including preventive and response measures, emergency procedures, and regular security drills and training for staff.

The security standard will require that security personnel, whether directly employed or contracted through a reputable international security company, adhere to the principles of proportionality and good international practice, including proper hiring, conduct, training, equipping, and monitoring. Additionally, Sunda will establish clear protocols and procedures for engaging with local law enforcement agencies and community stakeholders, particularly in situations where the use of force may be required.

As part of the client's community grievance mechanism (see stakeholder engagement below), provisions will be included for Affected Communities to express concerns about the security arrangements and acts of security personnel, in accordance with PS4 requirements. Sunda’s security standard will also define requirements for assets to assess and document risks arising from the project's use of government security personnel (where engaged) and seek to ensure their actions are consistent with the principles outlined in PS4.

Emergency Preparedness and Response – As discussed in the PS1 section above, to ensure alignment with PS4, Sunda's ESMS [ESAP #1b] will define requirements for assisting and collaborating with affected communities, local government agencies, and other relevant parties in preparing to respond effectively to emergency situations. 

 As described in Sunda's existing ESMS, stakeholder engagement encompasses stakeholder identification, mapping, and analysis. The approach follows IFC's "Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets." Effective communication and consultation with stakeholders are noted.

As part of the corporate ESMS enhancement [ESAP #1b], Sunda will develop a corporate stakeholder engagement procedure that meets the requirements of PS1, per ESAP #6a. Given the industrial contexts of Sunda's assets, this procedure will require assets within the borrowing base to develop an appropriately scaled stakeholder engagement plan, as outlined in ESAP #6b. The respective stakeholder engagement plans will inform and be informed by a community grievance mechanism, aligned with PS1, per ESAP #6c. This grievance mechanism will include provisions for Affected Communities to express concerns about security arrangements and acts of security personnel, in accordance with PS4 requirements.

The ESMS [ESAP #1b] will define implementation and ownership requirements. The ESMS [ESAP #1b] will require that the stakeholder engagement plan be overseen by asset-level senior management, with assurance of its effective implementation provided through an auditable corporate monitoring and evaluation standard for stakeholder engagement and grievance resolution processes, as defined in the revised corporate ESMS [ESAP #1b]. 

 evan.zhang@sunda.com

Sunda Industrial Park behind Westhill Mall, Accra, Ghana