The expansion of spinning capacity proposed at Hobiganj is on a 51.54 acres greenfield site. The entire land is in the possession of the company and has been secured with a compound wall on all sides. Land has been purchased from private landowners through willing buyer and willing seller transactions and land compensation has been paid to all landowners. No physical or economic displacement has resulted and therefore IFC Performance Standard (PS) 5 (Land Acquisition and Involuntary Resettlement) is not applicable. Further, the selected land is located in an area at Hobiganj with presence of existing industries and, therefore, the type of risks and impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), is not applicable. There are no known indigenous people and/or cultural heritage within the vicinity of the project, thus PS7 and PS8 is not considered to be applicable at this stage.                                                  

This is a Category B project as per IFC’s Policy on Environmental and Social Sustainability (2012). The key E&S issues include:  (i) the company's management and monitoring systems to assess and manage E&S risks and impacts from its operations, as well as those related to the construction of new spinning facility and supply chains for the facilities covered under the project;(ii) consistent management of labor and working conditions, gender based violence,  freedom of association/collective bargaining and occupational health and safety (OHS) policies and practices ; (iii) resource efficiency (water and energy consumption); (iv) monitoring and management of air emissions, wastewater and solid/hazardous waste disposal; (v) life and fire safety management, emergency preparedness and response; and (vi) community health/safety/security issues and (vii) the company's stakeholder engagement activities related to E&S aspects.                                                   

PS1: Assessment and Management of Environmental and Social Risks and Impacts:

Policy:

BTL has adopted an Environmental and Health and Safety Policies, that are broadly aligned with the objectives of IFC’s Performance Standards. The Group has established management systems that are independently verified and certified as compliant to ISO 9001, ISO 14001 and ISO 45001 across its denim operations and planning the same for spinning operations shortly.

The Group supplies products to recognized international companies which require compliance with their codes of ethics and procedures and maintains product certifications required by international buyers. The Group currently maintains global certifications such as Global Organic Textile Standard (GOTS), Organic Content Standard (OCS), Global Recycled Standard (GRS) and Recycled Claim Standard (RCS) across its spinning and other operations.

The company has in place policies on labor, environment, fire safety and business integrity which form the framework for Badsha’s environmental and social management of operations. Similar policies, management systems and processes will be extended by the company to the proposed spinning facility.

Environmental and Social Assessment and Management System: The Group 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. 

At the facility level, the plants maintain a regulatory register comprising an annual compliance monitoring plan, permit renewal calendar and applicable list of legal regulations.

As per ESAP#1, the Company will engage with a qualified consultant to prepare an Environment and Social Impact Assessment Study (ESIA) for the new spinning facility in accordance with Bangladesh Environment Conservation Rules (BECR) 2023 and IFC PS1 requirements. Based on the ESIA findings, the Company will develop and implement a site specific   Environmental and Social Management Plan (ESMP), consistent with legal/regulatory and IFC requirements. The ESMP will include documented E&S management and monitoring plans for construction and operation phases of the new spinning facility. The construction ESMP will provide specific guidance on E&S management measures and include monitoring procedures and checklists, as follows: clear EHS and working conditions requirements at the site; occupational health and safety procedures for the construction workforce; responsibilities of company personnel for implementation and on-site monitoring, aligned with the ESIA; requirements on labor law compliance including prevention of child labor;  labor camp guidelines in line with the IFC guidance note on workers’ accommodation; construction management practices to minimize the impact on neighboring communities and documented internal safety inspections and audits.

The new facility will be required to obtain necessary environmental approvals from the Department of Environment (DOE) and also other E&S approvals as may be applicable, prior to initiating construction works at site. As per ESAP#2, the Company will as part of the E&S management system develop a legal and commitment register to identify and document the applicability of the E&S permits and licenses and have a clear strategy in place to ensure that the permits are received before the initiation of construction works for the new spinning facility.

Organizational Capacity and Competency:

Head of HR, Admin and Compliance has overall responsibility for managing EHS and social issues and risks for the Badsha Group of companies. The spinning and denim operations have separate and dedicated teams of E&S professionals who are responsible for implementation and monitoring of the E&S systems at the facility level. Each team comprises of a Manager (EMS), who is responsible for monitoring and management of the environmental and health and safety aspects and a Senior Compliance Officer who oversees social and labor related aspects and stakeholder issues. The team also includes an experienced Fire and Safety Officer, responsible for managing life and fire safety (LFS) aspects at the facilities. A separate Environment Management (EMS) Team has also been constituted at BTL with inter departmental representatives (from HR & Admin, Utilities, Maintenance, Stores, etc.) – this team is tasked with responsibility of implementing environmental initiatives at the department level and to conduct internal assessments to review environmental performance improvements and progress. As per ESAP#3, the EHS organizational structure for the new spinning facility will be established before commencement of facility operations.

Emergency Preparedness and Response:

The Company has documented Emergency Action Plan for BTL’s spinning facility. The emergency action plan outlines specific procedures to be followed in case of fires, floods, earthquakes, gas pipeline rupture, security threats, labor unrest and other potential emergencies. A specific emergency response organization at BTL has been defined and external responders to be contacted during emergencies (Fire Service, Police, Hospital, etc.) have also been identified. Quarterly meetings are held to review the Emergency Action Plan and assess the Company’s preparedness to deal with emergencies and to determine the need for any additional actions.

Monitoring & Reporting:

The Group monitors E&S indicators linked with resource consumption (energy and water usage), stack emissions and ambient air quality, GHG emissions, wastewater generation and quality of treated effluent, workplace and ambient noise levels, solid waste generation and disposal, accident/incident records, labor compliances, grievance redressal, etc. Internal auditing is coordinated by the Head of HR, Admin and Compliance and the findings are shared with the Senior Management.

External audits are organized as per the requirements of global customers and the Group’s systems and procedures are reviewed during independent assessments (as required by the buyers) applicable to the textile industries sector such as Oeko-Tex 100, Zero Discharge of Hazardous Chemicals (ZDHC), Better Cotton Initiative (BCI), SEDEX Members Ethical Trade Audit (SEDEX SMETA), Worldwide Responsible Accredited Production (WRAP) and the Business Social Compliance Initiative (BSCI) amongst others.

As per the ESAP#1, the Company will develop an E&S monitoring plan for the new spinning facility as an outcome of the proposed ESIA Study – the plan will specify minimum KPIs/parameters to be monitored, monitoring frequencies, type of monitoring and the definition of thresholds that signal the need for corrective actions.  

PS2: Labor and Working Conditions

As of May 2023, BTL employs 7800 direct workers for its existing operations comprising about 75% female and 25% males. All the workers are directly employed by the Company and there are no third-party workers at the existing facilities. For the new spinning facility at Hobiganj, BTL expects to hire an additional 3,500 workers with similar arrangements, once the facility is operational. About 400 contractual workers will be involved in site development and construction works for the new spinning facility across the construction period, which is expected to last for 10 months. The Company has hired the contractual workers directly, and many of them (mostly the skilled workers) have worked with the Group for a long time, participating in construction projects at various Group facilities.

Human Resource (HR) Policies and Procedures, Working Conditions and Terms of Employment:

BTL has adopted HR policies and procedures broadly aligned with the requirements of PS2 and national law. The HR policies addresses recruitment, wages, working hours and overtime, prohibition of child labor, forced labor, sexual harassment and abuse, non-discrimination, freedom of association, etc. Appointment letters are issued to workers at the time of employment and describe the working conditions and terms of employment. Also, induction training is provided to new workers explaining the HR policies and procedures. The policies are also displayed on the notice boards at facilities in local language. The Company will apply the same HR policies and procedures, for managing workers in the new spinning facility funded under the project.

However, the contractual workers engaged for construction works have not been provided with any engagement contracts. As per the ESAP#4, the Company will ensure that all contractual workers engaged for construction works at the new spinning facility will be provided with formal engagement contracts, clearly defining terms of engagement, and working conditions and aligned with Bangladesh Labor Laws and IFC PS2 requirements.

Freedom of Association:

Currently there are no staff unions at BTL. However, the Company has developed a Freedom of Association Policy and does not restrict formation of employee unions, in line with Bangladesh labor legislation. A participation committee has been formed at BTL which has elected worker representatives, along with representation from the management. The committee meets on a regular basis to discuss issues related to workplace and improvement of facilities. A similar committee will be formed at the proposed facility.

Non-discrimination and Equal Opportunity: The company’s Non-Discrimination Policy includes equal opportunity among employees, prohibiting discrimination of any nature.

Grievance Mechanism:

The Company has a documented grievance handling policy and procedure and the same is communicated to the employees through induction/refresher trainings. Grievances received are first directed to the section head for redress and then escalated to the HR department and the Grievance Redress Committee (GRC) that exists at the facility level. Compliant boxes have been provided within the facility and grievances can be raised anonymously; signages have been displayed on the shop floors explaining the grievance process. A grievance register is also maintained at the facility which records the grievances raised and their redress. However, no defined process has been established for contract workers, involved with construction work at the new facility, to access the Group’s grievance redress system. As per ESAP#5, the Company will update and adopt the Group HR policies and procedures that meet local regulatory requirements to extend relevant provisions of IFC PS2 and grievance mechanism to contract workers and implement procedures to oversee compliance with labor laws and PS2 requirements.

Additionally, considering the significant workforce of women employees, the Company has documented a ‘Prohibition of Harassment and Abuse Policy’ and conducts regular awareness trainings on the same for workers and supervisors. A specific committee has been formed to deal with sexual harassment complaints and the policy has included guidance on the methods of investigation and resolution of such complaints. The Company regards issues related to sexual harassment with utmost concern and seriousness, since they have a direct bearing on the Company’s reputation and credibility in the market and their ability to attract and retain the women employees who are vital for their operations; they follow a proactive and preventive approach of educating their employees about the consequences and implications of such behaviour and maintaining secure and confidential communication channels for reporting and resolving any such incidents.

Protecting the Workforce:

The Company clearly indicates its commitment in respect of child labor and forced labor through its Policies and Code of Conduct (COC). The Company does not employ anyone below 18 years of age. Based on observations during the appraisal, no instances of child labor or forced or bonded labor were noted.

Occupational, Health and Safety (OHS):

The Company has developed a documented Health and Safety Policy and Procedure for its spinning operations and has identified machine safety and other risks for individual sections of the factory (e.g., carding, drawing, finishing, simplex, ring frame, packing, etc.). Hazard Identification and Risk Assessment (HIRA) registers have been used to list all identified hazards with a work zone, including the hazard levels and the controls available to eliminate or reduce the associated risk. The HIRAs have been developed specific to different work zones within the factory and appropriate signages, highlighting the risk assessments and safety instructions, have been displayed in respective work areas. Training is provided to workers on usage of personal protective equipment (PPE) and usage of PPE was noted to be adequate. The visit to BTL’s existing spinning factory did not indicate any unmitigated safety hazards. The compliance team of the facility is responsible for routine inspections and monitoring. The existing spinning facility also has a health and safety committee (having representation from workers and management) which meets regularly to discuss the OHS issues. A workplace environmental quality monitoring program is in place to monitor indoor air quality (PM10, PM2.5, SOx, NOx, CO, VOCs), using 3rd party laboratories. The results of the workplace monitoring (conducted during May 2023) were aligned with DoE/WBG requirements. BTL has also monitored workplace noise within the facility and has identified production zones with high noise levels, basis which a PPE protocol has been designed and implemented. BTL conducts regular annual medical check-ups for staff members.

Once operational, the new spinning facility will implement similar OHS systems and processes.

Regarding life and fire safety (LFS), the visited BTL spinning facility was noted to have fire detection, alarm and firefighting passive and active systems included centralized smoke detection and alarm, fire hydrant and fire extinguishers, manual call points, fire exit signages, emergency lights and public address systems. The emergency evacuation plan was also displayed appropriately within the factory premises. The firefighting equipment is subjected to periodic inspection and regular L&FS training is provided for workers. 

The spinning facility has a valid fire license issued by the Bangladesh Fire Service and Civil Defence Department (BFSCD) and is compliant with their requirements. Periodic audits as well as  bi-annual fire drills are conducted by the BFSCD, within the factory premises. The fire safety function is under the direct supervision of the Head of HR, Admin & Compliance and is supported by a designated Fire & Safety Officer at the facility level as well as the team of security personnel, (who form a critical part of the fire safety team and have been provided with adequate fire safety training).

The Company reported a major fire incident that took place within the factory premises on 14 July 2020 at their raw cotton warehouse. BTL’s firefighting team and firefighters from BFSCD worked together to extinguish the fire. There were no injuries or fatalities resulting from this incident. The company has reported that there have been no such or similar incidents in the last three years. The company has ensured regular L&FS audits and inspections, training, and fire drills with active involvement of BFSCD along with availability of valid fire licenses to minimize the risk. It was reported that the BFSCD does a facility inspection every six months, based on which the fire license is issued.

For the new spinning facility, the LFS designs have not been initiated and presently only architectural briefs for the new building have been developed. The Company will develop LFS designs for new spinning facility to be consistent with an internationally recognized LFS code (e.g., United States National Fire Protection Association (US NFPA) or equivalent). As per ESAP#6, the Company at the design stage, will commission a suitably qualified LFS consultant to review the site specific architectural brief and confirm that all the LFS-related aspects of design are consistent with an internationally recognized LFS code in addition to ensuring alignment with Bangladesh National Building Code (BNBC)/BFSCD requirements.

Supply chain:

Company operations depend on supply chains to source cotton from global cotton merchants such as LDC, Olam International Ltd., Cargill Cotton, Faircot, COFCO, Materra, etc. The Company is committed to addresses child labor and forced labor issues in its cotton supply chain and has in place a Code of Conduct (COC), that has identified specific E&S requirements for its suppliers. The suppliers are required to acknowledge the requirements as stated in the company’s COC and ensure that they are in compliance with the Code and applicable laws.

The Company annually procures around 120,000 tons of cotton from global suppliers and the Company’s global suppliers have instituted appropriate E&S management systems. The suppliers’ partners with the Better Cotton Initiative (BCI), the International Labor Organization (ILO), the Association of Cotton Merchants in Europe (ACME), Cotton Made in Africa (CmiA), Suppliers Ethical Data Exchange (SEDEX), etc. and have certified systems in place to address the labor risks in its supply chain. A small part of the cotton (about 100 tons, annually) is also sourced from local/regional raw cotton suppliers, who usually do not always possess necessary systems to address labor risks in their primary supply chain.

As per ESAP#7, the Company will strengthen the supplier evaluation program, including updating of its Supplier Selection Policy and Procedure and its existing Code of Conduct, to put in place screening and monitoring mechanisms for its supply chain for the new spinning facility. Specifically, the updated procedure will include mechanisms applicable to existing and new suppliers for: a) an ongoing review of child labor, forced labor and OHS risk issues b) improving the monitoring and follow-up procedures to collect and review supplier’s information that demonstrates evidence of meeting IFC PS2 requirements and c) based on the review and audit findings, take appropriate management action in compliance of Para 29 of PS 2 requirements.

The audits will be focussed on local non-certified cotton suppliers that provide only a small part of the Company’s requirement but probably with high-risk exposure. The company will work with such suppliers to address any existing gaps against IFC PS2 requirements. For the supply from global cotton merchants with appropriate certification, the preference will be to select and work with suppliers who provide better evidence of their product being free of any labour risks in the primary supply chain.     

PS3: Resource Efficiency and Pollution Prevention   

Resource Efficiency:

An in-depth cleaner production assessment was conducted for the Group’s denim operations in 2022. Based on the study recommendations, specific measures were adopted to optimise resource utilisation and to reduce the amount of GHG emissions. The Group has also adopted limited scale water and energy conservation initiatives for its denim operations e.g. implementing rainwater harvesting systems and use of solar power for outdoor and emergency lighting. BTL is considering energy and resource conservation initiatives for its new spinning operations, through selection of machinery and equipment with low fuel consumption and/or better energy efficiency.

For the spinning operations, the key resources involved are water, natural gas, and electricity; the Company closely monitors the resource consumption data for their existing spinning operations.

Electricity at BTL’s existing spinning operations is sourced from a captive power plant that uses natural gas as fuel. According to the data reported by the Company, the annual electricity consumption in 2022 was 65 million units, while the annual gas consumption was 16.5 million cubic meters. The Company plans to have similar arrangements for sourcing power at the new spinning facility.

The water requirement is sourced from ground water and the Company has acquired a No Objection Certificate (NOC) from the Upazilla Parishad for extracting the ground water. The water requirement for the existing spinning operations is reported to be 375 000L/day. The company plans to use groundwater for the new spinning facility after obtaining the necessary approvals.

Greenhouse Gases (GHG) Emissions: BTL has prepared an annual GHG Inventory for the period between Nov 2021 to Oct 2022 by engaging a third party service provider. The GHG inventory has been prepared in accordance with ‘2006 IPCC Guidelines for National Greenhouse Gas Inventories for Stationary Combustion. Tthe total GHG emission was estimated as 89,535 tons of carbon dioxide emission equivalent per annum. BTL does not have any indirect emissions associated with the off-site production of energy as it does not purchase electricity from the public grid.

Air Emissions: Air emissions from BTL’s spinning operations are limited to the generators stacks from its captive power plant and the boiler exhausts. The current operations include 14 generators that use natural gas as fuel to generate captive power and also include five boilers for generating steam. BTL has obtained necessary approvals from DoE for installation and operation of the captive power plant of 11.036 MW, in addition to obtaining an ECC for the overall spinning operations. BTL conducts regular monitoring of stack air emissions by engaging BAB accredited agencies. The latest stack air emission monitoring results (conducted during May 2023 and covering all generator and boiler stacks) indicate compliance with the DoE emission limits as well as the limits specified under World Bank Group EHS Guidelines.

Wastewater Treatment: No significant process wastewater streams are generated from the existing spinning operations. The domestic wastewater (sewage) generated from the existing operations is being collected through septic tanks installed within the factory premises. The DoE has advised the Company to install a Sewage Treatment Plant (STP) for their existing operations. Accordingly, the Company has engaged a consultant to develop a design report for an STP with a capacity of 135 000L/day and the same has also been approved by the DoE. The installation of the STP is expected to start shortly. The new spinning facility is being planned with the necessary provision of an STP.

Waste management: The main waste streams generated from spinning operations include jute, cotton cones, wastepaper cuttings, plastic bags, baling wire, iron scrap etc. The generated wastes are non-hazardous in character and are stored in bins provided within the shop floors and also at multiple locations within the factory. The company has signed a contract with an authorized waste vendor and the waste is regularly disposed of through this vendor. The company records waste quantities and maintains manifests for all waste disposed of through the vendor. The company has reported that the spinning operations do not involve the use of hazardous materials/chemicals and do not generate any form of hazardous waste.

For the greenfield spinning facility, as per ESAP#1, the Company will develop and implement plans for appropriately managing emissions, effluents, and wastes, generated from the Project, consistent with regulatory and IFC requirements.  

PS4: Community Health, Safety and Security

The Company has designed, constructed, and is operating and maintaining the BTL spinning plant in compliance with the relevant factory regulations. The Company has established regular infrastructure and an equipment safety related inspection regime in compliance with local factory regulations. To deal with any local traffic increase and associated impacts on community health and safety resulting from the vehicular fleet movements (carrying raw materials and finished goods), BTL raises driver’s awareness on defensive driving and speed limits during traffic.

Security Personnel: Security organization at BTL’s existing spinning facility is led by on-roll company staff. The team is led by a Senior Security Officer and includes Security Shift in Charge (6 Nos.), Security Inspectors (3 Nos.), Security Clerks (4 Nos.) and 89 unarmed Security Guards (men and women guards). The security personnel are trained to manage the entry/exit gates, vehicular and pedestrian movements, and other areas within the plant premises. They also form an integral part of the critical emergency response teams such as fire and security threat. Regular training program are conducted by the Company for the security personnel on the standard operating procedures for their job including human rights and code of conducts as well as on emergency response. The Group’s facilities are audited as per the requirements of the US Customs-Trade Partnership Against Terrorism (CTPAT). Hence CTPAT aligned SOPs and security protocols are followed at the plants.                                  

The Group considers the neighborhood communities, statutory authorities, customers, employees, contractors, and suppliers as key stakeholders. Community stakeholders are engaged through corporate social responsibility (CSR) programs. As part of its CSR initiative, the Group arranges for repair and maintenance of community infrastructure (e.g., public roads) and participates in community tree plantation programs and other community development initiatives.

For the new spinning facility at Hobiganj, it was reported that the local community members regularly engage with the management directly or through Badsha group employees who stay in the area. The Group’s denim factory (Pioneer Denim), located in the same area, has formally instituted a process for regular community engagement. For the new spinning facility, the Company will also develop and implement a formal stakeholder engagement plan and community grievance mechanism as part of the ESIA (ESAP#1).                                                   

Company: Badsha Textiles Limited  

Point of Contact: Muhammad Habibur Rahman FCMA    

Title: Executive Director (Finance and Operation) 

Telephone Number: +8801714167534           

Email: ed@badshatex.com          

Mailing Address: Holland Center 8th Floor Cha 72/1-B, Progati Sarani Dhaka, Dhaka, 1212 Bangladesh           

Website: https://www.badshatex.com/