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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
Maistra Hospitality Group publicly discloses policies related to E&S, OHS and HR adopted at all hotels (https://www.maistra.com/company/company-policy/#/) and has a documented Environmental Health and Safety (EHS) management procedures to manage its operational E&S and OHS risks in line with national and EU regulatory requirements. The Company holds ISO 14001, Environmental Management System and Hazard Analysis and Critical Control Point (HACCP) certificates. As per ESAP#1, Maistra Hospitality Group will improve its existing E&S policies and develop a standalone child safeguarding policy to articulate its E&S commitments.
The Company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national and EU standards and E&S regulatory permits and requirements. In accordance with Croatian regulations, reconstruction/ refurbishment/ renovation activities for the properties under this project, do not require the full-scale E&S impact assessments (ESIAs), but environmental mitigation measures (i.e., energy efficiency, waste management) are an inherent part of the technical design of the facilities. Abilia together with Maistra Hospitality Group’s EHS and legal team are responsible for the initial E&S assessment, obtaining all construction and operational permits, including the environmental authorizations for any new developments.
As part of this investment, Maistra Hospitality Group will enhance its E&S management system including (i) update the existing E&S policies and develop and implement a child safeguarding policy and procedure; (ii) update the E&S risk screening/assessment procedure for new developments and regular operations to expand the scope in line with IFC PSs requirements; (iii) develop and implement a Change Management Procedure; (iv) develop a Contractor Management Plan (CMP); (v) update the E&S monitoring procedure for its operations and activities carried out by the contractors and sub-contractors (will also include labor aspects); (vi) develop and implement a company level stakeholder engagement plan(SEP) (ESAP#1).
Maistra has undertaken a high-level climate risk assessment for its operations in accordance with EU regulations. The identified risks include potential droughts, heatwaves, coastal flooding, sea-level rise and wildfires. As a part of ESAP#1, the Company will update the existing E&S risk screening/assessment procedure to cover climate risk assessment for its existing and future assets.
The Company requires from its contractors and sub-contractors to follow Maistra Hospitality Group’s policies and procedures which are reflected in the legal agreements as specific E&S requirements. The construction contractors are required to develop a dedicated Construction phase E&S Management Plan (CESMP). Furthermore, the Company assigns/hires an OHS coordinator to ensure that the contractors and sub-contractors effectively implements the required provisions and management plans. For the assets under this investment, the CESMP will be developed and implemented by the Company (or the construction contractor with the adequate capacity to develop the CESMP on behalf of the Company) to address environmental, labor and OHS issues (commensurate with the risks) (ESAP#2).
The Company monitors its E&S performance and conducts internal audits. External audits by relevant governmental authorities are conducted annually or semi-annually. Maistra Hospitality Group will update its existing internal monitoring procedure by defining E&S-related key performance indicators (KPIs) to be aligned with national and EU regulatory requirements as well as with WBG General EHS Guidelines. The monitoring program will also include the oversight of third-party construction and operations activities (oversight of construction E&S activities as included in the ESAP#1).
EHS management of the hotels are currently under the responsibility of the development manager, and he is supported by five officers: L&FS, OHS, environmental, resource efficiency and food safety (under OPS). Currently, the Abilia project management team with the assigned OHS coordinator oversees the EHS practices during the construction phase of the projects. Maistra Hospitality Group will hire or assign a dedicated and qualified E&S manager to oversee and manage all E&S risks of the hotels including construction related activities performed by the construction contractor and sub-contractors (ESAP#3).
Maistra Hospitality Group has a corporate template for emergency preparedness and response plan (EPRP) for all hotels which covers the possible emergency scenarios based on a risk analysis including fire, earthquake, violent person and terrorism, accidents, and natural disasters. Most hotels have been provided with emergency power (back-up) systems. The Company is preparing the respective EPRPs for the Hotel Marjan. ESAP#4, Maistra Hospitality Group will provide copies of the EPRP for Hotel Marjan and Vrsar Holiday Village, which will cover additional scenarios such as (flash) flooding, heatwaves, drought, sea-level rise, and wildfires, as needed, per its additional climate risk assessment.
Maistra Hospitality Group is in the process of implementing a structured supply chain risk screening assessment through its initial qualification review for any new suppliers and annual review of existing suppliers per the EU and Croatian regulatory requirements and respective policies and procedures including child and forced labor. The Company has a publicly available General Terms and Conditions for Supply of Goods and Services and recently developed a Self Assessment Questionnaire ( SAQ) which includes labor and environmental related questions e.g., social policies, OHS management.
As part of this project, ESAP#5, Maistra Hospitality Group will develop: a) a Supply Chain Policy and update the General Terms and Conditions for Supply of Goods and Services aligned with PS2 requirements which will be a requirement for all primary suppliers (such as food suppliers); b) Maistra Hospitality Group will communicate publicly on its web-site the updated General Terms and Conditions and explain the requirements during the annually negotiation process with individual suppliers and service providers. The Company will regularly supervise suppliers’ adherence to the General Terms and Conditions via already developed Self Assessment Questionnaire and report on findings to ensure that the suppliers follow E&S requirements stated in General Terms and Conditions (ESAP#6).
PS 2 – Labor and Working Conditions
As of July 2023, at peak season, Maistra Hospitality Group employed a total of 4,725 workers (55%/45% female/male ratio), comprised of 30% permanent staff and 54% temporary staff, 12% seasonal student workers (comprises of college students and mainly apprentices who prefer to continue working during the summer period in the same position they’ve been trained for during the school period), and 4% agency workers, engaged through local labor agencies, engaged to meet seasonal demand. High school students and university students are employed on seasonal contracts, during the summer period, via vocational schools and student service centers, in accordance with Croatian legislation. The Company also uses contractors for activities associated with core operational tasks such as cleaning, horticulture and maintenance services.
Maistra has corporate-level HR policies and procedures, including a Labour Standards and Human Rights Policy, Recruitment and Selection Policy, Violation of Work Obligations Policy, and Employee Data Protection Rules. Maistra also has an Employee Handbook (MAIbook) and an Ethical Code (applicable to employees and workers acting on behalf of the company) which set out the terms and conditions of employment, including a section on zero tolerance for discrimination and harassment.
The employment terms and conditions are in line with national legislation. The Company respects workers’ right to freedom of association and collective bargaining, and Maistra and HUP workers can join two established sectoral and national level labor unions, with Collective Bargaining Agreements negotiated between the unions and the Company, and applicable to employees, student workers and agency workers. The process followed in cases of retrenchment is clearly defined in Croatian Law and set out in the Collective Bargaining Agreement. As per ESAP#7, Maistra Hospitality Group will prepare a document that will provide an overview of applicable HR Policies and Procedures and will communicate it to all workers including labor agency workers in Croatian and English during onboarding. Moreover, the Company will communicate the Code of Ethics via its web-site to Maistra Hospitality Group customers/guests to raise awareness about workers’ protection, rights and safety.
The Company has a documented Worker Grievance Management Procedure, including a dedicated ‘Protection of Workers’ Dignity’ channel for handling harassment cases, in accordance with the national labor law. The Company also has an externally managed and publicly available online platform called ‘Better Maistra’, open to all stakeholders, including workers, to anonymously report incidents and behaviour not in compliance with Maistra’s values and ethical standards.
As per ESAP#8, Maistra Hospitality Group will enhance the existing Worker Grievance Management Procedure to allow for anonymous grievances to be raised by all workers. Additionally, the Company will develop a grievance register process to collect and address the grievance and concerns in a transparent and timely manner. Workers will be informed about the enhanced procedure once it is in place.
During the peak season of 2023, approximately 4% of the workforce are engaged through three local labor agencies for temporary employment, with workers from Asia (e.g., the Philippines and Thailand). These workers typically spend six months working at the hotels mainly as cleaners and housekeepers. Once the summer season is over, they often remain in Croatia and work for other companies still employed by the temporary employment agencies. As part of ESAP#9, Maistra Hospitality Group will update its own Maistra Hospitality Group Recruitment and Selection Policy to define requirements for labor agencies recruiting workers from overseas, including clear communication of Maistra employment conditions to workers in home country before travelling to Croatia to start assignment, and prohibition of agency placement or transportation fees for workers travelling from overseas; and assess compliance with this policy as per requirement reflected in the contracts with labor agencies and contractors. As part of ESAP#10, Maistra Hospitality Group will undertake interviews with agency workers to verify whether agencies and origin sub-agencies (if applicable) are meeting the Company’s policy requirements; and if agencies and sub-agencies are found not to be working in accordance with the Company’s policy requirements implement corrective actions, including implementing the disengagement procedure if relevant. In the event that agency placement or transportation fees are being charged to workers from overseas, by agencies or sub-agencies, Maistra will take the necessary actions for agency workers to be reimbursed of any transportation or recruitment fees.
The reconstruction/refurbishment of the assets will be undertaken by a third-party contractor, who will recruit workers for the construction phase. As included in the ESAP#1, Maistra Hospitality Group will define in the CMP, the Company’s labor-related requirements for contractors and subcontractors, aligned with Croatian Law and the Company’s updated HR policies and procedures. As per ESAP#11, Maistra Hospitality Group will commission a labor assessment during the initial stages of the Hotel Marjan construction phase, to ensure the construction contractor and subcontractors are meeting the requirements established in the CMP and labor conditions will be monitored by the appointed EHS manager during the life of the construction phase.
Maistra Hospitality Group has a documented OHS management procedures, covering hazard identification and risk assessment, L&FS, Food Safety, Leisure Safety, Emergency Response, Crisis Management, Legionella Control Procedure, Storm Prevention, Pest Control, and required trainings. The Company has OHS representatives at all facilities who are part of the OHS committee which meets regularly and is a forum for communication between workers and management on health and safety issues. Over the past years, there have been no fatalities or major incidents reported during hotel operations.
PS 3: Resources Efficiency and Pollution Prevention
Energy and resource efficiency measures are considered at design phase of the new developments and includes installation of energy efficient equipment, HVAC, heat pumps and other measures.
Water supply during construction and operation of assets is provided through the municipal network and domestic wastewater is discharged through the municipal wastewater system. Potable water quality is monitored periodically, and swimming pool water quality is tested and recorded daily in each hotel, which are generally in line with legal requirements.
Electricity is sourced from the public grid and there are back-up generators powered with diesel in case of grid power failure. Natural Gas is used for heating purposes including space heating, water heating and cooking. Air emission measurements of the boilers are conducted annually as per the respective local regulation which meets the requirements.
The Company estimates its annual GHG emissions of its operational hotels. Vrsar Holiday Village generates far below 25,000-ton carbon dioxide per annum (tpa). Upon completion of the Hotel Marjan, GHG emission is not expected to be above 25.000 tpa in total.
Maistra Hospitality Group has hazardous and non-hazardous waste management procedures including a system of sorting, storage, and disposal, in line with applicable legal requirements. Solid wastes consist mainly of cardboard paper, plastic, and wooden packaging, that is segregated at source and handed over to the local authorized recyclers. Food waste is segregated and collected for disposal in municipal landfills. For the construction, Maistra Hospitality Group requires the contractors to handle solid waste separately, by use of licensed waste management companies.
Hazardous materials that are stored/used on site include chlorine, pH chemicals for the pool, disinfectants, and cleaning detergents for housekeeping, and are used in limited quantities and in compliance with national regulations, access control protocols, and material safety data sheets requirements and guidance.
The Company follow the local regulatory requirements and relevant EU Directives while performing the pesticide management activity and storage of the relevant substances. To control any harmful organisms, the agents in line with the relevant EU Directives are used.
PS 4: Community Health, Safety and Security
As noted in the ESAP#1, the Company will develop and implement a child safeguarding policy and relevant procedure which will comprise of safety measures for children that stay in the Maistra’s facilities as guests. Additionally, as per ESAP#7, the Company will communicate via its web-site with its customers/guests Code of Ethics which demonstrates the Company’s commitment to prohibit any kind of harassment to its workers.
Maistra Hospitality Group implements the design and construction standards for seismic risks prevention during new developments, which are reviewed and approved through the construction permit issued by the state authorities.
The Company developed a corporate L&FS standard procedure which requires engagement with qualified L&FS professionals approved by the government of Croatia to conduct L&FS reviews of the hotels and to confirm that all systems are operational and detect any risky condition, periodically. Based on the review, as necessary, the Company develops enhancement plans to minimize L&FS risks and comply with legal and national code requirements.
Visited Hotels were provided with the necessary L&FS infrastructure and systems including different types of fire extinguishers, fire detection and alarm system with centralized control panel, sprinkler systems, fire hydrants, fire hose reels at every floor, water storage tanks with fire pumps, and public address systems from a centralized secure location at each hotel. Additionally, the means of egress (corridors and staircases) were noted to be protected with fire resistance construction and provided with smoke control systems (e.g., stair pressurization system in high rise hotels). The Company has developed a L&FS master plan for Hotel Marjan in accordance with national fire regulations, and European fire codes which was approved by local authorities.
Additionally, as part of ESAP#12, Maistra Hospitality Group will obtain certificates from a L&FS professional that Hotel Marjan and Vrsar Holiday Village facilities were built in accordance with the respective L&FS Master Plan and post-construction certificates will be submitted to IFC.
All properties are guarded with unarmed security guards from licensed private security companies. Regular training programs are conducted for the security workers on the standard operating procedures for their job including L&FS trainings. As per ESAP#8, the Company will communicate with security guard companies all updated General Terms and conditions to increase anti-sexual harassment sensitization among security staff.
