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
Environmental and Social Policies. Minth Group has established several group-level policies focused on environmental, social and occupational health and safety (EHS) aspects and compliance with national regulations and are largely consistent with IFC’s Performance Standard (PSs). The policies are binding for its subsidiaries, including MAE Serbia and Minth Poland and can be found at the following link: https://minth.rs/bezbednost-i-zdravlje-na-radu-zastita-zivotne-sredine /.
Identification of E&S Risks and Impacts. The company identifies and manages its E&S risks and impacts per applicable national standards, E&S regulatory permits and requirements. Minth maintains a legal EHS registry of the applicable laws and regulations for countries they operate to carry out environmental and social impact assessments for all greenfield projects. For MAE Serbia and Minth Poland, for the expansion project, the subsidiaries have finalized and developing the EIA studies (please refer to annexes disclosed together with this review). Minth’s subsidiaries existing E&S risks and impacts identification process is largely consistent with PS1. As per ESAP#1, MAE and Minth Poland will conduct a supplemental environmental impact assessment study (EIA) for their facilities in line with IFC PSs’ requirements, World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines, and WBG EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing. The supplemental EIA will include social impacts, climate risks and cumulative impacts, etc.
E&S Management System and Programs. Minth Group has established its E&S Management Systems (ESMS) in line with ISO 14001 Environmental Management Systems and ISO 45001 Occupational Health and Safety Management Systems international standards requirements. Management programs in Minth subsidiaries in Serbia and Poland are mainly focused on meeting the local regulatory requirements, like the preparation of a waste management plan, life and fire safety (LFS) plan. MAE Serbia and Minth Poland will develop and implement an ESMS with Environmental and Social Management Plans (ESMP) related to the construction and operations. ESMS/ESMP will also address E&S monitoring and reporting, ambient air quality, point source air emissions, odor, effluent discharges, waste management, noise, and workplace OHS monitoring (ESAP#2). The ESMS/ESMPs will be consistent with national regulatory requirements, IFC PSs requirements, WBG EHS General Guidelines, and WBG EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing.
E&S Organizational Capacity/Competency. Group has established the Sustainability Committee, which works alongside the Audit Committee, governed by the Board of Directors to ensure a top-down implementation of Minth’s environment, OHS and HR governance principles. At subsidiary level Minth has a decentralized EHS organizational structure where EHS management at each individual facility are coordinated by the respective EHS departments/services and plant-level managers. Facilities have a fulltime EHS Manager who oversees the environmental performance, ensures adherence with the EHS policies and reports to facility’s General Manager. Disclosure, stakeholder engagement and external grievance management are currently handled by general manager office personnel engaged in public relation activities. HR Manager is responsible for managing internal grievances.
Emergency Preparedness and Response. Client’s ESMS is established to identify, assess and respond to emergency situations. Subsidiaries have documented emergency preparedness and response plans (EPRPs) at each production plant in line with local and national regulatory requirements largely aligned with PS requirements. The EPRPs and Emergency Action Plans include risk assessment and response to scenarios of fire, flood, technical incidents, with clear roles and responsibilities assigned within the organization. MAE and Minth Poland will update their emergency preparedness and response plans (EPRPs) to include climate-related events such as heatwaves, heavy rains, and floods (ESAP#2).
Supply chain management system. Aluminum billets and slabs are main row material inputs relevant to supply chain and are being provided from European suppliers. The Company established a centralized supplier management system that includes Minth Group Supplier Code of Conduct, the Supplier Information Management Guide, the Process Audit Management Guide, the Minth’s Supplier Management Manual, and the Guidelines for Supplier Risk Management. Suppliers are required to conduct self-assessments in addition to on-site assessments by the Company before any cooperation. MAE and Minth Poland will update their ESMS for supply chain, namely a Supplier code of conduct and Supplier Management Manual, to include a clear prohibition of child labor and forced labor in all purchasing procedures. The client will require its suppliers to adopt the manual and will develop a communication plan to inform its suppliers and train its employees. (ESAP#2).
E&S Monitoring and reporting. Subsidiaries have developed programs to monitor, report and review the compliance of their facilities with the respective national law and standards. MAE reports results of environmental monitoring to the local and national authorities. Senior management regularly reviews and updates E&S targets for continuous improvement.
PS 2 – Labor and Working Conditions
By the end of 2023, MAE employs around 2000 employees, mainly direct employees. The company plans to hire additional 1000 employees in 2024 and 300 in 2025. In Poland, by the end of 2023, there were around 90 employees and by the end of 2024, the total headcount is planned to be around 220.
HR Policy and Procedures. Group endorsed HR Corporate policy, procedures, instructions, and internal regulations. Minth Group adheres to the labor laws and regulations of the countries and regions in which they operate with employment and recruitment practices fair and in accordance with international standards such as the International Human Rights Law, the eight fundamental conventions of the International Labor Organization, and the United Nations Guiding Principles for Business and Human Rights. Serbian and Polish subsidiaries’ HR practices are consistent with national labor and employment laws and largely aligned with IFC PS2 requirements. HR policies and procedures cover the right to fair labor remuneration, rest and vacation time, labor safety and health protection, vocational skills training, access to social insurance and welfare, the right to file labor disputes and to seek legal recourse in cases of labor-related grievances as well as equal opportunity, anti-harassment, anti-discrimination, whistleblowers protection, etc.
Working Conditions and Terms of Employment. Terms of the employment are defined in the written employee contracts. Working regulation defines working hours, shifts, rests, minimum wage, overtime, probation period, criteria for annual leave, achievements assessment, personal development, training, remuneration, in compliance with national regulations. Within ESAP#4 the company will update its HR policies in line with PS2 requirements, as further discussed in the sections below.
Non-discrimination and Equal Opportunity. The company level anti-discrimination hotline, a work equality office, and a dedicated working group are established to encourage employees to work on creating a healthy and inclusive work environment.
Workers Organization. The company adheres to the principle of freedom of association and is respectful of employees’ right to form, join, and organize labor unions of their own choice and engage in collective bargaining. Around 80 % of the employees of the Group are represented by unions.
Protecting the Workforce. The minimum age of employment at Minth is 18 years as defined in the Recruitment Policy. As reported in the Environmental Social and Governance (ESG) Report for 2022 published on https://www.minthgroup.com/wp-content/uploads/2021/04/2022-Environmental-Social-and-Governance-Report.pdf , there is no instance of child labor or forced labor violations at Minth Group.
Grievance Mechanism. Group has established an internal grievance mechanism, including the official website, email, and hotline. Whistleblowing Management and Integrity Reward System offers rewards, without retaliation, for reporting misconduct. MAE and Minth Poland will formalize the grievance mechanism to align it with PS2 requirements to clearly explain how an employee, including third-party workers, outsourced service providers and contractors, can raise concerns, file grievances, and how the concerns are managed. The mechanism will also allow for anonymous complaints. The grievance mechanism will specifically define the procedure for addressing prevention of sexual harassment and specific considerations related to harassment/gender-based violence (GBV) grievances. The grievance officers will be trained to manage and process GBV and harassment grievances and make sure it is accessible for direct and contracted workers (ESAP#4).
Workers Engaged by Third Parties. MAE EHS requirements for contractors are incorporated in common agreements stipulating the third-party obligations regarding the OHS, fire safety, labor protection, and environmental protection in accordance with the local laws. Contractors are mainly engaged for construction works, security, maintenance services, etc. As part of ESAP#2, MAE Serbia and Minth Poland will develop and implement ESMPs, to contain E&S Contractor Management Plan to manage E&S performance and compliance of its contractors, subcontractors, and other third parties working in operation or the construction of the new facilities.
In MAE 5 % of workers are engaged through a leasing agency. MAE and Minth Poland will update their Recruitment and Selection Policy and Labor Leasing Policy to define requirements when recruiting workers from agencies (ESAP#4).
OHS. The Minth Group has an OHS management system, applicable to its subsidiaries. MAE has developed an OHS policy, in line with group’s management system, setting the basic work health and safety principles, roles and responsibilities, including third parties (contractors, suppliers, etc.). The system includes a documented workplace risk assessment procedure and a risk mapping/register. Project specific hazard identification/assessments are conducted for operational activities, in line with the applicable regulations and industry best practice. In Minth Poland, workplace risk assessment is in progress, and client will develop workplace risk assessment, together with plan for workplace monitoring aligned with local regulatory and WBG EHS General Guideline requirements and per OHS risk assessment findings. (ESAP#2).
In the Group’s subsidiaries, including Serbia and Poland, there were no work-related fatalities occurred in the past three years. In 2022, Minth Group recorded a total of 16 work-related accidents, all being minor injuries, whereas MAE reported seven lost-time work-related injuries for 2023. MAE and Minth Poland will revise their accident and incident reporting procedures to include lost time frequency incident rate (LTFIR, number of lost time injuries per million work hours) as part of the lagging OHS indicators. Company will include this indicator in its monitoring report and further focus on reporting and analyzing leading indicators of unsafe working conditions and near-misses. Targets will be set and monthly measured and reviewed by management (ESAP#2).
PS 3 - Resources Efficiency and Pollution Prevention
Resource Efficiency. Minth Group monitors its water and energy consumption and has a target to use 50% recycled aluminum by 2030. The company is replacing all lighting with LED energy saving lights with multi-zone lighting and sensor-based control and is installing variable frequency and thermal insulation. The Group is strategically switching from non-renewable to renewable energy, while this project will facilitate use of 100% renewable energy for its electricity needs.
Minth Group has developed Water Use Management Guidelines and by 2030, it plans to achieve a 20% reduction in water consumption compared to 2020, by implementing measures such as closed-loop water use.
Greenhouse Gases (GHG). Per Minth Group‘s annual ESG Report, for 2022, GHG were estimated to be around 57,000 ton carbon dioxide gas equivalent emission per year (tpa). Upon project completion, additional GHG emission is expected to be significantly less than 25.000 tpa.
Air Emissions. The treatment of air exhaust will include installation of a scrubber with alkali solution and Raschig rings. Air exhaust from welding is filtered on baghouse filters. In case of electrophoretic painting, activated carbon filters and regenerative thermal oxidizer are applied for air exhaust purification. MAE and Minth Poland’s emissions monitoring results are in line with local requirements, however, air emission monitoring reports do not contain certain parameters relevant to metal products manufacturing (like volatile organic compounds, hydrocarbons, particulate matter, etc.), as referred from WBG EHS Guideline for Metal, Plastic, And Rubber Products Manufacturing. As part of the ESMS and ESMP, Minth subsidiaries will upgrade E&S Monitoring and Reporting Plan for its emissions to cover all required parameters consistent with national requirements, IFC PS3, WBG EHS Guidelines, and GIIP, as defined in ESAP#2.
Water treatment. Wastewater streams are separately collected, the process wastewater are treated, and after the quality control, discharged into the city sewage system. MAE and Minth Poland are monitoring wastewater streams in line with national requirements. Monitoring results are in line with local requirements and WBG EHS guidelines levels.
Waste Management. Minth Group has established a comprehensive solid waste management system in each of its production bases and follows internal Waste Resource Management Guidelines, The Company requires each production unit to establish targets to continuously reduce solid waste generation per unit of output. Within the production complexes the company has allocated individual buildings or rooms for temporary storage of waste, clearly labeled, secured and protected from external factors. Liquid waste is placed in secondary spill containment trays. Handling of the sludge from the oil separator is contracted with the licensed operator. MAE and Minth Poland keep records on waste amounts, with handling, recycling and/or disposal methodology, and report to the national environmental protection agency on an annual basis.
Hazardous Materials Management. All hazardous substances (oils/fuels/ chemicals) are stored in line with good industrial practices to avoid spilling and land and water pollution risks. Material Safety Data Sheets (SDS) for chemicals are available at working stations and employees are trained to work with them in line with safe work instructions.
PS 4 - Community Health, Safety, and Security
The project location is in a low-density residential area, there are no individual housing facilities in the immediate vicinity.
LFS and structural certification and approval authorization process for design, construction and commissioning follows local codes and regulations and is generally consistent with internationally recognized LFS standards.
Transportation of raw materials and products is mainly outsourced to licensed third parties. Client contractually requires the contractors to follow the national laws for traffic and transportation safety.
Security Personnel. The company retained a licensed company to provide security. The security is unarmed and not equipped with unlethal means (shockers, sticks).
