This is a Category B project according to IFC’s 2012 Policy on Environmental and Social Sustainability due to limited and site-specific E&S risks and impacts associated with the construction and operation of poultry sheds in consolidated agricultural areas in Issyk Kul and planned broiler sheds and feed mill will be located in unutilized land (i.e., not cultivated) in an old agro-industrial area in Kemin. Key E&S risks and issues for this project include: (i) AK's E&S management and monitoring systems capacity to assess and manage E&S risks (including food safety) and impacts from its direct and sourcing (soy, wheat, corn) operations; (ii) fair treatment and safe working conditions for employees and contractors, including implementation of HR policies and procedures aligned with PS2 requirements; (iii) emergency preparedness and response, including life and fire safety (L&FS) and dust explosion; (iv) resource (energy/water) efficiency, GHG emissions, and management of air emissions, solid/hazardous waste, effluent, and odor; (v) community safety risks, including traffic, and use of security forces; (vi) effectiveness of stakeholder engagement plans (SEP) and community grievance mechanism; (vii) animal welfare practices and bio-security controls; and (viii) avoidance of conversion of natural habitat from grain sourcing.                                                  

 PS 1:  Assessment and Management of Environmental and Social Risks and Impacts 

E&S Policies. AK has yet to develop corporate-level E&S policies for the poultry operations segment, its feed mill and grain sourcing. AK will establish an overarching environmental and OHS policy defining the objectives and principles to achieve E&S performance against IFC Performance Standards (ESAP#1). AK will also develop and implement an animal welfare policy aligned with the Principles and Criteria of a credible voluntary animal husbandry standard (e.g. https://globalslp.org/) (ESAP#2). Upon the approval of the policies, AK’s management will socialize these with its workforce, contractors, and service providers. To ensure effective implementation of its E&S policy framework, AK will develop a plan including specific assignment of capital expenditures (CAPEX) and operational expenditures (OPEX) for the environmental, OHS and animal welfare improvement measures identified in the attached ESAP (ESAP#3). AK shared a draft of the legal registry of E&S's legal and regulatory requirements that apply to its existing poultry operations (air emissions control, well and fire permits) validating legal/regulatory compliance. AK will maintain such legal registry for the planned facilities financed by this investment (ESAP#4).

Identification of E&S Risks and Impacts. AK identify and manage E&S risks and impacts associated with its operations through compliance with applicable national E&S legal and regulatory framework. An EIA prior to construction was prepared, following national regulations. Following the EIA process, an Environmental Management Plan (EMP) is developed, including mitigation measures to be implemented during the construction and operation phase. AK submitted the approved EIA and construction permit for the AK’s broiler farm in Issyk Kul. AK will hire an independent, reputable national consultant to prepare an IFC PS-compliant ESIA for the AK’s broiler sheds and feed mill site in Kemin. These studies will be disclosed on AK’s website. (ESAP#5).

E&S Management System and Programs. AK does not have a corporate-level ESMS.  Existing OHS procedures are in line with national legislation and generally in line with OHS requirements under PS2. Upon completion of the E&S risk assessment for all proposed greenfield poultry production and feed mill operations, AA will develop and implement an ESMS including (i) an E&S policy, (ii) identification of E&S risks and impacts, (iii) E&S management programs, and relevant Environmental and OHS Standard Operating Procedures (SOPs), (iv) E&S management governance, (v) Emergency Preparedness and Response Plan, (vi) E&S monitoring and reporting, including KPIs, (vii) stakeholder engagement, and (viii) community grievance mechanism in compliance with IFC’s PS1 requirements for the AK facilities (ESAP#6). A year after completing the ESMS manual, an independent consultant will complete an audit to verify effective implementation of the ESMS.

Organizational Capacity/Competency. At the corporate level, the company’s E&S responsibilities are distributed among several roles: the HR Director (who oversees an HR specialist, office manager, and document management specialist), an OHS engineer, the Head of Security (who supervises security personnel), a Quality Manager, and a Senior Veterinarian. AK adheres to unified OHS and HR procedures established by AA. AK has a dedicated HR department. AK has an Occupational Health and Safety (OHS) department led by the OHS Manager, who coordinates the activities of various departments. This department is responsible for training the company’s personnel, assessing their knowledge, and ensuring safe working conditions for all employees. Each AK facility has an OHS engineer responsible for orientation for new employees and registering in logbooks, monitoring OHS conditions, and reporting to the OHS Manager. The OHS Manager reports to the Deputy General Manager at AK and interacts with the State Labor Inspectorate.  The flock health is managed by a head veterinarian, supported by additional veterinarians. 

AK has limited E&S capacity, as environmental management, social liaison, and community communication was managed by AK’s managerial team alongside their other duties. For this Project, AA recently recruited a full-time E&S manager to lead the completion of the Project ESAP and the development/implementation of the ESMS for the poultry and feed mill operations. AK will allocate annual budgetary resources to implement the E&S actions (ref. ESAP#3) and maintain the ESMS. The E&S manager reports directly to AA’s general manager. In addition, AK will contract a qualified E&S consultant to support the E&S manager in completing the ESAP per the agreed timeline (ESAP#7).

E&S Training. AA conducts internal training to employees that are required by local regulations, such as mandatory training on OHS, response to emergency situations and first aid and waste management. OHS training consists of general onboarding and job-specific risks, including fire safety and biosecurity in a classroom setting and is then followed by workplace-specific training at the facility. Life and fire safety and OHS training is repeated every six months. Employees also undergo regular training on compliance with food safety standards per international norms, and production staff receive training on equipment and vehicle operation (forklifts, trans pallets). Before employees can work with hazardous chemical or biological materials, they must first receive internal safety briefings. Biosecurity training includes conceptual, structural, operational, and biosecurity culture topics, focusing on operational biosecurity guidelines for employees. A flock health manual that includes training for staff in both the breeder and broiler operations is available. AK will update and document their EHS training program for the poultry and feed mill operations in line with applicable IFC PS requirements and WBG EHS Guidelines (ESAP#8).

Emergency Preparedness and Response. AK’s operations have documented emergency preparedness and response plans (EPRP) aligned with local legislation. The roles and responsibilities of employees responsible for evacuation, rescue, and firefighting are defined and displayed at various locations across the poultry farms and at the feed mill. Evacuation route maps, assembly point signs, and water hose reels are placed at appropriate locations. Drills are conducted every six months to ensure the implementation of fire safety measures. Several workers have been trained in fire safety, and the operation of fire safety equipment, and construction workers will be required to receive similar training. Given climate projections, flood risk is expected to increase in the region, so AK will include flood risk in the EPRP plans and drills (ESAP#9).  

Monitoring and Review: AK is not currently monitoring or reporting their EHS performance, though the technical department records the site level, water, and energy consumption monthly, and OHS staff track OHS statistics. In line with environmental permits, WWTP discharge parameters and air emissions are measured and monitored by governmental agencies. AK will develop E&S Key Performance Indicators (KPI) to monitor performance-based requirements against applicable WBG General and Sector Specific EHS Guidelines. The E&S KPIs will include resource efficiency (electricity, consumption), CO2 emission per ton of product, water consumption per ton of product, waste generation, OHS leading/lagging indicators (Lost Time Incident Frequency Rate (LTIFR), gender equality (percentage of woman employees) at minimum. Annual management review meetings will be organized to review AK's overall E&S performance (ESAP#10).

Supply Chain Risk Assessment and Management. AK purchases hatching eggs, feed and premixtures of vitamins and minerals for its poultry and feed mill operations. Hatching eggs are primarily supplied by Kyrgiz Broiler, which is a subsidiary of AA, while smaller part is imported from Türkiye. The current poultry diets consist of wheat and corn as energy feeds, and soybean meal as source for protein. The wheat and corn are sourced locally while soybean meal is purchased from crushing plants in Russia which uses Russian soybeans and the premixtures are imported from Türkiye. AK has procurement systems and procedures for supplier selection and product specification, but these procedures do not include any E&S requirements. AK will develop and implement a Supply Chain Management System (SCMS) for its poultry and feed mill operations including its primary suppliers, such as feed and hatching eggs suppliers. First, AK will map its primary suppliers describing the type of business, country of origin, production areas, number of employees and their own E&S management systems. Then, AK will undertake a risk assessment process to identify E&S risks associated to its suppliers against PS2/PS6 supply chain requirements, namely child labor, forced labor, significant safety issues, and deforestation/Natural Habitat conversion risks. If needed, AK will request more data from high-risk suppliers (e.g. grain suppliers) and will reserve the right to terminate the business relationship if information is not provided or identified risks are not mitigated by the suppliers. As part of the SCMS, AK will establish a Supplier Code. The Supplier Code will be included in all purchasing agreements (to be signed by all suppliers), explicitly stating the prohibition of child labor, forced labor, prevention of significant safety issues, and the protection of biodiversity values, including no deforestation/conversion of Natural Habitat. A process of disengagement from suppliers that do not meet the Code’s requirements will also be established as part of the SCMS. (ESAP #11).

PS2: Labor and Working Conditions

As of May 2024, AK employed 475 workers including seven temporary workers employed to cover maternity leaves. In term of gender breakdown, 327 workers (69 percent) are male and 148 (31 percent) are female. Most of the companies' workforce are local people from the surrounding villages. The proposed project is expected to increase the workforce of AK to 635 employees.

Human Resources Policies and Procedures. AK defines its internal HR policies and procedures via its Internal Regulations on the Personnel Policy and Remuneration of Employees, a Code of Professional Ethics and Disciplinary Procedure, which address the rights and responsibilities of the employer and the employees. The policies and procedures are aligned with Labor Code of KR and apply to company’s all poultry operations. AK will revise its HR policy and procedures in line with IFC PS2 requirements to cover non-discrimination and equal opportunity, gender-based violence and sexual harassment (GBVH), freedom of association and collective bargaining, child and forced labor, retrenchment, grievance mechanism and relevant measures to supervise the implementation and compliance. HR policy and procedures will be adequately reflected in its subsidiaries’ employee handbooks, employment contracts, and induction trainings (ESAP #12).

Working Conditions and Terms of Employment. Each worker receives a written employment contract that describes the name and legal domicile of the employers, the worker’s job title and the place of work, the date employment begins, the anticipated duration of the contract, probation period details, amount of wage, date of wage payment, work and rest period and leave entitlement. Working conditions, terms of employment including contractual arrangements, wages, leave, etc. are communicated to employees during onboarding, through corporate email and messenger, and by posting up-to-date information on information boards in common areas of production premises. AK provides three different work schedule arrangements, and all must follow local legislation stipulating that an employee's monthly work does not exceed 165 hours.

Protecting the Workforce. KR's labor law prohibits use of child labor and forced labor. The minimum age of employment at AK is 18. The revised HR policy of AK will clearly state the prohibition of child and forced labor (ESAP #12).

Workers’ Organizations. There is no established trade union in AK. AK resolves any labor-related issues per the local legislation. AK will revise the HR policy and will include a clear statement about respecting the workers’ right to freedom of association and collective bargaining (ESAP #12).

Non-discrimination and Equal Opportunity. AK's revised HR policy will affirm equal opportunities, diversity, and non-discrimination based on race, nationality, ability, age, gender, marital status, sexual orientation, ethnicity, religion, and political viewpoint (ESAP #12).

Gender based violence and harassment. AK’s HR policy and procedures will include the prohibition of any forms of harassment, including sexual harassment, as well as gender-based violence and harassment (GBVH), along with the corresponding disciplinary measures which applies to its all employees in poultry processing operations and a confidential channel available for employees and suppliers to file concerns and grievances, including sexual harassment (ESAP #12).  To raise corporate awareness of gender aspects including GBV and sexual harassment in the workplace, AK will engage with an external expert to develop and implement a training program for managers and a training of trainers program for HR personnel to provide further trainings to all its employees in poultry operations. The training program will also include AK’s respective policy and procedures including grievance mechanism (ESAP #13).

Grievance Mechanism (GM). According to the GM procedure, AK logs all complaints or inquiries, provides an appropriate response explaining the issue or conducts a formal investigation with the involvement of relevant department heads and a written response to the complainant. AK will revise and disclose to all employees in poultry operations a formal workers’ grievance mechanism in line with PS2, inclusive of culturally appropriate, confidential, and accessible channels, with the possibility of anonymous submission (ESAP #14). AK will appoint and train qualified grievance officers to manage and process GBV and harassment-related grievances for its poultry operations (ESAP #15).

Occupational Health and Safety. AK’s OHS system includes documented workplace risk assessments, job hazard analyses, and instructions specific to the job.  Project-specific risk identification/assessments are conducted for operational activities.  A work permit system is in place, and the LOTO (Lock Out Tag Out) system is implemented before any maintenance work. AK provide the workforce with Personal Protection Equipment (PPE) (e.g., gloves, protective masks, ear plugs, welding shields) based on the workstation hazard risk profile. As the KR labor code requires, 10% of employees are trained as certified first aiders. AK monitor workplace working conditions, including noise and dust and ambient air quality, to safeguard workers' health at each facility. The existing feed mill (10 tons/h) is fully automated, improving production accuracy and reducing labor inputs. Dust suppression systems and good housekeeping practices to prevent dust accumulation were observed during the site visit in the existing feed mill in Issyk Kul. Specific maintenance procedures and LOTO requirements are in place for welding and any hot work that may cause ignition risk and dust explosion. The new feed mill with the capacity of 30 tons/h, to be constructed in Kemin, will have similar precautions against explosion and fire. To date, no fatality has been reported at the AK subsidiary. In 2024, one lost-time accident was recorded. AK’s LTIFR (Lost Time Incident Frequency) has been below the sector average for the last three years. Going forward, AK will establish a contractor OHS management procedure for the construction workers including a training program and an accident recording system. Contractor accidents will be reported to IFC in the Annual Monitoring Report (AMR) (ESAP#16). 

Workers engaged by Third Parties. AK does not use a third party for its day-to-day operations but commissions contractors for the construction works. AK has yet to develop labor and OHS-related requirements for qualification and selection of its contractors. For the construction phase, AK will develop and implement a?Contractor EHS Management Plan, Procedures, and Instructions, including necessary training programs for contractor’s workers and labor management monitoring activities for effective implementation by the contractors and ensure the contractors follow the procedure. The Contractor EHS Management Plan will include E&S performance requirements for selecting the construction contractors and provisions for bidding documents and contractual agreements with the contractors (ESAP#17).

Supply Chain. Acknowledging the contextual risks of harmful child labor in the agriculture sector in KR, AK will undertake a PS2 supply chain risk assessment and develop and implement an SCMS to mitigate the related E&S risks and meet PS requirements (ESAP#11).

PS3: Resource Efficiency and Pollution Prevention

Resource Efficiency. The project's annual anticipated energy consumption at AK is 4,066,078 kWh of grid electricity, and 8,872 tons of coal. All broiler sheds are closed with environmentally controlled, fully automated systems. Tunnel ventilation with evaporative pads for cooling and hot water for heating is used. Heating is via a centralized hot water system in a closed circuit. The main central boiler provides hot water to each shed. Temperature control with these systems is energy efficient. AK only has access to coal as fuel source for the boilers. Natural gas is unavailable in the region, and electricity is not permitted for use in this industry since the country faces electricity shortages. AK is cognizant of the importance of decarbonization and have explored various options for minimization of coal usage, including using geothermal energy, solar panels. AK considers energy efficiency as a key technical specification when selecting new equipment including the planned feed mill which will be operated with electricity. Poultry facilities recently converted the cooling system to air cooling instead of water and air cooling, and energy consumption reduction is expected. AK found that centralizing coal-burning boilers is viable for reducing coal use and decarbonization. It was implemented in broiler sheds, decreasing coal usage by 60% in 2023. Water consumption in AK’s operations is mainly linked to cleaning and domestic needs. The water consumption at AK poultry farms were estimated as 18,750 m3 per month. As per the proposed expansion, the project is expected to increase its energy consumption. Going forward, AK will implement an energy and water consumption management plan to improve efficiency through data collection, E&S KPIs, energy consumption/management reports, and reduction targets for its poultry and feed mill operations (ESAP #18).

Greenhouse gas (GHG) emissions. Coal-fired boilers and the electricity used from the grid are the main sources of GHG emissions for the operation of the broiler houses and feed mills. The project's operational Scope 1 and 2 annual GHG emissions are expected to be 9,788 tCO2 equivalent. AK will quantify GHG emissions annually from the facilities owned or controlled within the physical project boundary (Scope 1) and indirect emissions associated with the off-site production of energy that the project uses (Scope 2) and report its GHG emissions in the AMR. GHG emissions will be quantified using internationally recognized methodologies (ESAP#19).

Water supply. Water is supplied from groundwater wells at all poultry farms and feed mill. All wells have up-to-date permits issued by the Ministry of Natural Resources, Ecology, and Technical Supervision of KR, limiting the maximum flow rate for sustainable use of water resources. To support this, hydrogeological studies were conducted. Reverse osmosis and ultraviolet (UV) filtration systems are used for raw water treatment prior to usage.

Wastewater. The poultry farms have their own package biological WWTPs, and treated water is applied to the land with permission from the local authorities.  The local authorities measure BOD5, COD, pH, SS, and other parameters regularly as per the Environmental License, and the analyses show that they are below the national limits of the State Agency for Environmental Protection and Forestry and/or WBG General EHS Guideline values. For the proposed broiler farm to be constructed in Kemin, package biological WWTP are required by national environmental law and as an environmental permit requirement. Going forward, AK will conduct quarterly measurements for their discharged wastewater and submit the results to IFC (ESAP#20).

Air Emissions. Coal fired boilers (used to heat the farms and provide hot water, and provide steam for feed mill process), and the dust (particulate matter) from feed mill operations are the main sources of air emissions. National legislation does not allow sulfur content of more than 1% (Mass fraction of total sulfur in dry fuel state). The coal used by AK has 0.28 % sulfur content according to the specifications submitted during IFC appraisal. Authorities regularly conduct air emission measurements. The results of the measurements of air pollution parameters such as particulate matter, sulfur dioxide, nitrogen dioxide, and carbon monoxide aligned with local legislation (KR Law on Protection of Atmospheric Air No. 51) and IFC General EHS Guideline limits. AK will submit their air emission measurement reports for the poultry operations’ coal boilers and feed mills conducted by an external licensed company to IFC (ESAP #21). AK will continue to report measurements in the Annual Monitoring Report (AMR) and take necessary technical measures if the measurements do not align with local legislation or IFC General EHS Guideline limits, whichever is more stringent.

Hazardous and Nonhazardous Wastes. The hazardous materials in AK’s poultry farms are limited and include cleaning/disinfection products and veterinarian products to prevent and control poultry disease. Antibiotics are used on farms under the strict guidance and supervision of veterinarians. Feed mills generate various by-products that is recycled or reused (pellet fines, dust, and other residuals). A licensed, separate company collects hazardous waste and disposes of it following national regulations. Wastepaper and plastics are segregated and sold for recycling. Poultry farm waste (some 720 tons of manure per annum) is sold to farmers as organic fertilizer. Organic waste from production (carcasses, bone, feathers, etc.) is sent to AK’s rendering plant for fish feed production. AK will develop and implement a Waste Management Plan by identifying the waste stream at each farm and feed mill, assigning dedicated staff for waste management, assessing current waste disposal methods, setting targets for waste reduction and training of employees on the waste management procedures (ESAP#22).

Cooling agents.  AK uses pad (evaporative) cooling system in their poultry farms. Office air conditioning systems contain R32 which has comparatively low global warming potential.

Pesticide Use and Management. A legally registered company conducts rodent and pest control in all operations, including poultry farms and feed mill. The rodent and pest control products currently used are not listed under WHO Class 1a and 1b chemical formulations. AK will prepare a management system procedure to implement pest and rodent management and will prohibit any use of pest control products from WHO Class 1a and 1b chemical formulations in their premises including the new feed mill (ESAP #23).

PS 4: Community Health and Safety

AK’s operations including planned feed mill are located in consolidated agricultural area and old agro industrial zone not surrounded by community settlements. Hence, no significant impacts on the health, safety, and security of the local community are expected due to the operations of these plants. AK maintain a minimum buffer zone of 500 m to manage biosecurity risks in line with local legislation prescribes for the broiler farms to be located in Kemin.

Traffic Safety. The routes used for transportation do not pass through the community settlements. AK has its own transport fleet and internal OHS instructions for freight car drivers are in place. The drivers undergo induction and in service trainings, and mandatory preliminary and periodic medical examinations. Sanitary passport is issued for each driver.  AK will develop/implement a Road Safety Management Plan applicable to its transport fleet. The plan will address driver fitness, competence, and training, speed limits, emergency response for road accidents, vehicle maintenance, and safety standards (ESAP#24).

Food Safety Management System. AK were certified against the FSSC 22000 food safety management system, which allows the traceability of their finished products in the market. Recall procedures and customer grievance mechanism are in place. To date, product recalls have not been required.

Security Forces. There are 30 security personnel deployed to poultry processing operation premises of AK. They are retired members of the Kyrgyz armed forces and certified. The security guards are not armed, and they are provided with work ethics and responsibilities trainings during their onboarding.

PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

AK’s existing and planned poultry farms and feed mill were assessed to identify risks and impacts to biodiversity values and ecosystem services and to define PS6 supply-chain requirements for AK’s purchase of soybean meal, wheat, and corn used as raw materials. AK’s existing and planned facilities do not overlap with Legally Protected Areas (LPAs), Internationally Recognized Areas (IRAs), or priority biodiversity values. Therefore, biodiversity-related risks associated with these facilities are insignificant.

Sustainable Management of Living Natural Resources

AK purchases soybean meal from Russia, and corn and wheat domestically from suppliers in KR. The soybean is produced and crushed by the same producers/suppliers in the Krasnodar Region in Russia, where no recent significant risk of deforestation/Natural Habitat conversion to soybean production has been identified. In KR, AK has suppliers who purchase wheat and corn from production areas in Chui Region, where the fields have been used for agriculture for the past several decades, with no identified risk of significant Natural Habitat conversion. AK will develop/implement a SCMS, where its primary suppliers and production areas for soybean, wheat and corn, and identify deforestation/Natural Habitat conversion risks associated with their supply-chain through implementing a risk assessment process (ESAP#11). The Supplier Code will also be in line with PS6 supply chain requirements for no deforestation, no conversion of Natural Habitat and avoidance of impacts on biodiversity values. 

Biosecurity and Animal Welfare. AK does not have a documented policy and management system on animal welfare nor certification from any external poultry production assurance certification schemes; however, each process and relevant training were designed considering the five freedoms of animal welfare at the farms and slaughterhouse. The design, management systems, and production standards at the poultry farms have been developed and implemented to comply with good animal welfare practices. An assessment of animal husbandry standards, including animal welfare, was completed in April 2024. The biosecurity infrastructure and planning have been well designed and meet international good industry practices with documented procedures and staff training. In compliance with IFC Practices for Sustainable Investment in Private Sector Livestock Operations, AK does not use antimicrobials for growth-promoting purposes. Going forward, AK will certify or independently verify AK ‘s poultry operations against Global Smar Livestock Practices (https://globalslp.org/) (ESAP#25).                                                                                                    

 AK engages with its stakeholders on as needed basis through facility managers. AK works closely with local government entities of Balykchy town and in the Issyk Kul region and arranges meetings with communities once a year. In response to a few public complaints about odor emitted from its rendering plant in Balykchy town, AK relocated the plant away from the town in April 2024 to address the community’s concerns. AK will develop and implement Stakeholder Engagement Plans (SEPs) for its poultry and feed mill operations, in line with PS1 requirements and commensurate with the risks and impacts of its operations. The SEPs will include formal grievance mechanisms for external stakeholders and will be periodically reviewed and updated. AK will assign suitably qualified staff to implement the SEPs/CGM (ESAP#26).                                                   

 The ESRS / ESAP, existing local EIA for Issyk Kul site and the E&S Impact Assessment (ESIA) to be prepared for AK’s poultry and feed mill operations in Kemin will be made available via IFC Project Information Portal. Local disclosure of the documents will be done by AA and AK in Kyrgyzstan.

Contact Person: Askar Arpachiev

Agro Kush LLC

Address: Logvinenkovskiy 159, Novopokrovka v., Ysyk-Ata district, Chui region, Kyrgyz Republic

Email: aarpachiev@toyboss.kg

Phone: +996 705 331 133