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.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Assessment and Management System: Kazyon Egypt has established an environmental and social management system (ESMS), certified in line with international management system standards of ISO 9001: 2015 (quality management), ISO 14001 (environmental management), ISO 45001 (OHS management) , and ISO 22000 (food safety management). The ESMS is largely in line with IFC PS requirements. For the expansion in Morocco, the company is not legally required to conduct environmental and social impact assessment.
For Morocco, The company will develop and implement an E&S management system (ESMS), based on the existing ESMS in Egypt, aligned with national laws and IFC PSs including (i) an E&S policy; (ii) identification of risks and impacts including E&S risk screening procedure for new DCs, stores and suppliers; (iii) management programs to mitigate the E&S risks, such as for OHS, waste management, transport management plan, security management plan, management plan for refrigeration and cooling agents; (iv) an E&S organization with defined roles and responsibilities; (v) emergency preparedness and response plans; (vi) stakeholder engagement and community grievance mechanism; and (vii) monitoring, review and reporting of E&S performance. ESMS will cover all activities including the operations in DCs and stores (ESAP#1)
Organizational Capacity and Competency: In Kazyon Egypt, Environmental & Social (E&S) compliance is coordinated by the head of internal audit for the DCs and store’s operations, development director of construction, assets and maintenance for the expansion and greenfield projects. Kazyon Morrocco will appoint an Environment Health and Safety manager (EHS) and will be supported by a team of EHS supervisors for Kazyon DCs and stores in Morocco. Similarly, as the number of staff will grow, Kazyon will hire an HR team in addition to supply chain team as further discussed under PS2 section below (ESAP#2).
Emergency Preparedness and Response: Kazyon Egypt has a draft Emergency and Evacuation plan for each of its operations. The plan includes the roles and responsibilities of the emergency team, a list of emergency contacts, the number of drills per year and identifies potential emergency risks and mitigation measures. For Kazyon Morocco, as part of the ESMS, the company will develop an operational emergency preparedness and response plan in accordance with national law and IFC PSs for the existing and future DCs and stores. The EPRP will be guided by the risk assessment of the Morocco operations in addition to life and fire safety (ESAP#1)
Monitoring and Review: Kazyon conducts internal and external audits for all operations in Egypt, the results of which are reported regularly to management. The company monitors and records injuries, EHS violations, training among other key performance indicators (KPIs). The KPIs are reported on quarterly basis to the management team. As per ESAP#1, Kazyon will cascade down corporate E&S monitoring and reporting procedures and requirements to Kazyon Morroco operations and develop relevant KPIs.
PS2: Labor and Working Conditions
The existing workforce in Kazyon Morocco is around 680 workers of which 22% are females. With the expansion, the workforce is expected to increase to around 3800 workers.
Human Resources Policies and Procedures: Kazyon Egypt has an employee code of conduct complying with the National Labor law including reference to the prohibition of forced labor, child labor, discrimination, harassment and abuse, expected hours of work, overtime, freedom of association and health and safety. The company has also a draft of a worker grievance policy and a human resource policy.
Kazyon Morocco will develop HR policies and procedures in accordance with national law and IFC PS2 requirements. HR policy and procedures will address, but not be limited to, worker code of conduct, labor and working conditions and terms of employment and dismissal, non-discrimination and equal opportunity, prevention of child and forced labor, worker grievance mechanism, prohibition of sexual harassment and abuse, freedom of association and retrenchment. These policies and procedures will be endorsed by senior management and communicated to all company workers, including third party workers, through training and other sensitization activities such as toolbox talks and bulletin boards (ESAP# 4).
The company will also hire a professional labor specialist to conduct a labor assessment for Morrocco operations, to identify social and labor risks (if any) in line with IFC PS2 and national legislation and to provide recommendations to address these gaps (if needed). Within this assessment, the company will also conduct a baseline assessment to identify Gender-Based Violence and Harassment (GBVH) gaps, risk factors and propose a GBVH risk mitigation plan (ESAP#3).
Working Conditions and Terms of Employment: There are three types of contracts for workers in Morocco, fixed term, temporary contracts and professional integration contract for skilled workers. As per ESAP#4, company will develop new worker contracts templates with references to leave entitlement, overtime policy where overtime maybe required, length of notice required prior to termination and grievance procedures as well as any collective bargaining arrangements that may apply in line with the national legislation and IFC PS2.
Workers’ Organizations: None of the project's existing workers are represented by any unions. As part of ESAP #4, the company will develop a clear freedom of association policy and procedure and communicate it to the workers in alignment with IFC PS2 and national law.
Workers Grievance Mechanism: Kazyon Morocco will develop a worker grievance mechanism in line with IFC PS2. The grievance mechanism will be accessible to third party service providers and will include statements on anonymity when required, anti-retaliation, timeline for responses, and closure of grievances. The grievance procedure will allow for reporting on sexual harassment. and the HR team and senior managers will be trained to address GBV issues. A staff member will be assigned as a custodian of the procedure and will regularly update the grievance log. All workers, including third party workers, will be trained on this procedure through induction and regular training (ESAP#4).
Retrenchment: Kazyon Morocco is a recently established project, and no retrenchment is anticipated. Still, the company will develop a retrenchment framework, in line with IFC PS requirements and national law, as per ESAP #4.
Child and Forced Labour: Kazyon Morocco will develop a child Labor and forced Labor policy and procedure per IFC PS2, to underline and implement its commitment for no children or forced labor are employed in Kazyon premises per ESAP#4. The policy will be applicable to third-party workers and the supply chain (ESAP#5 and 6). For suppliers that undergo a process for registration as vendors, the assessment and contracts will include E&S considerations, particularly on child and forced labor.
Third Party Workers: Most of the workers in Kazyon Morocco are hired directly by the company without using agents. Some security workers are hired in the DCs through a third-party security company. Kazyon will communicate its new HR policies and procedures to third party workers and will contractually bind all service providers to adhere to them. The contracts will also include audit rights for Kazyon Morocco where service providers will be penalized up to termination of their contract if they are not aligned with IFC PS2 and good international industrial practices. (ESAP # 5)
Supply Chain: Kazyon Egypt suppliers are assessed and registered based on their previous work and the technical specs of their products. The company has a supplier code of conduct covering working conditions, prohibition of child labour, forced labour, grievance mechanism, non-discrimination and equal opportunity and occupational health and safety. Once the supplier is selected, the monitoring is managed by a different department and it does not include monitoring any E&S related matters.
Similarly, for Kazyon Morocco, the potential suppliers undergo a process of registration that does not include environmental and social considerations. The company will develop a supplier code of conduct for its Morocco operations including clear prohibition of child labour and forced labour in all of its purchasing procedures. The company will incorporate contractual clauses in its agreements, with its primary suppliers, requiring them, to comply with its supplier code of conduct and will reserve the right to audit suppliers for their compliance with the code of conduct. The company will assess current and future primary suppliers against compliance with the updated supplier code of conduct and engage with suppliers to develop corrective actions (if gaps are identified) (ESAP# 6).
Contractor Management: The Engineering, Procurement and Construction (EPC) contracts includes clauses for the contractor to follow the national law and Kazyon’s commitment to sustainable development, safety, environment and labor. Kazyon Morocco will develop a contractor management plan in alignment with IFC PS2 and the Good Practice Note for Contractor Management for all contractors to follow while undertaking work the company. EPC contracts will include clear reference to prohibition of child and forced labor as per IFC PS2 requirements (ESAP #6).
Occupational Health and Safety: Kazyon Egypt has an OHS Management system. The internal audit department registers and reports incidents to senior management on quarterly basis and carries out monthly store inspections covering product quality and safety, maintenance and infrastructure, staff hygiene, store cleanliness, quality and food safety. All Kazyon Egypt workers also go through safety induction and store managers and supervisors are receiving training on QHSE policy and food safety, cleaning methods, safe storage methods, pest control, first aid, firefighting As per ESAP#1, Kazyon Morocco will formulate and implement an OHS policy and procedures, which will include (but not be limited to) monitoring of key OHS leading and lagging KPIs (e.g., recording and investigation of incidents, provision trainings, enforcement of use of PPEs, temperature & noise workplace measurements), as a part of the OHS management system, in line with IFC PS2 and the WBG General EHS Guidelines.
PS3: Resource Efficiency and Pollution Prevention
Resources Efficiency
Electricity is the main energy source for Kazyon Morocco and is sourced from the national power grid for all facilities. Kazyon Morocco operations mainly involve using cooling devices such as refrigerators and air conditioners operated using electricity. As part of their ESMS (ESAP#1), the company will develop E&S management plan, to review the cooling agents on a frequent basis, and develop a replacement process for them with low ozone consuming alternatives. In addition, consumption of the company resources (water and energy) will be monitored including the assessment of resource efficiencies and KPIs to be established under E&S monitoring procedures.
Greenhouse Gases (GHG). GHG emissions for Morocco operations is expected to be below 25.000 ton carbon dioxide equivalent emission per year.
Air emissions. There are multiple backup generators operated with diesel and other fossil fuels, operated only in cases of electricity outages. Currently Kazyon Morocco does not monitor its air emissions. As such, the company will institute regular monitoring and use to demonstrate compliance to applicable regulation and to WBG EHS guidelines as part of the ESMS under ESAP# 1.
Solid and hazardous wastes. The main waste produced by the company is plastic and carton used for wrapping, as well as organic waste and oils used for fleet maintenance. Kazyon Egypt has standard operating procedures (SOPs) for managing all types of waste at the DC, which will be replicated in its operations in Morocco. Currently, in Kazyon Morocco, waste is picked up by the relevant municipality from the retail stores while it is picked up separately from the DCs. The main hazardous waste used is the oil from servicing generators and vehicles inhouse in the DC. Wastewater is collected through the municipal wastewater collection network. As per ESAP #1 , Kazyon Morocco will develop a waste management plan, considering hazardous wastes as well, to be applied its DCs and stores. The plan will define the types of waste, handling, separation, storage, use of licensed waste collectors, maintaining and reviewing records or proper disposal of waste and including roles and responsibilities assigned to fully trained professionals, KPIs and any specific waste reduction measures undertaken by the company in line with WBG EHS guidelines.
PS4: Community Health, Safety and Security
Life and Fire Safety:
Kazyon DC and stores in Morocco are following Morocco National Fire Service Regulations on Fire Precaution regulations regarding life and fire safety (L&FS) design and installations. As per ESAP#7, Kazyon will develop a corporate “Life and Fire Safety (L&FS) Master Plan” for the construction and remodelling of the new stores and DCs, that will form part of the “corporate store and DCs design manual”. The master plan will consider local legal requirements, and aspects such as occupancy levels, means of egress and systems for fire prevention, detection, and suppression as per the section 3.3 Life and Fire Safety (L&FS) applicability and approach of the General EHS Guidelines.
Similarly, as per ESAP #8, for a group of 10 new stores starting operations in the next 12 months after IFC’s investment, the company will submit to IFC the acceptance reports of L&FS, fire department permits and certifications that each facility is constructed and commissioned in compliance with local building codes, fire department regulations.
Traffic Management: Kazyon Egypt has Standard Operating Procedures (SOPs) for trucks including procedures for shipping and distributing the product, maintenance and spare parts management and driver hiring requirements which will also be applied to Morocco operations. Kazyon Morocco owns and manages 10 trucks which will be increased to 18 by the end of 2024. Each truck is fitted with a GPS system that enables monitoring the quality of driving, and an incentive system is applied. As per ESAP#1, the company will develop a transport management plan in line with IFC PS4 and WBG EHS General Guidelines, including all KPIs, to avoid and manage worker safety risks. The plan will include gender-based violence (GBV) provisions, driver training, and worker safety measures.
Workers for the DC are transported through a bus service provider. The contract with the bus service provider does not refer to Kazyon’s supplier code of conduct or health and safety guidelines. Kazyon Morocco will include clear reference to Kazyon Morocco’s supplier code of conduct and WBG General guidelines for Environment, Health and Safety including prohibition of child and forced labor and access of third party workers to the Worker Grievance Procedure (ESAP#5)
Security Personnel: Besides the directly recruited security staff, Kazyon Morocco hires 24 unarmed security staff through a security provider. As part of the ESMS (ESAP#1), the company develop a security management procedure and plan. The plan will be based on a security risk assessment and will include screening of private security providers based on a valid business license, corporate history as well as company and employee background checks. Contracts with security service providers will include training and compliance with Kazyon Morocco’s code of conduct and will provide access of security workers to Kazyon worker grievance mechanism.
