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 Assessment and Management System
CS Chemicals has an integrated ESMS with policies, plans and procedures that is broadly aligned with IFC PSs requirements, and commensurate with its operations' scale and E&S risks and impacts. It is certified per ISO 9001:2015, ISO 14001:2015, and ISO45001:2018; Labor Standards, Health & Safety, Environment and Business Practices from SEDEX, UK; and ESG certification from ECOVADIS. CS Chemicals is compliant with local and national regulatory requirements and permits such as Standard Organization of Nigeria (SON MANCAP) certification for LABSA & Silicate manufacturing products; chemical manufacturer approval/certification from National Agency for Food and Drug Administration and Control (NAFDAC). Some of the ESMS plans and procedures are dated but not signed by management. Going forward, CS Chemicals will develop the following missing documents: a stakeholder engagement and grievance management framework, security management plan, hazardous material management plan, incident/accident register, and update existing documents to meet the IFC PSs requirements and obtain management approval/signature (ESAP#1).
Identification of Risks and Impacts
The existing facilities have been operational for close to two decades and both have valid Environmental Audit Certificates from the National Environmental Standards and Regulation Enforcement Agency (NESREA). CS Chemicals has a Hazard Identification and Risk Assessment (HIRA) procedure and risk register which identified potential hazards/risks, associated causes and mitigation measures. An Environmental Impact Assessment (EIA) for the new silicate plant site dated 2016 was submitted to the authorities and is still pending approval. The assessment identifies generic risks and impacts without proposing mitigation measures. It omits baseline data and stakeholder engagement. CS Chemicals will update the risk assessment in accordance with IFC Performance Standard 1 and Good International Industry Practices (GIIP). CS Chemicals will obtain the EIA certificate of conformity in accordance with the national regulations and develop a risk register, for the ongoing construction and future operational phases. The E&S risks and impacts identification will cover (but not limited to): heat wave risks; OHS; LFS; third party workers; community health and safety (ESAP#2).
Organizational Capacity and Competency
CS Chemicals has health, safety, environment and quality on-site officers and off-site consultants. The Head of Manufacturing is primarily responsible for achieving the HSE objectives and targets at the facilities. The HSE Officers assess risks, implement operational controls, monitor overall HSE key performance indicators (KPIs) and report to respective management teams. CS Chemicals will strengthen the team’s HSE implementation and monitoring capacity by appointing a corporate HSE manager to coordinate the HSE activities across all facilities and support the teams in implementation of the site specific ESMS (ESAP#3).
Emergency Preparedness and Response
Agbara and Ikorodu facilities have fire emergency protocols and a firefighting truck and ambulance on standby. Evacuation exits and assembly points are well marked. However, the emergency response plan does not cover all potential emergencies, e.g. medical emergencies, natural gas leaks, chemical/fuel spills and security emergencies. Furthermore, the ERP does not address coordination with neighboring facilities and communities that may be potentially impacted by site emergencies such as gas leaks. CS Chemicals will update its emergency response plan to include all potential emergency scenarios; an emergency response team with roles and responsibilities (as well as their back-up); emergency equipment and procedures; operational requirements, including emergency drills; coverage of climate-related events - exploring preventive measures for workers during floods and heatwaves; monitoring, maintenance and inspection of emergency equipment, reporting and performance assessment, training needs and their frequencies (ESAP#4). All employees and contract workers will be trained on the emergency response plan.
Monitoring and Review
CS Chemicals has environmental and OHS monitoring programs in place as described in its SOPs for monitoring, measurement and improvement, and environmental pollution monitoring. The facilities maintain accident-incidents records but need to establish a register to follow up and closeout corrective actions (ESAP#1).
PS 2 – Labor and Working Conditions
The Group employs 345 people, comprising 118 direct employees and 227 contractor employees. Among the total staff, 14 are females (four in administrative positions and ten with subcontractors providing security and cleaning services). The group is expected to employ a total of 450 employees when the new facilities and expansion are operational.
Human Resources (HR) policies, management procedures, working conditions and terms of employment: The operating companies have labor policies, HR procedures for staff requisition, induction training and development manuals, and employee handbooks that outline working conditions for staff and are implemented consistently across all facilities. Workers’ salaries comply with minimum wage regulations, and the employee handbook contains an overtime policy that adheres to national law. CS Chemicals does not employ forced labour or individuals under 18 years of age, as stated in its labour policy. As per (ESAP#1), CS Chemicals will develop a policy addressing sexual exploitation, abuse, and harassment (SEAH) and implement a grievance mechanism for SEAH cases.
CS Chemicals offers separate cloak rooms for males and females at their facilities, designed for resting and dining. However, these cloak rooms require renovation to improve their condition. CS Chemicals will update the welfare committee policy and provision of basic services. The facilities should be upgraded in accordance with GIIPs (ESAP#5).
Freedom of Association and Grievance Mechanism: Employees of CS Chemicals do not belong to any unions but have adopted a policy of freedom of association and collective bargaining through a staff welfare committee to which all employees belong. The welfare committee includes a representative from each department, who acts as a liaison between employees and management regarding grievances, welfare matters, and compliance issues. Based on discussions during the appraisal, they are satisfied with this arrangement. There is a welfare committee policy in place, but this document is not signed nor approved by the management. To strengthen the freedom of association and collective bargaining provision, CS Chemicals shall include this policy on freedom of association in its HR policies (ESAP#1). A grievance procedure is documented in the employee handbook and explained to employees during the induction session. The company will update the grievance procedures to include provisions for sexual harassment complaints, anonymous submissions, protection against retribution, resolution processes, and extend the grievance process to third party workers (ESAP#6).
Occupational, Health and Safety (OHS): The facilities have documented OHS management systems and processes. The equipment and operations are all automated, which reduces the risks associated with hygiene and worker safety. The workers are provided with appropriate personal protective equipment, and use is strictly enforced within the facility. Training on equipment operation is formally documented as part of the employee induction process. Material Safety Data Sheets (MSDSs) for all chemicals used at the facility are available. Noise and air quality monitoring in the work area is conducted periodically to assess the level of exposure to noise and various chemicals used / produced within the facilities.
All employees complete pre-employment medical fitness examinations, and a certificate of fitness is kept in their personnel files. Additionally, periodic follow-up medical examinations are conducted. Per ESAP #1, the hazard identification and risk assessment at the project sites will include the implementation of heat stress management protocols, provision of drinking water to workers, alternative work schedules during high temperatures, and the provision of shaded/cooled breaks. The implementation will be supported by regular training and communication with all employees.
Life and Fire Safety (LFS): The facilities adhere to a fire safety SOP that includes both automatic and manual fire suppression with fire extinguishers and fire balls, fire detection and notification alarm, hydrant system, adequate means of egress, signage, and emergency backup power. CS Chemicals holds a fire protection certificate from the state fire and safety services.
Contractor Management: CS Chemicals outsources cleaning, security, and transportation services to third-party agencies. They have a legal and contractor management manual which emphasizes contractors’ commitment to HSE in the signed agreements with contractors. CS Chemicals will include procedures for auditing contractors, supervision and annual review of contractor performance for compliance with the corporate contractor management manual, applicable legal requirements including wage regulations and IFC PS2 requirements (ESAP#7).
Supply Chain: CS Chemicals has a documented supplier’s code of conduct, a raw materials policy, a sustainable procurement policy and a code of business principles. Going forward, CS Chemicals will incorporate clauses from the preceding policies such as OHS, non-discrimination, prohibition of SEAH, child and forced labour in supplier contracts. Additionally, CS Chemical will maintain oversight to prevent and remedy such practices including termination of contracts if risks are not adequately addressed within an agreed period (ESAP#8).
PS 3 Resource Efficiency and Pollution Prevention
Resource Efficiency: Water for construction and operations is mainly sourced from groundwater abstracted through on-site bore wells with government approvals and permits, and consumption is measured using flow meters. The primary energy source is natural gas, used to power gas generators due to the unreliable energy supply from the national grid. Solar power systems are being implemented, with 30 KW already installed and 250 KW in progress. CS Chemicals incorporate energy and resource efficiency measures in their designs. All steam pipelines are protected with cladding and insulated rockwool. Smart lighting systems with features such as dimming and motion sensors are implemented to conserve energy. Condensates from steam systems are collected and reused in boilers.
Greenhouse Gas Emissions: CS Chemicals monitors its GHG emissions, which are documented in its annual sustainability reports. GHG for 2023 totaled 11,538.1 metric tons of CO2 equivalent (MTCO2-e). Energy efficiency is enhanced through the implementation of waste heat recovery boilers. These boilers convert waste heat from the sulphonation process into steam, which is then utilized in the silicate dissolving/production plant. This innovation results in natural gas savings and a reduction in carbon emissions.
Pollution Prevention: The production facilities operate as a semi-closed system in which no materials (liquid or solid) are released from the plant into the environment, except for gaseous emissions. CS Chemicals has an environmental pollution monitoring SOP that documents procedures for monitoring air and noise levels, analyzing potable water and wastewater, and conducting soil analysis. Monitoring of ambient and point source air quality was conducted by a consulting firm as part of an audit in 2023 and results indicated no exceedances. CS Chemicals has a waste management plan with procedures for handling and disposing of hazardous and non-hazardous waste. Waste is segregated and collected by government-approved waste vendors; for collection and disposal of non-hazardous waste and relevant State Environmental Protection Agency (EPA) accredited for Hazardous Waste. CS Chemicals has Wastewater Treatment Plants (WWTPs). Effluent from industrial process is collected and after filtration through sand and activated carbon filters in the WWTP, it is analyzed daily and subsequently recycled for reuse in the cooling tower. The effluent analysis is performed by an external government-licensed laboratory, and results indicated no exceedance. The values also comply with the WBG general guidelines.
Hazardous Materials Management: CS Chemicals operations involve hazardous chemicals such as linear akyl benzene, caustic soda, and the storage of diesel for backup generator sets. Although safe practices are followed, there are no documented procedures for chemical management. Indoor storage areas have proper ventilation systems to manage fumes. As per ESAP#1 and as part of ESMS improvement, CS Chemicals will develop specific procedures and work instructions for managing hazardous materials including storage, handling and use of the chemicals as well as response to any spills. Training on these procedures will be provided to all employees at all facilities during the workers’ induction session and on a quarterly basis thereafter.
PS4 Community Health, Safety, and Security
The Agbara and Ikorodu facilities are in industrial zones. However, there are some communities within a few hundred meters of the facilities at Agbara. Considering that the operations are formulation and packaging operations, significant adverse impacts are not expected on the neighboring communities, except in case of emergencies (e.g. untreated wastewater discharge, fire outbreak) or through traffic and security. The plan for handling such emergencies will be included in the emergency response plan (ESAP#1).
Traffic Management: Trucks are used for the transportation of raw materials and finished products. CS Chemicals has a site traffic management SOP outlining various safety measures, applicable only within its premises. The traffic management plan as per ESAP#1 should be expanded to address safety concerns beyond the plant facilities. The plan should include procedure for managing spills, checking the condition of drivers and trucks before each trip, conducting random drug and alcohol tests for drivers, and administering breath alcohol tests before each trip and vehicle monitoring system to mitigate the risk of accidents.
Security Management: Security at the facilities is provided by unarmed third-party licensed security agencies. CS Chemicals has no chief security officer / manager to supervise the security personnel. Also, there is no documented security management plan. As per ESAP #1, CS Chemicals will conduct security risk assessments and develop a security management plan that aligns with IFC PS. The plan will incorporate a clear protocol with due diligence in hiring, and training processes for security personnel across all facilities. Additionally, CS Chemicals will provide training on the UN Voluntary Principles on Security and Human Rights, including SEAH; life and fire safety emergency training; and engagement practices with surrounding communities.
