All but four facilities are leased and leased properties will continue to be used as part of the expansion. Therefore, PS5 Land Acquisition and Involuntary Resettlement is not considered to be triggered. Similarly, no impacts are expected on biodiversity, indigenous peoples or cultural heritage, as all stores are developed in urban and sub-urban areas in commercial settings, with no known presence of a sensitive biodiversity area, indigenous people and cultural heritage.

This is a Category B project as per the IFC's Policy on Environment and Social Sustainability (2012). The proposed project will have limited adverse E&S impacts that are few, site specific, largely reversible and readily addressed through existing mitigation measures.  

Key E&S risks and impacts associated with this Category-B project include: The company’s E&S capacity and management systems to assess and manage the environmental, social, health and safety aspects of its operations (stores, DCs, meat processing facility and expansion to new locations) in compliance with legal requirements and the IFC Performance Standards (“IFC PSs”); E&S screening criteria and assessment procedures for new stores and their locations; Assurance of fair, safe and healthy working conditions for its workforce, including management of internal grievance mechanism and risks related to gender-based violence and sexual harassment, and supply chain management; resource efficiency, water and waste management, including management of goods subject to recalls, and expired foodstuff and goods; life and fire safety (“LFS”), structural stability of facilities and emergency response management for all stores as per IFC requirements that relate to (but not limited to) food safety management, and traffic and security management;  stakeholder engagement and external grievance mechanisms.

 PS1: Assessment and Management of Environmental and Social Risks and Impacts 

Boxer does not currently have a consolidated Environmental and Social Management System (ESMS) to coordinate its various environmental and social programs and initiatives. Action items are included in this section, as well as in the PS3 and PS4 sections, detailing how existing E&S policies and procedures will be consolidated into an overarching ESMS, in line with IFC PS requirements and national legislation, relevant to Boxer’s operations (ESAP#1). 

Policy: Boxer has in place standalone OHS, food safety, climate change and energy, ethical sourcing and biodiversity, food losses and waste, sustainable packaging, waste and water policies that apply to all its facilities across South Africa and Eswatini. A standalone overarching E&S Policy is not in place. An E&S Policy will be developed that provides a framework for E&S risk management and includes a commitment to comply with all applicable laws, regulations and IFC PSs (ESAP#1). Additionally, the policy will specify the roles and responsibilities within Boxer for ensuring conformance with the policy and overseeing its execution. 

Identification of Risks and Impacts: Boxer maintains corporate and store-level risk registers that are periodically updated in consultation with the management team. Risk registers are updated annually with the involvement of senior management and standard work procedures are updated every other year or sooner if required. These registers include key risks such as fire, civil unrest, supply chain disruptions, food safety, OHS, and power outages. The risk register will be included in the consolidated ESMS (ESAP#1).

The sites for the new stores are proposed and screened by the operations team. Sites are then presented internally for approval from an operations and business perspective. Once approved, stores are designed as per Boxer’s documented specifications (which are in line with the IFC PS and WBG’s EHS Guidelines). Developers and landlords are responsible for obtaining any environmental and social impact assessment (“ESIA”) approvals, while ensuring facilities meet Boxer's specifications.

On behalf of the consortium, an independent environmental consultant at the Whetstone DC monitors the construction contractor's compliance with the Environmental and Social Management Program (“ESMP”), which aligns with both national requirements and IFC Performance Standards. The ESMP was developed as part of an ESIA commissioned by the original property developer in 2020. Prior to selling individual plots, including the Whetstone DC site, the developer completed land subdivision and installed basic infrastructure including roads and bulk services.

Management Programs: Boxer has implemented various E&S management programs across all its operations, which include detailed procedures, that mainly relate to safe working practices. Daily and weekly checklists, as well as internal and external audits, cover OHS, food safety and waste management. These existing procedures, checklists and other management documents will be linked to the ESMS (ESAP#1).

Organizational Capacity and Competency: Boxer’s sustainability and E&S team focus on all facilities in South Africa and Eswatini. Boxer has an Executive Sustainability Officer focused on sustainability strategy, resource efficiency data collection, monitoring and reporting, and stakeholder engagement. The Executive Sustainability Officer reports directly to the CEO. The Group Risk Officer is responsible for food safety and OHS, including implementation of management programs. The Group Risk Officer reports directly to the CEO. An OHS manager, reports to the Group Risk Officer, who monitors compliance with legislation and is assisted by OHS officers responsible for conducting safety and risk assessments and identifying training needs at facilities. A Food Safety manager, reports to the Group Risk Officer, who monitors food safety. A social, ethics, and transformation committee is currently being established to oversee the business's E&S performance at the board level. Service division managers oversee and provide food safety and operational support to service departments (butchery, bakery, deli etc.), including conducting internal audits. Additionally, service department specialists offer specialized training and support to operations.

At each facility, the branch manager serves as the OHS officer and oversees food safety, ensuring that all noncompliance’s are identified, corrected in a timely manner, and that controls are put in place to prevent recurrence. Fire marshals and first aiders are present on-site for every shift. At the meat processing plant, dedicated food safety and OHS officers are in place.

Emergency Preparedness and Response: Detailed emergency preparedness and response plans are in place at each facility covering emergencies such as riots, fire, strikes unrest, robberies and floods. Emergency plans and procedures are displayed on the notice boards in the staff area and are available on the intranet. Staff have been trained in the procedures.

Stores have either one or two floors and have multiple emergency exits. Fire prevention and warning mechanisms are in place. Sprinkler systems are installed in larger stores and smoke detection systems in all stores bigger than 500 square meters. Evacuation drills are conducted at each facility at least twice per year.

 Monitoring and Review: At each facility, the branch manager is responsible for monitoring and reviewing E&S procedures. Each facility has a an OHS committee that meets monthly to oversee conformance with Boxer’s policies and procedures. The committee includes the branch manager, OHS representatives, first aiders, and fire marshals. Standard procedures are in place for the OHS meeting that provide a framework for discussing current risks, formulating action plans, assigning responsibilities, and setting deadlines for addressing non-compliances.

 PS2: Labor and Working Conditions

As of September 2024, Boxer employs around 30 400 staff (57% female), of which 15 800 are part-time and 14 600 full-time. All are permanently employed. Around 440 contracted staff, supplied by labor brokers, are hired at DCs. Contracted staff assist with picking of products during busy periods. 

HR Policies and Procedures, Working Conditions and Terms of Employment and Non-Discrimination and Equal Opportunity: Boxer has an HR Code of Conduct, which covers employees expected behavior, disciplinary procedures by offence type, and grievance procedures that cover all operations in South Africa and Eswatini. A standalone sexual harassment policy is in place, which states that Boxer has zero tolerance towards sexual harassment and defines sexual harassment and its different forms. All employees have written contracts that detail remuneration, probation periods, provident fund, freedom of association, hours of work, overtime, annual leave, sick leave and maternity leave. Terms of employment are developed per national legislation requirements and generally aligned with IFC PS2.

Workers’ Organizations: At Boxer, approximately 53% of workers are members of the South African Commercial, Catering and Allied Workers Union (SACCAWU). A relationship agreement is in place between Boxer and SACCAWU, and Boxer management meets regularly with the union. Union representatives, or shop stewards, are present in stores and DCs. All HR policies are signed off by the union. A three-year wage agreement with SACCAWU is in place, and this agreement applies to all Boxer workers, regardless of their union membership status.

Non-discrimination and Equal Opportunity and Prevention of Child and Forced Labor:  The code of conduct states that any form of harassment to fellow employees, customers or suppliers results in immediate dismissal. All staff are above the age of 18 and are required to complete high school. Boxer keeps identification cards on file for all staff, which include the date of birth to verify age.

Retrenchment (Store Takeovers): When taking over any Pick n Pay stores or stores owned by other supermarket chains, Pick n Pay offer retrenchment packages to staff aligned with national legislation or move staff to other nearby stores. Boxer employs all Pick n Pay staff who want to remain at the store under Boxer ownership. South Africa’s legislated retrenchment requirements align with the IFC PS, including consultation, severance pay and notice periods. Unions are consulted as part of this process. When Boxer takes over franchised Pick n Pay stores that are due to close, Boxer offers the same employment terms and benefits to Pick n Pay employees. For corporate stores (i.e. owned directly by Pick n Pay), which constitute 20% of acquisitions to date, there might be loss of income to prevent retrenchment, which is consulted and approved by the union.

Grievance Mechanism: The grievance procedure for staff is detailed in the code of conduct and is in line with IFC PS2. At Boxer, employees can lodge complaints with their superior or an indirect supervisor. Unresolved issues are escalated to the regional manager for a hearing, with an appeal process up to the CEO. A tip line allows for anonymous complaints, investigated by the regional manager and loss control team. Sexual harassment complaints are handled directly by HR. Common grievances include unfair treatment, nepotism, unfair dismissal, and mistreatment by bosses. Complaints were addressed through the documented procedures and resulted in disciplinary procedures, as per the HR policy, where the complaint was found to be valid.

Occupational Health and Safety (OHS): Lost time injury frequency rate was 5.75 for the first half of 2024 (LTIFR, number of lost time injury cases per million worked hour), which is satisfactory when compared to the good international industrial benchmark (www.bls,gov, food and beverage stores LTIFR of 7.5). There have been no fatalities in the last three years. There is an incident investigation system in place and key OHS risks associated with the operations include slips, trips and falls, injuries from heavy lifting, fire, security related risks, violence from customers and cuts and lacerations. Weekly OHS checklists are completed by OHS representatives at each branch. These checklists cover areas such as training, register and checklist completion, first aid, and facility maintenance. Periodic inspections are conducted by internal auditors to monitor compliance versus OHS and food safety standards. Additionally, external audits are conducted bi-annually. The company will develop action plans to improve its incident performance and include OHS monitoring and auditing procedures in the consolidated ESMS (ESAP#1). 

All contracted service providers operating at facilities are required to sign an agreement requiring them to comply with South Africa’s OHS Act (which is also applied in Eswatini) and Boxer’s OHS policies and procedures. Boxer has a dedicated OHS Contractor Officer who is responsible for contractor management. OHS requirements for contractors will be included in the consolidated ESMS (ESAP#1). 

Supply Chain: Boxer has a supplier code of ethics, which all suppliers are required to sign. As per ESAP#2, Boxer will:

1. Update the existing Boxer supplier code of conduct to include a requirement to prevent the conversion of critical natural habitat for primary production suppliers;
2. Map the supply chain for Boxer confined label products and identify high risk confined label suppliers based on E&S risks and mutual dependence;
3. Develop a supply chain compliance procedure, which will describe processes for communicating E&S compliance requirements, screening of new confined label suppliers with respect to these requirements, incorporating compliance requirements in contracts, regular monitoring and verification of compliance, rating system for suppliers and consequences of non-compliance; and
4. Prepare a plan for monitoring and reviewing high risk confined label suppliers as per Boxer’s mapping of confined label suppliers as approved by the Boxer Board and implementation of the supply chain compliance procedures.

PS3: Resource Efficiency

Resource Efficiency: Boxer under Pick n Pay have made public commitments to reduce energy, refrigerant emissions, waste and water consumption and report its resource efficiency performance as part of the Pick n Pay sustainability report (https://picknpayinvestor.co.za/pdf/sustainability-reports/2024/pnp-2024-sustainability-report-and-databook-single-pages.pdf). Boxer have put in place several resource efficiency initiatives as part of Pick n Pay’s wider resource efficiency program, including reducing carbon emissions, diverting waste from landfill and water efficiency. Resource efficiency data is recorded on Boxer’s intranet system.

Boxer will adopt the same approach as Pick n Pay on resource efficiency and its first sustainability report will be published in 2026. Boxer is developing an ESG strategy and gathering baseline data on GHG emissions, water, waste, and energy to set targets.

Boxer will develop resource efficiency targets, relevant to its operations, and establish monitoring and reporting procedures for all relevant aspects, including, energy, GHG emissions, and general and food waste, incorporating these into the ESMS (ESAP#3).

Power Supply: The main source of electricity at facilities is the national grid. Back-up diesel generators are provided at every facility and are designed to provide eight hours of power with 100 L of diesel stored in bunded tanks. Boxer has solar installations at 90 facilities.

Water Supply: Water is sourced from municipalities and Boxer have installed water tanks to store water for when supply is disrupted at select facilities.

Greenhouse gas (GHG) emissions: Diesel generators and refrigerant gases are the main source of GHG emissions. Boxer is in the process of converting stores to natural refrigerants to reduce GHG emissions. A coal boiler for powering steam cookers is in place at the meat processing facility. It uses approximately 120T of coal per month.

As per an independent GHG verification of Pick n Pay Group’s FY24 GHG Statement, Boxer Superstores produced around a total of 463 500 tons carbon dioxide equivalent greenhouse gas per year (scope 1, 2 and 3 emissions).

Boxer’s exposure to physical climate change risks is primarily associated with an increase in the prevalence and intensity of extreme weather events that can result in damage to its facilities and supply chain disruptions. Risks related to damaged buildings are mitigated through robust building specifications and the location of stores in urban or peri-urban settings. Supply chain disruptions are mitigated by maintaining a broad range of suppliers, both within South Africa and internationally.

Waste: The domestic wastewater generated from the facilities is limited and is disposed of to the public sewage system. For the meat processing facility, oil traps are installed in all drains, which are maintained by a third-party waste contractor. The local municipality test wastewater from the meat processing facility on a periodic basis, where the effluent quality is in line with local requirements.

Solid waste from stores and DCs (primarily domestic waste, perishable items, food waste and packaging materials) is disposed through municipal or other external waste management service providers with required authorizations. Boxer has initiatives on reducing packaging waste. Through its waste management policy, Boxer processes over 7,000 tons of recyclables annually while actively reducing operational waste through supplier partnerships. Hazardous materials and waste at facilities is limited to cleaning materials, diesel and oil. Material safety data sheets are maintained along with safe operating procedures.

PS4: Community Health, Safety and Security

Infrastructure and Equipment Design and Safety and Life and Fire Safety Systems: The Boxer Building specification manual stipulates that the developer/landlord is responsible that all facilities comply with South African Bureau of Standards, South African National Standards and South African National Building Regulations and it includes detailed fire safety requirements. It applies to facilities in both South Africa and Eswatini. It also requires that the developer / landlord appoint a professional team, including fire and structural engineers. A fire compliance certificate must be issued to Boxer prior to occupation.

Facilities visited were observed to be equipped with fire protection systems, including sprinkler systems, standpipe/hose systems, fire protection water supplies, fire pumps, fire mains, fire extinguishing systems, fire detection/alarm systems, etc. In rack sprinkler systems are installed by Boxer at distribution centers. All visited facilities have multiple emergency staircases, routes and exits which were identified with markings. Trained fire marshals are in place at facilities. All facilities have fire and evacuation procedures, and evacuation drills are conducted twice per year.

Comprehensive weekly and monthly fire safety checklists are completed by branch managers and external audits covering fire detection and equipment are conducted twice per year on every facility.

Food Safety: Boxer’s food safety practices are documented, audited, and compliant with local legislation. A food safety management system aligned with HACCP – SANS 10330:2020 (Hazard Analysis and Critical Control Point (“HACCP”) system is in place, which is aligned with the IFC PS. The Boxer system includes comprehensive policies, procedures, training schedules, and management review requirements. Branch managers complete daily, weekly, and monthly food safety checklists for specific store areas such as the deli, bakery, and butchery. External audits conducted bi-annually, cover safe food handling, refrigeration, cleaning, waste management, and pest control. A procedure is in place for food safety complaints and product recalls, although no recalls have been conducted in the factory’s history.

The meat processing facility has the relevant permits in place, allowing it to export to Eswatini, with annual renewals. The facility and equipment are well-designed and maintained in terms of good hygiene and manufacturing practices, with movement patterns designed to prevent contamination. Senior management is committed to continual improvement, and an experienced food safety representative oversees the system. Weekly food safety, occupational safety, health, environment, and quality meetings are conducted, with records maintained and communicated to staff.

Transport Safety: Boxer does not own its own fleet and instead uses third-party service providers for its transport operations (approximately 100 Boxer branded vehicles). A lead logistics provider is in place to manage the relationship with transporters on behalf of Boxer. The consultant optimizes routes, monitors drivers to have adequate rest times, and engages with transporters on safety issues. All transporters use mixed telematics to monitor driver behavior, and Boxer can access real-time data.

Boxer will obtain from its outsourced fleet road safety management plans. Boxer will stipulate that each plan should include requirements for the training of drivers on road safety, vehicle requirements, maintenance checklists, and incident reporting. (ESAP#4).

Security forces: Unarmed private security guards from a third-party contractor are employed at all Boxer stores. In addition, armed reaction units are assigned to all sites by third-party security firms. All security guards employed by Boxer are certified by the Private Security Industry Regulatory Authority (PSIRA). A Boxer security manager oversees compliance with security protocols and ensures that all guards meet industry standards.

Boxer will conduct a group-level security risk assessment. This assessment should be consistent with the requirements of IFC PS and relevant legislation to ensure that security measures protect personnel and property while minimizing risks to workers and members of the public. Boxer will also include Security Management Plan requirements in security provider contracts to ensure compliance with company policies and standards, and to ensure consistent management of the security risks identified in the Security Risk Assessment. (ESAP#5).

 Boxer has a stakeholder engagement policy and plan in place which outlines stakeholder groups (customers, employees, trade unions etc.) and details areas of interest and frequency of engagement with various identified stakeholder groups.

Customers can lodge complaints at stores with branch managers or through a customer care line. A customer complaint and claims standard operating procedure has been drafted but has not yet been implemented. It covers food safety and quality and health and safety incidents. In addition, it includes a timebound process with roles and responsibilities for resolving and responding to customer complaints. The complaints and claims procedure will be updated before being finalized to incorporate complaints raised by affected community members (ESAP#1).

  Company Name: Boxer Superstores (Pty) Ltd

Address: 41 The Boulevard, Westend Office Park, Westville, 3610, South Africa

Phone: +27 (0) 31 275 7000

Facsimile: +27 (0) 86 686 2820