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
E&S management system (ESMS): NHLL has a corporate integrated management system (IMS) that consists of corporate policies, Standard Operating Procedures (SOPs), manuals, and defined Key Performance Indicators (KPIs) for monitoring, evaluation, and reporting. The ESMS is embedded in the IMS which among other aspects covers human resources, corporate social responsibility (CSR), safety, procurement and supplier management, environmental protection, and resource conservation. The overarching corporate E&S policy requires compliance with host country’s laws, regulations, and good international industry practices (GIIP). Each function is managed by its relevant corporate department. All subsidiaries and facilities are required to prepare management plans aligned with corporate IMS and obtain applicable regulatory permits. Accordingly, NHS has implemented an IMS aligned with the corporate IMS and adapted to its business. NHS’s facilities operate in line with Corporate and NHS E&S requirements and hold certifications appropriate to their operations and markets, for example, ISO 9001 (Quality Management Systems), ISO 22000 (Food Safety Management Systems), HACCP (Hazard Analysis and Critical Control Points).
NHS will develop an overarching environmental and social policy in accordance with its corporate policies, aligned with applicable laws and regulations and the requirements of IFC Performance Standards including among other aspects, policy on sustainable sourcing freedom of association policy for workers. (ESAP #1).
Identification of Risks and Impacts: The Company has obtained all mandatory regulatory permits to operate its feed mills and comply with the conditions of those permits. For new facility, NHS will engage qualified external experts to conduct an appropriate E&S impact assessment, identify potential E&S risks and impacts, and prepare Environmental Management Plans (EMPs) with measures to meet regulatory requirements and IFC’s PSs requirements (ESAP#2).
Construction E&S Management Programs: The Company will develop and implement an Oversight Contractor Management Framework (OCMF) aligned with IFC PSs for monitoring and oversight of construction activities to meet local regulations and construction industry standards as well as WBG EHS guideline requirements. This OCMF will specify E&S management plans required from the construction company to address construction activity-related impacts and will be developed into Construction Oversight Management Plans (COMPs) for each construction site (ESAP#3).
Corporate departments are organized by function and oversee the operations and performance of all subsidiaries, including NHS. The Corporate Board Committees for Strategy and EHS provide high-level strategic direction and oversee environmental and social (E&S) management. The Corporate Internal Control Department (ICD) is responsible for maintaining and updating policies and standard operating procedures (SOPs), as well as evaluating compliance. The Investment and Development Department manages all new development projects and associated construction, while the ESG Unit is responsible for E&S performance reporting and external communications.
At the facility level, the General Manager (GM) holds ultimate responsibility for managing operational, E&S, and OHS issues supported by technical, administrative, and human resources teams, which also have a dotted reporting line to their respective counterparts in the corporate departments. E&S unit in each mill is responsible for oversight of E&S policy and procedure implementation, performance monitoring and reporting. Each facility develops training programs, providing general and specialized EHS training for new and existing workers.
Emergency Preparedness and Response (EPR): As part of its operational manual, the corporate has developed a documented EPR plan covering emergencies related to fire, typhoon, earthquake. Each facility has developed a more detailed EPR plan drawing upon the Corporate EPR, commensurate with its specific operations. Emergency drills are conducted periodically in-house and in coordination with the fire departments of the host countries at least twice a year.
Supply chain management. Feed mill production primarily requires agricultural commodities such as corn and soybean meal, supplemented by small quantities of flour and chemical additives. NHS utilizes the centralized corporate procurement system to source these commodities from a few large international traders. Corn is sourced from the United States, Brazil, Argentina, and Ukraine, while soybean meal is sourced from the United States, Brazil, and Argentina. Preliminary review indicates that none of these countries are considered high risk in relation to child labor, forced labor, OHS, or deforestation for these commodities.
The procurement platform maintains a regularly updated database of qualified suppliers and purchase orders can only be placed with pre approved suppliers. Any new supplier must undergo evaluation and audit before inclusion. To align with IFC requirements on preventing child labor, forced labor, OHS risks and deforestation (ESAP #4), NHS will enhance the system to: i) source only deforestation free or certified corn and soybean, or procure exclusively from certified suppliers; ii) embed prohibitions on child labor and forced labor, as well as requirements for safe working conditions, into all purchase agreements; and iii) audit, track, document, and confirm supplier compliance.
Monitoring & Reporting: NHS rely on the Corporate monitoring and reporting system, whereby, key performance indicators (KPIs) related to its feed mill are regularly monitored, compiled at the corporate level monthly and benchmarked against local regulatory and industry standards and mitigation measures developed to address outstanding issues. Since 2023, the corporate has published its annual monitoring report in line with the Global Reporting Initiative (GRI) standards. Moving forward, NHS will develop separate progress reports for all mills under IFC investment, including E&S KPIs, mill expansion status, compliance monitoring results, and other relevant information (ESAP#5).
PS2: Labor and Working Conditions
The Corporate employs approximately 42,000 people, of which women employees make up over 35% of the workforce and hold 14% of leadership positions. NHS currently has about 9,200 employees of which 8600 are local hires and women making up around 25% of the workforce. Additional 500 employees are expected be hired due to expansion project. All employees are regular staff, and the Company does not employ temporary workers.
Human Resources Policies and Procedures: The Corporate Human Resources (HR) Manual outlines policies and procedures covering HR planning, recruitment, terms of employment (including working hours, compensation and benefits), training and career development, labor relations, and HR management tools. This manual serves as the framework for all subsidiary companies, which adapt it to local conditions and ensure compliance with national labor laws.
All employees receive a written contract and an HR induction on joining. During the induction, they are informed of their terms of employment, HR policies, and procedures. The Corporate has an integrated online platform where HR information and updates are readily available and easily accessible to all employees.
Workers’ Organization: The Company does not restrict formation of lawful worker unions. Several facilities currently have active workers unions. In line with ESAP #1, the Company will develop a formal policy affirming its commitment to not restrict the formation of lawful workers’ organizations.
Non-discrimination: The Corporation’s Human Resources (HR) policy includes explicit provisions on non-discrimination and equal opportunity and measures in place to for its implementation
Retrenchment: The Company has not undertaken any retrenchment to date and does not anticipate any retrenchment in the foreseeable future. In line with its ongoing expansion, the Company plans to recruit additional employees to meet increased operational needs.
Grievance Mechanism (GM): The Corporation operates a multi-channel grievance mechanism that enables employees to raise concerns or complaints through: 1) Regular communication with managers or HR personnel; 2) Email and smart phone apps ; 3) An online open platform that allows anonymous submissions, with the option for open discussion among staff; and 4) Union channels as an alternative route for grievances. All grievances are logged, with responsible personnel assigned to manage the case and resolutions documented ensuring confidentiality and non-retribution. Moving forward, the Company will designate trained and competent personnel to handle matters related to Gender-Based Violence and Harassment (GBVH), applying a complainant-centric approach and full confidentiality (ESAP#6).
Protecting the workforce: NHS has in place policy and procedures to prevent child labor and forced labor in its operations.
Occupational Health and Safety (OHS): Each facility has a documented OHS management program which identifies OHS risks and mitigants are implemented which is overseen by qualified safety personnel. Safety teams conduct regular internal inspections and provide monthly monitoring and reporting on safety performance. In the past 5 years, no lost-time incidents have been reported in NHS.
Going forward, NHS will enhance its reporting system to include the recording and analysis of first-aid cases and near misses (ESAP#7).
Workers Engaged by Third Parties: The Company will engage contractors for the development of new production lines and facilities. Construction of a feed mill production line typically takes 3–4 months with a peak workforce of 100–200 workers, while development of a new mill takes 12–18 months and can require 400–500 workers at peak. As per ESAP #2 construction contractor will have contractual obligation to comply with labor laws and working conditions. Further, as per ESAP# 3, NHS will implement the Oversight Management Plan to oversee and report contractor E&S performance and compliance with labor laws including among aspects, workers accommodation.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency: The Corporate implements environmental protection and resource conservation policies requiring all construction to undergo environmental and energy-saving assessments, and to comply with all applicable environmental and energy laws and regulations. The design and construction of new feed mills incorporate measures for enhanced natural light and ventilation, and to reduce heat load.
Electricity is the primary energy source for feed mills, supplied mainly from public grids and, in some cases, supplemented by solar power. Water use is minimal and piped from the public supply network for steam, and office use. Operational parameters are optimized whenever possible by upgrading or replacing equipment, lighting systems, and other infrastructure with more energy-efficient alternatives. The corporate ESMS platform supports real-time monitoring of energy consumption and can issue alerts when usage exceeds established limits.
Carbon Footprint: Project GHG emissions including Scope 1 and Scope 2 GHG is estimated at about 46,246 tCO2eq per year. This will be monitored once the expansions become operational.
Air Emissions. Diesel-fueled generators are used as backup power, while small to medium-sized boilers produce the steam needed for feed production. Depending on operating conditions, boilers use piped natural gas (PNG) in Vietnam and Egypt, and biomass in Cambodia, Bangladesh and Nipal as fuel. Air emissions are regularly monitored to comply with environmental permit requirements. Under this Project, all new feed mill lines as well as any new feed mills to be constructed, will be designed to meet the applicable emission limits from WBG EHS for steam generation.
Noise. The feed mill operation is automated with control center monitoring. Noise generated from rotating equipment is enclosed. The use of personal protective equipment (PPE) is enforced when entering these areas. External noise levels are within the limits set by the World Bank Group (WBG) Environmental, Health, and Safety (EHS) Guidelines.
Wastewater. Wastewater generated at the feed mills includes domestic wastewater from offices, boiler wastewater, and other domestic water discharged to the sewage system. Boiler blowdown water, which contains elevated levels of calcium and magnesium compounds, is pre-treated to remove these solids before discharge. All wastewater is treated and monitored to ensure compliance with relevant discharge standards.
Waste management. Dust from bag filter and dust waste at loading/unloading areas are feed dust which recycled back into operation process. At sites where biomass is used as boiler fuel, bottom ash and fly ash from bag filters are collected and used as fertilizer. Small quantities of used lubrication oils and oily rags are securely stored and disposed of by licensed third party contractors. Much of the plant operation is enclosed, minimizing human contact and exposure to wastes or emissions.
PS4: Community Health, Safety and Security
All facilities under the proposed Project are located in industrial and semi-industrial areas, away from nearby residential communities. Therefore, the risks and impacts of operations on the health, safety, and security of nearby communities are minimal.
Traffic impacts on nearby communities are also limited, as the company operates a maximum of about 30-40 trucks daily to and from the facilities, which are well connected by good road infrastructure. During construction, a traffic management plan will be developed and implemented to mitigate the impacts on the local communities as per ESAP#3.
Security guards are deployed through certified security providers in accordance with the host country’s requirements. In the project countries, no armed security guards are assigned to any of the facilities. All security personnel undergo background checks, complete relevant training, and sign the corporate code of conduct. Their responsibilities are limited to monitoring the entry and exit of personnel and vehicles to and from the plants. Grievances related to security guards can be emailed to HR or a designated address and are handled with strict confidentiality. Resolution involves the security providers and, when necessary, local authorities.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
The Company’s feed mills primarily source corn and soybean meal through international traders and their subsidiaries located in NHS’s countries of operation. Sourcing of these commodities can carry biodiversity risks related to the conversion of natural and/or critical habitats (deforestation). A review of the supply chains for corn and soybeans indicates that this risk can be mitigated by sourcing soybean and corn from certified suppliers. This can include seeking certified soybean and corn certified under the RTRS Standard for Responsible Soy, the RTRS Standard for Responsible Corn Production, ProTerra or equivalent standards with commitments on deforestation free supply. NHS will include in the update to the Sustainable Sourcing Policy commitments to procure certified commodities and to implement a verification program to determine ongoing compliance with the commitments (as per ESAP #4).
NHS also procures biomass for use in boilers within their operations Cambodia and Bangladesh. The biomass is sourced from production of commodities, including rice husk, sugarcane and plantation timber residues. Deforestation risks for these commodities are low in these two jurisdictions; however, their use is to be managed through the updated Sustainable Sourcing Policy. Given that certification of biomass supply is not possible to reduce deforestation risks, NHS is to implement a system to identify the source of production where feasible and verify that the supply is not contributing to deforestation risks (as per ESAP#4).
