Based on IFC’s review, no risks and adverse impacts of the project that need to be managed consistent with PS5 (Land Acquisition and Involuntary Resettlement), PS6(Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) were identified.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with the Performance Standards.                                                  

 This is a Category B project according to IFC's Environment and Social Sustainability Policy and is expected to have limited adverse impacts that are largely reversible and can readily be addressed through additional mitigation measures and adoption of good international industry practices (GIIP). The key risks and impacts include: (i) corporate E&S management systems (ESMS) and their application across the different businesses; (ii) organizational E&S capacity; (iii) working conditions and OHS for employees and contractors; (iv) handling of cargo containers in compliance with international regulations; (v) emergency, oil, and chemical spill management; (vi) air pollution management; (vii) waste and wastewater management; (viii) community and public safety; (ix) management of any potential impacts on sensitive environment and (x) grievance mechanism for employees, contractors, seafarers, drivers, and different types of workers of the company and its subsidiaries.                                                 

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

E&S Management System and Programs: Arkas Holding's existing management system comprises of the human resources and OHS policies and procedures. Environment-related policies are defined and managed at the subsidiary level. Each subsidiary operates based on its independent management system.

Arkas Line and Arkas Logistics identify and manage E&S risks and impacts associated with its operations through compliance with applicable national standards. The subsidiaries have also implemented an integrated management system and are certified as per ISO 9001 (Quality), 14001 (Environment), and 45001 (Occupational Health and Safety).  The subsidiaries' 2023 Sustainability reports are disclosed on their respective websites: Arkas Line (https://arkasline.com.tr/surdurulebilirlik-raporu/) and Arkas Logistics (https://arkaslojistik.com.tr/en/sustainability).  Both subsidiaries have plans and procedures for managing waste, oil spill prevention, hazardous material cargo, OHS, incident and accident reporting, traffic management, and emergency response.

Arkas Logistics also has ISO 27001 (Information Security Management System) certification and ISO 10002 (Customer Satisfaction and Quality Management System). Moreover, the Arkas Line ship fleet operations have a safety management system (SMS) certified by an accredited third-party safety expert to comply with the International Management Code for the Safety Operations of Ships and Pollution Prevention (ISM Code). The ship fleet operations received an International Ship Security Certificate (ISSC), a Safety Management Certificate (ISM), and a Compliance for Maritime Labor Certificate. Arkas Line has a wastewater (ballast bilge, sewage) management plan, a waste management plan, and an inventory of hazardous materials procedures.

As per ESAP#1, Arkas Holding will establish an overarching Environmental and Social Management System (ESMS) to systematically manage the risks and impacts of all its subsidiaries and businesses, particularly since each business has inherent risks relevant to its sector. The company will develop a corporate-level ESMS which will include (i) E&S policies; (ii) E&S risk screening and impact assessment procedures for any new or expansion of facility or activities of subsidiaries; (iii) E&S management plans;  (iv) E&S organization and training plan; (v) emergency preparedness and response plan; (vi) E&S monitoring and reporting procedures; and (vii) a stakeholder engagement procedure including an external grievance redress procedure. Arkas will develop the above ESMS elements (i.e., policy, risk and impact assessment, management and monitoring program, capacity training) for the following aspects (a) gender and child protection; (ii) climate risks; (iii) greenhouse gas emissions; (iv) resource efficiency; (v) air quality and emissions; (vi) noise; (vii) water quality and wastewater; (viii) hazardous and non-hazardous waste; (ix) traffic management; (x) contractor management; (xi) land acquisition; and (xii) biodiversity protection, in line with IFC PS requirements and good international industry practice (GIIP) as reflected in the relevant WBG EHS Guidelines. The existing labor and OHS management will also be enhanced as discussed in the PS2 section and integrated as part of the ESMS. The corporate-level ESMS will be cascaded to the different business groups and subsidiaries. Each subsidiary will enhance or develop its ESMS in line with the corporate-level ESMS and commensurate its business operations.

Arkas Line will enhance its E&S procedures on (a) biodiversity management particularly considering that the ships operate in designated international marine mammal association (IMMA) areas and would require a cautionary approach to avoid and prevent any collision with the cetaceans protected by the IMMA;  (ii) air pollution (e.g., nitrogen oxide, carbon dioxide, sulfur dioxide total suspended particulates);  (iii) noise generated by the ship fleet operations, (iv) resource efficiency programs to reduce vessel waste and wastewater generation, (vi) waste management at port receptors in non-EU countries, demonstrate duty of care; (vii) climate risk considerations, and (vii) contractor management, including for shipbreaking facility, depots, warehouses.  Arkas Logistics Group will also enhance its E&S procedures, on wastewater and waste management, particularly in depots and warehouses, biodiversity risk for new routes of logistics fleet (e.g.  Arkas rail locomotives, Arkas heavy fleet for wind projects), climate risk consideration, and contractor management, particularly since third-party contractors provide 70% of the trucking business.  The other subsidiaries (e.g., Arkas Rail and Arkas Heavy) under the Logistics Group will develop E&S policies and procedures in line with their operations.  

Organizational Capacity. The Board members of Arkas Holding are also represented in the subsidiaries. The Arkas Line Sustainability Director directly reports to the Board members.  The fleet environmental team and OHS managers have a different reporting line linked to the Maritime Operations Manager.  Arkas Logistics' Quality Management Systems Department is tasked to spearhead the subsidiary's sustainability transformation strategy but it does not have an in-house E&S expert. As per ESAP# 2, Arkas will appoint E&S Specialists at the corporate level to oversee the implementation of the corporate ESMS and manage the company's compliance with IFC's E&S requirements and E&S training for the operationalization of the ESMS. Arkas Logistics will also increase its E&S capacity and engage an E&S expert to support implementation of the updated ESMS, which can be a shared resource within the Logistics Group.

HSE Training. Arkas Academy, another Arkas subsidiary, is focused on spearheading the internal mandatory and voluntary training for Arkas Group. It provides general sustainability, OHS, and HR training for all Arkas staff. Training plan and records are maintained at the subsidiary level. Specialized training related to E&S, OHS and HR are developed at the subsidiary operational level. Fleet ships have environmental pollution training, ballast management, safe working practices, and the use of life safety equipment (e.g., life rafts, life buoys) and fire protection equipment. The Arkas vessels have a safety training list in their SMS. Arkas Logistics training is more focused on OHS aspects. As per ESAP#2, Arkas and its subsidiaries' training plan will be updated to cover the corporate ESMS and increase awareness of IFC PSs and WBG EHS guidelines.

Emergency Preparedness and Response. Arkas and the subsidiaries' facilities (e.g., warehouses) have their specific emergency response plans. All land-based facilities conduct emergency drills on an annual basis. The ships have an emergency plan that is integrated in their SMS, including emergency communication protocols that differentiate between accidents and other emergency situations.

Monitoring: The national regulations OHS key performance indicators, including OHS training, records of accidents, and lost-time injuries, are periodically monitored across businesses. The ships are audited by a third party in accordance with ISM and the requirements of the International Convention for the Safety of Life at Sea (SOLAS). Both subsidiaries have an E&S legal compliance tracking system.  As per ESAP#1, Arkas will update its monitoring and reporting procedures. All high-risk items identified by the subsidiaries during their E&S assessments will be reported upfront to the corporate level team, with their corresponding mitigation plan. The subsidiaries' E&S performance monitoring report will be updated and streamlined following key performance indicators in line with updated corporate ESMS and relevant WBG EHS Guidelines and submitted to the corporate team annually.   The monitoring report will cover all operational sites, including direct workers, contractors, and third-party providers' E&S performances.

PS 2 – Labor and Working Conditions

Arkas Holding employs directly a total of 2,915 land-based employees across its affiliated companies, including 1,063 at Arkas Shipping and Transportation Inc., 81 at Arkas Container Transportation Inc., 104 at Arkas Holding Inc., 178 at LIMAR Port and Ship Operations Inc., 1,485 at Arkas Logistics Inc., and 17 at Arkas Petrol.  The group also employs a total of 647 seafarers, including 99 at Arkas Shipping, 240 at Arkas Container, 130 at Limar, and 78 at Arkas Petrol. In terms of indirect workforce, Arkas Holding engages 64 indirect workers, Limar engages 15, and Arkas Logistics engages 673 through third-party service providers and vendors.

There are no past or planned retrenchment activities within Arkas Holding and its subsidiaries based on the information gathered and interview conducted with the different Arkas HR teams.

HR Policies: Arkas and subsidiaries have HR frameworks aligned with the Turkish Labor Law, covering compensation, working hours, leave, and standardized employment contracts. The framework follows the Hay Evaluation Methodology to define positions equitably while promoting transparency, non-discrimination, and gender neutrality. The Arkas Ethics Code specifies the company's commitment to equal opportunities, safe working conditions, respect for employee rights, collective bargaining, and no tolerance for forced and child labor and discrimination. It also has separate policies on (i) anti-retaliation, (ii) prevention of conflict of interest, (iii) consultation, notification, and reporting, and (iv) child labor, forced labor, and employment of youth. The two subsidiaries adopted and tailored the corporate policies and procedures to their operational context. Both subsidiaries have a Gender Based Violence and Harassment (GBVH) policy. Arkas Line additionally follows Turkish Maritime Labor Law No. 854, Maritime Labor Convention (MLC 2006), and relevant international maritime conventions for the operations of its ships. Arkas Line has a Shipboard Harassment and Misconduct policy, which specifies a zero-tolerance approach to all forms of harassment, including GBVH. This was visibly posted in crew-accessible areas on the ship visited.

Working Conditions and Terms of Employment: There are three types of workers assessed: (i) land-based direct and indirect workers; (ii) seafarers for Turkish-flagged ships; and (iii) seafarers for foreign-flagged ships. For the land-based workers, Arkas and Arkas Logistics apply standard open-ended contracts for direct workers, including truck drivers, office staff, and port personnel. The sample contracts and pay slips reviewed showed the total amount paid for overtime and holiday work. The pay slip documentation quality also varies per subsidiary. Former workers of the company have raised concerns related to overtime pay, national and public holiday pay, severance pay, and notice pay. Timekeeping systems such as workers shift logs or SMS-based approvals have to be improved.

Turkish-flagged ships seafarers are employed under fixed-term service agreements governed by Turkish Maritime Labor Law No. 854 and covered by a collective bargaining agreement (CBA) signed with the Türkiye Denizciler Sendikasi (TDS). The foreign-flagged (e.g., Malta, Morocco) seafarers are also employed under fixed-term contracts. The contracts are in line with the Maritime Labor Convention (MLC 2006), the Standards of Training, Certification and Watchkeeping (STCW), and the International Transport Workers' Federation (ITF), which are the ship-approved CBAs. The CBA agreement includes provisions for the health protection and medical care, overtime pay, statutory leave entitlements, Turkish social security (SGK), and union representation amongst others. The ships' working hour limits and rest period requirements are aligned with international standards. For both ship types, regular working hours are set at eight hours per day, 48 hours per week, and monthly guaranteed overtime is set at 110 hours under the Turkish CBA and 103 hours under the ITF-CBA. Overtime beyond these thresholds is required to be compensated for a 125% premium as per applicable regulation. The seafarers sample contracts showed that monthly wages are structured as consolidated payments, which by default are intended to cover regular hours, overtime, and public holiday work. 

Former employees have raised concerns related to severance pay, notice pay, overtime pay, annual paid leave, national and public holiday pay. As per ESAP #3, the company and subsidiaries shall enhance its HR procedures in line with PS2 including; (i) implementing systematic timekeeping to document actual hours worked across all positions, including fixed-overtime of ship crew to track actual overtime spent and support compliance on working time and rest periods; (ii) improve pay slip transparency by itemizing wage components (e.g., hours worked, overtime, premiums, allowances); (iii) update HR system to ensure correct wage calculation are provided for all direct and indirect workers, in line with the applicable Labor Law and CBAs; (iv) conduct employee and contractor training on compensation, rights and benefits during onboarding and annual basis through employee engagement programs; and (v) appointment letter of workers shall indicate all conditions of employment, relating to (a) allowable overtime period and compensation,  (b) benefits (e.g., leaves, medical, social insurance), (c) length of notice in case of employment termination, (d) rules related to salary deduction, and (e) opportunities to form or join worker organizations as mandated by law. As per ESAP #4, Arkas will commission an independent third-party labor audit and inspection of subsidiaries direct and indirect/contractor workers to determine their level of compliance with the relevant labor laws and IFC PS2. Non-compliances will be recorded into a corrective action register with a time-bound and costed implementation plan.

Grievance Redress Mechanism (GRM). Arkas Holding maintains a group-wide grievance mechanism in line with its Ethics Code, Consultation, Notification and Reporting Policy, and the Anti-Retaliation Policy. It has a dedicated Ethics Line (by phone and email) at the corporate and subsidiary levels, enabling employees to raise workplace concerns without fear of retaliation. There are three channels used by Arkas Logistics internal platform (i.e. Mavi Hat, Serbest Kürsü, and the Arcell mobile application) to gather grievances. These are still separate systems and limit the ability of Arkas Logistics to conduct trend analysis or assess resolution timelines. Arkas Logistic grievance log record is limited and has not captured any labor and OHS related issues in the past three years, which suggests the need for the system to be strengthened. 

 Arkas Line also uses the Ethics Code Complaint System, the Open Platform, and the Arkas Blue Line to receive

grievances for land-based employees. The ships have their separate onboard grievance mechanism that applies to both Turkish-flagged and foreign-flagged vessels, in line with the Maritime Labour Convention (MLC 2006).  The vessels GRM procedures indicate that crew members can submit complaints through the following channels: (i) direct superior, (ii) senior officer, (iii) captain (iv) DPA and that complaints should be recorded and resolved in a timely and fair manner. The crew members can escalate issues through the Flag State Administration, Flag State Control Officer, Classification Society Inspection Officer on behalf of the Flag State, Port State Control Officer, Local Ship Staff Union.    Based on vessel crew members interviewed, they verbally share their grievances with their direct supervisors. The ship masters manually logged the grievances received in the compliant forms and tracked and resolved through consultation with relevant crew members or individuals via e-mail. Complainants express their opinion in the decision section of the forms whether they are satisfied or not regarding the Master’s decision. The Arkas vessels do not have a digital complaint log, or central system to track complaint resolutions or to assess the quality of resolution.  The company plans to record the complaint received in the ARFLEET system by raising them as nonconformity to be able to digitally track the complaints.

Arkas Line is in the process of establishing an anonymous ethics hotline. The anonymous written and telephone whistleblowing hotline will be active within 2025 through the arkasline.ethicshelpcenter.com. Arkas Holding plans to adopt the anonymous system once it is functional for Arkas Line.    As per ESAP#5, Arkas Holding and its subsidiaries will enhance their worker grievance mechanisms (GRM) to align with PS2. The revised GRM system will:(i) systematically log all verbally raised grievances and that grievance forms are acknowledged by the workers; (ii) implement a centralized and digital grievance logging platform covering all subsidiaries (iii) ensure anonymous and confidential grievance submission through the Ethics Help Center hotline (mentioned above) and site-specific GRM; (iv) systematically track, consolidate, and analyze grievances by category, resolution status, and timeline across entities; (v) establish gender-sensitive and survivor-centered reporting pathways for GBVH-related complaints; (vi) disaggregate grievance data by gender and worker type (e.g., direct employees, subcontracted workers, truck drivers, seafarers); (vii) provide regular training to grievance focal points (e.g., HR staff, captains, supervisors) on PS2-compliant handling procedures; and (viii) conduct regular awareness activities for all worker groups to improve visibility, trust, and accessibility of the grievance process including disclosure meetings to workers, display GRM related posters in the facilities common areas.

Gender and GBVH.  Arkas signed the Women’s Empowerment Principles (WEPs) in 2015, an initiative established in 2010 in collaboration with the United Nations Global Compact and UN Women. The total number of women employees in Arkas Line in Türkiye and abroad offices is 580, representing 34% of the employees, of which 16% are in managerial or upper-level positions. There are 50 women officers working in the ships directly managed by Arkas Line, representing 10% of the total number of vessel employees. Gender data are currently limited to Arkas Line offices.

Both of Arkas subsidiaries have adopted a standalone GBVH Policy that affirms a zero-tolerance commitment toward all forms of gender-based abuse, aligned with PS2 and ILO Convention No. 190. The policy applies to all employees, managers, subsidiaries, business partners, and supply chain actors. The policy prohibits any physical, psychological, verbal, or digital violence, discrimination, or harassment based on gender, sexual orientation, or gender identity, and specifically prohibits retaliation against complainants. Arkas Line also has a Harassment and Abuse on Board Policy and Procedure which specifies the responsibilities of ship personnel, procedures for raising a complaint, investigation and disciplinary actions.  Arkas will develop or adopt the GBVH Policy across its subsidiaries (ESAP #1) and as per ESAP #6, improve the GBVH response framework by (i) appointing a GBVH focal person within the HR team that has training on managing GBVH issues; (ii) the focal person will plan the staff (direct workers and contractors) training in gender-sensitive complaint handling; and (iii) the focal person oversee implementation of ESAP #5.

Contractors and Third party. Arkas does not have a corporate-level contractor management system. The subsidiaries have different procedures for contracting. Arkas Line has developed a documented Procedure for Purchasing Labor Services through Subcontractors, which defines baseline criteria for contractors across its organization. Arkas Line has institutionalized these requirements through dedicated contractor selection and evaluation procedures, The contractors are screened based on their existing policies and historical performance related to labor rights, OHS, emergency preparedness, anti-discrimination, and grievance mechanisms. Arkas Logistics has a Procurement and Third-Party Transport Supplier Management Procedure which outlines detailed selection, evaluation, and monitoring mechanisms for contracted service providers, especially in domestic road transport. As per ESAP #1, Arkas and the subsidiaries will adopt a contractor management plan as part of its corporate ESMS to identify if the contractors’ E&S policies and procedures are in line with the corporate ESMS, and the contractors’ PS2 and PS4 risks are evaluated before engagement. As per ESAP #7, it will specify legal E&S provisions that will be incorporated in the  contractor’s agreement to meet Arkas ESMS, IFC PS and WBG EHS Guidelines. Arkas Line’s shipbreaking contractor, for example, will include provisions regarding its capacity to manage hazardous ship components and comply with WBG EHS Guidelines for Shipping and GIIP (e.g., IMO Guidelines on Ship Recycling, Resolution). 

Occupational Health and Safety Management: Arkas and its subsidiaries have separate OHS management policies and procedures, emergency response procedures, accident/incident investigation procedures, and health surveillance procedures. The subsidiaries conduct OHS risk assessments for each of their activities.

Arkas Line has established an OHS system aligned with international maritime safety standards (MLC 2006, ISM Code, SOLAS, MARPOL, and ISPS), and largely aligned with IFC PS 2. The company applies a comprehensive Risk Assessment Procedure across its fleet, managed via an online system (i.e., the ARFLEET system). Risk evaluations are conducted routinely before high-risk operations (e.g., bunkering, passage through high-risk zones) or after incidents. Additionally, each ship prepares an OHS performance report, with key performance indicators including personal accidents (e.g., lost time injury fatality); port state control (e.g., inspections), ship management information (e.g., spills, and accident releases).

Arkas Logistics implements the Journey and Travel Emergency Response Plan and Road Safety Procedure for all fleet operations, including protocols for fatigue management such that all drivers must undergo fatigue management training every three years, comply with rest periods, and observe a maximum of nine hours of driving within any 24-hour period. The procedure also specifies requirements for defensive driving training, vehicle maintenance, and travel risk assessments. All professional drivers operate under a real-time vehicle monitoring system which tracks speed, duration of driving, and emergency behaviors. The output from the monitoring system  is used to assess the drivers OHS performance.

However, it is noted that the current OHS incident log maintained at the corporate level primarily captures data from office-based subsidiaries (e.g. ARKAS Otomotiv, Arkas offices). The OHS corporate team has limited oversight of subsidiaries’ risks and corresponding management measures. Arkas will enhance its OHS Management System aligned with PS requirements and WBG EHS Guidelines and define the leading and lagging OHS indicators that each subsidiary will monitor and report to corporate level. (ESAP #1).

PS3: Resource Efficiency and Pollution Prevention 

Resource Efficiency. Arkas Line and Arkas Logistics' resource efficiency measures focus on fuel and energy consumption, which are linked to their GHG emission tracking. Arkas Line additionally collects data on wastewater generation and the quality of treated effluent, solid waste generation, and disposal in line with IMO requirements. Arkas Logistics' is also tracking its GHG emission, while Arkas Holdingis also constructing a new office building following the Leadership in Energy and Environmental Design  (LEED) criteria to reduce resource consumption (e.g., electricity and water).

Greenhouse gas (GHG) emissions.  Arkas relies on its subsidiaries to conduct GHG monitoring based on international standards applicable to their operations. Arkas Line monitors the emissions of its ship fleet operations in compliance with the International Maritime Organization (IMO), European Union Monitoring, Reporting, and Verification (EU MRV), EU Emission Trading System (ETS), and FuelEU Maritime (FUEM) regulations. The Arkas Line fleet management team measures its ships' Energy Efficiency Existing Ship Index (EEXI) and annual CII, per the amendments to MARPOL Annex VI. It identified six ships requiring emission reduction necessary actions of which have been taken with engine power reductions and two ships rated 'E', which it plans to disregard by 2026. As presented in its Ship Emergency Efficiency Management Plan (SEEMP), Arkas has operationalized the use of BIO24 fuel since 2024. The fuel change is expected to reduce the overall emissions of Arkas ships by 2,672 metric tons (mt) of carbon dioxide equivalent (CO2e) in 2025. Arkas Line emissions at the end of 2025 are expected to reach 481,881 mt CO2. Aside from using BIO24 fuel, the company's five-year strategic plan includes (i) retrofitting of ships with lower efficiency ratings. This will include design upgrade using pre-shrouded vanes, high-efficiency ship propeller, and Hub Vortex Absorbed Fins (HVAF) (ii) an improved management system through engine power limitation, (iii) enhanced data collection, and (iv) establishing software for IMO and EU compliance monitoring. The six new incoming ships in 2028 will have energy-saving devices equipped with more modern engines. By 2030, Arkas Line plans to install an onshore power supply for its ship fleet to reduce emissions while at berth. Arkas intends to continue to increase its nominal capacity (TEU) by 35.2% in 2030. Following the implementation of the above strategies, the emission contribution is projected to grow by only 2.4% above the 2025 emission levels, considering the nominal capacity increase.

The latest emissions data for Arkas Logistics is from 2023. The greenhouse gas (GHG) emissions for the Arkas Logistics subsidiary amount to 50,389 mt CO2e (Scope 1) and 2,371 mt CO2e (Scope 2), representing approximately 90% of the total emissions of the Logistics Group. In the past years, rail cargo transport has utilized government-operated locomotives. Hence, these were not accounted for in the Logistics Group's Scope 1 and 2 emissions monitoring and accounting. The new locomotives for the Logistics Group that are expected to be delivered by the end of 2025 can operate on electric and diesel power.  As per ESAP #1, Arkas will implement monitoring procedures to quantify its GHG emissions and those of its subsidiaries in line with internationally recognized methodologies and GIIP and implement GHG reduction measures as reasonably practicable.

Air Pollution. The Arkas’ ships primarily operate in the Black Sea, the Mediterranean, West Africa, and North Europe and have extended their operations in the Red Sea and North America. These are  designated emission control areas (ECA) in these seas.  Arkas ships have separate fuel tanks where they use very low sulfur fuel oil (VLSFO), with 0.5% sulfur fuel during regular voyages, and use ultra-low sulfur fuel oil (ULSFO), 0.1% sulfur fuel, when passing through ECA. Ships berthing inside EU ports also use marine fuel with the same low sulfur content. Arkas Line will install sulfur oxide scrubbers on 12 ships to continue using heavy fuel oil. The vessels' main engines are designed to meet IMO nitrous oxide emission limitations.

Additionally, ships utilize silicone paints as their anti-fouling system. The vessels assessed received an International Anti-fouling System Certificate confirming that no harmful compounds (e.g., organotin) are used in its system.  On the other hand, Arkas Logistics' truck fleet uses Euro 6 standard diesel fuel to minimize emissions. The Arkas logistics fleet management team maintains all trucks, and regular emission tests are conducted to keep their licenses. 

Wastewater Management. The ship fleet produces various types of wastewater, including ballast water, domestic wastewater, sewage, and bilge and cargo tank wastewater. Each ship adheres to a ballast management procedure that details the storage and discharge operations for ballast water, both at sea and near port. The volume of ballast water is monitored and documented during these operations. In addition, the ships are equipped with oily water separators for managing bilgewater, ensuring that no effluent is discharged into the sea with a concentration exceeding 15 parts per million (ppm). Sewage treatment facilities are also installed on the ships. These systems comply with the provisions of MARPOL. In practice, the ship collects all waste and wastewater and discharges them at port reception facilities. Arkas Logistics' wastewater generation is from ok depots where cargos are repaired and maintained, oily water is collected in a tank and sent to a third party for proper disposal.

Hazardous Materials. Arkas Line screens each cargo transaction using a Prohibited and Restricted Dangerous Goods List. The agencies that process delivery requests screen the cargo content against the list. Only when the agency accepts this will the cargo be delivered to the port. The supplier's material declaration and International Maritime Dangerous Goods (IMDG) labelling and packaging are checked at the port.  The hazardous materials are segregated on the ship according to their hazardous classification. The ships also have an Inventory of Hazardous Materials (IHM) Management procedures for ship dismantling.

On the other hand, all dangerous goods transported through Arkas Logistics are handled in accordance with local regulations and the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR). Cargos must provide information based on their Safety Data Sheets. Additionally, truck drivers must prepare a safety plan for materials that pose high-risk consequences before cargo acceptance.

The two subsidiaries' pollution prevention and management efforts are generally in line with GIIP. The subsidiaries' existing plans will guide Arkas in preparing the corporate ESMS section on pollution prevention, as per ESAP #1.

PS 4 – Community Health, Safety and Security

Traffic Management: Traffic risk is mainly from Arkas Logistics operations, as it also provides service to Arkas Line once the ships reach the port in Türkiye. Arkas Logistics has an established Road Safety Procedure and a Hazardous Materials Transport Implementation Procedure which defines the (i) roles and responsibilities of Arkas Logistics drivers, and management, and other personnel, (ii) vehicle maintenance, (iii) vehicle equipment,  (iv) driver requirements (e.g., health and fitness checks, training), and (v) travel risk assessment considering factors such as weather, road surface, visibility, route safety history, accident-prone areas, and proximity to sensitive environments or communities. Based on the travel risk assessment results, a route-specific Travel Management Plan is prepared by the transportation management team and provided to the driver before the trip.

Arkas Logistics has a Dangerous Goods Transportation Application Procedure following the ADR requirements. Arkas Logistics enforces strict compliance with applicable Turkish legislation and international transport standards. Only qualified drivers with valid ADR training certificates are allowed to transport such cargo. All vehicles are equipped with reflective triangles, high-visibility vests, helmets, fire extinguishers, emergency kits, communication equipment for emergency purposes. A real-time vehicle monitoring system and camera system are installed at the front and rear of the trucks.  In line with ESAP #8, Arkas Logistics will enhance its Traffic Management plan by:  (i) updating its Traffic Risk Assessment procedure, to ensure that not only new routes but also existing routes are periodically monitored for any change in E&S risk profile; (ii) provide more visible contact details at each  of the trucks including contractor trucks where concerns/complaints can be registered, and (iii)  integrating the Traffic Management Plan to the contract with other truck fleet companies, including the GBVH training and external GRM requirements. As per ESAP #1, Arkas will adopt the Traffic Management Plan which it could adopt from the Arkas Logistics updated plan.

Life and Fire Safety (L&FS): Arkas ships are equipped with fire protection equipment such as extinguishers and fire doors in engine rooms. Lifeboats, life-rafts, and life jackets are available on the ship. External audits for ISM code compliance include the fire safety aspect. Arkas Logistics trucks have fire extinguishers, and warehouses are fitted with fire sprinklers and hoses. Depots feature fire extinguishers, especially in areas where hot work is done. As per ESAP #1, Arkas will develop its standard operating procedures as part of the OHS management, inspecting L&FS for the different subsidiary’s facilities and ensuring compliance with national regulations at a minimum.

Security Personnel: Arkas and the subsidiaries engage security service contractors for their offices, warehouse, and depots. The sample vessel has a Ship Security Plan following the ISPS Code while Arkas Logistics has a security management plan, but focused on OHS aspects of the operations. As per ESAP #9, Arkas and the subsidiaries will develop or enhance their respective security management plan in line with IFC PS4  requirements which will include (i) assessing risks posed by security arrangements; (ii) undertaking background verification on security personnel's character with no incidents of past abuses; (iii) applying the Arkas HR policies principles in contracting the security personnel; and (iv) require training of security personnel regarding internal GRM, GBVH, and how to manage  workers protests.                                                  

 Arkas implements a broad Corporate and Social Responsibility (CSR) initiatives that include support for education (e.g., school sponsorships), youth-oriented and sports programs, environmental awareness and conservation campaigns, art and cultural support, internship opportunities, and youth empowerment projects.  These activities reflect the company’s commitment to long-term stakeholder value and sustainable development. As per ESAP#1, the ESMS will include a child protection policy as part of its E&S policies to manage risks related to the operations of CSRs where children/youth are the primary beneficiaries.

Arkas Holding operates the Arkas Blue Line platform, a public communication and feedback tool used jointly by Arkas Line and Arkas Logistics. While initially designed with a customer service focus, the Blue Line also functions as an open-access grievance mechanism, allowing stakeholders to submit feedback or concerns via online form, phone (+90 232 477 77 70), or email (mavihat@arkas.com.tr; arkasizm@arkas.com.tr).

Additionally, Arkas Line conducted stakeholder mapping in 2023 and invited internal and external stakeholders, including civil society organizations, maritime personnel, customers, and suppliers, to participate in the materiality assessment.” 

As required under ESAP #10, Arkas will develop a stakeholder engagement plan (SEP) that will include: (i) stakeholder identification, analysis, and planning, (ii) disclose and dissemination of information, (ii) updating the external grievance mechanism that will be accessible, transparent, and capable of receiving anonymous submissions; and (iv) ongoing reporting to affected communities and stakeholders in line with IFC PS1 requirements.                                                  

•     Contact Person: Ms. Aylin Saul  
•    Company Name:  Arkas Holding A.S.  
•    Address:  Liman Caddesi  Arkas Binasi No:38 Alsancak 35230 Izmir/Turkiye  
•    Email:  Aylin.SAUL@Arkas.com.tr 
•    Phone:  +90 (232) 477 77 77