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
E&S Policy and Management Systems: The key focus of Marginpar’s E&S management systems is to ensure compliance of its operations with the requirements outlined by the Floriculture Sustainability Initiative (FSI) (https://www.fsi2025.com/). This is an industry driven initiative where the members have committed to adhere to the standards. FSI standards cover requirements on environmental, social, occupational, health and safety (OHS), labor and working conditions and good agricultural practices (GAP). The Group has thus developed policies and procedures at each farm level for achieving this certification. The certification is provided based on audits by a number of different certification agencies e.g. Kenya Flower Council (in Kenya) and MPS, Netherlands (in Ethiopia). All the farms (including in Tanzania and Zimbabwe) are certified. During the site visits, environmental, health, safety policies and procedures were noted to be displayed at the visited farms.
The Group has also established an Environmental and Social Management System (ESMS) framework, which was developed in 2018/2019. The ESMS framework was designed to include all elements required under the IFC PSs. Farms were required to develop their own procedures under this framework. The Group has also developed an environmental, social and governance (ESG) Roadmap which has objectives on water management, energy use and waste management, GAP, HR, community development and suppliers/partners. The roadmap was prepared till 2025 and now a draft roadmap for 2030 has been prepared and is under finalization.
Lastly, the farm operations are guided by 5S and Group’s HAMUKA (“Hatutaki Muda Kariki” – “Say No to Waste”) culture. All parts of operations are thus expected to focus on efficiency and organization. All farm areas have labeled and earmarked areas. Natural teams i.e. small groups of 7–12 employees working in the same areas are responsible to maintain all areas including required safety protocols.
Based on the appraisal visits, basic E&S requirements were noted to be in place at all farms, there was a significant variation in the available policies and procedures and their implementation across each farm, as has been described in this ESRS in the relevant sub-sections. In particular, this was noted on OHS, certain aspects of labor and working conditions (incident and grievance management, overtime tracking, workers’ facilities) and chemical handling. The Group needs to structure all of its E&S policies and procedures under its ESMS framework and ESG roadmap and ensure consistency in their implementation at the farm level (ESAP#1).
E&S capacity: At the corporate level, ESG manager is responsible for implementation of the E&S management systems. ESG manager is supported by another ESG officer and reports to the Cluster Captain for People and Culture. HR managers from each country also report to the same cluster captain. At the farm level, farm manager is responsible for E&S implementation and is supported by the clinician, HR manager and production manager.
All farms in Kenya have an ESG Committee chaired by the farm manager, with other members being the HR manager, production manager, and representatives from the worker committees (health and safety, welfare, gender, and energy). Currently, Ethiopia farms do not have active ESG committees.
Based on the observations of the appraisal, the level of E&S implementation varies across farms depending upon the capacity of the staff involved (e.g. clinician, HR manager). Once the Group structures its E&S policies and procedures under its ESMS framework and ESG roadmap, more training will be required for all staff involved in E&S management. Also, Starbright should have additional ESG staff at the corporate level to ensure more oversight and ensure implementation of revised policies and procedures. Finally, Starbright shall ensure that Ethiopia farms also have the required committees in place and have regular meetings (ESAP#1).
All farms conduct regular toolbox talks which cover safety and HAMUKA aspects. Also, regular external training was noted to be conducted on fertilizer and pesticide handling, fire safety, first-aid and gender awareness. However, internal job-specific and risk-based E&S training needs to be provided at all the farms. Worker interviews also suggested the frequency and adequacy of training needs to be increased. As per the ESAP(#1), in addition to the external training, each farm should identify risk-based and job-specific training and prepare an annual training plan. The training plan should be implemented, and it should be monitored as one of the key performance indicators for each farm.
Identification of E&S risks and impacts: Risk identification is embedded in operations through the HAMUKA culture, which is used to identify risks at farm level. Also, there is a risk assessment procedure in the ESMS framework and Star Bright conducts E&S risk assessments per farm. Additionally, the Kenya farms undertake an annual OHS risk assessment to meet the statutory requirements. The risk assessment register maintained by the farms needs to be improved as the current risk assessments did not comprehensively cover all material risks and there were differences in farm level risk assessments whereas operations are similar. As per the ESAP(#1), Marginpar shall develop a comprehensive E&S risks and impacts identification, assessment and management procedure to guide future periodic risk assessments compliant with IFC PSs. The risk assessments completed under the procedure shall also inform the E&S training plans (discussed above).
Emergency Preparedness and Response: The ESMS framework includes an emergency preparedness and response procedure. At each farm, documented emergency procedures are in place. Assembly areas are identified, and fire drills are conducted once/twice a year. Fire extinguishers are installed across the various farms and have displayed basic guidelines on actions to take in case of fire emergencies at various points around the farms. The company also has relationships with local emergency services providers, as well as security.
Each farm also has a dedicated clinic supported by a full-time nurse or clinician who is responsible for any immediate and basic treatment of incidents. Serious incidents and those requiring further treatment are referred to the neighboring regional hospital. Each farm has a number of staff trained as fire and first-aid marshals. All farms in Kenya also conduct a fire safety audit to meet the statutory requirements.
E&S Monitoring and Review: Periodic water and wastewater testing is conducted at all farms. As part of the Kaizen and 5S based system (Hamuka), all farms conduct weekly area inspections for all aspects including safety aspects. Accidents-incidents are logged and recorded. As part of the certification requirements, data on fuel, energy and water consumption, pesticide usage is recorded in a database on the certification body’s website. For farms in Kenya, environment, OHS and fire safety audits are also conducted in line with statutory requirements.
The corporate ESG manager and ESG officer conduct periodic internal audits to assess farms’ compliance as per FSI standards. Also, as mentioned above, all farms are FSI compliant and audited by external agencies (i.e. KFC and MPS) When certified via KFC or MPS, will result in being also FSI compliant.
The Group’s monitoring and review system need improvements as, currently, no E&S key performance indicators (KPIs) have been identified for each of the farms. There is no consolidated report on E&S performance submitted by the farms and there is no regular senior management review to assess farms’ compliance with the ESMS and ESG Roadmap. In addition, E&S performance review with senior management is currently not undertaken. As per the ESAP(#1), the group will develop an E&S monitoring and review procedure, which would specify the type and frequency of monitoring to be conducted at the farms as well as E&S KPIs as per applicable local standards, ESMS requirements, ESG Roadmap and relevant and applicable World Bank Group (WBG) Environment, Health and Safety (EHS) Guidelines. Regular monitoring will be conducted for all the farms and reports will be shared with senior management for review as well with IFC as part of annual monitoring reports.
PS2: Labor and Working Conditions
Workforce Overview: Marginpar employs a total of 4,000 employees globally. In Kenya, the Group has a direct workforce of about 3,000 staff with 52% males and 48% female staff. This includes about 2700 employees on fixed-term contracts and 300 on seasonal contracts. In Ethiopia, the Group employs a total of about 1000 employees with 49% males and 51% females and 23 seasonal workers.
HR policies and procedures: Marginpar maintains a relatively comprehensive HR framework covering general operational policies, equal employment and opportunity, workplace non-discrimination, leave (annual, maternity, paternity and sick leave), freedom of association and collective bargaining, a workers grievance mechanism, disciplinary policies, child and forced labour and retrenchment. The Group also aligns its policies with local law and benchmarks against local sectoral unions in Kenya and Ethiopia. Policies and procedures were noted to be broadly aligned with IFC PS2 requirements except for the gaps indicated below.
Working Conditions and Terms of Employment: Employment terms are governed by country specific local employment laws and the collective bargaining agreement (CBA) in Kenya (discussed below). Contracts for both fixed-term and seasonal employees specify details such as basic pay, statutory deductions, benefits, allowances, working hours, overtime, and overtime pay, leave entitlement, accommodation and travel allowances, and disciplinary/termination conditions. Wages are fixed based on at the legal requirements and additionally, against the Kenya Plantation and Agricultural Workers Union (KPAWU) standards in Kenya.
Seasonal workers are employed under short-term contracts. The group prioritizes internal recruitment unless the required skills are unavailable within the existing workforce. Marginpar also maintains a database with the objective of converting season workers into permanent contracts. Seasonal workers are informed of contract termination at least seven days prior to the end of their contract.
All workers work 46-hour weeks except for security staff who work 12-hour shifts and 60-hour weeks. Overtime hours were noted to be within the regulatory limits. Currently, attendance and overtime records are manually maintained and later transposed into an online HR system. The Group plans to transition to a biometric system for improved accuracy. As per the ESAP(#2), Marginpar will automate the working hour and overtime tracking system. Also, a specific overtime policy will be developed and implemented to ensure control of overtime hours.
Workers’ Organizations: All farms have workers’ welfare committee, which meets regularly to discuss workplace issues. In Kenya, union membership among the workforce ranges between 10% and 30% across farms. A CBA has been signed in collaboration with the employee welfare committee and benchmarked against KPAWU. During interviews, workers indicated there is a general preference to sign up to the CBA rather than join the union (KPAWU).
In Ethiopia, the HR policy upholds workers’ rights to freedom of association and collective bargaining. All farms have a workers’ union. Discussions with the union representatives indicate that the majority of workers (~95%) are unionized. The unions are proposing to sign a CBA with the group, however, the same has not been negotiated and finalized.
Non-Discrimination and Equal Opportunity: The Group has a policy on non-discrimination. Marginpar has gender committees at all farms with representatives from each department. The gender committee members receive training on an annual basis from an external service provider and are responsible for providing gender and non-discrimination training to all employees. The gender committee in collaboration with HR is also responsible for handling any complaints and incidents related to gender-based violence (GBV).
The Group currently lacks a dedicated GBV policy, although a policy statement addressing the issue is included within the broader Human Resource policy. The broader policy, however, does not provide clear procedures or designated channels for reporting such incidents, nor does it specify the steps for investigation and disciplinary action. It was found that, although some cases were addressed through legal means, survivors did not receive any medical or psychological support. In Ethiopia, the predominantly male labor union leadership had previously received some external GBV training, but more training is required. According to HR, in principle, GBV cases should be managed by the gender committee, as has been done previously. Discussions with the gender committee also highlighted its role in addressing and investigating sexual harassment incidents, as well as referring these cases to management for appropriate disciplinary action. However, recent changes in the membership of the gender committee mean that strengthening of the committees is required. During worker interviews (in Kenya and Ethiopia), it was confirmed that additional support and training is needed for the gender focal points on raising awareness across the company on gender related matters, as well as the sensitive handling of GBV cases. As per ESAP(#3), Marginpar will develop a stand-alone GBV policy to cover:
• Specifically address prevention and mitigation of sexual harassment, exploitation and abuse in the workplace with applicable extensions to the company contractors and community members;
• incorporation of the currently active gender committees for receipt of any GBV related complaints; and
• commitments to training of staff with responsibilities in receiving and handling GBV complaints and specifically cover survivor-centered mechanisms approach, referral pathways, data protection policies and non-retaliation protections.
Also, Marginpar will provide specialized training for staff tasked with handling such complaints, focusing on survivor-centered approaches, clear referral pathways, data protection policies, and strong non-retaliation safeguards; and mapping of service providers such as psychosocial and medical to ensure GBV survivors receive essential services.
Grievance Mechanism: Marginpar has a grievance handling procedure which is captured within the corporate HR policy with several channels for workers to raise grievances ranging from departmental supervisors, the welfare committee and HR. These procedures provide clear guidance for reporting concerns, offering both formal and informal avenues for employees to raise issues. If a grievance cannot be resolved by an immediate supervisor, the grievance handling procedure details an escalation process to ensure matters are addressed appropriately. The grievance procedures do not mention an anonymous reporting channel, though the HR policy’s freedom of association section refers to a suggestion box for employees to submit complaints, suggestions, or observations anonymously, these were not observed during IFC visits. Employees can also raise grievances with the farm manager and the employee relations manager.
Further, it was noted that, currently, there is no proper grievance registry or log that shows how grievances are addressed and resolved. Conversations with employees revealed that workers often report concerns to their supervisors or to HR and many directly raise them with the labor union. Marginpar HR is working to further develop their grievance and whistleblowing mechanisms to improve confidentiality e.g. through a third-party hotline or dedicated email address. To meet PS2 requirements, as per the ESAP(#3), Star Bright will update its grievance redress procedure to allow for anonymous grievances and include policy statements allowing all third-party workers to have access to the mechanism. Further, a formal registry or log should be implemented and maintained by HR to document grievances and the subsequent resolution and follow-up actions, ensuring transparency and accountability in the process.
Protecting the workforce: The group’s HR policies mandate the prohibition of child labor and hazardous work for anyone under the age of 18, as well as committing to full compliance with national and international labor laws, including ILO Convention 138 and 182. The policy also applies to third party workers and the supply chain. They also include stipulations regarding regular monitoring and audits to prevent and address child labor incidents including policy commitments on remediation programs focusing on the child’s best interests, their education and wellbeing. Site appraisal and worker interviews confirmed that the company checks and maintains records of national ID cards as a means of ensuring minors are not employed. No practices or instances of forced labor were noted.
Occupational Health and Safety: In the HR policy, Marginpar commits to prevent injury and ill-health to employees and contractors, promote a positive safety culture through continuous communication with workers and ensure identification, assessment of hazards and risks in their operations. As mentioned under PS1, all farms conduct some level of risk assessment, which needs to be further strengthened under the ESAP.
All farms provide required personal protective equipment (PPE). All workers wear overalls and gum boots. All employees handling chemicals (e.g. sprayers, people working in central fertigation units) are also provided with gloves and respirators. Based on the site visit observations, PPE compliance needs to be improved in certain areas (ESAP#4).
An onsite health clinic and clinician are provided at all the project farms. Pre-employment and routine (quarterly) health surveillance is conducted for all workers including those handling chemicals. This includes pre-placement medical testing and quarterly testing thereafter of workers handling chemicals including cholinesterase testing which is a legal requirement under the Kenyan Occupational Health and Safety Act (OSHA, 2007), and lung function tests every six months for cold store employees. As per the ESAP(#4), the Group shall conduct repeat kidney and liver function tests on annual basis for any workers handling chemicals.
All incidents and accidents are recorded per farm. As per available data for last three years, most of the injuries are cuts, bruises and sprains. Although the Group has an incident investigation procedure, it is not consistently implemented at all the farms. As part of the improvement of ESMS implementation (under ESAP#1), accident investigation procedure will be consistently implemented.
All farms have a health and safety committee which meets regularly to discuss any OHS improvements.
Employee welfare facilities: Each farm was noted to have canteen, drinking water points, toilets, shower and change rooms (separate ones for sprayers and other workers). Kenya farms also have a laundry on-site. Worker facilities were noted to have scope for improvements especially at Kudenga Farm (canteen and cooking areas) and Larca Farm in Ethiopia (all facilities). Cooking and canteen areas in all Ethiopia farms were noted to be small and need additional space and ventilation. Toilets in Kenya farms also need upgrades. As per ESAP(#5), theGroup will review these welfare facilities at its farms and prepare a corrective action plan with reasonable timelines. The plan will be implemented within the agreed timelines.
Supply Chain: For their supply chain, Marginpar relies on a limited number of local supply chain partners, primarily suppliers of packaging materials, agrochemicals and fuel. Also, freight services are outsourced to logistics companies. For its contractors and supply chain partners, the group has a code of conduct, which among other requirements, includes supply chain requirements as per PS2 (i.e. no child labor, no forced labor and no significant safety hazards), compliance with legal requirements. The code of conduct is signed by the contractors/suppliers.
PS 3: Resource Efficiency and Pollution Prevention
Electricity Consumption and Resource Efficiency: The main source of electricity is grid electricity supplemented with rooftop or ground-mounted solar systems in Kenya. Solar pumps are also used for borewells. Diesel generator (DG) sets are installed at all farms to provide backup power during outages. The power back-up is mainly needed for lighting and refrigeration. As part of the certification requirements, consumption of electricity, fuel and water are monitored at all farms and also reported in the databases maintained on the portal of the agencies e.g. Kenya Flower Council.
All farms in Kenya have energy committees, which meet on a regular basis to discuss energy efficiency measures for the farms. Some of the farms in Kenya have also undertaken an energy audit. As regards efficiency measures, solar panels have already been installed in Kenya. Also, all farms have installed/progressively changing to LED lights. Cold-store gas replacement is underway to improve energy efficiency in refrigeration. Currently, farms in Ethiopia do not have energy committees and the implementation of the resource efficiency measures is not at the same level as Kenya. To ensure consistent implementation of such measures, and as part of the improvement in implementation of the ESMS, the Group will prepare a resource efficiency plan and implement the same for all farms (ESAP#6).
The carbon footprint calculated for the project based on the 2024 energy and fuel consumption is as follows: Scope 1: 456 tonnes of Carbon Dioxide equivalent (tCO2e) and Scope 2: 1485 tCO2e.
Water and Wastewater Management: In Ethiopia, water is sourced exclusively from borewells and stored in lagoons. In Kenya, water requirements are met through a combination of rainwater harvesting (accounting for about 60–70% of annual demand) and borewell abstraction (accounting for about 30–40% of annual demand). All Kenya farms are equipped with rainwater collection and harvesting systems, with water stored in on-site lagoons. Excess run-off is discharged outside farm boundaries.
While the Group has undertaken testing of run-off water, current monitoring protocols require strengthening. As per the ESAP(#7), the group will conduct targeted sampling during the first rains to assess potential pesticide residues in discharged water.
Wastewater generated from chemical usage areas e.g. post-harvest areas, personal protective equipment (PPE) and handwashing stations, spray rooms, central fertigation units is pre-treated in deactivated tanks. After de-activation, this wastewater with other wastewater from canteen and toilets is collected and treated through constructed wetlands with root zone-based treatment systems. The treated wastewater is then directed to lagoons and reused in farming activities. All farms have such treatment plants except L’arca Farm in Ethiopia, where the plant is under commissioning.
The Group conducts regular water and wastewater testing at all farms. Drinking water testing results were noted to be compliant with the World Health Organization limits except for few parameters at the Nanyuki farm. As per ESAP(#7), the group will evaluate root causes of these exceedances and implement required corrective actions as needed.
The wastewater quality was noted to be meeting the national standards except for Phosphorus and Total Coliforms at Naivasha and Nanyuki farms. Also, Fluoride and Total Suspended Solids were exceeding the limits. It is important to highlight that the treated wastewater is not discharged outside and is mixed with other fresh water in the lagoons for reuse in farming.
Waste Management: Marginpar focusses on waste minimization throughout its operations. All farms have designated storage areas for various waste streams, and all waste is segregated at source. In Kenya, recyclable waste is sold to external vendors, and all biological waste is composted on-site. Chemical storage tanks are washed and disposed of through an authorized service provider.
In Ethiopia, certain types of plastic and packaging waste were noted to be burnt on-site. As per ESAP(#7), the group will identify sustainable solutions for disposal of such waste either through recycling OR else, installing a suitably designed incinerator, which can meet WBG EHS Guidelines.
Pesticides Management: Integrated pest management approaches are implemented by the group at all farms. As per the requirements of KFC certification, Star Bright has already phased out all WHO Class 1a and 1b pesticides. During the appraisal, only one fumigant (Class 1a) was noted to be used at one of the farms. As per ESAP(#8), the Group will ensure all such remaining Class 1a and Class 1b chemicals are phased out.
Chemicals Management: The most significant chemical usage at the farms is in the central fertigation units and spray rooms. All farms were noted to have storage of chemicals in secured areas. The implementation of chemical handling and spill control procedures and their display were different at each of the farms. Also, the eye showers were not appropriately designed. As per ESAP(#8), the group will install well designed eye showers with appropriate access in all chemical usage and storage areas. Also, chemical handling and spill control procedures , material safety data sheets and safety instructions will be consistently displayed in all farms. Lastly, as mentioned above in E&S training, chemical management training needs to be included in the training plan.
Diesel is stored on-site in aboveground or underground storage tanks. As per ESAP(#8), adequate secondary containment will be provided for diesel storage tanks and unloading areas.
PS4: Community Health, Safety and Security
Security Management: Unarmed security guards are deployed at each farm. Currently, there is no security management plan or training of guards on the use of force (voluntary principles on security and human rights), and appropriate protocols for engaging with communities. Therefore, as per ESAP(#9), Star Bright will document a specific security policy/code of conduct which will include Community conduct, Code of Ethics, GBV aspects, clear guidelines on use of force as well as processes on background checks of the guards.
Traffic Management: Most of the farms are located in rural areas and have narrow access roads. All logistics are outsourced, and flowers are shipped through trucks to the nearest airport. Therefore, as per ESAP (#9), Star Bright will develop and implement a traffic safety management plan to minimize risks and impacts on the communities from the project facilities.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Protection and Conservation of Biodiversity: Of the 10 farms, three in Ethiopia are located in the Ethiopian montane moorlands ecoregion, and seven in Kenya are situated throughout Central Kenya, in the East African montane forests ecoregion. All farms are situated in consolidated agricultural landscapes and consist of modified habitat.
One of the Kenyan farms (Bondet), which has been in existence since 2002, is located adjacent to the fenced boundary of Mount Kenya Forest Reserve protected area, which forms part of the Mount Kenya Key Biodiversity Area (KBA) and Alliance for Zero Extinction (AZE) site; and another (Carzan MR) which was acquired in 2018 is located within the Mau Narok - Molo grasslands KBA. No impacts on the priority biodiversity values of the respective KBA are expected since no expansion beyond the current footprint of these farms is planned, and the Group will continue to employ sustainable farming and water management practices (as already described in PS3) at these sites. Based on consultation with protected area sponsors, the Group will develop a biodiversity management plan for the Bondet farm as part of the overall Integrated Environmental Management Plan, which will include provision for planting indigenous tree species as a buffer between the farm activities and the boundary of Mount Kenya Forest Reserve, as well as measures for alien and invasive species identification, control and management (ESAP#10). The E&S risks and impacts identification, assessment and management procedure to be developed per ESAP#1, will include procedures for the appropriate identification and assessment of biodiversity risks for any future expansions across all Group operations.
Sustainable management of living natural resources: The Ethiopian and Kenyan farms are situated in consolidated agricultural landscapes with low risk of habitat conversion, and all sub-projects will be undertaken on the existing footprint of the farms, with no new land acquisition due to the Project expected. All farms are FSI compliant for sustainable management practices (https://www.fsi2025.com/) and are certified by KFC (in Kenya) and MPS (in Ethiopia). To be FSI-compliant, companies must hold both an environmental certificate and a Good Agricultural Practice (GAP) certificate, which is benchmarked against GLOBAL G.A.P., and compliance is independently verified by a number of different agencies. The group has thus developed and implemented policies and procedures at each farm to achieve this certification.
