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
Farovon is at an early stage of developing its Environmental and Social Management System (ESMS) and has established a Code of Ethics and a Health and Safety Policy Statement in accordance with national regulatory requirements. Farovon’s ESMS will be adapted for this Project.
Farovon identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national regulatory standards and regulatory permits. An Environmental Impact Assessment (EIA) of the Project facilities (two flour mills and oil bottling plant) is not required in full scope under national law, as the Project falls under a simplified environmental assessment procedure, and various permits for water use, air emissions and waste disposal have been obtained. EHS risk assessments and Standard Operating Procedures are limited in scope and will require substantial revisions as part of ESAP Item #1.
In accordance with ESAP Item #1, Iroda will implement an ESMS in line with IFC PS requirements and the World Bank Group Environmental, Health, and Safety (EHS) General Guidelines and the EHS Guidelines for Vegetable Oil Production and Processing. The following ESMS elements will be developed/updated and implemented: IFC-compliant E&S policies and procedures including a Human Rights Policy; ESMS Manual including details of Iroda’s internal organizational capacity; Training and Development Procedure; Corporate Code of Ethics, Labor and Working Conditions Management Plan; Worker Grievance Mechanism; Gender Risk Assessment, Stakeholder Engagement Plan and External Grievance Mechanism, Contractor Management Plan; Security Management Plan; Road Transport Safety Plan; Waste Management Plan; Hazardous Materials Management and Safety Plan; Environmental Monitoring Procedure, Emergency Preparedness and Response Plan.
Iroda’s Director is assuming responsibility for EHS at all the facilities who is supported by several Health and Safety (H&S) personnel. Iroda will, in accordance with ESAP Item #2, appoint sufficient resources to strengthen their internal organizational capacity who has responsibility of overseeing the development and implementation of the ESMS and conducting ongoing monitoring of the project’s E&S performance in alignment with PS requirements.
Raw materials for the flour mills and oil bottling plan are wheat and sunflower/cottonseed oil (300,000 and 1,560 metric tons/year, respectively) sourced from Kazakhstan. Farovon has a Procurement Procedure and, as part of integrating the requirements of International Standard Organization (ISO) 31000:2018 Risk Management and Food Safety System Certification (FSSC) 22000, developed internal procedures that require food safety risks within their supply chain to be identified and managed. All procurement processes are documented using a risk-based approach consistent with these international safety standards.
In accordance with ESAP Item #3, Iroda will develop and implement a Responsible Sourcing Policy covering their procurement of raw food materials, a Supplier Code of Conduct, and a Supply Chain Management Plan. The Supply Chain Management Plan will assess raw materials suppliers to identify risks related to child labor, forced labor, and significant life safety or biodiversity risks, and establish a schedule of audits and inspections for high-risk suppliers. The Supplier Code of Conduct will require suppliers to implement any necessary remedial actions within a reasonable timeframe. If they fail to do so, Iroda will be able to invoke a disengagement clause and engage an alternative raw material supplier.
Farovon has established a corporate-level Emergency Preparedness and Response (EPR) framework embedded across its production sites, supported by defined governance arrangements, specialized response teams, scenario-based procedures, and regular drills. The system includes a dedicated Emergency and Civil Defense Commission, fire-response coordination with state authorities, and documented training activities. In accordance with ESAP Item #1, Iroda will formalize and disclose consolidated EPR documentation into an EPRP, ensure site-specific risk-based emergency planning, and maintain verifiable monitoring, training, and drill records demonstrating systematic implementation and continuous improvement.
PS2: Labor and Working Conditions
Farovon has approximately 1,000 direct workers and has implemented a Human Resources (HR) Statement and Code of Ethics that reflects national legislation which are broadly aligned with IFC Performance Standard 2 requirements. These Statements are being used by Iroda and cover recruitment, working conditions and written terms of employment, freedom of association, and non-discrimination and equal opportunity. As of November 2025, Iroda employed 66 people (57 men and 9 women) which will increase to approximately 140 people during operations. Iroda’s existing workforce are issued with written employment contracts that describe their working terms and conditions and include working hours, wages, overtime, compensation and other benefits.
In accordance with ESAP Item #1, Iroda will develop and implement a Human Rights Policy and Labor and Working Conditions Management Plan. The existing Corporate Code of Ethics will be updated to clearly define workplace harassment and Gender-Based Violence and Harassment (GBVH) and include controls to manage such risks. The Human Rights Policy will prohibit child labor, forced labor, commit to freedom of association and collective bargaining, non-discrimination and equal opportunity, and prevent GBVH amongst the workforce.
Farovon’s HR Statement recognizes workers’ rights to form or join workers’ organizations and to engage in collective bargaining. Direct workers are informed of these rights during their initial induction, and a collective bargaining agreement is in place amongst some workers employed by Farovon. The Labor and Working Conditions Management Plan will include a commitment for the workforce to have the right of freedom of association and to undertake collective bargaining activities.
The Corporate Code of Ethics prohibits workplace discrimination, and all workers receive equal opportunity training during their initial induction. As per ESAP Item #1, the Labor and Working Conditions Management Plan will elaborate on how information related to non-discrimination and equal opportunity is provided to the workforce throughout their employment.
The representation of women amongst Iroda is limited (14% of the total workforce). In line with Iroda’s commitment to equal opportunity and as per ESAP Item #1, Iroda will conduct a gender risk assessment and workers affected by GBVH will be provided with appropriate support from trained personnel, and referral pathways will be established and made accessible to all.
In accordance with ESAP Item #1, Iroda will develop and implement a Worker Grievance Mechanism that allows for anonymous submissions, ensures protection from retaliation, and maintains strict confidentiality. Multiple channels will be provided for workers to raise concerns, including dedicated pathways for sensitive cases such as discrimination and GBVH. Iroda will maintain a central grievance log covering all workforce submissions, and staff responsible for grievance management will receive specific training on the handling of GBVH cases. A central register will be used by Iroda to record and track all grievances until they are resolved.
Farovon have an established OHS Management Plan that records incidents using KPIs in accordance with their OHS policy. This system includes an OHS organization with assigned roles and responsibilities, a risk and hazard identification procedure, an OHS risk register, Standard Operating Procedures (SOPs), permit to work system, equipment and chemical maintenance program for the machine processing of food products, OHS training, and emergency response protocols.
In accordance with ESAP Item #4, Iroda will implement an updated OHS Management Plan to ensure alignment with GIIP that reflects the outcome of a workplace risk assessment covering the inhalation of flour dust, noise exposure, heavy lifting, mechanical rotating machinery, and exposure to hot surfaces. The updated OHS Management Plan will define OHS training requirements in a Training and Development Procedure, establish a process for near-miss reporting, include an Incident Investigation and Root Cause Analysis Procedure, and an EPRP. KPIs will be used to benchmark OHS performance against relevant industry standards and Senior Management will be provided with OHS KPIs using a dashboard so they are aware of Iroda’s ongoing OHS performance.
During operations, Iroda will engage third-party companies to undertake specialist maintenance and other services. In accordance with ESAP Item #1, Iroda will develop and implement a Contractor Management Plan that references Iroda’s HR policies including the updated Corporate Code of Ethics and Human Rights Policy, and describes the working terms and conditions applicable to third-party Project workers in accordance with national legislation and PS2, and includes details of a grievance mechanism available to the contract workers. Iroda will use the Contractor Management Plan to monitor and assess the E&S performance of contractors using KPIs.
PS3: Resource Efficiency and Pollution Prevention
Air emissions from flour milling can contain significant concentrations of dust. The company will use equipment including cyclone systems at the flour mills that provide effective dust separation and prevent air pollution. Water for the Project operations will be supplied from an existing licensed borehole. Electricity will be sourced from the national power grid from an existing connection, and a standby backup generator will be available to provide continuous power in the event of grid interruption. Limited environmental monitoring is undertaken annually by state authorities, with data being recorded and periodically reviewed through Farovon’s management system.
In accordance with ESAP Item #1b, Iroda will develop an Environmental Monitoring Procedure to monitor its water, air emissions, resource efficiency, and estimate annual GHG emissions. KPIs for resource consumption (water, electricity) will be used to compare efficiency to industry benchmarks. Project sanitary and industrial effluents will be discharged into an existing centralized sewage network with quality meeting national permit conditions for discharges and EHS Guidelines.
Farovon engages government-authorized contractors to dispose of all solid waste. In accordance with ESAP Item #1b, Iroda will develop a Waste Management Plan for the segregation, storage, recycling and disposal of solid wastes in alignment with the General EHS Guidelines. Audits will be undertaken on the companies used for treatment and disposal of hazardous waste to ensure they are operated in accordance with national regulatory requirements and GIIP. Hazardous material usage will be limited to cleaning chemicals and equipment maintenance products such as solvents, grease and lubrication oil. Chemicals used for pest control will be applied by third-party certified companies to meet regulatory requirements. In accordance with ESAP Item #1b, Iroda will prepare and implement a Hazardous Materials Management and Safety Plan that covers the selection of low toxicity chemicals, safe use, handling, storage and disposal.
PS4: Community Health, Safety and Security
Community safety
Although the Project facilities are located within an existing industrial site, they are near a cluster of residential houses creating a risk of unauthorized access by local residents including vulnerable people such as children. In accordance with ESAP Item #1, Iroda will develop and implement a Security Management Plan and a Stakeholder Engagement Plan outlining measures to prevent unauthorized access, including the installation of a boundary fence and security gate, and inform local communities of the importance of not entering the site and how an emergency will be communicated to them.
In accordance with ESAP Item #1, Iroda will develop and implement an EPRP that reflects the available emergency response resources from each Project facility, the broader industrial site, and regional government departments. The EPRP will: a) define roles and responsibilities, establish an organized emergency response structure, and incorporate legal and company requirements, b) address specific risks such as dust explosions, fires, spills, medical evacuations and consider climate-related risks like heatwaves and flooding, c) specify routine drills and performance assessments, consider existing risks in the plant, and d) establish notification procedures to inform residential receptors within the industrial site in the event of an emergency, and e) engage directly with local residents associated with the risk of a flour dust explosion. The EPRP will be shared with the appropriate government authorities to coordinate and discuss response arrangements for potential major incidents and define mutual aid agreements.
Flour dust is a highly combustible material and, when dispersed in the air, poses a potentially significant risk of dust explosion and subsequent fire. In accordance with ESAP Item #5a, Iroda will conduct an Atmospheres Explosive (ATEX) assessment to identify, evaluate, and control the risks of explosion in the workplace, based on equipment that has been purchased or is already installed (as applicable). The assessment shall include the development of a time-bound corrective action plan, identifying any additional technical, operational, or organizational measures required to achieve compliance.
Given the proximity to communities to the flour mills Iroda will in accordance with ESAP Item #6, Undertake a risk assessment and develop a Process Hazard Analysis (PHA), Dust Hazard Analysis (DHA), and Dust Management Plan. The PHA and DHA will include an assessment of the effects (blast pressure zones) of the simulated explosion scenarios at various locations (grain storage silo, conveyor, processing equipment, elevators, etc.), predict life and fire safety risks, structural failure events that may occur after an explosion, and check the adequacy of internal explosion proof structures and life and fire safety measures. Induced and combined risks associated with other high-risk operations at the industrial facility will be evaluated, including the use of hexane for oil extraction. A Hexane Emissions Management Plan will be developed and implemented in accordance with ESAP Item #5b.
The Dust Management Plan for the two flour mills will include procedures to minimize the build-up of flour dust, check dust extraction facilities at flour transfer points, ensure sealed containment to limit the escape of dust, include grain moisture controls, and control flammable liquids such as hexane. Flour dust risk shall be continuously monitored using calibrated devices for particulate concentration on air, measurement of dust accumulation along horizontal surfaces, temperature monitoring equipment, spark detection systems in conveying lines, misalignment detection system in equipment, and a centralized alarm system will be available to warn workers of remedial actions required. In accordance with ESAP Item #4, Iroda will develop and implement a Hexane Emissions Management Plan that includes details of the capture and recovery system, leak detection and repair, operating practices to minimize losses, and monitoring and recordkeeping.
The FSSC 22000 certification process requires a Hazard Analysis and Critical Control Point (HACCP) system that identifies, evaluates, and controls biological, chemical, and physical hazards in food production to prevent contamination and ensure consumer products are safe to eat. FSCC also requires a dedicated person in each production area to be responsible for food safety. A centralized register will be used to reflect the actions from internal audits at production areas, and pest control measures.
All Iroda staff vehicles undergo annual inspections to ensure maintenance complies with national regulatory requirements. During operations of the facilities, customer trucks will visit the facilities to collect food products. In accordance with ESAP Item #1, Iroda will develop and implement a Road Transport Safety Plan that reflects the outcome of a risk assessment associated with the passage of customer trucks in/out of the site and measures to protect onsite workers.
Security Personnel
Iroda uses internal staff to provide unarmed security at facilities and prevent unauthorized entry. Staff wear uniforms and have been checked for past involvement in human rights abuse. In accordance with ESAP Item #1, Iroda will prepare a Security Management Plan that includes a risk assessment associated with inappropriate conduct towards local people and implement additional measures required.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Sourcing raw materials for the Project may impact biodiversity receptors from the use of fertilizers, pesticides, and land clearance activities. In accordance with ESAP Item #3, Iroda will develop a Responsible Sourcing Policy and Supplier Code of Conduct consistent with IFC PS6, clarifying that land use expansion into natural habitat by its third-party suppliers is prohibited.
Iroda will strengthen supplier due diligence by implementing a traceability system for contract farmers involved in wheat, sunflower, and cottonseed cultivation. This will be achieved through the development of spatial mapping platforms and enhanced monitoring and verification in line with PS6 supply chain requirements. In addition, Iroda will arrange for independent annual audits to confirm the effective implementation of the Supplier Code of Conduct.
