This is a Category B project according to IFC’s Policy on Environmental and Social (E&S) Sustainability, because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key E&S issues associated with this Project include: capacity to develop and implement management system covering environment, health and safety and food safety aspects; assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and Performance Standard 2; resource efficiency of the operations (water, energy, milk); monitoring and management of air emissions, wastewater treatment and discharge, solid and other waste disposal; life and fire and safety management including emergency preparedness and response for handling ammonia leakage from refrigeration system; and supply chain of milk.

There are no new material E&S issues associated with the investment under the COVID 19 RSE facility. Company is in the process of implementing the agreed E&S action plan for #42009 and has completed implementation of most E&S action plan items but is delayed on few items (such as installing fire hydrants (partially completed till now), completing audit by corporate HR department to confirm compliance with various statutory requirements on providing wages, working hours, overtime, OHS, and benefits to the contract workers and completing audit to confirm implementation of SOP for ammonia handling). Company has agreed to complete all the above actions by March 2021 except installation of fire hydrants which will be completed at all facilities in a phased manner by Dec 2021.

Please refer to the Environmental and Social Review Summary (ESRS) linked to this project SII in the IFC's project disclosure website.

UPDATE RELATED TO ADDITIONAL INVESTMENT UNDER COVID-19 RESPONSE FACILITY:

E&S Performance and COVID-19 related Impacts:

Dodla Dairy’s E&S management approach is discussed in detail on the Environmental and Social Review Summary disclosed in Feb 2019 at https://disclosures.ifc.org/#/projectDetail/ESRS/42009. The company’s E&S performance continues to be satisfactory and is materially compliant with applicable at-approval requirements under the active investment. This follow-on investment, under the COVID-19 response facility, does not result in any new additional material E&S risks.

Scope of IFC’s Appraisal:

IFC’s E&S review for this follow-on investment, comprised a virtual meeting with the company’s senior management, environmental health and safety team and human resources team via a video conference to understand the impact of COVID-19 pandemic on the company’s operations - particularly on its workforce. IFC also reviewed related information and documents shared by the company and its own records of the company’s E&S performance during the current investment under process. After COVID-19 related travel restrictions are removed, IFC will visit the client, as part of its regular portfolio monitoring activities.

Response to COVID-19 Pandemic

Impact on Employment

Dodla Dairy has confirmed to IFC that the company has neither implemented any retrenchment of workforce nor any adjustment of their terms of employment as a result of the COVID 19 pandemic. The company has not suspended or cancelled contracts with its core contractors. Also, the company has relaxed loan conditions and made provisions to provide interest free loans to its employees.

Health Impact of COVID

To contain the spread of COVID-19 and to ensure safety of all workforce, the company has implemented specific occupational health & safety (H&S) measures to respond to COVID-19 risks in the workplace, such as the installation of sanitization tunnels and temperature check at the entrance of all processing plants, regular fumigation of the plants and offices, sanitation of transport vehicles, installation of air curtains in one unit, maintaining social distancing norms, and strict adherence of usage of Personal Protective Equipment (PPE), such as masks, gloves, goggles, sanitizers, etc. by all factory workers and front-line sales personnel.

The company made accommodation as well as food provisions and conducted 2100 hours of COVID-19 safety awareness training for all the employees. COVID-19 testing medical expenses were reimbursed by the company, and at high risk plants, in-house testing was organized. The company is preparing its Emergency preparedness and response plan (EPRP) that covers consequences related to COVID-19 infections, which shall be completed by March 2021.

As a condition of this follow-on investment, the company will continue implementing the COVID-19 infection prevention, control and response plan, consistent with the PS2 and PS4 Interim Advice for IFC Clients on Preventing and Managing Health Risks of COVID-19 in the Workplace.

Moreover, the company will ensure ongoing compliance with IFC Performance Standards – especially provisions under PS2: Labor and Working Conditions and PS4: Community Health, Safety and Security

Refer to the E&S Action Plan tab in the ESRS for project 42009: https://disclosures.ifc.org/project-detail/ESRS/42009/dodla