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Nigeria

Kasada Hospitality Fund LP, Sub-project Galaxy

$38.07 million
Hospitality
Environmental and Social Review Summary
Proposed
twitteremail

ENVIRONMENTAL AND SOCIAL REVIEW SUMMARY 

Kasada Hospitality Fund LP, Sub-project Galaxy

This Environmental and Social Review Summary (ESRS) is prepared by MIGA staff and disclosed prior to the date on which MIGA’s Board of Directors considers the proposed issuance of a Contract of Guarantee. Its purpose is to enhance the transparency of MIGA’s activities. This document should not be construed as presuming the outcome of the decision by MIGA’s Board of Directors. Board dates are estimates only. 

Any documentation that is attached to this ESRS has been prepared by the project sponsor, and authorization has been given for public release. MIGA has reviewed the attached documentation as provided by the applicant,and considers it of adequate quality to be released to the public, but does not endorse the content. 

Kasada Hospitality Fund (“Kasada” or “the Fund”) is a US$500 million hospitality sector focused private equity fund backed by the Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, and Accor, Europe’s largest hospitality group (www.kasada.com). Kasada is the first large-sized, professionally sponsored, and managed hospitality investment platform in Sub-Saharan Africa (SSA). Between 2021-2024 Kasada plans to build a portfolio of hotels in SSA primarily through the acquisition of existing (brownfield) hotels as well as the development of a smaller number of new (greenfield) hotels. The first phase (the “Project”), implemented over a period of approximately 18 months, will comprise the acquisition, refurbishment, and improvement of up to 20 hotels (or c. 4,000 hotel keys) across six or more SSA countries (comprising operational hotels as well as under-construction greenfield hotels). Following each acquisition, the relevant hotels are converted into and operated under the Accor hotels management and branding. To this end, all acquisitions will comprise financing for: (i) providing liquidity injections to ensure the functioning of these hotels in the COVID-19 environment (when applicable) and (ii) capital expenditure / improvements to ensure the hotels’ compliance to Accor standards and to achieve higher operating efficiencies. 

IFC will provide senior debt for Phase 1 on IFC’s own account and through syndications. In addition, MIGA will provide a total coverage of up to €225.9 million to Kasada and its subsidiaries for their equity, quasi-equity and/or shareholder loan investments against the risks of Transfer Restriction (“TR”), Expropriation (“Expro”), and War and Civil Disturbance (“WCD”). The individual sub-projects will be issued for a maximum tenor of up to 15 years and the guaranteed percentage will be up to 90 percent for equity /quasi equity investments, and up to 95 percent for shareholder loans. See the Summary of Proposed Guarantee for further details.

The deployment of IFC’s loans, MIGA’s guarantees, and the Fund’s capital will be structured as sub-projects, each of which will be progressively reviewed by IFC and MIGA, subject to standardized investment criteria and terms. 

IFC and MIGA coordinated the environmental and social due diligence for the first batch of sub-projects and subsequent acquisitions.  

The first sub-project, named Project Ayaba, comprised the acquisition of 8 existing Accor-managed hotels in Abidjan, Cote d’Ivoire (4 hotels); Dakar, Senegal (3 hotels); and Douala, Cameroon (1 hotel).  

The second sub-project, Project Wind, included the acquisition of the Safari Hotel, Safari Court Hotel and associated conference center located in Windhoek, Namibia.  

The third sub-project, Project Umbrella, included the acquisition and refurbishment of the Crowne Plaza hotel in Nairobi, Kenya. 

The fourth and latest sub-project, Project Galaxy, included the acquisition, refurbishment, and expansion of the 181-keys Southern Sun Ikoyi hotel in Lagos, Nigeria, together with an adjacent commercial property that is going to be redevelop for hospitality uses. 

 

Project Ayaba is under IFCs financing package; accordingly, IFC has led in carrying out environmental and social due diligence (ESDD) for this sub-project, and disclosed the associated (ESRS) and environmental and social action plan (ESAP) on March 2021. As sub-projects Wind, Umbrella and Galaxy are currently relying on alternative financing, MIGA coordinated the relevant ESDD activities and associated disclosure of the ESRS and the ESAP reports.  

Details about the above-mentioned sub-projects are provided in the Project Briefs  

This is a Category B project according to IFC’s / MIGA’s Policy on Environmental and Social Sustainability (2012 / 2013). Based on IFC’s review, coupled with existing knowledge of the sector, the project is expected to have limited adverse environmental and social risks and impacts that are site-specific, and can be avoided or mitigated by adhering to recognized good international industry practice (GIIP). 

Key E&S risks and issues associated with this project include: (i) the Fund’s E&S management system and procedures allied to the their internal capacity to effectively identify, assess and manage E&S risks and impacts associated with the portfolio of hotels as well as future new greenfield developments; (ii) provision of fair and safe working conditions for workers (including contractors) during both operational and refurbishment activities; (iii) the state of hospitality industry relations in the country and the level of engagement with labour unions; (iv) resource efficiency and waste management; (v) life and fire safety and emergency preparedness and response; and (vi) stakeholder engagement, including effective grievance management and redress.  

While all Performance Standards are applicable to this investment, IFC’s/MIGA’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: 

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

PS 2 - Labor and Working Conditions; 

PS 3 - Resource Efficiency and Pollution Prevention;  

PS 4 - Community Health, Safety and Security. 

The Project primarily involves the acquisition of existing operational hotels, the acquisition and completion of under-construction greenfield hotels, and building greenfield hotels. Hence, it is not anticipated that the Fund will undertake much land acquisition for the development of their Phase 1 hotel portfolio. Further, based on the Fund’s current and proposed business plans coupled with the dominant urban and brownfield nature of the hotels, it is expected that the project will not result in adverse material impacts on local indigenous groups and cultural heritage. As such, no impacts for this project are expected which must be managed in accordance with IFC PS5: Land Acquisition and Involuntary Resettlement, PS6 - Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples and PS8: Cultural Heritage.

This ESRS initially focussed on the 8 hotels acquired under the first sub-project, Project Ayaba. The document was disclosed in March 2021, and it was updated in subsequent versions to include the following sub-projects: 

  • Project Wind, disclosed in April 2022; 

  • Project Umbrella, disclosed in December 2022;  

  • Project Galaxy; this latest amendment of the ESRS reflects additional desktop reviews and a site visit carried out by MIGA in December 2022 in the context of this sub-project. 

Each sub-project was subject to further Environmental and Social (E&S) due diligence, and relevant findings were reflected within each subsequent version of the ESRS; when deemed necessary, the Environmental and Social Action Plan (ESAP) was also subject to revision. Should additional hotels be acquired under further sub-projects, they will be also subject to further E&S due diligence, and the ESRS updated as necessary. In cases where IFC is not supporting the sub-project, MIGA will update the IFC ESRS and disclose it on its website. 

The initial ESRS included a desktop appraisal of existing Kasada and Accor Environmental, Health and Safety (EHS) policies and processes, hotel level polices and processes, as well as phone and video interviews with the Kasada Head of Asset Management and Legal Counsel. Document review also encompassed the appraisal of Kasada’s proposed E&S management approach (both pre- and post-acquisition) focusing on the Fund’s ability to monitor the implementation of E&S policies and standards at each of the hotels within their portfolio. This included their existing capacity, monitoring and reporting mechanisms and their ability to enable future project compliance with IFC’s Performance Standards. 

Throughout the subsequent acquisitions and related updates of the ESRS, the following field appraisals were undertaken: 

  • The field appraisal for Project Ayaba, led by IFC and conducted on 26 and 27 January 2021, which consisted of site visits to three hotels (Pullman, Ibis, and Novotel) located in Dakar, Senegal; 

  • The field appraisal for Project Wind, led by IFC and conducted from 18 to 20 October 2021, which included site visits to both hotels located in Windhoek, Namibia; 

  • The field appraisal for Project Umbrella, led by IFC and conducted from 6 to 8 June 2022, which included a site visit to the Crowne Plaza hotel, located in Nairobi, Kenya;  

  • The field appraisal for Project Galaxy, led by MIGA and conducted from 30 November to 3 December 2022, which included the site visit to the Southern Ikoyi Sun Hotel in Lagos, Nigeria. 

 

The primary objectives of the field visits were to appraise the physical condition of the hotels with a particular focus on the management of life and fire safety, hold discussions with key management, human resources personnel and employee representatives, review the findings in the environmental and social due diligence reports carried out for the hotels, and assess the level and efficacy relating to the implementation of various E&S policies and approaches.  

IFC’s/MIGA’s appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFC’s/MIGA’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 the 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 

Environmental and Social Assessment and Management System: 

All hotels acquired under Phase I of the Project will be operated and managed by the Accor Group (“Accor” or the “operator”). As defined in the Hotel Management Agreements (HMA) with each respective hotel, Accor has the sole and exclusive control of the hotels in terms of management approaches and the determination and implementation of all policies and procedures, including Accor’s E&S policies and procedures.  

Accor’s Environmental and Social Management System (ESMS) includes E&S management programs, policies, charters, and global standards relating to environmental compliance, safe food and hygiene, ethics and corporate social responsibility, grievance management, recruitment and selection, workplace health and safety (for both employees and contractors), hotel incident management, fire & life safety, and security. In addition, all hotels will implement Accor’s Planet 21 program (or its subsequent versions) that looks to improve the sustainability of hotels in relation to energy and water efficiency, food management, carbon emissions, waste management, sexual harassment, non-discrimination, employment equity, and corporate social responsibility.  

Prior to Kasada’s acquisition, Project Wind and Umbrella were privately managed assets. These hotels only had partial elements of an ESMS and are transitioning to Accor policies and procedures, including a formal ESMS as required by MIGA/IFC Performance Standard 1. Project Galaxy was managed under the corporate Southern Sun Environmental Management System (EMS) which included processes and procedures for the management of the key environmental and health and safety aspects of the business. This EMS was deemed to be broadly adequate and appropriately implemented; however, minor shortcomings were identified regarding human resources practices, social issues management, and engagement of workers. 

Following the acquisition of the hotels, Accor will transition the hotels to their existing policies and ESMS over a period defined in the ESAP for each sub-project (ESAP 1). To this end, Accor has a dedicated Task Team to ensure the suitable implementation and adoption of key policies and standard operating procedures. This process is implemented through the Accor Task Manager platform over the transition period and covers key areas such as talent and culture, finance, procurement, engineering (including L&FS), marketing, IT, security etc.  

Identification of Risks and Impacts: 

As a component of its hotel acquisition approach for brownfield investments, Kasada currently undertakes both pre- and post-acquisition due diligence processes. The existing pre-acquisition process predominantly relates to technical, financial, E&S, and legal due diligence at the time of acquisition, as well as the assessment of compliance with national standards, E&S regulatory permits, building permits, land titles etc. The post-acquisition assessment process requires an ongoing commitment to Accor’s existing ESG and Planet 21 programs and policies. For Project Wind, Umbrella and Galaxy, Kasada also procured an independent pre-acquisition E&S audit of the hotels against the requirements of relevant local legislation and IFC/MIGA Performance Standards, with a focus on Life & Fire Safety (L&FS), and food and hygiene. 

For the acquisition of under-construction greenfield hotels, the Fund has developed a screening procedure vis-à-vis the agreed eligibility criteria and the standard operating procedure for conducting E&S due diligence of potential investments against local host country requirements and IFC/MIGA Performance Standards. As part of the screening procedure, the Fund will assess the applicability of all the Performance Standards for all the future greenfield acquisitions and developments to comply with these requirements; this task was captured as an action in the first sub-project ESAP.  

Organizational Capacity and Competency: 

Kasada employed a dedicated E&S Manager to provide monitoring and oversight of its hotel portfolio. The approach, going forward, will include conducting pre- and post-acquisition due diligence and the management and assessment of E&S KPIs. This role is supported by the general counsel, Asset Manager, and the technical and construction team. As Kasada’s portfolio continues to grow through ongoing acquisitions, the Fund will be required to review and assess their internal E&S capacity to ensure adequate oversight and monitoring (ESAP 2). 

As the operator of the hotels, including Project Galaxy, the various Accor departments (including sustainability, crises management, occupational health and safety, security etc.) provide an ongoing E&S oversight, support, and monitoring function to Kasada. With reference to the HMA’s, Accor, as the operator of the hotels, retains unfettered management control of the hotel, including recruitment; however, some recruiting, including the employment of the General Manager, must be agreed by Kasada. At hotel level, the General Manager is ultimately responsible for all E&S aspects of the hotel, including providing monthly feedback to the business review meetings and annual monitoring against the pre-defined Kasada and Accor KPIs.  

Emergency Preparedness and Response:  

Accor has developed and implemented a Hotel Incident and Crises Manual for all hotels they operate in the Middle East and Africa (MEA). All incidents, including accidents, armed robbery, electrical failure, bomb threats, fatalities, demonstration, food poisoning, fire or explosion and theft, are classified as either bronze, silver, or gold, which determines the appropriate management response. As per the manual, each hotel must have a crises response team as well as a Crisis Plan. All employees are required to receive training in relation to the procedures and guidelines detailed in the Crisis Plan. The general manager of each hotel has ultimate oversight of crises management and reporting. For significant incidents, Accor has established a MEA Crises Response Team.  

Ongoing training, maintenance, as well as any incidents in relation to the Crisis Plan will be recorded and reported as per the requirements of the Hotel Incident and Crises Manual and monitored by Kasada as per the monitoring framework. 

COVID-19: 

In response to the ongoing COVID-19 pandemic, all Accor managed hotels have been required to implement the ALLSAFE program. This has introduced intensified hygiene and prevention measures and safety standards. The program includes a dedicated guest hotline, enforcement of social distancing in all common areas, contactless check-in, and payment (where possible), provision of hand sanitizer in public areas, reinforced cleaning of public areas, employee safety and hygiene training, guest access to medical professionals and reinforced food safety standards and protocols. As a component of the transition to an Accor-managed hotel, any sub-project and its related hotels (including Project Galaxy) are required to implement the Accor ALLSAFE program. In addition, Kasada will obtain SAFEhotels certification for their hotels, that includes a hygiene element (further detail included under Performance Standard 4). 

Monitoring and Review: 

The Fund has developed initial key performance indicators (KPIs) that go beyond the current industry benchmarks, which they aim to achieve over the next three to four years. These KPIs relate to enhanced sustainability in the areas of employment equity, improved energy efficiency, Excellence in Design for Greater Efficiencies (EDGE) certification for all hotels, food waste reduction and Hazard Analysis Critical Control Point (HACCP).  

As a component of the first ESAP, Kasada has also developed and implemented a standardized monitoring framework that assesses individual hotel compliance against predefined Kasada KPIs, Accor policies and procedures, including Planet 21, local regulatory requirements, IFC Performance Standards, contractual and collective bargaining agreements.  All hotels are required to provide feedback on any material E&S issues to Kasada at the monthly business review meetings and quarterly reviews. Comprehensive monitoring results against all the KPIs will be provided for the annual review and, where necessary, mitigation and management measures factored into the budget requirements.  

In addition to these measures, as per the HMA’s, Kasada agrees that the operator, Accor, may once every fiscal year, carry out an audit of the hotel’s systems to ensure compliance with Accor Group Policies, including policies relating to the security of the network. Kasada will be responsible to implement all recommendations following such an audit. 

PS 2: Labor and Working Conditions 

Human Resources Policies and Procedures: 

As per the HMAs, it is agreed that Accor, as the hotel operator, has unfettered management control and absolute discretion, in relation to all human resource (HR) matters of the hotel employees including recruiting, secondment, training, supervisions, promoting, discharging, and liaising with, and negotiating with workers unions.  

Accor HR policies and procedures will be implemented across all of the hotels. This includes a recruitment and selection policy, recruitment charter, Code of Conduct, Ethics and Corporate Social Responsibility charter, grievance management procedure, workplace health and safety procedure among others. These policies are noted to be consistent with the respective local labor laws and requirements of MIGA / IFC Performance Standard 2.  

At the close of the first transaction, the eight Project Ayaba hotels had a total of 635 employees (approximately 66% male and 34% female) while the Project Umbrella and Wind hotels had a total of 38 and 76 employees respectively. These employees are predominantly in the areas of management, human resources, front of house, housekeeping, food and beverage services, maintenance, IT, administration, sales, and marketing. The majority of employees were provided with open ended (permanent) contracts, while a smaller number are provided with term (temporary) contracts. All hotels also employed a number of contractors provided through third-parties including security guards, gardeners, maintenance staff etc. The majority of employees at each hotel were locally sourced, with few expats mostly engaged in management functions. 

Project Galaxy has a reported workforce of around 180 employees with a gender ratio of 133 male (74%) and 47 female employees (26%) engaged in admin, finance, food and beverage front office, housekeeping, kitchen, sales, marketing and security. Most employees are contracted directly by the hotel and the use of third-party workers is mostly limited to restaurant staff.  

 Labor and Working Conditions: 

Building upon the Accor’s HR policies and procedures, labor and working conditions at the eight Project Ayaba hotels reviewed are determined predominantly by existing collective bargaining agreements, which are aligned with respective local legislative requirements. The collective bargaining agreements cover working conditions, including recruitment, probation, salaries, working hours, benefits, leave, disciplinary action and termination, retrenchment etc. All employees are provided with a written contract (open ended or term), as per the requirements of the collective bargaining agreements, detailing their terms of employment.  

For the Project Wind hotels, no collective bargaining agreement is present and hence labor and working conditions are defined by local legislative requirements. 

Labor and working conditions within the Project Umbrella hotel are defined by Kenyan legislative requirements and detailed within the staff handbook. This covers areas of non-discrimination and equal opportunity, retrenchment, and employee grievance management.  

For Project Galaxy, labor and working conditions are defined by Nigerian labor requirements and, under the previous ownership, the primary document that was used to govern working conditions and the relationship between management and employees was the Human Resources (HR) handbook, which was deemed broadly aligned with IFC / MIGA Performance Standard 2, with only minor gaps identified.  

Within the first three – six months of Accor assuming operations of the respective hotels, through their Task Manager Platform, a labor assessment will be completed to ensure alignment of existing practices, procedures, and employment contracts with both local legislation, as well as Accor policies and procedures (ESAP 3).  

Additionally, Kasada would commission a complementary independent labor audit to verify compliance of labor conditions with IFC and MIGA standards (ESAP 4). 

These audits will cover areas relating to labor and working conditions, relations with the hospitality industry, adequacy and unions, safety and comfort of working areas, hiring, compensation and benefits, employee relations, safety, and security. Where gaps or non-alignment are identified, corrective actions will be implemented through a timebound action plan. 

Workers Organizations: 

As articulated in Accor’s Ethics and Corporate Social Responsibility Charter, all employees have the right to find and join organizations of their choosing with the aim of collectively defending their interests through a collective bargaining process. This stance is reiterated in the respective HMA’s which state that Kasada, as the owner and employer, will comply with hotel employees’ rights to join and form workers’ organizations and/or unions of their choosing, and undertake collective bargaining.  

The majority of employees at the eight Project Ayaba hotels are currently unionized, however, membership of the unions is on a voluntary basis. Each union has an elected representative committee who engage with hotel management on a regular basis. The committees are re-elected every three years. At the close of the first transaction, each hotel currently had a collective bargaining agreement (CBA) in place. The CBAs govern all aspects of the employment terms and conditions in accordance with local legislative requirements.  

In order to ensure immediate and long-term labor management, including engagement with local unions, is completed in accordance with the requirements of both local legislation and Performance Standard 2, Kasada developed a timebound management and engagement action plan detailing their approach to labor management as part of the ESAP for Project Ayaba. The action plan included a training schedule of all Kasada and Accor management and heads of department on the requirements of Performance Standard 2.  

At the time of carrying out due diligence for Project Wind, eight employees were unionized with the Namibia Food and Allied Workers Union (NAFAU) and there was no sectoral or hotel specific CBA in place; however, should worker representation reach 51%, the option to enter into a collective bargaining process is available.  

At the time of due diligence for Project Umbrella and Galaxy, a defined approach or policy regarding freedom of association or collective bargaining was lacking; however, Project Umbrella had several employees who are members of the Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers (KUDHEIHA). None of the employees at Project Galaxy are currently unionized. 

As a component of the transition to an Accor ESMS (ESAP 1), every hotel, including Project Galaxy, will be required to adopt Accor’s Ethics and Corporate Social Responsibility Charter, whereby all employees are entitled to join an organization / union of their choosing, and bargain collectively.  

Non-Discrimination and Equal Opportunity: 

Accor has developed and implemented, across all of their managed hotels, a compulsory Ethics and Corporate Social Responsibility Charter, which is overseen by the Groups Ethics and the CSR committee. As per the charter, all Accor managed hotels are committed to eliminating all sources of discrimination and promoting equal opportunity, including in the areas of recruitment, promotion, training, and career support.  

Furthermore, as captured in the Diversity and Inclusion Commitment, Accor promote diversity and non-discrimination on the grounds of country, region or neighborhood of origin, family name, culture, age, gender, physical appearance, disability, sexual orientation, education, and others. Accor has also implemented the RiiSE initiative which is an international network to promote diversity and gender equality in the workplace.  

Additionally, Kasada is targeting 100% gender pay parity across all their hotels and 50% female general managers by 2025. 

 

Retrenchment: 

Based on the available information, prior to the acquisition none of the Project Ayaba hotels were required to retrench any staff due to the ongoing Covid-19 pandemic and all salaries were maintained; however, approximately 183 term contracts were not renewed during this period, representing 78% of temporary employees. Any planned retrenchment in the future, has to be managed as per the requirements of the existing collective bargaining agreements, taking into account length of service, family responsibilities, professional qualities etc. The employee representative must be consulted regarding any retrenchment plans.   

Due to COVID-19 implications and more than one year prior to the acquisition of Project Wind hotels by Kasada (and without Kasada’s involvement), significant salary reductions occurred in April 2020, and the majority of employees were retrenched in May 2020. The previous hotel owner provided impacted employees with written notices as well as engaged with employees, NAFAU and the Ministry of Labor as per the requirements of local legislation.  

Similarly, due to COVID-19 related restrictions and financial constraints, the Project Umbrella hotel was required to retrench 144 employees and place an additional 46 on unpaid leave. The process included the payment of salaries up to end August 2020, severance pay, payment of accrued leave, and a certificate of service. For these sub-projects, actions to assign compensation to former employees affected by retrenchment were pursued. 

Regarding Project Galaxy, employees were not retrenched during the pandemic, however some staff were placed on mandatory leave with salary reduction. During this period, the medical and pension coverage for all the employees were not affected, and only bonuses, leave and transport allowances, and long-term service awards were suspended. Employees’ salaries and all benefits were reinstated up to the pre-COVID regime on 1st September 2021.  

Grievance Management: 

Accor has developed a grievance procedure that will be applied across all its hotel operations including the sub-projects. The procedure details the process for raising grievances, timelines for feedback and resolution, documentation, and the appeal process.  

Accor has also implemented a whistleblowing hotline, the Accor Integrity Line, allowing employees to report any grievances or conduct that is contrary to Accor policies, in complete confidentiality and anonymity if necessary. The mechanism is also offered on an internet platform accessible 24 hours a day, 7 days a week and is available in 29 languages. 

Prior to Kasada’s acquisition of the Project Wind hotels, a Grievance Management process was implemented at the hotel level and that was re-aligned with the Accor standards and requirements following change of operatorship. 

At the time of due diligence, Project Umbrella and Project Galaxy lacked a formal documented employee grievance policy. The implementation of the Accor grievance procedure, as well as their whistleblowing hotline, was reflected as an ESAP action for both sub-projects (ESAP 5).   

Protecting the Workforce: 

As per Accor’s Ethics and Corporate Social Responsibility Charter, no hotels under their management are permitted to institute any form of forced, child or undeclared labor. In terms of child labor, Accor commits to comply with the legal minimum working age in each host country and to never employ anyone under the age of 14. As a component of Accor’s selection and recruitment process, the age of all potential employees is verified and recorded. In addition, the Charter also details a zero-tolerance approach to any form of harassment, including sexual harassment, and bullying in the workplace. These policies are applicable to both employees within Accor managed hotels, as well as suppliers and third-party service providers. 

Occupational Health and Safety: 

During planned refurbishment and upgrades to the hotels, it is anticipated that numerous contractors will be on site. For this purpose, Accor has developed and implemented a Workplace Health and Safety Policy and associated agreement for contractors and suppliers to ensure a suitable safe environment and work site. This forms the basis of all agreements with contractors and covers areas such as product safety, environmental management, health and safety, hazardous material handling, hygiene, insurance, and compliance (fire, electrical, plumbing and ventilation). 

Should an employee be involved in an incident, even a minor one, they are required to immediately report the incident to the relevant hotel manager, who subsequently completes either an Accident and Dangerous Occurrence Report or Incident Report which is sent to the Director of Operations and the MEA Risk Management team. After every incident a debrief form must be completed and a meeting held to review the outcomes of the incident. Incidents must be reported within 48 hours.  

In the context of Project Galaxy, Occupational Health and Safety (OHS) matters were governed prior to the acquisition through an overarching OHS Policy, that covered the activities of management, workers, and contractors. The policy set out OHS objectives as well as performance targets. Risk assessments were undertaken and management programs/procedures compiled for relevant operational occupational health and safety risks identified; Employees were provided with task-specific training programs. As part of the EMS-implementation of the hotel, OHS audits were regularly undertaken. Permits for the handling and storage of hazardous substances were held and valid.  

Accor has developed and will implement policies and procedures identifying specific occupational health and safety risks in its hotels and which will be applicable to all hotels, including Project Galaxy (ESAP 1). Occupational Health and Safety is reiterated in the Code of Conduct. As per the Hotel Incident and Crises Manual, all hotels, including Project Galaxy, are required to develop their own Hotel Incident and Crises Manual to facilitate the response to an incident.  

Third Party Workers: 

The hotels in the current pipeline of acquisition under Phase 1 utilize a limited number of third-party service providers to fill roles such as security, garden maintenance, restaurant services (when applicable). Upon each hotel’s acquisition, these third-party service providers are required to comply with all Accor policies and standards, as well as local legislative requirements.  All third-party workers and service providers are also required to comply with the Accor policy on Workplace Health and Safety Agreement for Consultants, Contractors, and Suppliers. The policy forms the basis of all agreements with contractors and suppliers and sets out the minimum health and safety, environmental protection and fire prevention requirements of all contractors, suppliers, or consultants. These same requirements are applicable to Project Galaxy. 

PS 3: Resources Efficiency and Pollution Prevention 

Resource Efficiency:  

Accor has committed to environmental management and sustainability through several policies and standards. The Ethics and Corporate Social Responsibility Charter reiterates its position on energy and carbon footprints, pollution and discharges, water conservation and waste recycling.  

In addition, Accor have also developed and implemented an Environmental Compliance Guideline that provides design and operational strategies and technologies to reduce energy and water consumption, carbon footprint and maintenance costs. Lastly, all Accor managed hotels are required to achieve at least a mandatory ‘bronze’ status in terms of the Planet 21 requirements. This includes initiatives to improve and monitor water and energy efficiency as well as waste management.   

In addition to Accor’s mandatory requirements of the Environmental Compliance Guideline and Planet 21, Kasada is looking to operate its hotels following internationally accepted green building standards, as part of IFC’s Excellence in Design for Greater Efficiencies (EDGE) certification. The fund, as one of their KPIs, is targeting to achieve EDGE certification for all sub-projects and hotels by demonstrating at minimum 20% savings in energy, water, and embodied energy in materials. Kasada will also look to achieve a 10% per room energy reduction by year two of operation.   

Greenhouse Gas Emissions: 

Greenhouse Gas (GHG) emission sources from operations will be mainly related to grid electricity use, diesel use for back-up generators and vehicles. As per the Accor Environmental Compliance Guidelines, all hotels are required to keep accurate and documented records and measurements of all energy consumption. This includes sub-metering at high-energy use areas kitchens, laundries, and swimming pools. All hotels are required to track their energy consumption via the Planet 21 Gaia platform.  

Kasada, as a component of their monitoring framework, will monitor and record resource usage, including water, energy as well as their estimated gross GHG emissions from all the hotels. 

Pollution Prevention and Waste Management: 

As per the Accor Environmental Compliance Guidelines and Planet 21 mandatory ‘bronze’ requirements, all hotels are required to manage their waste, (water, solid and hazardous), in a sustainable and environmentally friendly manner. This includes the removal of plastic straws and cotton buds, using eco-friendly cleaning products, ensuring that 100% of wastewater discharge, including sewage and grey water, is connected either to a municipal wastewater treatment network or a hotel-owned treatment facility and sorting and processing of hazardous (paint, batteries, fluorescent bulbs, printer cartridges, aerosols, waste oil etc.) and solid waste (glass, paper, plastic, cardboard) into appropriate waste streams.  Hotels are also required to identify and document all hazardous material on site. 

In addition to the Environmental Compliance Guidelines and Planet 21 requirements, the fund is targeting zero waste to landfill at 20% of their hotels by 2025.  

In the context of Project Galaxy, Kasada/Accor will follow up to ensure relevant discharge permitting required to operate the hotel-owned wastewater treatment facility is in place, in accordance with applicable requirements (ESAP 6). 

The wastewater treatment facility was refurbished in June 2022 and, according to the latest discharge monitoring results, no exceedances of the applicable regulatory thresholds were reported since the refurbishment.  

PS 4: Community Health, Safety and Security 

Community Health and Safety: 

Food Safety  

Accor have developed and implemented a Safe Food and Hygiene Standards Manual that includes a Food Safety Policy, roles and responsibilities, food safety team, Hazard Analysis Critical Control Point (HACCP) requirements, supplier management, receiving and storing of food, pest control etc. Accor’s intention is to ensure that all their managed hotels will achieve a basic compliance level of food safety based on international food safety requirements, with an expectation that hotels move forward to seek HACCP certification.  

Internal audits are conducted during hotels operation to ensure alignment with Accor food safety and hygiene requirements, which are in line with the requirements of Performance Standard 4. This covers areas such as general maintenance, cleanliness, food storage control, hygiene etc.  

Project Umbrella had the relevant food and hygiene license granted by the Nairobi City Council. Food and hygiene were also covered under the annual NEMA audit for Project Umbrella. 

Project Galaxy is subject to regular inspections of food safety undertaken by the relevant authorities, and the internal audit system adopted prior to the acquisition assessed compliance with HACCP protocols. Employees working in the kitchen areas are trained in hygienic food preparation, storage, and processing. 

Life and Fire Safety 

Accor has implemented a corporate life and fire safety (L&FS) system technical document (i.e. L&FS Master Plan), aligned with the requirements of the WBG EHS General Guidelines and international fire safety codes, that provides the minimum requirements for L&FS at all Accor managed hotels (new facilities or to be renovated).  

 

For existing Accor-branded hotels, and before starting under Kasada’s management, the hotel general manager is required to commission a L&FS audit (or “Fire Safety Strategy”) against the minimum performance requirements set out in the technical document. The audit is prepared by qualified fire safety consultants who put together a corrective action plan with an associated implementation timetable to correct eventual deficiencies and non-compliances. Additionally, the hotels have implemented a periodic O&M plan, including inspection, testing and maintenance of L&FS systems by own personnel and qualified local subcontractors.    

 

IFC’s virtual visit to hotels based in Dakar confirmed that the hotels have the required L&FS infrastructure and systems including required L&FS features, as described above. Also, the hotels have fire brigades with good emergency training provided by an external certified company.  The evacuation procedures, roles and responsibilities of the various staff are reviewed regularly through pro-active measures and exercises. 

 

As of March 2022, the Project Wind hotels only ensured compliance with local Namibian L&FS regulations and have achieved certification on this basis. The hotels undertook an independent L&FS audit focusing on areas such as prevention, early detection, containment and mechanical, electrical and plumbing (MEP). The findings and remedial measures of this audit, to address the identified gaps with local legislative requirements and World Bank Group EHS Guidelines, were  provided to and agreed upon with MIGA. 

 

L&FS at the Project Umbrella hotel is compliant with national requirements, including emergency exits, ventilation, fire suppression and containment, equipment maintenance, and the hotel is subject to annual NEMA audits. The hotel is in possession of a current fire clearance certificate. As a component of the Project Umbrella refurbishment, two existing floors will be converted into a coworking space managed under the WOJO franchise. The coworking space will operate separately from the hotel while implementing its own policies and principles. As owners, Kasada will retain overall control of the asset, including ensuring adequate L&FS provisions as detailed under Performance Standard 4. 

Regarding Project Galaxy, the L&FS systems follow the design, maintenance, and auditing requirements of national and state legislation, holding valid certificates from the council. All auxiliary firefighting equipment assessed during the site visit showed valid service history documentation and appeared to be in good condition. Operations procedures outlined specific firefighting techniques relevant to the use of the equipment. The maintenance staff also regularly conducts internal audits on fire safety systems, infrastructure, training, as well as quarterly fire drills. Audit results reflected an appropriate performance in both fire protection and safety.  

All hotels in Kasada’s portfolio, both as a component of this phase and potential future acquisitions, will adopt and comply with Accor’s Fire Life and Safety System technical document, local legislative requirements and the World Bank EHS Guidelines. In addition, Kasada will obtain SAFE certification (https://safehotels.com/) for their hotels, that covers L&FS, including detection, suppression, equipment and infrastructure, evacuation, training, and certification (ESAP 7).  

Security:  

All hotels in Kasada’s portfolio are required to adopt and implement the Accor Global Brand Security Standard. The standard provides minimum baseline security requirements pertaining to physical, technical, human and operational practices and is largely aligned with the requirements of IFC Performance Standard 4 as well as the Voluntary Principles on Security and Human Rights. 

Security at all the hotels in Dakar, Cameroon and Ivory Coast is provided by private third-party contractors. At the time of IFC appraisal for Project Ayaba (2021) due to perceived terrorism threats in the region, the Senegalese government was providing armed gendamerie for additional security. As per the Accor Global Brand Security Standard, contracted security companies must be properly licensed in accordance with local laws and comply with the requirements of the standard. This includes the justified and legitimate use or force, training and vetting. 

 

At the time of due diligence, security at the Project Wind was also provided by a third-party contractor who is responsible for vetting and ongoing training of their guards, and the hotel also employed a permanent security supervisor. The hotel underwent the necessary requirements, as per the Task World platform, to transition to the Accor Global Security Standard. This included conducting a comprehensive Security Risk Assessment which was scheduled during the transition period and updating security related plans as necessary and in line with Performance Standard 4 requirements.  

Security at the Project Umbrella hotel is provided by a third-party service provider, Secure Kenya Limited. At the time of due diligence, Project Umbrella was required to undergo the necessary requirements, as per the Task World platform, to transition to the Accor Global Security Standard. 

Project Galaxy employs the services of a specialized international firm for conducting security services (G4S). Access to the hotel is controlled, and the perimeter of the property is patrolled. G4S and their employees are registered with the regulatory authority governing the legislation on private security services. 

Kasada are in the process of ensuring all their hotels are SAFE certified (https://safehotels.com/). This covers processes and procedures, training, management and organization, systems and infrastructure, and crises management (ESAP 7).  

Accor, through its Ethics and Corporate Social Responsibility Charter commit to responsible communication practices, including responsible marketing, communication and transparency. This includes engagement with communities in which they operate, as well as with guests. Stakeholder engagement is managed at a global, regional and brand level. Accor also utilize engagement channels such as their webpage (https://group.accor.com/en/commitment/planet-21/our-partners), social media platforms and their annual integrated report to communicate progress and performance in relation to diversity, challenges, strategy, and sustainability (https://group.accor.com/-/media/Corporate/Investors/Documents-de-reference/2019-integrated-report.pdf). 

In 2009, Accor signed the Responsible Communications Charter, which was revised and consolidated to become the FAIRe program in 2018, which Accor is a signatory. Accor also contribute to local economic development through direct and indirect employment by promoting local recruitment practices and offering skills and technical training.  

External grievances can be lodged on a variety of platforms including the Accor website, phone, email, social media and via Accor’s Integrity Line. 

 

Local Access of Project Documentation: 

Contact Person: Pierre-Etienne  de Montgrand  

Company Name: Kasada Capital Management  

Email:  pierre-etienne.demontgrand@kasada.com  

Phone: +27 10 541 0906 

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