Nestle Limited – Kabirwala Factory

AWS Audit Report

1. Client and Certificate Details

1.1 Client details:

Client Name: Audit location: Nestle Pakistan Limited – Kabirwala Factory 7 KM, -Kabirwala Road, Kabirwala, Pakistan Activities/Processes: Contact person: Foods & Beverage Manufacturing Aatekah Ahmad Mir Khan AWS Reference Number: Type of audit: Certification Audit AWS-010-INT-CAB-00-06-0005-0049

Audit date(s):18 – 20 Dec, 2018 Audit standard : AWS Core criteria

Proposed date of next audit: Dec, 2019 Audit report completed by: Tariq Qamar

1.2 Audit team: Name Nationality Telephone number Role in team Spoken Languages

Tariq Qamar Pakistan 0092-300-8488792 Lead Auditor English+ Imran Altaf Bhatti Pakistan 0092-300-8290788 Local Expert English+Urdu May Huang Chinese +8618017501175 Remote Support English+Chinese

2. Details of Audit and Scope of Certification

Audit Standard The AWS International Water Stewardship Standard Version V1.0 April 8th 2014

Scope of Certification Manufacturing and warehouse of Milk Powders, Dairy Tea Whitener, UHT Milk, Butter, Noodles and Seasoning.

Description the catchment The catchment scope includes Lower Bari Doab that is fed by the River Ravi and the in which client operates Chenab Rivers on the Northwest and West, and by the Sutluj River in the South East. It located between Latitude 29°30' and 31°45' N. and longitude 71°to 74°45'E. It has an area of 12,150 square miles. Plant is located about 7KM from khanewal along Kabirwala Road. It is located about 3KM from Kabirwala lying at latitudes 32°22’, 18 North and longitudes 71°52’59 East. Summary of shared water The organization has precisely defined the stakeholders for water governance in challenges catchment. These includes local community, vendors, neighboring industries, government officials. The shared water related issues are also identified, these mainly includes bad quality of drinking water and inefficient sewage system in the catchment.

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AWS Audit Report

Organization has actively participated in catchment’s water governance improvement by raising the awareness of the local community and by implementation of water related improvement projects within factory & in catchment.

3 Audit Summary

Main processes/ Practices adopted (concise summary of the client’s Point values activities / places conformity or non-conformity with: all core indicators; and (each core inspected all advanced-level indicators) indicator and advanced-level indicator) 1 commit The factory has established commitment to document which is CORE endorsed by Factory Manager and Head of Technical (dated July, 2018). The commitment statement is covering almost all aspects of alliance for water stewardship standard. 1.1 The site is following the corporate water stewardship policy which is also being followed company wide and found satisfactory. 1.1.1

The policy and commitment documents found readily available, 1.2 on company web-site, for public or any interested party

1.2.1 2 gather and understand An updated layout of factory was available. Site boundaries, CORE water source (turbines), effluent treatment plant, water and effluent lines were clearly mentioned on the site layout. 2.1

Site has two deep water wells (turbines) as source of water. 2.1.1 After withdrawal from wells the water is transferred to a bulk water tank and distributed to different areas in factory. Deep Well # 01 was established in 2006 having depth of 400 ft where 2.1.2 as Well # 2 was established in 2013 having 330 ft depth. Access to both wells is controlled effectively. Also adequate flow meters were installed on water distribution lines.

Factory has different discharge points and discharges converge 2.1.3 to a single ultimate discharge. Ultimate discharge is not going in

a water body but is going to agricultural fields.

The factory catchment includes Lower Bari Doab that is fed by the River Ravi and the Chenab Rivers on the Northwest and West, and by the Sutluj River in the South East. It located 2.1.4 between Latitude 29°30' and 31°45' N. and longitude 71°to 74°

45'E. It has an area of 12,150 square miles. Plant is located about 7KM from khanewal along Kabirwala Road. It is located

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AWS Audit Report

about 3KM from Kabirwala lying at latitudes 32°22’, 18 North and longitudes 71°52’59 East.

The factory management has identified the stakeholder’s 2.2 related issues to the water governance in the catchment. Four main stack holders have been identified which includes; vendors, industries, community and government officials. The shared water related issues are also identified, these mainly includes bad quality of drinking water and inefficient sewage 2.2.1 system in the catchment. Sewage water issues includes: • Bad odor • Sewage line leakages • Blocked sewage and spillover

Whereas drinking water issues includes: • Drinking water quality • Over use of water • Malfunctioning of government filtration plants

The sphere of influance has been identified which includes local community, vendors, neighboring industries, government offices (like EPA, PFA, WWF, health department, MEPCO, SNGPL 2.2.2 etc), but the main stakeholder Raw Milk Suppliers was also identified in sphere , further this may be beneficial if uniform approach may be used for identification of Interests. (OBS)

Factory management has actively participated in catchment’s water governance improvement by raising the awareness of the local community and by implementation of water related improvement projects within factory & in catchment. They have 2.3 publically led initiatives including; • Installation of 3 water filtration plants at Kabirwala, 2.3.1 Khanewal and Allahbad • Participated in canal cleaning • Tree plantation drives • Irrigation water distribution to neighboring farms

• Water conservation projects at factory and milk collection centers • etc

Factory management has identified the water related applicable laws and regulations. These includes; • Environmental Protection Act 2012 2.3.2 • Punjab Environmental Quality Standards

• Drainage Act 1973 • PSQCA • Factory Act 1934 3 BV CERTIFICATION PAKISTAN 010-59683888 Nestle Pakistan Limited – Kabirwala Factory

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• EPA drinking water standard • And etc

The hydrological study for ground water balance of the catchment has been verified. According to the study following is 2.3.3 the groundwater balance for bari doab (2015);

Recharge components Rainfall recharge = 6.97 MAF

Recharge from irrigation system = 21.81 MAF Return flow from GW abstraction = 6.3 MAF Total = 35.08 MAF

Discharge Components Ground water abstraction = 34.00 Evaporation losses = 1.54 Total = 35.54

Water quality (physical, chemical and biological) parameters of source water are being monitored on regular basis. Last sample for deep well #1 and deep well # 2 were tested on 25/09/2018 2.3.4 and 20/08/2018. All the parameters were found in acceptable range. 2.3.5 A hydrological study conducted by SGS (2015) to investigate irrigation water status of the catchment. The study concludes that 80-85% criteria irrigation water parameters are well 2.3.6 complying FAO Guidelines.

Factory’s water stewardship plan is available, have SMART action items. Also management has developed an incident and response plan which includes the undesired water related 2.4 incidents and emergencies. (emergency preparedness and response plan, Doc # 1581-SHE-D3-19.04). The existing 2.4.1 emergency and incident procedure addresses well contamination, spillage and flood.

Factory’s water balance was available on year time step. Detail is as follow;

Total raw water withdrawal = 663002 m3/year Additional Cow water = 151392 m3/year 2.4.2 Discharge through ETP (76 %) = 504653 m3/year Rest consumed in evaporative losses, gardening and RO

Quality of effluent at ETP discharge is being regularly monitored. Last monitoring was done by Global Environmental lab (April 2018). All monitoring parameters were in range. 2.4.3

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Factory has maintained the inventory of chemical used and stored within premises. Total 171 chemicals are included in the inventory list

Factory has two deep water wells (turbines) as source of water. 2.4.4 2.4.5 The water saving projects are translated in to cost saving. Factory have saved 73,920 PKR during with water conservation 2.4.6 projects in 1 year. 2.5 2.5.1

The organization has also identified site’s water risk keeping in 2.5.2 view likelihood and impact. They have prioritized them on basis 2.6 of likelihood and impact based priority matrix. Criterion for establishing likelihood was addressed like well-contamination 2.6.1 was considered as Moderate. 2.7 The factory has identified the opportunities for year 2019. 2.7.1 following projects have been identified; • Sterilized water recovery • Reduce water consumption at CIP

• Installation of eco taps 2.7.2 it is estimated the 24556 m2/year water will be saved with the implementation of above mentioned projects.

2.7.3 3 plan Factory has nominated an AWS team, led by a water expert. The CORE roles and responsibilities AWS team has been clearly identified. Factory compliance manager is responsible for water related 3.1 legal compliance. 3.1.1 Raw water quality (physical, chemical and biological) parameters of source water are being monitored on regular basis. Last sample for deep well #1 and deep well # 2 were tested on 25/09/2018 and 20/08/2018. All the parameters were found in acceptable range.

The quality of effluents at ETP discharge is also being regularly monitored. Last monitoring was done by Global Environmental lab (April 2018).

Site has developed water stewardship plan that includes 3.2 initiatives with timelines. The plan is focused on water governance, sustainable water balance, water quality and status 3.2.1

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of other water related important areas. 3.2.2

Site has developed an incident and response plan which 3.3 includes the undesired water related incidents and emergencies. 3.3.1 3.4 No documentary evidence found for communication of site plan to the relevant catchment authority, however evidence was shown 3.4.1 only for engagement like plantation of tree. This may be beneficial if minutes of such meeting maintained as evidence for points discussed.(Minor NC)

4 Implement The quality raw water and effluent are being regularly CORE monitored. Reports of following monitoring were reviewed and found satisfactory. Raw water quality (physical, chemical and 4.1 biological) parameters of source water are being monitored on regular basis. Last sample for deep well #1 and deep well # 2 4.1.1 were tested on 25/09/2018 and 20/08/2018. All the 4.1.2 parameters were found in acceptable range. The quality of effluents at ETP discharge is also being regularly monitored. 4.2 Last monitoring was done by Global Environmental lab (April 2018). 4.2.1 4.2.2 Factory management has actively participated with government officials for good water governance in the catchment. Following 4.2.3 are some of the executed activities.

• Tree plantation with government officials – 21/March/2018 • World water day with DO environment - 22/March/2018 • Beat the plastic pollution campaign – 05/June/2018 • Installation of 3 water filtration plants – MOU signed with government officials. 4.3 The organization is continuously monitoring the static levels of deep water wells. 7.1 % reduction has been achieved in water 4.3.1 withdrawal in 2018 as compared 2017. Target for 2019 is set 5 % reduction as compared to 2018. 4.3.2 4.3.3 A hydrological study conducted by SGS (2015) to investigate irrigation water status of the catchment. The study concludes 4.4 that 80-85% criteria irrigation water parameters are well complying FAO Guidelines. 4.4.1 4.4.2

4.5 The organization has identified milk suppliers as important 4.5.1 supplier according to AWS requirements and further documentary evidence available about their commitment on 4.5.2

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AWS plan. This may be beneficial to get documentary 4.6 commitments from Supplier and service provider for water stewardship plan 4.6.1

The site has adequate arrangements to ensure access to safe 4.7 drinking water, sanitation and hygiene (WASH) for all workers. 4.7.1 Site is also using a self-assessment tool for evaluating access to water sanitation and hygiene (WASH) at work place. It covers 4.8 the workplace facilities related to water supply, sanitation and hygiene. Test reports of ground water shows that is fit for 4.8.1 drinking.

Company is regularly arranging the engagement sessions for stakeholders. The record is maintained on a register.

5 evaluate The organization is continuously monitoring performance CORE against AWS plan. The performance is reviewed in OMP review meeting. 5.1

The main KPI is water withdrawal reduction. The target for 5.1.1 2018 was 3.5 % reduction in water withdrawals compared to 5.1.2 2017 but 7.1 % reduction has been achieved. Target for 2019 is set 5 % reduction as compared to 2018. 5.1.3 - The water saving projects are translated in to cost saving. 5.2 Factory have saved 73920 PKR during with water conservation 5.2.1 projects in 1 year. 5.3 No water related emergency incident or extreme event 5.3.1 occurred, hence no incident report available. 5.4 AWS plan was last updated in June 2018 5.4.1 6 communication and CORE disclose 6.1 The summary of AWS plan and performance has been made publically available on company website. 6.1.1 (http://www.nestle.pk/csv/water/aaliance -for-water- 6.2 stewardship) 6.2.1 The team responsible for water related legal compliance is also mentioned on website. Compliance manager is responsible for 6.3 water related legal compliance. 6.3.1

No complaint and no water related emergency incident or 6.4 extreme event reported so far. 6.4.1

6.5

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6.5.1 Only Core Level of AWS certificate are considered in the scope at this stage. No advance level criteria have been included and assessed. However they shared some initiative for advance level. Comments on points of ► Organization is engaging public and Government sectors for weakness & opportunities for different water shared activities and initiatives, this may be improvement beneficial if minutes of such meeting maintained as evidence for points discussed

Comments on points of 1. The company has good compliance with legal requirement. strengths 2. Site has established a competent team of AWS champions with their roles and responsibilities. 3. The documentation is impressive and also retrieval is excellent 4. The site AWS plan and management is good, such as water usage and effluent data and information were collected and analyzed, objective and actions are properly established. 5. The company involved stakeholders to take part in water awareness education, meeting and seminars. Audit Conclusion: The Major NCR is not found but 3 Minor NCRs and 5 observations raised

Recommendation for Certification & AWS Core, AWS Gold, or AWS It is recommended the company to be registered for Platinum Certified to be AWS certification （Core level) awarded

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4. Audit Observations, Findings and Conclusions

Main processes/ activities / Names & dept . of people interviewed Number of NCRs places inspected 1 commit Kabir Wala Factory Manager (Mr Ifzal Akhtar) Nil Factory Compliance Manger (Naeem Iqbal) Human Resource Manager (Ayub-ur-Rehman)

2 gather and understand AWS Lead & Water Expert ( Bilal Ahmed Sial) Nil Shafiq-ur-Rehman ( SHE Manager ) Human Resource Manager (Ayub-ur-Rehman)

3 plan AWS Lead & Water Expert ( Bilal Ahmed Sial) 1 Shafiq-ur-Rehman ( SHE Manager ) Human Resource Manager (Ayub-ur-Rehman) Kabir Wala Factory Manager (Mr Ifzal Akhtar) Factory Compliance Manger (Naeem Iqbal)

4 Implement AWS Lead & Water Expert ( Bilal Ahmed Sial) Nil Shafiq-ur-Rehman ( SHE Manager ) Tanzeel Ur-Rehman ( Manager Quality Assurance) Kabir Wala Factory Manager (Mr Ifzal Akhtar) Factory Compliance Manger (Naeem Iqbal) Saleem Ashraf (Factory Engineer)

5 evaluate AWS Lead & Water Expert ( Bilal Ahmed Sial) 1 Shafiq-ur-Rehman ( SHE Manager ) Tanzeel Ur-Rehman ( Manager Quality Assurance 6 communication and AWS Lead & Water Expert ( Bilal Ahmed Sial) Nil disclose Shafiq-ur-Rehman ( SHE Manager ) Tanzeel Ur-Rehman ( Manager Quality Assurance Total 02

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Major Non Conformity AWS Client’s response and BV assessment NO. Description of NC requirement Documentation provided Nil Nil Nil Nil

Minor Non Conformity AWS Client’s response and BV assessment No. Description of NC requirement Documentation provided No documentary evidence The Plan was discussed and The communication found for communication of shared during different thru email is site plan to the relevant meetings, however formal was confirmed during catchment authority , not acknowledged. Mail was audit and closed however evidence was forwarded to all concerned 1 3.4.1 shown only for engagement during audit like plantation of tree. This may be beneficial if minutes of such meeting maintained as evidence for points discussed Commentary of The document stakeholders in Videos & reviewed and closed feedback Forms were available but few questions were not answered in that feedback form that can define performance of water No evidence found for the stewardship. comments on stakeholder on 2 5.3.1 performance of water stewardship. Collected stakeholders comments from newspapers. Also modified form as per requirement & shared with stakeholders for feedback to get clear impact of performance on water stewardship.

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Observations AWS Client’s response and BV assessment NO. Description of Observations requirement Documentation provided This may be beneficial if Noted and communicated Will be verified in

uniform approach may be surveillance 1 used for identification of 2.2.2 Interests. This may be beneficial to get All are committed and Will be verified in documentary commitments implementing our suggestion. surveillance 2 4.6.1 from supplier and service However, this will be also provider for water taken stewardship plan

5 Surveillance schedule and if samplings required:

Default surveillance level to be annual on-site audit will be due in Dec 2019 and Advance level will also be included if agreed with client.

5. Disclaimer Bureau Veritas is an independent professional services company that specialises in Quality, Health, Safety, Society responsibility and Environmental management with almost 180 years history in providing independent verification and audit services. The audit was based on a sampling approach and therefore nonconformities may exist which have not been identified. No member of the audit team has a business relationship with Nestle . We have conducted this audit independently, and there has been no conflict of interest.

6 Appendix A Checklist (paste AWS Standard Site Evaluation Tool.xlsx )

6 Appendix A Checklist Description Objective evidence (audit team shall not give a response of “not applicable”)(stakeholder consultation results should be included in relevant cells)

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STEP 1: COMMIT

Criterion 1.1 1.1 Establish a leadership commitment A documented commitment statement was available at on water stewardship: Have the senior- site which mainly includes; commitment to most manager at the site, and if continuously improve the efficient use of water in its necessary a suitable individual within operations, work together with stakeholders in the corporate head office, sign and catchment for better water governance and comply publicly with all water related legal requirements. The right of disclose a commitment to: access to safe water, adequate sanitation and hygiene x Uphold the AWS water stewardship for all on-site workers is also committed. The outcomes (good water governance, commitment statement covers almost all aspects of sustainable water alliance for water stewardship standard. balance, good water quality status and healthy status of Important Water- Related Areas); The organization have allocated adequate resources for x Engage stakeholders in an open and implementation of AWS program. AWS team has been transparent manner; provided trainings on AWS standards. The team x Strive to comply with legal and includes motivated individuals from different regulatory requirements departments and Mr. Bilal Sial has been nominated as x Respect water-related rights, AWS lead and focal person. including ensuring appropriate access to safe water, sanitation and Organization has also signed an MOU with WWF hygiene for all workers in all premises Pakistan and LUMS university for capability under the site’s control; development and awareness enhancement in water related issues x Support and coordinate with public

sector agencies in the implementation They maintained record like pictures, also maintained of plans and policies, attendance of stake holders .They also signed MoU in including working together towards between Nestle and WWF for AWS. The existing meeting the human right to water and commitment covers all the requirements in detail like to sanitation. meet human rights to safe water, ensure ecosystem, x Continually improve and adapt the effectively use of water in industry and agriculture. site’s water stewardship actions and They also identified role for Government and their plans; commitment to focus cost effective measures. They also x Maintain the organizational capacity focused to right of worker on-site to have access of safe necessary to successfully implement water, adequate sanitation and hygiene. They also the AWS Standard, focused on engagement of stake holder, and also including ensuring that staff have the coordinating with and supporting Public Sector. They time and resources necessary to also committed for continual improvement and also undertake the committed for disclosing material on water related implementation; information to all relevant audience and also x Support water-related national and committment to law. This is also avaiable on their international treaties; website x Disclose material on water-related information to relevant audiences. 1.1.1 Signed and publicly disclosed The commitment document has been signed by Plant statement that explicitly covers all Manager (Kabir Wala Factory), NW technical manager requirements (see details in Criterion and NW Business Executive Officer.

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1.1) The commitment statement was signed on July, 2018 and is available on company website for public.

Criterion 1.2 1.2 Develop a water stewardship The site is following the corporate water stewardship policy: Develop an internally agreed- policy which is also being followed company wide and upon and communicated and publicly found satisfactory. The policy document is titled as available water stewardship policy that “Nestle Commitment on water stewardship (Appendix) references the concept of water to Nestle Policy on Environment Sustainability” and stewardship (as informed by the AWS available on company website. Standard, outcomes and criteria). 1.2.1 Publicly available policy that The documented policy is available and main focus of meets all requirements (see Guidance) policy is; - Work to achieve water efficiency across operations - Advocate for effective water policies and stewardship - Treat water discharge effectively - Engage with supplier, especially those in agriculture - Raise awareness of water access and conservation - Report publicly on a regular basis on the progress of meeting AWS commitments STEP 2: GATHER & UNDERSTAND

Criterion 2.1 2.1 Define the physical scope: Identify A documented layout of site is available. Site have a two the site’s operational boundaries, the deep well as only water source and single drain point. The drains from different areas in site comes to single sources the site draws its water from, main drain and discharged is one and in field. the locations where the site returns its discharge to, and the catchment(s) that the site affect(s) and is reliant upon. 2.1.1 Documentation or map of the site’ Updated site layout/map is available mentiontion different areas including; deep well, process area, s boundaries Admin block, main enterence and etc. The site map was verified during site visit. 2.1.2 Names and location of water The site has only two source of water supply, which are sources, including both water service Turbine I & II. The turbines are located within site’s provider (if applicable) and ultimate operational boundries and clearly identified in site source water layout. 2.1.3 Names and location of effluent The site have only one effluent drain point, which is discharge points, including both water clearly identified in site layout. The drains from service provider (if applicable) and different areas in site comes to single main drain point ultimate receiving water body and discharged in field. 2.1.4 Geographical description or map The catchment scope includes Lower Bari Doab that is of the catchment(s) fed by the River Ravi and the Chenab Rivers on the Northwest and West, and by the Sutluj River in the South East. It located between Latitude 29°30' and 31° 45' N. and longitude 71°to 74°45'E. It has an area of 13 BV CERTIFICATION PAKISTAN 010-59683888 Nestle Pakistan Limited – Kabirwala Factory

AWS Audit Report

12,150 square miles. Plant is located about 7KM from khanewal along Kabirwala Road. It is located about 3KM from Kabirwala lying at latitudes 32°22’, 18 North and longitudes 71°52’59 East. Criterion 2.2 2.2 Identify stakeholders, their water- related challenges and the site’s sphere The organization have identified the stake holders including general public, community, nabouring of influence: Identify stakeholders, industry, business and legal authorities.Major document their water-related contributor is Milk Collection includes farmer & milk challenges and explain how the collectors. stakeholders are within the site’s sphere of influence. On the basis of community survey and technical surveys, shared water related challenges of the catchment have been identified. The shared challenges have been analyzed and discussed with concerned authorities. Finally, two major shared challenges have been identified: Waste water discharge concern i.e bad odour, spill over & Drinking water related challenges i.e quality of water, over use of water & filtration plant issue. 2.2.1 List of stakeholders, descriptions The organization have defined to types of stakeholders: of prior engagements and summaries of internal and external stakeholders. Internal their water-related challenges stakeholders are company management and employees. The external stakeholders includes; - Neighbouring industry and local residents - Research and Development organizations - Government offices - Non government organizations like WWF - General public, media and academic institutes

The site has also identified shared water related challenges, such as; Waste water discharge concern Waste water discharges, bad odour, drinking and sewage water mixing and lack of proper channels or pipelines for sewage. Drinking water related challenges as community Dirty water Need clean drinking water Water scarcity Static water level drop

The interviews were also conducted during audit , Rubina Iqbal , Farhat Iqbal, M. Naveed & M. Shahid from Neighbour Factory were interviewed. 2.2.2 Description of the site’s sphere of The site has only two source of water i.e. turbines, for which hydrological surveys were performed by influence technical experts. The catchment of site has been

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defined (20Km Radius around the site) on the basis hydrological survey estimating the influence of water extraction from deep well at site. Criterion 2.3 2.3 Gather water-related data for the catchment: Gather credible and Adequate metoerological and hydorlogical information temporally relevant data on the site’s is available for the catchment. Hydrological and metrological studies provide adequate water inputs catchment's data for the catchment. x Water governance, including

catchment plan(s), water-related public They have withdrawal permit IEE. Nestle- policies, major publicly led initiatives DD(EIA/Most)57 dated 22.10.2015 NOC for installation under way, relevant goals, and all of Turbines. water-related legal, regulatory

requirements; A detailed technical report was available for the x Water balance for all sources while catchment area ground water status and future trends. considering future supply and demand “Design Report – NESPAK trends; Hydrogeological Study for a Deep Well in Kabirwala” x Water quality for all sources while considering future physical, chemical and biological quality trends; x Important Water-Related Areas, including their identification and current status, while considering future trends; x Infrastructure’s current status and exposure to extreme events while considering expected future needs. 2.3.1 List of relevant aspects of catchment plan(s), significant publicly The catchment has two major shared challenges: led initiatives and/or relevant water- Finally, two major shared challenges have been related public policy goals for the site identified: Waste water discharge concern i.e bad odor, spill over & Drinking water related challenges i.e quality of water, over use of water & filtration plant issue. Organization has identified the actions to tackle with these challenges. 1.They have installed 3 filtration plant in Kabir wala, Khanewal & Allahbad. 2. 4 Govt Schools 3. Vocational training Institute 4. Renovation of all schools 5. Nestle Health project 6. Nestle enhancement Program 2.3.2 List, and description of relevance, Site has developed a list of water related legal of all applicable water-related legal and requirements which includes; regulatory requirements, including - Pakistan Environmental Protection Act, 2012 legally defined and customary water -Punjab Environmental quantity standard for liquid rights and water-use rights Industry - National Environmental quality standards, 2000 - Drainage act, 1973

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- Pakistan standards and quality control authority - Environmental Impact Assessment - Factory act 1934 - Initial environmental examination - Drinking water standards – EPA - Pakistan water law -Punjab Irrigation & drainage -National water policy

The compliance monitoring mechanism is also in place 2.3.3 Catchment water balance by Adequate metoerological and hydorlogical information temporally relevant time unit and is avalble for the catchment. Hydrological and commentary on future supply and metrological studies provide adequate water inputs demand trends data for the catchment. Grand balance of bari Doab 20 J , Recharge components 6.97 , Recharge from irrigation system 218 % ,Return flow from obstraction 6. 3 Total 35.08. “Design Report – NESPAK Hydrogeological Study for a Turbine in Kabirwala” 2.3.4 Appropriate and credibly EPA has defined quarterly monitoring on priority measured data to represent the effluent quality parameters. However, site is monitoring physical, chemical and biological status effluent quality on monthly basis as a good practice. of the site’s water source(s) by Turbine I & II product water quality is also being monitored in addition to effluent water quality. All the temporally relevant time unit, and water quality results were found in compliance with commentary on any nticipated future requirements. Sample # 644369 was collected for changes in water quality testing dated 20-08-2018. 2.3.5 Documentation identifying Site has adequate studies on status of water related Important Water-Related Areas, issues of catchment including future trends. Following including a description of their current are main studies available status and commentary on future trends “Design Report – NESPAK Hydrogeological Study for a Turbine in Kabirwala”

“Important water related area is Turbine 1 & 2. 2.3.6 Existing, publicly available Waste water discharge concern i.e bad odour, spill over reports or plans that assess water- & Drinking water related challenges i.e quality of water , related infrastructure, preferably with over use of water & filtration plant issue. content exploring current and projected sufficiency to meet the needs of water uses in the catchment, and exposure to extreme events

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Criterion 2.4 2.4 Gather water-related data for the site: Gather credible and temporally Site water stewardship plan is available, have SMART relevant data on the site’s: action items. Site has developed an incident and response plan which x Governance (including water includes the undesired water related incidents and stewardship and incident response emergencies. plan);

x Water balance (volumetric balance Site has installed adequate instrumentation on water of water inputs and outputs); lines and area wise water consumption is being x Water quality (physical, chemical monitored and recorded. On the basis of site water and biological quality of influent and consumption and turbine water extraction data, site effluent) and possible sources of water water balance is calculated and recorded on weekly pollution; basis. x Important Water-Related Areas (identification and status); x Water-related costs (including capital investment expenditures, water procurement, water treatment, outsourced water-related services, water-related R&D and water-related energy costs), revenues and shared value creation (including economic value distribution, environmental value and social value). 2.4.1 Copies of existing water Site water stewardship plan is available, have SMART stewardship and incident response action items. plans Site has developed an incident and response plan which includes the undesired water related incidents and emergencies. Doc # 1581-SHE-D3-19.04 2.4.2 Site water balance (in Mm3 or Site has installed adequate instrumentation on water m3) by temporally relevant time unit lines and area wise water consumption is being and water-use intensity metric (Mm3 monitored and recorded. On the basis of site water or m3 per unit of production or consumption and Turbine water extraction data, site service) water balance is calculated and recorded on weekly basis. Total raw with draw 663002, 76 % discharge & 24 % other. 2.4.3 Appropriate and credibly Site is monitoring effluent quality on monthly basis as a measured data to represent the good practice. Turbine water and product water quality physical, chemical and biological status is also being monitored in addition to effluent water of the site’s direct and outsourced quality. All the water quality results were found in compliance with requirements. Records are available. water effluent by temporally relevant

time unit, and possible pollution sources (if noted) 2.4.4 Inventory of all material water- List of water critical (171.) chemicals was available, related chemicals used or stored on- which are allowed to store at site. The application of site that are possible causes of water chemicals are defined and MSDS e.g Nitric acid, ethanol pollution etc also available. The storage and handling found according to safe guidelines

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2.4.5 Documentation identifying maintained existing, or historic, on-site Important Water-Related Areas, including a description of their status 2.4.6 List of annual water-related costs, Average water cost has been calculated to be Swiss revenues and franc 0.06 /m3 for 2017, which is based on average cost description/quantification of social, of turbine water including losses & process water. environmental or economic value generated by the site to the catchment Criterion 2.5 2.5 Improve the site’s understanding of They himself identified as indirect used like leak bottle , spot bottle and also performed measurement From its indirect water use: Identify and Development authority no indirect water continually improve the site’s understanding of: x Its primary inputs, the water use embedded in the production of those primary inputs and, where their origin can be identified, the status of the waters at the origin of the inputs; x Water used in outsourced water- related services within the catchment. 2.5.1 List of primary inputs with their As MDA no indirect water is at this site as source is only associated embedded annual (or turbines 1 & 2. They himself identified as indirect used better) water use and (where known) like leak bottle , spot bottle and also performed their country/region/or catchment of measurement From Multan Development authority no origin with its level of water stress indirect water . Annual calculation of raw water 135019, seaving water 13788 & recieved water 39050. 2.5.2 List of outsourced services that They have list of outsources services like Following is consume water or affect water quality the list OF OUTSOURCED SERVICES USING WATER ON- and both (A) estimated annual (or SITE better) water withdrawals listed by • Cleaning/washing of floors (Non production area) outsourced services (Mm3 or m3) and (B) appropriate and credibly measured • Food service provider data to represent the physical, chemical • Laundry and biological status of the outsourced annual (or better) water effluent • Tyre washing

Criterion 2.6 2.6 Understand shared water-related On the basis of community survey and technical challenges in the catchment: Based surveys, shared water related challenges of the upon the status of the catchment and catchment have been identified. The shared challenges stakeholder input, identify and have been analyzed and discussed with concerned prioritize the shared water-related authorities. challenges that affect the site and that affect the social, environmental and/or economic status of the catchment(s). In considering the

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AWS Audit Report

challenges, the drivers of future trends and how these issues are currently being addressed by public-sector agencies must all be noted.

2.6.1 Prioritized and justified list of Two major shared challenges have been identified: shared water challenges that also Waste water discharge concern i.e bad odour, spill over considers drivers and notes related to & Drinking water related challenges i.e quality of water , public-sector agency efforts over use of water & filtration plant issue. Criterion 2.7 2.7 Understand and prioritize the site’s Site has identified the water related risks and prioritized them on basis of likelihood and impact based water risks and opportunities: Based priority matrix. upon the status of the site, existing risk management plans and/or the issues identified in 2.6, assess and prioritize the water risks and opportunities affecting the site. 2.7.1 Prioritized list of water risks Five risks are defined high priority; facing the site, noting severity of impact - well pump/casing malfunctioning and likelihood within a given time - Well contamination frame - Static level (water table) decreasing - - 2.7.2 Prioritized list of water-related Yes opportunities for the site They identified opportunity for improvement 2019 . Six projects identified. 1. Sterilized water recovery 2. Reduce water consumption at CIP& Power 3. Reduction of water consumption by dosing concentrate chemical 4. Installation of Eco Tap 5. Tap water reduction across 6. Water & quantity monitoring of Effluents 2.7.3 Estimate of potential 24556 m3/ Year savings/value creation STEP 3: PLAN Criterion 3.1 3.1 Develop a system that promotes Site Compliance Manager is responsible for and evaluates water-related legal identification of water related legal requirements and compliance: Develop, or refer to, a monitoring their compliance. system that promotes and periodically evaluates compliance with the legal and regulatory requirements identified in Criterion 2.3.

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AWS Audit Report

3.1.1 Documented description of Site Compliance Manager is responsible for system, including the processes to identification of water related legal requirements and evaluate compliance and the names of monitoring their compliance. those responsible and accountable for legal compliance Criterion 3.2 3.2 Create a site water stewardship strategy and plan: Develop an Site has identified water stewardship initiatives with internally available water stewardship timelines. The initiatives are focused on water strategy and plan for the site that governance, sustainable water balance, water quality addresses its shared water challenges, and status of other water related important areas. risks and opportunities identified in These initiatives were identified on the basis of; Step 2 and that contains the following - Peer reviews components (see Guidance for plan template): x a strategy that considers the shared Current water related projects include drip irrigation water challenges within the catchment, for other crops to reduce water consumption, water risks for the site (noting in construction of check-dams and dug-wells to reduce particular where these are connected rain water runoff, tree plantation and etc to existing public-sector agency catchment goals) and the site’s general response (from Criteria 2.6 and 2.7) x a plan that contains: o A list of targets (based upon Criterion 2.7) to be achieved, including how these will be measured and monitored. Note: where identified as a shared water challenge, these targets must be continually improving for the four water stewardship outcomes until such time as best practice is achieved; o A list of annual actions that links to the list of targets; o A budget for the proposed actions with cost/benefit financial information (based, in part, upon financial data from 2.7); o An associated list indicating who will undertake the actions (i.e., who is responsible for carrying out the work) and who will ensure that the work is completed (i.e., who is accountable for achieving the target), including actions of other actors in the catchment; o A brief explanation that speaks to how the proposed actions will affect: (A) water-risk mitigation, (B) water stewardship outcomes and (C) shared water challenges.

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AWS Audit Report

3.2.1 Available water stewardship AWS strategy , plan and third docuemnt OMP is strategy Avaiable and found adequate.

3.2.2 Available plan that meets all Site water stewardship plan includes actions to improve component requirements and internal and external water governance addresses site risks, opportunities and stakeholder shared water challenges

Criterion 3.3 3.3 Demonstrate responsiveness and Incident and response plan is in place. Water related resilience to water-related risks into incidents and emergency situations are identfied. The the site’s incident response plan: Add guideline to respond such event are defin in folowings

to or modify the site’s incident - Emergency preparedness and business contingency response plan to be both responsive plan in case of seasonal (monsoon rainfall) floods and resilient to the water-related risks [1583-SHA-D3-03-00] facing the site. - Emergency preparedness and response [1583-SHE- D1-02-02] - Business contingency plan for non-operational DW [1582-MFG-D3-0805] 3.3.1 A description of the site’s efforts Yes In SOPs mentioned in 3.3 to be responsive and resilient to water- related issues and/or risks in an appropriate plan Criterion 3.4 3.4 Notify the relevant (catchment) No documentary evidence found for communication of authority of the site’s water site plan to the relevant catchment authority, however evidence was shown only for engagement like plantation stewardship plans: Contact the of tree. This may be beneficial if minutes of such meeting appropriate catchment maintained as evidence for points discussed.(Minor NC) authority/agency (if any) and inform them of the site’s plans to contribute to the water stewardship objectives of their catchment plan as identified in Criterion 2.3. 3.4.1 Documented evidence of Yes, agenda and minutes of meeting communicating the site’s plan to the relevant catchment authority/agency STEP 4: IMPLEMENT

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AWS Audit Report

Criterion 4.1 4.1 Comply with water-related legal The water related legal compliance is being monitored and regulatory requirements and on regular basis, EPA has defined quarterly monitoring respect water rights: Meet all on priority effluent quality parameters. However, site is applicable legal and regulatory monitoring effluent quality on monthly basis as a good requirements related to water balance, practice. Turbine water and product water quality is water management and Important also being monitored in addition to effluent water Water-Related Areas as well as water- quality. All the water quality results were found in related rights. As noted in Criteria 1.1 compliance with requirements. They have EPA Testing. and 3.2, where, through its water use, the site is contributing to an inability to The site has adequate arrangements to ensure access to meet the human right to safe drinking safe drinking water, sanitation and hygiene (WASH) for water and sanitation, the site must also all workers. Site is also using a self-assessment tool for continually work with relevant public evaluating access to water sanitation and hygiene sector agencies until this basic human (WASH) at work place. It covers the workplace facilities right to water and sanitation is fulfilled. related to water supply, sanitation and hygiene. 4.1.1 Documentation demonstrating They have EPA Testing. Records of water quality test compliance reports and self assessment (WASH) were available. Also all results found in compliance 4.1.2 (Catchments with stakeholders No such incident happend for unmet human rights. who have an unmet human right to safe Celebrating following drinking water and sanitation) Tree plantation with Govt Official – 21 March Documentation of efforts to work with World Water Day Environment -22nd March relevant public sector agencies to fulfil Beat Plastic Pollution -05th June human right to safe drinking water and MoU signed with Technical Muncipal administartion sanitation. “ Donating Water filteration plant” date June 13th , 2016. Criterion 4.2 4.2 Maintain or improve site water Many water relater initiative have been implemented balance: Meet the site’s water balance for improvement in site water consumption targets. Site water consumption have been reduced from 7.1% to targets. As noted in Criterion 3.2., 3.5% 2017-2018. Target of 2018-2019 is 5 % reduction. where water scarcity is a shared water challenge, the site must also continually decrease its water withdrawals until best practices are met and work with relevant public sector agencies to address the imbalance and shared water challenge. Note: if a site wishes to increase its water use in a water scarce context, the site must cause no overall increase in water scarcity in the catchment and depletion of the site’s water source(s) and encourage relevant public sector agencies to address the unlawful water use contributing to the imbalance in the catchment. 4.2.1 Measurement-based evidence Site water consumption have been reduced from 7.1% showing that targets have been met to 3.5% 2017-2018. Target of 2018-2019 is 5 % reduction.

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AWS Audit Report

4.2.2 (Water scarce catchments only) Site water consumption have been reduced from 7.1% Evidence of continual decrease or best to 3.5% 2017-2018. practice 4.2.3 (Sites wishing to increase They are providing training to public and community withdrawals in water scarce regarding water scarcity and they also have a different catchments only) Evidence of no net projects on water recovery increase in water scarcity Criterion 4.3 4.3 Maintain or improve site water The quality of source water is monitored. The quality: Meet the site’s water quality monitoring results shows quality degradation in term of conductivity which has increased from 800 – 900 ppm targets. As noted in Criterion 3.2., over the passage of 7 years (2009 to 2016). However where water quality stress is a shared these values are in safe range. water challenge, the site must also

continually improve its effluent for the Site management is engaged in activities to improve parameters of concern until best water related areas. These activities are focused on practices are met and work with reducing the water withdrawal and adopting best relevant public sector agencies to practices to avoid water quality degradation. Static and address the imbalance and shared dynamic depth of water table is being monitored on water challenge. Note: if a site wishes daily basis. to increase its water use in a water stressed context, the site must cause no overall increase in the degradation of water quality in the catchment and degradation of the site’s water source(s) and encourage relevant public sector agencies to address the unlawful water use contributing to the degradation in the catchment. 4.3.1 Measurement-based evidence Water quality test reports are available and all showing that targets paramenters found in safe range have been met 4.3.2 (Water quality-stressed They are only focusing to site water and improving this catchments only) Evidence of continual water improvement or best practice 4.3.3 (Sites wishing to increase effluent Site is strictly monitoring quality of its effluent water so levels of water quality parameters of that it doesnot harm the catchment water reserviors. concern in water quality-stressed Thrid party effluent quality test reports are avaiable as catchments only) Evidence of no net evidance that the effulents quality parameters are in degradation in water quality in the range defined by EPA. catchment Criterion 4.4 4.4 Maintain or improve the status of Site has intiatited some new project to reduce it water the site’s Important Water-Related consumption and following water conservation best practices. Site water consumption have been reduced Areas: Meet the site’s targets for from 7.1% to 3.5% 2017-2018. Important Water-Related Areas at the site. As noted in Criterion 3.2., where Important Water-Related Area degradation is a shared water challenge, the site must also continually

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AWS Audit Report

improve its Important Water-Related efforts until best practices are met, and the site must not knowingly cause any further degradation of such areas on site.

4.4.1 Documented evidence showing Yes, Site water consumption have been reduced from that targets have been met 7.1% to 3.5% 2017-2018 4.3.2 (Water quality-stressed Yes, water saving of 6300 m3 till Nov, 2017 catchments4.4.2 (Degraded Important Water-Related Area catchments only) Evidence of continual improvement or best practice Criterion 4.5 4.5 Participate positively in catchment Current water related projects include drip irrigation governance: Continually coordinate for maize crop to reduce water consumption, and cooperate with any relevant construction of check-dams and dug-wells to reduce catchment management authorities’ rain water runoff and etc efforts. As noted in Criterion 3.2, where water governance is a shared water challenge, the site must also continually improve its efforts until best practices are met 4.5.1 Documented evidence of the site’s Yes, minutes of meetings with government official, pictures, progress report and interviews with ongoing efforts to contribute to good stakeholders . Awareness session with Journal dated catchment governance Jan 29th , 2018 held. 4.5.2 (Weak water governance Continual Improvement is in place water awareness catchments only) Evidence of continual session dated March 22nd, 2018. improvement or best practice Criterion 4.6 4.6 Maintain or improve indirect water The community and Government and NGOs was use within the catchment: Contact the interviewed they appriciated the effort of Nestle. site’s primary product suppliers and water-related service providers located in the catchment and request that they take actions to help contribute to the desired water stewardship outcomes. 4.6.1 List of suppliers and service List of service providers is available and food service providers, along with the actions they provider has been identified as AWS stakeholder. have taken as a result of the site’s engagement relating to indirect water use

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AWS Audit Report

Criterion 4.7 4.7 Provide access to safe drinking The site has adequate arrangements to ensure access to water, adequate sanitation and hygiene safe drinking water, sanitation and hygiene (WASH) for awareness (WASH) for workers on-site: all workers. Site is also using a self-assessment tool for Ensure appropriate access to safe evaluating access to water sanitation and hygiene water, effective sanitation and (WASH) at work place. It covers the workplace facilities protective hygiene for all workers in all related to water supply, sanitation and hygiene. premises under the site’s control. 4.7.1 List of actions taken to provide Site management is; workers access to safe water, effective Providing clean drinking water to all workers sanitation and protective hygiene Continuously monitoring cleanliness through inspection (WASH) on-site Ensuring good condition of sanitation system Implementing best hygiene practices Criterion 4.8 4.8 Notify the owners of shared water- They have supplier list 15-20 holders with contacts related infrastructure of any concerns: Contact the owners of shared water- related infrastructure and actively highlight any concerns the site may have in light of its risks and shared water challenges. 4.8.1 List of individuals contacted and Maintained key messages relayed STEP 5: EVALUATE

Criterion 5.1 5.1 Evaluate the site’s water - 2.5 million PKR saving from water related areas - 16.5 % water saving have been achieved by stewardship performance, risks and water related projects benefits in the catchment context: Periodically review the site’s performance in light of its actions and targets from its water stewardship plan to evaluate: x General performance in terms of the water stewardship outcomes (considering context and water risks), positive contributions to the catchment, and water-related costs and benefits to the site. 5.1.1 Post-implementation data and Site water stewardship plan results are evident of site’s narrative discussion of performance efforts to minimize risk of static depletion of water and context (including water risk) table. 5.1.2 Total amount of water-related They have different water saving projects. Water saving costs, cost savings and value creation of 73920 PKR from water related areas for the site based upon the actions outlined in 3.2 (drawn from data gathered in 2.4.6) 5.1.3 Updated data for indicator 2.4.7 They have updated data for catchment which is Bari on catchment shared value creation Doab. based upon the actions outlined in 3.2 25 BV CERTIFICATION PAKISTAN 010-59683888 Nestle Pakistan Limited – Kabirwala Factory

AWS Audit Report

Criterion 5.2 5.2 Evaluate water-related emergency No water related emergency incident or extreme event incidents and extreme events: Evaluate occurred, hence no such evaluation available. impacts of water-related emergency incidents (including extreme events), if any occurred, and determine effectiveness of corrective and preventive measures. Factor lessons learned into updated plan. 5.2.1 Documented evidence (e.g., Maintained as presentation and also photographs annual review and proposed measures) Criterion 5.3 5.3 Consult stakeholders on water- Feedback was positive about the planned water related related performance: Request input initiatives in different nearby areas. from the site’s stakeholders on the site’ s water stewardship performance and factor the feedback/lessons learned into the updated plan. 5.3.1 Commentary by the identified Identified. stakeholders Criterion 5.4 5.4 Update water stewardship and They have water steward ship plan focusing to incident response plans: Incorporate sustaiable water balance,water governance,healthy the information obtained into the next status and quality iteration of the site’s water stewardship plan. Note: updating does not apply for initial round of Standard implementation. 5.4.1 Modifications to water They have updated as this is first water stewardship stewardship and incident response plan they mentioned indicator , responsibility and plans incorporating relevant mitigation as well. information STEP 6: COMMUNICATE & DISCLOSE

Criterion 6.1 6.1 Disclose water-related internal They have documented Internal Procedure for Alliance governance: Publicly disclose the for watersteward ship, They explained all 6 steps. They general governance structure of the have also Internal team for Islamabad like AWS Lead, site’s management, including the Corporate Public affair, AWS Link Nestle water, Fcatory Compliance Manager names of those accountable for legal compliance with water-related laws and regulations.

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AWS Audit Report

6.1.1 Disclosed and publicly available They have documented Internal Procedure for Alliance summary of governance at the site, for watersteward ship, They explained all 6 steps. They including those accountable for have also Internal team for Islamabad like AWS Lead, compliance with water-related laws Corporate Public affair, AWS Link Nestle water, Fcatory and regulations Compliance Manager

6.2 Disclose annual site water They have a web link for DISCLOSED SUMMARY OF stewardship performance: Disclose the SITE WATER STEWARDSHIP RESULTS, relevant information about the site’s http://www.nestle.pk/asset- library/documents/creating_shared_value/yearly- annual water stewardship water-ratio-trends-isf.pdf performance, including results against the site’s targets. 6.2.1 Disclosed summary of site’s http://www.nestle.pk/asset- library/documents/creating_shared_value/yearly- water stewardship results

water-ratio-trends-isf.pdf 6.3 Disclose efforts to address shared This was verified during stake holder interview of water challenges: Publicly disclose the Community, Industry and NGO and found satisfactory site’s shared water challenges and report on the site’s efforts to help address these challenges, including all efforts to engage stakeholders and coordinate and support public-sector agencies. 6.3.1 Disclosed and publicly available This was verified during stake holder interview of description of shared challenges and Community, Industry and NGO and found satisfactory summary of actions taken to engage stakeholders (including public-sector agencies) 6.4 Drive transparency in water-related They have CRP tool kit which was verified and foud compliance: Make any site water- satisfactroy related compliance violations available upon request as well as any corrective actions the site has taken to prevent future occurrences. Note: any site- based violation that can pose an immediate material threat to human or ecosystem health from use of or exposure to site-related water must be reported immediately to relevant public agencies. 6.4.1 Available list of water-related Yes they used compliance tool kit and CRP tool kit compliance violations with which was verified during audit and found satisfactroy corresponding corrective actions

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AWS Audit Report

6.5 Increase awareness of water issues The have communication on Intranet, and also notice within the site: Strive to raise the borad and also proviuded tarining from AWAS and in understanding of the importance of house and also thru WWF water issues at the site through active communications. 6.5.1 Record of awareness efforts The staff at different level interviewed and awareness (dates and communication) and, if level found satisfactory and also training is provided possible, level of awareness

7 Appendix B Competence of team members Mr Tariq Qumar Bureau Veritas Team Lead, approved Local AWS Lead Verifier, Certification, He holds a Bachelor Degree in Agriculture and M.Sc in Agriculture Pakistan Engineering. Before joining BV, he gained 12 years of working experience in food industries including water industries He passed the training and obtained the certificate of AWS Verifier and Lead Auditor for SA8000 and ISO 14001. He has good knowledge and fluency in Urdu & English languages.

Mr Imran Altaf Bureau Veritas Team Member, approved Local AWS source, Bhatti Certification, He holds a Bachelor Degree in Mechanical Engineering and Masters in Pakistan Business Administration (MBA). Before joining BV, he have 18 years of diversified experience in different industries including engineering services, foods, water and certifications. He is Lead Auditor for SA8000, ISO 14001, ISO 50001 and OHSAS 18001.He is also Lead verified for CDM. He has good knowledge and fluency in Urdu & English languages.

Ms May Huang Bureau Veritas Team Member, approved AWS Lead Verifier, Certification, China She holds a Bachelor Degree in Environmental engineering in Electrics and hydraulics of Wuhan University and a Master of Environmental Chemistry. Before joining BV, she gained 7 years of technical working experience in water treatment and environment protection. She pass the training and obtained the certificate of AWS Verifier and also Lead Auditor for ISO 14001.

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