Duoc Growth

Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.

Project number	28539
Country	Chile
Sector	Education Services
Department	Health and Education
Company name	DUOC UC
Environmental category	B
Status	Pending Disbursement

Date ESRS disclosed	August 21, 2009

Previous Events	Signed: September 30, 2009 Approved: September 25, 2009

View Summary of Proposed Investment (SPI), click here

Overview

Category & Applicable Standards

Key Issues & Mitigation

Community Engagements

Client's Documentation

Overview of IFC's scope of review

IFC’s environmental and social review included review of project information and documents provided by the sponsor, and field visits to their operation in Chile.

Project description

Duoc is a leading higher education institution in Chile providing technical degrees, vocational training and professional degrees to a student body of over 50,000. The University operates in 12 campuses and provides more than 80 different degrees, including nearly 50 technical degrees and more than 30 professional degrees. Its market share in the Chilean higher education sector is around 6%.

The project involves land acquisition and a two-phase construction (17,000 m2) of the “Maipu Campus”, with combined student capacity of 5,500 students.

Key environmental and social issues and mitigation

1.0 Environmental, Health and Safety, and Social Assessment and Management Systems:

Duoc operates following the law and regulations of Chile, and has an OHS and life and fire safety management system (PEC, a system combining some elements of ISO 9000, ISO 14000, and OSHAS 18000) that regulates their safety operations. Duoc has 8 sub-centres in Santiago (San Carlos de Aponquindo, Puente Alto, Plaza Vespucio, Plaza Oeste, Padre Alonso de Ovalle, Antonio Varas, Alameda, Melipilla), Vina del Mar and Valparaiso in the Region of Valparaiso, Concepcion in the Region of Bio-Bio, the Liceo Politecnico Andes (high school for technical training) and Casa Central. As per the Environmental and Social Action Plan (ESAP), Duoc will upgrade its management system encompassing social, occupational health and safety, human resources, and environmental affairs management for all its operations. The upgraded ESMS (Environmental and Social Management System) shall comply with Chilean regulations and IFC policies and performance standards. The ESMS will also specify operating policy requirements as well as basic procedures that must be in place for quality control and compliance during construction and operational phases (pollution loads, solid waste, OHS, life and fire safety, facilities for the handicapped, management of hazardous materials, etc.). Duoc will implement a formal system for monitoring and reporting social and environmental to senior management and for reporting back to IFC. As a whole, the environmental and social management system (ESMS) will provide adequate assurance of Duoc’s ability to manage all aspects of operations in all campuses and the means to communicate management-approved decisions to employees.

Duoc has agreed to formalize the corporate managerial duties for environmental and social performance in all operations.

Duoc will update its “Induction Document” and will implement a training programme on Environmental and Social issues, as part of the induction for new employees. Such training will be also provided to current professors and employees.

Consistent with the requirement of Performance Standard 1, Duoc will develop a corporate formal system for community engagement and grievance mechanism, and will ensure it is clearly communicated by posting on Duoc’s website and included in relevant written public communications at the facilities.

2.0 Labor and Working Conditions

Duoc has a widely recognized “Open Door” and “Fair treatment” non-discriminatory policy for its workforce. There is no evidence of restriction of freedom of association and Douc practices collective bargaining. The Union leader (Union: “Sindicato Nacional de Trabajadores Duoc”) indicated satisfaction with Duoc’s relationship with employees, and a pride to be part of Duoc’s family. Duoc provides loans to employees for health, home improvements, catastrophe’s relief, accidents, education, and others as evaluated by Human Resources and senior management. The Ministry of Labor conducts regular labor audits, a normal procedure in Chile.

In 2009 Duoc reports 3631 employees, of which 2457 are professors at the different campuses. Thirty-five percent of the workforce is women. As part of their moral principles established to relate to students, employees, and public Duoc has implemented an “ethic salary” of Chilean pesos 286,225, USD 540 (over the country minimum wage of Chilean wage 165,000, USD 312). Overtime is paid according to a system agreed with employees. No work carried out at Duoc is ever done under any form of forced labour conditions. No identity documents of workers are ever deposited with management during employment for any reason. No indentured, or bonded labor was found. Duoc observes in full ILO conventions 138 and 182 concerning child labor.

Duocs’s labour practices are defined in the “Reglamento Interno de Higiene y Seguridad” for existing procedures and in service contracts. These documents provide specific rules and define Duoc’s practices related to transparency in labor practices. Duoc adheres to the national labour law for Chile, but has not implemented a corporate human resources policy. In accordance with the attached environmental and social action plan (ESAP) Duoc will develop a corporate human resource policy management system procedures and labour contracting specifications to ensure full compliance with labor law in Chile and IFC Performance Standard 2. The update shall specifically include reference to non-discrimination, freedom of association and collective bargaining, and safeguards to further ensure that child labor and forced labor is not used directly or through contractors, and will submit the policy to IFC for review. The corporate human resources policy will apply to all campuses and will be implemented and managed by the Human Resources Division. Duoc will communicate the policy document to all current employees, and those contracted in the future, as part of the induction process

An informal mechanism is in place to address workers grievances, and will be formalized by Duoc at the corporate level. Duoc will modify its human resources policy and procedures to develop and formalize a corporate employee grievance mechanism, to be managed by the Human Resources Division, and included in the integrated ESMS as part of labor management practices and efforts to achieve transparency in compliance with Performance Standard 2. Duoc will submit the grievance policy to IFC for review. Duoc will further disseminate the grievance process as part of its ESMS.

An emergency contingency plan has been developed and implemented by DUOC. All life and fire safety regulations are in place and training on handling fire equipment is conducted periodically with attendance of all employees, including senior management. The Duoc will develop and implement a training plan to ensure that all students and employees are knowledgeable of existing emergency procedures and emergency contingency plans, including evacuation routes. The emergency procedures will be communicated to parents and the community by posting on Duoc’s website. Duoc will perform three fire drills per annum (two partial and one general) in all corporate operating campuses.

Duoc provides service contracting firms (Temporary Labor Firms and Contractors) with a manual that includes health and safety requirements just as with fixed staff. For all such service firms, Duoc does not complete full payment until evidence is provided that the contractor has registered all employees and made all social security system payments (health, pension and professional risk). As per the ESAP, Duoc will develop more rigorous reporting requirements and introduce pertinent sections in contracts, in order to ensure that supply chain contractors are in compliance with: payment of workers’ legal benefits; timely payment of wages; occupational safety regulations, including provision of potable water and personal protective equipment, and ILO Conventions 138 on Minimum Age and 182 on Worst Forms of Child Labor.

Duoc has contracted catering services at each of the campuses, and will develop and implement a corporate plan to IFC that will include supervision of adequate storage and handling of food and chemical cleaning items in all catering facilities.

The Duoc has a nationally recognized certification (Mutual) to handle occupational health and safety (OH&S). During appraisal, the Campus of Valpariso received the safety prize from Mutual de Seguridad (CChC). The mission found a need for Duoc to ensure that all contractors make available PEP’s to their workforce. Duoc will further ensure that these are constantly made available, properly used, and replaced when they wear out. Duoc has installed emergency warning devices and signals in all their premises, and has agreed to further improvement in the display of signals and emergency warning devices to allow clear identification of evacuation routes and further ensure safety of the students, public, and workforce. This plan should consider pavement markings, wall signals, warning signs, and
tools, according to international standards, to indicate evacuation routes and alternate means of escape, meeting points for people to gather and ensure that everyone has left the danger zone. As per IFC requirements, Duoc will provide third party certification by a qualified professional acceptable to IFC that the design and construction of life and fire safety systems for Maipu and all new buildings complies with the specifics of IFC life and fire safety guidelines. To date, no deadly accidents have been reported at Duoc.

3.0 Pollution prevention and Abatement

Duoc consumes annually 8,836,777 KWh; 25, 129 liters of gasoline; and 15,151 liters of Diesel. Duoc does not exceed 100,000 tons CO2 equivalent. Duoc will implement an energy reduction plan, and will motivate employees and students and stimulate ideas for reduction of energy use in all campuses.

Duoc operates 12 Diesel-fired generators for energy emergency purposes. Altogether the 12 generators are used less than 50 hours per annum in total, and only for maintenance purposes.

Liquid effluents from operations in all Duoc campuses are discharged into the municipal sewage system. There are no discharges of effluents to surface waters.

All campuses produce some 7,600 m3/year of solid waste (inorganic, organic, masonry trash, etc.). These are managed in accordance with regulatory municipal agency permits. Duoc has no hazardous waste. Chemical substances used in training laboratories are stored and residues disposed in a safely manner in line with international standards.

4.0 Community Health, Safety and Security:

Some campuses of Duoc are surrounded by residential neighborhoods. Duoc keeps a good relationship with neighboring communities, and as part of the ESMS will formalize a community engagement plan.

5.0 Land Acquisition and Involuntary Resettlement:

According to legal documents presented by Duoc during appraisal, all their land acquisitions or rentals are done within a willing buyer-willing seller framework.

6.0 Biodiversity Conservation and Sustainable Natural Resource Management:

Natural or critical habitat or endangered species: There are no legally protected areas where the campuses of Duoc are located. Duoc operations do not involve modification, conversion, or degradation of any critical habitats.

Water management: Duoc uses 152,324 m3/annum of water that comes from public source. Duoc has institutionalized a water saving plan in all campuses, and all facilities have pressurized systems to save water.

Duoc management has contracted a licensed pest control company to eliminate rodents and insects from campus premises. To protect students and employees, Duoc has agreed to eliminate as feasible WHO Class 1a and 1b chemical formulations for pesticides in their premises. Duoc will develop a corporate proposal to upgrade the pest management strategy in all campuses, provide adequate evidence of procedure incorporation into management
systems procedures manuals; and, dissemination of the procedure. Duoc will ensure that contractors and suppliers are in compliance with providing adequate personal protection equipment. Duoc will provide to IFC the protocol for cholinesterase analysis for workers in contact with WHO Class 1a and 1b chemical formulations. Each year Duoc will include the cholinesterase results in the AMR, and will inform IFC if there is any rotation policy of workers in contact with WHO Class 1a and 1b pesticides.

7.0 Indigenous People:

The appraisal mission found no evidence of indigenous people in the area where the campuses of Duoc are located.

8.0 Cultural Heritage:

Duoc is active in management and restoration of national monuments. Has implemented a study programme at Valparaiso Campus to train professionals in architectural refurbishment work. Duoc will develop and implement a plan to preserve the buildings at Alonso de Ovalle in Santiago, and Luis Cousinio in Valparaiso and report annually progress to IFC. The plan will include continuing maintenance of the two historic buildings, and the retrofit of life and fire safety systems and equipment to comply with IFC general environmental, health, and safety general guidelines. Duoc will present to IFC the Refurbishment Plan for the two buildings, and will provide adequate evidence of procedure incorporation into management systems procedures manuals; and, dissemination of the procedure.

Client's community engagement

DuocUC, through its Pastoral leadership, develops different social impact programs that benefit the community (training, missions, voluntary work, “Nazaret activities”, service and learning collaborative projects, “put your hands”, etc.), oriented specifically to institutions that support people at social risk y and with limited economic resources. More than 1,200 DuocUC students participate in these activities, which have benefited more than 5,000 people throughout Chile. The administrative and teaching staff of the institution also support these initiatives through food and clothing donations.

Additionally, the Pastoral leadership supports the Church, providing the institution’s infrastructure and developing training for its staff. Along these lines a Diploma of Ecclesiastical Management for secretaries is offered, developed in the Archdiocese of Concepcion, with 38 secretaries receiving training; in the Diocese of Melipilla, another 37 secretaries received training; and in the Diocese of Valparaiso, 36 secretaries received training. Finally, last year in the Archdiocese of Santiago, the IV version of this diploma began being offered, achieving the training of 120 secretaries.

With respect to human resources, a Pastoral direction is in place, which has a Pastoral coordinator and a chaplain in each campus, who are in charge of developing these programs jointly with the students at each campus.

In 2009, $157,059 will be used for these activities.

Additional information can be found at www.pastoral.duoc.cl

Local access of project documentation

Fundacion Instituto Profesional DuocUC
Eliodoro Ya�ez 1595, Piso 12
Providencia, Santiago, Chile
Tel. 56-2-354 0151

Duoc - Maipu
Sr. Vladimir Sagredo
Avda. Esquina Blanca 501 (Ex-506)
Maipu, Chile
Tel. 569-83423607

To comply with IFC requirements for local disclosure, Duoc will translate the content of the ESRS and the Environmental and Social Action Plan (ESAP) into Spanish and make these documents available locally at Duoc Casa Central (Duoc Headquarters), and at Maipu, the city where the construction will take place. For this purpose, Duoc will provide the address and phone number in the Spanish translation of the ESRS.

Duoc will place newspaper advertisements in a newspaper of nationwide circulation and in a local paper at Maipu if available, stating where information about the project and associated impacts and mitigation measures will be found.

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