Aier Eye

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	24778
Country	China
Sector	Health Care
Department	Health and Education
Company name	Changsha Aier Eye Hospital Group Co., Ltd.
Environmental category	B
Status	Active

Date ESRS disclosed	September 18, 2006

Previous Events	Invested: November 16, 2006 Signed: November 6, 2006 Approved: October 25, 2006

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

An IFC Environmental Specialist visited the Shanghai Aier Hospital on July 31, 2006 and met with Dr. James Wood, Strategy Planning Manager. IFC Specialists reviewed an Appraisal Information Questionnaire completed by the sponsor, as well as a number of documents sent by the sponsor, including operational procedures, drawings and photos of their facilities, and descriptions of their facilities and operations. Specialists also spoke with Mr. Leping Jiang regarding medical quality control and infectious disease control issue; and Mr. Gang Xu about new projects and facilities.

Project description

The proposed project is an expansion of Changsha Aier Eye Hospital Group Co., Ltd (Aier Group or Aier), the largest private eye care network in China, headquartered in Changsha, Hunan Province. It currently operates several full service eye hospitals in different cities, and includes the expansion and renovation of a number of other hospitals. There is also a proposed establishment of an Optometry School, as mentioned below. Each hospital is located or to be located in rental property in the commercial area of each city, with access to convenient public transportation.

The project involves:

The establishment of two new full service specialist eye hospitals in:

- Chongqing, a major city in southwest China; and
- Haerbin, capital city of Heilongjiang Province in northern China.

The relocation and expansion of existing eye hospitals in:

- Wuhan, capital city of Hubei Province in central China;
- Chengdu, capital city of Sichuan Province in southwest China;
- Hengyang, a second tier city in Hunan Province in central China.

The relocation and upgrading of eye care centers previously located within public hospitals, to stand alone eye hospitals in:

- Hefei, capital city of Anhui Province in central China;
- Nanchang, capital city of Jiangxi Province in central China;
- Nanning, capital city of Guangxi in southern China;
- Zhuzhou, Shaoyang and Yueyang, three second tier cities in Hunan Province.

The establishment of a joint Aier Optometry School, located in Changsha, with the cooperation of one of the top ranking medical schools in China.

Key environmental and social issues and mitigation

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. Further information is provided in the attached documentation, the Corrective Action Plan (CAP).

- Site Description and Potential Land Acquisition:

All of the existing Aier Eye Hospital facilities (6) are located in urban areas, in exiting medium to low rise buildings, with the exception of Hengyang Aier, which leases the 4th floor of a 12 story high rise office building. Several older, existing facilities operate in renovated space in a building, where they share the space in some cases, with other facilities. However, the more recent Aier Hospital facilities, although still renting space, more often than not, are the only tenant in that particular building, which has been renovated with the sole purpose of operating the Aier Hospital. The sponsor has no intention of building any purpose built buildings for any of their facilities, which are located in urban downtown areas, therefore land acquisition and resettlement is unlikely to be an issue.

The sponsor has completed an Environmental Assessment for each of their facilities as part of their project preparation phase and in the context of the Chinese Environmental Protection Bureau requirements. According to the sponsor, no impacts were identified in the EIAs completed for the existing facilities up to this point. Additionally the Chinese Health Bureau has stringent requirements and inspects facilities regularly against these standards, and as a result, management programs are understandably geared to passing these inspections. All the facilities are connected to the national electrical grid as well as the municipal water and sewerage services in each location. There are no generators used and no air emissions from the facilities. All facilities use bottled water for drinking water and sterilized water for medical procedures. Three of the larger hospitals (Wuhan, Changsha and Hefei) have water purification systems, as will all future facilities.

- Environmental and Social Management Systems:

The sponsor has policies and comprehensive procedures in place at the corporate group level and at each hospital where they may have adjusted these procedures to fit their specific operations. The company recently received ISO 9001 certification for the Wuhan Aier Hospital and they plan to pursue this accreditation with their other facilities in the future. The company has agreed to commit to this at a corporate level and to work to adopt a formal management system in each existing facility and in future facilities as they are established. This commitment to an integrated Management System, using ISO 9001 as a basis, will be made as a Condition of Disbursement and the time line will be agreed between IFC and the sponsor, to be reviewed annually at supervision. The sponsor will report on each of the facilities using agreed upon statistics in the Annual Monitoring Report (AMR) which will be sent to IFC annually for the life of the loan. IFC will work with the sponsor incorporate a cycle of continual improvement throughout the group.

- Infection Control Procedures:

The sponsor has at the group level specific Infections Control Procedures which are in turn in place at all facilities. There is routine monitoring at the individual facility level and semi-annual inspections by the group of individual facilities, as well as what is required by the Health Bureau.

- Water Quality:

Bottled water is used for drinking at all hospitals. Tap water is used for other purposes such as cleaning, and laundry. As mentioned, some facilities currently have water purification systems and all future hospitals will have purification systems. Water quality does comply with national drinking water standards at all facilities. The sponsor will complete potable water testing at each of their facilities to ensure compliance with IFC guidelines in their Annual Monitoring Report (AMR). As well they will have their bottled drinking water tested annually to ensure it is in compliance with IFC guidelines and include that report in the AMR as well.

Liquid Waste Management: Liquid waste is disposed in the municipal sewerage systems for all facilities. The District Environmental Monitoring Station monitors and tests the waste water prior to its entering the municipal system. A contract with the Municipal Waste Water Station concerning the pretreatment of one of the facilities (Shanghai Aeir Hospital), as well as the data from the Monitoring Station was reviewed by IFC. Residual Chlorine levels are within the WHO standard. The company will send the District Environmental Monitoring Reports from each facility on the pretreated waste water to IFC as part of their AMR.

- Solid Waste Management:

Medical waste is managed according to the requirements of the Chinese Health Bureau. Waste is collected daily by an appropriately authorized (by the Health Bureau) third party disposal company and disposed of in either land fills or incinerated, depending on the type of waste. Wastes, such as sharps, are handled appropriately according to best international practice. Office waste is collected by the municipality daily and disposed of in land fills.

- Emissions to Air:

Air emissions are limited to ventilation extraction points which are via HEPA filters. The air conditioning plants are reverse cycle units, for example at the Shanghai Aier Hospital. Hot water is heated by heat recovery from the air conditioning. – i.e. no fossil fuel used for domestic hot water heating systems. Additionally there are no generators used, all facilities are connected to the grid, with a UPS for the operating theatres.

- Life and Fire Safety:

The sponsor has submitted the drawings of five of the hospital facilities (Wuhan, Changsha, Chongqing, Shanghai and Zhuhou ) for IFC to review and they are generally in compliance with the IFC Life and Fire Safety Guidelines. To address the issue of Life and Fires Safety further, the sponsor has agreed to prepare a corporate wide Life and Fire Safety Master Plan (L&FSMP) based on the IFC L&FS Guideline for all of the Aier Hospital Facilities. The sponsor will use this L&FSMP as a guideline for selecting any new property to rent for renovation and relocation of new facilities, as well as the properties expected to be relocated in 12 to 18 months. They will also review all existing hospitals and outline a Corrective Action Plan if necessary. Implementation of this time bound plan will be monitored during annual supervision of the project.

- Labor and Working Conditions:

Most of the staff are professionals, such as doctors and nurses, with some support and cleaning staff. Aier Hospitals do not use any contract employees. Staff safety is the joint responsibility of the Director of the Administration Department and the Hospital Director for each facility. The company facilities have lecture theatres at some locations and multiple meeting rooms and train their staff regularly on a wide range of issues. Labor and working conditions comply with Chinese labor laws.

IFC PROJECTS