City School

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

28932

Country

Pakistan

Region

Middle East and North Africa

Sector

Elementary and Secondary Schools

Department

Reg Manufact, Agri & Services, EMENA

Company name

The City School

Environmental category

Status

Hold

Date ESRS disclosed	May 6, 2010
Last Updated Date	February 8, 2012

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

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. The review of this project consisted of appraising information provided by the Sponsor related to technical, environmental and social issues, as well as visits to some of the Sponsor’s existing school premises in Lahore and Karachi, Pakistan.

Project description

The City School (TCS or the “Company”) was established in 1978 as a Pakistani company operating a network of Kindergarten (KG) to Grade 12 (K-12) schools. TCS operates 158 schools in 45 cities across Pakistan offering Pakistani curriculum and Cambridge International Examinations (CIE) O- and A-level examinations. In 2003, TCS expanded internationally to operate a school in Dhaka, Bangladesh, followed by establishing another campus in Dubai, UAE in 2006 and in 2007 in Jeddah, Saudi Arabia. TCS has 6 regional offices and head office in Lahore, Pakistan. The facilities serve about 54,291 students within 155 schools.

TCS intends to pursue an aggressive expansion plan both within and outside Pakistan. This expansion entails the establishment of new schools in newly-constructed facilities as well as on rented campuses. TCS plans to expand its operations locally through the construction of 19 new and add-on purpose built campuses in major urban centers. TCS international expansion plan is to establish additional schools in Saudi Arabia, UAE, and Bangladesh, as well as in the Philippines.

TCS will split its Pakistan business between an operating company (Opcoo) and a real estate company (Propco). The real estate company will own all current Pakistani lands and buildings and all future land associated with the new purpose built campuses, and will lease the property to the Holdco company under long term leases for construction of new campuses.

Key environmental and social issues and mitigation

The key environmental, social, health and safety impacts associated with the project include the sponsor’s ability to manage Environmental, Health and Safety (EHS) issues consistently across operations in different countries; employment practices and working conditions during construction and operations; life and fire and safety (LF&S), energy efficiency and ‘green building’ opportunities; and management of liquid, solid waste and potable water supply. The information about how these potential impacts will be addressed by TCS is summarized in the paragraphs that follow. Actions are summarized in the attached Environmental and Social Action Plan (ESAP).

Social and Environmental Assessment and Management Systems

Under the requirements of the Pakistan’s Environmental Protection Act 1997, sponsors of new or expansion projects are required to prepare an initial environmental examination (IEE) or, where the project is likely to cause an adverse environmental effect, an environmental impact assessment (EIA) study. On the basis of the IEE or EIA study, the Pakistan’s Environmental Protection Agency (EPA) grants environmental clearance for the project. Because most TCS schools were constructed prior to the law coming into effect, environmental clearances were not required. TCS will submit copies of the required clearance/exemption for the other premises in accordance with the timeframe outlined in the attached ESAP. For future expansion plans, copies of the subsequent EPA clearances and permits will be provided to IFC, as outlined in the attached ESAP. In compliance with national requirements, an IEE will be prepared for any new premises constructed. The IEE will be carried out by a qualified consultant team against the requirements of both host country regulations as well as IFC’s PSs.

Since its inception, the Company has moved towards a business model where key functions such as human resources, finance and administration are centralized and conducted at the head office, whereas the day-to-day running and management of schools are delegated to school heads and regional offices. TCS recognizes the need to develop an environmental, health and safety (EHS) management system, as well as facility guidelines and maintenance procedures, and incorporate these into a comprehensive social and environmental management system (SEMS) to guide the operation of its existing facilities and future acquisitions. The SEMS will ensure compliance to applicable host country(s) environmental and social regulations as well as IFC’s PSs and guidelines, and will be implemented at corporate level in accordance with a timeframe agreed with IFC. The SEMS will include a provision that future acquisitions are screened against IFC PSs, IFC guidelines and national requirements, and that corrective action plans are prepared and implemented for gaps identified. The SEMS will include a land acquisition procedure that complies with the requirements of PS5 to cover instances (if any) in which land is not acquired on a willing buyer-willing seller basis. TCS has agreed to implement the SEMS throughout all its facilities and future expansion.

Host country regulatory requirements for educational premises in Pakistan, Bangladesh, Saudi Arabia and UAE require compliance with building codes, including life and fire safety (L&FS) codes, prior to receiving an operational license. TCS’s existing facilities have complied with all national L&FS requirements. TCS has in place a decentralized school inspections program, and part of the key areas of evaluation is emergency response planning. TCS have in place an acceptable emergency response plan in head office and some of the schools. TCS will review these emergency response plans to prepare a master plan including fire, hazard, assault, violence and personal injury, and will be adopted at each of TCS’ school facilities, in accordance with a timeline agreed with IFC.

TCS has reviewed IFC’s guidelines related to Life & Fire Safety (L&FS); including the requirement to develop an L&FS Master Plan that identifies major fire risks, applicable codes, standards and regulations, and mitigation measures. The L&FS Master Plan is to be prepared by a suitably qualified professional acceptable to IFC who certifies that the design meets the requirements of IFC’s Life and Fire Safety guidelines. The qualified professional who prepares the L&FS Master Plan will undertake a review of L&FS systems testing and commissioning of existing facilities and new acquisitions and certify that construction of these systems has been carried out in accordance with the accepted design; the findings and recommendations of this review may be incorporated into the ESAP, as needed, along with a mutually acceptable time frame for implementation.

Labor and Working Conditions:

At present, full time staff number approximately 6970 employees including about 4028 teaching staff, 4132 females and 419 contract or part time staff. Staff Manuals and general HR policies are present at both the facility and TCS level. All newly-hired employees undergo a probation period as permitted by host country labor law requirements. TCS has confirmed that it complies with all host country labor laws in the countries in which it operates. TCS has a comprehensive HR manual and procedures. The system will be reviewed to including grievance mechanism that conforms fully to all PS2 requirements as well as host country labor law and regulations. TCS has a group health insurance policy with Allianz EFU Health Insurance Limited. The group policy indicates that insurance will be offered as part of employee benefits after passing the probation period of 1 year; currently there is 4007 individuals covered under the policy. TCS will consider extending full medical coverage to all employees as part of the HR system.

TCS has put in place a comprehensive-in-service training (INSET) program, which includes a diploma arrangement with the University of Strathclyde, Manchester Metropolitan University and the University of Edinburgh. Overall 78% of TCS teachers are trained at the certificate level and 5% of total teacher contact time is allocated to professional development

The facilities in all countries are equipped with laboratories and some of the facilities are equipped with appropriate OHS equipment including laboratory goggles, gloves, first aid kits and fire blankets. The company has agreed to include in its Operation Manual all aspects of laboratory(s) and clinic(s) management to address OHS procedures and safeguards to be standardized in all operations.

Pollution Prevention and Abatement:

TCS’s strategy is to acquire or develop facilities in urban areas where infrastructure facilities of water supply, wastewater collection and power are supplied by relevant municipalities In addition to classrooms, the Group’s facilities may include laboratories, cafeterias, washrooms, and auditoriums. None of the facilities includes dormitories, as all students are day scholars. All premises in Pakistan are equipped with standby diesel generators. Proper handling and storage of fuel will be included in the Standard Operating Procedures (SOP) manual. Schools utilize a limited number and volume of hazardous materials. Small volumes of chemicals used in high school science laboratories and cleaning solvents are stored in locked and controlled rooms; handling procedure of all outdated chemicals are not well managed. As part of the SOP manual, procedures for handling of hazardous material will be recommended to be incorporated in all TCS operations. In addition, TCS will ensure that all schools obtain and post copies of the appropriate Material Safety Data Sheets (MSDSs) in the chemical storage rooms. In facilities where a pool is part of the amenities, an ultraviolet (UV) water sanitation system will be installed to eliminate use of gaseous chlorine. Pool waste water will be dealt with as per government guidelines.

The City School architectural and projects department, under an internationally known consulting architect and other specialist school architects, has a set of procedures for Health and Safety during construction of schools and campuses. TCS, during construction stages of the new facilities, will adhere to IFC EHS guidelines and monitor air, water and noise on a monthly basis per the national requirements. TCS will explore the opportunity of utilizing “green building” schemes in the expansion program.

Community Health, Safety and Security:

As noted above, TCS will submit a life and fire safety Master Plan to IFC for its existing facilities. The Company will also put in place a disaster response plan for earthquakes, fires and other large scale emergency situations.

Given the current unrest in many parts of Pakistan, TCS has hired security personnel equipped with firearms to secure their premises. Security measures are governed by the national requirements. TCS has in place a safety and security program that covers training and having supervisors in the 4 regions of TCS’ operation. As part of IFC’s investment requirements, TCS will ensure that third party security forces adhere to PS 4, and will establish a community grievance mechanism as part of its SEMS system. These items are included in the Action Plan.

Land Acquisition and Involuntary Resettlement
TCS international expansion plan is to construct one new purpose built campus in Jeddah. It may also open rented campuses in Jeddah, Riyadh and Khober. TCS will open a new school in the Dhaka with an expected capacity of 1,300

Most of the land owned or leased by TCS has been acquired from respective owners on a “willing buyer-willing seller” basis. The company carried out appropriate due diligence before acquiring these properties and confirmed that the land leased and acquired by TCS did not displace local populations, either physically or economically. TCS recognizes that a proactive procedure for screening future land acquisition is needed. The company has reviewed the requirements of PS5 and will adopt a land acquisition ‘screening’ procedure in order to formally assess and document that no involuntary resettlement has occurred as a result of its expansion program.
Cultural Heritage
In Pakistan, a mazar (shrine) is found in every town or city. Most of TCS’ premises are not located in proximity to any shrine. TCS has indicated that it will include a process for identifying and responding to the presence of cultural heritage resources at future developments, and will ensure that its policy and procedures in this regard are incorporated in its SEMS and comply fully with PS8.

IFC PROJECTS

RECENTLY DISCLOSED