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| Comunicaciones Celulares S.A. |
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| 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 | 28005 |
| Country | Guatemala |
| Sector | Information |
| Department | Global Inform. & Comm. Tech. |
| Company name | Millicom International Cellular S.A. - MIC |
| Environmental category | B |
| Status | Pending Approval |
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| Date ESRS disclosed | May 22, 2009 |
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| View Summary of Proposed Investment (SPI), click here |
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| Overview | Category & Applicable Standards | Key Issues & Mitigation | Community Engagements | Client's Documentation |
| Overview of IFC's scope of review |
The review of this project consisted of a visit by IFC staff to the project site, to meet with and interview Comcel management and to have a first-hand look at operational activities. IFC staff also appraised technical, environmental and social information submitted by Comcel, including:
- Technical specifications for site construction;
- Rollout process and Corporate Social Responsibility documentation; and
- Human resources policies and procedures. |
| Project description |
| The project consists of a corporate loan for the expansion and upgrade of Comcel S.A.’s 2G and 3G mobile network throughout Guatemala, including rural areas of the country. Comcel S.A. is the largest mobile telephony operator in Guatemala, with 4.5 million subscribers and approximately 45% market share. |
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| Identified applicable performance standards |
IFC’s environmental and social due diligence indicates that the principal Performance Standards (PSs) to be applied to this investment are:
- PS1: Social and Environmental Assessment and Management Systems;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health, Safety and Security.
PS5: Involuntary resettlement issues are not expected to arise in this project, as sites will not be developed if they would require resettlement.
PS6: Biodiversity conservation and natural habitat issues are not expected to arise in this project, as sites are chosen only in already-developed areas.
PS7: Indigenous peoples issues are not expected to arise in this project, as no local community members around sites will be from peoples defined as indigenous under PS7.
PS8: Cultural heritage issues are not expected to arise in this project, as sites will not be developed where such issues would arise.
Nevertheless, a condition of IFC’s investment will be that Comcel’s operations shall consider all relevant social and environmental risks and impacts, including issues covered in all IFC PSs. |
| Environmental and social categorization and rationale |
| This project involves the development of cellular tower sites. The key issues associated with the project are environmental, health, safety, and social management; construction of towers; labor and working conditions (including occupational health and safety); pollution prevention and abatement, and community security. The nature of the Company’s operations is such that no major adverse environmental or social impacts are expected to result from the project, and that it will be possible to avoid or mitigate any limited adverse impacts that might result. As a result, it has been classified as a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. |
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| Key environmental and social issues and mitigation |
The proposed project will upon implementation of the specific agreed measures comply with applicable standards including host country laws and regulations, IFC Performance Standards, and IFC environmental, health and safety guidelines. Comcel’s plans for environmental and social management are summarized as follows:
Environmental, Health, Safety and Social Management:
Comcel has adapted Millicom Group environmental and social policies and procedures to local circumstances, including procedures for site selection, site construction, waste management, and human resources management. These policies and procedures are in written form, and were being implemented well before IFC’s appraisal.
Comcel assesses risks and impacts relating to each potential tower site, and through its procedures for site selection, will avoid developing any site with sensitive environmental issues, or that would require physical or economic displacement of local community members. All relevant permits are obtained for each site.
Comcel’s policies and procedures will ensure that the company manages all relevant functions covered in IFC’s PS2 through PS8. Relevant environmental and social terms will be included in any agreements with contractors, and compliance with such terms will be monitored by Comcel.
Comcel has established a new, proactive Corporate Responsibility Program that has begun to implement initiatives in the areas of education, environmental protection, public health, poverty eradication, and disaster recovery. Comcel will consider merging responsibility for environmental and social management across its operations into its Corporate Responsibility Program.
Labor and Working Conditions
Comcel has 600 direct collaborators (i.e., workers), and 400 indirect collaborators who provide security, housekeeping, and sales. Detailed human resources policies and procedures are designed to ensure compliance with all applicable local labor laws and regulations. These policies and procedures promote the fair treatment, non-discrimination and equal opportunity of its collaborators, and include written procedures for handling grievances by collaborators. Recent surveys show satisfaction at work by 85% of Comcel collaboratorss, and Comcel has been ranked a the sixth best employer in Guatemala.
Comcel ensures that its collaborators are provided with appropriate personal protective equipment and health and safety training for the type of work in which they are engaged. For all of its offices, operational sites, switching centers, and retail outlets, Comcel employs appropriate measures for life and fire safety.
Retail operations are conducted through 60,000 points of sale. Vendors are typically not Comcel collaborators. Each one typically manages a small leased space, and not only sells products from other telecom companies, but often also sells various sundries.
Comcel will make commercially reasonable efforts to ensure that contractors’ employees who perform work related to core functions of Comcel for a substantial duration shall be provided a safe and healthy work environment, including appropriate training, protective clothing and equipment, and are not below the legal employment age.
Pollution Prevention and Abatement
Comcel will include relevant terms in agreements with contractors that cover pollution prevention and abatement. These terms shall require compliance with local requirements for manufacturing, transportation, operations including hazardous materials management, and obtaining permits. As a condition of IFC’s investment, Comcel will develop and implement an action plan – which it will reflect in its policies and procedures for site construction – to add secondary containment structures around fuel tanks as well as spill protection equipment at all Comcel facilities no later than the end of 2010.
The Company is developing an aggressive alternative energy program to roll out a network of solar panels that will power or partially power more than 60 of the company’s cell sites. This is expected to be the first telecom project financed by IFC that would finance the use of solar panels. The proposed use of solar panels can be expected to reduce impacts associated with generators and fuel tanks normally used in such a project.
Community Health, Safety and Security
Comcel engages security contractors who employ armed guards after performing background checks on candidates. The company will establish its own mechanism to receive and resolve any potential complaints from local community members on the use of force by any Comcel security services provider, and will ensure compliance with PS4.
The company will include terms in every security services contract to provide for a written procedure on the proportional use of force, and for training on the use of force to be provided to each guard on a regular basis. Comcel has committed to monitor compliance with such terms. |
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| Client's community engagement |
| Comcel recognizes has in place procedures for prior disclosure of the development of new tower sites to local communities 30 days before construction begins, and for resolving complaints or grievances. It employs a senior officer to work full time on disclosure and community engagement. Comcel is committed to complying with local codes and IFC Performance Standards on disclosure and community engagement. |
| Local access of project documentation |
Mr. Mynor Rebuli (Treasurer)
Telephone + (502) 2428-1009
Fax + (502) 2428-1155
Km. 9.5 Carretera a El Salvador
(CA1) Edificio Plaza Tigo
Santa Catarina Pinula, Guatemala |
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| Availability of Full Documentation |
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| Information Disclosed |
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