MedLife II

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

29638

Country

Romania

Region

Europe and Central Asia

Sector

Hospitals and Clinics

Department

Reg Manufact, Agri & Services, EMENA

Company name

MedLife SA

Environmental category

Status

Active

Date ESRS disclosed	May 24, 2010
Last Updated Date	February 8, 2012
Previous Events	Invested: August 23, 2010 Signed: June 30, 2010 Approved: June 29, 2010

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 review of this project consisted of reviewing previous Annual Monitoring Reports submitted to IFC, evaluating additional documentation provided by Medlife, interviews with the management team including quality control, human resources, engineering, infection control and site visits to the MedLife Memorial Hospital and MedLab laboratory in Grivita, two operational hyperclinics as well as to the locations of future expansions in Bucharest. Medlife.

Project description

MedLife is a successful private healthcare provider headquartered in Bucharest planning to invest up to EUR 20 million in 2010 – 2013 to expand operations in Romania: i) build a 2nd, 120-bed, hospital in Bucharest; ii) add 7 hyperclinics (2 in Bucharest and 5 in smaller cities across Romania) and 2 laboratories (outside Bucharest); and iii) target acquisitions of smaller outpatient clinics, laboratories and hospitals outside Bucharest.
IFC made its first project with Medlife in 2006 and has considered this second investment given Medlife’s commitment and good performance in social and environmental sustainability.

Identified applicable performance standards

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment may have impacts which must be managed in a manner consistent with the following Performance Standards:

PS1: Social and Environmental Assessment and Management Systems;
PS2: Labor and Working Conditions;
PS3: Pollution Prevention and Abatement;
PS4: Community Health, Safety and Security.

There is actually no issue related to PS5 Land Acquisition and Involuntary Resettlement, given the fact that MedLife rents uninhabited buildings for its current expansion projects. Hospitals, clinics and laboratories are located within urban areas, no issues have been identified in relation with PS6, PS7 and o PS8, namely biodiversity conservation and sustainable natural resource management, indigenous people and cultural heritage. Nevertheless, the Company will incorporate all IFC Performance Standards on Social and Environmental Sustainability into its management system and will accordingly evaluate new expansion projects to ensure operation in full compliance with IFC requirements.

Environmental and social categorization and rationale

Key issues for this project taken into account during appraisal include site selection, land acquisition and permitting; corporate environmental and social management systems, including management of construction and operations of the hospitals/clinics, management of solid and liquid waste, in particular hazardous medical wastes and water quality; air emissions control, occupational health and safety activities, prevention of nosocomial diseases; life and fire safety and consideration of seismic risks within the context of the protection of community health and safety. The appraisal concluded that any impacts will be limited, site-specific and can be addressed by adhering to generally recognized performance standards, guidelines or design criteria. Therefore, this is a Category B project according to IFC’s Environmental and Social Review Procedures.

Key environmental and social issues and mitigation

Description of the key issues and mitigation measures are described in the paragraphs below. Furthermore, Medlife has agreed to implement an Environmental and Social Action Plan which is enclosed with this report.

PS1: Social and Environmental Assessment and Management Systems

Management Systems and Assessment: MedLife hospitals and hyperclinics operate under management systems established and certified in accordance with the international standards of ISO 9001:2008, ISO 14001:2005 and ISO 18001:2007. The medical laboratories are accredited to the international standard of ISO 17025:2005 which is specific about competence of calibration and testing laboratories and to the ISO 15189:2007 which describes medical laboratories norms. The accreditation will be extended to the expansion projects. Medlife is also targeting the accreditation of its health care services under the standards set by Joint Commission International which is an assessment and certification body accredited by International Society for Quality in Health Care and recognized by World Health Organization. Medlife hospitals, clinics and laboratories are subject to regular inspections by the Ministry of Health of Romania to ensure on-going compliance with local regulations.

Development stages of new hospitals and clinics, including planning and design, construction and start-up are subject to assessment and approval by regulatory authorities according to national regulations which refer to internationally agreed standards, particularly to EU regulations and norms. Construction safety, life and fire safety, water supply, wastewater discharge, handling and disposal of wastes require permits and licenses. Medlife will provide IFC with the copies of the third party assessment documents and licenses for its facilities and relevant action plans to remain in compliance.

Medlife will conduct social and environmental due diligence to ensure compliance to the IFC’s performance standards, for all new projects, acquisitions and changes. On-going operations will be regularly reviewed.

Organization: Overall environmental, health, safety management systems at Medlife rely on Management Systems Coordinator and detailed responsibilities are delegated at each hospital, clinic and laboratories. Key responsibilities are documented according to the ISO 9001:2000 standard. In accordance with the current operations and on-going expansion Medlife will review its organization and management systems documentation and ensure that IFC Performance Standards are fully incorporated and assignments made to monitor performance at each facility and at the corporate level. Additional resources will be provided as necessary.

Training: Training provisions for staff are organized and tracked by the Human Resources Department of Medlife. All staff receive induction training at hire and regular refresher trainings. Trainings include, but are not limited to; management systems, service excellence, occupational health and safety, risk assessment and control, infection control, emergency management and response, environmental management.

Monitoring: Quality and EHS (Environment, Health and Safety) monitoring programs at hospitals, clinics and laboratories are set in line with the regulatory requirement as well as in accordance with ISO 9001, ISO 17025, ISO 14001 and OHSAS 18001 management system requirements. Medlife will regularly submit to IFC an Annual Monitoring Report on Environmental and Social Performance prepared in accordance with the IFC’s Performance Standards and guidelines.

PS2: Labor and Working Conditions

Labor Relations: Medlife has an internal human resources procedure which particularly describes in line with the local regulations; employee qualification, hiring and contract making processes, promotions and general working conditions. The minimum age of employment is 18. Cleaning and security services are outsourced at the clinics. Catering and laundry services are outsourced at the hospitals. The Company reported that there is no discrimination on the basis of personal beliefs or characteristics, Medlife does not employ child or forced labor, and does not anticipate any retrenchment in the near future as reported by the management; in fact, Medlife is currently in a growth phase. The management stated that it does not prohibit or discourage union membership; nevertheless, there is actually no union activity or collective agreement in the hospitals; employees work through individual contracts. Employees can address grievances directly to their hierarchy or to the Human Resources Department. There is a formal grievance procedure describing how to communicate and address the grievances. Medlife will review and enhance its Human Resources policy and procedures for its own staff and contractors to ensure that all IFC Performance Standard 2 requirements are formalized within the policy and procedures.

Occupational Health and Safety: As mentioned previously, Medlife has established an occupational health and safety management system in its hospitals and clinics certified in line with the international standard of OHSAS 18001. Workplace risks are regularly assessed and mitigation measures implemented within an action plan. Biosafety is the key program in the laboratory operations. Infection control and emergency response committees conduct regular meetings, trainings and drills. The record keeping of these meetings, trainings and drills will be further enhanced. All staff, including medical and non-medical, receive adequate training in accordance with the specific risks of their workplaces. No major accident occurred in any of the facilities for the last five years as reported by Medlife. Medlife reported that personnel are subject to the medical checks in accordance with the Romanian labor legislation both upon employment and periodically, depending on the characteristics of the activity carried out.

Medlife will ensure that control of occupational health and safety control programs are extended to the construction and renovation works. Medlife will set up relevant occupational health and safety manuals and thoroughly include in all contractor agreements the rules on occupational health and safety and other working conditions, in accordance with the IFC PS2 requirements, will ensure that trainings are provided to the construction/renovation employees and will establish regular inspection mechanisms to ensure that rules are implemented.

PS3: Pollution Prevention and Abatement

Hazardous Materials and Waste Management: Laboratory chemicals, cleaning and disinfection materials and other hazardous substances used in the hospitals and clinics are supplied from reliable, certified sources. Environmentally safe materials are selected wherever possible. Extremely toxic formaldehyde is not used in any hospital or clinic. New cooling systems at hospitals and clinics include HFC refrigerants such as R-407a without ozone depleting potential. Medlife will continue these efforts and will maintain a hazardous materials inventory at the workplaces.
Infectious waste, wastewater from radiology units and other hazardous wastes from laboratories are segregated at sources, collected at labeled containers, appropriately stored on-site, then transported and disposed of by licensed contractors. Medical waste is handled by authorized agencies and incinerated at government approved facilities. Medlife is planning to establish an on-site medical waste treatment system based on decontamination of infectious waste using microwave action, which will be operated by a licensed contractor company. The system is developed in Austria and is designed to disinfect various kinds of infectious waste including fatty (ointments, pastes etc.) and albuminous substances (blood, pus, serum, etc.) in containers, used dialyzer, tubing, syringes, needles, blood bags, plastic disposals, catheters, metallic parts and many more. On the other hand, as this system cannot treat cytotoxic, radioactive waste, hazardous chemicals, body parts and large metal items, Medlife will continue to use a combination of different treatment and disposal means in accordance with the type of the wastes generated.
Medlife will further develop hazardous materials and waste minimization programs, for instance, will be limiting the consumption of x-ray chemicals by moving imaging diagnostics into digital solutions in the future. There are no other sources of radioactive wastes or effluents as Medlife does not actually provide nuclear therapy. In case future operations include such treatments, Medlife will make appropriate handling and disposal of relevant wastes and effluents.

Other Wastes and Effluents Management: Domestic wastewater is discharged to the municipal sewer system without any specific requirement for pre-treatment. There is only a decantation tank and wastewater discharged to the city sewerage is regularly monitored by certified agencies and reports submitted to the regulatory authorities. Non-hazardous waste is collected and disposed of by the municipality. Medlife will further develop its waste management program towards waste minimization, collecting recyclable wastes separately, where feasible.

Resource Conservation and Energy Efficiency: Water is supplied from the municipal networks and electricity from the city grids. Natural gas run boilers are the main sources for ambient heating and vapor generation. The hospitals are equipped with diesel run back-up generators. Medlife has installations to optimize water consumption and is in the process of introducing energy conservation programs. Energy efficient HVAC systems are being installed. Medlife will continue to develop water and energy conservation programs and annually report to IFC about relevant initiatives and performance.

PS4: Community Health, Safety and Security

Community Health and Safety: Hospitals, clinics and laboratories of Medlife are equipped with the latest generation medical and laboratory equipment. Strong mechanisms for maintenance of medical and analytical equipment are in place. Utilities and safety equipment also are subject to regular maintenance programs and these will be further developed. Infection control techniques are established and tracked by two medical doctors specialized in this area.

As reported by Medlife, life and fire safety design and installations are being provided in line with the national standards and regulations which are being adapted to the EU norms and regulations. Fire sprinklers, detection and alarm systems, other fire fighting and emergency provisions are present in the Medlife Memorial hospital and will be installed to the new hospital which will developed in Bucharest. Other facilities are also designed to have adequate provisions on life and fire safety. Construction is either undertaken by Medlife or partly outsourced to experienced construction companies. Medlife management reported that project designs and constructions take into account seismic risks. Bucharest is at high seismic zone. Medlife management reported that acquired buildings for conversion into into health care facilities are consolidated to address seismic risks.

Medlife will provide IFC with third party verification documents on life and fire safety, earthquake safety and infection control for each clinic and hospital which is operational and under construction and relevant measures to remain in compliance with national and internationally agreed standards. Further detailed review of the existing facilities as well as of expansion projects will be performed by qualified experts as defined in the action plan agreed with IFC.

Water for consumption is supplied from municipal network and treated further at on-site facilities through a combination of reverse osmosis, ion exchangers, chemical and UV-disinfection systems. Strict procedures are established on water quality monitoring with regard to ISO 9000 management systems and infection control mechanisms. There is no cafeteria within the hospital and clinics premises, catering services are outsourced to an approved contractor which is regularly inspected as reported by the Medlife management.

Security: Unarmed and trained security personnel are employed through private contractors, in accordance with the IFC PS4 requirements.

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