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| Anhanguera Edu |
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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 | 28097 |
| Country | Brazil |
| Sector | Education Services |
| Department | Health and Education |
| Company name | Anhanguera Educacional S.A. |
| Environmental category | B |
| Status | Pending Approval |
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| Date ESRS disclosed | August 10, 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 |
| IFC’s appraisal consisted on a review of social, environmental, health and safety and social/community information submitted by Anhanguera Educacional Participações S.A. (“AESA” or the “Company”). The appraisal included a one day site visit of the headquarters in Valinhos, one hour drive from São Paulo and 3 university campuses, one in Sumaré, metropolitan region of Campinas, and two in Campinas, FAC II and FAC III . During the visit to headquarters, IFC interviewed the director of engineering in charge of building new units and maintenance of the whole portfolio, the HR manager, in charge of company’s policies and information, the manager of external contracts and the company’s layer in charge of Company’s acquisitions. |
| Project description |
Anhanguera Educacional Participações S.A. (the “Company” or “AESA”) is Brazil’s leading private, for-profit professional education company. The Company delivers education services through its: i) campus network (Anhanguera Educacional); ii) vocational training centers (Microlins); and iii) distance learning platform (Anhanguera/LFG). Management’s growth strategy focuses on growing its on-campus students, distance learning, and vocational training units. The Company is planning to raise over US$44 million (approximately R$100 million) to fund its growth over 2010.
Founded in the early 1990’s from a single college, the Company today is the largest post-secondary education institution in Brazil, with an estimated enrollment of 141,000 students in 2008 distributed across 52 campuses and 774 distance-learning centers. With an additional 500,000 students/year in vocational training programs, AESA has educated over 700,000 young working adults in Brazil in 2008, more than any other education institution in the Americas.
This is a repeat investment which was supervised in 2006. |
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| Identified applicable performance standards |
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will 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 issues
PS5. Land Acquisition and Involuntary Resettlement
Following review it was determined that issues covered by PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples, and PS8: Cultural Heritage are not associated with this project, because the project does not involve biodiversity and natural resource management, indigenous population or cultural heritage, respectively. |
| Environmental and social categorization and rationale |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
Key environment, health and safety and social aspect of the project which were analyzed during IFC’s review were:
- Management Systems
- Construction and operation of any new campuses
- Employee and Student health and safety activities
- Life and fire safety
- Labor and working conditions
- Energy conservation
- Solid waste management
- Site Selection
- Land Acquisition
- Permitting. |
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| Key environmental and social issues and mitigation |
PS1: Social and Environmental Assessment and Management Systems
AESA does not have a formal certified Environmental and Social Management System in place, but a management system that is appropriated to the size and nature of an educational group, promoting sustainable social and environmental performance.
The main issues managed by operational units are the Life and Fire Safety (L&FS) and solid waste management, both centralized in the Engineering department from the Company’s headquarters in Valinhos. The Company has plans to implement ISO 14.000 as an enhancement of the current management system, but there is no formal schedule for the implementation. Although the management is completely centralized in the headquarters, local managers are motivated to propose improvements and provide inputs to the current management system.
The Company has a risk committee to assess all risks related to its activities such as laboratories of health disciplines (nursing, veterinary, agriculture and waste generation). The risk committee has a monthly meeting to assess environmental, and Life and Fire safety risks as well as legal risks. The risk committee has implemented a corporate waste management plan for waste generated in health services which disciplines also the selective collection of various types of wastes in the corporation. The waste generation and proper handling storage and disposal is currently audited by an external consultancy firm.
The quantity of students varies from unit to unit, depending on the maturity of the project. The average number of students per unit is 2750, with a minimum of 300 and a maximum of 10.000 students per unit. AESA has been growing with high expansion rates since 2004, when it had 8 units and 10.500 students. Currently AESA counts with 55 units and 150.000 students, spread between 8 states in Brazil (Rio grande do Sul, Santa Catarina, São Paulo, Minas Gerais, Distrito Federal, Mato Grosso, Matogrosso do Sul and Goiás). All the units are located in urban areas. Around of 25% of the units have less than 1000 students, 60% have between 1000 to 5000 students and around 15% between 5.000 and 8.000 students.
AESA has 2 models of expansion, (i) acquisition of existent buildings and refurbishment to company’s necessities or (ii) the acquisition/rental of areas followed by the construction of its own buildings. The refurbishment of existent buildings, although a good solution for fast growth of the portfolio, is a more challenging project because of the need to adapt existing buildings to AESA’s needs such as libraries, laboratories and appropriate classrooms. The construction of new buildings in existent areas close to places with high density of potential students has been the best option. The company manages its own constructions of units, outsourcing only the construction workers but keeping the management of the construction site, plans, costs, permitting and compliance of the project. By controlling the construction of new sites, AESA is able to reduce the final cost of constructed square meter in 50% of the market value.
PS2. Labor and Working Conditions
HR policies
AESA has formal Human resources policies providing information of workplace rights, benefits and obligations. The policies are available in the company’s induction, but the accessibility to them is still limited. This problem is addressed by the implementation of an Intranet in the second half of 2009. The company also counts with a non discrimination and Equal Opportunity policy which will be accessible in the Intranet website, together with an internal grievance mechanism (ouvidoria), not implemented yet. The HR policies comprises also items referring to child labor and forced labor, although both practices are not allowed according to Brazilian law.
AESA also has formal policies for hiring employees, as well as formal rules to layoff process.
Life &Fire Safety (L&FS)
AESA works following the instructions of a senior L&FS consultant who had been part of the state São Paulo fire fighters. All new buildings follow a default drawing which is revised yearly to comply with the building and L&FS codes. The current default drawing encompasses 4 groups of 3 storie buildings with classrooms and laboratories which work in a modular system to better respond to the necessities of each unit in a determinate period. The division between each classroom is made of portable cement plates, which work as a dry wall but with better properties such as low noise interference, changes of lay-out without waste generation and fire resistance. The new material was developed by the AESA’s Chief engineer and was approved by IPT (Instituto de Pesquisas Tecnológicas), a well known research institute of the State of São Paulo.
AESA counts with trained fire brigades in its units, which are trained externally once a year and audited by and external consultant. Fire drills are not often, and the last one happened in 2005. The SESMIT will prepare a schedule a yearly fire drill for all the units.
AESA has agreed to assess its default drawings and plans against international Life & Fire Safety codes.
Protection of workforce
AESA analyses not only the safety risks but also risks associated to teachers performance. There is a serious concern in maintaining the integrity of teacher’s voice. In order to do this, AESA’s classrooms are equipped with microphones, air ducts are frequently cleaned to prevent respiratory diseases, together with audiometric tests. There is also an internal survey to determine the level of satisfaction of the employees.
Non-Employee Workers
The construction of new units is managed by AESA which provide plans, controls budget and has its own engineer. The workforce used is formally hired from subcontractors through a contract of services. AESA provided to IFC a model contract containing also compulsory clauses of Occupational Health and Safety, a Safety Manual and a Manual of Personal and collective protective equipments. The Contract also sets the subcontractor as responsible for any fatality or accidents that may occur with the subcontractor employees in the construction site. It is is also part of the contract the need of formal proof that the subcontractor is paying taxes, salaries and a monthly list of the workers employed in the construction site, prior to AESA’s monthly payment of services. Another clause says that AESA does not allow to subcontractor to hire workers who are not properly registered in the ministry of labor and without uniforms and protective equipment. A code of conduct is also part of the agreement, as well as penalties for non compliance for any of the clauses agreed.
Grievance mechanism
The Company still does not have a formal grievance mechanism, which is planned to be implemented in the second semester of 2009, when AESA’s intranet will be launched, which will also address the lack of communication between AESA and its employees and students. Currently the main complaints are the delays and the difficulties to perform simple activities such as cancelation, charging of tuition fees and communication between units and headquarters.
Occupational Health and Safety (OHS)
The Company has a well established OHS department working in partnership with ASOMETRA, a Safety Enginnering and Labor Medicine firm, following NR 4 - SESMIT (Specialized Service in Safety Engineering and Labor Medicine), which is a compulsory legal requirements disciplining the dimensions of the OHS services depending on the risk graduation and the total number of employees to define the size and composition of the OHS team (Safety engineer, safety technician, nurse, auxiliary nurse). The SESMIT comprises the PCMSO (program of control of occupational health), the PPRA (program of prevention of environmental risks) and t the CIPA (internal commission of accident prevention) among others.
Accident Reporting
AESA monitors both employees and non-employees accidents and working conditions. The accidents report applies for both employees and outsourced workers. In order to control and mitigate incidents and accidents in all units during the construction phase, AESA has released a safety manual for construction sites, which is attached to every outsourcing contract to make sure that all the outsourced employees are aware of the safety procedures.
PS3. Pollution Prevention and Abatement
AESA units use water and energy from the local supplier, as well as sewage treatment. All the units explore daylight as much as possible, although most of them operate only at night. In each unit there is a general services manager reporting to a regional services manager who reports to the engineering department in the Headquarters.
Waste management manual.
The AESA’s Waste Management Plan was made in partnership with Ciclo Ambiental, an environmental consultancy, and it is in its 12nd version. The plan initially approaches the related Brazilian Standards to solid and hazardous wastes, and the waste characterization according to local concept. The manual explains the waste segregation, means of collection, temporary and long term storage and final disposal. It also approaches specifically the health services waste and risk management in case of hazardous wastes.
Energy efficiency AESA has promote the change of fluorescent light bulbs to T5 light bulbs which last longer and together with a reflecting system illuminates better than the previous system. The payback of the new lighting system is 2 years.
AESA units are also flexible in terms of energy management. All changes needed to set a new lay-out can be easily and directly made in the distribution panel, with no need to change the cabling or any other device.
AESA also invested in energy consumption monitoring and energy efficiency initiatives for all units, initially with unsatisfactory results. The company then hired the firm ACS, an energy management company which can provide long distance monitoring of the energy consumption through software. The same software will be used to control the water consumption in all units. The initial results indicated a 10% reduction in the consumption, without tackling energy waste and without an awareness campaign, the company’s next goal.
Water consumption As a standard for all units, AESA has installed taps which close automatically, basins with 6 liters per flush and a leak detection program based on the software monitoring. In this case both engineering department and maintenance department are working together to provide a more efficient use of energy and water.
PS4. Community Health, Safety and Security issues
During the construction of new units, AESA follows a safety manual which describes the measures to prevent excessive vibrations, car accidents, the release of debris of the site and the protection to not allow the projection of debris out of the site when building or demolishing, explosions and any other activities that may disturb the community, private properties and welfare of local citizens. The Safety manual also disciplines the way that each activity should be execute to mitigate its internal and external impacts.
PS5. Land Acquisition and Involuntary Resettlement
The company has a Land Acquisition and Integration system, in which every activity and necessary step of the process is clearly described, with respective timeline and responsibility. The process counts with an integration team which will provide all necessary inputs to implement AESA’s management. The integration team is composed by people from various areas such as legal, academic, engineering and finance among others. Since AESA is an open Company, every acquisition must be informed to CVM (São Paulo Stock Exchange Comission) and communicated to the press and the market.
The Acquisition process starts by an assessment of an independent audit company that is hired to analyze initial risks, including all legal risks related to the new project. The takeover process is managed by an integration manager who will coordinate all the integration phases.
In some cases AESA rents a land for a long period, around 20 years, and builds a new unit in it. |
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| Client's community engagement |
AESA develops its community support through a program named “the Community Extension Program” with 520 projects in 2008, and 520.000 people assisted. This Program is developed around the cities and regions of the university campuses and encompasses:
Open Library of child and adolescent.
With the objective of collaborating with the schools nearby the campuses, AESA implemented in 2006 the “Open Library of Child and Adolecent Project”, a project to stimulate reading, together with public elementary and middle schools located nearby the campuses of AESA College.
Open College for Senior Citizens
AESA is investing on the construction of a social place promoting the permanent upgrading and the personal growth process of this specific group, avoiding their social isolation. The program of promotes the integration of physical, social and psychological aspects and the work with active participation of the students in their learning process.
School Help
The projects focus on school support and pedagogical and psycho-pedagogical assistance to children from public schools who present learning disabilities or need psychopedagogical orientations to make the homework.
Adolecent and Adult Literacy and Inclusion
This program is part of the State program “ILP - Inclusion and Literacy Program”, and has the objective of assisting teenagers and adults, from the age of 15 years and above, who did not have access to formal education at the appropriate age.
Nursery
The Nursery is destined to pedagogical activities, to the recreation and leisure of the children who are between 3 and 12 years of age. The service is offered to public and private schools.
Digital Inclusion
AESA implemented the Digital Inclusion Project at many campuses, together with local organizations, third sector organizations and governmental agencies.
Qualification and Professional Upgrade
The main objective of this Program is, in partnerships with several organizations, to aggregate values to young adults and adults professional education, trying to decrease the exposition to social and personal risks.
Legal Assistance
The objective of AESA's Legal Assistance Program is to offer free assistance and orientation to the population through the Special Civil Court (from Brazilian Legal System). The idea is to facilitate the access of citizens to the legal system and select the law suits which normally would be taken to the municipal judiciary system.
Health
Students of the courses related to health, supervised by professors, are responsible for the orientation and the close monitoring of groups they work with, by means of actions of health promotion, prevention, recuperation, rehabilitation of diseases and more frequent damages, and of maintaining the health of the community.
Odontological Assistance for Adolescents
The program was implemented to assist adolescents from the campuses surroundings neighborhood in the preventive and curative odontological treatment, contributing to the improvement of dental health in this community.
Sport Projects
The Program focuses on the practice of physical activities as away to promote health and social well-being. |
| Local access of project documentation |
Project information will be made available at the following location:
Alameda Maria Tereza, 2000 -
Valinhos SP - Brasil -
CEP 13278-181 |
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| Availability of Full Documentation |
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| Information Disclosed |
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