Max Healthcare 3

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	27976
Country	India
Sector	Health Care
Department	Health and Education
Company name	Max India Limited
Environmental category	B
Status	Active

Date ESRS disclosed	May 12, 2009

Previous Events	Invested: June 18, 2009 Signed: June 12, 2009 Approved: June 11, 2009

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

As an existing client, MHIL is required to report annually to IFC on the ongoing management of its environmental and social performance. In addition, IFC undertook a supervision visit to MHIL facilities in November 2008 and an appraisal visit MHIL’s corporate offices in April 2009. These visits confirmed that MHIL is meeting the requirements of the original investment agreement and continues to demonstrate that its operations comply with World Bank group requirements. In addition, IFC reviewed MHIL’s compliance with host country laws and regulations, findings of supervision visits to MHIL facilities presently under construction, MHIL’s policies and Standard Operating Procedures (SOPs) related to environmental management and occupational hygiene, health and safety, changes to MHIL’s corporate management of environmental and social issues since the earlier (2007) investment, and results of the Company’s ongoing energy efficiency program.

Project description

Max Healthcare Institute Limited (MHIL), an existing IFC client, operates six hospitals (700 beds) and two specialty clinics in the North Capital Region (NCR), which includes New Delhi and its surroundings. It is currently undergoing a significant expansion which will increase its presence to about 1300 beds by 2011. Most of this expansion involves extending capacity at its existing hospitals, but also includes the opening of a new 100 bed hospital in Dehradun (some 300 km north of Delhi), and two new hospitals in the NCR.

The project involves construction of the two new 300 bed multi-specialty tertiary hospitals in the NCR. Once complete, these facilities will take MHIL’s beds under management to approximately 1700. The first hospital will be in Shalimar Bagh, an inner city residential suburb in northwest Delhi. The second hospital will be in Greater Noida, a rapidly growing industrial and residential area under the management of the New Okhla Industrial Development Authority to the southeast of Delhi. Both hospitals are planned to start as 150-bed multi-specialty hospitals in Phase I, while an additional 150 beds are proposed to be added in Phase II. Tertiary facility at Shalimar Bagh will commence operations in 2011 while the facility in Greater Noida is likely to commence in 2012. The proposed facilities will focus on cardiology, neurosciences, urology and trauma and orthopedics.

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; and
- PS5: Land Acquisition and Involuntary Resettlement.

The project appraisal assessed the applicability of PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples, and PS8: Cultural Heritage. In regard to PS6, the project sites are expected to be located in heavily modified urban/peri-urban neighborhoods and no impact on biodiversity is therefore expected. With respect to PS7 and PS8, no indigenous peoples or cultural heritage resources will be affected by development of the project.

PS5: Land Acquisition and Involuntary Resettlement:

All of the land for Max Healthcare’s existing and under-construction hospitals has been acquired either on a willing buyer-willing seller basis or through concession under NCR planning programs designating areas for health care developments. The company has confirmed that none of its land acquisition and facility developments to date have entailed involuntary resettlement, and that it has always sought to acquire land that will not displace local residents or encroachers, either physically or economically. To formalize this policy, Max 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. The company is in full compliance with all applicable national and local laws on land acquisition and has confirmed that all requisite permits, consents and approvals have been obtained for land acquisition.

Environmental and social categorization and rationale

The project involves several hospital developments in peri-urban areas of India, primarily in the NCR. The key social, environmental, health and safety impacts associated with the project will include emissions to air and water; management of hazardous materials and wastes; labor and working conditions, employee occupational health and safety and community health and safety during construction and operation.

Given that the proposed project locations are all in heavily to moderately modified areas, adverse impacts on environmentally sensitive areas are not expected to occur. The nature of hospital operations is such that it will be possible to readily design and implement engineering and management measures to mitigate any adverse impacts that result from the project. In light of the fact that mitigation measures can readily be designed, adverse impacts are not expected to be diverse or irreversible and will be limited to project site, and no physical or economic displacement of communities occurred, the project has been classified as a Category B.

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 host country laws and regulations, IFC’s social and environmental Performance Standards, and relevant environmental, health and safety (EHS) guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

PS1: Social and Environmental Assessment and Management Systems:

The company has established detailed environmental and occupational health and safety practices and SOPs that conform to international best practice for the hospital sector. These systems have been covered under ISO 9001:2000, ISO 14001:2004, ISO 15189 (laboratory quality and competence), and the National Accreditation Board for Hospitals for the respective hospitals. Environmental, social and health and safety (ESHS) issues are managed by the Heads of hospitals, who report directly to Regional Heads, who in turn report into the CEO, the Regional Heads are a part of Max Healthcare’s senior management group, to ensure that continuous improvement and instances of non-compliance are addressed immediately. In addition, MHIL’s senior management group recently adopted an online system for tracking compliance of senior management project and other commitments and deadlines, to track management timelines and responsibilities.

Although Environmental Impact Assessments (EIAs) are not required by the Government of India for health care facilities, national law requires a number of environmental consents and clearances be obtained to ensure that key environmental impacts have been assessed and accounted. These clearances are necessary to receive regulatory approval to commence construction and for receipt of a license to operate. MHIL has received all requisite clearances for its existing facilities and provided copies of these to IFC including clearances required by the following statures:

- Water (Prevention & Control of Pollution) Act, 1974;
- Air (Prevention & Control of Pollution) Act, 1981;
- Environment Protection Rules, 1986;
- Environmental Impact Assessment Notification, 1994;
- Bio-Medical Waste (Management and Handling) Rules, 1998; and
- Hazardous Waste (Management and Handling) Amendment Rules, 2003.

For facilities or expansions under construction, MHIL has applied for or received all relevant GoI clearances including plot Allotment Letters, Possession Letters and Sanction of Building Plans. For clearances already received, the Company will provide IFC with copies prior to disbursement. For clearances that have not yet been received, MHIL will provide IFC with copies as and when these are issued by the relevant Government entities

- PS2: Labor and Working Conditions:

As concluded in the E&S review of IFC’s earlier investments, MHIL has in place a Human Resources policy and procedures that are consistent both with relevant Government of India (GoI) statutes and regulations and international best practice for the sector. Max Healthcare has reviewed PS 2 and confirmed that its policies and procedures conform fully with all PS2 requirements and to the four key ILO conventions. MHIL has in place detailed HR policies and procedures pertaining to grievance redressal, recruitment, performance appraisal, sexual harassment and work culture. IFC’s review of the Company’s policies and systems shows that the policies are fair, non-discriminatory, transparent and sensitive to employee rights and privacy.

Employee OHS procedures and safeguards are detailed in a series of SOPs that have been developed by the Company for all aspects of its healthcare services. MHIL has in place a detailed and comprehensive training program structure and schedule for all new and existing staff. Through employee training programs, the Company ensures that all health care facility staff understand and manage the specific occupational hazards to which they are exposed. In addition, the Company monitors in-house occupational safety and health statistics to ensure that training programs are continuously updated to reflect the needs of each facility’s staff and patients. The Company’s HR policies and OHS procedures extend to all contractors involved in its operations, whether employees or contractors, and comply with basic regulations such as minimum wage, worker insurance, compensation in case of fatality/disability, etc. For example, before MHIL will approve payment to contractors, the contractor must provide documentary evidence that payment has been made to workers’ bank accounts; cash payments to workers are avoided. MHIL also ensures payment of accrued bonuses to contract workers before reimbursements are made to the contractor.

MHIL has provided details on the life and fire safety (LFS) design, management and monitoring systems it incorporates in its facilities, which have been reviewed by IFC. All facilities include a fire ring and mains with connectable hoses and dedicated water supply; central alarm, smoke detectors and sprinkler systems; and adequate and appropriately signed means of egress. The Company has intensive training programs for all staff that cover fire prevention and response, and designates trained fire responders throughout the organization. These teams are responsible for training, demonstrating, and monitoring the implementation of the LFLS programs.

For facilities developed or expanded under the project, MHIL will submit an L&FS Master Plan that identifies major fire risks, applicable codes, standards and regulations, and mitigation measures. The L&FS Master Plan will be prepared by a suitably qualified professional acceptable to IFC who will certify that the design meets the local regulations and in addition to requirements of IFC’s Life and Fire Safety guidelines. On the basis of the Master Plan and its findings and recommendations, IFC will determine whether additional actions are needed, and agree with MHIL on a mutually acceptable time frame for implementing these conditions. The qualified professional who prepares the L&FS Master Plan also will undertake a review at the time of L&FS systems testing and commissioning and certify that construction of these systems has been carried out in accordance with the accepted design. Findings and recommendations of this review may be incorporated into the E&S Action Plan, as needed, along with a mutually acceptable time frame for implementation. Deadlines for submission of the L&FS Master plans are set forth in the E&S Action Plan.

EHS issues during construction are managed by MHIL’s Projects Department. Contracts with construction firms contain specific EHS provisions, compliance with which is overseen by the Projects Department who are on site at all times during construction. Site safety meetings are held weekly and attendance by safety officers of all contractors is mandatory. The status of general safety conditions and use of PPE by all workers is reviewed at this meeting, and laborers not wearing adequate PPE are not allowed to work at site. All contractors are required to have a housekeeping team which is responsible for cleanliness of the site areas at which they are currently engaged. Non-compliance with EHS provisions is grounds for termination of any of construction contract.

PS3: Pollution Prevention and Abatement:

MHIL utilizes grid power supplemented by standby diesel generators at all of its facilities. Temporary sources of power (diesel generators) used during construction and as standby power are closely monitored to ensure compliance with both GoI and IFC emissions and noise requirements. As a part of these requirements, gensets must be housed in an acoustic chamber to reduce noise to permissible limits.

MHIL has adopted an aggressive program to conserve energy at all of its facilities through the use of energy efficient technologies and practices, including the use of:

- natural daylight wherever possible in the hospital building to reduce electricity consumption;
- compact fluorescent bulbs for maximum general lighting applications;
- screw compressors in air-conditioning systems which lower energy consumption by 40%;
- double glazed glass on all windows; and
- fly-ash bricks for construction of outer walls of all buildings

All existing and proposed Max Healthcare facilities receive water from the municipal water supply system and/or permitted groundwater resources. MHIL facilities maintain on-site storage capacity to ensure adequate water supply for operations. Water quality is regularly monitored both in-house and by independent laboratories. Potable water is derived from on-site reverse osmosis (RO) plants or from licensed bottled water suppliers. All facilities are equipped with sewage and/or wastewater treatment plant as required. Treated effluent is disposed to the municipal system in compliance with guidelines of the relevant State Pollution Control Board, which are consistent with World Bank Group (WBG) guidelines. The primary care outpatient facilities do not require water treatment plants; potable water is supplied by licensed bottled water suppliers. MHIL has established water conservation programs and practices as mandated under the Water Conservation Act.

All facilities follow MHIL’s SOPs for the disposal of general, pathological and chemical waste. These SOPs conform to IFC guidelines, Indian regulations, and industry good practice. At each facility, waste is segregated by category and stored temporarily on site as per internationally accepted procedures. General (non-infectious/non-hazardous) solid waste is collected and disposed per municipal regulations. The Company has contracted with contractors licensed by the New Delhi Pollution Control Committee to collect, store, treat and dispose of bio-medical waste in accordance with national regulations.

MHIL has in place a detailed Infection Control Policy and Procedures Manual that is periodically reviewed by an Infection Control Committee (ICC) made up of the members of various medical departments and including nursing, housekeeping, operating room and laboratories. The ICC’s role is to serve as both a monitor and a resource in maintaining control standards for nosocomial infection in order to minimize risk to both staff and patients. MHIL provides in-house training for all newly employed healthcare providers and housekeeping staff aimed at preventing infections as well as annual refresher training for existing staff. The training includes modules on the SOPs for bio-medical waste management outlined above. All facilities adhere to a regular disinfection schedule, with a dedicated staff for laboratories and operating theatres, monitored on a weekly basis. The ICC reviews these monitoring reports and initiates corrective actions as needed.

PS4: Community Health, Safety and Security:

MHIL has in place detailed SOPs for a number of possible disaster situations, such as civil disturbances, earthquakes, flooding, bomb threats, external disasters and terrorist attacks. The Company has formed Emergency Response Teams (ERTs) in every facility, which act as ‘first responders’ in the event of any security or disaster situation. As part of its ESHS management system, MHIL also has SOPs for medical related emergencies, including policies and procedures to prevent community exposure to disease, pathogens and other bio-hazards during normal and emergency scenarios. Emergency response procedures are based on risk assessment and analysis. Hospitals are designed with separate entry and exit for service and delivery vehicles, so that the main entry roads are utilized only by staff, patients and visitors. MHIL employs a core Security services team in house, which oversees all aspects of employee, patient and facility security, including training of staff, securing of premises in the event of emergency situations, and protection of people and property. In addition the Company engages unarmed private security services at each of its facilities. Private security staff are trained in Max’s overall security systems prior to being stationed at a Max facility. Max is currently in the process of integrating these personnel into the ERTs, to ensure consistent implementation of emergency response protocols at all facilities.

The company has designated a “May I help you?” desk in each of its operational hospitals. Staff at these desks are responsible for receiving and responding to questions, concerns or grievances raised by nearby communities or other stakeholders, and each hospital is required to maintain a register of such inquiries. Contact details (phone number and email address) are posted at the hospital entrance. As part of its ESHS management systems, MHIL will formalize its existing processes for community engagement, consultation and feedback at proposed construction sites, and ensure that consolidated reports of community interactions are conveyed to senior management on a quarterly basis.

PS5: Land Acquisition and Involuntary Resettlement:

All of the land for Max Healthcare’s existing and under-construction hospitals has been acquired either on a willing buyer-willing seller basis or through concession under NCR planning programs designating areas for health care developments. The company has confirmed that it has always sought to acquire land that will not displace local residents or encroachers, either physically or economically. As a result, none of its land acquisition, and none of its facility developments to date have entailed involuntary resettlement. To formalize this policy, Max 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. The company is in full compliance with all applicable national and local laws on land acquisition and has confirmed that all requisite permits, consents and approvals have been obtained for land acquisition.

PS6: Biodiversity Conservation and Sustainable Natural Resource Management

Max Healthcare has installed rain water harvesting systems, the design and layout of which is provided and approved by the Central Groundwater Board. The system is designed to capture and route rain water through recharge pits. Water conservation plans are also implemented for recycling of water through sewage treatment plants. The recycled water is used in cooling towers and horticulture.

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