Max Phase 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	25805
Country	India
Sector	Health Care
Department	Health and Education
Company name	Max Healthcare Institute Limted
Environmental category	B
Status	Active

Date ESRS disclosed	April 9, 2007

Previous Events	Invested: July 20, 2007 Signed: June 29, 2007 Approved: May 24, 2007

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 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. The review of this project consisted of appraising technical, environmental and social information submitted by the project Sponsor including:

- review of Max Healthcare’s policies and Standard Operating Procedures related to environmental management and occupational hygiene, health and safety;
- assessment of supplemental information submitted by the company on key environmental and social assessment issues; and
- meetings with the project’s management team in March 2007 to discuss IFC’s PSs, guidelines and other requirements.

Project description

The proposed project is an expansion of Max Healthcare Institute and its network of hospitals (Max Healthcare or the company), one of the fastest growing healthcare providers in India. The company currently operates five hospitals (575 beds) primarily in the North Capital Region (NCR), which includes New Delhi and its approximate surroundings. Based on the strong demand for privately provided healthcare in India and particularly in Delhi, the company has plans to expand its presence to about 1200 beds by 2013. IFC’s investment would assist Max Healthcare implement its expansion strategy over the next two to four years. The proposed project includes:

- a 268 bed addition to Patparganj hospital, bringing total bed size to 414;
- new 100 bed secondary/multi-specialty hospital in Dehradun, located 250km north of Delhi;
- new 84 bed tertiary expansion (focused on obstetrics, gynecology, and pediatrics) at Saket in South Delhi; and
- Max Hospital -Gurgaon (new 100 bed facility).

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 also 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.

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 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. The company has indicated that, to date, it has acquired project sites on a willing buyer-willing seller basis and that had either formal or informal residents or users of resources. Moreover, 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 the environmental and social requirements - the host country laws and regulations and the World Bank/IFC social and environmental Performance Standards and 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. Further information is provided in the attached documentation.

- PS1: Social and Environmental Assessment and Management Systems:

The company has established detailed environmental and occupational health and safety practices and Standard Operating Procedures (SOP) that conform to international best practice for the hospital sector. These systems have been covered under ISO 9001:2000 and the National Accreditation Board for Hospitals. Environmental, social and health and safety issues are managed by the Heads of hospitals, who report directly to Max Healthcare’s senior management group, to ensure that continuous improvement and instances of non-compliance are addressed immediately. The company also has established a detailed and comprehensive training program structure and schedule for new and existing staff. As part of its ESHS management systems, the company will attempt to formalize its process for community engagement, consultation and feedback. The company has received all relevant GoI clearances for existing and under-construction facilities, including plot Allotment Letters, Possession Letters and Sanction of Building Plans, as applicable. Requisite post-construction clearances include:

- consents under the 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.

The company will provide IFC with copies of all clearance documents for future developments received in the previous 12 months with submission of the Annual Environmental and Social Monitoring Report (AMR) submitted to IFC.

- PS2: Labor and Working Conditions:

The company has in place a Human Resources policy and procedures that are consistent both with all relevant Government of India (GoI) statutes and regulations, as well as 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. Employee OHS procedures and safeguards are detailed in a series of standard operating procedures (SOPs) that have been developed by the company for all aspects of its healthcare services including radiology, pathology, ambulance operations, pharmacy operations and emergency medicine. Radiology staff, for example, are regularly monitored for radiation exposure and x-ray equipment is inspected and certified by the Bhaba Atomic Research Center annually. 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. The company utilizes either Materials Safety Data Sheets or International Chemical Safety Cards to familiarize employees with the hazards and personal protective equipment required for specific tasks and chemical compounds that they use, or to which they are exposed, in their work (e.g. disinfectants, fumigants). 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 has provided details on the life and fire safety (LFS) design, management and monitoring systems it incorporates in all of its facilities, which have been reviewed by IFC. All of Max Healthcare’s 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.

In addition to the LFS systems and equipment that will be installed, the company has 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. The company will submit an L&FS Master Plan to IFC 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 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 conditions to the attached Environmental and Social Action Plan (ESAP) are needed, and agree with the company 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 ESAP, as needed, along with a mutually acceptable time frame for implementation.

Environmental, health and safety during construction is managed by Max Healthcare. The company’s contracts with all construction firms contain specific environmental, health and safety (EHS) provisions, compliance with which is overseen by Max Healthcare personnel 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:

All existing and proposed Max Healthcare facilities receive water from the municipal water supply system and/or permitted groundwater resources. Medcentre facilities maintain on-site storage facilities 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. Hospital facilities maintain on-site storage facilities to ensure adequate water supply for operations.

All Max Healthcare facilities follow the company’s standard operating procedures (SOPs) for the disposal of general, pathological and chemical waste. These SOPs conform to WBG guidelines and Indian regulations. 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 two companies - Synergy Waste Management Company and Sambranky (located in Ghaziabad) - for the removal and disposal of all biomedical waste. Both contractors are authorized/licensed by the New Delhi Pollution Control Committee to collect, store, treat and dispose of bio-medical waste per national regulations (The Gazette of India notification No. / D.L. – 33004/98).

The company maintains a comprehensive infection control program, detailed in its 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 at its Medcentres. The role of the ICC 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. The company also 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. This training includes modules in the company’s standard operating procedures for bio-medical waste management as outlined above. All facilities follow a regular schedule of disinfection – with a dedicated staff for laboratory and operating theatre – that is undertaken in accordance with occupational safety and health objectives described below and monitored on a weekly basis. The ICC review the results the results of these monitoring reports and initiates corrective actions as needed.

- PS4: Community Health, Safety and Security:

As part of its ESHS management system, Max Healthcare prepares emergency preparedness and response plans (EPRPs) for all of its facilities, including policies and procedures to prevent community exposure to disease, pathogens and other bio hazards during normal and emergency scenarios. EPRPs 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. Max Healthcare engages a private company to provide security services to the hospital and associated facilities. Contract provisions will include guidelines on how security personnel shall interact with any communities surrounding the facility. The Max Healthcare management team has reviewed PS4 and indicated that the facility will comply with its requirements in full. The company has designated a “May I help you” desk within each of the hospitals. Staff at these desks will be responsible for receiving and responding to questions, concerns or complaints raised by nearby communities or other stakeholders, and each hospital will maintain a register of such inquiries. Contact details (phone number and email address) at the hospital entrance.

- 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.

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