NMC 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	26119
Country	Russian Federation
Sector	Health Care
Department	Health and Education
Company name	AVA Peter Ltd
Environmental category	B
Status	Pending Disbursement

Date ESRS disclosed	December 6, 2007

Previous Events	Signed: February 20, 2008 Approved: February 19, 2008

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

The review of this project consisted of appraising technical, environmental, health, safety and social information submitted by the project sponsor, and a site visit in July 2007. The environmental and social (E&S) appraisal team visited the company’s existing operations in St Petersburg, and also one of the satellite clinics. The E&S team also held meetings with NMC management and staff.

Project description

The proposed IFC investment involves a local currency loan to finance the three-year expansion of the New Medical Center (NMC), a private provider of healthcare services in St. Petersburg, Russia and an existing IFC client. The proposed project comprises the following two main components:

- Refurbishment and operation of a clinic and hospital in Kazan (a public-private partnership with Kazan municipality);
- Refurbishment and operation of 10 satellite clinics across St. Petersburg.

Key environmental and social issues and mitigation

- Environmental and social management and organization

Over the past 5 years the company has developed an informal social and environmental management system (SEMS) which ensures that waste, chemical handling, Occupational Health and Safety (OHS) and training issues are addressed. As the company scales up to a multi-site operation there is need to formalise and expand the scope of the SEMS and in particular to address reporting and accountabilities for SEMS delivery. The sponsor recognizes the need to develop a more formal and comprehensive SEMS, and will develop and implement this as a Condition of Disbursement (CoD) for funding.

The focus of SEMS will be on procedures and processes (including grievance mechanisms) necessary to ensure that there is effective management of E&S issues across all sites, and staff capacity building/training, and accountabilities will also be enhanced as appropriate. Solid waste management and handling, Fire and Life Safety (FLS), and OHS aspects will form the focus of the SEMS.

An environmental audit of the Kazan site will also be undertaken as a CoD to ensure that there are no environmental liabilities associated with former hospital use.

- Labor and Working Conditions

Human Resources (HR) Policy and Management:

Currently NMC employs 480 staff (72 % of these are full time posts), expanding to an estimated 1190 at full project completion. The company has a written HR policy which reflects Russian employment norms and requirements and there are formal employment contracts with all staff. Salaries for all staff are above minimum wage. Staff receive specific training when they join the company (including company rules and policies, fire and life safety, communication and client service) and professional staff are provided with opportunities for continuing professional development. Staff receive regular medical checks and medical staff are required to maintain a current “health passport” (confirming that they do not have infectious diseases).

Worker’s Organization:

Employees have the right to collective bargaining and freedom of association (and there are regular monthly meetings of HR department staff and employees).

Non-Discrimination and Equal Opportunity:

Hiring is conducted in accordance with the Russian Labor Code and there is a strict policy against discrimination based on gender, race, age or nationality. The HR department asserted that there is no discrimination and there is a broad mix of employees including disabled/visually impaired, and employees from several different regions/ ethnicities.

Protecting the Work Force:

Protection of the work force in Russia is provided through legislation, in particular the Labor Code. The Labor Code was updated in 2006 to provide extensive protection for workers and ensure that a large array of social benefits must be provided by the company. Overall, employee satisfaction appears high with 100% of employees having a labor contract and a low staff attrition/ turn over rate. There is no retrenchment anticipated for this project and there is a commitment to minimum age requirements for all employees and contractors.

For the construction/development of existing facilities, NMC applied labour (OHS and minimum age requirements) via FIDIC contracts to third party construction companies and they plan to do the same for all new works also.

Occupational health and safety (OHS):

OHS issues are addressed via training for all staff and through the provision of appropriate personal protective equipment for staff. The company maintains an accident log and investigates all incidences of accident.

- Pollution Prevention and Abatement

NMC will generate solid wastes and liquid effluents.

Liquid effluents:

Are currently discharged to functioning municipal sewers under licence and there is pre-treatment of effluents prior to disposal (including disinfection as necessary). Development of new sites will utilise similar approaches to waste water effluents and the project will comply with national laws and international funding requirements.

Solid Waste Management:

Solid waste from existing facilities (the Scandinavia clinic and satellite clinics in St Petersburg) is recycled where practical (glass, paper, plastics, mercury lighting, x-ray fluids and materials) and good industry practices are applied in terms of on site medical waste management (Class B wastes). Solid waste which cannot be recycled (and which does not contain infectious or highly hazardous materials) is managed to industry good practice standards by the sponsor. NMC uses the services of a State waste management agency - Spestrans – which is responsible for transport and final disposal. Spestrans dispose of an estimated 600,000m3/month of Class B wastes from all medical facilities in St Petersburg, of which NMC contributes in the region of 30m3/month. NMC does not generate Class V (highly hazardous wastes containing toxic or infectious materials).

The company has passed all inspections by Spestrans and also a recent (Feb 2007) State inspection by an independent review group (and has been cited as an example of best practices in medical waste management).

Similar methods of waste management will be developed for the new St Petersburg facilities and in Kazan.

The company has committed to using best efforts to promote the use of good practices in medical waste management via the nascent Association of Private Clinics in St Petersburg and will work more broadly to explore opportunities for improving medical waste management .

- Community Health, Safety and Security

Principal risks to community health and safety will relate to fire and life safety risks for patients and visitors to the company’s facilities. There is an acceptable level of Fire and Life Safety (FLS) control and management at the Scandinavia clinic: Smoke detectors, alarms, fire hoses and extinguishers are present throughout the facility and automatic powder fire control systems are present in the clinic’s boiler and generator rooms. There are twice monthly fire alarm tests and FLS training for all staff. The company has committed to the installation of relevant FLS requirements at all new facilities and confirmation that these have been designed/ installed will be a CoD for the current project.

Air conditioning systems at the Scandinavia clinic are managed and maintained regularly with specific interventions to reduce risk of disease (especially legionnaire’s disease).

There are no other significant community health risks associated with this investment.

- Cultural Heritage

The sponsor has renovated the Scandinavia clinic (which is in a preservation area in the centre of St. Petersburg) and adjacent public open space in a sensitive and culturally appropriate manner that was approved by the city regulators. Cultural heritage at Kazan (essentially the retention and preservation of the fa�ade of a protected building), will be managed in accordance with local and international funding requirements.

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