Zulekha Hospitals

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

28873

Country

United Arab Emirates

(IDA)

Region

Middle East and North Africa

Sector

Hospitals and Clinics

Department

Reg Manufact, Agri & Services, EMENA

Company name

Zulekha Healthcare Holding Limited

Environmental category

Status

Pending Disbursement

Date ESRS disclosed	January 28, 2010
Last Updated Date	February 8, 2012
Previous Events	Signed: June 24, 2010 Approved: May 28, 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 investment consisted of appraising technical, environmental and social information submitted by Zulekha Hospitals Group, UAE (Zulekha Hospitals or the Company) including: operational data for its UAE hospitals, technical and architectural plans for the proposed expansion in Sharjah and greenfield hospital in India, design guidelines and criteria, water and waste management authorizations and monitoring data for existing hospitals, etc. The appraisal also included visits to existing UAE facilities to review the operations and E&S management practices; a site visit to the proposed greenfield hospital in Nagpur, India; and discussions with technical consultants and top management of the Company in UAE and India.

Project description

Zulekha Hospitals is a UAE-based healthcare company with 3 clinics and two multi specialty secondary care hospitals in the UAE. Currently it operates one 63-bed hospital in Sharjah, established in 1992, and one 78-bed hospital in Dubai established in 2004. Both of these hospitals have a total built-up area of 185,200 sq feet and are accredited by the US-based Joint Commission International (JCI).

Zulekha Hospitals is now expanding into India by setting up a 160-bed secondary care hospital in Nagpur, in the state of Maharashtra, under the name of Alexis Multi-Specialty Hospital Private Limited (Alexis or India Project). Construction of this hospital is expected to start in early 2010 and to be completed in 24 months. In addition to this expansion in India, the Company is also proposing to expand its current facilities in Sharjah, UAE by adding 135 beds and refurbishing the existing hospital facilities (Sharjah Project).

IFC is considering financing these developments (the Project) through debt and equity investments.

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:

While all of IFC’s Performance Standards are applicable to Company’s operations and the proposed Projects, the Performance Standards that apply to this corporate investment at appraisal are:

- PS 1: Social and Environmental Assessment and Management System;
- PS 2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health, Safety and Security

No new land acquisition is necessary for the Sharjah Project. The land required for India Project (approx 75,000 square feet) has been purchased from Sadiq and Co. - the local partner for the India Project - on a willing-buyer, willing-seller basis; issues relating to PS5: Land Acquisition and Involuntary Resettlement are consequently absent from the Project.

As both Projects are located in well developed urban areas in major cities, PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples and PS8: Cultural Heritage are not encountered.

Environmental and social categorization and rationale

The Company’s operations involve construction and operation of healthcare facilities such as hospitals and pharmacies. Key environmental, social, health and safety impacts associated with the Projects during construction and operations include: Environmental, health, safety, and social management –including air emissions control, potable water supply and treatment, waste water management, health care waste management including non hazardous and hazardous medical waste both liquid and solid; labor and working conditions, employee and contractor occupational health and safety, including training and housekeeping; disinfection, sterilization, hygiene and implementation of good hospital management practices required to prevent infections among patients and employees; community health, safety and security during construction and operational phase – including radiation hazards, traffic management, and security services; life and fire safety including emergency response; and energy & water efficiency opportunities to further reduce the facilities’ environmental footprints and ensure they are climate change resilient.

The project may result in limited number of specific environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The Company will manage its environmental and social performance in accordance with applicable local laws and regulations and international standards, including IFC’s Performance Standards on Social and Environmental Sustainability. This corporate investment is therefore categorized as Category B.

Key environmental and social issues and mitigation

The Company 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 including: the host country laws and regulations; IFC’s Performance Standards; and the World Bank Group (WBG)/IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow. Further information is provided in the attached documentation (Environmental and Social Action Plan: ESAP).

PS 1: Social and Environmental Assessment and Management System

Social and Environmental Assessment

As a part of the licensing process for both the expansion and new developments the sponsor had to fulfill certain environmental, health and safety requirements set by different responsible government agencies, although formal environmental and social assessments were not required.

In the UAE the Company provided copies of its operational permit & carried out a gap analysis of IFC standards that demonstrates that it operates its hospitals in compliance with relevant local regulations. Regular inspections of Company’s operations are conducted by relevant government agencies. Necessary regulatory approvals and authorizations are being processed and procured for the India Project.

Management Program and Organization

Both of the UAE facilities are JCI-certified and thus have standard procedures related health, hygiene and safety management. The new facility in India will also follow the same set of procedures and is expected to obtain JCI certification as soon as possible from the date of operation.

Site visits of the existing operation in the UAE have indicated that the sponsor has considerable in-house capacity and project management expertise to develop, construct and operate its facilities. However, currently, there is no formal, corporate level organization or management system covering all the operational facilities. Rather, the engineering and the maintenance departments are responsible for managing environmental and safety issues at each facility. However, In view of the expanding footprint of its operations, Company will implement a corporate-wide formal and certifiable environmental management system (EMS) within 18 months from disbursement. For this purpose it will appoint a full-time EHS in-charge at corporate level to oversee all these initiatives across all the facilities.

As part of the EMS, the Company has also agreed to ensure that Environmental and Social Management Plan/Procedures (ESMP) are integrated into the tender documents for all of its proposed construction activities, both in the UAE and in India, and to monitor the adequate implementation of such procedure.

Community Engagement

The Company has confirmed that no complaints have been received from the local communities near its existing sites to date. Each of the existing facilities has implemented a grievance mechanism for receiving and addressing grievances raised by the local community. The Company has stated that, in most cases, people prefer speaking directly to an administration manager.

For its proposed the Sharjah extension and the Greenfield hospital in India Projects, Company will establish a formal grievance mechanism during the construction and operational phase, so that the neighboring community could convey its concerns to the management.

PS 2: Labor and Working Conditions

Currently, the Company employs over 1,000 staff including 170 doctors and 270 paramedics. The Company’s staff includes significant numbers of women at all levels, including 65 women doctors out of a total of 170.

The Company has a comprehensive human resources (HR) policy and documented procedures for managing HR issues, ranging from recruitment and retention, working hours, maternity leave, training and staff development, bi-annual staff survey that indicates high staff satisfaction, workers grievance mechanism and disciplinary policy. During the visits of the UAE facilities, the Company’s HR policies, management system, conditions of employment and working conditions were reviewed and were found to be in compliance with UAE National Law and IFC PS2 requirements.

Benefits provided to employees (over and above those that are mandatory under UAE regulations) include: medical benefits for all staff and their immediate family members; free treatment of staff at Zulekha hospital, with highly discounted treatment for family members; free transportation to and from work; subsidized meals at the hospital canteen; 45 days of maternity leave for woman employees and housing provided to staff near the operational facilities, either free or with subsidized rental costs.

The work force is provided with appropriate personal protective equipment (PPE) and a number of training courses in occupational health and safety (OHS) are provided. All employees are provided with regular medical check-ups and the Radiation Safety Badges worn by staff working in the Radiology Unit are tested by a third party testing entity every month. All the medical equipment containing radioactive material is checked and maintained by Siemens quarterly, while the equipment is also tested for leakage every year.

Regular trainings are conducted for all the staff, as part of the company annual training program and cover topics such as patient care, problem solving training, managing stress, team work, customer care etc. The UAE fire department provides training to Company’s staff on fire and life safety.

It was noted that while working conditions, OHS procedures and practices are, compliant with IFC standards .However they would need to be strengthened for employees of external contractors during constructions. The Company has therefore agreed to include relevant IFC PS2 requirements in contracts between the Company and its sub/contractors. These requirements, should address compliance with Labor and OHS Laws of UAE and India, and compliance with IFC PS2. Company will monitor and report any accidents during construction to IFC.

For the India Project, the Company plans to work with some of the best and highly reputed construction companies in India who have articulated and formalized their own health and safety policies and management systems. Moreover, at each construction site, the Company will appoint at least one of its own full time site engineers to monitor the compliance with requirements of IFC PS and relevant guidelines and ensure quality and safety throughout the construction phase.

In the UAE, the Sharjah extension includes either modification at the ground floor of the existing building No-2 (which is an old building of G+1) or full demolition of the same building with permit to be obtained by end of 2011. The decision of opting either of the above options will be purely based the availability of power supply from the Electrical Sub Station. The review carried out during appraisal indicated that there is a significant risk of asbestos material being present in Temporary store in the UAE. As a result, the company shall carry out an Asbestos audit prior to starting demolition of this store and provide IFC with a Demolition Management Plan prior to the start of the demolition work.

The Company’s internal grievance mechanism encourages staff to raise issues through direct discussions with immediate supervisors or managers and grievance boxes are located throughout the facilities. No court cases or incidents of labor unrest, strikes or other disputes were reported.

PS3: Pollution Prevention and Abatement

Zulekha Hospitals’ management is committed to ensuring the compliance of all its hospitals with both local regulatory requirements and IFC guidelines for air quality, wastewater discharges, hazardous waste, ambient noise and workplace conditions. The Company complies with all of the statutory requirements related to EHS for its operational facilities in UAE and is in the process of acquiring all the necessary permits and authorizations for the Projects in India and Sharjah.

Water for the existing facilities is provided by the municipal sources and is further treated on site before use in critical areas. In the UAE, potable water is provided by third party vendors certified by the UAE government as meeting WHO standards. Water required for India project will be provided by the municipality. In addition, there are plans to have a bore well as a back-up water supply. An in-house water treatment shall be provided to ensure water quality (potable water and water needed for medical purposes). In order to conserve water, sensor water taps with thin water spray are gradually being installed in all of the Company’s facilities. The Company has agreed to provide IFC with data to indicate the extent of the water savings resulting from the installation of such equipment.

Electricity for the UAE facilities is available from the national grid for all hospital areas and an uninterrupted power supply is provided in high risk area as the operating theatre, recovery rooms and outpatient clinics. For the India Project, diesel generators will be installed as a back-up power source in the event of grid power cuts, which are frequent. All diesel storage tanks will be provided with secondary containment as necessary to ensure that spills or leaks do not contaminate nearby soils or surface waters.

The Company is actively implementing energy efficiency measures across its facilities. The Dubai and Sharjah buildings have installed light emitting diode (LED) and compact fluorescent lamp (CFLs) lighting in all public area. At the Sharjah facility, an experiment is underway to replace 60 watt light bulbs with 7 watt bulbs in public areas. Other energy efficiency measures are being studied by the Company and these will be gradually implemented across its existing and upcoming facilities as possible. The Company has agreed to provide IFC with energy conservation data as a result of these efforts.

At both UAE hospitals, potable water supply is received from local municipal authorities. However the water is further treated through an in-house Reverse Osmosis Treatment plant before use in critical operations such as laboratory, dental, operation theatre.

In the Sharjah and Dubai hospitals, as per the local authorization, wastewater is discharged into the city sewer for final treatment in a municipal wastewater treatment plant. The company will provide IFC with data demonstrating that waste water discharged into the sewage network is compliant with IFC guidelines – general EHS guidelines and that the Dubai WWTP has the capacity to treat this effluent adequately prior to discharge to the sea.

In the case of the India Project, local regulations require an on-site wastewater treatment plant for the new hospital. As the treated wastewater will be recycled via a cooling tower, no discharge to municipal system is expected. The hospital will also be equipped with rainwater harvesting features, a mandatory requirement by the local government.

In the UAE, management of hazardous health care wastes is overseen by the Company’s infection control team. Housekeeping staff wear appropriate protective equipment and follow the Company’s infection control policy when managing the hazardous waste. Hazardous wastes are collected in special yellow bags or hard plastic containers (for sharps) and disposed of in a locked temporary storage area outside hospital building and with limited access. Other clinical wastes are collected in black bags and disposed in the same disposal storage area. Storage rooms have limited access and the yellow bag store room is an air conditioned room – in accordance with the biomedical waste management requirements to prevent infections. Solid waste is collected by the municipality while the sharps and the yellow bags are collected by an authorized and licensed private firm for disposal in the Dubai hazardous waste incinerator. No incineration is conducted on-site at any of the Company‘s facilities.

For the India Project, the biomedical waste will be sent to authorize handlers. Air-conditioned rooms will be provided for the storage of biological solid waste, in accordance with local regulations.

The Company will develop a plan for Disposal of Hazardous Materials, which will be reviewed by a suitable qualified third party to assess compliance with IF’s requirement as a condition of disbursement for IFC’s investment

PS4:– Community Health, Safety and Security

The proposed site for the India Project is adjacent to a national highway, and very close to the Nagpur ring road, thereby providing very good connectivity from within as well as outside the city. As such, the Project is not expected to result in significant transportation impacts for the neighboring community.

Also for the India Project, the review of preliminary architectural design suggests that the proposed parking space could be inadequate in future, even though it is fully compliant with local building codes. The parking requirement has been assessed and possible changes have been incorporated and submitted to IFC for review by Hospital consultant s on December 01, 2009.

The designs for the operational facilities in UAE are in accordance with JCI requirements and follow NFPA design requirements. The sponsor is also planning to obtain JCI certification for its India hospital as soon as possible from the date of operation. And the facility will be designed in conformance with both NFPA and JCI requirements.

The Company has developed Fire and Safety plans for its UAE operations. Regular trainings, informative courses and public awareness campaigns on the use fire fighting tools in emergency situations are held regularly. Fire drills are being carried out by the fire department twice/year. All the existing facilities are equipped with adequate fire protection systems that include fire extinguishers and hose reels, smoke detectors and fire alarm. Emergency exists are properly marked and there are maps of exit route on each floor as well as a 2 hour fire proof safe room on each floor. The newest part of the Sharjah hospital, Dubai hospital and the planned extension in Sharjah are equipped with automatic sprinklers in addition to the equipment mentioned above. Throughout the facilities, there are adequate instructions and good signage for the use of fire-fighting equipment.

The Company has reviewed IFC’s Life and Fire Safety Guidelines and agreed to implement these in the design and development of the Projects. Specifically, the Company has agreed to design, construct, and operate the Projects in full compliance with local building codes, local fire department regulations, local legal/insurance requirements, and in accordance with internationally accepted life and fire safety (L&FS) standards such as US National Fire Protection Association (NFPA). For this purpose, the Company will undertake a third-party audit of its architectural designs against the requirements of the US NFPA’s Life Safety Code and submit to the IFC a certification from competent third party architects and professional consulting engineers. Similar audit will be undertaken after the completion of project construction prior to commencing the operations.

The Company has taken adequate precautions to prevent accidental exposure to radiation, and all the facilities are in compliance with the applicable regulations and requirements in this regard. For the India Project, it is proposed to introduce Linear Accelerator based radiation therapy for cancer treatment at some point in the future. Adequate design provisions have been made for the safe use of this equipment, which includes installation of a 6-foot thick concrete enclosure in the basement. These designs have been approved by the atomic regulatory body in India.

In UAE, the Company has its own trained security personnel as a part of the Maintenance and Services Administration. For the India Project, the Company plans to contract its security services to a professional third party service provider after adequate due diligence on firms providing these services. The security personnel will not carry firearms. In addition to protecting the hospital property and Company assets, the security guards perform important support functions such as regulating vehicular movement control and facilitating patients and visitors entrance to the hospitals.

On the basis of the above information and through the implementation of the Environmental and Social Action Plan, it is expected that the Project will be operated in compliance with IFC’s PS, relevant environmental, health and safety guidelines, and host country requirements.

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