10755 - Freecom (Pty) Ltd.

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Environmental Review Summary

Project Number

10755

Company Name

Freecom (Proprietary) Limited

Date ERS Disclosed

Mar 16, 2001

Country

South Africa

Region

Africa

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 24, 2001
Signed : Aug 16, 2001
Invested : Oct 15, 2001

Sector

Computer & Electronic Products(Computers & Peripherals, Communications Equip., Elec. Watches & Similar Elec. Products. Integrated Circuits & the application of Miniturization Technologies characterize this sector.)

Industry

other

Department

Regional Industry - MAS Africa

Project Description

This project would expand the operations of Freecom, a company focused on providing IT solutions to the lower/middle income "first time buyer" end of the market, the sector of market not being specifically addressed by any of the larger players in the PC market today. The objective of Freecom will be to make appropriate and affordable Information Technology more accessible to a larger part of the market, typically presently excluded on the basis of price, rapid obsolescence, and difficulty of use. The company will provide a personal computer solution bundle based on refurbished used computers and a new software, called "New Deal", that offers full functionality but requires less computer resources to run on than the traditional Windows based software. This allows the life cycle of older model computers (486 and early Pentium models) to be extended. Freecom will seek to provide an affordable fully functional PC solution backed up by after sales support not normally available to buyers of used equipment. The target market stretches from first time home users, through schools community centers, non-governmental organizations (NGOs) and small businesses. It is envisaged that distribution of the computers will involve establishment of community technology centers that will function both as sales offices and computer literacy training centers. Sources for used computers will typically be those retired from corporations when they upgrade their systems. Freecom has formed a relationship with Per Scholas, a US based not-for-profit corporation that is already established in the USA as a personal computer refurbishment concern. Per Scholas has undertaken to supply Freecom with computer hardware. Additional used computers will be sourced from large South African corporations by offering a simple and socially responsible means of disposal. Freecom has partnered with New Deal Inc., a Boston-based software company that developed "smart" software that can be run on older PC models. Freecom will have distribution rights for New Deal in southern Africa, with an option to extend this distribution right throughout Africa. The proposed re-engineering factory facility has a high social/community emphasis and employs physically disabled workers, rehabilitated ex-offenders, abused women and their families.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

1. Site selection for computer refurbishing facilities: Freecom (Pty) Ltd is located in a modern business park within a “clean-industry” node, approximately 15km from the Cape Town city center. The area, Montague Gardens, has a fully established transport, communications and utility infrastructure. Adjacent residential areas for all socio-economic groups provide much of the company''s human resources. The business park premises conform to stringent local municipal building regulations. Occupant safety, access, lighting, air quality, sanitation, power and communication requirements are all adequately provided for in the facility.

2. Source of water and electricity, including fuel storage if applicable: The region has well-developed water and electricity supply infrastructures. Water is supplied by the Cape Metropolitan Council. Distribution of electricity is the function of the Electricity Supply Company. A nuclear power station situated 30km north of Cape Town supplies a significant portion of the power to the national grid. Because Freecom will not require a back-up generator, there is no need for fuel storage on site.

3. Air emissions and workplace air quality: The approved design of the premises and associated building regulations ensure adequate workplace air quality. None of Freecom''s activities result in air emissions.

4. Disposal of solid and liquid wastes, including sewage and hazardous wastes: Under South African by-laws, local governments are responsible for the management of wastewater and industrial effluent. The law prohibits the discharge of industrial effluent into sewers and storm water drains that does not conform to set limits and proscribes the measures to be followed where such disposal is required. The minimum requirements for the handling and disposal of hazardous waste are prescribed by the Department of Water Affairs & Forestry (DWAF). The Cape Metropolitan Council (CMC) Waste Management Department has provided a number of environmentally approved landfill sites for the disposal of waste, including specific sites for hazardous materials and chemicals. The disposal of toxic/intractable/special waste is subject to the granting of a permit, which is monitored by a scientific services department. Freecom (Pty) Ltd may use the services of the CMC or an authorized waste disposal management service. At this point in time, no hazardous materials are used in the factory. Cleaning materials used are of the type approved for household cleaning. If, in future, large-scale computer refurbishment results in an accumulation of redundant or damaged electronic components (i.e., monitors, motherboards, which present a minimal hazard) these will be separated from domestic waste and managed according to municipal regulations for industrial waste disposal.

5. Handling and storage of chemicals and hazardous materials: Freecom is in the process of implementing the ISO 9001:2000 quality system. Segments of the quality system are already being complied with, including work instructions and other quality control procedures for the handling and storage of materials. Material safety data sheets (MSDSs) will be maintained in the event of hazardous substances are being used As noted above, no hazardous substances are used in Freecom''s operations at the present time. Should they be required in future, Freecom will endure they are handled, stored and used in accordance with IFC guidelines and local regulations. The MSDSs will outline the health and environmental risk and emergency procedures to be followed in the event of spillage or accident.

6. Use of PCBs and CFCs, if applicable: Adoption of the ISO Quality System approach has resulted in Freecom eliminating the use of substances that have significant environmental impacts. Freecom has installed non-CFC air conditioning systems and does not have any electrical equipment that contains PCBs.

7. Workplace safety and equipment safeguarding: South African businesses are required to conform to a number of labor regulations, including the Basic Conditions of Employment Act (BCEA), which includes a Codes of Good Practice that promotes the well being of employees, the Occupational Health and Safety Act (OH&SA), the Labour Relations Act, and the Employment Equity Act It should be noted that employers are required by South African law to display a copy of the BCEA and OH&SA at the workplace where employees can read it. BCEA and OH&SA proscribe detailed workplace safety and equipment safeguarding. conditions. Freecom adheres strictly to equipment maintenance and inspection instructions, conducts workplace audits that are subject to regular management review, and has adopted a philosophy of continuous improvement. These efforts have further contributed to employee safety. Freecom''s internal work instructions detail the protective clothing to be worn, which is provided to all employees.

8. Employee health, safety and training: The provisions of both the OH&SA (General and Safety Regulations) and ISO 9001:2000 resource management and measurement processes ensure that employee health and safety training are consistently addressed. Each employee has a job description and training file that ensures that only trained staff may operate specific equipment. Where applicable, work instructions give pertinent attention to safety and environmental aspects. Under the terms of the BCEA, employees are served with a written contract/letter of appointment that describes the place of work and where the employee is permitted to work. The resident Quality Manager monitors the implementation and maintenance of these terms and conditions.

9. Fire protection, emergency response and life safety: In addition to the provisions of the laws cited above, the industrial complex is regularly subjected to fire prevention inspections by local authorities. A large and modern fire protection service is situated at the entrance to the industrial site. The Milnerton Medi-Clinic (a fully equipped hospital with air ambulance) is situated near the industrial area’s western entrance. The police services and various emergency response organizations are also in close proximity. Within the factory, a Freecom employee with the appropriate training is designated to render immediate assistance and to control the contents of the medical first aid box. Various organizations such as the Red Cross and St John’s provide on-site training courses for employees and supervisors.

10. Local disclosure: Local disclosure of the ERS was made done with an advertisement in the Cape Times on March 9, 2001.

Conclusion & Monitoring

This Environmental Review Summary (ERS) 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. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with 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. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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