11489 - Andrade

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Environmental Review Summary

Project Number

11489

Company Name

ANDRADE GUTIERREZ S/A.

Date ERS Disclosed

May 29, 2002

Country

Brazil

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 28, 2002
Signed : Apr 17, 2003
Invested : Jul 29, 2003

Sector

Other Funds

Industry

other

Department

Gbl Infrastructure & Natural Resources

Project Description

Construtora Andrade Gutierrez S.A. (CAG) was founded in 1948 and focused on the construction of public infrastructure projects such as highways, hydroelectric plants, airports and industrial plants. Privatization of key infrastructure sectors in Brazil in the 1990''s allowed CAG to expand into public infrastructure concessions and telecommunications to leverage its experience in the construction industry. In 1997, CAG defined a new strategy and decided that group''s structure should be rationalized by regrouping the assets into a holding company structure. The central holding of the group is Andrade Gutierrez S.A. (AGSA).

AGSA has requested that IFC provide a financial package with the intent of strengthening the group''s financial structure by lengthening the maturity of its financing. Part of the loan proceeds will be applied to new investments of the group, most likely to occur in Brazil''s infrastructure sector, in which case it would do so through AG Concessoes.

Environmental and Social

AGSA has presented plans to address these management issues to ensure that they will, upon implementation of specific measures agreed, operate in a manner so as its activities will comply with applicable host country laws and regulations and World Bank requirements as described in IFC’s current guidelines and policies. The detail about how these issues will be addressed by AG is summarized in the paragraphs that follow.

Environmental and Social Performance of Existing Activities
The vast majority of the environmental and social impacts caused by AGSA’s activities are associated with CAG and Andrade Gutierrez Concessões S.A. (“AG Concessions” or “AGC”) operations. By their nature, the Andrade Gutierrez Telecomunicações Ltda. (“AG Telecom”) and the "Porto Real" real estate ventures present no significant impacts of concern, nor are there any outstanding EHS compliance or performance issues attached to AGSA’s participation in these investments.

With regard to environmental and social compliance, CAG''s construction activities appear to be managed in compliance with all appropriate legal requirements, the construction of the Itapebi hydropower plant for a private energy consortium being a typical example. At Itapebi, CAG implemented a comprehensive program for managing environmental and social performance during construction of the powerhouse, rock fill dam, spillway, intake and penstocks, and three temporary river diversion tunnels. The EHS program included procedures for proper storage and handling of fuels, oils, and other hazardous materials; construction waste (both solid and hazardous) management; soil erosion and sediment control; fugitive dust control; reclamation and restoration of areas disturbed or degraded during construction; and safe work practices. Employees received training in work safety and family and personal health, as well as environmental training appropriate to their jobs. Local project staff monitored day-to-day activities to ensure that they are in accordance with procedures, permit conditions and the Environmental Impact Statement’s (“EIA”) requirements. Although not responsible for resettlement of approximately 400 people affected by the development of the project, CAG assisted the owner by playing an important role in facilitating resettlement activities and constructing new housing and community infrastructure, and mediating among the various community and government stakeholders to help implement an equitable relocation outcome for the affected families.

IFC is familiar with AGC’s toll roads and water/wastewater investments (e.g., Sanepar) due to its shareholding in AGC and its direct investments in Nova Dutra and AutoBAn. While these projects have not been without issues, environmental and social management by the operators has generally been good. Toll roads operated by CCR generally meet IFC’s policies and guidelines. From an environmental management viewpoint, AGC''s investment in Sanepar meets IFC’s requirements. There are, however, issues related to sewage treatment standards, such as level of treatment and local interpretation of federal standards, that need to be reconciled as they may affect AGC''s investments in other water and sanitation concessions.

Environmental, Health and Safety and Social Management Systems

At present, AGSA''s approach toward managing EHS issues is to fulfill all legal requirements associated with its construction activities, with responsibility essentially delegated to the contract, or project, management level. Operational procedures are developed for each project in accordance with site-specific legal and contractual requirements, including those established by:

The Environmental Impact Statement (EIA/RIMA) process;
Environmental permits; and
EHS standards and regulations.

The construction project manager assigns responsibilities at the site for implementation of various environment, health and safety procedures, and also establishes appropriate internal and external communication programs, and employee training programs (including accident prevention). In addition, the manager, working with the owner’s representative, develops community relationships and development programs.

Significant changes and improvements to EHS management within CAG are now underway. Over the last few years an explicit Quality Management organization has been created. Reporting directly to the CEO, the Director of Quality Management Systems is developing and implementing an ISO 9001 system corporate-wide with the aim to become certified to this international standard for quality management as it applies to CAG''s construction activities.

More recently, CAG has taken the decision to formally integrate EHS into its Quality Management System framework. With support from ERM, an outside consultant, CAG is in the process of developing a plan for implementation of an Integrated Quality, Environmental, Occupational Health and Safety Management System (IMS). The IMS will be developed and implemented to meet the requirements of ISO 14001 (the international environmental management system standard) and OHSAS 18001 (an international occupational health and safety system standard). As part of their support effort, ERM will also assist CAG with organizational change management during the implementation phase of the work. CAG expects to have the IMS implemented before the end of 2003.

In going forward with the development and implementation of the IMS, AG will expand the scope to include the following elements:

Incorporate World Bank environmental and social policies and guidelines as part of the legal and other requirements that apply to its construction, concession, and telecom investment activities, to the extent that AGSA has a controlling interest in these companies. For AGC, these policies and guidelines will apply as per the agreements signed on November 5, 200. For those companies in which AGSA owns a minority interest, it will exercise its corporate power to the extent possible, through shareholder votes, directorships or otherwise, to ensure that the environmental management systems are consistent with the World Bank’s environmental and social policies and guidelines;
Assign an individual at the AGSA organizational level with overall responsibility for environmental and social matters, including oversight of a process for periodic AGSA management level review of environmental and social performance;
Incorporate a formal procedure for environmental and social screening of new projects and investment opportunities into the corporate business strategy, commercial planning, and bid policy and process; and
Implement the necessary improvements to AGSA and/or AGC management systems so as to be consistent with IFC''s requirements for the AGC investment.
In addition to the recommendations of the outside consultant, AGSA''s IMS implementation plan will reflect these additional elements as a condition for IFC''s investment.

Employee Health and Safety Performance and Programs
In effect since 1994, CAG''s occupational safety and health policy is to provide a safe workplace for its employees and subcontractors, and to minimize accidents. All employees receive regular training in work safety, workplace hazards, first aid, and the proper use of personal protective equipment. In addition, depending on the specific job activity, special training is provided for selected employees. Daily health and safety discussions take place among work teams at job sites, and periodically, special health and safety promotional events are organized. Rewards are provided to employees involved in activities with no recorded accidents to reinforce this objective. Through the procedures established in the CAG Program to Prevent Environmental Risks (PPRA), and the Occupational Health and Medical control Program (PCMSO), and the Working Environment in the Construction Industry Program (PCMAT), locally responsible staff monitor work activities'' compliance. In addition, CAG conducts periodic internal audits.

Incidents and accidents are documented and officially reported to the relevant government authorities, and investigated and critically reviewed by internal work committees. Corrective measures are developed and implemented to avoid reoccurrence.

Community Relations and Development Programs
CAG''s community related programs are a key component of its construction activities. Activities vary depending on the type and complexity of the project and the characteristics of the local community and culture. Informal meetings are conducted, and both local political leaders and other community organizations are contacted. Information is distributed before any activity starts, as well as during the entire course of the construction effort. Schools, public offices and neighborhood associations are invited to visit the sites; opinion polls are taken, and leaflets are distributed.

Physicians assigned to the construction sites provide talks about preventive health and hygiene to the local population. Occasionally, vaccines and/or other medicines (for treatment of parasites, yellow fever, tetanus, etc,) are distributed. Sports tournaments are organized between employees and local teams. Literacy classes are provided for workers and their families, who are also eligible to attend education equivalency courses in collaboration with industry associations or universities.

Protection of Cultural Property
CAG follows all relevant legal and other requirements related to the protection of cultural resources and property where its activities impact archeological sites, and ensures that activities are carried out in accordance with approved plans and procedures. CAG coordinates with government-approved experts and authorities to report and collect findings and objects, some of which are put on public display at the work site.

Conclusion & Monitoring

IFC will evaluate AGSA''s compliance with the applicable environmental and social requirements during the lifetime of the investment by reviewing the annual monitoring reports (AMRs) covering: (i) the status of implementation of the IMS and related activities; and (ii) ongoing environmental and social performance of AGSA''s construction activities, concession operations, and other business activities. Periodic site supervision visits may also be conducted.

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.

Projects

Environmental Review Summary

Project Description

Environmental and Social

Conclusion & Monitoring

Similar Projects

Projects

Environmental Review Summary

Project Description

Environmental and Social

Environmental Category B Disclosure Requirementsy

Environmental and Social Issues

Proposed Mitigation for Environmental and Social Issues

Conclusion & Monitoring

Conclusion

Monitoring and Compliance

Press-Release

Related SPI

Similar Projects

Disclaimer