11664 - TIM Peru S.A.C.

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Environmental Review Summary

Project Number

11664

Company Name

America Movil Peru S.A.C.

Date ERS Disclosed

Oct 30, 2002

Country

Peru

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Mar 6, 2003
Signed : May 7, 2003
Invested : Jun 13, 2003

Sector

Mobile Telephony

Industry

other

Department

WBG Digital and AI

Project Description

TIM Peru S.A.C. (TIM Peru or the company) is a wholly-owned subsidiary of Telecom Italia Mobile (TIM), Italy''s largest mobile telecommunications operator with over 36 million subscribers in Europe and Latin America. The project consists of the nationwide expansion and upgrade of TIM Peru’s cellular network, the third largest in the country, to increase capacity and population coverage, improve quality and reliability, and offer more value-added services. The company acquired its mobile license in May 2000 through a competitive bidding process and launched initial service in January 2001. As of end-August 2002, TIM Peru had over 300,000 subscribers.

TIM Peru intends to expand the availability of mobile services to a larger part of the population, particularly through the aggressive use of prepaid services, which are typically more affordable. Further, the increase in mobile penetration resulting from the expansion of a third operator will foster greater competition in the Peruvian telecommunications sector, thereby increasing access to reliable and affordable telecommunications and other value-added services.

IFC’s role is to provide long-term financing to the company at a time when financing flows to telecommunications companies in emerging markets have receded due to a global downturn in the sector.

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 upon, 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.

The company is developing an Environmental and Social Management Policy and Procedures Plan (ESMP) at the corporate level. In developing the ESMP, TIM Peru will be following the same approach to worker health and safety and environmental management as TIM in Italy. With respect to worker health and safety, this approach will include a continuous assessment of occupational risks and improvement in internal procedures and processes; a Safety Management System; and a company-wide definition of responsibilities and training programs to implement the safety management system. With respect to environmental management, the approach will focus on minimizing electromagnetic emissions and visual impact. The ESMP will be a vehicle for transferring the best practices of TIM in Italy to TIM Peru.

The company''s expansion plans are primarily in the major population centers of Peru, but will include expanding coverage along the Pan-American Highway to approximately 2000 kilometers. Through its contractor, Nokia, the company primarily leases space for its antennae and base stations from land owners through a willing lessor/willing lessee relationship. In about 2 percent of the cases, the company is purchasing the sites through a negotiated sale. It typically places its equipment on roof tops or existing structures to avoid cost, and most sites will be located within towns or cities. Thus, changes in on-the-ground land use are likely to be minimal. Along the Pan-American Highway, the company will be using hill tops for its stations. TIM Peru, however, has given assurances that (i) new installations will minimize impacts on sensitive areas, such as national parks, forests, wetlands, or cultural sites and (ii) existing installations will be used where feasible.

In cases where an antenna or base station site is near or within a protected cultural area, the company must obtain permission from the National Institute of Culture (INC), the designated regulatory agency. Where the project may impact on the physical or visual integrity of a site, the permission includes an evaluation of project impacts and a mitigation plan. TIM Peru is considering locating a repeater near the Machu Picchu Sanctuary. Workers at the Sanctuary and the nearby hotel will form the customer base. If the company installs the repeater, the 11 meter tower will be located down the road from the Sanctuary near an INC employee canteen and will be disguised as a local tree species. Additionally, the company will work with INC to educate users in the courteous and appropriate use of mobile phones within the Sanctuary itself.

In identifying new sites, the company assesses potential impacts on the local neighborhood and minimizes them. The neighborhood is informed about the project through local meetings, and the company seeks the approval of these neighbors.

All sites will have batteries associated with them in case of power failure. Seven sites in Lima and 45 sites in other parts of the country have generators ranging in size from 20 to 23 KW to protect strategic equipment from power loss. The generators are housed in their own noise-insulated structures and only operate in case of power failure. At other locations, the company periodically uses 4 KW and 8 KW portable generators, for outdoor and indoor sites respectively. All of the generators are small in capacity and are considered under World Bank Group guidelines to have minimal impact on air emissions. TIM Peru will follow World Bank Group ambient noise guidelines. For example, ambient noise outside the generator room must be below 45 decibels in residential areas during the night. The company will follow a routine preventative maintenance schedule that ensures the generators operate according to manufacturers'' specifications and, thus, minimizes the air emissions and ambient noise. All fuel storage will have secondary containment. The batteries are acid-free and thus present a low risk for environmental damage. Additionally,TIM Peru uses special racks for their transportation and uses clear procedures for their handling to avoid accidents.

All solid and liquid waste management is carried out under maintenance and operations procedures that specify (i) containers for handling, transportation and disposal, and (ii) monitoring of actual practice to improve performance. Contractors must follow these procedures as well. Solid and liquid waste generated as part of the network installation and operations is limited and will be disposed of in accordance with local regulations. Though its equipment and operations are new, the company is already developing equipment recycling programs and identifying companies that can handle its future hazardous waste stream. Nokia is supplying equipment for the project that does not use equipment containing polychlorinated bi-phenols (PCBs) or chlorofluorocarbons (CFCs). The company will not install equipment that uses either of these substances.

As mentioned, the company is developing a Safety Management System. To ensure adequate fire protection, all sites will have fire extinguishers for suppressing electrical or diesel fires, as appropriate, placed outside fire-risk areas against highly visible backgrounds. The Department of Maintenance and Operation has a regular equipment inspection program in place that includes the testing of fire safety equipment. The company conducts regular drills for both fire and earthquakes.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will 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.

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