IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because the specific environmental and social impacts that may result can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor, and field visits by IFC staff to representative operations of CGL. Because the new investment will be a corporate loan, key issues reviewed during appraisal involved the following: air and wastewater emissions; solid waste and hazardous materials handling; use of PCPs in transformers; fire and life safety; general worker health and safety; staff retrenchment; and, development and implementation of environmental and health and safety management systems to cover all group operations.

The company has presented plans and supporting information which confirms that its operations will comply with the environmental and social requirements, host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts are being addressed by the sponsor is summarized in the paragraphs that follow. CGL has a total of 16 operational facilities situated in 10 cities across India in the states of Maharashtra, Madhya Pradesh, Goa, Gujarat and Karnataka. These are all located in industrial estates. The company produces a wide range of electrical equipment, including transformers, electrical switchgear, and AC and DC motors in a wide range of sizes and capacities. At all plants, the majority of operations involve mechanical assembly of parts produced elsewhere, along with finishing (painting), testing and packaging. Some plants have small facilities for plating and die casting. All of the plants are regulated by the state Pollution Control Boards, which impose standards which are comparable to the IFC guidelines. The plants are required to carry out frequent monitoring and reporting, and are all in compliance with these local emission regulations. The plants receive electrical power from the local utilities, and most have backup diesel generators in case of outages. In addition to these generators, other air emissions are generated from ovens used for heat treating or drying components. These are fueled by electricity or natural gas or diesel fuel, and meet IFC emission limits. Little process wastewater is produced in any of the plants. In plants where there are painting or plating operations, any effluents are subject to physical-chemical treatment. All plants have septic systems for sanitary wastes. In all cases, treated wastewater is used on site for landscaping purposes, and none is discharged from the site. Sludge from water or wastewater treatment is handled by licensed disposal companies. There is limited use of hazardous materials in their manufacturing processes. Paints, varnishes and solvents, when used, are properly stored and handled. One plant uses liquid oxygen in the manufacturing process for lamps, and this is subject to strict state regulation, including containment of the facilities to ensure safety of any operations. Two plants have small-scale, largely manual, plating operations. These are well managed to minimize air emissions (acid fumes) and wastewater from these units receives specific treatment to remove metals. Metal and other scrap is sorted and is all sold to third parties for recycling. Used transformer oil is returned to the producer for reprocessing. CGL only uses synthetic oils for their transformers, which do not contain any PCBs. Overall, environmental issues are generally well handled in all operations. In some cases, general housekeeping needs improvement. Worker health and safety measures are adequate, but improvements are needed in some areas, particularly worker use of PPE and in noise protection. CGL management recognizes the need for compliance with both IFC guidelines as well as Indian regulations in this regard, and will develop and implement appropriate programs to ensure that all plants meet the standards for worker health and safety. Fire protection appears adequate in all the facilities, with some operations having their own fire response teams and vehicles. CGL has both energy and water conservation programs depending on the nature and size of specific plants, and provides training on a range of health and safety topics. Workers receive a package of benefits, including subsidized meals, medical care and recreational facilities. CGL supports various community initiatives by its plants, depending on the local community needs. Examples include support to schools and medical clinics, working with local technical schools on internship programs, and involvement with local and national industry associations in their programs. CGL is committed to ensuring that world-class standards of environmental protection and health and safety in all of its operations. A majority of its plants have already achieved ISO 9001 quality certification, and the company has started the process of implementing environmental and health and safety management systems at all operations and achieving ISO 14001 and OHSAS 18001 certification for these. At the corporate level, CGL will implement a management system for environment and health and safety, with the objective of providing central coordination of all programs in these areas. This will include the designation of a senior management officer to serve as the corporate focal point for all of CGL’s health, safety and environmental procedures and operations, and to coordinate planning across all operating units. CGL is committed to implementing appropriate quality, environmental, and health and safety management systems in each operating unit, and to achieving ISO 9001, 14001 and OHSAS 18001 certifications for these systems, and will agree with IFC on an appropriate schedule for achievement of these targets prior to disbursement of this investment.

This ERS contains the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that this proposed investment will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines, and the company's environmental and health and safety performance will be further strengthened upon successful implementation of the agreed management systems.

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.