24398 - Fundo de Educacao para o Brasil

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Environmental Review Summary

Project Number

24398

Company Name

Fundo de Educacao Para A O Brasil Fundo de Investimento

Date ERS Disclosed

Dec 15, 2005

Country

Brazil

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : May 11, 2006
Signed : May 25, 2006
Invested : Jun 13, 2006

Sector

Colleges, Universities, and Professional Schools

Industry

other

Department

Regional Industry MAS LAC & EUR

Project Description

The Fundo de Educação para o Brasil (the Fund or FEBR) was structured by Banco Patria, one of Brazil’s leading private equity firms, as an investment vehicle focused on the post-secondary education segment in Brazil. FEBR has one single asset, a controlling stake in Anhanguera Educacional S.A. (“AES”). The Fund will channel its investments in the sector through AES.

AES is a private, for profit, São Paulo based, post-secondary education company with 10 campuses and average enrollment of 16,800 students in 2005. AES focuses on offering good quality, affordable education to lower-income students in Brazil.

IFC’s investment of up to $16 million will be used to fund part of AES’ expansion strategy, centered on building new campuses in small to medium sized cities in the state of São Paulo and other regions in the Brazilian Southeast – the country’s most prosperous – over a 3 year implementation period.

Environmental and Social

The sponsor 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 – of the 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 will be addressed by the sponsor/project is summarized in the paragraphs that follow.

- The company has got three staff members involved in dealing with environmental issues, with the help of a consultancy firm, and have started adjusting to ISO 14.001 requirements as an aim. By 2007 they have plans to attempt certification, but have started adjusting their facilities stage by stage, focusing initially on managing laboratory residues (all permits for handling substances were handed to us).

- Water and solid waste management is mainly done through the public infrastructure systems, with the exception of some effluents which are treated before being directed to the public sewage system.

- The university campuses produce little waste. Anhanguera is developing a system and building capabilities to separate solid waste for recycling purposes.

- A few hazardous materials used in the lab (very small quantities) are disposed of periodically, through a specialized company service.

- For emergency systems, they also rely on the available public infrastructure, given their units are all located in urban areas, close to hospitals and firemen. There is staff members trained in first aid and they hope to in the future have one in each unit, trained for rescue.

- For fire safety, although there were not substantive issues found, in most cases there is a lack of emergency lights and smoke detectors, fire hoses, in one or two locations there were missing a second means of fire egress, which could be solved by adding additional doors and external metal cases.

- Workplace safety environment and occupational health and safety is the responsibility of a regular consultant, who carries out trainings, installs manuals, equipment and signaling at the labs.

- Labor issues are dealt with by a human resources manager and the information he gave us informed that the company fulfills all of Brazilian legislation and does more (health plan, subsidies, scholarships etc). Most of their staff is directly hired and only a small percentage is third party contractors. The salaries paid are above the average price. They have never had any labor issues in Brazilian courts, except minor issues related to sub-contractors during construction, which they now monitor closely. Unions are active and they follow all union resolutions and collective bargains accordingly. In regard to retrenchment, there is a procedure installed, which allows for multi party analysis of the situation, including a psychologist, relocation is also attempted before firing someone. When that is unavoidable, then support for a relocation outside is offered and some financial support for a few months. No discrimination practices are tolerated (racist behavior has been reason for firing a staff member), although statistics are not collected for gender and ethnic background of workers. There have been no cases of HIV amongst staff.

- Land acquisition and resettlement were ruled out as relevant issues by the staff, because they have a policy to only ever rent properties in order to benefit from an existing governmental incentive. They may purchase a rural property for a new campus, however, they have declared they will not buy anything with resettlement issues.

- In terms of corporate social responsibility, the university runs a range of voluntary activities in partnership with local authorities, NGOs and local communities, generally putting staff at disposal to supervise student practice as legal aids, counselors etc. They also give talks and training for income generation activities and general well being for the community, in partnership with local authority. This would benefit better from monitoring and evaluation of the results, reporting (even to enhance their marketing image). They could also look into SME opportunities and demonstrated interest in this theme during the appraisal visits.

- The company is in material compliance with operating licenses required by government, subject to a final review from legal counsel.

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:

- the status of implementation of any measures contained in the Environmental and Social Action Plan[s] (see above) and
- 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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