Environmental Assessment (OP 4.01).

There is no impact on indigenous people or cultural property under the project, nor is the project expected to have any impacts on natural habitats, forests, or protected or sensitive areas.

A second runway was foreseen by 2014 in the concession agreement. However, LAP is able to handle projected passenger traffic with its existing infrastructure and does not need to expand (construct a second runway) in the foreseeable future. The Ministry of Transport and Communications (MTC) also has the right to postpone construction if a second runway is deemed unnecessary.

If the construction of the second runway is to proceed in the future, the MTC would be responsible for providing all necessary land in a single act, as well as all related relocation and compensation of occupants of such land. LAP will only begin construction after the MTC has delivered all the land necessary for the expansion. Peru’s current practices for valuing affected assets and compensating the legal owners of expropriated properties are broadly consistent with WBG policy. IFC will not be able to evaluate whether the resettlement of informal settlers will meet WBG policy until the resettlement plan or plans of the MTC is/are produced. LAP will closely monitor and inform IFC of any resettlement-related developments. LAP and IFC will review the MTC’s resettlement plan or plans as they become available and work with the MTC and seek to ensure that resettlement follows WBG policies.

2021 Update: While the original disclosure from 2006 mentioned that the standards applicable to the project were those contained in IFC’s Operational Policies 4.01, the executed shareholders agreement refers to the 2006 IFC Performance Standards as at-commitment E&S requirements.

While all Performance Standards are applicable to the investment, including the proposed rights issue, IFC’s environmental and social monitoring indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

PS 1: Social and Environmental Assessment and Management Systems

PS 2: Labor and Working Conditions

PS 3: Pollution Prevention and Abatement

PS 4: Community Health, Safety and Security

PS 5: Land Acquisition and Involuntary Resettlement:                                        

 In the 2006 the project was categorized as “B” because at the time of investment there of the “limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.”. The construction of the second runway and corresponding airport expansion was not certain, because, as stated in the disclosed ESRS, “LAP is able to handle projected passenger traffic with its existing infrastructure and does not need to expand (construct a second runway) in the foreseeable future.

2021 Update: Since the time of IFC’s appraisal, air traffic figures have grown significantly and so did the need to develop the airport expansion project. LAP developed an ESIA for the project (disclosed together with this ESRS) and obtained all the required permits and approvals. The airport expansion project which is under development include the construction of a second terminal and a second runway, aprons and other airside and landside facilities on land which required the permanent resettlement of 707 families. The current project phase is characterized by increased magnitude of E&S risks and impacts, which are consistent with a “Category A” investment.                                                 

 The ESRS disclosed in 2006 mentioned that “LAP has developed and implemented an environmental management system in accordance with ISO 14001, the international environmental management system standard. This management system is certified according the norm and audited every year by an accredited company.”

Currently, LAP has an integrated system for Occupational Health, Safety, Environment, Social and Quality. The system is certified under ISO 9001, ISO 14001 and ISO 45001. The scope of the system covers airport operations and the expansion works of the new project. LAP’s management system is mature and functioning, with objectives, targets and indicators to measure effectiveness of key environmental, safety, health and social programs and aligned with continuous improvement. LAP has a Sustainability Policy oriented to the generation of value and continuous improvement, understanding sustainability as the means for the transformation and development of the organization. The Policy integrates commitment to environmental protection, health, safety and social development into a balanced business model, through transversal and reliable relationships. 

As part of LAP’s integrated E&S management system, the company has procedures for the identification of hazards and risks, and procedures to identify environmental impacts and aspects. The company has developed an ESIA for existing operations and an amended ESIA for the airport expansion project, which was disclosed in 2020 in IFC’s ESRS disclosure page. Both ESIAs received regulatory approvals.

LAP’s system has several management programs and procedures for the systematic risk management, review and monitoring of E&S risks and impacts related to occupational health, safety, operational safety, environmental and social aspects, including labor-related matters. These management programs, tailored for the current operations and for the expansion project, have clear definitions of roles and responsibilities, management, controls and monitoring actions, indicators and reporting requirements which are reviewed on a regular basis as part of the E&S management system certification process.

Organizational Capacity and Competency

All environmental, social, health and safety matters are under the responsibility of LAP’s Development and Sustainability manager, who has a team of E&S specialists to implement and monitor all related E&S programs with the support of Organizational Development, Labour Relations, Reputation Management and Sustainability areas, among other departments of the Company, as appropriate. 

In addition, LAP has dedicated team to manage all expansion project E&S related matters including an Environmental Manager, a Health and Safety Manager, a Quality Assurance Manager and a Security Manager who is also in charge of contractor and labour relations.

Social management of LAP’s current airport operations and the expansion project is consolidated under the leadership of the Sustainability Manager.

Emergency Preparedness and Response

The ESRS disclosed in 2006 mentioned that “LAP has a comprehensive Emergency Response and Preparedness Plan with documented procedures for fuel and other chemical spills and other accidents. Appropriate emergency equipment, including fire brigade equipment, is provided.”

IFC’s E&S monitoring observed that LAP maintains a well-structured emergency preparedness and response plan that covers different type of scenarios and emergency levels for aircraft-related emergencies, integrity and structural threats, epidemiological contingencies, situations involving hazardous materials, and security incidents. Four levels of risk are defined, and emergency procedures, including roles and responsibilities, defined accordingly. The plan is reviewed and approved by regulatory authorities and is updated every two years. Emergency preparedness and response plans and procedures specific for the expansion project are in place.

Monitoring and Review

The disclosure of 2006 makes reference to the company’s E&S management system which is audited every year, through “periodic audits on environmental, safety and occupational health issues of the operators and concessionaries at the JCIA, in order to ensure fulfilment of applicable obligations”. The monitoring and review of E&S risks and impacts and of the overall efficacy of implemented controls continues for both current airport operations and expansion project activities.  There is an environmental monitoring plan and an annual occupational health and safety monitoring plan. Follow up is conducted and reported, and any deviation noted and tracked to completion. As part of the assurance process, legal compliance audits, E&S audits and inspections are conducted.

LAP has established a “Community Monitoring and Surveillance Committee”, which is an E&S participatory monitoring program composed by representatives from the surrounding neighbourhoods and communities. The Committee meets semi-annually to review compliance with the Social Management Plan. Committee members also participate in quarterly campaigns of air quality and environmental noise monitoring and semi-annual surveillance campaigns for water quality and fauna.                                                    

 Human Resources Policies and Procedures

LAP has adopted a corporate Human Resources (HR) procedures, Internal Labor Regulation and, Code of Conduct, that are applicable to all employees. Also, LAP has adopted a Code of Conduct and contracts applicable to third-party contractors. The Internal Labor Regulation prohibits discrimination, child labor and forced labor. Procedures cover recruitment, terms of employment, employee conduct, compensation and benefits, grievance mechanism, performance evaluation, training, and professional development. The HR management is consistent with Peruvian labor legislation and IFC PS2 requirements.  LAP has in place a Diversity & Inclusion Strategy and a policy against Sexual Harassment to promote equal opportunities and reduce the risk of gender-based violence.

Working Conditions, Terms of Employment & Workers’ Organizations

LAP complies with Peruvian labor legislation for minimum age, working hours, shift times, overtime payment, and benefit requirements. Information on terms of employment and benefits is provided to all employees through written contracts and the Internal Labor Regulations and explained during induction sessions. Peruvian labor law protects collective bargaining and the rights to strike as well as defines minimum wage, working hours, minimum wage and overtime payment, compensation, and entitlements. Currently, approximately 18 percent of LAP employees are affiliated with a labor union (Sindicato Unico de Trabajadores de Lima Airport Partners – SUTRALAP). As per Peruvian legislation, LAP negotiates collective agreements with union representatives at intervals agreed by the parties (currently, every three years). Contractors’ workforce for the expansion of the airport who perform field activities are affiliated with the federation of workers of civil construction (“construcción civil”) which is a member of the General Confederation of workers of Peru (Confederación General de trabajadores del Perú – CGTP). 

Labor Grievance Mechanism

LAP has in place a Workers Grievance Mechanism accessible to all direct workers who can log grievances through suggestion boxes distributed throughout the facilities and by telephone. Confidentiality is protected and the mechanism accepts anonymous grievances. Grievances are received, classified and documented by Labor Relationships Management, which leads the investigation, follows up on the resolution process, analyzes trends and is in charge of reporting to senior management. A specific procedure is in place for gender-based violence and harassment grievances that is managed by a Committee made up by equal number of male and female representatives. Additionally, for the expansion project there are Workers Grievance Mechanisms accessible to contractor (non-employee) workers who can log grievances through suggestion boxes distributed throughout the facilities and also available by telephone.

Occupational Health and Safety

The 2006 disclosed ESRS reports that “LAP has a suitable employee health and safety program. Personnel are regularly trained on the hazards, safety procedures and emergency response procedures associated with their tasks”. LAP continues to manage occupational health and safety (OHS) risks in compliance with Peruvian regulations, and through a comprehensive and well-defined OHS system of norms and procedures applicable to airport operations and the expansion project. 

Management of the COVID-19 pandemic

LAP has implemented policies, controls and procedures in line with national directives to prevent and manage COVID-19. The company’s plan includes the close monitoring of workers health conditions through periodic PCR tests, the enhancement of remote work for employees, consistent use of PPE tailored to the level of risk and exposure, trainings, and psychological support program.

Workers engaged by Third Parties

Third-party contractors currently engaged by LAP include cleaning, maintenance and repair, and security service providers. The company has an adequate system to oversee outsourced workers’ working conditions in line with Peruvian legislation. LAP monitors labor and working conditions of the contractors’ workers engaged in the expansion project through the implementation of a Contractor Management and Assurance Plan.                                                  

All the environmental and pollution prevention controls, resources efficiency and monitoring programs reported in the ESRS of 2006 remain in place and have been expanded to apply to the airport expansion project as well. From environmental impacts and aspects identification, to implementing corresponding controls and pollution prevention measures, LAP has implemented good practice environmental management (including for areas under the direct control of LAP, and areas managed by contractors and subcontractors). There is a culture of pollution prevention and in all the areas and work fronts both at the airport and in the expansion project the implementation of environmental mitigations is evident, with good housekeeping, adequate segregation of residues and with the required pollution prevention measures commensurate to the nature of the activity and the corresponding risks and impacts.

The ESIA for the expansion project includes noise monitoring, modelling, and results of existing and future aircrafts operations noise based on: (i) the Integrated Noise Model (INM) developed by the US Federal Aviation Administration Office of Environment and Energy; (ii) the information from the Aircraft Noise and Performance Database (ANP); (iii) and the requirements set forth in ISO 20906:2009 “Acoustics Unattended monitoring aircraft sound in the vicinity of airports”, and ISO 1996-2:2017 “Description, measurement and evaluation of environmental noise”. Environmental sound maps were produced, and affected areas determined. LAP is implementing the Environmental Noise Mitigation Committee Program which is a commitment from the ESIA. The committee is composed of representatives of local public entities (Regional Government of El Callao), LAP, airlines, civil aviation authorities and regulators (DGAC, DGASA, MINAM, CORPAC) to assess the results of aircraft noise monitoring. The committee will be in charge of addressing any issue related to aircraft noise of the expansion project and to establish appropriate controls and mitigation measures as required and consistent with good international industry practice, as reflected in the industry-specific World Bank Group EHS Guidelines.

As part of the early works of the expansion project, all the pollution legacies had to be remediated in line with provisions set forth in local regulations and in the approved ESIA. The company reported in 2020 that all the 294 legacies that could interfere with the airport expansion project were properly remediated to satisfaction of environmental regulatory authorities (DGAAM).                                                

The main issue related to community health and safety of LAP is related to noise from its operations. As indicated above, LAP is making efforts to put in place and support a multi-institutional committee to monitor and manage noise of operations in addition to participatory monitoring. 

Risks and impacts associated with the construction of the expansion project, including road safety, are closely managed. A road safety plan is in place to minimize impacts to communities from the construction of the expansion project. Considering the urban context of the area, and that all workers are expected to commute daily from their residences, no significant risks of health or social impacts related to influx are expected.  Nonetheless, LAP has a code of conduct addressing the expected behavior of workers in the workplace and with local community members, including provisions to avoid gender-based violence and harassment, and the company monitors small businesses that provide food and other services near the entrance to the project area. 

LAP has established a 10m wide corridor along the edge of the airport property to facilitate evacuation of the community in case of tsunami. As part of the emergency response planning, LAP communicates its emergency preparedness and response plan and conducts drills in coordination with the responsible authorities and affected communities.

LAP has two security contractors with a total of approximately 450 guards in two shifts.  Both private security firms provide training on the use of force and human rights and perform background checks of all guards as required by law.  In additional to private security, the national police is stationed in the airport as part of the national program of civil aviation security.  LAP coordinates security closely with the national police and has regular meetings where topics such as protection of human rights are discussed to ensure alignment with LAP’s policies and national regulations. LAP participates in the investigation of any security grievance or incident occurring within its facilities. Investigations usually include review of CCTV security cameras installed through the airport and covering most areas where security guards are present.