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 – 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.
1. Social and Environmental Assessment and Management Systems
1.1 Environmental and Social Assessment
Each of the Fosun Pharma Group companies has adopted EHS management systems with Standard Operating Procedures (SOPs) to manage environmental, health and safety, labor and life and fire safety issues. At the corporate level, the Group is in the process of reviewing the procedures of each company against industry standards and will develop corporate-wide SOPs to ensure consistency across the Group. As required, facilities within the Group have prepared environmental impact assessment reports for their production facilities that have been approved by the local authorities. All of the Group’s pharmaceutical production facilities are GMP (Good Manufacturing Practice) compliant and are regularly inspected for their EHS and labor performance. Nine of the Group’s Active Pharmaceutical Ingredient (API) facilities (including those that manufacture clindamycin, clindamycin hydrochloride and Levamisole Hydrochloride) are certified by the United States’ Food and Drug Administration (FDA), undergoing a rigorous process that ensures the quality and safety of the products. Two of these products are also certified by the European Directorate for the Quality of Medicines (EDQM), and three of them are each certified by Health Canada''s Therapeutic Products Directorate (TPD), WHO/EU or Doctors without Borders. Inspections by representatives of the US FDA and the World Health Organization are conducted every 2 to 3 years, including Fosun’s accredited facilities in Guilin, Chongqing and Shanghai. Other foreign pharmaceutical regulatory authorities from Canada, Europe and Asia also inspect Fosun Pharma companies that produce products for export.
1.2 Management Program
Fosun, as the Group’s headquarters, oversees the EHS performance and compliance of the Group companies through its Pharmaceutical Management Committee. Committee members include the Senior Assistant of the CEO, the heads of the R&D, Marketing, Finance, HR and Legal Departments, and an EHS Manager who is soon to be hired. To monitor and assess EHS performance, the Committee holds weekly meetings, reviews weekly, monthly and annual reports submitted by each Group company, holds regular teleconferences with Group company representatives and holds corporate level meetings to convene representatives of the Group companies. Fosun Pharma is reviewing the management systems and Standard Operating Procedures (SOPs) of its Group companies against international and other company benchmarks and plans to continue to enhance the implementation of its corporate wide approach to EHS throughout the Group companies.
Organization
Each of the Group companies has assigned responsibility for EHS matters to responsible staff. Representatives of the Group companies report and are accountable for performance to the Group’s Pharmaceutical Industry Committee. EHS performance targets are set for each of the Group companies and senior management bonuses are linked to these annual results. The Chairman of Pharmaceutical Industry Committee is responsible for the Group’s EHS performance. This responsibility will be transferred to the soon to be appointed EHS Manager for Fosun.
Training
Fosun Pharma and its Group companies provide induction and job-specific training for all employees, including training on environmental, health and safety issues. Ongoing awareness raising initiatives are undertaken as well as regular refresher training based on job function.
Community Engagement
Fosun’s initiatives are described in the Community Engagement section below.
Monitoring and Reporting
Fosun Pharma Group companies have monitoring systems and reporting requirements as part of their EHS management systems and SOPs and have implemented system to allow environmental protection officers to review same time monitoring results for wastewater discharges and air emissions online. Performance is regularly reviewed by managers in the Group companies and regularly provided to Fosun Pharma at the corporate level. A comprehensive annual report is also provided on each company’s performance and monitoring results. Fosun Pharma also monitors EHS performance at weekly meetings of the Pharmaceutical Industry Committee, through regular teleconferences between the Committee and the Group companies and at corporate level meetings that convene representatives of the Group companies. The Group companies are regularly inspected by local officers of the Environmental Protection, Occupational Health and Safety, Fire Safety, Animal Testing authorities and the Chinese Food and Drug Administration (SFDA).
2.0 Labor and Working Conditions
2.1 Human Resource Policy and Management
Fosun Pharma employs 9,008 staff in 31 subsidiary companies and 142 pharmacies. 75 of these staff are employed at the corporate level. Group companies employ over two-thirds of their workforce from local communities.
Fosun Pharma provides all staff with an Employees’ Manual outlining the company’s human resource policy, compensation and benefits provided, sick leave and holiday allocation, insurance, etc. All staff sign their acceptance of the manual. Employees of all Group companies receive documented conditions and terms of employment and benefits in compliance with local law and PS2. Staff performance is assessed annually and performance targets are set for each staff. The staff manual also includes information on union membership and channels for internal communication and raising grievances.
Internal grievance channels include an internal e-mail (including a direct e-mail channel to the group president), Fosun Pharma’s website, staff suggestion boxes, regular meetings between management and staff and participation of the group companies’ union representative in management meetings. Fosun Pharma also organizes a Mutual Assistance Foundation that provides assistance to staff in need and 80% of staff are members of the foundation. Contracts with service contractors include requirements to meet local labor laws and compliance is checked by Fosun Pharma companies.
2.2 Worker’s Organizations
All staff receive an application to join the union that is run by representatives of the Group companies. 90% of staff are members of the union. Branch representative in each of the Group companies participate in daily management and planning meetings and hold monthly meetings with staff. Issues raised by the union representatives relate to compensation, working conditions, staff activities and improving the management of operations. Follow-up actions taken and responses are communicated to staff.
2.3 Non-discrimination and Equal Opportunity
The Fosun’s Employee Manual outlines the company’s human resource policy, commitment to non-discrimination and equal opportunity.
2.4 Retrenchment
Fosun Pharma does not have plans for the retrenchment of a significant number of employees. Staff turnover at the headquarters of Fosun Pharma is 13%, while the sector average is 14%.
2.5 Protecting the Work Force
The Fosun Pharma Group companies do not engage child or forced labor. The company complies with local labor laws and related PS2 requirements to protect the workforce. All employees are over the age of 18 with education and technical training commensurate with their job responsibilities.
2.6 Occupational Health and Safety
Each of the Fosun Pharma Group companies implements Standard Operating Procedures (SOPs) to provide a safe, healthy and hygienic work environment and to prevent accidents, injury or disease. At the corporate level, the Group is in the process of reviewing the procedures of each company against industry best practice and will develop corporate-wide SOPs to ensure consistency across the Group. Fosun Pharma will ensure that its corporate SOPs and the management systems of its Group companies meet the occupational, health and safety requirements of IFC’s Performance Standard 2 on Labor and Working Conditions.
Job applicants receive health checks before employment in Fosun Pharma Group companies and staff are checked annually. These checks are conducted at local hospitals. In the event that staff contract a communicable disease medical treatment is provided and as appropriate they are transferred to another job position that does not involve contact with pharmaceutical product production. The company reports that none of its Group companies have experienced any fatal or serious accidents.
3. Pollution Prevention and Abatement
3.1 Pollution Prevention, Resource Conservation and Energy Efficiency
Measures to prevent, minimize and mitigate environmental impacts are covered by the environmental management systems and in the SOPs of each of the Fosun Pharma Group companies. The majority of the company’s facilities were recently established or updated to comply with GMP and local environmental pollution requirements.
Where organic solvents are used in the production of pharmaceutical products, they are recycled within the process to minimize quantities used and sent to the company’s wastewater treatment facilities. Fosun Pharma companies install wastewater treatment facilities and report that all wastewater discharges comply with local requirements. Parameters monitored include: the pH value; Biochemical Oxygen Demand (BOD); Chemical Oxygen Demand (COD), suspended solids (SS); oil and grease; and nitrogen content. IFC also requires effluent monitoring of typical flow, AOX, Phenol, Arsenic, Cadmium, Chromium (hexavalent), Mercury and Active Ingredients, and bioassay testing to ensure that toxicity of the effluent complies with IFC requirements. Fosun’s pharmaceutical production facilities will conduct effluent monitoring and bioassay testing for these additional parameters. If the testing determines noncompliance with IFC requirements, a corrective action will be required to implement improvement measures. Group companies will also review air emissions from facility-operated energy sources (e.g. onsite power plants, generators and boilers) to ensure compliance with IFC requirements and implement improvement measures as needed.
3.2 Waste
Each Group has SOPs for the proper management of waste. All wastes, including solid, hazardous and biological are collected separately for disposal by authorized contractors.
3.3 Hazardous Materials
Each Group company has SOPs for the proper handling, storage and disposal of hazardous materials.
3.4 Emergency Preparedness and Response
Each of the Fosun Pharma subsidiaries have SOPs to prevent and respond to emergencies, to conduct emergency response drills and to engage local fire and police authorities in the drills and when needed in the event of an emergency. Fire extinguishing equipment was located in prominent locations and is checked on a monthly basis. Fosun Pharma will review its fire safety SOPs and ensure that inspection dates are clearly indicated on each extinguisher throughout the Group.
3.5 Green House Emissions
Greenhouse gases emitted annually by Fosun Pharma Group companies are expected to be in quantities well below the IFC threshold of 100,000 tons of CO2, as specified in PS4.
3.6 Pesticide Use and Management
Contracts with farmers cultivating TCM ingredients include requirements regarding the use of legal pesticides and herbicides and specifics regarding the use of products with reduced environmental impacts. Fosun Pharma staff visit farmers to provide technical advice and monitor the application of approved pesticides during the point in the growing season when these products may be applied.
4. Community Health, Safety and Security
4.1 Community Health and Safety
Fosun Pharma Group companies implement EHS SOPs to minimize the impacts of their operations. Company facilities are not within the vicinity of local communities and potential impacts are not anticipated to result in impacts beyond the project site.
Emergency Preparedness and Response
Fosun Pharma Group companies implement emergency preparedness and response SOPs, including fire response and measures to prevent the release of pollutants or biological waste from its facilities. Arrangements are established with local fire authorities and annual inspections are undertaken by authorities responsible for EHS and the treatment of biological and hazardous waste.
4.3 Security Personnel Requirements
Most Fosun Pharma Group companies employ unarmed staff or contractors to secure their facilities. When service companies provide security personnel, the contracts include requirements to meet local laws and to provide appropriate training.
5. Land Acquisition and Involuntary Resettlement
PS5 is not applicable as Fosun Pharma Group companies have not acquired land in areas that involved physical or economic displacement. Most facilities are in areas designated for industrial purposes or development zones. The company does not have any expansion plans that will involve resettlement in the next 5 years. IFC’s PS5 will apply to any land acquisition involving resettlement or physical displacement undertaken by Group companies during the project.
Biodiversity Conservation and Sustainable Natural Resource Management
Protection and Conservation of Biodiversity
The facilities of Fosun Pharma Group companies are not located in legally protected areas, areas of high conservation or biodiversity value, or have the potential to introduce alien species. Key issues assessed as part of the appraisal include the sourcing of ingredients for Traditional Chinese Medicine products and animal testing activities.
6.1.1 Traditional Chinese and Herbal Medicines
Two of Fosun’s subsidiaries, Guangxi HuaHong and Guilin Pharmaceutical, produce traditional Chinese medicine (TCM) and herbal products. All of these products are derived from plants and do not contain animal parts or derivatives. The ingredients used in Fosun’s TCM and herbal medicine products are commonly found plants and none of them are listed in the CITES or IUCN lists as endangered or from a threatened source. The plant ingredients are purchased from small-scale farmers and local markets in Guangxi and Hunan provinces. Contracts with farmers stipulate a minimum price to be provided to farmers and this provides an additional income source for many farmers. The sources range from weeds that grow in rice paddies, to plants collected along the roadside, to plants gathered in mountainous areas. The company has stated that the plants do not originate from ecologically sensitive areas and they are not harvested on a large scale or in ways that damage habitat.
Fosun Pharma reports that the majority of the ingredients used in its TCM and herbal medicine products are in abundant supply and are required in small quantities by the company. For some ingredients that are required in larger quantities (i.e. tassel flower and Sweet Wormwood herbs), Fosun Pharma has initiated an out grower program to ensure the sustainability of this supply. The company provides seeds and technical advice free of charge to assist farmers cultivate these ingredients.
Animal Testing and Clinical Trials
Most of the Group companies produce previously approved generic drugs (i.e. Chinese replications of drugs already approved elsewhere), which must be tested on animals to for quality control purposes. Only new drugs require both animal testing and clinical trials. In 1995, the Chinese government issued the National Technical Guidance on the Testing of Animals. This outlines requirements for animal testing and allows companies to avoid animal testing when reference data is available, and proceed straight to clinical trials.
The determination of when animal testing is required, as well as the procedures and conditions for testing, is mandated by the US FDA, SFDA and other national drug inspection bodies of the countries that import Fosun’s pharmaceutical products (i.e. USA, Canada, Europe). The only frequent animal testing that is conducted by the Group involves temperature checks on rabbits to ensure the quality of the finished product. The Chongqing Pharmaceutical Research Institute, as the Group’s main research and development facility, does test new products on mice, rabbits, dogs and/or monkeys as required. If testing is required by other facilities, it is outsourced to accredited labs. All animals used for medical tests are procured from authorized facilities and their transportation, extent and nature of use and eventual disposal is secured, tracked and monitored. All laboratories involved in animal testing, including those operated by Fosun, are certified to GLP (Good Laboratory Practices) by the SFDA. Adherence to the required SOPs is regulated by the SFDA and this is inspected annually by local authorities from the Animal Testing Committee. Each facility is also certified by the Animal Testing Committee and operated in accordance with Chinese GMP and national laws enforced by the SFDA. Nine of the company’s key products are certified to Current Good Manufacturing Practice (cGMP), including: Clindamycin Hydrochloride, Bumetamide, Levamisole Hydrochloride, Levamisole Phosphate, Oxfendazole, Mitoxantrone Hydrochloride, Artesunate and Artesunate Tablets, and Artesunate for Injection. Fosun Pharma reports that it strictly adheres to GLP requirements for animal testing. Moreover, Fosun Pharma will review current policies and procedures, and update if necessary, to ensure SOPs adopt international best practice for the three “R” concepts of Reduction, Refinement, Replacement for animal testing, by project completion.
Clinical trials of new generic drugs are monitored and approved by the SFDA and undertaken by hospitals under the control of the Ethics Committee of each institution. Agreements, including conditions required by government regulations, are signed with all participants in clinical trials; some are volunteers and others receive payment depending on the nature of the drug. Permits granted to produce generic drugs are reissued every five years and suspended if there are any legitimate grievances or problems reported.
Management and Use of Renewable Natural Resources
The project will not involve the management of renewable resources. Out grower initiatives to manage the supply of some of the company’s TCM ingredients are outlined in section 6.1.1.
