24858 - Multiplaza II ISCH

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Environmental & Social Review Summary

Project Number

24858

Company Name

INTERNATIONAL SHOPPING CENTERS HOLDINGS, INC-ISC

Date ESRS Disclosed

Jun 2, 2008

Country

Honduras

Region

Latin America and the Caribbean

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Dec 16, 2005
Signed : Jun 13, 2008
Invested : Jul 7, 2008

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

other

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

The project is an expansion by approximately 8,300m2 gross leasable area (GLA) of the existing two story Tegucigalpa “Multiplaza” mall , owned and operated by Multiplaza SA de CV (the company), a mall of approximately 30,000 m2 GLA. Expansion will be accommodated entirely on land already owned by the mall and currently used as a parking lot. The project will include expansion of seating area in the mall’s food court by some 350m2, and net expansion of the retail area by some 10,600m2, to accommodate a new “anchor store” clothing retailer of some 1,500 m2 and additional smaller retail units, and construction of a new three-storey car parking area of total parking area of some 22,500m2.

Overview of IFC's Scope of Review

The scope of IFC’s review included review of documents related to IFC’s previous investment in the Multiplaza Mall, site visits to Grupo Roble’s (the sponsor’s) existing Multiplaza and Metromall malls in Tegucigalpa, review of project design and permitting documents including the Contract for Compliance with Environmental Protection Measures for Multiplaza Stage III expansion” agreed between the company and the Honduran Secretariat of Natural Resource and Environment (SERNA), and discussions with Company and Sponsor staff on management of environmental, occupational health and safety and human resources issues.

E & S Project Categorization and Applicable Standard

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

- PS1 Social and Environmental Assessment and Management System;
- PS2 Labor and Working Conditions;
- PS3 Pollution Prevention and Abatement;
- PS4 Community Health, Safety and Security;

The project is located in a well established urban area in Tegucigalpa, on land which has been owned by the project company since the mid 1990s and which is currently used as a parking lot. For this reason, impacts associated with the other Performance Standards are not expected

Key environmental and social issues associated with this project are life and fire safety including consideration of emergency response procedures, liquid effluent treatment and disposal, energy efficiency and solid waste management.

Potential impacts are few in number and limited in impact and may all be addressed through readily available mitigation measures. This is therefore an environmental and social Category B project.

Environmental and Social Mitigation Measures

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, IFC Performance Standards, and IFC 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. Further information is provided in the attached Environmental and Social Action Plan (ESAP).

Social and Environmental Assessment:

The project has been designed and will be constructed in a manner compliant with a “Contract for the Compliance with Environmental Mitigation Measures” between the company and SERNA. This contract was developed, to a structure defined by SERNA following environmental assessment of the project by the company. Following assessment, the company prepared a draft agreement which was submitted for SERNA’s approval which was granted. The contract and addendum dating from August 2007 define over 140 measures to mitigate possible social and environmental risk arising from all stages of the mall’s life cycle. Separate sections of the contract deal with the project’s construction phases (where issues considered include access paths, excavation work, storage of materials, machinery safety, safety in construction, and handling earth removed from the construction site), design standards, operation and emergency response.

Social and Environmental Management:

The sponsor is a highly respected operator of shopping malls in several countries in Central America. Over the last few years, considerable attention has been given to systematic management of quality in the malls. Management of occupational health and safety, public safety and environmental management are considered subsets of quality management. The sponsor has over the last several years supplemented internal resources by using consultancy assistance for specialist advice. The sponsor’s flagship mall in San Salvador has a quality management system certified compliant with ISO 9001. The formal management system has been extended to Multiplaza Honduras.

Adequate resources are available for management of environmental and social matters. Technical issues are managed by in house staff reporting to mall managers, who in turn report to country operations managers. Monitoring routines are defined in quality and maintenance manuals and are respected.

Contingency plans define emergency response to fire, how to evacuate the building and provision of first aid. These are rehearsed regularly.

Labour and Working Conditions:

- Human Resources Policy

Grupo Roble has a common human resources policy which is applied across its operations with adaptations where necessary to account for different legal or other requirements in the countries of operation. The HR policy is defined in a “Welcome to Roble” manual which is provided in hard copy to company managers for use in staff briefing, and which is available to all staff via the Company Intranet – computer terminal access is provided to all staff. The HR policy covers issues such as hiring procedures, rights and responsibilities of the employee and employer, an introduction to the company, working hours and salary and non-salary benefits. This is supplemented by an “Internal Working Rules” document which is legally required.

- Working Relationship

This is defined in a written contract between employee and employer, which is explained to and signed by the employee. The contract makes reference to the HR policies but also covers individual arrangements for example concerning salary. Copies of the contract are retained by the company and the employee.

- Working Conditions and Terms of Employment

Salary levels are based upon country conditions and minimum salaries comfortably exceed legal minima in Honduras and the other countries in which the sponsor operates. Roble also offer a wide range of non-salary benefits which meet or exceed country requirements, for example a shorter than legally required working week, sick pay matching salary, payment for overtime (normally required for holiday working rather), statutory maternity leave, but also paternity leave, support in the event of bereavement, a Christmas bonus, retirement fund and life insurance for all employees. The company also provides basic medical care through access to a clinic and has an optional employee saving fund. All regular workers for the company are full-time employees; no contract labor is used for day-to-day jobs.

- Workers’ Organizations

Neither the sponsor nor the company has a trade union, but would not prohibit union membership among staff where this is permitted by law; in Honduras armed guards are prohibited by law from trade union membership.

Although there are no trade unions, employees have several means available to make their views known. The first of these is the normal line management channel. In addition, Human Resources department staff make regular pre-announced visits to the malls, and are available for discussion with staff. Staff are aware that complaints may also be made to the Labor Ministry, and one such was made last year and was dismissed. Lastly, the sponsor has an annual survey in which the views of staff are solicited. These surveys have high response rates, and overwhelmingly favorable response.

- Non-Discrimination

The sponsor has a policy of non-discrimination on the basis of any characteristic not related to a person’s ability to meet job requirements. Recruitment and advancement is solely merit based, and a 6-monthly performance evaluation process is used to appraise performance on an objective basis.

- Protecting the Work force

The company checks the identity of all potential employees and will not employ minors or forced labor.

- Occupational Health and Safety (OHS)

Occupational health and safety is managed within the context of the company’s quality assurance system. OHS audits have been completed by external consultants, at which time action plans were developed and implemented by the company with the consultant’s assistance. The OHS manuals define safe working practices for a variety of tasks required in the mall, fire response, correct use of machinery and so on. Accident records are kept at all the sponsor’s malls; the most common recorded accident is a trip and fall which typically occurs once per year per mall.

Pollution Prevention and Abatement:

- Liquid Effluents

At present liquid effluents, (sanitary waste water, and waste water arising from catering activities) are discharged without treatment from the mall. Project design will develop waste water treatment facilities for the existing mall and the newly constructed expansion. This will require construction of pumping stations to pump effluents to two packages waste water treatment systems serving different areas of the malls. The treatment systems will be specified to more than meet IFC and local standards.

-Resource Efficiency

Electricity use in common areas is relatively modest. Air conditioning is provided in the food court and financial center, but otherwise mall common areas are ventilated but not cooled. Store air conditioning is the responsibility of tenants. The company operates an energy efficiency campaign, with automation of some lighting, and limiting operating hours of escalators.

-Refrigerant Selection

The company has started to phase out HCFC-22 refrigerant and is replacing this by a drop-in non ozone-depleting substituteR407.

Community Health and Safety:

- Life and Fire Safety

The existing mall is compliant with all local fire safety requirements. It is sprinklered throughout, supplemented by extinguishers and fire suppressant in restaurant kitchens, has multiple exits and emergency exit signs and emergency lights. The expansion will be designed to be fully compliant with all local fire safety codes, and with NFPA requirements. The company contracts maintenance of the fire safety systems to a suitably qualified contracting company based outside Honduras, and has well-established emergency response procedures which are practiced regularly.

The company imposes regulation and inspections, intended to safeguard again fire risk upon its mall clients. For example, tenants are prohibited from undertaking any electrical or hot-work unless approved by and conducted under the direct supervision of the company. Electrical currents drawn by tenants’ systems are checked regularly to ensure there is no overloading. Restaurant grease filters are maintained by the company at regular intervals.

- Potable Water

The company will install equipment to purify water using a chlorine dosing system in the main pumping reservoir.

- Security Guards

The company employs armed security guards at the mall, which is common practice throughout the region. These guards are subject to a rigorous selection procedure; which includes background checks, and polygraph tests. The company also prefers to employ persons who are not familiar with guns and to train them. The security guards receive regular training in the use of arms, and in conduct expected of an armed guard, and are subject to strict supervision by the company’s staff. Guns used by the guards are the property of the company and remain on company premises at all times. The company’s business relies on attracting members of the public to the mall, and in this respect the company is highly motivated to ensure that the guards behave in a proper manner. Ongoing communication with the public provides a grievance mechanism.

Stakeholder Engagement

The local planning process made the mall expansion plans accessible in general form to the public. This ESRS comprises the first concise summary of the mall expansion project to be made public.

Because the mall’s business depends on high levels of public access to an acceptance of the mall, the company has an ongoing public relations and communication program, which forms an effective community engagement channel and mechanism for expression of grievances if any should arise. Part of the new expansion is an information kiosk that will be readily available in the main plaza. Community grievances will be taken by the staff. The kiosk will also contain information about ongoing events in and outside the mall, benefits for the community and actual and future projects for the mall.

Client Documentation

File Name	Actions
EAP Multiplaza Stage III.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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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