25898 - SEF Azel

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Environmental & Social Review Summary

Project Number

25898

Company Name

AZERBAIJAN ELECTRONICS CJSC

Date ESRS Disclosed

May 14, 2007

Country

Azerbaijan

Region

Europe

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 29, 2007
Signed : Aug 13, 2007
Invested : Nov 8, 2007

Sector

Other Services (Including IT Enabled Services)

Industry

Manufacturing

Department

Regional Industry MAS LAC & EUR

Project Description

Azerbaijan Electronics is one of the most successful computer and office equipment suppliers and systems integrators in Azerbaijan. Its main lines of business, all related to the procurement, supply and maintenance of computers and office equipment, include:

- systems integration;
- retailing of electronic and computing products;
- post-sale service;
- software development; and
- computer assembling.

Azel was established in 1991 by Messrs. Igor Yakovenko and Emin Guliyev and has been consistently growing for the past fifteen years and expanding its business to become the market leader. Azel has a good track record with major computer and office equipment vendors such as Hewlett-Packard, IBM, Canon, Samsung, Microsoft and others, which has also helped the company to enter neighboring markets such as Georgia and Central Asia.

The company has grown from 6 employees in 1995 to 130 in 2007. The company is now planning to create a stable platform for its development by investing in new and larger space for its main office and two additional retail stores. The company plans to:

- purchase of 1,300 m2 of new office space in the center of Baku; and
- expand the company’s computer/office equipment retail network to five stores by purchasing two new locations of 150m2 each.

Total project cost is expected to be $5.1 million, and IFC has been requested to provide an A Loan of $2.5 million, with the balance to be financed by new equity and internal resources.

Overview of IFC's Scope of Review

The review of this project comprised a review of the HR Policy and manual, visits of two of the three company retail stores in Baku, visit of the company future head quarters and discussions with the company President, the Sales manager, the HR manager and the Financial Manager.

E & S Project Categorization and Applicable Standard

IFC’s review has identified impacts that are required to be managed in a manner consistent with the following Performance Standards (PS):

- PS1: Social and Environmental Assessment and Management;
- PS 2: Labor and Working Conditions;
- PS 3: Pollution Prevention and Abatement;
- PS 4: Community Health and Safety

Azel’s existing assets are located in the city of Baku. No land acquisition is planned as space is being bought in existing buildings for new retail stores and in a building currently under construction for the company’s new headquarters. The latter is being built following voluntary sale of existing old buildings, demolished as part of the development of the area into a new residential and office zone. No people were displaced or lost economic livelihoods when this development plan was implemented. No indigenous peoples are known to be present, and no cultural heritage sites have been identified close to any of the stores or offices.

The relevant PSs have been provided to, and discussed, with the company as have the relevant IFC guidelines (i.e., General Environmental Health and Safety Guidelines, 30 April 2007).

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a 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.

Environmental, social , health and safety issues associated with this project include:

- Storage and handling of products;
- Solid and hazardous waste management and disposal;
- Housekeeping and Occupational health and safety;
- Sustainable community relations and initiatives an
- Labor and working conditions.

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 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.

AZEL has plans to address these impacts to ensure that the proposed operations comply with the host country laws and regulations; IFC environment and social performance standards; and IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow.

- Environmental and Social Assessment & Management:

All of Azel’s retail stores, warehouse and offices have commercial licenses issued in compliance with Azerbaijan national regulations.

Management System and Organization:

While Azel does not have a formal Environmental Management System, environmental management and house-keeping are the responsibility of the company’s Internal Security Manager. In addition, the company is certified compliant with ISO 9001 (ISO 9001 certification earned in 2003, with a current certificate valid until 2008).

The retail stores are located in shopping areas and are serviced and monitored by the municipality for compliance with Health and Safety regulations.

Every second year, the company is also further audited on Health and Safety by the Ministry of Ecology who then delivers a permit for continued operation.

Training:

Azel is providing a comprehensive training program to all employee on both IT technical issues and environmental and health and safety aspects related to its operations. In particular, as the service center operating under the specifications of HP, Samsung, IBM Canon and Toshiba Company employees to have access to additional and cutting edge technical training

Monitoring and Reporting:

Azel is regularly monitored and audited by its suppliers on quality of services, and by the local authorities.

- Labor and working conditions:

Human Resources Policy and Management: AZEL currently employs 130 persons, both men and women, and has developed a Human Resource (HR) Policy and Manual applicable to it offices and retail stores. The HR policy includes procedures for selection, hiring, training, promotion, resignation, lay-off and firing. It also specifies wages and benefits, working hours and overtime, leave and holidays. The company’s human resources function is managed centrally by the Human Resources Manager. All policies, procedures and guidelines follow Azerbaijan labor law as well as the recommendations of major suppliers such as HP, IBM, and Canon.

Worker’s Organizations: Azel’s employees are organized through an elected workers committee that has monthly meeting, attended by the HR manager

Non-Discrimination and Equal Opportunity:

Azel is an equal opportunity employer and encourages professional development.

Retrenchment:

While there are no current plans for retrenchment, the Azel group would apply Azerbaijan regulations should this occur. These regulations require detailed justifications for the retrenchment, a retrenchment plan, public disclosure and compensation for retrenched workers. These regulations also include procedures designed to ensure that any retrenchment is carried out in a manner that is non-discriminatory, equitable and transparent.

Protecting the Work-Force:

The company does not employ child labor and is not involved in forced labor, in line with national laws that prohibit such labor. Medical benefits also include social security and additional private health insurance.

Occupational Safety and Health:

Environmental, health and safety procedures are in place at all company retail stores, warehouse and offices in compliance with the local requirements.

- Pollution Prevention and Abatement:

Azel current and future headquarters as well as all of its retail stores and warehouse are fully serviced by the municipality.

Resource Conservation:

Power is supplied by the Baku municipality at all of Azel locations.

Water:

Water is supplied by the Baku municipality at all Azel locations

Solid Waste:

The small quantities of hazardous waste produced at Azel’s operations (derived from maintenance of computers and replacing of obsolete parts) are shipped back to the manufacturer for adequate final treatment and disposal.

- Community Health and Safety:

Fire and Safety:

Emergency response Programs are implemented in all Azel’ s operations, in compliance with local regulation . The Baku fire department carries out regular inspections of fire fighting equipment at each of the company’s stores, facilities and offices. Azel is currently in the process of selecting a company for the implementation of a fire and safety system at its future headquarter. Whatever system is finally chosen will be in compliance with international standards.

Stakeholder Engagement

Azel carries out several types of actions with the local community such as donating technical equipment to the Economical University. It also provides school scholarships to the best students and it is a company which is very sought after for employment. In addition, Azel is a major sponsor of the Azeri archery federation.

For more information please contact:

Mr. Irada Mursa Lova
5th floor, 65 Fizuli street,Baku, AZ1014
Azerbaijan Republic

Telephone :+ 99 412 497 40 40
Fax: +99 412 497 40 42
E-mail: im@azel.net

This information will be made available in Azeri on the Azel web site: www.azel.net and posted at the entrance of each store and at the headquarters.

**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.

Projects

Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Identified Applicable Performance Standards

Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

Stakeholder Engagement

Stakeholder Engagement

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