25922 - BC Albania

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Environmental & Social Review Summary

Project Number

25922

Company Name

THE BEST CONSTRUCTION SH.P.K.

Date ESRS Disclosed

Jun 29, 2007

Country

Albania

Region

Europe

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Feb 28, 2008
Signed : Feb 29, 2008
Invested : Apr 25, 2008

Sector

Construction and Real Estate

Industry

Tourism, Retail and Property

Department

Regional Industry MAS LAC & EUR

Project Description

The project is to design and construct the following two real estate developments in the wider Tirana area:

- in Lundra a complex of 22,000 m2 consisting of 26 town houses and 70 apartments along with commercial and retail space, and
- in the Curilla coastal area next to Durres, a complex of 33,000 m2 similar in design to the one of Lundra.
- In addition the project envisages financing BC’s principal activities of acquiring a Land Bank (investment properties not developed) to develop and provide quality serviced residential, commercial and/or mixed accommodation for customers.

The operations of the project consist in the construction of the aforementioned, sale of finished properties, and the rental of some of the commercial ones. The first part of the construction is the infrastructure within the property, consisting of roads, pipes for water, sewage and utilities. This will be followed by groundbreaking and basement construction, then vertical construction in parallel on all buildings. The two phase project will be implemented over a three year period.

Overview of IFC's Scope of Review

The review of this project consisted of appraising written technical, environmental and social information submitted by Best Construction (BC), in response to questions asked by IFC and a visit by IFC to the current project site, Lundra, and meeting with BC management.

When the design of the second real estate site, Curilla, is proceeding around the mid of 2008, IFC will review the detailed design and carry out an additional site appraisal to ensure that this phase of the project also fully comply with the IFC Performance standards and guidelines. During this EHS site appraisal IFC will assess what PS are applicable for any other developments that are or will be part of the project.

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 Systems,
- PS2: Labor and Working Conditions,
- PS3: Pollution Prevention and Abatement,
- PS 4: Community Health, Safety and Security,
- PS 5: Land Acquisition and Involuntary Resettlement,
- PS 6: Biodiversity Conservation and Sustainable Natural Resource Management

This project involves construction of 55,000 m2 residential apartments and commercial offices capacities in two locations; Lundra, near Tirana and Curilla, near Durres. Acquisition of land, to be identified, for further development is also anticipated. Key impacts associated with the project include:

- Environmental, Health, Safety, and Social Management;
- Labor and working conditions, employee and contractor occupational health and safety,
- Community health and safety during construction and utilization phase;
- Life and fire safety.

The nature of the residential / commercial real estate buildings/operations is such that no major adverse environmental or social impacts are expected to result from the project, and that it will be possible to mitigate any minor, adverse impacts that might result. As a result, it has been categorized as a 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).

IFC’s environmental review initially considered potential impacts associated with the Lundra and Curilla developments, as follows.

- PS1: Social and Environmental Assessment and Management Systems

Environmental, Social, Health and Safety issues are being dealt with through separate processes that the company has in place while BC does not have a formalized ESMS.
Separate processes include:

- BC has developed Urban Planning and Regional Environment Study of Farke-Petrele Area, where the Lundra real estate will be developed.
- BC has internal team of 4-6 engineers for quality control of building materials installation. BC hires also third party independent professionals to test quality of products of its suppliers.
- Regarding health and safety of its work force the company conducts internal controls of its workers. The company has an agreement with a doctor appointed by the Health Inspectorate to visit, once every six months, and examine BC’s workers, and their condition of work.

- BC and its relations with subcontractors are defined through contract. This contract specifies the mutual obligations regarding the quality of work, standards of the construction building, workers health and safety.

- Environmental due diligence of projects has been outsourced as there is no internal staff responsible for this.
- Mr. Sherko, VP, is in charge of handling community relations associated to project sites through monthly meetings.

EHS aspects of the BC’s operations are checked at each stage of construction, as requested by Albanian Law. The stages are:

- cordoning of the land;
- after finishing the foundations and underground, reaching level zero (quota zero-zero control);
- after finishing the skeleton of the building; and
- project completion.

Mr. Sherko, is in charge of coordinating the team of engineers on social and environmental and quality controls mentioned above and to deal with outside inspections.

The following licenses were obtained in order to submit the request of approval of the project by the National Territory Adjustment Council: architectural design, surveyor clearance, geological study of the site, water supply, sewage, electricity, telecom, national health inspectorate permit, life and fire safety, and “the opinion” of the county office.

BC presented its project for Environmental and Social Permit to the Regional Agency for Environment on May 16, 2007, which has sent it to the Ministry of Environment for final approval, expected by end of July, 2007.

BC has agreed to develop a more formal and integrated Environmental and Social Management System (ESMS), using an IFC template as a basis. The ESMS shall be drafted by BC and submitted to IFC for review as a Condition of Disbursement. The ESMS will be fully developed and would provide the framework for Curilla development.

- PS2: Labor and Working Conditions

Human Resources Policy and Working Conditions
The individual contracts for staff are in compliance with the “Labor Code” of Albania. BC uses individual bargaining, compensation, and bonuses schemes, based on annual performance. Management organizes informal discussions with the staff and encourages performance and individual recognition. No formal grievances or lawsuits have been filed against BC. BC has had no court cases with any party, be it government, landowners, or clients. Disciplinary policy has yet to be developed as part of the Human Resource Policy.

BC does not engage with suppliers or contractors who have employees below the legal employment age, which for Albania is 16 years. The number of subcontractor’s work force to be employed once the construction starts is expected to be 70 in addition to BC work force of 10 engineering and technical staff; 10 construction specialists; 20 workers. Maximum working hours in BC is 48 hours per week.

BC will request its subcontractors during construction work, to apply the requirements of PS2 which relates to non-employee workers. The subcontractors must meet the minimum age requirement and have to be socially insured in compliance with Labor Law. The subcontractors must have professional licenses to operate and hire.

BC has agreed to develop a formal human resources policy.

Occupational Health and Safety:
The health guidelines are controlled by the Health Inspectorate while those for safety are monitored by the Construction Police. BC’s workers are insured for health and social risk through workers’ compensation under the national social and health insurance scheme, corresponding to a premium of 32.9% of the monthly salary of each employee. BC’s subcontractors’ employers are also covered under their own insurance scheme.

Occupational health and safety will also be covered by the ESMS to be developed under PS1 above. During construction, BC will be responsible for ensuring the security, safety, and safety training of contractors’ employees, according to the requirements of PS2.

- PS3: Pollution Prevention and Abatement

IFC guidelines for energy, water, and liquid and solid waste will be applied during both the construction and operational phases of the project. During the construction phase, IFC guidelines should be reflected in contracts between BC and contractors.

Energy: Power at the new buildings will be provided by the public electrical grid.
Water Supply and Quality: The municipal water utility will provide pre-treated water.
Waste Water: Waste water will be treated at a sewage treatment plant to be built by BC on the properties. After the on-site treatment, the treated waste will be discharged
Solid Waste: Solid waste consists mainly of paper that is disposed of through recycling and collection by public and private companies.
Renewable Energy: BC is considering installing solar panels on each unit to help save energy. For the villas, each buyer will have the option to install solar panels. To save additional energy, BC is planning to building using sandwich walls.

BC will apply similar measures for their second development in Curilla

Installment and commissioning of the waste water treatment plants at the Lundra and Curilla sites will be a loan condition.

- PS4: Community Health, Safety and Security

BC will evaluate health and safety (including L&FS as mentioned below) risks and impacts that could affect the local community during the design, construction, operation and decommissioning stages of the project, and will establish measures to prevent or mitigate such risks and impacts commensurate with the identified risks and impacts. These measures will be included in BC’s integrated ESMS to be developed.

Fire and Life Safety:
Albanian Law on Fire and safety requires any new building design to be benchmarked against the standards set in the Law. Fire and safety aspects are inspected by the Enterprise for Protection Against Fire at the Prefecture level. When BC delivers the design of a project to the Territorial Adjustment of the Commune, the latter will approve the final design for implementation of the project examining the file in detail. BC has a designated engineer that deals with fire and safety systems controls.

The new BC building, like all new buildings accessible to the public and financed by IFC, must be designed, constructed and operated in full compliance with all local building codes, local fire department regulations, local legal/insurance requirements and in accordance with an internationally acceptable fire and life standard.

IFC is requiring BC to prepare an L&FS Master Plan identifying major risks, applicable codes, standards and regulations and mitigation measures. The Master Plan will be prepared by a suitably qualified professional acceptable to IFC. On the basis of the Master Plan, its findings and recommendations, IFC will determine whether additional conditions in a Corrective Action Plan (CAP) are needed, and agree with the Company on a mutually acceptable time frame for implementing these conditions. The qualified professional who prepares the L&FS Master Plan will also undertake a review at the time of L&FS systems testing and commissioning and certify that construction of these systems has been carried out in accordance with the accepted design. Findings and recommendations of this review may also be incorporated into the CAP, as needed, along with a mutually acceptable time frame for implementation.

Contractors for design of the new buildings and the construction will apply sound principles of environmental engineering and safety engineering during the sitting and construction phase, and these principles will be stipulated between the contractors and BC in their contracts, to prevent and/or avoid any reputational or other risk for BC associated with potential adverse environmental and social performance of the contractors activities. Structural elements will be designed and constructed by qualified and experienced professionals and certified and approved by competent authorities or professionals.

Security personnel:
BC already has contracted a licensed security company for the construction site.

- PS5: Land Acquisition and Involuntarily Resettlement

IFC also considered the potential development of a land bank to facilitate future developments. Any future land acquisition will be on a willing-buyer, willing-seller basis, thereby avoiding any potential issues arising from involuntary land acquisition from existing occupiers. In addition, any future real estate projects will be developed in accordance with Albanian law, and IFC’s Performance Standards.

- PS6: Biodiversity Conservation and Sustainable Natural Resource Management

The environmental assessment processes described above will be followed. This should enable potential issues relating to biodiversity conservation and natural resources management, and possibly effects on cultural heritage to be identified at an early stage, and avoided.

Stakeholder Engagement

At community level, BC has organized meetings with Commune representatives, with Village Elder, and with neighbors. There were no concerns raised; but to the contrary, the project was well received. BC will help with building of adjacent road paving, sewage and water distribution pipes, painting of local schools, sponsor commuting costs for students going from the site area to Tirana for studies. BC has also helped in cleaning the Lana river of Tirana going through urban cities, and in building public fountains or renovating sidewalks with upscale stone tiles.

BC will make available for the public this ESRS in Albanian, at the local building sites in Lundra and Curilla (at the time if the development - the fall 2008), and publish an advertisement about the ESRS in a local newspaper and on Lundra website and Curilla municipalities’ website.

After disclosure of this ESRS, BC will initiate communications with the local community and its representatives and local authorities to address any critical concerns that may arise during the project’s construction phase, such as noise, dust, working hours, increased local traffic and congestion due to heavy vehicles traveling into and out of the site, construction-related water supply and wastewater discharge/treatment, solid waste disposal, storage and containment at the site of hazardous material if any, as well as during the operational phase of the campus.

Client Documentation

File Name	Actions
Action Plan 2007June28 BC.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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