26292 - Vinte Viviendas Integrales, S.A. de C.V.

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Environmental & Social Review Summary

Project Number

26292

Company Name

Promotora de Viviendas Integrales, S.A. de C.V.

Date ESRS Disclosed

Oct 26, 2007

Country

Mexico

Region

Latin America and the Caribbean

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Dec 7, 2007
Signed : Dec 14, 2007
Invested : Feb 20, 2008

Sector

Construction and Real Estate

Industry

Tourism, Retail and Property

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Vinte Viviendas Integrales (Vinte or the company) is a mid-sized vertically integrated housing developer that targets the medium and low income segments of the population within the Metropolitan area of Mexico City, the area with the largest population density and housing demand in the country.

The company has approached IFC for assistance in providing a $15 million equivalent Mexican peso revolving facility (the IFC Revolving Loan) to finance its working capital requirements for the construction of low income housing developments in Mexico City and other growing cities such as Pachuca, Playa del Carmen, Monterrey, Guadalajara and Queretaro.

Overview of IFC's Scope of Review

IFC provided an environmental and social information questionnaire which was duly completed and submitted by the company. On the basis of the completed questionnaire IFC staff traveled to Mexico to visit three housing states in the vicinity of Tecamac in the State of México, interviewed company executives and review supplemental environmental and social information. The information thus gathered was reviewed vis-à-vis IFC’s policy and performance standards, as well as general environmental, health and safety guidelines.

E & S Project Categorization and Applicable Standard

While all Performance Standards (PS) 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.
- PS4: Community Health, Safety and Security.
- PS5: Land Acquisition and Involuntary Resettlement
- PS8: Cultural Property

Issues related to PS6: Biodiversity Conservation and Sustainable Natural Resource Management do not apply as by law housing developments cannot be located in protected areas or areas with natural habitats.

Issues related to PS7: Indigenous Peoples (IPs) do not apply at present because IPs would not be affected by Vinte developments unless they become involved in land sales. Development area is in semi-urban location. Land acquisition by Vinte is done in a responsible manner on a willing-buyer-willing-seller basis, which would not impinge on IPs rights.

Environmental, Health and Safety General Guidelines (April 30, 2007).

Environmental and Social Mitigation Measures

The proposed IFC investment will provide working capital financing to a housing construction company currently engaged in housing developments in the Metropolitan area of Mexico City. To be in compliance with IFC’s environmental and social standards, the company will be required to adapt its current environmental policy to IFC’s Policy and Performance Standards (PPS) on Social and Environmental Sustainability. Furthermore, the company shall design all its future projects to meet IFC’s PPS and applicable guidelines.

The paragraphs which follow describe how the company will mitigate potential environmental and social risk in compliance with PPS and local requirements.

- PS1: Social and Environmental Assessment and Management Systems:

- With respect to the company’s management of its environmental, social and health and safety performance during design, development construction, operation and maintenance of their housing developments, the company follows Interplan’s standards, (Interplan is a subsidiary of Vinte) which are consistent with generally accepted good practice, and has received the government’s “Mexican Housing Award”. However, the company is aware that they need to implement a more comprehensive Environmental and Social Management System as required by IFC, and have agreed to do so.
- The social and environmental assessment of the impacts of new projects, were analyzed by means of a full EIA as required by Mexican law.
- Vinte complies with environmental and social requirements stemming from the EIA, as well as other national and local permitting requirements; and
- The company representatives participate in the development of the local housing development plans and systematically engages with local communities regarding environmental, health and safety performance, and any corporate social responsibility efforts as appropriate. Vinte has agreed to upgrade its social and environmental assessment and management structure in through a series of actions documented in the attached Environmental and Social Action Plan.

- PS2: Labor and Working Conditions:

- The company complies with Mexican and IFC requirements with regard to fair, safe and healthy working conditions in construction and maintenance of their operations.
- The company has an equal opportunity policy, favoring local workers and a gender-wise balanced workforce.
- Vinte currently employs 1,752 staff plus a number of subcontracted workers.
- With regard to Vinte’s own staff, the number of accidents over the past 12 months has diminished significantly from the previous year. However, the company has committed to develop and implement procedures to ensure the health and safety of its own and subcontracted workers, and to a continual improvement consistent with OHSAS 18001 standards.

- PS3: Pollution Prevention and Abatement:

- The company is compliant with applicable IFC requirements with regard to control of dust and noise arising from construction activities, erosion and sediment control; as well as the safe storage, handling, application and disposal of hazardous materials used in the construction activities. Vinte´s general approach is to design its developments with separate piping for sewage, which is discharged to municipal sewers, and stormwater, which is infiltrated to the aquifer in suitable infiltration ponds, as required by local authorities. For discharge into natural bodies of water, the law requires prior treatment by developments or by the municipality as appropriate. The company adapts this approach according to site circumstances and local regulations. Vinte´s procedures will be improved as part of the implementation of an integrated management systems as described under PS1 above.
- The company’s initiatives on efficient use of housing utilities (water, gas, electricity); treatment and discharge of domestic effluent; emergency preparedness and response; and solid waste management were found to be appropriate. The company is gradually installing low-energy light bulbs and low water consumption showers and toilets as new houses are being built. Houses are delivered with a “user´s guide” which explains how to use the energy and resource efficient devices and encourages their use. The company´s houses are for low to mid-income dwellers and do not have air conditioning or other high-energy demanding features. Double glazing and AC are not essential for Vinte´s masonry houses under weather conditions in the area. Vinte is offering solar heaters to buyers in the new development of Solar del Cid, and intends to do the same in other housing estates under development.

- PS 4: Community Health, Safety and Security:

- The company gives due consideration to impacts of design, construction and maintenance activities, including:

- life and fire safety in design, construction and maintenance;
- impacts of construction camps, movement of vehicles to and from construction sites, operation of construction equipment, containment of dust, noise and other nuisance factors;
- control of public access to construction sites; and
- emergency preparedness and response: developments are subdivided in several closed communities (privadas) fitted with closed circuit cameras at its entrance and in common areas to enhance security and monitor children at play. The images from these cameras can be viewed at the computer provided by Vinte in every house as part of the company’s internet connectivity program.

- PS 5: Land Acquisition and Involuntary Resettlement:

There are no issues with regard to the potential displacement of occupants and/or users of land acquired for future projects. The location of Vinte’s housing estates is regulated by state and local development plans. When an area is designated for urban development areas under communal ownership (ejidos) formerly used for limited agricultural production are legally subdivided and sold to developers under a willing seller-willing buyer arrangement. Land whose use is changed from agriculture to urban development rapidly increases in value, which amply compensates for any improvements the ejidatario might have done and is paid at the market price. Illegal land occupation is a feature in Ecatepec and parts of Tecámac. However, Vinte only purchases land in areas zoned for urban development and fully titled. Land invasions of housing developments and their neighboring lands are extremely rare.

Depending upon project circumstances, issues covered by the following Performance Standards may also be encountered from time to time:

- PS 6: Biodiversity Conservation and Sustainable Natural Resource Management:

By company policy, Vinte does not acquire land that could have adverse impacts upon natural or critical habitats.

- PS7: Indigenous Peoples:

While the company does not have an indigenous peoples’ policy, Vinte has committed to comply with Mexican government regulations pertaining activities that may affect indigenous communities.

- PS 8: Cultural Heritage:

The company has agreed to develop a chance finds protocol providing appropriate protection in the event of unexpected discovery of items of cultural heritage, and the contractual right to apply such a protocol if necessary.

Upon completion of the appraisal review, staff identified compliance gaps and designed adequate mitigating measures to be included in the attached Corrective Action Plan (CAP). Performance reporting requirements will also be established as appropriate.

Stakeholder Engagement

The company representatives participate in the development of the local housing development plans, and regularly engage with local communities regarding environmental, health and safety performance according to the requirements of the EIA regulations. The company has agreed to improve community engagement activities up to IFC standards and formalize them as part of its Environmental and Social Management System.

This environmental and social review summary will be locally disclosed at the following address:

Torre del Angel. Paseo de la Reforma 350 Piso 11. Col. Juárez
C.P. 06600, México D.F.

For any further question or comments please contact:

Domingo Valdes, Finance Director
Vinte
Telephone: (5255) 9171 1527
E-mail: domingo.valdes@realparaiso.com

Client Documentation

File Name	Actions
ESAP.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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