26739 - SGH II

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Environmental & Social Review Summary

Project Number

26739

Company Name

BAIT AL-BATTERJEE MEDICAL CO. LTD

Date ESRS Disclosed

Oct 23, 2008

Country

Middle East, Pakistan, and Afg Region

Region

Middle East

Last Updated Date

Jun 11, 2022

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Feb 3, 2009
Signed : Feb 12, 2009
Invested : Feb 25, 2009

Sector

Hospitals and Clinics

Industry

Health, Education and Life Sciences

Department

Regional Industry - MAS ME & Africa

Project Description

The project entails funding the expansion plans of Saudi German Hospitals Group (“SGH” or “the Group”), a leading provider of healthcare services in the Middle East and North Africa (“MENA”) region. The Group commenced operations in 1988, with its first hospital in Jeddah, Saudi Arabia. Currently the Group has a regional network of five hospitals, four training and nursing institutes and one medical college located in Saudi Arabia and Yemen. The Group has developed an ambitious long-term corporate vision:

- to design, finance, construct and operate 30 world-class hospitals and create 50,000 jobs by the year 2015 and
- to be the dominant regional player in the private medical education by establishing 5 medical colleges by the year 2010.

In order to meet these long-term goals, the Group is embarking on a multi-phase expansion plan to enhance its presence in its existing hospitals and move to new markets. The Group’s expansion plan includes:

- a 150 bed hospital in Hail, Saudi Arabia;
- a 300 bed hospital in Cairo, Egypt;
- a 315 bed hospital in Dubai, UAE;
- a chain of thirty specialty clinics in Cairo;
- a 100 – 150 bed hospital in Addis Ababa, Ethiopia; and
- a nursing school in Cairo.

Overview of IFC's Scope of Review

IFC’s initial appraisal of the first investment took place in the fall of 2006 and consisted of appraising a wide variety of technical, environmental, health and safety, labor, community and social information provided by the Saudi German Hospital Group (SGH). Discussions were held with corporate staff namely the Directors of Quality, Health and Safety, Human Resources, and Building Maintenance. In addition meetings were held with representatives of SGH’s Construction Division and their in-house architects – responsible for the design and construction of all the Group’s facilities. The IFC team also visited the site of the Cairo hospital where construction activities were just starting (i.e. basement concrete was being poured). Further visits will take place to the various sites which are at different stages of development, (see project description below).

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:
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:

- PS 1 Social and Environmental Assessment and Management Systems;
- PS 2 Labor and Working Conditions;
- PS 3 Pollution Prevention and Abatement;
- PS 4 Community Health, Safety and Security: and part of
- PS 5 Land Acquisition and Involuntary Resettlement. The two new sites involve no involuntary resettlement, other sites will be assessed as the project develops.
- PS 6 Biodiversity Conservation and Sustainable Natural Resource Management does not apply to these projects given the location of the 2 hospitals (i.e. urban settings in Sana’a and Cairo).
- PS 7 Indigenous People does not apply as there are no indigenous people impacted or involved in these projects.
- PS 8 Cultural Heritage does not apply as there is no cultural heritage impacted by these two projects.

Based on the discussions with the client and the visit to the new hospital site in Cairo, this project will have limited potential adverse environmental and social impacts. Also any impacts will be few in number, site-specific, reversible, and easily addressed through agreed mitigation measures. As a result of the above this is a Category B project according to IFC’s Environmental and Social Review Procedures and good international industry practice.

Environmental and Social Mitigation Measures

The client has presented plans to address any impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements of Egypt and Yemen as well as IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the projects is summarized in the paragraphs that follow.

SGH has a clearly defined corporate vision and mission statement as well as policies and operational procedures in all key areas. Given the size and scope of SGH’s operations in the Middle East region, the Group has developed a very strong and effective management team. This includes a corporate quality management team and systems that implement programs at all SGH’s facilities. This has resulted in excellent EHS performance throughout the Group. The President/CEO of the Group reports to the Board and has a corporate office that provides a staff function to the operating hospitals. Each hospital/major facility in the Group has a Chief Operating Officer (COO) with a Chief for Medical Operations and a Chief for Administration. Each hospital has a Steering Committee (SC) chaired by the COO and with each medical service (e.g. X ray, lab services) and each administration department (e.g. marketing, maintenance, catering, finance) head as a member. Each hospital also has a Medical Department Committee (MDC) chaired by the Chief of Medical Operations. At each hospital the SC and the MDC meet very regularly and are linked by videoconference to the Group President who chairs this meeting. Minutes for each meeting are posted online for access by anyone in the Group and action items are coded for follow-up. In addition to the committees detailed above, each hospital has a Quality Assurance and Safety Committee that also meets on a regular basis. The idea is to facilitate the sharing of best practice, review performance and learn within the Group. As noted above this has allowed for strong and effective management and leadership resulting in excellent performance and a commitment to quality. Finally each hospital has it’s own strategic goals, key performance areas and performance indicators which are monitored and reported on regularly.

The new hospital in Sana’a was a greenfield development in an urban setting and is located on land zoned for this type of use. In Yemen the hospital was permitted by both the Sana’a city authorities and the central Ministry of Health. In Cairo the new hospital will also be built on vacant land in an urban setting near the airport that has been zoned for this type of development – a large shopping centre is planned for development next to the hospital. As is the case in Yemen, both the Cairo municipal authorities (for such issues as zoning, fire protection, water supply, wastewater treatment, solid waste disposal, supply of electricity, and transportation) provide the necessary permits to the project and the central Ministry of Health also provide the required approvals. The key approvals in both cases from an EHS standpoint are the municipal/city permits and these have all been obtained for both projects. Generally these types of medical facilities (300 bed hospitals) are expected to pose limited impact on the environment and the neighboring communities provided they are operated to international standards. Once the hospital is completed, the Ministry of Health inspects the facilities before giving the final approval to open. In addition to local regulatory compliance, SGH will provide IFC with documents of evidence for compliance to international and local fire and life safety standards as required by IFC. Also subsequent to construction, confirmation that construction was according to design, and certified by the designer.

When SGH opens a new hospital, a team of staff from the corporate office and selected other hospitals help to implement the new organizational structure and procedures consistent with SGH’s policies. SGH has achieved ISO 9001:2000 (Quality) certification from an international certifier (TUV of Germany). Education and training are one of the core values of SGH. Internal and external training is provided on a regular basis for all medical staff. This training is provided by in-house experts, medical consultants (frequently from Germany), other experts as well as through conferences and workshops.

SGH has a well known code of patient’s rights and responsibilities. There is a very strong and well organized grievance procedure for both inpatients and out patients, with an open door policy. The basic rule of the SGH Group is “money back if not fully satisfied”. These programs are handled by SGH’s QA Department.

Based on the requirements of the local permitting process, it is anticipated that this project will comply with both host country government’s requirements (Yemen and Egypt) as well as the IFC EHS requirements.

Current employment in the Group is about 5,000 staff including the new hospital in Sana’a as well as the Group’s design and construction subsidiaries. Staffing for the hospitals is about 4 to 5 employees per bed – thus the new Cairo hospital will have a full staff compliment of about 1,215 with 225 doctors, 390 nurses, 150 technicians, and 450 administrative/support staff. One of the major issues facing SGH relates to the hiring, training and retaining of high quality staff from the medical sector (e.g. doctors, nurses, laboratory technicians). SGH is currently building a 4,000 student full service Medical College in Jeddah, the first private Medical College in the Middle East. This institution will be accredited in Germany and will provide trained medical staff for the Middle East region and of course to SGH. The Medical College will train not only doctors and dentists but also nurses and technicians.

SGH’s Human Resource policies and procedures are very detailed and all SGH facilities are required to comply with these policies and procedures and their performance in this regard is monitored very carefully. All SGH employees from doctors to construction workers have employment contracts which are renegotiated every 3 years on average. All workers are paid monthly and there are bonuses and performance incentives which are normally paid quarterly. Market surveys etc are used to determine salary levels as there are no unions or collective bargaining agreements. Salaries and benefits in SGH are excellent by the standards in the Middle East. As is often normal in the Middle East, SGH provides furnished housing for their staff – normally apartments whose size varies depending on the person’s seniority in SGH. Construction workers are provided on-site housing, mess, religious and recreational facilities as well as round trip tickets home at no cost and 30 days annual paid vacation.

SGH complies with the labor laws of the country in which they are operating. Their policies and procedures are open and transparent and SGH advertises itself as an equally opportunity employer. The Group currently employs 29 different nationalities, of all religions, and their working language is English.

SGH has a fully developed and operational grievance procedure. While employees are encouraged to talk to management about any problems there is a formal grievance procedure where employees put their issues in writing. Again as for hiring, these HR processes (e.g. discipline, grievances) are very transparent. SGH prides itself on being an excellent place to work.

SGH has a corporate occupational health and safety (OHS) policy as well as detailed procedures in place. Each Group facility has a trained OHS officer responsible for these issues as well as staff training. Each department in each facility has a nominated OHS representative who supports the OHS Officer. The OHS representative also in trained (internal and external training). An annual schedule of staff OHS training is prepared and implemented. All accidents must be reported in writing and initially investigations completed within 24 hours by the OHS Officer. All SGH buildings have the required smoke and fire detection equipment with either fire extinguishers or, in the larger facilities, sprinklers and hose and reel fire fighting systems. Building designs also allow for proper egress in emergency situations. These requirements are consistent with IFC’s Life and Fire Safety Guidelines.

Raw water to the existing hospital in Sana’a and the new hospital in Cairo is provided by the Municipality with SGH then providing necessary additional water treatment prior to distribution to the medical facilities. Wastewater is segregated at both hospitals with grey water (basically washwater) treated and then used for onsite irrigation. Blackwater is discharged to city’s industrial wastewater sewer for treatment prior to discharge to the environment. In Cairo there is a new municipal wastewater treatment plant near the airport whereas in Sana’a a municipal wastewater treatment plant is being built. SGH has very detailed procedures for handling all types of wastes. Red bag waste is collected by SGH staff and stored onsite. In both Cairo and Sana’a licensed contractors collect this red bag waste every day for transport to a Government licensed incinerator for disposal (i.e. in Cairo it is disposed of in the University of Cairo medical waste incinerator). In addition laboratory and radiological wastes are also collected regularly by Government licensed contractors for proper treatment and disposal. Garbage is also collected every day by a licensed contractor and taken to a licensed landfill for disposal. In Cairo natural gas is used in the boilers whereas in Sana’a the boilers are fired with either diesel or fuel oil. SGH wishes to be as resource efficient as possible and their hospital designs and operation tend to be as energy and water efficiency as possible.

In the case of emergencies the SGH hospitals will be expected to respond – hospital staff have been appropriately trained and SGH has detailed operational procedures in place for emergency preparedness and response and these will be implemented as each new hospital opens. Emergency drills will be completed and these drills will be coordinated with the local civil defense, fire and police authorities – in fact these authorities will actively participate in these drills. In Cairo security will be contracted to a local experienced security company – security guards will be trained and not armed. Similarly in Sana’a SGH will retain an experienced security contractor to provide both internal and external guards who will all be trained. As is required in Sana’a the guards external to the hospital will be armed but the internal security guards will not be armed. This approach is consistent with Government of Yemen policies and procedures and SGH will closely monitor the performance of their security contractor. Men in Yemen are normally armed at least with the traditional knife (dagger) – patients and guests entering the hospital in Sana’a will be asked to surrender their weapons by the security guards – again this is normal procedure in Yemen.

SGH has purchased the necessary land for the Sana’a and Cairo hospitals in urban areas near the airport (in both case) at fair market value. In Sana’a the vacant land was purchased from Yemen Airways and in Cairo the vacant land was purchased from an Egyptian industrial enterprise, Olympic Group. In Cairo, Olympic Group is planning to build a high end shopping center next to the SGH hospital. Both sites are well situated and traffic flow in the immediate area of the hospitals is excellent. There is a well functioning market for the selling and purchase of real estate in both Sana’a and Cairo. The process is open and transparent. There are no economically or physically displaced persons or resettlement of any sort from the purchase of land.

Stakeholder Engagement

Once SGH opens a hospital there are numerous community programs such as HIV AIDS, drug abuse, traffic accident prevention, mother and baby programs, special informational and support programs for a wide variety of groups including diabetics, heart and cancer, and HIV AIDS patients, and those who experience a death in the family. There are also education programs focused on children – in Jeddah Children’s Day is Thursday – these programs often use an entertainment approach to successfully present a serious medical education message to children. Students are encouraged to visit the hospital and doctors from the hospital also visit local schools. NGOs can use the hospital facilities (e.g. auditorium) free of charge.

The SGH Group operates a number of very effective not for profit organizations such as:

- Saudi Entrepreneurship Development Institute (SEDI) in Jeddah which helps SMEs with amongst other programs train-the-trainers, incubators, mentoring. UNIDO also supports SEDI;
- Health Management Research Institute (HMRI) in Sana’a, Yemen which carries out non-clinical medical research. A similar institute in India is also involved:
- Family Business Academy (FBA) which helps family businesses in Saudi Arabia with such issues as succession planning, role of the spouse, and financing – all key issues for family owned SMEs; and
- Charity Blood Bank which will be the largest blood bank in the region that will take blood donations, test and store the blood, and then distribute it as needed free of charge. In many Muslim countries it is not unusual for large companies such as SGH to be very active in the community especially if the company is involved in areas with a strong commitment to the public good, such as healthcare.

Please direct questions to:

Mr. A.R. Mohan, Corporate Office Director
Saudi German Hospitals Group
P.O. Box 61313 Sharjah, United Arab Emirates
Telephone: 971 6 5569900

Project documents disclosed at the following locations:
Egypt:
Saudi German Hospital
Security Gate, Heliopolis, Airport Road,
Cairo, Egypt

Ethiopia:
Saudi German Hospital Site
Security Gate,
Addis Ababa, Ethiopia

World Bank Group Offices (IFC)
Ms. Nada Shousha,
Nile City Towers, North Tower, 24th Floor 2005C
Cornich El Nil, Ramlet Boulac
Cairo, Egypt

Tel: + 20 (2) 2461-9140 / 45 / 50
Fax: + 20 (2) 2461-9130 / 60

World Bank
Mr. Aliou Maiga,
Addis Ababa.
P. O. Box 5515
Addis Ababa, Ethiopia
Tel: (251-11) 517 60 00 / 662 77 00
Fax: (251-11) 662 77 17

**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.

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