26978 - Midas

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Environmental & Social Review Summary

Project Number

26978

Company Name

Midas Communication Technologies Private Limited

Date ESRS Disclosed

May 28, 2008

Country

India

Region

South Asia

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jul 25, 2008
Signed : Aug 1, 2008
Invested : Aug 13, 2008

Sector

Other Services (Including IT Enabled Services)

Industry

Telecommunications and Technology

Department

Gbl Infrastructure & Natural Resources

Project Description

Midas Communication Technologies Pvt. Ltd (Midas) is a Chennai-based Indian telecommunications equipment company that designs voice and data technology platforms and Ethernet switches and access systems to provide affordable and appropriate telecom access solutions for both urban and rural areas in emerging markets.

Midas focuses on product design and outsources its manufacturing to world-class Contract Electronic Manufacturers. This allows Midas to scale up or down its manufacturing as required, in order to meet customer demand and avoiding high capital expenditures. Its headquarters in Chennai include a Technology Center, Sales & Finance Office, and Testing Lab. Midas has an additional Testing, Integration and Quality Control facility in Pondicherry, in which final assembly, packaging, and warehousing of manufactured products take place.

Midas is seeking to scale up its operations by
- continuing to develop its family of products while targeting new clients in other low-income countries;
- developing new promising technologies;
- deepening existing customer relationships; and
- expanding market reach through increased sales & marketing efforts.

The total funding amount sought is $25 million, to be financed with a $12 million equity investment from IFC, in addition to equity investments by other investors.

Overview of IFC's Scope of Review

The review of this project consisted of appraising technical, environmental and social information submitted by Midas, and a visit by IFC investment staff to the project site, to meet with Midas management and to have a first-hand look at operational activities.

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 principal Performance Standards to be applied to this investment are PS1: Social and Environmental Assessment and Management Systems and PS2: Labor and Working Conditions. A condition of IFC’s investment will be that Midas’ operations shall consider all relevant social and environmental risks and impacts, including issues covered in all IFC Performance Standards.

The key issues associated with the project are implementation of a policy and procedures for environmental, health, safety, and social management; labor and working conditions, including employee and contractor occupational health and safety. The nature of Midas’ operations is such that no major adverse environmental or social impacts are expected to result from the project, and it will be possible to avoid or mitigate any limited adverse impacts that might result. As a result, it has been classified as a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects.

Environmental and Social Mitigation Measures

Midas’ products themselves are designed to comply with international standards, with an emphasis on low-power consumption, and technical specifications are made available to customers. Midas has also provided IFC with information on key risks and impacts, to ensure that the proposed project will upon implementation of specific agreed measures comply with the environmental and social requirements: applicable host country laws and regulations, IFC Performance Standards, and IFC environmental, health and safety guidelines. This information is summarized as follows:

- Environmental, Health, Safety and Social Management:

In Midas’ own facilities, to ensure compliance with applicable laws and other standards, Midas has developed a draft Social and Environmental Management System (SEMS) Manual with some draft policy and procedures for environmental, health, safety, and social management. This includes administrative guidelines for managing office functions, general infrastructure, travel, security, and staff welfare. Packaging for Midas products makes use of mostly recycled wood and cardboard.

As a condition of IFC’s investment, Midas has agreed to develop a more formal and integrated SEMS to IFC’s satisfaction, including policies and procedures to cover all its offices and facilities.

Midas has outsourced manufacturing operations to reputable companies with high quality management standards. Midas has selection criteria for contracters to ensure that production processes are consistent with the RoHS (Restrictions on Use of Hazardous Substances) regime.

Midas is committed to improving its SEMS to provide for environmental, health and safety terms in contracts for its major outsourced production processes, and monitoring by Midas of compliance with those terms. In tenders for work likely to incur environmental, health and safety risk, Midas will require submission of environmental, health and safety management plans with bids, and the strength of these plans will be considered in tender evaluation. Midas will appoint its own staff to supervise the contractors’ compliance with the environmental, health and safety management plans and require improvement in the event that non-compliance is identified.

- Labor and Working Conditions:

Midas has 334 direct employees. For these employees, Midas has a set of policies and procedures on human resource management that complies with the principal requirements of PS2. The policies and procedures include rules on working conditions and terms of employment, non-discrimination and equal opportunity. Midas’ testing facilities are certified for their safety by local regulators. For all of Midas’ own offices and facilities, appropriate measures for life and fire safety will be included in Midas’ SEMS.

In addition, Midas shall make commercially reasonable efforts to ensure that contractors’ employees who perform work related to core functions of Midas for a substantial duration shall be provided a safe and healthy work environment, including appropriate training, protective clothing and equipment. These requirements will be included in detail in contractor agreements, as indicated in the above section. Midas shall also make commercially reasonable efforts to ensure that no contractors’ employee who performs work related to core functions of Midas for a substantial duration is below the legal employment age. Midas will develop a procedure to monitor compliance with requirements on labor and working conditions by its contractors, including reports by the contractors and visits by Midas staff. This will be reported on to IFC through annual monitoring reports.

Stakeholder Engagement

Midas recognizes the importance of community engagement, and has included principles for its implementation in its draft Social and Environmental Management System Manual. Midas facilities, including those where final assembly, packaging, and warehousing of manufactured products take place, are located in non-residential areas, so that risks and impacts to residential communities are minimized. To support local communities, Midas engages in distribution of clothes and food to old age homes and orphanages in the vicinity of Midas offices; facilitates blood donation by Midas employees on requests from accredited hospitals, institutions and volunteer groups; and contributes to relief funds in the event of natural calamities.

Questions or comments can be directed to:

Mr. Shirish Purohit, Mr. Rene Abraham
Chief Executive Officer, Chief Technology Officer
Midas Communication Technologies Private Limited
#14 Kalyani Nagar, Kottivakkam
Thiruvanmiyur, Chennai 600041
India

Telephone: +91-44-2451-2050
Fax: +91-44-2451-0555

**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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