26984 - Montenegro Mall

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Environmental & Social Review Summary

Project Number

26984

Company Name

GINTASMONT INVESTMENT CONSTRUCTION AND TRADE AD

Date ESRS Disclosed

May 20, 2008

Country

Montenegro

Region

Europe

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 26, 2008
Signed : Jun 30, 2008
Invested : Dec 31, 2008

Sector

Retail (Including Supermarkets, Grocery Stores, etc.)

Industry

Tourism, Retail and Property

Department

Regional Industry MAS LAC & EUR

Project Description

Mall Montenegro Project (the project or the Mall) is a private-public partnership project developed jointly by Gintas Construction Contracting & Trade Company, Turkey (Gintas, Sponsor) and the Municipality of Podgorica, Montenegro (the Municipality). The Mall will be developed by Gintas’s subsidiary company established in Podgorica “Gintasmont” and it will be the first multi-functional shopping mall development in Montenegro and will introduce new standards and best practices of modern shopping mall concept in the country. Total project cost is approximately €30.7 million, and IFC has been asked to provide a financing package of up to €10 million.

The project will be developed on an existing “bazaar” site called ‘Velika Pijaca’, on a 22,373 sq.m. property, and built-up construction area will be 58,484 sq.m. Once complete, the Mall will accommodate leaseable surface for hypermarket, large stores, retail shops, office spaces. The shopping mall will offer 4 screen cinema, entertainment facilities, outdoor entertainment square, open and covered car parking, food court, restaurant and cafés. The project will be developed in three phases: In the first stage (Phase I), the Municipality has already torn down the sprawling old “bazaar” in the proposed site, and has constructed a more compact new “Green Bazaar” where the Municipality will be the owner, landlord and the operator. The New Green Bazaar is relevant to the Project such that Gintasmont is doing work to set it up for the Municipality, and will receive the land and the communal tax for Phases II and III on successful completion of Phase I. The second phase (Phase II) is to extend the shopping centre facilities creating larger shopping area, activity area, cinemas and is expected to be completed by September 2008. The cafés and large stores to be established shall be owned and operated solely by Gintasmont. The third phase (Phase III) will mostly consist of the shopping mall with food-court and other retail units. The shopping mall will be completed in September 2009 and shall be owned and operated solely by Gintasmont

Overview of IFC's Scope of Review

The review of this project consisted of

- appraising technical, environmental and social information submitted by Mall Montenegro during the site visit i.e. environmental impact assessment, construction design, blue prints for various utilities, procedures for OHS and life and fire safety plans,
- a visit by IFC to the project site and
- meeting with Mall Montenegro project management. The following potential environment, health and safety and social aspects of the project were analyzed:

- land acquisition and planning procedures;
- management of environmental and social developmental issues impacts during construction and operation;
- labor and working conditions during construction and operation;
- life and fire safety related aspects of building design and operation, including emergency response procedures;
- occupational health & safety during construction and operational phases;
- potable water sourcing, wastewater disposal, and solid waste management;
- energy efficiency;
- hazardous materials and liquid and solid waste management;
- Mall Montenegro’s activities in the local communities

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 System;
- PS2 Labor and Working Conditions;
- PS3 Pollution Prevention and Abatement;
- PS4 Community Health, Safety and Security;
- PS5 Land Acquisition and Involuntary Resettlement.

Project land will be acquired through an agreement between Montenegro Municipality and Gintas (The Sponsor) where Gintasmont will receive land for the development after the successful completion of the Phase I (The New Green Bazaar). No biodiversity and natural resources, indigenous peoples or cultural heritage are involved or impacted by this project. Therefore, the requirements of IFC’s Performance Standards 6 Biodiversity Conservation and Sustainable Natural Resource, 7 Indigenous People (IP) and 8 Cultural Heritage are not relevant to this project.

This project involves construction of a new 58,484 m2 Mall and 22,373 m2 new bazaar on an existing bazaar site called “Velika Pijaca”. Key environmental, heath and safety issues associated with the project include:

- Environmental and social development management;
- Labor and working conditions, employee and contractor occupational health and safety, and community health and safety during construction and operational phase;
- Life and fire safety;
- Hazardous material storage and handling.

The nature of the retail 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).

- PS1: Social and Environmental Assessment and Management Systems:

Gintas posses certified international standards IS0 14001 and OHSAS 18001 through which it has been managing the environmental, health and safety aspects of their developments. According to Montenegrin Environmental Law a company is obliged to undertake an assessment prior to a project development in order to get an environmental permit to operate. Mall Montenegro has commissioned a local environmental consultant to undertake the necessary environmental assessment. Based on the findings of the assessment the project will not have negative EHS impact.

Based on the architectural and main construction design an urban and construction permit was issued. After the work is completed a service permit / operational permit will be issued. Integral part of such permit will be licenses for water supply, sewage, electricity, solid waste management, power supply, sanitary license, life and fire safety, etc.

Mall Montenegro has hired local engineer for project management while the design for the project has been done by Gintas’s in-house designers. Regular monitoring of the construction work is performed by the local construction inspections and during the operational phases monitoring will be performed by different inspectors in charge of utilities management.

Gintasmont will develop a formal environmental policy statement and develop an environmental manual according to which the company is going to monitor its EHS performance

- PS2: Labor and Working Conditions:

Human Resources Policy and Working Conditions -

Gintas has a Corporate Human Resources policy which is designed to ensure compliance with Turkish labor regulation and is compliant with IFC’s Performance Standards. Gintas developed its HR policy in terms of national employment and labor standards and it will apply it to Gintasmont’s operations in Montenegro. Practically there are two sectors in company: technical affairs and administration affairs. Gintas is employing engineers on project basis, company extends contracts to qualified persons in order to expand its organization. In addition an internal education programs to increase employee loyalty to the company has been introduced by the company. Senior staff of the company elects prospective junior engineers to be trained for a long term employment in the organization. Total number of Gintas staff is 150. Gintas employ local seniors in Albania and Montenegro to get their expertise for operation sustainability.

Gintasmont requires its construction contracting companies to use similar conditions in its projects in Montenegro. Several Bosnian and Serbian construction companies which have been hired by Gintasmont for works on Mall Montenegro will be applying the requirements of Montenegrin Labor Law and IFC PS2, including those related to non-employee workers to its operations. These contracts specify the mutual obligations regarding the quality of work, standards of the construction building, workers health and safety, life and fire safety. The contractors develop project–specific plans to ensure safety in construction, and following their internal procedures undertake regular checks to ensure compliance. These checks are supported by regular inspections undertaken by Gintasmont’s staff and local inspections. 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. Gintasmont will not engage with suppliers or contractors who have employees below the legal employment age, which for Montenegro is 18 years. Mall Montenegro subcontractors’ employers are covered under their own insurance scheme.

Occupational Health and Safety –

During the construction phase Gintasmont will be responsible for ensuring the security, safety, and safety training of contractors’ employees, according to the requirements of PS2. For that purpose Gintasmont has developed OHS plan. Mall Montenegro will require that the successful contractor and any subcontractors similarly develop and apply plans for safe working. Sanitary / health check up of the kitchen, restaurant workers as well as the sanitary conditions in the restaurant and toilettes will be regularly monitored by Health Inspectorate. The company will employee full time first-aid attendants who is going to provide training and assistance in case of emergency.

As Gintasmont will be managing the operations of Mall it has agreed to commission an experienced consultant to undertake an OHS risk assessment at the new store, and to develop OHS action Plan which will provide technical control of risks identified. As apart of OHS plan Gintasmont will develop system to monitor use of refrigerants in servicing refrigeration and air conditioning system

- PS3: Pollution Prevention and Abatement:

IFC guidelines for energy, water, waste water 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 Mall Montenegro and contractors.

Energy:

Power at the new Mall will be provided by the three transformer stations of 3,75 MW connected to the State owned electric grid network and from on-site generator as a back up option.

Air Emission:

These are expected to be limited to emissions from project boilers. These are likely to be small, quite possibly of a size not requiring regular monitoring, and should not have significant discharges. Non ozone-depleting refrigerants are used in heating and air conditioning systems.

Water Supply and Quality:

The municipal water utility will provide pre-treated water. Mall will have water reservoir for use in case of water shortages, supply interruptions and for hydrant network in case of fire.

Waste Water:

Sanitary waste water will be pretreated in on-site septic tank/oil and grease traps (restaurant and public lavatories) and discharged off into the city sewage collection network. Septic tank will be designed and installed according to the local regulations and guidance to prevent any hazard to public health or contamination of land and will meet IFC guidelines for discharge to surface water. Storm water will be collected by a separate collection network, treated in sand and oil/grease traps and discharged to a nearby stream.

Solid Waste:

Solid waste consists mainly of cardboard paper, plastic and wooden packaging, polystyrene that will be collected, sorted and handed over to the local recyclers. Household solid waste will be temporarily disposed off in on-site premises (organic waste from the green market will be collected twice a day), before it is collected by the local Utility and disposed off at the Podgorica disposal site or by local recyclers.

Hazardous Material Management:

Diesel fuel tank of 2,3 m3 is type of built-in package and is secured to prevent leakage and contamination of the soil. Bulk storage of other flammable or reactive materials such as paints and solvents will be in dedicated storage with appropriate containment and fire protection. However, small quantities of these materials will be displayed at point of sale. The project will not use PCBs.

Energy Efficiency:

Gintasmont has found that the target clients of its real-estate development are increasingly concerned with energy costs of their buildings. Store design will include features to promote energy efficiency, including well-thermo insulated building walls, selection of efficient lighting systems, multiple glazed windows, blinds/shades to limit summer cooling loads, automatic shut on-off doors between departments/entrance to the buildings.

- PS4: Community Health, Safety and Security

Mall Montenegro will evaluate health and safety (including L&FS and occupational health and safety) 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. Associated risk with the development of this project are infrastructure and equipment safety during the construction phase such as increased traffic of heavy machinery, noise , dust and during the utilization phase, hazardous material handling ( for example diesel storage tanks). Gintasmont project manager at site is responsible that trucks leaving the site do not pollute the public road with airborne dust emission from their loads and mud from the tires and thus create traffic hazard for other vehicles.

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 included in contracts between the construction company and Mall Montenegro. Structural elements and other safety-related features will be designed and constructed by qualified and experienced professionals and certified and approved by competent authorities or professionals, including construction provisions that will ensure the structural integrity of the buildings commensurate with the earthquake risk for Podgorica region.

Fire and Life Safety:

Montenegrin Law on fire and safety requires any new building design to be benchmarked against the standards set in the Law. In addition, the mall has been designed to be compliant with EU building codes. Gintasmont has hired an experienced consultant to prepare fire protection plan for the Mall (effectively the fire-safety specification for the building) identifying major risks, applicable codes and standards and regulations (Montenegrin and EU) and mitigation measures, which when implemented will result in the building’s compliance with national and an internationally recognized (i.e. EU) fire protection code. The building will be inspected after construction by State agency, to verify that it was built in accordance with the Fire protection plan. Only after this approval is obtained (along with the approvals for different utilities in the Mall) the final service permits will be issued to Gintasmont. Fire protection system of the Mall will be modern and sophisticated with, for example, sprinklers system in all area with public access.

Gintasmont has committed to complete a formal Life and Fire Safety (L&FS) Master Plan which will be prepared by a qualified professional acceptable to IFC certifying that design of the facilities meets IFC''s guidelines.

For seismic protection, before the construction starts all design / blue prints are submitted to an authorized state agency for evaluation of, among other things, structural integrity of the building
(quality of concrete , stress calculations, and the earthquake coefficient are taken into the considerations). Gintasmont has applied so called Euro Code in design in the building. Podgorica is in IX earthquake zone and Gintasmont has designed for 15 % more of the steel bars in the construction than required by the local regulation. Gintasmont will inspect works during construction and shall commission a post-construction check by a qualified engineer to confirm that the building was built according to design.

Security personnel:

Security to Mall Montenegro will be provided by a private agency that is licensed by the Montenegrin law and has been providing service to wide range of clients in Podgorica. Security personnel are trained in the use of force for defensive purposes and in an appropriate conduct toward customers, workers and local community. The building will be equipment with audio and video surveillance system which will be operated during 24 hours.

- PS5: Land Acquisition and Involuntarily Resettlement

As a part of the deal between Municipality of Podgorica and tenants of the “old bazaar” it was agreed that, once New Bazaar (Phase I) is completed it will offer space for renting under favorable prices for all interested old tenants and any outstanding number of new places to new interested tenants under the current market price conditions. Although Gintasmont was not part of this deal, the deal between the Municipality and the tenants was done in anticipation of redevelopment of the bazaar and completion of Phases II and III (the project) and as such will benefit the project with the resettlement conducted in compliance with IFC Performance Standards 5.

Stakeholder Engagement

The project is located in urban center of the city and in the proximity of the household buildings. There has been an extensive interaction with the local communities, i.e Gintasmont has publicly disclosed all technical documentation for duration of three month prior to the project start up and arranged for a day long public consultation. Mall Montenegro has not received any complaints regarding this project. For any future interaction with local community there will be a point of contact at Mall Montenegro in case of any complaint or grievance, which will be addressed promptly.

Mall Montenegro will make available for the public this ESRS and Action Plan in local language, at the building sites and the company premises, and publish an advertisement about the ESRS and Action Plan in a local newspaper.

After disclosure of this ESRS and Action Plan, Mall Montenegro will initiate communications with the local community 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 operation of the stores.

Client Documentation

File Name	Actions
Final Action Plan Mall.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).

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