27117 - JICT

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Environmental & Social Review Summary

Project Number

27117

Company Name

JAKARTA INTERNATIONAL CONTAINER TERMINAL, PT

Date ESRS Disclosed

Oct 13, 2009

Country

Indonesia

Region

East Asia and the Pacific

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 26, 2009
Signed : Dec 10, 2009
Invested : Jan 14, 2010

Sector

Port and Harbor Operations

Industry

Infrastructure

Department

Regional Industry - INF Asia & Pac

Project Description

PT Jakarta International Container Terminal (“JICT” or “Company”), located in the port of Tanjung Priok, is the largest container terminal in Indonesia and handled almost 2 million Twenty-Foot Equivalent Units (“TEUs”) in 2008. The proposed project will be on existing JICT concession area, and includes (i) developing approximately 32 hectares of container yard, roads, parking and an administrative facility; (ii) acquiring new container handling equipment for the quay and the container yard; and (iii) constructing up to 24 entry gates and about 2 km of access roads within the port premises. JICT is seeking financing from IFC for up to $30 million from IFC’s own account and a syndicated B loan of up to $40 million.

JICT is owned 51% by Hutchison Ports Jakarta Pte Ltd, a member of Hutchison Port Holdings (“HPH”) group, 0.1% by Koperasi Pegawai Maritim and 48.9% by Indonesian state-owned port operator PT. Pelabuhan Indonesia II (“Pelindo II”). HPH is the world''s leading port investor, developer and operator with interests in a total of 300 berths in 49 ports, spanning 25 countries throughout Asia, the Middle East, Africa, Europe, the Americas and Australasia. Pelindo II operates 12 of Indonesia’s largest ports.

Overview of IFC's Scope of Review

The scope of review of JICT''s compliance with IFC’s Performance Standards and local environmental, social and occupational health and safety standards, included assessment of the effectiveness of the Company’s environmental and social management system for its proposed capital expenditure projects and its ability to ensure and monitor compliance with regulatory requirements and IFC’s Performance Standards in its operations. The review relied on documents and reports made available by JICT and interviews conducted by IFC staff during their site visits to their facilities located in Jakarta, Indonesia. During the visit IFC staff conducted interviews with key management personnel including Expansion project team, Operation managers, EH&S staff and Human Resource staff, as well as various engineering and support staff. IFC staff also met with representatives of the labor union (SPJICT).

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; and
- PS3: Pollution Prevention and Abatement;

Issues associated with the following Performance Standards were not encountered during the assessment of the project: PS4: Community Health Safety and Security – JICT facilities are located within port facilities owned and operated as part of the Port of Tanjung Priok. The port has safe access roads with little impact to non-commercial usage. Impacts or risks to nearby communities are marginal and no documented complaint has been presented since beginning of operations at any of the Company''s facilities; PS5: Land Acquisition and Involuntary Resettlement – no land is being acquired as part of the proposed project, and all development is on existing property owned by Pelindo II;PS6: Biodiversity Conservation and Sustainable Natural Resource Management – JICT’s operations have no known direct impact on conservation or biodiversity related issues; PS7: No Indigenous People are known to have been in the area or affected by the project; PS8: No evidence of the presence or impact to issues associated with Cultural Heritage.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key environmental, health and safety, human resources and social issues that were reviewed included the following: Environmental and social management system; Emissions to the environment – air, water and subsurface; Solid and hazardous materials management, including transportation; Disposal of dredged sediments by governmental agencies; Life and fire safety; Community and occupational health and safety; Energy use and efficiency; and Community engagement; Land acquisition; and issues associated with the supply chain. JICT has a capable management team which is working to strengthen, and has presented specific plans to put in place a management oversight program that address key issues and gaps to ensure continued compliance with local regulatory requirements as well as consistency with IFC Performance Standards and applicable environmental, health and safety guidelines.

Environmental and Social Mitigation Measures

JICT has provided information on its current practices and policies that seek to address these risks and impacts to ensure that the proposed project complies with or, will upon implementation of specific additional agreed measures, comply with host country laws and regulations and the IFC Performance Standards on Social and Environment Sustainability and applicable environmental, health and safety guidelines. Environmental, social and health and safety issues that require ameliorative measures will be addressed by JICT as part of IFC’s Debt and any associated Agreements.

Social and Environmental Assessment and Management Systems:

As required by Indonesian regulatory requirements, JICT has completed an update to the original environmental and social impact assessment (AMDAL) that was undertaken by the port authority in 1999. Scope of update undertaken by JICT included the development of the container yard, roads, parking and an administrative facility, and about 2 km of access roads within the port premises. No mitigation measures were identified from the update process as being required, and JICT has since obtained approval for its construction activities from the relevant regulatory agencies to commence construction and associated development activities.

The Company’s management program includes operational policies and procedures that are implemented by a Safety, Security and Environment Senior Manager who reports to management (Director of Human Resources and Administration) on a regular basis. Policies and procedures comply with applicable local regulatory requirements and consistent with IFC Performance Standards, for operation of these facilities. JICT has an existing management system which provides oversight of business operations, and will implement an Environmental and Social Management System (ESMS) to provide consistent oversight of environmental, social and health and safety for all its operations and sub-contracted tasks/labor. JICT will also designate an individual on the board of the Company to ensure compliance with HPH group policies, procedures and regulatory requirements.

Human resources are managed effectively at the corporate level with oversight of all the JICT''s facilities and operations. Training of staff is done on a routine basis in compliance with local workplace regulations, and in particular to the requirements of port operations. The department of Human Resource and Administration is responsible to ensure that employees are adequately trained to perform their work safely. Supervisors monitor that standards are met and any reportable incidents are reported and follow up action taken when required. Reporting requirements comply with national laws and regulations.

Labor and Working Conditions:

JICT employs 984 permanent employees and 1,303 subcontracted or outsourced employees to support its operations which run 24 hours a day. JICT has a Human Resources Policy that is consistent with local and national regulatory requirements. The policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is provided in the form of an employee handbook at the time of induction. Employment relationships recognize the principals of non-discrimination and equal opportunity. Employees have the right to freedom of association and have the opportunity to collectively represent to the management any issues or grievances that they may have. Consistent with Indonesian labor laws, employees at JICT have the right to be part of a trade union. SPJICT, which is a member of the International Transportation Federation, is the sole trade union at JICT and is actively engaged in ensuring workers rights and negotiating labor agreements with the management. While meetings are routinely held between JICT management and elected representatives of the trade union, collective labor agreements are negotiated once every two years.

The minimum employment age at JICT is 18 years. Child labor or forced labor is not employed directly or by subcontractors. Subcontractors are expected to comply with all local labor requirements specified in contractual arrangements. A plan has been implemented for accident prevention and worker safety consistent with local regulatory requirements. All employees in the company have to undergo a full training program at induction and subsequently regarding worker health and safety relevant to their job activity. Occupational health and safety of employees at JICT is managed by the Human Resources and Administration Department. Facilities are audited yearly by regulatory agencies to monitor compliance with labor regulations. JICT has taken corrective measures to reduce the potential for recurrence of accidents through expanded training, and implementing and enforcing standard operating procedures that specifically seek to mitigate these risks. Further as part of the agreed ESAP, JICT will retain an external occupational health and safety consultant to build internal capacity and develop an implementation plan to achieve international standards for occupational health and safety for its employees and sub-contractors. It is anticipated that the Company''s occupational health and safety performance will routinely meet requirements of IFC Performance Standard 2 and guidelines for the sector, after recommendations from the external consultant are implemented.

Pollution Prevention and Abatement:

Emissions to the environment from JICT include discharge of treated effluents, storm water and exhaust from miscellaneous equipment such as quay cranes and generators. As required by Indonesian regulatory requirements, JICT will commission and operate a wastewater treatment plant with a capacity of 200 m3/day. Treated effluent will be discharged to the harbor and is designed to meet strict effluent quality guidelines, and also meet IFC guidelines for the discharge of treated effluent to surface water. As part of the concession agreement, JICT is also responsible for operating and maintaining a common sewer overflow channel which flows through the property. The common sewer overflow channel conveys untreated sewage and storm water from the neighboring towns to an outfall that discharges into the harbor.

Air emissions are primarily from some quay cranes that use diesel, and other miscellaneous equipment such as generators. Indonesian law does not require monitoring of air emissions from JICT operations, and hence no data is available to confirm compliance with applicable IFC guidelines. Moving forward, as agreed in the ESAP, JICT will monitor and report emissions from its various sources, and ensure compliance with the relevant IFC guidelines. JICT will also ensure that any new equipment procured will meet or exceed applicable IFC guidelines.

Limited quantities of solid waste are generated from JICT’s operations and facilities which include both recyclable and non-recyclable materials that are sold to or disposed by licensed vendors. Limited quantities of hazardous wastes are also generated including spent oils and lubricants and containers which are also disposed as per local regulatory requirements.

Annual fresh water consumption by JICT is estimated to be about 110,000 cubic meters, which is supplied by the port authority. Annual energy consumption by JICT includes 10 million liters of HSD, and 17,000 MWh of electricity which is supplied by PLN. Net green house gas (GHG) emissions attributable to JICT’s annual consumption of electricity and fuel usage, is estimated to be about 42,000 metric tons of carbon dioxide equivalents per year.

Stakeholder Engagement

As an operator of a commercial container terminal, JICT has limited direct interaction with local communities around the port of Tanjung Priok. No local communities have been significantly affected by environmental risks or impacts from JICT’s ongoing operations. JICT has a corporate social responsibility program which focuses on education for poor member of society. The company creates jobs and other opportunities for local communities in the neighborhood, and has no adverse social impacts. As a result, no formal information dissemination activities have been undertaken so far. Notwithstanding, as part of its Environmental and Social Management program, JICT will establish methods for communicating environmental and social aspects to external interested parties and maintain procedures for receiving, documenting and responding to concerns from any external interested parties relating to the project.

For more information see the company’s website at http://www. jict.co.id or contact:

Mr. Derek Pierson
President Director
Jakarta International Container Terminal
Jl. Sulawesi Ujung No.1, Tanjung Priok
Jakarta 14310

Tel: +62 21 4390 5111 Ext.1121-23
Fax: +62 21 4390 2446
Email: ca@jict.co.id

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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