27807 - SunPower

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Environmental & Social Review Summary

Project Number

27807

Company Name

SunPower Philippines Manufacturing Ltd

Date ESRS Disclosed

Mar 13, 2009

Country

Philippines

Region

East Asia and the Pacific

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Feb 1, 2010
Signed : May 6, 2010
Invested : Nov 12, 2010

Sector

Electrical Machinery, Equipment and Components (Electric Lighting, Motors, Batteries, Insulated Wires and Cables, Fiber Optic Cable, Carbon and Graphite Products, etc.)

Industry

Manufacturing

Department

Regional Industry - MAS Asia & Pac

Project Description

SunPower is a global player in the solar industry. The company was founded in 1985 by Dr. Richard Swanson and his students while he was professor of electrical engineering at Stanford University. In 2008, SunPower generated revenue of $1.43 billion.

SunPower is in the process of completing its second solar cell fabrication facility in the Philippines (the “Project”). The project will result in the completion of twelve solar cell manufacturing lines with an aggregate nameplate capacity of 466 MW.

Overview of IFC's Scope of Review

The scope of review of SunPower Corporation''s (“SunPower” or the “Company”) 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 SunPower and interviews conducted by IFC staff during their site visits to their manufacturing facilities located in Laguna (Fab 1) and Batangas (Fab 2) in the Philippines. During the visit IFC staff conducted interviews with key management personnel including plant managers, EH&S staff and Human Resources, as well as various engineering and support staff.

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;

Issues associate with the following PS’ were not encountered during the assessment of the project: PS4: Community Health Safety and Security – SunPower facilities are located in an Industrial Estate with safe access roads and away from residential communities. Impacts or risks to nearby communities are marginal and no documented complaint has been presented since beginning of operations at any of SunPower''s facilities; PS5: Land Acquisition and Involuntary Resettlement - Site and associated facilities at the Batangas location (Fab 2) were purchased in the First Philippine Industrial Park (FPIP) through a private party willing buyer - willing seller transaction and there has been no public opposition or legal complaints related to the transaction; The EIA conducted by SunPower and IFC’s environmental and social due diligence have concluded that the project has no significant impact on Biodiversity Conservation and Sustainable Natural Resource Management (PS6), No Indigenous People are known to have been in the area or affected by the project (PS7), and no evidence of the presence or impact to issues associated with Cultural Heritage (PS8).

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; Quality and sustainability of water resources; Emissions to the environment – air, water and subsurface; Solid and hazardous materials management, including transportation; Life and fire safety; Community and occupational health and safety; Energy use and efficiency; and Community engagement. SunPower has an actively engaged management program and has presented specific plans to 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

SunPower 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 SunPower as part of IFC’s Loan and Equity Agreements.

Social and Environmental Assessment and Management Systems:

As required by local regulatory requirements, SunPower completed an Environmental Impact Assessment (EIA) which was approved by the local government prior to commencement of any activity related to the construction or operation of the facility in the First Philippine Industrial Park located in the Batangas Special Economic Zone. SunPower is ISO 9000 certified and has a management system which has elements that provide oversight of environmental, health and safety (ESH) functions. SunPower plans to achieve ISO 14001 certification by June 2009 for its Environmental Management System (EMS). SunPower’s management program includes operational policies and procedures that are implemented at the facilities level by ESH supervisors and line managers who report to VP Operations on a routine basis. Policies and procedures comply with applicable regulatory requirements for operation of these facilities. The EMS at SunPower includes effective training, documentation of monitoring results, mechanisms for correcting problems and investigating accidents or non compliance, and ensuring that appropriate adjustments to procedures are made to prevent reoccurrence. SunPower has designated individuals at the facilities as well as management level to coordinate implementation of EHS improvements and provide oversight of related issues at all SunPower facilities. SunPower has a Corporate Social Responsibility (CSR) program that is solely focused on the social responsiveness to the community.

Human resources are managed effectively at the corporate level with oversight of all SunPower facilities. Training of staff is done on a routine basis in compliance with Philippine workplace regulations. Facilities operations managers are responsible to ensure that employees are adequately trained to perform their work safely. SunPower has a monitoring program for occupational health and safety (OH&S) issues that are managed at the facilities level in compliance with local regulatory requirements. Facility operations managers monitor that standards are met in every facility and any reportable incidents are reported and follow up action taken when required. Reporting requirements comply with national laws and regulations, and are largely consistent with applicable IFC EHS guidelines for the sector.

Labor and Working Conditions:

SunPower employs more than 3,300 people at its solar fabrication facilities in the Philippines. Labor practices and working conditions, including occupational health and safety, comply with local regulatory requirements and are consistent with IFC policies and applicable sector guidelines. SunPower 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. The minimum employment age at SunPower is 18 years. Child labor or forced labor is not employed directly or in the supply chain. Subcontractors are expected to comply with all local labor requirements specified in contractual arrangements. There is a plan 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 at SunPower facilities are managed by designated health and safety staff. Facilities are audited twice a year by regulatory agencies to monitor compliance with labor regulations. Workplace air quality and noise is monitored annually and is within acceptable limits. Facilities and associated infrastructure are largely well maintained. Fire drills and emergency procedures drills are routinely held at the manufacturing facilities. OHS performance is monitored as per regulatory requirements. The OHS performance of SunPower is consistent with good international industry performance for the sector. Areas of improvement include improvements in emergency and safety signage, handling of hazardous materials including corrosives and gases, and effectiveness of internal training. SunPower also regularly monitors its workplace air quality against relevant standards such as those established by OSHA for exposure to industrial chemicals and vapor.

Pollution Prevention and Abatement:

Water consumption after expansion in production capacity is estimated to be about 11 million cubic meters annually. Effluents from SunPower facilities include wastewater from cell manufacturing operations, and sanitary wastewater. Process effluents, including non-contact cooling water and scrubber blowdowns are discharged after treatment to surface water. Discharge of treated process effluent is in compliance with discharge permits issued by the Laguna Lake Development Authority (LLDA), and within IFC EHS guidelines for the parameters monitored. Sanitary wastewater is discharged to the FPIP centralized wastewater treatment system for treatment before discharge to surface water. The FPIP centralized wastewater treatment facilities receiving sanitary wastewater from SunPower have adequate capacity to treat the wastewater prior to final discharge, and are reported to be in compliance with regulatory requirements. Stormwater discharge is not regulated by local regulatory agencies and is presently discharged to surface water without treatment. SunPower will review impact to surface water from discharge of treated process effluent and untreated stormwater for compliance with applicable IFC requirements and implement remedial action if necessary.

Air emissions from SunPower facilities primarily include emissions from process operations which may include VOCs, heavy metals and acid vapors. Air emissions are in compliance with host country regulations. SunPower will review air emissions from its facilities for compliance with applicable IFC requirements and implement remedial action if necessary.

Management of solid and hazardous materials, wastes and residuals at SunPower’s facilities complies with local regulatory requirements. Licensed subcontractors are used for the collection and disposal of solid and hazardous materials. SunPower procurement procedures contractually require that its suppliers and subcontractors comply with national regulatory requirements and SunPower''s ESH&S policies. As a process of continuous improvement in its performance, SunPower will review its solid and hazardous materials and waste management practices (training, handling and storage) at its operations for consistency with applicable IFC requirements.

Globally, SunPower consumes about 206,000 MWh of electric energy annually, all of which is obtained from the public service grid. Net green house gas (GHG) emissions attributable to SunPower’s annual consumption of electricity, is estimated to be about 150,000 metric tons of carbon dioxide equivalents per year. Renewable energy produced by photo voltaic solar modules manufactured by SunPower provides a significant offset to GHG emissions. It is estimated that the Project will directly avoid 90-100 million tons of CO2 emissions over the projected 25 year life of modules, when offset against electrical energy produced through conventional fossil fuel generated electricity. SunPower will monitor and quantify GHG emissions annually in accordance with internationally recognized methodologies. SunPower will evaluate other technically and financially feasible and cost-effective options for further reduction or offset project-related GHG emissions during the design and operation of the project.

Stakeholder Engagement

SunPower maintains good relations with the communities in which it operates. No local communities are significantly affected by environmental risks or impacts from SunPower''s operations. The company creates jobs and other opportunities for local communities, and has no adverse social impacts. As part of its EMS and Corporate Social Responsibility (CSR) programs, SunPower will continue to communicate 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: http://www.sunpowercorp.com , or contact:

Jay Peir
SunPower Corporation
3939 N. 1st Street
San Jose, CA 95134 U.S.A.
Tel: +1-408-240-5500

Environmental and social information pertaining to the project will be available for access by the locally affected communities outside the company’s premises:

SunPower Philippines Mfg. Ltd.
3rd St., First Philippine Industrial Park (FPIP)
Brgy. Sta. Anastacia, Sto. Thomas
Batangas, Philippines 4234

and at the following address:

City Government of Tanauan
Tindalo Ave. Mt. View Subd.
Barangay Poblacion 3,
Tanauan City, Batangas
http://www.tanauancity.gov.ph

Client Documentation

File Name	Actions
ESAP_SunPower_V2.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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