29903 - Q and M

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Environmental & Social Review Summary

Project Number

29903

Company Name

Q & M DENTAL GROUP (SINGAPORE) LIMITED

Date ESRS Disclosed

Feb 24, 2011

Country

China

Region

East Asia and the Pacific

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Mar 24, 2011
Signed : Apr 27, 2011
Invested : May 15, 2012

Sector

Hospitals and Clinics

Industry

Health, Education and Life Sciences

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Established in 1996, Q & M is a private dental healthcare group listed on the Singapore Stock Exchange operating 40 dental clinics, two dental centers (a larger dental clinic with a more comprehensive range of dental services such as 3D Radiography), one mobile dental clinic, one dental laboratory and a dental supplies company in Singapore. The Sponsor is looking to expand in China and aims to establish a network of dental clinics and a number of dental laboratories (JV facilities). Currently, the Sponsor has three local Chinese partners based respectively in Beijing, Nanjing and Yiwu, with which it is looking to set up joint venture entities. Q & M and its Yiwu JV partner has applied for a piece of 1.3 hectare plot in a nearby county to build a new facility building.

Q & M’s expansion in China is estimated to cost US$30 million and IFC has been approached to provide financing of up to US$15 million to support this expansion.

Overview of IFC's Scope of Review

The scope of review of Q & M Dental Group’s (the “Sponsor” or “Q & M”) China operations included assessment of the Company’s capacity to provide oversight and monitor compliance with IFC’s Performance Standards as well as national environmental, social and occupational health and safety regulatory requirements in the People’s Republic of China. The scope of IFC’s review focuses on Q & M’s China operations, and includes reviewing Q & M’s management system to ensure effective management of future Q & M sites and facilities within China. The review relied on documents and reports made available by Q & M and interviews with management and facility staff in China. IFC staff met with Q & M’s senior management team from Singapore including the Executive Director and the CEO of its China investment arm, and also visited joint venture or potential facilities (the Company or companies) in Beijing (dental clinics), Nanjing (dental clinics) and Yiwu (dental laboratory mainly producing dentures, porcelain teeth, ceramic and metal crowns, implants, and tooth bridges - to supply dental clinics within China) into which Q & M is planning to invest using IFC proceeds.

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 in Q & M’s China operations will have impacts which must be managed in a manner consistent with the following applicable Performance Standards.

PS 1: Social and Environmental Assessment and Management Systems;
PS 2: Labor and Working Conditions;
PS 3: Pollution Prevention and Abatement; and
PS 4: Community Health, Safety and Security

Issues associated with the following PS were also assessed but were found to be non-applicable to the project: PS5: All JV facilities are located within commercial-residential mixed complexes in urban settings with no known cases of unresolved land acquisition issues. The Yiwu JV partner has applied for a 1.3 hectare site in a nearby county to set up a new dental laboratory to complement or in addition to the existing one in Yiwu. The land belongs to the state and does not involve involuntary physical or economic displacement of local communities. PS6: No adverse impacts to biodiversity or sustainable natural resource management were found; PS7: No Indigenous People are known to be in the area or affected by the project; PS8: No evidence of the presence or impact on issues associated with Cultural Heritage was identified.

Since this investment may be used to support other facilities in China yet to be identified, the Sponsor shall consider all relevant social and environmental risks and impacts according to IFC performance standard requirements while assessing any new business opportunities, service models, or new sites.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific and reversible 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, hazardous, biomedical and infectious medical waste and materials management, storage, collection and disposal; life and fire safety and emergency preparedness and response program; community and occupational health and safety; resource use and efficiency; and community engagement.

Environmental and Social Mitigation Measures

PS1: Social and Environmental Assessment and Management Systems

Q & M has corporate operational procedures and documents in Singapore detailing its environmental and social management processes such as - its quality manual, departmental operating manuals, procedures on handling sharps and biohazards, a human resource management manual, task-based staff training documents, and an inventory of controlled documents pertaining to ISO9001 requirements. The Sponsor’s Singapore operations have ISO9001 certification of the quality management system and the Sponsor has provided IFC with the report of an external audit conducted in July 2010. The Sponsor has in place required operational licenses issued by the Singapore Ministry of Health, the National Environment Agency, and the Ministry of Manpower.

At joint venture (JV) dental clinics in Beijing and Nanjing, designated personnel have been assigned to manage E&S aspects of operations - for example, handling sharps, medical wastes, and the on-site wastewater treatment facility (WWTF) at the Nanjing clinic. Relevant records of waste disposal have been shown to IFC. The general manager at each clinic regularly checks management records including those of waste handling and disposal.

The Yiwu dental laboratory has a set of controlled management documents dated December 2004 established as per the national YY/T 0287-2003 standard (equivalent of ISO 13845:2003) – a quality management standard pertaining to the medical equipment manufacturing industry. It is in the process of re-applying to the local authorities to become certified against the YY/T 0287-2003 quality management standard. The Yiwu Government Food and Drug Administration inspected the Yiwu plant in December 2009 and asked the Company to be compliant with the Yiwu city “Medical equipment manufacturing enterprise quality management audit directive”.

Q & M expressed a commitment to ensure that its China operations comply with all national requirements. It is in the process of setting up its overall management system in China, and has appointed a CEO for its China investment arm to oversee its China operations. The appointee will be responsible for ensuring E&S compliance at existing and future JV facilities by working closely with the general manager at each JV facility.

As per PS1 requirements, the Company will set up its China corporate E&S management system (ESMS), referencing its system in Singapore, which will include mechanisms by each JV facility to regularly monitor and report on key E&S performance metrics to the CEO who is based in China, and to take correction actions where needed. These ESMS will become part of the Sponsor’s overall system of key performance indicators which it will utilize to manage all aspects of its China businesses.

PS2: Labor and Working Conditions

The JV facilities in Beijing, Nanjing and Yiwu altogether have about 300 staff - dentists, nursing staff, and denture production workers and salespersons directly-hired on a contract or permanent basis. Of this total, the Yiwu plant headcount takes up about 250 plus. All dental clinic staff sign a contract with the clinics.

The JV facilities have communicated human resource policies to staff and have regular staff meetings as well as one-on-one conversations with employees as a way to hear their feedback on work-related issues. The Yiwu plant relies mainly on line supervisors to communicate with workers and receive their feedback and the general manager also communicates directly with workers every month. Line supervisors evaluate staff performance as a team.

Working conditions at the dental clinics are clean and reasonable. At the Yiwu plant 250 plus employees work within a limited space and the Sponsor and facility management acknowledged the lack of space as an issue to be addressed. The plant appears clean, well ventilated and lit. The Yiwu partner is reluctant to make upgrades to the existing plant as it is on a short term lease contract, and space limitations also mean that there is little scope for expansion. The Sponsor and Yiwu Company expect that the proposed new facility will offer a much more spacious and upgraded working environment for staff. The Sponsor and the Yiwu JV partner are expected to finalize the move within 18 months from the time of commitment of IFC financing. If this does not materialize by then, an alternative solution acceptable to IFC will be agreed to within 3 months from that date, which offers a more spacious working environment for staff.

The Yiwu plant management states that workers are paid competitive salary levels and management recognizes their performance through a bonus system linked to work quality. Housing or housing subsidy is provided for Yiwu employees who have worked for more than 3 years and workers also receive a monthly meal subsidy. The staff quarters visited by IFC provide basic living conditions and appear safe and reasonably clean – about 4-5 workers of the same gender share a room with bunk beds and shared baths.

IFC finds no restriction on freedom of association at JV facilities. At the Yiwu plant there is a union headed by the general manager which organizes leisure and family activities for staff. IFC did not detect any signs of workplace discriminatory practices or breaches of the principle of equal opportunity at any JV facility, nor any use of child or forced labor.

At JV dental clinics compensation or time-in-lieu is provided for overtime work performed, as per national labor contract law requirements. Employees work 40 hours a week. The Yiwu plant, due to business demand, has asked its workers to perform overtime work during major holidays.

As per national social security regulations, the dental clinics in Beijing and Nanjing have made contributions toward medical, work-related accident insurance, maternity, and unemployment insurance coverage for their employees. The Sponsor will ensure that all JV facilities abide by national labor requirements including those on working hours, social security coverage, and having formal contracts in place.

Turnover at the JV dental clinics is at a rate of less than 5% while at the Yiwu plant it was under 10% in 2009. The Yiwu plant has dismissed about 25 workers in the past two years due to their work not meeting quality expectations – percentage of products rejected by clients and client feedback in general were used as main gauges of work quality. The Yiwu plant does not have a retrenchment and dismissal policy and plan in place, and arrangements are made on a case by case basis.

The Yiwu plant is currently a labor-intensive operation relying mainly on the craftsmanship skill of workers to produce dentures, porcelain teeth, ceramic and metal crowns, implants, and tooth bridges. Under JV cooperation with the Sponsor, it will adopt a more computer-automated process whereby dentures will primarily be machine-made. Due to anticipated business expansion and with a new facility to be opened, the Sponsor expects no retrenchment of existing workers. Instead total headcount is expected to increase to about 500 for the JV. About 15 persons will be assigned to new departments, while others will be retrained to be able to operate computer automated equipment.

The Sponsor has a human resource policy in Singapore and is in the process of developing one for its China operations to ensure that its human resources practices are consistent with China’s labor laws and IFC PS2 requirements. The Sponsor will ensure that as part of its China human resource policy, it will develop a set of retrenchment policies and procedures applicable to all JV facilities and communicate them clearly with all staff – in addition to retrenchment, these documents will also establish clear policies and criteria as to which work quality related metrics are used to base dismissal decisions on. If any JV facility expects a major laying off of workers (defined as 10% or more of a facility’s workforce retrenched in a given calendar year), Q & M will have a specific plan developed by that facility to address impacts on workers made redundant, and will ensure communication of that plan to affected workers before they are retrenched. The plan will be consistent with Q & M’s China retrenchment policies and procedures.

JV facilities provide personal protective equipment (PPE) that includes surgical caps, clinical masks, and latex clinical gloves to its employees for prevention of biological and pathogenic hazards. Activities that require PPE include, but are not limited to dental operations, handling of sharps, and operation of wastewater treatment. IFC reviewed facility procedures for handling sharps and needles which are mandated by local regulations. There was one case of an employee at one of the Nanjing clinics having allergic reaction to latex gloves two years ago. The employee received medical treatment and the condition has not recurred since then. The Sponsor will ensure that as part of the China ESMS, JV facilities adopt a policy on minimizing latex related allergy.

None of the clinics perform any surgery using nitrous oxide anaesthetic and beryllium thus exposure is minimal. A policy will be put into place by the Sponsor to minimize exposure should any of the JV clinics consider using nitrous oxide in future, and that any intravenous sedation procedures are administered by registered and fully trained anaesthetists.

Yiwu company management has asked workers responsible for de-dusting to wear face masks but this is not always observed. Monitoring of radiation levels at work areas in and around the X-ray machines is conducted, and the JV clinics have radioactive operational and safety procedures as well as required radioactive diagnostic licenses. X-ray machine operators have safe, radiation-free refuges in which to work and they undertake radiation level health check up regularly as required by law. Patients wear lead aprons for protection.

While the Yiwu plant is generally well-ventilated, certain rooms appeared mildly dusty due to unsealed gypsum plaster powder. Regular tests of indoor air particulate levels are not conducted. Workers undergo a body check up every two years at Yiwu and IFC examined samples of check-up results which did not indicate negative findings.

Given the possibility of back and neck pains, and of eye sight deterioration that could arise from prolonged periods of focused work at dental laboratories, the Sponsor will ensure that annual employee health checks include results of posture-induced occupational injuries and will develop a set of corporate ergonomic guidelines.

PS3: Pollution Prevention and Abatement

Three types of wastes are generated at JV dental clinics – general and sanitary wastes; health care wastes such as body fluids and used gloves; and sharps and needles. At one clinic in Nanjing, photosensitive wastes also arise from X-ray rooms and are classified as special hazardous wastes handled by a specialized collection agency. Body fluids go into the building sewage which enters into municipal sewers. JV clinics segregate the various types of wastes in separate and color labeled disposal bins and outsource the disposal, collection and handling of wastes to Government-approved third-party operators. Operational procedures governing medical waste collection practice are in place, and IFC reviewed manifests of hazardous waste transfer from 2009. Solid wastes at the Yiwu plant are collected by a local garbage collection firm which also collects leftover or discarded gypsum.

Some of the JV clinics use dental amalgam (mercury-containing teeth coating) and discarded amalgam is trapped by filters built into the dental basins which are handled and collected by specialized medical waste companies. Other clinics are using resin-and-plastic composite materials in place of amalgam.

IFC concludes that overall the JV facilities have adequate waste management systems and procedures (e.g. audited transfer lists) in place to ensure compliance with national and IFC EHS guideline requirements.

Electricity at JV facilities is supplied by the local grid company. Total annual energy consumption at JV facilities was about 336,000 kWh in 2009. Water usage is not significant and water is supplied by municipal water companies. Net greenhouse gas (GHG) emissions attributable to consumption of grid electricity are estimated to be 255 metric tons carbon dioxide equivalent per year.

PS4: Community Health, Safety and Security

Q & M JV facilities are located in mixed-use (commercial and residential) neighborhoods. The facilities follow local regulations in relation to the transport and storage of medical supplies and wastes, to minimize the possibility of impact on local communities. JV facilities have established life and fire safety (L&FS) procedures at its facilities and have obtained required local regulatory approvals. Smoke detectors, emergency lighting, signage, and fire hose were in place at clinics and the Yiwu facility and there are accessible means of egress. There have been no security concerns at JV facilities or any incidents of disease outbreaks.

For all future facilities to be constructed, or existing facilities to undergo major renovations, the Sponsor will commission a qualified fire safety engineer to prepare a life and fire safety “Master Plan” (effectively a fire safety specification), which when adopted will cause fire safety aspects of building design and operation to be compliant with all local requirements and an international fire safety standard (e.g. U.S. NFPA). The Sponsor will also will commission a post-construction fire safety audit of the facilities by a qualified fire safety engineer to confirm that the works were completed in compliance with the master plan.

The Yiwu plant employs a sales force of about 15 staff who regularly drive to distant, sometimes cross-province locations to meet clients. There have been no automobile accidents in the past. Considering potential safety risks associated with long distance driving, the Sponsor will ensure that a corporate safe driving policy and procedures be developed and adhered to by all staff who need to drive for business reasons.

Stakeholder Engagement

No local communities in Beijing, Nanjing or Yiwu have been significantly affected by E&S risks or impacts from Q & M joint venture operations, and the Sponsor and JV partners have not been the subject of any public complaints or litigation with respect to its environmental, social or health and safety performance. As it expands operations in China, the Sponsor will look for opportunities where feasible to undertake community outreach activities e.g. scholarships for underprivileged children.

For more details on the project, contact:

Dr. CHEAH Kim Fee
Q & M Dental Group (China) Pte Ltd
Blk 67 Ayer Rajah Crescent #05-12/14 Ayer Rajah Industrial Estate Singapore 1399
http://www.QandMdental.com.sg
Email: drcheahkf@QandM.com.sg

Q & M will place an advertisement in a major local newspaper in Beijing, Yiwu, and Nanjing to alert the public that results from IFC''s environmental and social review are available for public access. It will also post the environmental & social review summary (ESRS) and environmental & social action plan (ESAP) outside all its JV facilities in China with addresses listed as follows; and the same on its corporate website or provide a web- link to IFC''s disclosed ESRS and ESAP.

Addresses of JV facilities in People''s Republic of China:
BLK4, No. 15-12 Unit, Yuan Zhong Yue Lai, No.15 Haidian Street Central, Haidian District, Beijing
No. 214 Unit, Level 2, China Life Insurance Tower, No. 16 Chao Wai Street, Chaoyang District, Beijing.
Unit 4A-4B, BLK S4-S5, Xin Cheng International, No. 6 Chao Wai Street, Chaoyang District, Beijing.
BLK 509, Xin Cheng Guo Ji, No. 6 Chao Wai Street, Chaoyang District, Beijing.
2/F, No. 16-18 Xin Guang Bei Road, Qingkou Industrial district, Yiwu, Zhejiang Province.
9/F Hua Wei Building, No. 107 Shi Gu Road, Nanjing City.

Client Documentation

File Name	Actions
ESAP_FINAL.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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