PS1: Social and Environmental Assessment and Management System
PS3: Pollution Prevention and Abatement

PS4: Community health, safety and security issues are not expected to be significant due to the rural location of most of the Company’s towers.
PS5: Involuntary resettlement issues are not expected to arise in this project, as sites will not be developed if they would involve physical or economic displacement of people.
PS6: Biodiversity conservation and natural habitat issues are not expected to arise in this project, as sites are generally chosen in or near already-developed areas.
PS7: Indigenous peoples issues are not expected to arise in this project, as no local community members around sites will be from peoples defined as indigenous under PS7.
PS8: Cultural heritage issues are not expected to arise in this project, as sites will not be developed where such issues would arise.

Nevertheless, a condition of IFC’s investment will be that Russian Towers’ operations shall consider all relevant social and environmental risks and impacts, including issues covered in all IFC PSs.

As this project involves the development of towers mainly on existing railway rights of way or on land owned by local authorities, no major adverse environmental or social impacts are expected to 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.

The key E&S issues involve labor and working conditions, including employee and contractor occupational health and safety. The proposed project will upon implementation of the specific agreed measures comply with IFC Performance Standards, IFC environmental, health and safety guidelines, and applicable country law, rules and regulations. The Company’s plans for environmental and social management are summarized as follows:

PS1: Social and Environmental Assessment and Management System:

Russian Towers has environmental and social policies and procedures for managing deployment of technical sites and human resources. The Company will improve its written documentation of these policies and procedures, and will apply the improved policies and procedures to its operations. These policies and procedures will include procedures for selection, construction, and management of all sites in compliance with IFC Performance Standards and EHSS Guidelines, including procedures for management of Russian Towers’ employees as well as management of key contractors performing core functions for the Company.

Russian Towers outsources construction and maintenance of tower sites to reputable companies with high quality management standards. Environmental, health and safety regulations in Russia are generally strong and compliance is enforced. For any environmental, health or safety issue covered in IFC Performance Standards not covered by Russian regulations, Russian Towers will include appropriate terms in its contracts with any contractors performing core functions for the Company, such as construction and security. Russian Towers will develop written policies and procedures for monitoring compliance with those terms. The Company will require corrective action in the event that non-compliance is identified, and will consider terminating any contractor in the event of non-compliance. The Company reviews each contractor’s permits, licenses, rules, and safety program before the contractor begins to work.

Russian Towers identifies new sites primarily on the basis of where it finds gaps in coverage or some other good business opportunity. Then the company or a contractor identifies and assesses risks and impacts relating to each potential site, in accordance with IFC Performance Standards and Telecommunications Guidelines. Since most sites are acquired or developed in rural areas, visual and electromagnetic impacts are minimal.

Russian Towers’s policies and procedures will ensure that the company manages all relevant functions covered in IFC’s PS2 through PS8. The company will always obtain all relevant permits prior to constructing or operating a tower. Through its procedures for site selection, Russian Towers will always decline to acquire or develop any site that would require physical or economic displacement of local community members.

PS2: Labor and Working Conditions:

Russian Towers has about 40 direct employees, and expects about 56 in 2012. Each tower site requires on average 5 to 8 contractor employees at the construction stage and 2 contractor employees for occasional maintenance work.

The Company will formalize policies and procedures for managing its human resources in written form under IFC’s investment, to ensure compliance with IFC Performance Standards. These policies and procedures already include a policy that limits regular and overtime hours, and procedures for managing any grievance by employees, who have access to a mechanism involving negotiations with management, with an avenue for appeal according to the applicable labor code. The Company will offer equal opportunity regardless of marital status, ancestry, religion, gender, age, national origin, or handicap.

Under terms of the Company’s agreements with contractors that perform construction and maintenance, Russian Towers ensures that contractors’ employees are provided with appropriate personal protective equipment and health and safety training for the type of work in which they are engaged. Under IFC’s investment, Russian Towers will develop written policies and procedures for monitoring compliance with those terms. The Company will require corrective action in the event that non-compliance is identified, and will consider terminating any contractor in the event of non-compliance.

Generally, protection of the work force in Russia is provided through its labor laws, and particularly through its Labor Code, which guarantees a basic level of social benefits. Labor laws reflect Russia’s endorsement of the core labor standards of the International Labor Organization – incorporated in IFC Performance Standard 2 – e.g., providing for no discrimination based on gender, race, age, ethnicity, or nationality. Contractors are obliged to have documented working conditions and terms of employment, which are communicated to all workers in a written form prior to their start of work.

PS3: Pollution Prevention and Abatement:

By offering its clients the opportunity to collocate equipment on its tower sites, Russian Towers reduces the amount of pollution that otherwise occurs when a tower is used for only one company’s equipment. The Company’s sites rely on electricity from the national grid, with assurance of reliability due to the location of sites on railway rights of way. As a result, no backup generators and fuel tanks are needed, eliminating risks involving noise and fuel that occur in most mobile telecom projects.

Russian Towers includes environmental conditions in its agreements with contractors that perform core functions, so that contractors who perform construction and maintenance for Russian Towers are required to implement measures to manage pollution prevention, abatement, and mitigation regarding any environmental impacts of construction and maintenance, in compliance with IFC Performance Standard 3 and IFC’s EHSS Telecommunications Guideline. Under IFC’s investment, Russian Towers will develop written policies and procedures for monitoring compliance with those terms. The Company will require corrective action in the event that non-compliance is identified, and will consider terminating any contractor in the event of non-compliance.

Russian Towers is committed to prior disclosure of the development of new tower sites to local communities, as site conditions warrant. Under IFC’s investment, Russian Towers will develop written policies and procedures for community engagement. These policies and procedures will provide for a mechanism to resolve any concerns of local community members. The Company is committed to following up on any complaints from community members until they are resolved. Public hearings on a proposed site are convened as prescribed by Russian law, with a 30-day advance notice prescribed by Russian regulations.

For acquisition of tower sites, Russian Towers will consult with relevant municipalities or local village councils. The Company or a contractor obtains required authorizations. The Company will continuously make available information to community members on electromagnetic radiation from tower sites as needed, consistent with IFC’s Telecommunications Guidelines.

Victor Leonchikov
Telephone: +7 (495) 967-32-32
Facsimile: +7 (495) 967-32-31
mailto:vleonchikov@rtowers.ru