PS1: Social and Environmental Assessment and Management System
Ambow leased or acquired the land use rights of the career enhancement campuses in Beijing, Dalian, Kunshan, and the university campus in Suzhou from local Governments or local partners and these campuses already had operational buildings, which the Company took over and started operating. In terms of risk assessment, before taking over the campuses and buildings, the Company worked with relevant local Government authorities to identify and mitigate risks, focusing on risks related to fire safety, sanitary waste discharge, and garbage storage and handling. The process by which the Company assesses E&S risks is consistent with the level of risks entailed and PS1 requirements.
The Company, a private educational provider, orients all aspects of operations to meet the quality expectations of its clients and key partners (e.g. local universities). This demand-driven approach - and a mechanism evident during appraisal whereby the Company adopts experiences from existing campuses to improve the design and operation of new ones - ensures oversight of operational aspects including E&S. For instance, meticulous attention was paid to the design (e.g. no balconies to minimize accidents) and day to day management of dormitories and cafeterias to minimize any food and student safety incidents.
The following version-controlled corporate operational policy documents, shared with IFC, describe key aspects of the Company’s E&S management: group health and safety management manual; emergency response procedures; campus emergency preparedness and response plans; human resource policy, procedures and employee manual; and dormitory safety management manual. The Company has in place required operational licenses (e.g. food catering license) issued by regulatory authorities.
Designated personnel from the human resource and administrative departments have been assigned to manage E&S aspects of operations. At the campus level, the head of school is responsible for management oversight of all aspects of operation, while administrative and facility maintenance departments manage and monitor day to day E&S issues e.g. ensuring proper collection and disposal of food wastes, and functional facility and equipment.
At the group level, administrative department staff is responsible for contractor oversight, with two dedicated staff members monitoring contractor work through regular site visits. The Company use only a small number of reliable contractors with whom they have developed long standing relationships e.g. for major renovations they use 2-3 contractors consistently in Beijing and Kunshan. In selecting contractors, the Company uses a number of criteria including whether the contractors follow good waste management practices, and regularly obtain records of whether contractors provide social insurance coverage for their workers. All contractors have to sign a pledge on work quality and environmental performance aspects.
The Company provides training to all staff regularly and induction training for new staff, with a strong focus on campus safety. Training content related to E&S includes such topics as fire safety, energy and water efficiency, and overall campus safety.
PS2: Labor and Working Conditions
The Company’s facilities in China altogether employ about 5,900 staff members, directly hired on a contract or permanent basis as of Dec 2011. Of this total, about 45% are teachers or teaching assistants, and the rest are from the management, support, sales, student advisor, and R&D departments. Since start of operations in 2000, the Company has also employed over 10,000 part time teachers typically on shorter term tenures.
The Company ensures that a copy of its human resource (HR) policy and employee manual is provided to and discussed with all staff when they join as part of the induction process. It holds regular staff and departmental meetings to obtain feedback from staff. In terms of grievance mechanisms, drop boxes are placed in public areas into which staff can place written feedback, and learning center front desk staff also provides an avenue for employees to submit feedback on work related issues, which are forwarded to the Company’s HR department for follow up.
The HR policy commits Ambow to non-discrimination and equal opportunity in employment. Remuneration and benefits are competitively determined by referencing results of annual market surveys. All employees are covered by mandatory social insurance, and receive ongoing training for professional development. Employees who have completed two term-contracts become employed as permanent staff as required by the national Labor Contract Law. Working hours (40 hours per week) and overtime payments (or compensation time in lieu of) conform to national labor law requirements.
Campuses and the Shanghai career enhancement center visited by IFC, including student dormitories and guest housing units appeared clean and organized, and working conditions were reasonable. IFC finds no restriction on freedom of association or any use of child or forced labor at the Company. There is a worker’s union which 90% of all staff has joined on a voluntary basis. The union organizes recreational activities for staff and provides assistance to employees in need.
Overall staff turnover at the Company falls within a range of about 10-20%, tending to be higher for sales and student advisor staff members. There have been very few staff let go in the past few years and as the Company continues to expand, it does not expect any major retrenchment to take place. If retrenchment does happen, the Company will follow relevant procedures built into its HR policy and which are consistent with national regulatory requirements.
Workers undergo a health check up every two years and those performing higher risk tasks (e.g. facility maintenance) undertake annual check-ups. There have not been any cases of occupational health and safety incidents since the Company started operations and health check up results do not indicate any trends of chronic work related health conditions.
PS3: Pollution Prevention and Abatement
Key types of wastes generated at the four campuses of Kunshan, Dalian, Beijing, and Suzhou are sanitary wastes from dormitories and kitchen wastes from cafeterias. Kitchen and solid wastes are collected by local licensed collection firms. Sanitary wastes at all campus locations are discharged through enclosed pipes directly to the local municipal sewer for treatment at municipal waste water treatment plants (WWTP), which treat wastes to within national and World Bank Group (WBG) Environmental Health and Safety (EHS) General Guideline limits. At all campuses, storm water drainage is separated from waste water which is transported in sealed pipes.
It is estimated that the Suzhou, Dalian and Kunshan campuses will together consume about 94,000 tons of water per year, and all Company facilities will consume a total of about 1.5 MWh of grid electricity. There is no use of coal or coal boilers at any of the campuses. Heating at campus buildings is achieved by reverse cycle air conditioners, and in the case of Dalian, Beijing and Kunshan campuses, by hot air supplied from the local municipal heating company through underground insulated heat ducts which connect to a system of inter-building heat ducts. Based on these figures and information provided by the Company, the annual greenhouse gas emission of Company operations is estimated at 11,000 tons CO2 equivalent.
The Dalian campus has installed 140 plus solar panels which satisfy the hot water needs of the 1,200 student dormitory rooms, 300 teacher living quarters, and 260 guest rooms, resulting in a 33%-50% grid electricity saving. Hot water heating units in the common areas of dormitories have a built-in mechanism to capture waste heat for re-use. If the solar system happens to be out of commission, backup electricity-powered water heaters will be put into use.
At all campuses, minimum space heating temperature levels are set, and are shut down in the afterhours. Each building and major water/electricity usage area has sub-meters installed, and readings are regularly monitored by facility management staff. Buildings in cold-weather locations (Dalian, Beijing, Kunshan) are fitted with double-glazed windows and insulating building materials to reduce heat loss. Water pipes are checked on a daily basis for leakage. Students are encouraged to adopt energy-conserving habits. Cafeterias have a program to recycle glass and plastics.
PS4: Community Health, Safety and Security
Campus designs and operations prioritize safety considerations. For instance, at Suzhou, diesel oil used as fuel for the 11 hot water boilers (which supply hot water at 70°C to student dormitories), is transported by licensed supplier trucks to an isolated corner of the campus and stored in a 25 cbm tank at 4 meters below ground to minimize safety risks. Facility personnel check the refilling process daily.
The Company has a team of unarmed security personnel at each campus touring and inspecting all areas of each campus according to a strict regime, and at some campuses the local police department has set up an on-site station with real time surveillance of campus security through a network of CCTV’s. The ground floor of each dormitory building at Suzhou has peripheral infrared detectors installed. The aim of various security measures is to achieve tight access control into and out of each campus, so as to ensure a safe environment for students and staff. There have been no security concerns or incidents at the Company’s facilities and campuses.
The Company has detailed food safety procedures in place and implements them stringently with a goal of zero incidents e.g. food suppliers are checked regularly. Weekly food safety tests for heavy metal content, coliform, nitrite and salmonella, and unannounced spot checks, are conducted by the food safety inspection teams of the local Governments. The Dalian campus exercises an access control policy to both the kitchen area and the locked food storage rooms - no unauthorized personnel are admitted into the kitchen area, and all authorized personnel must wear required anti-contamination attire before entry. Regular student satisfaction surveys are conducted to seek student feedback on food quality and variety.
At the Beijing Changping career enhancement campus, catering operations are outsourced to a number of smaller operators (so as to provide a good variety of cuisines for students to choose from). While the overall kitchen area appeared to be reasonably clean, the hygienic conditions at some of the back kitchen storage areas could be improved. The Company indicates it already has plans to overhaul the entire cafeteria and kitchen areas as part of the ongoing overall campus renovations. The Company will verify to IFC that the overhaul has been completed at the next planned IFC supervision visit – refer to the ESAP for details.
At the group and facility levels, the Company has established life and fire safety (L&FS) procedures in place and all campuses have obtained required local regulatory approvals. No ignition or standalone heat sources e.g. hot water kettles are allowed inside dormitory rooms to minimize fire risks. While fire safety related designs at all buildings conform to national requirements (e.g. signage, double exits located within a certain distance, functional and regularly inspected fire extinguishers and hoses, quarterly fire drills involving all personnel on campus), the Company takes extra steps e.g. constructing wider-than-required staircases to facilitate speedy evacuation by students and staff in case of emergencies. Local fire departments conduct quarterly inspections and also unannounced spot checks.
As per WBG EHS General Guideline requirements, for all future campuses to be constructed, or existing campuses to undergo major renovations (whether construction is commissioned by the Company directly or by a third party such as the local Government), the Company will commission a qualified fire safety engineer to prepare a L&FS “Master Plan” (i.e. fire safety specification), which when adopted will cause fire safety aspects of building design and operation to comply with local requirements and one internationally accepted fire safety standard (e.g. U.S. NFPA). The Sponsor will also will commission a post-construction audit of the facilities by a qualified fire safety engineer to confirm that the works were completed in compliance with the master plan. Refer to the ESAP for details.
PS 5 – Land Acquisition and Involuntary Resettlement
Ambow’s 138 tutoring centers and 25 career enhancement centers are rented spaces within commercial buildings in urban areas and do not involve land acquisition activities by the Company. The Company acquired the land use right of the 600mu Suzhou campus from the Suzhou University in 2000 which had held it for a number of years prior to 2000. The 110mu Dalian campus and 70mu Kunshan campus both involved Ambow entering into a cooperation agreement with the local Government whereby Ambow operates the campus, with the local Government holding the land use rights and being the owner of the building properties.
The Company will develop and implement a corporate level due diligence system to ensure all land acquisition activities are consistent with PS5 requirements. This will apply to future projects whereby Ambow intends to set up new campuses by acquiring land use rights or entering into long term leases (>10 years) of existing campuses - whether it is directly involved in land acquisition or the process is government-led.
