33142 - On Telecom

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Environmental & Social Review Summary

Project Number

33142

Company Name

ON TELECOMUNICACOES LTDA

Date ESRS Disclosed

Mar 18, 2014

Country

Brazil

Region

Latin America and the Caribbean

Last Updated Date

Dec 1, 2016

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Apr 30, 2014
Signed : May 30, 2014
Invested : Jul 23, 2014

Sector

Cable and Broadband

Industry

Telecommunications and Technology

Department

TMT, Venture Capital & Funds

Project Description

The Project involves an investment by IFC in On Telecom (or the “Company”), an early stage wireless broadband operator in Brazil. The proposed investment will consist of up to US$20 million of equity and up to US$70 million of debt financing -- including up to US$40 million syndicated or parallel loans – in a project whose total cost is estimated at US$250 million. The project consists of build out and network expansion of On Telecom’s wireless broadband operations in the interior of the State of Sao Paulo, Brazil.

On Telecom is deploying a TD-LTE network to provide broadband connectivity to underserved geographical and socioeconomic segments of the market. The Company will provide wireless broadband access prioritizing urban and suburban areas with poor or no fixed line networks in place. ON Telecom’s current licenses cover 133 cities in the interior of the State of Sao Paulo and the company is exploring the possibility of acquiring additional regional licenses in Brazil.

On Telecom’s offices are in leased space in Campinas, Sao Paolo in Brazil. On Telecom plans to develop over 200 new tower sites in 2014, and over 200 new ones in 2015. About one-quarter of them are to be operated by On Telecom, while three-quarters of them will involve having On Telecom equipment installed on towers operated by other companies. About three-quarters will involve greenfield towers with earthworks, and one-quarter will involve On Telecom equipment being installed on rooftops of existing buildings.On Telecom will have its equipment installed in one or more data center.

Overview of IFC's Scope of Review

The review of this project consisted of a site visit by IFC staff in March 2014 to On Telecom Limited in Brazil, to obtain direct understanding of its proposed operational activities. IFC also appraised a summary of On Telecom’s infrastructure, a preliminary sustainability policy, a site evaluation form, and environmental and social terms included in On Telecom’s agreements with contractors.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFCs 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. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The key environmental and social (“E&S”) issues associated with the project are in the construction of towers and laying of cable; labor and working conditions (including employee and contractor occupational health and safety); and pollution prevention and abatement.

IFC’s appraisal considered On Telecom’s E&S management policies and procedures and gaps between them and IFC requirements. Where necessary, corrective measures intended to close those gaps, within a reasonable period of time, are summarized in the paragraphs that follow. Through implementation of those measures, the project is expected to be designed and operated in accordance with Performance Standard objectives.

As there are no major adverse environmental or social impacts expected to result from the proposed project, and it is possible to avoid or mitigate any limited adverse impacts that might result, the proposed investment has been classified as a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects.

PS5, PS6, PS7 and PS8 are not considered directly applicable given the nature of the project’s operations; however the E&S review process referred to below under PS 1 will be used to identify and mitigate any economic or physical displacement, biodiversity impacts, impacts on Indigenous Peoples and/or cultural heritage impacts related to the establishment of new towers, cables or other infrastructure.

Environmental and Social Mitigation Measures

Stakeholder Engagement

On Telecom is committed to complying with IFC Performance Standards on disclosure and stakeholder engagement. Given the spread out nature of the company’s operations, there are no core affected communities with which to engage, rather pockets of people that may reside in the proximity of a planned new facility. As a condition of IFC’s investment, On Telecom will develop procedures to cover public disclosure prior to the construction of any new On Telecom tower or any other free-standing facility, or any substantial laying, maintenance, or upgrading of optical fiber cable. The procedures will, for example, provide for On Telecom to post at least one sign at each new site at least three days prior to the start of work in addition to following Brazilian disclosure and consultation requirements.

On Telecom’s stakeholder engagement procedure will also include a simple grievance mechanism and commitment to follow up on any complaints from community members related to company activities. If a substantial number of community members complain about the same issue, and circumstances indicate that a meeting for On Telecom to engage with community members may be useful, then On Telecom will organize such a meeting.

On Telecom will continuously make available information to local community members on electromagnetic radiation from tower sites as needed, consistent with IFC’s Telecommunications Guidelines.

Broad Community Support

Environmental & Social Action Plan

On Telecom(33142) Supervision Disclosure Snapshot – Version 3
Description	Anticipated Completion Date	Status	Comments	Completion Date
On Telecom will appoint at least one qualified person at its headquarters to be an E&S coordinator	30-May-2014	Completed	Completed	5/30/2014
On Telecom’s E&S policies and procedures will be improved to provide for the following, all according to IFC standards: (a) E&S review to be performed prior to the acquisition, development, and/or management of all sites and facilities, commensurate with the nature of each site or facility, and the level of E&S risks and impacts at each site/facility, (b) management of core contractors, (c) pollution prevention and abatement, and (d) public disclosure.	31-May-2014	Completed	Completed	7/16/2014
On Telecom’s HR policies and procedures will be improved to provide for the following, all according to IFC standards: (a) life and fire safety, (b) a limit on hours worked per week, (c) a mechanism for handling worker grievances with a channel for appeal of initial decisions, (d) non-discrimination in recruitment and during employment, (e) provision of personal protective equipment, and (f) coverage of employees of contractors and subcontractors.	31-May-2014	Completed	Completed	7/16/2014
On Telecom will develop policies and procedures on screening of security services and the use of force according to IFC standards.	31-May-2014	Completed	Completed	7/16/2014

Client Documentation

File Name	Actions
PS1_33142.doc

**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.

Projects

Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Identified Applicable Performance Standards

Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

PS 1: Assessment and Management of Environmental and Social Risks and Impacts

PS 2: Labor and Working Conditions

PS 3: Resource Efficiency and Pollution Prevention

PS 4: Community Health, Safety and Security

Stakeholder Engagement

Stakeholder Engagement

Local Access of Project Documentation

Broad Community Support

IFC's Determination of BCS

Environmental & Social Action Plan

Environmental & Social Action Plan

Press-Release

Related SII

Client Documentation

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Information on E&S Complaints and Grievance Mechanisms

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