34301 - Scanntech

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Environmental & Social Review Summary

Project Number

34301

Company Name

SCANNTECH

Date ESRS Disclosed

Mar 4, 2014

Country

Uruguay

Region

Latin America and the Caribbean

Last Updated Date

Dec 1, 2016

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : May 2, 2014
Signed : May 29, 2014
Invested : Jun 13, 2014

Sector

Retail Payment Points

Industry

Financial Markets

Department

TMT, Venture Capital & Funds

Project Description

The project involves a proposed subscription by IFC of $10 million in preferred convertible stock in the holding company of Scanntech (or the “Company) to implement the Company’s project (estimated to cost $45 million) to expand its technology platform solution to small and medium independent grocery stores in South America. Scanntech installs cash register equipment, directly via its own technicians or via third-party technicians, who personally visit stores and provide training to the stores’ employees on the use of Scanntech’s equipment. Payments are collected by Scanntech electronically.

Scanntech leases small office spaces for administration and sales in Montevideo (Uruguay), Sao Paulo (Brazil), and Buenos Aires (Argentina). The Company also maintains servers in the central telephone company of Uruguay. Scanntech also leases a small engineering and call center as well as a warehouse facility in Montevideo (Uruguay) and a small storage unit (of less than 200 square meters) in Buenos Aires (Argentina), while warehousing and logistics in Brazil will be performed by a subsidiary of Federal Express. There are no plans for additional office space or warehousing in the next 5 years.

Scanntech fully designs its main product, the iPos, in Uruguay, and contracts its manufacture to a company in China. Scanntech purchases all other components (bar code scanner, cash drawer) off-the-shelf, and no alterations are done to these products. In 2013, Scanntech commissioned the manufacture of 5,000 units of its iPos unit from Nanjing Malata Technology Co. Ltd. in Fujian, China. Scanntech expects that the number of iPos units that it orders will increase significantly in each of the coming three years, and Scanntech will be considering the potential selection of a new manufacturer, either to replace or to complement its contract with Nanjing Malata Technology Co. Ltd.

Overview of IFC's Scope of Review

The review of this project consisted of a visit by IFC staff to the headquarters of Scanntech in Montevideo, Uruguay in January 2014 to meet with and interview management of Scanntech. IFC staff also appraised a Scanntech human resources manual, and information on the manufacture of Scanntech’s iPos units.

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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The key environmental and social issues associated with this project are compliance with IFC standards on supply chain management and fair, safe and healthy working conditions.
IFC’s appraisal considered Scanntech’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.

PS3, PS4, PS5, PS6, PS7 and PS8 are not considered applicable given the nature of the project’s operations.

Environmental and Social Mitigation Measures

Stakeholder Engagement

Scanntech recognizes the importance of community engagement. However, community engagement has not been an issue in Scanntech’s operations to date and is unlikely to in future as the company has no directly affected communities and works primarily with small businesses. Nevertheless, Scanntech commits to promptly respond to any third party queries, complaints or grievances received from members of the public during its operations under IFC’s investment, by means of a simple external communications procedure.

Broad Community Support

**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

Stakeholder Engagement

Stakeholder Engagement

Local Access of Project Documentation

Broad Community Support

IFC's Determination of BCS

Press-Release

Related SII

Similar Projects

Information on E&S Complaints and Grievance Mechanisms

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