34366 - CLN South Africa

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Environmental & Social Review Summary

Project Number

34366

Company Name

MA AUTOMOTIVE ROSSLYN (PTY) LTD

Date ESRS Disclosed

Nov 5, 2013

Country

South Africa

Region

Africa

Last Updated Date

Jun 12, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Dec 3, 2013
Signed : Dec 13, 2013
Invested : Dec 20, 2013

Sector

Motor Vehicle Parts

Industry

Manufacturing

Department

Regional Industry - MAS Africa

Project Description

The project is to finance CLN’s operations in South Africa. CLN produces body parts for car manufacturers and the production consists of relatively simple but high quality operations of steel/aluminum blanks being pressed into appropriate forms and shapes, cutting and removal of excess materials, followed by assembling of selected parts of car bodies by welding or gluing (primarily carried out by robotics, and placing of these interim products in racks ready for usage by car manufacturers. The CLN facilities have no galvanizing and only minimal water based painting operations and therefore no hazardous material discharges or emissions occur.

Overview of IFC's Scope of Review

IFC’s environmental and social review of this project included site visits to several CLN operations in South Africa (all operated under the name MA Automotive South Africa (MA)) including; i) a site visit to the MA headquarters in Rosslyn to review their corporate management systems and collect performance data related to environmental, health and safety (EHS) and social performance at all facilities; ii) site visits to three production plants close to the Rosslyn headquarters; and iii) site visits to two production plants near East London, with one of the East London production plants visited being a new plant under commissioning for production of aluminum based products. The site visits all included review of plant specifications, logistical tie-ins, and performance data as well as interviews with the production managers.

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

The proposed project is being developed in accordance with national regulatory requirements and international standards by a Sponsor committed to sound environmental and social management. The project complies with national labor standards which are aligned with IFC’s requirements and has no emissions and discharges from controlled sources. Further, all the activities are located within established industrial parks with no impacts on communities. Thus this is a Category B project in accordance with IFC’s Environmental and Social Review Procedure.

PS4: Community Health and Safety is not relevant to this project as all the sites are all located within dedicated industrial parks and not in proximity to any residential areas. Further, the production plans use no chemicals or combustible materials that can cause harm over distances and the plants all receive all raw materials (primarily steel and aluminum blanks) by vehicle using the well-established South African highway systems and deliver their products to local production plants using the same. Finally, security is provided by unarmed guards. Thus the project’s impact on communities is limited.

The approach to land acquisition is on the basis of a willing seller / willing buyer and thus PS5: Land Acquisition and Involuntary Resettlement does not apply. All activities occur within established industrial parks and this will similarly apply in the future. Thus PS6: Biodiversity Conservation or Sustainable Natural Resource Management does not apply and for this reason neither does PS7: Indigenous Peoples or PS8: Cultural Heritage (PS8).

Environmental and Social Mitigation Measures

The local approval procedures for production facilities like the MA operated cutting, stamping, and part assembling of automotive skin parts require the preparation of environmental impact assessments (EIA) and subsequent approvals ahead of project implementation. These documents and approvals have been gained over time prior to the individual MA production plants being established. Any future projects will also need to complete an EIA and comply with IFC Performance Standards and the World Bank Group EHS General and sector specific guidelines.

The MA headquarters in Rosslyn implements corporate management systems to ensure all production plans adhere to the same operational standards for production quality, human resource management, health and safety, and environmental standards. IFC’s review included interviews and corporate data reviews with Rosslyn based corporate managers for each of these areas. It was found that all areas were consistently managed in accordance with recognized international standards, had strong documentation to ensure compliance with the PS2: Labor and Working Conditions, were certified for quality assurance purposes against ISO/TS16949, and environmental management purposes by ISO 14001 and are planning for OHSAS18001 (occupational health and safety management systems) within the next 2 years. All requested information was readily available and showed that the central management organization has good communications with the individual production units it oversees.

Each production plant has its own safety organization with clearly stated and disclosed goals and achievements. These local safety organizations are responsible for actions in relation to emergency situations. Due to the facilities not having hazardous materials that can cause damage to persons outside the company fence line the emergency response preparedness mainly focus on the need for ensuring on-site safety.

Based on the review of the corporate management systems and data received the environmental and social risks associated with the proposed project are minimal, as described in the following sections, and mainly relates to the assurance of continued implementation of already proven systems and technologies. The mitigation measures agreed with the Sponsor are focused on continued implementation of already developed action plans for lowering the accident frequencies at three out of 9 production plans which have recorded accident frequencies of up to 21 LDA/MMH (Lost Day Accidents per Million Man-Hours) which is well above a 10 LDA/MMH general benchmark. The company will report on mitigation measures on a yearly basis.

Stakeholder Engagement

The MA facilities are all located in industrial park areas and participate in overall activities carried out by these parks where applicable. Besides this, MA’s direct community engagement is limited to its job creation activities which help the general economy in the areas where the production plants are located.

As part of the mandatory EIA process for new projects there is stakeholder engagement and the approach to this is well defined in the associated legislation to ensure all stakeholders have an opportunity to engage and comment on the project proposal.

The MA facilities are all existing production plants or plants near commissioning and disclosure of local documentation has, at the time when these plants were constructed, been done in accordance with the South African legislation of that time. MA will therefore disclose this document on its local web page and the documentation will be available at the Rosslyn plant at the following address:

8 Marthinus Rass Street
Rosslyn, South Africa
Telephone: +27 12 521 2500

Broad Community Support

Environmental & Social Action Plan

**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.

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Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

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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

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

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