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
PS 5 – Land Acquisition and Involuntary Resettlement

There are no impacts of concern associated with the following Performance Standards: PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources – No negative impacts on conservation or biodiversity have been identified in the environmental and social impact assessments (ESIAs) prepared for the concessions to be financed by IFC; PS7: Indigenous People – The concessions are no located in indigenous people (IP) lands and no adverse impacts on IPs have been identified through the ESIA process ; PS8: Cultural Heritage – The projects being considered for IFC financing are not located in areas of known historical or cultural significance according to the aforementioned ESIAs.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because it will create a limited number of specific environmental and social impacts that can be minimized, avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. Water and wastewater treatment projects being considered for IFC financing have a limited footprint, improve access to safe potable water, and help reduce pollution from discharge of otherwise untreated effluents.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Key environmental and social issues include: environmental and social management system; quality and sustainability of water resources; emissions to the environment – water and subsurface; community and occupational health and safety; emergency response; energy use and efficiency; community engagement; and land acquisition.



Performance of the company’s existing environmental and social management system is consistent with IFC PS requirements in providing adequate oversight, comprehensive risk assessment, monitoring, reporting and training. As the company grows its portfolio of water and wastewater assets, BEWG will continue to manage its environmental and social performance per IFC PS and applicable World Bank Group EHS guidelines, and implement specific mitigation, monitoring and management measures outlined in the respective ESIAs for each site, and IFC PS requirements.



Local governments select locations for project sites, and obtain documented approval from the impacted communities for the siting of such facilities. Consistent with the PRC laws and requirements, ESIAs are prepared by the company for projects and approved by the government. The impact assessment process includes detailed assessment of potential environmental and social impacts, as well as extensive consultation on various aspects of the project – from site selection, land acquisition through conditions for project operation, monitoring and reporting. Through the impact assessment process the government ensures that potential impacts of the project are identified and addressed during the project planning stage, and are used to prepare specific environmental control plans containing identified mitigation measures. The company's obligation in the concessions is to comply with the requirements set forth in concession documents. The company’s environmental management team has overall responsibility for obtaining appropriate permits and approvals from various government agencies, and ensuring all operations are consistent with the terms of the concession agreement. The ESIA process undertaken by the company for the projects being considered for IFC financing is consistent with IFC PS1 requirements.



The sponsor has a robust corporate management system which provides some oversight of environmental, social, health and safety (ESHS) issues. Among other things, this ensures the operations comply with all applicable laws and regulations. The existing management system includes a series of procedures, work instructions, and reference documents which, when combined with the findings of the project-specific assessments, comprise a program of mitigation and performance improvement measures and actions necessary to effectively manage the E&S risks and impacts of its projects. For new projects, assessments are periodically aggregated and summarized for senior management review. And through management meetings and written documents, project and site managers periodically re
port on environmental, health and safety performance, as well as accidents and incidents on existing projects.



The company’s management program includes operational policies and procedures that are implemented at the facility level by supervisors who report to management on an as needed basis. Policies and procedures comply with applicable local regulatory requirements for operation of these facilities including those for human resources and labor, occupational health and safety, and environmental compliance. The Vice President, Human Resources has responsibility for overseeing matters related to labor, working conditions and health and safety. The company provides professional training to key personnel to ensure they have relevant skills and adequate training to perform their work. Assisted by qualified personnel, project managers for each project company are responsible for day-to-day implementation of project-level programs and plans. In accordance with the project-specific work plans, project or site managers are responsible for providing environmental and health and safety training to employees, including contractor personnel.



The company monitors environment, health and safety performance for each project according to the procedures established in their existing management system. In addition to standard procedures detailed in the existing management system, project specific procedures are developed to comply with provisions contained in E&S impact assessments and concession agreements with local governments. For example certain identified major environmental, health and safety risks and impacts, measurable targets are established as compliance benchmarks. If monitoring results indicate nonconformance with standards or deviations from established benchmarks, appropriate corrective or preventive actions are initiated. A similar approach is adopted for unplanned events such as accidents where the events are investigated, and corrective or preventive actions initiated to prevent recurrence.



As the company continues to grow, it will augment its management capacity by assigning additional staff and resources to provide oversight of its environmental and social performance. Responsibility for the management of environment, health, safety and social performance is currently assigned to a senior level staff within the water arm reporting to its CEO. The individual has overall responsibility for strategies, policies, standards, compliance, and management initiatives related to environmental and social matters, and for ensuring adequate resources are made available. As referenced in ESAP action item #1 (ii), for the projects being considered for IFC financing, the company’s existing environmental and social management system (ESMS) will be updated to explicitly make reference to the IFC Performance Standards (PS).

Currently the company employs 6615 staff, and the number of sub-contracted employees can vary significantly depending on construction activities at any given time. The company has a Human Resources policy that complies with local and PRC regulatory requirements, and is applied consistently to all direct employees across all its business lines and (subsidiary) project companies. As required by law, the policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is provided in the form of an employee handbook at the time of induction. As is common practice in China, although not explicitly stated, employment relationships recognize the principles of non-discrimination and equal opportunity. Although there is no union at the company IFC found no evidence the company restricts employees’ rights to form or join unions. Additionally under PRC law employees have the right to freedom of association and have the opportunity to collectively represent to the management any issues or grievances that they may have.



The minimum employment age at the company is 18 years. The company ensures that child labor or forced labor is not employed directly or by subcontractors through verification of relevant documents. Working hours on site can vary by nature of activity and phase of project, with most labor intensive phases being at the construction phase during which there are continuous operations. Construction activity is largely subcontracted for which unskilled labor is procured locally. Regulatory requirements in PRC do not require the company to provide direct oversight of wages, working or living conditions of subcontracted labor. Wages are paid by subcontractors to labor on a monthly basis and calculated with basis on the hours worked, inclusive of overtime. Terms of employment for sub-contractors are as per PRC laws and the company relies on regulatory agencies for ensuring that sub-contractors comply with applicable labor laws. Moving forward, the company will review its human resources policy to ensure consistency with IFC Performance Standard 2 on wages, grievance procedure for workers and contractors, working and living conditions for any labor employed by the company, either directly or through sub-contractors.



Human resources are managed at corporate level with oversight of the company facilities and operations. Training of staff is done on a routine basis in compliance with local workplace regulations. The department of human resources is responsible to ensure that all employees are adequately trained to perform their work safely. Supervisors monitor that standards are met and any reportable incidents are reported and follow up action taken when required. Training, monitoring and reporting framework is consistent with PRC requirements, and is expected to be consistent with IFC requirements after implementation of the ESMS program.



Occupational health and s
afety of employees at the company is managed by the Human Resources and Administration. There is a plan for accident prevention and worker safety consistent with local regulatory requirements. All employees in the company have to undergo a training program at induction and subsequently regarding worker health and safety relevant to their job activity. Facilities are audited yearly by regulatory agencies to monitor compliance with labor regulations. The company has been in compliance with regulatory requirements and has recorded no significant lost time incidents or fatalities in its operational history. Although the company has been in compliance with applicable regulatory requirements, there is variance between compliance requirements under regulatory obligations when compared to IFC Performance Standard 2 and Guidelines on Occupational Health and Safety (OHS). As referenced in ESAP action item #1 (iii), the company will develop an implementation plan to achieve internationally acceptable monitoring and reporting standards for OHS for its employees and sub-contractors.

BEWG uses conventional treatment technology for treatment of potable water and for municipal wastewater treatment in all the projects under consideration for IFC financing. The technologies in use are widely used globally and proven to provide reasonable assurance of meeting discharge standards when operated with adequate training. Treatment plant designs are typically developed by the client for EPC contracts, or specified in most concession agreements. The technology used is fairly basic, both for water (solids removal through chemical coagulation, flocculation, filtration and disinfection using nongaseous chlorine); and wastewater treatment (screening, primary sedimentation, secondary biological treatment with nutrient removal and secondary sedimentation, and optional UV disinfection). Effluent discharged from wastewater treatment facilities operated by the company under the concession agreements either comply with or for those under construction are designed to comply with local regulatory requirements. Discharge standards are established by the government and vary by project location and receiving water quality standards, an approach that is consistent with World Bank Group (WBG) guidelines for the discharge of treated municipal wastewater to surface water. However, limited effectiveness of industrial source control programs can result in industrial pollutants to be discharged to wastewater treatment plants (operated by BEWG) that are not equipped to treat such pollutants, resulting in a potential pass through to receiving bodies of water and contamination of treatment plant residuals. Industrial wastewater discharged to municipal wastewater collection and treatment systems in China require pre-treatment to comply with discharge requirements established on a source specific basis. Concession agreements generally do not require monitoring of industrial chemicals in the influent or effluent. Currently, the company’s monitoring and reporting requirements are limited to its obligations set forth in individual concessions.



Air emissions from wastewater treatment facilities operated by the company primarily include nuisance odors and noise which are typical to wastewater treatment operations. Facilities are generally located away from local communities and odor or noise is not typically anticipated to be a nuisance. Through its community engagement program, the company will continually monitor the acceptance level for odors and noise to ensure appropriate provisioning of odor and noise control technology if needed. Emissions of VOCs and other aerosols from wastewater treatment activities are not currently monitored by the company. For protecting worker health and safety at the wastewater treatment plants, as part of the ongoing OHS review, the company will assess the risk posed and take any remedial measures if needed.



Significant quantities of solid waste are generated as part of secondary wastewater treatment operations, mainly from p
rimary and secondary clarifiers. Annual production of sludge from the projects under consideration for financing by IFC is estimated to be about 242,600 tons per year. As per terms of the concession agreements, the company is required to deliver the sludge to municipal sanitary landfills at an acceptable moisture content although there are no additional requirements for chemical or microbiological characteristics or thresholds. All wastewater treatment plants operated by the company are equipped with sludge dewatering facilities. Dewatered sludge is disposed only in municipal sanitary landfills at no cost to the company. BEWG plans to continue to dispose of the sludge at municipal sanitary landfills, in favor of incineration or reuse, in order to mitigate risks from potential contamination of sludge from uncontrolled/unknown industrial discharges.



Principal energy usage includes electricity procured from the grid for the operation of water and wastewater treatment plants (estimated to be about 125 million kWh per year). Total greenhouse gas (GHG) emissions attributable to the company’s annual consumption of electricity exceed 95,000 metric tons of carbon dioxide equivalents per year. The company closely monitors energy usage at its facilities to reduce specific energy consumption, and will continue to explore opportunities for energy efficiency in its operations to reduce operational cost and its carbon foot print. The company will also monitor and report on an annual basis its net GHG emissions using internationally acceptable methodologies for quantifying such emissions.

Key risks to communities from the company’s operations include transportation and handling of hazardous chemicals and gases which are used in normal operation of water and wastewater treatment facilities. Engineering controls and staff training are provided to mitigate risks and issues associated with the company's operation of water and wastewater facilities. The use and storage of hazardous chemicals are subject to stringent safety standards as required under PRC laws. The company is required to have emergency prevention, control and response plans which specifies responsibilities, ensures appropriate response equipment and materials are in place, and detail a set of procedures to be followed to minimize the harm of any potential accident. Moving forward, as referenced in ESAP action item #2, the company will review its scope of emergency response and update procedures as needed, including drills to test the effectiveness. The company will also add a community involvement component that addresses appropriate behavior and safety measures to be implemented in the event of an unplanned release beyond the plant boundaries due to either irregular plant operations or an accident at the facility, or during transportation of material destined for the facility. The company employs adequately trained and unarmed guards at all its facilities. Provision of security services is in compliance with PRC regulations and are meant to ensure site safety, and limit access to authorized persons only.

During the planning phase of new projects, the company collaborates with the local governments at various project locations in making available relevant E&S information. In China, dialogue and communication with potentially affected communities, including public consultation and disclosure of environmental and social impact assessments, occurs through procedures established by PRC regulations which include, for example, community meetings, facility tours and information sessions. As a result, information dissemination activities have included those undertaken by the local government, which includes community consultation during project development and operational phases. As part of its environmental and social management program, the company will establish methods for communicating environmental and social aspects to external interested parties and maintain procedures for receiving, documenting and responding to concerns from any external interested parties relating to the project. Specific procedures will be developed to incorporate community engagement, including clear procedure on disclosure and consultation with potentially affected communities.

For more information see the company’s website at http://www.bewg.com.hk or contact:

Contact Name: Ms. Tingting Dai
Address: No. 101, Baiziwan East Lane,
Chaoyang District, Beijing 100124,
China

Tel: +86-10-6729 4613
Fax: +86-10-6704 8484
Email: mailto:daitingting@bewg.net.cn

Relevant environmental and social review documents will be made available on the company’s website, at the twelve projects sites being considered for IFC financing, and its corporate office:

Ms. Tingting Dai
Address: No. 101, Baiziwan East Lane,
Chaoyang District,
Beijing 100124,
China

Tel: +86-10-6729 4613
Fax: +86-10-6704 8484
Email: mailto:daitingting@bewg.net.cn

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Adoption of IFC Performance Standards as part of BEWG’s legal requirements for projects under consideration for IFC financing.	09/01/2015
Update existing ESMS to explicitly include compliance with IFC Performance Standards (PS) for projects under consideration for IFC financing.	03/30/2016
Enhanced procedures for oversight of construction activities – payment of wages, grievance procedure for workers and contractors, working and living conditions and OHS issues. Integrated OHS functions – training, monitoring, and reporting for staff and sub-contractors.	03/30/2016
Procurement procedures to provide oversight and contractually require that its suppliers and subcontractors comply with national regulatory requirements and BEWG's ESHS policies.	03/30/2016
Procedures for communicating environmental and social aspects to external interested parties related to the project.	09/01/2016
Retain Consultant or assign qualified individual from the company to review and update emergency resposnse procedures, training and infrastructure to ensure safe operations.	09/01/2015
Completion of emergency response and preparedness review by consultant and allocation of resources.	12/31/2015
Implement recommendations from consultant review of emergency response and preparedness.	03/30/2016
Completion of action items for emergency response and preparedness.	09/01/2016