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

This is a category B project according to IFC’s Procedure for E&S Review of Projects because a limited number of specific E&S impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Key E&S issues and risks associated with this category B Project are: company''s social, environmental, occupational health and safety management system and performance at corporate level; human resources management policies and practices; management of contractors and supplier; waste management for the vehicle maintenance facilities; land acquisition for the future vehicle maintenance depots development; and community safety and security issues associated with the Company''s taxi business.

Blue Bird’s immovable assets (i.e. vehicle depots, parking lots and workshops) are all located in urban areas. Some new facilities will be developed as part of the project on the vacant plots of land that are already owned by the project sponsors. The project, thus will not involve any new land acquisition and involuntary resettlement in the future. Therefore, impacts related to PS5: Land Acquisition and Involuntary Resettlement; as well as those related to PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage, are not expected for this investment.

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.

- Environmental & Social Assessment:



With regard to potential environmental impact caused by taxi, car, or bus pools, the Law No. 32 of 2009 on Protection and Management of the Environment (“Law No. 32/2009”) stipulates that any business activities having a potential major or significant impact on the environment must prepare an Environmental Impact Analysis (EIA) study, also known as AMDAL in Indonesia. Those activities that do not require EIA study, are required to undertake an environmental management effort (“UKL”) and an environmental monitoring effort (“UPL”).



However, as per the State Minister for the Environment Regulation No. 5/2012, the provision of taxi, car rental, or charter bus services and the ownership of taxi, car, or bus pools are not classified as a business or activity which requires an EIA. As such, Blue Bird is only required to undertake the UKL and UPL to comply with Law No. 32/2009. While the company complies with all applicable environmental regulations, including those relating to emissions and waste disposal, it is currently in the process of obtaining the approval of certain UKL and UPL from the relevant authorities.



- Management Systems:



Blue Bird operates an extensive information technology (IT) network and systems to support and manage its operations, with its E&S and safety aspects well integrated into this IT-based operational management system. The key functions of Blue Bird’s IT based management system platform include:

Fleet Management – Management of each vehicle from acquisition, daily departure and returns to depots, to maintenance and disposition, monitoring vehicle availability and location on a real-time basis, and tracking the operating metrics of each vehicle, including usage, mileage, insurance coverage and maintenance requirements.

Driver management – analysis of information and data about each driver, including revenue earnings, commissions, days worked, routes travelled, complaints history and general performance history.

Customer management – analysis of information and data about each customer, including demographics, transaction history and preferences,

Call centers – management of call centers, reservations and bookings based on vehicle availability and location.

Transaction Processing: Management of booking, amendment and cancellation of taxi, limousine & car rental and charter bus reservations,

Financial management – processing of payments received, including commission from taxi business and rental payments from limousine & car rental and charter bus services, and preparation of accounting and financial information.



Going forward, Blue Bird will document its E&S objectives and principles in a form of an overarching EHS / Sustainability policy. The policy will articulate the company’s commitment to comply with the applicable laws and regulations as well as compliance with IFC Performance Standards applicable to Blue Bird.



- Organization:



In accordance with I
ndonesian law, Blue Bird has a Board of Directors and a Board of Commissioners – both appointed by the shareholders at general shareholders meeting. The two boards are separate and no individual may be a member of both boards.



The Board of Commissioners is responsible for supervising the management, give recommendations, and supervise the policies of the Board of Directors. The Board of Directors manages day to day operations and appoints its principal senior management.



Blue Bird has an experienced management team in place to manage day-to-day operations of the company, comprising of: an Executive Director supported by Vice Presidents for Regulatory Affairs, Central Operations, Human Resources (HR), Technical, Operations, Administration/Finance, and Audit.



- Monitoring & Reporting:



Blue Bird has instituted an internal monitoring system, to ensure the consistency and high quality of its services. A set of key performance indicators (KPIs) covering operational, HR and safety aspects of the operations are integrated in the operational management system as described above.



- Emergency Preparedness and Response



Blue Bird places a very high emphasis on ensuring safety and security of its drivers and passengers. For this purpose, Blue Bird has installed a sophisticated onboard security system to manage any emergencies. This includes an amber-colored bulb on the roof of each car, which the driver can activate with a secret button whenever a crime occurs. In addition to this visual emergency signal for other Blue Bird drivers in the vicinity, it initiates a silent call to headquarters and activates a recording system so that the conversation in the taxi can be heard live from headquarters and recorded for court evidence, if necessary. It also transmits a GPS signal for headquarters to trace and requests other Blue Birds in the area to follow the car and report back. Drivers have a secret code to tell headquarters whether the situation is still under control or if it has escalated into a dangerous situation that needs immediate assistance. For drivers who help their friends in such a scenario, there is an award called the “Blue Knight” for their courage.



In addition, as part of emergency drills, the drivers are routinely trained to respond to on–the-road emergency situations.

As of April 2014, the company had a total workforce of 37,311 including over 34,000 drivers. The manpower composition also included about 1,300 Depot/Office Staff, 1,100 mechanics and around 900 field workers. Female employees constitute about 12 % across all levels, including about 131 female drivers in Jakarta area.



- Working Conditions and Terms of Employment



As opposed to other business models prevalent in Indonesia, where taxi operators charge their drivers a flat fee (essentially a rental agreement), Blue Bird operates a commission-based arrangement under a partnership agreement with its drivers.  As such, the drivers are not considered employees of the company under the Indonesian Labor Law, and are not subject to the requirements of minimum wages, working hours or overtime.



Working Hours/Overtime:



Blue Bird’s regular and executive taxis services operate one shift per day: a morning shift where drivers can operate their taxi at any time between 3.00 am to midnight, and a night shift where drivers can operate their taxi at any time between 2.00 pm to noon on the following day. The company typically assigns one full-time driver to each of its regular and executive taxis, who work on either the morning or night shift on a two-day-on, one-day-off work rotation. Drivers, who are not allocated a particular taxi, operate available taxis when the regular driver is not available or where a driver does not collect their vehicle before the shift cut-off time.



Under its partnership program, the company provides its drivers with a certain flexibility to determine, based on their local experience and knowledge, the optimal hours they work during their extended shift in an effort to maintain good working relationships with the drivers, as well as increase the return obtained from each taxi. For example, during a night shift, which can extend up to a maximum of 22 hours, drivers have the flexibility to choose both the areas in which they operate and the times during the shift in which they are operational and when they choose to break.



Working hours of drivers are divided in morning shift and night shift. The drivers are encouraged to take a rest in every 4 hours to do stretching. For drivers coming back to pool, the system is locked for 4 hours, and then continue to be operated.





Wages / Remuneration:



Blue Bird enters into a partnership agreement with each of its drivers, which provides for a commission-based remuneration structure, bonuses and other incentives. The company purchases the vehicles and drivers operate the vehicles pursuant to the terms of the partnership agreement.



While these agreements are not subject to the minimum wage regulation, set by the government, according to the Blue Bird management, the total remuneration of all the Blue Bird drivers is well above the prevailing minimum wage levels and are in line with the prevailing living wage.



Taxi driver’s commissions are reviewed on an ad hoc basis. Th
e regular taxi commission structure was last revised for drivers based in Jakarta and Cilegon, two of the company’s largest taxi markets, in May 2013.



Prior to May 2013, all taxi drivers received a commission-based remuneration depending on the amount of taxi fares earned by the respective driver, in addition to receiving certain bonuses and other incentives, while the company directly reimbursed the fuel costs.



The May 2013 changes effectively transferred fuel cost management to drivers based in Jakarta and Cilegon and, as a result, increased the base commission amount payable to the taxi drivers to incorporate the estimated cost of fuel that corresponds to the level of fares achieved by a driver during the relevant shift. The company provided these drivers in Jakarta and Cilegon with temporary fuel subsidies to offset the additional costs associated with the increase in fuel prices, until fares were adjusted.



Drivers in all other locations remain subject to a commission based remuneration structure with 100% reimbursement of their fuel costs. Daily rental and charter bus drivers receive a commission based on a base daily amount together with an additional commission based on the type of daily rental service each driver undertakes.



Blue Bird drivers have an option to participate in a vehicle ownership scheme that allows them to purchase the vehicle after five years at a price that is lower than the market price of the vehicle. Such vehicles are not sold with a taxi license; rather, they are intended for personal use. The company also offers other incentives to all the drivers, including a monthly bonus based on their number of years of service and the amount of revenues generated, health benefits, dormitories, housing and motorcycle loans and scholarships for drivers’ children.



The company provides additional incentives to high performing drivers as well as long serving drivers. The best performing drivers are also afforded the opportunity to have preferential selection of driving shifts and vehicles, as well have the opportunity to become a mentor to the younger drivers.



- Workers’ Organization



All the permanent drivers and employees (a total of about 3,300 as in April 2014) are members of the Blue Bird Group Working Union. The company has not experienced any major disputes with this union in the past.



- Grievance Mechanism



Employees and drives can file grievances to Customer Response Center (CRC), or, at the time of routine training for employees and drivers, which there is a special session for conveying grievances. These grievances shall be answered by the relevant department, which shall be documented, and the report is submitted to the Board of Directors.



- Training



Blue Bird believes that the quality of its drivers is one of the features that distinguishes its service offering from those of the competitors and is critical to the development of customer loyalty. For this purpose, the company commits s
ubstantial resources to provide comprehensive training for its drivers to ensure that they have the necessary skills and competencies to maintain high standards of customer service.



Blue Bird’s training programs consist of four key steps which the drivers complete over their time with the company:

Initial training: pre-operations training (in addition to the two day induction process), covering driving skills, customer services, vehicle operation and basic English conversation.

Basic training covering: among others, operational review, customer service (mindset and skill), work ethic, basic English conversation and defensive driving attitude and skills.

Development training: continuous development training covering, among others, service culture, defensive driving culture and eco driving culture.

Professional driver training: with respect to experienced drivers, professional driving training courses.



Blue Bird’s executive taxi drivers and charter bus drivers also receive additional specialized training.



As of April 2014 , the company had three training centers, two located in Jakarta and one in Tangerang, which were manned by over 28 staff. The company also undertakes various training programs at its depots. In 2013, Blue Bird conducted approximately 2,640 training classes for the taxi, limousine & car rental and charter bus drivers nationwide and 200 training classes for the executive drivers in Jakarta..



To ensure the training facilities are able to continue to provide high quality training to the growing number of drivers and to provide accessibility for drivers to attend training, Blue Bird intends to open several new training locations over the next two years. Company also intends to increase the number of staff trainers and associate trainers to ensure that the new drivers continue to receive the highest standard of driver training in Indonesia.



- Child and Forced Labor



All employees and drivers are hired through open recruitments and based on the candidate’s qualification. The minimum age of hiring is 18 in line with Indonesian labor law requirement.



- Occupational Health and Safety



Blue Bird has a strong emphasis on safety – both for its passengers and drivers alike – and has implemented a robust monitoring, management and training regime for the drivers and other staff. As a result, it has a very strong safety record and hence it’s taxi fleet has been recognized and recommended as the safest transportation option by many international agencies, embassies and travel guides.

Taxi depots are the key facilities for Blue Bird’s business. These depots are strategically located in the locations in which the company operates. As of April 2014, Blue Bird operated from 61 depots across Indonesia, 44 of which were located in Jakarta, and all of which are connected via IT network with the company’s head office in Jakarta, allowing the head office and management staff to monitor the performance and operations on a real-time basis.



In addition, the taxi depots provide repair and maintenance services for the taxis. As of April 2014, 34 of the standard depots were fully equipped with maintenance and servicing facilities while the other 27 satellite depots have basic maintenance facilities. Standard depots provide additional maintenance and servicing services for those satellite depots located within close proximity.



The key environmental issue associated with these depots and workshops is the storing and collecting used lubricant oil, which is regulated under Decree of the Head of the Regional Environmental Impact Controlling Agency No. 255 of 1996 on the Procedure on the Storing and Collecting of Used Lubricant Oil.



The company complies with the applicable environmental permit requirements for the waste management from these depots, including the waste lubricant oils.



- Energy Sources and GHG Emissions:



The primary energy requirement for the project is that of electricity for its depots and officers which is procured from the national grid. Small capacity diesel generators are installed as backup, for use in the rare case of power failure. The other main source of emissions is the fuel used in the fleet of taxis and buses.



The GHG emissions of the project are, therefore, dominated by those due to the vehicles fuel consumption, electricity consumption, and a small contribution from loss of refrigerant from heating, ventilation and air-conditioning (HVAC) systems.

As described earlier, Blue Bird is known for its high standards of safety and security, which is founded on a robust training regime for its drivers. Additionally, the company subscribes to vehicle insurance covering damage to the vehicles, personal injuries to the drivers and passengers and third party liability caused by its vehicles.



Blue Bird Group has recently launched its new line of taxis designed to provide easy access to the disabled, Blue Bird Lifecare Taxi, the first of its kind in the country.



All the depots and facilities of Blue Bird are located in the urban areas with good road connectivity, and have adequate space to park the taxis that are not in service. As such, the traffic related impacts due to these depots and the company’s operations are not expected to be significant.

The company does not have any affected communities, given that its operations are spread out in dense urban areas and have no direct pollution, noise or other adverse impacts on neighbors that differ from those of ordinary traffic flows. Primary stakeholders include drivers and passengers / clients.

Blue Bird’s Customer Response Center is the primary channel to receive and record any complaints and grievances that the customers may have about the drivers, service quality or safety.

Blue Bird Peduli (Blue Bird Care – a philanthropy division of Blue Bird Group) engages with the community for its corporate social responsibility activities. These include assistance in disaster relief or scholarships to the children of Blue Bird drivers. It recently launched the ''Women Empowerment Project'' focusing on the spouse of the Blue Bird Group drivers and employees, with a potential member of more than 30,000 women.

Going forward, as the company gets listed on the Jakarta Stock Exchange; it will publicly disclose the relevant information to its shareholders and general public through its annual reports as well as its website.

Public disclosure of this ESRS in local language will constitute an important step in the company’s stakeholder engagement activities.

Blue Bird will disclose this ESRS locally at its website: http://www.bluebirdgroup.com

All inquiries and comments may be directed to:
Mr. Robert Rerimasie (Finance Director/ CFO)
Tel: +62 (21) 7989000
Fax: +62 (21) 7989102
Email: mailto:robert.rerimassie@bluebirdgroup.com

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.