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 location of project sites are adjacent to existing urban area with typically no impacts on indigenous peoples, cultural heritage, or biodiversity are envisaged. Therefore PS6, PS7 and PS8 are not considered applicable. Further, such issues are assessed via the environmental impact assessments undertaken for the projects. In respect of land acquisition, land acquired both historically and currently is based on willing-seller and willing-buyer basis through market transactions. Nonetheless, to ensure land acquisition complies with IFC’s requirements a land acquisition screening mechanism has been included in the environmental and social management system to ensure such.

This project is categorized as B in accordance with IFC Environmental and Social Sustainability Policy as there are plans and systems in place to ensure the potentially limited impacts and risks are adequately managed. In this regard, the company has previously developed and implemented a corporate level environmental and social management system (ESMS) that is applied to all projects to ensure compliance with national requirement and those of IFC.
The key environmental and social (E&S) issues have been identified as: (i) effective implementation of the corporate level ESMS to provide systematic and consistent management of E&S issues across all projects and to ensure the land acquisition process complies with IFC’s requirements; ii) rigorous implementation of the Contractor Management Plan to ensure provision of fair, safe and healthy working conditions during construction and operations; iii) consistent application of pollution control measures during planning, construction and operations; iv) design of the proposed projects taking into account life and fire safety considerations for public access buildings and incorporation of energy efficiency measures; v) ensuring construction nuisance to adjacent or nearby communities is minimized; and, (vi) active periodic external E&S (include labor) monitoring is undertaken as required and the findings thereof acted upon in an appropriate manner.

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

Ciputra Residence has developed over 1,000 hectares of housing and related infrastructure in Indonesia during its operational history. Development of ongoing and planned projects over the next 20-30 years will result in development of over 4,800 hectares of housing.

The company employs experienced staff with strong management, real estate development and associated technical background. The Ciputra Residence project development cycle includes conceptual and engineering design, construction, and operational management of residential and commercial properties. Design and development are completed in accordance with Indonesian legal requirements, including the specifications outlined in respective regional and city master plans. Environmental Impact Assessments (“AMDALs”) as required under Indonesian law are prepared and approved for all site developments. These documents describe the impacts of new projects and provide measures to be implemented to avoid, manage or mitigate expected impacts in order to meet national requirements.

Engineering and construction contracts are outsourced on the open market via competitive bid processes with works being completed in a manner consistent with Indonesian regulatory requirements. In addition to meeting all local regulatory requirements, the company ensures that seismic designs meet good international industry practice. Residential buildings and building complexes with at least four floors, in addition to meeting all local requirements, are equipped with fire/smoke alarms and at least two exit routes.

Environmental & Social Management System:

Following IFCs previous investment the company developed a comprehensive ESMS at the corporate level that is applied at the project level to identify and manage impacts and risks throughout the project development process. The ESMS includes: i) a Land Acquisition Screening Mechanism to ensure that land acquired by a third party, such as joint operation partners, is conducted either on a willing buyer-willing seller basis or meets national laws and the requirements of PS5 Land Acquisition and Involuntary Resettlement; ii) an Emergency Preparedness and Response Plan (EPRP) that covers all foreseeable emergency scenarios associated with the construction phase of projects; iii) a corporate level master Occupational Health and Safety (OHS) training plan; iv) life and fire safety measures for multi-story residential buildings and public-access buildings consistent with IFC’s requirements; iv) a Contractor Management Plan to manage labor related issues across all contractors and subcontractors for current and future projects to ensure consistency with host national laws and PS2: Labor and Working Conditions; the latter includes procedures for managing key occupational health and safety issues such as working from heights, safe handling of hazardous materials amongst others; v) a grievance mechanism to allow for the receipt of gr
ievances from contractors, employees and external parties with measures to address issues in a timely and effective manner; and, vi) ensuring allocation of a designated manager that is responsible for the development and implementation of health, safety, environmental and social management plans for each project.

Note: The Contractor Management Plan was developed as result of the previous investment whereby the company commissioned a comprehensive labor audit that identified a number of shortcomings in labor management and safety practices. The findings thereof were then used as the basis for the development of the Contractor Management Plan as a part of the ESMS.

To ensure the effective performance of the ESMS as the part of the IFC’s investment the company will develop a timetable for the implementation of the corporate ESMS to all project sites to be agreeable to both the Company and IFC. (ESAP#1).



Organizational Capacity and E&S Programs

The company has hired an appropriately qualified professional responsible for overall Health, Safety, Environmental and Social performance (E&S Manager), and provided sufficient resources and staff to allow for development and implementation of the ESMS. The E&S Manager has a team of 5 qualified professionals to implement E&S requirements at the project level. Each construction site is visited at least once a week by company staff who participate in the daily safety briefing, provide training as needed, observe safety practices, and check contractor labor records (attendance, training, payroll, etc.). The findings of each visit are recorded on a standardized form and followed up in future visits.

The main contractor at each construction site employs an individual whose sole responsibility is training and overseeing safety performance and labor practices, and associated record keeping. This person reports directly to the site manager and liaises closely with Ciputra Residence E&S staff.



Monitoring & Reporting

As part of the corporate ESMS routine monitoring and supervision activities are undertaken at active Indonesian sites by the E&S Manager or his staff on at least a weekly basis. They review key elements of contractors’ and subcontractors’ environmental, occupational health and safety, labor management performance and record the findings on standardized forms which classify main findings as green (no follow up required), yellow (follow up required) and red (urgent follow up) and provided for scheduled updates. A reporting template for any accidents (major, minor, near miss) has been developed and started being used to record major accidents by contractors and subcontractors. All relevant information is retained by the E&S department, either in hard or soft copy.

As per the ESAP Ciputra Residence will develop a centralized system to monitor, on an on-going basis, the status of implementation of its ESMS. The monitoring system will specifically record the status of corrective action
s arising from future labor audits and other monitoring activities such as the findings from the weekly visits of the E&S manager or staff made to project sites. In addition, E&S performance will be reported to senior management team on a quarterly basis. The quarterly report will at least contain updated information with reference to each corporate E&S procedure (developed as part of the ESMS establishment) and measurable implementation status (including % of completion) for each construction sites and highlight expected delay in implementation. Issues requiring immediate attention will be reported to senior management once it is available. (ESAP#2)

Ciputra Residence will also to retain a qualified consultant to undertake periodic ESMS implementation external monitoring (including labor) to ensure the implementation and effectiveness of the ESMS in all sites. (ESAP#3).

Emergency Preparedness and Response

Life and fire safety is the main operational risks associated with real estate development and operation management. Following IFC’s initial investment, the company has developed an Emergency Preparedness & Response Plan (“EPRP”) that covers foreseeable emergency scenarios associated with each project in its construction phase including fire, explosions, severe weather such as floods and storm events, earthquakes, release of hazardous materials, food poisoning and the spread of an epidemic. Safety signage and emergency evacuation plan including evacuation instructions, are displayed at construction sites and also at main office building.



Training

Ciputra Residence’s training programs were previously focused on improving communication and managerial skills. Training programs on environmental initiatives have now been undertaken and will continue. Labor and Occupational, Health and Safety (“OHS”) training was initiated following IFC’s initial investment. All workers undergo safety induction training when first employed and at the beginning of each project. OHS briefings are held on a daily basis and include training in various aspects of health and safety. In addition, on a weekly and monthly basis the company’s E&S Manager provides additional training on topics of interest for company and contractor workers. Currently the company training is directed at safety officers and, moving forward, the company will increase job-specific training for workers depending on their category of work.

Ciputra Residence currently employs 500 full-time staff who manage project-related activities on a day-to-day basis, including activities undertaken by construction contractors for the development and operation of the company’s projects in Indonesia. Employees are all Indonesian. Female employees constitute approximately 30% of the total regular workforce of the company.

Each group of houses/shop houses is constructed by 2-4 main contractors, each of which employ multiple subcontractors to provide the labor force. At the sites visited by IFC, each contractor had 2-4 subcontractors with a total workforce of 50 or more. The construction contractors’ workforce is predominantly male with the total number of contracted workers ranging from approximately 800 to 1,000 at any one time.

Human Resource Policy Management

The company’s Human Resource (“HR”) corporate policies and operational procedures are established based on Indonesian labor law requirements. A HR Manual has been produced which documents the terms of employment, policies and procedures for recruitment, compensation and other benefits, training, performance appraisal, and promotions. All employees of Ciputra Residence have access to the HR Manual.

Employees receive a Contract of Employment when commencing employment at Ciputra Residence which provides details including wages, working hours, overtime compensation, insurance, maternity benefits and leave conditions. Direct employees hired by the company are generally professionals whose salaries are above the regulated minimum wage and are within the reasonable range for their types of employment.

There is no trade union in the company for staff or construction contractors, though the company does not restrict employees’ freedom of association. Grievance channels are built on the existing management system; issues can be escalated to higher levels within the organization as and when needed. As a part of the Construction Management Plan, a grievance mechanism is being established at the corporate and project levels to allow free flow of grievances from contracted workers and Ciputra Residence’s own staff to the relevant line managers for proper resolution.

At the time of IFC’s initial investment and the subsequent labor audit, contractor and subcontractor employment practices followed the standard practice for such workers involved in low rise building construction in Indonesia. Workers did not have employment contracts and there were no formal human resources policies and procedures. In addition, payrolls were managed informally and there were few or no records of payments to workers. The company has since worked with its contractors to ensure that all workers have written contracts with clear terms of employment and that attendance and payroll records are kept and maintained. The company regularly verifies that contractors and subcontractors keep appropriate records. Periodic labor audits have been implemented to review the de
tails of labor contracts and records to verify they meet the requirements of Indonesian law and PS2 Labor and Working Condition. The latest labor audit was conducted in September 2015 and the report concluded that written contracts are in place, the company is working with legal counsel to ensure contracts used by contractors and subcontractors are in line with national requirements and requirement on minimum wage are followed throughout all levels. The next labor audit will be part of the E&S external monitoring that is scheduled in April 2016.

Protecting the Work Force

The minimum age for employment under international standards and Indonesian Labor Law is 15 years, with 18 the minimum for hazardous work, including construction. In compliance with local labor laws, the company requires contractors to check and keep records on the age of all workers. The company checks these records and reports all workers are of age 18 or older. The latest labor audit in September 2015 concluded that there is a centralized screening system in place to prevent any under-age workers. Workers are required wear an identification card to enter a construction site. The company do not use forced labor.

Workers Accommodations

As it is mentioned in the previous section, the company uses local construction contractors with workers typically provided by subcontractors for the construction. Most construction workers at the sites visited come from locations distant from Jakarta. Most workers reside in accommodations provided by contractors/subcontractors. The labor audits periodically assess the worker accommodation and concluded the conditions vary from site to site. The latest labor audit conducted in September 2015 observed that accommodation require improvements. To ensure all workers accommodation will meet health and safety standards, the company will develop a workers accommodation standard in reference with IFC’s requirements on workers accommodation. The standards will be introduced to the contractors/subcontractors and be implemented incrementally to help ensure consistency with key aspects of IFC’s Workers Accommodation standards (ESAP #4).

Labor and Safety Compliance by Contractors

Construction for low-rise buildings is generally undertaken by the informal sector in Indonesia, typically by small to medium-sized companies with limited workforces. Ciputra Residence needs to contract with 15 to 30 construction companies at any one time, with a total workforce each ranging from 800-1000 working for the two largest projects CitraGarden and Citraraya. The contractors’ workforce is either hired directly or indirectly by contractors and, primarily, subcontractors through foremen.

Prior to IFC’s initial investment contractors were independently responsible for ensuring their labor practices were in line with national requirements and Ciputra Residence management did not oversee the performance of those contractors. Following IFC’s investment and completion of
the original labor and OHS audits the company developed a Construction Management Plan and became responsible for contractor OHS and labor performance. As noted previously, the company trains workers, requires labor contracts (and provides templates), requires labor recordkeeping (and again provides templates), and has generally taken steps to bring its contractors and subcontractors into compliance with its newly developed ESMS requirements as well as Indonesian law and PS2.

Personal protection equipment (PPE) such as hamlet, safety boots is supplied by contractors, or in some cases funded through the company. It was reported that workers sometimes resist using PPE at all times, but that compliance is improving. Some PPE appeared new and relatively unused, which attests to the need for further attention and enforcement. Work sites observed were generally safe and largely well-organized which indicated the company and contractors had taken action following contrary findings of the labor audit earlier in 2015. Steel scaffolding was observed and residual bamboo scaffolding was well-grounded in those sites visited, however, the latest labor audit identified a few areas where improvements in scaffolding installation and use are still required. The single biggest issue of concern is working at heights at two or three story buildings where workers were observed on ledges with no barriers or other fall protection, and no harnesses or other PPE to protect against falls. Other safety concerns include heavy manual lifting. So as to address these issues IFC will seek further confirmation of enhanced implementation of the Contractor Management Plan and associated OHS actions to mitigate these risks during the next labor audit (ESAP#5).

First aid facilities were observed at the construction sites, the incident reporting procedure is being implemented and as per the company’s ESMS and Contractor Management Plan all construction workers are provided with medical coverage by the company.

IFC''s assessment considered the company''s operations with regard to resource consumption (water, energy and fuel), efforts to optimize resource inputs, waste minimization and management practices, as well as the storage and handling of hazardous materials used in the construction and operation of facilities.

Pollution Prevention and Resource Conservation:

Environmental impacts and mitigation measures during construction and operation are identified in the AMDAL reports. Impacts during construction are mainly related to land preparation, air emissions (limited number of heavy equipment, vehicles and generators), sewage from domestic use, solid and liquid waste management, stormwater management and nuisance impacts e.g., noise and dust. The construction related impacts are management via the corporate ESMS which include specific control measures such including secondary containment, spill kits, and fire safety controls where hazardous materials, such as cement additives and coating materials will be stored and/or used. At construction sites, the IFC team observed that cement and other such materials were kept isolated and protected from the elements. Water supply during construction and operation are municipal water supply and storm water discharged via the municipal system.

At CitraGarden City and some other developments the company has constructed and operates domestic water treatment plants and/or wastewater treatment plants, particularly when local authorities cannot provide those services. Water treatment plants are operated to meet national standards and are inspected by relevant authorities. The company also monitor the quality and keep records.

The company continuously work with IFC’s Green Buildings team and good neighborhood initiatives to explore specific resource efficiency measures including the use of treated sewage for flushing toilets and watering the gardens to minimize discharge to external environments, the use of star-rated energy efficient electrical appliances and T5/CFL/LED lighting, use of fly ash blended concrete and bricks, rainwater harvesting, the use of water-based paint, thermal insulation for roofing, natural cross-ventilation, blinds for shading, solar water heating systems, implementation of passive solar design principles, low-flow plumbing fixtures to minimize wastage of water and LED lighting in public areas.

Greenhouse Gases (“GHG”): The main source of GHG during the construction phase will be the fuel consumed by construction vehicles and electricity usage. Ciputra Residence will provide the GHG figures to IFC through its Annual Monitoring Report.

The company designs public access buildings to meet all local fire regulations and the requirements of an internationally accepted life safety code. Following IFC’s initial investment, the company submitted to IFC a fire safety master plan that identified major fire risks, applicable codes, standards and regulations, and mitigation measures to follow such that the buildings meet locally recognized code and an internationally accepted life safety code. The master plan was prepared by a qualified professional and is consistent with IFC’s Life and Fire Safety (“L&FS”) requirements. The professional who prepared the L&FS master plan also reviewed L&FS systems testing and commissioning and certified that construction of these systems was carried out in accordance with the accepted design. Proposed structures and facilities have adopted a disaster response plan for earthquakes, fires and other large-scale emergency situations. This is a progressive issues and has to be dealt at ongoing basis, IFC will seek further confirmation to ensure life and fire safety is adequately addressed in pace with the project development.

The company takes measures to protect the community during construction, including clear demarcation (with fencing) of construction areas, restricted access to construction sites, proper illumination of areas, and provision of safety information to visitors and people residing in the projects while construction is being completed.

The company maintains good relations with local communities and its customers. Ciputra Residence offices and staff are located in the project sites where neighboring communities can raise and register any concerns. There were no material concerns raised previously for the completed and ongoing projects. The interested parties can share their concerns with the local authorities who will follow-up and provide feedback.
Following IFC’s initial investment, the company developed a formal grievance mechanism and has posted boxes at strategic locations around its developments; no grievances have been received from construction worker to date. Grievance received from community are mainly after sale service issues and have been addressed with outcomes satisfactorily.

Ciputra Residence will disclose this document in the local prevailing language at JL. Prof. DR. Satrio Kav. 6, Jakarta 12940, Indonesia. For enquiries or concerns about the environmental and social impacts of the Project please contact:
Mr. Agussurja Widjaja, Director
Ciputra Residence
Jl. Prof. DR. Satrio Kav. 6
Jakarta 12940, Indonesia
Phone: +62-21-520-7333
Fax: +62-21-527-4125

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
1. Ciputra Residence to develop a timetable for the implementation of the corporate ESMS to all project sites to be agreeable to both the Company and IFC.	02/29/2016
2. Ciputra Residence to develop a centralized system to monitor, on an on-going basis, the status of implementation of its ESMS. The monitoring system will specifically record the status of corrective actions arising from future labor audits and other monitoring activities such as the findings from the weekly visits of the E&S manager or staff made to project sites.	02/29/2016
3. Ciputra Residence to retain a qualified consultant to undertake periodic ESMS implementation external monitoring (including labor) to ensure the implementation and effectiveness of the ESMS in all sites. The first of such external monitoring to be completed by April 2016.	04/30/2016
4. Ciputra Residence to develop and implement a workers accommodation standard in reference with IFC’s requirements on Workers Accommodation. The standards will be introduced to contractors/subcontractors and implemented incrementally over time to help ensure consistency with key aspects of IFC’s Workers Accommodation standards within the local context.	04/30/2016
5. Ciputra Residence to expediently implement fall protection measures, such as proper scaffolding installation and use as fall prevention measures for all work in heights, as part of the enhanced implementation of the Contractor Management Plan. Fall protection measures shall be fully implemented in the CitraGarden and CitraRaya project sites by the next audit to take place on or before April 2016.	04/30/2016