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 project doesn’t envisage any physical expansion requiring new construction or land acquisition; therefore, PS5 – Land Acquisition and Involuntary Resettlement – does not apply because there is no planned land acquisition as part of this project; in addition, the POS are located in established commercial areas. PS6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources – does not apply because the company operations are located on modified habitat. PS7 – Indigenous Peoples – does not apply because the project will not cause adverse impacts to indigenous peoples. PS8 – Cultural Heritage – does not apply as there is no planned expansion in known cultural heritage areas.

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

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria as is described in the following sections.

Specific key environment, social, health and safety issues reviewed include:
• Corporate environmental and social management capacity to operate in a manner consistent with IFC Performance Standards;
• Working conditions for employees and contract workers;
• Occupational health and safety (OHS);
• Life and fire safety (LFS) in the distribution center and POS;
• Efficient use of energy;
• Management of hazardous waste; and
• Use of private security guards.

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.

In 2013, GPF initiated the implementation of its EHS management system with the objective of being ISO 14001 and OSHAS 18001 independently certified by 2018. Currently, the EHS department consists of an EHS Manager, two coordinators, two technicians, four doctors specialized in occupational medicine and four nurses. The EHS Manager is also responsible for physical security with the support of one coordinator and two supervisors. The EHS Manager reports directly to Operations to ensure EHS becomes integrated into daily operations. The company’s management system is in material compliance with IFC PS1 requirements.



Policy: GPF has an environmental and OHS overarching policy which is communicated to all employees at the time of induction training and through the EHS employee handbook (it is available at http://www.corporaciongpf.com/sostenibilidad/seguridad-salud-ocupacional-y-ambiente/).



Identification of Risks and Impacts: Environmental and OHS risks assessments have been conducted for the company’s operations and all job positions. These are reviewed annually by the EHS coordinators. The company’s doctors and specialized consulting firms (i.e. for the assessment of ergonomic and psychosocial hazards) participate in the annual review of the OHS risk assessments.



Management Programs: Management programs are based on the results of the EHS risk assessments covering both environmental and OHS elements. These include aspects such as required environmental permits, procedures for safe operation of equipment, safe work permits, the implementation of job rotation, the allocation of personal protective equipment (PPE), an occupational health surveillance program, and the emergency preparedness and response plan. All documentation is located in a shared drive.



The EHS department has developed inspection checklists – which include environmental, OHS, and lire and fire safety (LFS) aspects – for the distribution center and the POS. Inspections at the POS are carried annually (SanaSana, OkiDoki) or semiannually (Fybeca) by the EHS technicians. Inspection records with required corrective actions are uploaded in a shared drive and it is the responsibility of each POS chief to implement the corrective actions with the support of the Facilities department. Critical issues identified by the EHS technicians during inspections are also raised to the POS regional coordinator for immediate action. Inspections in the distribution center are conducted semiannually by the OHS joint committee.



The EHS department has also developed a checklist to inspect the documentation (e.g. licenses, insurance) and condition of vehicles that transport company’s personnel, which are mostly owned by independent contractors. Repeated non-compliances can result in termination of the contract. Currently, no inspection is carried out for vehicles transporting merchandise as this service is provided by an external reputable company.



Organizational Capacity and Com
petency: All professionals working in the EHS department have academic background in engineering and extensive training in occupational health and safety. The EHS department is responsible to identify risks and mitigation actions, but each POS chief has the responsibility to implement them at the POS (e.g. obtain permits, install evacuation signage, etc.)



All employees receive EHS training at the time of their induction. EHS policy and rules are also summarized in an EHS employee handbook that is provided to all employees and key contractors. Refresher and in-depth training is conducted in the distribution center by the EHS coordinator. Refresher training in the POS will be regularly provided by each POS chief; for this, the EHS department is designing a toolkit with illustration to be used as support.



OHS joint committees were established in 2013. Members are elected for a two-year period and they can be re-elected. Committee members have been trained in management systems (ISO 14001, OSHAS 18001) and hazards. The OHS joint committee at the distribution center meets monthly to review progress implementation of corrective actions; the EHS coordinator and one doctor are present in all meetings to provide advice but have no vote. Due to geographical constraints, Regional OHS joint committees for the POS meet once every quarter to discuss about general OHS issues that may affect all POS. Meetings are always attended by the EHS coordinator and the EHS Manager.



Emergency preparedness and response: The company has defined scenario-based emergency plans both for the complex of Amaguaña, which includes the distribution center and corporate offices, and for the POS. Plans include an emergency risk assessment; define emergency response procedures and the responsibilities of the emergency team; describe evacuation routes and meeting points; list the number, location and maintenance schedule of emergency detection and response equipment; establish the frequency and structure of emergency drills; describe the protocols for emergency brigades; and establish communication protocols in case of emergencies.



Emergency drills are conducted in the complex of Amaguaña every six months in coordination with the fire department. Drills have taken place in all shifts; results are analyzed to identify and address shortcomings. Emergency drills are also conducted in all POS; employees are trained in the use of fire extinguishers and first aid, and instructed to safely direct customers towards the evacuation routes. Emergency drills in POS located inside shopping malls are organized in collaboration with the administration of the shopping mall.



In 2014, GPF installed an NFPA-compliant fire detection and suppression system in the complex of Amaguaña; sprinklers have been installed at the distribution center, and the corporate office is equipped with fire hoses. One employee from the Facilities department has been trained to weekly inspect and run the
pump room, and the system is maintained annually by an authorized provider.



Monitoring and Review: GPF has a monitoring program – including dates, responsible and resources – that covers all EHS risk areas. Senior management regularly reviews the effectiveness of the EHS management system and provides the resources to implement preventive and corrective actions.

Human Resources Policies and Procedures: GPF has documented policies and procedures for recruitment, selection, hiring and termination. All HR policies and procedures are uploaded in the company’s intranet portal and are accessible to all employees.



Working Conditions and Terms of Employment: The Internal Work Regulations - dutifully approved by the Ministry of Labor – inform employees about their rights and responsibilities, including type of employment contracts, work schedules, working hours overtime arrangements, wage and benefits, wage deductions, breaks, rest days, holidays, leave, access to training, performance evaluations, disciplinary procedures, and the right to work in an environment free of harassment and discrimination. Employees are informed of their rights and responsibilities at the time of hiring and when any change takes place. The Internal Work Regulations are also accessible in the company’s intranet portal.



GPF has approximately 5,000 employees, ninety-one percent (91%) of which have open-ended contracts, seven percent (7%) have part-time contracts, and the remaining two percent (2%) have temporary contracts for a probationary period. Regular services contracted to third parties are physical security, transport of merchandise and personnel, home delivery services from Fybeca’s POS, catering, and landscaping.



Wages have three components: legal wage and benefits, variable remuneration, and additional benefits. Legal wages correspond to the sectoral minimum wages set annually by the Ministry of Labor; variable remuneration is linked to employee’s performance and represents ten to forty percent (10-40%) of total compensation. In the case of operational staff, it can be up to 40% and is also dependent on unit team goals. In the case of corporate staff, it can be up to 16% when the individual, the team unit, and the company exceed the defined goals. Additional benefits can include transportation, food, uniforms and private health insurance. Monthly payrolls – itemizing compensation for ordinary, overtime and night hours, variable remuneration (bonus) and wage deductions – are uploaded in the company’s intranet website. Employees have fifteen (15) calendar days to present claims through the system. Ninety percent (90%) of the employees regularly access the intranet portal; computers are available in the distribution center and POS for employees to access the portal.



Overtime is managed by each individual POS and is regularly controlled by HR to avoid excesses and ensure legal compliance.



Workers’ Organizations: GPF indicated it does not restrict workers’ rights to form workers’ organizations. In 2014, two workers’ organizations were established, the Sindicato de trabajadores de Provefarma, which is part of the Confederación ecuatoriana de organizaciones sindicales libres (CEOSL), and the Asociación de empleados de Provefarma. The company provides adequate facilities to both organizations to conduct its activi
ties. The Assistant manager of labor relations and representatives of both organizations meet monthly to review issues related to employees’ wellbeing. Meetings with senior management (CEO or COO) are scheduled quarterly. Currently, neither of the organizations are authorized to negotiate collective bargaining agreements as their membership – approximately ten percent (10%) of Provefarma’s employees – does not reach 50% +1, which is required by the Ecuadorian legislation to negotiate collective bargaining agreements. The company will document and communicate to all employees its policy of non-discrimination against workers who participate, or seek to participate in workers’ organizations (ESAP #1).



Non-discrimination and Equal Opportunity: Job descriptions based on required competencies have been formulated for all positions in the company. No distinction based on gender, age, ethnicity, race or disability is made at the time of recruitment, selection and hiring. The percentage of women in the company is approx. sixty percent (60%) and forty percent (40%) at managerial level. The company complies with Art. 42 of the Ecuadorian Labor Code, which requires companies to recruit at least four percent (4%) of its work force among people with disabilities.



A structured career plan – which includes an extensive 3-year training program – has been established for all employees working in retail, which represent more than eighty percent (80%) of the company’s workforce. Since the establishment of the new organizational development strategy in 2013, staff turnover has decreased from 35.10% to 26.42%.



Retrenchment: In case the implementation of the project requires staff optimization, GPF will assess alternatives to retrenchment prior to implementing any collective dismissals. If collective dismissals are unavoidable, the company will develop and implement a retrenchment plan consistent with PS 2 to reduce adverse impacts of retrenchment on workers. The retrenchment plan will be based on the principles of non-discrimination. All outstanding payments, social security benefits and pension contributions, and severance payments will be paid on or before termination of the working relationship to the workers. Prior to implementation, the retrenchment plan shall be submitted to IFC for review and agreement.



Grievance Mechanism: Since 2013, GPF has employed the services of an independent company to manage a whistleblowing and grievances hotline: GPF Contesta. The use of GPF Contesta has been limited. Most internal complaints are therefore still channeled through reporting lines, but no documented procedure exists in this regards. GPF shall institutionalize an internal complaint management and resolution mechanism (grievance mechanism). This shall include the documentation and communication of procedures to register and investigate complaints, and communicate back decisions taken. The grievance mechanism shall allow for confidential and anonymous
complaints. (ESAP #2)



Protecting the Work Force: GPF does not employ minors or any type of involuntary or compulsory labor. The company is member of the “Red de empresas por la erradicación de trabajo infantil”, an organization aimed to eradicate child labor. Together with UNICEF, the Ministry of Labor and other member companies, they share good practices to eliminate child labor not only in their companies but also their value chains. All employees, contractors, and suppliers of GPF must take a test, which increases their level of awareness of what is child labor and what are its negative impacts. Contracts with suppliers and contractors include provisions on the prohibition of child labor and forced labor; non-compliance is motive for the anticipated termination of the contract. Contractors with the highest risk for child labor - gardening series, catering, and POS remodeling – are checked regularly.



Workers engaged by Third Parties: Contracts with contractors also include provisions to guarantee that their workers have been hired legally and receive wages and benefits as established by law. Contractors are also obliged to present under request, documents that certify the payment of wages and to the social security system.



Occupational Health and Safety: The EHS department has developed OHS risk matrixes for each job position. Management programs – including procedures, training, and allocation of personal protective equipment (PPE) – are based on the result of these analyses, which are reviewed annually. The company has also implemented an occupational health surveillance program focused on ergonomic assessments, which has been identified as a significant risk. Ergonomic microbreaks (pausa activa) have been introduced among workers in the distribution center to reduce the risk of workplace musculoskeletal disorders.



GPF maintains records of work-related lost-time injuries and illnesses among its employees. There were thirty one (31) cases of workplace injuries for the 2015 calendar year. The lost time frequency rate (LTIFR, injuries per million hours worked; and at least one lost day) for this period is 3.54, which is lower than the industry average for wholesale and retail trade LTIFR in the US at 5.5 as calculated in 2013. No records are kept for contractors (e.g. home delivery, physical security, catering). GPF shall regularly collect workplace lost-time injury records for - all direct workers and contracted workers that regularly provide services to the company and shall report them in the Annual Monitoring Report (AMR) to be presented to IFC.

Resource Efficiency: In 2015, the company measured the carbon footprint of the distribution center, corporate building and seven representative POS. From this exercise, lighting in the POS was identified as the area with the highest energy consumption. Therefore, the company has decided that all new or remodeled POS will be equipped with energy-efficient LED lighting technology.



Average electricity consumption in POS is 345 kWh/m2, averaging 150 kWh/m2 for POS located in temperate climates and 500 kWh/m2 for POS in tropical climates. The estimated GHG emissions of Corporación GPF are about 19,800 tons of CO2 eq/year; this number does not include emissions from transportation of merchandise and personnel, which are contracted to third parties.



Wastewater Treatment: In 2014, GPF built a wastewater treatment plant to treat the wastewater from its corporate building and distribution centers located in Amaguaña (outskirts of Quito) before its release to a water body. An employee from the Facilities department has been trained to operate and maintain the plant. Treated wastewater is sampled and analyzed every quarter by an accredited laboratory. The last physical-chemical analyses conducted in November 2015 complied with the guidelines values for treated sanitary sewage discharges of the World Bank Group (WBG) General EHS Guidelines. Effluents from POS are only sanitary wastewater and are discharged to municipal sewerage.



Solid waste management: GPF has a program to reduce and recycle packaging materials, which includes the use of reusable plastic containers that are returned to suppliers, and the return of all packaging material from the POS to the distribution center for its classification and recycling. In 2014, 36 tons of paper, 362 tons of cardboard, and 13 tons of plastic and scrap were recycled. Recycling bins are located in the storefront all POS for the recycling of plastics and paper by the Municipality.



Hazardous waste management: In 2014, GPF generated 21 tons of hazardous waste, mostly consisting of expired and damaged medicines. The company is authorized as a hazardous waste generator by the Ministry of Environment and it only uses authorized service providers to ensure hazardous wastes are destroyed and disposed in an environmental sound manner. Expired and damaged medicines and medical waste (Fybeca has 3 pharmacies that offer limited medical services such as injections) are treated and disposed only by authorized companies.



As transportation of goods and personnel is provided by external contractors, GPF is in the process of implementing a system to ensure that its contractors only utilize approved service providers for the change of oil and tires.

Infrastructure and Equipment Design and Safety / Life and Fire Safety (LFS): The EHS Department has developed a checklist – which includes LFS requirements – to be used by the Facilities Department when remodeling or opening new POS. All POS have fire detection and alarm systems, emergency lighting, evacuation signage, and the required number of fire extinguishers and exit points. All POS have fire permits in place, which are issued by each city’s fire department and are a requisite to obtain the operations permit by the municipality.

Conformance with LFS requirements inside the POS is regularly audited by two EHS Coordinators (see also section PS 1 – Management Programs). The company will reevaluate the LFS systems in shopping centers where POS are located to ensure that clients and workers can evacuate safely in case of fire or other emergencies (ESAP #3). In addition, in case of automatic sliding doors installed in any POS or company’s facility, the company will ensure adequate egress in the case of power failure (ESAP #4).

Security Personnel: Security services are provided by a specialized and well recognized company. Security personnel is located in the corporate office, distribution center, and selected POS. Posted guards are unarmed and they are regularly trained in customer service protocols, progressive use of force and protection of life, and first aid. POS are monitored through CCTV, and armed responses are sent to the POS only under request. Coordination of police response is arranged through well-defined internal protocols. The private security contractor and Corporación GPF’s physical security supervisor and two coordinators conduct regular visits to verify that security guards comply with the company’s code of conduct and their job descriptions.

Complaints related to the non-appropriate conduct of security personnel are handled by each POS chief, who can request his replacement.

Since 2011, GPF has been publishing its sustainability report following the Global Reporting Initiative (GRI) guidelines (it is available at http://www.corporaciongpf.com/sostenibilidad/memoria-corporativa/). The 2014 GPF sustainability report obtained the G4 “Materiality Matters” recognition by GRI, which formally acknowledges that the report focuses on those issues that are most important to the business and its stakeholders. As part of its 2014 GRI sustainability report, GPF conducted a stakeholder mapping and identified the main challenges to be addressed to maintain constructive relationships with employees, workers’ organizations, shareholders, suppliers, contractors, authorities and clients.

Stakeholders can contact the company through the numbers provided in the webpages of Corporación GPF, Fybeca, SanaSana, and Okidoki, and can directly post comments in the facebook pages of Fybeca and SanaSana. The company has an open line of communication with suppliers and contractors. The offices of Corporate Affairs and Risk Management manage the external complaints.

GPF has also established strategic alliances with the Ecuadorian Red Cross and the Junta de Beneficencia de Guayaquil – a private non-profit charity institution founded in 1888 that provides social care to millions of low-income Ecuadorians – to offer health care services to disadvantage groups. More than 2.7 million USD have been invested in these initiatives from 2010 to 2015; approximately two-thirds of these funds have been collected through clients’ donations at the POS.

Contact Person: Hellen Andersen
Company Name: Director Desarrollo Organizacional
Address: Corporación GPF. Av. de los Shyris Km 5 ½ vía Sangolquí-Amaguaña. Quito, Ecuador.
Email: mailto:hcandersenj@corporaciongpf.com
Phone: (593-2) 3829800

Broad Community Support is not applicable for this project

Fybeca(37855) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Document and communicate the company’s policy on non-discrimination against workers that participate, or seek to participate, in workers’ organizations and collective bargaining.	31-Dec-2016	Completed	Completed	12/31/2016
Implement a grievance mechanism for workers and their organizations to raise workplace concerns. The mechanism shall involve an appropriate level of management and address concerns promptly using an understandable and transparent process that provides timely feedback to those concerned, without any retribution. The mechanism shall allow confidential and anonymous complaints to be raised and addressed.	31-Dec-2016	Completed	Completed	5/1/2017
Ensure that workers and clients of points of sales (POS) located inside shopping centers can safely evacuate the shopping center in case of a fire or an emergency.	31-Jul-2017	In progress	Under discussion with IFC Client
Ensure that all automatic sliding doors in corporate offices and POS can be easily open in the case of power failure.	31-Jul-2017	In progress	Under discussion with IFC Client