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 which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key E&S risks and issues associated with this Category B Project include: social and environmental assessment of the impacts of the Project during both construction and operations; company’s capacity and ability to implement environment, health and safety management systems both at corporate level and facilities level; engagement with local communities in accordance with local requirements and IFC Performance Standards (PSs); assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant PSs both during construction and operation; resource efficiency of the operations (mainly water and energy); management of organic solvent usage and emissions of volatile organic compounds, other gaseous compounds and particulates; monitoring and management of wastewater treatment and discharge; solid/hazardous waste management; life and fire safety management including emergency preparedness and response; and community safety.

IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s 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 implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Assessment : Considering that the API manufacturing facilities are covered under the category of bulk drugs and intermediates, excluding drug formulations, as defined in the Indian environment impact assessment rules, the company is required to conduct Environmental and Social Impact Assessment (ESIA) studies for any major expansion at the existing API facility or for any new API facilities.  The company has completed such an ESIA study as per applicable legal requirements for expansion of its Bonthapally facility and is in the process of obtaining the required environmental clearance from the State Level EIA Authority of Telangana. Considering that this is an expansion within an existing facility located in an industrial area, the ESIA covers all key E&S risks and impacts. For the construction of new Vizag facility, the company was not required to conduct the ESIA as an ESIA has been conducted on an industrial area level by the developer and accordingly the common infrastructure is provided for the industrial area. The company has obtained the required permits for establishment of the facility from the State Pollution Control Board.

Policy and management programs :  The company has corporate quality and environmental, occupational, health and safety (OHS) policies, which guide the development and implementation of the operational procedures at each facility. 

All the Hyderabad facilities (i.e. Jeedimetla, Bonthapally and Gagillapur) have implemented environment and OHS management systems in line with the requirements of ISO 14001 and OHSAS 18001. As the Vizag facility was acquired from another company, Granules is planning to implement similar management systems at that facility by 31 ^st  Dec 2018, however, the facility has implemented key environment and OHS procedures.

Also, all API facilities are  approved as per Good Manufacturing Requirements (GMP) requirements of United States Food and Drug Administration (USFDA). Additionally, they have approvals from a number of other agencies including World Health Organization (WHO), European Directorate for Quality of Medicines (EDQM), Infarmed (National Authority of Medicines and Health Products, I.P., Portugal), Korea Food and Drug Administration (KFDA), and COFEPRIS (Federal Commission for Protection against Sanitary Risks, Mexico).  The Gagillapur facility is also approved by USFDA, Infarmed,  South Africa’s Medicines Control Council (MCC-SA), Therapeutic Goods Administration (TGA), Australia and COFEPRIS. 

Implementation of the environment and OHS management systems was noted to be adequate at the visited operational facilities (except a few areas identified in the ESRS in the following sub-sections). As per the ESAP, the company will implement similar environment and OHS management systems at its operational Vizag facility as well as the new Vizag facility. 

Identification of Risks and Impacts : Aspect-impact analysis and risk assessments are carried out for environment and OHS aspects at all facilities as per ISO 14001 and OHSAS 18001 requirements. Also, Hazard and Operability (HAZOP) studies are completed for any change in the manufacturing processes. Environmental risks are identified as per legal requirements and the aspect-impact identification procedure under the ISO 14001 requirements. 

Organizational Capacity and Competency : The company has a Senior Manager – EHS who is responsible for EHS management of all Hyderabad facilities. Additionally, there is an EHS team at each of the facilities comprising of EHS Managers/coordinators, safety officers and other staff who are responsible for implementing facility specific EHS systems. The EHS managers/coordinators report to the head of operations at the respective facilities. The EHS managers/coordinators at the Hyderabad facilities also work with the Senior Manager-EHS to ensure consistent implementation of the EHS procedures. 

The company had conducted a pilot program at its Jeedimetla facility as part of which they had identified owners of certain safety procedures (like incident analysis, safety observations, training and communication, process risk management) and zone owners responsible for implementation in their zones. The pilot was successful and now the company is in the process of rolling the same out at its Bonthapally facility. Similarly the company will roll this out to other facilities.      

As set forth in the ESAP, the company will strengthen the E&S organization by appointing/identifying a corporate EHS manager who will be responsible for implementation of E&S management systems at all facilities including the existing and new Vizag facilities. 

Emergency Preparedness and Response :  In accordance with local requirements, Granules provides fire safety equipment at its facilities based on the nature of risks involved. The fire safety system at visited facilities included portable fire extinguishers (both cylinder type and ceiling mounted modular ones), fire hydrant systems with dedicated fire water storage, water and foam monitors, sprinklers (in certain storage areas), smoke detectors and fire alarms. Required number of personnel was noted to be trained in fire safety and emergency response at the visited facilities.  There were emergency response kits (e.g., spill kits, self-contained breathing apparatus boxes) well identifiable and located at various locations, based on expected risks, in the facilities visited by IFC.

It was noted that the on-site emergency response plans (OSEPs) are developed for all its facilities covering various types of emergencies. The assembly points are identified and marked. Emergency exits were noted to be clearly marked and have emergency lighting provisions. However, areas of improvements were noted in conducting mock drills covering all kinds of emergencies at the visited operational facilities. Thus as set forth in the ESAP, the company will develop an annual calendar which will be include drills for all potential emergencies and all shifts. The new Vizag facility will also develop an OSEP and conduct regular trainings and mock drills. 

Monitoring and Review : All facilities conduct regular environmental monitoring including ambient air quality, stack emissions (for both process and utility stacks), effluent quality, ambient noise, water quality etc. in order to ensure compliance with the applicable legal requirements and standards. The results were noted to be meeting the legal requirements and WBG EHS Guidelines. 

Also, at Hyderabad facilities, regular internal audits (required under EMS/OHS management system) are carried out. The internal audit system needs to be implemented at the Vizag facility and the same will be implemented as part of the implementation of EMS/OHS management systems.  In terms of external audits, safety audits are conducted as per statutory requirements (for API manufacturing facilities). Third party certification bodies audit the certified facilities periodically as part of the management system certification/surveillance protocols. The regulatory agencies of various countries (mentioned above), as well as clients also carry out GMP audits on a periodic basis. Management review meetings (MRMs) and safety committee meetings are conducted regularly at facility to review EHS performance.

Currently the reporting of the EHS performance is limited to the facility level. As set forth in the ESAP, the company will strengthen the monitoring and reporting processes by identifying key performance indicators (KPIs) on EHS performance which are monitored at each facility and used for benchmarking at the corporate level. The corporate E&S manager (discussed above) will ensure regular monitoring of these KPIs at all facilities and report the same to the senior management of the company.

Granules has a total workforce of 2350 employees. Also, the company employs an additional 1300 contract workers in its facilities. The contract workers are typically involved in material transfer, loading-unloading, helpers in utilities (boilers/chillers), housekeeping, security and gardening. After the proposed expansion, the number employees is expected to increase by 400 and number of contract workers is expected to increase by 150.

HR Policy and Management:  The company has documented HR policies which are  available on the company’s intranet such that they are accessible to employees.  All employees sign a contract with the company at the time of employment. The contract describes the working conditions and terms of employment. The employees are provided all the legal benefits including provident fund (PF), employee state insurance (ESI) coverage, gratuity, leave etc. and are covered under the personal accident policy as well as a medical insurance policy. Based on the review of the data at visited facilities, the working conditions and terms of employment for the employees was noted to be meeting the legal requirements.

Non-discrimination : The company has a specific policy on equal opportunity and non-discrimination. 

Child labor and forced labor : The company has a specific policy on child labor. Based on the visits, no instances of forced labor were noted.  

Freedom of association and grievance mechanism : Granules does not restrict freedom of association of its employees. There are worker-management committees at each of the other facilities, all of which include mechanisms for identifying, investigating and resolving any employee grievances.

As per the ESAP, the company will document a specific grievance redressal policy in line with PS2 requirements including provisions on anonymously raising grievances. Also, the policy will be communicated to all employees. 

Occupational Health and Safety (OHS):  As discussed above under PS1, the company will implement certified OHS management system (as per OHSAS 18001 requirements) at its existing and under construction Vizag facilities.  T he company has been implementing safety training programs to contractors.

All Hyderabad facilities and the Vizag facilities have a number of standard operating procedures (SOPs) on OHS which include safety rules and training, permit-to-work (for working at height, hot work, entry into confined spaces, etc.), fire safety, spill control and emergency response, personal protective equipment (PPE) usage, safety committee, use of material safety data sheets (MSDSs), accident reporting and investigation. The visited  facilities were noted to conduct risk assessment for their operations and undertake required safety measures. HAZOP studies are conducted for new projects or any changes in the processes at the facilities. Based on the observations at the visited facilities, safety induction is provided to employees and contract workers. Regular safety trainings are provided to employees. Although basic safety awareness is provided to the contract workers, there is a scope for improvement in safety training provided to contract workers. As set forth in the ESAP, the company will identify specific training programs to be provided to contract workers (e.g. waste management, chemicals management, emergency response, MSDSs) to be added their training calendar. The training programs will be included in the training calendar of all facilities. 

Required safety equipment is provided including PPE depending on hazards related to the type of task being performed and the production unit, including hard hats, safety shoes, safety glasses, masks or respirators (including self-contained breathing apparatuses) and hearing protection. PPE usage was noted as being adequate at the visited facilities. The use of partitioned workplace areas with differential air pressure was observed at the visited facilities in certain areas. Safety signage was noted to be provided, as needed, in English or other local languages as applicable at the facilities. 

Regular health checkups are conducted for both employees and contract workers. Workplace monitoring, including noise and particulate is carried out as per statutory requirements. The results were noted to be in compliance with the applicable national standards and WBG EHS guidelines. As set forth in the ESAP, the company will initiate VOCs monitoring at all facilities (wherever solvents are used in the process) and share sample of such results will IFC. The results will be regularly reported in the annual monitoring reports (AMRs) submitted to IFC. 

The company provides well-equipped Occupational Health Centers (OHC), staffed with male nurses with a local doctor on call, which caters to both employees and contract workers. 

All OHS incidents/accidents are recorded at the facilities. As per available records for last three financial years in the AMRs (2013-14, 2014-15 and 2015-16), no lost time incidents (LTIs) are reported at any of the Hyderabad facilities. Also, based on a review of records during appraisal, no LTIs are reported at the Vizag facility, however, there was a boiler explosion in March 2015 which resulted in property damage but no injuries. As per the ESAP, the company will improve the implementation of the SOP on accident reporting and investigation and the format of recording of incidents/accidents will be changed to include detailed investigation, root cause analysis and corrective and preventive actions in the same format to ensure all incidents/accidents/near missed are investigated in detail. 

Third party workers and construction safety:   As mentioned above, Granules hires contract workers at its facilities which are supervised by the facility’s relevant management teams (on HR, engineering, production).  All contract workers are provided EHS induction and basic safety awareness before start of the work. 

The facility HR departments monitor contractor compliance with various statutory compliance requirements on providing wages, working hours and benefits to their workers. Granules also requires contractors to provide evidence of their compliance with applicable legal compliance requirements every month before clearance of their bills.  The wages and overtime payment for the contract workers were noted to be as per statutory requirements. 

As regards construction safety, the company has contracted a common contractor for construction of its Vizag facility as well as expansion project at Bonthapally. The contractor has a documented safety manual and a full time safety team at both the construction sites. Safety induction is provided to all workers and tool box meetings are conducted regularly. Required PPE are provided by the contractor and during the site visit, the use of PPE (including helmets, safety shoes, safety vests, safety belts for working at height, face shield and gloves for welding) was noted to be adequate during the visit. Adequate safety signages and barricading were noted to be provided at the construction sites. 

The contractor’s safety officer monitors construction operations at the sites including sub-contractors’ operations. All incidents and accidents are recorded and investigated. As per the records available during the appraisal, no LTIs are reported at the sites.

Air Emissions : The main emissions sources at Granules facilities are the process emission stacks and vents, and the utility stacks including boilers and back-up diesel generators. All process vents are provided with alkali or acid scrubbers whereas the boiler stacks are provided with bag filters. VOCs emissions are condensed and solvents are recovered through solvent recovery plants (mainly a distillation process), or sent to authorized service providers for recovery. At Vizag, the boiler is a furnace oil (FO) based boiler. 

Ambient air quality (AAQ) and process emissions are monitored on a monthly basis at every facility. Process and power/steam generation stack emission monitoring results and AAQ monitoring results were noted to be compliant with the limits specified for the facilities by the relevant State Pollution Control Boards, National Ambient Air Quality Standards (NAAQS) and relevant WBG EHS Guidelines. 

Water Consumption and Wastewater Discharges : The source of water at the visited facilities was from the industrial area supply and same source will be used for the new Vizag facility. The water is pre-treated by the industrial area authority and is further treated at the facilities with filtration, ion exchange and reverse osmosis.  At Vizag, the water is further treated with filtration, softener and EDI (electro-deionization).

As regards wastewater, the high chemical oxygen demand (COD) and low COD effluents are segregated. At the Vizag facility, the effluents are pumped to the Common Effluent Treatment Plant (CETP) for the industrial area. The new facility will follow the same system and pump the effluent to the CETP. As the effluents are expected to contain solvents, the company is providing hoods and scrubber for the effluent storage tanks at both the existing and new Vizag facilities. 

Similarly, at the Jeedimetla and Gagillapur facilities, the process effluents are pumped to the CETP for treatment and disposal. At Bonthapally facility, the high COD effluent is first treated through a stripper (for recovery of solvents) and multi-effect evaporator (MEE). The condensate from the MEE is mixed with the low COD effluent whereas the remaining slurry is dried in an agitated thin film dryer and waste salts are landfilled at government approved treatment, storage and disposal facilities (TSDFs). The low COD effluent is treated through physico-chemical treatment) followed by biological treatment and reverse osmosis (RO). The treated water from the RO is utilized for cooling tower make-up and gardening. Quality of untreated effluents are regularly monitored by the CETP operators for key parameters before acceptance for treatment. The CETP operator ensures treated effluent are in compliance with the national standards. 

The domestic sewage is treated either through septic tanks or through sewage treatment plant (STP) at the facilities. At new Vizag facility, the domestic sewage is treated either through septic tanks and mix with low TDS stream and sent to CETP of the developer or through sewage treatment plant (STP) at the facilities. 

Waste Management : The major streams of hazardous waste generated at the facilities include inorganic salts from MEEs, spent solvents, and used oil. The wastes were noted to be stored in designated and appropriately designed storage areas. All hazardous waste streams are sent to government licensed service providers or TSDFs for disposal. 

The non-hazardous waste streams like plastic, metal and packaging waste are segregated and sold to external agencies for further recycling. 

Hazardous Materials Management : Production processes at Granules facilities require the use of a number of hazardous chemicals in various quantities especially the API facilities where production processes require the storage of a number of chemicals in bulk including different solvents (e.g. hexane, toluene, acetone, methylene dichloride, ethyl acetate). The production processes at the Bonthapally facility currently do not involve usage of  any  solvents, however, the expanded operations will involve use of solvents. Similarly, at the new Vizag facility, solvents will be used. 

Hazardous material management was found to be adequate at the facilities visited by IFC. Hazardous materials handled at the production facilities were properly assessed and classified for associated hazards. MSDSs were found to be properly maintained and readily available in all production facilities and chemicals were noted to be stored as per their compatibility. Appropriate signage was noted to be provided. Secondary containment as well as other safety provisions, including spill control and response were provided as needed, at the visited facilities for their storage. 

Training in chemical handling and emergency situations is provided to employees. As mentioned above, as per the ESAP, the company will strengthen the training provided to contract workers on chemicals management. 

Greenhouse Gas (GHG) emissions : Based on available data on electricity and fuel consumption, t otal annual direct and indirect GHG emissions from the Project will be approximately 31,000 tons of CO 2  equivalent (tCO2e) (Scope-1: 16,000 tons and Scope-2: 15,000 tons).  

Resource efficiency : The engineering teams at all facilities monitor the energy and water consumption and efficiency targets are fixed on an annual basis. The targets are included in the key result areas (KRAs) of various departments.

?   For the new block at its Bonthapally facility, the company has included following key resource efficiency features in the design: Use of high efficiency agitators in place of conventional agitators

?   Dry vacuum pumps installation which reduces the generation of high TDS effluents and the consumption of energy for the treatment of same. 

?   Multiple effects evaporators (MEE) for treatment of process mother liquors instead of using conventional methods like evaporation in reactors. 

?   Top dish insulations for all the major equipment to reduce the losses due to radiation in cases of continuous heating.

?   Continuous drying SFD instead of using the conventional FBD (Fluidized Bed Dryer) which reduces the steam consumption.

?   LED lighting for the new blocks.

?   Recycling of Technical Mother Liquor (TML) and Pharma Mother Liquor (PML) reducing the water consumption.

?   All effluents to be recycled after treatment

?   Utilization of dry vacuum pumps instead of steam jet ejectors reducing the water consumption by avoiding the steam consumption

Emergency Preparedness and Response : All Granules’ facilities  are located in notified industrial areas surrounded by other similar industries. The new Vizag facility is being built within the same industrial area as the existing Vizag facility i.e. JN Pharma City. The industrial areas have adequate access roads and are typically located close to the highways/wide roads.

As mentioned above, detailed On Site Emergency Plan is developed for each facility. The facilities conduct drills on a regular basis, in collaboration with the local fire brigade and  also participate in the offsite emergency mock drills organized by the authorities. The company’s facilities are members of Mutual Aid Response Groups (MARG) of the industrial areas through which nearby companies coordinate and provide mutual support in disaster management in case of an emergency.   

Hazardous Materials Management and Safety:  The company receives the needed raw materials including hazardous chemicals through contracted specialized transport service providers. The hazardous materials are stored in dedicated storage areas with adequate fire safety provisions.  A basic check is performed the vehicle on-site when the vehicles. All solvent tankers are earthed and spark arrestors are provided before unloading. As set forth in the ESAP, the company will document specific procedures for unloading of hazardous chemicals including solvents which will be displayed at the storage locations. Also, the company will document specific instructions for its transport service providers and drivers in case of  hazardous material transportation which will include (a) proper maintenance of vehicles; (b) proper documentation of the vehicle and driver like driving license, pollution under control (PUC) certificate; (c) no carrying sources of fire on the vehicles like  stove, kerosene oil, match box, gas lighter; and (d) maintaining MSDSs and Transport Emergency (TREM) cards for the transportation of hazardous materials and solvents. The requirements will be included in the contracts signed with the transport service providers.

Security Personnel : Unarmed security personnel are employed at all facilities through security contractors. The company briefs security personnel about policies on child labor and provides training on basic safety, first-aid, fire safety and emergency response.  The company has instructed security guards at each plant to refer any inquiries from the community to the relevant manager, up to and including the MD, as required given the nature of the inquiry.

Granules has a strong commitment to community engagement and social development in the areas where its facilities are located. The company works with local Resident Welfare Associations and other Non-Governmental Organizations (NGOs) at each facility (generally managed by HR) to identify community needs and determine which of these the company is able to support. At all facilities, Granules is supporting local community in higher education, water supply to the residents, afforestation projects, extending support for laying roads and street lights and maintenance of student hostels nearby. Also, the company is extending support for construction of temples, provision of furniture to the schools and beds to hospitals.

E&S related risks and impacts of Granules’ operations have been disclosed in the previous ESRSs as mentioned above. Also, the ESIA reports for the new projects are disclosed on the website of State  Level EIA Authority of Telangana.

The  company maintains contacts and interacts with neighboring communities as  part of its CSR and other community development programs  such as meetings, medical camps,  health cent er amenities, and other social activities.

The Company will disclose this ESRS and the ESAP locally at the following addresses:

Granules India Limited

Plot No. 160/A & 161/E, Gagillapur Village

Qutubullapur Mandal

Rangareddy District 

Telangana - 500 043.

Tel: +91   8418 3066 6400

Granules India Limited

Temple Road, Bonthapally Village 

Jinnaram Mandal, Medak District

Telangana. 

Tel: +91 8458- 306600

Granules India Limited

Plot No. 30, Jawaharlal Nehru Pharma City 

Parawada Mandal, Visakapatnam

Andhra Pradesh - 530019

Tel: +91-08924 236696

Enquiries and/or comments about the Project may be directed to:

Mr.R.Ramraj, AVP - Formulations  

Granules India Limited

Plot No. 160/A & 161/E, Gagillapur Village

Qutubullapur Mandal

Rangareddy District 

Telangana - 500 043.

Tel: +91   8418 3066 6400

Email id:  Ramraj.r@granulesindia.com

For Bonthapally facility:

Mr. PN Baskaran 

AVP - Operations

Granules India Limited

Temple Road, Bonthapally Village 

Jinnaram Mandal, Medak District

Telangana. 

Tel: +91 99631 73311

Email id:    Baskaran.pn@granulesindia.com   

For Existing and New Vizag facilities:

Mr.Vedprakah Ragate 

Vice President – Operations

Granules India Limited

Plot No. 30, Jawaharlal Nehru Pharma City 

Parawada Mandal, Visakapatnam

Andhra Pradesh - 530019

Email Id :   Vedprakash.ragate@granulesindia.com

Tel: +91 9963629642.