The Group purchases lands for further developments on a willing buyer - willing seller principle. No involuntary resettlement or economic displacement was caused as a result of the previous acquisition, meaning that PS 5: Land Acquisition and Involuntary Resettlement was not found relevant to the completed and on-going developments. It is expected that the Group will follow this practice in future. NEPI Rockcastle will realize its projects in developed residential/ industrial, commercial areas with no presence of individuals classified as indigenous, biodiversity or cultural heritage issues. Thus, PS 6: Biodiversity Conservation and Sustainable Management of Living Resources, PS7: Indigenous Peoples and PS8: Cultural Heritage are not found relevant to this project.  

The proposed investment is expected to have limited adverse environmental and social impacts during construction and operation. Impacts are expected to primarily occur on site, with construction impacts mainly being short term and not significant. The predicted adverse impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria, as described in the following sections. Accordingly, this is a Category B project as per IFC’s Environmental and Social Sustainability Policy.
 
Key environmental and social issues applicable for this investment are: (i) effectiveness of the company's management systems, including its internal capacity and staffing, to undertake its operations in a manner that is consistent with IFC Performance Standards; (ii) provision of adequate level of life and fire safety in shopping malls, retail buildings, and office buildings; (iii) energy and resource efficiency features in the design and operation of buildings; (iv) design and construction of new assets in accordance with internationally accepted building codes and standards.

Management System, Policy and Management Programs: 

Before the merger, NEPI and Rockcastle had their own sustainability policies with commitments to address environmental and social issues, including minimizing environmental impacts by applying of sustainable practices during projects’ design, construction, operation and renovation; reduction of water and energy consumption, improvement of waste management systems; use of environmentally friendly materials; maintaining a healthy and secure work and social environment. The group’s sustainability policy will be based on the same principles. Currently the group is in the development process of their integrated sustainability plan, that will include:

-   sustainable resource management; 

-   sustainability through "green buildings";

-   business integrity through implementation of principles and standards, set out in a code of ethics. 

The group’s E&S management system is in process of ensuring accordance with international standards ISO 9001, ISO 30001 and ISO 14001 and includes operational procedures and sufficient to manage environmental, safety aspects of the group’s operations and developments.

Identification of Risks and Impacts

Environmental impact assessment studies are undertaken prior to any construction project development to get a construction permit as per the national environmental legislation in countries of the company operations. The group’s development team (through external consultants) is responsible for obtaining all permits for its projects, including construction and operational permits. Integral part of such permits are terms for water supply, sewage, electricity, solid waste management, life and fire safety, etc. 

Organizational Capacity and Competency

NEPI’s Rockcastle development teams are responsible for extension / new constructions. The group has in-house expertise and development teams undertake project management responsibilities and oversee a project from its initiation, to selection and appointment of contractors and monitoring the progress of a project. Development teams include permitting specialists responsible for obtaining of all construction, environmental, utility connection permits and approvals. 

The Group enters into construction agreements with contractors who have proven professional capabilities in addition to a track record of completing projects of a similar scope on time and within budget. Construction projects are managed by a qualified construction project management company (CPMC) and supervised by a project manager assigned from a development team. CPMC is responsible for quality control, management and supervision of other contractors engaged for earthworks; construction; facade; roof covering; heating, ventilation and air conditioning; life and fire safety; electrical and plumbing and others type of works. CPMCs are hired through a bidding process and selection requirements among others include proven professional capabilities and experience, availability of HSE management system. 

After putting of a building into operation an asset management team becomes responsible for its management. As a part of asset management team there are coordinators responsible for energy efficiency and utility management, as well as for security, health and safety issues. Existing shopping malls, office buildings have managers and staff in place who manage engineering and other contractors hired for utility and equipment maintenance, waste collection and disposal. 

Under the supervisory board a risk, audit and ethic committees are established to oversee risks and group’s compliance to adopted commitments. 

Emergency Preparedness and Response

For commercial and retail property, it is critical to ensure management of tenants, particularly from the perspective of life and fire safety and emergency preparedness. In addition to designed and maintained passive life and fire safety systems, NEPI conducts fire and emergency evacuation drills regularly. There is no evidence to suggest that the same approach will not be applied by the group in future. 

Monitoring and Review 

As a part of the corporate governance structure the group has established internal control system that allows supervise key performance indicators on the regular basis. The internal management reporting system is designed to track key performance indicators, including energy saving and utility maintenance costs. IFC do not expect material deficiencies in the group’s practices with IFC Performance standards requirements on this subject.

Human Resources Policy and Working Conditions:

The group employs about 400 employees. NEPI Rockcastle is currently developing HR Policies, including equal employment and non-discrimination, gender diversity policy, those addressed core principles consistent with IFC Performance standard 2, including non-tolerance to discrimination, harassment, intimidation or coercion based on race, religion, gender, age, nationality or disability. NEPI had corporate human resources procedures such as code of ethics, internal rules of behavior, whistleblower protection policy, remuneration policy, designed to ensure compliance with national labor regulation. The HR documents were available for all staff. There is no information refuting that the same approach will be applied by NEPI Rockcastle and it is expected that the group will continue promoting the same principles. 

No staff retrenchment has been conducted by NEPI during the previous acquisitions and as a part of this project the Group will adopt the policy framework on human resources management during further acquisitions of assets. New employees are going through an onboarding process on the relevant policies and processes.  

Occupational Health and Safety

As a part of asset management team NEPI has assigned security, health and safety coordinators responsible for managing of health and safety issues in compliance with national law, including staff training to safety rules, first aid measures, evacuation plans and etc.

During the construction phase, NEPI via a competitive bidding process appoints a qualified construction project management company responsible for ensuring compliance to national occupational health and safety requirements of all contractors engaged into the project implementation. CPMC prepares an occupational health and safety management plan for each construction stage and that is agreed contractually with all contractors. Contractors develop project–specific plans to ensure safety in construction, and following their internal procedures undertake regular checks to ensure compliance. The subcontractors must meet the minimum age requirement and have to be socially insured in compliance with Labor Law and this falling under the responsibility of the CPMC.

NEPI Rockcastle is committed to follow sustainability principles during its property design, construction and operation and develop low environmental impact buildings and find ways to reduce running costs and improve working and living environments. Energy efficient measures are considered at design stage, those typically include increasing internal natural light, reducing daytime electricity consumption; use environmentally friendly materials; procurement of energy efficient equipment; use of non ozone-depleting refrigerants in heating and air conditioning systems, installation of LED lighting.

Sustainability performance criteria are considered at new acquisitions and after an asset is in the portfolio, sustainability improvements are proposed for implementation, those mainly include improvement of energy efficiency through reduction of water and energy consumption; improving environmental quality of buildings (i.e. materials / technology replacement).  Existing properties undergo regular retrofit to improve energy efficiency whenever possible and cost effective. Once these criteria are implemented, the building enters the BREEAM certification process.

NEPI Rockcastle holds A-rating energy performance certificate for most of its new buildings in Romania as per national law no. 159/2013 and EU Directive 2010/31/EU on energy performance of buildings and have most of its property BREEAM certified.

NEPI Rockcastle may seek certification of the project against IFC’s EDGE (Excellence in Design for Greater Efficiency), a voluntary program that provides third-party verification of green buildings. 

In accordance with the practices applied by NEPI for projects’ development on brownfields the Group will ensure that comprehensive environmental site assessment of existing soil, groundwater contamination is conducted and decontamination program (if needed) is implemented. 

Operational assets are mainly connected to municipal electricity grids and sewerage system.  There are a few shopping malls which are not connected to municipal sewerage system and thus on-site wastewater treatment with the further discharge to surface water is provided. For such assets, a responsible subsidiary holds environmental permits and ensures that monitoring of discharged water is conducted by hired accredited analytical laboratory. 

Solid waste consists mainly of cardboard paper, plastic and wooden packaging, polystyrene that are collected, sorted and handed over to the local recyclers.  The Group targets all its portfolio buildings to increase a selective waste collection rate. During construction or refurbishing operations wastes generated are collected and disposed by a construction contractor as part of its service agreement.

NEPI Rockcastle evaluates security and safety risks and impacts that could affect the local community during the design, construction, operation of its buildings and establishes mitigation measures. Technical design of new buildings implemented by licensed qualified contractors applies sound environmental and safety engineering principles in accordance with the national EU-based legislation and best practices. Romania is an earthquake zone and the structural design of the buildings complies with Romanian structural and seismic codes, which are harmonized with EUROCODE (European structural design codes). 

During the construction / rehabilitation works the proper fencing, clear demarcation of construction areas as well as safety warnings are ensured to restrict public access to construction sites. 

Fire and Life Safety: 

Life & fire safety practices applied by NEPI were reviewed by IFC as a part of first appraisal engagement.  NEPI ensured that all its facilities are equipped with life and fire safety (L&FS) elements in accordance with the national fire safety code. 

During the technical design fire-safety specification and fire protection measures are implemented in accordance with applicable codes and standards and regulations (national and EU). The buildings are inspected after construction by a state agency, to verify that it was built in accordance with the fire protection plan. L&FS equipment is installed throughout the buildings and includes fire detectors and alarms, sprinklers in all areas; fire doors at all staircases; public address system; portable fire extinguishers; firefighting pumps; fire hoses.

Fire drills are conducted on a regular basis. NEPI had signed contracts with fire brigades and first-aid services located nearby with NEPI’s property to provide assistance in case of emergency. NEPI assets has developed emergency evacuation plan, egress route.

The Group is agreed to adopt a life and safety policy committing to build, operate and maintain its buildings as per EU fire safety code.

Security personnel:

Security services are provided by private agencies licensed by the national law. Security personnel are trained in the use of force for defensive purposes and in an appropriate conduct toward customers, workers and local community. 

NEPI Rockcastle recognizes the importance of stakeholder engagement and ensures disclosure and discussion of environmental impact study results with affected communities for its construction projects as per requirements of national legislation. 

Most of the retail centers have an information point, where customers can address any concerns and complete available complaints form. The issues are reported to a respective asset manager.

Before the merger, NEPI and Rockcastle produced annual reports, those included information on sustainability matters, environmental performance, community engagement activities and those are accessible at their website. As part of JSE listing requirements the group will continue producing group-wide annual report in future to be posted at the web-site  https://nepirockcastle.com/

Contact Person: Mirela Covasa, CFO

Company Name: NEPI Rockcastle PLC

Address:  2nd Floor,  30 Athol Street, Douglas, Isle of Man, 

IM1 1JB

Email: mirela.covasa@nepirockcastle.com 

Phone: +40 21 232 1398