Environmental and Social Assessment and Management System
The company’s overseas solar assets generally have low environmental and social impacts due to the nature of solar projects and the small size of individual projects (1MW-15 MW). To mitigate the impacts in its projects, the company utilizes its corporate ESMS, which serves larger scale solar power projects in China and its PV-manufacturing business. The company has direct access to domestic operational and technical staff and uses their expertise in its overseas business including for site selection and management of contractors.
The company will formalize its environmental and social procedures used in overseas operations and update its ESMS for overseas assets, which will include an E&S Policy and Health & Safety (H&S) Policy, an ESHS Management Plan (ESMP) with monitoring actions, an overarching system for reporting and tracking non-compliances, and an organizational framework as described in ESAP item #1. As mentioned above, the company will enhance and formalize a comprehensive Environmental and Social Management System (ESMS) for its overseas operations commensurate with the risks of solar projects to guide its asset acquisition, project development and operations as detailed in ESAP item #1. The company will appoint a dedicated Environmental, Social, Health and Safety (ESHS) Manager for its overseas operations as detailed in ESAP items #2. As part of its updated ESMS, the company will develop comprehensive environmental and social due diligence process for its future non-Chinese asset acquisitions and demonstrate that all new acquisitions will comply with IFC PS as detailed in ESAP item #3. For all new acquisitions before starting construction of new projects, the company will develop, in partnership with its construction, operation and management contractors, a project-specific Environmental and Social Management Plan (ESMP) to comply with IFC PS as described in ESAP item #4.
Policy and Management Programs
The company’s Environmental and Social Policy is built into its four sets of corporate level procedures and requirements as follows: i) environmental protection management procedures; ii) emergency preparedness and response planning procedures and guidelines; iii) safety procedures; and iv) new asset acquisition due diligence procedures.
Corporate level key performance indicators (KPI) are embedded into each of the corporate procedures, and matching KPIs can be found in operational level procedures. Operational staff use a template approved by corporate departments to report on performance against these KPIs. Reporting against some of the parameters is done on an exception basis (e.g. electrical safety inspection status is reported regularly regardless of whether there is an incident, whereas safety non-compliances are only reported as incidents occur). These procedures and KPIs and the corresponding reporting mechanisms form the key elements of the company’s ESMS. The company exercises a document control system on the above procedures, and its Hangzhou facility is certified against ISO9001 (quality management), ISO14001 (environmental management), and OHSAS18001 (occupational health and safety).
Identification of Risks and Impacts
Environmental and Social Impact Assessments (ESIA) are prepared for the company’s largest overseas projects, but considering that the majority of projects are of small (1MW-15MW), not all sites are required to undergo the full ESIA process. In such cases, local regulators usually require an abbreviated Environmental Statement (ES) procedure or similar. The company uses ESIA or ES in its due diligence process for asset acquisition in order to assess potential environmental and social issues associated with proposed sites and includes these in its site selection process as well as in project development after acquisition.
The company has in place a set of detailed guidelines governing its due diligence process on assets identified for potential acquisition, which describe the different stages of the due diligence process. Environmental and social aspects of the due diligence process are reviewed by company personnel and focus on four aspects: (i) regulatory approvals: verifying whether approval memorandum letters have been issued by the appropriate environmental or safety regulatory department on the project’s ESIA; soil and water erosion control programs, and on the safety evaluations; (ii) technical aspects: engineers report on civil works required to prepare sites for construction, soil quality and vulnerability to floods, soil erosion and dust generation, availability of water and infrastructure for construction and power transmission from sites, (iii) land acquisition and related aspects (i.e. availability of cadastral map, permit for land classification for construction purposes; state land allocation memorandum as applicable; availability of land use certificate; and verifying whether land acquisition was conducted via willing-buyer-willing-seller transaction and full compensation has been paid to land owners (since the company usually acquires land from commercial entities and land developers).
As part of the enhanced new environmental and social due diligence procedure and ESMS, the company will introduce screening for land acquisition and involuntary resettlement risk; potential impacts on biodiversity; on local cultural heritage; on local indigenous peoples; and for potential cumulative impacts (primarily land acquisition and construction phase impacts, such as high traffic volume, across multiple adjacent sites). The company will incorporate applicable findings from the above into its overall due diligence report for each potential asset. It will implement reasonable corrective actions in a timely manner should risks/impacts from the above are identified and ensure that resources are available for implementation. It will regularly report corrective action implementation progress to the company's senior management, and will also include this in annual monitoring reports (AMR) submitted to IFC.
Organizational Capacity and Competency
The company’s Environment, Health and Safety (EHS) Department is responsible for overseeing it’s domestic and overseas operations, environmental, occupational health and safety and contractors’ EHS performance. Human resources management is staffed with an HR Manager and coordinators. Land acquisition due diligence work is conducted by the Legal department which reports to Country Managers and the Chief Executive Officer. At the operational level, company operations across China are geographically grouped under its regional offices, each headed up by a regional manager who manages the operations of several facilities under his/her jurisdiction with implementation support from site-based staff. The Overseas Projects Department is headed by the Overseas Manager, who oversees the various country offices. On new asset due diligence, several functional departments including EHS, HR, Legal, Procurement and Engineering work together to identify potential acquisition targets and lead the development of new projects. In order to reinforce its capacity to manage EHS aspects in the overseas projects, the company will appoint a qualified Environmental, Social, Health and Safety (ESHS) Manager to oversee its overseas solar operations and to conduct a review of construction and operations of its overseas projects as detailed in ESAP item 2. Site-specific EHS oversight during project construction will be the responsibility of an EHS Officer or Consultant employed by the EPC contractor or directly by the company.
Emergency Preparedness and Response (EPR)
Emergency Preparedness and Response requirements on company operations are defined in the company’s corporate level EPR procedures, with matching asset-level procedures developed based on corporate requirements and tailored to local conditions. The corporate level procedural manual has identified eight key categories of emergencies (e.g. flooding, earthquakes, fire, etc), specifying required planning, responses, and chains of command under each scenario.
Monitoring and review
The company routinely monitors and reports to its management on assets’ EHS performance and submits reports to local regulators. Depending on in which jurisdiction the asset is located, these reports include human resources and OHS statistics as well as Engineering, Procurement and Construction (EPC) and Operation and Management (O&M) contractors’ OHS performance.
