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
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 8 – Cultural Heritage
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
PS 5 – Land Acquisition and Involuntary Resettlement
In accordance with the last plans provided by the concessionaire, no land acquisition will be required for imminent works, as all upgrade and expansion will be undertaken in the current concession areas. As part of the E&S management system, the concessionaire will develop a land acquisition and livelihood restoration framework (LALR) that will highlight principles and responsibilities that will guide land acquisition for future works or any other scenario where land is required. The LALR is specified under PS1.

PS 7 – Indigenous Peoples
No indigenous peoples are present in the areas surrounding the project site.

This is a Category B project in accordance with IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result from project activities that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key issues associated with the project include: i) ongoing review of future projects to ensure alignment with IFC’s environmental and social (“E&S”) requirements including good international industry practices (“GIIP”); ii) ensuring sustained support to environmental, health and safety (“EHS”) / risk management systems taking into account that the company is seeking to increase the number of filling stations and extend the supply of industrial gas to remote areas in the country; and iii) ensuring adequate mitigation measures are installed at potentially high risk facilities such as the hydrogen production and storage facilities. Measures are defined in the project ESAP to address these and include a focus on occupational health and safety (“OHS”) of the employees and potential risks to the nearby communities from production and transportation activities.

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 and Social Assessment and Management System

In accordance with Government Regulation No. 40/1996, Aneka Gas receives land
title in the form of Right to Use (“Hak Pakai”) from the National Land Office.
This is normally for a period of 30 years and may be extended. Subsequently,
in accordance with Law No. 32 of 2009 on Environmental Protection and
Management and the associated regulations on environmental permitting, the
company is required to obtain an environmental license for new developments
from the State Minister of Environment, Governor, or Mayor/Regent. For this,
the company is required to undertake an Environmental Impact Analysis (Analisis
Mengenai Dampak Lingkungan or “AMDAL”). The company completes the AMDAL using
its internal resources and then submits this to an environmental consultancy
who facilitates the formal submission to the relevant authority. Aneka Gas has
confirmed that it has obtained all necessary permits and licenses for
developments and complies with the stipulated permit conditions.

Going forward, as defined in the ESAP, the company will develop and implement
an E&S due diligence procedure whereby the company will assess the
applicability of PS1 – PS8 and shall ensure that AMDAL (whenever required for
new projects), shall also comply with the specific requirements of IFC’s
Performance Standards and the World Bank Group (“WBG”) EHS Guidelines.

The company has a formal documented EHS / risk management system as outlined in
the sections below. In addition, Aneka Gas is in the process of certifying 2
plants against ISO 14001 and OHSAS 18001, environmental and occupational health
and safety system respectively. This process, which is to be completed by end
2016, is a pilot for the purpose of certifying all 44 plants against these two
management systems. Currently it is envisaged that the broader certification
process will be completed by the first quarter of 2018.

Taking into account the company’s recent expansion, there are in excess of 120
separate operations and there will be an increasing number of facilities in
remote areas. The company has agreed to commission a suitably qualified
independent specialist to undertake an EHS audit of the company’s activities
(construction, operations and transport) and associated management systems.
The focus thereof will be to assess activities relative to GIIP and national
legislative requirements. Specific aspects the audit will focus on are outlined
below. Following the audit, the company will then agree with IFC on a time
based action plan to implement the audit findings. These requirements are
defined in the ESAP.

Policy

The company has a clearly defined EHS policy signed off by the company
President with a specific focus on minimizing EHS risks and ensuring employee
safety. To strengthen this, Aneka Gas will amend the EHS policy to include
specific reference to alignment of the company activities with the IFC
Performance Standard and WBG EHS Guidelines.

Identification of Risks and Impacts/ Management Programs

Aside from AMDAL as required by the regulatory authority for new developments,
the company applies the Layer of Protection Analysis (“LOPA”) technique to new
developments to assess off-site impacts (on nearby communities). This is a risk
assessment method for evaluating the risk of hazard scenarios and comparing
these with risk tolerance criteria to define if existing/additional safeguards
are needed. So as to assess on-site risks, the company applies an internal
methodology i.e., Hazard, Identification, Risk, Determination, Control
(“HIRDC”), to all operations. This is a detailed review whereby all potential
risks associated with a facility are defined, mitigation measures detailed for
the identified risks and measures to be implemented in the event that risks are
realized. This review is undertaken by the Plant Manager, vetted by the EHS
Supervisor and then approved by the General Manager. As part of the audit
referred to above, this will incorporate a review of the company’s approach to
risk identification and assessment including application of the HIRDC model and
LOPA technique to ensure this is aligned with GIIP for this sector.

So as to support HIRDC and LOPA there is a specific procedure for “The
Identification and Assessment of Health, Safety and Environmental Impacts” with
a comprehensive suite of some 32 procedures covering all aspects of the
operations including that related to competency training, job safety analysis,
waste management, monitoring incidents, reporting and investigating incidents,
among others.

Organization Capacity and Competency

At corporate level Aneka Gas has an EHS supervisor who reports directly to the
company Operational Director. He is supported by a dedicated EHS officer for
each region i.e., eastern and western, and there are safety representatives at
each facility. Depending on the size and activities at each site this
representative may or may not have EHS as a full-time responsibility.

The EHS Supervisor has an academic background in safety and risk management and
all EHS officers are required to complete the government accredited safety
course and have the associated certificate issued by the Ministry of
Manpower. As per the independent EHS audit this will include a review of
organizational capacity within the company to identify if enhancements are
required taking into account the number of operations and the dispersed nature
of these.

Emergency Response and Planning

Building upon HIRDC and LOPA, all facilities have developed emergency response
plans to facilitate a response to on and off-site incidents. Annual fire drills
are also undertaken with involvement from the local fire department. Design of
the relevant facilities is signed off by the authorities to ensure they have
the requisite fire-fighting equipment, and there is a planned maintenance
schedule for all such equipment.

As outlined in the subsequent sections there are appropriately trained staff at
all operations to provide support in the event of an emergency. All vehicles
have the necessary fire prevention equipment i.e., fire extinguishers, and
drivers are trained in the use of such.

In addition, Aneka Gas has developed a separate emergency response plan in the
event of an incident involving a vehicle transporting gases. Other than the
one incident that involved offsite impacts as discussed below, to date the
company has had no major incidents. The EHS audit will however review the
company’s approach to emergency planning and response to ensure this is aligned
with GIIP.

Monitoring and Review / Reporting

Regular internal audits are undertaken of operations and in accordance with the
EHS procedures there is a clear approach to incident recording and reporting
and the compilation of statistics. OHS related Key Performance Indicators
(“KPIS”) typically measured at Aneka Gas facilities include fatalities, lost
time injuries, near misses, first aid cases, property damage and traffic
accidents. A detailed checklist is also applied for monitoring of vehicles and
there is also monitoring of various workplace parameters. Monthly reports are
compiled on data collected and there is an annual EHS report to the Board of
Director. As per the external EHS audit to be undertaken, this will include a
review of the approach to internal auditing including the need for ongoing
external (independent) audits of facilities to ensure alignment with GIIP.
Further, monitoring and reporting of incidents allied to the corporate and site
specific approach to communications and reporting will be reviewed in the EHS
audit.

Currently the company does not undertake any external reporting on EHS
performance.

Human Resources Policies and Procedures

As of March 2016, Aneka Gas employs 1088 permanent employees of which 25% are
female. For purposes of daily operations there are no contract staff, except
for the cleaning functions and approximately one third of the security staff
that are outsourced.
The company has a clear HR Policy and associated manual, a copy of which is
provided to all staff upon employment along with a signed contract detailing
the terms of employment. There is a HR Manager for the company who is supported
by HR representatives assigned to each region and who also have supporting
staff.

All plants operate on a 24 hour, 3 shift basis while the filling stations only
operate during the day i.e., 8 am – 5 pm. Minimum wages are defined for each
of 34 provinces in Indonesia individually and Aneka Gas typically pays workers
the minimum wage in their first year of employment and thereafter the wage
level increases beyond this level. In accordance with national legislation the
company only employs individuals 18 years and over and this is confirmed via
their identity document. No forced labor is associated with any of Aneka Gas’
activities.

As per national legislation, employees are free to join unions, though only 5%
of employees have i.e., the Metal Workers Union (Serikat Pekerja Metal) and
Indonesia Workers Union (Serikat Pekerja Indonesia). Collective labor
agreements are required by law if more than 10% of employees are members of a
union, though the company has confirmed that if employees that have joined a
union requested such an agreement, they would allow this.

The HR manual includes a documented grievance mechanism whereby employees are
able to raise a grievance with their direct supervisors, the next level of
management or the HR department, and if the grievance is not resolved, it may
be raised with the Department of Manpower. The company is in the process of
compiling an employee Code of Conduct for managing worker ethics and this
includes an approach to facilitate anonymous submission of grievances allied to
a whistleblower policy among other aspects. Aneka Gas plans to implement the
Code of Conduct in December 2016.

Discussions with the company indicate that they reference Aneka Gas as being an
equal opportunity employee when advertising for employment positions, however
beyond this there is no formal documented policy. Thus as per the ESAP, the
company will develop and implement a policy on equal opportunity and
non-discrimination and communicate this to employees.

All employees are members of the government healthcare program for employees
(BPJS Kesehatan) and the government social security program for employees (BPJS
Ketenagakerjaan). Employees receive 12 days leave per annum and this increases
depending on the number of years worked at the company. Three months maternity
leave is granted to female employees as per national regulation and employees
may take leave for specific family circumstances e.g., a death in the family,
and for religious holidays depending on their faith.

Additional benefits include one meal per day (this may be provided as an
allowance depending on the location), a transportation allowance, mobile phone
allowance and in the event that they need to relocate for work, employees
receive allowances to facilitate this including a housing allowance and a cost
of living adjustment depending on the location to which they are transferring.

The company does not provide accommodation to staff and rather this is via
allowances in the event they are transferred on a temporary or permanent basis.
This similarly applies to contractors during construction in that the
contractor is required to include an accommodation allowance for the workers in
their tender submission so workers may rent accommodation in the area.

Occupational Health and Safety (“OHS”)

OHS is managed via the EHS / risk managed systems described above and the
company is piloting implementation of OHSAS 18001 at 2 plants with the
objective of implementing this at all plants by early 2018. Overall the
approach to OHS management is deemed to be structured and well controlled via
application of the HIRDC model, the various EHS procedures applied, the job
safety analysis and ongoing training.

As stated there is a dedicated EHS Supervisor for the company, an EHS officer
designated to the two regions respectively (eastern and western) and safety
officers for each facility. EHS and notably risk management in daily
activities is the responsibility of all employees though and all plant / site
mangers have EHS / risk management as part of their daily function /
responsibility. As per the ESAP and defined under PS1 above, the external audit
will review human resource capacity relative to EHS at the corporate and site
level allied to communications and reporting structures relative to GIIP and
define recommendations to enhance these aspects where necessary.

Personal Protective Equipment (“PPE”) is provided to all employees and replaced
at least every 2 years or earlier if necessary. Requirements for PPE use are
defined in the job safety analysis undertaken for all tasks. During the site
visits, the use of PPE by all staff was observed to be high. Requirements for
driver PPE are also defined and these are checked by security as part of the
regular vehicle inspections that are undertaken when vehicles enter / exit a
company facility.

In accordance with national legislation, an individual trained in first aid is
required for every 25 employees and such an individual is available on every
shift at all operations. The first aid representatives are required to have a
certificate issued by Government confirming they have been trained accordingly
and undertake a refresher course every 2 years. All facilities have a first
aid box and if necessary employees are then transported to the nearest medical
facility.

All plants have a weekly safety briefing which is part of the regular
management meeting and this is a scheduled item on the agenda. The HR
department defines a training program for all employees which is location
specific and there is ongoing training for the EHS representatives that
includes fire-fighting, pressure testing and general safety awareness training
among other key topics. All employees undergo annual general safety training
which is aside from the job specific training.

Drivers engaged in transportation of gases are required to have a “type B”
driving license which is issued by the Police Department and undertake a
defensive driving training course by the Ministry of Transportation before
being employed by the company. Thereafter drivers need to undertake mandatory
annual defensive driving and safety courses as provided by Aneka Gas. Aside
from the EHS representatives who undergo training on fire-fighting training,
each plant has a fire fighting team that is available on all shifts and they
undergo regular training. At the filling stations, employees undergo training
in the use of fire extinguishers.

All employees are subject to a medical checkup upon employment, and this is
then undertaken annually.

Workplace monitoring including illumination, noise and air quality is
undertaken by the Department of Health at all plants annually and assessed
against national requirements. The approach to such monitoring to ensure
alignment with GIIP will be assessed via the external audit to be undertaken.

The company indicated that it has not experienced a fatality since operations
commenced in 1975. Data received from the last 3 years on 50 filling stations
operated by the company indicates no lost time injuries (“LTI’s”). Information
was also provided on 3 plants which indicates only 2 LTI’s and a first aid case
over the previous 3 years for one plant, while there were no other incidents
reported for the other 2 plants. Information is also provided on near misses,
property damage and traffic incidents for the plants. However, more detailed
information was not readily available and thus the approach to monitoring and
recording of incidents needs to be enhanced to ensure this is centrally
available. Equally, there is a need to ensure consistency in the approach
across all operations such that mitigation measures can be defined and directed
to appropriate areas / facilities accordingly. This is a specific area of
focus for the external EHS audit to ensure alignment with GIIP.

Workers Engaged by Third Parties

Cleaning staff and some one third of security personnel are outsourced from
reputed / licensed contractors/companies. These employees are subject to the
same EHS procedures as all other company employees and have access to the
company grievance mechanism. Oversight of these workers and those of the
contractors involved in construction are managed as per a specific contractor
procedure.

For construction of new projects, Aneka Gas acts as the project manager and
employs contractors to undertake the specific tasks e.g., civils, plant
installation etc. In accordance with contract documentation, contractors are
required to comply with the company’s EHS procedures unless they are able to
confirm application of more stringent measures.

To ensure contractor workers are employed in accordance with national
legislation and this Performance Standard, the company will amend its existing
contractor procedure to specify these requirements. In addition, it will
include a monitoring procedure by Aneka Gas to confirm associated compliance by
contractors during their employment.

Electricity is a key cost for Aneka Gas and review of the average plant
performance (for ASPs) indicate the company’s operational efficiency is above
the European benchmark data for similar operations. Aneka Gas will therefore
engage with IFC’s energy efficiency team to assess opportunities to improve
efficiency. Water usage at the plants is typically limited to use in ablution
facilities and the total volume is considered limited.

Total estimated greenhouse gas emission from Aneka’s operations including those
related to electricity consumption, fuel consumption, and process emissions are
approximately 288,100 tons of CO2-equivalent per annum.

All ASP’s have oxygen, nitrogen and argon storage facilities while the oxygen
gas plants have oxygen storage tanks. The nitrous oxide plants have a limited
capacity and the associated storage facilities are equally limited. i.e., 3
m3. There is no bulk storage of acetylene, as upon production it is
transferred directly to cylinders for onward distribution to clients. Thus the
primary hazardous material stored on-site at plants in bulk is hydrogen. Two
of these plants produce hydrogen for direct client consumption and have back up
facilities, while the other two plants have storage tanks of 800 m3 and 1000 m3
respectively. As outlined in the subsequent section, specific studies will be
undertaken at the hydrogen facilities to ensure hazards associated with the
plants and storage facilities are adequately addressed. Hydrogen is
transferred from the plants to certain filling stations in specialized trailers
for the filling of cylinders.

As outlined, the company applies the HIDRC model to activities to identify and
manage risks and there are clearly defined procedures for the filling and
handling of cylinders for all gases handled and distributed by the company;
there are also requirements for equipment calibration used in the filling of
cylinders. Filling occurs in predefined areas and the cylinders are then
stored in dedicated areas prior to being transported to clients.

Aside from the hazardous gases such as hydrogen, acetylene and nitrous oxide
handled and stored on site, other hazardous materials utilized on-site are
limited and generally include lubricating oils and paints which are stored in
dedicated secure areas; this practice was observed at all the plants visited.
Similarly wastes generated by the operations are limited with hazardous waste
being used oil, used paint containers and cleaning materials, and the remainder
being general wastes. As per the waste management procedure all wastes are
segregated and recycled to the extent possible. Hazardous and general waste is
collected by government approved waste companies for disposal.

All facilities have ablution facilities and water for such is supplied by the
local municipality / equivalent and facilities have dedicated septic tanks for
the collection of sewerage. This sewerage is then collected by the relevant
government agency or government approved collectors for disposal at the
government sewerage treatment works. Potable water is provided at all
facilities by the company via water dispensers and there is no charge for such.

Stormwater is collected in on-site drains prior to being discharged off-site.

Design parameters applied to facilities are defined by national requirements,
though all storage vessels including cylinders utilized at filling stations are
provided by recognized international suppliers. The manufacturer’s
specifications for ongoing testing of such vessels is defined in a certificate
issued by the Department of Manpower. Thereafter, this Department undertakes
the testing of vessels as per the specifications defined.

The potential for significant off-site impacts associated with the ASP’s,
oxygen, and carbon dioxide and dry ice plants are considered limited due to the
nature of the operations and the associated products. That said, the company
did experience an incident at an ASP located in the city of Medan in July 2015
which resulted in off-site impacts; this is the first incident at any of the
company’s facilities that has resulted in such impacts. An investigation by
the company indicated it was the result of human error during plant
commissioning whereby insulating material i.e., perlite, a non-toxic material,
escaped via a safety valve and spread into the neighboring residential areas
causing nuisance impacts. This resulted in residents protesting, and in
response the company assisted residents in cleaning up the area and a nominal
amount of compensation was paid to affected community members.

The nitrous oxide plants have limited storage tanks and there is no bulk
storage of acetylene; thus the potential for off-site impacts from these
manufacturing activities are limited. Potential off-site impacts are thus
primarily related to the hydrogen plants and associated storage facilities and
Aneka Gas has applied the HIDRC model to the plants and LOPA technique to the
storage facilities. However, to ensure the approach to risk assessment for
these facilities aligns with GIIP the company will commission an independent
specialist to undertake Hazard and Operability Studies (“HAZOP”) studies for
these plants, allied to quantitative risk assessments (“QRA”) for the hydrogen
storage facilities. Thereafter and based on the study findings, Aneka Gas will
agree with IFC on a time based action plan to implement the recommendations /
mitigation measures as may be defined; these requirements are defined in the
ESAP.

All vehicles have GPS tracking devices fitted with the necessary safety
equipment e.g., fire extinguishers, which are checked according to the required
schedule. All vehicles are also serviced according to a planned maintenance
schedule and there are regular checks to confirm for oil leaks, the condition
of wipers, lights and hydraulics among other aspects.

As outlined, the EHS audit will review the company’s approach to emergency
planning and response including that associated with the transportation of gas
to ensure this is aligned with GIIP.

Security at all facilities is unarmed and they may call on the police if
necessary.

There is limited stakeholder engagement by the company as part of the Environmental Impact Analysis for purposes of new developments, and beyond this engagement is ad hoc and not formalized in any manner. For the most part, facilities are located in industrial areas / urban centers and the day to day operations of plants, transportation aside, have a limited impact on communities. However given the extent of the company’s operations and the fact that the company does have activities in varying settings, as per the ESAP a corporate Stakeholder Engagement Plan (“SEP”)will be compiled inclusive of a grievance mechanism. This plan will define stakeholders associated with the company’s operations, methods of engagement so that they are proactively engaged, and a distinct grievance mechanism that ensures grievances are recorded at all facilities and there is a clear process to resolve them. This SEP allied to the grievance mechanism will then be communicated to all the EHS representatives for implementation accordingly.

Corporate responsibility programs are defined by the General Manager responsible for each area and typically contributions and the like are ad hoc and dependent on whether communities make specific requests. Examples of such support include the building of a mosque and monetary or in kind contributions to support local celebrations.

The ESRS and ESAP are available on the World Bank Infoshop and from the company as per the details below.

Contact Person: Ferryawan Utomo
Company Name: PT Aneka Gas Industri Tbk.
Address: UGM Samator Pendidikan Building, Tower A, 6th floor.
Jl. Dr. Sahardjo No. 83, Manggarai, Tebet,
Jakarta Selatan 12850, Indonesia
Email: mailto:ferryawan@anekagas.com
Phone: +62 21 8370 9111
Facsimile: +62 21 8370 9911

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Update/implement the company’s Environmental, Health and Safety (“EHS”) management systems so as to include reference to alignment of activities to IFC’s Performance Standards (“PS”) and the World Bank Group (“WBG”) EHS Guidelines in the policy document.	02/01/2017
Update/implement the company’s EHS management systems so as to include an EHS due diligence procedure for all new developments i.e., filling stations, new plant developments and acquisitions, that includes a review against the requirements of the Performance Standards and the WBG EHS Guidelines; the due diligence procedure is to specifically include the need for assessment against the requirements of Performance Standard 5: Land Acquisition and Involuntary Resettlement, and Performance, Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources.	03/01/2017
Update/implement the company’s EHS management systems so as to include a corporate stakeholder engagement plan including a grievance mechanism to be applied to all operations.	06/01/2017
Commission a suitably qualified specialist to undertake an EHS audit of the Company’s activities (construction, operations and transport) and associated management systems to assess compliance against Good International Industry Practice (“GIIP”) and national legislative requirements. This is to specifically include; i) a review of the Company’s approach to assessing risk in application of the Hazard Identification Risk Determination Control (“HIRDC”) model and Layer of Protection Analysis (“LOPA”) technique;ii) a methodology applied to internal auditing of operations and the approach that must be applied to external auditing of activities annually; iii) human resource capacity at the corporate and the site level to manage EHS allied to communications and reporting systems and structures; iv) approach to monitoring and recording of incidents and responses to such e.g., corrective action plans; v) a review of the approach to workplace monitoring; and vi) emergency response planning.	02/28/2017
Based on the findings of the EHS audit agree with IFC on a time based action plan to implement any corrective actions identified:	04/30/2017
Develop and implement an equal opportunity and non-discrimination policy and communicate this to employees.	12/31/2016
Amend the contactor workers procedure to require contractors to comply with national legislation including the relevant aspects of this Performance Standard. This procedure is also to define the approach to monitoring by Aneka Gas to ensure compliance by contractors with the procedure.	12/31/2016
Commission a suitably qualified specialist to undertake Hazard and Operability (“HAZOP”) studies for the three hydrogen plants and a quantitative risk assessment ("QRA") for the two hydrogen storage tanks; the approach to these is to be based on GIIP and assess compliance relative to the PS requirements and the WBG EHS Guidelines	02/28/2017
Based on the HAZOP studies and QRA's agree with IFC on a time based corrective action plan to implement the actions and or recommendations as may be defined in the respective studies.	04/30/2017