While all Performance Standards are applicable to this investment, IFC’s 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.

PS1: Assessment and Management of Environmental and Social Risks and Impacts
PS2: Labor and Working Conditions
PS3: Resource Efficiency and Pollution Prevention

The company rents office space, does not plan to acquire land, and do not manufacture any equipment; the latter is provided by recognized and established suppliers which are required to adhere to stringent internal quality requirements including that associated with the national regulatory authorities in the countries in which they operate. Thus PS4: Community Health and Safety does not apply to the project and neither does PS5: Land Acquisition and Involuntary Resettlement. PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources does not apply given the urban focus of activities and similarly for this reason PS8: Indigenous Peoples or PS8: Cultural Heritage are also not applicable.

This is Category B project according to IFC’s Policy on Environmental and Social Sustainability.   The project is expected to have limited environmental and social impacts and none are expected to be significant. Operations typically consist of rented office space with limited storage facilities, maintenance of small equipment at some of the office locations and installation and maintenance of equipment at client facilities. Delivery of supplies occurs by small vehicles / trucks and this activity is outsourced. Thus potential impacts and risks associated with activities are limited.

Key issues associated with the project include issues related to the management of human resources and ensuring the provision of quality products to clients.

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.

The company has no environmental and social management system and given the nature of the operations, this is not considered applicable to the project.  Rather, every office has a Quality Management System tailored to their activities and local requirement e.g., in Malaysia and Singapore the operations are subject to regulations associated with “Good Distribution Practice for Medical Devices”.  Currently, only the Malaysian operations is accredited against ISO 9001, a certifiable quality management system, and there is no intention to extend this more broadly. Product quality i.e., that provided to IDS, is the responsibly of suppliers who are all reputable companies experienced in the manufacture of medical equipment / consumables.  IDS requires that all products provided by suppliers are registered with the national authorities in which they operate and in some cases products are also registered with the United States Food and Drug Administrative Authority.

Where the company undertakes installation and / or maintenance of equipment on behalf of suppliers, the company technicians responsible for this receive training by the suppliers on the related product, and installation and maintenance requirements as applicable.  In some instances suppliers may commission third party audits to ensure equipment has been appropriately installed. However, the company assumes no liability for any equipment provided and rather this resides with the suppliers.  

The company has a Chief Compliance Officer who ensure the various offices comply with regulatory and supplier requirements and this individual reports to the Fung Group Board of Directors.  

The company has no security personnel and this is provided by unarmed guards located at the office complexes in which they operate.  Transport of supplies and equipment are substantially handled by subcontractors inclusive of another logistics company owned by the Fung Group.  

Each office has an emergency response plan as per the requirements of the building in which they are located.  So as to formalize this the company will develop and implement guidelines defining specific requirements for all offices so as to ensure employees are aware of how to respond in the event an emergency, and that there is at least one emergency training drill per year. This requirement is stipulated in the project ESAP.

As of January 2017 the company employed a total of 1221 workers across all operations and of these some 44% are women.  The composition of the office typically include the sales team and marketing department approximately one third of all staff, with the rest being administrative and IT staff, technicians and management.  All workers are employed on a permanent or annual contract basis and have a formal written / signed contract which references the Group human resources (HR) policy and manual allied to the tenure of employment if applicable.  Other than those employees associated with logistics, there are no other workers providing ongoing support to the respective operations.

All offices have a HR Manager and there is a comprehensive Group HR Manual inclusive of policies and procedures covering various topics which apply to all offices; the individual offices then tailor the Manual to ensure alignment with national requirements.  Procedures and policies defined in the Manual include that related to hiring and appointment, orientation, promotion and performance management, transfers, business ethics, training, allowances and the approach to company entertainment and travel, amongst others.

The Group has a clear commitment to equal opportunity and non-discrimination as stated in the Group HR Manual whereby it is noted that the company is an equal opportunity employer and believes in the fair treatment of all employees and potential employees. In addition, all applicants for employment are noted to be considered “regardless of race, color, religion, sex, marital status, age, national origin or any other considerations deemed inappropriate by local labor law”.

None of the employees are unionized in any of the offices, though it was noted the company does not prevent employees from being unionized should they so wish.

While there is a detailed approach to managing employee performance and conduct, there is no standardized grievance mechanism.  Thus as defined in the project ESAP the company will develop and implement a grievance mechanism to be applied to all operations which also allows for anonymous reporting.    

The company follows local legal requirements regarding occupational health and safety. All employees are afforded company life and personal accident cover and each country office offers medical support. To date the company has not recorded any lost time injuries and none of the activities associated with IDS are considered to pose significant occupational health and safety risks. There is a Group procedure on “Workplace Safety & Housekeeping” and this focuses specifically on ensuring offices are maintained in an orderly manner, office equipment is appropriately located and stored and there are sufficient ablution facilities and these are adequately maintained.

While IDS has limited leverage over logistics companies, when contracts are renewed, the company will contractually require compliance by service providers with national labor law.

IDS only contracts with reputable and established suppliers which are international companies and thus risks associated with the supply chain are considered to be minimal and adequately managed.     

IDS rents office space within existing buildings and energy use is typically associated with lighting and the use of other electrical equipment e.g. photocopiers.  Thus there is no specific focus on optimizing energy usage.  Based on the 2016 electricity usage of all IDS offices, the total kWh consumed is 1,223,226 which equates to 385 tons of CO₂.

Potable water is provided in offices via water stations and bottled water whereas water for ablutions is provided via the local municipality and via the landlords from which offices are leased.  All waste water from ablutions is disposed of via the municipal systems.

Solid waste generated by the offices is nonhazardous and typically includes waste paper and plastics, and limited scrap from the maintenance of small scale equipment. Maintenance of large equipment is undertaken on-site and the respective facilities assume responsibility for disposal of any scrap.  IDS is not responsible for the disposal of old / obsolete equipment and this is undertaken by the facility.  Where parts and consumables that the company utilize on an ongoing basis become obsolete, these are returned to suppliers.    

IDS is not involved in any stakeholder engagement beyond the direct company activities with suppliers and customers. The Fung Group have a Foundation which supports education programs, community projects and disaster relief.

Contact Person: Stewart Kwok

Company Name: IDS Medical Systems Management Limited

Address: 13F, LiFung Centre, 2 On Ping Street, Siu Lek Yuen, Shatin, Hong Kong

Email: stewartkwok@idsmed.com

Phone: +852 2300 3335

Facsimile: + 852 2300 3334

Broad Community Support is not applicable for this project.