This is a Category-B project according to IFC’s Policy on Social and Environmental 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. Performance Standards 1-4 are those expected to apply for the proposed project. Key E&S issues associated with this investment concern the following: (i) an overarching system and management approach for analyzing, mitigating, and monitoring E&S performance, (ii) labor standards, worker rights, and relevant occupational health and safety (OHS) standards for the company’s workforce, (iii) community health and safety, including emergency response, road safety, and management of security personnel, and (iv) stakeholder engagement and grievance mechanisms. 

 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 and Management System: As the company grows in size and complexity, it is increasingly developing its approach to managing the distinct E&S elements it faces in its day-to-day business. Its approach to working with users of its platform, namely motorcycle couriers and more recently independent van drivers, has been undergoing an evolution that could benefit from a more structured approach to stakeholder mapping and engagement, as spelled out elsewhere in this disclosure under “Stakeholder Engagement.” Loggi also recently commissioned consultants to prepare basic documents required by Brazilian regulations on occupational health and safety (see below under PS2 for details), and it is beginning to put in place some key components of an environmental and social management system (ESMS) going forward, including on efficiency of resource use. However, the company does not currently have an overarching ESMS. Under the ESAP it will develop and consolidate such an ESMS.

Policy: Loggi has no overarching E&S policy in place that articulates the company’s approach to sustainability, including stakeholder engagement and its commitment to improve the lives of its users, especially motorcycle couriers. In accordance with the ESAP, the company will therefore develop a document that articulates its approach to sustainability issues and provides a framework under which all other components of its ESMS can function.

Identification of Risks and Impacts: Loggi operates in a sector where there are no formal requirements to carry out an assessment of risks and impacts. The only operating requirements are an authorization from the Brazilian federal agency for land transport (ANTT) and registration with state-level tax authorities, which the company has secured. In addition, for the transport of pharmaceutical products (e.g. drugstore deliveries), the federal health agency (ANVISA) requires a license for which Loggi has made to make some modifications to its warehouse layout, flow, and storage arrangements, and it commissioned a review of OHS requirements as part of that process. This assessment led to the development of an occupational health surveillance program (PCMSO) and a workplace/environmental risk prevention program (PPRA), which systematically identifies OHS risks and impacts for its direct-hire workers. This needs to be updated for its warehouse operations and consideration be given to how the company approaches OHS for the independent drivers using its platform, as discussed further under PS-2 (Occupational Health and Safety).

Management Programs: The company is currently launching a program to come into compliance with the Brazilian regulatory norms for OHS. See more details under PS-2.

Organizational Capacity and Competency: Loggi currently distributes responsibilities for E&S-related functions across two principal teams. First, the company’s operations team is responsible for its relationship with drivers, including training, user satisfaction, enforcement of best practices, and support, including an initiative provisionally called LoggiClub (see below under PS-2 and Stakeholder Engagement for more details). Within operations, there is a specialized team – called Community Operations – that handles issues related to drivers’ daily operations. The company’s HR team also has a new group focused on managing environmental and social issues. Its role will be to assure the well-being of Loggi’s employees, promote a positive workplace environment, and encourage volunteer initiatives, including in the community. To ensure effective, company-wide integration and coordination of E&S functions, the ESAP requires Loggi to nominate a senior-level officer at the executive committee level to coordinate E&S functions.

Emergency Preparedness and Response: Loggi has a valid fire safety certificate (known in Portuguese as an AVCB) for its offices in Barueri (greater São Paulo) and Rio de Janeiro, and it is in the process of applying for such certificates for all of its other premises/facilities. The application process involves the identification of fire hazards and risks as well as preventive measures and the development of an emergency preparedness and response plan (known in Portuguese as a Plano de Atendimento a Emergência, or PAE). It also has a formally constituted fire response team (known as a brigade) within its staff for its main administrative office in Barueri (on the outskirts of São Paulo) and warehouse in SP, but it does not yet have such teams established for its other locations. Under the ESAP, the company will ensure (1) that all of its premises have valid (or are in the process of securing valid) AVCBs, including PAEs, (2) that PAEs include hazard identification, preventive measures, guidance for maintenance of fire equipment, and training programs, (3) that all of its workplaces have brigadas (and/or in buildings with multiple tenants that Loggi staff are part of location-wide brigadas); (4) that brigada members are duly trained, and (5) that fire drills are carried out at least on a yearly basis for all of its locations.

In addition, it should be noted that the specialized training that couriers undergo to secure the Condumoto motorcycle license covers basic first aid as well.

Monitoring and Review: Loggi systematically tracks data on its pool of independent couriers, including on such metrics as numbers of deliveries, driver earnings per month, and the like. It does not, however, systematically track E&S data, including relevant information related to the couriers who use its platform, such as total hours worked in a given day, satisfaction with the courier experience, and accidents or other problems. As part of its management dashboard and in light of its E&S policy to be developed under the ESAP, Loggi will therefore also identify and track at the senior management level relevant performance indicators related to E&S.

Working Conditions and Management of Worker Relationship: Loggi both employs direct-hire workers – who work in product design, engineering, sales, customer support, and administrative and managerial roles – and enables independent drivers who use its apps to access an online delivery order system and earn fees from completing deliveries. Subsequent sub-sections will discuss direct-hire employees in greater detail. This general overview provides additional information on the independent drivers that Loggi relies on for its delivery services.

Independent Drivers:

At appraisal, Loggi had more than 2,600 such drivers listed as “active,” of whom 98% are men (as confirmed by a survey conducted in February 2016). In the view of both Brazilian labor law and PS-2 requirements, there is no employment relationship between Loggi and the individual drivers. Nonetheless, given their centrality to the Loggi business model, they are discussed extensively in this section. In the case of IFC’s analysis, the drivers do not receive a salary from the company or any contractor it might use, and the drivers do not work on the basis of a fixed schedule. While there are standards of professional conduct for the drivers and Loggi has quality assurance processes in place, there is no supervisory relationship between the company and the couriers. For example, a driver can choose not to accept delivery requests without any reason and without any negative consequences whatsoever.

Brazilian labor regulations consider Loggi’s pool of registered couriers to be independent contractors and not to be employees of the company. The relevant regulatory framework described in Federal Law 12.009/2009 and Federal Law 128/2008 clearly states that such drivers can work as independent contractors as long as they operate as a MEI (“Microempreendedor Individual” or individual micro-entrepreneur), they have a valid tax ID number, and they pay a single monthly contribution toward local and federal taxes and the social security system (INSS). The motorcycle courier sector has additional requirements for independent drivers to meet under Law Federal Law 12.009/2009. Independent motorcycle couriers and van drivers are able to download the app, create an account, and proceed with registration upon acknowledging they have read and understood terms and conditions of the user agreement. This agreement states clearly that there is no employment relationship between drivers and Loggi and describes the circumstances under which they will operate, including the use of online service orders. The agreement also specifies the fact that user rights can be terminated for fraud, illegal activity, or performance incompatible with Loggi policies. Both Loggi and the independent driver can end the contractual relationship at any time without cause and without notice. Under the ESAP, Loggi will review and clarify its presentation materials for newly registering drivers to better communicate to them the circumstances under which user rights can be terminated. These terms will also be reinforced at appropriate times and through appropriate modalities, including written communication, in the event that an individual driver has violated such norms.

Loggi’s onboarding process requires the digital uploading of documentation for the driver’s MEI, the driver’s license required for motorcycle couriers (Condumoto), and proof that the driver’s motorcycle is registered properly as a courier vehicle. These steps involve payment of minimum life insurance and vehicle insurance fees. Van drivers have to present an additional document issued by ANTT (the federal land transport agency) and proof of a clean criminal record. Once this registration information is checked by Loggi staff, new couriers are welcomed and trained via a 3-hour onboarding session to orient them on use of the Loggi platform. As part of its initial publicity and marketing efforts, the company has also outfitted new drivers with branded jackets, t-shirts, trunks and/or specialized credit card machines, depending on the types of deliveries the courier is likely to make. Jackets and trunks have reflective strips that increase courier visibility and thereby contribute to traffic safety.

Mindful of the need for satisfied users among the independent couriers, Loggi has been targeting earning levels of c. R$25-30 per hour at any time of the day. Based on 120 hours worked over a month (the maximum that the top 3-5% earners work) or less than 6 hours per day, this target hourly rate would yield R$3,000-3,600 per month, or roughly 3 to 3.6 times the monthly minimum salary in the state. The company does so by flattening out the demand curve across different peak periods for its services (corporate document delivery in the mornings and afternoons, restaurant deliveries at lunchtime and in the evening/night, and e-commerce deliveries from early morning until early evening). This constant flow of delivery orders allows drivers to pick the periods that best suit their schedules. Loggi reports that high levels of driver satisfaction has translated into an attrition rate of only 0.3-0.5% per month.

Based on data shared with IFC, drivers have earned, on average, R$1,600-2,000 in income making some 5-7 deliveries per day within a 3.3-hour time period, on average, according to the company. These numbers include drivers who use multiple apps and/or mix part-time work via Loggi with other sources. Drivers interviewed by IFC report working longer hours in order to reach their own daily earnings targets. Those who consistently worked full days using the Loggi app (five days a week) earn upwards of R$3,000-4,000 per month and generally report being satisfied or even highly satisfied with the app, the customer experience and service as a driver, monthly earnings, and the promptness with which earnings are paid after the close of the month. One advantage cited is the reduced down time they face. In order to maintain driver earnings at satisfactory levels, Loggi has at times frozen onboarding of new drivers to maintain the size of the pool of active drivers and therefore to keep demand for their services stable. Drivers can also earn a referral fee for introducing other drivers or new clients to Loggi’s services.

Drivers receive ongoing orientations and information updates via in-app messaging, and they have in-app, email, and phone channels for reporting problems. Loggi is currently developing a system of in-app video trainings to further professionalize the services the users provide. In addition, through a data-crunching and quality of service system called Alice, Loggi is able to monitor and detect potential fraud, consistent service delays, and other misconduct by drivers. Using a three-warning system that is communicated via in-app messages and/or in person depending on the circumstances, Loggi can terminate drivers’ use of the platform for reasons of poor service, misuse, fraud, or other misconduct. Since its launch in late 2013 a total of 54 drivers have had their user rights blocked. In addition, the company is exploring ways in which it can leverage the size of the pool of independent drivers to negotiate discounts on products and services used frequently by the couriers and to provide other benefits to drivers via a program provisionally called LoggiClub.

Human Resources Policies and Procedures, Working Conditions, and Terms of Employment: At the time of appraisal, the company had 237 direct-hire staff, of which 46% are women, and 54% are men. The company has no third-party workers or contractor staff. Loggi seeks to provide its personnel with attractive conditions of employment and a positive workplace environment in light of Brazilian legislative requirements, and the company's own internal culture and corporate values. Terms of employment and working conditions are spelled out clearly in employment contracts and the collective bargaining agreements to which Loggi is subject. In addition, the company seeks to offer its personnel further benefits, such as participation in profit-sharing (participação nos lucros e resultados, or PLR), a private life insurance policy, private health and dental insurance, subsidized childcare for employees with young children, subsidized transport and gym membership, and other benefits beyond what Brazilian law requires. Despite operating in the highly competitive tech sector in Brazil, where turnover can be high, Loggi has grown significantly, doubling its staff over the last year, while largely retaining longer-serving staff. It has seen 88 departures, which represents a turnover of 37%, which is considered good by the sector’s standards. At the same time, as a start-up, the company is still structuring and improving its HR practices, including through the appointment of a full-time HR manager earlier in 2016 and the introduction of performance-based bonuses. Under the ESAP, Loggi will develop a comprehensive set of HR policies and procedures in line with PS-2 requirements, including the establishment of a worker grievance mechanism (see below), and communicate them widely throughout the organization.

Aside from the legal action regarding alleged labor infractions initiated from outside of the company (see below under Stakeholder Engagement), Loggi reports no investigations or lawsuits by the Public Prosecutor for labor issues. Relatively minor labor grievances have been settled amicably with complainants.

Workers’ Organization: Workers’ rights in Brazil, including the rights to association and to the formation of unions, are safeguarded in the 1988 Constitution and an extensive, detailed labor code known as the Consolidação das Leis do Trabalho, or CLT. Under Brazilian labor laws, virtually all workers are required to associate with a union (individuals can opt out of paying dues, if they complete certain formalities), and Loggi’s direct-hire employees benefit from the existence of collective bargaining agreements in their sector. The company in no way restricts union membership, it abides by the terms of collective bargaining agreements, and it respects labor rights. The vast majority of the company’s direct-hire employees in São Paulo (where most of them are located) are affiliated with two separate unions for workers in the transport sector: SINDIESP and SETCESP. Employees are affiliated with similar unions in other cities.

Independent drivers who handle delivery orders through Loggi’s apps are free to affiliate with unions for motorcycle couriers in their respective cities, namely SINDIMOTO’s state-level branches for drivers in São Paulo, Rio de Janeiro, Belo Horizonte, and Porto Alegre. For drivers in Curitiba, the analogous union in Paraná state is SINTRAMOTO. Both the company and drivers reported, however, that these unions focus primarily on representing motorcycle couriers who work as full-time, direct-hire employees (for example, for a courier dispatch service or for a restaurant chain or corporate organization that manages its own courier fleet) and not those independent drivers who work on an on-demand basis for Loggi and/or its competitors. The rise of on-demand, app-based platforms like Loggi has prompted difficulties with SINDIMOTO-SP, as discussed in greater detail below, under Stakeholder Engagement. In part due to recent protests against Loggi by dissatisfied drivers and involving SINDIMOTO-SP, the company has announced the creation of a 5-person consultative committee of independent couriers elected by their peers. This move was supported by the Public Prosecutor for Labor Issues and the Ministry of Labor in meetings with the company (see External Communications and Grievance Mechanisms in the Stakeholder Engagement section for more details).

Non-discrimination and Equal Opportunity: As a matter of Brazilian law, Loggi prohibits employment discrimination and promotes equal opportunity. It will ensure that these commitments to non-discrimination and equal opportunity are stated and communicated clearly when it develops and publicizes its HR policy and procedures (see ESAP item, above).

Retrenchment: Due to Loggi’s rapid growth over the last three years, it does not expect the need for layoffs of direct-hire staff. However, should the elimination of a number of work positions or the dismissal or layoff of employers is required, Loggi will follow the requirements of PS-2 in addition to Brazilian legislation and any requirements under sectoral agreements with the unions.

Worker Grievance Mechanism: As a relatively young company, Loggi has not yet formalized its worker grievance system beyond having the HR department manage directly the few complaints that have arisen to date. Under the ESAP, Loggi will therefore design and operationalize a worker grievance mechanism, including the formalization of a Workplace Code of Conduct or similar policy as appropriate. In line with the requirements of PS-2, this mechanism will be open to both direct-hire and any third-party workers Loggi might eventually have and provide anonymity to complainants, should they so desire. In addition, the ESAP requires that Loggi further develop and expand the channels for communication with and resolution of potential grievances from its independent drivers. As these drivers are not strictly speaking part of Loggi’s workforce, these requirements are addressed under Stakeholder Engagement (specifically under External Communications and Grievance Mechanisms).

Protecting the Work Force: Loggi verifies the age of all its potential employees during recruitment. As a part of Brazilian legislation and internal policy (to be developed under the ESAP item on an HR policy above), Loggi will state clearly its prohibition against child and forced labor. By law motorcycle couriers with the official Condumoto driver’s license (a prerequisite for an independent driver to be registered to use Loggi’s app) must be at least 21 years of age.

Occupational Health and Safety: Loggi’s office and warehouse employees work in relative low-risk environments from an OHS perspective. No workplace accidents were reported in 2015 or in 2016, as of the time of appraisal (November 2016). Nonetheless, to conform with Brazilian OHS regulations (known as the normas regulamentadoras or NRs) and their specific requirements, the company is beginning to put in place the necessary staff, processes, and documentation for assuring safe workplaces. Loggi has in place an occupational health surveillance program (PCMSO) and a workplace/environmental risk prevention program (PPRA), and it is establishing workplace safety committees (CIPOs). During appraisal, it was observed that OHS requirements at its cross-docking warehouse were not being enforced. Also, given the strong growth of the company, Loggi need to ensure that it is putting in place an OHS management system that is scaling appropriately and addressing evolving risks, hazards, and impacts. Under the ESAP, the company will ensure that it has analyzed and is complying with NRs that have not been covered by the OHS measures taken to date, such as NR-17 on ergonomics for its warehouse operations. It will also put in place an OHS policy and appropriate procedures to ensure that staff are trained in OHS requirements, that appropriate personal protective equipment is provided and used, and that control, monitoring, and review procedures are followed.

With regard to the independent motorcycle couriers upon which Loggi’s business is based, the company has no formal legal requirements for safeguarding and monitoring worker safety issues. As independent operators, couriers are instead required to make minimal monthly payment into the worker’s insurance system managed by the National Institute of Social Security, in the event of lost income due to injury or unemployment. The company established a partnership with an online payment platform to help facilitate driver compliance with monthly payment of taxes and INSS contributions, but it does not directly verify whether such payments have been made. In order to qualify for a Condumoto motorcycle courier’s license, the courier’s driving record cannot show traffic infractions in the previous year exceeding a minimal number of points, which strongly incentivizes driver safety. Also, in order to secure the motorcycle registration needed for a courier bike, the vehicle must have proper safety features, such as reflective strips on trunks. As noted above, the company currently provides new drivers with branded equipment, including jackets and/or trunks, which have reflective strips that increase courier visibility and thereby contribute to safety. In addition, the company collects information on road accidents involving platform users, and data reveals that about a half-dozen such accidents occurred in the last six months, the majority of which resulted from collisions with other vehicles/parties and not speeding. Company data reveals that the average speed traveled by couriers using the app in São Paulo is 19 km/hour. One of these accidents was fatal, and one courier was shot in the shoulder during a failed armed robbery (see more below under Security).

Nonetheless, given high rates of road accidents experienced generally by such couriers in Brazil, the ESAP requires that as part of the communication between Loggi and independent drivers, Loggi will implement a mechanism to promote safe driving, which might include an educational campaign and pointers/tips on road safety sent through the app/online platform and targeted alerts for drivers reaching excessive driving times or a high number of kilometers traveled in a given day. In addition, Loggi will standardize its internal reporting on driver incidents involving accidents, injuries, or other physical harm that drivers might experience so as to better analyze and prevent such incidents in the future. Finally, as part of its LoggiClub initiative (see below under Stakeholder Engagement), the company will identify mechanisms to facilitate access for independent drivers to private health insurance.

In addition, Loggi has been attentive to insecurity and criminality that drivers occasionally face when making deliveries in more insecure neighborhoods. From time to time, drivers have been the victims of armed robberies when potential assailants realize the value of e-commerce goods that they drivers are delivering. (There may also be deliberate ruses involving bogus e-commerce orders as a means of targeting delivery personnel.) As a result, Loggi has taken a number of measures to reduce driver risks, trying to assign drivers to handle orders in neighborhoods they know better, and rejecting e-commerce delivery requests in the most dangerous neighborhoods. On a quarterly basis, using data from the national mail service (Correios) about neighborhoods where violent robberies of delivery personnel have taken place, Loggi characterizes some area as off-limits for e-commerce deliveries. Meanwhile, Loggi is trying to develop alternative delivery options in such neighborhoods so that law-abiding residents who wish to make e-commerce purchases are not unduly disadvantaged.

Resource Efficiency: Loggi seeks as much as possible to reduce if not eliminate its office waste. It has introduced a “Paperless HR” system, by which all HR-related matters are handled digitally and online, and it has a goal to stop the use of disposable plastic drinking cups.

Electricity and Water: Electricity and water use stems from routine office tasks, remain low, and do not represent a significant source of impacts. Electricity use, for example, has totaled approximately 152,000 kWh in the year to date.

GHG Emissions: Based on direct energy use by Loggi (see immediately above), it is estimated that the company’s activities emit 1,985 tons of carbon dioxide equivalent per year. In addition, it is noteworthy that the type of motorcycle used by the vast majority of motorcycle couriers is a “flex” model, which can be fueled by ethanol, further reducing net carbon dioxide emissions.

Solid Waste Management: Loggi’s office and warehouse operations produce small amounts of waste from paper products, domestic use, and packing materials. Wherever possible and in accordance with Brazilian regulations, segregated waste are recycled, and other waste streams are handled by municipal waste removal services and sent to licensed landfills.

Community Health and Safety: Traffic safety is the principal interface between the project and communities in which Loggi operates. Loggi is unable to guarantee fully community safety with regard to the delivery services taking place through its apps for various reasons, including the independent, autonomous status of drivers using the platform, the sizeable number of deliveries involved, the kilometers traveled, and the nature of traffic in urban settings. That said, a number of mitigants are in place that reduce the number of accidents involving users of Loggi’s apps. First, independent drivers can register and maintain their registration on Loggi apps only if the relevant driver’s specialized license (e.g. Condumoto) is valid, including having no outstanding traffic infractions/fines and remaining under the limit of points levied for any acts of unsafe driving. Condumoto licenses must be renewed on a yearly basis. This requirement both increases the likelihood that only safer drivers register as Loggi users and incentivizes them to remain so. Second, Loggi advises motorcycle couriers using its platform to abide by legal requirements and safe driving practices (Regras de Circulação para Motoboys) through the onboarding process. If proven, a user’s access to the Loggi platform can be terminated for unsafe driving. Third, Loggi reports that platform users themselves have occasionally alerted the company to other drivers engaged in unsafe practices. This occurred roughly a dozen times in 2016 and led to further investigations, follow-up discussions with the drivers concerned, and in some cases termination of the driver’s contract and user rights. Finally, Loggi tracks accidents, travel speeds, and other driver data involving users of its apps, and data for recent months reveal very low numbers of accidents involving other parties, including 9 collisions. Nonetheless, as specified above in PS-2 (Occupational Health and Safety), the ESAP requires Loggi to explore additional ways in which its data on driver behavior can be used to create safety-related alerts and performance improvements. In addition, as noted elsewhere in this ESRS under Stakeholder Engagement (External Communications and Grievance Mechanisms), the company will strengthen channels for the general public to alert Loggi to potentially unsafe driving and/or be able to lodge more readily whatever complaints they might have.

Emergency Preparedness and Response: See PS-1 for more information.

Security Personnel: The company rents warehouse space for its cross-docking operations in São Paulo within a larger distribution center that has armed security guards contracted by the center’s owner/operator. These personnel are trained and certified by the private security firm who employs them, including in the use of firearms and lethal force. In accordance with the ESAP, upon renewing its current contract or entering into any new contracts with warehouse owners/operators employing armed security, the company will require the inclusion of a clause specifying the need for appropriate application of PS4 principles for armed security personnel at the distribution center in question, including appropriate vetting, policies and procedures, and human rights training for such. Specifically, under its contracts, Loggi will request the owner/operator of the logistics center to develop a formal policy to clarify the circumstances under which armed guards are authorized to use their firearms or other deadly force and publicize channels for stakeholders, such as independent drivers using Loggi’s platforms, to raise complaints if necessary. In addition, Loggi will seek to maintain oversight of how and when the owner/operator of the logistics complex ensures all armed security personnel receive mandatory/periodic training, including human rights awareness and scenario-based trainings for reacting to potential civil unrest or disturbances. Such trainings should cover how to interact with stakeholders, including independent drivers using the Loggi platform and instruction in the rules of engagement and use of non-lethal methods. These procedures will also address how any incidents involving private security personnel are to be investigated and/or referred to law enforcement authorities in light of local legal requirements.

Stakeholder mapping/analysis and Stakeholder Engagement Plan: Loggi is heavily focused on user satisfaction, both in terms of end-users who are ordering/receiving deliveries and in terms of independent couriers using their app/platform to receive and execute delivery requests. The company uses a third-party online consumer complaint tracker (www.reclameaqui.com.br) to measure user satisfaction, and even with growth to more than 250,000 deliveries/month, complaints have measured less than 0.01% for the last year. For its platform users, Loggi has technologically sophisticated but user-friendly features in its apps, email channels, and a dedicated Customer Experience team designed to support drivers (via email and phone, should the in-app features fail to resolve problems).

In addition, it has sought to manage in an ad-hoc fashion its sometimes contentious relations with both the workers’ union, SINDIMOTO, representing couriers employed directly by traditional dispatch firms and the employers’ union, SEDERSP, regrouping such companies. (Under Brazil’s corporativist labor management system, both workers and employers have formal unions representing them in sector-based bargaining processes.) Possibly motivated by perception that online delivery apps like Loggi’s and the use of independent couriers are challenging the sector’s traditional business model, both organizations have sought to bring cases against Loggi via the Public Prosecutor for Labor Issues (MPT in Portuguese), alleging in essence that a de facto employment relationship exists between Loggi and platform users. Cases initiated in 2013 and 2014 were deemed inadmissible by the MPT in September 2014 and again in March 2015. In meetings Brazilian labor authorities have stated unequivocally that Loggi’s relationship with platform users falls within the proper, regulated use of independent contractors for certain professions, including courier services.

Nonetheless, Loggi continues to try to manage more constructive relations with SINDIMOTO and the independent drivers who use its app. In mid-November 2016, an adjustment in prices paid per certain types of deliveries was introduced abruptly and without prior consultation with independent drivers. The couriers reacted negatively to these changes and blocked Loggi’s warehouse entrance for a couple of days. The company resolved the protest amicably by withdrawing its pricing changes, agreeing to the creation of a driver’s committee (see below), and attending a consensual meeting with the Prosecutor’s Office for Labor Issues with a number of motorcycle courier leaders. Given the absence of an employer-employee relation between Loggi and the couriers, the Prosecutor’s Office reaffirmed the utility of the proposed drivers’ committee. Based on information available to IFC at the time of appraisal, the company’s approach to engagement with these stakeholders appears solid and aimed at improved relations. In addition, the company has developed positive relations with the São Paulo municipal government’s department of transportation over the last year and participates as an industry representative in the committee responsible for monitoring and proposing regulation of the transport of small deliveries (Comité de Transporte de Pequenas Cargas). City authorities are supportive of Loggi’s business model, which allows legally registered motorcycle couriers to earn improved incomes as independent drivers.

To date, however, the company has not formally mapped out its stakeholders, developed and implemented a Stakeholder Engagement Plan (SEP), or engaged in a structured approach to information disclosure and consultation with key stakeholders. Rather, it has employed a highly adaptive, more ad-hoc approach to communicating with stakeholders, including the independent drivers it relies on for its business model. Under the ESAP, the company will therefore carry out a process of stakeholder identification and analysis and develop and implement a SEP in line with PS-1 requirements. As part of this effort, it will better define how mechanisms such as the newly-announced drivers’ committee (see next sub-section) and other channels for communication and consultation will function.

External Communications and Grievance Mechanisms: Loggi does not currently have a structured approach to external communications or grievance management, including with its independent drivers. As a result of the November 2016 protest action by some drivers in response to changes in fee payments (see above, at Stakeholder Mapping/Analysis and Stakeholder Engagement Plan), the company has announced the creation of a 5-person consultative committee for communicating with elected representatives of platform users, but it has not yet discussed or finalized this body’s more precise composition, role, and scope. Loggi is therefore required under the ESAP to further define and begin functioning of this body and develop a broader strategy and appropriate mechanisms for all key stakeholders to be able to lodge grievances with the company, including couriers and members of the general public (who might have complaints about couriers’ driving practices, for example). Specifically, Loggi will make it clearer on branded driver equipment (e.g. trunks), its app, and its website how members of the general public can alert the company to unsafe driver practices or otherwise lodge complaints. As part of this effort, Loggi will develop and implement appropriate procedures for receiving, resolving, and responding to such complaints, including anonymous ones, in a timely fashion and aligned with the requirements of PS-1.

Company Name: Loggi

Address: Avenida Andrômeda, 885, 26^th Floor - Alphaville Empresarial, CEP: 06473-000 Barueri, SP, Brazil

Email: juliana.clemente@loggi.com

Phone: +55 (11) 2424 7790