This is a category “A” project according to IFC’s Policy on Environmental and Social Sustainability in consideration of the inherent potentially significant and diverse environmental and social risks related to the sector where YMI operates, involving the construction of several greenfield linear infrastructure projects in the context of a growing portfolio of countries of operations.  The key issue associated with this proposed investment is the potential involvement of the company in future projects with high E&S risks in which YMI, as an EPC contractor, may have limited control. These include risks and impacts potentially associated with large rail system projects where the company may be involved, particularly in instances where project construction activities may be located in areas posing significant environmental/biodiversity and/or social concerns. Therefore, a primary mitigation is the capacity and ability of YMI’s at both corporate and project level to consistently implement a robust E&S screening process for each prospective project, that will assure that project opportunities and future activities are screened for high E&S risks and, if not screened out, undertaken consistent with IFC PSs. 

Typical issues which can be directly mitigated and managed by the company during construction of projects include fair, safe and healthy working conditions for direct and contract employees; handling of hazardous materials, management of waste, wastewater and construction nuisances (such as noise, vibration and dust), community safety and road safety, and engagement with affected communities in collaboration with local authorities and the project’s developer. 

Social and Environmental Assessment and Management Systems  : YMI established a corporate Integrated Management System (IMS) based on specifications of the international environmental management standard ISO 14001, the international occupational health and safety management system specification OHSAS 18001 and ISO 9001 Quality Management System. YMI management systems are ISO and OHSAS certified. 

The IMS includes the corporate HSE standards and procedures for the management of HSE risks associated with YMI’s business activities. The IMS provides the company with relevant corporate HSE standards to be included in their technical bids and to ensure that consistent standards apply to each project.  The management system requires identification of project HSE risks prior to starting the construction activities and development of a site-specific HSE management program to mitigate and manage these risks throughout the construction period.  The IMS procedures cover water quality management, air quality and dust control, waste management, noise and construction nuisance reduction, stakeholder engagement and grievance management, biodiversity and ecological protection, design change management, environmental incident response and report, archaeological chance finds, integrate pest management, etc. 

A corporate IMS unit was established for the development of the Integrated Management System, and is responsible for the implementation and continuous improvement of HSE policies, guidelines and procedures. The unit consists of a dedicated manager and a full time team of three staff responsible for quality, safety, environmental and social management. At an operational level the IMS unit is responsible for (i) ensuring corporate policies, guidelines and procedures are incorporated in the bidding documentation, (ii) providing individual projects with corporate requirement, guidance and procedures, (iii) carrying out periodic supervision and monitoring of all projects, and (iv) maintaining a corporate level HSE performance database. 

The company’s IMS includes a number of procedures that guide HSE monitoring. The monitoring program covers the key aspects of HSE performance including monitoring of the implementation of project-specific plans and procedures, monitoring of key H&S statistics and reporting of the results to project management. In addition, all projects are audited monthly by the corporate unit and audit results are reported to project management and consolidated in bi-annual audit result reports for senior management. In addition to YMI’s audits, external monitors contracted by some project owners make both scheduled and unannounced visits to construction sites to assess performance. 

IFC reviewed the implementation of a sample of project-specific construction HSE plans developed in line with the requirements of the IMS. Sub-contractors are contractually required to carry out their activities in accordance with YMI’s HSE policies and procedures and the company monitors their performance. Every construction project has a company’s dedicated on-site HSE manager, and a team of supervisors, with dual reporting lines to the construction manager at the project level and to the relevant project coordination manager and corporate IMS unit manager at the corporate level. 

Assessment and management of E&S risks and impacts of individual projects are often beyond the scope of YMI’s work, in particular, management of legacy issues and risks and impacts associated with site selection, including land acquisition, biodiversity, indigenous peoples and cultural heritage. IFC review found there is limited policy guidance from the corporate IMS to the project teams on how to deal with those issues when they occur. 

In accordance with the schedule outlined in the attached ESAP, YMI will perform a gap-analysis between its current IMS and IFC’s Performance Standards and applicable World Bank Group Environmental, Health, and Safety guidelines. Based on the outcomes of the gap-analysis, YMI will review and upgrade its IMS to ensure it is fully aligned with IFC PSs. As part of this task, the company will develop and adopt corporate guidelines under the IMS to require the consistent development of Construction Environmental and Social Management Plans (CESMPs) in all of its projects, to ensure that project-specific impacts that may arise in the course of construction activities are identified, relevant mitigation and management measures are developed, and corporate E&S capacity is strengthened to meet project development needs ( ESAP # 1  ). 

YMI typically undertakes an initial E&S risk screening exercise during the asset identification and review stage, and undertakes a fatal-flaw analysis early on, involving, amongst other aspects, potential E&S fatal flaws (e.g. overlap with protected areas, proximity to populated areas). Project design in conjunction with E&S data guides the siting of project right of ways, where applicable. However, the availability and use of relevant E&S information and screening criteria need to be strengthened to fully align with IFC PSs. In upgrading its IMS, YMI will develop an E&S risk screening and project categorization procedure, that will refer to the IFC Performance Standards as a relevant E&S requirement for new projects. The process will include explicit criteria that allow early identification and classification of high E&S risks (e.g., biodiversity, involuntary resettlement, Indigenous Peoples, cultural heritage), project’s categorization and relevant requirements in terms of bidding decision, planning, monitoring and auditing of projects by the E&S staff at the project level and at the corporate level as per ESAP #1 requirement. The experiences, practices and lessons learnt in managing AKH railway project in Ethiopia will be used as the basis for the development of the new corporate policies. Following the screening of high E&S risks, the procedures for new projects will: a) recognize relevant PS requirements and define YMI’s responsibilities, including YMI’s role in its collaboration with the project developer, in addressing those risks; and, b) based on a), establish relevant E&S action plan with itemized tasks and time-bound requirements for each project within their power of influence to implement and achieve compliance with PSs. 

Once upgraded and functioning the IMS will provide specific guidelines to be followed for project-specific circumstances, deliverables, budget, responsibilities, and reporting and monitoring. YMI will retain qualified E&S advisors with international experience on biodiversity, resettlement and community engagement to oversee the risks and impact screening and assessment for new construction business at the corporate level and to oversee E&S performance of each project  (ESAP #2)  . 

In all projects involving international project finance, YMI’s E&S performance is reviewed under the scope of periodic external E&S monitoring; for example, YMI’s AKH railway project is one of the projects being monitored by a reputable external E&S monitor. An independent monitoring mechanism will be established under the proposed IFC investment as part of ESAP # 2. 

Emergency Preparedness and Response  : As per relevant IMS procedure, projects are required to develop a comprehensive Emergency Preparedness and Response Plan to address all foreseeable incidents and emergency situations, including fire, explosion, road accidents, earthquake, tsunami, flooding, terrorist activity and other threats. The plan also contains detailed preparedness to safeguard the health and safety of workers and the communities in the event of an emergency. In Ethiopia, emergency contacts are posted in operational areas for ease of reference and appropriate fire control measures are in place. All construction sites of the AKH railway project are fenced. Periodic emergency drills are undertaken and continuous training is provided to construction workers.   

Human Resources Policies and Procedures  : YMI directly hires workers (include casual workers) at all construction sites, except, as needed, the workforce mobilized by subcontractors to assist with specialized tasks such waste management, blasting. At present, YMI has a total employment of approximately 15,000 working for 17 projects. YMI’s policy is to hire as many local workers as possible on each construction contract. In Ethiopia, the AKH railway project has a total of 6,000 workers and approximately 3,000 of them are Ethiopian nationals.  

YMI has developed a comprehensive set of HR policies and procedures which articulate requirements of working age, job specifications, competencies structure and grading, annual performance assessment, promotion process, worker’s code of conduct and feedback and grievance procedures. YMI’s HR Policy also contains an explicit commitment to nondiscrimination and equal opportunity. The policy is supported by a formal performance evaluation system which includes assessment of the suitability of the staff member for wage increases and/or promotion.The HR management system also includes detailed procedures for dismissal with cause and retrenchment, in line with international good practice. YMI has a corporate HR department with a team of five staff and a manager responsible for oversight the implementation of the corporate HR policies and procedures in all of the countries in which YMI has operations.

The key elements of YMI’s HR management approach are embodied in its corporate Code of Conduct, Employee Relations policies and procedures and HR Assessment Policy. These documents specify the Company’s working relationship with its employees and are communicated to each employee through their employment contracts. Employment contracts clearly specify each employee’s position, detailed job description, rights and responsibilities of the employee and YMI, contract duration, salary and benefits. YMI’s HR policies and procedures are introduced to candidates during employment negotiation and discussions. YMI has three types of employment contracts, they are defined term (termed) and undefined term (permanent) and part time contracts. All employees receive a copy of their employment contract at the time of employment. These policies and procedures are implemented consistently across all construction activities and company operations, with the exception of specific provisions needed to ensure compliance with host country labor law. The policies also apply to workers of all subcontractors. 

YMI is committed to talent identification, career path planning and training, and promotion for its growing business need. Since YMI was awarded for the construction of two large greenfield railways in Africa, YMI has constantly reviewed employment categories and competencies, and hired termed workers. As part of the workforce development strategy, workers who are working for the AKH railway project in Ethiopia are being considered for new railway projects in Tanzania and Senegal.  

HR department prepares and distributes to each employee an orientation handbook for every project which includes: (i) introduction to YMI and its ongoing projects, (ii) human resources principles and policies (iii) basic information on project country, (iv) project specific information, (v) occupational health and safety and environment, (vi) country contacts and emergency contact information (vii) practical information on life in the country.

YMI complies with relevant labor laws and regulations covering short term workers on construction projects, including those related to minimum wages for the type of work undertaken, working hours, and payment for overtime work. The company employs no one under the age of 18, even when project host country has less stringent requirements on working age; at every YMI construction site there is a policy to verify the age of all workers. YMI project companies are in close contacts with host country labor authorities throughout the recruitment process and for the duration of employment of national workers. 

YMI endorses the principle of freedom of association consistent with host country law; both in YMI’s home country and abroad, workers have the right to join a union to negotiate salary and working conditions as part of a collective bargaining agreement. In Ethiopia, for example, local workforce joined worker’s organizations which negotiated working hours and worker’s code of conduct. YMI has grievance procedures that allow workers to raise employment related issues to their immediate supervisor, HR manager and/or project manager. The grievance mechanism includes a form and collection box to enable anonymous as well as named complaints. The grievance forms and box are available at all sites, in the entrance to the offices or in the canteens, so they are easily accessible for all workers. Another common way of raising concerns is by approaching union representatives. YMI Human Resources (HR) department meets with the union regularly to discuss any issues related to employment. 

Occupational Health and Safety  : Workforce health and safety (“H&S”) is a key component of the company’s IMS and project specific HSE management systems. Project related activities are subject to hazard identification and risk assessment to ensure that H&S controls to manage risk are in place prior to starting the activity and that the workforce, including sub-contractors and casual labor, are all trained on the work hazards present, the correct use of equipment, the procedures to be followed and protective gear to be worn. 

At the construction sites, the company provides induction HSE training for employees, sub-contractors and casual workers. Short-term contract workers receive the same training, personal protective equipment (PPE) and on-site medical care as YMI employees. There is an HSE briefing (“Toolbox Talk”) at the start of every shift. On-site HSE supervisors and site officers are in place at all construction sites to ensure implementation of H&S procedures, equipment safety and safe use of equipment and to monitor performance. 

Procedures are equally adopted by company’s subcontractors and primary suppliers.  The railway sleeper manufacturer, a key supplier to AKH project, is also a sibling company of YMI and follows the same practices as YMI. 

YMI has established standards for construction worker accommodation camps that include size and number of beds in each worker accommodation unit, number of ablution facilities, and requisite infrastructure including food preparation, prayer areas, and recreation facilities. These facilities are regularly inspected as part of YMI’s audit process. Non-local workers are provided with accommodation and food in camps to minimize risks and impacts as a result of worker influx. Every YMI construction project site also has a clinic staffed by a full time doctor and ambulance and there is a requirement for a fire truck to present during every shift. 

YMI have detailed maintenance programs for equipment, vehicles and hand tools. Preventive maintenance programs are in place and regularly tracked. All chemicals are labeled and stored appropriately with relevant material safety data sheets (MSDSs). PPE use was consistently observed and emergency showers were found to be available on site. Medical examinations of the employees are carried out at intervals defined by host country legislations.

Lost time injury frequency rates (LTIFRs) and near misses are closely monitored. The strict enforcement of H&S procedures by YMI is reflected in the positive safety statistics reported at all YMI’s construction sites. Statistics for 2016 are consistent good industry practice (LTIFR~5). Incidents are categorized and reported to management and each lost time incident is investigated through root-cause analysis and corrective actions identified. Company’s procedures are adapted where necessary to prevent re-occurrence.

Coherent with PS3, the corporate management system includes several procedures to manage resource efficiency and pollution prevention and that are used as reference by each project manager to develop the project-specific procedures. These include (a) water quality management procedure, (b) air quality and emissions procedure, (c) waste management procedure, (d) noise and construction nuisance (i.e., vibrations) reduction procedure, (e) integrated pest management, (f) environmental incident response and reporting procedure. 

At the project level, YMI monitor surface water quality, drinking water, wastewater effluents, air quality, environmental noise and results are compared with project standards, including relevant WBG EHS guideline values. If exceedances are identified, they are analyzed and corrective actions implemented as needed. 

Energy and Water Use Efficiency:   Energy consumption is being recorded at project level; energy consumptions for all construction equipment are logged and analyzed to control and improve efficiency. 

The railway project in Ethiopia use water from its own wells which are well secured and protected. The project document on water availability provides an estimate of the water needed during the construction phase, and compares it to water availability in the project area of influence, to ensure that water use by the project does not adversely impact water availability for local communities. 

The company will continue to review the energy and water usage and will set annual corporate and project specific objectives of reduction in energy usage and fresh water consumption.  This will strengthen the practice in terms of energy efficiency measures and water reuse, prioritizing implementation in locations where there is water stress. Hydrogeological and water sustainability studies will be consistently carried out for all projects to ensure sustainable use of water and to prevent adverse impact on water availability for the affected communities  (ESAP #3)  .

Green House Gas Emissions  : The company quantifies and accounts for GHG emissions at project level. For example, the study carried out for the AKH railway project estimated that the total GHG emissions for the project construction phase, including direct emissions and emissions from purchased electricity from the electricity grid, is 45,297 Tons CO 2   equivalent per year. AKH project ESMS contains measures to reduce GHG emissions, such as selecting and maintaining efficient machines for construction. Practices used in the project will be further developed into a corporate level GHG reduction and management strategy, including identification of annual targets for GHG emission reduction and GHG reporting ( ESAP #3). 

Soil Erosion and Contamination  : Railway projects often require significant earthmoving activities and slope cuts and fills which may cause adverse impacts on soils, particularly soil erosion and slope instability. In addition, there is a risk of soil contamination due to spillage of fuels and other hazardous substances, and construction equipment cleaning. Mitigation measures adopted for the AKH project included consideration of seasonal constraints for the execution of specific project activities (like land clearing, excavation in soil and earthmoving works) during the dry season; workspace and staging area management to minimize the construction footprint ; designing and construction of drainage and erosion control structures; land reinstatement and re-vegetation immediately following the completion of the works; planting appropriate plant species on erosion-prone slopes; and procedures to prevent soil pollution by project activities and spill control.

Air Emissions and Ambient Air Quality  : Dust suppression is regularly implemented through watering and project vehicles carrying dust-generating materials are properly covered. During drilling and rock cutting, watering is used to minimize dust generation or, as needed, dust is collected from the rock surface with a dust collection system. Where blasting is required adjacent to residential areas or sensitive resources, blasting mats are used to prevent dust impact. Dust measurements are performed per project requirements at locations selected by environmental risk analyses.

Wastewater Treatment: Wastewater both from operation and camp site are treated as required by the IMS. AKH construction sites have packaged wastewater treatment plants (WWTP), including disinfection stage, to treat domestic waste waters. The plants were designed to comply with relevant WBG General E&S Guidelines for discharge of treated effluents to surface waters, which are typically met; all plants have been permitted by the competent authorities. 

Going forward, YMI will prepare and implement corporate wastewater treatment plant operational guideline which includes emergency procedures and measures to deal with equipment breakdown as per  ESAP #  3 .   The corporate procedure will require the development of project-specific WWTP operational procedures.  

Solid Waste Management:   Management of solid non-hazardous waste and limited amount of hazardous waste was in general adequate at the sites IFC visited, involving measures for waste segregation and reduction. Non-recyclable waste produced on site was segregated and temporarily stored in appropriate containers and treated in accordance with the provisions set under the waste management plan and in compliance with applicable regulations. 

Concrete waste was dewatered by filter presses and dried in lined pits and either taken to a designated disposal area or incorporated into structural earthworks. Secondary containment (drip trays and concrete containment) was available for storage of oil and chemicals.

Noise:   Regular noise measurements are required by the relevant YMI’s procedure and are consistently performed around construction sites and in consideration of residential receptors. YMI’s project management limits the hours of operation of noisy equipment operating in proximity of communities; requires the use of mufflers where appropriate; and selects equipment with lower sound power levels, where available.

Infrastructure and Equipment Design and Safety:   YMI’s engineering designers follow international standards such as the European structural design codes (EUROCODE), or other internationally recognized building codes at the request of the clients, as well as applicable national standards including seismic codes, life and fire safety, environmental protection and energy efficiency.

All kinds of construction work implemented for EPC projects, including underground works, concrete, structural steel, piping, equipment erection, general erections work, coating and painting, electrical and other utilities, insulation, are subject for daily quality control implemented as a part of corporate quality management system. The quality of completed construction works is checked and accepted by the project management team, technical representatives of a client and design company (design supervision) and project’s compliance to the applicable standards is confirmed by a group of third party technical experts at commissioning stage. The same procedure for verification by external third party experts is used where YMI acts as project designer and developer. 

Traffic and Public Road Safety:   Construction traffic is usually the main interface between a project and affected communities and construction traffic safety management is of paramount importance for the company. YMI’s standard operating procedures for construction projects include guidelines for ensuring safe design, operations and maintenance of the construction project infrastructure and equipment, control of public access to construction sites, appropriate use of signals and physical barriers, separation of pedestrian ways from work areas and defensive driving, among others. In cases when projects use part of public road network for project-related traffic, YMI requires projects to follow the IMS procedure on community safety and enforce a policy of “no driving in the dark”. 

In Ethiopia, road incidents have been a long-standing concern, given that the AKH project uses local public road for project related traffic, crossing a number of rural communities. The project developed and implemented community awareness programs in coordination with local authorities, focusing on communities and schools located along the main road used by the project. The project also implemented driver’s safety awareness training and enhanced speed limit control with positive results reported in terms of traffic management and community safety. 

As per ESAP #1, the corporate IMS upgrade will include a specific requirement for the development of detailed traffic and transport management plans in all projects where YMI operates, with focus on community safety measures. Such plans will include provisions for road maintenance and repair, driver’s defensive training, vehicle maintenance, speed limits and control, project related signage, abnormal load escort and operating times, and community safety awareness. 

Security Personnel:   YMI contracts the services of private security companies for each project to take care of access control and asset protection. In addition to hiring security personnel from private security firms, as needed, the company hired licensed armed security services. YMI will develop a security management policy consistent with the requirements of PS 4 incorporating Good International Industry Practice (e.g. the relevant guidelines of the Voluntary Principles on Security and Human Rights). Further, as part of the IMS upgrade, YMI will develop a corporate procedure which requires project security contractors to screen their personnel so as (i) to avoid hiring anyone implicated in past human rights abuses; (ii) to ensure that security personnel are instructed on how to interact respectfully with workers and members of the community; and (iii) to ensure that use of armed security personnel, where needed, is carried out in full compliance with PS 4 requirements. As part of the security management procedures YMI will develop a protocol to assess and manage risks associated with potential project’s use of public security as a part of its ESMS’s system upgrading. 

As a main contractor, YMI’s interaction with local communities starts from mobilization and site preparation and continue to the completion of the construction.       

Planning and management of community engagement activities are the responsibility of each project team, usually in coordination and under supervision of the project developer. Project interaction with local communities are predominately to address contextual issues or to support local communities within the project area of influence. For example, the railway project in Ethiopia developed and launched several community development programs, including: i) community awareness programs in coordination with local authorities to increase road safety awareness within the rural communities and targeting local schools; ii) water well restoration programs for vulnerable communities with difficult access to water; iii) programs to raise HIV awareness in the local communities and workforce; and iv) malaria awareness and preventive programs. 

As part of corporate IMS upgrading, YMI will develop community engagement framework and will require all greenfield railway projects to develop and implement a Community Engagement Plan (CEP) as a part of CESMPs to identify and address country contextual issues and community issues and engage with Affected Communities. The CEPs which will include community analysis and mapping, implementation procedures, clear roles and responsibilities, budget and resource plan, key performance indicators (KPI) and targets, assigned roles and responsibilities, incentives, and a grievance redressal mechanism. In addition to, when indigenous peoples or vulnerable groups are identified within the area of influence of a project, YMI will require the project team to develop an indigenous people plan or a community development plan in consultation with affected people to identify programs that will benefit local community. For the development of the community engagement framework the company will hire a qualified social specialist. Activities integrated with the CEPs will include community development programs (e.g., community health; education, sustainable livelihood development program; etc.), which will be designed and implemented to strategically contribute to CEP objectives and measured according a defined set of KPI’s.