PS5 on Land Acquisition and Involuntary Resettlement does not apply as the project is planned on land already owned by LLP through a willing buyer willing seller transaction. PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resource is not considered applicable as the projects are being developed in a peri-urban area of modified habitat with no significant biodiversity values. PS7 on Indigenous People does not apply because no indigenous people, as identified by IFC Performance Standards, have been identified in the area of influence of the centers that will be financed under the project. PS8 on Cultural Heritage does not apply as there is no planned expansion in known cultural heritage areas.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Specific key environmental and social issues reviewed for construction activities include: (i) client’s corporate environmental and social management capacity to build the project in a manner consistent with IFC Performance Standards; (ii) working conditions for employees; (iii) management of occupational health and safety (OHS) risks; (iv) efficient use of energy and water; (v) waste and wastewater management; and (vi) construction contractor’s environment and social management systems (ESMS).

Environmental and Social Assessment and Management System: LLP developed an Environmental Impact Declaration (Declaración de Impacto Ambiental, DIA) for the project. The DIA’s was presented to the relevant authority (Ministerio de Producción) and the respective Environmental Licenses will be issued. LLP already secured the relevant operating permits for the project (Habilitación Urbana and Construcción Simultanea).The DIA includes an environmental management plan (EMP) that will be incorporated into the ESMS that LLP’s main contractors will have in place for the project. Thus, as part of the ESAP, LLP will include contractual obligations for its main construction contractors: structural, steel (frame and roof), infrastructure and building shell; to develop, coordinate and implement the measures specified on the EMP and relevant programs and procedures to ensure alignment with PS1.

Policy: LLP agreed to develop an environmental policy that will define its objectives and principles that guide its activities and will specify who is responsible to ensure conformance with the policy and be responsible for its execution.

Identification of Risks and Impacts: As noted earlier, LLP developed a DIA where environmental risks for the project were identified. Subsequent stages of development in the same land plot will only require building permits (Licencia de Edificación). Key risks identified on the assessment are presented in their respective following sections of this document.

Management Programs: Land preparation is currently underway and LLP contractor for this task has adequate management programs and procedures in place to address the risks of this activity, to name a few: waste management, re-fueling of equipment, emergency response, occupational health and safety, and pollution control.

Organizational Capacity and Competency: LLP operates in Costa Rica, where it developed its first logistic warehouse park. The sponsor has recently acquired land in Colombia which will be developed in parallel with the Peruvian operation.. LLP employs experienced staff with background in the logistics and construction sector, with adequate technical background. For its Peru operations, there is a CEO managing a Market Leader and a Development Director, who then manages a Property Manager and a Project Manager. LLP’s CEO and founder has over 14 years of experience developing similar centers in Latin America, and its Peru Market Leader has extensive experience in the construction of operation of logistic centers in the country.  Oversight of the contract for construction activities, including ESMS implementation on site relies on the Project Manager. A construction management firm is tasked with managing the construction supervision and main contractors.

Emergency Preparedness and Response: On site, there is an emergency response plan in place developed by the land preparation contractor. However, LLP will require its subsequent contractors to coordinate and develop an emergency response plan for construction activities that will consider the relevant potential emergencies for both operational and natural hazards in the area (earthquake, flash floods, etc.), as part of the ESAP. Design and development plans for the project, were completed in accordance with Peruvian legal requirements. Regarding fire safety infrastructure and equipment, the project will be equipped with a fire pump and control room that complies with the requirement of the US National Fire Protection Association (NFPA 20). As per construction plans (blueprints) hydrants will be installed across the buildings, as well as sprinklers and fire extinguishers that comply with local fire safety requirements. There will be a water tank storage to ensure adequate response in case of emergencies.

Monitoring and Review: LLP is relying on a construction management company and a construction quality assurance and control company, whose responsibility is to ensure that subcontractors perform their work plan on schedule and as specified in the contract. As part of the ESAP, the construction quality assurance and control company will develop relevant key performance indicators to monitor the environmental, and OHS performance during construction and will report findings to LLP’s Project manager.

Human Resources Policy and Procedures, Working Conditions and Management of Worker Relationship: LLP’s workforce in Peru comprises of 3 people that are in charge of commercial and project management activities. During construction, it is expected that contractors will employ up to 169 employees on site. There is a contractual obligation for construction contractors to comply with labor and occupational health and safety (OHS) regulations. LLP and its subcontractor employees will be: free to join unions, provided with information regarding their labor rights, not employ child and forced labor, and provide all the conditions required to ensure a safe working place, including but not limited to training, communication of hazards and provision of personal protective equipment. In addition, LLP will ensure that there is an internal grievance mechanism in place for all employees working on the project.

Occupational Health and Safety: The project’s OHS risks are those inherent to conventional construction activities, such as: working at heights, handling of heavy equipment and hand tool operations, hot work, ergonomics, among others. Currently, there is an OHS supervisor (Supervisor de Prevención de Riesgos) on the construction site and, and employees go through an induction period before being allowed on site. As specified on the ESAP above, subcontractors will be required to follow the relevant OHS regulations, to ensure that risks on the construction site are adequately assessed and mitigated.

Workers Engaged by Third Parties: As highlighted earlier, LLP contracted the services of a construction management company. The scope of this contract includes the management of subcontractors participating in the project. These subcontractors, while not required to have their own ESMS, are contractually required to follow local environmental and OHS regulations. As part of the ESAP, LLP will ensure that all contracts will have this requirement and that all employees on site have access to the internal grievance mechanism.

Resource Efficiency: The project is planned to be built with energy and water efficiency measures to achieve IFC’s Excellence in Design for Greater Efficiency (EDGE) certification. The project will take its electricity from the grid, and there will be an emergency diesel generator. Lighting will be provided using LED lamps. As a measure to reduce water use, wastewater will be adequately treated on site to the relevant standard to be used watering green areas on the project site.

GHG Emissions: GHG emissions for LLP are due to electricity and fuel consumption during construction and operations. Based on these estimates for the facility, emissions are expected to be approximately 3,200 tonnes of CO2-equivalent annually; including the expansion plans emissions will be below 25,000 tonnes of CO2-equivalent, therefore no reporting requirements apply to this project.

Water: During construction, potable water will be brought to the project site by trucks. Water use for operation activities will be primarily for domestic use and will be sourced from nearby water wells for which LLP has the relevant permits for its use.

Pollution Prevention: Air emission sources at the project site are due to dust, exhaust from trucks and emergency diesel electricity generation. Noise levels due to equipment operation and truck traffic will be monitored during construction and will be negligible during operations. Since the project is located in an industrial area with no nearby residents, effects of project activities on air quality are expected to be minimal with the implementation of standard industry practices during construction.

Wastes: During construction, waste material will be collected and segregated before recycling. Disposal of construction excess material and other wastes will be done in facilities designated by the municipality. Conventional waste expected to be generated during operations will be mostly related to packaging material (organic, aluminum, plastic, carton and glass) and will be segregated, stored, recycled or disposed according to local requirements in the municipal landfill; scrap metal and recyclables are collected by contractors.

Hazardous Materials Management: During construction, these correspond to: used oil, lubricants, batteries, paint and solvents; construction contractors are required to adequately store and dispose these types of wasted.  During operation, the facility will have dedicated storage for hazardous waste and each tenant will be responsible of adequate storage and disposal. The facility will have a tank for diesel storage for electricity emergency generation and will be provided with secondary containment Tenants are required to avoid storage and handling of hazardous materials.

Wastewater Treatment: The facilities’ effluent is characterized as domestic and a wastewater treatment plant (WWTP) will be part of the project. Water effluent will be treated to the adequate level for irrigation as per local regulations and LLP will obtain the relevant permit for this purpose, and this requirement will be part of the ESAP.

Community Health and Safety: The project poses minimal health and safety risks to the surrounding communities. Potential risks that could arise are: noise, dust, and traffic disruptions due to construction activities; traffic disruptions due to tenants’ trucks entering and exiting facilities during operations.  The company has undertaken a traffic impact assessment, that sows that impacts are indeed minimal.

Security Personnel: LLP contracts its security personnel. Guards are armed, and its main responsibilities are: access to the facilities for employees and trucks, coordination with the construction site manager on the response to emergencies in the project site. As part of the ESAP, LLP will ensure that security contractors are adequately trained in the use of force and appropriate conduct toward workers and nearby residents, have not been implicated records of past abuses and follow the local requirements for security contractors.  

LLP is in the process of fulfilling the relevant stakeholder engagement requirements specified by the municipality, in order to obtain the relevant license to operate. The project scope details, as well as the environmental impact assessment was disclosed as per local requirements in official publications and local press (October 2016), and relevant stakeholders were invited and attended a meeting regarding the project (October, 2016).  As part of the ESAP, LLP will develop a grievance mechanism to capture and respond to any concern that the neighboring communities may have during construction activities.

Contact Person: Alvaro Chinchayán

Company Name: Latam Logistic Properties

Address: Av. Juan de Arona 151 oficina 701B – San Isidro, Lima - Perú

Email: alvaro@latamlp.com

Phone: +511-7108700

Facsimile: +511-710-8700