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

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

PS5 (Land Acquisition and Involuntary Resettlement, PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not considered applicable. The Zain group has a corporate commitment to avoid sites where involuntary resettlement would be required and implements only long-term lease arrangements according to market conditions for site acquisition through contractors. As described under PS1, the group’s ESMP guidelines include procedures for screening and assessing proposed new tower sites, including potential impacts on biodiversity and cultural heritage.  Zain routinely disqualifies sites that might impact sensitive areas of biodiversity or cultural heritage (and in case a chance find occurs, the company has procedures to handle it).  There is no potential for impacts on Indigenous Peoples in this project.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with the Performance Standards.

The project may result in a limited number of potentially adverse E&S impacts, which can be avoided or mitigated by adhering to recognized international industry performance standards or guidelines. This project is therefore classified as a category B according to IFC’s Policy on Environmental and Social Sustainability.

 Key E&S issues associated with this proposed investment are: i) enhancing the training, monitoring and reporting component of the corporate ESMS to strengthen oversight on company contractors; ii) labor and working conditions of the employees, contractors and franchisers; iii) occupational health and safety of contractors; iv) management and monitoring of waste and hazardous materials; and v) assessing and mitigating social risks of company security arrangements vis a vis affected communities and company’s employees as the project operates in a fragile and conflict affected area.

Environmental and Social Assessment and Management System:

Zain Group has a corporate E&S policy and an Environmental and Social Management System (ESMS), which operates based on the group’s ESMP, that is cascaded to the eight OPCOs, including Zain Iraq. The E&S policy of the company commits to assess and mitigate environmental and social impacts of their operations in compliance with national regulations and international standards. E&S policy is shared with the employees as part of their onboarding upon recruitment.

 Zain Group’s corporate plans and procedures are supplemented and reinforced through OPCO’s operating practices, which are integrated as appropriate to comply with national labor laws, applicable and relevant environmental standards and regulations and to accommodate local operating procedures.  In this light, Zain Iraq has prepared and put into place a set of specific environmental, health and safety and social operating procedures. The company has procedures to avoid acquiring or developing any sites with sensitive environmental / biodiversity issues, sites with important cultural heritage values, or sites requiring physical or economic displacement of local community members in line with the group’s ESMP. All tower sites are under long-term lease and protection contracts with landlords and the contracts are stipulated per market conditions, therefore not triggering PS5. The site selection and development process by Zain Iraq is controlled integrating network coverage needs with ESMP criteria.

The group’s ESMP and Zain Iraq EHS procedures are focused on managing E&S risks and impacts of tower site operations. The company has been installing last-mile fiber-optic cables for main tower sites (32 sites in total up to now) which only took place along existing easements, usually public roads, with negligible environmental or community impacts. As indicated above, and to meet the demand, the company is considering to further expand installation of fiber-optic network. In Iraq, fiber-optic cables are installed by the developers, based on easement contracts concluded between the landlord and the regulator (Ministry of Communication).  As per ESAP item 1a),  the sponsor and company will review and update the group’s ESMP and relevant EHS operating procedures at the company level to ensure that  E&S risks and impacts of cable installation and operations are assessed and mitigated in compliance with IFC Performance Standards before undertaking any such operation. 

 Identification of Risks and Impacts:

The group’s ESMP includes sections on managing the environmental and social impacts of day-to-day operations, tower site acquisition, construction, maintenance, as well as annual monitoring and reporting procedures to be followed by the OPCOs. For the establishment of tower sites, the company undertakes a detailed assessment including regulatory, business, technical, and E&S aspects before finalizing any new development.  The local legislation does not require the company to do an environmental and social impact assessment (ESIA) for the sites.  However, the registration of sites under the Ministry of Environment (MoE) was introduced by the government as a requirement in 2007 and modified in 2010 to strengthen and formalize environmental monitoring of sites. More than 95% of the sites were assessed by the MoE with regards to their location, isolation, civil works and equipment, and are formally registered under this program. The company is awaiting the remaining sites to be cleared by the Ministry as per new regulations. Furthermore, company’s policies require all future sites to be registered per local requirements and compliant with the group’s ESMP, through its management contract with Ericsson.

 Organizational Capacity:

Zain Iraq has an environmental, health and safety (EHS) department, composed of an EHS manager, an environmental specialist, and an occupational health and safety (OHS) specialist.  The company E&S team reports directly to Zain Iraq management and works in close cooperation with the sustainability, risk management and asset management teams at the headquarters.  The E&S team conducts regular supervision to operations and sites.  The EHS manager is involved in site screening and selection decisions when, according to the ESMP, areas with potential environmental sensitivities are under consideration.

 The E&S training program for tower site construction and operations falls under responsibility of Ericsson.  As per ESAP item 2,  Zain Iraq will strengthen oversight of contractor and sub-contractor training requirements in line with the group’s ESMP, through inclusion, in the contract clauses, of a requirement for a training plan tailored to the needs of the operation.  The company will define and adopt adequate indicators to monitor the performance and completion of trainings by the contractor, including sub-contractor staff. Training requirements related to occupational health and safety to be covered under this ESAP item are discussed under PS2 section below.

 Emergency Preparedness and Response:

Main emergency risks identified by the company’s Emergency Response Procedure are fire emergencies, bomb threats and earthquake emergencies, as well as other possible emergencies such as floods, riots, strikes. Specific emergency plans are prepared through a business continuity and risk management perspective, and they include measures for staff and community awareness, preparedness and protection. Emergency drills are conducted on a monthly basis with the involvement of staff and security personnel. Corrective actions are recorded and the necessary system updates are undertaken.  Overall the company’s emergency preparedness and response plans and measures are consistent with PS1.

One of the emergency situations pertinent to company operations is the development of small scale fire incidents at the mast of the towers during summer months.  Few of these incidents occurred every year but were minor, extinguished by own means and not affecting any staff or communities.  The tower operations are automated and any irregularities are detected by the 12 Network Operation Centers distributed all over the country. Fire-fighting system available at tower sites depend on the characteristics of the site. The critical sites incorporating mobile switching centers and the NOCs have centralized fire suppression systems whereas the other tower sites are equipped with portable fire extinguishers. All generator powered sites are equipped with powder based extinguishers.  All warehouses are equipped with hydrant systems. The HQs are all equipped with smoke detectors, fire-alarms and portable extinguishers. All fire detection and suppression systems are regularly checked and operated by the civil defense team of the company.  Security staff at tower sites are trained in fire-fighting and first aid.  The company is in contact with the local fire brigades in case of any emergencies in offices or sites. Security arrangements will be further detailed under PS4 below.

 Monitoring and Review:

Zain Group’s overall environmental and social performance is disclosed annually through Sustainability Reports (link provided under the Stakeholder Engagement section), prepared in line with Global Reporting Initiative (GRI) G4 standards. Data published in these reports are certified by an external independent auditor (Deloitte). Zain Iraq prepares quarterly reviews on workplace incidents, health and safety breaches and monthly reviews on fuel use and CO 2  emissions to be shared with the HQ. The data in these reports are reviewed and followed-up by the corporate sustainability and risk management teams and feed into the corporate Sustainability Report.

A Site Survey Report and a Site Acquisition Report are prepared for each new site of Zain Iraq, followed by Site Maintenance Reports during operations. These reports focus on sites’ technical aspects and do not incorporate any summary of E&S risks.  As per ESAP item 1b)  the company periodically reviews and updates its procedure on site survey, acquisition and maintenance reports and will review and update contractor/sub-contractor monitoring reporting, including the template for the internal E&S reports to include (i) E&S risk assessment for site selection, according to the group’s ESMP, and (ii) E&S compliance assessment criteria in line with IFC Performance Standards requirements.  The procedure will also define key performance indicators applicable to type of operations such as, but not limited to, visual and noise impacts, community health and safety, site cultural and environmental values, fire incidents, occupational incidents and near misses, waste management, environmental spillages, and management of community grievances. The company will also ensure adequate training to contractors and line staff on ESMP site selection and assessment criteria  under ESAP item 2.   

Ericsson issues bi-monthly reports to report back on-site visits covering an average of 10-20% of the total sites.  Zain Iraq implements its own monthly audit program over contractors with a target of covering 5% of the whole network monthly and 50% yearly.  The remainder of the network is audited via other means such as site reports submitted by Ericsson and by power maintenance and fuel provision contractors following maintenance.  As per ESAP item 1b,  the company will require Ericsson to incorporate, into their bi-monthly reports, key performance indicators to monitor compliance with IFC Performance Standards.

 Working Conditions, Management of Worker Relationship and Terms of Employment:

Zain Iraq directly employs 2,127 staff, 919 of whom consisting of part-time and temporary positions (e.g. call-center operators).  Staff mainly work at the three company HQs, Baghdad, Erbil and Basra.  Tower sites are operated remotely and only some have assigned security guards.  Tower site acquisition and maintenance works have short term duration and are contracted to Ericsson.  The company also has 61 franchise shops for selling Zain products to customers distributed all over the country. 

 All human resources operations, policies and procedures are led by the corporate human resources (HR) team and operationalized by the relevant HR teams at the OPCOs.  Zain Iraq HR team consists of experienced professionals working in close cooperation with the corporate team. 

 Human Resources Policies and Procedures:  

The Zain Group has a human resources policy applicable globally, that incorporates general principles and values, code of conduct, recruitment process, equal opportunities, training, working conditions and contract types, leave, compensation and benefits, termination procedures, performance and awards, generally in line with PS2. OPCOs adapt their human resource procedures, based on the corporate policies, per their operational needs and in compliance with country legal requirements.  HR policies and code of conduct are shared with all employees during their induction and all HR procedures are accessible to employees through intranet.

Grievance Mechanism:  

The human resources policy refers to a grievance and a whistleblower protection mechanism. These mechanisms are currently not being systematically implemented groupwide and sponsor is in a process of reviewing their implementation and developing procedures.  As per ESAP item 3,  the sponsor and Zain Iraq will develop a formalized grievance mechanism procedure which will be implemented and communicated widely, covering all types of employment (full-time, part-time, short-term, contractor, franchise).  This process will provide alternatives for employees to raise concerns other than to the immediate supervisors and will allow grievances to be submitted anonymously. Furthermore, the sponsor and Zain Iraq will develop and implement appropriate measures to enhance awareness and use of the mechanism such as dedicated e-mail addresses, awareness campaigns, hotlines, grievance boxes, appointment of  grievance coordinators and evaluation committees. 

Workers’ Organization:

There are currently no unions at Zain Iraq.  Employees join professional chambers as required or on voluntary basis.  As per ESAP item 4,  the sponsor will incorporate in its HR policy/procedures statements on recognition and respect of employees’ rights to join a lawful organization of their own choosing and commitment to comply with the laws pertaining to freedom of association and collective bargaining across all its locations, in accordance with the labor regulations of Iraq, whether there is a representation system or not.  These statements will be adopted in Zain Iraq HR procedures.

Non-discrimination and Equal Opportunity, Protecting the Work Force:

Zain is a multinational group, employing people from various ethnic, religious, and national backgrounds. Gender equality, non-discrimination and equal opportunity principles are endorsed all throughout the employment process and principles.

No child labor or forced labor is allowed at any Zain premises; the company requires any individual to be above 18 for employment, verified by background and document checks.

Zain endorses a group wide policy to empower women.  Female students’ involvement is encouraged and actively sought in university job fairs. In Iraq, Zain employs 27% female workers and provides a workplace with safe and appropriate facilities for women and men.  Company subsidized nursery support is available to employees’ kids up to three years old at Baghdad HQ, which currently caring for about 40 kids.  Female workers are also entitled to reduced hours to allow breastfeeding.

 As expatriate workforce in Iraq is particularly vulnerable, the company pays special attention to its protection with robust measures such as full-accommodation provided at HQ and escorted transportation.

All full-time workers of Zain are covered by private life and health insurance also covering passive war risk (passerby impacted by conflict during out-of-office hours). The insurance package will be extended to cover part-time and contractor employees in 2018. Zain currently requires their contractors to insure their own workers as part of their contracts. 

Retrenchment:

Zain Iraq has a formal procedure on termination of contracts.  Due to unstable market and contextual conditions in Iraq, collective dismissals may occur.  Dismissals are handled by the HR team in compliance with national regulations and substantially consistent with IFC PS2 provisions, incorporating an assessment of alternatives, settlement of all financial obligations, and offering additional allowances to support the employee based on mutual negotiations.  Furthermore, dismissed staff CVs are kept in the company database for eventual re-hire or sometimes referred to company’s business partners or contractors.   As per ESAP item 5,  the company will incorporate into its termination procedure   a section on handling collective dismissals due to economic, technical or organizational conditions and include a commitment to prepare a retrenchment plan, when necessary, in line with PS2 requirements.

Workers Engaged by Third Parties:

Zain Iraq has its security, about 1,700 guards, contracted out, as well as some office support (191 contracted workers).  The Company franchises employ a total of 139 workers. The company requires compliance with national labor laws from all its contractors and franchises and has provisions enforced to suspend contracts in case of a breach.  As per ESAP item 6 , the company will incorporate the group’s HR policy’s key components (such as entitlement to a contract specifying terms and conditions of work, code of conduct, social security, non-discrimination and equal opportunities, anti-harassment, grievance management, freedom of association, child labor and forced labor prohibition) to its contracts with contractors and franchises and ensure compliance through training and auditing. 

Occupational Health and Safety:

Zain Iraq staff doesn’t have frequent direct exposure to occupational health and safety hazards related to installation or maintenance of telecom equipment. The company ESMP is a part of Ericsson’s contract and includes specifications on health and safety conditions for the construction and maintenance. Ericsson receives bi-monthly reports from its sub-contractors and conducts regular monthly visits, whereas Zain Iraq HSE team also implements its own audit schedule to the power maintenance contractors, Ericsson, other maintenance contractors and vendors.

 Zain Iraq has in place standard operating procedures (SOPs) for incident investigation and tracking as well as main hazards related to telecom works such as electrical safety, work at heights, personal protective equipment, first aid and fire prevention and hazard risk assessment.  These SOPs form the basis of the company oversight on contractors.  Last work incident recorded for a contractor was three years ago, before Ericsson was contracted to operate the network.  It involved electrocution and resulted in a fatality.  Since then, safety performance has improved.  A company technical team administers the incident recording procedure and no technical works are allowed without their supervision.   As per ESAP item 2, t he company will ensure the implementation of a training program to contractors and line staff on OHS SOPs (such as incident reporting, work at heights, fire safety, electrical safety, first aid, PPE usage).

  Pollution prevention and GHG emissions:

The main pollution risks of company operations are related to the use of generators for back up electrical service.  As the electricity infrastructure in Iraq is unreliable, company operations heavily rely on diesel generators.  Zain has a robust procedure on leakages / spillages of diesel fuel requiring all the sites to have a secondary containment.  Zain EHS team ensure compliance with this requirement through regular inspections implemented by the contractor and its own team. 

Greenhouse gas emissions associated with use of generators were reported by the company at 228,930 CO 2eq  ton/year for 2016.  The company introduced several measures to meet management target to reduce CO 2  emissions by 20% by 2020 at the group level. The company has met its target before the deadline with a 26% decrease achieved by 2016 through the implementation of several measures, which also paved the ground for better resource efficiency, including: replacement of old generators with smaller more efficient ones; prioritized site sharing with other base transceiver station (BTS) operators; select outdoor BTS when possible.  Implementation of these measures is still ongoing and GHG emissions data is tracked monthly and reported to corporate management.  

 Solid waste, fuel waste and wastewater:

Used oil from the diesel generators at the antenna sites is collected during maintenance by the fuel suppliers and stored in drums at their warehouses before being sent for recycling.

Suppliers are collecting used batteries and used filters/components of air conditioning systems from Zain and this is included in the purchasing order issued by Zain.  Additionally, when possible and safe, the company donates unused/obsolete telecom equipment to universities as educational tools.

Solid, liquid waste management and dust control are addressed in construction contracts.  Contractor is required to clear away and remove from sites all construction materials, rubbish and any temporary structures, reinstating the site as near to its initial conditions or to the satisfaction of the Zain construction supervisor. This may include grading or removal of excavated soils, disposal of excess building material, etc.  The company requires that construction waste is disposed of by the contractors in a disposal site, acceptable to the company. 

Wastes generated at the tower sites, such as trash generated by guards and maintenance technicians, are containerized on site and transported for disposal by suitable contractors. 

The company does not have in place a waste management and monitoring program, which keeps track of all types of waste produced through company operations despite the relevant ESMP guidance described above.  As per ESAP item 7,  the company will prepare and implement a waste management and monitoring plan, which identifies all types of waste produced as a result of its office and site operations (domestic waste, wastewater, hazardous and non-hazardous waste), their storage, handling, treatment, recycling methods, relevant chain of custody and auditing of contractors.

 Hazardous materials:

Main hazardous materials described for company operations in the ESMP are fuels used in generators, polychlorinated biphenyls (PCBs) still present in the electrical equipment, and ozone depleting substances (ODS) used in the cooling equipment.  There are specific safety instructions for fuel handling/delivery and guidance on installation of concrete bunds for diesel oil storage tanks.

 According to the ESMP, all new Zain electrical equipment shall be free of PCBs. If any equipment is found to contain PCBs, warning labels shall be placed and measures initiated for the replacement and safe disposal of PCB fluids. 

With regards to ODSs, the ESMP requires a monitoring system to ensure refrigerants containing ODS are avoided during future equipment maintenance and a phase-out plan is implemented.  As per ESAP item 8,  the company will d evelop a comprehensive hazardous material procedure including but not limited to: inventory, labelling, handling and storage, disposal and storage of PCB and ODS containing equipment, phase-out plan, material safety data sheets, secondary containment, site emergency intervention measures (spill kits etc.), and auditing.

 Contact Person: Samer Musleh, Chief Financial Officer

Company Name: Atheer Telecom Iraq Limited

Adress: Bldg. 47, Str. 14,District 605 Hay Al Mutanabi, Al Mansoor, Baghdad, Iraq

Email: samer.musleh@zain.com

Phone: +964 780 296 9854