There are no impacts of concern associated with the following Performance Standards based on IFC’s current understanding of the FY16/17 capital investment program: PS3: Resource Efficiency and Pollution Prevention: CoE’s operations themselves have no adverse impact on the environment or resource efficiency. Where applicable, project specific impacts are assessed and managed through environmental and social management plans setup for individual projects, as specified under PS1 section; PS5: Land Acquisition and Involuntary Resettlement – No physical or economic displacement is anticipated on account of land acquisition for the projects included in the FY16/17 capital investment program. IFC is not aware of any outstanding legal challenges or issues related to ongoing or historical land acquisition at any of the sites; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources – All aspects of concessions including those related to biodiversity and conservation are reviewed through government led impact assessments, and for the projects included in the FY16/17 capital investment program, no negative impacts on conservation or biodiversity within the projects’ area of influence have been identified; PS7: Indigenous People  – No indigenous people are known to have been in areas or affected by projects included in the FY16/17 capital investment program; and PS8: Cultural Heritage – The projects included in the FY16/17 capital investment program are not located in areas of known historical or cultural significance.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because it will create a limited number of specific environmental and social impacts that can be minimized, avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. Key E&S issues associated with this investment include: Borrower environmental and social management capacity; monitoring and performance of environmental, health and safety and social management systems; specifications and operating procedures, performance and operational standards, and alignment with internationally recognized practices for the sector.

Because proceeds from IFC’s proposed investment may be used to support future but, as yet, undefined projects in addition to existing projects and those identified as under development, a condition of IFC’s investment going forward will be that CoE will adopt IFC Performance Standards as part of applicable requirements in all of its operations, and consider issues identified in PS1 through PS8 when assessing any new business opportunities, acquisitions or mergers, or business models.

CoE has a robust management system which provides oversight of environmental, social, health and safety (“ESHS”) issues in the Municipality. Among other things, this ensures operations comply with all applicable laws and regulations. The existing management system includes a series of procedures, work instructions, and reference documents which, when combined with the findings of the project-specific assessments, comprise a program of mitigation and performance improvement measures and actions necessary to effectively manage the E&S risks and impacts of its projects. For new projects, assessments are aggregated and summarized for senior management review.  Through management meetings and written documents, project and site managers periodically report on environmental, health and safety performance, as well as accidents and incidents on existing projects.

Performance of the Municipality’s existing environmental and social management system is largely consistent with IFC PS requirements in providing adequate oversight, comprehensive risk assessment, monitoring, reporting and training. For the projects included in the FY16/17 capital investment program, for better alignment with IFC PS requirements, CoE will manage its environmental and social performance per IFC PS and applicable sections of relevant World Bank Group EHS guidelines, and implement specific mitigation, monitoring and management steps to provide enhanced oversight of its environmental and social performance, programmatic integration of ESHS functions for all its operations and those of its subcontractors. 

Locations for project sites are selected by the local government. Final selection of sites and its approval for specific use is confirmed after completion of environmental and social impact assessments (“ESIA”), and for expansion beyond existing approved capacity, ESIAs are updated prior to regulatory approval where applicable. Consistent with the South Africa laws and requirements, ESIAs are prepared by the Municipality for projects and approved by the government. The ESIA process complies with South Africa requirements and is consistent with IFC PS1 requirements. The impact assessment process includes detailed assessment of potential environmental and social impacts, as well as extensive consultation on various aspects of the project – from site selection, availability of water, land acquisition through conditions for project operation, monitoring and reporting. 

The Municipality’s management program includes operational policies and procedures that are implemented at the project level by supervisors who report to the management team on an as needed basis, and through scheduled reporting processes. Policies and procedures comply with applicable local regulatory requirements including those for human resources and labor, occupational health and safety, and environmental compliance. The Head of Human Resources has the responsibility for overseeing matters related to labor, working conditions and health and safety. The Municipality provides professional training to key personnel to ensure they have relevant skills and adequate training to perform their work.  Assisted by qualified personnel, project managers for each project are responsible for day-to-day implementation of project-level programs and plans.  In accordance with the project-specific work plans, project or site managers are responsible for providing environmental and health and safety training to employees, including contractor personnel. 

The Municipality monitors environment, health and safety performance for each project according to the procedures established in their existing management system. In addition to standard procedures, project specific procedures are developed to comply with provisions contained in the ESIA. If monitoring results indicate nonconformance with standards or deviations from established benchmarks, appropriate corrective or preventive actions are initiated. A similar approach is adopted for unplanned events such as accidents where the events are investigated, and corrective or preventive actions initiated to prevent recurrence.

Environmental impacts associated with CoE projects and operations are managed in accordance with good international industry practices that are largely consistent with IFC Environmental, Health and Safety Guidelines and outcomes consistent with IFC’s Performance Standard 3 provisions. Site specific pollution prevention and mitigation measures associated with each of CoE’s projects and operations are identified and addressed through environmental and social assessment and subsequently through E&S management plans.

Engineering controls and staff training are provided to mitigate risks and issues associated with the Municipality's operations. The use and storage of hazardous chemicals are subject to stringent safety standards as required under South African laws. The Municipality is required to have emergency prevention, control and response plans which specifies responsibilities, ensure appropriate response equipment and materials are in place, and detail a set of procedures to be followed to minimize the harm of any potential accident. The Municipality has emergency response policies and procedures, and has periodic drills to test their effectiveness. The municipality has a community involvement component that addresses appropriate behavior and safety measures to be implemented in the event of any emergencies

Currently the municipality employs 17,072 persons directly, and 20,654 persons in contracted positions. The number of sub-contracted employees can vary significantly depending on construction activities at any given time. The Municipality has a Human Resources policy that complies with local and South African regulatory requirements, and is applied consistently to all direct employees across all its business lines and (subsidiary) project companies. As required by law, the policy is included in employment contracts, and addresses working conditions, terms of employment, wages and benefits. This information is provided in the form of an employee handbook at the time of induction. As is common practice in South Africa, although not explicitly stated, employment relationships recognize the principles of non-discrimination and equal opportunity. Although there is no union at the Municipality, under South African law, employees have the right to freedom of association and have the opportunity to collectively represent to the management any issues or grievances that they may have. 

The minimum employment age at the Municipality is 16 years. The Municipality ensures that child labor or forced labor is not employed directly or by contractors through verification of relevant documents. Working hours on site can vary by nature of activity and phase of projects, with most labor intensive phases being at the construction phase during which there are continuous operations.  Construction activity is largely subcontracted for which unskilled labor is procured locally. Wages are paid by subcontractors to labor on a monthly basis and calculated with basis on the hours worked, inclusive of overtime. Terms of employment for sub-contractors are as per South African laws and the municipality relies on regulatory agencies for ensuring that sub-contractors comply with applicable labor laws. 

The human resources department at CoE provides oversight of all projects, facilities and operations. Training of staff is done on a routine basis in compliance with local workplace regulations. The department of human resources is responsible to ensure that all employees are adequately trained to perform their work safely. Supervisors monitor that standards are met and any reportable incidents are reported and follow up action taken when required. Training, monitoring and reporting framework is consistent with South Africa requirements, and is consistent with IFC PS1 requirements. 

Occupational health and safety of employees at the Municipality is managed by Risk Management and is in the process of being transferred back to the Human Resources Department. There is a plan for accident prevention and worker safety consistent with local regulatory requirements. All employees in the Municipality have to undergo a training program at induction and subsequently regarding worker health and safety relevant to their job activity. Project and facilities are audited yearly by regulatory agencies to monitor compliance with labor regulations. The Municipality has been in compliance with regulatory requirements. The administration of injury on duty is the responsibility of the Insurance and Risks Office in Finance Department. The Finance Department serves as a link between CoE and the Compensation Commissioner in the Department of Labor. Departments in CoE report to Finance Department when employees are injured at work and the Finance Department lodge a claim with the Compensation Commissioner in the Department of Labor. The Department annually reports on incidents and fatalities.

The Municipality works with the local government at various project locations in making available relevant E&S information. In South Africa, dialogue and communication with relevant stakeholders and disclosure of environmental and social impact assessment occurs through procedures established by South African regulations. As a result, information dissemination activities have included those undertaken by the local government, which includes stakeholder consultation during project development and operational phases. As part of its environmental and social management program, the municipality has established methods for communicating environmental and social aspects to external interested parties and has clear procedures on disclosure and consultation with potentially affected communities. The program includes procedures for receiving, documenting and responding to concerns from any external interested parties. 

For more information, see the municipality’s website at  http://www.ekurhuleni.gov.za

Name of Contact Person: Themba Gadebe

47 Van Buuren Road,

Genniston, South Africa

Phone 011 999-1522/0763037594

E-mail   themba.gadebe@ekurhuleni.gov.za