Risks and potential impacts relevant to the application of PS4, PS5, PS6, PS7 and PS8 for this proposed corporate finance investment are managed by the implementation of the corporate E&S management system (ESMS) as discussed under PS1.  No armed security guards are used by the company or its contractors and the company performs activities for the information and protection of the communities (such as electromagnetic field “EMF” protection, emergency preparation and response plans, etc); the land acquisition process for the development of any new telecommunication sites is expected to involve a willing buyer willing seller transaction; no operations are expected to negatively affect habitats of high biodiversity value and the location of any new tower site or other telecommunication infrastructure (such as base stations) will undergo a screening process to identify whether the site is located in an ecologically sensitive area and, as needed, develop relevant mitigation measures; no Indigenous Peoples are expected to be affected by the project; and no important cultural heritage is expected to be impacted.  The corporate ESMS will screen for such risks as part of the procedures required for the development of new sites and for mergers and acquisitions of assets.

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

The key E&S issues associated with the project are in the potential impacts associated with future mergers or acquisitions, construction of telecommunications infrastructure; labor and working conditions (including employees’ and contractor workers’ occupational health and safety); and pollution prevention and abatement. As E&S risks and impacts are expected to be limited, site-specific, and relatively few, and it is possible to avoid or mitigate any limited adverse impacts that might result, the proposed investment has been classified as a Category B project according to IFC’s Policy on Social and Environmental Sustainability.                      

Environmental and Social Assessment and Management System

Telecom Argentina has developed and implemented an E&S management system (ESMS) that has been certified as ISO14001 at corporate level, and it requires that the ESMS is implemented in all companies of the group. The company has a qualified officer at the corporate level (i.e. Sustainability Manager) overseeing the implementation of the ESMS and relevant mitigations of E&S risks and impacts of company’s operations. The E&S organization includes an EHS manager in Argentina and a team of supervisors in Uruguay. 

Telecom Argentina’s ESMS provides for E&S policies and procedures, which are made available to staff in all the countries where the company operates.  They include, among others, procedures relevant to legal permitting of sites, monitoring and managing electromagnetic fields (EMF) from company’s towers, site inspections, measures to ensure workers’ use of personal protective equipment, and procedures for waste management. The ESMS includes provisions for training of company workers on environmental management and occupational health and safety, including work at height, accident prevention, fire and electrical safety, and management of any spills of fuel or other chemicals and contractors on OHS matters. 

A corporate procedure (Normativa Telecom 03/PC-3036 – Medición de Radiaciones No Ionizantes - RNI) has been developed with provisions for the assessment of EMF. During the period of 2015 and 2016, for example, the company performed more than 2,000 measurements of EMF levels at its sites. In addition to meeting local requirements, the procedure requires that readings are done for each of the following cases: a) before commissioning new sites, b) increase in power/ capacity of existing equipment, and c) decommissioning of antennas and equipment. Management measures include institutional controls and security (fences, electronic access control, and/or guards) at the towers and other sites, and installation of signage to create awareness of EMF hazard (among others) and contact information for any inquire or complaint from the community. Telecom has an information program for the public which can access relevant information at the service centres and on the company’s webpage.  

Under IFC’s investment, Telecom will ensure that the company’s operations comply with IFC’s Performance Standards and relevant and applicable World Bank Group Environmental, Health and Safety (EHS) Guidelines, in addition to the applicable social and environmental laws and regulations of the respective countries where it operates. The ESMS will be reviewed and updated to include this commitment (ESAP item #1).

The ESMS has overarching provisions to manage future acquisitions of companies and/or assets and mergers of companies and minimize risks for the company. The relevant procedures will be updated to ensure compliance with IFC requirements. The procedures will identify E&S risks associated with proposed acquisitions and mergers, and include risk-based criteria, developed consistent with IFC Performance Standards, to inform the decision whether to proceed with the acquisition / merger (ESAP item #2).  Regarding new infrastructure, telecom towers, base stations or others, the company initially maps potential sites according to transmission and operations needs and consider the best potential sites in each searched area. Based on  current regulations, Telecom will screen for E&S risks associated with the site selection and installation of any new infrastructure, such as towers or access roads.  The screening procedure will screen any potential site for E&S risks and potential impacts associated with land acquisition, on areas of high biodiversity value, on communities of Indigenous Peoples and on cultural heritage, consistent with IFC Performance Standard requirements. Wherever any such area of high biodiversity value or communities of Indigenous Peoples or cultural heritage are identified, appropriate management measures will be applied, consistent with the requirements of IFC Performance Standards. 

Currently, a number of E&S policies and procedures in use are still to be integrated and exist as part of the procedures of the individual companies (Telecom, Personal, Cablevision, Grupo Clarin) that have merged under Telecom. As part of the ESAP item #3, Telecom will ensure that all E&S and HR policies, procedures and plans, which are applicable within the group, are fully integrated under the Telecom’s ESMS.  All policies and procedures will ensure compliance with IFC Performance Standards.

Telecom engages contractors to perform core functions with safety risks including work at height, work in confined spaces, electrical work, and tower maintenance. Under the contractual agreements with its contractors and suppliers, Telecom requires compliance with the company’s E&S policies and procedures. Telecom performs periodic E&S audits of its contractors; the results are communicated to the contractor, as needed with a corrective action plan and deadlines for implementation. 

The company publicly discloses annual sustainability reports since 2008. Starting from 2018, the sustainability report will be extended to cover the operations of all subsidiaries and all countries of operation (Argentina, Uruguay and Paraguay). The company will report to IFC on compliance with the Performance Standards.

Emergency Preparedness and Response

Emergency preparedness and response services are subcontracted by Telecom to specialized companies that are certified in accordance with Argentinian applicable laws. These companies provide several related services, including security, surveillance and buildings’ access control, emergency preparedness and response services and evacuation management for all main buildings within the urban areas and for remote facilities. Telecom has a corporate level Emergency Preparedness and Response Plan (EPRP), ensuring consistency among operations and subsidiaries and addressing all risk scenarios which are applicable for the operations of the group. 

Labor and Working Conditions

Telecom employs approximately 25,000 direct workers in Argentina, Paraguay and Uruguay. The number of workers employed indirectly through agents and contractors totals about 15,000. The company’s workforce include 28% of female employees out of which 22% are in managerial and supervisor positions. The company has an annual turnover of less than 1%.

Telecom has developed and implemented a set of human resources policies and procedures consistent with IFC Performance Standard 2, and which is made available to the company’s workers. The company provides for freedom of association (the right to unionize) of its workers, and respective national unions have Telecom workers as members. After the merger in December 2017, Telecom unified 23 existing collective agreements of the merged companies and has developed a common set of human resources policies and procedures related to operating framework, technology, working hours, benefits, occupational health assistance and working conditions.  A new corporate collective agreement was signed by senior management and implemented in August 2018. Company’s policies promote fair treatment, non-discrimination and equal opportunity of its employees, regardless of race, gender, religion, nationality, language, age, sexual orientation, civil status, handicapped status, or socio-economic status.  As part of the corporate policy and program for workforce diversification, the company has formed two committees for anti-harassment, gender and occupational wellness. .

Telecom has corporate policies (HR and Code of Conducts and Ethics) with their respective procedures in place to ensure that grievances of workers, including contractor workers, are generally resolved within 30 days, with measures to ensure confidentiality and a channel for appeal.

Occupational health and Safety (OHS):

The company has implemented comprehensive OHS policies and procedures; health and safety performance is measured by the company and annual statistics (severity and frequency index) are reported to the government and ART. The company reported OHS performance in 2018 with a corporate incidence rate of 12.25, frequency rate of 2.35 and severity rate of 0.55, that is below the benchmark for this industry. Most of the occupational incidents reported occurred during the employees commute to work and are directly related to small injuries and incidents while walking on uneven sidewalks and surfaces (for instance, twisted ankles, etc.). During the same period, Telecom reported a low incidence rate of traffic accidents, within the incidence shown above, with occurrences involving company vehicles and private employees’ cars during commuting to work, with minor consequences.     

Appropriate training is provided to Telecom’ staff.  As part of the OHS policies, the company ensures that its contractors implement the required health and safety measures and the relevant training for their workers. Contractors are required to provide protective clothing and equipment to their workers and the company supervises and enforces these provisions.  For daily activities and field work, the company enforces the use of hazard evaluation checklists and work permits for its own staff and contractors’ employees in all operational activities.

Telecom Argentina’s policies and procedures require the deployment of appropriate measures for life and fire safety (LFS) at the company’s offices, operational sites, and switching centres, and the company maintains strict records of all building permits. The company performs detailed LFS reviews of all service centers open to the public.

Resource Efficiency and Greenhouse gases (GHG’s) Emissions

For the period 2016/2017, Telecom reported the emission of about 230,000 tons CO2eq per annum from their operations, including direct use of fuel sources (diesel, gas and gasoline) for heating, transportation, etc. and direct purchase of electricity from the grid.

The company has implemented a corporate program (named “Climate – Lighting – Control”) aimed at energy efficiency and energy savings.  In company’s buildings where the program has been applied, significant energy savings were reported. For example, for four of the main buildings, the energy savings for the period 2014/2016 reached 4.53 GWH. In 2017/2018, Telecom implemented a new energy supply matrix promoting the use of renewable energies in its operations, consistent with the Renewable Energy Law (Ley de Energia Renovable) in Argentina.  Similar programs are planned for implementation in Uruguay and Paraguay.

Pollution Prevention

At Telecom sites, operations inevitably generate some waste materials, that need to be properly disposed of. Telecom has policies and procedures for waste management (collection, recycling / reuse, disposal) consistent with Section 1 of World Bank Group EHS Guidelines for Telecommunications. Notably, Telecom collects used batteries for reuse or recycling (725 tons in 2017). It is a company’s requirement to use certified companies for final disposal of waste.

Telecom sites generally use power from the electric grid, with backup power provided by batteries wherever possible, thereby limiting the use of fuel tanks, generators, and associated noise and potential fuel leaks. A small percentage of Telecom’s base stations/telecommunications towers use diesel generators for backup power. Almost all fuel tanks connected to those generators have a capacity between 400-500 litres, while core network equipment requires only one site to have a principal fuel tank of 2,500 litres with a secondary tank of 1,000 litres, and another site with a principal fuel tank of 1,400 litres and a secondary tank of 200 litres. Telecom has policies and procedures to provide for secondary containment around all fuel tanks – with a minimum 110% capacity of the tanks’ volume – and policies/procedures for handling any fuel transportation and spill, consistent with Section 1 of World Bank Group EHS Guidelines for Telecommunications.

Telecom includes terms in its agreements with contractors that cover pollution prevention and abatement. The company monitors compliance with terms in its agreements with contractors and seeks improvement if non-compliance is identified.  

Telecom recognizes the importance of stakeholder and community engagement (the company has approximately 26 million clients) and is committed to comply with the requirements of IFC Performance Standard 1 on disclosure and stakeholder engagement.

The company’s CSR strategy includes specific programs developed and managed by the company as well as participation in programs through alliances with strategic partners such as NGOs, municipalities and other government bodies, universities and other private sector companies.  The main CSR programs are aligned with the company’s core business objectives and envision alliances with municipalities to implement such programs at the local level, including: (i) reduction of the digital divide, (ii) child protection and responsible use of Information and communications technology or (ICT), (iii) relationships with local communities, and (iv) electronic waste management.

The company has established procedures and mechanism to receive complaints and address concerns raised by local community members about industry sector issues such as electromagnetic fields, landscape integration, and visual impact (for instance, camouflage of visually intrusive structures and antennas). In addition, with regard to new sites chosen by Telecom for the development in any given year, the company participates in the elaboration of the Best Practice Code for the Mobile Network Deployment (“Codigo de Buenas Practicas para el Despliegue de Redes de Comunicaciones Moviles”) together with the Argentine Federation of Municipalities (“Federacion Argentina de Municipios”) and other Mobile Network Operators. According to such Code, Municipalities and Operators have agreed to establish a procedure in order to address concerns raised by local community members.

Telecom Argentina S.A.

Marcelo Iribarne    Head of Capital Markets

Telephone Number: +541149683304

Email: miribarne@teco.com.ar

Mailing Address: Avenida Alicia Moreau de Justo 50 – Ciudad de Bs. As. - Argentina

Website: https://institucional.telecom.com.ar