All the Company’s existing warehousing space, the railway cargo station and the airport cargo warehouse are leased/purchased via market-based willing-buyer willing-seller transactions within urban areas with existing infrastructure; these assets are usually located in industrial zones. The Company conducts pre-screening by third parties to identify any existing risks before finalizing the selection of a site and before any acquisition, including to ensure compliance with national regulations and master plan zoning. Therefore, no risks and impacts are expected that need to be managed consistent with PS 5 - Land Acquisition and Involuntary Resettlement.

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 which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environmental and social (E&S) risks and issues associated with this project include: (i) adequate assessment of E&S impacts of existing and future planned acquisitions and developments, and implementation of effective mitigation measures; (ii) labor and working conditions including occupational health and safety, including safe handling and storage of cargo; (iii) solid and liquid waste management; (iv) LFS management of the warehouses and (v) ensuring transportation safety for the logistics fleet and associated impacts on the communities.

 Environmental and Social Assessment and Management System:

The Company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements, including environmental certificates, construction permits and fire certificates. ITL plans to implement ISO 9001 (Quality Management Systems) and has therefore introduced a corporate document quality control system.

As per the applicable legal requirements, ITL completed Environmental Social Impact Assessments (ESIAs) in the past depending on the size and location of its projects. The Company will conduct similar assessments for future development activities as needed, and the assessments will be consistent with IFC’s Performance Standards (ESAP 1).

ITL has corporate E&S policies and related procedures as part of its EHS Management System (ESMS), including: EHS policy and principles, EHS management procedures, fire and safety management, waste management, human resource management procedures including contractor management, emergency response procedure and accident reporting. The EHS procedures have been made available to each Company facility, which are required to prepare customized documents befitting localized conditions. Key performance indicators (KPIs), such as number of accidents, trainings provided, unsafe behavior / safety observations and compliance with legal requirements, are reported on a monthly basis to corporate EHS management and performance is verified by periodic management reviews and site inspections by the corporate EHS team.

Based on IFC’s review, some subsidiaries, including in associate companies, have not yet adopted and implemented the corporate ESMS and procedures. Therefore, as part of ESAP 1, ITL will expand the scope of the corporate ESMS to be applied to all subsidiaries and provide sufficient management capacity and training for its implementation. The ESMS will be completed in accordance with good international practices, will be appropriate to the nature and scale of the facilities and commensurate with the level of their environmental and social risks and impacts, and will be consistent with IFC’s Performance Standards. The existing policies and procedures will be complemented with the following corporate procedures: 1) E&S due diligence / risk screening procedure for business/asset acquisitions and new projects; 2) ESIA procedure for new projects; 3) Asset (including land) acquisition procedures; 4) corporate E&S monitoring and review procedure; and 5) Stakeholder engagement procedure, including community grievance mechanism.

Organizational Capacity and Competency:

The Company has appointed a full time EHS manager at the corporate level, together with EHS officers in charge at each facility (around 15 staff) who are also responsible for emergency response. Their role includes to assess and ensure that the Company’s facilities develop and implement their site-specific EHS management system in line with the corporate EHS policy requirements, and for the implementation of its operations including EHS trainings and supervision of contracted companies.

Some subsidiaries have still not appointed EHS officers or EHS services are provided by contractors. As set forth in ESAP 2, the Company will review and update its E&S organization and will ensure that at least one EHS officer is appointed for each facility operated by the Company or by its affiliates and will also ensure that each subsidiary appoints an E&S supervisor or manager responsible for ESMS implementation in line with corporate HSE policy and standards.

Emergency Preparedness and Response:

ITL has a documented Emergency Response Procedure including fire, explosion, chemical spills and natural hazards as part of its ESMS. Required training is provided on fire safety and emergency response, including via mock drills covering employees in all shifts in coordination with local fire department. Fire safety systems are provided at each facility in compliance with the local legal requirements. Visited warehouses were noted to be provided fire extinguishers, smoke detectors and fire alarms, sprinklers, fire hydrants, and fire hoses/reels. The fire safety systems are inspected by the local authority in advance to their operation and checked on a regular basis by internal and external audit.

Monitoring and Review:

EHS KPIs for each facility are periodically reported to the corporate EHS manager. The Company has an internal audit plan, which is implemented under the supervision of the corporate EHS manager. Based on the findings from audits, the EHS team analyze the root causes of any compliance observation or non-conformance and define the relevant corrective actions across all facilities.

As part of ESAP 1, this approach will be expanded to all new facilities and all subsidiaries, for which implementation is still more scattered and less systematic. The Company will develop and implement a corporate E&S monitoring and review procedure as part of the ESMS, covering both construction of new assets and facilities and operations of company’s and subsidiary’s facilities. The monitoring procedure will expand on current KPI reporting to include EHS KPIs (both leading and lagging indicators) such as trainings, management walkthroughs, inspections and audits, incident rates, lost time injuries, near misses, labor compliance (working hours, overtime payment, grievances), energy and water efficiency, solid waste management, implementation of management programs during construction, contractor compliance, and community grievances.

ITL currently has about 1,900 employees (40% female) and additional 300 drivers that are directly hired. Around 50 persons are hired as outsourced workers, including cleaning staffs and security guards. In the past two years, mainly given the job market dynamics in the country, the Company’s workforce experienced around 35% to 40% staff turnover, mainly for entry level positions. There has not been any large-scale retrenchment since the Company commenced operations, except for the last mile service department due to change in the business model, with most staff transferred to other offices/departments.

HR Policies and Procedures, Working Conditions and Terms of Employment:

ITL has documented HR policies and procedures including recruitment, staff trainings, benefits (including meals and life and medical insurance) and payment. During recruitment, the Company performs relevant screenings, including employee’s age verification, but it ensures that no pregnancy tests are required and that there are no other discriminatory or exploitative practices. All employees are given written appointment letters which explain their employment terms and conditions. Retrenchment is not expected, including as a consequence of new acquisitions, but if that occurs ITL will follow related requirements as per IFC PS2.

At each facility, employees work in two to three shifts and working hours are recorded by a time recording system; overtime is usually not required as each shift has enough capacity. However, if required, any overtime is paid in line with national regulation.

While no instances or risks of child- or forced labor were observed, and no immigrant workers are reportedly employed by the Company, the company HR policies are not explicit about protecting the workforce from discrimination and exploitative practice. As part of the ESAP 3, the company will review and update the corporate HR policy/guideline to include: (i) policies on prevention of sexual and other forms of harassment intimidation and/or exploitation, especially in regard to women, non-discrimination (based on race, religion, gender, ethnicity and handicap), and other forms of exploitation (child labor, forced labor, abuse and violence); (ii) a retrenchment procedure to be applied in case of retrenchment at the corporate and the subsidiary level; and (iii) policies on protection of vulnerable categories of workers, such as migrant workers and workers engaged by third parties. The Company will ensure that the HR policy is adopted and implemented throughout the group and will take the relevant measures to supervise implementation and ensure compliance. 

Freedom of Association & Grievance Mechanism:

A collective labor agreement is in place between the trade union and ITL, which covers details on wages, working hours including overtime hours, leaves, benefits and allowance in association with company’s regulation. The union regularly meets with management for negotiation and discussion on the implementation of the collective labor agreement.

The company does not have a formal grievance mechanism, although workers can report their grievances to the HR department. As set forth in ESAP 4, the Company will prepare and implement a grievance handling procedure. The mechanism will comply with IFC PS2 requirements, will also allow for anonymous complaints to be raised and addressed and, as needed, will also be extended to serve workers engaged by the third party.

Occupational, Health and Safety (OHS):

The Company has documented HSE regulation and procedures applicable to each facility and truck drivers. Trainings on EHS are provided to all employees, including drivers, on: occupational safety and sanitation, evacuation drills, fire-fighting drills, traffic safety, personal and property security. Safety induction is provided to all workers, and specific safety training is provided prior to new job assignments. The technical trainings, including the training on safety response and fire-fighting, are carried out regularly in cooperation with relevant local government fire-fighting departments. The Company conducts OHS review meetings monthly with all EHS officers in charge. It also provides all staff with personal protective equipment (PPE), as would be relevant to the activity undertaken. Most of the facilities visited had clearly marked emergency exits, and evacuation routes with a provision of emergency lighting at some facilities; however, areas of improvement were also noted. As part of ESAP 5, the company will ensure the installation of fire-fighting systems and the operability of the emergency response and evacuation systems and will implement the regular audits and corrective actions as part of corporate ESMS, including for newly acquired facilities.

Workers engaged by third parties:

The Company has procedures for contractor management including procurement procedures for the selection of the contractors, as well as other procedures for EHS training and operational risk management. ITL has a corporate technical / engineering team who monitors and reports on safety performance of contractors hired for construction works at new or existing facilities.

ITL contracts security guards and cleaning service through specialized agencies. The Company provides contracted workers with insurance and PPE. It further requires its contractors to follow the company’s EHS policies and procedures, including compliance with labor law, which is agreed in the contract and monitored by the Internal Audit team.

Energy Supply, Resource Efficiency and Air Emissions:

All facilities are connected to the national power grid, with stand-by diesel generators available. As part of the measures to improve resource efficiency, the company has installed LED lighting and plans to install solar photovoltaic panels at their warehouses for lighting power. There are no major air emission sources installed, such as combustion equipment, at the Company’s facilities.

Based on the available information, the annual electricity and diesel consumption for the ITL operation (for FY18) was about 42,000 MWh and 7,000,000 liters, and the company’s GHG emissions are estimated at 37,000 tons CO2 eq/annum.

Water and Wastewater:

Water for the facilities is sourced from local public water supply systems. Bottled water is provided for employee consumption. Wastewater is generated mainly from washing/domestic discharge. Effluents are usually discharged to the sewer of the industrial zones where ITL facilities are located, although some facilities have sewage treatment plants (STPs). Sludge produced by the STPs is removed regularly by a licensed contractor. The Company monitors the effluent quality for compliance with national requirements and results were found to be within the performance levels of the relevant World Bank Group EHS Guidelines. 

Waste Management:

The Company has waste management procedures covering all its facilities, consistent with the applicable legal requirements. ITL carries out periodic audit of its waste management contractors. At each logistics facility, non-hazardous and domestic waste are segregated which are then collected and disposed of by the responsible government agency. ITL has also documented safety instructions for storage, handling and use of hazardous wastes as part of its ESMS.

The logistics facilities of ITL handle and store cargos of daily commodities such as food, beverage, electric appliances and will not deal with restricted items such as explosives or hazardous chemicals/materials.

Community Safety:

The Company has EHS policies and regulations related to its truck drivers, requiring them to submit their driving record and certificates before employment and to follow the corporate polices and code of conduct. The Company ensures that its transport fleet follows national regulatory requirements on road safety e.g. having two drivers taking turns to drive a vehicle for any journey exceeding a certain physical distance; mandatory rest hours after a certain distance traveled; etc. ITL has provisions to ensure that its warehouses have adequate parking spaces.

Training is provided to drivers by ITL HR department and relevant external experts on safe driving requirements. The Company is currently implementing freight management system including trainings on safety awareness, safety awards to reduce traffic accident and emission together with GPS and information technology solutions to track travel statistics and data real-time.

Security Personnel:

All facilities are guarded with unarmed security guards from private security agencies and ITL has the security policy as part of HSE management system, is providing training and is monitoring the conduct of security personnel.

Currently, the Company does not externally communicate any sustainability related information. As set forth in the ESAP 6, the Company will develop and implement an external communications mechanism which will describe Company’s procedures to: (i) receive and register external communications (including any grievances from the public); (ii) screen and assess the issues raised and determine how to address them; (iii) provide, track, and document responses, if any; and (iv) capture the lessons learned within the ESMS, as appropriate.

As part of its corporate social responsibility policy, ITL provides scholarships; health checks for children and elderly in rural areas; and support to victims of natural disasters and vulnerable people.

 Contact Person: Mr. Simon Thuc

Company Name: Indo Trans Logistics Corporation

Address:  52-54-56 Truong Son Street, Tan Binh Dist, Ho Chi Minh, Vietnam

Email: simon.thuc@itlvn.com

Phone: +84-8 3948 6888