The operations of the company are low risk and mostly within urban areas. The company’s fleet is mostly motor bikes. Therefore, PS4 (Community, Health and Safety) is not applicable. The warehouses, fulfilment center and laboratory are located in urban areas in leased spaces and no additional land acquisition is expected for company’s future expansion thus PS5 Land Acquisition and Involuntary Resettlement is not applicable. Similarly, PS6 (biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not applicable.                                                    

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 (E&S) impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.   

Key E&S risks and issues related to this project will include: (a) company’s capacity and systems to manage its social, environmental, health and safety aspects of its operations (deliveries, warehouses and other locations) in compliance with legal requirements as well as IFC Performance Standards and World Bank Group (WBG) EHS guidelines; (b) life and fire safety (LFS) management and emergency response planning; (c) assurance of fair, safe and healthy working conditions for its workforce (both company employees and third party workers) including regular external compliance audits; and (d) ensuring compliance with IFC PSs requirements in the supply chain.

Environmental and Social Assessment: Considering the company’s operations, 1mg is not required to undertake a formal Environmental and Social Impact Assessment (ESIA) study and seek prior environmental clearance for establishing its warehouses or laboratories. The company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable E&S regulatory permits and requirements.

E&S Policy and Management System: Currently the company does not have a documented EHS policy. As set forth in the ESAP, the company will document an EHS policy. The operations are mainly warehousing and laboratory testing, the environmental and occupational, health and safety (OHS) risks are limited. Basic procedures for warehousing operations have been documented (for DMPL). Also, for the laboratory, procedures are being developed as per the accreditation requirements of National Accreditation Board for Testing and Calibration Laboratories (NABL). As set forth in the ESAP, to strengthen its EHS management, the company will develop basic procedures on: (a) life and fire safety (including provision and maintenance of fire safety systems, fire safety training); (b) emergency preparedness and response (including emergency response plans, regular training and mock drills); (c) OHS management (including general safety guidelines, use of appropriate personal protective equipment (PPE), injury prevention, storage and handling guidelines for hazardous chemicals, road safety guidelines, first-aid and regular OHS training, and accident/incident/injury reporting and investigation); (d) environment and OHS monitoring and review; and (e) community grievance mechanism. The procedures will be implemented by 1mg and DMPL within the agree timelines.

Organizational capacity and competency: The chief operating officer (COO) is responsible for various parts of the operation with delegated responsibilities to various managers. As per the ESAP, the company shall identify an appropriately qualified professional to implement and monitor EHS procedures at DMPL and 1mg, discussed above.

Emergency Preparedness and Response: The visited warehouse and laboratory were noted to be provided with fire extinguishers and fire alarm system (although it was under commissioning at the lab). The emergency exits, and routes were noted to be marked. Basic emergency response procedures were noted to be documented at the warehouse whereas it was under development for the laboratory. As discussed above, the company will develop emergency response plans for the laboratory and warehouses covering likely emergencies and ensure regular training and mock drills. Such emergency response plans and training records will be shared with IFC for review.

Monitoring & Reporting: As per the ESAP, the company will develop a procedure on EHS monitoring which will specify minimum EHS parameters (including energy consumption, EHS trainings conducted, health and safety accidents/incidents, etc.) to be monitored, monitoring frequencies and the definition of thresholds that signal the need for corrective actions. Regular monitoring will be conducted for the defined parameters as per the procedure and the company will ensure corrective actions are taken as necessary based on the results.

The company employs about 790 people. DMPL and LabForSure employ about 180 and 580 people, respectively.

Human Resource (HR) Policies Working Conditions and Terms of Employment: 1mg has documented HR policies which cover various operational matters like recruitment, leaves, incentives, travel, mobile reimbursements and exit management. DMPL and LabForSure have only limited number of documented policies. As per the ESAP, the DMPL and LabForSure policies will be documented (similar to 1mg policies) and in line with the PS2 requirements.

All on-roll employees (of 1mg/DMPL/LabForSure) receive written appointment letters explaining the terms and conditions of their employment. Based on available records and documents, the same were noted to be in line with the applicable legal and PS2 requirements.

Grievance Mechanism: As required under the applicable legal requirements. the company has a policy on prevention of sexual harassment (POSH) at workplace, which described the process of addressing sexual harassment related complaints. Also, internal complaints committee (ICC) has been formed with an external/NGO member and regular returns are filed to the authorities. Similar POSH policies and ICC are in place at DMPL and LabForSure.

However, currently the company/DMPL/LabForSure does not have a documented grievance handling mechanism. As per the ESAP, the company will develop and implement a documented workers grievance mechanism which meets IFC PS2 requirements with a consistent and well-structured system of documenting grievances received and processed. The company will also create awareness among employees regarding the grievance mechanism. Same actions will be implemented at DMPL and LabForSure.

Non-discrimination: As mentioned above, non-discrimination is part of 1mg’s recruitment policies and as per the ESAP, similarly, will be included in the policies of DMPL and LabForSure.

Protecting the Workforce: The company does not employ anyone below 18 years of age and age proofs are collected at the time of recruitment. Based on observations during the appraisal, no instances of child labor or forced or bonded labor were noted.

Occupational, Health and Safety (OHS): Considering the operations are mainly warehousing, laboratory testing and deliveries, the OHS risks are not significant. To strengthen OHS management for its operations, as discussed under PS1 above, as per the ESAP, the company will develop a basic OHS management program which will at least cover general safety guidelines, injury prevention, storage and handling guidelines for chemicals, road safety and preventive maintenance guidelines, material handling, management of biohazard and exposure to biological fluids, first-aid, regular OHS training, use of appropriate personal protective equipment (PPE), and accident/incident/injury reporting and investigation.

Third Party Workers: Third party workers are employed by 1mg mainly for security whereas DMPL employs them for material handling, picking, last mile deliveries and security. Similarly, LabForSure hires few part-time consultants for sample collection and deliveries. The third-party workers are mostly hired through external agencies and their records are reviewed by the respective HR departments to ensure compliance with applicable legal requirements before the agencies are paid. The part-time consultants work as professionals and paid on the basis of services delivered to LabForSure.

Supply Chain: Most of the medicines sold by listed vendors through the platform are sourced either from reputed pharmaceutical companies or their stockists. The company’s control and leverage on these companies is very low.

As mentioned above, the company has few own private label products manufactured by third-party entities, under the ‘1MG’ brand which are distributed through the platform as well as offline through the pharmacies. These medicines are sourced from reputed manufacturers who are also manufacturing it for other big companies. The company screens these manufacturers through its contract manufacturer checklist which covers certifications and licenses, distinct areas/sections, production process review, and hygiene and sanitation. Considering that the company has only started with these private labels, the volumes are low and thus most of the orders are on-time orders. Therefore, the company’s control and leverage on these manufacturers is very low. However, as per the ESAP, the company will add IFC PS2 requirements on supply chain in its check-list i.e. availability of basic E&S permits, prevention of human rights violation (e.g. forced and bonded labor, child labor) and no significant safety hazards.

Power Supply and Air quality: As the warehouses, stores and laboratory are in urban areas and the power supply is through the grid. Back-up generators are provided at the warehouse and laboratory and used only in case of power failures. The usage is expected to be less than 500 hours/year. The fleet vehicles are regularly maintained and serviced to ensure that the pollution levels are controlled within the limits.

Water and Wastewater Management: Water is from the borewells or public supply. The wastewater from warehouse is essentially domestic sewage and discharged in the public sewage network. The laboratory has a disinfection plant where all effluent is treated with alum and sodium hypochlorite before it is discharged in the public sewage drain.

Solid and Hazardous Management: The waste generated from the warehouses is mainly packaging waste, sold to the external agencies, and expired medicines/drugs, which are returned to the respective vendors.

Bio-medical Waste (BMW) Management: As mentioned above, the company is developing EHS procedures for the laboratory. The same will include documented procedures for BMW management which should describe the system of appropriate sorting, labelling, handling, storage and disposal of BMW as per applicable legal requirements. BMW generated at the laboratory are segregated at source and bagged into color coded bags. The laboratory has an agreement with an authorized agency to collect BMW for disposal.

During the site visit, it was noted that currently the BMW is stored in an open area. As per the ESAP, the company shall construct a covered area to store BMW waste till the time the waste is collected by the external agency.

 In terms of disclosure of E&S information, the publication of the ESRS and ESAP will be company’s first disclosure of such information. As per the ESAP and as part of development of E&S procedures, 1mg will develop a community grievance mechanism i.e. a process to receive and responding to the grievances from neighboring communities.

Considering the corporate nature of the investment, 1mg will disclose this ESRS and the ESAP at the following address:

1MG Technologies Private Limited

Corporate Office: 1st Floor, Motorola Building

MG Road, Sector-14

Gurugram, Haryana – 122001.

Any queries and/or comments about the project may be directed to:

Mr. Prashant Tandon

Chief Executive Officer

1MG Technologies Private Limited

1st Floor, Motorola Building

MG Road, Sector-14

Gurugram, Haryana – 122001.

Tel: +91 124 4108418