Rationale for each PSs not triggered:

• PS5/land acquisition and legacy land impacts and ownership – No new land acquisition is needed under this project. Land is chosen according to its location and perceived competitiveness for hotel or resort operation. Project hotels were built on sites which were acquired many years ago, on a willing buyer willing seller basis.
• PS 6 No areas of concern for biodiversity were identified for the project locations under this investment.
• PS 7 For project hotels, no indigenous people are present within the scope of the project. In Brazil, one protected area is managed by indigenous people. However, Brazil hotels are not part of this investment

PS 8 No known cultural properties or artifacts are to be found near any of OA existing facilities or future developments.                                                

  This is a Category B project according to IFC's Environmental and Social Sustainability Policy. Based on the information reviewed by the Company, this investment will have limited adverse E&S risks and impacts that are few and site-specific, with no renovation or construction impacts, only operational impacts are expected. These can be avoided or mitigated by adhering to recognized performance standards, procedures and guidelines as described in the following sections.

Key E&S risks and impacts associated with the project include (a) Development and implementation of corporate and hotel level E&S management systems; (b) assurance of fair, safe and healthy working conditions (esp. on GBV, child labor and freedom of association) in compliance with IFC PSs; (c) pollution prevention (waste, emissions and effluent management) in line with WBG EHS Guidelines; and (d) life and fire safety (LFS) management at all hotels in line with WBG EHS Guidelines.                                                 

   Identification of E&S Risks and Impacts:

The company identifies and manages E&S risks and impacts associated with its hotel operations in line with applicable national standards and E&S regulatory permits and requirements. No environmental impact assessments (EIAs) were required and conducted for any of the Cape Verde hotels, that were acquired from the state. Relatively recently constructed Salina Sea has an environmental permit that was issued based on the 2008 EIA (attached, Annex I). As a part of its environmental management system (EMS), OA conducted risk assessments for each project Hotel. Risk assessments included the details of the environmental aspects, and corresponding mitigation measures in the EMS, referring to management programs, documentation and adequate checks.

E&S Management programs:

Salinas hotel has developed a set of environmental policies and an EMS, based on international environmental management system standard, ISO 14001. OA is in the process of adopting the EMS at corporate level, which will be implemented by other hotels in Cape Verde, OA has a set of environmental health safety and social (EHSS) procedures, as defined by the tourism accommodation health & safety technical guide by the Association of British Travel Agents (ABTA) travel association and the Federation of Tour Operators (FTO). It has been used by OA as reference for the hospitality sector, covering hygiene, food safety and worker safety. Health and safety technical guideline is the principal document that tour operators inspect OA hotels in Cape Verde. As ESAP item #1, the company will develop and implement a corporate level environmental and social management system (ESMS), in line with IFC PS, and local legislation requirement. (ESAP item # 1).

The environmental management system includes the following policies and procedures: EMS policy, organizational chart, roles and responsibilities, environmental management programs, reporting and documentation. Emergency preparedness and response plan is also included in the EMS. An annual internal auditing system has been formalized. In terms of external auditing, project hotels receive inspections, that relate to general hygiene, food safety, fire safety measures and fire drills conducted, from Société Générale de Surveillance (SGS), tour operators and the Hazard Analysis and Critical Control Point (HACCP) certification authority where the findings are communicated to senior management and corrective actions are planned as needed at each hotel.

Organizational capacity and competency:

Environmental and social aspects of the hotels are currently under the responsibility of the maintenance manager and his team. An EMS manager who is responsible from day-to-day implementation of the EMS, including the monitoring of E&S improvement programs, resource efficiency and E&S performance of each hotel is yet to be assigned. Hence, the maintenance manager currently ensures that EHS meetings are organized periodically and separately at every hotel, and the performance is reviewed every month by the senior management. As part of the ESAP item 2, OA will designate or hire qualified staff at corporate level with overall responsibility and authority for overseeing and managing all environmental, health and safety (E&S) risks of all of the Project hotels including implementation of the corporate ESMS as intended to be prepared as part of ESAP item 1.

Emergency Preparedness and Response:

Based on tour operator standards, the European and Portuguese fire codes are used as a reference for project hotels. Each operating hotel has developed an emergency preparedness and response plans (EPRP) for different emergency scenarios including fire, typhoons, spring tides, heavy rain, spills and leakage incidents. Emergency teams are set up to deal with accidents and emergency situations and receive relevant training. Fire drills are conducted twice a year at project hotels. The company is currently including COVID-19 protocols as the internal emergency plan (IEP) at each Project Hotel.

Monitoring & Reporting:

As part of the EMS, the company monitors E&S key performance indicators (KPIs) such as water management, waste management and wastewater management. The maintenance team is in charge of reporting on E&S KPIs to project hotels management through E&S performance reports on monthly basis.

As per the ESAP item 1, the company will further enhance the ESMS to include E&S KPIs for all project hotels consistent with IFC PS requirements and WBG EHS guidelines (both General EHS guidelines; and EHS guidelines for Tourism and Hospitality), as applicable. This will include but not be limited to better integration of such aspects as health and safety of employees and guests, such as lost time injury frequency rate, number of near misses and community E&S-related grievance mechanism into an ESMS, as explained in more details in the paragraphs under PS2 below.

Supply Chain:

Through documented contractual covenants, project hotels’ suppliers are required to respect all project hotels’ policies. However, the company does not conduct supply chain screening or audits. As per ESAP item #3, the company’s procurement processes should be updated in line with IFC PSs to incorporate basic labor risk screening involving, at a minimum, child and forced labour. This might include (but not limited to) additional questions for supplier selection and evaluation as well as a supplier E&S risk analysis.                                                

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

As of October 2021, there are overall 625 permanent and contractual employees at project hotels where 201 workers are females. Most workers start on fixed-term contracts, which are typically six months to one year in duration. Some staff are retained on shorter one-month contracts (e.g., gardeners) while expatriates may be engaged on longer term contracts. Fixed-term contracts are extended for up to 5 years, which is the legal limit as indicated by OA’s management. Employees demonstrating adequate performance or commitment are moved onto permanent contracts.

OA has an HR policy and employee handbook applicable for all staff directly under OA contract. The employee handbook was introduced at group level which newly hired employees receive during their onboarding. All direct employees are expected to complete the probation period and are provided with written contracts which explain their employment terms and conditions. The HR policy and procedures communicated in the employee handbook include information on employee benefits, payment and leaves.

As part of the ESAP item 4, the company will update its employee handbook, human resources policy and procedures, in line with IFC PS2 requirement, to cover (a) casual workers’ rights (b) freedom of association & collective bargaining including a policy to ensure respect for the right of unions, to be formed by workers and representatives that will negotiate with management through collective bargaining, to be elected by the workers; (c) retrenchment policy and procedures for employees working within project hotels; (d) renumeration and overtime; (e) grievance mechanism for all employees including contract workers which regularly documents all grievances or concerns and how these are being resolved etc.. The company does not hire staff below the age of 18 years; and does not allow child or forced labor. The company will formalize this as part of its employee handbook update.

Grievance Mechanism:

The company does not currently have a formal grievance redressal mechanism (GRM) for its employees. Currently, employees are expected to direct their grievances either to their supervisor or HR department. The employees also do not have access to the process of routing their gender and GBV complaints. The company will design an employee grievance mechanism to meet the IFC PS2 requirements and provide a framework for GRM to be followed at all project hotels including provision for anonymous grievances. The company will ensure that the grievance systems at all hotels are available to direct employees as well as contract workers. OA will ensure that the updated GRM is disclosed, and provisions communicated to both the employees and contract workforce. The company will ensure that the GRM regularly documents all workers issues (grievances or concerns) and the resolution in a time bound manner (ESAP item # 5).

 Freedom of Association:

The company does not discourage formation of union, restricts freedom of association or prohibits workers from joining any union. Cape Verde labor laws allow formation and registration of trade unions. Currently there are unions at three hotels with no collective bargaining agreement (CBA). OA will update its HR policies and procedures on freedom of association to underline the workers right to form and to join workers’ organisations of their choosing without interference and to bargain collectively. It should indicate that there will be no discrimination or retaliation against workers who participate, or seek to participate, in organisation or collective bargaining (ESAP item # 4).

Accommodation:

For expatriate workers, the company provides accommodation. The process is carried out by HR department and is usually divided in two phases; hotel accommodation, providing all the basic services, followed by house search and transfer. As part of the agreement between the company and the employee, this can be replaced by a payment of a subsidy that covers the house cost as well as gas and electricity payment. For other employees, whenever possible, the company provides accommodation to individuals who leave their communities looking for a job opportunity. Employer provided accommodation (with sufficient description of who is entitled and all conditions that apply) will be included in a stand-alone document. The policy /SOP will also include statement as part of the COVID policy the temporary accommodation arrangements at the hotel is a voluntary program in response to the current situation of lockdowns. The workers will also have the freedom to choose whether to avail of this option or not without any concern of losing their job (ESAP item # 4).

Retrenchment:

OA has been impacted by COVID-19 resulting in around 261 employees (14 permanent and 247 contractual) being laid off by the company. Almost all short-term labor contracts were not renewed on their renewal dates. Employees were notified in advance of the decision of not renewing and/or extending the contracts. Layoff of permanent staff required notifications to relevant trade unions and the labour ministry. As set forth in ESAP 4, the company will include retrenchment policy in line with IFC’s PS2 as part of the employee handbook update and will make it applicable across all the operating hotels of OA.

Occupational, Health and Safety (OHS):

OA conducts for its project hotels hazard identification and risk assessment on occupational health and safety to identify and mitigate specific safety risks in their operations. Regular training programs and all induction trainings are conducted on various safety related topics such as HACCP, hygiene for food handlers, fire detection and first aid, as required by the tourism accommodation health & safety technical guide of ABTA and FTO.

OHS statistics (fatalities, incidents records) are monitored by maintenance department at each hotel and there were no major injuries between 2019-2021. OHS statistics are currently not included in either internal or external reporting. As part of the ESAP 1, the company will consider relevant lagging and leading indicators for effective OHS performance management.

COVID19 Management:

Due to the COVID pandemic, working schedules have been adapted to the activity of each hotel. Project hotels employed a stay-at-home policy and safety measures when possible. Only Belorizonte hotel has been completely closed during the pandemic and the rest of the hotels faced partial closures. Closure was between March and August 2020. The company has implemented a COVID19- free procedures manual (PM) to ensure the safety of their staff and guests. The PM includes prevention measures for social distancing instructions to employees (reception, housekeeping, bellmen, laundry services, etc.) on health, cleaning, disinfection, and hygiene measures to be observed and precautionary measures to be taken by guests.

Gender:

Under ESAP item 6, the company will conduct a gender smart audit of the project hotels in CV. As needed, company will (i) engage expertise to help assess the risks of sexual harassment in the workplace and gender-based violence (GBV) in affected communities and supply chains, (ii) update and implement the new anti-sexual harassment policy together with relevant disciplinary procedures in line with guidance from “Addressing Gender-Based Violence and Harassment Emerging Good Practice for the Private Sector”, (iii) document a process to show how your anti-sexual harassment (ASH) policy is implemented and (iv) develop and implement a grievance mechanism for reporting sexual exploitation and abuse perpetrated by employees in affected communities.

The company will also improve implementation of HR policies by integration of GBV and sexual harassment policy, procedures and grievance mechanism into the staff induction training on HR policy. A training program will be developed to ensure that once a year refresher training will be provided covering GBV and sexual harassment policy procedures, GRM, code of conduct, for all existing staff, including security guards and mandatory onboarding training for any newly recruited staff will be conducted. The management team shall be trained separately from other employees (ESAP item # 7).

Workers engaged by third parties:

Project hotels HR hires short term contracted personnel as needed such as during months of peak hotel operation. HR policies and procedures are also applicable to them, which is same as the employee handbook for project hotels. Security personnel and housekeeping staff are also employed through use of outsourced agencies.

Under ESAP item 8, the company will (i) develop a contractor management system, in line with PS2 requirements, including terms of employment, minimum age, non-discrimination and equal opportunity, freedom of association, worker accommodation and occupational health and safety; grievance mechanism; etc., (ii) implement procedures to demonstrate compliance with the national laws, PS 2, and OA’s employee handbook, and (iii) develop and implement a code of conduct for employees and contractors that prohibits GBV.                                                  

   Resource Efficiency:

The company has a plan to generate electricity from renewable energy and plans to install PV panels and solar thermal systems in its project hotels in Cape Verde. Water consumption reduction efforts include the re-use of water from baths in toilets after passing through the water purification system. Also, water flow reducers are installed at all project hotels.

The three project hotels currently have a total of five diesel oil powered generators ranging from 90 to 860 kVA capacities and five LPG/fuel oil fired boilers ranging from 19.1 to 270-KW power and up to 500 L capacity. In addition, power is currently sourced from the national electricity grid.

The current GHG Scope 1 emissions from the project are [1,034] ton equivalent carbon dioxide emissions per annum (tpa), while the scope 2 emissions are [949] tpa for FY2021. The GHG emissions on annual basis are far below 25 000 tpa. 

Water and Wastewater:

Potable water is monitored on weekly basis and swimming pool water quality is tested and recorded daily in each hotel. The source of water at the hotels is through the municipal water network. The company has installed water purification systems at all the hotels.

All of project hotels are designed to treat 100% wastewater through on-site wastewater treatment plants (WWTP). Treated wastewater is recycled water to be used for the irrigation of green spaces. Treatment plant sludge is naturally dried and is sold to farmers to be used in agriculture after being tested at least once a year. The wastewater from hotel kitchens is directed to grease separators and then discharged to public sewage system while the grease is treated as common waste.

Hazardous Materials and Waste Management:

Chemicals stored/used on site include chlorine, pH chemicals for the pool, disinfectants and cleaning detergents for housekeeping. All containers are elevated on wooden pellets in the storage room. Quantities on-site are minimal to last a few days of operation. The company has hazardous and non-hazardous waste management procedures including a system of appropriate sorting, storage and disposal which are consistent with applicable legal requirements.

The company practices responsible waste disposal. Waste types generated at the project hotels include paper, plastic, metal, electronic waste, broken glass and organic waste which are segregated at source. The sorted waste is collected by municipal waste treatment companies. All hazardous and non-hazardous wastes are collected for disposal by authorized public service agencies specialized in each type of waste.                                                

 Life and Fire Safety Management:

Each operating asset has a set of fire safety procedures to prevent fires and describing actions to be taken in the event of fire, evacuation procedures, roles and responsibilities of the various staff and are reviewed regularly through pro-active measures.

Each hotel undertakes fire drills over-all hotel premises at least defined as per government regulation. Each drill is followed by an assessment of observed gaps with corrective actions to be addressed by the asset loss & prevention department.

Virtually visited hotels were noted to be provided with LFS infrastructure and systems including different types of fire extinguishers, smoke detectors and fire alarms, manual call points, sprinklers, fire hoses at every floor.

The projects team of CHL and external specialists prepare LFS designs for the new hotels based on LFS master plan in compliance with local fire safety regulations as well as the specific requirements / standards from each brand. The designs are reviewed by each hotel in line with own brand’s international LFS standard. Once the hotel is constructed, the implementation of the LFS systems is monitored by the corporate property management. The same is also reviewed by local fire safety authorities for their compliance and the company obtained the certificate in advance to the operation.  Any new building will follow the requirements of the local and international hotel brand LFS standard as such.

For existing properties, as per ESAP 5, CHL will engage a competent LFS professional acceptable to IFC to conduct a risk-based LFS review at a representative sample of hotels (operational and under construction) against GIIP (e.g. IFC’s Good Practice Note: Life and Fire Safety for Hotels).  Findings of the review will be used to set a time-bound action plan, if needed, to be implemented by CHL, and also to introduce systematic improvements on LFS management at the company level.

The assets are mostly observed to be well managed and have the required L&FS features of the local NBC; however, the company will benefit from better oversight over the brands procedures, especially in terms of the details of the O&M, emergency response procedures (ERP), etc (related to L&FS). Further, as per ESAP 6, the company will, based on the third party LFS review and review of the different brand’s standards, develop a set of corporate L&FS documentation (master plan, O&M standards, etc.) and ensure that CHL maintains and manages L&FS related records for sites at the corporate level.

Security Personnel:

All assets including hotels are guarded with unarmed security guards from licensed private security agencies. Regular training programs are conducted for the security workers on the standard operating procedures for their job including life and fire safety trainings.