There are no impacts or concerns associated with following Performance Standards: PS5 Land Acquisition and Involuntary Resettlement: land acquisition for business purposes focuses on existing assets in developed industrial parks or commercial premises which are retrofitted to accommodate the Group needs while all transactions are on a willing buyer willing seller basis; PS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources: no operations adversely impact or have potential risks to high biodiversity values; PS7 Indigenous Peoples: the company development activities are focused in the developed urban fringe; PS8 Cultural Heritage: no impacts or concerns given the nature of the business activities, but chance find procedures will apply if the company is involved in any facility construction.   

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The E&S risks and impacts associated with this project are limited, site-specific, and can be readily addressed through generally accepted mitigation measures described in this document and the attached Environmental and Social Action Plan (ESAP).

Key E&S issues associated with this investment are:  (i) effectiveness of ASSA management competency and capacity to implement EHS/labor management systems; (ii) emergency preparedness and response plan, especially Life and Fire Safety (L&FS) for buildings with public access; (iii) hazards posed to the public for premises that can be accessed by public; (iv) resource (energy/water) efficiency and solid and hazardous waste management; (v) community safety / traffic safety (and management of risks associated with a large fleet and a large number of drivers; and, (vi) pollution prevention and control associated with the vehicle fleet operations.

     Environmental and Social Assessment and Management System: ASSA, its subsidiaries, and Joint Ventures (JVs) do not manufacture products, are not primary producers of living natural resources nor involved in heavy industry. All entities under ASSA have a limited environmental and social footprint. ASSA’s ESMS is maintained through ASSA’s “Green Strategy”, this document forming the basis of its environmental and social objectives, mission and vision and used as the manual in support of ASSA ISO14001 and OHSAS18001 certification. The scope of these certificates is for the car rental, driver outsourcing and freight logistics business. The ESMS defines policy, standards, roles and responsibilities for implementing, committee to support implementation, standards for emergency response, occupational guidelines, HIRA, applicable legal requirements and permits, training, and monitoring requirements, with standards based on Indonesian regulations. Although ASSA has a management system which is aligned with the requirement of this Performance Standard, none of the subsidiaries or JVs’ have yet adopted such management system. As set forth in ESAP #1, ASSA shall expand the scope of the existing ESMS and develop a Group-level ESMS applying to all ASSA subsidiaries and JVs and provide sufficient management capacity and training for its implementation. In addition to the scope of the existing ESMS, the  following aspects will be added: i) asset (including land) acquisition procedures, including E&S due diligence process, and assessment of structural and building suitability for use; ii) L&FS for buildings with public access; iii) energy and water efficiency (including options for conversion of vehicle fleet to alternative fuels, electric and hybrid vehicles etc.,); iv) stakeholder engagement , including community grievance mechanism; and v) E&S evaluation protocols for business acquisitions. The implementation of the Group level ESMS will be coordinated out of the existing General Affairs (GA) functions within ASSA with adequate supporting roles within each subsidiary and JV.

Policy: ASSA has a defined corporate EHS policy communicated internally and externally through its website and posting in all offices.  This policy commits ASSA to adhere to internationally recognized certification of its ESMS systems, avoid and prevent OHS and other operational risks, and avoid, minimize and reduce negative impacts to the environment. None of the subsidiaries or JVs’ have yet adopted such policy. As set forth in the ESAP #2, ASSA will upgrade its Group-level E&S  policy stating its commitment to avoid, mitigate and manage risks and impacts in compliance with IFC Performance Standards, and consistent with the good international industry practice (GIIP) as described in the applicable and relevant sections of the World Bank Group General EHS Guidelines and will implement this commitment at the level of its subsidiaries and JVs’. This revised policy will be communicated to and part of the training for staffs and contractors.

Identification of Risks and Impacts: ASSA complies with national regulations for the identification of risks and impacts and has in place adequate capacity to assure this. Generally, all entities under ASSA acquire existing facilities and retrofit these with their specific needs. In doing so the ASSA and its entities comply with building and permit regulations and, if required, undertake an environmental and social assessment study in the form of an environmental effort and environmental monitoring (known as UKL – UPL in Indonesia). The identification of risks and impacts will be systematized at the Group level as a procedure to be consistently applied by all subsidiaries and JVs.  See ESAP #1.

Organizational Capacity and Competency: ASSA’s ESMS is implemented through the General Affairs (GA) department which reports to the President Director. ASSA has sufficient capacity to manage E&S needs with a well-structured GA department overseeing the implementation of the E&S and OHS objectives. The GA department is structured from head office to each branch level through the Quality Safety Health and Environment (QSHE) teams (two to three officers per branch) which support the branch manager in implementing ASSA EHS/labor standards. This model is being adopted by the other operating subsidiaries and JVs within the Group, such as ASL, TAB (Anteraja) and AS Lelang (JABI), including GA roles within their corporate structures and plan to implement similar approaches based on ASSA’s Green Strategy. The approach will be formalized for all subsidiaries and JVs as part of the Group level ESMS. See ESAP#1.

Emergency Preparedness and Response: ASSA has in place documented emergency preparedness and response plans (ERP) sufficient to cover relevant emergency events. These plans are developed through the application of the HIRA process. Response plans include driver accidents (both logistics and rentals), hijacking and theft of high value cargoes. In the event of a road traffic accident, drivers are trained to render first-aid assistance as needed and report the incident to the competent authorities. ASSA drivers are required to take responsibility in such situation and act accordingly. The requirement for an emergency preparedness and response procedure and organization will be extended to all subsidiaries and JVs as part of the Group level management system. See ESAP #1.

Land Acquisition: Land acquisition is undertaken through a willing buyer willing seller basis and to date focused on acquiring brownfield locations within the urban fringe, such as former warehousing or car showrooms. ASSA prefers sites that match the profile of existing car showrooms with infrastructure for car storage, basic maintenance/serving and offices. AS Lelang (JBAI) land is focused on former industrial sites that can be easily converted to car storage locations i.e. levelled with all-weather surface and basic administrative and auction buildings erected. TAB (Antaraja) focus on existing warehousing infrastructure with adequate vehicle access in designated locations. Both acquired sites and sites for future acquisition visited during this appraisal process confirmed the approach. ASSA and its subsidiaries and JVs will continue to acquire land on “willing buyer/willing seller” basis and to focus on land which is unoccupied, unencumbered of any claims and will not result into the displacement of residents or land users. A land acquisition procedure will be developed at the level of the Group, included in the ESMS and adopted by all subsidiaries and JVs. See ESAP #1.

   The Group, including subsidiaries and JVs, currently employ ~7,130 employees including couriers, drivers and administrative staffs with ~393 positions supplied by outsourced labor service providers (supplying a mixture of skilled administrative labor and unskilled support labor). Of this total work force (including outsourced labor supply) ~6% are female. Out of ~4,700 employees providing driver and courier services, none are female, with only six females out of ~1000 delivery drivers in TAB (Anteraja). Each subsidiary or JV has its own HR function, payroll, policies and procedures consistent with ASSA standards as described below.

Human Resources Policies and Procedures: ASSA HR policies and procedures are based on Indonesia labor regulations and are communicated to the workers during the hiring and induction process. Although the worker handbook for ASSA is compliant to the national labor law and approved by the local Government labor authority, it lacks specific guidance and communication on policy and worker rights relating to: (i) nondiscrimination, equal rights and equal pay; and, (ii) freedom of association and right to collective bargaining. ASSA include in their peraturan perusaahan (company employment regulation) disciplinary approaches for acts of sexual misconduct within the work place. It is noted that the work environment is male dominated with no female workers allowed to work beyond 2100 hours in the evening. Sorting hub roles in TAB (Anteraja) are night roles, and hence no female workers are employed. ASSA’s management emphasized that the Group does not discriminate, and job advertisements shown for TAB (Anteraja) did state both male and female may apply; however drivers and courier work is male dominated as these are the main applicants.  As set forth in the ESAP #3, ASSA HR function will conduct a review and update of its employment policies and include in its core HR policy the following requirements: (i) defined policy emphasizing commitment for all subsidiaries to nondiscrimination, equal rights and equal pay; (ii) freedom of association and right to collective bargaining; (iii) overtime requests are to be agreed with workers and include consideration of relevant occupational health and safety needs; (iv) a zero tolerance approach for any proven case of gender based violence (GBV), or case of work place harassment; (v) a confidential survivor centered channel and grievance mechanism procedure for the receipt and management of sexual harassment and GBV related complaints; (vi) confidential and anonymous channels for grievance to ASSA Group-level HR departments; and, (vii) no discrimination in setting working hours and hours of work. The policy will outline roles, responsibilities, accountability and disciplinary procedures.

Working Conditions and Terms of Employment:  Terms of employment for all employed ASSA staffs is fixed term or open ended contracts. Drivers and couriers are engaged on fixed term contracts based on the length of the contract with the business client, and paid in compliance of the labor law in Indonesia receiving all statutory benefits and entitlements. Generally, all driver contracts are fixed term for two years with a three-month probationary period. TAB (Anteraja) workers were on fixed term contracts with all new workers receiving fixed term contracts with a probationary period for three months and fixed for one-year transferring to open ended on successful completion of the initial contract. Salaries sighted across the ASSA and TAB (Anteraja) were aligned to the minimum wage standards for a 40-hour working week. Based on records reviewed, workers received access to benefits, including holidays and other statutory entitlements such as social insurance as per the national labor law requirements. Overtime payments were calculated based on the national law and standards. TAB (Anteraja) couriers receive additional vehicle allowances for costs of maintenance and fuel for motorbikes. ASSA and TAB (Anteraja) customer service centers operate on 24 hours, seven days a week, with staffs rotated on night shift on a three-weekly basis. TAB (Anteraja) only operate sorting centers at night from 10pm to 6am with workers paid in accordance with national regulations. While ASSA’s working conditions and terms of employment for employed staff are generally aligned with Performance Standard 2, corrective actions will be implemented for outsourced service providing staffs as described below. It was also noted that AS Lelang (JBAI) facilities did not include gender divided toilets for male and female workers. As set forth in ESAP #4 JBAI facilities shall be audited to ensure that gender separate toilet facilities are installed at all sites/offices.

ASSA HR policies and recruitment process include explanations on terms and conditions of the contracts and company benefits prior to signing of the employment agreement. IFC’s review found that in some instance’s issues for outsourced service provider workers, also in terms of awareness of full entitlements and benefits under national regulations. As set forth in ESAP #5, ASSA, its subsidiaries and JVs’ will ensure that all outsourced service providers comply with labor law in terms of workers’ rights and access to benefits for staffs working under the ASSA Group. ASSA, its subsidiaries and JVs will require labor service providers to sign a code of conduct that states that all provisions within the labor law shall be upheld, including the provision of maternity benefits, with no form of pregnancy testing allowed, as part of the recruitment process. All outsourced labor shall be made aware of and be given access to both the sexual harassment complaints channel and the employee grievance mechanism of ASSA, its subsidiaries and JVs.

ASSA’s management indicated that medical checks were included as part of the candidate selection process. These checks were conducted for screening out users of illegal drugs and carriers of communicable diseases, such as Tuberculosis or Hepatitis C, the former for couriers and parcel handlers and the latter for drivers. It was also stated that medical checks were conducted on office staffs for ASSA. As set forth in ESAP #6, ASSA, its subsidiaries and JVs’ will specify into its HR policy and procedures, including the recruitment procedure and the worker hand book, the rational why medical checks are required. It shall state medical checks are limited to communicable diseases, aligned to related work place safety considerations, and applied in accordance with prevailing regulations and national law. The checks will not be used in a discriminatory manner. Notification of the focus of medical checks will be provided to ASSA subsidiary and JVs workforce.

Grievance Mechanism: ASSA has in place a whistle blower policy that is anonymous. A complaints procedure is present but does not allow for submission of anonymous complaints through a direct confidential channel to the HR function. There is no channel for workers to bring complaints regarding sexual harassment and gender-based violence, nor any survivor centered approach for management of these issues (if they arise). ASSA will develop and implement a grievance process for receiving, recording, reporting, evaluating and responding to HR related complaints (including channels for submission of anonymous complaints and for submission of complaints regarding sexual harassment and gender-based violence) and will ensure that all workers, outsourced staffs and contractors within ASSA, subsidiaries and joint ventures, have access to this.  See ESAP #3.

Occupational Health and Safety: ASSA is OHSAS18001 certified with effective policies and procedures for the identification, management, and mitigation of hazards. Safety and accident data for ASSA is closely monitored and all accidents investigated. During the reporting period 2018 three non staff fatalities occurred as a result of road traffic accidents with drivers. All incidents were investigated by the national authorities. The management system requires drivers to conduct defensive driver training on an annual basis and be trained in ERPs, including basic first aid practice. The ASSA GA department applies a HIRA evaluation procedure to all commercial activities for ASSA operations. None of the subsidiaries or JVs’ have adopted similar approaches at the time of IFC’s review. It was noted that none of the couriers in TAB (Anteraja) had been trained in defensive driving techniques nor had received training on emergency response. TAB (Anteraja) couriers provide their own motorbike as a condition of employment. The current policy from TAB (Anteraja) is to evaluate the age of the motorcycle and if under seven years old is considered as road worthy. No physical checks by the company are conducted on the road worthiness of the motorbike. This represents an OHS risk that TAB (Anteraja) will correct.  To be included as part of the ESMS and ESAP #1, all new recruits will be required to submit an industry standard certification of road worthiness for their motorbikes, in addition to proof of ownership and age. This certificate must be renewed on an annual basis and confirm that key safety features such as tires, brakes, and lights are fit for purpose. All TAB (Anteraja) drivers will have advanced/defensive driver training as part of the induction training.  

   Resource Efficiency: ASSA has in place a management program on efficient use of natural resources. For instance, ASSA has installed photovoltaic cells and water recycling systems at four branch offices. ASSA is conscious of resource efficiency and monitors costs to continually evaluate opportunities as they arise. This approach focuses on identification of the least cost highest impact.

To date ASSA reports that these approaches will generate an additional 140 MW of energy per annum. The potential for implementing similar approaches to the subsidiaries or the JV operations exists but needs to be developed. Given that there are no defined policy or targets for resource use / energy efficiency, they will be developed and included as part the ESMS under ESAP #1

Water:  ASSA have installed water recycling systems at all car washing ports in its branch offices and recycles 95% of water consumed in this process. The process involves a three-stage water treatment tank system, treatment through sand and activated carbon before reuse. The balance of water consumption at ASSA, its subsidiaries and JVs is used by employees and for general sanitation.

GHG Emissions: Within ASSA ~22,000 rental cars are operating with commercial clients in additional to ~500 light goods vehicles and 30 heavy goods vehicles. At the time of the appraisal it is estimated that ~1,000 couriers are employed with an anticipated growth to 25,000 couriers during the time of the IFC investment. As a result of the business scaling up, in total the group transport fleet including both light, heavy goods, cars and motor bikes will be about 50,000. Based on available assumptions that all rentals average 12,000kms per annum, with all light goods and heavy goods vehicles averaging 20,000km per annum, and couriers averaging 10,000kms per annum, GHG emissions are estimated at ~75,000 – 100,000 tCO2e per annum during the life time of the IFC investment. As included in ESAP #1 ASSA, its subsidiaries and JVs will identify, evaluate and implement technically and financially feasible and cost-effective options to use of alternative fuels, vehicle fleet types (electric vehicles and hybrids), and mobile renewable technologies (such as solar panels for cold storage trucks) to promote fuel efficiency and reduce the Group’s carbon footprint.

Hazardous Materials and Wastes: The ESMS includes details on the management of hazardous wastes including: (i) waste characterization and volume; (ii) labelling needs; (iii) storage needs; (iv) handling, emergency response and disposal. ASSA generates hazardous materials in the form of used oils, batteries, brake and vehicle coolant fluids taken from servicing of its car and commercial vehicle fleet. All ASSA branch sites visited confirmed that hazardous materials and wastes are managed in accordance with the ESMS, all storage locations shown were locked, maintained sufficient spill containment and response, material log books, with material safety data sheets (MSDS) on display. Replaced car tires are resold to vendors.   

   Community Health and Safety: ASSA and TAB (Anteraja) ensure that all drivers are legally licensed to operate their vehicles. Fatalities do occur due to road traffic accidents with three fatalities recorded in 2018. All accidents involving the ASSA fleet, in addition to an internal investigative process, are investigated by the national authorities and records of all incidents are maintained on file. ASSA drivers are instructed to adhere to the speed designation of the road they travel on and to drive within reasonable and safe limits. Drivers are drug tested, subject to periodic medical checks and required to take defensive driving training. All couriers employed have driving and vehicle licenses checked and are subject to drug tests prior to being employed by the company. ASSA will ensure that community safety is protected through implementation of a road / traffic safety program, including measures to monitor compliance with driving code of conducts and speed limit restriction. See ESAP #1.

Emergency Preparedness and Response: ASSA maintain adequate ERP and drivers and L&FS plans for branches, but none of the other subsidiaries or JVs have developed systems to address these needs. AS Lelang (JBAI) the auction house has premises that are subject to public access with approximately 100-150 persons present during an auction. Shortcomings in terms of L&FS permits and building permits as well as in terms of documented assessments on building integrity and safety were found for the facilities visited by IFC, which JBAI will correct. As set forth in ESAP #7, ASSA shall set a standard for L&FS compliance for existing AS Lelang (JBAI) facilities based on the national fire standards for buildings that allow public access and aligned with the ‘Specific Requirements for Existing Buildings’ as described in section 3.3 of WBG General EHS Guidelines. ASSA will also set and implement an international L&FS standard approach to be included in all future AS Lelang (JBAI) developments. This international standard will be applied in new facilities planned or constructed and will be evaluated by an independent suitably qualified consultant (in addition to compliance to the relevant national L&FS standard), consistent with the with the ‘Specific Requirements for New Buildings’ as described in section 3.3 of WBG General EHS Guidelines. ASSA will have all AS Lelang (JBAI) facilities accessed by the public (all buildings) assessed to ensure that the building standards are compliant to prevailing regulations. This assessment shall be conducted by a qualified independent building engineer to confirm buildings are fit for purpose and compliant to prevailing regulations and standards for buildings for public use, including L&FS regulations and standards.

Security Personnel: ASSA logistics moves high value cargoes for clients which have been subject to hijacking. To reduce this security risk, ASSA logistics apply an approach of route mapping (which is applied to all deliveries) to screen out locations most susceptible to such risks. This includes identification of crime hotspots, road and road works that will cause slowing of the vehicle and truck rest stops with a known history for robbery. All cabs are fitted with security devices and trailers and cabs fitted with security cameras. All vehicles are tracked and monitored in real time with routes kept confidential. Drivers are trained not to resist armed men and are not punished for any failure to protect cargoes.

ASSA employs an outsourced security provider to protect its facilities. Under Indonesian law, all outsourced security companies have to be licensed and all staff trained to a professional standard. None of the security guards at ASSA and subsidiary facilities are armed. ASSA logistics do engage with security services to protect high value cargoes and these individuals are armed. As set forth in the ESAP #8, the ASSA will ensure that a code of conduct is signed between the armed security provider and ASSA, subsidiary or JV to ensure that the provider applies reasonable force, and ensures that all firearms are licensed, fit for purpose and the security personnel is trained (i) to assure safe and reasonable use of the weapon, and (ii) to an appropriate conduct toward workers and local communities. The code of conduct will require security personnel to act within the applicable law. ASSA will also provide a grievance mechanism for the workers and local communities to express concerns about the security arrangements and acts of security personnel.