For newly constructed buildings, the company is required as per national and local environmental regulations to commission an environmental impact assessment (EIA) by a qualified technical institute. The EIAs describe management programs and monitoring requirements and address key risks and impacts commensurate with the nature of business activity of the company.

The company’s E&S policy statement is included as part of its annually published environmental, social, and governance (ESG) reports, with the first such report published in 2017. Each campus has developed and implemented a set of detailed procedural documents, job descriptions and requirements, emergency preparedness and response requirements, and performance evaluation indicators, related to campus safety and security, life and fire safety (L&FS), traffic management, construction contractor occupational health and safety, and energy consumption and efficiency. L&FS procedures include those related to overall L&FS management, facility and equipment inspections, training/drills/evacuations, organizational management, performance evaluation, document management, hazard minimization, management of high risk areas, L&FS management requirements for various building/occupancy types (e.g. dormitories/cafeterias/lecture halls), equipment maintenance, and L&FS control at large scale on-campus events, etc. Day to day operations are implemented based on the above and other procedures, and performance is evaluated as per established indicators. Procedural documents adopt a similar format across campuses, while their actual content differ slightly across schools according to local conditions.

Emergency Preparedness and Response (EPR):

Operational L&FS emergency response procedural documents are in place at campuses, as are EPR procedures detailing actions to be taken in case of emergencies related to fire, water quality degradation, food safety, traffic incidents, natural disasters (e.g. earthquakes), and public health incidents (i.e. epidemic outbreaks). Fire drills are undertaken at each campus annually, and the local fire brigades conduct irregularly inspections of buildings as part of overall EPR readiness. The L&FS procedures define the roles and responsibilities of fire wardens and other related personnel in case of fire incidents, and of various working groups (e.g. evacuation team; medical response team) set up to deal with a potential fire situation.

Organizational Capacity and Management Programs:

Campus EHS management is administered by on-site personnel at each campus as per local conditions and in line with local procedures developed. At each campus, the Administrative, Security, and Support department is responsible for overall campus safety and security, L&FS management, contractor management, energy and waste management, and for construction oversight. Construction contractor tendering and selection is centrally managed at the company headquarter, with post-selection oversight applying a standardized approach across campuses.

There is a risk management support team (“in-house team”) in place at the corporate level of Minsheng, responsible for applying life and fire safety (L&FS) requirements to various campuses, and (as applicable and when the need arises) for screening and managing any potential PS5 risks associated with new land acquisition at campuses. As part of the company’s imperative to reinforce its in-house capacity, the in-house team will join upcoming L&FS audits at three new buildings – refer to the PS4 section and ESAP for details.

The company’s planned expansion could potentially involve new land acquisition in future, although at this time there is no specific planned acquisition of land. To address potential land related risks and impacts in future assets, the company will develop a set of corporate level land acquisition and involuntary resettlement procedures to screen and due diligence to-be-acquired greenfield sites for potential residual PS5 risks and take corrective actions as needed. Once developed, the company will apply such procedures to all future greenfield new land acquisition sites and will document screening results and corrective actions taken (where required). Refer to the ESAP for details.

The company’s workforce, totalling over 4,600 staff, comprises full time or part-time teaching staff, administrative, support, and building maintenance and security personnel. The company contracts with all staff directly. Salary and benefits levels are determined by referencing prevailing labor market rates at comparable industry levels. The company observes national labor laws including provisions on minimum wage, working and overtime hours, mandatory social security enrolment, etc in all material aspects. Each school has developed a detailed set of human resource policy and procedures. Terms of employment (e.g. on working hours; leave; etc) are communicated to employees and written into employment contracts. Overtime work does not occur to any significant extent. The company hires construction contractors to build or upgrade facilities, as described below.

The company has a detailed human resource policy and manual at the corporate level drafted and implemented, consistent with national labor requirements. No major retrenchment is planned in the foreseeable future as the company is expanding operations. Key means of management-worker communications are drop boxes, social media internal chat groups, staff sending anonymous emails to management should they wish to, regular staff meetings, and day to day direct dialogue between workers and supervisors. Where an employee feels an issue remains unresolved, s/he can escalate this to the human resource department or to senior managers. There have been no material labor litigations which may have material impact on the financial situation of the Company.

IFC’s review did not find any signs of the use of child or forced labor, and employment practices of the company are consistent with principles of non-discrimination and equal opportunity, including measures in place to receive and address grievances in relation to potential harassment in the workplace and at campuses (Note: there have been no such known cases to date). There are labor unions in place at campuses and the company does not place any restrictions on any staff members wishing to join or set up a labor union. There have been no major occupational health and safety (OHS) incidents at any of the campuses in the past including work related traffic accidents. Overall, given the company’s business nature, OHS risks during operation are limited. During construction of new buildings or refurbishment of campuses, OHS risks are managed by construction contractors as per national requirements including the use of personal protective equipment, accident reporting, safety supervision and oversight, etc. The company, in its procurement process, looks at performance aspects of construction contractors including labor practices, and regularly conducts its own inspections during construction. Staff dormitories visited by IFC appeared clean and safe, with adequate provisions (e.g. washing facilities) in place.

Resource Efficiency and Greenhouse Gas Emissions:

Based on the methodology and calculations in the company’s 2018 ESG report, annual total greenhouse gas emission of the project was estimated to be 17,851 tCO2e, attributable primarily to consumption of grid electricity and secondarily to consumption of natural gas. Water consumption across campuses is estimated at 1.2 million cubic meters per annum. Heating during winter at campus buildings is achieved by direct steam supply from municipal supply companies. The use of LED lights and the practice of turning off lights when rooms are vacant are examples of measures taken to conserve energy. Various campuses continually look for economically and technically feasible opportunities to achieve resource savings e.g. at Dianchi College, installation of an upgraded on-site septic tank system in 2018 resulted in the re-use of 13,000 cbm of treated grey water per month (instead of being discharged to groundwater) which represents a sizeable reduction in the waste water footprint of that campus. At other campuses, valves have been replaced by more water-efficient ones, and consumption of natural gas has been partially reduced by installation and use of air source heat pump systems resulting in cost and fuel savings.

Pollution Prevention:

There are no boilers or other regularly used combustion units installed at project campuses rated above 2MWth and backup generators receive limited usage - hence project air emissions are limited. Waste water generated at campuses consist of sanitary and kitchen wastewater, treated by a number of on-site septic tanks which are regularly inspected and maintained, before being discharged to the municipal sewerage system in compliance with local regulatory requirements. Grease traps are in place at kitchens, and oils and grease are collected and disposed of by licensed external contractors. The quantity of solid wastes generated at campuses are limited, of which sludge from septic tanks are collected by licensed contractors to be sent to local authorized landfills or sold to local recyclers as per local regulations.

There have been no major security and safety incidents (i.e. fires; food poisoning; epidemic outbreaks; harassment incidents; vandalism; etc) at any of the campuses since operational commencement. All campuses employ in-house unarmed security guards, who receive training provided by a qualified external trainer on topics such as professional behavior. Detailed procedures are in place on the maintenance and use of security apparatus and equipment.

The company is in regular contact with local fire departments which conduct regular and unannounced on-site inspections. As part of IFC’s equity investment in 2017, Minsheng engaged a qualified external auditor to audit three campuses in Chongqing (including CVCAT) during 2015-16 and has subsequently completed most corrective actions arising from the audits - the company will be closing out remaining sub-actions in the near future.

Under this new project, the company will be engaging another qualified external L&FS auditor/engineering entity, to undertake the following: (a) Review the L&FS master plan of each of three to-be-constructed new buildings at three (3) different campuses, to ensure that they fulfill national (GB) and U.S. National Fire Protection Association (NFPA) 101 code and sub-code requirements; and (b) Upon construction completion, undertake a post-construction audit at each of the three new buildings to verify compliance with their L&FS master plan designs. Refer to the ESAP for details.

All members of the Minsheng in-house risk management team will join the entirety of the above three (3) LFS audit processes at the three (3) new buildings/campuses and work closely with external auditors during those audits, from the preparation and master plan review stage, to successful conclusion of post-construction audits. As part of this (and in addition to what will be produced by external auditors), the in-house team will develop its own robust documents so as to fully capture experience gained from audit participation: (i) pre-audit preparation materials and plan; (ii) post-construction-audit findings summary reports; and (iii) the company’s suite of refined corporate level L&FS system documents including policies, standard operating procedures, key performance indicators, L&FS regular site inspection checklists, reporting and monitoring templates, and work instructions and work manual. This suite of corporate L&FS documents will be applied consistently by the in-house team to future construction and major renovation of public access buildings (at all existing and new campuses) and should cause them to materially comply with Chinese national and U.S. NFPA 101 code and sub-code requirements. Refer to the ESAP for details.

The company describes its overall stakeholder engagement activities in its annual ESG reports. Key stakeholder groups for the company are its students, teacher and non-teacher staff members, and local residents in the vicinity of each campus. To date, there have been no known grievances or issues of public concern associated with this project. During school operations, the administrative support offices as well as security entry points at each campus are the key public interfaces to receive external communications including grievances from the public if any; and members of the public can also dial into each school’s general inquiry phone number to communicate any concerns they may have. Local residents who have set up grocery shops, small supermarkets, and restaurants next to the campuses interact with the student body and staff members of the schools by providing products and services to cater to their needs.

Contact Person: Mr. ZHANG Xin Le

Minsheng Education

Address: 3/F Full Tower, No.9 Dong San Huan Zhong Lu, Chaoyang District, Beijing, P.R. China

Tel: +86 10 85911180

Email: zxl@minshengedu.com