The proposed resource efficiency and environmental improvement project will not result in significant environmental and social (E&S) risks and impacts. Considering the location and the expected improvements in the existing facilities; and that no armed security is employed, it will have limited risks and impacts related to community health, safety and security. Thus PS4 (Community Health, Safety and Security) is 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 impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. 

E&S Risk Assessment and Management:

The company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards, E&S regulatory permits and requirements. Weigao has obtained ISO 9001 (Quality Management Systems), 14001 (Environmental Management Systems) and OHSAS 18001 (Occupational Health and Safety Management) certifications, which were observed to be effectively implemented during the site visits.

As per the applicable legal requirements, Weigao has completed Environmental Impact Assessments (EIAs) in the past for any new development, including electron beam sterilization facility and wastewater recycling plant, for submission to the local environment bureau in Weihai. The company will conduct similar assessments for the proposed project activities as needed.

Weigao has corporate policies and procedures related to operations and EHS, as part of its Safety Management System including: quality control policy, environment protection and energy management, fire and safety management, management of hazardous materials, human resource management procedures including non-discrimination policy, sexual harassment, grievance redress mechanisms, emergency plans and accident investigation.

All the facilities have a documented safety manual based on the corporate Safety Management System with oversight from experienced EHS professionals. Argon Medical has its own E&S management system in accordance with the regulations of United States.

Organizational capacity and competency:

At the corporate level, Safety and Technology Department (around 60 staffs) is responsible for supervision and implementation of EHS management. The department is also in charge of EHS trainings and supervision of contracted companies and contract workers. Legal Affairs Department also oversees the compliance with required labor laws and regulations.

At the factory level, Safe Production and Environment Officer at each production line is responsible for implementation, monitoring and reporting of safety management requirements as per the direction of the corporate Safety and Technology Department.

Emergency Preparedness and Response:

Weigao has a documented Emergency Response Plan as part of its Occupational Safety Management Systems. Required training is provided on fire safety and emergency response including mock drills covering employees in all shifts as part of Safety Management System.

Adequate fire safety systems are provided at manufacturing facilities in compliance with the local legal requirements. Visited factories were noted to be provided with LFS infrastructure and systems including different types of fire extinguishers, smoke detectors and fire alarms, sprinklers, fire hydrants, fire hoses/reels. The fire safety systems are inspected on a regular basis by engineering department and no material non-compliances recognized in the past.

Monitoring & Reporting:

As part of the quality assurance implementation and continual improvement, all facilities monitor number of quality and EHS related key performance indicators (KPIs) including record of accidents, potential hazards identified, compliance with legal requirements etc. The KPIs are investigated by Safe Production and Environment Officer and reported to the corporate Safety and Technology Department. The department analyses the root causes and implements corrective action in a timely manner, across all facilities.

The company also received random inspection from Weihai city and Shandong province every year. No material noncompliance or incidents in relation to environmental protection recognized in the past years.

Weigao currently has about 9,600 employees that are directly hired. Female employees make up roughly 60% of the total workforce. Around 780 persons are hired as temporary workers including cleaning staffs. Security guards, gardeners, canteen services, and transportation service providers are indirectly hired through specialized agency to support such function.

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

Weigao has documented HR policies and procedures on recruitment, non-discrimination (based on race, religion, gender, ethnicity, pregnancy and handicap), humanitarian treatment (child labor, forced labor, abuse, violence and sexual harassment). During recruitment, the screening check for employee’s age verification are performed, ensuring that ID documents are retained with workers.

All the employees receive free transportation, meal service and life and medical insurance, as well as social welfare benefits. Labor accommodation is provided only to the employees who wish to stay within company premises.

At each facility, employees work in three shifts and working hours are recorded by time recording system, overtime is not regularly required as each shift has enough capacity. Additional payment is offered in line with national regulation if overtime is required.

Freedom of Association & Grievance Mechanism:

The company has a labor union which mainly focuses on trainings and recreation activities among employees. The union is not involved in collective bargaining agreements in the past.

The company has formal grievance handling procedures at factory level. The general grievance from an employee can be reported either to HR or Senior Manager. Direct hotline to CEO and grievance boxes are also available, serving as a channel to receive anonymous grievances. No material grievances, court cases, serious breach or misconducts are reported in the past.

Occupational, Health and Safety (OHS):

While the operations at Weigao present limited low OHS risk to the workers, the company has documented OHS management system and procedures applicable to each factory. Trainings on OHS are provided to all employees including: safety operation precautions, escape evacuation drills, fire-fighting drills, traffic safety, personal and property safety, operating procedures, basic maintenance points. All workers including new employees, are required to have initial safety training prior to starting work.

The company conducts OHS review meetings monthly with senior management. The technical trainings on safety response, usage of machinery and fire fighting in cooperation with relevant experts are conducted regularly. The company provides all the staff with personal protective equipment (PPE), such as boots, caps, masks, gloves, and/or working clothes, as would be relevant to the activity undertaken.

At the visited facilities, emergency exits, and evacuation routes were noted to be clearly marked and having a provision of emergency lighting. No major incidents or accidents reported in the past years. The site visit did not indicate any unmitigated safety hazards.

Workers Engaged by Third Parties:

As previously explained, apart from the construction workers, Weigao indirectly hires security guards, gardeners, canteen services, and transportation service providers through specialized agencies. These workers are provided the similar access to union as well as grievance mechanism.

Weigao requires its contractors to follow the company’s management procedure including compliance with labor law, which is agreed in the contract and monitored by the Legal Affairs Department. No material incompliance recognized in employment, labor practices and standards.

Resource Efficiency:

The company’s energy consumption is monitored and reported in the annual corporate reports every year and resource efficiency is continuously improved based on the monitoring results.

Some of the initiatives implemented at Weigao for resource efficiency in the past few years include: installation of LED lighting, wastewater recycling and waste heat recovery system.

The proposed project focuses on resource efficiency and environmental protection measures, such as: power optimization with retrofit transformers, wastewater recycling plant and electron beam sterilization across its manufacturing operations. Detailed technical plans for these improvements are being developed and finalized. As per initial estimates, the company hopes to reduce its energy and water consumption by 65,000 MWh/year and 600t/day. Similarly, electron beam sterilization will replace the ethylene oxide usage; thereby improving the occupational health and safety for the workers and the overall environmental performance of the operations.

Energy Supply and Air Emissions:

Electricity is sourced from national grid for all the factories. No other fuels or generators used as power grid failure is not common in the region, small UPS (Uninterrupted power supply) batteries are installed in case for power shut down. There are no major air emissions sources from manufacturing processes.

Based on the review of available data and information, all visited factories were noted to conduct regular air emissions monitoring and results were found to be in compliance with the national air quality standards.

Greenhouse Gas Emissions:

Based on the information from company report, in 2018 the annual energy consumption for Weigao was about 118,000 MWh electricity, 260,000 liters of gasoline, and 47,000 liters of diesel. Accordingly, the estimated GHG emissions from current operations were reported to be about 96,000 tons CO2e in 2018.

As the project is to support energy efficiency and sustainable resource consumption, the project will not result in additional emissions. Instead, the estimated GHG emissions reduction due to the project is expected to be 53,000 tons CO2e/annum.

Water and Wastewater:

Water for the existing factories is sourced from local public water supply. Potable water for employee consumption is provided from local bottled water suppliers.

There is very little process effluent generated from the Weigao facilities, as the wastewater is recycled through solvent recovery facilities, and treated water is stored in the water tanks adjacent to workshop as processing water source. Excess process water is pre-treated and mixed with domestic wastewater, and further treated at the on-site sewage treatment plant.

The company has on-site sewage treatment plants (STPs) with membrane bio reactor as per the environmental permit condition. Treated effluent is discharged to the reservoir inside the company premises in the recreation zone. A small amount of sludge is produced from the treatment systems, which is removed regularly by the contracted company. All the monitoring results were noted to comply with the national standards and WBG EHS General Guidelines.

Waste Management:

The company has waste management procedures covering all its facilities, including the system of appropriate sorting, handling, storage and disposal and is consistent with the applicable legal requirements. Experienced experts assist the waste management including preparation of internal rules and regulations.

At each manufacturing factory, non-hazardous and domestic waste are segregated which are then collected and disposed of by the responsible government agency. Visited factories were noted to have a segregated waste storage area.

Hazardous Materials and Waste Management:

The manufacturing facilities of Weigao use solvents (Dimethyl Acetate) in the process, mainly for melting of the polymer. Weigao has also documented safety instructions for storage, handling and use of hazardous materials as part of its Safety Management System. The solvent was noted to be stored in separate secured areas with secondary containment. The used solvents are recycled through the wastewater recycling system and will not be released to environment.

Ethylene Oxide (EO) has been displaced from sterilization process as the company has introduced electron beam sterilization process since 2014. The change also protects healthcare service providers from hazardous exposure to EO.

 Weigao publishes Corporate Annual Report including environment and social responsibility every year publicly available at:

(http://en.weigaogroup.com/index.php/home/category/index/sc_id/648).

Weigao has developed a community grievance mechanism to receive and respond to grievances from the local communities. Community can provide their grievance through hotline to Weihai city mayor also, no complaints from community received so far.

Weigao donates products to medical facilities where the patients cannot afford to pay. The company also carries out active hiring campaigns both within Weihai City and in the surrounding provinces. The hiring practices include active employment policies for disabled people.

Contact Person: Phyllis Chan

Company Name: Shandong Weigao Group Medical Polymer Co.,Ltd.

Address: 18 Xingshan Road Weihai Torch Hi-tech Science Park, Weihai, Shandong Province, China

Email: phyllischan@weigao.com.hk

Phone: +852 2838 1868