Working Conditions and Management of Worker Relationship
As per its 2019 sustainability report, IVL employed globally a diverse workforce of 22,696 employees representing 79 nationalities and including 198 employees with disabilities and 669 temporary staff. This workforce comprised of 22% women employees; in 2019, IVL recruited 2,042 new employees of whom, 28.2% were women. The company expects to hire about 400 new employees for the project.
Human Resources Policies and Procedures
IVL has articulated overarching HR vision and policies in the CGM at the corporate level aligned with international good practices including IFC PS2 requirements, ILO conventions and UN Global Compact. No past material labor related disputes or legal cases are reported.
The company has an extensive focus on training and skill development for its workforce. The company reports an average of 33 hours of training per employee during 2019, which included topics such as: EHS and quality, functional training, induction and orientation, leadership and behavior, technical and language skills. IVL continued to invest in occupational health and safety training for all employees and recorded over 465,000 hours of health and safety related training in 2019.
IVL's group-wide policies and CGM including HR policy and practices are applied globally, but the implementation is decentralized to facility level in the business segments and aligned with respective local labor regulations where facility is located.
The Group hires temporary workforce through licensed agencies as per specific needs at the facility level and strictly in compliance with applicable local labor laws. Appropriate compliance training on Human Rights, Health & Safety is provided to temporary manpower too.
At facility level, in Rayong about 1,200 direct and 250 contract workers are employed. The facility has its own HR procedures and manual (building upon IVL's CGM and other related policies and customized for local labor laws) which covers manpower planning, recruitment, training, performance appraisal, employment relation & welfare, attendance & compensation, payroll and CSR. Similarly, the facility in Nakhon Pathom has a workforce of about 740, including about 120 migrant workers from neighboring countries. The facilities reviewed by IFC were noted to follow the applicable labor laws and IFC PS2 requirements; and have successfully undergone several labor audits from the government agencies as well as buyers. The facilities reviewed have received various certifications and awards from local authorities and the Thai Ministry of Labor for its good HR practice.
Freedom of Association
As articulated in its Human Rights Policy, the company respects the rights of employees to form and join an association without fear of retaliation, interference and harassment if the association complies with local laws. As reported in 2019 sustainability report, over 51% of its total employees were covered by collective bargaining agreements globally.
Non-discrimination and Equal Opportunity
“Diversity is our Strength” is one of IVL's five core values; and as articulated in its corporate Diversity Policy, it encourages diversity in its workforce and is committed to protecting its employees and stakeholders from all forms of discrimination and harassment based on their ideological views, race, color, religion, gender, sexual orientation, national origin, age, disability, social-economic status or any status regarded as a human right. It will adopt reasonable and inclusive practices throughout its operations and work to eliminate prejudice, discrimination, bullying and harassment. IVL's grievance mechanism channels are designed to receive and appropriately handle any complaints related to bullying, sexual harassment and gender-based violence, as described below).
Grievance Mechanism
IVL has formal and well-established grievance mechanisms based on a corporate set of guidelines. The employees can file their grievances and suggestions with the facility level HR teams or by using IVL’s whistleblower reporting channel which is hosted by third party to maintain confidentiality of the complainants.
IVL's whistleblower policy provides all employees with the opportunity regardless of employment status to anonymously raise any issues such as unethical practices, corruption, environmental, health and people, product and process safety violations and issues, any form of discrimination and sexual harassment, breaches of human rights and retaliation.
Implementation of whistleblower policy in practice is audited by a third-party assessor nominated by Nomination, Compensation and Corporate Governance (NCCG) Committee. In 2019, nineteen contacts were made to the Whistleblower Committee, of which ten were reported to be resolved while nine were under an investigation. Moreover, IVL reports that about 24 grievances about labor practices were filed through the formal grievance mechanism which were / being resolved.
One area for improvements identified during the IFC review and site visit, is to further strengthen the facility level grievance mechanism. As per ESAP#2, the company will update its grievance mechanism at the facility level, (i) by providing channels for raising anonymous grievances (e.g. suggestion boxes) and (ii) extending this grievance mechanism to the contractor employees. The company will inform the availability of such site-specific grievance mechanism in addition to the corporate whistleblower channel during regular trainings for staff and contractors' employees.
Protecting the Work Force
The company publicly discloses its CGM which documents the overarching HR related principles and policies such as prevention of child labor and forced and compulsory labor. HR manuals at facility level adhere to these overarching HR policies at the corporate level.
Occupational Health and Safety
IVL's corporate Health and Safety Policy aims to ensure adequate health and safety standards across the group, which is an important element of the Group's sustainability agenda and framework.
Each facility follows the local regulations governing the protection of the workforce. High standards of workplace health and safety are maintained such as safety training, good safety signage and employee health, accident records, use of personal protective equipment (PPE), and handling of chemical materials (e.g. use of secondary containment). All incident data are collected and complied through internal reporting systems for investigation, root cause analysis and to establish corrective and preventive measures. Other statistics, such as Occupational Illness Frequency Rate or Lost Days, are tracked (for own employees, contractor employees and the aggregate) and disclosed in the company's annual sustainability report.
Two of the major safety related KPIs tracked by the company include Total Recordable Injury Rate (TRIR) and Lost Time Injury Frequency Rate (LTIFR) for the workforce (including contract employees). TRIR (the number of injuries for every 200,000 man-hours during a defined period of time) was 1.45 in 2019 compared to 1.00 in 2016. LTIFR (the number of lost-time injuries for every million man-hours during a defined period of time) was 4.18 in 2019 compared to 2.95 in 2016. Both TRIR and LTIFR have increased in recent years at the first glance. The company has presented analysis to show that this was largely because of recent acquisitions of fiber facilities by IVL, which is manpower intensive business, resulting in an increase in the injury cases when aggregated at the Group level. However, both TRIR and LRIFR are improving over time at each facility level. IVL reported one fatal work-related accident (electrocution of a contractor at one of the IVL facilities in Thailand) in 2019, while 35 (over 37%) of IVL sites attained the goal of “Zero-Accident” in 2019. IVL has set itself a target of 10% reduction in TRIR by 2025, compared with 2019 levels.
At the facility level, internal safety checks and site patrols are conducted by EHS officer daily and by EHS committee on a monthly basis. Safety trainings are provided to employees and OHS records maintained as per the management systems and corporate reporting requirements. Site visited (Nakhon Pathom in Thailand) and others reviewed virtually were noted to have good housekeeping, with safety signage and other necessary documentation including safety targets and current statistics prominently displayed, aligned with GIIP.
Supply Chain
One of the key factors for establishing PET recycling facilities, is the availability of post-consumer PET bottles in the local market, which is therefore, an important element in the feasibility studies conducted by IVL for the recycling business. IVL develops a robust local supply chain for post-consumer PET bottles for each facility based on specific local conditions following somewhat different models; however, it must comply with IVL's Supplier Code of Conduct and other sustainability policies and initiatives as described below.
For the reviewed operational rPET facilities in Thailand, the post-consumer waste PET bottles are received from the aggregator companies, who are registered with the facility, in compliance with IVL's Supplier Code of Conduct. These large aggregators, in turn, receive PET bottles from smaller individual collectors/ aggregators, who collect PET bottles from institutional entities such as malls, hospitals, universities, arenas etc., and make bales (i.e. tightly wrapped bundles of compressed PET bottles tied with a metal cord) at their facilities for delivering to IVL facilities. Nakhon Pathom facility receives 130-135 tons per month from 8-10 registered aggregators. The aggregators/main suppliers undergo regular monitoring and scrutiny – including planned and unplanned site visits - by IVL teams to ensure compliance with IVL requirements.
During the site visit to Nakhon Pathom, IFC reviewed sample supplier audit reports, which were noted to cover aspects related to legal compliance, safety and child labor. Moreover, IVL's recycling facilities in Thailand also undergo rigorous audits for the GRS standards, as described earlier, which also covers elements of supply chain and a review of/visits to some key suppliers. IVL's buyer brands which have strong focus on EHS and labor standards (e.g. Ikea) also regularly review and audit the company's supply chain. Such external audits provide an additional layer of oversight and strengthens the company's management of supply chain E&S risks.
Under the project, the company is setting up the rPET facility in the Philippines, in collaboration with Coke. For this, the IVL-Coke joint venture will develop rPET supply chain by leveraging Coke's distribution network and establishing post-consumer PET bottle collection points at the distributors' points of sale. Beverage delivery trucks will collect the empty PET bottles and the bales will be prepared and delivered to the rPET facility for recycling. Consumers are incentivized to return the empty bottles by offering them small gifts, such as coffee vouchers. Coke has assigned a senior level resource from its sustainability team to work on this initiative. The new rPET facility will comply with not only IVL's supplier code of conduct and other E&S requirements but also those of Coke – including monitoring and oversight.
For the other facilities to be developed under this project (viz. in India, Indonesia, Brazil), the company will develop supply chain for post-consumer PET bottles as per the requirements of its Human Rights Policy, whereby IVL “is committed to promoting human rights and complying with high environmental standards throughout its entire value chain based on the UN Global Compact and ILO and ISO standards in areas relating to human rights, labor conditions, environmental responsibility, and anti-corruption”.
IVL in 2014 initiated the human rights assessment as part of the Supplier Evaluation Process, which now applies to all new raw material and critical non-raw material suppliers. IVL reports that 100% of its global raw material suppliers and critical non-raw material suppliers were assessed in 2019 for the human rights related risks; no key raw materials and critical non-raw materials suppliers were identified for the risks related to incidents, child, forced and compulsory labor among others. No complaints concerning human rights were submitted through the grievance reporting system.
IVL's Supplier Code of Conduct requires the suppliers to comply with all applicable laws and regulations, ensure health and safety in the workplace and to deploy appropriate labor and hiring practices. Every supplier must submit a self-assessment questionnaire at the time of entering the contract which covers aspects such as: prevention of child labor, forced labor, human rights violence, adherence to ethics and legal requirement, etc. The Code of Conduct is not only applicable to supplier but is also applicable to its subsidiaries and any sub-contractors providing goods or services. Necessary E&S compliance related clauses are included in the legally binding purchase contracts. The risk management committees of respective businesses review supply chain risks on a quarterly basis and appropriate risk mitigation actions are initiated as needed. IVL's supply chain management team regularly interacts with its suppliers which helps in monitoring the suppliers for this commitment. In addition, all suppliers are required to respond to the self-assessment questionnaire every three years. Site visits are conducted on irregular basis to check suppliers' E&S management practices and compliance with IVL requirements.
Impact of COVID-19 Pandemic on Workforce
The company's business operations are not seriously disrupted by the COVID-19 and most have been operating relatively normally. A Global Emergency Management Team manages COVID-19 related issues at the corporate level. Some of the actions taken to date include collecting information on employees' adherence to COVID-19 preventions practices using checklist (e.g., regular measurement of body temperature, use of masks and gloves, or sanitizing environment) and contact tracking of infected employees, if any. The company has also established COVID-19 Sanitary Threats Business Continuity Plan Guidebook which covers various instructions for infection prevention.
