The proposed investment is expected to have limited environmental and social (E&S) impacts that will be site-specific, with none anticipated to be significant. Further, the impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Policy on Environmental and Social Sustainability.

Key E&S issues applicable for this investment are: (i) the design and construction of buildings in accordance with national construction codes and standards, particularly related to seismic resistance, and life and fire safety; (ii) the Companies’ E&S management systems, including their internal capacities and staffing, to undertake their operations in a manner consistent with IFC Performance Standards; (iii) the effective implementation of the environmental, occupational health and safety (OHS) management plans during construction; (iv) energy efficiency and other resources consumption during buildings operation, and (v) stakeholder engagement and community consultations.                                                   

Environmental and Social Assessment and Management System

Iulius identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements during design, construction and operational phases. Asset management companies, namely Attrius Developments and Iulius Management Center have their own Environmental Health and Safety (EHS) management procedures and ISO 9001 Quality Management System certification valid through 2022; and have started the process for obtaining ISO 14001 Environmental Management System certificate. In addition to ISO 9001 certificate, the General Contractor also holds ISO 14001 certification, both valid through 2022.

In accordance with Romanian regulations, Iulius’s property development projects do not require full-scale E&S impact assessments (ESIAs), but environmental mitigation measures are an inherent part of the area development plan and the technical design of the properties. Iulius follows applicable EU and national legal requirements for the design and construction, including the specifications defined by the municipal authorities and the national building code and the requirements of environmental, sanitary and fire safety authorities. The development and legal teams are responsible for obtaining all construction and operational permits, including the environmental authorizations. Integral parts of such permits are terms for water supply, sewage, electricity, solid waste management, life and fire safety, etc.

Iulius is engaged in improving the resource efficiency of its assets and has so far used LEED (Leadership in Energy and Environmental Design) as a green building certification scheme for the 11 portfolio assets it has constructed and operates in Romania. The contract with the General Contractor and subcontractor agreements include instructions concerning the methodology for implementing the Green Building certification requirements. These instructions identify the contractor’s and its sub-contractors’ responsibilities to achieve the required standards.

The environmental management plan for the construction of Phase I of the project has been developed by the General Contractor as a part of construction management plan to address environmental and OHS issues, including storm water runoff management, waste management, traffic and transport management plan and job safety measures.

Organizational Capacity and Competency

Iulius has in-house professionals experienced in real estate development, and engages qualified design, architect, construction contractors and consultants to ensure the design and development of its properties is in compliance with legislative requirements and its own building standards. Iulius is planning to assign a sustainability officer responsible for the development and implementation of group-wide policies, strategic documents, as well as proper reporting on sustainability matters. As per ESAP item #1, Iulius will ensure that the sustainability team includes an environmental specialist with EHS responsibilities at corporate level, whose responsibilities include: improving corporate level relevant ESMS policies and procedures; establishing processes and reporting lines to collect, analyze and report data and E&S related information, including construction related activities performed by the General Contractor.

Once operational, each asset has its own EHS management team including an OHS officer, a security officer and a fire safety officer.

Emergency Preparedness and Response

Local seismic activity, and life and fire safety (LFS), are the key operational risks associated with Iulius’s real estate development and operational management. Iulius has a process for emergency preparedness and response, which guides how Iulius manages its assets. Further, this process is incorporated into the contracts with tenants and contractors, as also determined by national legislation. Regular drills are conducted for staff and occupants. Iulius’s properties have emergency preparedness and evacuation plans, that include responsibilities in the event of emergencies, emergency notification system, actions to be undertaken by emergency teams and other employees. The General Contractor has a specific emergency preparedness and response plan for the construction period of the project that identifies roles and responsibilities of emergency teams and employees, training and drilling requirements as per national legislation.

Monitoring and Review

As part of current management system and processes, each company involved in the project and each asset management unit has its own EHS monitoring system based on national standards and E&S regulatory permits and reporting requirements during construction and operational phases. Being LEED certified, the assets conduct environmental monitoring for parameters including water and energy use. As set forth in the ESAP item #2, Iulius will develop and implement a documented EHS monitoring procedure, as part of the ESMS, covering construction and operation phases of the assets. The monitoring procedure will include key performance indicators on OHS (e.g., accidents, incidents, lost time injuries, near misses), labor compliance (working hours, overtime payment, grievances), energy and water efficiency, solid waste management, and the implementation of management programs during construction and operations.

The number of employees of Iulius Holding is 1,353 of which 500 (37%) are women. Iulius Management Center has around 1,200 employees of which 400 are administrative staff in the asset management function, while Iulius Real Estate has a total of 39 employees. At the time of appraisal, the General Contractor had 16 employees at the project site, while its sub-contractors had a total of 43 staff on site. At the peak time of the construction (estimated to be between March 2021 and May 2022) approximately 600 to 700 workers are expected to be on site. Total number of workers during the construction period is expected to be 1,600.

Human Resources Policies and Procedures/ Working Conditions and Management of Worker Relationship

Iulius and the General Contractor both have formalized HR policies and procedures, related to hiring, onboarding, work schedule, training, annual leave, safety rules, ethics code and a whistleblower policy, included in their documented internal rules and regulations. All information related to the labor and working conditions are provided during the on-boarding procedure of all new staff.

Workers’ Organization

The employees of Iulius are not members of any trade union, but as per the local labor code, there is a collective labor contract that specifies the election of an employee representative. The representatives of the employees are elected at each registered workplace in the general meeting of the employees, with the vote of at least half of the total number of employees.

Non-discrimination and Equal Opportunity

The Internal Rules of Procedures Manual has a dedicated chapter for the rules regarding the principle of non-discrimination and the elimination of any form of dignity infringement, including the obligations of the Employer to provide equal gender opportunities and maternity rights / non-discrimination, and harsh penalties for any form of sexual harassment.

Grievance Mechanism

According to the grievance handling procedure all employees are expected to direct their grievances to HR and HR must respond to any grievance in 30 days. As per the ESAP item #3, Iulius will include in its HR procedures provisions for receiving and handling anonymous grievances from its employees and will provide access to its internal grievance mechanism to the General Contractor’s and the sub-contractors’ employees as well.

Occupational Health and Safety

OHS risks from Iulius’ own operations are limited. HSE performance of service provider companies is supervised by its facility managers. Iulius reported to have had no lost time incidents / fatalities during the last 3 years, including the contractor workforce.

The overall OHS obligations are included in the contract with the General Contractor, such as having its own OHS officers on site, and having staff that are properly trained, and equipped with personal protective equipment in accordance with the type of performed works. A site safety plan is developed by the company and submitted to the General Contractor to be implemented during the construction. Iulius assigns a labor safety and health coordinator to each construction site to monitor the compliance of General Contractor with the site safety plan and report on safety performance. The General Contractor has reported no workplace accident or injury for the last three years.

Workers Engaged by Third Parties

The minimum age for employment under international standards and Labor Code of Romania is 18 years of age, including for construction activities. Construction contractors contractually ensure that this minimum age of employment is adhered to, as well as compliance with local laws, and the implementation of safety procedures and practices (e.g. job safety instructions, safety talks and briefings etc.). The General Contractor oversees the compliance of third-party workers with national labor laws and OHS requirements. Iulius will ensure the EHS monitoring procedure identified in ESAP item #2 includes provisions for overseeing construction and other contractors with labor laws and OHS requirements, such as daily inspections, internal and external audits. The revised grievance mechanism will also cover the third-party workers (ESAP item #3).

Resource Efficiency

Energy efficient measures are considered at the design stage of each asset as per the LEED Green Building certification requirements. These measures and requirements, including using environmentally friendly and recyclable materials, purchasing energy efficient equipment, installation of automated heating, cooling and ventilation systems, and LED lighting, are clearly identified in the construction contract with General Contractor and sub-contractors. Iulius is in process of receiving EDGE certificate for the Phase I development (UBC Campus), as the design of the project achieves the minimum of 20% savings in energy, water and embodied energy in materials.

Electricity is sourced from the public grid for all assets. As a standard back-up system in case of grid power failure, a 1,680 kW diesel generator set will be installed for the UBC Campus.

Water supply during construction and operation of assets is provided through the municipal network and domestic wastewater is discharged through the municipal wastewater system.

GHG Emissions

The GHG emissions from all assets in operation is calculated as 65,106 tones/year. The estimated GHG emission from the Phase I, UBC Campus, is expected to be around 8,509 tones/year.

Solid Waste Management

Iulius Management Center has a solid waste management system in place for each of its assets. Solid waste consists mainly of cardboard paper, plastic and wooden packaging, that is segregated at source and handed over to the local recyclers. Extra staff are employed for final segregation of collected wastes. The waste management procedures comply with local regulatory requirements and are included in the rule book for tenants.

Structural Safety

Romania is situated in an area of seismic activity and national regulations cover seismic risks in respect of the design and execution of construction works. Iulius strictly adheres to the design and construction standards for seismic risk prevention, which is confirmed in the construction permit issued by the state authorities on completion.

Life and Fire Safety

The design of Phase I includes life and fire safety provisions as per local regulation, which is consistent with EU requirements. Iulius holds fire safety permits for each building as required by national legislation. Fire safety measures include an automatic fire detection system and fire alarm, automatic sprinklers, where applicable, fire extinguishers, evacuation exits and emergency lighting. Evacuation drills for various scenarios (earthquake, fire, natural hazards) are performed regularly by facility managers with engagement of tenants.

The construction management plan identifies the measures to protect the community during construction, specifically clear demarcation (with fencing) of construction areas, restricted access to construction sites, proper illumination of areas, provision of safety information to visitors, and information to nearby communities on managing truck traffic, dust and noise during construction.

Security Personnel

The security teams deployed to Iulius’s assets are not armed. The only protection equipment used by security teams is security sticks and pepper spray, which is mandatory and enforced by the local regulation.

The project site is located in the perimeter of the mediaeval Princely Court of Moldavia from the 14th century. The historical edifice of Palace of Culture is located next to the southeast of the project site. This building is listed in the National Register of National Monuments. It was rebuilt and expanded between 1803 and 1806 as the Princely Palace of Moldavia, and then renovated between 1841 and 1843. It served as Administrative and Justice Palace until 1955, but nowadays hosts four museums, the Cultural Heritage Conservation and Restoration Center, and several exhibitions. This structure will not be affected by the project construction, but the silhouette of this historical area is to be protected as per the protection status assigned by the national regulations.

Iulius engaged with Chamber of Architects to launch and complete an architectural design competition for Phase II, UBC Palace Tower, to ensure the architectural design of this high rise building is compliant with the silhouette protection requirements. Iulius will ensure, through meaningful stakeholder engagement and public information activities identified in the stakeholder engagement plan under ESAP item #4, that any public concerns on silhouette protection are addressed in the selected project design.

In compliance with the national legislation, the site clearance works for Phase I were executed with the permits obtained from the Ministry of Culture, via the Iasi County Department of Culture. The archeological investigation works have been performed by the Romanian Academy – Iasi Branch – Iasi Institute of Archeology.

Information about the new projects is made publicly available through local and national media channels. Iulius’ web site includes a contact link for public concerns, queries and claims. Each asset management company has its own external grievance mechanism as well.

As part of the local project approval process, the municipality of Iasi conducted a public consultation meeting at its townhall on December 10, 2019. Over one hundred people, including representatives of professional bodies, were present in this meeting. In general, the participants were supportive of the project, though one concern raised during the meeting was the height of Phase II, UBC Palace Tower, in terms of the protection of the silhouette of the historical area where the building will be located. The municipality will conduct further public consultations for Phase II as per the local project approval process once the design has been completed.

As per the ESAP item #4, Iulius will develop a project specific stakeholder engagement and public consultation plan for the selected design of UBC Palace Tower to ensure that the project has been properly introduced to the public through local and national media channels. This will happen before the public consultation meeting is announced and relevant representatives of professional bodies (local and national) are invited and the concerns raised by participants are reflected in the final design.                                                   

Contact Person: Raluca Munteanu

Company Name: Iulius Real Estate SRL

Address: Palas street 7a, building A1, office Ab 24, Iasi, Romania

Email: Raluca.munteanu@iuliusmall.com

Phone: 0040 232 208 825