None of the existing operations resulted in involuntary economical or physical displacement, thus PS 5 (Land Acquisition and Involuntary Resettlement) is not triggered. Furthermore, as the plants are not located neither in international nor national biodiversity conservation/preservation areas, indigenous communities and/or in areas with known cultural heritage value none of PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous People) and/or PS8 (Cultural Heritage) are applicable.  However, as the locations for the proposed developments as part of this project are not known, and even though, it is anticipated Vatia would aim to not trigger neither of PS5,  PS6, PS7 and/PS8, prior to acquiring/developing and development, the Company will strengthen and develop as needed policies and procedures to screen the applicability of all the PSs as summarized under PS1 section and, if triggered, manage risks and impacts in line with these applicable Performance Standards.

This is a category B project according to IFC’s Policy on Environmental and Social Sustainability because the Environmental, Social and Health & Safety (ESHS) impacts related to the investment are limited, site specific, covering the footprint of existing brownfield assets, and the associated environmental and social (E&S) impacts of the new assets can be managed through the implementation of appropriate mitigation measures. IFC’s review did not identify any significant adverse impacts or high-risk exposures.

Key E&S risks and issues for this project include adequate development and implementation of a comprehensive EHS and social management system; contractors E&S management; labor standards, adequate land acquisition practices; worker rights, and implementation of occupational health and safety (OHS) measures; adequate management of air pollution, hazardous materials, solid and hazardous wastes, wastewater; and emergency preparedness.                                                   

Environmental and Social Assessment and Management System 

Vatia has a documented system of operational integrity and environmental and social management system (ESMS), including quality, which is based on ISO 9001 :2015, ISO 14001 :2014, and OHSAS 18001 :2007 certifications. The system addresses risk assessment, mitigation and validation; training programs; etc., and it is set to ensure compliance with country regulations. As the ESMS is based on continuous improvement principles, to assess the effectiveness of its ESMS, Vatia conducts periodic audits, proactively engaging with its employees and assessing performance thorough key leading performance indicators (KPIs.) The outcomes and implementation of resulting recommendations are confirmed and budgeted by senior management and the related conclusions reached at senior level are shared with the employees through the workers/management committee that is in place. Furthermore, Vatia along with its insurance Company also conducts periodic evaluations addressing aspects such as policy adequacy, overall management system implementation, effectiveness of the workers/Company committee, compliance with legal requirements, contractors’ management, risk identification, communications and stakeholder engagement, etc. Outcomes of these audits include establishing annual safety plans based on risk assessments; updating risks and vulnerabilities assessment; assessing further epidemiological conditions; etc. Specifically, the 2019 audit revealed that the Hidrotolima operations where above 80% for most of the parameters with the exception of risk identification and contractors’ management. The Vatia operations were 86.5% compliant.

As part of the ESMS, Vatia also has a detailed change management procedure to address the environmental, health, and safety (EHS) aspects, by conducting risk assessments, related to new processes, acquisitions, installations, legal changes, new good practices, etc.

Policy 

The Company has an overarching E&S policy and principles that guide the management of the E&S issues across Vatia’s operations which is aligned with the IFC PSs. The policy is communicated through the employees’ induction process, periodic trainings, and it is available onsite. As needed, the policy is updated to reflect changes and will be also applied to the proposed project. The policy has been developed based on values of integrity, excellence, responsibility and respect to drive their business in a responsible and ethical way, with personal and professional excellence, superior quality and competitive prices.  Vatia also has a Code of Conduct, and Anti-Sexual Harassment and Whistleblower Policies. Moreover, the Company is also part of the transparency and anticorruption group for the energy sector in Colombia and as a result it has developed internal good governance, ethics, and transparency strategies and procedures.

Identification of Risk and Impacts

As required by the local environmental authorities, the existing operations have conducted environmental assessments to identify risks and determined appropriate mitigation measures as per host country requirements and follow the conditions stipulated in the environmental permits. With regards to the Company’s future developments, as IFC’s investment will be also used to either purchase existing or to develop greenfield solar farms in Colombia and, as locations / land for these developments are not being identified, the Company will define the locations not only considering business opportunities but also looking for compliance with the requirements of IFC PSs and local environmental requirements. Specifically, the Company, as part of its management systems, will develop screening procedures to assess the compliance with IFC PSs, and as needed it will conduct E&S impact assessments (ESIAs) in line with IFC’s PSs and EHS Guidelines to determine corresponding potential E&S impacts and mitigation measures (see action No. 1 of the ESAP.) Furthermore, the Company will develop corresponding E&S management plans (ESMPs) including detailed procedures, but not limited to, such as job risk assessment, OHS, emergency response plans, accident investigations, etc. in alignment with IFC’s PSs to oversee the implementation and E&S performance of these activities.  (see action No. 2 of the ESAP.) Furthermore, the Company shall require their contractors to develop, implement and maintain their own ESMPs and associated procedures aligned with project ESIA requirements, scope of work, and OHSAS18001/ISO 45001 certifications (see action No. 3 of the ESAP.)

Management Programs   

In 2019 and early 2020, the Company developed the generic environmental management plants (EMPs) for the Vatia and Hidrotolima SHHPs respectively. The plans addresses housekeeping, pest management, wastewater handling and waste management aspects. As part of IFC’s investment, Vatia will develop the specific ESMPs in alignment with IFC’s PSs, WBG Guidelines and local requirements for each one of the Vatia and Hidrotolima SHHPs including implementation timetables for each of the needed actions (see action No. 4 of the ESAP.)

Both Hidrotolima as well as Vatia SHPPs comply with all legal requirements except for the Hidrotolima Mirolindo plant which has yet to receive confirmation from Cortolima, the local environmental authorities, about the required social investment plan. Once approved, Vatia will inform IFC and immediately proceed with such implementation.

For the new developments part of this proposed project, accordingly, the Company will require its contractors to develop ESHS management plans ensuring compliance with Vatia’s and local requirements in accordance with IFC PS1 and other PSs if these are triggered.

Organizational Capacity and Competency 

At the corporate level, the Company has a dedicated qualified specialist in charge of the integrated ESMS, who reports directly to Generation Manager for Tolima plants and to Cauca Generation Director for Cauca Plants, and is supported by dedicated specialists to manage and oversee the EHS performance of its operations. Furthermore, Vatia also has qualified personnel dedicated to overseeing the HR procedures and practices of its current operations and a qualified team who conducts stakeholder engagement at the nearby communities of its SHPPs. In addition to the corporate structure, there are E&S dedicated personnel to deal with the day to day E&S aspects at each site.

The Company also conducts ESHS and labor trainings including at-induction and periodic in-depth trainings, as well as, special training for identified risky activities. The training programs forms part of the broader ESMS and will be extended to the new developments as part of this proposed project.

Emergency Preparedness and Response

As part of its Standard Operating Procedures, the Company has developed fire response plans and have installed some fire prevention measures. In early 2020, the Company developed a comprehensive corporate emergency response plan including potential worst-case scenarios, response actions, emergency response equipment and response personnel; protocols to conducting the emergency response drills; etc.  As part of IFC’s investment, Vatia will develop the specific emergency response plans for each of the Vatia and Hidrotolima SHPPs in line with Good International Industry Practice (GIIP) including a communication protocol to alert local authorities and communities as appropriate and it will also identify and install the needed additional safety prevention measures (i. e., smoke detectors, alarm systems, fire extinguishers, fire hydrant systems with dedicated fire water storage and sprinklers, water mains and fire hydrants, portable first aid kits, emergency warning alarms, emergency shutdown procedures, etc.) (see action No. 5 of the ESAP.) and will assigned qualified fire and emergency response brigades at all times. So far, none of the SHPPs have had any accident or significant emergencies. 

As Vatia has not yet conducted emergency response drills at any of its SHHPs, as part of IFC’s investment, it will develop specific emergency response protocols and develop a timetable for conduct emergency response drill for each of the SHHPs (see action No. 6 of the ESAP.) 

For the new developments part of this proposed project, the Company will develop emergency preparedness and response plans covering preparedness and responses to a range of potential emergency scenarios, including but not limited to fire, earthquakes, extreme weather conditions, and medical emergencies. The response plans will also include organization and responsibilities of those involved in controlling emergencies, detailed procedures to be followed, and guidance for communication to alert local authorities and communities as appropriate (see action No. 7 as part of the ESAP.) Accordingly, the Company will require its contractors to develop corresponding emergency response plans in accordance with IFC PS1 and PS4 as part of their own ESMS. Regular drills and emergency exercises will be conducted by the Company and contractors covering the different emergency scenarios.

Monitoring and Review

The Company has a well-established EHS monitoring program through which it conducts semiannual monitoring of the water quality (pH, dissolved oxygen, total suspended solids, biological oxygen demand, nitrites, nitrates, total and fecal coliforms, oil and grease, among others) at the intakes and discharge canals of the eight SHPPs operating in the Department of Cauca and two of the Hidrotolima SHPPs, Santiago and Mirolindo. The third SHHP in the Department of Tolima, “Pastales” has yet to receive the approval of the monitoring program by the local environmental authorities to begin applying it. The water quality monitoring results indicate that the parameters measured follow the WBG EHS General Guidelines and local regulatory requirements.

For the new developments as part of this project, Vatia will update the current monitoring plan to include the additional monitoring locations, parameters to be measured, frequencies, and monitoring sites for operations and workplace monitoring (See action No. 8 of the ESAP.)  Furthermore, it will supervise the contractors to ensure they comply with the contractually agreed EHS aspects during the construction phase, as applicable. Vatia is committed to periodically reporting the results of its environmental and social performance to the Colombia environmental authorities and to IFC.

COVID-19 Response

As a result of the COVID-19 pandemic the Company has not laid-off workers but has made temporary adjustments to its workforce by adapting to the national as well as respective local labor directives. The Company has paid full salaries to the employees during the lockdown period. The Company hires local workers and has no migrant workers or worker acomodations. There have been no significant health impacts on the Company’s workforce due to the pandemic. Furthermore, the Company developed, and it is implementing a COVID-19 infection prevention, control and response plan, consistent with the provisions under PS2, PS4, and the Interim Advice for IFC Clients on Preventing and Managing Health Risks of COVID-19 in the Workplace.

Specifically, the Company has established social distancing protocols for workers at plant sites; it has contracted qualified companies to conduct periodic/rigorous disinfection at all premises; it distributes and requires use of masks at all times by all employees, while at premises; and it scans temperature of all persons coming into premises.  As part of its COVID prevention program, the Company has conducted awareness training on hygiene at the workplace as well as at home                                                   

 Human Resources (HR) Policies and Procedures

The Company’s Human Resources and Human Rights policies and procedures are rooted in the values that guide their actions with staff, customers and the communities and environments in which they operate and are based on the relevant international conventions. The Company promotes transparent and consistent application of its labor policy through its code of conduct and the HR procedures in place including the internal employment rules and regulations and the health and safety rules. The policies also include measures related to broadly communicating the Company’s policies on equal opportunity, local hiring practices and grievance mechanisms. Furthermore, the Company has a zero-tolerance policy for discrimination or harassment. The Company’s Human Resources and Human Rights policies is aligned with the local labor laws and are consistent with the requirements of IFC PS2.  Vatia will extent the same policies and procedures, including workers’ grievance mechanisms to the new developments for its own workers and contractors, as per this proposed project.

Working Conditions and Terms of Employment

All operations promote local hiring. As of May 2020, Vatia has 178 direct employees of which 60 are female and Hidrotolima has 42 direct employees of which 2 are female. In addition to the jobs it generates in the urban areas, Vatia also generates direct and indirect jobs in the rural areas for minorities and vulnerable communities. Furthermore, to enhance the overall condition of its employees, particularly those in the rural areas, Vatia has scholarship programs and education plans to help improve their overall conditions.

The terms of employment, which are defined in the internal employment rules and regulations, are provided to each employee upon hiring. They include benefits, hours of work and overtime compensation, vacations, prevention and consumption of psychoactive substances, performance evaluation, etc. All employment benefits and other relevant HR aspects are included in each employee’s individual file, which contains the written contract, remuneration details, Company policies and the relevant procedures, all signed at the time of recruitment.

The normal working hours at the Company operations are 9-hours shifts, five days a week. The Company uses extra hours, depending on production needs and fully complies with local law requirements related to overtime benefits. On 2019, Deloitte conducted a labor audit of Vatia operations though which it did not find any labor related non-compliances.

Workers’ Organization

The Colombia’s Labor Code recognizes worker’s rights to form and to join worker’s organizations. Even though Vatia employees have freedom of association, none of its employees are unionized. All operations have enjoyed overall good and friendly labor climate and up to date there have not been any labor conflicts at any of its operations. As per local requirements, Vatia has established good relations committees (Comité de Convivencia Laboral in Spanish) set with clearly established rules and procedures, and conformed by management and employees, to address aspects related with labor harassment. It meets quarterly and more frequently, as needed.

Non-discrimination and Equal Opportunity

The Company’s HR policy includes provisions related to non-discrimination based on race, nationality, disability, social class, sex, religion and/or political ideas. The Company is an equal opportunity employer that extends equal employment opportunity to all applicants and its selection decisions are merit based. Furthermore, in compliance with the local requirements as well as IFC PS 2 there is no forced labor in either its or contracted operations. All Vatia contractor’s employees are also required to be older than 18 years old.  Furthermore, the Company will commit to maximizing the inclusion of women in the workforce as much as reasonably practicable and will investigate different options and make concerted efforts for women empowerment while offering career growth opportunities.

Grievance Mechanism

Vatia encourages all employees to have respectful and transparent conversations with their managers, the Company has a formal procedure for employees raising grievance about labor harassment.  It has developed a detailed format for those to be presented, once received, they are discussed and resolved in the dedicated employees and manager committee dedicated to address grievances. The grievance and resolutions are also documented. The availability of this process is communicated to all the employees through internal communications. Even though the Company has a functional grievance system in place, as part of this project it will formalize the process by writing the grievance mechanism protocol consistent with the IFC PS 2 requirements see action No. 9 of the ESAP.) This protocol will include (a) means to present the grievances openly/anonymously (e.g. mail, phone, verbal report to immediate supervisor/reporting authority; etc.), (b) process of receiving and registering grievances/complaints, (c) assessment and categorization of grievances, (d) prioritization and hierarchy of grievances and response time, (e) guidelines for resolution and response of grievance, (f) responsible personnel in charge of resolution, (g) documenting grievance/resolution, and (h) periodic monitoring of grievances and review by senior management. Furthermore, for each of the new developments, it will establish the corresponding grievance mechanism as part of the ESMS.

Occupational Health and Safety (OHS)

As part of its management system, Vatia has a suite of programs, safety manuals and procedures aiming to prevent injuries and fatalities and to ensure a strong safety culture including job safety analyses; use of the permit-to-work system, as needed, to ensure that hazards and risks are understood and controlled; incidents/accidents report and investigation to identify possible causes, correct and draw lessons; selection and management of  contractors that meet the Company’s safety requirements; etc. All employees including those from contractors are required to abide by these rules.  Currently, Vatia is updating the work at heights and electric risks assessments protocols, once completed they will be submitted to IFC (see action No. 10 of the ESAP.) 

As per its risk assessment evaluation, Vatia provides and requires to its own and contracted employees compulsory use of PPE and has EHS internal auditors and incident investigation teams at all sites. As part of its operational safety approach, it also has in place a rigorous maintenance management system (i. e., pre-defined preventive based on standard procedures and predictive maintenance checks.) It has in place EHS training programs (i.e., management of solid waste, global warming, conservation of flora and fauna, efficient use and saving of water, and reinductions in safety and occupational health tending to the use and handling of personal protection equipment and safety conditions during operational tasks) and also conducts specialized training, as needed (i.e., confined spaces, safety audits, job hazard analyses, biomechanical risk, emergency preparedness, CPR, fire prevention, electrical hazard, etc.) In 2019, Vatia has two accidents. In 2019, it has had 2 accidents and so far in 2020 it has had also two accidents.

Furthermore, all sites exhibit only designated walkways, stairs, ladders, roads or other access ways are allowed when entering or exiting work locations. Appropriate warning signs, barricades or barriers are used for any potentially hazardous conditions. Vatia systematically documents and investigates all incidents and near-misses to determine the underlying causes and contributing factors of the incident and implements corrective actions to prevent the recurrence of similar incidents. All observations and investigations results are shared with all workers through the joint committee of management and workers on occupational health). 

For the proposed developments as part of this proposed project, Vatia will develop a workplace monitoring program (see action No. 11 of the ESAP.)
 

As part of the management of the OHS aspects of the operations, the Company also has a joint committee of management and workers on occupational health (COPASST - Comité Paritario de Seguridad y Salud in Spanish) that meets in a monthly basis and actively engages in the management of the OHS system and ensures that all employees are properly informed about applicable occupational hazards and trained to prevent or control those.

Vatia conducts periodic occupational medical assessment of the overall and occupational health for all its employees, it conducts at-hiring and periodic check-ups and along with the health and safety managers determine the best workplace conditions for the workers. 

For the proposed developments as part of this project, Vatia will require its contractors, as appropriate, to develop EHS plans and to demonstrate compliance with Vatia’s policies and procedures through the monitoring program to be established.  The contractors in conjunction with the Company will identify potential emergency scenarios during the project implementation and develop adequate emergency response measures.

Workers Engaged by Third Parties

Vatia has protocols in place for the selection and contractual relationship with contractors to ensure they comply with the EHS requirements of the Company.  The contractors to be used for the developments of this proposed project will engage in contractual agreements with Vatia to also ensure that labor conditions are in line with the local regulatory requirements as well as IFC Performance Standard 2.  Vatia will have a plan to monitor the performance and compliance of its contractor with the agreed contractual requirements. Monitoring will include regular audits, review of the contractor’s internal monitoring reports and documentation as well as review of grievances logged by the contractors and subcontractors’ employees. In addition, it is expected that no less than half of the labor force to be hired during the proposed will come from nearby areas.                                                 

 Resource Efficiency

As per the local environmental authorities, Vatia is required to develop ad seek approval of a plan to ensure savings and efficient use of water (in Spanish: Programa para el Uso Eficiente y Ahorro de Agua – PUEAA) which requires developing means to maintain, monitor, and report the ecological flow assigned as part of the licensing permits or concession authorizations, to prevent water leaks, and to satisfy the forestry compensation requirements for each of the SHPPs.  

Water

As part of the water concessions for the SHPPs, the local environmental authorities clearly determine the allowed water intake volumes and the ecological flows.  Furthermore, whenever, there are downstream users, the environmental authorities require the Company conducting assessment of downstream water demand prior to assigning the corresponding volumes for energy generation.  For instance, for the Mirolinda SHPP, the assessment of the hydric demand at the Combeima River established 1600 l/seg for domestic use, 4,827 m3/seg for energy generation, and also considered the water needs for irrigation of approximately 7.000 Ha of rice and sorghum planting.  As the water used for energy generation is revert to the river there is no river loss of water for other downstream uses. Also, twice a year, Vatia measures and reports to the environmental authorities the authorized flow rates in the conduction channels and has a rigorous maintenance program to detect possible leaks in a timely manner and take the necessary corrective actions to avoid water losses and thus satisfy the water preservation requirements imposed to each SHHPs.

Water Quality

Twice a year, the Company conducts upstream and downstream monitoring at all SHHPs with the exception of the Hidrotolima Pastales plant, as it has yet to receive the monitoring plant approval from the environmental authorities. The parameters measured include pH, conductivity, dissolved oxygen, total suspended solids, biological oxygen demand, nitrites, nitrates, total and fecal coliforms, and oil and grease, among others. The results indicate that the water quality is not affected by the energy generation operations as the concentrations downstream are the same as to those upstream and in some instances the conditions are improved.

For the proposed solar projects, the water requirements during operation will be largely for panel cleaning.  As part of the evaluations to be conducted to address potential impacts from these projects, Vatia will assess potential impacts of water intake to assist in the selection of efficient cleaning technologies (see action No. 12 of the ESAP.) For instance, if ground water is to be used, the Company shall first undertake the hydrological studies to determine the availability and suitability of groundwater for construction activities and for panel washing during operation. Groundwater shall not be used for potable water unless subject to appropriate treatment.

Pollution Prevention

Vatia current hydropower generation does not generate air emissions. It is also anticipated that for the proposed solar developments there will not be either generation of air emissions. 

As indicated above, as per action No. 4 of the ESAP, the SHPPs environmental management plans will develop and implementation of proper housekeeping, wastewater management, and effective hazardous waste managements. Typical operational wastes anticipated to be generated by the proposed new developments include discarded PV modules and panels.  It is anticipated, the Company will aim to establish mechanisms to return the discarded PV panels to the PV manufacturers for recycling. Furthermore, for the proposed developments, Vatia will require the EPC contractors / O&M operators to implement pollution prevention measures in accordance with national law, IFC’s Performance Standards and WBG EHS Guidelines, and ESIAs.

As part of the requirements of each the SHHPs water use concessions, Vatia was required to develop and implement reforestation plans that conduct an annual hectare of ecological restoration in the areas of influence of each plant and maintains and preserves the forest conditions of (a) the water source springs in a radius of at least 100m, (b) both sides of the river basins with strips of at least 30 m wide; and (c) areas where the slopes are above 45 degrees and are related to the SHPPs water sources.  Vatia periodically reports the outcomes of this plan to the local environmental authorities.

Greenhouse Gases

The current operations generate approximately 190,4 gigawatt hours (GWh) of electricity per year, resulting in a predicated annual GHG reduction of 72.542,4 tCO2eq/year. 

Potential greenhouse gas emissions from the new proposed developments will be generate only from those to be constructed and they will be predominantly associated with the use of fuels for generators, transport, on-site equipment, and machinery. Although the quantities of emissions have not been calculated, these are expected to be low and significantly less than 25,000 tones CO2 equivalent (tCO2eq/year). 

 Community Health and Safety

Even though Vatia conducts period maintenance to its operations and it has identified worst- case scenario conditions; as part of this project, Vatia will assess the reliability of all SHPPs structures to confirm there will not be potential negative impacts to nearby communities (see action No. 13 of the ESAP.)

For new developments, as part of this proposed project, and prior to engaging in either constructions or acquisitions, Vatia will assess risks and impacts to host communities and develop, as needed, Community Health and Safety plans and procedures to protect their public health, safety, and security on issues such as road safety and traffic management; potential emergencies and required responses; security measures to prevent unauthorized access during construction; gender-based violence, etc. as described in PS 1(see action No. 14 of the ESAP.)

The emergency response plans to be developed for the SHPPS as indicated above (see action No. 4 of the ESAP) will also include engagement processes to inform the that local communities of any emergency situation that may impact them.  The same approach will be used for the emergency response plans to be developed for the new developments as part of this proposed project.

As part of its ESMS, Vatia has developed a safety transportation plan applicable to its employees and contractors. The plan identified potential safety triggers needed to be addressed (i. e., day/night trips, shifts length, distances, training, ability, drugs usage, vehicle mechanical conditions, etc.) and established an action plant to address all relevant points including clear polices about use of psycho altering substances, vehicles preventive maintenance, training, safety measures, audits and KPIs to ascertain compliance, etc.   

Security Personnel

For the Company headquarters in the city of Cali, the Florida SHPP located in the city of Popayán and the Mirolinda SHPP located in the city of Ibague Vatia outsources its security personnel to a licensed security agency to provide unarmed security personnel. The access to these sites is under the oversight of the security personnel at all times. For the remaining plants, the Company has not found a need to do so, until now.  However, the Company maintains contact with the public security forces to learn about security aspects in the surroundings of its plants and also as a security prevention measure.  The private security personnel are screened for criminal backgrounds; and so far, there have been no incidents related to security.

As Vatia is committed to run its operations in line with the Voluntary Principles on Security and Human Rights as per IFC PS4, it will develop security management protocols for each of its operations, including security screening procedures consistent with Voluntary Principles, and relevant human rights good practices (i.e., proper use of force; appropriate conduct toward workers and other stakeholders; etc.) and will conduct relevant trainings, as needed (see action No. 15 of the ESAP.)