Assessment of Risks and Impacts and Site Selection:

As per national regulations, due to the nature of business operations, the company is not required to prepare project E&S impact assessment (ESIA) reports for regulatory approval for its tower construction business. For the Nantong assembly plant, an ESIA was prepared and approved by the local environmental authorities in 2019. The company’s corporate level environmental, health, and safety (EHS) management system manual includes E&S and non-E&S site-selection criteria (e.g. avoidance of sites on steep slopes susceptible to soil erosion; and where fire truck access is difficult), which are applied by the company in screening potential new tower sites. As part of its standard operating procedures, the company also undergoes a process of: (i) identifying each key EHS risk at site; (ii) assessing the potential impact of each risk on stakeholders / local communities; (iii) assigning a composite risk rating to each identified risk; and (iv) developing appropriate risk mitigation actions accordingly.

Policy, Management Systems and Programs, and Reporting and Monitoring:

The company is certified against ISO9001 (quality management), ISO14001 (environmental management) and ISO45001:2018 (Occupational health and safety or OHS) management system requirements, with annual internal and external audits carried out to verify system compliance. The company’s corporate level EHS manual, which came into effect in January 2019, was developed based on identified key potential E&S risks most relevant to the company’s operations, and on ISO certification and auditing requirements. It comprises the following core elements: (i) EHS related policy, E&S operational goals/objectives, and key performance indicators (KPI); (ii) new project site screening procedures and selection criteria; (ii) detailed procedures and requirements on: OHS, waste and noise management, emergency preparedness and response, energy and resource efficiency, vehicle and contractor management, and life and fire safety including detailed procedures on electrical safety; (iii) EHS organizational structure, roles and responsibilities, and reporting relationships; and (iv) monitoring requirements. As supporting documents to the EHS manual, a detailed set of implementation and monitoring records shared with IFC (e.g. compliance audit reports; fire and emergency drill reports, equipment maintenance records; waste management and disposal records; contractor EHS compliance inspection reports), including staff and departments with assigned responsibilities, confirm effective implementation of manual requirements including a stringent mechanism to monitor and report on potential E&S risk and impacts. All agreements signed with construction contractors include clauses related to waste management, labor and working conditions, and OHS, which contractors are required to abide by, with compliance confirmed through regular on-site inspections by the company’s assigned EHS and OHS staff. Contactor site inspection is part of the company’s overall site management requirements described in its Site Management Plan and Procedures documents.

To further reinforce the company’s ESMS, on the basis of its existing site selection criteria, the company will develop: (i) screening procedures consistent with PS6, and implement these so as to avoid siting at locations where priority ecosystems and natural or critical habitats could potentially be impacted; (ii) screening procedures for the potential presence of and impacts on indigenous peoples groups; and (iii) procedures to screen for and manage chance finds which will be applied in the event that cultural heritage is discovered during development of towers or other facilities. Refer to the ESAP action #1 for details.

Emergency Preparedness and Response (EPR):

IFC’s review finds the company’s EPR procedures (as part of its EHS manual) to be adequate and commensurate with the company’s construction and operational E&S risks. EPR procedures detail actions to be taken in case of emergencies related to fire, electrical incidents, and potential natural disasters. EPR procedures define the roles and responsibilities of appointed staff members in various emergency scenarios, and also stipulate emergency drill requirements.

Organizational Capacity:

The following are key departments at the company with E&S related responsibilities (in brackets): (i) Administrative and Support (overall coordination and supervision); (ii) Development and Construction (site and contractor EHS management, security management, and stakeholder engagement); (iii) Environment & Safety (risk assessment, OHS, waste management, prevention of soil erosion and site rehabilitation; resource efficiency, and life and fire safety including electrical safety); (iv) Operations and Maintenance (stakeholder engagement; and site-safety). The heads of these departments report to the General Manager of the company. Regional offices of the company throughout China have operational staff with designated EHS duties and they together with the persons-in-charge at regional offices report to headquarter-level E&S departments. As confirmed by training logs shared with IFC, the company has a training program in place which includes E&S related content (e.g. working at heights) which operational staff and contractor staff are required to attend. IFC’s review concludes that the company has adequate teams in place at headquarter and regional levels commensurate with the project’s nature and extent of E&S risks and impacts.

Human Resources Policies and Working Conditions:

The company has a workforce of about 1,370 employees. No major retrenchment is expected in the foreseeable future as the company is expanding, and the company states that there have been no instances of workforce reduction or no-pay-leave arrangements due to the COVID-19 pandemic. All employees are full-time direct hires and with a male to female ratio of about 4:1 which reflects available talents in this sector and also the fact that the nature of construction, operation, and maintenance work requires frequent travels in the field and its workforce therefore tends to comprise mainly male workers.

Oversight of all employment relationships is provided by the human resources function which is managed centrally from the company’s headquarters in Shanghai. Employment practices of the company are consistent with principles of non-discrimination, zero tolerance for harassment (including gender-based harassment) in the workplace, prohibition of any child and forced labor practices at all times, and equal opportunity. Salary and benefits levels are determined by referencing prevailing labor market rates. Terms of employment consistent with national labor laws including provisions on minimum wage, working and overtime hours, leave days, etc., are written into all employment contracts. Most company staff in regional locations choose to rent their own accommodation and therefore the company does not need to provide staff quarters, and the short duration of construction cycles / tower maintenance interventions and the limited size of the construction / maintenance crews mean that there is limited need for on-site labor camps, since local houses meeting the company’s safety and hygiene requirements can be readily rented in nearby towns.

The company’s Development and Construction team uses and oversees about 90 third party construction teams throughout China to undertake tower construction activities, with each such team typically employing between 10-30 construction workers, and with each team staying at a site usually for not more than 30 days given the nature of tower construction work. All contractor workers are covered by social insurance as per local labor requirements, and as mentioned under PS1, all contractors are bound by E&S clauses, including labor and working conditions, written into agreements signed between the company and contractors, and the company’s site-based supervisors regularly monitor contractor compliance.

Grievance Mechanisms and Workers’ Organizations:

Effective measures are in place to receive and address worker grievances and these are extended to include contractor workforces. Key means of management-worker communications are day to day direct dialogue between workers and supervisors during staff meetings, toolbox meetings, a telephone hotline, and the use of the company’s internal and public social media accounts to send messages to management (anonymously as needed). The company does not restrict staff members from joining or setting up a labor union, or from entering into collective bargaining agreements should they wish to. Most of the company’s staff have voluntarily chosen to join the labor union at the company, which plays an active role in employee relations and dispute mediation (should the need arise).

Occupational Health and Safety:

According to OHS statistics shared with IFC, there have been zero fatalities and lost time accidents, including work related traffic accidents, in the past 36 months of operation. Overall, given the company’s business nature of tower construction and operations & maintenance, OHS risks are considered moderate. As described under PS1, at each tower site, the company undertakes a detailed OHS hazard point identification, risk-rates each risk point (e.g., staircases, electrical wire connection points), and identifies and implements appropriate risk mitigations accordingly. The company’s risk analysis has identified the following to be key OHS risks at its tower sites and has developed specific mitigations (in the form of standard operating procedures) to minimize such risks: (i) workers struck by falling objects (ii) risk of falling while working at heights (iii) mechanical injury from equipment handling; and (iv) electrical risks. Toolbox meetings and regular refresher training to all workers are held to reinforce safety messages and requirements, and regular inspections/maintenance of equipment (e.g. guard rails) is conducted. Detailed records shared with IFC (e.g. a log recording the distribution of personal protective equipment to site staff; electrical equipment functionality inspection records; site-based OHS compliance verification report; etc) indicates that the company has a OHS management system in place with a continuous improvement program. To reinforce this and the company’s oversight of contractor OHS performance, the company will develop and implement a contractor OHS performance monitoring program and will require regular compilation and reporting of OHS statistics, both lagging (e.g. person-hours worked; no. of fatalities; no. of first aid cases; no. of lost time accidents; no. of vehicular or traffic incidents, including road traffic accidents) and leading indicators (e.g., near misses, no. of training sessions administered, no. of site inspections undertaken, etc.). from all site-based construction contractors, and include these in its internal compilation, analysis and reporting of OHS statistics to the company’s headquarters. Refer to ESAP action #2 for details.

The company has taken various measures (e.g. temperature checks, handing out hand sanitizers, etc.) to minimize the risk of COVID infections in its workforce and contractors are also required to abide by these measures.

Telecom equipment mounted on the company’s towers is powered by grid electricity (with stand-by generators) and this was consumed in order to power clients’ equipment. Based on annual grid electricity and gasoline (used in backup generators) usage figures provided by the company, annual greenhouse gas (GHG) emissions of the project are estimated at 95,700 tCO2eqv. Since this exceeds the 25,000 tCO2eqv threshold defined in PS3, the company will include in annual monitoring reports submitted to IFC, the project’s estimated GHG emissions, based on an internationally recognized calculation methodology.

The company’s tower construction activities result in limited air emissions, wastewater discharge, and solid waste generation. Noise impacts during construction are mitigated through various hardware and management measures (e.g. the use of drilling piles rather than adoption of piling-hammering; noise barriers and containment devices; and avoidance of nighttime work). Contractors are required to adopt measures to monitor and minimize noise, dust, and vibration disturbance during construction, and this is closely monitored by the company’s on-site inspection teams. Hazardous wastes (e.g. oily rags, etc.) are also limited in quantities and are collected, transported, and handled as per regulatory requirements. Effluent consists of limited quantities of sanitary wastewater generated at sites.

Construction waste is handled and disposed of by licensed waste disposal contractors in line with the company’s written requirements as per pre-agreed waste management measures between contractors and the company, with the wastes recycled/reused where possible, and where not possible transported by licensed vehicles to designated and authorized waste disposal sites. When a site is no longer in use and as part of site-decommissioning, the company’s procedures require it to undertake appropriate site rehabilitation including re-vegetation.

The company places a high priority on ensuring strong stakeholder relations and minimizing any potential adverse impacts from its operations on the health, safety, and security of local communities. Contractors and their workforces are bound by a worker code of conduct to minimize disturbance and risks to local residents and communities. The company implements a standard operating procedure on traffic and safety management and all company and contractor vehicles are required to abide by the SOP, with compliance verified through daily site inspections. The company’s operations and construction departments implement a program to regularly check on the structural integrity of constructed towers.

The most notable potential source of concerns by local communities is in relation to potential health risks associated with exposure to electromagnetic field (EMF) radiation from equipment mounted on the towers. Radiation monitoring reports/results at Guodong tower sites are commissioned by the company’s MNO clients and undertaken by qualified third-party technical institutes. See also the next section under the company’s detailed stakeholder engagement program.

Based on the company’s experience to date, there have been materially no instances of security concerns (e.g. theft or equipment tampering) at tower sites during construction and operational phases. Adequate ingress measures including fencing and locked gates are in place at tower sites, and the company has local unarmed personnel monitoring each construction and operational site. The company implements a security management procedure which prescribes what needs to be done in case of potential security events at sites.

Key stakeholder groups for the company are its employees, local community members, clients, contractors, and local authorities. The company places a strong emphasis on proactively engaging local stakeholders, particularly local residents in proximity to its tower sites, to address their concerns about potential exposure to EMF radiation levels from the towers and telecom equipment. Given the role of the company in the screening and selection of the sites for its towers, this is duly undertaken by the company, even though its MNO clients are the actual owners and operators of signal-emitting equipment mounted on the towers. The company’s engagement with local stakeholders starts when the company begins early surveys and identification of potential sites, and this materializes through community meetings, discussions with community leaders and other stakeholders, and informal household interviews, to understand stakeholder interests and priorities. During such early and subsequent engagement, the company hands out information pamphlets which contain: (i) factual information related to risks associated with potential exposure to tower EMF radiation; and (ii) and radiation monitoring reports/results at other Guodong tower sites, as commissioned by the company’s MNO clients and undertaken by qualified third party technical institutes.

During day to day maintenance of the towers, regular contact is maintained with various stakeholders, and the company, through its grievance redress mechanism (GRM), receives and addresses potential grievances, as confirmed by detailed grievance logs shared with IFC. IFC’s review finds that the company has an effective Stakeholder Engagement Plan (SEP) and GRM in place and its engagement with communities is robust and befits the nature and extent of E&S risks and impacts. To further reinforce its GRM, the company will: (i) post its contact information (including public WeChat account, telephone hotline, and email address) in a conspicuous location at each tower site, so that local stakeholders can use such information to readily reach the company as needed; and (ii) also share such contact information during various local stakeholder meetings at all sites and include it in the information pamphlets that it hands out to local stakeholders. Refer to the ESAP action 3 for details.

Contact Person: Mr. Angelo Leung

Chief Financial Officer

Guodong Network Communication Group., Ltd.

Address: 20/F, East Tower, China Merchants Plaza, No. 333 Chengdu North Road, Shanghai, China 200041

Tel: +86 21 52989988

Email: angeloleung@guodongnetwork.com

http://www.guodongnetwork.com