The three Data Centers are located in established industrial zones in the State of Sao Paulo. Therefore, the project is not expected to intervene in areas of biodiversity importance or indigenous lands or cultural heritage sites and therefore, impacts to be managed in a manner consistent with PS6, PS7 and PS8 are not expected. There are no impacts to be managed consistent with PS5 as all lands were acquired under a “willing buyer-willing seller” transaction, without physical or economical displacement, and no new land acquisition is expected as part of this investment.

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 that can be avoided or mitigated by adhering to the implementation of Good International Industry Practice (GIIP) and design criteria as described in the following sections. Key environmental and social issues reviewed during IFC’s appraisal include: (i) environmental and social management system implementation; (ii) management of environmental, labor and occupational health and safety practices as well as labor and working conditions of employees and contracted workers; (iii) energy/resource efficiency and energy management, including backup power and fuel storage; (iv) management of solid waste, including safe disposal of batteries and electronics; (v) security management; and (vi) the company’s stakeholder engagement activities, commensurate with the level of risks and impacts.

 Environmental and Social Assessment and Management System

All ODATA DCs have a limited footprint and are located in established industrial zones. Each property has between 8,000 and 60,000 m2 and were acquired under a “willing buyer-willing seller” transaction. DC SP02 is the only facility that will have physical expansion under this investment, with the construction of a new building inside ODATA’s existing property and therefore no land acquisition required.

A simplified assessment of E&S risks and impacts for licensing purposes is required for the construction and operation of this type of facilities by Brazilian authorities. In addition, as a part of permitting process for waste management, fire safety and general installation & operation, the company is required to assess and revise its designs/plans as required, so as to comply with the stipulated requirements – thereby mitigating key environmental and safety related impacts.

In addition to managing local requirements in terms of environmental and labor management, including OHS, ODATA has an Integrated Management System (IMS) in place to manage multiple aspects of its operations in line with industry standards, including quality, and certain environmental and health and safety aspects. The company, however, does not currently have an overarching sustainability / environmental and social (E&S) policy, although it does have elements in place that could serve to inform a policy and risk management approach, including an established approach on Human Resources and OHS (see below under PS2) and on resource efficiency and pollution prevention (as described under PS3).

Moving forward, in accordance with the ESAP Action #1, ODATA will expand its IMS, commensurate with the project’s risks and impacts, to meet IFC’s Performance Standards, including identifying and evaluating potential E&S risks and impacts (identification and evaluation matrices); defining relevant management plans and procedures; and incorporating a set of relevant E&S performance indicators into company’s monitoring system and for management review. The management system will include but not be limited to: (i) corporate environmental, health and safety policy that addresses ODATA’s operations in Brazil and is aligned to IFC PS requirements; (ii) E&S risk and impact assessment and management procedure; (iii) contractor E&S management procedures; (iv) waste management; (v) hazardous materials management; (vi) fire safety and emergency response; (vii) occupational health and safety (OHS) guidelines for direct-staff and contracted workers; and (viii) any other aspects identified in the company’s risk and impact identification matrices.

Management Programs and Organization

The company manages its operations in conformity with relevant national requirements and with good international practices. ODATA’s DC SP01, for example, has received the Tier III design, project and construction certification from the Uptime Institute (a global standard tier classification - https://uptimeinstitute.com/), which includes set of criteria covering mechanical, electrical, structural, and site elements.

The company currently implements a number of E&S policies and procedures (Health & Safety Procedure, Whistleblower Policy, Grievance Procedure; Fire Safety Procedure; Waste Management Procedure; among others) for routine business operations. Some OHS aspects are managed through specific procedures, which are not linked to the internal system, including an occupational health surveillance program (PCMSO), and a workplace/environmental risk prevention program (PPRA), as described below under Performance Standard 2.

At the time of appraisal ODATA did not have a dedicated team responsible for E&S management at the corporate level. Rather, these responsibilities were divided between the human resources department and teams responsible for quality management in its operations.

At the individual facility level, DCs managers are responsible for these functions as part of facilities management, including waste management, general maintenance and life and fire safety (L&FS). All DCs managers have regular meetings with senior management, where operations issues and matters are discussed. In addition, the company has a certified OHS officer, which is deployed at the facilities during normal shift hours, from Monday to Friday. This OHS officer is tasked with operational OHS oversight within the DCs. The current organization is adequate for the level of risks and allows the company to monitor and improve the implementation of its procedures and ensures quality control.

When projects are conceived, or specific maintenance activities are needed, the engineering department or the network and telecom department develop terms of reference for contractor and supplier management and undertakes project supervision in accordance with ODATA’s set of requirements.

The procurement team is responsible for sourcing of the vendors focusing on quality control and cost effectiveness. Current procedures for vendor evaluation include requirements for assessing HSE performance and labor compliance of both contractors and suppliers.

Emergency Preparedness and Response

All ODATA DCs have an Emergency Preparedness and Response Plan (known in Brazil as PAE) in place and supporting procedures to prepare and respond to emergencies. The plan is supported and resourced with a well-structured emergency brigade team. As per ESAP Action #2, the company will develop a corporate level Emergency Preparedness and Response Procedure aligned with the business continuity plan. Given the fire hazards associated with the DCs, the fire safety systems at each facility are as follows: i) High Sensitivity Smoke Detection (HSSD) system; ii) fire alarm and detection system; iii) dry pipe pre-action sprinkler system and hose reels; (iv) clean agent gaseous systems in some critical areas and, v) fire extinguishers located as required by local fire codes throughout the facility. All fire suppression systems comply with Tier III DC requirements and are certified by both the national fire department for compliance to national regulations, and third-party auditors for customer compliance. Maintenance and testing are programmed and performed by independent contractors based on international (NFPA) codes for methods and frequency.

The company has also recently developed a specific Pandemic Emergency Response Plan (PERP) which aims to identify mission-critical scenarios and services and guide the planning and execution of service continuity and availability plans for ODATA DCs. The PERP follows the World Health Organization’s Pandemic Phase classification approach to support a structured response to pandemic and infectious disease events.

Monitoring and Review

The company implements procedures to monitor and review, especially with regard to operations, quality control and safety indicators, such as recordable injuries and unsafe conditions. However, ODATA currently has no formal monitoring and review process in place for its E&S management performance. With the expansion and upgrade of the company’s IMS, as per the ESAP Action #1, ODATA will develop a corporate level procedure for monitoring of E&S performance across all DCs, in line with applicable regulatory and requirements and relevant and applicable sections of the World Bank Group (WBG) EHS guidelines. The E&S monitoring system will define the key performance indicators (KPIs) (such as OHS incidents, near misses, energy and water use, and waste management) to be monitored and the frequency with which these will be monitored. This system will link to and build upon the company's existing internal reporting and quality control systems.

 At appraisal, the company had 117 direct employees, though its permanent workforce is expected to grow with the expansion of the DCs. Approximately 20% percent of ODATA’s workforce is female. Security and cleaning are the only outsourced services, employing additional 48 workers, who are managed by contractor companies, as described below and under PS4.

Human Resources Policies and Procedures

Under ODATA’s integrated management system, there are human resources (HR) procedures related to recruitment, trainings, performance management, and OHS, among others. The company has also developed an internal Code of Ethical Conduct, which clearly prohibits discrimination and promotes equal access and treatment of the company’s workforce. The company, however, does not currently have an HR Policy in place that covers the guiding principles of this Performance Standard. As set forth in the ESAP action #3, ODATA will develop an HR Policy that is consistent with PS 2 and include the following requirements: (i) working relationship; (ii) working conditions and terms of employment; (iii) worker’s organization; (iv) non-discrimination and equal opportunity; and (v) grievance mechanism. As part of its HR Policy and in alignment with the company’s Code of Ethical Conduct, ODATA will also emphasize its zero-tolerance approach for any proven case of gender-based violence (GBV), or case of workplace harassment. The policy will also outline roles, responsibilities, accountability and disciplinary procedures.

Working Conditions and Terms of Employment

Terms of employment and working conditions are defined in the contracts that ODATA signs with its employees, and are consistent with the provisions of the Brazilian labor law.

The company offers its workers competitive salaries, all basic benefits guaranteed by Brazilian law, and additional benefits (such as access to private health insurance, life insurance, transportation and meal tickets, among others) in order to attract and retain high performing staff. ODATA has a well-structured and documented approach to hiring, onboarding, managing, training, and promoting its workforce and to terminating employment, should the case arise.

The company has a formal induction process, where every newcomer is welcomed on his or her first day by the HR Department and introduced to the company’s mission, vision and values, to the Code of Ethical Conduct and to the benefits and compensation policy.

Terms of employment are spelled out clearly in employment contracts and the collective bargaining agreements to which ODATA is subject. Worker rights in Brazil, including rights to association and to the formation of unions, are safeguarded by the 1988 Constitution and an extensive, detailed labor code known as the Consolidação das Leis do Trabalho, or CLT. Under Brazilian labor laws, all workers are allowed to associate with a union, and ODATA's employees benefit from the existence of collective bargaining agreements in their sector. The company does not restrict union membership, it abides by the terms of collective bargaining agreements, and it respects labor rights.

As a growing company in a highly competitive marketplace for IT professionals in Sao Paulo, ODATA is committed to developing effective means for managing its employees’ learning needs and training its personnel. The company has also developed a structured approach to training and professional development.

Grievance Mechanism:

The Code of Conduct stipulates the principles that shape the company’s workplace environment and specify which behaviors are considered unacceptable. ODATA has established an internal complaint mechanism to provide employees, including third-party workers, service providers, and other suppliers with a confidential channel to raise grievances about any misconduct or about any other issue in the workplace and improve governance and the working environment. It is possible to register a case by phone or through the company’s website (www.canaldeetica.com.br/odata). This channel is being managed by a specialized company named Canal Confidencial (Confidential Channel), which directs confidential complaints to an ethics committee composed of four members elected by the company’s Board of Directors. The Ethics Committee, the Compliance Officer and the Legal Department are ODATA's internal bodies responsible for observing and applying the provisions of the Ethics Code.

Protecting the Workforce

ODATA systematically applies all Brazilian legislation and regulations on labor standards, including respect for labor rights, minimum age requirements, and prohibitions against forced labor, which are articulated in the Code of Ethical Conduct.

Under a government sanctioned apprenticeship initiative, the company hires two youth (known as “Menor Aprendiz”) per year who meet the program’s criteria and who are not permitted to engage in any hazardous activities. The company has a well-defined procedure for how such apprentices can be hired and are managed. For all other workers the minimum age for employment is 18 years.

Occupational Health and Safety

Brazil has a highly detailed and prescriptive set of OHS regulations mandated by national law (known as the Normas Regulamentadoras, or NRs). ODATA pays particular attention to NR 10 (electrical installations), NR 33 (confined spaces), and NR 35 (working at height) in its operations, and it implements requirements under the NRs by developing a workplace/environmental risk prevention program (known as PPRA, or Programa de Prevenção de Riscos Ambientais). There is also a comprehensive system of medical exams upon hiring and departure of any staff and periodic testing, depending on the nature and risk profile of the occupation concerned (via an occupational health control program known as a PCMSO, or Programa de Controle Médico e Saúde Ocupacional).

As observed during appraisal, the company has in place an OHS procedure for operations. The main risks associated with OHS within DCs relate to electrical maintenance and maintenance of supporting infrastructure (transformer stations, power houses, and Uninterrupted Power Supply (UPS) i.e. battery banks) and the management and oversight of construction operations, the latter discussed under the following section. The company employs technicians and engineers for general maintenance. Specific electrical repair works are contracted to specialized providers. The company has also a formal process to notify the vendors of minimum OHS standards and vendors OHS performance is assessed on a regular basis. Safety indicators are reported to the company’s senior management and board of directors.

Pre-employment documentation is reviewed by the Procurement Department for any third-party workers being hired to carry out potentially hazardous tasks. There is onboarding/induction around OHS issues for all staff and third-party workers. For those functions involving hazardous activities (e.g. use of elevated work platforms), the company’s management system requires the use of appropriate personal protection equipment and certificate of training. Safety records reviewed show a limited number of incidents, without any serious accident (e.g., one lost time incident of medium severity in 2019).

Workers Engaged by Third Parties

The vast majority of ODATA’s workforce consists of direct employees. Only janitorial and security services are contracted via third-party companies. All third-party workers have a contract detailing their terms of employment and working conditions, which are in line with country regulations and with ODATA’s Code of Ethical Conduct. The contracts between ODATA and service providers include legal requirements on proper labor and OHS practices, and ODATA pays them only on the basis of evidence that they are in compliance with them. In addition, as discussed above and under ESAP Action #1, ODATA will develop and implement a corporate procedure to formalize the management of the E&S performance of its contractors, subcontractors, and other third parties working for the project during construction and operation.

 Resource Efficiency

As a Data Center operator, electricity is the most significant resource consumed. In 2019 the company consumed approximately 3.5 million kilo watt hours (kWh) for the operations of the three DCs. It is anticipated that energy consumption will increase during the lifetime of the IFC investment, through the expansion of the existing DCs, that should achieve a potential power capacity of approximately 30 megawatt (MW).

The company monitors energy use in real time tracking and continually evaluates energy saving opportunities. The company’s DC SP01, for example, is the first colocation DC in Brazil to receive the LEED Gold certification, from the U.S. Green Building Council, in addition to the Tier III design and construction certification from the Uptime Institute.

GHG Emissions

The estimated annual GHG emissions will be about 2,200 tCO2e per annum during the life time of the IFC investment. This is based on an assumption that up to 30 million kWh of energy will be consumed per annum during the life time of the IFC investment. Stand-by generator fuel usage was minimal in 2019 as back-up systems were run periodically for testing purposes only, with no recorded electrical blackouts from the independent power provider to the industrial parks.

Pollution Prevention

ODATA’s DCs have energy plants with dedicated double-sourced transmission line with a high voltage in 138kV, connected to utility substation with redundant feeds, which allows for better quality and efficiency energy. Each site has modern diesel-fueled emergency generators, redundant static and high-capacity uninterruptible power sources (UPS) to ensure uninterrupted energy and to guarantee that critical systems area always functioning. The emergency generators are regularly inspected and maintained by ODATA teams and authorized service providers are hired to certify the equipment. The generators are the main sources of air emissions and noise from the facilities, but they are stand-by and operational only in case of power outage. Wastewater are limited to sanitary water, and discharged to the public wastewater collection and treatment system.

Waste and Hazardous Materials

The company has an operating procedure for waste management, including hazardous wastes. Electronic waste, as this relates to customer servers, is the responsibility of the ODATA clients. ODATA utilizes lead acid batteries for UPS and stores between 60,000 and 240,000 litres of diesel fuel on site for the emergency generators. Diesel fuel is stored in 30,000-liter or 60,000-liter underground storage tanks with level detectors. All tanks are fully inspected every two years to evaluate their conditions and for leak testing. The UPS valve regulated lead acid batteries are stored in raised platforms. All batteries are supplied by third-party manufactures to international specifications. Battery banks are replaced every five years and old batteries are disposed of through the manufacturer who recycle the components.

All transformer units are managed by a manufacturer approved vendor, certified for the handling, filtering, and disposal of used transformer oil. The use of polychlorinated biphenyl (PCB) in transformer units is prohibited in Brazil since 1981 and, therefore, no PCB is contained in the transformer oil.

 Due to the location of the DCs and the company’s business activities, there are no or minimal community health and safety risks and impacts which must be managed in a manner consistent with PS4.

With respect to security risks, the company employ armed security personnel provided by a licensed service provider. Under the ESAP (Action #4), the company will conduct a security risk assessment as per the requirements of this Performance Standards to ascertain the risks posed by its security arrangements to those within and outside its facilities and to determine whether such private security personnel are being hired, equipped, and trained adequately in light of PS4, including on human rights issues, proper use of force, and appropriate conduct toward workers and other stakeholders. In addition, the company will develop a security management policy and procedure for how to select and contract the security providers and manage the private security for its facilities.

The company maintains a 24-hour customer service line and adheres to industry standards for levels of service to their customers. As part of the actions under ESAP #1, ODATA will implement and maintain a procedure to receive, register, screen and address external communications (including any complaint) from the public, document responses, and adjust management program. 

Contact person: Fernando Jaeger

Address: Rua Joaquim Floreano 913, 4º Andar – São Paulo, SP, Brazil. CEP 04534-013

E-mail: fernando.jaeger@odata.com.br

Phone: (+5511) 4871 2924