Given the focus on development, distribution, marketing, and sales of products from existing own or third party manufacturing facilities located in urban areas, PS 5: Land Acquisition and Involuntary Resettlement, PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS 7: Indigenous Peoples and PS 8: Cultural Heritage are not considered applicable to the project.                                                

 This is category B project according to IFC’s Policy on Environmental and Social Sustainability. Based on information reviewed by IFC, the proposed business activities are considered to involve potentially limited adverse E&S risks and impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. Key E&S risks and impacts are related to: (i) management of contractors and suppliers, (ii) labor and working conditions and (iii) management of expired or non-conforming products.                                                  

Genomma’s operations in Argentina, Brazil, Colombia and Ecuador rely on about 40 local CMOs for the production of OTC and PC products (about 15 critical CMOs manufacture 95% of the volume). Pharmaceutical activities are highly regulated in all these countries and CMOs are required to obtain Good Manufacturing Practices (GMP) certificates from relevant national authorities to operate, such as ANMAT in Argentina, ANVISA in Brazil, INVIMA in Colombia, and ARCSA in Ecuador. In addition to requiring valid GMP certificates, Genomma’s quality control personnel audit all CMOs regularly (critical CMOs on an annual basis). CMOs must achieve a score above a determined threshold to be approved as providers.

The main purpose of GMP certificates and Genomma’s audits is to ensure that products comply with quality specifications and are safe for human consumption, and do not necessarily include an assessment of the environmental, health and safety (EHS) practices of the CMOs. As per ESAP item # 1, Genomma will revise its audit procedure in each country of operation to ensure CMOs adequately manage their EHS risks. Genomma will verify, at a minimum, that CMOs have valid environmental licenses, dispose hazardous wastes in an environmentally safe manner, ensure industrial effluents are adequately treated before discharge to surface waters and have occupational health and safety (OHS) management systems aligned with Good International Industry practice that includes aspects such as i) having a medical surveillance programs; ii) ensuring workers are provided with adequate personal protective equipment (PPE); iii) having effective dust extraction and collection systems; iv) there is adequate machine guarding in place; and v) appropriate procedures are in place for lock-out/tag-out, working at heights and working on confined spaces, amongst other, and these are implemented accordingly. The audit will also benchmark the accident frequency / lost time injury rate for CMO’s against that defined for the sector and where there are variances above this, request to the CMO’s to take action to address. In addressing the above Genomma will ensure that quality control teams conducting the audits have the required competences to assess the CMO’s EHS practices. 

Genomma does not own or operate distribution centers and transportation fleets in Argentina, Brazil, Colombia and Ecuador. In each country, the company relies on one reputable 3PL provider specialized in distribution services for pharmaceutical companies. 3PL providers are responsible for the management of the warehouses, including emergency preparedness and response.

Genomma’s administrative offices in all countries occupy rented spaces inside commercial office buildings, and the  supplies (raw and packaging materials) storage and weighting area and quality control laboratory in Argentina is located in a rented space inside a pharmaceutical facility. Genomma participates in regular emergency drills organized by the administration of the buildings. 

E&S key performance indicators monitored by the operations of Genomma in the countries of operation include the generation of waste and consumption of electricity in warehouses.

Besides CMOs and 3PLs, Genomma relies on numerous suppliers of goods and services, including providers of raw materials (e.g. active pharmaceutical ingredients, additives, etc.) and packaging materials. In 2020, Genomma developed a Code of Conduct for Suppliers (https://esr.genommalab.com/wp-content/uploads/2020/06/Co%CC%81digo-de-Conducta-y-Etica-para-Proveedores.pdf) documenting the company’s environmental and social policies. All suppliers of good and services in Mexico have signed the Code of Conduct for Suppliers, and it is expected that suppliers in the rest of Latin America will acknowledge and sign the document by the end of 2021. In addition, Genomma has prepared a Supplier Sustainability Self-Assessment to assess the supplier’s performance in five aspects: corporate governance, working conditions, environment, stakeholder engagement, and quality. It is expected that all key suppliers will complete the self-assessment by the end of 2022.                                                    

 Genomma currently employs 288 direct employees across Argentina, Brazil, Colombia and Ecuador in descending order. Staff are mainly dedicated to product development, quality control, marketing and sales. Women represent 58% of the workforce and 6.25% at managerial level. Employee turnover in the last two years has been below 30% except for Colombia where it was 55% in 2019 and 36% in 2020. Genomma has recently hired a Human Resources (HR) Business Partner in Colombia (previously only in Argentina and Brazil) to implement an employee retention strategy.

Human Resources Policies and Procedures

Genomma’s employees abide by the company’s Code of Conduct communicated during induction training and available on the internet (https://esr.genommalab.com/wp-content/uploads/2020/05/CODIGOCONDUCTAESP.pdf). This overarching document includes provisions regarding the company’s and employees’ responsibilities to promote a safe work environment free of harassment and discrimination. In addition to the Code of Conduct, offices at the country level have their own human resources policies and procedures (e.g., recruitment, performance evaluation, promotions). HR Business Partners oversee HR related issues at the local level.

Working Conditions and Terms of Employment

Genomma complies with relevant labor legislation in each country where it operates. All employees have full-time indefinite contracts except for few individuals hired on a term basis to provide specific short-term services such as replacing staff during maternity leave.  Employment contracts are adapted on a country by country basis to meet local laws and regulations, but they all include information on work hours and compensation. In Ecuador and Colombia, employment contracts are also governed by Internal Work Regulations, which detail the rights and obligations of employees and the employer. In Argentina, employment contracts are governed by the Employment Contracts Act (20744/1973 and amendments), and in Brazil, by the Consolidation of Labor Laws (CTL) (5452/1953 and amendments) and the Collective Agreement of the trade union “Sindicato dos Comerciarios de Sao Paulo”.

Workers’ Organizations

Genomma’s Code of Conduct includes provisions on the company’s commitment to freedom of association. In Brazil, 100% of the workforce belongs to a trade union (Sindicato dos Comerciarios de Sao Paulo) that negotiates working conditions through a Collective Bargaining Agreement on a yearly basis. In Argentina, only two workers belong to a trade union (Sindicato de la Industria Cinematografica). Workers in Colombia and Ecuador are not members of any union or workers’ organization.

Non-Discrimination and Equal Opportunity

The Code of Conduct includes provisions on the company’s commitment to non-discrimination and equal opportunity, and the prevention of harassment and sexual harassment. In 2021, Genomma developed a Diversity and Inclusion Policy and established internal committees in charge of establishing and revising the company’s processes and procedures (e.g. recruitment, training, promotion, complaint management and resolution) to achieve the intent of the policy (https://esr.genommalab.com/wp-content/uploads/2021/06/Poli%CC%81tica-de-Diversidad-Inclusio%CC%81n-e-Igualdad-de-Ge%CC%81nero-1.pdf). An Anti-Harassment Policy, explicitly including aspects of sexual harassment, is currently under development. 

Workers Grievance Mechanism

Confidential and anonymous complaints can be submitted through a Whistleblower Hotline hosted by a reputable third-party company, EthicsGlobal. The Hotline is available by website or by phone both to internal and external stakeholders, including contracted workers such as sales representatives (https://gen-teescucha.ethicsglobal.com/#). Grievances are then redirected to the Ethics Committee, composed by the company’s CEO, the Corporate Legal Director, and VP of Institutional Relations, who assign staff responsible for investigation. The Ethics Committee is responsible for defining the course of action based on the findings of the investigations. In 2020, two labor related complaints were recorded and investigated by Human Resources in Argentina and Brazil. Both complaints concerned ineffective leadership and corrective actions have been implemented.

As per ESAP item #2, Genomma will revise its grievance mechanism to ensure this is adequate to address sexual harassment complaints. The mechanism shall (i) be based on a survivor-centered approach (i.e. prioritize the rights, needs and wishes of the survivor; (ii) ensure that the name of the complainant is shared only with her/his consent and on a need-to-know basis; (ii) prevent breaches of confidentiality to prevent risks to the safety of the complainant and the alleged harasser; and (iv) be able to provide psycho-social first aid and other support (e.g. legal advice) to survivors of sexual harassment.  Genomma will also ensure that staff responsible for the implementation of the mechanism (e.g. reception of complaints, investigation) have the required competences.

Protecting the Work Force – Child Labor and Force Labor

In 2020, Genomma developed a Code of Conduct for Suppliers (https://esr.genommalab.com/wp-content/uploads/2020/06/Co%CC%81digo-de-Conducta-y-Etica-para-Proveedores.pdf) documenting the company’s environmental and social policies, including the prohibition of child and forced labor. All suppliers of good and services in Mexico have signed the Code of Conduct for Suppliers, and it is expected that suppliers in the rest of Latin America will acknowledge and sign the document by 2022. Genomma does not employ workers under 18 years of age.

Workers engaged by Third Parties

Genomma relies on reputable CMOs and 3PL providers for the manufacturing and distribution of products, which are required to obtain operating licenses and authorizations by relevant authorities for the manufacturing and handling of pharmaceuticals.  Genomma also relies on about 80 sales representatives in Argentina, Brazil, Colombia, and Ecuador, hired through third-party contractors. Labor compliance by these third-party contractors is verified monthly.

Occupational Health and Safety

Genomma’s employees in Argentina, Brasil, Colombia and Ecuador are mostly administrative staff and OHS risks are therefore limited.  A small number of employees in Argentina are potentially exposed to active pharmaceutical ingredients (API) when weighing and preparing the raw materials to be sent to CMOs (CMOs in other countries provide full service including the procurement and preparation of raw materials). Operations in Argentina rely on an external EHS consultant which regularly visit the company to verify that adequate control measures are in place. Medical examinations (pulmonary x-ray, blood test) are also performed annually for these personnel.

Management of the COVID-19 pandemic

Genomma has documented Covid-19 biosafety protocols in each country and has implemented various measures to limit the spread of SARS-CoV-2 within its workforce. Office employees are working under a home-based work regime, and bio-safety protocols are in place to prevent infections among workers whose tasks require physical presence in laboratories and warehouses. In person visits from sales representatives have also been restricted. As of June 2021, less than 10% of the workforce has tested positive to the virus and no cases requiring hospitalization or fatalities have been registered. None of the contagions took place within the workplace.                                                   

The main sources of waste are damaged or expired products, and to a much lesser extent, non-conforming products and expired chemicals. As noted, except for Argentina, product manufacturing is outsourced under the modality of full service to CMOs. Therefore, the disposal of non-conforming products, and of expired or obsolete raw materials, is directly managed by CMOs and reported to Genomma.

In Argentina, Genomma is responsible for managing the inventory of raw materials and to conduct quality control analyses of raw materials and final products. Its quality control laboratory is located inside a pharmaceutical facility. Effluents from the cleaning of laboratory glassware and equipment is directed to the facility’s industrial wastewater treatment plant before discharge into the municipal sewage.  Liquid wastes (e.g., used reagents) are stored and disposed as hazardous wastes. Likewise, expired or obsolete chemicals and non-conforming products are disposed as hazardous wastes. About 4 and 8 tons of chemicals and non-conforming products were generated in 2019 and 2020 respectively.

The same 3PLs contracted for transportation and delivery of finished products are responsible for reverse logistics of damaged or expired products. About 89 tons and 60 tons of OTC and PC products were returned to distribution centers in 2019 and 2020 respectively, corresponding to about 1% of product sold.

Final disposal of hazardous wastes, and non-conforming, damaged or expired OTC and PC products is done only through licensed providers specialized in the physical destruction of hazardous wastes and pharmaceutical products. These products are generally destroyed through incineration.                                                  

 About 100 trips are required every day for the distribution of finished products from the distribution centers to clients across Argentina, Brazil, Colombia and Ecuador. Genomma does not own distribution centers and transport fleets and all distribution is done through large 3PL providers specialised in the warehousing, transportation and delivery of pharmaceutical products.

The transportation of finished products from CMOs to distribution centers is the responsibility of CMOs in Brazil, Colombia, and Ecuador. In Argentina, the transportation of raw materials and finished products to/from CMOs is done by three small transportation companies contracted directly by Genomma. 

Risks related to product theft in distribution centers and during transport are managed by the 3PL and transportation providers who implement mitigation measures such as perimeter access control through fences, cameras and presence of security guards in warehouses, safe route planning, and real time vehicle tracking systems. According to Genomma, no theft of merchandise has occurred to date.

Genomma’s administrative offices in all countries occupy rented spaces inside commercial office buildings, and the chemical storage and quality control laboratory in Argentina is located in a rented space inside a pharmaceutical facility. Genomma does not contract security personnel in any of these locations.