All hospitals are existing and any new hospitals to be acquired are brownfield acquisitions. Therefore, no land acquisition is expected for the project. Therefore, PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. All hospitals are located in urban/per-urban areas and thus PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not applicable. Similarly, PS7 (Indigenous Peoples and PS8 (Cultural Heritage) are also not applicable.                                                    

This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012).

Key E&S issue and risks associated with the project include:

-          the company's management and monitoring systems as well as organizational capacity to assess and manage E&S risks and impacts from its operations (both existing and proposed) for the facilities covered under the project;

-          the company’s ability and processes to identify and mitigate E&S risks and impacts in future developments/ acquisitions and mitigate these;

-          assurance of fair, safe and secure working conditions for employees (including contracted workers) especially on COVID related protocols;

-          management of solid (including bio-medical) waste and wastewater;

-          emergency preparedness and response systems including appropriate life and fire safety (LFS) design;

-          security management; and

-          company's stakeholder engagement activities related to E&S aspects.

Lenmed has a Clinical Governance Framework (developed in 2019; progressively being implemented at all its hospitals) which focusses on customer excellence, clinical risk management and compliance, clinical outcomes, Lenmed Way (best practice compliance) and clinical efficiency. The company has a corporate Health and Safety Policy statement and an environmental policy that has recently been approved by the Board’s committee on Social and Ethics (S&E).

In line with the South African legal requirements, Lenmed has developed an extensive OHS management system which includes risk assessment, alert and incident management, health & safety framework and structure and emergency preparedness. Formal work procedures have been developed and implemented at the hospitals.

Lenmed has a board committee on Clinical Governance with mandate to embed clinical outcomes and service quality into the core of company’s culture. Each hospital has a clinical governance committee which is responsible for implementation of these practices. There is also a board level Social and Environment (S&E) committee which monitors company’s activities on social responsibility i.e. social and economic development, good corporate citizenship, environment, health and public safety, consumer relationships and labor and employment. At a corporate level, Lenmed has a quality department which monitors implementation of clinical governance systems. All Lenmed hospitals have a designated role of safety, health, environment and quality (SHEQ) officers as well as the health and safety committee. SHEQ officers are responsible to monitor the implementation of Lenmed’s OHS management systems and monitor SHEQ key performance indicators. These include OHS, facilities and environment related KPIs. At the other hospitals outside South Africa, hospital clinical governance committees monitor implementation of OHS procedures. All hospitals prepare an annual training plan which includes training on personal protective equipment usage, COVID19, healthcare waste management, etc. In addition, the facilities department is responsible to ensure provision of life and fire safety systems and regular energy monitoring.

The company conducts a review of HR systems and quality of facilities for any new hospitals to be proposed for acquisition using internal resources. Also, financial and legal due diligence is conducted through external consultants. As the company proposes to acquire a number of new hospitals, as set forth in the ESAP(#1), the company will develop a documented E&S screening and assessment procedure for all the future acquisitions / developments in compliance with respect to IFC PSs and World Bank Group EHS guideline requirements especially focusing on Human Resources, LFS, and OHS/waste management. Based on the assessment, the company will screen out corrective action plans  to be prepared as needed and implemented within the agreed timelines. For any major refurbishments, environmental impact assessment will be prepared as per applicable legal requirements and environmental management plan will be prepared and implemented by the company.

Lenmed has a formal emergency preparedness and disaster management process which covers all internal emergencies and external disasters e.g., fire, flood, healthcare risk waste/hazardous chemical substance spill. All hospitals have implemented a coded emergency response system (blue, red, pink etc.). All visited hospitals were noted to have multiple emergency exits with suitable signages. Evacuation plans were noted to be displayed in all areas. All employees are trained in emergency response procedures at induction and regular drills are carried out. Annual fire drills are carried out at all hospitals and additional training is conducted on a monthly basis. As per the ESAP(#4), frequency of emergency response drills will be increased and additional drills will be carried out at all hospitals.

As part of the clinical governance and OHS management systems, all hospitals monitor their performance against a number of indicators which include OHS key performance indicators (KPIs) such as patient and employee falls, needle stick injuries, incidents and near-misses. All hospitals have internal audits on clinical governance (including infection prevention and control) and OHS aspects. Health and safety officers conduct monthly inspections using a checklist.

SHEQ officers in each hospital conduct internal audits for their respective hospital and document the results in internal systems. Also, the corporate quality department conducts an audit of all hospitals at least on annual basis. All hospitals are benchmarked and provided a rating based on these audits. S&E committee meets on a quarterly basis and reviews progress on various goals on social and economic development, corporate citizenship, environment, health and public safety and stakeholder/consumer relationships. Data on incidents, accidents and labor issues is part of the reporting to S&E committee. The committee provides a report to the company’s shareholders and in the Annual integrated report. As the environmental policy has been approved recently, environmental plans were also reviewed in the S&E committee meeting.

Lenmed employs about 3000 permanent employees (76% females) and about 750 contract workers (who are involved in catering, housekeeping, security) across its hospitals. Lenmed has documented HR policies and procedures that are consistent with the national labor regulations and IFC PS 2 requirements and apply to all employees. The company has a human rights policy which is developed based on the principles of UN Global Compact and thus cover all aspects covered under PS2 including freedom of association, reasonable conditions of employment, child and forced labor prevention, non-discrimination etc. Additionally, the company has employee equity policy (covers equal opportunity and diversity), employee relations policy (covers employee grievance mechanism and disciplinary procedures) and recruitment and selection. For hospitals outside South Africa, the policies are adapted in line with the national requirements and translated in local language for employee understanding. All policies are communicated during induction and are also accessible by employees through the shared drive. A policy file is placed in each department and any new joinees are introduced to these policies. Each employee receives a written contract that describes the working conditions and terms of employment, and an employee handbook is also provided. As mentioned above, in case of an acquisition, Lenmed conducts an HR review of the target hospital and identifies actions to integrate the new hospitals in their HR management system over a period.

In line with its policies, the company does not prohibit the freedom to associate and workers right to form and join workers organization. When a majority of employee join a union, a Recognition Agreement is signed between Lenmed and the Union. There are no consequences to joining a union of choice. The company policies encourage non-discrimination and equal opportunity. Diversity indicators are monitored at all hospitals and reported regularly to the S&E committee. Lenmed does not employ any child, forced or bonded labor practices. Both the visited hospitals (AKPH and DPH) have a union and a collective bargaining agreement is signed between the unions and management. Also, Lenmed has reported that the newly acquired hospitals also have unions.

Lenmed has a documented grievance mechanism in place under its employee relations policy. The grievance mechanism allows for submission of anonymous grievances by escalation to the next level. Also, the company has a whistle-blower tip-off line managed by an external vendor and suggestion boxes which the employees can use to raise anonymous grievances.

Lenmed employs third-party workers mainly for catering, security and housekeeping. Lenmed requires its contractors to comply with national labor laws through specific contract clauses. Currently, there is no verification of compliance of contractors’ with agreed clauses. Considering the number of contract workers, as per the ESAP(#6), the company will develop a contractor compliance verification procedure to supervise and review compliance with applicable legal requirements and IFC PSs for third party workers.

The key occupational, health and safety (OHS) concerns for employees in the healthcare sector typically include falls, needle stick injuries, management of infectious diseases, radiation exposure and chemical management. As mentioned under PS1, the company has a health and safety policy as well as a risk assessment management procedure. All unit managers and heads of departments are expected to complete a risk assessment to identify key OHS risks in a documented risk register. All hospitals have SHEQ officers as well as health and safety committee which monitor implementation of these procedures. The committee meets on a monthly basis. Also, key performance indicators including incidents and accidents are monitored on a regular basis. National requirements are followed with respect to radiation equipment installation, operation, maintenance, and radiological safety for employees across all its hospitals. All incidents and accidents are investigated and the investigation is documented in the system.

For COVID19 response, a separate risk assessment has been performed at all hospitals and required procedures have been implemented for various areas like screening, isolation areas, clinical support services, catering and security services as well as post exposure management (for employees). COVID19 coordinators have been appointed at all hospitals. Weekly assessments are performed to assess compliance with these procedures. Lenmed has developed COVID19 handbook for its employees and has lot of communication on COVID19 prevention and control. COVID19 Vaccination has been provided to Lenmed staff.                                                     

The company closely monitors water, electricity, liquefied petroleum gas and diesel consumption across all the facilities. For energy efficiency, the company has installed heat pumps (to heat water) and solar photo-voltaic (PV) panels (on one of the hospitals) as alternate energy source. Currently, the company does not have a formal program on resource efficiency. As per the ESAP(#3), the company will develop a resource efficiency program which will describe resource efficiency measures to be implemented at its facilities; monitoring, and benchmarking of resource consumption across its facilities; and efficiency goals and targets.    

Electricity is sourced from the national grid for all hospitals and diesel generators are provided for complete power back-up for essential areas in case of power-cuts. There are no major air emissions / pollution from the operations at any of the hospitals except for incinerator (for disposal of bio-medical waste) at MPH. The company has not completed emissions monitoring for the incinerator to assess compliance with national standards and World Bank Group EHS Guidelines. As per ESAP(#2), the company will monitor the emissions of incinerator to assess compliance with national standards and World Bank Group EHS Guidelines and implement required corrective actions (if any) based on the results.

Water for all the hospitals is sourced from the local utility supply company and tested periodically. At MPH, softener plant has been installed to treat the water on-site. Also, reverse osmosis treatment plant has been installed on-site at all hospitals to supply water for dialysis. Wastewater from all the hospitals is discharged into the municipal sewage disposal systems as per the requirements of local municipalities except for MPH, which has a wastewater treatment plant on-site with secondary treatment through a membrane bio-reactor process. The company has not completed wastewater testing for the plant to assess compliance with national standards and World Bank Group EHS Guidelines. As per ESAP(#2), the company will test the wastewater quality to assess compliance with national standards and World Bank Group EHS Guidelines and implement required corrective actions (if any) based on the results.

The company has a documented health care risk waste (HCRW) management procedure which describes the system of appropriate segregation, handling, storage and disposal of HCRW from its hospitals. Infection Prevention Coordinators at the hospitals are responsible to ensure implementation of the procedures and conduct periodic audits. All waste is segregated at source by staff in the respective areas and stored in color coded bags. Segregated waste is removed from the medical areas to central storage area at the hospital from where it is collected by an authorized external agency for disposal. The central waste storage areas were reviewed in the virtual site visits and were noted to be appropriately managed with adequate ventilation and rodent control systems. The external agency collects and transports the waste in appropriately licensed vehicles to their disposal facility. All hospitals maintain storage and disposal records for the HCRW. One of the hospitals - MPH has an incinerator on-site while BPH has an autoclave on-site. Apart from HCRW, other general waste like kitchen waste and recyclables (e.g. paper, plastic, metals, glass) are disposed through external vendors.

Pest control has been outsourced to an external vendor at all hospitals.  

The annual greenhouse gas (GHG) emissions from the project are expected to be 15400 tonnes of CO2-equivalent annually (700 tonnes direct and 14700 tonnes indirect).

As described in the project description, all hospitals have four or less floors except EHHC, which has five floors. Most of the existing hospitals are in South Africa and thus have life and fire safety (LFS) systems as per the South African Code, which is one of the six internationally recognized codes as per WBG EHS General Guidelines. A sample of the hospitals (two in South Africa and one in Botswana) were (virtually) visited to review the LFS systems implementation and maintenance. All visited hospitals were noted to have fire extinguishers, fire hoses, smoke detection and fire alarm systems, multiple fire exits on all floors and fire rated doors. Based on the information provided, other hospitals have same LFS systems provided. Evacuation plans and exit signs were noted to be displayed in all areas. EHHC additionally also has fire sprinklers. The maintenance of the systems was noted to be adequate in the visits. Key improvement areas based on the visits were noted to be (a) fire enclosure of internal electrical and mechanical rooms; and (b) installation of smoke detectors in medical air, vacuum and boiler rooms. As set forth in the ESAP, the company will evaluate these issues for hospitals and will share a corrective action plan. The same will be implemented within reasonable timelines.

The company has completed fire risk assessments for its hospitals and is progressively (in phases) implementing the identified improvements in these assessments. For future acquisitions, the company will review the LFS systems as part of the pre-acquisition due diligence, mentioned under PS1 and ensure implementation of corrective action plan within reasonable timelines (as set forth in ESAP#4). Also, as set forth in the ESAP, for any significant future refurbishments (i.e. increasing the capacity by more than 25%) at existing hospitals, the company will review the LFS designs of the proposed refurbishments and develop a LFS master plan consistent with one of the internationally recognized codes (including South Africa LFS code) as per the requirements of WBG EHS Guidelines. The company will submit to IFC design and post-construction professional review and certification that the building is designed and built in accordance with one of the internationally recognized codes (including South Africa LFS code). Any remedial measures needed to bring the building into compliance with IFC’s requirements will be completed within a timeframe agreed with IFC.

Lenmed has documented infection prevention and control strategy and each hospital has an infection prevention specialist who ensure implementation of the program with support from all other departments. In addition to the engineering and administrative controls such as proper ventilation systems with independent air handling units (AHUs) for critical care rooms and architectural segregation, the company has documented procedures on various aspects related to infection control including cleaning, disinfection and sterilization, access control, kitchen, sanitation and food management, hand hygiene, etc. All patients that show any signs of a hospital or community acquired infection are treated, isolated if required, and information and follow up is provided after discharge to manage the infection at home. All new patients are screened using a questionnaire and treated prior to surgery, or isolated should further laboratory screening be required.

All hospitals employ engage unarmed private security services at each of its hospitals through a third-party service provider. All hospitals have adequate parking for staff, patients and visitors.

Lenmed has a stakeholder communications plan which covers communication activities for various stakeholder groups i.e. medical practitioners, patients and communities and employees. As mentioned under PS1, the company discloses a summary on progress on aspects covered in the S&E committee mandate which includes human rights, labor and employment practices and environment, health and safety. To further strengthen and formalize its stakeholder engagement, as per ESAP#5, the company shall formulate a documented community grievance mechanism in line with PS 1 requirements for addressing community grievances arising out of company’s operations.

 Lenmed will disclose the ESRS-ESAP at the following address:

Lenmed Investments Limited

2nd Floor, Fountain View House

Building 9, Constantia Office Park

Corner 14th Avenue and Hendrik Potgieter Street

Johannesburg.

Any queries and/or comments about the project may be directed to:

Mr. Fredré Meiring

Group Chief Financial Officer

Lenmed Investments Limited

Phone: +27 (0) 87 087 0600