The PT BBI facility is located in the KNIC industrial park on land acquired in 2019 from the industrial park operator under a willing buyer willing seller basis.  In addition, the land on which the industrial park itself is located was also acquired on a willing buyer / seller basis. As such, PS5: Land Acquisition and Involuntary Resettlement is not considered applicable to the project.   As identified from a review of time series satellite imagery prior to the industrial development in early 2012, the site was used for agriculture and therefore considered as modified habitat. The PT BBI plant site is within the KNIC that has been partially developed, with activities commencing in approximately 2012. The site was cleared, levelled and access roads constructed prior to PT BBI acquiring it. Thus, PS6 Biodiversity is also not considered applicable. PS7: The KNIC industrial park is situated across a largely developed area and there are no indigenous peoples living in the area; thus PS:7 Indigenous Peoples is not applicable. There are no known cultural heritage sites or property on the PT BBI site or across the broader KNIC and thus PS8: Cultural Heritage is not considered appliable.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with all Performance standards                                                   

 The project has been classified as Category B according to IFCs 2012 Environmental and Social Review Procedure given the development will have potentially limited adverse social or environmental impacts that are few in number, site-specific, largely reversible, and readily addressed through mitigation measures.

Key environmental and social issues (E&S) associated with the proposed investment include: i) BrightGene’s corporate EHS and quality management system and capacity to ensuring effective implementation thereof;  ii) BrightGene’s ability to ensure application of similar systems and capacity at the plant in Indonesia as reflected in China operations; iii) effective implementation of labor and occupational health and safety requirements for both direct employees and contractors alike; iv)  monitoring environmental, pollution control and waste management in compliance to national standards and IFC’s Performance Standards; iv) efficiency of raw material, water and energy usage in the manufacturing process; and, v) management capacity to apply corporate EHS standards to the PT BBI operations.                                                   

 Environmental and Social Assessment and Management System: The Environmental Impact Assessment (EIA) (UKL-UPL Environmental Management and Environmental Monitoring requirements) for the Indonesian plant was submitted to the Karawang District Environmental Agency in 2019, with a recommendation for approval secured on 25 April 2019, and the Environmental Permit subsequently issued. Based on the scope and scale of impacts, the UKL UPL is considered as adequate and aligned to PS1 requirements. Once constructed, the facility will require monitoring reports to be submitted every 6 months to the regulatory authority to demonstrate compliance to the facility’s environmental permit. The broader impacts from the development and operation of the KNIC industrial park were addressed as part of an EIA prepared for KNIC by an independent consultant.

At the corporate level within China, BrightGene manages three production sites. These facilities all maintain independent approaches to the management of E&S risks based on standalone EHS policies. The EHS policies reviewed are considered comprehensive and clearly define roles, responsibilities and procedures at the respective management and operational levels. These policies and procedures have been designed to comply with the requirements of the National Medical Products Administration, and local EHS regulations. Similar systems will be applied to PT BBI and adapted where necessary to ensure compliance with the Indonesian National Agency for Drug and Food Control (Badan Pengawas Obat dan Makanan) and shall include: i) safety production standards; ii) requirements of the relevant regulatory permits; ii) Occupational Health and Safety (OHS) SOPs; iii) occupational health assessments; iv) workplace monitoring; and v) worker health checks and screening. BrightGene’s EHS management policy also reflects the needs for their Global Client requirements (based on customer demands), with one facility (Suzhou) having been accredited to ISO45001 and ISO14001 (safety and environmental management systems respectively), and the Taizhou and Suzhou plants GMP (Good Manufacturing Process) certified by the above Chinese regulatory agency.

The Taizhou production plant EHS management system was considered as the most comprehensive and aligned to PS1 expectations and the intention is that similar EHS management systems and processes will be applied to PT BBI following adaption to the Indonesian regulatory setting, the production process, and market access certification.

As set forth in ESAP #1, the BrightGene shall transfer its EHS policy commitments to PT BBI and update these to reflect the requirements for Indonesian regulations, IFC PSs and Good International Industry Practice (GIIP) and publish these commitments on the PT BBI company website, and in the facilities.

PT BBI as yet, has not formally established any management systems, policies, or procedures. However, PT BBI management noted that they are in the process of developing a suite of SOPs’ building upon those developed for the BrightGene Taizhou production plant and adapted to meet Indonesian regulatory requirements and the local setting. Under Indonesian regulations, PT BBI is required to hold the following licenses for the plant: i) Master Plant Development; and ii) a GMP Certification and Production Registration issued by the National Agency for Drug and Food Control (BPOM). The GMP certification process in particular captures aspects such as production processes and procedures, contamination controls, resourcing related to personnel, equipment and materials, documentation, control and monitoring, product recall systems and periodic audits. Through the Ministry of Health, PT BBI is also required to attain pharmaceutical industry production certification. In addition, licenses are required for the sale of manufactured API’s and FDF’s in Indonesia and other export market i.e., Production Registration (primarily for export products), certificate of Pharmaceutical Product (CPP) issued by BPOM and Product Registration from the national food and drug administration in the export destination country or World Health Organization (WHO) respectively. All these elements will feed into the final ESMS.  PT BBI has noted that SOPs are presently in draft form and will be completed and ready for implementation ahead of the initial production trialing phase in January 2022. In addition, to support the effective development of PT BBI an ESMS will be a fundamental requirement to ensure alignment with IFC PS1. In support of the above and as per ESAP #2 PT BBI shall develop and implement a PS1 aligned ESMS (based on the BrightGene Taizhou production plant systems) appropriate to risks and scale of the operations which shall include (but not limited to) production process materials and energy efficiency, waste and waste management, environmental monitoring, emergency response, contractor/outsourced labor assessment, and community grievance. As applicable, this ESMS shall define roles and responsibilities, structures for implementation, EHS objectives and targets, supporting management plans, procedures supporting work instructions, and monitoring needs. The ESMS shall also include a process for internal audits, evaluation, continual improvement and training within the workforce.

Policy: As noted, BrightGene does not have any corporate level policies with each facility being responsible for establishing its own policy and systems. PT BBI will thus adopt those from the Taizhou facility and adapt these for the Indonesian regulatory setting and the plant layout. See ESAP#1.

Organizational Capacity and Competency: BrightGene has adequate EHS capacity for the facilities in China.  For example, within the HQ and the Suzhou operations there are dedicated EHS heads supported by three staff members each. For the Taizhou operations, there is an EHS committee at the senior management level who review EHS performance quarterly with daily EHS work led by a dedicated EHS department comprising of five employees with an EHS function integrated into each operational department. All new staff, including contractors are subject to EHS on-board training. Other internal trainings (such as EHS and OHS) are held on a rotational  basis. As set forth in ESAP #3, PT BBI shall ensure adequate EHS capacity to support development, management and implementation of its facility level ESMS (as per ESAP #2).  This will include formation of an EHS committee and appointment of senior EHS management and assignment of suitability qualified staff to support this role.

Emergency Preparedness and Response: BrightGene’s individual operations have established an Emergency Preparedness and Response Plan (EPRP) based on regulatory requirements. These EPRPs’ are subject to periodic review and as necessary, updated to ensure consistency with regulations and the production process. BrightGene operations regularly check and maintain all the emergency equipment and infrastructure, conduct emergency drills for different emergency scenarios including chemical spills, life and fire safety (LFS), accident and emergency evacuation etc. As per ESAP #2 the ESMS shall include a site-specific EPRP allied to  confirmation of the  frequency for emergency drills for PT BBI which is aligned to national regulations and IFC PS1.

Monitoring and Review: BrightGene is subject to internal and external periodic EHS reviews. Internally, BrightGene organizes internal EHS audits on a quarterly basis and all operations are subject to EHS reviews by external parties. External EHS audits are conducted by the China regulator every two to three months at each site and this includes technical review of specific processes and safeguards. In addition, operations are subject to quality control and operational standards audits by customers to ensure these are aligned compliance to their associated requirements.  As included within ESAP #2 PT BBI ESMS shall include monitoring and reporting systems consistent with this IFC PS1, regulatory requirements and BrightGene’s Taizhou facility standards                                                  

PT BBI currently employs no operational staff in Indonesia with only a small team of highly skilled workers presently engaged on project management of construction, equipment installation, production preparation, quality assurance and control, human resources planning, securing all necessary regulatory permits and eventually overseeing commissioning of the facility.

PT BBI is still finalizing its HR requirements for semi-skilled and skilled workers for the operational phase. These requirements shall include having multiple pharmacists onsite during production. The finalization of this HR plan is anticipated to occur during the initial commissioning and piloting phase such that adjustments to final labor requirements can be made prior to full operations commencing. Additionally, out-sourcing strategies are yet to be defined. In alignment with the company’s approach to HR policies and procedures, PT BBI will be required to establish policies and procedures for managing the performance of any contractors in relation to working conditions, terms of employment and OHS to ensure alignment with this Performance Standard.

BrightGene has a corporate HR policy and employee manual applicable to all subsidiaries which is consistent with local labor laws of China and IFC PS2 requirements, with each subsidiary having designated HR personnel on its roster responsible for all HR needs.  The key policies and procedures include all of the core IFC PS2 requirements including that related to: i) provision of grievance channels; ii) mechanism for reporting sexual harassment; iii) freedom of association and right to collective bargaining; iv) nondiscrimination in the work place; and v) voluntary right to refuse overtime. In addition, the approach to HR includes provisions to strictly forbid any forms of workplace harassment, which is regularly communicated to all staff. BrightGene also adheres to requirements to prohibit any instance of child labor or forced labor practices in its own facilities and operations and in contractor and sub-contractor operations. PT BBI are in process of developing a human resources policy and handbook in accordance with Indonesian regulations.  As set forth in ESAP #4 PT BBI shall adopt the BrightGene corporate level HR policy and procedures to comply with local regulations and aligned to PS2. This shall include the specific aspects as referenced above in relation to BrightGene and, albeit not exclusively; i) a policy and procedure on management of cases of sexual harassment, including defined channels for reporting, receiving, reviewing and responding to these, while ensuring confidentiality of the complainant, ii) an anonymous grievance process, iii) steps for induction and training on benefits and rights prior to signing of contract agreements, iv) adequate systems to ensure that all outsourced labor providers comply with national labor law, v) all labor (including outsourced labor) have access to complaints and grievance channels as per full time workers; vi) guidelines for accommodation standards aligned with IFC’s requirements for permanent and contract labor alike, and vii) accepted GIIP for work place and OHS standards.  

Occupational Health and Safety (OHS). As noted, the approach to EHS at BrightGene is driven at each facility level and largely by local regulatory requirements; this includes all aspects related to OHS. A PT BBI specific OHS system is under development, which will consist of SOP’s and reporting templates. Based on BrightGene’s Taizhou facility, key documents to be included within the PT BBI system include (but are not exclusive to): i) OHS Hazard Point Assessment; ii) contractor safety management policy; iii) Supplier Management Policy; iv) SOPs  for permit work including working at heights, confined space, hot work, and lock out tag out for electrical works, maintenance and cleaning of equipment.

It was noted from the site visits in China that all the facilities had near miss reporting and root cause analysis SOPs for reported accidents, with the Taizhou facility having recently completed a comprehensive OHS Hazard Point Assessment through qualified third-party consultants. This OHS Hazard Point Analysis process involved reviewing all raw materials used in the production site, outline of the factory, workforce, work shift/method of working, all production equipment and OHS considerations from the building design. The analysis also assessed occupational hazard point monitoring for 21 points including applicable risk factors such as noise, air quality (dust, volatile organic compounds and heat etc.). The process assessed  OHS policies, EPRPs, Personal Protective Equipment (PPE), and adequacy of the emergency infrastructure.  Based on this review, the Taizhou project improved its OHS, implemented Job Safety Analysis (JSA) resulting in safety equipment and/or additional engineering control measures being implemented. All the recommendations from this review, and the improvements resulted in refining of SOPs including a process for permitted maintenance activities capturing aspects such as hot work, confined spaces and working at heights. The overall OHS and performance of BrightGene within its China operations is considered aligned with the expectations of IFC PS2. This demonstrates BrightGenes proactive approach to safety and quality control within the workplace. BrightGene shall apply the same approaches to develop the OHS systems and workplace controls in PT BBI (see ESAP #4). 

Workers Engaged by Third Parties: Construction of the plant civil works is being undertaken by PT Adhi Perkasa Sakti (APS) a local contractor engaged by PT BBI. APS is implementing a site-specific safety plan, which includes a quality, OHS policy, goals and targets, roles and responsibilities, safety program (including daily, week and monthly routine activities), forms, JSA (for various construction and installation activities), and basic safety policies and procedures relating to site vehicles and transportation.  APS is also required to comply with national labor requirements by PT BBI. The above is in line with the minimum OHS standard PT BBI required the appointed Engineering Procurement and Construction (EPC) contractor to apply which included a process to assess the qualification of the contractors and construction workers in relation to OHS management at the project, review associated insurance requirements and compliance to national labor laws. The civil construction process will conclude at the end of November 2021 and, as reported by PT BBI, there has been no significant OHS issues or concerns reported during the construction phase.  As set forth in ESAP #5 PT BBI shall develop and implement a contractor management policy and procedure that defines the minimum expected standards for OHS and HR management during operations on the PT BBI property. This procedure shall include at a  minimum OHS standards, procedures for communicating OHS and labor needs at point of tendering, review of safety management plans (submitted as part of tender), monitoring and review of OHS and labor standards during operation.  Amendments to engagement contracts to define minimum standards for OHS and labor of employed workers, workers accommodation, and  responsibility for oversight of sub-contractors, including penalties and sanctions for identified noncompliance. This procedure shall be supported by PT BBI staff and systems and include the requirement to monitor implementation and maintain oversight, and shall be applicable in all construction, fitting, commissioning stages of the facility and future construction operations on the site                                                   

 Resource Use Efficiency: At the corporate level BrightGene do not provide any specific directives or policy framework for efficient use of natural resources. Presently, considerations for resource efficiency through all aspects of the life cycle, including building design, equipment selection, equipment operation and product life cycle (e.g., raw material conversion rates, water and energy usage), is driven at the facility level and focused on regulatory compliance. Precise resource requirements associated with API and FDF production have not yet been defined, with the commissioning and trial period (commencing in January 2022) amongst other aspects it is not possible to precisely define water and electricity requirements.  Included within the ESAP#2 PT BBI shall develop a resource use efficient policy/commitment. This shall be supported by a resource efficiency management and monitoring plan, and a Cost Benefit Analysis (CBA) tool to evaluate energy (including adoption of renewable energy options such as roof top solar) and water efficiency saving opportunities to ensure alignment of the requirements with this Performance Standard.

Greenhouse Gas Emissions: Plant electricity consumption has not yet been accurately defined by PT BBI. As noted previously, a commissioning and trial phase will commence in January 2022 whereby electricity consumption required to achieve necessary outputs and product quality will be measured and benchmarked for long term operations. Energy efficiency measures to reduce electricity usage (and therefore GHG emissions) through the trialing phase include scheduling of process production outside of peak hour consumption, and appropriate office lighting types and usage. All electricity needs will be provided through the Java-Bali electricity grid owned and managed by Perusaahan Listrik Negara (PLN), the Indonesia National Electricity Company. PT BBI has secured preferential electricity access through PLN, whereby in the event of local grid blackouts or load shedding events, the power supply to PT BBI will be maintained with only minimal interruption during switching. As a result of this, there is no requirement to have stand-by diesel generators or associated diesel storage tanks. Although total energy production is not known, it is unlikely that a facility of this size (taking existing IFC clients as a benchmark) will have GHG emissions exceeding 25,000 tCO2e per annuum.

Water Use: Water will be supplied to the plant by the KNIC water supply system and is guaranteed to meet drinking water quality standards. This standard is not sufficient to meet the regulatory requirements for use in API and FDF manufacturing and therefore a water purification plant will be developed on the site. This will utilize a combination of pre-treatment, multiple stage reverse osmosis and an electrodialysis system to ensure that water purity standards are met. As with electricity consumption, the precise average daily consumption of water by the plant during production will be determined during the commissioning and trialing phase. In addition to the purified water required for processing and manufacturing, other water uses within the site include staff amenities. 

Pollution Prevention: As the PT BBI site does not utilize any diesel or other combustion sources emissions to air are minimal, with the main sources being hazardous wastes (generally associated with cleaning products), rinse water from process cleaning routines, handwash and condensate materials.

The precise volumes of wastewater that the water purification and cleaning processes will generate will be calculated during the commissioning and trialing phase. Except liquids containing hazardous materials, all industrial process and sanitary wastewater are to be directed to the KNIC wastewater treatment plan (WWTP) subject to it meeting basic criteria. PT BBI anticipates that no treatment of the wastewater stream will be required to meet parameters such as pH, Biological and Chemical Oxygen Demand (BOD and COD respectively) prior to discharge to the KNIC wastewater treatment plant. However, this will be evaluated during the trialing process and should difficulties meeting the necessary criteria before discharging to the KNIC WWTP arise, space has been allocated within the site to establish a primary wastewater treatment system. Wastewater from the KNIC WWTP will be treated to meet applicable government standards for treated effluents (West Java Governor’s Decree No. 6/1999 regarding Wastewater Quality due to Industries in West Java) before being released into local water ways. Due to this, the regulatory monitoring obligations are placed on KNIC as the end disposal point and not PT BBI. This is reflected within the UKL-UPL for PT BBI, which does not impose any wastewater monitoring obligations on them.

Solid wastes will be generated from packaging, machinery maintenance and repair, office operations, and canteen operations. Waste materials will be separated and recycled where possible. Hazardous waste (classed as “B3” within the Indonesian regulatory setting) will also be generated, although in smaller volumes through cleaning products and oils and lubricants from machinery. Hazardous and non-hazardous waste storage areas are to be developed onsite and appropriately licensed waste contractors will be engaged. Given the prevalence of industrial zones through the broader area, securing appropriately licensed contractors is readily achievable. The UKL-UPL imposes management and monitoring obligations on PT BBI for both hazardous and non-hazardous waste streams. This includes daily visual monitoring of storage areas and six monthly reporting obligations. As included as part of ESAP #2 as part of the ESMS, PT BBI shall include a waste management plan comparable to the level and risk of waste being generated from the site focused on recycling and waste reduction.

Destruction of APIs and FDF’s may occasionally be required should QA/QC identify that batches of finished product are not suitable for distribution, or in cases where product recalls are required. BPOM requires that these be destroyed by incineration only. PT BBI do not propose to install an incinerator on the site given the infrequency of use, nor does the approved UKL-UPL afford PT BBI any legal rights through which to construct and operate such a facility. Thus, a third party will be identified with an appropriate licensed incinerator to destroy products where quality requirements are not met or at the directive of BPOM. PT BBI has an obligation to have representatives present when the products are placed in the incinerator to ensure chain of custody and guarantee that materials have indeed been destroyed. There will be air quality impacts associated with incineration and, therefore, as part of supply chain considerations PT BBI must ensure that any facility utilized is appropriately licensed and results on monitoring available for review. As included in ESAP #2 PT BBI shall integrate as part of its ESMS a contractor and service provider review procedure and checklist to screen service providers related to the disposal of raw materials or off spec product for compliance to prevailing regulations, and audit facilities to confirm compliance to these. This shall be applied to PT BBI engaged licensed waste management and hazardous materials management disposal agents                                                  

 Community Health and Safety: As a producer of medical supplies, product safety and compliance are critical components of PT BBI’s business. Risks to public health can arise from PT BBIs productions of API’s and FDF’s, particularly with regards to potential patient and user health issues if the pharmaceuticals do not meet this high QA/QC standards by BPOM. As part of its Ministry of Health Pharmaceutical Production Certification, PT BBI will be required to have at least three pharmacists onsite each in charge of quality assurance, production, and quality control respectively. Development and implementation of quality control and assurance policies and procedures will need to be strictly applied at the new plant in accordance with prevailing laws. The company will adopt a Quality Management System consistent with the ISO9001 standard adopted at the China facilities in particular Taizhou.

The plant is situated within the KNIC industrial park, where access is controlled, and overall facility and security management provided by KNIC. PT BBI will also be required to have its own site security. The site itself is situated in the south-west corner of the KNIC and is accessed via a wide internal road system developed specifically to accommodate heavy vehicle movements and is completely separated from community roads and thoroughfares. The KNIC industrial park has access from a major highway connecting the site with Jakarta and West Java and therefore the transport of materials and products to and from the site is not anticipated to create traffic issues. The nearest dwellings to the site are approximately 700m to the west and have separate access outside of the industrial area. Given separation distances and the nature of the plant, any potential impacts associated with noise and air quality will be attenuated by distance and the effect of the plant on those residential areas is anticipated to be negligible. The UKL-UPL monitoring framework for the project provides for air quality and noise monitoring to be undertaken every six months, with the nominated locations for monitoring are within the boundaries of the site itself. It will be necessary for at least one of the monitoring locations to be outside of the site boundaries to determine compliance with emission levels outside the boundary of the site. As included in ESAP #2 the ESMS shall define the requirement and approach to annual monitoring of noise and ambient air quality on the fence line of the facility.