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

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. Based on information reviewed by IFC, the proposed project is expected to have limited adverse E&S risks and impacts that are few in number and site-specific, and readily addressed through existing mitigation measures and good international industry practices (GIIP) as described in the following sections.

Key E&S issues associated with the project are: (i) development and implementation of a corporate E&S management system (ESMS) and relevant procedures and plans to assess and manage the limited adverse E&S risks and impacts in line with IFC Performance Standards (PSs) during operations, network upgrades and potential expansion and acquisitions, including management of right-of-way and land access; (ii) labor and working conditions including OHS management during operations and maintenance (O&M) and network upgrade works (e.g. ground disturbance, excavation, electrical safety, vehicle movement etc.); (iii) emergency preparedness and response, including for COVID-19 pandemic; (iv) solid and hazardous wastes, hazardous material management, visual impacts, electric and magnetic fields (EMF); (v) community health and safety including infrastructure safety, road safety and L&FS in the retail stores; (vi) security management;  (vii) stakeholder engagement and grievance mechanism.

 Environmental and Social Assessment and Management System and Policy

Telecom Armenia is yet to establish a corporate Environmental Policy; however, the company has developed a code of conduct and policies related to occupational health and safety and human resources which are applied across their operations. Telecom Armenia has not developed a formal Environmental and Social Management System (ESMS), and E&S risks and impacts associated with their operations are managed through compliance with applicable national E&S regulations.  The company will develop and implement an ESMS, appropriate for the scale of its business, in accordance with the general requirements of IFC PS1. This ESMS will include an overarching E&S policy defining the company’s E&S objectives and principles, and include relevant plans / procedures, including an E&S screening, due diligence and assessment procedure (to identity, assess and manage relevant E&S risks and impacts of acquisitions and new assets), waste management, visual impact, pollution prevention / spill management, community health and safety, contractor management, security management, land acquisition and access, biodiversity conservation, and chance finds (cultural heritage), in accordance with IFC’s PSs (ESAP 1).

Telecom Armenia has two dedicated OHS experts who report to the Human Resources & Organizational Development Director. Stakeholder engagement and social issues responsibilities are currently split between the company’s Technical Director and Brand Development and Communications Director. The company’s Chief Operating Officer (COO) is currently responsible for overseeing environment, social and governance performance. The company does not currently have any internal environmental & social expertise and will appoint a suitably qualified, environment & social specialist / coordinator to oversee the development and implementation of their ESMS (ESAP 2).

Telecom Armenia have developed a company risk assessment, although currently it does not include E&S / OHS considerations. As per ESAP 3, the company will develop a risk register that will include all safety and E&S risks associated with the company’s operations, including physical, chemical, and electric hazards, and gender-differentiated risks. For each risk identified, the company will define and implement appropriate mitigation measures.

The company has existing assets, developed before the acquisition by VEON Armenia LLC, which are located within areas that are important for biodiversity. Maintenance, upgrades, and expansion works could pose risks to biodiversity through habitat loss, disturbance, and displacement of wildlife. An Environmental Impact Assessment (EIA) is generally not required under Armenian regulations for the company’s business activities, however as part of the yet to be developed ESMS (ESAP 1) the company will develop a procedure that includes a screening to assess the E&S sensitivity of future asset locations. The procedure will also ensure that locations of higher environmental, biodiversity, cultural heritage or other social value for local communities are identified and avoided, or where avoidance is not possible, risks and impacts are assessed and mitigated as per IFC’s PSs. More specifically, the screening process will consider risks to both areas legally protected, internationally recognized areas, as well as other priority biodiversity features as per PS6.

As project activities associated with IFC’s financing will not be located within natural habitats, legally protected and/or internationally recognized areas, PS6 is not determined to apply. However, if future works, including maintenance and upgrades, are to be performed within such areas, the company will meet the requirements for Natural or Critical Habitat as per PS6, as applicable. In addition, the client will: i) demonstrate that the proposed development in such areas is legally permitted; ii) act in a manner consistent with any government recognized management plans for such areas; iii) consult protected area sponsors and managers, Affected Communities, and other stakeholders on the proposed works, as appropriate; and iv) Implement additional programs, as required, to promote and enhance the conservation aims and effective management of the area. The company will apply appropriate mitigation measures, as per the mitigation hierarchy defined within IFC’s PSs, in addition to any actions defined by key stakeholders, to ensure no disturbances occur to any sensitivities during such works (ESAP 1).      

As of October 2021, Telecom Armenia employed a total of 1,974 direct employees (59% male and 41% female) and 36 contractor employees.  The majority of female employees work within office and retail store environments. Sex-disaggregated data is collected and tracked related to turnover and absenteeism, with no significant variance noted.

Armenia has ratified the ILO core labor standards and they are incorporated in the national labor laws.  Hereby the core labor standards, as defined in PS2 are part of the national requirements which the company is required and committed to follow for its employees. The labor code of Armenia forbids forced labor. The company and its contractors do not employ anyone under the age of 18 years and employee’s age is verified and recorded during the recruitment process.

Telecom Armenia has formal HR policies and procedures which define hiring, rights and obligations (including non-discrimination and equal opportunities) and working conditions. The main documents regulating labor-related issues include Internal Labor Rules and Regulations, the collective agreement, individual employment contractors and the Code of Ethics. The Code of Ethics which applies to all company employees and extends to company contractors, outlines the company’s commitment to encouraging equality and diversity among the workforce and eliminating unlawful discrimination. The code also prohibits any form of harassment, including sexual harassment, and bullying. Human resources requirements, including the Code of Ethics, are communicated to all company employees during their own onboarding with refresher training being conducted periodically. The company’s Internal Labor Rules and Regulations outline employees’ fundamental rights and obligations, including working conditions and remuneration, although do not clearly define the rights of freedom of association.

As per ESAP 5, the company will conduct a review of existing HR procedures and policies and, as required, update these to meet IFC’s PS2 requirements, including respect of employees’ rights to join a lawful organization of their own choosing and commitment to comply with the laws pertaining to freedom of association and collective bargaining, policies to prevent any form of forced labor, child labor, discrimination and sexual harassment, and gender-based violence. The requirements outlined within the revised HR policies and procedures will be extended to all contractors and sub-contractors irrespective of the duration of their contract. 

The company has developed a ‘Speak Up Policy’, which allows staff and contractors to report potential or known violations against the company’s Code of Ethics and to raise employment related complaints. This process includes various channels of communication, including anonymous reporting. As per ESAP5, the company will revise their existing worker’s grievance mechanism (WGM) and implement it, in accordance with IFC’s PS2 standards. The WGM is to include specific considerations related to the harassment/gender-based violence grievances. This should include multiple entry points to raise and address allegations including options to report anonymously if preferred. The company will appoint a grievance officer to coordinate the implementation of the WGM.

Since acquiring VEON Armenia LLC in November 2020, the company has completed a staff optimization process that resulted in approximately 300 employees being made redundant over twelve months. The company implemented this process as per relevant local regulations. The company has developed a Retrenchment Policy that defines its approach to managing retrenchment. The company will revise this policy to comply with both national and IFC PS2 requirements. Should further retrenchment be required, the company will develop a Retrenchment Plan at least two months before commencement, meeting national and IFC PS2 requirements and in consultation with workers and their representatives (ESAP 6).

The company has developed an occupational health and safety management system (OHS MS) although it is not accredited to, nor appears to be fully aligned with GIIP (e.g., OHSAS 18001 / ISO 45001) and is predominately driven by regulatory compliance. The management system includes an OHS policy and series of work safety instructions. The company conducts annual safety inspections of all working locations. All workers complete basic OHS training and supervisory staff and employees undertaking high risk activities complete specific OHS training. 

As per ESAP 7, the company will revise and upgrade its OHS MS to ensure that it meets PS2 requirements and is developed in accordance with GIIP. The OHS MS will include an OHS Management Plan which will include clear procedures for hazard identification and assessment, hazard and risk controls, incident reporting and investigations (including reporting of comprehensive safety statistics) and OHS training and competency requirements.

The company has established a COVID-19 Committee led by the CEO and consisting of 15 employees from different departments, tasked to develop a COVID-19 action plan, tailored to their operations. This action plan defines preventive actions to mitigate any risk related to the business continuity and employee’s safety.  Due to the pandemic, the company has not and does not have any plans to lay off any workers.

The company has developed a Business Partner Code of Conduct which defines basic requirements and responsibilities of suppliers and contractors in relation to sustainability and human rights, although there are some inconsistencies with IFC PS2, including child labor, freedom of association & gender considerations.  The company has also established a worker safety annex which is included within suppliers’ contracts. As per ESAP 8, the company will review and revise their existing business partner compliance provisions to include E&S expectations which align with IFC PS2. The company will include EHS selection and qualification criteria within contractors and primary suppliers bidding processes, with EHS requirements being included within tender documents.  The company will further implement processes to identify, manage, and monitor environmental, social, health & safety, risks and track performance of project key contractors and primary suppliers. 

 The company’s operations do not result in significant quantities of wastes and emissions. The company is not required, under national regulations, to conduct any environmental monitoring unless a complaint is received (e.g., elevated noise), at which time monitoring is required to be conducted.

Electricity is sourced from the public grid for the majority of the company’s assets, with diesel generators only being relied upon in more rural areas in which grid power is unreliable. Backup power in case of outages at base stations and towers is predominately provided by batteries, with solar systems currently being trialed at some locations. All lighting is using energy efficient LED lights. Water supply at the head office and stores is from municipal sources, with drinking water being provided by a local supplier. In 2020, total electrical consumption was 36,734,526 MWh with a total greenhouse gas (GHG) emission of 14,840 tons of CO2-equivalent generated.

The company is yet to develop a formalized waste management procedure, although has commenced implementing a limited recycling program. As part of their ESMS (ESAP 1), the company will develop an environmental monitoring plan (e.g., noise and EMF, as discussed under PS4) and a hazardous material and waste management plan, to be extended to their contractors aligned with local legal requirements, IFC PS3 and the relevant and applicable parts of World Bank Group EHS general guidelines and EHS guidelines for Telecommunications. It will consider waste reduction & additional recycling opportunities and including a waste tracking system.

For this proposed investment, life and fire safety (L&FS) of publicly accessible buildings i.e., retail stores, potential risks from electric and magnetic fields, preventing unauthorized access to fixed telecommunication assets and traffic & road safety are key considerations.

Physical security at retail stores, office buildings and warehousing are predominately completed by in-house security personnel, with security service providers only providing security services at three locations, in which 24-hour surveillance is required. All security personnel are trained and unarmed. Screening, including criminal background checks, is completed during the recruitment process for all security personnel.

National legislation requires all telecoms operators to comply with electro-magnetic and sanitary-hazardous safety requirements related to base stations and telecom towers. Prior to being granted regulatory approval to install and operate physical RAN sites, the company is required to complete EMF testing to confirm compliance with these requirements. Testing is verified by the relevant regulatory body prior to operational approval being granted. The company completes periodic EMF testing when conducting modification or maintenance works.

The company is currently completing an asset inspection program in which the technical status of all RAN sites acquired during the acquisition of VEON Armenia LLC will be inspected. As part of this asset inspection program, the company will inspect all physical RAN sites to ensure their structural integrity and to ensure that appropriate measures have been implemented to prevent unauthorized access. If non-compliances are identified, an action plan will be developed and implemented in a timely manner (ESAP 9). 

The company’s retail stores are aligned with the national fire code, which includes requirements for fire prevention, fire protection and emergency planning.  The company is implementing a fire policy commensurate to the risk level of the retail stores and includes information on basic fire emergency planning and training. The virtually visited stores appear to be well managed from a L&FS risks perspective and were observed to have portable fire extinguishers, clear exit signage, fire alarm, manual pull stations, smoke detectors, security system, separation between the storage and retail areas and with two separate exits in most cases.

The company has a documented Emergency Preparedness and Response Plan (EPRP) at a corporate level which is developed aligned with national requirements. The company currently does not have facility level (i.e., retail stores, warehouse) plans. As per ESAP 10, the company will revise its corporate level EPRP to be aligned with IFC PS and GIIP and develop facility level EPRP’s. The EPRP will include features specific to retail stores, management of the general public (i.e., children, people with disabilities and elderly, etc.), information related to the particular store (i.e. location and address, selection of two safe external gathering points, external hazards) and drawings of the specific fire protection features.

Telecom Armenia operate their own fleet of vehicles fitted with a GPS vehicle monitoring system which monitors location, distance travelled, vehicle speed, fuel level etc. The company requires all drivers to comply with national traffic laws, although does not have internal policies or procedures to manage occupational road risks. As per ESAP 11, the company will develop and implement a formal Traffic and Road Safety Management Plan aligned with national requirements, IFC PS4 and GIIP and will extend it to all contractors and sub-contractors.