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 Environment and Social Sustainability. The proposed project has a limited footprint and is located in an established industrial park; it is expected to have limited and site-specific E&S risks and impacts that are few, site specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP).

Key E&S issues and risks reviewed during the appraisal included : i) based on the knowledge of operations of the DCs in Brazil, evaluate the company's management capacity and monitoring systems to assess and manage E&S risks and impacts from its operations in Mexico,; ii) consistent management of labor and working conditions and OHS policies and procedures; iii) resource efficiency measures; iv) monitoring and management of air emissions, v) solid waste, wastewater and hazardous materials; vi) emergency planning and response, including that for COVID-19 pandemic, vii) impacts on nearby community health and safety; and viii) the company's stakeholder engagement activities.       

The company identifies and manages E&S risks and impacts associated with its operations through compliance with applicable local standards and E&S regulatory permits and requirements. ODATA has a corporate Integrated Management System (IMS) which includes EHS policies as well as an OHS policy which applies to the project. ODATA management system is certified ISO (International Standards Organization) 14001 (Environment), ISO 9001 (Quality), ISO 20000-1 (Information Technology Service Management), and ISO 27001 (Information Security Management) across all its facilities, which will be extended to the DC project in Mexico. The company’s corporate E&S management system is commensurate with the scale and E&S risks and impacts of its operations and is aligned with IFC’s Performance Standards (PSs).

The project is not required to develop a regulatory ESIA for the construction of the project, as per environmental regulations in Mexico. For construction, the industrial park developed a MIA (Manifiesto de Impacto Ambiental) for licensing purposes and to include all tenant’s developments.  Later, before starting operations, ODATA will be required to develop an addendum to the MIA and get approval of the local municipality.  During construction, the company has developed policies and procedures to manage and control E&S risk and impacts. Specifically, ODATA has corporate procedures for the identification and assessment of risk in their operations as part of the IMS. This includes the development of a risk matrix and action plan. As indicated, the project has a limited footprint and is located in an established industrial park. ODATA acquired the land on April 2021 from VYNMSA Queretaro Industrial Park (the owner of the park) and performed an assessment of the site before acquisition, including compliance with E&S permits, and ownership of the land. The project was granted a construction permit that stipulates E&S conditions, including erosion, dust and noise control and traffic, and OHS, including a COVID-19 plan.

ODATA has a dedicated corporate Quality and EHS compliance team, including an EHS Coordinator, responsible for overseeing EHS initiatives across the company operations and providing support to the local team to comply with corporate environmental and social management framework. During construction, based on the management plan of the MIA, ODATA has contracted a consultant company to provide EHS management and supervision of the construction site. The consultant is responsible to adapt corporate policies and procedures to the construction site as well as to report to the company’s Quality and EHS personnel at the country level.

As part of the corporate EHS management, the company monitors key performance indicators (KPIs) in all existing DCs, such as occupational risk, worker health records, record of injuries, training, life and fire safety (L&FS), energy and water consumption, and waste generation during construction and operation. The KPIs are reported on a monthly basis to the corporate Quality and EHS team and to ODATA client’s EHS team, via compliance checklists. For the project in Mexico, the corporate Quality and EHS team have weekly meetings with the EHS consultant and the general construction contractor’s EHS team to review KPIs and discuss construction issues and practice.

Moving forward, in accordance with ESAP #1, ODATA will formalize the adoption of its Integrated Management System (IMS) to the operations in Mexico, and update its policies and procedures (including non-discrimination, emergency planning, security) to ensure compliance with IFC’s PS and local legislation, and translation to Spanish.

ODATA has documented corporate emergency preparedness and response plan (EPRP) for its current operations in Brazil and Colombia which will be extended to the project. ODATA’s clients have specific requirements for emergency preparedness and response; therefore, the corporate EPRP already includes emergency procedures and specifications, which consider provision of state-of-the-art fire suppression systems, fire alarm, adequate internal layout and evacuation routes, fire extinguishers, signage, and hose reels been placed at many locations of the facility. Additionally, the project is required to comply with local legislation which includes the approval of the Civil Protection Plan before its commissioning. As part of ESAP #2, the company will develop a site-specific Emergency Response Plan for the project, compliant with local regulations and IFC’s PS.    

The Quality and EHS team conducts internal safety audits to the company’s operations and projects and it is externally audited independently by their main client to ensure implementation of EHS, OHS, and fire safety measures. On a monthly basis as a minimum, training is provided to employees, including construction crew workers, in fire safety and operation of fire safety equipment, by local certified companies.                                                     

The project employed nine direct employees at the time of the appraisal, and during operations it will employ approximately 30 staff, including management. The general contractor had 250 construction workers at peak, including other third-party employees working at the premises (food service, cleaning, private security service).

ODATA has documented corporate HR policies and procedures that are consistent with the national labor regulations where they operate and IFC PS 2 requirements, and apply to all employees. Each worker receives a written contract that describes the working conditions and terms of employment, an employee handbook, and a Code of Conduct and Anticorruption to be signed by the worker. The HR policy includes the assurance of equal opportunity, transparency, and no-discrimination during all aspects of the work including recruitment, performance review, and promotion.

ODATA’s corporate Code of Conduct and Anticorruption promotes non-discrimination and equal opportunity for its direct employees and contracted workers. This code includes prohibition of child work and forced labor.

ODATA has implemented a recruitment procedure that includes medical exam required for the position. Moving forward, in accordance with the ESAP#3, ODATA will update their recruitment procedure to prohibit any discriminatory practices such as pregnancy testing and HIV/AIDS testing.

ODATA’s HR Policy does not prohibit the freedom to associate, and workers have the right to form and join workers organization. HR procedures include collective agreements in countries where they operate, when applicable. HR policies and procedures will be updated to comply for the project with IFC’s PS and Mexican regulations.

ODATA has a documented workers grievance mechanism in line with its HR policy. The grievance mechanism allows for submission of anonymous grievances, recognise the applicability of external judicial or administrative remedies (civil, administrative, and criminal sanctions) in addition to internal sanctions, and is also available to the contractors and their workers who are included in related training and awareness campaigns conducted by HR department. The code condemns any type of reprisal for submitting complaints. Grievances are received via email, website (through third party consultant company), phone or through the compliance officer, legal department, HR department, or supervisor. Grievances are then analysed by the Ethics Committee. The Ethic Committee, the compliance officer, and the legal department oversee the implementation of the grievance mechanism. This committee is formed by four members designated by the board and the country manager, including an HR representative.

The company manages OHS in accordance with good international industry practice (GIIP). The project construction site is managed by the construction contractor and supervised by the EHS consultant and the EHS corporate team. Construction OHS risks are managed through procedures prepared by the consultant and they are monitored using a risk matrix which includes risk assessment, identification of mitigation measures, and assessment of residual risks. The local EHS team has weekly meetings with the construction company and the EHS consultant and collects the lagging and leading indicators, including incident and near-miss statistics, as well as, the action plan and status of the respective recommended actions.  Based on the information reviewed, contractor’s OHS performance has been satisfactory, with no lost workdays reported since construction started in April 2021.

The EHS consultant has developed a COVID-19 management program and a contingency plan validated by ODATA. This program includes standard operating procedures to test personnel on a monthly basis, instructions to stay home if feeling sick, limiting the maximum occupancy in corporate and construction vehicles, several shifts for the food service, and promoting social distancing in the job site. As a result of the pandemic, the company has not laid off any workers and does not plan to do so and there have been no salary cuts or no-pay-leave arrangements.                                                   

Across its facilities, the company is implementing initiatives to reduce energy consumption and waste generation. ODATA will be certified according to the Underwriters Laboratories Environmental Claim Validation Procedure (UL ECVP 2799) as per its contract– waste diversion validation program (zero waste to landfill) procedure which will be extended to the project.

Electricity for the project DC operations will be sourced from the national grid, and there will be no major air emissions. ODATA’s main client has global policies for usage of renewable energy and during operation the company will be open to free market negotiation to purchase energy from renewable sources if available. Diesel generators will be part of the energy backup system; their emissions will be negligible as they will be used only in emergency. Energy consumption and greenhouse gas emission calculations are reported as part of the company’s KPIs. ODATA will obtain credentials for the project infrastructure, including LEED Gold certification from the US Green Building Council, working with several systems aimed at maximizing energy efficiency, thermal and flow visualization, incident and operation control and instant management of changes. The project DC will have modern equipment in general, particularly for the cooling infrastructure that is key equipment regarding energy efficiency. According to the information provided, the GHG emissions for this DC are estimated at approximately 19,500 tCO2eq/year, based on the electricity consumption (scope 2).

Water will be sourced from the industrial park and the local utility company. Wastewater produced during construction of the project is stored, collected, and managed by a third party authorized service provider. During operation, wastewater will be collected by the sewer system of the industrial park which is connected to the municipal sewer system.

The company has hazardous and non-hazardous waste management procedures which are in line with the requirements of IFC’s PS3. At the construction site, all waste materials were found to be properly labelled and stored in the designated area. All hazardous (e.g., used oil, oily rags, paint) and non-hazardous wastes are collected for disposal by authorized third-party companies. During operation, the project will have a waste management procedure, developed under ESAP #1. Waste packaging will be collected by the suppliers of IT equipment for recycling. General waste, including e-waste, will be collected by authorized third-party companies for recycling and/or disposal.                                                   

As indicated, ODATA has documented corporate Emergency Preparedness and Response Plan (EPRP) and Firefighting Procedures and will implement a firefighting system and emergency equipment in the project building.  The corporate EPRP includes the establishment of an emergency brigade responsible to communicate and coordinate with the local firefighting groups. Since the project is located within an industrial park separated from residential areas, no significant impacts on the health, safety, and security of the local community are expected.

The industrial park has its own security workers controlling access and providing security inside the park. ODATA contracts private security services for the project site. ODATA has documented corporate procedures and guidelines for security personnel and performs assessment of the security risk as part of the risk matrix. ODATA will develop a security risk assessment and will define if armed security will be required. ODATA has a procedure for security personnel which includes rules of behavior to engage with workers and the community, rules for the use and maintenance of firearms and munitions, training, and requirements for selection of security personnel.

Moving forwards, as part of ESAP#4, ODATA will update its procedures and guidelines for security personnel in compliance with Mexican legislation and IFC’s PS4 requirements.