This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. Based on IFC’s review, the proposed project is expected to have limited adverse environmental and social risks and impacts that are few in number and site-specific and can be avoided or mitigated by adhering to recognized performance standards, good international industry practices and guidelines as described in the following sections.

The key E&S risk associated with the project include; (i) the company's E&S systems and staffing to manage its operations in line with IFC Performance Standards (PSs); (ii) adequate E&S impact assessment of its new developments in accordance with legal requirements and IFC PSs; (iii) assurance of fair and safe working conditions for employees and contract workers (especially during construction); (iv) resource efficiency; (v) life and fire safety design of the proposed developments; (vi) impacts on nearby communities and implementation of suitable stakeholder engagement procedures including a PS compliant grievance management mechanism.

AlleyRoads has developed and implemented a corporate environmental and social management system (ESMS) that is in accordance with South African national legislative requirements governing the construction and housing industry. This includes a series of both corporate and project level policies and procedures as defined in their internal management policies and procedures document. The company has procured an independent environmental consultant, who reports directly to AlleyRoads management, to standardize their environmental, social and governance (ESG) reporting processes and ensure existing E&S policies and procedures are reviewed and updated as necessary on an annual basis. The company’s ESMS is generally in line with IFC PS requirements.

As per the requirements of local legislation, AlleyRoads has completed an environmental impact assessment (EIA) for both the Grootfontein and Meyerton Mews developments and acquired the necessary environmental approvals. The Inkanyezi Village development does not require an EIA, or associated approvals, as it is already a registered erf within an existing township. Due to the scale and locality of the Grootfontein site, a further social impact assessment (SIA) and heritage study was also undertaken. In addition, an environmental management plan (EMP) has also been developed for each of the three sites.

AlleyRoads have developed an internal monitoring and evaluation policy. E&S monitoring, to ensure compliance with the internal policy, EMP and local legislation is provided by an independent environmental management consultancy procured by AlleyRoads who conduct bi-monthly monitoring and reporting. The company has an appointed health and safety (H&S) officer who reports directly to management. The H&S officer oversees and monitors the implementation of occupational health and safety (OHS) procedures and is responsible for ongoing on-site E&S monitoring, in particular relating to OHS compliance. The H&S officer provides a monthly report to AlleyRoads management.

At the time of appraisal in December 2021, AlleyRoads employed a total of 24 direct employees, with a combination of open ended and term contracts for short term consultancy services. All employment contracts are drafted in accordance with local labor legislation. The company anticipates their labor force to grow over the next three years as their portfolio increases. AlleyRoads has developed and adopted several internal human resources (HR) policies and procedures, including a code of conduct, industrial relations policy, equal opportunity policy, sexual harassment policy, disciplinary policy, appointment, and induction procedure etc. Currently the company does not have a dedicated HR officer, with HR managed by respective directors in their relevant section. The company shall appoint an HR officer who will be responsible for the management and implementation of HR policies and procedures (ESAP #1).

The company makes extensive use of contractors and sub-contractors particularly during project construction. All procurement is managed in accordance with the company’s supply chain management (SCM) Policy. Prior to the procurement of any third-party contractors, AlleyRoads, in accordance with their SCM Policy, review and approve their contractors’ relevant permits, licenses, authorizations and agreements and resources available to implement these systems. Contractors are provided with a standard Joint Building Contracts Committee contract. In addition, as per their written contract, contractors are required to comply with the company’s code of conduct as well as the requirements of the site-specific EMP, developed in line with related risk assessments, and Environmental, Health and Safety (EHS) requirements.

Working conditions and terms of employment at the company are based on the South African Basic Conditions of Employment Act. This includes requirements pertaining to terms of employment, employment contracts, regulation of working hours, leave allowances, wages, and termination of employment.

None of AlleyRoads’ direct employees are currently unionized, and the company has not to date had any engagement with labor unions. The company does engage with local business forums as and when required. As per the requirements of the Labor Relations Act and IFC PS2, AlleyRoads will develop a corporate level policy complying with workers’ rights to join and form workers’ organizations and/or unions of their choosing and bargain collectively. (ESAP #2). AlleyRoads has adopted an equal opportunity policy in accordance with the requirements of the South African Equal Opportunity Act. As referenced in the policy, the company is committed to encouraging equality and diversity among the workforce and eliminating unlawful discrimination.

The company has implemented an employee grievance management mechanism as a component of their internal management policies and procedures. AlleyRoads will update the procedure to ensure grievance submission requirements and options are clearly stipulated, roles and responsibilities are defined, anonymous grievances and contractors/sub-contractors’ access are allowed, and clear and appropriate feedback and resolution timelines are determined (ESAP #3).

AlleyRoads does not have a specific retrenchment policy and no retrenchment is currently envisaged. Should any retrenchment be required, this will be conducted as per the requirements of Section 189 of the South African Labor Relations Act which includes consultation, written notices, and relevant severance pay.

Due to the nature of the sector, AlleyRoads have developed and implemented several OHS policies and standard operating procedures aligned with the South African Occupational Health and Safety (OHSA) Act. Each site is required to prepare and implement an EHS file that includes elements such as a construction safety plan, fall protection plan, site safety induction procedures, personal protective equipment issue register, an incident management procedure, site safety meeting minutes etc. The company has maintained an OHS record for all previous developments, however, no incidents have been reported to date. As mentioned under PS1, AlleyRoads have a dedicated H&S Officer responsible for overall OHS monitoring and reporting.

 Energy Efficiency

AlleyRoads is required to design and construct their housing units in accordance with South African national building regulations (SANS 10400). These regulations define the minimum requirements of the South African National Building Regulations on energy efficiency and environmental sustainability in building design. They require that new developments ensure a degree of energy and water efficiency through measures such as low flow showers, LED lighting, natural ventilation, insulation, solar energy, and the use of specific building material. 

All of AlleyRoads’ developments are equipped with a solar edge system – this system provides approximately 30% of the energy requirements and allows for daily energy monitoring and statistics. In addition, the company is looking to achieve Excellence in Design for Greater Efficiencies (EDGE) Advanced certification for their proposed developments.                      

Waste and Hazardous Material Management

AlleyRoads have developed and adopted a waste management plan that details the company’s approach to sorting, storing, and disposing of both normal and hazardous waste. Hazardous materials include relatively small amounts of fuel and machinery oil used by construction vehicles and equipment, as well as other hazardous waste such as paint. Other waste profiles include building and construction rubble and glass. The management of onsite waste is the responsibility of the construction contractor to either stockpile on site, use as fill where possible, and ensure correct disposal. Disposal is done at registered landfill sites. The H&S Officer monitors and reports on waste management compliance and management on each site.

 Infrastructure and Equipment Design and Safety

All AlleyRoads developments are designed and constructed in accordance with South African National Building Regulations (SANS 10400). These standards cover elements such as structural design, public safety, lighting and ventilation, facilities for disabled persons, fire protection and installation, refuse disposal and resource efficiency. In addition, the company has applied for and obtained various related permits for all three sites, including department of labor notifications for all contract employees and National Home Builders Registration Council (NHBRC) registration, and building approvals. As per ESAP #4, upon completion of the projects, AlleyRoads will engage with a suitably qualified infrastructure and L&FS professional acceptable to IFC to evaluate and certify that the systems were built/installed in accordance with the approved design documents and standards.

Community Health and Safety

Risks of accidents during construction are expected to be mitigated through measures such as: access control, barricading, signage, proper securing of material while moving them, planning of the material transportation to minimize risk and disruption, and speed controls. Other impacts to the community such as noise, air pollution and other nuisances during construction will be assessed, mitigated, and managed on a project level through the EMP.

Life and Fire Safety

AlleyRoads are required to design and construct all their housing developments in accordance with local life and fire safety regulations and standards. A fire engineer is involved in the initial design of all new developments, conducts monthly inspections during construction and provides signoff following a fire inspection upon completion. Each development is also required to obtain a fire department occupancy certificate. Typical fire protection measures include smoke sensors, sprinklers, fire hydrants and hose reels. These systems are maintained on an annual basis. In addition, each development has an emergency evacuation procedure. As discussed in “Infrastructure and Equipment Design and Safety” section above, per ESAP #4, AlleyRoads will engage with a qualified infrastructure and L&FS professional, acceptable to IFC to evaluate and certify that the projects and systems were designed and/or built/installed in accordance with the approved design documents.

Security

Each of the proposed AlleyRoads developments will be surrounded by a perimeter wall with electric fencing, with controlled and monitored access. The company will make use of private security contractors for their developments who are required to be registered with the South African Special Risks Insurance Association (SASRIA), who are an insurance company that cover damage caused by politically motivated riots, and ensure guards are suitably trained, vetted and graded. On site guards are not armed but can call for armed response in an emergency situation.

AlleyRoads will develop and implement a corporate security management procedure detailing the company’s approach to security management at their relevant developments. This will include the completion of site-specific security risk assessments, requisite training for security guards (including use of force and human rights), and incident reporting (ESAP #5).