Based on IFC’s review, no impacts are expected that need to be managed in a manner consistent with PS6 “Biodiversity Conservation and Sustainable Management of Living Natural Resources”, PS7 “Indigenous Peoples” and PS8 “Cultural Heritage”. The project site is located in a peri-urban area of Vientiane City, characterized by largely modified habitat and with no cultural heritage values identified during the S-ESIA process. There are no communities identified as Indigenous Peoples in the project area of influence.  

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, as it is expected to have potential adverse E&S risks and/ or impacts that are limited in scale, few in number, generally site-specific and readily addressed through mitigation measures, by adhering to good international industry practice (GIIP) procedures, guidelines, and design criteria, as described in the following sections. Key risks and issues include availability and implementation of an E&S assessment and an ESMS aligned with IFC PS 1 requirements; company’s capacity to ensure E&S performance in line with IFC PS requirements; labor and working conditions during construction and operations; government-led resettlement any grievance from project-affected people (PAP); handling of hazardous cargo; occupational health and safety (OHS) and community health and safety management.        

Environmental and Social Assessment and Management System: TDP will develop a project-specific and integrated Health, Safety, Environment, Security and Quality Management system (ESMS) and indicated that the management system will be aligned with the requirements of ISO 9001 (Quality Management System), ISO 14001 (Environment management system), and ISO 45001 (OHS management system). The company has started the process to obtain ISO 45001:2018 certification by a recognized certification body. The ISO 45001 certificate for the Container Freight Station (CFS) and the warehouses was obtained in November 2021 and it is expected that the certification of the entire operations will be completed within six months of project operations. The IMS will be set up by June 2022 with the certifications for ISO 9001, ISO 14001 planned to be completed within 6 months of project operations. The project ESMS will be established and maintained by the company and will be appropriate to the nature and scale of the project and commensurate with the level of its environmental and social risks and impacts. The ESMS will incorporate the following elements: (i) policy, including compliance with laws and regulations of Lao, IFC’s PSs and relevant international conventions; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review (ESAP No 1). 

VLP has developed project policies and procedures including: (a) overarching E&S policy statement; (b) environment and climate policy; (c) safety security health environment and community policy; (d) OHS policy; (e) OHS Management System Manual; and (f) Human Resources (HR) policy. TDP will update these existing policies to align them with PS requirements including: (a) expanding HR policy/handbook to govern company practices on labor relations to contractors and its supply chain, retrenchment planning, right to forming/joining workers’ organizations, and gender considerations including policies on gender-based violence; (b) management of community health and safety risks; (c) policies and procedures for handling, storage, and disposal of hazardous chemicals and materials; and (d) waste management (ESAP No 1).  

The policies will be formalized through approval from TDP’s and VLP’s management team and communicated across staff of all levels by: (a) including E&S policy in induction and refreshing trainings and awareness programs for all company employees and contractor workers; (b) E&S policy statements will be published on company’s website,  displayed in key areas within project site and company’s facilities; (c) compliance with E&S policies will be included as a requirement in the contractor’s contracts (ESAP No 1). 

Identification of Risks and Impacts: An ESIA and an environmental and social management and monitoring plan (ESMMP) in line with national regulations were developed by the company in 2020 for the permitting purposes. In 2021, the company commissioned an external consultant to undertake a S-ESIA to bridge the gaps with IFC PS including: the definition of the project area of influence per PS1 definition; integrating the baseline studies with biodiversity and ecosystem services, waste and wastewater generation, a socio-economic baseline including land use history and rights, and a review relevant to potential for historical pollution; updating the assessment of adverse impacts and risks and the identification of technically and financially feasible and cost effective measures to manage and mitigate potential impacts; development of a supplemental E&S management and monitoring framework to detail monitoring measures and indicators, timeframes for implementation of the planned activities and responsibilities for the management and monitoring measures identified. Both the ESIA, with ESMMP, and the S-ESIA are published together with this ESRS.   

Considering that the Dry Port is located in an area in which multiple other projects (such as the Logistics Park, Kunming-Vientiane rail, Thanaleng to Nong Khai bridge, Laos-Vietnam (Vientiane to Vung Ang) railway) are being developed, the company will complement the existing studies and develop an assessment of cumulative impacts from other existing, planned or reasonably defined developments, as recommended by the S-ESIA. The company will engage relevant parties, including the Ministry of Public Works and Transport and the stakeholders implementing the other projects, and will consult with the affected communities in the assessment, design, and implementation of coordinated mitigation measure to manage the potential cumulative impacts resulting from the various projects in the project’s area of influence (ESAP No 2).  

Management Programs: The management plans to mitigate the identified E&S risks during construction phase were included as part of the ESIA developed as per national regulations. These were complemented by the E&S operational management framework to mitigate the operational E&S impacts that was developed as part of S-ESIA. TDP will expand the E&S operational management framework into functional management plans which will specify: mitigation, management and monitoring measures; project standards to be applied in compliance with national regulations and to meet IFC’s PS requirements; responsible parties for implementing the mitigation and management measures; monitoring and reporting requirements, including measures of performance (Key Performance Indicators (KPI)) (ESAP No 3). 

There is also a Contractor Management Framework (CMF) which provides the requirements for VLP to manage project contractors. A Contractor Control Procedure was also developed which outlines VLP Health Safety Security and Environment (HSSE) procedures and responsibilities for managing contractors performance. During project construction, site inspections are undertaken by HSSE Team and included in weekly HSE reports. As part of ESAP No 3, TDP will expand the CMF into a contractor management plan aligned with IFC PS 1 requirements, and applicable to all contractors working for the project construction, operations and maintenance activities, including procedures to implement the corrective actions identified in the site inspection reports and procedures of TDP’s oversight of contractors. c   

Organizational Capacity and Competency: Currently there are seven personnel in the HSSE team of VLP, including a manager and supervisors and offices dedicated for the project.  Periodic training is provided to staff on HSSE and trainings have also been provided on ISO 45001. VLP/TDP management team received an external ESMS training in September 2021 and a training plan will be developed and rolled out for all staff on a regular basis, as part of the implementation of the ESMS and ESMMP for operation phase. As part of ESAP No 4 the company will establish a social performance / community liaison specialist team to implement the Stakeholder Engagement Plan (SEP) (see Stakeholder Engagement section) and the community grievance mechanism during the operation phase of the project.  

Emergency Preparedness and Response: The project’s Emergency Prevention and Response Plan (EPRP) developed as part of S-ESIA provides adequate details on procedures to be implemented to prevent and address emergencies including, but not limited to, fire, chemical spills and gas leaks. The EPRP sets principles of emergency response and crisis management to be applied by the project and establishes the approach to planning and manage emergency response, including: (i) roles and responsibilities; (ii) structure of emergency response organization; (iii) legal requirements; (iv) emergency equipment; (v) company requirements; (vi) emergency procedures; (vii) resources required; and (viii) monitoring, control, reporting and performance assessment. 

Monitoring and Review: During construction, monthly site safety inspections have been undertaken by VLP in addition to bi-annual EHS audits undertaken by representatives from the Laos Head Quarter office of SHC.  The main EPC contractor (SHC) site management has undertaken periodic HSE review and audits, and reported on air quality monitoring and wastewater monitoring at batching site and campsites as part of weekly HSE reporting to VLP. As part of ESAP No 1, the company will monitor and report to IFC on the implementation of requirements set forth in ESMMP and the S-ESIA, in addition to submitting periodic reports to Ministry of Natural Resources and Environment as required by the project Environmental Clearance Certificate.          

As of February 2022, VLP workforce comprises of 202 workers including 12 temporary staff of which 196 are Laos workers, six Thai workers. Of the total workforce, 57 are female. SHC has 168 workers onsite, of which 64 are Chinese migrant workers and 104 are Laos nationals. SHC workforce has seven female workers.  The workforce of other contractors on site comprises of 12 Laon national workers. The operational workforce is expected to be around 200 [mix of TDP employees and contractor staff]. Of the TDP employees, 60% are employed for office & management and 40% are employed for dry port operations.  During the Operation Phase of the Project the permanent personnel will be accommodated in two staff accommodation buildings for a total capacity of 125 – 164 staff. The construction of staff accommodation buildings is close to completion. TDP will undertake audit of the worker accommodation facilities for compliance with PS2, including alignment with GIIP as described by IFC/European Bank for Reconstruction and Development ‘Workers’ Accommodation: Processes and Standards –A Guidance Note’ (IFC/EBRD Standards) and implement remedial measures (ESAP No 5) 

VLP has developed an HR policy and an employee handbook with various HR procedures covering: (a) code of conduct; (b) equal employment opportunity and anti-bullying; (c) grievance complaints; (d) recruitment; and (e) terms of employment, including payroll information, working hours, overtime, leave, salary reviews timing that are appropriate to the size of the existing, and predicted future, workforce. As part of ESAP, TDP will expand the HR policies to align with PS 2 requirements by including details on: (a) anti-sexual harassment; (b) gender based violence (GBV); (c) demobilization of construction workers; (d) use of recruitment intermediaries; (e) forced and child labor; (f) process to explain how VLP HR policies and procedures will be cascaded down to contractors employed on the project including contractor monitoring and (g) contractual obligations for contractors to follow PS 2 requirements. TDP will also adopt a Freedom of Association policy in line with PS2. TDP will develop a Code of Conduct for workers, including truck drivers, for their interactions with communities and associated GBV risks.  (ESAP No. 5). The contractor management plan will include (a) details on how TDP monitors contractor working conditions including management of worker accommodation (b) detailed aspects on monitoring of working conditions including but not limited to working hours, overtime, wage, overtime and benefit payments, grievance management, worker contracts, and general working conditions (ESAP No. 3). 

The working conditions and terms of employment included in Employment Contracts are aligned with requirement of IFC PS2 s. VLP has a system in place to monitor overtime and ensure that corresponding limits and payments are adequate. TDP will (a) update the payslips to record the daily overtime hours (b) amend existing employee contracts and any new contracts to align the requirements of time period of probation and compensation during probationary period with national legislations, as well as amend the workers’ grievance mechanism to fully align them with labor law and PS2 requirements The internal grievance mechanism will address GBV concerns. The updated grievance mechanism will be accessible to the workers of EPC contractors and will allow for accepting any grievance since the start of construction retrospectively until the end of construction. The company will reach out to all the employees of EPC contractors and communicate establishment of a grievance mechanism that will also be used for submitting retrospective grievances if any. The company will use various information channels such as company website, email communication etc. to reach out to existing workforce of EPC contactors as well as demobilized workforce for disclosure and dissemination of the grievance mechanism and the grievances will be received through various channels such as website, text message and/phone hotline. All grievance will be reviewed, recorded, and investigated and the result of the investigation will be either directly conveyed to individual worker through the helpline/email or website or posted in a grievance investigation result page of the website as appropriate. (ESAP No. 6)   

An external consultant undertook a Labor and Working Conditions Audit against the requirements of PS2 in October and December 2021. Based on the findings of the initial audit visit in October 2021 a CorrectiveAction Plan (CAP) was agreed with VLP. Issues identified by the audit included: (a) concerns about migrant workers’ freedom of movement; (b) provision of contracts to all contractor workers; (c) compliance of working conditions for contractor workforce with Laos Labor Law; (d) delay in payment of wages by the main contractor; (e) compliance of worker accommodation and conditions with PS2, including alignment with GIIP as described by IFC/European Bank for Reconstruction and Development ‘Workers’ Accommodation: Processes and Standards –A Guidance Note’ (IFC/EBRD Standards); (f) concerns about measures implemented to prevent and mitigate risks associated with COVID-19 pandemic; and (g) absence of a workers grievance mechanism.  The external labor consultant carried out a follow up audit in December 2021 to review progress in implementing the CAP and reported satisfactory progress with all findings satisfactorily addressed, and remaining areas of improvement relevant to the workers accommodations, including provision of wastewater treatment and drainage facilities, installation of adequate number of toilets; installation of medical facilities/services; and provision of dedicated places for religious observances. For ensuring accurate recording of overtime hours by EPC contractor, TDP will maintain attendance sheet where EPC workers will be required to sign off manually the daily time-in and time-out (ESAP No. 6)  

As part of the conditions required to meet IFC PS2, the company will develop a Demobilization Plan for end of construction and provide evidence of all salaries and benefits have been paid by the project contractors and all contracted workers for the construction phase are able to return to place of origin.  The company will ensure that employees are retrospectively paid for the probation period as per the provisions of local labor law. The company will review the contracts of its entire workforce and calculate the additional payment to be made for the probationary period to be aligned with national legislations. The additional payment will be made within the period of 3 months through direct deposit to workers' bank account/ by cash if workers did not have bank account and evidence of payment will be retained. Furthermore, TDP will work with the EPC contractor to ensure that all demobilized workers receive all payments before end of construction (such as social security, pension, severance benefits etc.) in accordance with national law. (ESAP No 7).  

Occupational Health and Safety: As indicated above, VLP has an OHS policy and an OHS management manual which were reviewed by IFC. During the construction phase, the main contractor (SHC) has set up an OHS management system aligned with GIIP. The system includes the required procedures and assigns the overall responsibilities for meeting the requirements to the project manager, who is assisted by a site manager and a Safety and Environmental (S&E) protection department who is charge of the identification of hazards, verify implementation of the OHS procedures, and report performance to the project manager. The S&E protection department consist of a safety manager assisted by at least an OHS officer per 20 construction workers. In addition, a safety committee was formed to ensure the OHS communication between the different organization levels and good practices. Details on safe work practices are defined during the risk assessments or established at the site.   

As part of the ESMS set forth in ESAP No. 1, going forward, TDP will undertake operational OHS risk assessment, develop an OHS management system and relevant procedures for OHS supervision to mitigate the risk based on the outcome of the OHS risk assessment including a training program applicable to both company employees and contractor personnel and auditing of the work practices as implemented by contractors to ensure these are in line with local legislation and GIIP and meet the requirement of PS2.  As indicated under PS1, VLP has established an HSSE team which will be in charge of the implementation of the ESMS for the project.                  

Resource Efficiency: The water demand for the Dry Port in the operational phase of the Project is estimated to be 10,000 m3 per annum for the first 20 years of operation, which will be met through the existing water pipeline. The annual electricity requirement for the Dry Port in the operational phase has been estimated between 1600 MWh (at the beginning of the operations in 2023) and 7500 MWh (in 2050, according to the planned growth of the activities) per annum. The electricity requirement will be supplied by 22 kV line connecting to the existing 230 kV substation. Reefer connections (cooling warehouse) account for 50% of total energy demand; followed by terminal high mast lighting, yard tractors, and building installations. Fuel is required for rubber tired gantry, yard trackers and other equipment, e.g., forklifts. The estimated Dry Port fuel consumption in initial years of operation (year 2023) is approximately 0.57 million liters and increases to approximately 2.3 million liters in 2050. Annual greenhouse gas (GHG) emissions from fuel consumption associated with dry port operations (operations of rubber tired gantry cranes and other equipment) are estimated at 1,650 tCO2e in 2023 and expected to increase to 6,750 tCO2e in 2050.  The annual GHG emissions from electricity consumption for dry port operations will be 895 tCO2e in 2023 which will increase to 4,181 tCO2e by 2050.  A climate change risk assessment (CCRA) has been undertaken as part of S-ESIA. TDP will integrate CCRA results and measures into the ESMS and operational management plan and also develop measures-based strategy building on the CCRA study to reduce GHG emissions gradually (ESAP No 1). The design of the dry port facility layout included the following measures to ensure efficiency and safety for the operation: minimal distance for the cargo movement/traffic and efficient customs procedure; container yard and warehouse located in the area where the trailers and trucks can access easily; goods handling separated by the category and packaging; truck parking area delineated according to the size and location.  

Pollution Prevention: The environmental impacts from construction activities are site specific and have been mitigated by adopting the mitigation measures included in the ESMMP developed for the project. During operational phase, the dry port will need to manage and control air emissions and noise; waste and wastewater. As mentioned in the earlier section, the company will expand the operational management frameworks presented in S-ESIA into functional management plans and implement the corresponding measures to mitigate the impacts to physical environment. The company will conduct a detailed assessment of noise impacts from the dry port operations and from the increased cargo movement due to the dry port operations and develop mitigation measures based on the results of the assessment (ESAP No 8). Air emissions will include the exhaust emissions from vehicular traffic and operational equipment (e.g., reach stackers, forklifts, terminal tractors). The dry port facilities will be provided with septic systems, located in proximity to all the relevant facilities. The waste generated from dry port will be segregated and stored in a dedicated waste storage facility designed to ensure adequate segregation and containment. No specific or separate facilities are currently planned for the storage of hazardous wastes. The waste collection and disposal will be managed by a specialized contractor. There are no licensed hazardous waste storage/treatment facilities in Laos and VLP reported that the municipal landfill site managed by Vientiane government has a dedicated section for hazardous waste streams. As part of the operational ESMMP, the company will develop and implement a pollution prevention and control management plan and a waste management plan, including the required supervision and audit requirements of the waste management contractors and disposal sites, in compliance with PS3 requirements. The company will also install a dedicated facility to adequately and temporarily store hazardous waste generated during dry port operations (ESAP No.9) 

As per ESAP No. 9 the company will also develop and implement systems to ensure: i) dangerous goods / hazardous materials received at the site are classified and labeled as per national law and GIIP; ii) staff is trained in procedures for screening, acceptance, handling, transfer, and storage for hazardous goods / hazardous materials; and iii) adequate storage areas for dangerous goods / hazardous materials are available as well as emergency response procedures to ensure collection and/or containment of accidental releases.                    

The project is in proximity to residential receptors that may be affected by increases in traffic and noise associated with vehicle movements and port operations, and other emissions which will be mitigated through management, mitigation and monitoring measures included in ESMMP. The project will generate high volumes of heavy vehicles using local road networks with potential risks and impacts on the health and safety of nearby communities and existing road users. The project area will be bonded from access to the public as the custom operations will be subsumed in the facility. During the operation phase, unarmed security personnel will guard each security checkpoint, with the CCTV monitoring room being operated by the Company’s H&S team. The access road will be fenced to avoid unauthorized entry, and custom police will be on duty at the entrance. The company will develop and implement Traffic Management Plan, which will take into account the results of the cumulative impact assessment study and will consider the existing and planned developments in the vicinity. Traffic Management Plan will be developed to ensure: (i) stakeholder engagement with local communities and also related project users such as truck drivers to inform the measures as well as input into the SEP for specific community awareness raising activities to be planned; (ii) full mapping of project vicinity roads, access routes to be used, pubic areas and structures such as schools, temples, marketplaces, etc.; (iii) structural stability assessment for houses that may be affected by vibrations as detailed by the S-ESIA, (iv) traffic management measures based on the traffic assessments, stakeholder engagement and this full mapping as well as measures for houses that may be structurally affected by vibration (ESAP No. 10). As discussed below under Stakeholder Engagement, in addition to implement the required pollution prevention and control management plan and the traffic management plan, the company will widely disclose the grievance mechanism to the surrounding communities to ensure that any concerns regarding project operations can be conveyed and addressed (ESAP No 12). 

Emergency Preparedness and Response: Fuel storage within the project boundaries is not envisaged, however the facility will handle transportation and storage of dangerous goods / hazardous materials which will be subject to a specific management plan and procedures. As discussed above, an Emergency Preparedness and Response Plan (EPRP) has been developed, which the company will expand to include the safeguard measures for mitigating any risks to health and safety of communities. The company will consult the local government agencies and the local communities while expanding the EPRP and will disclose appropriate information to Affected Communities, relevant government agencies, or other relevant parties regarding emergency preparedness and response activities, resources, and responsibilities. Trainings and awareness sessions will also be provided to local government agencies, affected community and other stakeholders to familiarize them with proper response procedures (ESAP No 1) 

Security Personnel: The project has a contract in place with a local security service provider for the construction phase. A security management plan will be developed which will include undertaking security risk assessment, details of recruitment, training on human rights and use of force, appropriate use of force policies, conflict resolution, gender-based violence considerations and the role of any government bodies or defense personnel that may be involved in providing security during the operations phase (ESAP No 3). The community grievance mechanism (ESAP No. 12) will include provisions for affected communities to express concerns about the security arrangements and acts of security personnel.