This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The E&S risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

AGUNSA’s corporate management system, policies and procedures should ensure that Environmental, Social, Health and Safety (ESHS) risks and impacts are properly assessed and that corresponding controls are in place at the corporate level to inform the E&S management of each business line. The key E&S risks associated with AGUNSA are related to the adequacy of internal procedures to screen E&S risks and impacts; general OHS management; pollution prevention and control; labor management, including terms of employment, non-discrimination and gender-related issues at the workplace; contractor EHS management, relations with workforce, grievance mechanism; community safety; and stakeholder engagement.                                                 

Policy

AGUNSA has five corporate policies that cover i) Sustainability, ii) Environment, iii) Quality, iv) Occupational Health and Safety, and v) Corporate Social Responsibility. These policies guide the corporation’s operations, including those performed by subsidiaries and associated companies across the region. Policies are extended to AGUNSA’s contractors. In addition, subsidiaries and associated companies can adapt the corporate documents and draft their own policies based on their specific needs. Policies are communicated to employees during the corporate induction process, posted in the offices and made available for consultation in the Company’s intranet.

Through these policies, AGUNSA seeks to have a positive impact on workers and communities and commits to comply with all legal requirements related to the development of its activities. As part of ESAP item #1 AGUNSA will update its five E&S Policies in line with IFC Performance Standards and include commitments related to (i) stakeholder engagement, (ii) labor and working conditions or Human Resources, (iii) Security Policy, and (iv) gender equality and no tolerance of gender-based violence and harassment (GBVH).

Environmental and Social Assessment and Management Systems

The company’s integrated management system (IMS) and related procedures are based on ISO standards, including ISO 9001:2015 (quality), ISO14001:2015 (environment) and ISO 45001:2018 (occupational health and safety). Several subsidiaries and associated companies are already certified under ISO standards and a number of others will undergo the certification process in 2022 and 2023.

In Chile, AGUNSA’s management system is described in the Company’s IMS manual, and its implementation lays within the corporate EHS department. In subsidiaries and associated companies in other countries, the E&S management system follows AGUNSA’s corporate guidelines and ISO standards, but the IMS implementation is managed independently at the country level. AGUNSA needs to standardize and expand the scope of its IMS, particularly with regards to social risks and impacts identification and management with the necessary elements to effectively “plan, do, check, act” with regards to E&S outcomes. Therefore, as part of ESAP item #2, AGUNSA will: i) incorporate social policies, management plans, procedures, and stakeholder engagement features as an integral part of the Company’s management system; ii) implement the updated IMS and related procedures in the business lines and affiliates that require E&S management; and iii) develop a “Corporate E&S Assurance Plan” to guarantee that the corporate IMS is correctly and uniformly implemented across the organization.

Identification of Risk and Impacts

The identification of risks and impacts is performed through AGUNSA’s IMS. The risk assessment process is described in the IMS manual, in the procedure for the Identification and Assessment of Risks and Opportunities and in the procedure for the Identification of Legal Requirements and Compliance Assessment. 

In addition, the Company has an Environmental Aspects and Impact Assessment procedure to assess environmental aspects and establish control measures across AGUNSA’s operations. Environmental risks are registered in a matrix that includes the identified aspects and impacts, the assessment of importance, magnitude and probability of occurrence, along with the corresponding control and mitigation measures.

The identification of OHS risks is described in the procedure for the Identification of Hazards, Assessment of Risks and Controls. The mitigations follow the risk control hierarchy, prioritizing risk and impact elimination, substitution, engineering controls, administrative controls and, as a last resource, the use of protective personal equipment. 

AGUNSA acquired land for all its warehouse business lines in Chile, Ecuador, and Peru from private owners without any occupants that need to be compensated for or resettled. Although the Company has not a written land acquisition policy or procedure, it has established that no land acquisition will be undertaken in cases where potential physical displacement could happen.

AGUNSA has three regional airport concessions in Calama, Puerto Montt and Arica in Chile where the Company is in charge of land-side activities including commercial, operational and financial management and of the improvements and refurbishment of existing facilities, terminals and supporting infrastructure. The General Directorate of Civil Aviation of Chile (“DGAC Chile”) is in charge of air-side operations. No expansions of runways, large airside infrastructure, or additional airport footprint is envisioned. Airports are located in rural or semi urban areas which are scarcely populated (i.e. limited receptors and affected stakeholders). With regards to ports and marine facilities, AGUNSA has the concession of the port of Manta in Ecuador and the port of Valparaiso in Chile, and through the GEN group the ports of Antofagasta, Talcahuano, Coronel and Calbuco (in Chile as well.) None of these concessions include the commitment to develop new piers or new large infrastructure which could require additional footprint, major marine developments or dredging. Therefore, E&S risks and impacts of ports and airports concessions are considered to be limited. The implementation of the “Corporate E&S Assurance Plan” referenced in ESAP item # 2 will ensure that these concessions are embedded within the scope of AGUNSA’s corporate integrated management system, and that corresponding E&S plans and procedures are uniformly implemented.

The Company needs to enhance its corporate procedures and tools for risks and impacts identification and will develop and implement as part of ESAP item #3: i) a “Social Risk & Impact Assessment Procedure” aimed at completing relevant environmental impacts assessment processes to assess and manage social risks and impacts on relevant stakeholders and communities potentially affected by the Company’s activities and processes such as transportation, logistic services, warehousing & distribution, ports and airports operations; and ii) a “High Level Biodiversity Screening & Assessment Procedure” to properly assess and manage potential biodiversity impacts that may be caused by AGUNSA’s operations. These procedures will be aligned with the requirements set forth in IFC Performance Standards and will cover baseline studies, risk assessment management programs and monitoring activities, as appropriate, for existing business and operations and for any new business or subsidiaries that may be developed or acquired in the future.

Management Programs

The Company’s ESHS management programs and plans are steered through the implementation of the policies that forms part of the Company’s IMS. AGUNSA’s management programs respond to the mitigation measures identified through the risk identification process and cover OHS, environmental management, hazardous substances, waste management, emergency response, among others. The appraisal identified the need for AGUNSA to develop the following management programs and procedures as part of ESAP item #4: i) a “Corporate Stakeholder Engagement Framework” that includes: (a) identification, mapping, and prioritization of stakeholders; (b) strategy of consultation and disclosure; (c) social monitoring and defined key performance indicators; and (d) an “External Grievance and Communication Mechanism” to receive, track and address inquiries, concerns, and complaints related to the Company’s E&S performance from affected stakeholders and communities; ii) a “Corporate Environmental Numeric Standards Document” detailing the performance levels and numeric standards that will be adopted by AGUNSA for any discharge or release into the environment in line with the World Bank Group (WBG) General EHS Guidelines or industry guidelines, as appropriate; and iii) a “Corporate Land Acquisition and Resettlement Framework” aligned with Performance Standard 5 and including provisions regarding the need to provide compensation of assets at replacement value and setting the principles and criteria for the development of Resettlement Action Plans or Livelihood Restoration Plans should these be needed. As part of this Framework, AGUNSA will include provisions to prevent and address any potential economic displacement resulting from the operation of Ports, particularly with regards to affectations to fishers, tourism and/or small businesses. 

Organizational Capacity and Competency

At the corporate level, responsibility for E&S management resides with the head of EHS who reports directly to the corporate administration manager. The head of EHS is supported by the heads of sustainability, OHS and management system. In addition, the corporation has a manager of people and organizational development that oversees all human resources related matters. AGUNSA’s corporate team is composed by qualified personnel with clear lines of responsibility for managing E&S matters. Depending on the size and nature of activities, subsidiaries and associated companies have dedicated staff to oversee E&S and HR issues. Country office staff coordinate directly with the corporate team. As part of ESAP item # 5, AGUNSA will hire a Senior Social Specialist or Coordinator, versed in IFC Performance Standards or similar international standards, to join the corporation’s E&S team to manage all the social requirements and activities resulting from the implementation of the related procedures described in the relevant ESAP items, which are necessary to align AGUNSA’s operations to IFC Performance Standards.

Emergency Preparedness and Response

AGUNSA has an overarching Emergency Preparedness and Response Plan (EPRP) that is adapted based on the specific needs of each operation. The adapted plans include potential emergency scenarios such as natural disasters, spills and fires and describe the roles and responsibilities of the emergency response team, emergency contacts and communications. The EPRP may be supplemented by additional documents such as evacuation protocols and emergency-specific documents.  In addition, the Company performs and records drills regularly.

Special attention is provided to AGUNSA companies that perform transportation services, which follow dedicated emergency procedures, establish clear reporting lines and response plans.  All the vehicles and trucks use GPS tracking systems, continuously monitor fleet drivers, manage compliance, safety and performance. 

Monitoring and Review

The Company monitors the implementation of its E&S management programs through a software tool (Isotools) that has been tailored to AGUNSA’s E&S monitoring needs, covering a wide range of topics, including legal compliance, training, assessment of suppliers, waste management, environmental monitoring,  and others. The tool is fully operational in Chile and Peru and is being rolled out in Ecuador and other countries as well. Findings from the E&S monitoring are classified as observations, opportunities for improvement and non-compliances. All recorded findings are tracked to resolution.

AGUNSA has a procedure that follows the Ishikawa incident investigation methodology (root cause analysis) to assess and investigate incidents, including those related to OHS, environment or physical security. Corrective and preventive actions are registered and monitored.

Inspections to verify operating conditions and adherence to EHS procedures are performed regularly. The Company has a non-conformities management procedure that details the process to manage, report and track any recorded OHS, environmental or physical security findings or events. In addition, AGUNSA has an internal audit program to assess compliance of the Company’s management systems against ISO 9001, 14001, and 45001standards, assess legal compliance and ensure all customer E&S requirements are met. The review of the management system and its components is reported to senior management on an annual basis. The corporate EHS team communicates with subsidiaries and associated companies frequently to ensure AGUNSA’s guidelines are properly followed.

E&S Contractor Management

AGUNSA’s E&S contractor management follows the requirements set forth in local regulations. The Company has a procedure for contractor management, establishing that contractors and subcontractors are required to adopt and implement the Company’s OHS and Environmental policies, standards and procedures. In addition, site inspections, audits and documentation reviews are performed regularly to assess compliance with AGUNSA’s standards. Meetings between AGUNSA and contracted companies are held monthly to verify risk prevention practices and OHS and environmental management.                                                   

As of May 2022, AGUNSA reported 4,838 direct employees and approximately 1500 contractor workers in all business lines and subsidiaries distributed over 16 countries. The number of direct workers has been increasing at a rate of about 13% annually since 2020. Approximately, 59% of the direct workers are based in Chile, 18% in Ecuador and 9% in Peru. These three countries account for 86% of the workers of the corporation.

Human Resources Policies and Procedures

The Company has an “Internal Order, Hygiene and Safety Regulation” (“RIOHS” for its Spanish acronym) which includes rules of ethics aligned with Chilean regulations, covering labor and working conditions, non-discrimination, promotion of equal opportunity, respect to freedom of association and no tolerance to harassment, including any form of sexual harassment. The RIOHS is followed by all the associated companies of AGUNSA in Chile and partially implemented by subsidiaries and associated companies in the other countries, which basically follow the country’s labor regulations. Employees are provided with contracts describing labor and working condition. Through the induction program workers are informed of the corporate policies, which are also publicly disclosed in the Company’s website and the RIOHS.

Working Conditions and Terms of Employment

Contracts with direct employees specify labor conditions. Through the induction process, employees are made aware of the Company’s RIOHS, their rights and responsibilities. AGUNSA companies in Chile verify that all contractors’ workers are following the local regulations and RIOHS. The Company’s procedure for the qualification and payment of contractors ensures that contractors follow and comply with labor regulations and requirements, including workers’ terms of employment, benefits, wages, overtime and hours of work, social security obligations, and life insurance requirements. Through periodic audits and monthly field inspections, the Company verifies adequate working and OHS conditions provided by contractors and suppliers. While the procedure is in place for Chile, the Company has a plan to extend it to all AGUNSA’s subsidiaries and associated companies in other countries.

ESAP item #6, requires AGUNSA to develop and implement corporate procedures to ensure: i) there is a clear prohibition on child and forced labor; ii) there is no tolerance to reprisals; iii) any retrenchment is managed per IFC Performance Standard 2; and iv) working conditions and terms of employment, including contractors’ workers follow Performance Standard 2 requirements.

Worker’s Organizations

The company recognize the workers’ rights to organize in all its countries of operation in line with applicable local regulations. AGUNSA has in place a collective agreement with the union that oversees all the activities across Chile. Approximately 50% of AGUNSA’s workers are members of this union, however the union represents all the workers, and working conditions and benefits that are negotiated and reflected in collective agreements with this union, are applied to all Company’s workers.  The last collective agreement was subscribed in Q1 2020 and is in effect until 2023.

Non-discrimination and Equal Opportunity

AGUNSA has an “internal declaration of principles for equal opportunity and non-discrimination”. Approximately 43% of the total workforce in Chile are women, while in Peru is 27% and in Ecuador 22%. The Company has set a target that at least 30% of the workforce must be composed by women. This directive is being applied in Chile and it there are plans to extend it to all subsidiaries and associated companies over the next few years. AGUNSA has a series of initiatives to foster more participation of people with disabilities throughout the organization as well. 

As part of ESAP item #7 AGUNSA will develop and implement a “Corporate Gender Management Strategy” to: i) promote more women in the workforce in Company’s subsidiaries and associated enterprises, including contractors; ii) ensure there is no unintended discrimination in the recruitment selection and promotion procedures and removing any barriers for women to be hired, retained and promoted in the organization; iii) incorporate specific management tools related to the risk of experiencing gender-based violence, and sexual harassment (GBVH) for Company workers and contractors (including security providers). As part of this ESAP item, the Company will develop an action plan for the implementation of the Strategy with specific milestones and timelines.

Worker’s Grievance Mechanism

The Company’s ICOHS describes an internal procedure to address general workers’ queries, concerns, and complaints. These are communicated to the direct supervisor, who can solve the complaint or escalate it to the manager for resolution. The procedure indicates a maximum period of 15 days to respond and address to resolution individual grievances, and up to 30 days for collective complaints. This procedure is mainly applied in Chile and to lesser extent in other countries. The procedure includes a communication channel through the web page for the use of alternative, confidential or anonymous channels.

According to the information provided by the Company, as of the end of May 2022, AGUNSA Chile has not recorded any work or labor related complaints since the beginning of the year. For complaints related to GBVH, the Company’s ICOSH describes a specific procedure for the victims to file complaints directly to the administration manager and allows up to 30 days to develop an internal investigation to provide a corresponding response. The procedure includes sanctions for perpetrators. 

As part of ESAP item #8, AGUNSA will, in line with Performance Standard 2, develop and implement a “Corporate Grievance Mechanism for Workers” (CGMW) applicable to all its businesses, subsidiaries and associated companies. The CGMW will include: i) the commitment to develop a company or subsidiary-specific internal grievance procedure for workers based on Performance Standard 2 requirements and tailored to the nature of the business/activity and in a culturally appropriate manner; ii) access to adequate channels (including confidential, anonymous and GBVH specific complaints) for all direct and indirect workers; iii) a strategy to disseminate the CGMW with corresponding inductions, trainings and refreshers; iv) grievances status, tracking system and log, with relevant monitoring and reporting processes; and v) specific provisions to ensure GBVH grievances are adequately addressed with a survivor-centered approach and mechanisms to ensure that all employees, contractors and subcontractor workers are aware of the tools and processes and know how to properly access and use them.

Occupational Health and Safety

AGUNSA has a well-structured occupational health and safety (OHS) management system which is ISO45001 certified. The system encompasses all the activities carried out by the Company’s employees, contractors and subcontractors and is centered in risk identification, assessment and control. The corporate risk management strategy is based on contextual and SWOT analysis (strengths, weaknesses, opportunities and threats), definition of short, medium and long-term OHS objectives, risk management, metrics and performance monitoring. No Lost Time Incidents have been recorded over the last three years as a result of a strong incident prevention culture across the companies and countries where AGUNSA is in charge of operations. Safety performance is closely monitored and reported in Chile. Agunsa is in the process of gradually expanding the monitoring and OHS KPIs reporting protocols to subsidiaries and companies in other countries as well.

The Company employs over 70 OHS risk prevention professionals working in the field to oversee compliance with OHS procedures and industry good safety practices. There is an OHS joint committee in place with the mandate to conduct incidents investigation, oversee the implementation of risk mitigation measures, and raise safety awareness and training campaigns.

With regards to occupational health, AGUNSA has an hygiene and safety procedure in line with regulatory requirements. The procedure is based on identified hazards and factors of risk in the work environment and integrates a set of initiatives to promote the health and wellbeing of workers. Depending on the type of activity and risk exposure, medical surveillance tests are conducted.

With regards to COVID19, the Company has implemented controls and monitoring processes to address risks and exposure to COVID in line with government regulations and good international practices. Implemented measures include COVID awareness raising, social distancing, enhanced sanitation protocols, regular PCR tests, periodic health checks and distribution of PPEs. No known cluster infections have occurred at the workplace.                                                   

Resource Efficiency and Greenhouse Gases (GHG)

AGUNSA has implemented resource efficiency initiatives in some of its operations, including the use of renewable energy and the replacement of conventional light bulbs with LEDs. However, there is no corporate resource efficiency strategy, or plans to systematically reduce energy, water or other resources and materials consumption.

In 2021, the Company quantified GHG scope 1, 2 and 3 emissions for AGUNSA Chile which totaled 47.000 tCO2e (13.000 were related to scopes 1 & 2). The Company is currently working to include its subsidiary AEXA as part of the 2022 GHG monitoring process. According to the reported figures, more than 60% of GHG emissions come from land transportation businesses, followed by the replacement of refrigerant gases and general diesel usage. AGUNSA operations participate in the “Chile GHG footprint program” from the Ministry of Environment which recognizes companies that quantify, reduce and neutralize GHG emissions.

To further improve its resource efficiency and GHG monitoring, and as stated in ESAP item # 9, the Company will: i) develop a corporate resource efficiency strategy aligned with Performance Standard 3 requirements to gradually implement technically and financially feasible and cost effective measures for improving efficiency in its consumption of energy, water, and material inputs with a focus on areas that are considered core business activities; and ii) expand its GHG estimation for scope 1 and 2 for the business lines and affiliates operated by AGUNSA with significant GHG emissions.

Water Consumption and Wastewater Management

According to the information provided by the Company, the main source of water supply is from the potable water municipal grid. Most of the assets and company operations are located in industrial and urban areas where potable water is provided by private or municipal water companies. 

The main source of liquid effluents comes from domestic wastewater and in most facilities, these are discharged into municipal sewerage systems. For those cases where municipal sewage is not available, the Company has installed activated sludge wastewater treatment plants which are operated by specialized contractors. No direct untreated effluent discharges to sea or to any in-land water bodies are registered. Effluent parameters are measured based on the frequencies established in environmental or operations permits, and water quality compared with local regulations. As indicated in ESAP item # 4, AGUNSA will develop a “Corporate Environmental Numeric Standards Document” detailing the performance levels and numeric standards that will be adopted by AGUNSA for any discharge or release into the environment in line with the WBG General EHS Guidelines. 

Pollution Prevention and Control

Pollution prevention is part of the Company’s environmental management system. AGUNSA has developed and implemented different management and monitoring plans to ensure their activities are conducted to minimize adverse impacts on human health and the environment, including for areas under the direct control of the Company, and areas managed by contractors and subcontractors. An environmental management plan is developed from the environmental assessment of projects and activities, regulatory compliance and identification of environmental aspects and impacts in line with ISO14001 requirements. The plan includes mitigations and controls, as well as basic monitoring and reporting requirements. During the site visits to a sample of AGUNSA companies and subsidiaries, the implementation of environmental mitigations was evident, with overall regular to good housekeeping, adequate segregation of residues and basic pollution prevention measures commensurate to the nature of the activity and the corresponding risks and impacts. Through the implementation of the “Corporate E&S Assurance Plan” referenced to in ESAP item # 2, AGUNSA will improve and standardize pollution prevention practices across the organization.

Waste & Hazardous Materials Management 

Solid waste generated by AGUNSA’s activities is segregated at source, classified (in hazardous, non-hazardous, recyclable and non-recyclable waste streams), temporarily stored in dedicated storage facilities, and disposed of following local regulations and procedures. Non-hazardous waste is evacuated from AGUNSA’s facilities on a weekly basis by licensed contractors. The management of hazardous waste (e.g., used lubricants, wipes impregnated with hydrocarbons, paint, solvents) is described in procedures adapted for each business line or subsidiary. In general, hazardous waste is labeled and stored in restricted areas as established in local regulations and regularly evacuated. Data on the quantity, type and final disposal of waste (hazardous and non-hazardous) is registered and shared with local authorities.

Management of hazardous materials is performed in accordance with the Company’s hazardous materials procedures, which outline provisions for the safe transportation, handling, labeling, and storage of hazardous materials including emergency response. In addition, the Company has specific procedures for the containment and collection of spills of hazardous substances. AGUNSA’s hazardous materials are stored in warehouses in the outskirts or industrial areas of cities. The observed warehouses in Chile, Ecuador and Peru have secondary containment to prevent spills, materials are labelled according to the Globally Harmonized System and are stored according to a compatibility matrix. To further improve AGUNSA’s waste and hazardous materials management, ESAP item #10 requires the Company to: i) conduct a technical inspection to non-hazardous and hazardous waste temporary storage areas and to hazardous materials storage facilities, ii) assess current final disposal practices for waste and safe and environmentally sound management practices for hazardous substances and, iii) develop an improvement plan in those areas or facilities where gaps are identified vis-a-vis internal procedures, country regulations and requirements set forth in WBG General EHS guidelines.                                                     

 Community Health and Safety

The Company has a small fleet of trucks and most of its transport-related activities are performed by third parties. AGUNSA has a procedure for the transport of hazardous materials that is followed by all the transportation companies that provide services to AGUNSA. The procedure includes the requirements for the identification of cargo, and the assessment and review of the safety and overall conditions of transportation units and operating procedures. In addition, AGUNSA has operational procedures for cargo transportation services detailing all the E&S conditions that third parties need to comply with, before providing services to AGUNSA.

AGUNSA acknowledges and addresses the risks to communities resulting from of transport-related activities by: i) delivering specialized training to drivers on defensive driving, ii) implementing safe transportation practices and emergency response, iii) conducting vehicle inspections before starting a journey, and iv) performing real-time GPS monitoring to all transportation units, verifying the use of designated parking and rest areas, and compliance with speed limits. To further enhance the Company’s safe transportation practices, AGUNSA will develop and implement as part of ESAP item #11 a “Corporate Transportation Manual for Community Safety” or “CTM” to include training and awareness in pedestrian safety, in emergency response for road accidents potentially affecting communities, and in the code of conduct and GBVH prevention in in resting areas or locations where drivers engage with communities.

Security Personnel

AGUNSA secures the services of specialized security companies to protect their facilities and operations. In Chile, and in compliance with national regulations, security guards are not allowed to carry weapons and must obtain a certification provided by the National Carabineers. For the operation of ports, such as the Terminal Portuario Valparaiso and Puerto de Manta, the security plan adheres to the International Ship and Port Facility Security Code, a set of measures to enhance the security of ships and port facilities. In other locations the Company includes armed security guards (e.g. in IMUPESA in El Callao, Peru) which are formally certified and receive regular training to prevent risks related to the use of force. As part of the implementation of the “Use of Security Forces Policy” indicated ESAP item #1, AGUNSA will pay special attention in the roll out process of the policy to workers and contractors that provide security services with security guards.