IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
E&S Policy:
IVL publicly discloses its group-wide policies related to EHS, OHS and corporate governance applicable to all the company’s operations at: https://www.indoramaventures.com/en/our-company/governance/policies . These policies cover anti-corruption, environmental health and safety, product quality, human rights and whistleblower protection aspects.
Identification of E&S Risks and Impacts Assessment:
IVL identifies and manages E&S risks and impacts associated with its operations in line with applicable national standards and regulatory requirements and through internal due diligence (DD) procedures. A DD is/will be carried out to ensure EHS and legal compliance are factored in as part of an acquisition or a new project development funded under the project. The ESMS identification of E&S risks and impacts procedure has been updated as per previous investment ESAP requirement and is consistent with the requirements of IFC PS1. Following the United Nations Global Compact (UNGC) principles, IVL has developed its workplace human rights assessment framework covering employees, children, indigenous people, migrant labor, third-party contracted labor, local communities, and vulnerable groups.
E&S Management System and Program:
IVL has established a corporate E&S management system (ESMS) consistent with IFC PS requirements, which is applicable across the group operations. The company has procedures related to ESMS, including corporate E&S policies, risk assessment and identification, and safety management procedures. The facility level ESMSs have obtained one or more of the management system certifications for quality (ISO 9001), environment (ISO 14001), energy (ISO50001), and health and safety (ISO45001). Various IVL facilities are also certified with EU-Eco Management and Audit, SA8000 (social accountability standard), OEKO-TEX Standard 100 (harmful substances in textiles), and ISO 22000 (food safety management). In addition, the company’s recycling facilities have received Global Recycled Standard (GRS) certification.
Organizational Capacity and Competency:
IVL has established the EHS organizational structure, and dedicated teams are in place at the corporate and facility levels to oversee EHS and sustainability including supply chain issues. At the corporate level, IVL has a Sustainability and Risk Management Committee (SRMC) to oversee the group’s sustainability activities and provide risk management oversight.
IVL has a global EHS team with around 15 staff, with a global oversight responsibility for the EHS aspects across all the operations. Under the supervision of the global EHS team, the EHS manager or EHS officers at each facility, in cooperation with the site head and business EHS team, is responsible for facility-level E&S management and ensuring compliance with the corporate EHS policy and local regulations. In addition, an internal audit team is in place with the responsibility to independently ensure the compliance of various facilities with legal and other applicable requirements.
Emergency Preparedness and Response:
IVL’s facilities have documented emergency response plans. The facilities have adequate fire detection and fire-fighting passive and active systems per respective national building and fire safety codes and good international industry practice (GIIP). Fire and other emergency response drills are conducted regularly based on the systematic risk assessments mentioned above. IVL has a local Risk Management Committee (RMC) at each facility, is in charge of evaluations and risk assessments, and maintains risk registers. In addition to the site RMC, a crisis management team is in place at each facility, handling emergency situations such as fire, accident, and chemical spillage.
Monitoring and Review:
IVL has established an EHS monitoring regime as part of its ESMS that is aligned with the requirements of global reporting initiative (GRI) standards. IVL collects relevant information and key performance indicators (KPIs) from across all its facilities related to several E&S aspects such as water and energy consumption, greenhouse gas (GHG) emissions, wastes, wastewater and air emissions, OHS, and community engagements.
The information is collected and compiled centrally, and summary reports are regularly presented to the respective site-level managers and the top management at the corporate level. In addition, IVL's facilities regularly undergo rigorous audits by SEDEX and customers to ensure IVL's compliance with the respective buyers' supplier code of conduct. IVL also participates in EcoVadis annual assessment and has achieved Gold Recognition as of March 2024.
PS2: Labor and Working Conditions
As per its 2022 sustainability report, IVL employed globally a diverse workforce of 30,201 employees representing 96 nationalities including 369 employees with disabilities. This workforce comprised about 25% of women employees.
Human Resources Policies and Procedures:
IVL has adopted overarching HR policies at the corporate level aligned with international good practices, including IFC PS2 requirements, International Labour Organization (ILO) conventions and UNGC. IVL's corporate HR policy and practices are applied globally, and the implementation is decentralized to the facility level in the business segments and aligned with respective local labor regulations where the facility is located.
Working Conditions and Terms of Employment:
All employees are provided with a contract, which includes the job title and duties, place of work, standard terms and obligations of the worker, working hours, salary and payment, and termination. IVL has overarching HR documents related to principles and policies such as preventing child labor and forced and compulsory labor. HR manuals at the facility level adhere to these overarching HR policies at the corporate level.
Working hours are recorded based on the IT-based time recording system, and payment, including overtime, is based on this record accordingly. The IT system can be programmed to flag discrepancies or potential issues, such as overtime violations or non-compliance with company regulations. Worker’s accommodation is not expected to be provided for the project sites, except for the existing facility in Nakhon Pathom with adequate basic utility services, including electricity, water, and internet.
Workers’ Organization and Retrenchment:
As articulated in corporate human rights policy, the company respects the rights of employees to form and join an association without fear of retaliation, interference, and harassment if the association complies with local laws. As reported in the 2022 sustainability report, over 42% of its total employees were covered by collective bargaining agreements globally. No material labor-related disputes, retrenchments, or legal cases were reported in the past three years.
Non-discrimination and Equal Opportunity:
As articulated in its corporate diversity policy and supported by the diversity, equity, and inclusion committee, IVL encourages diversity in its workforce and is committed to protecting its employees and stakeholders from all forms of discrimination and harassment based on their ideological views, race, color, religion, gender, sexual orientation, national origin, age, disability, social-economic status or any status regarded as a human right throughout its operations and work to eliminate prejudice, discrimination, bullying, and harassment.
Worker Grievance Mechanism:
IVL has formal grievance mechanisms based on a corporate set of guidelines. The employees can file their grievances and suggestions with the facility-level HR teams or by using IVL’s whistleblower reporting channel. IVL's whistleblower policy provides all employees with the opportunity, regardless of employment status, to anonymously raise any issues such as environmental, health and people, product and process safety, any form of discrimination and sexual harassment, breaches of human rights, and retaliation, etc.
Occupational Health and Safety:
IVL has OHS policy and procedures to assess OHS risks and ensure adequate health and safety standards across the group and prepared an exposure assessment and control standard to identify potential health hazards in the workplace, estimate the potential exposure and implement controls for any high-risk activities.
Several standards of workplace health and safety are maintained such as safety training, good safety signage and employee health, accident records, use of personal protective equipment (PPE), and handling of chemical materials. All incident data are collected and compiled through internal reporting systems for investigation, root cause analysis, and to establish corrective and preventive measures.
Safety training is provided to employees, and OHS records are maintained according to the management systems and corporate reporting requirements. In 2022, the total recordable injury rate (TRIR per 200,000 working hours) is 0.82, and the lost time injury frequency rate (LTIFR) is 0.51.
Workers Engaged by Third Parties:
The group hires temporary workforce such as cleaning staff, security personnel as well as construction works through licensed agencies as per specific needs at the facility level and strictly in compliance with applicable local labor laws. Appropriate compliance training on human rights, health & safety is provided. During the construction, the EHS team and relevant departments at each facility supervise and monitor construction contractors, ensuring EHS management implementation in line with the ESMS procedures and respective national laws and standards.
Supply Chain:
The Company sources post-consumer PET mainly from large aggregators. The aggregators/main suppliers undergo regular monitoring and scrutiny, including planned and unplanned site visits and annual audits, to ensure compliance with the IVL supplier code of conduct (CoC) requirements.
IVL has a documented corporate CoC and responsible sourcing policy compliant with the requirements of IFC PSs, which requires all suppliers to comply with applicable laws and regulations, ensuring workplace health and safety and deploying appropriate labor and hiring practices. Every supplier is contractually obliged to submit a self-assessment questionnaire when entering the contract, which covers aspects such as prevention of child labor, forced labor, human rights violence, adherence to ethics and legal requirements. The implementation status of Cis monitored by IVL’s supply chain management team. In 2021 and 2022 assessment results, 100% of raw material suppliers and critical non-raw material suppliers were assessed, and no human rights-related risks were identified nor specified as being exposed to risks of incidents of child and forced labor.
IVL develops a robust local supply chain for post-consumer PET bottles for each facility based on specific local conditions, following IVL's supplier CoC and other sustainability policies. The CoC applies to not only the supplier but also its subsidiaries and any subcontractors providing goods or services.
The risk management committees of respective businesses review supply chain risks quarterly, and appropriate risk mitigation actions are initiated as needed. IVL's supply chain management team regularly interacts with its suppliers, which helps monitor the suppliers for the supplier CoC commitment. In addition, all suppliers are required to respond to the self-assessment questionnaire. The aggregators/main suppliers undergo regular monitoring and scrutiny, including planned and unplanned site visits and annual audits, to ensure compliance with IVL’s CoC requirements, which will be applied to all the facilities under the project.
Moreover, IVL's recycling facilities undergo rigorous audits for the GRS standards, and external audits are done by agencies like Control Union and brand owners. IVL's buyer brands, which strongly focus on EHS and labor standards, regularly review and audit the company's supply chain.
As per ESAP #1, IVL will develop and roll out a standard operating procedure (SOP) for supplier management to IFC project at the site level in India and Indonesia including (but not limited to): i)mapping of suppliers (tier 1 suppliers and beyond, i.e., small collectors and aggregators) to the best of its ability to understand supply chain risks; ii) E&S screening and due diligence of suppliers in selection process including a verification process to ensure that primary suppliers have policies and procedures in place aligned with the code of conduct and PS2 requirements,; iii) inclusion of the IVL's responsible sourcing policy on prohibition of child labor into contract agreements with suppliers and a requirement for suppliers to cascade the requirements with their own suppliers; iv) training on IVL's supply chain management policy for suppliers (tier 1 suppliers and beyond where feasible); and regular monitoring of suppliers (annually at least certain portion of them) for their commitment to IVL's requirements including planned/unplanned visits; v)establishment of a formal process for supplier engagement, remedy or disengagement in case of non-compliance with the code of conduct and refusal to remediate issues; vi) develop a plan to increase efforts of traceability of the post-consumer PET in order to create safeguards and avoid sources with high risk of child or forced labor.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency:
As per IVL’s commitments and strategy, the group has resource efficiency targets including 10% reduction in water intensity, 5% reduction in energy intensity, 10% increase in renewable electricity consumption and a 10% reduction in GHG by 2025 compared to 2020 baseline. To meet these targets, IVL is designing and implementing several renewable energy and energy efficiency projects including the installation of onsite solar panels, efficient compressors, and waste heat recovery systems etc.
In 2022, 58% of IVL's manufacturing facilities globally are ISO 50001 (Energy Management) certified, and accordingly, they use a systematic energy management system approach to baseline, reduce, and monitor energy consumption while adopting global best practices and benchmarking performance.
The company analyzes GHG emissions across its operations globally per Greenhouse Gas Protocol on Corporate Accounting and Reporting by WRI and World Business Council for Sustainable Development and ISO 14064 to implement reduction measures. In 2022, IVL’s GHG emissions were 9.8 million metric tons. IVL has reduced corporate GHG emissions intensity by 3.84% compared to 2020, resulting in 0.585 tCO2e/ton of production.
Air Emissions and Ambient Air Quality:
The company monitors and manages the air emissions from its facilities per the local environmental permit conditions. The main source of emissions is combustion sources or captive power generation (boilers or generators); air pollution control measures are in place. IVL publicly reports the air emissions, viz. SOx, NOx, and volatile organic compounds (VOC) locally for the facilities as applicable and aggregated at the corporate level through the sustainability report. The air emission monitoring reports indicate compliance with the national air emission standards and WBG General EHS Guidelines (2007) emission guidelines.
Water and Wastewater:
IVL uses water intensively for rPET process primarily for bale washing and the company is committed to sustainable water management through its water management strategy which mandates water management improvement through regular assessments and by further implementing technologies. Through the implementation of water consumption reduction projects and its water management policy and strategy, IVL achieved a 1.70% reduction in water intensity in 2022.
IVL complies with all applicable environmental laws, international standards, procedures, and regulations in the countries where IVL operates. The company has installed onsite wastewater treatment systems in its facilities as per the local environmental permit conditions, and the treated wastewater is reused or recycled to the extent possible. At the Nakhon Pathom facility, about 70% of the treated wastewater is used for the initial washing and cleaning of PET bottles before recycling, and the balance is discharged of as per the environmental permit conditions.
Waste and Hazardous Material Management:
Relatively small amounts of waste are generated from rPET facilities. These wastes are disposed of through licensed contractors per local regulations, and chain of custody documentation is maintained. This involves maintaining proper waste inventory per legal requirements. In 2022, IVL reported no violations of domestic and international regulations.
In line with its corporate sustainability strategy, IVL is phasing out hazardous chemicals. The company has developed a hazardous chemicals/substances management plan that evaluates its portfolio, develops an approach for substitution, and sets targets for phasing out the specified hazardous chemicals. Operational controls are in place at the facility level for the storage, handling, and management of designated hazardous materials and wastes aligned with GIIP.
PS4: Community Health, Safety and Security
Most of IVL's operational facilities are in designated industrial zones, which are generally away from residential communities. Moreover, the rPET Operations at IVL facilities pose low—moderate risks and impacts on the health, safety, and security of the communities.
Infrastructure and Equipment Design and Safety:
All the IVL facilities are designed and developed as per GIIP and considering the local situation and design standards. Each facility is equipped with adequate fire detection and fire-fighting systems following respective national building and fire safety codes. In addition, the facilities in earthquake -prone areas such as Indonesia are designed following specific requirements for structural safety to withstand strong earthquakes as prescribed by prevailing design codes.
The life and fire safety requirement incorporates routine inspections, including checking the condition of fire extinguishers, ensuring emergency exit pathways, and regularly checking electrical appliances. Training for fire safety management has been implemented for each facility.
Community safety management:
Each IVL facility complies with applicable environmental and OHS related permit requirements to ensure community health, safety, and security. IVL developed an emergency crisis management standard to support sites in the case of an unforeseen event. Regular emergency response drills are conducted to test the preparedness of the company's emergency response, and such drills are conducted in collaboration with relevant authorities.
IVL commits to transportation safety applicable to logistics partners globally including inspection processes for the transportation of IVL’s raw materials. IVL has transportation safety protocols, utilizing adequate equipment and vehicles, provision of safety trainings and following industry standards and regulations to mitigate risks.
Security Personnel:
IVL employs unarmed security guards for its facilities from licensed security services companies. The security guards are trained to handle the emergencies as part of their duty. IVL conducts background checks of security guards and regularly undertakes internal briefings and provides training for the security personnel.
