This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability, as the construction and operation of the subprojects to be financed by the proposed investment are expected to have limited adverse E&S risks and/or impacts that are few in number, generally site-specific, largely reversible, 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 E&S issues reviewed at appraisal included: (i) company’s ESMS, including environmental licensing and contractor management; (ii) labor conditions and occupational health and safety (OHS) management, including contractor / third party management; (iii) community health and safety; (iv) security management; (v) land access and acquisition and potential risks associated with permanent or temporary displacement; and (vi) community grievance mechanism and stakeholder engagement.

E&S Policy and Management Systems

Sanasa manages its E&S aspects seeking compliance with applicable national and local E&S laws and regulations. The company currently has obtained all the required environmental licenses for its existing operations. For the existing plants, Sanasa was not required to undertake any ESIA process before the construction phase. Although Sanasa does not have an approved E&S Policy, the company manages its E&S risks and impacts through formally established procedures contemplating environmental, occupational health and safety (OHS), labor and community aspects of its operations. Sanasa implements a Corporate Risk Management Policy and Matrix as tools to support the identification of risks and impacts (including E&S) .

The company is also ISO 9001 (Quality) certified since 2004 encompassing all relevant business areas, including E&S.

As part of the project (ESAP #1), Sanasa will develop an E&S Assessment and Management Plan (ESAMP) to ensure that all the subprojects to be financed by IFC are implemented and managed in line with IFC PS in a manner commensurate with the level of the subproject’s E&S risks and impacts. The ESAMP will consolidate the policies, procedures and plans to guide the assessment, implementation and monitoring of all subprojects.

The OHS team is responsible for preparing, training, and communicating to all workers the Emergency Action Plan. For each eligible subproject, Sanasa will ensure that construction phase Emergency Preparedness and Response Plans (EPRP) are extended to the contractors  (ESAP #1). Sanasa E&S capacity is distributed across sectors including i) human resources (HR); ii) OHS; iii) environmental permits management and iv) quality control, including auditing and compliance. E&S staff focus on the development of procedures, performance indicators, and monitoring.

For the subprojects included in the use of IFC proceeds, (ESAP #2) Sanasa will assign at the corporate level (i) a dedicated and qualified E&S specialist to oversee the implementation of the ESAMP and (ii) a qualified social specialist to oversee the implementation of social management plans, including land acquisition aspects.

Human Resource Policies and Procedures

As of December 2021, Sanasa directly employed 2,131 workers under permanent contracts (in Brazil known as CLT) out of which 81% are men and 19% are women, and a total of 1,314 outsourced employees.

Sanasa HR policies and procedures are aligned with the local regulations and PS2 requirements and are communicated to employees, third-party contractors and interns through induction and training programs. The company’s HR policies include Human Resources Policy, Code of Conduct, Code of Conduct for Contractors and Anticorruption and Compliance Manual. The HR policies cover recruitment, terms of employment, payment, benefits, professional development, OHS, worker’s grievance mechanism, training, harassment, non-discrimination and equal opportunity, freedom of association, prohibition of child or forced labor, anticorruption practices.

The Code of Conduct describes Sanasa’s workers’ grievance mechanism, and orients how the complaint must be communicated and how it will be addressed on the Ethics Committee. The mechanism allows for anonymous complaints and assures confidentiality for the complainant, the reported parties and the information provided on the complaint.

The company has adopted several policies and procedures to manage OHS during construction and operation and maintenance (O&M) phases, including OHS Management Program encompassing procedures for work permits, training, preventive/corrective inspections, accidents and incidents in workplace analysis, and OHS programs required by Brazilian laws and regulations.

Employees periodically receive training in operational routines and safety standards. Sanasa’s contracts typically include the E&S and OHS requirements that the contractors must follow. Sanasa also requires its contractors to commit to the Code of Conduct for Contractors, which covers relevant labor subjects, such as: OHS, ethical conduct, anticorruption conduct, auditing, human rights and environmental compliance.

As per ESAP #1, the company will ensure the implementation of the contractor OHS Management Plan for each eligible subproject, to guarantee that labor and OHS conditions comply with local regulations, contractual requirements, and PS2 requirements.

Sanasa has heavily invested on several projects, programs and plans focused on enhancing resource efficiency, which are based on various technical solutions, such as: losses control, modernization of existing infrastructure, improving telematics for monitoring and data gathering, changing to sustainable energy sources, optimization of water and wastewater treatment technologies.

Sanasa has also implemented projects, programs and plans aimed on promoting pollution prevention, such as: solid and hazardous waste management; spring water, treated water and treated wastewater quality monitoring; optimization of wastewater treatment technologies; and composting of sludge from wastewater treatment. All these initiatives are in accordance with IFC PS3.

On the matter of solid waste and hazardous materials management, Sanasa follows Brazilian legislation. and IFC PS3 requirements. Sanasa manages its solid waste through programs such as non-generation, reduction, reuse and recycling programs. The workers receive adequate training on these subjects (as stated on PS2) and all the personal protective equipment (PPE) needed.

During the implementation of the subprojects, limited amounts of non-hazardous and hazardous wastes will be generated at the construction and/or renovation sites. Hazardous materials that will be temporarily stored and used at the sites during construction include gas cylinders, diesel, lubricating oils, paints, batteries, and other chemicals. Hazardous material will be stored with the required measures in terms of segregation and containment and will be handled with appropriate care and PPE.

As part of the ESAMP (ESAP #1), while a subproject is under construction, the company will present for each subproject an Environmental Control Plan, which should include: (i) environmental licensing control; (ii) solid waste and hazardous material management plan; (iii) submit periodic reports on solid waste and hazardous material management including volume of the various types of waste generated and evidence of storage, handling, treatment, and disposal in compliance with local requirements and PS3.

Sanasa permanently assesses and controls risks and impacts associated to the health and safety of the Affected Communities. Assessments focus on infrastructure safety, hazardous materials management, exposure to diseases and emergency preparedness and response, in line with IFC PS4 requirements.

Construction activities will result in some temporary community disturbance and nuisance, mainly in relation to noise, dust and project-related traffic. Although limited, noise will be monitored and mitigation measures applied where necessary. Since the subprojects proposed for IFC’s financing may include construction works in public roads, sidewalks and near households, (ESAP #3) Sanasa will supervise the works and ensure that, upon completion of civil construction and repairs, affected areas are left in good condition by the contractors.

Sanasa’s security, including armed personnel, is hired through legal agreements with qualified companies. Procedures to obtain the required authorization from the Federal Police include a review of the candidate’s criminal background and psychological evaluation; all candidates also need to pass a training session. The specialized security companies are periodically audited by the company, local authorities and federal government. In 2022, Sanasa did not report any complaints associated with security personnel.

As part of ESAP #1, the company will develop a Security Management Protocol, with generic security requirements applicable to the eligible subprojects, to ensure that contractors will manage it in line with IFC PS4 requirements.

Sanasa stakeholder engagement activities are held under the Relationship with the Community Sector, Customer Service Sector, and Social Communication Sector. Together, they have implemented procedures, projects and programs seeking to strengthen the company’s relationship with the affected communities.

For facilities requiring environmental permits, the company implements consultation and information disclosure activities before and throughout the construction and expansion activities. Sanasa publishes relevant documents, reports and other information on its web site and Transparency Portal. The record of engagement activities demonstrates that the company seeks to maintain ongoing dialogue with project affected households and local communities.

Stakeholders are also heard when preparing the Citizens Budget, carried out annually by the City Hall of Campinas, which reflects the expectations of residents about their needs and demands. The solicitations concerning water supply and sanitary sewage systems are communicated to Sanasa and become part of the 300% Plan, which foresees, by the year 2025, achieving universal sanitation in the municipality (100% water supply, 100% sewage collection, and 100% sewage treatment).

External Communications and Grievance Mechanism

The company aims to listen and understand the desire of the community living in the municipality of Campinas, to reach the universalization of sanitation fairly and equitably. For this purpose Sanasa maintains several communication channels available, via telephone, Ombudsman, contact portal over the internet, as well as face-to-face assistance in several units. Sanasa also annually discloses the complaints statistics on its website.

Since 2014, Sanasa publishes on its website yearly Sustainability Annual Reports developed in line with Global Reporting Initiative requirements and reviewed by external auditor.

As per the agreed ESAP #1, the company will ensure the contractors establish Stakeholder Engagement Plans for each subproject to ensure adequate stakeholder engagement during the E&S assessment and management process, tailored/ commensurate with the nature of activities being performed by them and the relevant E&S risks.

Company: Sociedade de Abastecimento de Água e Saneamento S/A

Point of Contact: Manuela Gonçalves Garcia

Title: Finance and Market Manager

Telephone Number: +55 19 3735-5212

Email: manuela.garcia@sanasa.com.br

Mailing Address: Avenida da Saudade, 500, Campinas, São Paulo, Brazil

Website: www.sanasa.com.br