Identification of E&S Risks and Impacts Assessment: The company identifies and manages E&S risks and impacts associated with its operations in line with applicable national standards and regulatory requirements. According to local legislation, the company is not required to undertake an EIA study (Analisis Mengenai Dampak Lingkungan Hidup: AMDAL or Upaya Pengelolaan Lingkungan – Upaya Pemantauan Lingkungan: UKL-UPL) for the existing operations. The company prepared declaration of environment management and monitoring (SPPL) forms for existing factories operations approved by Tangerang city government, which contain commitments regarding management of air quality, wastewater, general and hazardous waste. Similar approval procedure expected to be followed for the new factory in Batang and the company will follow the required procedure in line with current Indonesian regulations on environmental impact assessment.

The company plans to conduct screening check of acquiring companies including licensing and qualification review however there is no formal ESDD procedure available. As part of ESAP 1, the company will develop and implement a screening procedure vis-à-vis the agreed eligibility criteria and the standard operating procedure for conducting E&S due diligence of potential investments against IFC Performance Standards (PS). As part of the screening procedure, the company will assess the applicability of all these PSs for all the future developments to comply with PS requirements.

E&S Policy: Tawada has developed its corporate labor, health safety and environment policy applicable to all the company’s operations including subsidiaries. The policy includes commitments relating to management of its environment, OHS and social impacts, hazard identification, workers’ health and safety, continuous improvement, communication and engagement with workers and stakeholders.

E&S Management System and Program: The company has procedures related to E&S management including corporate E&S policy, risk assessment and identification, safety management procedures, waste management procedures applicable to factories and warehouse operations. The company has obtained certification for Good Medical Device Distribution Practice (CDAKB) from the Ministry of Health, which is mandatory for all medical device distributors in Indonesia. Both THC Martin Industri and THC Medika Industri have established quality management systems with standard operating procedures (SOP) and quality manuals on site. THC Martin obtained ISO 13485 (Quality Management System for Medical Devices) certification.

Organizational Capacity and Competency: The company has several departments to oversee various E&S aspects. E&S manager positions assigned at company headquarter, central warehouse in Cikupa, and two existing factories. HR department and regulatory team are also responsible for the implementation of corporate E&S management. Tawada has established an independent compliance department that reports to the ethics & compliance committee, chaired by the CEO. Currently the company has not confirmed the person in charge of overseeing the Batang factory for its construction and operations. As per ESAP 2, the company will nominate an E&S manager in charge of Batang factory to oversee and coordinate the implementation of the corporate EHS policy and ESMS including its construction and operations activities and will extend its E&S organization to the operations to be acquired.

Emergency Preparedness and Response: The company has emergency response procedures (ERP) for each factory’s operations, including responsibilities and duties defined for various staff and procedures for disaster prevention and management. It consists of a standard operating procedure in case of earthquake, fire, social disasters, power outages as well as provision of relevant trainings. However, there is no ERP available for warehouse and office building operations. As part of ESAP 3, the company will prepare ERP for the central warehouse, office buildings as well as Batang factory and operations to be acquired.

Monitoring and Review: The company monitors all factories and warehouse operations in accordance with key performance indicators (KPIs) such as accidents (OHS, traffic accident and fire), labor compliance (working hours, overtime payment). However, there is no formal monitoring and reporting procedures available. As part of ESAP 4, the company will prepare E&S monitoring and reporting procedures for factories and warehouse operations including the new factory in Batang and the operations to be acquired.

As of March 2023, Tawada has about 730 employees (63% male and 37% female), all employed directly. About 45% of the workforce is dedicated to sales and marketing, while 35% handles back-office functions. The remaining 20% is divided between service engineering and clinical support roles.

Human Resources Policies and Procedures: Tawada has a set of corporate HR policies, HR rules and code of conduct. The company’s HR documents include the rights and obligations of the workers, working hours, overtime, annual and maternity leaves, health and insurance, career development, resolution of labor disputes, and terminations etc. Any changes of the company regulation or HR policies are announced through email to all the employees. The company also regularly reports their company regulation to the local governmental employment agency. Going forward, as part of ESAP 5, the company will update its HR policies and procedures in line with IFC PS2 including; (i) worker grievance process including anonymous options; (ii) workplace sexual harassment including procedures for reporting, receiving, reviewing, and responding; (iii) define and exclude forced, or child labor; (iv) clear commitment for freedom of organization; and (v) retrenchment.

Working Conditions and Terms of Employment: All employees are provided with a contract, which includes the rights and obligations of the worker, working hours, wages and benefit, and social insurance. The company provides health and labor insurance. According to the company’s management, all employees exceed the minimum age of 18 years. The company provides accommodations in the central warehouse with adequate amenities including air conditioners, washing machines and washroom for their employees.

Workers’ Organization and Retrenchment: According to its management, Tawada does not restrict workers from freedom of association. The company currently does not have a labor union among the workers and is currently in the process of establishing a bipartite committee. There is no retrenchment occurred in the past years nor planned and no major labor disputes to date. As described in ESAP 5, the company will update its HR policy and procedure to include clear commitment for freedom of organization and a retrenchment policy.

Non-discrimination and Equal Opportunity: Although Tawada implements a non-discrimination policy in their recruitment guidelines, the company does not have a documented process for anti-sexual harassment nor any mechanism to receive allegations of sexual harassment in the workplace. As described in ESAP 5, the company will update its HR policies and procedures to include a zero-tolerance approach for proven cases of gender-based violence (GBV) or reports of sexual harassment and will include a mechanism for receiving complaints that protects the identity of the complainer, investigates the process based on a survivor centered approach, applying remediation in accordance with the HR policies and procedures and national regulations.

Worker Grievance Mechanism:

The Company has a formal grievance mechanism defining the process for receiving, assessing and resolving grievances for employees through face-to-face meeting, or by talking to HR department. This has been included in the employee manual, however the grievance mechanism is not accessible to contractors and there is no anonymous mechanism available. As described in ESAP 5, the company will update its worker grievance mechanism procedure to be applicable for its contractual workers. The company will also reinforce the policy of confidentiality and non-retribution, along with ability to raise anonymous grievance.

Workers Engaged by Third Parties: The company employs third party agencies to perform activities including construction works of new facility in Batang, intercity delivery transportation, waste management as well as security personnel. Currently the company does not have clear mechanism to implement corporate E&S standards as well as compliance monitoring. As part of ESAP 6, the company will develop a policy on labor standards for third party employees. This policy will set the standards expected for labor, OHS, relevant trainings including onboarding training/orientation and accommodation (if any) for screening, auditing and reporting on compliance with appropriate contractual enforcement processes. The company will undertake mechanism to monitor ongoing compliance of any third-party service providers including construction contractors.

Occupational Health and Safety: The company has developed OHS policies and implemented corporate OHS management and risk identification procedure. Company’s OHS requirements include workplace safety, installation of signs related to safety, provision of trainings and the use of personal protective equipment (PPE). The company plans to develop and implement additional procedures based on site specific risk assessments at the new facility in Batang once operational.

Regular OHS trainings provided to all the employees including security, additional safety and emergency situations are conducted to all factory and warehouse workers. All new employees are required to receive an induction training. There are no fatalities nor major incidents have been reported during the company’s operation over the past years including contractors.

Resource Efficiency: Some of the resource efficiency initiatives implemented include installation of LED lighting and waste minimization with efficient logistics arrangements. To minimize waste, the company’s procurement team closely monitors expiry dates of goods and handles accordingly. The Company is currently considering engaging with IFC’s Excellence in Design for Greater Efficiencies (EDGE) for the design of the new manufacturing facility in Batang.

Based on data from the company’s energy consumption including existing factories, the central warehouse and company’s office operations, total gross greenhouse gas (GHG) emissions at the year of 2022 is estimated to be around 3,000 tons of carbon dioxide equivalent per annum (CO2 eq tpa).

Energy Supply and Air Emissions: Electricity is sourced from the national public grid for all operations including existing factories and the central warehouse. No major air pollutant emission is expected from the company’s operations. Small amount of diesel oil would be used by the backup generators installed in the facilities mentioned above but due to annual consumption, it is not expected to generate significant quantities of air emissions.

Water and Wastewater: Water for the office operations is sourced from local municipal water supply system. Water for the central warehouse is supplied from the reservoir located within the industrial zone. For the factories’ operations, TWC Martin uses the water supplied from third party company and the estimated usage is about 175 m3 per year. TWC Industri uses the groundwater supplied from the industrial zone with a permission to use. The expected amount is 90m3 per year. The drinking water for employees is sourced from local bottled water supply.

There is no process wastewater generated from the project operations, other than for cleaning purposes or some wastewater with testing chemicals. Such wastewater is handled by the specialized third party companies. The similar approach will be applied to the new factory in Batang. Domestic wastewater from office and warehouse operations are discharged to the sewage system. The domestic wastewater from each factory has been treated by the septic tanks installed.

 Life and Fire Safety Management: Tawada has a fire safety permit at the office headquarter indicating that the fire protection system at the office building been tested and approved. The design of central warehouse in Cikupa has been approved by the local authorities, and the central warehouse has maintained appropriate L&FS infrastructure and systems such as fire extinguishers, smoke detectors, fire alarms, emergency exits and signs. The new factory in Batang expected to follow similar approval from local fire authorities and the company plans to install L&FS equipment that is suitable for the Batang factory operations.

The L&FS requirement incorporates a routine inspection including condition of fire extinguisher, ensuring emergency exit pathways, and regular checks on electrical appliances. Training for fire safety management has been implemented for its factory, warehouse and headquarter office operations with support from the local fire authorities. There is no fire incident reported for the company’s operation in the past three years.

Community safety management:

The company owns a small number of transportation fleet, which is expected to be expanded once the acquisition completed. The company also contracted to third party transportation fleet operators to support the intercity delivery services. There have been no major traffic incidents reported in the past three years. As mentioned in ESAP 6, the company will update policy and monitor on labor and OHS compliance for third party contractors including transportation fleet operators. As part of the ESAP 8, the company will prepare a policy related to traffic safety management to ensure its transport fleet follows national regulatory requirements on road safety.

Security Personnel:

CCTV monitoring and supervision system through video cameras has installed in the central warehouse in Cikupa observing the key areas. Some company facilities including the central warehouse premises are protected using contracted unarmed security. There are no current plans to use armed security guards. Tawada conducts background checks of security guards and provide a clearance letter for each security. The company regularly undertakes internal briefings and provides training for the security personnel.