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
Environmental and Social Management System
Axtel manages E&S risks in its projects and operations and maintenance (O&M) in line with local and national regulatory requirements and permits. The Company has corporate policies and procedures, seeking to align with ISO 14001 (Environment) and ISO 45001 (OHS), including a Sustainability Policy, Environmental Policy, Waste Management Plan, OHS Manual, Emergency Response Plan, Integrity Policy, Supplier Code of Ethics, among others. As per ESAP item #1, Axtel will build on its existing policies and procedures to develop an integrated E&S management system (ESMS), commensurate to the scale and impacts of its activities, and consistent with the IFC PS and relevant World Bank Group (WBG) Environmental, Health, and Safety (EHS) Guidelines. The ESMS will apply to site selection, design, construction, and O&M of existing and new assets, including work executed by contractors.
Axtel’s Sustainability Policy acts as the overarching ESMS policy, committing to E&S sustainability, and addressing legal compliance, OHS, human rights, labor relations, stakeholders, reducing impacts, protecting biodiversity, and continuous improvement. As part of ESAP item #1, Axtel will update the Sustainability Policy so that it is fully consistent with the principles of the IFC PS, indicating who, within Axtel’s organization, will ensure conformance with the policy and be responsible for its execution.
Axtel identifies key E&S risks and impacts for each specific site in accordance with local and national regulatory requirements. This includes, for example, environmental permitting for constructing new transmission towers. As part of ESAP item #1, Axtel will develop an E&S Assessment and Management Procedure for the design, construction, and O&M of existing and new assets, in line with IFC PS and relevant WBG EHS Guidelines. This will include a due diligence procedure for E&S aspects in line with IFC PS1-8 requirements, including a specific procedure to avoid and manage impacts related to sporadic land acquisition (permanent or temporary).
Organizational Capacity and Competency
Axtel’s Director of Legal and Regulatory Affairs is responsible for E&S matters, whose team includes the Compliance and ESG Manager. Labor and OHS are managed by the Human Capital team which includes an HR Manager and Security and Safety Manager. The Engineering and Infrastructure team is responsible for local government relations during infrastructure projects as well as facilities operations permits. The Supply Chain Director is responsible for fleet management. Going forward, as per ESAP item #1, Axtel will designate the ESG Manager as responsible for the development and maintenance of the integrated ESMS.
Emergency Response Planning
Axtel has a compendium of emergency response procedures in place in accordance with civil protection regulations. Buildings are equipped with emergency lighting, fire escapes, escape signage, and security cameras. Firefighting systems include heptafluoropropane systems for datacenters. Emergency exercises are carried out in line with civil protection regulations. All workers deployed to the field are tracked by the control room and each person is equipped with a mobile phone to report an emergency. For work in remote locations, there must be a minimum of two workers in the team. Axtel also has a plan to address the network impacts of hurricanes, earthquakes, and floods. Disaster recovery exercises are held regularly.
Monitoring and Review
Axtel reports ESG performance in its Annual Integrated Report (https://www.axtelcorp.mx/informe-de-sostenibilidad/). The report contains Axtel’s sustainability goals as well as data on environmental, OHS and diversity performance. The sustainability committee meets at least two times per year to discuss ESG metrics, and performance is presented to the board of directors once a year. As part of ESAP item #1 Axtel will develop procedures to monitor compliance with the whole ESMS, establishing and monitoring key performance indicators (KPIs) and performance targets for all aspects of E&S as defined by IFC PS, as well as internal audits to verify compliance with applicable legal requirements and any applicable parameters of the relevant WBG EHS Guidelines.
PS2: Labor and Working Conditions
The 2022 annual integrated report states that Axtel has 4,072 employees, 26% of which are women. In addition to staff, Axtel relies on third-party contractors for the delivery of infrastructure construction / installation projects, among other services.
Axtel’s HR policies are aligned with local regulations, covering labor and working conditions, including non-discrimination, promoting equal opportunity, and respecting freedom of association. Axtel’s staff contracts comply with Mexican legislation and regulations for minimum age, working hours, shift times, overtime payment, rights to privacy, and benefit requirements. The human rights policy commits to offer decent employment, with the right to rest, regular vacations and working hours in accordance with current legislation. The employment contract defines compensation, work hours, leave and medical benefits, disciplinary procedures. Prohibition of any forced or child labor in these policies apply to all workers and suppliers.
Axtel’s Human Rights Policy commits to facilitate freedom of association and the right to collective bargaining, based on the provisions of current labor legislation. All Axtel employees are non-unionized employees therefore Axtel has not signed a collective bargain agreement with any labor union.
Axtel’s Code of Ethics includes rules regarding discrimination, equal opportunity, and promotion of diversity. Axtel’s Directive on Labor Equality and Non-Discrimination aims to establish the guidelines that promote a culture of equality and non-discrimination. Axtel has also developed specific gender equality improvement measures and targets.
As part of ESAP item #1 Axtel will adapt and complement existing HR policies to fully align with IFC PS 2.
Worker Grievance Mechanism
As per the Code of Ethics, Axtel operates a grievance mechanism which is open to employees, contractors, and the general public. Grievances can be filed anonymously via freephone number, email, webpage, WhatsApp, and SMS (https://www.axtelcorp.mx/buzon-de-transparencia/). Employees can also report grievances to their manager, to HR or to the medical professionals that form part of the OHS team. An action plan is generated for each grievance, which is tracked to closure using a ticketing system. All new staff members are trained in the use of the system, and campaigns on how to use the system are periodically conducted.
Gender-based Violence and Harassment (GBVH)
Axtel’s Code of Ethics commits to a work environment free from all forms of violence or harassing behaviors, including sexism, sexual advances or inappropriate physical contact, gestures, photographs, jokes, or statements of a sexual nature. Staff are provided with specific training on GBVH, and HR is able to connect individuals to specialist support professionals, as required.
Occupational Health and Safety
Axtel’s Safety and Hygiene Policy commits to complying with company and regulatory OHS requirements. The OHS Management System Manual addresses risk assessment, operational controls, monitoring and audit, among other elements in line with PS2. Incident investigations are led by HR with the support of the OHS team. High risk activities are controlled by a permit to work system.
Workers Engaged by Third Parties
Axtel utilizes contractors for infrastructure construction / installation projects. All contractors are vetted on environmental and OHS performance before being awarded contracts. The Supplier Code of Ethics establishes Axtel’s requirements with respect to the grievance mechanism, worker welfare, waste management, and OHS obligations. The code is signed by each contractor company, accepting to correctly manage these obligations. Contractors are required by Axtel to include adequate provisions for supervision or works. As per ESAP item #2, Axtel will build on the Supplier Code of Ethics to develop E&S minimum requirements for infrastructure contractors that meet the IFC PS and relevant WBG EHS Guidelines. Axtel will also conduct periodic inspections of infrastructure projects to verify contractor compliance with the minimum E&S requirements.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency
In 2022, 51% of Axtel’s energy consumption came from clean or renewable sources. Axtel’s Directive for Energy Use and their Energy Savings Policy establish guidelines for the efficient use of electricity. Significant energy savings have recently been achieved by uninstalling obsolete equipment. Axtel monitors energy intensity in terms of energy consumed per unit of revenue as well as the “power usage effectiveness” of its data centers. Water is supplied from municipal sources and total consumption in 2022 was 16,957 m3. Axtel has an efficient water use policy.
Greenhouse Gases (GHG) Emissions
Scope 1 and 2 GHG emissions in 2022 totaled 43,808 tCO2e. Scope 1 emissions are from fuel consumption, power generation and vehicles, while Scope 2 emissions are from purchased electricity. Axtel has several initiatives planned in order to reduce Scope 1 and 2 emissions in the coming years. Axtel reports its GHG emissions publicly in its Annual Integrated Report.
Waste Management
Axtel manages waste in accordance with its Waste and Residue Management Policy and applicable legal requirements. Hazardous waste and lead acid batteries are temporarily stored before being collected and disposed of by authorized third parties. Obsolete electrical equipment is either reconditioned for redeployment or sold. In 2022, Axtel recycled 52 kilograms of paper and cardboard and prepared 50 kilograms of fiber and cardboard for reuse. All wastewater is routed to the municipal sewage system.
Hazardous Materials
Axtel stores hazardous materials as per their classification in accordance with applicable legislation. The main hazardous material stored is diesel (for emergency power generation), which is managed per the Safe Storage of Diesel Procedure.
Ozone Depleting Substances (ODS)
80% of Axtel’s cooling equipment contains R-22 gas (an ODS). As Axtel renews its equipment, it is phasing out the use of R-22. As per ESAP#3, Axtel will develop and implement a time-bound transition plan to use alternatives to R-22.
PS4: Community Health, Safety and Security
Community Health and Safety Management
Axtel does not operate facilities accessible to the general public. POPs are secured with perimeter fences and access controls. Interactions with the public do occur when installing or repairing fiber optic cables. Company vehicles are subject to Axtel’s Fleet Management Policy, which includes maintenance requirements. All drivers must have valid driver's license, undergo an annual medical, and are provided with training on safe driving techniques. To carry out works on public streets, Axtel requires prior authorization from the local government or city council, or if a federal road, from the Ministry of Communications and Transportation. These authorizations consider the potential inconvenience and hazards that the works may present to the public. As per ESAP item #2, Axtel will develop E&S minimum requirements for infrastructure contractors summarizing the general expectations in terms of E&S, including community health and safety management.
Security Management
Axtel has a Corporate Security Risk Evaluation and Management Policy (CSRE&MP). As determined by risk assessment, unarmed contracted security guards are deployed to control access to sites and report security violations to Axtel’s control room and the police. All security contractors are subject to background checks and are provided with an induction and periodic training, including human rights and use of force. With respect to fieldwork, a security risk assessment determines if workers require a police escort. As per ESAP item #4, Axtel will update or supplement its CSRE&MP to align with IFC PS4 and ensure that its principles of conduct are systematically communicated to public security forces, expressing Axtel’s desire that security be provided in a manner consistent with those principles.
