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: The Group E&S policy is based on four pillars defining its vision, mission, purpose and values and generally in line with IFC PS requirements. This is reflected in a general policy commitment to apply sustainable practices on a business-by-business basis. The Group is committed to be an ethical and responsible business operator, while deferring responsibility to subsidiary levels to develop its own applicable policies and commitments on its specific operations. SHL commits to compliance with applicable Sri Lanka's legal and regulatory requirements.
Management System and Identification of Risks and Impacts: The Group approach to management of E&S risks is devolved to the respective operating subsidiary. As such, the E&S management system (ESMS) at the subsidiary level is contingent on the specific risks and impacts of that business. SHL identifies and manages E&S risks and impacts associated with it business operations through compliance with applicable national standards with regard to pollution prevention (e.g., dust control, waste management), occupational health and safety, and others. As the Group is an existing IFC client, SHL's ESMS is generally in line with IFC PS requirements. SHL follows the local legal requirements for design, development and operation of healthcare business facilities including the requirements defined by permits/approvals. Environmental impact assessment (EIA) study is not required for SHL's business as per the local regulations.
Organizational Capacity and Competency: Group chief people and corporate communications officer set up group level policies, and define the scope and targets related with E&S. At the subsidiary/business unit level, health and safety committee is established and HR business partner and EHS officer implements the scope and targets defined at the corporate level to ensure hazard free work environment. Key performance indicators (KPIs) typically include workplace environmental monitoring, HR indicators (e.g., employees' attrition, grievances), occupational health and safety incidence, and others. The KPIs are assessed in a monthly review meeting and escalated to the group level.
Emergency Preparedness and Response: The Group has a commitment to comply with applicable Sri Lankan' laws and regulations for emergency response with each subsidiary required to demonstrate compliance and have preparedness plans in place for the management of fires and serious incidents. At the subsidiary level, major emergency situations associated with SHL's business operations may include fire accident. Facilities are assessed and certified by the District Factory Inspecting Engineer's Office, and audited annually by the local fire service department. In addition, standard operating procedures (SOPs) are established for fires covering prevention, emergency response, evacuation procedure and maintenance of firefighting system. Fire drills are implemented bi-annually.
Monitoring and Review: Monitoring parameters typically include workplace monitoring (air quality, noise level), environmental monitoring (wastewater, noise at boundary), HR indicators, and occupational health and safety incidence which are reported to health and safety committee on a monthly basis and reviewed by senior management.
PS2: Labor and Working Conditions
As of October 2023, SHL employs approximately 1,047 direct workers (approximately 85% male and 15 % female employees). Of the total 1,184 employees, 1,047 are direct employee (on-roll) and 137 are employees of third-party companies (off-roll).
Human Resources (HR) Policies and Procedures: SHL adheres to the Group's overarching HR policies and does not have its own HR policies. The Group's overarching policies cover various HR aspects such as non-discrimination and equal opportunity, prevention of sexual harassment, grievance handling, health and safety, code of conduct and others.
Working Conditions and Terms of Employment: Working conditions and terms of employment as well as responsibilities of workers are formalized into employment contracts and communicated to all employees along with the employee handbook. The terms and conditions include minimum wage, working schedule, overtime, benefits & welfare (e.g., Employee's Provident Fund and Employee's Trust Fund) and others. SHL monitors working hours of its employees and keeps records to ensure that excess wages are adequately paid. Sample employment contracts reviewed at the site visit indicated inclusion of these clauses stipulated in the employment manual.
Worker's Organization: The Group has unionized workforce within its subsidiaries.
Non-discrimination and Equal Opportunity: The Group's HR policy on non-discrimination specifies non-discrimination and equal opportunity. Based on the Group's policy, SHL commits to equal opportunity (e.g., respectful workplace environment, prevention of gender-based violence, sexual harassment), and discrimination is strictly prohibited in any procedures or practices.
Grievance Mechanism: SHL adopts the group level Grievance and Complaints Policy and Procedure, which includes a description of submission of the grievances, response time, and approach to management. The process does include a commitment to confidentiality but does not include the option for anonymous grievances, nor is the grievance channel open to outsourced workers or contractors in explicit manner.
As ESAP #1, SHL will update its existing grievance process at the group level to enable anonymous grievances to be received, allow access to grievance for outsourced labor and contractors, with complaints reviewed in accordance with existing procedures.
Prevention of Sexual Harassment: The Group has a zero-tolerance policy towards sexual harassment and gender-based violence, based on which SHL promotes work environment that is free of discrimination and unlawful harassment. Internal training session on prevention of sexual harassment is provided to all employees on a yearly basis to enhance employees' awareness on the sexual harassment prevention.
Protecting the Workforce: The Group has defined HR policy and procedure for prohibition of forced labor and child labor. The policy complies with national law and include mechanisms for not hiring workers below the age of 18 years. HR team checks relevant ID information during hiring process.
Workers Engaged by Third Parties: SHL follows Group's overarching policy for third party workers. SHL assesses the employment relationship between relevant contractors and workers and ensures that all contractors comply with legal requirements covering but not limited to minimum wage, hours of work, overtime payments, contributions to the statutory provisions, and other legally mandated employment terms with regard to all workers engaged by third parties.
Occupational Health and Safety (OHS): To improve ventilation at pharma manufacturing facility, Heating, Ventilation, Air Conditioning (HVAC) system is installed at all manufacturing area, as well as at quality assurance and research laboratories. Use of personal protective equipment (PPE) was observed during the site visits. Monitoring of workplace air quality and noise level is undertaken on a regular basis and the recent records indicate adequate compliance with the local requirements. SHL has not experienced serious OHS incidents, with fatalities and/or permanent disabilities, to date.
As ESAP #2, SHL will formalize a procedure to monitor, review and keep records of key performance indicators (KPIs) related with OHS statistics. These statistics include lagging indicators (e.g., injury frequency and severity, OSHA recordable injuries, near-miss, lost workdays, worker's compensation cost) and leading indicators (e.g., numbers of OHS audits and inspections planned versus conducted, training hours, number of management inspection rounds planned/executed).
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency: Major source of electricity consumption for SHL's operation is grid. Water supply is sourced from public utility. At the SHL level, rooftop solar is installed at the pharma manufacturing facility. Current resource consumption amounts at the SHL level are approximately 3,000 m3/year (water) and 752,000kWh/year (electricity purchase).
Greenhouse Gas (GHG) Emission: SHL's current GHG emission is estimated at 350 tCO2e. Incremental GHG emission associated with business expansion is estimated at 62kg CO2e.
Air Emission Monitoring and Ambient Air Quality: Main source of emission includes power generation (e.g., diesel generators) and dust in production area, which are generally in line with local regulations requirements and WBG's relevant EHS guideline's guidance value. Air emission of hazardous chemicals, such as volatile organic compounds, is not anticipated.
Wastewater Management: SHL's pharma manufacturing facility has wastewater treatment plant (WWTP) to treat process and domestic wastewater generated from facility operations. Treated water is monitored and tested by a third-party laboratory to ensure compliance with the local regulatory requirement. Sample records reviewed at the site visit indicated compliance with the local regulatory requirements as well as WBG EHS Guidelines effluent levels. Treated water is temporarily stored in tanks on site which are disposed of through licensed contractor on a regular basis.
Solid and Hazardous Waste Management: Wastes generated from SHL's business unit typically include organic wastes, waste machine oil, waste package, duster cloth and gloves, etc. Non-hazardous are collected by municipal waste collection system for disposal, and hazardous wastes are disposed of through licensed contractors in accordance with SHL's SOP on waste management as well as local regulations.
PS4: Community Health, Safety and Security
Infrastructure and Equipment Design and Safety: SHL's pharma manufacturing facility is located within a commercial park designed for such use, and infrastructure is constructed in accordance with the local regulatory requirement. Other facilities (warehouse, retail store) located out of the commercial park are also built in accordance with the national building code.
Road Traffic Safety: SHL has its own fleet (approximately 35 trucks) to transport products, hence SHL has responsibility to manage drivers' health and safety as well as road traffic safety. As ESAP #3, SHL will develop SOP on product transport including requirements (e.g., development of road safety plan, regular maintenance of vehicles, OHS of drivers) in line with the World Bank Group Environmental, Health, and Safety Guidelines (Community Health and Safety) under “3.4 Traffic Safety.”
Security Personnel: Unarmed security personnel are employed from a third-party company who conducts routine ID checks at the gates and security monitoring. Regular trainings are conducted by the third-party company for the security workers on their roles, responsibilities as well as use of force and human rights.
