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
In 2022, Mapletree established comprehensive Environmental, Social, and Governance (ESG) policies as part of its Environmental and Social Management System (ESMS). At the group level, the company has established Environmental, Health, and Safety (EHS) requirements, encompassing general policies, procedures, risk assessments, and templates. Recognizing the potential impact of ESG issues on investment decisions, development, and operations, Mapletree integrates these considerations throughout the real estate life cycle, including acquisitions, development of new assets, and ongoing operations, aligning with the Group’s "Net Zero by 2050" roadmap. However, a comprehensive ESMS has not been developed to define E&S requirements for both construction and operational stages. As part of ESAP #1, Mapletree will update its ESMS in accordance with good international practices, IFC Performance Standards requirements. A formal, documented ESMS will be developed to be applied to the sub-projects and provide sufficient management capacity and training for its implementation for construction and operations, with references to an E&S management program, as needed. The program will include policies, programs and plans applicable to sub-projects under IFC financing, where applicable, for the management of solid wastes; occupational health and safety; labor management and working conditions; community health and safety ; emergency preparedness and response; contractor E&S management which specifies the need for Request for Proposals, bids, and contracts to include needed project E&S requirements; land acquisition to comply with the IFC PS5 requirements for relevant subprojects; and stakeholder engagement and grievance redress procedure, among others.
The Board of Directors supervises ESG impacts and aligns the sustainability strategy with the organization’s long-term goals. The Sustainability Steering Committee (SSC), co-chaired by the Deputy Group CEO and Group Chief Corporate Officer, oversees overall sustainability performance and sets goals and targets. Reporting to the Board, the SSC includes CEOs of REIT Managers and representatives from Mapletree Group's senior management. The Sustainability Working Committee (SWC), a cross-functional committee, supports the SSC in monitoring, managing, and executing sustainability programs across the organization.
For sub-project under construction, an external construction consultant, along with a dedicated on-site team during construction phases, oversees the construction process, including EHS aspects. Mapletree staff are also involved in monitoring. Additionally, the appointed construction contractors for each sub-project have their own EHS representatives, who supervise the EHS aspects for their workers during construction. These contractors maintain EHS manuals and procedures, covering areas such as heavy equipment, scaffolding, electrical safety, working at heights, and hot work.
Before acquiring sites and during its internal due diligence process, Mapletree reviews the legal status of each site. The sub-projects will rely on the E&S impact assessment (ESIA) of the industrial parks, where the assets are located, which also includes development of management and monitoring plans in compliance with IFC PS.
At sub-project level, contractors are required to prepare customized EHS documents for construction, subject to company review and approval. Key performance indicators (KPIs), such as number of workers and number of accident incidents are reported to the company during construction. Performance is assessed through on-site audits conducted by a construction consultant responsible for EHS management oversight. Independent consultants conduct periodic environmental monitoring at the construction site.
For operational assets, Mapletree, through its external facilities manager, oversee E&S aspects such as engineering, security, emergency response, and fire response, to ensure compliance with the standard operating procedures (SOPs) within the established system and comprehensive procedures and national regulations.
As per the ESMS developed under ESAP #1, the company will enhance its E&S organization to clearly designate the responsibilities for implementing the ESMS at sub-projects. This involves appointing specific personnel, including management representative(s), with well-defined lines of authority and responsibility. Adequate ongoing support in terms of management, human resources, and finances will be allocated for the consistent and effective E&S performance. Additionally, sub-project personnel will be equipped with the requisite knowledge, skills, and experience for their roles.
PS2: Labor and Working Conditions
As of March 2023, Mapletree employs a total of around 2,400 employees globally. During the operation of the subprojects, as these will be run by tenants, the company will not have significant number of staff based at the subprojects.
The company has established HR policies and procedures in line with the national labor regulations and generally consistent with IFC PS2 requirements. All full-time and contract/part-time employees within the Group benefit from a welfare and benefits scheme covering insurance, medical and dental benefits, employee assistance, various leave types, flexible work arrangements, staff engagement initiatives, and wellness activities. Part time and temporary employees receive similar benefits to permanent employees and have their terms of employment formalized in contracts, and their rights and responsibilities are outlined in an accessible employee handbook.
Mapletree's commitment to diversity, equity, and inclusion, along with equal opportunities, is embedded in its Board Diversity Policy and Code of Conduct. The policy emphasizes a zero-tolerance approach to all forms of discrimination, harassment, or bullying in the workplace. The policy also includes a mechanism for reporting and receiving complaints related to such incidents, including an anonymous channel. However, Mapletree’s Diversity Policy, Code of Conduct and grievance mechanism is limited to Mapletree’s employees only.
Mapletree has implemented support channels for employee feedback and grievance resolution. This includes an open-door policy to foster an environment where employees are encouraged to express their concerns about any aspect of their employment. Additionally, Mapletree has a grievance handling mechanism that outlines internal escalation procedures for addressing work-related grievances, involving higher levels of management and the Human Resource (HR) department.
Mapletree has a Whistleblowing Policy that provides an avenue for employees and external parties to raise concerns about illegal, unethical or otherwise inappropriate behaviour. The policy contains assurance that whistleblowers will be protected from reprisals or victimization and refers confidentiality, and allows for anonymous reporting.
As set forth in ESAP #2, the company will require contractors to have anti-harassment requirements and grievance mechanism in place at the subproject level that adheres to IFC PS2 requirements. This mechanism will enable the submission and resolution of anonymous complaints. In cases the contractors/subcontractors are not able to provide a grievance mechanism, Mapletree will implement its grievance mechanism to include contracted workers and disseminate information about its existence.
Mapletree’s construction contracts include requirements for the contractors to comply with national labor standards and laws for managing OHS and labor compliance. The sub-project’s construction is overseen by a third-party consultant whose roles include review of contractor performance (including EHS) and includes checks and reviews. Either workers’ accommodations are provided on site or contractors rent local houses for their workers. As part of ESAP #1, E&S management procedures for contractors will be incorporated into the ESMS, including the requirements for labor and working conditions for their workers, in line with IFC PS2 requirements. The company will review and update its monitoring procedure to ensure compliance with national regulations and PS2 requirements. The responsibility to monitor such compliances will be assigned under the organizational structure as part of ESAP#1. Furthermore, Mapletree will request contractors to develop and implement a worker's accommodation standard in line with IFC requirements. The standards will be implemented incrementally over time to help ensure consistency with key aspects of IFC’s Workers Accommodation standards under PS2.
The OHS management system, that is developed at group level and for the construction phase, includes a set of policies and procedures for risk assessments, safe working instruction, safety training, and regular safety inspections. At the sub-project level, contractors are required to adapt/develop their policies, procedures etc. to meet the company’s EHS policies in addition to local requirements. There have not been any reported significant accidents or incidents at the sub-project construction sites in the last year since its commencement.
As part of ESAP #1, under the ESMS, the company will develop OHS procedures for the operational stages of the sub-projects including (i) identification of potential hazards to workers, particularly those that may be life-threatening; (ii) provision of preventive and protective measures, including modification, substitution, or elimination of hazardous conditions or substances; (iii) training of workers; (iv) documentation and reporting of occupational accidents, diseases, and incidents.
PS3: Resource Efficiency and Pollution Prevention
The sub-projects will be connected to the national power grid for power supply once operational and are targeting obtaining EDGE certificate. Several measures will be implemented at the sub-projects to achieve EDGE certification, including the installation of skylights in all warehouses to maximize daylight usage and reduce the need for electric lighting, roofing sheets will be employed, along with insulation at the roof level and external walls to prevent heat ingress. To further reduce heat ingress, the sub-projects will feature a reduction in opening sizes in the facade, resulting in a lower window-to-wall ratio. High-efficiency lighting will be provided in the warehouses. Roof spaces are required to be solar panel ready. There will be no major air emission sources installed, such as combustion equipment, at the sub-projects.
Water will be sourced from the local public water supply systems. The sub-projects are not expected to be major users of water or generators of wastewater. During construction and operation, wastewater generation will be conveyed through approved connections into the industrial park’s centralized wastewater treatment infrastructure for processing.
The sub-projects are estimated to generate relatively low greenhouse gas emission which is expected to be less than 25,000 tonnes of carbon dioxide equivalent annually in total upon project completion.
The company requires its contractors to develop waste management plans for the segregation, handling and disposal of wastes. For the operations phase, waste management will align with local requirements and will have minimization, segregation and proper recycling/disposal practices. As per ESAP#1, contractors will be required to develop waste management plans, and this requirement will be incorporated in the ESMS.
During the construction period there will be limited hazardous materials such as oil, paints and fuels used at the sub-projects and the company has articulated hazardous materials management practices that align with local requirements. Access control protocols are in place. Material safety data sheets are used to define requirements and as a guidance. For the operational phase, hazardous material management procedure will be formalized as part of the ESMS as per ESAP#1. Based on the company’s business plans the sub-projects are not expected to store hazardous materials such as restricted items like explosives or hazardous chemicals, other than the ones for cleaning/maintenance.
PS4: Community Health, Safety and Security
The sub-projects are being developed according to the company’s requirements and construction is overseen by a dedicated consultant team. The design specifications include international and local standards for structural design, seismic and wind resistance and are not being designed for the storage or handling of large quantities of hazardous materials.
The sub-projects (in construction and in future for operations) are guarded with unarmed security guards. There have been no security incidents at the sites.
The company will address community risks and impacts such as on nearby residential communities related to dust, noise, vibration, road congestion, traffic safety on local roads, and potential construction-worker related influx and/or that might relate to its security arrangements, through the ESMS as per ESAP#1.
The designs of the sub-projects include the specification of fire services installation to meet the requirements of Mapletree and national requirements (selecting whichever is stricter) with installation of sprinkler systems, hydrants and portable fire extinguishers. As part of ESAP #3, the Emergency Preparedness and Response arrangements will be reviewed and updated for the sub-project specific conditions to cover both construction and operations. EPR will be tailored per sub-projects, and will include procedures for incident investigation, fire drills for tenants during the operational phase, and that the fire safety systems are checked (and tested) on a regular basis appropriately by qualified parties.
PS5: Land Acquisition and Involuntary Resettlement
The proposed sites are currently in various stages of development, with government-led land acquisition completed for four sites. The land acquisition for the remaining three sites in Hung Yen Province is ongoing as part of the broader land acquisition process for the greenfield development of industrial zones. Except for the Bac Giang 1A and 1B sites, the other five sites have not been allocated to Mapletree.
Hung Yen 2 site: The affected land includes 38.06 hectares of paddy fields (76.12% of the total area), 2.22 hectares of perennial crop land (4.45%), 0.11 hectares of residential land (0.22%), and 9.45 hectares of public land (19.21%). A total of 350 households are affected. The Phung Chi Kien industrial zone land acquisition and compensation process is ongoing, conducted by the Hung Yen Provincial Land Fund Development Center. Valuation and detailed measurement surveys were conducted in early 2023. The government-led consultation and negotiation processes included face-to-face meetings, engagement during surveys, and public disclosure of draft compensation plans through CPC notice boards and community meetings. As of November 2023, the land acquisition and compensation process are ongoing, with notifications and decisions issued to affected households in accordance with national regulations. The total number of households yet to receive compensation and support is 67 households.
Hung Yen 3 and 4 sites: The affected land area comprises 62.16 hectares of paddy fields (82.88%) with the remainder consisting of annual cropland (3.39%), aquaculture land (2.83%), and public land (10.9%). A total of 613 households are affected, including 601 households experiencing losses in paddy land and 12 households facing losses in annual cropland and aquaculture land. Additionally, six graves will be relocated to the local concentrated cemetery.
As per ESAP#4, Mapletree, upon the allocation of land parcels in these industrial clusters, by working closely with the government and affected communities, will develop and implement a Livelihood Restoration Plans for the sites under IFC financing in line with the objectives of PS5 to mitigate the impacts on affected households and enhance positive impacts on surrounding communities.. Mapletree will also explore opportunities for implementing a Community Development Plan targeting broader communities, including those affected in the land acquisition process, in the project area.
