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
The trust will assign responsibility for E&S management to Grupo BAK. For the construction phase, an Integrated Management System (IMS) will be established in accordance with Grupo BAK’s Construction Manual. For the operations phase, E&S management plans will be developed and implemented. To systematically manage E&S in full alignment with the requirements of the IFC PS, as per ESAP #1, Grupo BAK will build on its existing processes to develop an E&S Management System (ESMS) for the Project, commensurate to the scale and impacts of its activities and consistent with national law, the requirements of the IFC PS, and the World Bank Group (WBG) General Environmental, Health and Safety (EHS) General Guidelines (2007), (“WBG Guidelines”).
Prior to purchasing the land, Grupo BAK confirmed that the plot was unoccupied, and then an E&S Impact Assessment (ESIA) was prepared by a specialized consulting firm, (approved by the relevant authorities, and disclosed together with this ESRS). The assessment considers the anticipated effects of climate change and includes the identification of emergency scenarios, requiring the development of an emergency preparedness and response plan (EPRP) for construction and operations.
The ESIA includes a suite of E&S management plans to be developed for construction and operations, which mostly align with IFC PS, and identified gaps are addressed by ESAPs # 3 to 7 and 10 to 12, for example, as part of ESAP #1, Grupo BAK will develop a Chance Finds Procedure in line with local requirements and IFC PS8.
The trust will oversee the Project via a technical committee, supported by an independent engineer. Grupo BAK has assigned a Project Director to manage construction, who will oversee an on-site IMS Manager, who in turn will manage an on-site OHS Coordinator and Environmental Coordinator. Once the first phase of construction is complete, Grupo BAK will establish and chair a homeowners’ association, responsible for managing operations. Grupo BAK will continue to lead the homeowners’ association until the Project is fully complete, (which will coincide with the full repayment of the IFC loan). At that point, leadership of the homeowners’ association will be handed over to a chairperson elected by the residents, and Grupo BAK will cease to be involved in operations.
As per ESAP #2, Grupo BAK will designate a qualified IMS Manager (with knowledge of the national regulatory requirements and applicable requirements of IFC PS), responsible for the development, implementation and maintenance of the ESMS and related E&S programs, plans and procedures. The IMS Manager will also oversee the handover of E&S duties to the residents once a chairperson is elected.
Grupo BAK’s EHS team will be responsible for conducting weekly EHS inspections and daily checklists. As part of ESAP #1, the Project will develop procedures to monitor and measure effectiveness of its ESMS and compliance with legal/contractual obligations, IFC PS, and relevant metrics of the WBG Guidelines, including key performance indicators (KPIs) and performance targets.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures
The project will have a peak of ~250 workers during the construction stage, consisting of both direct employees and third-party contractors, with ~45 employees during operations. Grupo BAK’s HR practices are in alignment with the DR labor code, that generally aligns with PS2. The local legislation covers a wide range of labor-related issues including recruitment, employment contracts, working hours, rest periods, termination, severance and collective bargaining. The Labor Code also requires that at least 80% of an entity's workforce must be Dominican, and no less than 80% of the payroll must correspond to wages earned by Dominicans, except for technical or executive positions. The Labor Code recognizes the validity of both written and verbal contracts and prohibits forced and child labor.
Grupo BAK’s Administration and Finance Manager has overall responsibility for HR matters for employees, who’s written contracts consider responsibilities and working hours. At the project level, there will be an HR Coordinator reporting to the Project Director, who will conduct periodic labor compliance audits. The Company has an HR Handbook ensuring labor rights and working conditions, in line with DR legislation. The Company does not have collective bargaining agreements. As per ESAP #3, the Project will develop and implement the necessary project-specific HR related procedures appropriate to its size and workforce, including a Labor Policy, which will address working conditions and requirements for staff and contractors, ensuring compliance with IFC PS2 and applicable labor law. The policy and procedures will be communicated to all staff and contractors during site induction, as well as annual refresher training.
The Project operates a workers grievance mechanism by means of in-person reporting to the direct manager, Project Director, or HR representative. To systematically manage workers grievances, as per ESAP #4, the Project will develop a documented Workers Grievance Management Procedure (GMP) in line with IFC PS2, including (i) channels to submit grievances (including anonymously), and (ii) the steps to manage grievances, monitor and report statistics, and raise awareness of the mechanism. The Workers GMP will apply to staff as well as contractors.
To systematically manage Gender-Based Violence and Harassment (GBVH) risks, as part of ESAP #4, the Project will develop a GBVH and Workplace Harassment Policy incorporating a specific referral pathway for GBVH cases. Grupo BAK will implement a GBVH training program and will systematically disclose the Workers GMP to direct and contractor workers and promote access to it.
Occupational Health and Safety
Grupo BAK manages OHS in line with national law and standards. During the construction phase, work will be conducted in accordance with a construction management plan, which will contain the project’s OHS requirements. To systematically manage OHS during construction and operations, as part of ESAP #1, the ESMS will include an OHS policy and OSH practices consistent with the requirements of IFC PS and the WBG Guidelines.
Workers Engaged by Third Parties
Much of the construction workforce for the Project will be contracted (a mixture of individuals and companies). Procurement is outsourced to specialist local firm, who’s pre-qualification process includes checking records of accidents. The construction management plan will include a section addressing the management of contractors, who will be required to follow the E&S protocols of Grupo BAK. A project management committee will meet once a week to review E&S performance.
To systematically manage construction contractors, as per ESAP #5, the Project will develop a Contractor E&S Management Procedure in alignment with the IFC PS, WBG Guidelines, and IFC’s Good Practice Note on Managing Contractor’s E&S Performance (2017). This procedure will include E&S screening for contractor selection, establishing minimum E&S management measures and reporting requirements (including KPIs), and defining roles and responsibilities at Grupo BAK to oversee E&S performance. The minimum E&S controls will cover labor and working conditions, including adherence to labor law, the IFC PS, and Grupo BAK's Labor Policy. These E&S requirements will be included in contractors' contracts, and training sessions will be conducted to ensure compliance.
For construction, an accommodation camp will be built for contract workers. As part or ESAP #6, Grupo BAK will develop a Worker’s Accommodation Plan to ensure alignment with PS2 and IFC/EBRD Guidance Note for Worker Accommodation Processes and Standards (2009) regarding safety and health, appropriate construction standards, provision of adequate and sanitary living conditions, and adequate sex-segregation. The plan will include a GBVH Risk Assessment and Preventive Action Plan to address risks within the accommodation.
PS3: Resource Efficiency and Pollution Prevention
The Project’s design includes measures for natural ventilation, reduced solar heating, and rooftop photovoltaics. During construction, air emissions will mainly come from dust, diesel generators, and vehicle engines, while in operations, emissions will be limited to emergency generators and domestic use of liquefied petroleum gas (LPG). Since national noise regulations are less stringent than guideline levels in the WBG Guidelines, the Project will, as part of ESAP #1, update their noise management plan to align with said guidelines.
During construction, potable water will be supplied by third-party tankers but in operations on-site groundwater wells will provide potable water (consumption is expected to be ~4 l/s). Due to poor groundwater quality, the Project will, as per ESAP #7, procure, install, and operate a potable water treatment plant (PWTP) in line with GIIP to comply with World Health Organization (WHO) drinking water standards. A monitoring plan will verify that all water supplied to areas of food preparation or for the purpose of personal hygiene complies with the WHO standards.
During construction, sanitary wastewater will be managed using a septic system while during operations, it will be routed to a wastewater treatment plant (WWTP). In both scenarios, solids will be collected and disposed of as hazardous waste by an authorized third party. In operations, some treated effluent will be used for irrigation (~40 m³/day), but the majority (~250 m³/day) will be directed to infiltration wells. The infiltration well discharges are subject to a specific permit which will stipulate maximum permissible limits for certain water quality parameters.
To supplement the existing ESIA, the Project will, as part of ESAP #7, hire a qualified consultancy, including a hydrologist and wastewater engineer, to conduct a hydrogeological study to assess project impacts on water supply and groundwater quality. In terms of facilities, Grupo BAK will procure, install, and operate a wastewater treatment plant (WWTP) in line with GIIP. The plant will comply with the wastewater quality standards of Table 1.3.1 of the WBG Guidelines, and a monitoring plan will verify compliance. To minimize the quantity of wastewater produced and disposed of onsite, the Project will, as per ESAP #8, include water-saving features in line with GIIP, and ensure that the design of the wastewater system can easily tie-in to the public sewage network once one becomes available.
Construction contractors will manage waste per a Waste Management Plan (WMP). During operations, a new WMP tailored to residential waste will be implemented. Authorized third parties will handle waste collection and disposal. Storage of hazardous substances will be consistent with legal requirements and the ESIA, which align with IFC PS, and the WBG Guidelines. As part of ESAP #1, procedures for the management of waste and pesticides/herbicides will comply with the requirements of IFC PS and the WBG Guidelines.
PS4: Community Health, Safety and Security
During the construction phase, work will be conducted in accordance with a construction management plan, which will contain community health and safety requirements. To fully align with the IFC PS, and the WBG Guidelines, as part of ESAP #5, the Contractor E&S Management Procedure will include community health and safety management practices, including a transportation safety plan. As part of the Worker’s Accommodation Plan per ESAP #6, Grupo BAK will develop a GBVH Risk Assessment and Preventive Action Plan to address risks associated with the influx of workers during construction. Preventive actions will include, at a minimum, awareness campaigns and communication of the grievance referral pathway within the local community, including residents of the apartments once occupied.
During construction, armed security will be contracted to control access to deter theft of materials. During operations, unarmed security will control access. As part of ESAP #1, Grupo BAK will develop and implement a security procedure in line with IFC PS4 addressing the construction and operations phases, including adequate training consistent with principles of human rights, training in the proportional use of force, as well as availability of the external grievance mechanism for affected communities to report any misconduct or harassment.
This mixed-use complex comprises three-story residential buildings with retail space accessible to the public on the ground level. Due to the buildings' limited height, the local fire safety requirements are minimal, as specified in the construction permit. Fire extinguishers are installed on each floor, and fire hose reels and pressurized standpipes, supported by dedicated fire pumps and water supply, will be installed throughout the estate. The ESIA includes specific provisions for leak prevention and a fire response plan for the LPG tank and surrounding areas. Additionally, the buildings have been designed in accordance with the DR's hurricane building code, which is considered good practice in the Caribbean region.
As per ESAP #9, the Project will install an addressable fire detection and alarm system to cover the common areas of each building and supervision of the systems in the retail spaces. This will enable the security guard to identify the alarm on the panel and respond to the exact location of the fire incident. Additionally, as the initial chair of the homeowners’ association, Grupo BAK will establish a user manual for each building in the complex. This manual will detail the specific L&FS arrangements, including the required inspection and maintenance program, emergency exit locations, evacuation plans, drills, training, and information to be provided to residents and tenants. The overall EPRP for the Project will include coordination and communication measures with the neighboring power plant, Consorcio Energético Punta Cana, in the event of any emergency, such as fire, explosion, or gas release.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
The project is within the Hispaniolan moist forests WWF Ecoregion and does not overlap with key biodiversity or legally protected areas. The 6.4-hectare site, likely deforested before 2005 for agriculture and livestock, is now surrounded by urban development. The ESIA found the area covered by secondary vegetation (4-6 m tall) with scattered trees (~15 m). Priority biodiversity species include the Cana palm (Sabal causiarum – EN per national list) and the Boca de Yuma frog (Eleutherodactylus probolaeus - range restricted and EN per IUCN and national list), among others, indicating the site is natural habitat. Supplementary studies confirmed E. probolaeus presence, and predictive models suggest a distribution larger than documented.
The project's main impacts on biodiversity include natural habitat loss and impacts on priority biodiversity values due to vegetation clearance. The ESIA’s management plans include rescue and relocation of several plant species: S. causiarum, Guáyiga (Zamia debilis); Vera (Guaiacum sanctum); and Quiebra-hacha (Krugiodendrum ferreum), (later two are listed as VU per national list). Additionally, the ESIA includes provisions to promote planting of native species during landscaping. As per ESAP #10, Grupo BAK will develop and implement a plant rescue and relocation protocol that, as much as feasible, adopts the IUCN recommendations on responsible translocation of displaced organisms, including the Guidelines for Reintroduction and Other Conservation Translocations. Furthermore, to support the landscaping program, the project will develop and implement a plant species selection protocol that, as much as feasible, adopts the IUCN Guidelines for the Prevention of Biodiversity Loss caused by Alien Invasive Species.
As per ESAP #11, Grupo BAK will develop and implement a Biodiversity Action Plan (BAP) in line with IFC PS6, to mitigate and offset residual impacts on natural habitat for E. probolaeus and other priority biodiversity values. The BAP will include: i) an assessment to determine residual impacts on natural habitats and priority biodiversity values; ii) an offset program and strategy to meet no net loss requirements; and iii) stakeholder consultation on the offset design and development. In addition, Grupo BAK will develop and implement a Biodiversity Monitoring and Evaluation Plan in line with IFC PS6, focused on priority biodiversity values, to evaluate and monitor the effectiveness of the offset program.
