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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Assessment and Management Systems
SABESP has established a corporate ESMS based on the ‘plan-do-check-act’ continuous improvement cycle focusing on environmental compliance and promoting positive changes in the corporation’s E&S culture. All the water and wastewater treatment plants in operations adopt the ISO 14001 standard, which sets out the requirements for an effective ESMS. SABESP's ESMS is commensurate with E&S risks and impacts associated with its operations and , mitigation and performance measures are established to ensure alignment with applicable laws and PS requirements.
As part of SABESP’s corporate ESMS, the Company has procedures for the identification of hazards and risks, for the standardization of E&S management practices, procedures and requirements for water and sanitation subprojects, for E&S management commensurate to the risks and impacts of each subproject, workforce management, equal opportunity, E&S trainings, stakeholder engagement, grievances mechanisms, pollution prevention, management of greenhouse gases (GHG), environmental education, environmental permitting, E&S assurance, and E&S management of contractors. It includes emergency preparedness and response, investigation of accidents and incidents and E&S reporting with leading and lagging key performance indicators (KPI) that are closely monitored and reported to management. E&S management programs at the subproject level are site specific, with clear definitions of roles and responsibilities, management, controls and monitoring actions, indicators and reporting requirements which are reviewed on a regular basis by SABESP, and by the E&S auditing and assurance companies that are hired for selected subprojects (see the ‘monitoring and review’ section below).
There are two key E&S management tools within SABESP’s ESMS that define the E&S requirements for all the water and sanitation subprojects the Company implements. These are the bidding package (‘Edital’) and the E&S Management Guidance Framework for Projects (‘Plano Orientador de Gestão de Obras’ or ‘PGO’), which define the rules and E&S-specific requirements and expectations to manage E&S risks and impacts, in line with PS requirements. The PGO requires that for each subproject, several project-specific E&S management programs (see Management Program section below) are developed and implemented by the Engineering Procurement and Construction (EPC) Contractors. These are reviewed and approved by SABESP, and later verified and audited in the field by the companies in charge of the E&S supervision and assurance. Under IFC Project, SABESP will be required to apply to all subprojects the same ESMS procedures, requirements and tools.
Identification of Risk and Impacts
On top of the regulatory environmental licensing process that requires the Company to conduct environmental and social impact assessments for certain projects (SES Main Municipality São Paulo and Guarulhos, SES Perus Leste & Oeste have environmental licenses, while Vertentes 2&3 was exempted by the local regulator), SABESP’s ESMS has several procedures for the systematic E&S risk identification, management, review and monitoring of E&S risks and impacts related to occupational health, safety, operational safety, environmental and social aspects, including labor-related matters in line with PS requirements. These include: i) E&S impacts and aspects matrices, which include a description of the nature of impact or risk, the receptor being affected, the probability of occurrence, magnitude and scale, as well as corresponding preventive and mitigation measures; ii) E&S risk management program (‘PGR’ for its Portuguese acronym) with the assessment of subproject’s risks to the wellbeing and general OHS conditions of workers and communities, as well as environmental risks during subproject’s implementation, iii) risk and impacts identification tools implemented prior to be beginning of the works (e.g. job safety analysis, environmental diagnosis of work fronts, field E&S risks matrices).
The risk and impacts identification process is sound and well-structured. However, to enhance the identification of E&S risks vis-à-vis IFC Performance Standards, SABESP will, as part of ESAP item #1, augment the E&S risks and impacts identification documentation carried out for the twenty seven subprojects as per requirement of IFC PSs in order to ensure that the construction will not result in economic displacement, cause the reduction of public spaces (e.g. loss of recreational areas), foster restricted access, cause potential sewage overflows, and inadvertently introduced unsafe conditions, including GBVH for the community, pedestrians, vulnerable groups and general stakeholders. Any resulting mitigations measures should be implemented in line with Brazilian legislation and IFC Performance Standards.
Management programs
The Company’s E&S management programs and plans form the basis of the E&S requirements applied to all sites and subprojects from construction through operations and maintenance (O&M). As described in the ESMS section above, these management programs and plans, which form part of the bidding package or the RFP and the E&S Management Guidance Framework, are in line with Brazilian legislation and mostly aligned with IFC requirements. They include details on monitoring actions, frequency of monitoring along with performance indicators and are reviewed and revised regularly. There are seven key project-specific management programs that are developed for each subproject : i) environmental management program (‘Plano de Gestão Ambiental’ or ‘PGA’ for its Portuguese acronym, ii) integrated E&S management and communication program, iii) program to manage traffic related impacts, iv) OHS management plan, v) quality management program, vi) E&S risks management program, and vii) emergency response plan. Based on the
Organizational Capacity and Competency
SABESP has an adequate number of qualified E&S staff managing the E&S risks of the construction and operations, both at the corporate level and also for the twenty seven subprojects. Additionally, each EPC contractor establishes E&S teams in the field, overseeing the implementation of all the E&S management programs. The EPC contractors’ team is composed of environmental officers and technicians, social & communications coordinators and representatives, a traffic safety team, a safety engineer and OHS technicians.
Emergency Preparedness and Response
At the corporate level, SABESP 's ESMS includes the identification and analysis of risks and preparation of emergency preparedness and response plans as well as protocols for the investigation of near misses and accidents at the workplace. For each subproject included in the IFC proceeds, the EPC Contractor has prepared an Emergency Preparedness and Response Plan (EPRP), following the identification and analysis of emergency scenarios specific to each subproject, including those derived from working on the streets and near communities and neighbors, as well as from accidents and incidents during the construction. The EPRPs were reviewed and approved by SABESP and are appropriate for construction-related emergencies. To better align the EPRPs to IFC PS, SABESP will, as part of ESAP item#2, supplement the EPRPs as part of an enhanced stakeholder engagement plan for the twenty seven subprojects to address potential emergencies from sewage overflows and pipes ruptures, as this is a recurrent grievance theme. The revised EPRPs shall include provisions to deal with these emergencies scenarios and to prevent and minimize community eventual health risks and exposure associated with these scenarios.
Monitoring and review
To ensure that EPC contractors are following the Company’s E&S requirements, SABESP relies on specialized third parties, namely: i) a subproject management firm (‘Gerenciadora’), responsible for the close monitoring of the E&S performance of subprojects, including the performance of weekly field inspections, and ii) an external audit firm (‘Auditoria’), responsible for undertaking monthly E&S compliance audits. Field inspection programs are in place to assess the efficacy of E&S procedures, quality of the works and overall E&S compliance, including labor. Where gaps are identified, these are recorded in the Company’s action tracking system and monitored to resolution. To ensure compliance with the Company's environmental and social requirements, EPC contractors must follow strict procurement procedures. This includes the requirement that suppliers and subcontractors present documentation proving environmental compliance and adherence to current legislation, as well as IFC PS. In this way, SABESP ensures that the impacts and mitigating actions associated with these services have been identified, addressed, and are being controlled by the contractors, and that the relevant licenses and permits have been duly issued. As per ESAP item # 3, SABESP will expand their E&S inspection protocols in line with PS to verify that main suppliers for aggregates, concrete, asphalt and waste management services (including construction waste disposal), the latter evidenced through documentation, for the twenty seven subprojects under IFC proceeds are adequately controlling and mitigating E&S risks and impacts.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures
As of April 2024, SABESP had a total of 10.533 employees out of which 20% are women. Employees are hired full-time, under permanent employment contracts. In terms of contractors, SABESP reported that the numbers vary depending on how many subprojects and tasks are being performed. It is expected that each of the subprojects included in IFC proceeds will have between 250 and 450 workers at the peak of construction. The Company’s human resources (HR) policies and procedures are aligned with the local regulations and PS2 requirements. They are communicated to employees and interns through induction and training programs. For third-party contractors, SABESP's HR policies and workforce management requirements are cascade through legally binding requirements. The company’s HR policies and internal regulations cover recruitment, terms of employment, compensation and benefits, OHS, workers’ grievance mechanism, training, professional development, GBVH, non-discrimination, and equal opportunity, freedom of association, and prohibition of child or forced labor. The employment contracts define working hours, working days, holidays, duties, and job title; payment including overtime; insurance; grievance procedures; and termination of employment.
Workers’ Organizations
Brazilian labor law protects collective bargaining and the right for workers to associate. As of 2023, approximately 65% of SABESP’s employees are unionized, but all workers are covered by the collective agreements. The company negotiates Collective Bargaining Agreements (CBAs) on an annual basis. CBAs include workers’ rights and benefits including minimum wage, overtime, additional bonus for hazardous activities, transportation vouchers, meal vouchers, vacation, and health care, among others.
Worker Grievance Mechanism
The company has an adequate workers’ grievance mechanism for its own staff and is accessible to third party workers that is in line with local regulations and PS2 requirements. SABESP has an anonymous grievance channel (e.g., telephone and website) to raise concerns and grievances related to non-conformities to the Code of Conduct and internal procedures, without the risk of retaliation (https://www.contatoseguro.com.br/sabesp, http://faleconosco.sabesp.com.br/). The channel is disseminated through induction and training programs, including for third-party contractors as part of their mandatory induction program. This channel does not prevent complainants from accessing to judicial remedies set by Brazilian regulations. As per local regulations, SABESP has developed a formal and confidential grievance handling policy and a resolution procedure to address and resolve grievances related to GBVH, consistent with PS2 requirements. All grievances are administered by an independent and specialized company.
Occupational Health and Safety (OHS)
The Company has an OHS Management System following the Corporate OHS Manual and the OHS Manual for Construction and Contracted Services, which includes the identification and analysis of risks and procedures for construction and maintenance. SABESP’s OHS procedures and internal technical norms are based on the national OHS standards and regulations (known as ‘Normas Regulatórias’ or ‘NRs’) and cover many safety topics including works at heights, safety excavation procedures, power and electrical safety, rigging and lifting equipment, confined space entry, civil works & construction safety, hazardous materials management, permit to work procedures, accidents, incidents and near-misses recording, OHS training requirements and personal protective equipment, among others. All OHS requirements are included in the bidding or RFP documents and in the PGO and are mandatory for the twenty seven subprojects.
Workers engaged by Third Parties
The EPC contractors and sub-contractors linked to the subprojects must meet SABESP’s E&S standards and procedures, which are included in the ‘Edital’, RFP and the ‘PGO’. EPC Contractors must follow the seven key project-specific programs that were developed for each subproject mentioned in PS1, and on top of it, ensure compliance with: i) periodic internal and external OHS and labor audits, ii) performing job safety analysis prior to work, iii) verify the adequate use of PPE, iv) implement an OHS plan (including hygiene aspects), iv) provide first aid and emergency response training (and practice drills) in line with the approved EPRP, v) establish a permit-to-work system in all construction fronts, vi) investigate all OHS-related incidents (including near misses), vii) establish procedures to ensure compliance with labor laws and Company’s labor & HR policies, including non-discrimination, working conditions, payment of salaries, benefits and insurance, viii) trainings on grievance mechanism; and (ix) record, status, and analysis of grievances (including GBVH-related grievances) submitted by contractor’s workers for each construction site.
To further align SABESP’s E&S conditions to IFC PS, it is required as part of ESAP item #4 that SABESP coordinates with the EPC contractors the expansion of the review and E&S assurance process to any temporary accommodation in use (or planned for the future) by the EPC contractor or by the main subcontractors, in order to verify that they follow IFC-EBRD’s Standards on Workers Accommodation (2009), and include a regular inspection of these premises in the overall OHS inspections program during the construction phase.
PS3: Resource Efficiency and Pollution Prevention
The twenty seven subprojects proposed for IFC’s financing are part of a series of programs implemented by SABESP to improve wastewater collection coverage and quality of water for the people of Sao Paulo and Guarulhos, meet legal requirements for water and wastewater, and improve resource efficiency and pollution prevention that would ultimately lead to the gradual environmental recovery of the Tietê River. EPC Contractors have performance-based financial incentives linked to water quality improvements and number of households connected.
At the subproject level, and on top of the E&S management programs already described in PS1 section above, SABESP requires that each subproject develops and implements during the construction as part of their site specific E&S management program the following management plans and controls: i) environmental management of construction camps and laydown areas, when needed, ii) prior-to-work assessment of environmental conditions and baseline, iii) solid and liquid waste management, iv) environmental controls for sensitive areas, v) protection and suppression of vegetation, vi) environmental noise management and monitoring, vii) erosion and accretion prevention, viii) communities disease prevention (dengue), ix) environmental controls during work fronts closure and demobilization, and x) environmental reporting. During the operations phase, SABESP requires the subprojects to define and implement an environmental control and assurance plan (‘PCAO’ for its Portuguese acronym) with directives and to mitigate any potential impacts during the O&M phase and ensure that adequate E&S conditions are maintained and there is no harm to the environment, to the neighboring communities and to the O&M workers. Aspects covered in the PCAO include: i) environmental noise, ii) odor problems, iii) emissions and particulate matter, iv) waste management, and v) protection of the vegetation.
With regards to Green House Gases (GHG), in 2023 SABESP improved the methodology for estimating GHG emissions and received a ‘Gold Seal Certification’ by the Brazilian GHG protocol program. The 2023 GHG inventory reported a total of 2,2MMtCO2eq for the entire corporation (77.5% for Scope 1, 4.6% for Scope 2, and 17.9% for Scope 3). To reduce GHG emissions, the Company continuously invests in improving the treatment efficiency of WWTPs, adopt practices and technologies to optimize energy efficiency, promotes cogeneration opportunities and fosters the use of energy from renewable sources.
Limited amounts of non-hazardous and hazardous wastes (used oils, residual paint, oil/paint-soaked rags, filters, empty chemical containers, contaminated soil, etc.) will be generated at the subprojects’ construction sites. Hazardous materials will be temporarily stored and managed as per SABESP’s procedures which follow local regulations and are generally aligned with good international industry practices (GIIP), and the provisions set forth in the WBG EHS General Guidelines. As described in ESAP item # 2 described above, SABESP will expand their E&S inspection protocols to verify that the waste management services (including construction waste disposal) for the twenty seven subprojects under IFC proceeds adequately control and mitigate E&S risks and impacts.
Once the subprojects enter the operations phase, most of the components (lift stations, the Perus WWTP, flowmeters, etc.) will be mostly automated and their operations will generate limited amount of non-hazardous and hazardous waste and will likely use limited amounts of hazardous substances, which according to SABESP will be handled according to the Company’s environmental procedures.
In terms of wastewater treatment, both SES Perus subprojects will treat the collected wastewater in a new WWTP, which is included in the SES Perus Leste investment. The WWTP (‘ETE Perus’) is a greenfield component that is fundamental for the environmental improvement of the Juqueri River basin, a tributary of the Tietê river, and for promoting the universalization of sanitation in the city of São Paulo. The ETE Perus will be located on an empty grassland with no economic activity, occupying an area of 6.35 hectares, and will receive 100% of the sewage collected from both SES Perus Leste and Oeste. The plant will serve a population of more than 380,000 inhabitants, with an average flow of 715 l/s. The treatment process will involve activated sludge in moving bed biofilm reactors (MBBR) designed for biological nitrogen removal. It includes the chemical precipitation of phosphorus, treated effluent filtration and disinfection and excess sludge treatment facilities. As per the Simplified Environmental Impact Assessment Study (see Client Documentation link) for ETE Perus WWTP, it is expected that the quality of the treated effluent (BOD5 = 22 mg/l, and dissolved Oxygen = 5,5 mg/l)which is consistent with national effluent level standards and will not adversely affect the water quality of the receiving Juqueri River, which currently holds a Class 3 category (out of a 4 tier category scale for water quality, where 1 refers to optimal and 4 refers to limited use). In the case of SES Vertentes 2 & 3, the collected wastewater will be treated in an existing WWTP (ETE São Miguel), which is an operational activated sludge treatment facility which is part of the Metropolitan Sewage Integrated System and will have sufficient capacity to receive the raw sewage from Vertentes 2&3 and other sanitation projects in the area. For the SES Main Municipalities of São Paulo and Guarulhos the additional collected volume will be treated through existing WWTPs idle capacities.
PS 4: Community Health, Safety & Security
Community Health & Safety
The construction and operation of the twenty seven subprojects is expected to have limited risks to community health and safety and will contribute to better sanitation, improved environmental quality and foster positive effects on community health by reducing the exposure to diseases linked to water pollution and raw sewage.
During the construction phase, SABESP and the two specialized third parties secured to support the Company’s assurance process (‘Gerenciadora’ and ‘Auditoria’) will perform regular E&S audits and inspections to ensure that all the E&S provisions described before are properly implemented, and that community safety risks are properly managed through adequate controls (i.e. management of construction traffic, pedestrian safety, open trenching and compliance with SABESP’s policy to close any open trench on the same day that is opened, community emergency preparedness and response, among others). On the other hand, once the subprojects are in operation, most of the infrastructure will be buried under public roads and street networks, with exception of the lifting stations (which have limited footprints ranging from 300 to 800m2) and the SES Perus WWTP, which are above ground facilities.
The twenty seven subprojects will include construction works in public roads/sidewalks, in public spaces such as parks, and in areas close to houses and communities. To manage potential GVBH risks for the community during the construction and operational phases, SABESP will, as part of ESAP item #5, review and assess its current GBVH risk management procedures for communities to strengthen the existing community grievance mechanisms and ensure that: i) there are suitable channels for GBVH complaints from neighbours and community stakeholders exposed to GBVH-related risks, ii) there is an adequate training, communication and diffusion of the community grievance redress program for the teams managing GBVH at the subproject level, iii) that management of any GBVH complaint is carried out with a survivor-centred approach. The findings of this assessment will be presented in a technical report that will lay out any resulting actions and recommendations from the diagnosis, which will be coordinated and implemented with the twenty seven subprojects.
Security Personnel
The EPC contractors of the twenty seven subprojects are responsible for providing security to all construction sites. Security is generally provided by unarmed security guards who are usually employees from the contractor’s direct workforce. All the security contractors must be registered and comply with the Federal Police Decree 387/06. They are required to provide evidence of compliance with Brazilian law and are vetted by the Company through criminal background checks. Security contractors are required to participate in trainings offered by security service providers, which includes training on the code of conduct, human rights, and principles of proportionality as per Brazilian legislation. Neighbors and communities can express concerns or grievances related to security personnel through the Company’s community grievance mechanism. SABESP has conducted a security risk assessment and developed security management plans in line with IFC requirements and delivers GBVH training to security guards and personnel of the security contractors.
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PS5: Land Acquisition and Involuntary Resettlement
The twenty seven subprojects involve a total of an approximate 624 thousand meters of sewage lines. It also includes 141 lifting stations (which are regularly between 300m2 to 800m2 each) and one WWTP (6.5 Ha) that will be built in existing areas owned by SABESP or requiring permanent land acquisition. Rights of way for the sewage pipes will generally follow existing rights of way along public roads.
SABESP works proactively during the early stages of project design, following its ESMS procedure for identification of E&S impacts, to adjust the alignment of sewage networks and the locations of the lifting stations, with the aim of avoiding any physical or economic displacement, and preventing adverse impacts on local communities. For the subprojects, SABESP informed that based in a preliminary assessment the selected areas are located in private and public land that are not occupied, and that resettlement will be avoided in all cases. If the project were to impact any structures, alternative designs will be explored to ensure that no physical or economic displacement occurs. ESAP Item #1 will supplement the E&S risks and impacts identification enabling this to happen
In instances where private land is required—whether for the permanent acquisition needed for lifting station construction or for securing rights-of-way for the sewage network—the process is conducted in line with the requirements of applicable national legal framework. A ‘declaration of public purpose’ (or ‘DUP’ for its Portuguese acronym) is required and land is normally secured through amicable negotiation. In cases of public land, an authorization is granted by the public authority.
Where no consensus is reached with landowners, a process of expropriation following the local law is implemented. The administrative process of land acquisition with landowners, including expropriation, is detailed in SABESP’s Land Regularization Procedure (‘Procedimento regularização imobiliária’).
PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
SABESP’s twenty seven subprojects are greenfield interventions, situated in peripheral and consolidated urban areas of São Paulo and Guarulhos municipalities within the Serra do Mar coastal forests Ecoregion (WWF) and mostly located along public roads and premises in Modified Habitats. Only two assets, from two different subprojects, overlap with Natural Habitat within Environmental Protection Areas, namely the APA Várzea do Rio Tietê and the APA do Cambuçu Tanque Grande. The areas consisted of secondary growth, degraded Atlantic Forest patches interspersed with planted fruit trees as well as exotic tree species. Regarding the proposed intervention, they are limited to small diameter pipelines that will be laid over in approximately 200 m alongside adjacent degraded streams, using a non-destructive method (tunnel liner or pipe jacking) resulting in minimal surface interference. Regarding permits, the planned interventions require approval from the respective local environmental authorities and the APA managers, including due compensation for the removed tree cover (from 1.5 to 6 times the cleared area), to which SABESP follows and is committed to meet in line with local legislation. Given the context and measures described above, the PS6 requirements for projects in Protected Areas and No Net Loss are deemed met.
