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 Policies and Management Systems. Huatong implements a comprehensive ESMS at the corporate level designed to ensure that E&S risks and impacts of the company are identified and effectively managed. The corporate ESMS is certified against international standards, notably ISO 9001:2018 (Quality), ISO 14001:2004 (environment) and OHSAS 18001:2007 (occupational health and safety (OHS)). Key elements of the ESMS include (i) an EHS policy that outlines Huatong’s commitments and guidelines for environmental protection, employee health and safety, compliance with laws and regulations, and continuous improvement; (ii) a process to identify environmental and social risks within its operations, documents these risks and develop effective measures to manage their impacts, including pollution discharge, resource consumption, and OHS hazards; (iii) an E&S management plan (ESMP) that specifies management objectives, targets, measures, and responsibilities for effective risk management including a monitoring and evaluation mechanism (iv) a requirement for E&S management team provided with regular capacity enhancement training (v) an emergency response plan that clarifies the emergency organization, division of responsibilities, available resources, and procedures and recommends regular drills to ensure preparedness. The corporate ESMS is only effectively implemented throughout Huatong’s operations in China. Going forward, Huatong will consolidate its corporate system into a comprehensive ESMS manual that is PS-compliant and will extend it to the project countries to guide the development of principles of business conduct expanding on; (i) E&S procedures for overseeing contractors’ performance and the organizational framework for operating the ESMS; (ii) stakeholder engagement and community grievance mechanism; (iii) community health, safety and security management; and, (iv) E&S monitoring and reporting procedures, including OHS leading and lagging Key Performance Indicators (KPIs) (ESAP#1).
Identification of E&S Risks and Impacts. Huatong has completed environmental and social impact assessments approved by relevant authorities following national standards and its own comprehensive process to identify E&S risks within its operations noted above. Also, Huatong has identified consultants to complete the ESIA of the Tanzania plantt. Going forward, Huatongwill upgrade the local ESIA for the Tanzania project into a PS-compliant ESIA that addresses shortcomings including (i) physical climate risk assessment, (ii) transport risks associated with transfer of equipment from existing facility to the new site and general operational logistics, (iii) gender based violence, and (iv) past community engagement processes, including those undertaken during the land acquisition process and the feedback on the willing buyer/willing seller process by the company, in accordance with PS requirements (ESAP#2).
E&S Management Programs. The ESIAs prepared in accordance with the respective national laws each include a section that presents a framework ESMP for the project construction and operations including E&S monitoring and review. As part of this IFC investment, Huatong will develop a ESMP for each project country that will describe the mitigation and performance improvement measures and corrective actions that address construction and operations E&S requirements, including labor and working conditions, OHS, energy efficiency, emergency preparedness, water management, waste management, pollution prevention, community, health, safety and security management (ESAP#3).
Also, Huatong will require the EPC contractors for the Tanzania plant to develop and implement a Construction Environmental and Social Management Plan (“CESMP”), based on the project ESIA and the ESMP of the project country in alignment with IFC PSs and WBG EHS Guidelines (ESAP #4).
Organizational Capacity / Competency. Huatong currently has a corporate environmental management team, but at the project country level, the responsibility for environmental and social management lies with the Chief Operating Officer. In Tanzania, the company has appointed a local E&S consultant for quarterly regulatory compliance monitoring. However, there are no dedicated national E&S resources within the project country organizations to oversee the day-to-day management of environmental and social aspects during construction and operations phases. As part of the IFC investment, Huatong will enhance its organization by appointing a full-time EHS Manager for the project, along with EHS Supervisors supported by national Community Liaison Officers in each project country (ESAP #5). The EHS Manager will be responsible for overseeing the update and implementation of the ESMS, addressing any compliance gaps identified in the ESAP as well as monitoring and reporting E&S performance to Huatong’s senior management. Furthermore, Huatong will ensure that the EPC Contractors deploy an EHS organization that includes at least one dedicated EHS professional and a human resource professional.
E&S Training Plan. Huatong prioritizes E&S training for its staff and employees during the onboarding process. The training focuses on its E&S policies, objectives and requirements, increasing awareness of E&S issues among employees, contractors, and subcontractors as well as on compliance with safety production laws and regulation. As part of the implementation of the ESMS (ref. ESAP #1), Huatong will conduct specialized training on safe systems of work and standard operating procedures across each plant to build the necessary skills and culture of safe and efficient operations.
Emergency Preparedness and Response. Huatong implements a factory-level Emergency Preparedness and Response Plan (EPRP), in compliance with regulatory requirements and the company's corporate ESMS. These EPRPs identify potential emergency situations and accidents that could occur at the factory level, assess their potential environmental impacts, and outline the necessary response actions and requirement for regular drills. As part of the IFC investment, Huatong will update its EPRP to include security evacuations, medical evacuations, road traffic accidents and climate change-related risks like heatwaves and flooding as well as maintenance of emergency equipment, and establishment of reporting and performance assessment mechanisms (ESAP#6).
Monitoring and Review. Huatong’s corporate ESMS details an environmental monitoring and review process with annual reports and audits. However, at the project country level, no formal reporting is maintained except for the quarterly regulatory audits conducted by external consultants as per the ESIA approval Terms and Conditions. As part of its PS1-compliant ESMS (ref. ESAP #1), Huatong will enhance its E&S monitoring/reporting procedure and will specify KPIs, including OHS leading and lagging indicators such as incident records, near miss, hazard reporting and other workplace monitoring data, frequency of monitoring, resources usage, and pollution management. Also, the procedure will outline a document management system at project level for both internal and external review.
PS2: Labor and Working Conditions
Huatong currently employs a total of 310 staff, with 300 in Tanzania, and 85 in Cameroon comprising 93% male workers and 7% female workers. During peak construction, the project is expected to employ up to 720 in Tanzania. The Cameroon plant will witness an increase of up to 200 direct jobs. The workforce will be recruited predominantly from project affected communities.
Human Resource Policies and Procedures. Huatong has a corporate HR management system designed for implementation in China based on its HR policy, which ensures compliance with national labor law. The system covers various processes such as recruitment, onboarding, salary payment, work organization, training, promotion, and termination procedures. It also includes provisions on non-discrimination, equal opportunity, workplace safety and security, and human rights. The HR system is not implemented consistently across the different operations. Going forward, Huatong will use the existing corporate HR policies and processes as the basis for development of a PS2-compliant HR Manual for its employees and contractors as a management tool for its workforce with concise, localized HR policies and procedures that reflect the legal requirements and contexts of the respective project countries. Also, the project HR manual will include policies and procedures not currently detailed in the corporate system, including: (i) retrenchment policy; (ii) procedures for allowing anonymous complaints; (iii) limits on overtime hours; and, (iv) provisions on migrant workers, subcontracted and supply chain workers (ESAP#7).
Working Conditions and Terms of Employment. Huatong employs staff under permanent or term contracts that outline their entitlements and obligations, including working hours, probationary periods, remuneration packages, and leave. Employees are insured in the national insurance scheme, which is monitored by the labor inspectorate in the project countries. Additional benefits such as housing fund, paid leave, year-end bonuses, transportation and feeding subsidies are also provided as part of the remuneration package. At the plant level, work is organized in two shifts, each lasting eight hours. A maximum of 10 hours of overtime work per week is authorized and is compensated in accordance with national labor requirements. Performance reviews are conducted annually using a formal evaluation system. The notice period for employee termination is one month, and severance payments are made in accordance with the Labor Code of the project countries. Currently, there are no labor cases pending before the courts for Huatong's operating assets in Tanzania and Cameroon. Huatong requires its employees to adhere to the employee’s handbook that covers disciplinary rules, attendance, leave systems, and employee benefits as well as dormitory and safety management rules / code of conduct. As part of the IFC investment, Huatong will implement measures to limit the number of overtime hours that workers can perform (ref. ESAP #7), particularly for those involved in non-stop cable extruding processes at its plants.
Grievance Mechanism. Huatong has yet to fully extend its corporate grievance mechanism for workers in Tanzania and Cameroon although complaint boxes are available at the factory in Tanzania and employees are encouraged to table all complaints directly to the HR manager or their production leads or workers union representatives. As part of the IFC investment, Huatong will extend its grievance mechanism to the project countries and render it accessible to all workers, including third-party workers and contractors in alignment with IFC PS2 (ESAP#8). Also, Huatong will sensitize its workforce about GBVH and provide specialised training to staff managing GBVH grievances.
Workers Engaged by Third Parties. During the construction phase, the EPC contractor is responsible for directly hiring construction workers from nearby communities and security agents through security service providers. Both the EPC Contractor and third-party service providers are required to adhere to Huatong's policies and standards especially on fair recruitment and to comply with the national Labor Code. As part of the project's ESMS (ref. ESAP #1) and HR manual (ref. ESAP #7), Huatong will develop and implement a procedure to monitor the labor and working conditions of third-party workers including monitoring the E&S performance of the EPC contractor workers and any other third-party workers. Additionally, Huatong will ensure that all contract workers have access to the EPC contractor's grievance redress mechanism, if available, or to Huatong's own grievance redress mechanism through the third-party workers monitoring procedure (ref. ESAP #8).
Worker’s accommodation. In Tanzania, expatriate workers are accommodated at a residence within the leased industrial facility while local staff commute from their homes. Moving forward, Huatong will take several actions to ensure that contractors worker’s accommodation aligns with PS2 requirements (ESAP #9).
Occupational Health and Safety. Huatong has established a comprehensive OHS policy at the corporate level, aiming to provide a safe and healthy work environment for employees, contractors, and visitors. The company has implemented work processes and procedures to ensure OHS compliance. The company has an employee health and safety committee led by the chief operations officer. Regular safety training, emergency drills, and inspection and maintenance of safety critical equipment are integral parts of Huatong's OHS system. At the plant level, Huatong has implemented various safety measures including screening of cables extruding machines with protective plates, providing employees with personal protective equipment (PPE), and color-coded floor markings to control access. Fire extinguishers, fire alarms, and fire hydrants are installed in workshops, and emergency contact numbers are displayed prominently. Good housekeeping practices are maintained, and electrical plugs and switches are kept in order. Workplace noise and air quality monitoring records are within applicable national standards. No fatal accident has been reported at Huatong's existing facilities in Tanzania and Cameroon although the full suite of site safety records is not maintained. As part of the ESMS (ref. ESAP #1), Huatong will extend its corporate HSE management system to the project level ensuring a strict implementation of safe systems of work and performance measurement and will require its contractors and subcontractors to adhere to safety procedures and reporting of OHS leading and lagging indicators.
The project area is exposed to risk of heatwaves due to physical climate change in Cameroon and Tanzania. Huatong will update its OHS procedure as part of the ESMS enhancement (ref. ESAP #1) to include measures that improve adaptability to high temperatures and address climate-related events, specifically heatwaves, providing access to drinking water, implementing alternate working schedules during hot weather, establishing rest areas, and outlining actions to be taken when operators show signs of heat stress and heat exhaustion as well as enforce the updated EPRP (ref. ESAP #6).
Life and Fire Safety. Huatong prioritizes life and fire safety (L&FS) requirements in the design of its factory. The design incorporates features such as high roof with adequate ventilation, automated smoke control systems, and internal L&FS systems including portable fire extinguishers, water hydrants, and reels. As part of the safety hazard identification and management of its new plant (ref. ESAP #2), Huatong will model fire incidents for its plants and implement L&FS measures including the installation of a fire water systems comprising a water reservoir, fire pumps, hydrants and fire hose reels. The company will also map out national incident response facilities such as fire brigades, hospitals, and incident support structures.
Supply Chain: Aluminium ingots for the Tanzania and Cameroon plants are sourced from Australia and Japan. Huatong prohibits the use of child labor, making it a fundamental requirement for cooperation with suppliers and has established a traceability system including audits and evaluations of prospective suppliers of raw materials, tracking their source and production process to ensure there is no involvement of child labor in the supply chain. Regular training sessions are conducted for suppliers to enhance their awareness and compliance with labor rights and the prevention of child labor.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency. Huatong relies on the national grid for its electricity and has reported a consumption of about 35 million kilowatt-hours in China, 4.3 million kilowatt-hours for the Tanzania plant and 1.16 million kilowatt-hours for the Cameroon plant in 2023. The Cameroon plant is equally supported by a back-up generator (<3MW). To reduce energy use, Huatong will implement green production interventions at its factories, reduce reliance on diesel generated electricity, optimize waste through recycling and reuse.
Huatong currently uses water from the national water utility and on-site boreholes for its processing operations in Tanzania and Cameroon. The Tanzania plant consumes approximately 20,000 m3 of water per year.. Huatong considers water consumption per unit of product as an important indicator of water resource efficiency and continuously applies new technologies and efficient cooling systems including a closed cooling circuit whereby majority of water is recirculated to improve water use efficiency. As part of the investment, Huatong will include water use assessment as part of the ESIAs (ref. ESAP #2) and will include water management measures in the ESMP (ref ESMP #3) of each project as well as require the EPC Contractor to include water management measures in the CESMP to align with IFC PS3 requires and WBG EHS Guidelines.
GHG emissions: Cable production by Huatong does not generate significant quantities of waste or emissions as its main energy source is grid electricity. As part of the IFC investment, Huatong will include greenhouse gas emission accounting system in its corporate E&S monitoring requirements (ref. ESAP #1) accordance with internationally acceptable protocols that will include collecting and testing data related to emissions and continuously improving protocols to reduce emissions within its processes.
Noise. Huatong operation do not generate noise that represents a nuisance to nearby communities but for some occupational noise that can become unsafe with long time exposure. Earmuffs constitute part of the PPE for employees and operators of noise generating equipment. The noise levels are monitored as part of quarterly regulatory audits and found to be within national limits and in compliance with WBG EHS Guideline values. As part of IFC investment, Huatong will include audiometry test as part of the annual health checks of factory staff who are constantly exposed to noise sources.
Air quality monitoring. Huatong monitors ambient air quality at plant boundaries and the surrounding and analyse for any spike in pollutant levels which may be attributed to its operations. Huatong’s current operations do not generate gaseous emissions at the factory. Any Construction related fugitive emissions will be managed in accordance with the project country ESMP (ref ESAP #3) to reduce harmful gas emissions and monitor to ensure compliance with applicable regulatory requirements and WBG EHS Guidelines.
Waste management. Typical non-hazardous waste generated from the cable production include metal scraps, substandard products, packaging material, plastics, cans, paper, and other construction waste like rubble, concrete and cement waste. Waste streams are collected in distinct labelled skips placed at dedicated areas on site and carted away regularly by authorised waste management companies. Project waste will be managed following the cradle to grave approach and hierarchy of waste management from avoidance, re-use, recycling and disposal in compliance with Huatong’s ESMP (ref. ESAP #3), national legislature and in accordance with WBG EHS Guidelines.
Wastewater treatment: Wire drawing requires water for cooling however this water is recirculated to minimize water usage and discharge of warm water into the environment. Wastewater generated from chemical toilets and lavabos within the factory and living areas in Tanzania is managed by an authorized service provider through the municipal facility. Stormwater and other effluents from construction activities will be discharges through sedimentation basins into the environment in accordance with the ESMP (ref. ESAP #3) and in alignment with WBG EHS Guidelines.
Hazardous Materials and hazardous waste management. Huatong current process include the use of limited chemical residues. Other occasional chemical wastes on site include chemical additives used at the concrete batching plant. As part of the IFC investment, Huatong will implement advanced hazardous material storage protocols in line with its ESMP (ref. ESAP#3) including storage of hazardous materials in roofed bunded areas and installation of oil water separators connected to hardstanding surfaces used for refilling at the fuel storage area aligned with WBG EHS Guidelines. Also, Huatong will ensure that adequate spill kits and firefighting equipment are readily available at hazardous material storage areas.
PS4: Community Health, Safety and Security
Traffic Safety. Huatong’s plants are in a buildup industrial zone in Bonaberri, Cameroon and Mukuranga, Tanzania with communities in the proximity and poor road network. In Tanzania, transport of cables, transformers, and concrete poles are handled by a contractor. The proposed IFC investment would increase transport requirements as equipment will be moved from current facility in Tanzania to the new site traversing communities in between. Huatong will develop a traffic management plan applicable to its transport fleet, as well as its suppliers and distributors that will address driver fitness, competence, and training, speed limits, emergency response for road accidents, vehicle maintenance and safety standards, and requirements for alcohol and drug testing (ESAP#10). Also, Huatong will provide a detailed induction session on the E&S provisions of its Code of Conduct, including zero tolerance to gender-based violence and sexual exploitation, abuse and harassment for its own truck drivers and transport service providers.
Security Personnel. Huatong utilizes unarmed and armed security agents from third-party security service providers. At its Tanzania plant, 9 security officers are deployed during the night and 3 during the day for access control. One of the security agents deployed per shift is armed. Also, a second layer of security consisting of 6 officers during the night and 2 during the day is provided by the industrial park operator. Furthermore, 164 cameras are installed along the perimeter fence and at different areas of the plant. Huatong will include background screening and specialized training requirements for security personnel including human rights and rules of engagement for the armed guard as well as expand the workers grievance management to cover its third-party security agents (ESAP#12).
