Based on IFC’s review, no risks and adverse impacts of the project that need to be managed consistent with PS5 (Land Acquisition and Involuntary Resettlement), PS6(Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) were identified.

If IFC’s investment proceeds, IFC will periodically review the project’s ongoing compliance with the Performance Standards.

 The investment is a Category B project. Based on information reviewed by IFC, the proposed project will have limited adverse E&S impacts that are few, site-specific, largely reversible and readily addressed through existing mitigation measures and good international industry practices (GIIP). 

Key E&S risks and issues include: i) the company's management and monitoring systems to assess and manage E&S risks and impacts from its operations ii) fair, safe and healthy labour working conditions including workers engaged by third parties and occupational health and safety (OHS); iii) waste water, and solid waste including hazardous waste management; and iv) chemical management, life and fire security(LFS) and emergency response plan(EPR).

 PS 1 - Assessment and Management of Environmental and Social Risks and Impacts

Management System and Identification of Risks and Impacts: Etana identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards. Etana has a production facility certified as per Indonesian GMP(CPOB2024), ISO14001 for environmental management, and SMK3-the national certification for Occupational Health and Safety (OHS) management system. Those systems establish environmental and occupational health and safety policies, objectives, and targets with detailed operational control procedures. Etana maintains regular monitoring and measuring of EHS performance, including annual internal audits and management reviews as well as external audit of ISO14000 every 3 years.

Etana follows National Environmental Impact Assessment (EIA) requirement for existing operation and obtained the LFS permit, OHS permit, and Environmental permit for operation. For future expansion activities, Etana will conduct additional ESIA and update the applicable management plans   consistent with national law requirements and IFC PS.

Etana has established contractor safety management program including pre-qualification review on EHS track record, standard commitment letter on EHS matters, and applicable corporate Standard Operating Procedures (SOP) to follow. As the company may need to build new warehouse and production facility in the future, Etana needs to further expand the coverage on environmental and social aspects, including requiring the contractor to implement a construction stage Environmental and Social Management Plan and provisions of prohibiting child labor, forced labor and GBVH as per (ESAP#1).

Organizational Capacity and Competency: The company has established an Environmental and OHS committee that has roles and responsibilities for managing environmental, health, safety, and social aspects. The committee is responsible for monitoring key performance indicators (KPIs) related to OHS, environmental monitoring, and sustainability initiatives. Environmental and OHS responsibility is further assigned to five Environmental and OHS staffs who report to EHS manager. EHS manager reports to chief technology officer and coordinates interdepartmental EHS matters. 

Monitoring and Review: Environmental, OHS, and HR related KPIs are integrated into both departmental and individual performance, which aligned with the overall goal of the company. The company maintains an EHS performance dashboard with monthly record. KPIs are reviewed on semi-annal basis. Environmental monitoring is conducted according to regulatory requirements for air emissions, wastewater discharge, noise and ambient environmental monitoring, with varying frequencies for different parameters. HR indicators (e.g., recruitment, attrition, grievance) are monitored by HR department.

Emergency Preparedness and Response: Etana has documented an emergency preparedness and response plan (EPRP) covering scenarios including fire incidents, chemical spills. It outlines the emergency scenario medical procedure, evacuation procedures and communication protocols.

PS 2 – Labor and Working Conditions

Etana employs 427 direct workers (approximately 62% male and 38 % female employees), and 250 are full-time and 175 are short-term seasonal workers. All direct hired workers obtain written contract. The company engages 47 third-party employees primarily for security, cleaning services, product transfer, and manual packaging.

Working Conditions and Terms of Employment: Etana corporate policy commits to non-discrimination and equal opportunity. Employment conditions, compensation, attendance, leave, insurance, overtime, performance evaluation, and promotions are all managed in accordance with corporate HR policies. Working conditions and terms of employment are formalized into employment contracts. The terms and conditions include minimum wage, working schedule, overtime, leave, and benefits (such as social security provisions), all referenced to local labour laws. Sample employment contracts reviewed during appraisal indicated the inclusion of these clauses stipulated in the contract.

Etana has an overtime management procedure and maintained records of staff working hours. According to the records, some staff members’ working overtime slightly exceed the national law's limit. Etana will develop a management program to reduce working hours to a legally acceptable level (ESAP# 2).

Worker's Organization: Currently, there is no labour union in Etana. The company has established a Bipartite Cooperation Institute, which serves as a communication and consultation forum regarding matters related to labour and working conditions within the company. Etana will clearly state the freedom of association in the HR policy (ESAP# 2).

Grievance Mechanism: Etana has established an internal policy that outlines the procedure for submitting and resolving employee grievances in a timely manner. This mechanism is applicable to all employees, providing a platform for voicing concerns. Employees can raise suggestions or complaints through email, WhatsApp, and internal communication sessions. Site visit identified pending grievances at company facilities that remain unresolved. Etana should improve the Grievance Redress Mechanism (GRM) by extending its applicability to third-party laborers, developing a plan to address pending grievances, and actively communicating with staff (ESAP #3).

Prevention of Sexual Harassment and Protecting the Workforce: Etana HR policy has specific provision regarding to child labor align with National Law and ILO requirement. IFC’s review did not identify any signs of the use of child or forced labor. The company commits zero tolerance to unethical behaviour such as sexual harassment, as part of company’s code of conduct. No cases have been reported in the existing reporting channel. Etana needs to develop a procedure for addressing gender-based violence and harassment (GBVH)  applicable to all employees, third-party workers and contractors. HR staff will be trained on how grievances received on GBVH are handled, respecting the confidentiality of the survivor, and ensuring a survivor-centric approach. (ESAP#3).

Occupational Health and Safety (OHS): Etana has established and maintained a Hazard Identification Risk Assessment for its operations, including warehouse activities, production processes, quality control, and auxiliary facilities. Manuals and procedures for mitigation measures on OHS have been formalized, and safety education and training are regularly provided to all workers, including those employed by third-party companies. Etana complies with the quarterly incident reporting requirements as mandated by national law. Third-party contractors submit their Occupational Health and Safety (OHS) data to the regulatory authorities. Key OHS performance indicators (KPIs), such as lost time injury, medical treatment cases, first aid incidents, and traffic incidents, are monitored on a monthly basis. Recent records show that there have been no OHS incidents that lead to lost time injury over the past three years. Etana needs to improve OHS statistics, including leading indicators such as safety training attendance, near-miss incidents, safety audits, and maintenance of safety equipment. The OHS statistics should be extended to include third-party and contractor labor (ESAP#4).

Supply Chain Management: Etana procures more than 200 different raw materials from both local and international reputable suppliers across the regions including China, Singapore, and Germany. Supplier prequalification process including review of the supplier’s environmental policy, permit, L&FS facility, waste handling etc. Suppliers must provide MSDS for chemicals and follow safety protocols to ensure worker protection. Etana needs to develop a supplier code of conduct with clauses on child labor, forced labor, and integrate those requirements in the review process for supply chain management (ESAP#5).

Management of Third-Party Workers: Etana requires its third-party labor practices to comply with national laws by including key terms in the service agreement. These include registering personnel in the Indonesian social security program, providing festive bonuses and overtime pay for work on public holidays, among others. The service provider is responsible for the timely payment of salaries and other obligations such as medical expenses, workers' social security, and other allowance per national law. Etana will strengthen the oversight of the third-party to ensure third-party labor get proper compensation (ESAP#6)

PS 3 – Resource Efficiency and Pollution Prevention

Resource Efficiency: Etana purchase electricity from national power grid, around 5,690,000 kWh/year. The company uses 1,641Sm3 natural gas for its boiler and 5,200L diesel for back-up generator. Current GHG emission is estimated at 4,451 tCO2e. Water is sourced from public utilities with annual consumption approximately 55,000 m3. The company initiate energy saving measures to improve efficiency.

Pollution Abatement:  Etana’s production process does not emit air pollutant. Air emission limit to the gas boiler, and diesel fuel use for emergency diesel generators and fire pumps. Third-party air emission monitoring results indicate material compliance with applicable national and World Bank Group (WBG) Environmental Health and Safety (EHS) Guidelines limits.

Wastewater generated at Etana facility mainly includes cleaning, laundry and other domestic use and very limited product wastewater (4m3/d). Those waters combined as 40m3/d, enter an on-site wastewater treatment facility that includes disinfection, physical, chemical, and biological treatment processes, ultimately discharge to the river nearby. Recent external wastewater monitoring results indicate material compliance with applicable national and World Bank Group (WBG) Environmental Health and Safety (EHS) Guidelines, and the monitoring results of ambient water quality indicate the effluent has negligible impact on the water quality of the river.    

Solid and hazardous wastes: The company production process generates solid wastes such as package waste and domestic waste. Hazardous waste includes contaminated laboratory waste (liquid and solid), defective products, used lubricants, clinical waste, waste material and products etc. In accordance with national regulatory requirements, they are stored, labeled, handled, stored at designated secure locations with access control. Licensed third party companies qualified to handle such wastes are engaged by the company to collect and transport them to designated disposal sites or facilities.

Hazardous Material Management: Etana uses organic solvent, reagent in its production and quality control process.  Wastewater treatment facilities also use chemicals for disinfection and pH stabilization. All chemicals maintained material safety data sheets (MSDS) provided by the supplier, applicable chemical management procedure has been developed for warehouse management, production process, and quality control process. The site visit observed that chemicals used for wastewater treatment are stored without leakage prevention, and some flammable chemicals are stored in the waste storage area. Etana needs to enhance chemical management for the wastewater treatment operation procedure and conduct internal audit for chemical management and make short term and mid-term action plan (ESAP #7).

PS 4 – Community Health, Safety and Security

Etana existing manufacturing facility is located within industrial parks, with limited direct exposure to local communities given that such parks are typically set up to be at reasonable distances from local residences and sensitive E&S receptor areas. Given the setback, Etana’s daily operation is not expected to disturb residents. Company facility is secured by unarmed security personnel. Security personnel are trained to properly use force (only for preventive and defensive purpose).

Etana’s existing facility has been fulfilling life and fire safety (L&FS) regulatory requirement, mandatory hardware such as smoke detectors and automatic warning systems have been installed. The local fire department has issued L&FS certificate and conducted regular audits to confirm that Etana facility has maintain good L&FS function. The Occupational Health and Safety (OHS) team routinely conducts inspections of life and fire safety equipment. Fire drill and other emergency response simulations are conducted annually. Follow the medical procedures, evacuation procedures, and communication protocols as outlined in the company’s Emergency Preparedness and Response Plan (EPRP). 

 Etana identifies different stakeholders, including customers, suppliers, subcontractors, government agencies, and the surrounding community. The company maintains a standard communication procedure that provides mechanisms for communication, participation, and consultation with various stakeholders on ES matters.

Etana’s facility is located within an industry park in East Jakarta manage by Jakarta Industrial Estate Pulogadung (JIEP). The facility is sited neighbor to industry and warehouse neighbors and is 500m away from local residential areas. As such, the company has limited day to day interactions with residents. The company’s existing business plan focus on maximize its existing manufacture facility with potential to build a new warehouse, and a new production facility. As per local regulatory requirements, all company facilities required to undertake environmental impact assessments (EIA) need to carry out public consultation activities during the EIA process to solicit and document potential stakeholder opinions about draft EIA reports and proposed mitigations. The company’s corporate website (https://www.id.etanabiotech.com/) serves as a channel to receive any potential grievances from public stakeholders and has posted an email address to receive any such enquiries.