This is a Category B Project according to IFC’s Policy on Environmental and Social Sustainability (2012) as the proposed project is expected to have limited adverse E&S risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures, as described in the following sections. Key E&S risk and issues associated with this project include: the company's capacity and systems to assess and manage E&S risks and issues associated with its operations and implementation of E&S management system (ESMS); provision of fair and safe working conditions for its employees and contract workers; implementation of Occupational Health and Safety (OHS) policies and procedures; pollution prevention including management of medical wastes; life and fire safety (L&FS) and emergency response procedures; and supply chain management.

 Identification of E&S Risks and Impacts Assessment: The company identifies and manages E&S risks and impacts associated with its operations in line with applicable national standards and regulatory requirements. According to local legislation, the company is not required to undertake an Environmental Impact Assessment (EIA) study (Analisis Mengenai Dampak Lingkungan Hidup: AMDAL) for the existing operations and expanding manufacturing facility under the project.       

The company plans to conduct screening check of acquiring companies including licensing and qualification review however there is no formal E&S Due Diligence (ESDD) procedure available. As part of ESAP 1, the company will develop a screening procedure and the standard operating procedure for conducting E&S due diligence of potential investments including expansion and acquisition projects against IFC Performance Standards (PS). As part of the screening procedure, the company will assess the applicability of all the relevant PSs for all the future developments to comply with PS requirements.

E&S Policy: Medela has developed its corporate Code of Conduct (CoC) and OHS policy, applicable to all the company’s operations including subsidiaries. The company is currently developing corporate ESG policy. As part of ESAP 2 the company will finalize the corporate ESG policy, which will refer to implementation of an ESMS in line with IFC PS.

E&S Management System and Program: The company has procedures related to ESMS including, risk assessment and identification, safety management procedures, emergency response procedure, and waste management procedure etc. The company has obtained certification for ISO 9001 (international standard for quality management) and “Good Storage and Distribution Practice for Pharmaceutical Products and Medical Devices” from the Ministry of Health of Indonesia. The manufacturing facility obtained ISO 13485 (international standard for quality management system for medical devices) certification. Company has integrated its existing ESMS procedures and processes into its quality management systems.

Organizational Capacity and Competency: The company has several departments to oversee various E&S aspects. EHS manager position assigned at company headquarter, at NDC, and the manufacturing facility. There are 35 EHS coordinators covering all the branch office and warehouse operations in cooperation with branch office manager and crisis coordinators to handle E&S managements on site. Similar structure has established for the company’s operations in Cambodia and will be followed for the future expansions.

Emergency Preparedness and Response: The company has emergency response procedures (ERP) for the manufacturing facility and each logistic facility’s operations, including responsibilities and duties defined for staff and procedures for disaster prevention and management. It consists of a standard operating procedure in case of fire, natural disasters, road accidents, and civil disturbances etc. The crisis coordinators assigned at each facility and branch office are in charge of initial responses and provision of relevant trainings, incident investigation and reporting.

Monitoring and Review: The company monitors all facilities and warehouses operations in accordance with key performance indicators (KPIs) such as accidents (OHS, traffic and fire) and labor compliance (working hours, overtime payment) and reported to managements on monthly basis. Closed circuit television (CCTV) monitoring and supervision system through video cameras is installed in the NDCs and branch office warehouses observing the key areas. The manufacturing facility monitors and reports its operations in line with legal requirements.

As of November 2024, Medela has about 2950 employees (71% male and 29% female), additional around 700 employees are outsourced mainly working for security, transportation and warehouse operations. Majority of the employees are working in Indonesia, and about 200 employees are working for the operations in Cambodia.

Human Resources Policies and Procedures: Medela has a set of corporate HR policies, HR regulations and code of conduct, which is applicable to all the employees. The company’s HR documents include working policies, working time, leave, social security, working related travel, termination, grievance etc. Any changes of the company regulation or any HR policies are announced through email to all the employees.

Working Conditions and Terms of Employment: All employees are provided with a contract which includes the rights and obligations of the worker, working hours, wages and benefit, job duty and responsibility, termination etc. According to the company’s management, all employees exceed the minimum age of 18 years. The company has a corporate policy to prohibit child labor and forced labor as part of the human rights enforcement. Working hours are recorded based on the information technology based time recording system. The company does not provide accommodations for workers.

Workers’ Organization and Retrenchment: According to its management, Medela does not restrict workers from freedom of association. The company currently does not have a labor union among the workers. There is no collective bargaining agreement and no major labor disputes to date. The company has a retrenchment procedure as part of corporate HR regulations. There is no retrenchment occurred in the past years nor planned.

Non-discrimination and Equal Opportunity: Medela implements a corporate policy related to non-discrimination and equal opportunity as part of its recruitment and selection policy as well as anti-sexual harassment and gender-based violence (GBV) as part of the documented corporate HR regulations.

Worker Grievance Mechanism: The company has a formal grievance mechanism defining the process for receiving, assessing and resolving grievances including GBV and anonymous processing. This is accessible to all the employees, contractors and business partners. The HR department is in charge of processing and reporting the process. There has been no major grievances with regards to EHS reported in the past three years.

Workers Engaged by Third Parties: The company employs third party agencies to perform activities including delivery service, warehouse operations, security personnel as well as construction and expansion works etc. The company has a contract with contractual workers and these contracts include the rights and obligations of the worker, working hours, wages and benefit, job duty and responsibility, termination etc. The operation managers oversee the HR compliance and regional HR persons are in charge of implementation of HR regulations as well as conducting site visits and compliance audits at each branch office. EHS manager and coordinators assigned at each site oversee contractor’s construction and expansion work in line with corporate E&S requirements.

Occupational Health and Safety: The company has developed OHS policies and implemented corporate OHS management and risk identification system including OHS risk identification procedure, OHS training procedure, incident reporting format, safety inspection checklist, health and hygiene, potential risk assessment and control procedure etc. A crisis coordinator allocated at each company’s facility together with facility manager will handle immediate responses following relevant emergency response procedures.

Company’s OHS requirements include workplace safety, installation of signs related to safety, and the use of personal protective equipment (PPE). The company developed incident reporting and investigation procedure as part of corporate ERP. Regular OHS trainings provided to all the employees and contractors. All new employees are required to receive an induction training. There are no fatalities nor major incidents have been reported during the company’s operation over the past three years including contractors.

Supply Chain: The company has several procedures related to supply chain including product purchase principles, a corporate procurement policy and a supplier code of conduct articulating its commitment to prohibit forced, or child labor and significant occupational health and safety risks. As per ESAP 3: the company will establish a procedure to assess supply chain E&S risks for its primary suppliers as well as electric motorcycles suppliers. The company will monitor its primary supply chain on an ongoing basis. If any E&S risks are identified, the company will develop processes to prevent and remedy such practices in a reasonable period of time.

Resource Efficiency and Green House Gas: Some of the resource efficiency initiatives implemented include installation of light emitting diode (LED) as electric saving lighting, efficiency chillers at the headquarter office, some branch offices and warehouses. The company started to introduce electric motorcycles at some branches.

Electricity is sourced from the national public grid for all operations except the NDC and manufacturing facility which is sourced from the power plant installed at the industrial estate.

The company monitors and reports total gross greenhouse gas (GHG) emissions every year. The GHG emissions from current Medela’s operations was reported to be around 23,000 tons of carbon dioxide equivalent per annum in FY 2023. 

Air Emissions: No major air pollutant emission is expected from the company’s operations including manufacturing facility. Small amount of diesel oil would be used by the backup generators installed in the facilities but due to annual consumption, it is not expected to generate significant quantities of air emissions.

Water and Wastewater: Water supply for the company operations come from the state own or private water company. The drinking water for employees is sourced from local bottled water supply. The water consumption from whole operations was reported to be around 86,000 m3 in FY 2023.

The company has wastewater management system including effluent monitoring under the supervision of local environmental agency. There is no significant amount of water used in the existing manufacturing facility and warehouse operations and no major process wastewater generated, other than some wastewater generated from cleaning and testing processes. Such wastewater is separately collected and handled by the specialized third-party companies. Domestic wastewater from office and warehouse operations are treated by septic tanks and discharged to the public sewage system.

Waste and Hazardous Material Management: The company has waste management procedures to dispose and to manage expired/damaged medical goods including a system of appropriate handling, storage and disposal. All the domestic waste or recyclable materials are collected for disposal or recycling by an authorized third-party agency/ local public services specialized in each type of waste. The company confirms each agency has the required license to handle the waste and the procedure is monitored by quality assurance team. To minimize waste, the company’s procurement team closely monitors expiry dates of goods and uses recyclable plastic materials for packaging.

Hazardous materials used in company operations are stored in dedicated areas where are segregated and closely monitored. The material safety data sheet (MSDS) has prepared for the chemicals or reagents to be used as part of the testing. Procurement and utilization of those hazardous materials are handled by persons with specialized experience.                                                  

Life and Fire Safety Management: Medela has fire safety permits for the NDC and manufacturing facility operations. The design of NDC and manufacturing facility has been approved by the local authorities. Visited facilities confirmed to maintain appropriate L&FS infrastructure and systems such as fire extinguishers, smoke detectors, fire alarms, emergency exits and signs.

The L&FS requirement incorporates a routine inspection including condition of fire extinguisher, ensuring emergency exit pathways, and regular checks on electrical appliances. Training for fire safety management has been implemented for its manufacturing facility, warehouse and branch office operations with support from the local fire authorities. There is no fire incident reported for the company’s operation in the past three years.

Community safety management: The company has a transportation team with around 34 drivers and also contracted to third party transportation fleet operators to support the delivery services. There have been no major traffic incidents reported in the past three years.

The company has several procedures/requirements related to transportation safety including predeparture check, maintenance recordings and prohibition of alcohol etc. The company also made a standard agreement with third party drivers regarding compliance with the company’s policy and regulation on the safe driving.

Security Personnel: Some company facilities including warehouses, manufacturing facility and branch office premises are protected using contracted unarmed security. There are no armed security guards used nor planned. The company regularly undertakes internal briefings and provides training for the security personnel through the corporate EHS coordinators.

 Stakeholder Engagement and External Communications and Grievance Mechanism: Medela developed a stakeholder engagement plan, describing key focus areas and framework of engagement for each stakeholder including employees, customers, society, shareholders, governments etc. The company produces corporate social responsibility reports every two years.

The company has a standardized guideline on handling stakeholder complaints and grievances and the channels to receive complaints are established via company e-mail, SMS and hotline call number. All the complaints from external stakeholders have been recorded in the corporate complaints recording system and the customer service department and relevant departments are in charge of processing the mechanism. The complaints received in the past years are mainly product related issues and there have been no complaints nor litigations with respect to the company’s environmental, social or health and safety performance in the last three years.                                                  

 Contact Person: Stephen Febianto Kusumo

Company Name: PT Anugrah Argon Medica

Address: Titan Center, lantai 4, Jl. Boulevard Bintaro, Blok B7/B1 No.5, Bintaro Jaya Sektor 7, Tangerang-Indonesia 15424

Email: stephen.febianto@anugrah-argon.com

Phone: +62 812-8208-2872