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 Impact
E&S Policies and Management Programs. To effectively manage the scale and range of E&S risks posed by the company’s operations, LIT has developed, and implemented, a robust ESMS aligned with local laws and regulations, IFC Performance Standard (PS) 1 and commensurate to the level of risks and impacts associated with the company’s activities. The company’s ESMS framework applies to all employees, contractors, and suppliers and is supported by relevant group and operational level policies, procedures, and guidelines. Key group level policies include a draft Sustainability Policy, Health Safety and Environment (HSE) Policy, and Human Rights Policy among others.
The group has developed a variety of management plans and standard operating procedures (SOPs) defining their E&S and health and safety management approach and requirements. The management procedures and guidelines cover a variety of functional and risk areas including, but not limited to, incident reporting, land acquisition, E&S screening and risk categorization, waste management (including hazardous and e-waste), emergency response, traffic management, security, contractor management, and training.
Identification of Risks and Impacts. A multifaceted approach has been adopted to risk identification, assessment, and management at the group, regional, and OpCo levels. This includes the implementation of various risk management policies and procedures, including a group Risk and Control Management Policy, and the maintenance and periodic updates of risk registers. HSE risk registers are maintained at all levels (group, regional, and OpCo), and are continuously updated with risks identified as part of the E&S project screening process, HSE audits, incidents, changes to processes, and legislation. As per the company HSE policy, EIAs are completed on a project-by-project basis as per local legislative requirements.
In addition to the above, LIT has also implemented an E&S Screening and Risk Categorization Procedure whereby E&S risks and impacts associated with infrastructure construction activities are proactively identified, managed, and integrated into the project lifecycle.
The board of directors is accountable for risk management at the various regional and OpCo levels, with the responsibility delegated to the Group Audit and Risk Committee. At the regional level, Risk Management Committee meetings are held quarterly in order to remain abreast of functional, operational and day-to-day risks at the various OpCos.
Organizational Capacity and Competency. The management and implementation of the ESMS at the group, regional, and OpCo levels is multifaceted. At the board level, the group plans to constitute an Executive Environmental, Social, and Governance (ESG) Committee with ultimate oversight of the groups E&S approach, sustainability strategy, and approval and monitoring of key performance indictors (KPIs). The group has also appointed an Executive Head of ESG responsible for implementing the Sustainability Strategy, providing group and operational guidance and support on ESG and sustainability best practices and advising on compliance requirements. At the regional level, this management approach is overseen by an Environmental, Social and Governance (ESG) committee as well as various HSE steering committees. At the country OpCo level, various HSE structures have also been established.
Emergency Preparedness and Response. As a component of their ESMS, LIT has developed and implemented an overarching Emergency Plan, as well as a procedure specifically for environmental incidents. Where relevant, LIT conducts emergency drills on a quarterly basis, and the process is analyzed to determine effectiveness and areas for improvement. In relation to third party contractors, their own environmental emergency procedures must ensure adequate response procedures to accidental actions or incidents such as discharges to water bodies and land and spillage of hazardous substances. To further support the emergency response procedures, the company has a well-defined incident management and reporting procedure, including reporting, review, investigation, and close out protocols.
Monitoring and Review. LIT monitor and report on their E&S performance through several mechanisms and platforms. Internally, the company makes use of monitoring, measuring, analysis and evaluations to support the operational effectiveness and efficacy of the ESMS. This includes monitoring operational aspects such as hazards and risks, contractor management and performance, internal HSE controls etc. In addition, LIT has an internal HSE audit function to further support conformity of E&S practices against the requirements of the various policies, procedures, and compliance requirements. Where gaps are identified, remedial action plans are defined and agreed with the relevant department, OpCo etc.
Externally, the company has generally adopted the Global Reporting Initiative (GRI) Standards to accurately measure and report on their sustainability impacts, ESG data, stakeholder engagement and materiality determination process. The company is further considering other reporting platforms such as the Taskforce on Climate-related Financial Disclosures (TCFD), the Carbon Disclosure Program (CDP), and the International Sustainability Standards Board’s (ISSB) International Financial Reporting Standards. Currently the company report on several KPIs, including, but not limited to, HSE incidents, contractor management, environmental aspects, E&S project screening, and labor. These KPIs and other reporting areas are included in the company’s annual Sustainability Report (https://za.liquid.tech/about-us/sustainability/).
The company has initiated a robust greenhouse gas (GHG) monitoring and reporting protocol aligned with the requirements of the Greenhouse Gas Protocol Corporate Standard (GHG Protocol) and ISO 14064-1:2018. In FY24 the company reported total emissions (Scope 1, 2 and 3,) of 63,630 tCO2e.
PS2: Labor and Working Conditions
Human Resources Policies. Across their various OpCos, LIT employ approximately 3,000 direct workers with a male to female ratio of 75:25. The company’s workforce is managed under several policies and procedures, aligned with the requirements of PS2, including a Code of Conduct, Human Resource (HR) Policy, Equality, Diversity, and Inclusion Policy, and Bullying, Harassment and Victimization Policy among others.
Working Conditions and Terms of Employment. Labor and working conditions are defined under the various HR policies and procedures and relevant labor legislation of the country of operation. Terms and conditions of employment, including remuneration, working hours, leave, benefits, training etc., are detailed in written employment contracts provided to all workers. In terms of remuneration, currently there is no prescribed minimum wage for the Information Communication and Technology (ICT) sector, hence LIT is guided by national wage standards, salary benchmarking, and internal policies and procedures. Contractors are monitored and audited to ensure they comply with minimum labor and working conditions in each country of operation. Working hours are agreed in each workers’ contract of employment and are in line with local labor legislation.
Workers’ Organizations. Currently none of LIT’s workers are unionized, however, the company recognizes the right of workers to join or be represented by a labor or trade union of their choice without discrimination. Workers are made aware of their inherent right through induction training, contract conditions and existing policies and procedures. Should national law substantially restrict freedom of association, LIT has provided alternative avenues for workers to express their concerns and protect their rights regarding working conditions and terms of employment.
Non-Discrimination and Equal Opportunity. LIT has implemented a Group Equality, Diversity, and Inclusion Policy whereby the company is committed to ensuring that all forms of unlawful discrimination do not occur throughout the recruitment and selection procedure or at any time during employment. This policy is supported by the Code of Conduct and Bullying Harassment and Victimization Policy. The company has further adopted a zero-tolerance approach to any form of direct or indirect discrimination.
Grievance Mechanism. Worker grievances and concerns are managed under the Group Internal Grievance Procedure. The procedure is made available to all workers, including contractors where necessary, who are provided with an overview of the process at induction, with ongoing awareness training provided. In FY24 LIT recorded 41 grievances across their various operations, with the majority being resolved in a timeous manner. In addition, the company has also implemented an independently operated whistleblowing procedure whereby anonymous grievances can be lodged.
Occupational Health and Safety. LIT has developed a robust health and safety management system, whereby occupational health, and safety (OHS) is managed under several HSE management procedures and policies, through ongoing training, and regular inspections. LIT has defined an overarching OHS Management Policy, supported by further procedures such as a Health and Safety Manual, Preventive Action Procedure, Training Procedure, and Risk Assessment Procedure among others. Regular health and safety training is conducted across all OpCos on topics such as first aid, firefighting, emergency preparedness and incident investigation.
At the operational level, all contractors are required, at the vetting and procurement phase, to define and demonstrate adequate health and safety management processes that are monitored by the LIT HSE department on an ongoing basis. Monthly inspections cover vehicles, construction sites, adequate use of personal protective equipment (PPE), and employee wellbeing among others. This process allows for the early identification of non-compliances against LIT policies and procedures, continual revision of risk registers, and updates at monthly HSE committee meetings.
Given the notable operating risk associated road and traffic safety, the company has implemented operational Driver Policies, supplemented by the existing operational Driver Code of Conducts, and further supported by ongoing driver training and inspections. These policies and procedures are included in all contractor specifications and have resulted in no road related incidents over the past two years.
Any reported HSE concerns, near-misses or incidents are reported, and investigated by the company’s HSE department to determine the extent and root cause of the incident and mitigation steps. In FY24 LIT reported a lost time injury frequency rate (LTIFR) of 0.54. No fatalities were reported across the group. The company has also defined an internal and external health and safety audit procedure to ensure continuous improvement of the company’s health and safety management system.
Workers Engaged by Third Parties. The nature of LIT’s operations requires the use of several third-party contractors and service providers. All contractors are managed under a suite of contractor health, social, safety, and environmental specifications that are detailed in all supply agreements and contracts. Contractors are vetted at the time of procurement and undergo annual HSE audit before being onboarded or re-appointed. Contractors are also required to submit monthly HSE data to LIT.
