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
E&S Policy:
DDC has a corporate policy related to EHS and OHS management applicable to all the company’s operations. The policy comply with national law and is consistent with the principles of IFC Performance Standards (PS). The policy cover legal compliance, environmental health and safety risk management, quality management, energy conservation, pollution control and protecting natural and working environment.
Identification of E&S Risks and Impacts Assessment:
DDC identifies and manages E&S risks and impacts associated with its operations in line with applicable national standards and regulatory requirements. As per national legislation, the construction and operations of Nghi Son and Dong Xuyen project are subject to Environment Impact Assessment (EIA) process. The EIAs studies has been conducted for Nghi Son and Dong Xuyen facilities by qualified consultants per national law, which identifies key environmental impacts associated with construction and operations of the project, including among other aspects waste, air emission, wastewater, health and safety management, and climate-related hazards. As part of ESAP#1, DDC will update related standard operating procedures as part of its ESMS, including emergency preparedness and response procedures, to address climate-related risks of the new manufacturing factories. DDC will also develop a suite of site specific construction E&S management plans (ESMPs) based on the updated EIA, national law and standards, the WBG General EHS Guidelines (2007) and WBG EHS Guidelines for Metal Plastic and Rubber products (2007).
E&S Management System (ESMS) and Program:
DDC has established a corporate quality, safety and E&S management system (ESMS) and has an EHS manual compliant with national law and standards which is applicable to all the facilities. The company has operating procedures related to ESMS, including corporate EHS policies, risk assessment and identification, emergency response, contractor management and operational safety management, monitoring and reporting procedure etc. DDC’s ESMS is commensurate with E&S risks of its operations. At the plant level, DDC factories have one or more of the following management system certifications for quality (ISO 9001), environment management (ISO 14001), and health and safety management (ISO45001). As part of ESAP #2, the company will augment its corporate ESMS, its a procedure for E&S risk identification of potential investments per IFC PS.
Organizational Capacity and Competency:
DDC has established a corporate level EHS organizational structure and dedicated team with around 55 staff including an EHS director. The team oversights the EHS and OHS aspects across all the facility operations including construction projects. Under supervision of corporate EHS team, an EHS manager and EHS officers assigned at each facility responsible for day-to-day operational management and ensuring compliance with the corporate EHS policy as well as local regulations and PS requirements. Similar to the existing factory operations, DDC will assign a plant level EHS manager position at each new factory under the project (Nghi Son and Dong Xuyen).
Emergency Preparedness and Response:
DDC has corporate level emergency response procedures (ERP) per national law applicable at each facility covering emergency response principles, identification of possible incidents, emergency drills, emergency communications and reporting. At each site, an EHS team oversees handling emergency situations such as fire or other accidents. Fire and other emergency response drills are conducted regularly based on the corporate risk assessment and identification procedure. As part of ESAP #3, the company will develop site specific ERP for new facilities funded under the project (Nghi Son and Dong Xuyen).
Monitoring and Review:
The company established an EHS monitoring procedure as part of its corporate ESMS. DDC collects relevant information and key performance indicators (KPIs) regularly from all its facilities related to several EHS aspects including water and energy consumption, greenhouse gas (GHG) and air emissions, wastes, wastewater quality, OHS and community engagements.
The information collected and compiled centrally is analyzed by corporate level EHS team. The summary reports are presented to the respective site level managers, as well as the senior management on monthly basis. In addition, an internal audit team including HR and EHS is in place with the responsibility to independently ensure the compliance of various facilities with legal and other applicable requirements.
PS2: Labor and Working Conditions
As of June 2025, DDC has about 4580 employees covering factory operations, office work and production management. This workforce comprised of about 14% women employees.
Human Resources Policies and Procedures:
DDC has overarching corporate human resource (HR) policies and procedures as well as Code of Conduct (CoC) in line with national laws and regulations covering salary, benefits, bonuses, performance management, appointment, dismissal, transfer, allowances, overtime, paid leave etc. DDC's corporate HR policy and practices are applied to facility level and are generally aligned with IFC PS2 requirements. However, as part of ESAP #4, the company will augment its HR policies and procedures per requirements of IFC PS2 addressing child and forced labor and management of retrenchment.
Working Conditions and Terms of Employment:
All employees are provided with a contract, which includes the job title and duties, place of work, standard terms and obligations of the worker, working hours, salary and payment, etc. Working hours are recorded based on the IT-based time recording system, and payment, including overtime, is based on this record accordingly. Worker’s accommodation has provided for some existing facilities with about 50-200 workers at each site, including adequate L&FS measures and basic utility services such as electricity, water, and assessed to be in line with IFC/EBRD guidance note on workers’ accommodation. There is no accommodation facility expected for the future development at Nghi Son and Dong Xuyen sites under the project.
Workers’ Organization and Retrenchment:
The company respects the rights of employees to form and join an association without fear of retaliation, interference and harassment if the association complies with local laws. As of August 2024, almost all full-time employees are members of the trade union. The company has a corrective labor agreement with the union including employment and job security, salary and working conditions, welfare etc. The company has a retrenchment procedure in line with national law including severance payment. DDC will as ESAP # 4 update HR policy to address retrenchment planning requirements of IFC PS2.
Non-discrimination and Equal Opportunity:
The company has a corporate ESG flamework and the CoC which describes diversity in its workforce and commitment to protecting employees and stakeholders from any forms of discrimination and harassment. DDC's grievance mechanism channels are designed to receive and appropriately handle any complaints related to sexual harassment and gender-based violence.
Worker Grievance Mechanism:
The company established an internal procedure for employee complaint resolution, receiving and resolving grievances covering all the company operations. There are the channels to receive complaints through a corporate website or a specific e-mail address to report grievances/complaints. Anonymous letter boxes are also available at each factory. Trade union and HR department oversee receiving/resolving grievance cases including sexual harassment together with relevant departments.
Occupational Health and Safety:
DDC has an OHS policy and relevant procedures to ensure adequate health and safety standards across the company operations include OHS hazard identification and risk assessment; safety guidelines covering working at heights, welding and cutting, hand tools, chemical safety, electrical safety, use of lifting equipment, grinding and cutting machines; fire safety guidelines; and safety guidelines for vehicles and transportation equipment.
Each facility follows the local regulations governing the protection of the workforce including contractors. Facility level workplace health and safety are maintained by EHS manager/officer on site including provision of safety trainings, safety signages, and personal protective equipment (PPE). All incident data are collected and complied through internal reporting systems for investigation, root cause analysis and to establish corrective and preventive measures as needed. In the past three years, there was only one fatality case recorded, the company investigated root causes and implemented corrective actions and mitigation measures. The company’s lost time injury frequency rate (LTIFR) is lower than the international industry benchmarks.
Workers Engaged by Third Parties:
The company hires temporary workforce such as waste management, security personnel as well as construction works through licensed agencies as per specific needs at the facility level. DDC developed a contractor competency assessment procedure covering screening, selection. Contractors are required to comply with corporate EHS and HR policy and procedures, applicable local labor laws which specifically described in the contracts DDC signed with the contractors.
During the construction, the corporate EHS and HR team and relevant departments at each facility oversee supervision and monitoring of construction contractors and ensuring the implementation of corporate EHS and HR policy and procedures.
Supply Chain:
DDC purchases steel plate, steel section, and panel steel as main raw materials for their operations including two new plants under the project. DDC cooperates with suppliers mainly with large, reputable companies operating and controlled by the laws of their own policy and procedures. However, the company currently does not have a supplier code of conduct. As per ESAP #5, the company will develop a specific supply chain management system aligned with PS2 requirements including: i) a procurement policy and supplier code of conduct that addresses child labor, forced labor, and significant safety issues as per PS2; ii) inclusion of contractual clauses requiring suppliers’ compliance with the code of conduct; iii) a supplier mapping and risk assessment procedure, iv) a verification process to ensure suppliers and their sub suppliers have the policies and procedures in place to meet requirements of the code of conduct; and v) a formal process for supplier engagement, remedy or disengagement in case of unresolved non-compliances.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency:
The Company has developed energy efficiency related rules and regulations applicable to each facility and implemented various measures on energy conservation and greenhouse gas (GHG) emission reductions including installation of solar panels. DDC analyzes GHG emissions across its operations in accordance with ISO 14064 (Greenhouse gases).
Some of the DDC's existing manufacturing factories are certified with Leadership in Energy and Environmental Design (LEED) Gold and accordingly using a systematic energy management system approach to baselining, reducing, and monitoring energy consumption. The two new factories covered under the project are in the process of applying for the LEED certificates in the design phase. The company utilizes recycled and sustainable raw materials and promotes circular economy in manufacturing operations.
Air Emissions and Ambient Air Quality:
The company sources its energy from the national grid via the municipal power supply for all operations. The company has established a management system for air pollution prevention and control, stipulating the responsibilities of each department in line national law and standards. The company monitors the air emissions from its facilities in accordance with the local environmental permit conditions. Based on the review of available monitoring data and information, results were found to be in compliance with the national air quality standards. However, air emission levels for particulate matter (PM) exceeds air emission levels of the WBG EHS Guidelines for Metal Plastic and Rubber products (2007). Hence as part of ESAP #6, DDC will install additional air filtration units to enhance dust capture efficiency, perform monitoring to demonstrate that air emissions levels comply the WBG EHS Guidelines for Metal Plastic and Rubber products (2007) (Table 5). Dust and emissions arising from the operation of cutting, welding, painting and surface treatment processing from new plant operations were assessed not resulted in major impacts.
Water and Wastewater:
Water for the existing facilities is sourced from the water supply system of the industrial parks or from local water treatment plants mainly for domestic water consumption. The company has established a wastewater management procedure and installed wastewater treatment systems in its facilities as per the local environmental permit conditions. Several measures taken to meet the regulatory requirements. The company monitors the wastewater quality and the records are in line with the national standards, local industrial zone requirements and WBG EHS Guidelines.
For the new plants under the project, rainwater overflows will be treated by sedimentation pit and drainage ditch system, and domestic wastewater will be treated by septic tank with grease trapping system and further treated by centralized wastewater treatment systems of each industrial zone.
Waste and Hazardous Material Management:
The company, as part of its ESMS, has waste management procedures covering all its facilities, including the system of appropriate sorting, handling, storage and disposal and is consistent with the applicable legal requirements. At each manufacturing factory, non-hazardous and domestic waste are segregated which are then collected and disposed of by the responsible third party agency.
DDC, as part of its ESMS, has documented safety instructions for storage, handling and use of hazardous materials following the waste management procedure in accordance with applicable laws and regulations. DDC has detailed information on the hazardous materials stored on-site and these are in designated areas, typically within the production areas. Given the nature of DDC’s activities for galvanization process, the proximity of the communities, and that they may access groundwater for potable use and others, as per ESAP #7, the company will conduct the Phase 1 environmental site assessment (ESA) per ASTM E1527-21, of pertaining to the storage and handling of hazardous materials and wastes at existing galvanization facility. Based on outcomes of phase I ESA, the company may undertake the Phase II ESA per the ASTM E1903-19 Standard and agree with IFC on a time-based plan to implement of corrective action measures identified as part of the ESA assessments.
In addition, as part of ESAP #8, DDC will commission a suitably qualified consultant to review hazardous material and hazardous waste management practices for its galvanization process against the national standards and WBG EHS guidelines and good international industry practice. The company will agree with IFC on a time-based plan to implement of corrective action measures identified as part of the abovementioned assessments.
PS4: Community Health, Safety and Security
Infrastructure and Equipment Design and Safety:
DDC facilities are designed and constructed considering the local building and fire safety codes. Hence, facilities are equipped with adequate fire detection and fire-fighting systems in accordance with local regulations for fire safety. Visited factories were noted to be provided with L&FS infrastructure and systems including fire extinguishers, fire alarms, fire hydrants, fire hoses/reels. The fire safety systems are inspected on a regular basis by EHS team on site and no material non-compliances recognized in the past three years. Similar safety design including fire-fighting systems will be applied in the new factories under the project.
Community safety management:
Each DDC facility complies with applicable environmental and L&FS related permit requirements to ensure community health, safety and security. DDC developed an emergency crisis management standard to support sites in the case of an unforeseen event. Regular emergency response drills are conducted to test the preparedness of the company's emergency response, and such drills are conducted in collaboration with relevant authorities.
The company owns around 15 trucks and works with external contractors for oversize/ overweight transportation vehicles and sea freight. DDC has developed as part of its ESMS, transportation safety guidelines and safety protocols to mitigate risks covering safety rules, utilizing adequate equipment and vehicles, vehicle inspection, provision of safety trainings in line with local industry standards and regulations.
Security Personnel:
DDC employs unarmed security guards for its facilities from licensed security services companies. The security guards are trained to handle the emergencies as part of their duty. DDC conducts background checks of security guards and regularly undertakes internal briefings and provides training for the security personnel.
