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 Assessment and Management System. VETC has established a set of internal working regulation for its operations, but currently lacks an Environmental and Social (E&S) policy. The company has implemented procedures related to E&S management including Sort-Set in order-Shine-Standardize-Sustain (5S) policies, safety management procedures, and business continuity plan applicable to its offices and toll stations. However, VETC has not yet developed a documented E&S management system (ESMS) aligned with IFC Performance Standards (PS) requirements, although VETC has existing processes and procedures that can help its development and implementation. As part of ESAP #1, the company will develop an ESMS in accordance with IFC PS requirements for ETC’s development and operations. The ESMS will encompass policies, programs and plans, addressing key risk areas, where applicable, such as labor management, occupational health and safety (OHS), waste management, resource efficiency, emergency preparedness and response, and contractor E&S management, among others.
Organizational Capacity and Competency. The company’s management team, supported by HR, Operation Management, Quality Management and Maintenance departments, is currently responsible for environmental, health, safety and social aspects. At the toll level, toll managers oversee daily operation, including health and safety management. As part of ESAP #2, VETC will appoint an E&S coordinator to oversee and coordinate the implementation of and compliance with ESMS requirements. Additionally, as part of the ESMS development, VETC will establish an E&S organizational structure that defines roles and responsibilities across HR, Operation Management, Maintenance, and relevant teams to manage E&S aspects.
Emergency Preparedness and Response. An Emergency Response Plan (ERP) is in place for the office building where VETC is a tenant, and its implementation is regularly monitored by the Building Management. Additionally, VETC maintains a Business Continuity Plan for its offices, data centers and toll stations. This plan identifies and assesses potential emergencies and responsive scenarios, including earthquakes, pandemics, power outages, floods, network failures, and fire incidents. As part of the ESMS (ESAP #1), VETC will develop a framework ERP to be adapted for site-specific EPRs at various toll stations. The ERPs will detail emergency response procedures, including roles and responsibilities, provision of emergency equipment and facilities (including life and fire safety systems), organization of emergency areas, incident investigation procedures, drills and training, emergency communication protocols, and regular inspections and testing of emergency systems.
Reporting & Monitoring. As part of ESAP #1, the ESMS will include a process to monitor E&S performance, including energy consumption and generation, waste management, health and safety incidents among staff. It will also assess the effectiveness of the management programs and compliance with relevant legal, contractual, and regulatory requirements.
PS2: Labor and Working Conditions
As of February 2025, VETC employs 776 full-time employees. Among them, 430 work at toll stations while 346 work in various functional departments at the headquarters. The overall employee distribution comprises 58.4% male and 41.6% female, with female employees accounting for 36% of the toll station workforce.
Human Resource Policies and Procedures. The Company Internal Labor Regulations are the primary document governing HR and working conditions, covering employment relationships, working hours, rest and leave days, benefits, workplace sexual harassment prevention, grievance mechanisms, disciplinary procedures, and termination. Additionally, the company has separate policies and procedures for recruitment and compensation, including salary and bonuses. Employees receive written individual contracts that are explained upon hiring. The contracts outline working conditions, including working hours, overtime arrangements, compensation, and insurance coverage, and are aligned with the company’s regulations and Collective Bargaining Agreement (CBA). HR policies and procedures generally are consistent with local labor laws and PS2 requirements.
Worker’s Organizations. As per the provisions of the Vietnamese Labor Code, workers have the right to freedom of association and collective bargaining. This provision is explicitly reflected into VETC’s existing CBA, which complements the company’s Internal Labor Regulation and related procedures. All employees who sign a permanent contract with the company join such union.
Non-discrimination and Equal Opportunity. VETC applies a merit-based principle in employment. VETC has also established anti-sexual harassment policies in accordance with Vietnamese Labor Code. To further align with IFC PS2, VETC will strengthen its existing policies to include (i) a clear definition and explanation of gender-based violence (GBV); (ii) a GBV Code of Conduct reflecting the company’s policy and setting standards for acceptable conduct and behaviour; (iii) updated grievance handling process to allow for anonymous complaints and provide referral pathways for complainants; and (iv) conducting training for all staff, including HR personnel and third party employees (ESAP#3).
Retrenchment. Workforce reductions have taken place over the past five years due to the sectoral regulatory requirements and company restructuring. The procedures adhered to the Vietnamese Labor Code, including notification and consultation with the labor union, notice periods, severance payments, and/or submission of layoff plans to the provincial Department of Labor. However, VETC currently lacks a formal policy and procedure for staff retrenchment. As part of ESAP#4, VETC will develop a comprehensive retrenchment policy and procedures that (i) include an analysis of alternatives to retrenchment; (ii) minimize adverse impacts on employees; (iii) are based on the principle of non-discrimination; (iv) reflect consultations with employees, the labor union, or the government; and (v) comply with the applicable CBA, contractual obligations, and/or national labor regulations on retrenchment processes and statutory compensation and benefits.
Workers Grievance Mechanism. Employees currently have several channels to raise grievances, including a Google form (Speak Up), direct communication with the HR department via email or phone, and an internal company social media group managed by HR. However, there is no formal grievance process in place. As part of ESAP#5, the company will develop a comprehensive worker grievance mechanism procedure. This will include clear steps for workers to express concerns, contact responsible personnel, and receive timely feedback. The company will also reinforce existing policies on confidentiality, non-retribution, and the ability to raise anonymous grievances as relevant in the grievance process. The grievance mechanism will be available to direct employees, contract workers and e-tag sale partners and VETC will disseminate information about the use of both grievance/reporting channels and emergency support options to all such workers.
Worker Accommodations. At toll stations, VETC provides free accommodation with essential services—including potable water, sanitation, kitchen facilities, and electricity—for toll workers residing far from the stations, while local workers commute daily. Each room accommodates two to three persons. The observed facilities are in alignment with IFC/EBRD Workers’ Accommodation Guidelines.
Workers Engaged by Third Parties. During the project development phase, the company engages contractors for the construction and installation of ETC systems at toll stations, and during the operational phase, for maintenance and repairs. VETC requires that its contractors adhere to safety protocols and comply with all applicable national regulations. Although VETC implements a monitoring and assessment plan for contractor performance, it does not yet incorporate E&S requirements. Under ESAP#1, contractor E&S management procedures will be incorporated into the ESMS, including (i) clear contractual obligations to comply with national laws and relevant PS2 requirements; and (ii) a screening and monitoring system for contractors and subcontractors’ compliance with established working conditions and OHS standards.
Occupational Health and Safety. VETC has developed a Safety Handbook outlining safety knowledge and guidelines to employees involved in the installation, operation, maintenance and repair of toll collection system. It covers various safety aspects including working at heights, electrical safety, fire safety and traffic safety. All the toll stations have obtained firefighting and prevention certification from the local authority. Life and fire safety requirements include routine inspections of fire extinguishers, emergency exit pathways, and electrical appliances. These are supported with coordinated firefighting drills with local fire departments and annual fire drill tests. The company will update its OHS policy and procedures that include (i) clear health and safety programs including fire safety and emergency preparedness programs, (ii) more detailed hazard identification and risk assessment to include ergonomic risks, traffic-related risks, worker exposure to the environment, violence and security risks, among others, (iii) prevention and mitigation plan including OHS awareness building, trainings and simulations, (iv) recording of accidents and illness, and (v) trained OHS employees such as OHS officer, trained first aid team, and trained fire safety team (ref. ESAP#1). The e-tag sale partners, particularly those working at the sale locations along the roadsides, will be included in relevant OHS training and awareness raising activities, including emergency preparedness and traffic-related risk management.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency and GHG Emissions. The company assesses its operations to enhance energy and resource efficiency, implementing initiatives such as phasing out incandescent bulbs with LED lighting, optimizing power usage in office areas, ensuring non-essential electrical equipment is turned off when rooms are unoccupied, reducing paper consumption, and establishing a KPI to cap electricity expenses at 95% of the standard cost per regulatory norms. Based on energy consumption data, each station uses approximately 72,240.87 kW per year, resulting in total gross greenhouse gas (GHG) emissions of 519 metric tonnes CO2e per year in 2024. Moving forward, VETC will calculate energy usage for offices, data centers, and toll stations, including estimating annual GHG emissions using recognized internal methodologies and best practices (ref. ESAP #1).
Energy Supply and Air Emissions. Electricity is sourced from the national public grid for all operations including office and toll stations. No major air pollutant emission is expected from the company’s operations. Small amount of diesel oil would be used by the backup generators installed at the stations but due to annual consumption, it is not expected to generate significant quantities of air emissions.
Water and Wastewater. Water for all the operations is sourced from local municipal water supply system. The drinking water for employees is sourced from local bottled water supply. The annual consumption of water by a station is estimated to be about 423.56 m3 for various operational and business needs, including sanitation, drinking, bathing, watering plants, and washing production equipment. Domestic wastewater from station operations is discharged to the sewage system.
Waste Management. The company generates various types of waste including domestic municipal solid waste, recyclables, and e-wastes (such as used electronic equipment including outdated electronic readers, antennas, and sensors, old computers). These waste materials are managed and disposed of in accordance with local regulations. Non-hazardous solid waste from the offices is managed by the Building Management and disposed of through local municipalities as mandated by local regulatory requirements. The company will document updated waste management procedures as part of ESMS development (ref. ESAP#1).
