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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
The company implements a documented E&S management system (ESMS) for the facility in Sweden, comprised of various policies and procedures, including E&S management procedures, a Staff Handbook, an Anti-Discrimination and Anti-Harassment Policy, Whistleblowing Policy, Termination and Dismissal Procedure, and OHS procedures in compliance with Swedish laws and regulations. The company holds relevant environmental and OHS operational permits and undertakes EHS risk assessments both at the facility level and at the specific task assessment level, an approach which will also be implemented at the Polish facility in accordance with national law and the company’s existing ESMS.
As part of ESAP#1, the company will develop and implement an ESMS to manage E&S risks and performance at the new facility in Poland, consistent with IFC PSs and implementing Good International Industrial Practices (GIIP) per applicable parts of the WBG EHS Guidelines for Metal, Plastic and Rubber Products Manufacturing and tailored to meet applicable Polish regulations. The ESMS will include: (i) adoption of current corporate E&S policies, procedures and plans; (ii) a Contractor Management Plan (CMP) to oversee, and monitor contractors during retrofitting and operations, and ensure they meet the company’s EHS requirements; (iii) an E&S monitoring procedure covering activities by contractors, the leased facility and third party employers; (iv) an emergency preparedness and response; (v) a corporate Code of Conduct applicable to Candela and all third parties, contractors, recruitment agencies or suppliers the company works with, setting out the company’s commitments and expectations regarding labor, social, OHS and environmental standards, and including company positions on gender-based violence and harassment, child labor, forced labor, freedom of association and collective bargaining, terms of employment and working conditions, and promoting a safe working environment.
The company has a qualified team of E&S professionals in Sweden, led by the Chief Human Resources Officer, covering HR, EHS, contractor management, procurement and supply chain management. For the project in Poland, the company will recruit a team of local HR, EHS and procurement professionals who will work in collaboration with the corporate team.
The company's facilities, including the new facility in Poland, are in industrial zones with access to external emergency support. The operational facility has a dedicated Emergency Response Plan and a Fire Protection Plan containing information on applicable regulations, evacuation procedures, fire safety and management, the alarm system, signage and lighting, and inspections. Staff are trained to oversee emergency situations and fire drills are carried out twice per year. Buildings are fitted with fire detectors and sprinkler systems and there is clear safety signage to raise worker awareness. An Emergency Preparedness and Response Plan will be developed for the facility in Poland as part of the ESMS, under ESAP#1.
PS 2 – Labor and Working Conditions
The company currently employs around 190 staff. For the operations in Poland, the company plans to recruit around 100 for the Polish facility. The company also engages contractors to support additional services including cleaning, and security.
Candela will develop and implement a Recruitment and Hiring Policy to define requirements for using a labor agency to recruit or employ workers (staff and contractors), including implementing the company Code of Conduct and prohibiting agency service placement or transportation fees for workers travelling from overseas. The company will assess compliance with this policy as per requirements reflected in the contracts with labor agencies and contractors (ESAP#2).
The company complies with local labor laws, all contracts specify employment terms, duration, remuneration, working hours, and leave. The company respects the principles of freedom of association and employees are free to join trade unions or form workers’ associations.
Candela's Staff Handbook, Code of Conduct and Anti-discrimination and Anti-Harassment Policy 2023 prohibit and define discrimination and harassment and broadly address gender-based violence (GBV) and sexual harassment in employment. However, they do not define GBV nor sexual harassment and do not establish clear measures to prevent, address and investigate such behaviors. In order to target these issues more comprehensively and through concrete actions, the company will update its Staff Handbook, Code of Conduct and policies (or adopt a GBV/sexual harassment policy) to explicitly address and prohibit GBV amongst the workforce, include disciplinary measures for their violation, and provide training to all workers on the GBV and equal opportunity policies and regulations during their initial induction and periodically thereafter (ESAP#3).
The company has a whistleblower policy and procedure, however, there is currently no formalized or documented procedure for managing worker grievances. As part of ESAP#4, Candela will develop a Worker Grievance Management Procedure (WGM), accessible to the company’s employees and all operational and future facilities, including consultants, contractors and third parties, in accordance with IFC PS2 and national law, and ensure that all workers are trained on and aware of the process. The WGM will provide various channels, through which workers can raise grievances, if preferred anonymously. The mechanism will define a grievance tracking system to capture and handle all grievances and ensure that all grievances are investigated and resolved within stipulated timelines, including a mechanism to report back to complainants in a timely manner on the status and resolution of the complaint/issue. The company will have a trained grievance officer who will act as the key focal point and oversee the implementation of the process, including maintaining an up-to-date centralized grievance register to monitor each grievance from the grievance being raised until closure. The company will also provide an expedited procedure, including a dedicated trained focal point, for handling “sensitive cases” - such as discrimination, mobbing, harassment and SEAH – in line with a survivor-centered approach, while also ensuring multiple options for reporting (in person, via phone, email, and anonymous). It will also identify and provide accessible referral pathways for survivors (psychological, medical, legal and judicial services).
The company has an established health and safety (H&S) management system aligned with local legislation, with defined ‘H&S Regulations’ and task-based procedures, which are communicated to all workers. EHS performance is led by the EHS Manager and supported by four safety representatives, and regular internal H&S inspections are carried out. The company also has a HSE incident reporting system, through which workers report incidents, including risk observations, near misses, accidents, environmental incidents, security incidents and commuting incidents.
The company works with a wide range of suppliers. There is currently no documented procurement policy or Supplier Code of Conduct setting minimal EHS and social standards for suppliers. As part of ESAP#5, the company will develop and roll-out a Procurement and Supply Chain Policy for assessing and managing supplier performance for current and future facilities, including: a) screening procedure for reviewing the EHS and social performance of potential suppliers pre-contract award; b) referencing the Corporate Code of Conduct, applicable to suppliers, in Purchase Order Terms and Conditions and supplier agreements/contracts; c) an inspection protocol for supplier visits; and d) a register containing findings from the screening and any supplier visits.
PS 3 – Resource Efficiency and Pollution Prevention
The production process does not require significant use of energy or other resources. Water use is limited to cleaning and domestic purposes. Electricity, supplied by the national grids, and district heating are Candela’s sources of energy. Furthermore, the company is implementing initiatives to reduce overall energy consumption. Candela’s greenhouse gas emissions are not expected to exceed 25,000 tCO2 equivalent per year.
The main source of air emissions from the existing and planned facilities are coating and painting activities. Air emissions, primarily Volatile Organic Compounds (VOCs), are monitored in accordance with local legislation and environmental permit commitments and in compliance with applicable local requirements, including the EHS Guidelines.
Candela implements a waste management system, including segregation, handling, and collection of waste by a licenced contractor who also conducts monitoring and reporting to local authorities. All non-hazardous waste is managed by the contractors and either recycled or used for energy recovery. Hazardous waste includes empty containers, spray cans, and cleaning wastewater from the painting and coating booths.
The waste management system includes procedures for handling hazardous materials, covering safe storage, use, transportation and disposal, with employees trained and external third parties contracted to handle and dispose of hazardous waste, in accordance with regulatory requirements and GIIP. Candela also monitors occupational exposure of employees to carbon fibre and VOCs in accordance with the local law.
As part of the ESMS developed under ESAP#1, the existing company procedures related to resource efficiency, emissions, hazardous materials and waste management, will be adopted at the Polish facility, and tailored to applicable local regulation.
PS 4: Community Health, Safety and Security
Candela existing and planned facilities are situated in designated industrial areas, away from residential communities and community exposure to health, safety and security risks is limited. Each facility complies with applicable life and fire safety requirements and structural safety. Regular emergency response drills are conducted to assess the preparedness of the company’s emergency response teams.
Traffic management is implemented as part of the OHS management procedures. As part of ESAP#6, the company will establish a traffic management procedure covering all existing sites, dedicated to the movements in and out of each site, potential risks and impacts, and management measures. Procedures for the facility in Poland will be incorporated in the ESMS under ESAP#1.
Finished vessels are certified with respect to public and sea safety by third parties according to GIIP and applicable requirements for commercial traffic in the legislation of its use. Security services at Candela facilities are provided by licensed third-party companies. Given the location of facilities, community risks related to security personnel are limited.
