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
Identification of Risks and Impacts
The Malaysian facility at Kulim was appraised as part of IFC’s previous investment for the site in 2024 and it was concluded that sufficient assessment of E&S risks and impacts had been completed to comply with IFC PS with additional requirements outlined within the ESAP for the Project. The project will involve a new production line within the main production building at the Kulim plant as well as additional water storage tanks installed, and the wastewater treatment system upgraded. Under Malaysia law, written notification and approval will be sought from the Kedah state authorities. Limited additional impacts are expected from delivery and installation of plant and equipment for the new production line, management of contract workers and disposal of equipment packaging which can be managed through the sites’ Environmental and Social Management System (ESMS).
For the new facility adjacent to the Nanjangud facility in India, an Environmental and Social Impact Assessment (ESIA) in accordance with IFC PS1 will be required to be completed prior to commencement of construction to mitigate against E&S risks and impacts [ESAP #1].
Environmental and Social Policies and Management Systems
AT&S has corporate level management systems that are ISO certified for Quality Management (QM) (ISO 9001), Environmental Management System (ISO 14,001) and Occupational Health and Safety (OHS) (ISO 45,001) that apply to all assets. Both the Indian and Malaysian facilities have developed site specific QM, ESMS, OHS policies and procedures to cover requirements on hazard identification, risk management, pollution control and monitoring, fire, and emergency responses as well as community engagement. AT&S also require these policies and procedures to be applied by all sub-contractors. For the Malaysia facility, these policies are aligned with IFC PS and will be extended to the new production line.
For the new AT&S’ Indian facility, QM, ESMS and OHS systems require to be established with IFC PS. Given that the new facility will employ new production processes, new site-specific policies and procedures are also to be prepared covering IFC requirements [ESAP #2].
Organizational Capacity and Competency
AT&S maintains core ESG and Health Safety and Environment (HSE) staff at their headquarters in Austria that oversee the development and implementation of E&S policies and procedures within their subsidiaries. Corporate capacity is supported by an ESG Steering Committee, that reports to the company’s Board and operates various networks to improve collaboration across the company’s assets.
At both the Malaysian and Indian facilities, dedicated staff are employed to oversee ESMS implementation, supported by procurement and Human Resources departments to provide training and support. Thirty-four staff are employed in Malaysia and 51 in AT&S India. It is unknown how many staff will be employed in the proposed Indian facility but will be determined as part of the ESIA and ESMS process (ESAP # 1 & 2). Four additional and dedicated E&S staff are to be employed to oversee the supervision of contractors’ E&S performance during construction at the Malaysian and Indian facilities (two at each site) [ESAP #3].
Emergency Preparedness and Response
The AT&S Malaysian facility has in place IFC compliant Emergency Preparedness and Response Management Manual (EPRMM) and associated awareness manual. A separate but related Guideline for Fire Protection has also been prepared. Regular drills are undertaken.
For AT&S India, emergency preparedness and response plans will be required to be prepared for the new facility to be applied at both construction and operation in compliance with IFC PS [see ESAP #2].
Monitoring and Review
The AT&S Malaysia facility has in place a monitoring and reporting program that is commensurate with the risks and impacts of the operations and is currently IFC compliant.
For the new facility in India, AT&S will be required to monitor both environmental parameters, OHS, labor working conditions and social aspects on a regular basis as part of the ESMS. Annual safety audits will also be required, including compilation into annual monitoring reports for head office. Monitoring standards for the new Indian facility will be required to reference and comply with the relevant and applicable parts of the World Bank Environmental, Health, and Safety Guidelines for Semiconductors & Other Electronics Manufacturing (WBG EHS Guidelines) as well as the WBG EHS General Guidelines [see ESAP #2].
Supply Chain
AT&S India uses the AT&S global supplier accreditation system that requires suppliers to undertake pre-qualification assessments, including assessments of commitments to human rights, labor and OHS risks consistent with the AT&S Supplier Code of Conduct (CoC). The CoC references the latest version of the Responsible Business Alliance (RBA) CoC, which has commitments consistent with IFC PS requirements for supply chain management related to labor, health and safety, and the environment. The General Terms of Condition of Purchase specify that all suppliers are required to comply with the CoC and RBA CoC.
It is understood that procurement for both the Malaysian and Indian facilities will be coordinated by AT&S head office in Austria. Application of the companies’ policies and procedures to reduce E&S risks will be applied, including through procurement and contracting of services.
PS 2 – Labor and Working Conditions
Human Resources Policies & Procedures
The regular employees of AT&S Malaysia are currently (as of May 2026) around 2,650 people and is expected to increase to 3,500 once the new line is commissioned. The gender ratio is 28% female and 72% male. There are currently approximately 520 contract workers on site, 100% of which are male. It is estimated that the workforce installing the new production line will consist of approximately 1,000 workers, some of whom are likely to be migrant workers and potentially housed within the community. AT&S Malaysia maintains an Employee Handbook and associated policies and procedures which are available for workers, including managing risks from contractor’s workforce and managing risks of worker accommodation compliant with IFC PS.
The new facility in India will be constructed by an independent contractor, and the anticipated workforce size is currently unknown, as is the need for workers’ accommodation. Workers’ accommodation requirements for both the Malaysian and Indian facilities will be required to comply with IFC’s guidelines on workers accommodation [ESAP #4]. AT&S India would be required to apply policies and procedures to manage risks for the workforce during construction, including monitoring compliance with PS2. When in operation, the employee Management Manual for India will be required to be updated to comply with IFC PS [ESAP #5] and will be applied to the new facility.
Workers Organization
The AT&S Corporate Code of Ethics and Conduct recognizes the right of all workers to form and join trade unions to bargain collectively and engage in peaceful activities in conformance with local law which applies to all their global operations and is available for staff to view. AT&S does not prevent workers from joining lawfully formed unions and its workers in India are part of two workers organizations.
Non-Discrimination and Equal Opportunity
AT&S has a corporate level Code of Ethics and Conduct which applies to all operations globally. The Code specifies that the company does not tolerate any unlawful discrimination or harassment based on race, colour, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training.
Grievance Mechanism (GM)
AT&S Malaysia’s Employee Handbook includes a grievance mechanism for employees that applies to relationships in the workplace, employment conditions and the termination of employment. Grievances can be submitted through supervisors and management, or staff can use the AT&S – Speak Up platform for anonymous submission. Grievances are currently raised by employees to their superiors. If required, these are escalated to the Head of Department and then to HR. Grievances can be submitted through a written form and dropped into a box, and these may be anonymous as well. The grievance mechanism also applies to contract workers.
Prior to the construction of the new facility, AT&S India are to establish a PS2 compliant grievance handling mechanism for all their and third-party employees to be employed during construction and operation (ESAP #6).
Gender Based Violence and Harassment
AT&S Malaysia’s Employee Handbook outlines policies for employees on personal conduct and anti-harassment. The Handbook has specific requirements to reduce risks related to sexual harassment and discrimination. The Company maintains a whistleblower mechanism and a complaint handling mechanism to manage risks, including with sub-contractors and suppliers. These mechanisms have been assessed to be IFC compliant.
AT&S India will be required to establish IFC PS2 compliant policies and procedures related to preventing gender-based violence and harassment for use by construction contract workers as well as the normal operating workforce during project operations. The India operations have a policy which is adequately implemented in compliance with the Sexual Harassment of Women at Workplace Prevention, Prohibition and Redressal Act, 2013. This will be adapted to comply with IFC PS2 and for the greenfield plant [ESAP #7].
Human Rights, Child Labor and/or Forced Labor
AT&S has a corporate level Code of Ethics and Conduct and procedures at all global facilities to ensure the prevention of forced labour. The company also prohibits the use of child labour. These policies apply globally to all operations and are implemented through local policies and procedures.
Occupational Health and Safety
AT&S has a corporate level ESG Policy which covers Operational Health and Safety (OHS) that has been developed compliant with ISO45,001 and aligns with IFC PS. The current lost time injury frequency rate (LTIFR) for AT&S Malaysia is 2.32. Occupational noise is monitored within the Malaysian facility and is reported to reduce risks to employees. Personal protective equipment (PPE) is provided to staff across the site. AT&S requires that contractors comply with their policies and procedures and manage OHS risks of contractors through a self-reporting mechanism that tracks statistics on the risk level of incidents. Oversite of OHS risk is completed by workplace committees and regular audits. Given the heightened risk posed, AT&S’ OHS policies and procedures are to be suitably adapted, applied and monitored at both the Indian and Malaysian facilities during construction [ESAP #8].
PS 3 – Resource Efficiency and Pollution Prevention
Resource Efficiency
AT&S are committed to resource efficiency and have developed a “Sustainability Strategy 2030: Accelerating Circularity” that includes commitments for energy efficiency, life cycle assessments, water recycling and use of raw materials across all facilities. AT&S are developing copper recycling, wastewater recycling and energy efficiency projects for their global operations which will also be used at the AT&S Malaysia site. The new AT&S India site is currently in the design phase and will adopt practices to install resource efficiency in the design. Commitments on procuring renewable energy for both the Indian and Malaysian facilities are also underway with goals of increasing supply to the plants by 2030.
Water and Wastewater
Water supply and wastewater management at the AT&S Malaysia facility is regulated by the Kulim municipal services and Kedah State Environment Department. Current water supply is sufficient for the plant including the new production line, which will result in an additional 30% increase in water use. Two new water tanks will be installed at the site to hold water for use in the new production line. The site’s current wastewater treatment plant will be upgraded in capacity to treat wastewater generated by the proposed additional production line. Wastewater discharges comply with WBG Guidelines. However, groundwater monitoring is awaiting implementation, with monitoring due to commence by December 2026.
Currently there is no information on the design parameters of the new Indian facility. AT&S have indicated that sufficient water supply is available from the local authority. The facility will need to be designed, built and operated to comply with all requirements outlined in IFC PSs and within the relevant and applicable WBG Guidelines as part of the ESIA, including a water balance assessment to ensure adequacy of supply [see ESAP #1]. Water supply, wastewater management and monitoring is to be included in the facilities ESMS [see ESAP #2].
Solid waste and hazardous material management
The AT&S Malaysia facility stores hazardous substances such as diesel, gas, inflammable materials, gas cylinders, corrosive or explosive chemicals separately in a dedicated location with secondary containment to avoid leakage and spillage. All waste is also segregated and within secondary containment. Hazardous waste is in the form of a sludge that contains metal and laminate contaminants. Both domestic and hazardous waste is managed through licensed waste disposal contractors, and the same will be done for the new production line. Tracking procedures are in place to ensure that the waste stream can be audited to ensure appropriate disposal.
For the new AT&S India facility, information on solid and hazardous waste management is not currently available. The WBG EHS Guidelines are to be applied in developing facilities, equipment, policies and procedures to manage waste and included in the ESMS [see ESAP #2]. The ESIA to be prepared is to consider waste generation and management [see ESAP #1].
Air Emissions
Monitoring data indicates that the Malaysia facility complies with WBG EHS Guidelines. The design of air pollution control equipment at the facility was based on the inclusion of an additional production line and the facility, and it is expected to continue to meet the relevant air quality criteria stipulated by the WBG EHS Guidelines.
There is currently no information on the pollution control equipment proposed to be installed to manage air pollution at the new Indian facility. The facility is however to be designed, built and operated to comply with IFC PSs and WBG EHS guidelines, including monitoring of point source and ambient air quality from multiple point sources and potential fugitive emissions and cumulative emissions as part of the ESMS (see ESAP #2).
GHG Emissions
The GHG emissions for the Kulim plant in Malaysia have been calculated as 45,884tCO2e/year for Scope 1, 2 and 3 emissions. There is insufficient information about the proposed Nanjangud plant to accurately calculate emissions.
PS 4 – Community Health and Safety
Infrastructure and Equipment Design, Life and Fire Safety
The AT&S Malaysia facility has been designed to comply with international standards using and is a state-of-the-art facility. Life and fire safety is managed through the sites’ Guideline for Fire Protection. Regular fire drills and monthly inspections are undertaken of all fire control devices and systems. The local community and surrounding industries are engaged in emergency planning.
For the new facility, AT&S India will apply building codes and equipment standards in line with good international industry practices. Design and life and fire safety risks of the new facility will be required to be assessed as part of the ESIA for the project [See ESAP #1].
Traffic Impacts and Transportation Safety
Traffic risks associated with the AT&S Malaysia and the AT&S India facility are low. Traffic enters through an existing road that enters each industrial estate. Neighboring residential and commercial communities exist adjacent to both sites. Transportation safety risks are associated with the transport of hazardous materials to and from the facility. Both AT&S sites use licensed contractors for this purpose. Construction traffic will increase at both sites and is to be assessed as part of the ESIA. Transport emergency procedures are to be established for the transport of hazardous materials [see ESAP #1].
Security Personnel
Security services are currently provided by a contracted agency at both AT&S facilities, which operate under service contracts. The security teams are not armed with guns or ammunition, and there have been no reported incidents of security – worker – community member conflict in the recent past. Training security personnel and grievance mechanisms are in place at both sites. Security management will increase at both sites during construction, and all policies and procedures aligned with IFC PS4 are to be appropriately socialized with security contractors prior to the commencement of construction [ESAP #9].
