If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.
PROJECT DESCRIPTION
Glenmark Pharmaceuticals Limited (or "Glenmark"
http://www.glenmarkpharma.com) is a leading player in the discovery of new molecules both NCEs (new chemical entity) and NBEs (new biological entity) with five molecules in various stages of clinical development. The company has a significant presence in branded generics markets across emerging economies including India. Its subsidiary, GGL has a fast growing and robust US generics business. The subsidiary also markets APIs to regulated and semi-regulated countries. Glenmark employs over 10,000 people in over 80 countries. It has thirteen manufacturing facilities in four countries and has five R&D centers.The proposed project will provide financing to Glenmark under the Global Trade Supplier Finance program ("GTSF" or the "Program") approved by the IFC Board in September 2010 (Original Project Link #28723).
OVERVIEW OF IFC'S SCOPE OF REVIEW
IFC's review of this proposed investment consisted of appraising technical, environmental, health and safety (EHS) and social related information submitted by Glenmark Generics Ltd (GGL) including: policies and procedures on EHS, human resources; organizational charts; regulatory permits, environment monitoring reports, etc. for its Goa facility located in Colvale Industrial Area, Colvale, Bardez (25 km from Panaji) in the state of Goa.The appraisal included a site visit to GGL's formulation facility in Goa ("Goa facility" or "the facility"), review of documents related to EHS compliance, human resource (HR) policies and procedures, labor relations; and discussions with the facility management (including Vice President - Manufacturing, Manager - EHS, and Senior Manager - HR & Administration).
IDENTIFIED APPLICABLE PERFORMANCE STANDARDS**
While all Performance Standards are applicable to this investment, IFC's environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards.PS 1 - Assessment and Management of Environmental and Social Risks and ImpactsPS 2 - Labor and working conditionsPS 3 - Resource Efficiency and Pollution PreventionIf IFC's investment proceeds, IFC will periodically review the the project's ongoing compliance with the Performance Standards
ENVIRONMENTAL AND SOCIAL CATEGORIZATION AND RATIONALE
This is a Category B project according to IFC's Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.Key environmental and social (E&S) issues associated with this Project include: continued implementation of EHS management systems; assurance of fair, safe and healthy working conditions in compliance with local regulatory requirements and relevant Performance Standards; resource efficiency of the operations; monitoring and management of air emissions, wastewater treatment and discharge, solid waste disposal; and life and fire safety management including emergency preparedness and response.The products sourced and invoiced for under the project will essentially be sourced from GGL's Goa facility. The Goa facility has been operating in a designated industrial area since 2004 and is not expected to have any impacts on the community health, safety and security. Therefore, PS4 (Community Health, Safety and Security) is not applicable. No new land acquisition is envisaged for any of the activities in the Project. Thus PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. Similarly, the type of impacts envisaged in PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous Peoples), and PS8 (Cultural Heritage) do not apply.
**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at
www.ifc.org/sustainability
ENVIRONMENTAL AND SOCIAL MITIGATION MEASURES
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 the 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
IFC's assessment considered GGL's management of its EHS performance in the operation of its Goa facility and compliance with national and local permit requirements.The Goa facility is divided in two adjacent campuses spread in an area of 17 acres - (a) S7 where the Solids and Semi-solids formulation plants are located; and (b) S9 where the hormone formulation plant is located. Both the campuses have separate utilities (boilers, back-up diesel generators, effluent treatment plants (ETPs)) as well as separate regulatory permits.Environmental & Social Impact Assessment (ESIA): GGL's Goa facility has been operating at the same location since 2004. The facility has undergone expansions in terms of facility and production capacity for which necessary approvals and consents are obtained; however none of these expansions required a formal Environmental and Social Impact Assessment (ESIA) study as per regulations. The Goa facility has all necessary permits as per the regulatory requirements.Policy and Management Systems: GGL has a Group EHS Policy applicable to its operations globally. As regards management systems, each GGL facility implements its own EHS management system. GGL is in the process of harmonizing EHS procedures and management system across facilities.The Goa facility has implemented an environmental management system (EMS) which was certified compliant with ISO 14001:2004 in March 2011. The EMS was noted to be adequately implemented. The facility is regularly inspected and is certified as per Good Manufacturing Requirements (GMP) requirements of various countries including United States Food and Drug Administration (USFDA), Canada's Therapeutic Products Directorate (TPD-Canada), United Kingdom (UK)'s Medicines and Healthcare Products Registry Agency (MHRA-UK), South Africa's Medicines Control Council (MCC-SA) etc. as well as the World Health Organization (WHO).Organization: At the corporate level, the corporate Head of EHS is responsible for EHS management for all GGL manufacturing facilities and reports to President - Global Operations & Supply Chain.At the Goa facility, the EHS management responsibility is with the Manager - EHS (who is also the Management Representative for EMS) who reports to the facility head as well as to Corporate - EHS Head. Manager- EHS at the facility is supported by an Assistant Manager - EHS and an Officer - EHS. Also, along with the EHS team, there is a core team for EMS implementation formed from representatives of various departments of the facility. This core team implements various projects to achieve the objectives and targets decided under the EMS.Training: EHS team has a training calendar as per which it conducts regular training programs for employees including EHS induction for new employees; EHS training for contract/casual workers; handling of solvents; work permit system; chemical spill management; waste disposal procedure; first aid training; use of breathing apparatus; fire-fighting using extinguishers & hydrants; Onsite emergency management; Occupational health & hygiene; personal protective equipment (PPE) usage; hazard identification & risk assessment; handling of hazardous chemicals etc.Fire safety and emergency response: The fire safety system at the facility is based on a fire hydrant system and portable fire extinguishers. About 35 hydrant points and 250 different types of fire extinguishers (ABC, dry chemical powder, Water type Carbon Dioxide (CO2), and mechanical foam) have been provided throughout the facility. Fire water storage tanks having capacities of 150 kiloliters (kl) and 130 kl have been provided for main plant and hormone plants, respectively.In addition, smoke detectors, multi sensor detector, manual call points for the alarm and hooter have been provided at many locations. The fire safety equipment was noted to be inspected regularly and well maintained.A number of workers have been trained in fire safety and operation of fire safety equipment. Refresher courses on fire fighting are run as part of the monthly training calendar. Though trained fire fighters are currently not available in all the shifts, the EHS team will ensure that continuous cover is provided, and emergency drills are held to cover all three shift times.To further improve the fire safety of the facility, a fire risk assessment was conducted at the Goa facility through an independent fire safety professional in March 2013. The facility is in the process of implementing corrective actions based on this assessment.The Goa facility has a documented emergency response plan with defined roles and responsibilities. The assembly points are identified and marked. Emergency exits and evacuation routes are clearly marked and have emergency lighting provision.The facility has also established an Emergency Control Center (ECC) from which emergency operations are directed and coordinated. This center is activated as soon as on-site emergency is declared.Monitoring and review: The Goa facility conducts regular environmental monitoring including quarterly stack, ambient air quality and noise level monitoring and monthly effluent testing. The EHS team has divided the facility in different zones and on a monthly basis, internal audits are conducted for selected zones out of these so that each zone is inspected atleast once in a quarter.Further, EHS reporting is part of the Management Information System (MIS) reporting. Every month the EHS team presents a report to the facility management on key EHS items including status of EHS permits, results of internal audits, training statistics, status of EMS projects etc. Similar report is submitted to the Corporate EHS Head as well. The Management review (MR) meeting for the EMS is conducted on a six monthly basis.
PS 2: LABOR AND WORKING CONDITIONS
GGL's Goa facility employs about 1100 workers including 400 contract workers hired through 6 different contractors. The contract workers are involved in movement of materials, secondary packing, cleaning/housekeeping, utilities (as helpers) security and gardening operations. The facility operates in three shifts.Human Resource Policies and Procedures: GGL's HR policies and procedures are displayed on the company intranet where all the employees can access them. The policies and procedures were noted to be consistent with the IFC PS2 requirements.Working conditions and terms of employment: For on-roll employees, the facility signs a contract with the employee at the time of employment. The contract describes the working conditions and terms of employment. Initially the employee is on probation for six months and is confirmed based on a performance evaluation. The employees are provided all the legal benefits including provident fund (PF), employee state insurance (ESI) coverage, festival bonus, gratuity, leave etc. All the employees are covered under the personal accident policy as well as a medical insurance policy. For the on-roll employees, the working conditions and terms of employment were noted to be meeting the legal requirements.The contract workers sign a contract with the respective contractors. The contract workers are paid the legal minimum wage and statutory benefits including PF, ESI and bonus. The payment to contract workers is made through bank accounts or in case of cash, in presence of HR representative from GGL. The wages and overtime payment for the contract workers are as per statutory requirements and by January 2016, the facility will ensure reorganization of shifts of contract workers to better align production schedules and overtime hours.Non-discrimination and Equal Opportunity: GGL has a documented policy on non-discrimination. IFC's review did not identify any instances of discrimination.Freedom of Association: Though GGL management does not restrict its workers to become member of trade unions, currently there is no workers' union at the Goa facility.Child Labor and Forced Labor: To prevent use of child labor, the facility collects age proof documentation at the time of recruitment of the worker. IFC's review identified no cases of child labor or forced or bonded labor.Grievance mechanism: The facility has a documented grievance procedure applicable for permanent and contract workers.Occupational Health and Safety (OHS): The facility is in the process of implementing OHS management and the facility has started Hazard Identification and Risk Assessment, Occupational Exposure Assessment and Job Safety Analysis for its operations.Training is provided to workers on usage of personal protective equipment (PPE) both as part of the induction as well as through refresher sessions. Usage of PPE was noted to be adequate. The visit did not indicate any unmitigated safety hazards.The facility has departmental safety committees as well as a central safety committee. The committees which have permanent employee representation meet regularly to discuss safety issues at the workplace. Going forward, GGL will ensure that these committees address occupational health and safety issues for contract as well as permanent workers.The facility documents and investigates accidents/incidents/injuries/near misses. The facility has an ambulance as well as an Occupational Health Center (OHC). A doctor visits OHC on daily basis for 3-4 hours and a male nurse is available round the clock. No lost time accidents have been recorded for the last two years.
PS 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION
Resource Efficiency: As part of the EMS, the facility has objectives and specific targets to reduce water and energy consumption and increase the production yield. Other improvement projects being undertaken by the facility are on rainwater harvesting, vermi-composting and reducing plastic wastes. The progress on these projects is reviewed on monthly basis by the facility management as well as in the MRM on a six monthly basis.Air Emissions: The main sources of air emissions at the facility are the boilers (4 x 0.85 tons/hour and 1 x 3.0 tons/hour), stand-by diesel generators (1 x 180 KVA, 3 x 750 KVA and 1 x 1010 KVA) and various process emissions stacks. The facility conducts stack emissions and ambient air quality on a quarterly basis. The monitoring reports indicate compliance with the legal requirements.The process emission stacks are provided with pollution control equipment based on a risk assessment that considers the compounds likely to be present in each stack. Pollution control devices include dust collectors, wet scrubbers and high efficiency particulate (HEPA) filters, selected according to risk.Water and wastewater (including Stormwater): The main source of water is the on-site borewell. The water is pre-treated in the Water Treatment Plant (WTP) with multigrade filter and ozonation. Ozonated water is used for drinking and domestic uses. For process uses, ozonated water is further treated with reverse osmosis (RO) and Electro-deionization (EDI).The industrial effluent generated in the facility is mainly from cleaning of process equipment and areas. The effluent is treated in the two ETPs - one for solids & semi-solids plants with a capacity of 200 m3/day and the other for hormone plant with a capacity of 100 m3/day. The ETPs are based on primary physico-chemical treatment and secondary treatment in a conventional activated sludge process (ASP). The treated effluent is used for gardening within the facility premises.The effluent is tested in the internal laboratory on a weekly basis and externally on a monthly basis. The facility has also tested the effluents from relevant parameters of the World Bank Group (WBG) EHS Guidelines for Pharmaceutical Manufacturing and the reports indicate compliance with the legal limits as well as the EHS Guideline values.The sewage generated in the facility is mixed with the process effluent and treated in the ETPs.Stormwater is currently drained off-site through stormwater drains. The facility is in the process of implementing rain water harvesting to recharge groundwater through an EMS project which is under implementation.Waste Management: The non-hazardous waste streams generated at the facility include plastic, paper, glass and metal waste. The hazardous waste streams include process residues, off-specification products, date expired/discarded drugs, process exhaust filters, used resins, used oil, electronic waste and ETP sludge.The non-hazardous waste is sold to external agencies who sell it further for recycling. The ETP sludge and process wastes (process residues, date expired/discarded drugs etc.) are sent to Mumbai Waste Management Limited's (MWML) authorized hazardous waste disposal facility in Taloja, near Mumbai, in the neighboring state of Maharashtra. The electronic waste and used oil are disposed of through authorized recyclers.
