Millicom Private Placement
IDB Invest is considering an investment of up to US$ 80,000,000 in a private placement of a note denominated in Colombian Pesos (COP) with interest payable in US dollars but indexed to COP, that may be issued by Millicom International Cellular, S.A., a multinational company with significant revenues coming from Latin American countries (LAC).
Proceeds from the note would be used by the Company for, amongst other purposes, regional capex and general corporate purposes in IDB Invest’s regional member countries (“the Project”).
IDB Invest's commitment to purchase the note would be subject to certain conditions being met, including the Company agreeing to comply with IDB Invest's environment and social policies whilst IDB Invest is a noteholder.
Addendum to Millicom’s disclosure - March 20, 2018:
Previous amount: US$80 million
New amount: US$50 million
1. General Information and Overview of Scope of IDB Invest E&S Review
The company provides fixed and mobile communications services, cable and satellite TV, Mobile Financial Services, and local content to its customers. The company is part of a European entrepreneurial investment group with investments across mobile telecommunications, e-commerce, entertainment and financial services.
Environmental and Social Categorization and Rationale. Per the IDB Invest Environmental and Social Sustainability Policy, the Project has been classified in Category B (medium risk), since its potential environmental and social risks and impacts are limited to the project site, are largely reversible, and can be mitigated via measures that are readily available and feasible to implement in the context of the operation.
While all Performance Standards are applicable to this investment, IDB Invest’s environmental and social due diligence indicates that the Performance Standards that are most relevant to this transaction include:
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention; and
PS 4 - Community Health, Safety and Security.
2. Environmental and Social Context. The company operates as a Telecom provider in certain Latin American and African markets, and also provides cable and satellite TV, Mobile Financial Services, and local content to its customers.
3. Environmental Risks and Impacts and Proposed Mitigation and Compensation Measures
3.1 Assessment and Management of Environmental and Social Risks and Impacts
In August 2016, the company has been certified ISO 14001, BS OHSAS 18001 and ISO 22301 (business continuity). The company adheres to OECD principles and the UN Global Compact and must comply with the IDB Invest Environmental and Social Sustainability Policy.
The company operates a policy governance framework with the aim of providing its employees and third parties with a set of rules, principles and guidelines to guide all business activities that the company is involved in. These policies are:
• Millicom Code of Conduct
• Anti-Bribery & Anti-Corruption Policy
• Whistleblower Policy
• Conflict of Interest Policy
• Millicom Supplier Code
• Millicom Anti-Trust Policy
• Environment Policy
• Health, Safety & Environment Manual
• Millicom Waste Management Guidelines
• Child labor and young workers
• Law Enforcement Assistance Guideline
The Health, Safety and Environmental Manual (HSE Manual) provides information and guidance on all aspects of health, safety and environmental (HSE) compliance within the company and its subsidiaries. The scope of this document covers all aspects of company’s operations across all countries and their respective activities including the use of contracted or managed services. The group’s Environmental Sustainability Steering Group (ESSG) reviews and oversees implementation of operational efficiencies. The ESSG is formed by the company’s senior management and sets the direction for environmental management, environment strategy and long-term targets. The company annually reports to all its stakeholders the Group’s environmental performance against targets via its corporate responsibility report.
The CEO has overall accountability for HSE matters across the whole organization. The Global HSE Manager is responsible for the implementation and management of HSE management systems. All employees and contractors undertaking work on behalf of the company or its operating entities must read and comply with its policies, attend any training required to undertake their work, report environmental incidents and reduce environmental impact.
Emergency procedures including emergency evacuation plan provisions are included in the Health, Safety and Environmental Manual.
The company annually reports to all its stakeholders the group’s environmental performance against targets, via its corporate responsibility report. Key performance indicators are aligned with the most significant issues identified by the stakeholders and with a strategic view of the business priorities, such as energy consumption and quantity of electronic waste (e-waste) recycled.
The company acquires a diverse range of products and services to external suppliers. All suppliers must adhere to the Supplier Code of Conduct (SCC) as a mandatory annex of the purchasing agreement. The SCC outlines the environmental protection requirements. The company monitors suppliers’ exposure to sustainability risks and promotes high levels of responsible conduct across the value chain. The procurement team conducts supplier assessments, due diligence and vetting of potential suppliers in collaboration with the corporate responsibility team.
To maintain a productive and mutually beneficial relationship with stakeholders, the company maps out and meets its stakeholders through the External Affairs Departments in each of the countries. This is led by one Global Chief of External Affairs. The company has developed a set of internal documents and policies that explain and define its approach, such as a Human Rights Assessment for each country it participates in, Anti-Bribery and Anti-Corruption policies, Supplier Code of Conduct, policies on information requests from government officials, and processes for proactive and reactive stakeholder engagement. Also, the company has developed model for community management a toolkit for the social interaction management of the infrastructure expansion roll-out.
External communications and grievances are handled through the Online Ethics Line, a web and telephone based service hosted by an independent third party hotline provider where anyone can make a report or file out a complaint on a totally confidential and anonymous basis. The hotline provider makes these reports available only to specific individuals within the company who are charged with evaluating the report, based on the type of violation and location of the incident.
3.2 Labor and Working Conditions
Every country operation is required to develop a Local Human Resources Policy Manual using the general Group principles and guidelines, and incorporating the specific local policies as per local regulations and requirements. The manual covers all areas related to human resources management aimed at attracting, retaining and motivating a workforce of the best qualified individuals whose diversity and skills contribute to and sustain the Group’s sense of excellence. In order to create a working environment free from hostility the company principles are reflected in the manual: equal employment opportunity, no harassment and no violence policy, mandatory reporting of violations and no retaliation, open door policy, etc. Also, the manual covers administrative matters such as working schedules, compensation and benefits, training and career development, leaves, insurance, performance evaluation, disciplinary actions, business travels, among others. All workers must adhere to the company’s Code of Conduct.
The company encourages employees to discuss grievances by approaching supervisors and managers. However, the Online Ethics Line is open to employees who wish to remain anonymous or prefer to pursue a different channel.
Under the company’s Child Labor and Young Workers Policy, the company and its subsidiaries do not hire workers under the age of 18 years old. The only exceptions to this policy are specific trainee programs for young workers that take into account the local legal restrictions applicable to persons under the age of 18. For any young workers above the age of 15 who have not completed compulsory schooling the company will ensure that their jobs will not interfere with the completion of their education. This policy applies also to contractors and suppliers.
The company adopts a risk based management system following OHSAS 18001, ISO 14001 and ISO 22301 standards and has recently completed its second annual external audit review. Working Instructions covering all work-related activities are included in the HSE Manual. The company adopts a training matrix based on associated work activities and risks, and completes training according to such work activities undertaken. Examples of risks considered are: office and workstation ergonomics, electrical handling, fire and emergency response, first aid, travel safety and security. All incidents or hazards are reported via company’s global incident management tool, and all cases are investigated with a view to determine their cause and the course of action to prevent any similar accident in the future.
The company also ensures that service providers have appropriate risk management, which is included in the new supplier due diligence process and supervised with regular audits and site visits. The HSE teams are part of supplier’s due diligence evaluation.
3.3 Resource Efficiency and Pollution Prevention
The company has the commitment to reduce energy consumption in general and reduce reliance on diesel and gasoline in particular. Network, integrated services, facilities management and fleet management teams look for opportunities to reduce its electricity or fuel consumption (switching off lights or monitors), as well as to roll out alternative energy sources, such as solar power and hybrid battery solutions. Each operation reviews network modernization, equipment swap to more energy efficient technologies, site-sharing with other network operators, and similar initiatives to reduce energy consumption.
Employees and services contractors are required to take all necessary precautions to prevent fuel spills and soil contamination, and ensure waste is reused or recycled where possible. Each operation has overall responsibility to ensure that anyone performing a task that may have a potential to cause a negative impact on the environment (e.g. fuel spills, replacing generators or oil filters) has appropriate training and formal qualifications. Records of these tasks are retained. This also applies to monitoring and performance review of services suppliers.
To reduce e-waste, the company looks for opportunities for reuse or sell obsolete equipment (either complete or in parts). If this is not an option, obsolete equipment is disposed through vetted vendors following the Waste Management Guidelines and the Waste Management Plan. Energy and e-waste are key indicators in the annual report and are therefore used to monitor efficiency and compliance with local legislations.
3.4 Community Health, Safety and Security
As part of the planning and site location, network teams work closely with corporate responsibility and communication teams in engagement with the local communities and citizens regarding radio frequency electromagnetic fields. The company requires that the base station equipment and mobile phones comply with international safety limits set by the International Commission on Non-Ionizing Radiation Protection (ICNIRP) or any stricter local requirements, as outlined in the Supplier Code of Conduct.
3.5 Land Acquisition and Involuntary Resettlement
There is no land acquisition or involuntary resettlement.
3.6 Biodiversity Conservation and Natural Habitats
The use of land is minimal for the expansion of operations. No impact is expected on natural habitats.
3.7 Indigenous Peoples
No adverse impacts on indigenous people is expected. However, in case an indigenous population is identified as a potential stakeholder, the company will proceed as established in the IDB Invest Environmental and Social Sustainability Policy.
3.8 Cultural Heritage
No impact is expected on cultural heritage. However, whenever there is an infrastructure expansion the risk of a chance find has to be evaluated and the necessary provisions have to be made accordingly.