Regional Telecom, Iraq

Project Description

The proposed project involves a guarantee to Alcatel-Lucent (AL) for its new investment in the form of vendor financing to Regional Telecom (RT), a new high speed/broadband data and mobile internet service provider in the Kurdistan region of Iraq. The Ministry of Transportation and Communication in the Kurdistan region of Iraq awarded RT a license in February 2013 to provide 4G mobile and data services using Long Term Evolution (LTE) technology in the Kurdistan region of Iraq. MIGA’s guarantee will cover debt financing for AL to provide equipment, infrastructure installation and deployment of 4G/LTE network covering four cities in Kurdistan region, namely: Erbil, Dohuk, Zakho, and Sulaymaniyah.

RT is currently in the initiation/start-up phase with soft launch planned for June 2013. The installation of RT’s network will mainly consist of using existing radio poles and towers and constructing new cell base-stations/towers where necessary and the laying of fiber optic cable to connect homes and businesses in urban cities mentioned above. Space on pre-existing towers owned and operated by other telephone/mobile operators will be leased in addition to  new rooftop cell base-station towers (up to 15 meters height) that will be constructed, owned and operated by RT. In addition, fiber optic cable will be laid underground to homes and businesses in cities and towns using modern micro-trenching; most of the fiber capacity required for the project will be leased from another operator that owns existing fiber infrastructure. Construction of the new cell base-station towers and installation of fiber optic cable has been underway since November 2012 and is expected to be completed by September 2013.

MIGA has been asked to provide a Guarantee to Alcatel-Lucent of France for Regional Telecom, Iraq (Project Enterprise); details are in the Summary of Proposed Guarantee (SPG) disclosed on 05/29/2013.

Environmental and Social Categorization 

The key environmental and social (E&S) risks associated with the project’s business activities are related to RT’s management of operations in terms of environmental, health and safety (EHS) performance; compliance with national laws and local permitting requirements for cell base-station sites, selection for towers/antennas and issues concerning right of way, labor and working conditions, including employee and contractor occupational health and safety, and hazardous waste management (batteries). The E&S risks are limited, generally site-specific, and readily addressed through mitigation measures, thus the project is classified “Category B” under MIGA’s Policy on Social and Environmental Sustainability.1

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[1] MIGA’s coverage under the proposed guarantee and the review of the project is limited to the establishment of RT’s operations as described above. Any potential future expansion of RT’s operations is not covered under the proposed guarantee.

While all Performance Standards (PSs) are applicable to this guarantee project, based on our current information the project will have impacts which must be managed in a manner consistent with the following PSs:

• PS 1: Social and Environmental Assessment and Management Systems
• PS 2: Labor and Working Conditions
• PS 3: Pollution Prevention and Abatement
• PS 4: Community Health, Safety & Security

PS 5: Land Acquisition and Involuntary Resettlement is not expected to be applicable as offices space and cell base-station sites are and/or will be leased and the project involves no physical or economic displacement. PS 6: Biodiversity Conservation and Sustainable Natural Resource Management is not expected to be applicable as project sites are mostly in urban areas in Kurdistan region with no biodiversity/International Union for Conservation of Nature (IUCN) protected sites, while towers used will be non-guyed type to reduce avian collisions and no impact is expected to any migratory bird routes. PS 7: Indigenous Peoples does not apply as no impacts on such individuals or groups are expected. PS 8: Cultural Heritage does not apply as no sites of cultural significance have been identified on or near areas affected by project. AL will use best efforts to require RT to include in its management systems a procedure for chance-find of cultural heritage consistent with PS 8.

The project will be required to comply with the World Bank Group (WBG) Environmental, Health and Safety (EHS) General and Telecommunications Guidelines.

The documents reviewed by MIGA include:

• MIGA environmental and social questionnaire;
• Regional Telecom business plan;
• Regional Telecom LTE license dated 02/07/2013;
• Framework agreement between Regional Telecom and Alcatel-Lucent dated 08/16/2012;
• Definitive Application for a MIGA Guarantee.

MIGA’s review of this project also included correspondence comprising of environmental and social information submitted by Alcatel-Lucent.

RT will be expected to develop and implement an E&S management plan (ESMP) for the project in accordance with an agreed time frame to address the potential E&S risks and impacts. The proposed project will be required to comply with (i) specific agreed measures to address potential E&S risks and impacts; (ii) the E&S requirements and regulations of the host country; (iii) MIGA Performance Standards on Social and Environment Sustainability; and (iv) WBG general and telecommunications environmental, health and safety (EHS) guidelines. The information about how the potential E&S risks and impacts will be addressed by the project is summarized in the paragraphs that follow.

PS 1: Social and Environmental Assessment and Management Systems

Social and Environmental Assessment: According to the Kurdistan region environmental protection law number 8 for 1998, telecommunication operators are not required to prepare any social and environmental assessment. However, environmental permits are required for construction of cell base-station towers. AL will be required to submit copies of the required permits/clearances to MIGA within an agreed timeframe.

Management Program: RT has hired an international consultant who is expected to facilitate the development of an environmental and social management system (ESMS). The ESMS will include roles and responsibilities as well as reporting requirements. RT will be required to avoid acquiring or developing any site with sensitive environmental issues or that would require physical or economic displacement of local community members. AL will be required to submit the ESMS developed for RT to MIGA within an agreed timeframe.

Construction of antennas/towers and cell base-station sites may have begun prior to implementation of the ESMS; however, AL will endeavor to cause RT to ensure compliance with E&S standards by subcontractors that perform core RT functions over a substantial duration of time. For future construction, the ESMS will also include procedures for site survey work that will include issuing a site acquisition report which covers mitigation measures for all relevant E&S risks and/or impacts. AL will require RT to design cell base-station sites to ensure compliance with WBG EHS guidelines for telecommunication operations and cell base-station site access requirements in accordance with good international industry practice for the telecommunications industry.

Organizational Capacity and Training: During this pre-startup phase the bulk of RT’s organization is in engineering and technical support and the administrative, marketing and finance departments are in the process of being built up.  RT currently subcontracts infrastructure work such as tower construction and fiber optic cable laying to outside firms specializing in these activities. RT engineers oversee project management, network planning and testing activities. Fiber optic cable laying is being done by the firm Signal Tel which is being overseen by a sister company, “Allai Newroz Tel”, which has an existing fiber network covering much of Kurdistan region of Iraq.  AL reviews tower site readiness prior to the installation of base-stations and antennas. RT will be required to train all relevant employees on procedures and implementation of the E&S management system once the organization is sufficiently in place, coinciding with the commencement of full commercial operations.

Monitoring and Reporting: Ongoing periodic monitoring and reporting of implementation of the ESMP, and health and safety plans and procedures will be part of the ESMS. Whereas RT’s quality control department will be responsible for the implementation of the ESMS, AL will require RT to report effectively on implementation under its ESMS monitoring and reporting regime.

Emergency Preparedness and Response: RT will be required to include in the ESMS a set of emergency response procedures, including a fire safety plan that adequately reflects the roles and responsibilities, procedures, incident reporting and training.

PS 2: Labor and Working Conditions

RT plans to employ about 60 direct employees across project operations for the first year and to expand that to about 486 by the third year of commercial operations. RT is a non-discriminatory and equal opportunity operator with no preference to gender or religion. Hiring of staff is already underway and positions are being advertised via local and online media.

RT has hired an international consultant with the stated objective to support RT in developing management systems. The consultants will focus on organizational design and recruiting with the following scope of work: to develop an organization structure, identify key functions and capabilities needed and design high-level processes and governance. The consultants’ work will necessarily encompass human resources (HR) policies and procedures. Going forward, RT will develop an HR manual that will comply with Iraq and Kurdistan Labor Code and regulation, as well as MIGA PS 2 requirements which stipulate mandatory induction training for all employees, including working at heights, and occupational health and safety. MIGA PS 2 requirements also stipulate that there be a grievance mechanism to enable employee concerns to be raised to RT management. The RT’s HR department will be required ensure compliance with relevant labor laws as well as compliance with MIGA’s PS 2 requirements. AL will submit RT’s HR policies and procedures to MIGA in accordance with an agreed timeframe.

Occupational health and safety during construction of cell base-station towers or installation/repair of fiber optic cables will be carried in accordance with the safety procedures and requirements that will be documented in the health and safety plan as part of the ESMS, including procedures for working at heights and requirements for personal protection equipment in accordance with the WBG EHS guidelines for telecommunications. AL will use best efforts to cause RT to include occupational health and safety requirements and monitoring provisions in agreements with its subcontractors that perform core RT functions over a substantial duration of time. 

PS 3: Pollution Prevention and Abatement

The cell base-stations and antenna/towers will be connected to the public electric grid with backup power system using lead-acid batteries with low gas emission and designed in accordance to the guide of the Association of European Automotive and Industrial Battery Manufacturers (Eurobat) with a lifetime of 12 years and longer. AL confirmed that according to the framework agreement, AL is responsible for maintenance and collecting depleted batteries to be disposed-of in accordance with AL standards and international requirements. AL will share with RT and MIGA its procedure for collection and storage of depleted batteries, including design of any storage facilities, which in any event will reflect the requirements of WBG EHS guidelines.

Electricity and water in all RT office sites are obtained from the respective municipalities and the grid. RT offices will also be connected to back-up electricity sources such as local privately owned and managed diesel power suppliers, and its own backup diesel generators located on premises, varying according to office location. RT back-up generators are mainly relatively low power units sufficient to power small office facilities environments; storage tanks for diesel are located above ground but away from pedestrian traffic in protected sites which are designed for spillage containment.  Municipal power infrastructure, in Kurdistan region of Iraq, is of varying availability and reliability, and whereas RT is not yet operational, actual usage of backup generators cannot be identified at time of due diligence; however, usage requirements are not expected to result in considerable amount of emissions due to the small scale of the business and as its offices are well disbursed.

PS 4: Community Health, Safety & Security

The cell base-station antenna/tower sites are typically leased and contracts will indicate rights of access of the public to rooftops. Typically security practices at communication towers consist of fencing and/or locks. RT will be required to comply with community health and safety requirements as stipulated in WBG EHS telecommunications guidelines.

The laying of fiber optic cables will be performed using micro-trenching, which can pose a health or safety risk from attendant noise and dust, and potential for construction site and material handling related accidents. RT will be required to ensure that sub-contractors performing micro-trenching will comply with the community health and safety requirements as stipulated in WBG EHS telecommunications guidelines.

Unarmed security personnel might be used for some RT offices, and RT will be required to manage its private security in accordance with PS 4 as well as local laws and professional standards.

RT will be required to develop and implement a mechanism to manage any concerns from local community members about it security personnel.

According to the RT LTE License dated 02/07/2013, the operator is required to acquire additional license(s)/permit as stipulated by the national laws and regulations. As indicated earlier, RT is required to acquire environmental permits for construction of cell base-station/towers in accordance with the regulations of Kurdistan region environmental law and legislation. AL will be required to submit copies of the required permits/clearances to MIGA within an agreed timeframe.

Given that the project involves telecommunication physical installations within urban areas, environmental permitting does not require community consultation/engagement.

There are no attachments for this ESRS document.