Environmental and Social Management Plan (ESMP) – Overview

1. Project Background

The Project involves the development, construction, andoperation of a green hyperscale DC facility in Malaysia. The facility will havean initial IT capacity of 60MW within a campus designed for a total IT capacityof 120MW (the Project). AIIB’s financing will support the development of thefirst 60MW phase, which is fully contracted under an off-take agreement withBytePlus. The Project is sponsored by Actis, and will be implemented by EpochDigital, an Actis portfolio company.

2. Purpose and Objectives

The Environmental and Social Management Plan (ESMP) outlinesthe measures to manage environmental and labor-related risks associated withthe project.

The Environmental Management Plan (EMP) specifically aimsto:

• Minimize adverse environmental impacts
• Ensure compliance with applicable environmentallaws and regulations
• Promote waste reduction, recycling, andpollution prevention
•  Identify and mitigate environmental risks

The Labour Force Management Procedure complements this byestablishing labour-related terms and conditions, including fair employmentpractices, safe working conditions, and grievance mechanisms.

The ESMP will be further improved to incorporate managementplans during operations stage.

3. Scope and Applicability

The ESMP applies to project activities undertaken by the Project Proponent and contractors, particularly during the planning andconstruction phases, as described in the EMP.

The EMP covers:

• Project planning and setup
• Construction activities and associatedenvironmental controls

The Labour Procedure applies to all employees (full-time,part-time, and contract) throughout their employment period.

4. ESMPStructure and Key Components

The Environmental Management Plan (EMP) establishes measuresto avoid, minimize, and mitigate environmental impacts during construction.

Key components include:

• Impact mitigation measures: erosion andsediment control, pollution prevention (P2M2), and waste management.
• Monitoring programs: monthly monitoringof air quality, noise levels, and water quality with reporting to regulatoryauthorities.
• Organizational structure: defined rolesfor Project Director, Project Manager, and Environmental Officer responsiblefor implementation and compliance.
• Waste management: segregation of scheduledand non-scheduled waste, disposal via licensed contractors, and regulatorytracking (eSWIS).
• Training programs: environmentalawareness, induction, and compliance-related training for workers.

Environmental controls in the EMP (e.g., noise, air, andwaste management) also contribute to reducing potential impacts associated withconstruction activities. These measures support compliance with laws underEnvironmental Quality Act 1974 (EQA) (Act 127) that is being enforced by theDepartment of Environment (DOE).

The project addresses social aspects related to laborconditions, worker welfare, and workplace safety. The project addresses:

• Fair employment practices
• Worker health and safety
• Workplace conduct and grievance handling

The Project is located on legally acquired, freehold landwithin an established industrial park and does not involve land acquisition,displacement, or loss of assets or livelihoods. The site was previously usedfor agricultural and industrial purposes and has been formally designated forindustrial development in 1990-s. No legacy land claims, resettlement issues,or land‑relateddisputes have been identified. Accordingly, land acquisition and resettlementare not applicable to this project.

The Project is located within an established industrial parkand does not involve land acquisition, physical displacement, or directcommunity interface that would result in differentiated impacts. Adoptedpolicies guarantee inclusive engagement practices, ensure equal access toinformation, and prevent any form of discrimination, coercion, or exclusionbased on gender, age, nationality, disability, or other social characteristics.Any concerns related to gender or vulnerability raised during construction oroperations will be addressed through the Project’s grievance mechanisms andmanagement measures.

The Labour Procedure includes commitments to:

• Equal employment opportunities regardless ofgender, race, or religion
• Equal pay for employees performing the sameroles

These provisions support a non-discriminatory workplaceenvironment.

The Project is being implemented by a contractor‑basedworkforce engaged through a principal contractor and multiple subcontractors.No material labor legacy issues have been identified to date. To avoid andminimize labor‑related risks, the principal contractor PMXMalaysia Sdn. Bhd.has adopted a Labor Management Procedure consistent withMalaysian labor laws and international good practice, covering minimum agerequirements, working hours, medical fitness, gender equality, workerqualifications, and registration requirements (including CIDB registration forconstruction workers). Contractor oversight arrangements are in place to verifyworker permits, competencies, and compliance with applicable labor andoccupational health and safety regulations.

To mitigate residual risks during the remainingconstruction, testing, and commissioning period, the Client has established aworkers’ Grievance Redress Mechanism that is accessible, confidential, andincludes clear procedures, timelines, and non‑retaliation provisions. Ongoingmonitoring of working conditions, health and safety performance, andaccommodation arrangements (where applicable) is being conducted by theprincipal contractor, with continued supervision required through commissioningand early operations to ensure sustained compliance.

The Labour Force Management Procedure establishes:

• Compliance with Malaysian laws (e.g., EmploymentAct 1955, OSHA 1994)·        
• Minimum employment age of 18 years
• Standard working hours (8 hours/day, 45hours/week) and rest days
• Pre-employment medical examinations
• Requirements for foreign workers (validpassport, work visa, CIDB registration)
• Provision of a safe and healthy workingenvironment

The Project is located within an industrial park approved byMalaysian authorities for data center developments, which avoids significantcommunity exposure to construction‑related risks. Given this fact andthe advanced stage of construction, cumulative community and occupational healthand safety impacts are expected to be temporary, localized, and low insignificance. Potential cumulative effects during construction are limitedto dust, noise, traffic movements, and waste generation, which are beingmanaged through standard EHS measures, coordination with municipal services,and contractor‑implemented management plans. During operations,cumulative risks related to increased demand for water, energy, and wastemanagement within the industrial zone are being addressed through resource‑efficiencymeasures, utility coordination, and ongoing monitoring. With these controls inplace, the Project is not expected to result in material adverse cumulativeimpacts on surrounding communities.

To minimize potential community health and safety impacts,the site‑specific EHS (environment, health and safety) measureshas been implemented, including controlled access to the site, trafficmanagement arrangements, dust suppression, and adherence to safety protocolsunder the project EHS Plan.

To mitigate residual risks, particularly thoseassociated with soil conditions with elevated metal concentrations, strictenforcement of PPE (personal protection equipment) use, dust control measures,and worker training is required, as recommended by the independent technicaland environmental assessment. Emergency preparedness and response arrangements,including fire protection systems designed in accordance with BOMBArequirements and coordination with local emergency services, have beenintegrated into project design and construction practices. These measures,together with continued monitoring during commissioning, are expected to keepcommunity health and safety risks at a low and manageable level.

The EMP includes measures that indirectly support communityhealth and safety, such as:

• Monitoring of air quality, noise, and water quality
• Control of runoff, waste, and pollution during construction
• Implementation of site-level environmental controls

These measures reduce potential impacts from constructionactivities on surrounding areas.

Given identified contextual risks related to potentialcoercion or retaliation, engagement with affected people is carried out in atransparent, inclusive, and safe manner, enabling stakeholders to raiseconcerns freely and without fear of reprisal. The relevant Project informationin a timely and accessible manner, and document stakeholder feedback isdisclosed in English and local languages.

Prior to construction, the project undertook communityengagement activities to inform stakeholders about the proposed works andconstruction details has been displayed before the site. Ongoing coordinationhas been maintained throughout project preparation with surroundingcommunities, relevant government agencies, and utility service providers toensure alignment and address concerns in a timely manner.

The EMP includes:

• Communication and reporting to regulatoryauthorities
• Internal communication through training andinduction activities

A Workers’ Grievance Redress Mechanism (GRM) has been establisheda in accordance with its Labor Force Management Procedure to enable all projectworkers, including contractor and subcontractor personnel, to raise work‑relatedconcerns in a safe, confidential, and non‑retaliatory manner. The GRMprovides accessible channels for both informal and formal grievance submission,with clearly defined procedures for acknowledgment, investigation, resolution,and appeal, and specified timelines for each step. Grievances may be submittedverbally or in writing, using physical or digital formats, and workers areinformed of the mechanism through induction, ongoing training and workingperiod. The GRM is guided by principles of accessibility, confidentiality,impartiality, transparency, and timeliness, and includes provisions to protectcomplainants from retaliation. Records of grievances and resolutions aremaintained and periodically reviewed to identify trends and improve labormanagement practices. The GRM will remain operational throughout construction,commissioning, and early operations.

A structured GRM is established for workers, including:

• Accessible grievance submission (informal andformal)
• Acknowledgment, investigation, and resolutionprocedures
• Defined steps including follow-up and appeal
• Principles of confidentiality, impartiality, andnon-retaliation

Inaddition to this GRM, Epoch Digital and Actis has disclosed corporate‑level grievance and whistleblowing mechanisms,which are publicly accessible through the following channels:

EpochDigital: https://www.epochdigital.org/contact-us and Actis: https://www.act.is/whistleblowing/

These mechanisms remain available as supplementary channelsand do not limit access to the Project‑level GRM or to AIIB’s independentProject‑affectedPeople’s Mechanism (PPM). The PPM has been established by AIIB to provide anopportunity for an independent and impartial review of submissions fromProject-affected people who believe they have been or are likely to beadversely affected by AIIB’s failure to implement its ESP in situations whentheir concerns cannot be addressed satisfactorily through the Project-level GRMor the processes of AIIB’s Management. For information on AIIB’sProject-affected People's Mechanism, please visit: https://www.aiib.org/en/about-aiib/who-we-are/project-affected-peoples-mechanism/how-we-assist-you/index.html

Key mitigation measures include:

• Environmental: erosion and sedimentcontrol, pollution prevention (P2M2), waste segregation and proper disposal,and environmental monitoring.
• Labour and workplace: compliance withemployment laws, safe working conditions, and worker grievance mechanisms.
• Training: environmental awareness andcompetency training., investigation, and resolutionprocedures

These measures are implemented throughout the constructionphase.

5. ProjectPhases Covered

6. Implementationand Supervision

Implementation is carried out by the Project Proponent andcontractors, with:

• Oversight by the Project Manager andEnvironmental Officer
• Regular site inspections and environmentalmonitoring
• Coordination with regulatory authorities

7. Reporting

Environmental monitoring results (air, noise, water) arecompiled and submitted to relevant authorities on a regular basis. Records aremaintained for compliance, inspection, and audit purposes.