The Argentine Republic Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) Negotiations Version ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) July 13, 2023 1|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN 1. The Argentine Republic (the Borrower) will implement the Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (the Project), through the Secretariat of Industry and Productive Development (SIDP, Secretaria de Industrias y Desarrollo Productivo) and the involvement of the Bank of Investment and Foreign Commerce of Argentina (BICE, Banco de Inversión y Comercio Exterior), as set out in the Loan Agreement. The International Bank for Reconstruction and Development (the Bank) has agreed to provide financing for the Project, as set out in the referred agreement. 2. The Borrower shall, through SIDP, shall cause BICE to ensure that the Project is carried out in accordance with the Environmental and Social Standards (ESSs) and this Environmental and Social Commitment Plan (ESCP), in a manner acceptable to the Bank. The ESCP is a part of the Loan Agreement. Unless otherwise defined in this ESCP, capitalized terms used in this ESCP have the meanings ascribed to them in the referred agreement. 3. Without limitation to the foregoing, this ESCP sets out material measures and actions that the Borrower shall carry out or cause to be carried out, including, as applicable, the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and grievance management. The ESCP also sets out the environmental and social (E&S) instruments that shall be adopted and implemented under the Project, all of which shall be subject to prior consultation and disclosure, consistent with the ESS, and in form and substance, and in a manner acceptable to the Bank. Once adopted, said E&S instruments may be revised from time to time with prior written agreement by the Bank. 4. As agreed by the Bank and the Borrower, this ESCP will be revised from time to time if necessary, during Project implementation, to reflect adaptive management of Project changes and unforeseen circumstances or in response to Project performance. In such circumstances, the Borrower, through the Project Implementing Entity, and the Bank agree to update the ESCP to reflect these changes through an exchange of letters signed between the Bank and BICE’s International Relations and Sustainability Chief. The Borrower shall promptly disclose the updated ESCP. 2|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY MONITORING AND REPORTING A REGULAR REPORTING Submit six-monthly reports to the BICE Prepare and submit to the Bank regular monitoring reports on the environmental, Bank throughout Project social, health and safety (ESHS) performance of the Project, including but not implementation, commencing after limited to the implementation of the ESCP, status of preparation and the Effective Date. Submit each implementation of E&S instruments required under the ESCP, the functioning of report to the Bank no later than BICE’s Environmental and Social Management System (BICE’s ESMS), stakeholder forty-five (45) days after the end of engagement activities, functioning of the grievance mechanism(s) and the each reporting period. Project’s Operational Manual (POM). B PARTICIPATING FINANCIAL INTERMEDIARIES (PFIs) REPORTS BICE shall require Eligible PFIs to BICE BICE shall request Eligible Participating Financial Intermediaries (PFI) to prepare furnish annually progress reports not and submit reports on ESHS performance of activities supported under Part 2 of later than thirty (30) days after the the Project, including the operation of the respective Eligible PFI ESMS (PFI ESMS), end of each calendar year. These according to the format set forth in the POM. reports shall be provided to the Bank, at the request of the Bank. This requirement shall be included in the respective PFI Financing Agreement. C INCIDENTS AND ACCIDENTS Notify the Bank no later than forty- BICE Promptly notify the Bank any incident or accident related to the Project which has, eight (48) hours after learning of the or is likely to have, a significant adverse effect on the environment, the affected incident or accident. A subsequent communities, the public, or workers, including, inter alia, cases of sexual report shall be provided within a exploitation and abuse (SEA), sexual harassment (SH), and accidents that result in period acceptable to the Bank, as death, serious or multiple injury. Provide sufficient detail regarding the scope, requested. severity, and possible causes of incident or accident, indicating immediate measures taken or that are planned to be taken to address it, and any information The requirement for Eligible PFIs to provided by the Eligible PFIs, as appropriate. report incidents and accidents shall be included in the respective PFI Subsequently, at the Bank's request, prepare a report on the incident or accident Financing Agreement. and propose measures to address it and prevent its recurrence. 3|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY BICE shall request Eligible PFIs to report any incident or accident that occur in their portfolio of activities that receive financing under the Project. The report will be prepared with the minimum requirements set forth in the POM. ESS 1: ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS 1.1 ORGANIZATIONAL CAPACITY FOR BICE AND ELIGIBLE PFIs a) The PCT (including the senior a) BICE a) Establish and maintain a Project Coordination Team (PCT) responsible, inter representative and an alia, for preparing and implementing BICE’s ESMS and for coordinating the environmental and social management of the environmental and social aspects of the Project in specialist), shall be established accordance with the provisions of the Loan Agreement and this ESCP. The PCT no later than thirty (30) days shall be comprised, among others, by: after the Effective Date, and thereafter maintained • A senior representative who will assume the overall responsibility for throughout Project coordinating the management of the environmental and social aspects of the implementation. Project. b) BICE shall require Eligible PFIs to b) PFIs • An environmental and social specialist responsible for the day-to-day designate a representative and implementation of the ESMS during Project implementation. an environmental and social specialist before the selection of b) Require that each Eligible PFI designate a representative to assume overall any activities to be supported responsibility for coordinating the management of the environmental and under Part 2 of the Project. This social aspects of the activities supported under the Project, and an requirement shall be included in environmental and social specialist responsible for the day-to-day the PFI Financing Agreement or implementation of the ESMS. the Participation Agreement, as applicable. 1.2 TECHNICAL ASSISTANCE Throughout Project BICE Ensure that the consultancies, studies (including feasibility studies, if applicable), implementation. capacity building, training, and any other technical assistance activities under the Project are carried out in accordance with terms of reference acceptable to the Bank, that are consistent with the ESSs. Thereafter ensure that the outputs of such activities comply with the terms of reference. 4|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY 1.3 CONTINGENCY EMERGENCY RESPONSE FINANCING a) The adoption of the CERC SIDP (Secretaria de a) Ensure that the CERC Manual includes a description of the ESHS assessment Manual, including the CERC- Industria y Desarrollo and management arrangements, including the CERC-ESMF, for the ESMF, in form and substance Productivo) through BICE implementation of the CERC Component, in accordance with the ESS. acceptable to the Bank, is a withdrawal condition under b) Adopt any environmental and social (E&S) instruments which may be required Section III.B(1)(b) of Schedule 2 for the activities under the CERC Component of the Project, in accordance with to the Loan Agreement. the CERC Manual and the CERC-ESMF, and the ESSs, and thereafter implement the measures and actions required under said E&S instruments, within the b) Adopt and disclose any required timeframes specified in said E&s instruments E&S instrument and include it as part of the respective bidding process, if applicable, and in any case, before the carrying out of the relevant Project activities for which the E&S instrument is required. Implement the E&S instruments in accordance with their terms, throughout Project implementation. ESS 2: LABOR AND WORKING CONDITIONS 2.1 LABOR MANAGEMENT PROCEDURES a) The LMP shall be established a) BICE a) prepare a Labor Management Procedure (LMP), aligned with ESS2, including, prior to carrying out any activity inter alia, provisions on working conditions, management of workers under Part 2 of the Project. This b) Eligible PFIs relationships, occupational health and safety (including personal protective action has the same timeframe equipment, and emergency preparedness and response), code of conduct as action 1.2. above. The LMP will (including relating to SEA and SH), forced labor, child labor, grievance be applied throughout Project arrangements for Project workers. Relevant labor and OHS measures shall also implementation. be part of the ESMS. b) BICE shall require Eligible PFIs to have in place procedures and measures b) This requirement shall be aligned with the ESMS and the LMP. included in the PFI Financing Agreement and/or the Participation Agreement, as applicable. 5|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY 2.2 GRIEVANCE MECHANISM FOR PROJECT WORKERS Establish grievance mechanism prior BICE and Eligible PFIs Establish and operate a grievance mechanism for Project workers, as described in to engaging Project workers and the LMP and consistent with ESS2. thereafter maintain and operate it throughout Project implementation. ESS 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION AND MANAGEMENT Relevant aspects of this standard shall be considered as part of BICE’s ESMS and the respective PFI ESMS, in accordance with ESS9. ESS 4: COMMUNITY HEALTH AND SAFETY Relevant aspects of this standard shall be considered as part of BICE’s ESMS and the respective PFI ESMS, in accordance with ESS9. ESS 5: LAND ACQUISITION, RESTRICTIONS ON LAND USE AND INVOLUNTARY RESETTLEMENT This standard is not relevant. ESS 6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES Relevant aspects of this standard will be considered as part of the BICE’s ESMS and the respective PFI ESMS, in accordance with ESS9. ESS 7: INDIGENOUS PEOPLES/SUB-SAHARAN AFRICAN HISTORICALLY UNDERSERVED TRADITIONAL LOCAL COMMUNITIES Relevant aspects of this standard will be considered as part of the BICE’s ESMS and the respective Eligible PFI, in accordance with ESS9. ESS 8: CULTURAL HERITAGE Relevant aspects of this standard will be considered as part of the BICE’s ESMS and the respective PFI ESMS, in accordance with ESS9. ESS 9: FINANCIAL INTERMEDIARIES 9.1 ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM a) The ESMS shall be established a) BICE a) Develop, maintain, and implement an Environmental and Social Management prior to carrying out any activity System (ESMS), to identify, assess, manage, and monitor the environmental under Part 2 of the Project. This b) Eligible PFIs and social risks and impacts for activities that may receive financing under action has the same timeframe Part 2 of the Project. The ESMS shall include, inter alia, the following as action 1.2. above. The ESMS elements: will be applied throughout • Identification of the activities that may receive support from the Project Project implementation. Environmental and Social Policy endorsed by BICE’s senior management. • Clearly defined procedures for the identification, assessment, and b) Eligible PFIs shall establish, adopt management of the environmental and social risks and impacts of activities and implement the respective supported under the Project, including, inter alia, relevant stakeholder FPI ESMS before the selection of engagement and disclosure requirements. any activity to be supported • Excluded activities that are not eligible for financing, as set out in the Loan under Part of the Project. This Agreement requirement shall be included in • Emergency preparedness and response measures the PFI Financing Agreement 6|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY • Organizational capacity and structure, with clearly defined roles and and/or the Participation responsibilities, as set out in action 1.1 above Agreement, as applicable. • Monitoring and reporting of environmental and social performance of PFIs and activities and the effectiveness of BICE’s ESMS Incidents and accidents notification and subsequent reporting requirements as set out under action B above. • An external communications mechanism, including measures to respond to public enquiries and concerns in a timely manner • Grievance Mechanism b) BICE shall request Eligible PFIs to develop or update, maintain and implement an ESMS in order to receive financing or to provide partial credit guarantees for activities through Part 2 of the Project, which will include, inter alia, the following elements: • Project description • Regulatory framework • Environmental and Social Policy • Clearly defined procedures for the identification, assessment, and management of the environmental and social risks and impacts of activities supported under the Project • Excluded activities that are not eligible for financing • Emergency preparedness and response measures • Organizational capacity and structure, with clearly defined roles and responsibilities • Supervision and reporting • Consultation and Disclosure • Grievance Mechanism 9.2 EXCLUSIONS Screen activities before determining BICE Screen, and require Eligible PFIs to screen, all proposed activities to be supported whether they are eligible to receive under Part 2 of the Project, against the exclusion list set out in the ESMS and the support from the Project. This POM. requirement shall be included in the PFI Financing Agreement and/or the 7|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBLE ENTITY The mechanism for conducting the analysis of exclusions shall be part of the BICE’s Participation Agreement, as ESMS and the PFI ESMSs. applicable. ESS 10: STAKEHOLDER ENGAGEMENT AND INFORMATION DISCLOSURE 10.1 STAKEHOLDER ENGAGEMENT PLAN PREPARATION AND IMPLEMENTATION a) The SEP shall be established prior BICE a) Adopt, implement, and disclose a draft Stakeholder Engagement Plan (SEP) for to carrying out any activity under the Project, consistent with ESS10, which shall include measures to, inter alia, Part 2 of the Project. This action provide stakeholders with timely, relevant, understandable and accessible has the same timeframe as information, and consult them in a culturally appropriate manner, which is action 1.2. above. The SEP will be free of manipulation, interference coercion, discrimination and intimidation. applied throughout Project implementation. b) Update, adopt, and implement the SEP, which should consider, inter alia, the disclosure of a summary of the ESMS on BICE’s website. The SEP may be b) Revised SEP disclosed amended and updated (and redisclosed) as needed during Project throughout Project implementation. implementation. 10.2 PROJECT GRIEVANCE MECHANISM The mechanism shall be established BICE Update, adopt, maintain and operate a Grievance Mechanism, as described in the prior to carrying out any activity SEP, to receive and facilitate resolution of concerns and grievances in relation to under Part 2 of the Project, and the Project, promptly and effectively, in a transparent manner that is culturally thereafter maintain and operate the appropriate and readily accessible to all Project-affected parties, at no cost and mechanism throughout Project without retribution, including concerns and grievances filed anonymously, in a implementation. manner consistent with ESS10. The grievance mechanism shall be equipped to receive, register, and facilitate the resolution of SEA/SH complaints, including through the referral of survivors to relevant gender-based violence service providers, all in a safe, confidential, and survivor-centered manner. CAPACITY SUPPORT CS1 CAPACITY BUILDING PLAN Plan to be submitted no later than BICE Prepare a plan for the development of ESHS capacities that includes a timeline sixty (60) days after the Effective and an estimated budget for training and activities aimed at improving BICE’s Date, and thereafter implemented ESMS and the PFI ESMSs. throughout Project implementation. Changes shall be made as needed throughout Project implementation. 8|Page ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) – Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) 9|Page