10678 - San Vicente International Terminal

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Environmental Review Summary

Project Number

10678

Company Name

San Vicente Terminal Internacional S.A.

Date ERS Disclosed

Sep 13, 2001

Country

Chile

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Mar 18, 2002
Signed : Feb 5, 2004
Invested : Mar 25, 2004

Sector

Port and Harbor Operations

Industry

other

Department

Regional Industry INF LAC & EUR

Project Description

The project consists of the operation, improvement and expansion of the Port of San Vicente (San Vicente), located about 520 km to the south of Santiago and 18 km from Concepción, capital of Region VIII. San Vicente Terminal Internacional (SVTI) has operated the port from January 2000 under a 15 year concession granted by Empresa Portuaria Talcahuano-San Vicente (EMPORT), the port authority of San Vicente and the neighboring port of Talcahuano. SVTI has the option to extend the concession for an additional 15 year term pending satisfaction of government criteria. SVTI is a joint venture of Sudamericana Agencias Aéreas y Maritimas S.A., a subsidiary of a well-established Chilean shipping company, and SSA Holdings International Chile Limitada, a majority owned subsidiary of FRS Service Companies, Inc. of the United States.

San Vicente is a medium sized port of Chile, specializing in handling forest products in bulk, break bulk, and containers. It is primarily a foreign trade port, with exports being over 80% of cargo. In 2000, the port handled 2.75 million tons of cargo of which over 65% comprised forest products for export – wood pulp, wood chips, sawn timber, paper, logs and fiberboard. A rapidly increasing number of containers are also handled through the port, with over 146,000 TEUs (twenty-foot equivalent unit) moved in 2000. The port comprises three berths totaling 603 meters in length, with a maximum draft of 12.2 meters.

The project includes improving the structural stability of the existing berths, relocation of storage sheds, refurbishment of existing structures, installation of computer and communication systems, acquisition of additional cargo handling equipment and financing of five of the six annual concession payments to EMPORT. The proposed investment would result in an increase in cargo handling capacity of the port and allow it to meet the growing demand for its services in the foreseeable future.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

As part of the transfer to private operation, SVTI engaged an environmental consultant to evaluate the environmental performance of the terminal as well as liabilities that were present from past operations. The consultant''s December 1999 report identified corrective actions to achieve compliance with Chilean environmental regulations, together with recommendations for improvements in day-to-day environmental management of the terminal. In February 2001, SVTI commissioned a follow-up audit of its current compliance status. It was determined that storm water and equipment wash water drains were not yet in compliance. SVTI has a full time environmental and safety officer who is addressing the audit''s action items. Overall, SVTI has made satisfactory progress since taking over operations in January 2000 and expects to be in full compliance by the end of 2001.

Under the concession agreement, SVTI has the obligation to perform maintenance dredging, as required, to assure the required operational depth at the pier. During 2001, maintenance dredging will be conducted by the port authority, EMPORT, to deliver the terminal in the agreed-upon condition. SVTI will take periodic water depth soundings alongside the berths at least every five years, and submit the results to the Chilean Maritime Authority for approval. Once a need for dredging has been determined, SVTI will be required to submit environmental analyses for approval, in the form of an Environmental Impact Report. Permits are required from the Maritime Authority for ocean disposal or by the Chilean environmental protection agency, COREMA, for land disposal.

SVTI provides full terminal services for cargo operations, including hazardous and refrigerated cargoes, and supplies potable water and deck fumigation services. Provisions and fuel are arranged between the ship''s agent and the provider and are provided to the ship at the berth. SVTI does not allow the discharge of solid or sanitary wastes or oily ballast.

Handling and storage of dangerous goods is regulated by the Chilean Maritime Authority. SVTI is not permitted to store dangerous goods within the terminal area unless a separate and segregated area is provided. Because the terminal has limited land area, relatively low volume of dangerous goods, and an established past practice of direct delivery, SVTI does not normally store dangerous goods on the terminal. Most dangerous goods are received from the shipper''s truck to ship or from ship to receiver''s truck. Depending on the hazard class some cargo is escorted to/from the end receiver/shipper. SVTI has procedures in place for handling dangerous goods while on the terminal.

Safety, security and emergency response services are provided and coordinated with local authorities. SVTI has a fire prevention/response plan that is part of the SVTI safety and security plan approved by the Chilean Maritime Authority and EMPORT. For first response the SVTI safety and security department is continuously staffed with supervisors trained in all aspects of port safety and security. The Talcahuano fire department is five minutes from the port. The Maritime Authority is responsible for spill response, and have necessary response equipment in place at the port. SVTI''s internal spill procedures are outlined in its environmental plan for the terminal.

Medical emergencies at the terminal are handled by IST, a private occupational health service provider. SVTI contracts with IST, who have a paramedic in a small clinic at the terminal, and a hospital nearby. IST also stations an ambulance at the terminal. Safety and medical treatment requirements are outlined in SVTI''s Personal Risk Prevention Manual. SVTI conducts large-scale emergency drills at least annually with the fire department, the Maritime Authority, and the IST.

Non-sustainable exploitation of Chile’s forest resources as well as plantation development of non-native species are concerns. Because forest products are a significant component handled at SVTI, IFC reviewed the sourcing of these products for consistency with IFC’s forestry policy.

Conversion of natural forest to plantations in Chile occurred as part of a government program to encourage the development of the country''s forest resources. At present there are about 2 million hectares of forest plantation in Chile, including about 755,000 ha in Region VIII, the primary market capture area for SVTI. In Region VIII the primary tree species are radiata pine (85%) and eucalyptus, and plantation output from mature and maturing plantations exceeds current industrial capacity. At this time, most of the native forest cutting in Region VIII is for traditional uses, such as locally-used lumber and fuelwood. Shipments of logs, green wood and dried wood products through SVTI are exclusively from plantations, and shipments of wood chips are also nearly all from plantations. These shipments, at present levels and at the expanded throughputs envisioned by SVTI, are not expected to contribute to further loss of Chile''s native forest resources.

Conclusion & Monitoring

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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