11383 - UABL River Barges

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Environmental Review Summary

Project Number

11383

Company Name

UABL PARAGUAY S.A.

Date ERS Disclosed

Apr 26, 2002

Country

Latin America and the Caribbean Region

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 25, 2002
Signed : Dec 17, 2002
Invested : Mar 21, 2003

Sector

Water Transportation

Industry

other

Department

Gbl Infrastructure & Natural Resources

Project Description

The project consists of the expansion of UABL''s (the "Company") river barge and terminal operations on the Paraná and Paraguay Rivers (the "Hidrovia"). The Hidrovia starts near Buenos Aires, between Argentina and Uruguay, and heads north to form over 3,000 km of waterways. It connects Bolivia, Brazil, Paraguay, Argentina and Uruguay. While of a size equivalent to the Mississippi River, the Hidrovia suffers from a lack of infrastructure and its potential is only beginning to be tapped. The Hidrovia is used for transporting petroleum products northward to upstream destinations in Argentina, Paraguay, Bolivia and Brazil, and for movement of dry cargo (including soy, industrial commodities such as limestone, and forest products) downriver where transfers to ocean-going vessels can be made for export. UABL was formed in October 2000 by the merger of the barge operations of Ultrapetrol Bahamas Ltd. and the operations of American Commercial Lines LLC, one of the biggest U.S. river shipping companies.

Environmental and Social

UABL has programs in place to address the above-referenced environmental, health and safety aspects and appears to be managing impacts competently with competent staff. UABL will continue to conduct its operations in compliance with applicable host country laws and regulations and in accordance with World Bank/IFC requirements. Details on various aspects are provided below along with agreed actions to improve performance.

1. Fleet Operations. UABL has a comprehensive operations manual covering environmental policy, occupational health and safety, training, communications, equipment, safety of fleet operations, waste management, water discharge, cargo handling including flammable materials, emergency response, and maintenance and repairs. Procedures are based on experience and practice from ACL’s river transport business and Ultrapetrol’s sea transport operations. UABL has developed an internal audit program covering operational safety for vessels and crew. The goal is for all push boats and crew to be certified at the highest standard. For navigational safety, UABL captains undergo training in Paducah, Kentucky on an ACL simulator. This is in addition to keeping current various licensing requirements and certifications required by flag countries. Barges carrying hydrocarbons undergo inspections by oil company clients. In addition, UABL vessels are covered by Protection and Indemnity Insurance, and vessels and operations are subject to random inspection through membership of UABL''s P&I Club. UABL’s operations manual can be considered the basis of an acceptable environmental management system. ACTION: UABL will conform its operations to the voluntary standards of conduct known as the Responsible Carrier Program ( see http://www.americanwaterways.com ) and adopted by ACL as applicable to the local conditions/ regulations. Established by the American Waterways Operators (AWO) in 1994, this program sets preferred operating principles and practices for the towboat and barge industry. UABL’s current operations manual covers many aspects of this program. UABL will identify gaps and work to close them by 2005 with the understanding that standards developed do not need to meet U.S. federal regulatory limits but either those limits or other reasonable standards. As part of the conformance program, UABL will establish a schedule for certification to UABL standards of all push boats. Certification of all push boats to UABL standards will be completed by 31 December 2002 or one year after the commencement of service of any new push boat, whichever is later.

2. Maintenance. Operations at the Pueblo Esther repair facility include drydocking, welding, cutting plates, and mechanical and electrical repairs. Sandblasting is performed on a limited basis and on relatively small surface areas to enable repairs. Sand is collected for reuse. Waste logs are maintained in accordance with Argentinean and UABL requirements. Oil and bilge slop are collected by contractors or refineries that recycle the material or burn as fuel (residuals in some cases are disposed by landfarming).

3. Contingency Plan and Emergency Response for Hydrocarbon Spills. UABL currently operates 36 tank barges transporting approximately 580,000 cubic meters of hydrocarbons annually (480,000 cubic meters (diesel) and 100,000 cubic meters (heavy fuel oil)) along the Paraná and Paraguay Rivers from Puerto de Dock Sur up to Puerto Aguirre, Bolivia and Encarnacion, Paraguay. Currently, loading and unloading is performed only at oil company terminals. UABL has developed an emergency response plan approved by the Argentinean Coast Guard. This plan (revision 2) has been in effect since December 2001. Spill response training is provided in coordination with the Argentinean Coast Guard’s Environmental Division. Other than using spill kits and booms on UABL boats in area (and being able to call upon the Clean Caribbean Corporation), the plan does not indicate specific equipment or responders external to UABL that are firmly available. However, UABL confirms the following: In the event of a spill, the Coast Guard or relevant country authority will coordinate a response using equipment from facilities in closest proximity to spill. The Argentinean Coast Guard has spill response units in Santa Fe (km 590) and Barranqueras (km 1680). A Paraguayan subcontractor (Oil Spill Response) has equipment based in Asuncion, and a Bolivian subcontractor has equipment based in Puerto Aguirre. Clean Caribbean Corporation is a potential responder or source of equipment for worse case situations; items would be shipped by air from CCC''s Miami base. Oil terminals are equipped with spill response equipment as well. The worst-case scenario involves a spill of approximately 500 cubic meters or approximately 125,000 gallons, which would involve structural damage, a collision, or explosion of one tank within a tanker barge.

4. Terminals or Facilities. Environmental impact assessments have been performed for Tres Fronteras, C.A. Lopez and Puerto Wanda in accordance with local requirements (these in themselves would be Category B projects). No dredging is needed to develop or operate these facilities. Neither Tres Fronteras nor C.A. Lopez is controlled by UABL. The owner and operator of Tres Fronteras improved a local school. In addition, the road has been improved and is watered as a dust suppression measure. In Paraguay, consultation occurred with people living near the facilities. Meetings occur periodically with local people who can raise concerns. The most significant issue is minimizing negative impacts of truck traffic. The operation of these terminals will result in a relatively high volume of truck traffic traveling through communities. ACTION: As a condition of disbursement, UABL will present a plan for Puerto Wanda covering measures such as driver training, speed limitations, limiting hours of facility operation, installation of cross-walks, signage, communication with communities and perhaps installation of traffic calming devices (e.g. speed bumps) to help prevent accidents (some of these measures are indicated in the environmental impact assessments). This framework will be used for other facilities to be developed in the future. In addition, UABL must submit to IFC the environmental assessment for any facilities to be developed as a result of this IFC project (e.g., wood loading or river oil terminals) and such facilities must be developed, constructed and operated in compliance with host country requirements and in accordance with the applicable World Bank/ IFC guidelines and policies.

5. Forestry Policy. UABL is targeting the three largest forestry companies in Misiones. All wood products produced by these companies are from plantations owned by those companies. Data from the Misiones forestry ministry shows source of wood from forestry companies in Misiones. The eight largest forestry companies in terms of production source all wood from plantations ( see http://www.misiones.gov.ar/ecologia/index.htm ). UABL confirms that the target forestry companies all source wood from plantations implanted more than 15 years ago. IFC''s Forestry Policy (OP 4.36) is not triggered by this project. Nevertheless UABL is committed to doing business with forest product companies committed to conservation-oriented forestry.

6. Fuel Efficiency. Based on discussions with UABL staff, fuel efficiency is a major concern of UABL as it represents a significant operating cost. UABL personnel work continuously to verify the quantity of diesel consumed. Consumption is logged by each vessel hourly, and calculations are made with respect to vessel and fleet consumption on a monthly and yearly basis. Energy efficiency is factored into considerations regarding vessel purchase, and maintenance is performed to keep efficiency at optimum levels. These practices result in natural resources conservation.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: (i) the status of implementation of any measures contained in the Environmental Action Plan to be developed and (ii) ongoing performance of project-specific environmental, health and safety activities. Periodic supervision visits will also be conducted.

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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