IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project covered MAEH’s existing facilities and operational practices, as well as the company’s technical and management capacity to expand its business lines and geographical locations. The following potential environment, health and safety and social impacts of the projects were analyzed: - Siting and licensing; - Waste collection and transport; - Waste receiving, storage and materials recovery; - Chemical stabilization; - Fuels blending and thermal destruction emissions; - Landfill disposal and groundwater quality; - Stormwater runoff and control, wastewater/leachate treatment, and surface water quality; - Air quality controls, including dust, odor and gas generation; - Closure and post-closure care; - Emergency preparedness and response; - Environmental management systems; - Employee health and safety; and - Community development and impacts.

MAEH designs, constructs, and operates its facilities and performs related waste management activities to meet best international practice. As one of the first regional operator in the rapidly growing East Asia region to provide industrial waste generators with integrated, responsible waste management and recycling services, it offers assurances to its customers, government, and the population at large that wastes are properly handled, treated, and disposed from “cradle-to-grave”. MAEH has presented plans to address the above listed impacts to ensure that the project will, upon implementation of specific measures, comply with applicable host country regulatory requirements, international environmental standards such as those of the U.S. EPA, World Bank environmental and social policies, and IFC Environmental, Health and Safety Guidelines for Waste Management Facilities. The information about how these potential impacts are and/or will be addressed is summarized in the paragraphs that follow: Siting and Licensing MAEH’s sites in Thailand and Indonesia were chosen through systematic evaluative processes that considered environmental impacts and proximity to developed areas. Originally identified and selected by the Government of Indonesia in the early 1990’s, the PPLi facility site has undergone significant study, review and approval by the relevant and appropriate government environmental impact management agency – BAPEDAL. PPLI holds all necessary government permits and licenses to operate as a hazardous waste management facility. ESBEC was sited in the Chonburi Industrial Estate in 2001 to service the industrial facilities located within the Estate, as well as other non-hazardous waste generators within the Eastern Seaboard area. It is the only facility of its kind in the region to have appropriately followed the Thailand EIA process and to have obtained all required government approvals from relevant government agencies (OEPP, PCD, IWD, and IEAT). Waste Collection and Transport MAEH collects and transports wastes – non-hazardous and hazardous – from customers using fleets of specially designed trucks and vans equipped with bulk containers, drum containers, and semi-trailer tankers. They also provide customers with appropriate waste containers for hazardous and non-hazardous waste needs. Vehicles are appropriately enclosed or covered to control odors and losses. The company properly maintains vehicles to ensure safe collection and transport of wastes. Waste Receiving, Storage and Materials Recovery MAEH has a waste manifest system that allows and confirms accurate tracking and identification of wastes received at its facilities. Upon arrival at the ESBEC or PPLi entrance and weighing station, waste deliveries are recorded (waste type and generator) and sampled to verify waste composition and to determine compatibility with treatment and/or disposal method. Each facility has an on-site modern chemical and physical analytical laboratory to ensure proper and adequate waste analysis. Adequate and environmentally sound and contained storage areas are available at both facilities for wastes that are not immediately treated or disposed after the waste receiving process. Many of the storage areas are covered, and all are constructed with secondary containment systems to prevent spilled waste from being released to the environment. Spills are collected in sumps located in each building or area, and can subsequently be removed and properly disposed. In keeping with best international practice, PPLi will be upgrading the storage areas and sumps to ensure that, if spilled, incompatible chemicals don’t come into contact. ESBEC has a materials recovery building to separate, hand sort and recover non-hazardous recyclables such as plastic, paper and scrap metal and glass. MAEH will ensure that any stormwaters that come into contact with these waste materials are separately collected and treated in the wastewater/leachate treatment plant. Chemical Stabilization MAEH treats, or stabilizes, certain non-organic hazardous wastes received at PPLi to make them less hazardous by changing them chemically and physically prior to landfilling. The process involves mixing wastes with Portland cement or fly ash (in predetermined proportions according to the constituents in the waste) in a steel-lined pit located in a covered building. Once stabilized, the end product is disposed in the secure landfill cell (see below). Dust and odors are controlled though the use of water sprays. No effluents or emissions are generated by this activity. Fuels Blending and Thermal Destruction Emissions At PPLi, organic hazardous wastes (e.g., spent solvents, waste oils, and other petroleum-based products) are blended together to create synthetic fuels that are subsequently burned in an adjacent cement kiln owned and operated by PT Semen Cibinong Tbk (SC). Blended fuel is temporarily stored in a tank farm equipped with foam cannons and nitrogen blanketing systems for fire prevention. The high operating temperature and long retention time inside SC’s cement kiln ensure the mixture is effectively destroyed as part of the cement-making process. Before sending the waste fuel to the kiln, PPLI tests the end product fuel to ensure it meets the contaminant (i.e., chlorine content) specification required by SC and Indonesian environmental standards, as well as benchmarks the fuel against U.S. EPA requirements. PPLi and SC monitor kiln emissions to ensure no hazardous constituents are released in concentrations of concern. Monitoring involves periodically conducting extensive trial burn tests to measure waste destruction efficiencies and final concentrations of hazardous constituents of concern – HCl, HF, dioxins and heavy metals (Hg, As, Cd, Pb, and Cr). These tests, the most recent of which was completed in August 2003, have demonstrated that kiln emissions comply with BAPEDAL and World Bank emission requirements. MAEH plans to operate a government-owned non-hazardous waste incinerator at the to-be-developed Bangpoo Environmental Complex (BPEC) in Thailand. Donated by NEDO of Japan to the IEAT of Thailand, this 100 tonne per day fluidized bed incinerator is intended to destroy wastes generated from Bangpoo and three other industrial estates, and sell steam produced during the process to potential industrial users within the Bangpoo industrial estate. The Japanese incinerator manufacturer designed the equipment to meet relevant Thai emission standards. MAEH will guarantee that World Bank standards are met during operations. That is, prior to operating the unit, MAEH is committed to making the necessary modifications to equipment and operating procedures of the incinerator to ensure compliance with World Bank emission limits, notably particulates and dioxins. During MAEH’s regular performance monitoring of thermal destruction activities at the SC cement kiln associated with PPLi’s fuel blending operation and at the BPEC waste incinerator, if contaminants in stack emissions are found to exceed allowable Indonesian and Thai standards, as well as World Bank guidelines and international best practice levels, operations will terminate until appropriate corrective actions can be implemented to bring performance into compliance. Specifically, at PPLi this means that MAEH will stop sending blended fuels to the SC cement kiln until corrective actions to adjust the fuel mixture, improve kiln performance, or other necessary mitigation measures are implemented. Likewise, at BPEC incinerator operations would cease until performance is corrected. In the meantime, the facility would be used only as a waste transfer station. Landfill Disposal and Groundwater Quality At ESBEC, MAEH disposes non-hazardous solid waste in a recently constructed secure landfill cell which is lined with 1 meter of compacted clay and 2 synthetic HDPE liners. The landfill also features a leachate collection system. Below the liner system and outside the landfill cell is a series of drainage trenches and sumps designed to collect and remove seasonally-high groundwater, which varies across the seasons. Also referred to as “inward gradient facilities”, this type of landfill design is consistent with current U.S. EPA requirements, and is finding increasing acceptance as being more environmentally protective, while allowing for more efficient utilization of landfill area. The Thai environmental authorities approved the site-specific design as appropriate and acceptable owing to MAEH’s commitment to continually manage leachate levels within the landfill and groundwater levels directly outside the cell boundary. Separate leachate and groundwater collection and pumping systems effectively prevent groundwater contamination. PPLi’s hazardous waste landfill cells are constructed with a double composite liner constructed of bentonite clay and HDPE. There are both primary and secondary leachate collection systems. Waste is covered daily with soil or synthetic material. The base of each cell is above seasonally-high groundwater levels. Closed cells will be capped with a compacted clay liner and an HDPE liner to prevent water from percolating into the unit, as MAEH has already successfully demonstrated in its first cell. Landfill cell design and operation complies with Indonesian requirements, World Bank guidelines, and relevant U.S. EPA hazardous waste regulations, and as a result, minimizes impact on groundwater resources. MAEH has implemented effective groundwater monitoring programs at ESBEC and PPLi consistent with best international practices. At each site MAEH has installed a series of strategically placed monitoring wells from which samples are taken quarterly and analyzed for various pollutant parameters and hazardous constituents. Wells are installed in the right places to detect leaks of contaminants from all waste treatment, storage and disposal operations at each site, including landfill disposal, as well as wastewater/leachate treatment (see below). Using both horizontal and vertical monitoring points, MAEH monitors the well data looking for potential changes in groundwater quality from background levels established earlier. Monitoring results show no evidence that the landfill cells are leaking. Stormwater Control, Wastewater/Leachate Treatment, and Surface Water Quality Adequate stormwater runoff control systems are in place at both sites. At ESBEC, stormwater from the landfill area is collected in perimeter channels that drain to a retention pond which ultimately discharges off-site to Manao Creek. At PPLi, stormwaters from the process area (i.e., waste receiving and storage, stabilization, fuels blending, etc.) are collected in a system that ultimately discharges to Cilogok Creek after treatment in onsite ponds. To control release of spilled hazardous constituents, the discharge features a closed sluice gate to allow for the recovery and removal of spilled waste. Stormwaters from the landfill and wastewater treatment areas are collected in a separate system that drains to a retention pond from which water is re-used for process-related needs at the site. Leachate from the ESBEC landfill, as well as non-hazardous industrial wastewaters delivered to the site by tanker truck are treated in a wastewater/leachate treatment system. It consists of an equalization pond followed by a series of biological reactors/batch aeration lagoons and a constructed wetland treatment area as a final treatment step. Effluent from the wetland area flows to a final effluent storage lagoon, the discharge of which combines with the site’s stormwater (see above) and is directed to Manao Creek. Sludge from the batch lagoons is periodically removed, allowed to dry and landfilled. The batch aeration lagoons are constructed with a liner system similar in design to the ESBEC landfill. MAEH regularly monitors effluent discharge quality from the system and it complies with Thai effluent standards and World Bank guidelines. Aqueous liquid wastewaters received at PPLi are treated in an integrated wastewater treatment system consisting of physical/chemical treatment processes, secondary biological processes, and a constructed wetland offering tertiary-level treatment. Sludges generated by the various processes are stabilized and disposed in the landfill. Some effluent is recycled for use in the stabilization process; the remainder is discharged to the Cileungsi River located to the north of the site. As with ESBEC, the biological processes at PPLi consist of a series of lined aeration lagoons and a final storage lagoon followed by engineered wetlands. MAEH regularly monitors effluent quality and it substantially complies with Indonesian effluent standards and World Bank guidelines. Air Quality Controls, including Dust, Odor and Gas Generation At both facilities, MAEH has implemented air quality control measures to minimize fugitive dust and odors. To control odors, the wastewater equalization ponds are covered, and atomizing sprayers have been installed around the biological lagoons as a further means of control. The small amounts of landfill gas generated by decomposing non-hazardous wastes in the ESBEC landfill are collected and flared in line with international best practice. Landfill gas is not generated at PPLi due to the nature of the hazardous wastes disposed there. Closure and Post-Closure Care After ESBEC and PPLi stop receiving wastes, all waste processing is completed, and the landfill space has been filled and properly capped, MAEH will maintain the sites in a way that ensures they will not pose a future threat to human health and the environment. Activities will include: - Maintaining the landfill cells’ final covers and groundwater monitoring systems; - Providing long-term management of groundwater at ESBEC to prevent its migration into the closed cells through continuous pumping, groundwater trench dewatering systems, or other similar approaches; - Making sure that the final covers and liner caps are not disturbed (e.g., during seismic events), and if so, reconstructing any disturbed areas; and - Monitoring groundwater to detect any releases of hazardous constituents. At ESBEC, this period will last for 10 years after closure is completed, at which time MAEH will return the site in a condition suitable for open space use, golf course construction, parkland, or the like. MAEH will conduct post-closure activities at PPLi for 30 years after closure. Emergency Preparedness and Response For all of its operations and activities, MAEH has equipment and procedures in place to minimize and prevent emergency situations and accidents, such as fires, explosions, or any unplanned release of waste or hazardous constituents to the environment. This includes having available alarm systems and communication devices on site, emergency equipment, and provisions for contacting local authorities. Emergency procedures follow best international practice. MAEH is also capable of providing off-site emergency response services to its customers. An emergency response vehicle and team of trained personnel are available at PPLi to respond to situations involving chemical spills, chemical fires, and decontamination. Environmental Management Systems MAEH has implemented and received independent certification to ISO 14001 environmental management systems (EMS) at its ESBEC/WMS operations, and is in the process of developing and implementing the same for its PPLi operations. PPLi is expected to be independently certified to this international environmental management system standard by December 2004. Any new activities, such as the Bangpoo Environmental Complex, will also have ISO 14001-certified EMS’s within one year of start-up of the operations. Employee Health and Safety MAEH has implemented an occupational health and safety policy program, the main goal of which is to provide a safe working environment for all employees. Continuing employee training is an essential component of the program, and training covers safe work environment, compliance with regulatory requirements, emergency response, fire fighting, chemistry of hazardous wastes, spill control and decontamination, and job-specific training. The program complies with all Thai and Indonesian health and safety standards and World Bank guidelines. There have been no major accidents or incidents at any of MAEH’s operations, nor have the relevant regulatory authorities issued any violations. Community Development and Impacts The PPLi site is near the village of Namdo, a poor community with a high unemployment rate. The site is separated from Namdo and other communities by a 300-meter buffer zone that is the property and responsibility of the Government of Indonesia. The Government never properly secured or enforced the buffer area, however, and over time villagers have come to use the area for crops and transit. Some have even built dwellings in the area. The result is that PPLi has close and frequent contact with local residents. PPLi has invested heavily in improving ties to the community. For community work, PPLi hired a consultant to advise on public relations planning, training of PPLi management on key corporate messages, and development of a formal community relations program which includes regular townhall meetings. PPLi has signed a formal agreement with the local village of Namdo addressing the certain complaints from the villagersand pledging to fund and oversee a program of community projects, including a health clinic and soccer field. The village, in turn, in signing the agreement, recognized PPLi’s right to operate a hazardous waste facility and control access to its property. The parties further reaffirmed the existence of the 300-meter buffer zone around the PPLi site. Going forward, PPLi will cooperate closely with representatives of the Government of Indonesia and the local community on issues affecting the population inside the buffer zone, if any, in accordance with relevant local laws and the World Bank Policy on Involuntary Resettlement. Being located within a planned industrial estate, ESBEC does not face encroachment issues and has had a positive profile in the community since its start. As part of the environmental impact assessment process for establishing ESBEC, MAEH commissioned a professional firm, ERM, to profile the community within a 5 kilometer radius and conduct a public education and consultation program to register local attitudes toward the proposed operation. Based on this groundwork, a “community contract” was negotiated and signed between ESBEC and the local community. The contract requires ESBEC to handle only non-hazardous waste, compensate local residents for any damage for which there is clear substantiation, and contribute THB 2.0 ($0.05) per ton of waste accepted at the site, among other commitments. In return, the villagers acknowledge that the site would eventually be expanded beyond the initial phase, accept that the site would take waste from beyond the industrial estate, commit to communicate complaints directly with ESBEC, and pledge to administer the community fund in a transparent manner. The community fund supports local education and public health efforts and is administered by a committee representing ESBEC, the community, IEAT and the owner of the industrial estate. Note: 1 Environmental Impact Assesment :ESBEC, prepared by ERM-Siam, Co. Ltd. (March 2001). Note 2 SC, majority owned by Holcim, a German multi-national cement company and member of the World Business Council for Sustainable Development, purchases the blended fuel from PPLi, and monitors kiln stack emissions to ensure levels meet environmental standards. Note 3 Tests are carried out according to the U.S. EPA protocol Note 4 Florida, Illinois, Virginia, California, Pennslyvania, Michigan, and New York environmental authorities have approved such designs on a case-by-case basis..

This ERS contains the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

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: - the status of implementation of mitigation measures; and - ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. IFC will also conduct regular and periodic site supervision visits.