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 consisted of appraising technical environmental, and social information submitted by SCA and the Government of Cambodia, and airport site visits by IFC staff. The following potential environment, health and safety and social impacts of the projects were analyzed. Subsurface contamination; Fuel/Hazardous materials storage and handling, including emergency response; Air emissions; Water supply; Stormwater drainage and effluent discharges; Solid and liquid waste management; Asbestos-containing materials; Aircraft noise; Employee health and safety, including fire and life safety; Cultural and archeological heritage and; Airport expansion potential and resettlement.

SCA and the Government of Cambodia have presented plans to address these issues and to demonstrate that the operation of the Siem Reap and Phnom Penh airports will, upon implementation of the specific measures comprising an associated Environmental and Social Action Plan, comply with applicable Cambodian environmental laws and regulations, the Cambodian laws that control the preservation of nature conservation areas and archeological resources, and World Bank policies and guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. - Subsurface Contamination Both of the airports have been subject to a varying level of military use during their lifetimes that could have led to the presence of unexploded ordnance (i.e., mortar rounds) on the properties. There is no available information to determine the potential levels of contamination or threat from this source, and it would be extremely expensive and time consuming to conduct intrusive physical investigations of the airport properties to determine the location of such materials. Consequently, SCA will include in the construction plans associated with any future developments at the airports, procedures to identify and eliminate the risk posed by the presence of unexploded ordnance in areas where construction would take place. Prior to the development of the new aviation fuel tank farm at Siem Reap operated by Shell, it is possible that subsurface soil and groundwater beneath the area where the old tank farm was located may have become contaminated due to localized spillages and undetected leaks. There is also the potential that spillages of diesel from the two above ground storage tanks that provide the fuel for the onsite power generators could have contributed to contamination in this general area, which is within 50 meters of one of the wells used to provide water supply for the airport (see further discussion below). SCA will remove and remediate visibly contaminated soils from around these tanks, and investigate whether the petroleum hydrocarbon contamination has spread beyond the immediate area. SCA will further remediate any additional soil or groundwater contamination discovered during the course of these investigations. The area behind the Maintenance Shop at the PPIA where waste oil is stored also shows signs of spillage to the surrounding soils. SCA will also remove and remediate the visibly contaminated soils in this area. - Fuel/Hazardous Materials Storage and Handling. The principal hazardous materials handled at the airport are aviation fuel, and diesel fuel used for onsite power generation. At Siem Reap Airport, there is a new aviation fuel tank farm constructed and operated by Shell under a lease agreement with SCA. Shell’s tank farm consists of three aviation fuel tanks provided with fully bunded concrete containment systems. All rainwater that collects within the bunded area is pumped into an oil-water separator prior to discharge to a nearby drainage channel. At Pochentong Airport, there are two aviation fuel tank farms – one owned and operated by PTT (nine tanks) and the other by Shell (two tanks) under lease agreements with SCA. Both tank farms are provided with concrete secondary containment systems to prevent accidental spills from being released to the environment. Shell and PTT have in place appropriate procedures to minimize the risk of accidents from storing and handling fuel (PTT’s aviation fueling activities are certified to ISO 9001, the international quality management system standard). Both airports store diesel in above ground storage tanks to fuel the onsite generators that provide electric power for their operations. At Siem Reap, SCA will install impermeable concrete containment beneath the tanks and associated fueling truck loading and unloading areas to prevent future accidental leaks and spills from being released to the environment. Although currently provided with earthen containment, the four diesel storage tanks at PPIA continue to pose environmental risk of accidental spills and leaks being released. Consequently, SCA will upgrade these containment systems with impermeable concrete to reduce the risk of future contamination. Other hazardous materials and chemicals incidentally used in maintenance activities (e.g., solvents, paints, pesticides), are stored and handled from time to time. SCA has established appropriate, segregated holding areas for these chemicals and materials. SCA, in coordination with its aviation fuel contractors and with local government authorities, has developed emergency plans and procedures which include provisions for properly handling major accidents, fuel spills and dangerous goods, and for explosions and fires. Appropriate emergency equipment is provided, including fire fighting vehicles, ambulances and associated emergency equipment, and personnel are trained in how to properly respond. Critical components of the emergency plans are tested on a regular basis. - Air Emissions The diesel oil-fired onsite power generators at both airports are the principal fixed point sources of air emissions. These 910kVA engines (8 at PPIA; 3 at Siem Reap) are well-maintained and appear to be performing within the manufacturer’s emission specifications. The overall pollution loadings from these sources are insignificant relative to the contributions from motor vehicles found in the urbanized areas of Siem Reap and Phnom Penh. - Water Supply At PPIA, potable water is supplied through connection to the Phnom Penh municipal system. Quality is monitored regularly to ensure compliance with drinking water standards. SCA relies on two sources of water at Siem Reap. Water withdrawn from two onsite groundwater wells is treated via activated carbon filtration and distributed to the terminal and adjacent buildings for non-drinking uses – sinks, toilets, washing, etc. Although it is not clear whether this water meets drinking water standards (it has not been tested), SCA has posted signs warning that this water is not to be used for drinking. Instead, bottled water is made available for drinking needs. In the event that SCA chooses to use the treated groundwater as a drinking water source, a quality monitoring program will be put in place to ensure that it meets Cambodian and World Health Organization drinking water standards. - Stormwater Drainage and Effluent Discharges Both airports have stormwater drainage systems sufficient to manage the surface water runoff from the runways, aprons, car parks, maintenance and ground handling areas of the airport properties. Runoff drains through systems of outlet works comprising collectors, canals, ponds, culverts, and natural waterways before eventually reaching the larger regional watersheds. Appropriate additional drainage facilities will be built in the framework of various expansions being planned. SCA regularly inspects drainage works, and cleans and dredges them to remove the sediment that periodically accumulates. At Siem Reap, all wastewater effluents from airport operations are currently treated by a system of septic tanks discharging to the surface water pond that is also part of the above-described drainage system. Septic tank effluents are further treated physically through a combination of infiltration/percolation through the soil base of the pond and biologically by exposure to the aquatic vegetation/wetland ecosystem of the pond. As part of the upcoming airport expansion program, SCA will install a new onsite wastewater treatment plant to replace this septic tank/land treatment system. Effluent from the plant will comply with the pollutant limits established by Cambodian law and the IFC/World Bank requirements for discharges to surface waters. PPIA airport wastewaters are treated in a wastewater treatment plant of sufficient capacity to handle projected increases in passengers for the new international terminal. Effluent quality of the plant complies with the limits established by Cambodian law and IFC/World Bank requirements. - Solid and Liquid Waste Management Solid wastes generated by both airport operations are collected respectfully by licensed contractors and disposed off-site at government-approved landfill sites. The contractors collect the wastes from specifically designated waste storage areas at each airport. The relatively small amounts of hazardous liquid wastes generated – primarily waste oils from maintenance operations – are stored in drums and periodically collected by the diesel fuel suppliers and recycled commercially. Waste batteries are also collected and recycled by the suppliers. Going forward, SCA will also investigate and implement, where possible, opportunities to recycle and/or reclaim other solid wastes, such as plastic, paper and metal wastes generated at the airports. - Asbestos-Containing Materials Because of the potential for buildings constructed prior to 2000 at both airports to contain asbestos, SCA recently conducted surveys to establish whether the material is present and its physical condition. PPIA structures showed no evidence of asbestos-containing materials. At Siem Reap, some asbestos sheeting material was found in the Temporary Terminal building. Although the material appeared to be in good condition, SCA had it removed and replaced in June 2003. All other structures showed no evidence of asbestos-containing materials. - Aircraft Noise SCA has assessed aircraft noise impacts on surrounding communities at both Siem Reap and Pochentong airports using the Integrated Noise Model (INM) developed by the U.S. Federal Aviation Administration (FAA). At Siem Reap, the INM found that noise limits are not exceeded even at the most sensitive noise receptors around the airport – the Phnom Bakheng Temple (3.5 km east) and the residential areas surrounding the Airport. What’s more, despite increased traffic, it is expected that noise levels will actually reduce in the future owing to changes in aircraft noise generation capabilities. At PPIA, the noise model shows that noise limits are occasionally being exceeded only at the residential-commercial properties located to the southwest immediately adjacent to the airport boundary at the end of the runway. There are no known sensitive receptors in this area, nor has SCA received any complaints from people living and working here. It appears that most, if not all, of the residents of this community settled here after the airport originally began operations. Noise limits are not exceeded for any of the other areas surrounding the airport. - Employee Health and Safety SCA has developed and implemented appropriate safety and security programs and procedures at both airports consistent with ICAO standards. Personnel working on airfield areas are provided with hearing protection and fluorescent outer wear, and are trained on the hazards, safety procedures, first aid, and emergency response plans associated with their tasks. All public buildings are (or will be) designed and constructed to French-based fire and life safety standards to ensure the safety of all occupants in case of fire. - Cultural and Archeological Heritage Siem Reap Airport is located within the single most important archaeological and cultural protected area in Cambodia – the Angkor Archaeological Park and UNESCO World Heritage site. In particular, the most significant cultural properties in the immediate proximity to the airport are: - Phnom Bakheng- a 9th century structure that sits atop a hill approximately 3.5 km to the east of the northern end of the airport runway; - Angkor Thom- a walled former city with some popular and impressive ruins also about 3.5 km from the northern end of the runway; and - Angkor Wat- a temple complex dating to the 12th century lying approximately 5 km due east of the airport. In view of the cultural and archaeological significance of the Siem Reap region, specific laws have been enacted to control all development and activities within this area. Created by law in 1995 in conjunction with the designation of the Angkor Archaeological Park on the UNESCO World Heritage List, APSARA (Authority for the Protection and Management of Angkor and the Region of Siem Reap) is charged with ensuring “all projects in the region are accompanied by an evaluation of their impacts on the environment, ….and minimize adverse effects.” Because the runway at Siem Reap is in direct line to the Angkor Thom site, a number of operating precautions are taken to minimize the potential effect that aircraft noise and vibration could have on the Angkor structures. First and in conjunction with APSARA, aircraft are directed to take off in the direction opposite to the Angkor sites (i.e., to the south) for the vast majority of departures (i.e., greater than 95% of flights). Second, in the unlikely event that meteorological conditions require aircraft to take off to the north, the ICAO and the State Secretariat of Civil Aviation (SSCA) have established a prohibited airspace over the Angkor temples – “Siem Reap VDR2”. This prohibited airspace requires aircraft to execute a left turn immediately after take off to avoid flying over the Angkor Thom site. The SSCA monitors compliance through its nation-wide radar system located at Phnom Penh. During its regular monthly site visits, UNESCO also regularly monitors impacts on the Angkor Archaeological Park. In addition, UNESCO and APSARA have publicly stated their desire to restrict the number of visitors to the Angkor Region to one million per year. Assuming all of these visitors pass through the Airport, this restriction equates to approximately two million passengers annually. SCA’s business and expansion plans are consistent with this limit. - PPIA Expansion Potential and Resettlement None of the improvements SCA has made to date at either airport has involved involuntary resettlement or even temporary dislocation or residents due to construction activities. More importantly, the Concession Agreement specifies that GoC is responsible for acquiring and delivering vacant enjoyment of any land needed to meet Airport future expansion needs. SCA is responsible for reimbursing the GoC for costs associated with land acquisition up to US$1 million. Future expansion needs, falling under the terms of the Concession Agreement, requires SCA to extend the runway by 600 meters (from 3000 to 3600 meters) on the southwest side of the airport. This requirement is based on the need to accommodate a fully loaded wide body aircraft (Boeing 747) capable of flying non-stop to Western Europe. Extending the runway would cause the permanent displacement of approximately 500 residents and landholders in a low-income residential/commercial community that exists immediately adjacent to the airport property at this location. In the eight years since the PPIA Master Plan was developed, the economics of and passenger forecasts for international air travel to Cambodia have changed dramatically. Due to the costs involved in expropriating the land required for the extension, the decision to extend the runway, in the final analysis, will likely be market-based. Based on continuing market discussions with international air carriers, there appears to be little market justification for the required runway extension. Should the need for the runway extension materialize, the GoC has a framework in place consistent with World Bank/IFC policy OD 4.30 -- Involuntary Resettlement to effectively manage the process. Using experience gained from developing and implementing several Resettlement Action Plans (RAP) on ADB-funded road projects throughout the country, GoC has established an intergovernmental committee and developed a draft RAP framework document for the Pochentong runway extension. Key work items include a survey of affected people; developing criteria for compensation and assistance to be provided to various categories of displaced people; consultation and the monitoring and evaluation of the process. GoC estimates that land acquisition process, if implemented, will take approximately 18 months to complete. In any case, SCA will be required by IFC to only implement the runway extension when the GoC has developed a specific Resettlement Action Plan in compliance with IFC policies on involuntary resettlement.

The SCA Environmental & Social Action Plan is attached below.

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 any measures contained in the Environmental and Social Action Plan 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. Periodic site supervision visits will also be conducted.