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 and environmental and social information submitted by the project sponsor and a consultant to IFC. The following potential environment, health and safety and social impacts of the projects were analyzed: conformance with international and PRC standards and requirements for river shipping operations, design standards for new vessels, environmental performance of operation and maintenance of the vessels, dangerous cargo handling practices, shipboard waste handling and disposal, and occupational health, safety and training programs.

The sponsor has presented plans to address these impacts to ensure that the proposed project will comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. Information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. >Conformance with international and PRC standards and requirements for river shipping operations Chinese Maritime Regulations are similar to international requirements since China is signatory to the International Maritime Organization (IMO). As Minsheng's vessels are below 500 GRT (gross registered tons), and are thus unaffected by international regulations, and are engaged only on domestic inland trade, regulations by the River Authorities and the Ministry of Communication (MOC) apply. China's inland river transportation regulations (National Regulations of Safety Management, or NSM) are patterned on the International Safety Management (ISM) Code of the IMO. Minsheng's oceangoing vessels must comply with the ISM Code and MARPOL pollution prevention requirements. In May 2003, the company set up the Safety Management System (SMS) and prepared Minsheng’s Safety Management System Document (SMSD) in accordance with the guidelines of domestic Safety Management Rules and on the basis of ISO-9001 process control principles. The company has a structure and organization with the appropriate responsibility and authority to manage SMS matters, and SMS implementing procedures are described in various manuals and other documents. Performance is monitored through a system of periodic inspections and internal audits. Non-conformities and accidents are investigated and corrected, as necessary. Senior management reviews performance results annually and ensures that appropriate adjustments to procedures are made. Minsheng's SMS program passed "Regulations of P.R.C on Administration of Ship’s Safety Operation and Pollution Prevention" in December, 2002, valid through December 2007. Minsheng's Yangtze River vessels are currently in compliance with GoC and international requirements. Similar to its river shipping operations operated out of Chongqing, Minsheng's Shanghai Branch has clearly established procedures for the management of self-owned and chartered vessels on its routes. As China is signatory to the International Maritime Organization (IMO), Minsheng's oceangoing vessels must comply with the International Safety Management (ISM) Code of the IMO. For owned vessels, Minsheng hires and supervises the crews and is fully responsible for compliance with ISM Code requirements. On time chartered vessels, crews are provided by the vessel owner, and vessel owners are responsible for each vessel's compliance with the ISM Code. Minsheng oversees the vessels' operation through logbook analysis and periodic on-board inspections. > Design standards for new vessels In developing the new design of vessels, Minsheng has taken into account the change in the vessel dimensions that can be supported by the completion of the Three Gorges Dam as well as current and anticipated cargo requirements. The inland river vessels are built to meet projected weather conditions and wave heights likely to be encountered during transit in the rivers and on the reservoir. Higher year-round river levels will allow operation of larger vessels with deeper draft. Minsheng, working with the Yangtze River Ship Design Institute, have developed an optimized hull design for increased efficiency. All new vessels will have oil water separators, and dirty oil storage tanks, as well as on board sanitary sewage treatment facilities. In addition, Minsheng's container and Ro-Ro ships will have double hulls to reduce the risk of pollution in the event of a grounding or accident. > Environmental performance of operation and maintenance of the vessels Routine repair work is mainly done when the ships are in port, and is undertaken by the crewmembers, sometimes with the help of Minsheng's repair and maintenance team, to minimize interference with the normal operation of the ships. Minsheng has established safety and waste management procedures for these repairs. Minsheng plans its annual, mid-term and special checks ship repairs according to the actual technical state of the ships and the ship repair intervals as regulated in the China Classification Society's "Regulations for the Checks and Repairs of Inland River Transport Ships". These repairs are all contracted to commercial shipyards at various locations along the Yangtze River. > Dangerous cargo handling practices Minsheng's container liners and bulk cargo operations transport a variety of industrial chemicals and products. Those articles that are explosive, inflammable, poisonous, corrosive, radioactive require precautions and are classified as dangerous cargo. The company carries out the "Regulations for the Transportation of Dangerous Cargos" issued by the PRC Ministry of Transportation. Minsheng's procedures for transporting dangerous cargos are stipulated in its ISO9001 Quality Management and SMS documents. > Fueling and shipboard waste handling and disposal Minsheng's vessels obtain diesel fuel for the main propulsion engines and electric generators at fueling stations operated by each port. Shipboard waste includes: rubbish, such as house refuse, maintenance waste, and other solid waste, oily bilge water, and sanitary sewage. In order to ensure the proper collection and management of the ship rubbish, each ship is equipped with trash bags and with trash/garbage containers with lids. Waste quantities and types are declared before the ship enters the harbor, and is offloaded to a collection vessel while at dock. Direct discharge of oily bilge water to the river is forbidden by regulation. Oil is removed by the oil/water separator to meet the national and IMO standard of 15 mg/l. Waste oil is handed over after arrival at the port. An official waste receipt is required to exit the port. Sanitary sewage is processed by onboard bio-chemical treatment plants that are in common use in the marine industry. These pre-packaged plants provide treatment to national and IMO standards. Cleaning and disinfecting of tanks and holds is often required when the commodities transported by the ship change, and government regulations apply for some special cargos, such as oil and dangerous cargos. Minsheng contracts these services to authorized and specialized enterprises, including two official licensed locations in Chongqing. > Occupational health, safety and training programs Minsheng's training programs are established as part of its Safety Management System, for all departments and ships to follow for the purpose of training, learning and implementation. Training for crewmembers is carried out by the Ship Safety Section. New staff are introduced to the relevant policies, laws and regulations, and safety policy and procedures of the company. Graduates of marine programs are provided 6 to 8 months of onshore study, at which time they are assigned to a ship for a 1 year internship. Common crewmembers have a familiarization period on board, as well as onshore and external training. Crews are trained in fire fighting and hazardous cargo handling and emergency response, and provided with appropriate personal protective equipment. Training includes both classroom training and emergency drills. In China, officers with a minimum of three years’ experience must pass a national exam before earning their navigation certificate. Minsheng then requires a one-year onboard internship. On receiving confirmation of proficiency from the ship and subject to successfully completing the company’s examination, they are appointed as captains.

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.

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 Minsheng's ongoing performance of environmental, health and safety and social activities. Periodic site supervision visits will also be conducted.