MWCI continues to demonstrate that its activities substantially comply with applicable Philippine laws and regulations and World Bank requirements. The company also continues to make progress on implementing the Environmental and Social Action Plan conceived for the first investment and still applicable. Appropriate internal policies and procedures are being followed, and a number of new initiatives that demonstrate environmental and social responsibility are being developed. The information about how these potential impacts are being addressed by MWCIis summarized in the paragraphs that follow.
- Raw Water Resource Use and Management
Provision of raw water resources remains the responsibility of MWSS, although MWCI is involved in decisions regarding their development to supply its service area. The Umiray, Angat, Ipo and La Mesa catchment areas are the primary source of potable water for the Metro Manila, with groundwater wells providing the balance, particularly for the peripheral areas. Additional water to meet the obligations of the concession will come from redistribution of the allocations from the existing sources, provision of new sources outside the present catchment areas by constructing new groundwater wells and new water treatment plants, and the continuing reduction in non-revenue water.
The hydraulic capacities of the existing aqueducts, treatment plants and primary distribution lines are approaching their maximum. A new aqueduct and primary distribution mains will be constructed together with an additional treatment plant. New groundwater sources will be developed together with expansion and extension of the water distribution networks, including the provision of strategically placed reservoirs and pumping stations.
A continued aggressive approach to reduce non-revenue water will support and limit the development of new water sources. This approach will involve pipe replacement (especially asbestos cement pipes), pipe relining, pressure control & meter replacement.
Along with others, MWCI is also participating in the La Mesa Watershed reforestation project to prevent soil erosion and reduce evaporation thereby ultimately ensuring that sufficient quantities and quality of raw water remain available to meet present and future customer demands. To date, approximately 100 hectares of forest has been replanted with over 60,000 native hardwood trees, with the ultimate aim to plant 125,000.
Future potential water resources for Manila Water include MWSS’s rehabilitation of the Wawa River Dam (2006), optimization of the Angat raw water supply (2009), Laguna de Bay treated water supply project (2007-2010). Beyond 2010 there is considerable uncertainty over resources, with the future Laiban/Agos dam system the only identified option at this time. Future dam and reservoir sites have been preliminarily identified by MWSS, although there is no guarantee that these will be developed. Surface water yields are vulnerable to the El Nino phenomenon, roughly a five-yearly event, although the impact is impossible to quantify. While the El Nino of 1997 created serious water shortages, in 2002 the effects were mild. Water supply from underground sources is not considered a long term sustainable strategy owing to limited availability and rapid saline intrusion.
- Potable Water Treatment Technology and Finished Water Quality
Overall, raw surface water quality from all of the surface water resources is acceptable, and capable of being treated to normal potable standards by conventional water treatment systems. MWCI’s potable water treatment plants employ a conventional process of flocculation, sedimentation, and filtration, and disinfection, and are producing good quality drinking water in terms of color, iron, total coliforms, faecal coliforms and plate counts. Records continue to show that the finished water complies with Philippine National Standards and WHO guidelines, and the plants should be able to continue to produce water complying with these and other international standards, as long as they are operated within the limits of their capacity.
- Wastewater Management and Water Quality Impacts
Sewage generated within the Manila Water service area is managed by household or communal septic tank systems and, to a lesser extent, sewerage collection and treatment systems. Supported by funding from the World Bank and ADB, the sanitation strategy for Metro Manila and the MWCI concession is to radically expand the septage management program in concert with the rehabilitation and new construction of small conventional sewage treatment plants serving medium and high-rise housing establishments, which are the current trend in the housing industry. Following this strategy, MWCI will expand its sanitation services so that all cities and municipalities in the concession area will be 100% covered with either sewerage and/or sanitation. The World Bank and the ADB are also integrally involved in implementing this strategy through the Manila Second Sewage Project (MSSP), the Manila Third Sewage Project (MTSP), and the Pasig River Rehabilitation Project (PRRP).
Started in 1998, the World Bank’s MSSP and MTSP activities in the MWCI area over the next few years involve the following:
- An improved septage collection and disposal system, which includes the provision of septage desludging trucks and construction of two centralized septage treatment plants within the concession area;
- Rehabilitation of the Makati sewerage system and of the Magallanes STP; and
- Construction of compact STPs for individual housing developments in Quezon City currently served by communal septic tanks.
The ADB’s PRRP includes a wide range of measures to improve the water quality in the Pasig River and environmental conditions in the vicinity. Activities to be completed include construction of a third septage treatment plant, and provision of over 30 additional septic tank desludging tankers.
With the help of the MSSP, MTSP, and the PRRP programs, Manila Water continues to progressively implement septage handling and disposal with resulting significant beneficial impact on the water quality of the concession area. Because the septage treatment plants will not be operational until 2006-2007, septage collected by the desludging trucks is being temporarily disposed on barren land areas covered by volcanic ash (lahar) in Pampanga northwest of Manila. Its use is helping to restore these areas to cultivation, and initial tests conducted by the government’s Sugar Regulatory Authority shows that septage enhances the harvest yield of sugarcane planted in the lahar soil.
The three sewage treatment plants currently operated by Manila Water continue to produce treated effluent that meets discharge limits imposed by the Department of Environment and Natural Resources (DENR) according to monitoring carried out by both MWCI and DENR. As part of the MSSP, construction of 36 compact sewage treatment plants is ongoing, and Manila Water expects to complete commissioning of these plants by June 2004. These will also be required to comply with the same DENR treated effluent discharge standards.
To help conserve clean water resources, Manila Water is exploring the potential for re-use of treated effluent for irrigation purposes within the city. The company is proposing that Magallanes STP effluent be transported by municipal tanker trucks to irrigate landscaped areas in the Makati area. Another possible activity could include the reuse of treated effluent from the new STP serving the University of the Philippines for meeting campus irrigation needs.
- Sludge Management and Disposal
Wastewater screenings from the sewage treatment plants are disposed to landfill and the dried sludge cake produced by the plants is used by the local community as soil conditioner. Owing to the lack of industrial discharges to the sewer system, the sludges are relatively free of toxic contaminants and are suitable for this end use.
The Philippine Fertilizer and Pesticide Authority has issued a temporary license to MWCI for the use of septage sludge and dried sludge from sewage treatment plants as soil conditioners for selected crops, as well as with lahar to produce a medium that will produce commercially saleable crops.
Going forward, MWCI will ensure that adequate environmental and health safeguards are in place to protect those transporting and using the sludges, and, in coordination with the local authorities, that consumers are protected through restrictions on the types of crops treated with sludge (i.e., root crops or crops which are always cooked) and the method of application.
- Hazardous Materials Management and Emergency Response
MWCI stores and uses significant amounts of chlorine (approximately 1250 tons annually) at the water supply treatment plants. Although unlikely, an accidental release of chlorine gas could present a high risk to adjacent communities. Manila Water has recognized the potential danger to its own employees and the surrounding neighborhood by recently completing a project to upgrade and enclose the existing chlorine store and provide a neutralizing system which will incorporate the latest design features to minimize the impact of an emergency. For other chemicals and fuel used within the treatment facilities, the protection systems are adequate and in line with normal industry practice. All water treatment chemicals are strictly controlled to comply with the Philippine Pollution Control Law.
MWCI has established a number of emergency response procedures to cover foreseeable eventualities relating to their business and to external security. The procedures cover: preparedness and response principles; communications with local authorities and emergency response bodies; medical aspects and first aid; incident reporting and investigation; and employee training.
- Employee Health and Safety
MWCI has an established employee health and safety policy which conforms with normal water and sanitation industry practice. The intention is to comply with all national standards, and to aim to meet best international practice. It sets out individual responsibilities within the company for ensuring all activities of work (whether direct or contracted) and places of work under their control are safe and without risk. MWCI has produced a series of written work procedures defining safe systems of work to be used by MWCI employees and contractors.
Employees and contractors receive regular training, information and instruction to raise awareness of the risks to which they may be exposed. Each employee has an annual health screening exam. All appropriate safety equipment and protective clothing is made available. Compliance with policy and procedures is monitored by means of periodic audits, and violations are noted and corrective actions communicated effectively. MWCI has a network of health and safety committees which regularly report on health and safety matters to the Corporate H&S Committee chaired by president of the company.
MWCI’s accident statistics indicate that accident rates initially were consistently reduced since 1998, and have since stabilized within the last two years. In any case, the rates are comparable to developed country construction industry and water utility experience worldwide. It is worth noting that there have been a number of recent incidents involving the public and contractors over the last year. Some were fatal and were generally the result of drowning (in open excavations, and, in the case of the Bignay incident falling into a pipeline), or accidents involving MWCI motor vehicles. All incidents are investigated, and measures are identified and taken to minimize the risk of re-occurrence.
Recently, MWCI has implemented some additional health and safety initiatives to improve the health and safety of its workforce. Examples include implementation of confined spaces training, chlorine spill response drills, and workplace hazard risk assessment and reporting measures, as well as contractor and vendor training programs.
- Land Acquisition and Resettlement
Owing to its obligations to expand water and sanitation services by constructing new pipelines, MWCI occasionally has been faced with having to temporarily or permanently displace residents or businesses from construction rights-of-way. Given the complexities (i.e., time and resource demands) involved in relocating legal and illegal residents, the company tries to avoid using occupied land wherever possible. In those instances, however, where it cannot be avoided, MWCI has been coordinating with the different government agencies in order to set out policies and mechanisms for consultation and compensation of people who are moved in accordance with existing Philippine Law.
For example, to enable the recent construction of a water pipeline supplying the Antipolo area, several squatters residences were purchased in negotiated, voluntary resettlement transactions. In this instance as with others, affected households were successfully relocated to their satisfaction.
As part of the upcoming ”Rights-of-Way” scheme planned for 2004, MWCI proposes to relocate some 1,200 squatter households from pipeline rights-of-way. In future years, MWCI expects more relocations to be needed as further capital programs are implemented. IFC, therefore, has asked that MWCI adopt a more comprehensive ”Framework for Resettlement” based on IFC’s policy OD 4.30 Involuntary Resettlement. This framework will discuss in more detail the principles and objectives governing resettlement in project areas, describe the process and responsibilities (MWCI and various Government Agencies) for preparing, approving and implementing resettlement plans tied to specific construction activities. The Framework should also address the criteria for compensation and assistance to be provided to various categories of displaced people, consultation and the monitoring and evaluation of the process. MWCI will also monitor the status of any new Philippine legislation concerning land acquisition and resettlement.
- Low-income Community Development
The “Tubig Para Sa Barangay” (“TPSB”, or “Water for the Poor Communities”) program was launched to provide low-income communities with properly connected water service at affordable rates. Areas that qualify for this program are those where there are large clusters of urban poor families, often illegal residents, with no pipe water service or, if there is piped water service in the area, with many illegal connections and poor water quality.
The TPSB program relies on MWCI’s ability to identify community leaders and approach them on a collaborative basis. An MWCI representative and the community representative together organize a particular neighborhood to receive a new water service connection. A typical scheme for the TPSB program is to install a “mother meter” for the whole community and individual submeters to serve four to five households each. The whole community is held accountable for paying the gross water consumption read from the “mother meter” and each family settles its own bill with the community representative according to its submeter. The community representative is responsible for collecting the water bills for MWCI each month. Families in many of these poor communities used to pay more than PHP 100/cum to vendors for potable water and the MWCI connection lowers this to PHP 9 for the same amount.
It is worth noting that MWCI’s concession agreement does not dictate any quotas for service to poor areas. Besides the financial savings for the low-income families, the TPSB program also delivers convenient and safe water supply to these users, who tend to be vulnerable to diseases.
From 1998 to 2003, MWCI has completed 357 TPSB projects benefiting 100,669 poor households. In 2003 alone, MWCI spent about US$1 million connecting 36,759 households. Of the 190,000 household connections that MWCI has added in its service territory since 1997, around half are done through the TPSB program. MWCI expects to spend about another US$8 million on the TPSB program through the Concession Period.
- Affordability and Willingness to Pay
MWCI’s water tariff is considered affordable, with monthly water bills much less than 5% of the income for low income households, which is the commonly cited World Bank indicator of affordability. MWCI’s tariffs are also less expensive than other household utility costs. Water cost is approximately 1% of the income for low income families and 1.4% for mid-income families. For comparison, the average household power bill is PHP 800/month, or 4.8% of the income for mid-income families and 14.5% for low-income families.
To low income consumers, the average cost per cubic meter compares favorably with the alternative source of water, i.e. private water tankers, who normally charge 100 PHP/m3. MWCI’s TPSB program helps poor families greatly in lowering water bills and in improvement of water quality. Substantial independent analysis of the concessionaires’ improvement in service to the poor has been done by, inter alia, Japan Bank for International Cooperation (JBIC), a World Bank-funded Public Audit of Water Services, and a local foundation, the Philippine Institute for Development Studies. According to one study, a family could spend somewhere between PHP600-700 per month on water before the TPSB program reached its neighborhood. This means that for a family earning PHP5,500 per month, 11-13% of household income is spent on water expenses alone. Once a family gets access to legal water connection through the TPSB project, the monthly water expenses drop and consumption rises.
- Environmental Management Systems
Although the company does not have a formal environmental management system (EMS), MWCI’s management structure, philosophy and procedures allow it to successfully manage and enhance environmental and social performance. The company has an awareness of the issues and the willingness to address them as demonstrated by assigning appropriate resources and motivating staff. Staff has adequate capabilities to ensure that issues and solutions are understood and proper procedures followed. For the most part, appropriate organizational structure and procedures are in place as evidenced by their success in meeting current environmental obligations, as well as implementation of the TPSB program. In the coming years, MWCI intends to develop a formal EMS, and seek accreditation to ISO 14001, the international EMS standard.
