AOC has presented plans to address these issues and has demonstrated that the proposed project will comply with applicable governmental and World Bank requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow and in Table 1 - Corrective Action Plan (CAP).
Environmental and social management –
AOC has environmental, health and safety (EHS) responsible personnel at its headquarters (HQ) as well as at its subsidiaries. Since the various AOC EHS teams work independently from one another, they do not have the benefit of exchanging experiences and practices thus AOC does not have means to consistently apply sound practices throughout its operations. To address this issue, AOC has recently hired Shell Global Business (SGB) to help the company develop a risk based environmental, health and safety management system to be implemented in all its operations. As part of this system, AOC will have specific procedures and improved practices resulting from the hazard and risk assessments to be conducted. Having a corporate environmental, health and safety management system that allows AOC to determine and identify priorities, main needs, and sound practices for all its operations will significantly improve AOC’s overall environmental performance and management. AOC will submit a copy of the implementation plan for the Corporate EHS management system by August 2006. AOC is also considering preparing its operations to obtain ISO 14001 Certification.
Environmental performance of industrial operations –
Since both refineries, Khabarovsk and Kherson, have been in operation for a long time and AOC realizes that the refineries can benefit from an upgrade and a more rigorous maintenance program, AOC has develop a long term (8 yr) program to enhance the operations as well as to improve the EHS of these facilities.
The Nakhodka port, which in addition to handling loading/unloading of products also provides maintenance and receives ballast water and residues from tankers, has improved the workplace conditions but needs to further improve other areas such as wastewater treatment plant. Etc. Details of the improvements plan for this port will be submitted to IFC as soon as they are completed them but not later than February 2007. The Vladivistok and Yugtorson ports have undergone continued upgrades and improvements. Many of the storage tanks have being replaced and have safety prevention features in place. However, there are several tanks at the refineries and at the oil depots still operating without double containment thus increasing the likelihood of soil contamination from leaks and accidental spills. To address this issue, AOC has an on-going program to upgrade the tank farms by replacing or overhauling the old tanks and installing safety prevention measures (i.e., double walls, enhancements to fire prevention systems, etc) at several of its sites. AOC will maintain IFC informed of the details of this program including, completion schedules as well as the specific actions being implemented.
AOC’s new and refurbished gas stations are being designed in agreement with international safety and environmental practices (i.e., underground storage tanks leak detection systems, alarms, oily wastewater separation and treatment, etc.)
AOC initiated petroleum exploration work on the Begaidar site in the republic of Kazakhstan. AOC will keep IFC informed of the exploration findings and will conduct the required environmental and social assessments as per local as well as IFC requirements.
As part of its operations, AOC conducts substantial transfer of raw materials and products (loading/unloading) at all facilities generating high volatile organic compound (VOC) emissions to the atmosphere. Given the need to control these emissions, particularly at the two refineries, which have residential neighborhoods nearby, AOC is initiating a program to install controls for the loading/unloading operations at the Khabarovsk refinery and its associated oil depot. Although, AOC has also initiatives to control the VOC emissions at some of its other operations, the company will develop a master plan for all its operations, establishing the current situation, identifying the actions to be implemented to reduce the loading/unloading VOC emissions, and establishing the implementation schedule. AOC will submit copy of this plan by August 2006.
Other sources of VOC emissions are the releases from the uncontrolled above ground storage tanks, and the releases/leaks from the old and/or non-maintained refineries equipment (i.e., pumps, flanges, valves, etc.) AOC has yet to detail a program to control these emissions. Details of how AOC will address this aspect will be submitted to IFC by August 2006.
Ambient air emissions are monitored at the two refineries. The concentrations seem to be in compliance with the local requirements even thought there are not controls to reduce process or fugitive air emissions.
At its refineries, AOC generates organic, inorganic, and non-contaminated rainwater effluents. The organic effluent consists of industrial process water, washing water, sanitary sewage and potential contaminated rainwater from roads and tank farms. Inorganic effluents consist purely of blow down water from cooling towers. AOC treats its wastewaters prior release.
AOC monitors the treated wastewater characteristics of its refineries prior to final discharge. Even though most of the parameters comply with the local requirements and IFC guidelines, there are a few parameters (i.e., phenols, chloride, oil & grease, total suspended solids) above compliance. The company has a plan to upgrade the wastewater treatment at the Khabarovsk refinery and eventually recycle its treated water as part of AOC’s on-going program to reduce the amount of liquid effluents produced. The Kherson refinery has a wastewater treatment plant in place. Its effluents comply with the local requirements. For the oil depots, AOC needs to develop and/or implement wastewater treatment upgrade plans, which will ensure full compliance with the required parameters. Copy of these programs will be submitted to IFC as soon as they are completed.
AOC has programs in place to handle the solid wastes produced. It recycles materials such as metal scrap, tires, used mercury bulbs, paper. The sludge generated, at the refineries, from the treatment of the wastewater is being stored on-site until recently. However recently, AOC began a program to recover this sludge by which, it removes the oil, separates it into light and heavy oils and reintegrate them as product into the storage tanks. Domestic residues are sent out for final disposal. Oiled cleaning cloths and used motor oil are burned
As part of the assessment of its operations, AOC identified contaminated soil and ground water (GW) at five of its large oil depots in Russia. AOC has yet to decide on the programs to be implemented to handle this situation. Copy of the action plan to address this issue will be submitted to IFC by December 2006. To ascertain that there is no more soil and/or GW contamination at the remaining oil depots, AOC will conduct an audit to assess the soil and GW characteristics of the oil depots in Ukraine and the Russian smaller depots and particularly those located in remote areas. AOC will submit to IFC a copy of the sites assessment audit as well as the reclamation program for the identified soil and GW contaminated areas by June 2007.
AOC relies on railroad, road, and maritime means to transport and deliver its raw materials and products. The local governments operate the railroad system, but AOC owns approximately 30% of the carts used for the railroad transportation. The company’s retail subsidiaries have their own truck-tanker companies. To minimize and properly handle transportation related incidents/accidents, AOC will develop and submit to IFC a Safety Transportation Plan, acceptable to IFC, by August 2006.
Health and Safety Programs –
The health and safety (H&S) conditions of the operations vary from site to site. Several of AOC operations have installed noise reduction measures in the areas where high noise is generated (i.e., compressor room, etc.) and conduct workplace monitoring. In general, hazardous materials used are handled only by trained workers and stored in appropriate areas. Although some of the sites have emergency response and spill prevention programs, and/or alarms and fire prevention measures, AOC, with the assistance of SEB, will develop a comprehensive H&S approach for all its operations and will strengthen and implement sound H&S practices (i.e., better alarms systems, fire prevention measures, use of personnel protective equipment, better H&S signaling, employee training, etc.) as needed.
AOC’s human resources department will be also part of the overall management improvement program. With this program the company expects to design a new organizational structure, develop competence standards and on-job training programs, and structure an award and recognition program for its employees, among other initiatives.
AOC has conducted some labor force retrenchment and anticipates it will continue doing so as part of its long plan to improve its operations. Although AOC has conducted these redundancies in accordance with the local requirements, it will also prepare and submit to IFC a retrenchment plan, by August 2006, indicating the magnitude, rationale, and timeframe of the redundancies that already took place as well as those scheduled to occur in the near future.
As part of its expansion program AOC has being buying existing gas stations on commercial willing buyer/seller transaction basis. Now, the company will also begin buying land or properties, other than gas stations, located in prime locations. To ensure that AOC carries out these transactions in a consistent manner and physical and/or economical displacement situations are properly and consistently handled, the company will prepare and submit to IFC a land acquisition plan, satisfactory to IFC, by the end of August 2006.
AOC will carefully assess the potential impacts and particularly the air emission impacts resulting from the long-term upgrade program AOC anticipate implementing at the two refineries ensuring it will protect the communities living next to the refineries.
Communication and Consultation –
Communication with the communities is important to AOC. Following the local ways, every month, AOC sets aside one day, to receive and address concerns from external groups or members of the local community. There is a person designated to deal with community related issues at each facility.
Social Programs –
In addition to having programs to ensure the well being of the employees, AOC also has an interest in contributing to community development. Since 2002, when AOC established the Zia Bazhaev Foundation, the company has developed and implemented a variety of programs to support the communities neighboring its subsidiaries. It has programs to assist orphanages and disabled people and to sponsor children art centers, pre-school institutions, and sport teams among others. It also participates in federal targeted programs delivering fuels to agricultural producers in the Amur region. AOC also gives preference to hiring locally. As part of this project, AOC will address aspects related to Corporate Social Responsibility.
