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/social information submitted by the project sponsor, as well as appraisal visits to the main steel production plant in Jamshedpur, several iron ore and coal mines, and community development programs operated by the company. The following potential environment, health and safety and social impacts of the projects were analyzed. - Corporate Environmental and Social Management Systems (ESMS), - Current environmental, health and safety, and social performance of company controlled operations, - Broad organizational environmental and social aspects of expansion plans, - Specific environmental requirements in relation to the expansion planned within existing operations, - Acquisition plans and plans for including acquired assets in the current ESMS, and - Project impact on employment potential.

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. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. Tisco has for at least 50 years been known for its progressive environmental and social responsibility. It was one of the first raw material mining operations in the World to introduce the idea of rehabilitation of mined areas (first commitment made April 1901), and its has progressively aimed at being a front runner in relation to Corporate Social Responsibility (CSR) (community development programs were started in 1958 and later formalized into the Tata Steel Rural Development Society in 1979), and Environmental Management Systems (EMS) (all units, including raw material mining operations, are ISO 14001 certified). Tisco has made its Corporate Sustainability Reports available to the public, including on the internet, since the first Global Reporting Initiative (GRI) standard was published. Tisco is also is also behind the establishment of a local Tribal Cultural Society, which aims at supporting tribal activities around its operational centers, and a comprehensive family and health planning initiative under the Tata Steel Family Initiatives Foundation, which supports community development and social welfare, disease prevention, and family planning. Overall, Tisco spends about US$10 million every year in community programs. All Tisco’s operations are designed to operate well within Indian environmental standards, and in accordance with the World Bank guidelines as applied to existing operations (e.g. up to 100 mg particulates/Ncm) except for a limited number of boilers operated at the coal mines and utilizing coal rejects. These boilers have particulate emissions up to 150 mg/Ncm, but will under the project be optimized to comply with the 100 mg/Ncm limit. Sulfur dioxide emission is a limited problem for Tisco due to the low sulfur content in its raw materials. All Tisco’s new developments under the proposed project will be designed in full compliance with the World Bank guidelines for Iron and Steel production. Initiatives are also included in the project to further reduce emissions from the existing production units hereby resulting in a zero increase of air pollution load. These emission reductions will be achieved either by improving operational standards or by replacing older units with new high efficient units (e.g. new Blast Furnace operations). The upgrade and expansion plans within India will be carried out under the existing ESMS. Tisco is also planning acquisitions outside of India, e.g. the planned acquisition of NatSteel (operations in Singapore, China, Vietnam, Thailand, Malaysia, Philippines and Australia). As part of the integration process, Tisco will prepare a review of the current Corporate Environmental and Social Management systems (ESMS) and operational standards of these operations. Tisco will then, where non compliance with either Tisco operational standards, local regulations or World Bank guidelines is found, prepare an Environmental Action Plan (EAP) for bringing these operations up to Tisco standard and full compliance with both local and World Bank guidelines and shall keep IFC informed about the progress during the tenure of the loan. Tisco currently has a permanent workforce of about 43,000 people, of which about 27,000 work in its Jamshedpur facilities. In addition, it has about 640 temporary employees and more than 10,500 suppliers’ employees working on sub contracted jobs in various units of Tisco. The project will, as a result of introducing new and more efficient technologies, result in a reduction in man-hours needed per tons final product. However, due to the expansion programs and the efficiency improvement programs running in parallel no direct retrenchment in anticipated. Tisco’s health and safety performance is average and does not support its leading role in other areas. Tisco’s current accident frequencies in the iron & steel as well as iron ore & coal mining operations are comparable to those found at similar operations in North America. Subsequently, Tisco has hired Dupont, which is a World leader in health and safety performance, to help implement new procedures and improve this performance. Additional documentation supporting Tisco’s leading role within sustainable industrial operation can be found at the following web-sites which carries specific reports. Corporate Sustainability Report for year 2002-2003 If the hyperlink above does not open the report use the following link: http://www.tatasteel.com/corporatesustainability/report02-03.htm The CSR report for 2003-2004 is expected to be released shortly. Family Initiatives and Rural Development If the hyperlink above does not open the report use the following link: http://www.tatasteel.com/corporatesustainability/family.htm Tata Steel Environmental Performance Report 2003-2004 If the hyperlink above does not open the report use the following link: http://www.tatasteel.com/corporatesustainability/pdfs/ENVPR03-04.pdf Social Initiative If the hyperlink above does not open the report use the following link: http://www.tatasteel.com/corporatesustainability/social.htm

This ERS contains the full environmental and social documentation prepared for public disclosure on 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 ongoing performance of project-specific environmental, health and safety and social activities. Periodic site supervision visits will also be conducted.