MRS has presented plans to address these issues to ensure that its operations comply with applicable Brazilian federal and state laws and regulations administered by IBAMA and the relevant state environmental agencies, the environmental, health, and safety requirements of the Rail Transportation Code, as well as the World Bank Group environmental and social policies. The detail about how these issues are addressed by MRS and other responsible parties is summarized in the paragraphs that follow.
- Rehabilitation of Previously Contaminated/Degraded Areas
MRS inherited contaminated and degraded land liabilities when it assumed control of the railway system from the federal government in 1996, although the legal responsibility for these liabilities remained with the former state-owned entity under the terms of the concession. Over the years leading up to 1996, spillage and leakage of diesel oil at depots where locomotives were fueled contributed to contamination of soil and groundwater in these areas. Notwithstanding, and using in-situ clean-up processes such as bioremediation, MRS completed remediation of the contaminated former fuel depots in 2004 pursuant to the requirements of the relevant state environmental authorities.
At the time of privatization, approximately 220 hectares of eroded embankments and cuttings along a railway segment known as the “Steel Line” in the State of Minas Gerais were also found to need rehabilitation -- regrading, slope stabilization, and revegetation. Starting in 1999, MRS has also made substantial progress in rehabilitating these 220 hectares under the regulatory oversight of the state environmental authority (FEAM). As of 2005, 54 degraded areas along 200 km of railway totaling more than 110 hectares have been rehabilitated. The 71 remaining areas will be addressed by no later 2009 in accordance with an agreement with FEAM.
- Hazardous Materials Management
The main cargo transported by MRS is comprised of steel inputs and products, including iron ore, coke, coal, and finished steel goods. In addition to steel-related raw materials and products, the company also transports smaller volumes of agricultural products and some bulk chemicals (i.e., sulfur for use in the production of fertilizer). And mostly for their own use as fuel for locomotives and other motorized vehicles, MRS transports refined oil products defined by Brazilian Ministry of Transport and IBAMA as hazardous, and as flammable dangerous goods by the UN. Considered hazardous or dangerous primarily because of their flammability, these include diesel, fuel oil, petrol (gasoline), and other petroleum-derived products. In the future, the company may expand into transporting other petrochemical products. Transportation of hazardous materials (hazmat) such as these present risks during loading and loading activities, where overfilling and spillage are the largest hazards. Hazards also arise from the risk of accidents during transport.
Hazmat transportation procedures comply with relevant Brazilian requirements and are generally consistent with the UN Model Regulations. Tank cars and wagons are designed to meet the technical standards of the Brazilian Rail Transportation Code (RTC). All tank cars display labels describing the dangerous properties of the goods being carried (RTC hazardous index and UN hazardous class) to allow proper handling by transport personnel or emergency services in the event of an accident. Moreover, Brazilian standards require tank cars to undergo periodic maintenance and repair in which worn components are replaced or brought to standard. MRS complies with these requirements.
As a rail system operator, MRS has responsibility for managing hazardous materials in transport – loading and unloading is the customer’s responsibility. MRS’s hazardous material management program includes:
- the systematic training of all personnel involved in the handling, transporting and surveillance of hazmats, and
- using only vehicles and equipment that are well-maintained and meet equipment operating standards.
MRS carries out risk analyses for the transportation of the various hazardous materials it handles to help determine the appropriate measures, procedures and practices to that will allow quick and efficient response to accidents that could harm people or the environment. MRS’s hazmat emergency plans and procedures also include extensive incident investigation protocols that establish the cause of the accident, and identify the steps needed to prevent reoccurrence. Finally, customers periodically audit MRS’s emergency preparedness and response plans and procedures to satisfy themselves of the robustness of the program.
At the direction of Minas Gerais State government authorities, MRS recently undertook the successful remediation of some environmental damage caused by a rail accident along the banks of the Paraopeba River. In coordination with the State, the company is also currently developing a remedial action plan in response to another accident that recently occurred along highway BR 265.
Through a contract arrangement with Ipiranga, the company constructed and operates three new fueling depots located at various points along the rail network. Each depot features advanced, modern environmental protection systems – enhanced equipment reliability, storage tank secondary containment structures, loading area track spill pans -- to prevent release to the environment of any oil that might be leaked or spilled. Contained stormwaters contaminated with oil are also treated. The design and operation of these depots are in compliance with appropriate and relevant Brazilian requirements, and environmental licenses have been received.
- Air Emissions
Owing to the large volumes of iron ore transported and the potential to create dust, MRS regularly monitors ambient air quality along its rail lines to confirm compliance with Brazilian ambient particulate standards. There have been no incidents of exceedances of standards, nor any notices of violations from environmental authorities. The way in which ore is loaded and carried in wagons is done so as to minimize the generation of dust.
- Operational Safety and Accident Prevention
The federal government authority (ANTT) which oversees the company’s operations has established annual accident reduction targets to be achieved by MRS, who, in turn, has established a number of programs to ensure the operational safety of the railroad system and to prevent accidents to vehicles and people living and working along the rail lines. Over the eight years it has been operating, the company has consistently achieved accident rates less than these targets, and it has programs in place to further reduce the rates to approach good international practice benchmarks. These include:
>> an ongoing track protection program that involves sealing off access to tracks and marshalling yards in places where pedestrian circulation is uncontrolled;
>> construction of pedestrian bridges at various locations where circulation is intense;
>> adaptation of grade crossings to comply with signaling requirements, placing of signs, pedestrian channelization devices and horizontal delineation, thereby improving conditions for motorists and pedestrians to cross the tracks;
>> educational campaigns within schools and communities at various prioritized locations along the system; and
>> working with the responsible municipal and state government authorities to prevent and remove, as necessary, illegal human occupation within the designated rail rights-of-way (see Resettlement discussion below).
In addition to having an extensive employee training programs in railway operations and safety, MRS has also acquired or developed several technologies to improve rail safety, including continuous radio communications between its Operational Control Center and locomotive drivers, a TrackStar rail grinder vehicle, hot box detectors along the network, and train simulators to improve locomotive driver performance.
- Maintenance-Related Effluents, Emissions and Wastes Management
MRS operates five maintenance and repair shops at separate locations distributed throughout its network where locomotives and railcars receive preventive and corrective maintenance. Wastewaters generated by these operations are treated in on-site effluent treatment units relying on physical-chemical pollutant removal processes. In some cases, treated effluents are recycled and used to wash railcars. In others, effluents are discharged in compliance with applicable Brazilian standards, and regularly pass inspections by environmental authorities. Oils removed by these treatment units along with other waste oils and solvents generated by maintenance and repair activities are collected and recycled by licensed contractors. All non-hazardous and hazardous solid wastes produced are adequately segregated, stored, and disposed in licensed Class I or II industrial landfills, or incinerated at commercially operated facilities. Scrap metal, paper, plastic, and glass is separated and recycled. Non-recyclable domestic wastes are disposed in licensed municipal landfills.
- Employee Health and Safety
MRS has an active occupational health and safety program designed to comply with Brazilian workplace regulations. The program includes a set of specific safety and health procedures for the range of job descriptions covered by their maintenance and repair center activities. Maintenance facilities are designed and operated to protect the health and safety of MRS and contractor employees, and accident prevention procedures are in place. Personnel are provided with appropriate protective equipment, and participate in extensive health and safety training programs. The company conducts regular inspections of its maintenance facility workplaces, including those operated by contractors, to ensure all requirements and procedures are being properly followed. Non-compliances are identified and corrected.
- Irregular Occupation of Right-of-Way
There are isolated areas along the company’s rail network, most notably in urbanized areas, where encroachment of irregular structures has taken place within the legally mandated right-of-way. In some cases, these conditions existed before MRS took control of the rail network from the federal government, and in others, this illegal development has continued to occur. This condition presents potential safety concerns to those who live in these structures.
Under the concession agreement, the relevant government authorities (local, state, or federal) have the responsibility and the ultimate decision-making authority to keep the rail network easements free of encroaching structures. The agreement further stipulates that MRS has the responsibility to identify areas where encroachments pose high safety risks and to communicate this information to the relevant government authorities so that appropriate corrective actions can be taken, including the resettlement of affected people. In practice, however, MRS has played an active role in partnering and sharing the financial responsibility with the relevant local government for any necessary resettlement. In some cases, the company has even taken the lead in managing some resettlement actions at the request of elected officials, especially where local government capacity limitations made this necessary.
Since it began operations, MRS has partnered with three local government authorities to relocate and successfully resettle some high-risk encroachments. These include the following:
>> Itaguaí (1999-2001). Involving 100 families. The resettlement process was carried out by the local authority, which did a diagnostic of the families and ran meetings with the community in order to sensitize them about the risks of living in the area. The local authority also selected an area close to the center of town, not too far from where they used to live, and set up a model show room (of how the new houses would look). MRS representatives participated in the meetings. The affected families positively benefited – they were moved to brick houses and obtained official titles to their homes and utility infrastructure. The new area is also markedly safer. With few exceptions, the affected people have indicated their satisfaction with the process and outcomes.
>> Belo Horizonte (2004-2005). This resettlement involved six families and was conducted by the Prefeitura. MRS’s participation involved financial support to relocate the families. Again, the affected people appear to be satisfied with the process.
>> Various isolated cases (annually). A small number of families are resettled each year due to accidents that damage their structures in easements located outside of major urban areas. MRS provides compensation for the value of their property losses, and financial support to relocate and rebuild elsewhere.
Going forward, MRS has identified ten additional high-risk areas that require the local authorities to undertake removal of irregular structures. As part of its local government partnership and coordination efforts, the company will adopt the World Bank Group policy on involuntary resettlement to guide their future activities in this regard. Recognizing that government authorities have the legal responsibility for ensuring affected people are removed and resettled, MRS will collaborate with these authorities to achieve outcomes that are consistent with the objectives of this policy. In circumstances where government capacity is limited, MRS will seek to play an active role during resettlement planning, implementation and monitoring. MRS may need to ensure in particular that the following components are included:
- a description of the entitlements of displaced persons provided under applicable Brazilian laws and regulations;
- the measures proposed to bridge any gaps between such entitlements and the requirements of the World Bank Group policy; and
- the financial and implementation responsibilities of the government agency and/or MRS.
- Community Engagement and Development
In accordance with Brazilian law, public disclosure and consultation is conducted for all activities requiring environmental licensing, which usually involves making related documents available at IBAMA offices. In addition, MRS consults with community leaders in areas where construction of fences or walls to seal off access to tracks is planned. Finally, the company has established a grievance mechanism to receive and respond to community complaints concerning such issues as noise or safety.
MRS has also established and implemented a number of active social responsibility and cultural aid programs targeting both employees and their families and the external communities along its rail lines. These programs are aimed at improving the company’s relationship with communities along its network, as well as implementing income-generating activities, raising environmental awareness, and improving cultural awareness. Such programs undertaken by the company include:
>> Provision of vocational training for low-income adolescents in gardening, environmental conservation and recycling;
>> Recreational and educational activities for children at risk;
>> School-based railroad safety theater productions;
>> Landscaping and clean-up of rail line easements along the Paraibuna River;
>> Sponsorship of the publishing of books in Braille for blind children;
>> Hosting cultural events in communities;
>> Development of plant nurseries to produce vegetation that can be planted along rail lines; and
>> School refurbishment, remodeling and expansion activities.
In order to strengthen their image as a socially responsible company, MRS could improve their public reporting programs, adopting well recognized approaches used in Brazil (IBASE) and internationally (GRI).
- Cultural Properties
Although not MRS’s legal responsibility, there are a number of cultural property units located in communities through which the company’s rail lines pass. MRS has chosen to voluntarily restore some of these properties, focusing on historically significant structures such as clock towers and railroad station buildings. Governed by the Brazilian law IPHAN that regulates cultural property restoration, MRS follows all applicable and relevant methodologies and principals for these activities.
- Indigenous Peoples
According to IBAMA, MRS’s activities do not impinge upon the indigenous peoples that may live in some of the communities through which the company’s rail lines pass. Although it is unlikely that these populations live sufficiently close to the rights-of-way to be affected by the ongoing rail operation, MRS will confirm the location of these groups in relation to its rail line to assist in resolving any possible future disputes that could arise.
- Environmental Management Systems
Having recently received ISO 9001 international quality management certification, MRS is now expanding its management systems for managing environmental, health, safety and workplace risks on an ongoing basis. With the objective of being widely recognized as the best railway in Brazil in terms of sustainable environmental and social performance, the company has embarked on a program to also become certified under the following international standards:
>> ISO 14001, environmental management systems. Company target: year end 2005;
>> OHSAS 18001, occupational health and safety management systems. Company target: year end 2006; and
>> SA 8000, social accountability systems for assuring humane workplaces. Company target: year end 2007.
