- Environmental and Social Management
PTC has a corporate Environmental Management System (EMS) in place to address the environmental, health and safety (EHS) aspects of its operations. Even though the EMS includes environmental corporate policies and procedures to comply with the local requirements, PTC will further enhance its EMS to ensure its operations comply with IFC’s environmental policies and guidelines. Currently, PTC is working in the assessment of the operations towards implementation of the ISO 14000 certification. GPC is also working towards 18001 OSHAS certification for Colregistros.
PTC’s corporate environmental group reports directly to the Corporate Manager. This group oversees the EHS performance of the operations and works closely with the operation managers at each site to properly implement EHS. PTC also contracts environmental consultant services to prepare environmental impact assessments, conduct quarterly environmental audits and environmental monitoring (water, noise, and air emissions, etc.), and help prepare EHS reports required by environmental authorities. As it grows PTC is committed to hiring additional EHS personnel.
PTC also oversees the EHS performance of all the other company’s subsidiaries.
PTC’s Social Management Department (SMD) is comprised of four specialists. The Coordinator of the SMD reports directly to the Corporate Manager. The SMD designs and implements community development initiatives in a variety of areas (education, health, basic infrastructure, vocational training, etc.), which benefit people living near PTC operations.
As part of this project, PTC will integrate social management, including the assessment and mitigation of the social impacts of the company’s operations, in an Environmental and Social Management System (ESMS). The ESMS will include procedures to avoid or mitigate the adverse social impacts of land acquisition, protect cultural property, and address the needs of indigenous peoples and Afro-Colombian communities impacted by PTC’s operations. These procedures will ensure compliance of PTC’s operations with IFC’s policies on Involuntary Resettlement, Indigenous Peoples and Cultural Property.
PTC is committed to enhance its social programs, as well as the skills of its social staff. PTC also plans to disseminate information about the outcomes of programs and community development activities through the publication of a Social Annual Report.
- Environmental performance of industrial operations
PTC is a local Colombian exploration and production (E&P) company which defines it business niche as small and medium fields. Since inception PTC has grown into a highly regarded company with 14 E&P assets spread throughout Colombia’s main hydrocarbon basins in the Departments of Casanare, Meta, Norte de Santander, Putumayo, Santander and Tolima. There are no protected areas or national parks within or adjacent to PTC’s fields. All oil extracted is mainly transported by road via truck, but in Putumayo oil is transported both by ferry and truck too.
During both exploration and the intensive testing phase, which typically occurs one year prior to production, PTC is required by the local authorities to produce Environmental Action Plans (EAPs) in order to obtain environmental permits. PTC is required to submit an Environmental Impact Assessment (EIA) for an entire field to obtain the environmental operating license. Currently all PTC fields have operating licenses, and all but two, which are not yet in the intensive testing stage, have EAPs.
PTC has recently prepared and submitted to the local authorities EIAs for four fields located in the Tolima and Meta Departments. PTC has also applied for the operating licenses, which are expected to be issued in 2006.
Typically, fields in production have the following installations: crude treatment stations, pumps stations, generators, wastewater treatment plants, loading stations, fire prevention systems, and storage tanks.
The necessary water for domestic and industrial operations is supplied either by superficial sources of water or by water wells. PTC has obtained the appropriate permits for the use/extraction of water. Water used in extraction and drilling activities is treated on-site or released to nearby water surface bodies. Storm water (non-contaminated) is collected in concrete troughs and discharged. As part of the project, PTC will ensure that (a) the process wastewaters are in compliance with local requirements of environmental legislation and will be adjusted progressively to IFC guidelines and (b) all its operations have systems in place to collect and properly treat its oil-contaminated water prior to releasing them into nearby water bodies. Sanitary water is treated in septic tanks systems
Gas produced during oil exploration/exploitation activities will either be re-injected or used as a fuel source for PTC equipment or disposed off as per Colombian legislation (e.g., steam generators).
PTC will establish a program to ensure proper handling of solid wastes, including adequate disposal of its biodegradable waste in properly designed sanitary landfills, recycling of non-hazardous waste where feasible, and proper treatment and disposal of hazardous materials.
Since PTC operates wells that have already been established and exploited by other parties and that may have past environmental liabilities, PTC has procedures in place, based on Colombian regulations, whereby remediation/clean-up costs are covered by the previous owner.
- Health and Safety Programs
PTC has personnel charged with the occupational health and industrial safety aspects of its operations and has established management procedures related to health and safety that are part of PTC’s corporate EMS. As part of its continuous improvement program, PTC will ensure that all its operations have best safety measures/systems (i.e., containment wall for storage tanks, impermeabilized floors in areas were oil is handled, leak prevention procedures, etc.)
PTC’s has rigorous induction programs for its employees, as well as for contractors and visitors, to ensure that workplace accidents/incidents are kept to a minimum. All employees are provided with and required to use personal protective equipment according to the dangers that are exposed. Hazardous materials are handled only by trained workers and stored in appropriate areas. Workplace conditions (noise, temperature, etc.) are monitored quarterly to ensure that employees are not exposed to unsafe conditions.
PTC is required by Colombian regulations to prepare Oil Spill Prevention and Countermeasure (SPCC) plans and has its own contingency plans identifying critical areas, controls and responsible personnel, and covering emergency response, communications, and detailing measures to be taken in the event of a spill or accident. These plans are based on and are part of the National Contingency Plan developed by the Colombian authorities.
PTC also has contingency plans for the transportation of fuel by truck and for the ferry (specifically in Putumayo). These plans are periodically updated to include aspects such as operation changes, or legislation modifications. As part of the contingency plans, PTC is also working in the establishment of Mutual Assistance Committees through which nearby companies participate in emergency responses in case of spills or accidental releases. PTC will conduct emergency response drills starting in 2006.
The companies that integrate the GPC have industrial safety and occupational health programs in place. These programs are annually certified by the Colombian Safety Council through rigorous audits. This Colombian procedure, known as RUC, is a standardized system to evaluate the EHS performance of the contractors/operators in the hydrocarbons sector.
Colregistros received an award from the Occidental Company for its continuous improvement policy on EHS aspects in 2004. It was also recognized by the Occidental Company as the best sub-contractor regarding EHS aspects in 2005.
- Transport.
All crude, which is sent to the Ecopetrol stations, is transported by truck through:
a) Sumprocol, one of the affiliates, using its own trucks and
b) specialized crude transport contractors companies.
There are procedures in place, for both own as well as contracted trucks, to ensure the safety transportation of crude, and the implementation of proper safety prevention procedures by all drivers. PTC is currently enhancing its procedures by developing a comprehensive Safety Transportation Plan, a copy of which will be submitted to IFC.
- Protection of cultural property.
PTC assesses the potential impacts of its projects on cultural property as part of the environmental and social impact assessment process. None of the current operations are located in areas where cultural resources, such as sites of archaeological value, are likely to be found. As part of this project, PTC will develop procedures to protect cultural property from potential adverse impacts of future operations and to ensure compliance with IFC’s Policy on Cultural Property. These procedures will be part of PTC’s ESMS.
- Land acquisition.
PTC’s Legal Department develops and implements the company’s procedures to acquire land rights. As part of this project, PTC will develop procedures to address the social impacts of land acquisition in a manner that is consistent with the requirements of IFC’s Policy on Involuntary Resettlement. Land acquisition procedures will be integrated into the Company’s ESMS.
- Relations with local communities
PTC’s social policy is to promote sustainable development and improve the quality of life in communities located within the area of influence of its operations. PTC has a Social Management Plan and is currently implementing community development projects in a variety of areas (education, health, basic infrastructure, vocational training, employment generation, etc.). These projects are carried out in collaboration with local communities and municipalities or other government entities. PTC’s policy is to maximize local employment and is committed to fill all unskilled employment positions with local persons.
As part of this project, PTC will integrate social management in the ESMS, which will include procedures to assess and mitigate the adverse social impacts of the company’s operations, inform local communities about the potential impacts and risks of projects, consult with project affected people, receive and respond to grievances, evaluate the needs of communities located within the area of influence of PTC’s projects, develop and implement community development programs, and maximize local employment.
- Potential impacts on indigenous communities.
The indigenous community Yaguara of the Pijao ethnic group is within the area of influence of PTC’s Pauta project located in the Municipality of Chaparral, Tolima. PTC carried out consultations with this community during 2004, according to the requirements of presidential Decree 1320 of 1999, which regulates prior consultation with indigenous and Afro-Colombian communities.
PTC will formalize current procedures to address the needs of indigenous peoples and Afro-Colombian communities impacted by the company’s current and future operations and will develop specific procedures to ensure compliance with IFC’s Policy on Indigenous Peoples. These procedures will be included in PTC’s ESMS.
- Relations with local communities in areas with security risks.
Petrotesting operates in areas that pose a risk to the company’s assets and personnel—risk of sabotage, theft, kidnapping, anti-personnel mines etc. The company faces the greatest security challenges in the Suroriente project in Putumayo, where it operates with the protection of the Colombian Armed Forces, and in the Río de Oro and Puerto Barco projects in Santander. PTC has adopted the International Voluntary Principles on Security and Human Rights and is applying them in Putumayo. PTC is committed to adopting the International Voluntary Principles in all of its operations.
PTC’s community development programs are an essential component of PTC’s strategy to reduce security risks. The company is committed to develop partnership with local communities, aimed at making them beneficiaries and stakeholders in company operations.
In addition of the social development of the communities where it operates, GPC is also actively participating in the development of alternative energy sources. Taken into consideration, that the Colombian government required that, starting in January 2006, the gasoline sold in the main cities in Colombia ought to be blended with 10 percent Ethanol produced with biomass, GPC along with the CIAT (International Center of Tropical Agriculture), Clayuca (Latino American Consortium for Development of Cassava) and Corpoica ( a Colombian Agribusiness and Research organism) began researching the production of ethanol from cassava (Manihot Esculenta) since 2003. Today GPC has identified 3 suitable cassava varieties, a 2300 ha in the Llanos region available to start the project, and has contracted the design of a 20,000 lt/d pilot ethanol production plant which is expected to be operational by the end of 2006. Should this $US 7 million pilot project be successful, GPC anticipates expanding the plant to produce 300,000 lt/d and to work with the nearby communities on the agribusiness aspects of the project. GPC expects to continue enhancing and helping with the social development of the areas where it operates by generating employment, developing alternative agricultural sources, skills training, etc.
- Revenue management by local municipalities.
The company is making significant contributions to local municipal revenue through royalty payments, that according to the law vary between 8% and 25% of the total production of each field, which are shared as follows: 12.5% to the municipal government, 47.5% to the departmental government, 32% to the National Royalties Fund (Fondo Nacional de Regalías) and 8% to port municipalities and districts . PTC is committed to promote professional and transparent management of municipal revenue from royalties and supports initiatives to train municipal staff and to increase their management capacity. Royalties are use for health, education and basic sanitation.
