The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, 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. - Environmental and Social Management.
Indorama is establishing a Management System to address the environmental, health and safety (EHS) aspects of its operations. Even though the system anticipates including EHS policies and procedures to comply with the local requirements, Indorama will further enhance its EHS management system to ensure its operations comply with IFC’s environmental and policies, performance standards and guidelines. As part of this project, Indorama anticipates obtaining the ISO 14000 certification and OSHAS 18001 certification for its operations in March 2008.
Indorama is structuring an EHS team to be coordinated by the EHS manager who will report directly to the General Manager. Indorama will also contract, as needed, environmental consultant services to conduct additional activities such as environmental assessments, environmental audits and environmental monitoring.
Labor issues at Indorama will be managed by the Human Resources Department. Indorama will be bringing its international experience in Human Resources Management to the project. Social issues will initially be handled under Human Resources, as well. Given, however, the often linked issues of community relations and environmental performance, the community relations management may be more closely linked to the EHS team in the future.
Indorama is committed to implementing a sound Environmental and Social Management System that will ensure compliance with the applicable IFC policies, performance standards and guidelines as part of this project.
- Environmental performance of industrial operations
EPCL’S operations are located in Port Hartcourt, Nigeria. EPCL operations include:
- an Olefins Plant with ethylene production capacity up to 260,000 tons/yr and propylene production capacity of 126,000 tons/yr. Currently this plant is shutdown. (It operated at 20 percent capacity utilization in 2004.) As part of this project, Indorama will bring production up to 15,000 tons per month by September 2006 and up to 21,000 tons per month by April 2007,
- a Polyethylene Plant with a HDPE production capacity of 270,000 tons per year. Currently this plant is shutdown. (It operated at 3.8 percent capacity utilization in 2004.) As part of this project, Indorama will bring production up to 14,000 tons per month by September 2006 and up to 20,000 tons per month by April 2007,
- a Polypropylene Plant with a production capacity up to 80,000 tons/yr. Currently this plant is shutdown. (It operated at 7 percent capacity in 2004.) As part of this project, Indorama will bring production up to 3,000 tons per month by September 2006 and up to 6,000 tons per month by April 2007,
- a power plant composed of four natural gas turbines with 132 MW production capacity and three steam boilers in the Olefins plant. 14 MW of power is being currently generated, which will increase to around 50 MW at full plant capacity, and
- a nitrogen plant producing approximately 4400 Nm3/hr-gas phase and 360 m3/hr liquid phase.
The main raw material for the olefin plant is Natural Gas Liquid (NGL), which is received at the plant through an 87 km pipeline from Obiafu-Obikrom. In addition to ethylene and propylene, other main raw materials used in the production of the polyethylene and polypropylene resins include catalysts, solvents, and additives.
Indorama’s objective is to achieve 15,000 tons/month in the olefins plant in a period of three months from the start up of its turn around maintenance (TAM) program and 21,000 tons per month by April 2007. Key elements of the TAM program include repair and overhaul of faulty equipment, upgrade of obsolete equipment and instruments, implementation of management systems, establishment of a maintenance program, and improvement of the EHS conditions of the operations. The EPCL plants have operated on very limited basis in the last few years and they exhibit significant lack of maintenance for the equipment and the installations.
Indorama is being required by the Government authorities to prepare and submit an Environmental Evaluation Report stating the current conditions of the EPCL plant and the proposed improvements. An action plan agreed between Indorama and the authorities will result from the submittal of this EER. Indorama has already conducted a preliminary assessment of the EHS conditions of EPCL operations and has begun identifying needed actions to be implemented.
- Energy Supply. The energy source for the operation is natural gas.
Green House Gases. Indorama’s management realizes that greenhouse gas (CO2) is both a serious global problem and a significant business opportunity for them in the form of carbon finance. Indorama will monitor the CO2 emissions from its own operations as well as those generated from the energy produced to support its operations. As appropriate, it will explore possibilities to apply for carbon credits.
Air Emissions. Main air emissions sources include: a) the four Gas Turbine exhaust from the power plant; b) three flares, each from the olefins plant, ethylene storage, and polyolefin plant and other hydrocarbon storage c) two waste oil burning pit; d) two incinerators, one for burning of the wastewater treatment plant sludge and another for the process solid residues generated as well as the domestic wastes e) six stacks from Olefin cracker and f) three stacks from Dow thermal heater furnaces in Polyethylene plant. In addition, fugitive emissions from the storage tanks and faulty equipment (i.e., valves, flanges, etc.) are also released. Main pollutants released include SOx, NOx, VOCs, CO, particulates, and CO2.
The overall air emissions will be reduced with the efficiency improvements to be accomplished as a result of the TAM program. As part of the project, Indorama will also reduce the amount of gases being flared out and will find sound alternatives to the on-site burning of the waste oils. The operational efficiency of the incinerators will be also ensured, and the emissions will be controlled to ensure compliance with the IFC requirements. The fugitive emissions will be controlled once Indorama completes the check up and improvements to be conducted to all equipment including valves, flanges, etc.
Water Source and Liquid Effluents. The necessary water for domestic and industrial operations is supplied by eight water bore wells. Water for consumption as well as process use (i.e., steam generation, cooling) is treated on-site. The water treatment plant, two cooling towers, the demineralization plant, and the biological and spent caustic wastewater treatments plant (WWTP) located in EPCL’s plant will all be upgraded as part of the project. The biological wastewater treatment plant, which has a design capacity of 75 m3/hr, and the spent caustic treatment plant will be repaired and restored operation by December 2006. The treated process wastewaters, contaminated storm water, and domestic effluents will continue to be released to the Bonny River and its concentrations will comply with the local requirements and IFC environmental guidelines. Storm water (non-contaminated) will continue to be collected in concrete troughs and also discharged to the Bonny River.
Wastes. Main wastes generated include product rejects, WWTP sludge, wastes oils, alumina dust, and domestic wastes. Currently these wastes are not properly handled, stored and disposed. Indorama will establish a program to ensure proper waste management including adequate handling and storage of hazardous materials; wastes recycling and reuse, as appropriate; proper treatment and disposal by March 2007. If needed, Indorama will design an appropriate landfill to dispose industrial wastes also by March 2007.
Soil and Groundwater Contamination. Indorama will determine and inform IFC about any past soil and ground contamination.
Ozone Depleting Gases. Indorama will not install new equipment (i.e., refrigeration units, fire extinguishers, etc.) which uses ozone depleting gases (ODG) and will replace all existing ODG equipment, as it becomes obsolete, with environmentally acceptable equipment in phased manner. Indorama is also committed to operate the EPCL plant in compliance with all applicable environmental international treaties and conventions.
Health and Safety (H&S) Programs –
The entire plant has been designed following international safety specifications (i.e., layout spacing, storage tanks placement, etc. as per best international practices) however, the plant has not being properly maintained in the last few years. Key H&S activities to be conducted by Indorama, as part of this project, include:
- a comprenensive safety audit of all its valves, flanges, traps, pumps, etc.,
- upgrading the fire safety conditions of the plants particularly the polypropylene plant,
- job safety analysis,
- updating the HAZOP as per the modifications to the operations to be conducted as part of this project,
- emergency drills, and
- preparing and establishing an emergency response plan including on-site/off-site aspects, critical areas, controls and responsible personnel, communications, and detailed measures to take in the event of a spill or accident.
Indorama anticipates to have implemented all needed H&S programs and activities to ensure compliance with IFC requirements by March 2007. Indorama will also conduct emergency response drills starting in March 2007 and will pursue the establishment of a Mutual Assistance Committee among the nearby companies to collectively participate in emergency responses in case of spills or accidental releases. Prior initiating the TAM program, it will also establish specific H&S programs.
Indorama will designate personnel in charge of the occupational health and industrial safety aspects of its operations and will establish a management system to ensure proper handling of H&S aspects. It will ensure that the employees are provided with and required to use personnel protective equipment. As part of the improvements, Indorama will also implement all needed measures to:
- map and measure noise levels in areas such as compressors, fans, extruder, etc.,
- provide and strongly encourage the use of PPE and
- control and reduce the exposure of the employees to harmful vapors such as CO, VOC, dust, etc.
It will ensure that all safety precautions are taken in the storage tanks areas, which include the following pressurized spheres: three 1,500 MT natural gas; four 1,100 MT Propylene Rich Feed (PRF); three 1,000 MT propylene; two 450 MT butene-1; two 2,400 MT dome roof-split tanks storing Virgin C5+ and two 1,300 MT dome roof-split tanks storing gas oil.
- Training
Indorama will develop and implement rigorous training programs for its employees, as well as for contractors and visitors, to ensure that workplace accidents/incidents are reduced to the minimum. And it will establish specific H&S training programs prior initiating the TAM program. Workplace conditions (noise, gases, etc.) will be monitored quarterly to ensure that employees are not exposed to unsafe conditions.
- Transport
Besides, the main warehouse in EPCL, Indorama will have two final products warehouses, one in Lagos and a second one in Kano at 600 km and 900 km respectively from Port Harcourt. Thirty to forty percent of the products are transported by contracted trucks. The remaining sixty-seventy percent will be sold on ex works basis under customers’ responsibility. To ensure safe transport operations, Indorama will develop a comprehensive Safety Transportation Plan by March 2007.
- Contractors
As part of the management system, Indorama will develop the EHS program to be applied to its contractors by March 2007 and prior to initiating the TAM program it will develop the contractor EHS requirements for this phase.
- Monitoring
Indorama will establish a monitoring program to assess its performance and identify the ambient air quality, discharged wastewater quality, point source releases, noise levels, employees’ workplace conditions, etc.
- Employee Retention.
The pre-privatization company had between 950 and 1000 employees. Indorama intends to hire up to 600 of these workers. Indorama will periodically provide the Nigerian National Petroleum Company (NNPC) with a list of those workers who wish to work for Indorama and whom Indorama wishes to retain. A suitable agreement has been concluded among NNPC, Union and Indorama in this respect. Indorama has already met with groups of workers, including union officials to inform them that the process of selection will be based on the principles of consultation, transparency, fairness, and recognition of grievances.
Indorama has already undertaken consultation with the unions on employee retention. Union leadership and the NNPC will be part of the communication process with the rank-and-file over how the process will work. Indorama has also been successful in facilitating the dialogue between the government and the Union over the payment of retirement benefits (see below).
Indorama will be transparent in what the plans are for the existing workforce, how the new workforce will be selected, the timetable, its commitment to non-discrimination and its mechanism for addressing grievances.
To ensure fairness, Indorama will specify the criteria by which workers will be selected. These criteria will include: a desire to work for Indorama, the appropriate job qualifications, a good work record, including a reputation for honesty, and a reasonable period of time before retirement. Indorama will also follow a policy of non-discrimination with respect to ethnicity, age, religion, gender, disability, and trade union membership.
Though Indorama believes that its planned process for selecting new staff is fair and effective, it will still have a grievance procedure that ensures that the above principles of fairness are, in fact, applied. The same general principles will be applied to the grievance mechanism as are applied to the retention process: transparency; openness to all workers; timeliness; and access to management other than the manager who made the original decision.
Those employees who do not want to work for Indorama, or who are not selected by Indorama will be redeployed by NNPC as per the agreement, signed April 21, 2006, between Indorama and NNPC. Because all workers can be absorbed by Indorama or NNPC, the change-over is not considered retrenchment.
- Land Acquisition
The Eleme Local Government Area is composed of 10 villages with a total population of approximately 51,000 people in an area of 140 square kilometers. Though the area is relatively close to Port Harcourt, the primary economic activity is agriculture. The Eleme people are linguistically related to the Ogini ethnic group. Six villages, Njuru, Agbonchia, Agbata (Okerewa), Aleto, Akpajo, and Chekwas (Elenewo), are considered host communities, as they gave up land for the original project.
Land for the plant was originally acquired in the early 80’s. Communities still feel that the compensation they received at the time, based on crops and economic trees, was inadequate. They have asked for participation in the ownership of the company. The National Commission on Privatization (NCP) has a policy for equity participation of host communities and labour of privatized enterprises. The Bureau of Public Enterprise (BPE) and Rivers State Government are in discussion to determine the percentage of equity for the host communities. The means of acquiring and warehousing equity shares on behalf of host communities are also under discussion.
