The company 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 IFC Performance Standards and the WBG/IFC environmental, health and safety guidelines, as applicable. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. Further information is provided in the attached documentation.
- PS1: Social and Environmental Assessment And Management Systems
LAPPL’s management demonstrates stewardship in addressing environmental, social, occupational health and safety (ESHS) aspects associated with its operations. The company will implement immediately an EHS Management System (EHSMS) and get the EHSMS certified for conformance to ISO 14001 and OHSAS 18001 standards, within 18 months of commissioning of Units 1 and 2. In the interim, LAPPL will ensure adherence to good ESHS practices and an ESMS Management Plan (ESMP), through appropriate contractual provisions with EPC as also O&M contractors. In ensuring appropriate incorporation of ESHS aspects in project design, construction and operation, LAPPL’s professionals also draw upon experience/expertise available within group companies as necessary [e.g. Lanco Kondapally Power’s EHS staff and EHSMS, which is also certified to ISO 14001 and OHSAS 18001 standards].
- The company has carried out a Comprehensive Environment Impact Assessment (CEIA) and has developed an Environment Management Plan (EMP). The company is in the process of completing supplemental ESHS assessment work particularly on:
- failure consequence analysis of ash pond dyke;
- Social and Environmental Impact Assessment (SEIA) for the railway spur, waterline and transmission line; and
- Greenhouse Gas (GHG) emission assessment including measures proposed to minimize net GHG emissions.
The supplemental assessment work will be completed together with the CSIA and disclosed together with the CSIA. The ESRS will be updated to reflect the outcome and findings of the supplemental work. The company obtained Environmental Clearance from Ministry of Environment and Forest on November 19, 2004 and Permission to Establish from Chhattisgarh Environment Conservation Board on October 13, 2005.
- LAPPL has signed a basket coal supply linkage agreement with South Eastern Coalfields Limited (SECL) for supply of coal from Korba fields. The linkage is for supply of 1.5 mtpa of coal for Unit 1 and the company is in the process of signing a second basket coal supply linkage agreement with SECL for supply of 1.48 mtpa of coal for Unit 2 of the project. Coal mines have not been considered associated facilities as:
- the coal is to be supplied under a basket linkage with SECL. A basket linkage may identify source (s) from which the coal will most likely be supplied. However, a basket linkage also obligates the coal supplier to supply the contracted amount of coal from any/all sources in a basket of sources available with it. The basket of sources of relevance to LAPPL’s coal linkage is Korba fields, which includes 11 operational mines. Further, while these mines may be the source for supplying coal to the project, the viability and existence of these mines is not exclusively dependent on the project; and
- LAPPL’s annual coal requirement (Units 1 and 2 together) is less than 10% of the annual production of the two most likely mines (Kusmunda and Gevra), from where coal is expected to be supplied to the project.
Coal will be transported from the mines (approximately 35 km from plant) by rail in bottom discharge wagon (BOBR) trains. The existing facilities at SECL Korba Coal fields will be used to load the Coal and the Wagons will be received using a 1.75 km private siding extended from Urga-Saragbundia stations on the Korba-Champa railway line. Coal will be received in BOBR (bottom opening) Wagons and unloaded into a Track Hopper in the plant site. The only associated facility is the proposed 1.75 km long railway siding, for transport of coal to the power plant. The 17.5 acres of land required for the siding will be acquired by the company, the siding itself will be constructed, operated and maintained by South Eastern Railway part of Indian Railways.
- LAPPL has commissioned a third party consultant to carry out a comprehensive social impact assessment (CSIA) as per IFC PS1 requirements. The Terms of Reference (ToR) for the CSIA was agreed with IFC and the CSIA will be completed in two phases: (a) first phase being a rapid social impact assessment (RSIA), to identify key impacts on the most vulnerable groups as well as mitigation plans for the identified key impacts; and (b) phase 2 being the completion of balance of the CSIA, livelihood restoration and community development planning work. The ESRS will be updated to reflect the findings and outcome of phase 2 of the CSIA, as and when it is completed. The company has since, completed the RSIA in December 2006-February 2007, which has been attached with this ESRS. The CSIA including the mitigation plans (CDP, PCDP and LRP) is expected to be completed by June 2007 and disclosed shortly thereafter.
- The company has, in response to the key recommendation of the RSIA, appointed a qualified social development officer with effect from February 5th 2007, to work with the third party consultant on the CSIA, engage with PAPs/affected communities and subsequently, implement the PCDP, CDP and LRP.
- PS2: Labor and Working Conditions
- LAPPL has adopted the Lanco Group Human Resource (HR) Policy and Manual, which are appropriately communicated to employees. The company’s HR policies and procedures are generally consistent with PS2 requirements. However, procedures pertaining to employee grievance redress and disciplinary action, need to be improved to make them consistent with PS2 requirements. The company will review its standard operating procedures (SOP) on grievance redress and disciplinary action to make it consistent with PS2 requirements. The company will also put in place formal procedures to ensure that the wages paid by contractors are compliant with host country labor wage requirements.
- The company will implement an OHSAS 18001 certified health and safety management system after commissioning. In the Construction stage, the company has deployed a safety officer for ensuring that contractors adhere to EHS provisions in the EPC and other contracts. The safety officer also conducts EHS training program for contract labor. While overall, OHS status at site is adequately controlled, the company will improve use of PPE particularly shoes, gloves and safety harnesses through enhanced training, supervision and enforcement measures.
- PS3: Pollution prevention and abatement:
- Management of resources including energy, water, hazardous and other materials - Design gross
heat rate of the plant at 2229 kCal/kWH, is better than the Central Electricity Regulatory Commission
(CERC) recommended heat rate of 2450 kCal/kWH for new plants of similar capacity. The project is
designed to use sub-critical steam technology, which is deemed to be best available technology for
this unit size (300 MW each). Towards water conservation, the company has adopted closed cooling
system to minimize water consumption and is in the process of identifying additional measures to
reduce water consumption from the design rate of 65,400 m3/day. EMP provisions for storage and
handling of hazardous and other materials will meet IFC requirements. The company will ensure that
PCB containing transformer oils is not used.
- Management of emission and discharges - The CEIA states that the particulate matter emission levels will be limited to 100 mg/Nm3. However, the ESP (Electrostatic Precipitator) is designed to ensure that particulate matter emissions meet IFC requirements of 50 mg/Nm3 at 6% excess oxygen. The Pollution Control Board permit also requires the plant to make a provision for future design emission of no more than 50 mg/Nm3. SO2 and NOx emissions will also meet IFC requirements for
plants located in non degraded airsheds, which is the case with the project. Sulfur content of coal is limited to less than 0.5% and will meet IFC emission requirement of 2,000 mg/Nm3 (at 6% excess oxygen), 0.2 tpd/MWe (up to 500 MWe) and 0.1 tpd/MWe (above 500 MWe), without Flue Gas Desulphurization (FGD). The Ministry of Environment and Forests (MoEF) and Chhattisgarh Environment Conservation Board (CECB) permits require the company to provide space for retrofitting an FGD unit in case 98 percentile of actual monitored SO2 emission values or ambient values exceeds limit for sensitive areas. Low NOx burners are provided for in design and the predicted emissions shall be less than IFC limit of 750 mg/Nm3 (at 6% excess oxygen). Treated waste water will be reused in the process or discharged on-land for irrigation of green belt.
A lined ash pond is proposed, to mitigate risk of ground water contamination. The EMP details appropriate measures for storage, handling and disposal of hazardous wastes, other wastes and for prevention of leachates (from coal yard and ash pond) contaminating ground water. Further, the EMP details measures to minimize fugitive emissions both during construction and operation. Total ash pond area is 250 acres. Unutilized flyash and bottom ash (for the complete plant life of 25 years for bottom ash and upto a maximum period of 9 years from plant commissioning for fly ash) will be disposed in slurry form to the ash pond, which is located within the plant boundary. The company has outlined a budget and plan for ensuring 100% fly ash utilization within 9 years of commissioning including through use in cement manufacture, light weight aggregate manufacture and development of a fly ash product park.
- Management of impact on ambient conditions – The predicted increase in ground level concentration (GLC) of suspended particulate matter (SPM) is 1% of the existing ambient SPM levels. While GLC increase in case of NOx and SO2 are higher, the ambient conditions will remain within IFC recommended limits. Predicted ambient noise levels at plant boundary will meet IFC requirements. There are several existing coal-fired power plants in the area but all are located beyond 14 km from the project site.
- Management of GHG emission - Lanco group has a demonstrated commitment towards renewable energy based power generation and/or use of less GHG intensive fuels/sources of primary energy. Lanco group’s portfolio of energy generation sources (commissioned capacity) includes: 3 MW wind based power; 18 MW of biomass based power; and 368 + 119 MW combined cycle gas turbine (natural gas CCGT). The Group is in the process of implementing 500+70+70+10+10 MW hydro-electric projects and also 1015 + 600 MW coal based power project. LAPPL has adopted a generation technology, which has a heat rate of 2229 kCal/kWH, nearly 9% better than the CERC recommended heat rate of 2450 kCal/kWH, for new plants of similar capacity. The GHG emissions of the project is estimated as 4.2 million ton CO2/year assuming 90% plant load factor, with emission performance of 910 gCO2/kWh, better than the Indian national average of existing coal-fired power plants (1,225 gCO2/kWh, average of 2001-2003). Further, the plant being pit head and its closeness to load centers, will result in better GHG efficiencies. The company will continue to explore techno-commercially feasible options for reducing the GHG intensity of its operations going forward through:
- improvements in energy efficiency;
- mixed fuel (biomass firing);
- enlarging offsets (afforestation program); or other measures. The company will quantify and monitor GHG emissions annually.
Monitoring and reporting - The EMP proposes detailed ambient monitoring programs including for
ambient air quality, surface water quality, ground water quality and noise, through which the
project’s direct impacts as well as potential cumulative impacts from other industrial sources will be
monitored by the company.
- PS4: Community health, safety and security
- LAPPL will construct infrastructure and use equipment that meet good industry practices. The company will design, construct, operate, maintain and monitor the power plant, to ensure minimal community, environment, health and safety impacts.
- Most of the construction work will be within the project site barring erection of the transmission line and laying of water pipeline. In the contracts for transmission-line erection/construction and laying of water line, the company will include contractual provisions to ensure that impacts on community environment, health and safety are minimized. Further, the Company will ensure, through appropriate risk assessment, engineering and management measures, that risks associated with the plant, are contained within the plant premises and societal risks are within international criteria/best practice norms.
- LAPPL will ensure that the EPC contractors adopt good ESHS practices during construction and in particular ensure that its employees and EPC contractor train equipment operators and drivers in safe driving techniques; develop a materials movement plan to ensure that vehicle movement during construction has minimal impact on daily life patterns of nearby communities; undertake appropriate measures to reduce fugitive emissions from storage and transport of excavated earth and other construction material; and periodically monitor ambient air quality as also noise levels in potentially affected communities/villages, and implement mitigation measures where required.
- While local labor will be used for semi-skilled and unskilled work, an influx of laborers is expected during the peak construction period. The company will ensure that appropriate amenities/facilities for labor are provided by the EPC contractor during construction. In this regard the company will provide, or require its contractors to ensure that, to the extent possible, members of local community are employed as construction laborers; labor camps have appropriate facilities and amenities including housing, toilets, washing and cleaning water, potable drinking water and cooking fuel; treated sanitary waste water meets IFC/WBG requirements prior to discharge; and potential host community impacts on account of influx of labor are assessed and managed.
- The RSIA indicates that the project is not expected to exacerbate community exposure to disease due to changes in land/hydrologic or other terrestrial/air quality/hydrologic regimes. However, under the CSIA, impacts of influx of labor will be assessed and LAPPL will require the EPC contractor, to implement measures to minimize risk of community exposure to disease due to influx of laborers.
- The company employs security, which is armed. The company will, within a timeframe agreed with IFC, develop and implement procedures for ensuring that:
- past records of security personnel employed are screened;
- security personnel have clear objectives and permissible actions laid out;
- security personnel are trained in avoidance of human rights violations, use of fire arms and handling various situations with clear procedures;
- security incidents are recorded, investigated and corrective action implemented;
- bona fide complaints against security personnel are investigated/disciplinary actions implemented; and
- there is a grievance mechanism for aggrieved members of community or employees in the event of a violation of the code for security personnel.
The company will evaluate adoption of the UK Voluntary Principals on the Use of Security Forces as suggested in the Guidance Note for PS4.
The company will:
- prepare an emergency preparedness and response plan (EPRP) both for onsite and offsite emergencies;
- communicate the EPRP to stakeholders and also link the EPRP to the district EPRP; undertake drills on emergency response including participation of nearby communities; and
- continually improve the EPRP based on outcome of the drills.
Further, the company will implement procedures, on an ongoing basis, to identify and remediate
potentially adverse impacts on community environment, health and safety.
- PS5: Land Acquisition and Involuntary Resettlement
- Total land required for the project is about 706 acres of which, 506 acres is already in possession of the company of which 469 acres of the land acquired is private land and the balance 37 acres is government land. The balance 200 acres apprx. (for ash pond of Unit 2, additional green belt, railway spur, river water intake pump-house) is in the process of being acquired/made available to the company by the State Government.
- While LAPPL adopted the plant layout to avoid any physical displacement, there is economic displacement of 330 families/households (PAH), from whom land has been acquired. 103 families that have lost their entire landholding of which 27 households are women headed. In all, 14 households are left with unviable parcels of land and land was acquired from 39 indigenous peoples (IPs)/scheduled tribes) households, 9 of the IP households are women headed.
- The land was acquired under The Land Acquisition Act of India, 1894 on behalf of Chhattisgarh State Industrial Development Corporation (CSIDC), by the local administration. The Phase 1 land has since been handed over to LAPPL on a 99 year lease.
- Market value determination for compensation was based on higher of average price of land transaction value (of each category of land) in the one year preceding cut off date and the methodologies were either:
(a) Bikri Chaant – on a per acre basis; or
(b) Misal approach based on per unit lagan basis.
In addition to the market value assessed, 12% per annum increment and 30% solatium on the assessed value, as per LA Act was paid.
- 15 of the 330 PAHs, lost structures and other assets (bore wells, pump house, wells and cattle shed). Structures and trees have been compensated based on valuation methodologies provided by Horticulture Department and Public Works Department. One PAH, who lost a house structure is being relocated to tenured land and has been compensated for the housing.
- While 3 PAHs have accepted compensation under protest, 15 have not taken compensation of which: 9 have not taken compensation due to internal family disagreements; 5 have not come forward to take compensation for reasons not known; and one has filed a litigation pertaining to the compensation amount fixed by the authorities. These 18 PAHs will be consulted under the CSIA process to specifically ascertain the reasons for not taking compensation. All others have taken the compensation that was awarded.
- LAPPL is required under its lease agreement with CSIDC, to provide employment to at least one member from each affected household towards livelihood restoration. While LAPPL will meet this requirement when the project becomes operational (latest by 2009), the company has also implemented measures to ensure that members of the affected households get contract employment during the construction phase currently underway.
- The RSIA indicates that 785 persons from the four project affected villages (PAVs) have obtained temporary employment at the project construction site. Of these, 545 persons belong to PAHs. The company is strengthening its procedures to monitor on a daily basis, the number of persons from PAHs with temporary employment on the construction site and will ensure preference in daily employment for them. Towards this, the company will issue identity cards to members of PAHs. However, some of the PAHs are either well off or do not show interest in the nature of work available at the project site during its construction stage.
- While prima facie it appears that the compensation framework meets IFC PS5 requirement, however, this aspect is currently being assessed in detail by the third party consultant, during the CSIA process. If the CSIA process identifies any gaps (between PS 5 and land acquisition undertaken), the company will develop and implement appropriate mitigation measures, which will be detailed in the CSIA.
- An RSIA (appended to this ESRS) has been completed, which identifies the key impacts of land acquisition; assessment of compensation; key grievances of PAHs; and immediate actions being implemented by the company to address these grievances.
- A CSIA is underway and expected to be completed by June 2007. The CSIA will form the basis of: mitigation plans, and include for example, the Community Development Plan; Public Consultation and Disclosure Plan; and Livelihood Restoration Plan. In the event that any significant departures from PS5/PS7 requirements are identified, mitigation will also address these gaps.
- The company will, prior to acquisition of the balance land, for Unit 2 Ash Pond and additional green belt, undertake a CSIA; and prepare a land acquisition and resettlement action plan in accordance with PS5 and 7 requirements, which is acceptable to IFC.
- PS7: Indigenous Peoples
- 39 of the 330 PAHs belong to Scheduled Tribes (Indigenous People/communities as per IFC PS 7). The affected IPs form part of the larger affected communities/villages. While the full scale and nature of impacts on IPs will be ascertained in the CSIA, the RSIA indicates that the key impact pertains to loss of livelihood, as in case of non IP PAHs. For the project, a separate Indigenous People’s Development Plan (IPDP) will not be prepared, as the IPs will be considered as one of several potentially vulnerable groups addressed in the CSIA, CDP, PCDP and LRP.
- Short term mitigation measures to restore livelihoods have been developed including preference to the PAHs in temporary employment during construction phase.
- Long term livelihood restoration will be detailed in the LRP/CDP, which will include specific provisions for affected IPs, if impacts/vulnerabilities distinct from other PAHs, are identified in the CSIA. The CDP will include provision of employment to at least one member from each of the 39 IP PAHs. In addition, other livelihood restoration/enhancement activities proposed to be implemented, to address the affected IPs loss of access to all or a portion of their agricultural land, will also be detailed in the CDP.