25332 - Cambodia Airp II

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Environmental & Social Review Summary

Project Number

25332

Company Name

SOCIETE CONCESSIONNAIRE DE L'AEROPORT

Date ESRS Disclosed

Mar 6, 2007

Country

Cambodia

Region

East Asia and the Pacific

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 6, 2007
Signed : Jun 7, 2007
Invested : Jul 18, 2008

Sector

Other Support Activities for Transportation (Grain Terminals, Cargo Terminals, Airport Operations)

Industry

Infrastructure

Department

Regional Industry - INF Asia & Pac

Project Description

The project company is Société Concessionnaire de l’Aéroport (SCA), a special purpose company that holds a 45-year concession (from 1995) from the Royal Government of Cambodia (RGC) to operate the Phnom Penh International Airport (PPIA) at Phnom Penh, the Siem Reap International Airport (SRIA) at Siem Reap, and the Sihanoukville Airport (SIA) at Sihanoukville. PPIA serves as the main gateway to Cambodia while Siem Reap mainly caters to the tourist traffic visiting the various Angkor temples located in the nearby Angkor Archeological Park, a UNESCO World Heritage site. Sihanoukville was established in the 1950s and forms together with Phnom Penh and Siem Reap one of the destinations that has been identified by the RGC as cornerstones for the country’s tourism development. The Sihanoukville airport, located 15 km from the city center, was built in the 1960''s and remains a small airport with limited facilities. SCA’s airport concession was modified to include the development and operation of Sihanoukville Airport in March 2006 by the RGC to the company. SIA, which had been closed in May 2006, reopened in January 2007.

The proposed project, expected to cost $40.1 million, consists of:

- the mandatory capital investments required under the concession for SIA for 2006 and 2007;
- the terminal capacity increase at SRIA to provide service to the increasing passenger growth; and
- future capital investments required at SIA in 2008-10, should traffic at the airport increase in accordance with the
company’s projections.

This would be a second IFC investment in SCA. In June 2004, IFC provided a $10 million to SCA to support capital expenditures at PPIA and SRIA.

Overview of IFC's Scope of Review

Documents Reviewed (desk reviews):

- Sihanoukville International Airport, Social & Environmental Impact Assessment (SEIA), prepared by JacobsGIBB Ltd for Société Concessionnaire de l’Aéroport, December 2006;
- Phnom Penh, Siem Reap & Sihanoukville International Airports, Investment Program Review, prepared by Jacobs Consultancy, October 2006;
- IFC Annual Environmental and Social Monitoring Report for Phnom Penh and Siem Reap International Airports, 2005 (DRAFT), prepared by SCA, October 2006;
- Addendum No. 6 to the Concession Contract between the Royal Government of Cambodia and SCA, March 2006.

Site Visits: Visits to the Sihanoukville Airport site and surrounds conducted by JacobsGIBB staff (as part of the preparation of the Social & Environmental Impact Assessment carried out at the request of IFC) on October 9 through 13, 2006, and by IFC Investment Department staff in September 2006.

Sponsor Interviews: Face-to-face meetings with SCA operational and technical management staff conducted by JacobsGIBB staff during the site visits. Teleconference with SCA staff (Jean Serge Boissavit and Charles Winter) conducted by IFC’s staff on 01/29/2007 and 2/6/07.

Other: Ongoing IFC supervision of Phnom Penh and Siem Reap airports environmental and social performance per the conditions of IFC’s existing investment in SCA (Project #21363) in June 2004.

E & S Project Categorization and Applicable Standard

PS1 – Social and Environmental Assessment and Management Systems
PS2 – Labor and Working Conditions
PS3 – Pollution Prevention and Abatement
PS4 – Community Health and Safety
PS5 – Land Acquisition and Involuntary Resettlement
PS6 – Biodiversity Conservation and Sustainable Natural Resource Management

There are no indigenous peoples affected by the airport development, nor is this in an area where cultural heritage is expected to be found. Therefore, PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) do not apply to this project.

Like the earlier IFC investment in the SCA’s Phnom Penh and Siem Reap Airports, this is a Category B project 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. In its capacity as the Airports’ concessionaire and in coordination with the RGC, SCA continues to manage its environmental and social performance in accordance with applicable Cambodian laws and regulations and international standards, including the IFC Performance Standards on Social and Environmental Sustainability.

Environmental and Social Mitigation Measures

SCA has assessed the anticipated impacts of the proposed project and will put necessary plans in place to ensure that it will comply with Cambodian legislation and IFC’s Performance Standards. Information about how these potential impacts will be addressed by SCA is summarized in the paragraphs that follow.

- PS1: Social and Environmental Assessment and Management System

The process of social and environmental assessment of SIA began with RGC’s development of the Master Plan for the Development of Sihanoukville to guide the long-term development of the region through the year 2040. This Master Plan was financed and developed at the initiative of SCA. The core of the strategy is the development of an international airport, which is intended to contribute to the expansion of logistical and port activities in the City and to the development of tourism along the coastal region. The Master Plan envisions expanding the existing airport from the current 123 hectares to an area of 682 hectares for aeronautical development and for the creation of an industrial and logistics zone. Because alternative locations around the City might have significant environmental impacts or flight safety issues, SCA and RGC considered this to be the most sustainable option available.

Through the services of qualified, experienced external consultants (JacobsGIBB Ltd.), SCA completed a Social and Environmental Impact Assessment (SEIA) of the proposed SIA development (November, 2006). The SEIA took into account the relevant and applicable environmental legislation within Cambodia, including the 1996 Law on Environmental Protection and Natural Resource Management, as well as the issues identified in IFC’s Performance Standards 2 through 8. Although the responsibility for upgrading the associated access road connecting the Airport with the main highway lies with the RGC, the SEIA also addresses the impacts of this activity.

SCA will adopt the recommended program of improvement measures to address identified impacts and issues listed in the SEIA, and will provide adequate support to ensure implementation. SCA’s operating procedures for environment, health and safety aspects of airport management will be extended to SIA. The company will also develop an organizational structure which clearly sets out the roles and responsibilities of the individual to be responsible for managing environmental, social and related community engagement activities going forward. Procedures to monitor performance will also be established.

- PS2: Labor and Working Conditions

The Cambodian Constitution and Labor Law guarantee basic rights for workers. Citizens have the right to form and join trade unions. For SCA’s existing operations at the Phnom Penh and Siem Reap airports, the company uses the terms and conditions of employment contained in the contracts it executes with its employees to ensure fair labor and working conditions according to these national protections, as well as internationally-recognized human rights principles. SCA will extend its human resources policy to SIA and will make it accessible to the 20 to 30 workers expected to be employed directly. SCA will also incorporate at SIA the procedure used at the existing airports for receiving employee complaints (PR HR-003).

The company has a robust employee health and safety program in operation at the Siem Reap and Phnom airports, and will adopt and apply the same approach at SIA. Employees working on airfields will be provided with personal protective equipment (PPE), as documented in the existing Ramp Safety procedure. They also will be properly trained in the relevant hazards, safety procedures and emergency response. In accordance with industry standards, fire prevention and fighting equipment will be sized and located so as to be readily available to ensure maximum protection against fire.

As part of SCA’s human resources policy, the company will require the contractors to comply with all relevant requirements of Cambodian legislation (including laws and regulations on acceptable conditions of work, monthly minimum income and maximum permissible workweek) and IFC’s Performance Standard 2. Construction and other contracts will specify occupational health and safety commitments to be observed by the contractors and subcontractors, as well as monitoring responsibilities.

- PS3: Pollution Prevention and Abatement

Pollution prevention and abatement issues of concern at SIA include: buried unexploded ordinance, fuel/hazardous materials handling and storage (including emergency response), air emissions, water supply, stormwater drainage and effluent discharges, and waste management.

Buried Unexploded Ordinance. Before further development of the site, SCA will undertake intrusive physical investigations to confirm that unexploded ordinance is not present. If any unexploded ordinance is found during the investigations, SCA will remove it or otherwise eliminate the risk posed by these materials. All unexploded ordinance found and removed will be handled and disposed according to internationally-accepted procedures.

Fuel/Hazardous Materials Storage and Handling. The principal hazardous materials handled at SIA will be aviation fuel and diesel fuel used for onsite power generation. There are no existing aviation fuel tanks. Any future fuel tanks and above-ground fuel tanks for SCA’s two diesel engine power generators will be provided with fully bunded and impermeable secondary containment systems to prevent accidental spills from being released to the environment. In addition, all rainwater that falls on areas where fuel is stored or handled will be treated in oil/water separators prior to discharge to surface water. Other hazardous materials and chemicals that may be used in maintenance activities will be stored in appropriate, segregated holding areas. SCA, in coordination with fuel providers, will develop emergency plans and procedures that include provisions for properly handling major accidents, fuel spills and dangerous goods, and for explosions and fires. Appropriate emergency equipment will be provided, including fire fighting vehicles and associated emergency equipment, and personnel will be trained in how to properly respond. Critical components of the emergency plan will be tested on a regular basis.

Air Emissions. The diesel fired power generators will be the principal fixed point sources of air emissions. These engines will be designed to achieve emission levels consistent with best practice for equipment of this type. SCA will operate and maintain the generators in accordance with the manufacturer’s specifications.

Water Supply. Bottled drinking water will be made available for potable use.

Storm water Drainage and Effluent Discharges. With the drainage system built with the new runway, SIA’s surface water drainage system will be sufficient to manage surface water runoff from runways, apron, car parks, and maintenance and ground handling areas. Suitably sized retention ponds will be provided to adequately control runoff quantity and quality. Sewage generated at the terminal and service areas, and from aircraft, will be collected in a separate wastewater collection system and treated in a septic tank and drain field system.

Waste Management. Solid wastes generated by airport operations will be collected by licensed contractors and disposed off-site at government-approved landfill sites. The relatively small amounts of hazardous wastes generated – primarily waste oils from maintenance operations – will be stored in drums and periodically collected and recycled. Waste batteries will be collected and recycled by suppliers.

- PS4: Community Health, Safety and Security

The Ream village is located to the northeast of the SIA airport. Dwellings located within close proximity to the airport, along the main roadways (Highway 4 and Ream road), are considered to be sensitive receptors to noise. The residents of some of these dwellings may relocate as a result of land acquisition for the project. SCA has commissioned noise surveys and plans to use the results to model the likely increase in noise levels for the years 2010, 2020 and 2040. SCA will recommend to Civil Aviation the implementation of noise abatement measures suggested by the modeling results.

As part of the airport works, the RGC will upgrade Ream Road to ensure adequate and safe access to the airport. The principal hazardous materials to be transported to the airport will be aviation fuel and diesel fuel for onsite power generation. SCA will ensure safe transportation of fuel in cooperation with fuel providers.

SCA will not employ security personnel directly. The Company will rely on the services of reputable service providers. SCA’s policy is to conduct due diligence on the service providers before offering contracts. The grievance procedures to be developed by SCA will include procedures that will enable local people to express concerns related to security arrangements.

- PS5: Land Acquisition and Involuntary Resettlement

SCA is operating SIA within the current site (called “Zone 1”, with 123 hectares). According to the Master Plan, SIA’s expansion will require the acquisition of 559 hectares (362 hectares for future aeronautical development in “Zone 2” and 197 hectares for a new industrial and logistics zone in “Zone 3”); therefore, if the Master Plan is implemented, the future airport and related facilities would occupy a total area of 682 hectares. The RGC issued a “Land Freeze Sub-Decree” on March 20, 2006, which prohibits new construction and land transfers within the 682 hectares, except for land transfers to the RGC.

Land acquisition would be carried out by the RGC. According to the Concession Contract, the RGC commits to acquire ownership of the land required by the project and to transfer to the SCA the plots of land necessary to carry out the future phases of development of the airport and of its industrial zone.

The transfer of the land (559 hectares) would occur in phases, depending on traffic growth and airline decisions regarding the type of aircraft that will fly to Sihanoukville. SCA’s timetable for the improvement and expansion of the airport, which assumes that airport traffic will reach 4-5 million passengers by 2040, is the following:

2007: the existing runway will be extended within an area that has already been transferred to SCA (Zone 1 of the Master Plan, with 123 hectares, and a section of Zone 2); no land acquisition or resettlement is required.
2008-2010: the works for the new runway would be initiated within Zone 2; about 150 hectares would be needed, a portion of which needs to be acquired.
2010-2014): new passenger terminal and other facilities would be built; the rest of Zone 2 would have to be acquired (212 hectares).
After 2010: construction of cargo terminal/apron and industrial zone; Zone 3 (197 hectares) would be acquired.

A Land Acquisition Committee was appointed by the RGC in April 2006 to deal with all matters related to land acquisition. SCA is a member of this committee. Other members include government officials and district/village chiefs. The Committee made an inventory of all land owners to be affected by the project and is also responsible for defining compensation procedures.

The 559 hectares that would be acquired according to the Master Plan include:
The area that have already been transferred to SCA.
505 plots that cover an area of approximately 452 hectares and that include two communities:
Ream Commune (Thmor Thom, Ong and Ream villages), which comprises 343 plots (79 residential and 264 agricultural) for 251 hectares
Bettrang Commune (Koh Ki, Chamnot Ream Villages), which comprises 162 plots (23 residential, 139 agricultural) for 201 hectares.

In January 2007, SCA made an inventory of all the shelters and houses located within the 559 hectares that might need to be acquired for the project. SCA found 67 structures with approximately 370 persons living in them. Of all the houses inventoried, only 4 are built with durable materials and none is linked to a water network. Most of the houses are located near the boundaries of the future airport zone.

The construction of the new runway (possibly between 2008 and 2010) may affect fishermen who use tidal wetlands for shell fishing in a temporary or permanent manner.

SCA will develop a Resettlement Framework (RF), to be approved by IFC, outlining procedures to address any physical or economic displacement associated with airport expansion in a manner consistent with the requirements of PS5.

- PS 6. Biodiversity Conservation And Sustainable Natural Resource Management

The area directly surrounding SIA is primarily used for agricultural purposes and is not considered to be of importance in terms of biodiversity. SIA’s Master Plan indicates the eventual need to acquire a small area (approximately 40 hectares to the east of the airport as part of the long-term development. Although this area falls within the current boundary of Ream National Park, the land that would be acquired is currently heavily cultivated (rice paddy fields), and does not resemble a natural, unmanaged habitat. Because the loss of this small amount of land will have no impact on the environmental integrity of the Park, the RGC has agreed to acquire the land and to redraw the Park boundary accordingly.

The Ream National Park encompasses mangrove forests and the small area that may have to be acquired to the east of the airport could include mangrove areas. If this is the case, SCA will protect these areas. If this is not feasible, and the project results in the elimination or degradation of any mangrove areas, within the small area in the Park or in other areas to be acquired for the project, SCA will implement a mangrove compensation program, which will enhance, restore or preserve mangroves elsewhere in order to compensate for any loss of mangrove within the project site.

Stakeholder Engagement

The Land Acquisition Committee and the local authorities are responsible for disclosing information about the Airport Master Plan to the general public and the local communities. Prior to SIA''s opening in January 2007, the Land Acquisition Committee met with the local communities on several occasions to keep them informed about the plans for re-opening the airport and to disclose information about the development plan of the airport zone. Some meetings took place in a building used by the rangers of Ream and others inside the Airport''s terminal. Around 100 villagers attended each of these meetings. Detailed explanations about SIA’s development plan were provided during the meetings, including activities planned for the short term (for example, pole’s construction and fencing) and medium and long term plans, such as the construction of a new runway and passenger terminal.

The main concern expressed at the meetings was the compensation price of the land required by the project. Compensation issues are being considered by the Land Acquisition Committee. The Committee meets on a regular basis with local authorities and government representatives, and also with the chiefs of the concerned villages and local representatives.

SCA will develop its own Community Engagement Program (CEP) to keep local people well informed about the project and to enable them to express their concerns. As part of the CEP, SCA will organize meetings to discuss the anticipated impacts of the project (positive and negative) and the manner in which negative impacts will be addressed. The CEP will facilitate communications between SCA and other project stakeholders and will ensure that local residents are aware of employment and other economic opportunities to be created by the project. The CEP will include procedures to receive and respond to complaints of local residents.

SCA will monitor social and economic conditions of the population living near the airport and will identify opportunities to fund community development projects or to support the implementation of specific components of the wider master plan for Sihanoukville. SCA plans to build a garbage collecting area for the Ream village, which will avoid potential pollution, improve health conditions and clean the neighborhood of the airport. SCA supports a program to facilitate the sales of locally-produced crafts in terminal buildings of PPIA and SRAIA and will do the same in SIA. Projects of this kind will be developed and implemented on the basis of consultations with the local communities and with their participation.

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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