25335 - Star Paper

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Environmental & Social Review Summary

Project Number

25335

Company Name

Star Paper Mill Ltd

Date ESRS Disclosed

Nov 28, 2006

Country

Nigeria

Region

Africa

Last Updated Date

Jun 4, 2025

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 3, 2007
Signed : Jun 25, 2007
Invested : Sep 7, 2007

Sector

Paper Tissue

Industry

Agribusiness and Forestry

Department

Regional Industry - MAS Africa

Project Description

Star Paper Mill Limited (Star Paper or the company) is in the final stages of completing a $28 million expansion of its existing paper manufacturing/conversion plant in Aba, Abia State, Nigeria, and is seeking IFC’s assistance with refinancing short/medium term loans and funding additional capital expenditure. Star Paper began commercial production on the new 60-65 tons/day tissue machine in May 2006 and has more than doubled its production capacity from 20,400 tons to 44,200 tons of jumbo reels per annum.

This project is the first phase of a larger program aimed at increasing the total plant capacity to 73,200 tons per annum (effectively more than tripling production capacity). Depending on the success of this project, Star Paper will evaluate the viability of a second phase expansion which could take place within the next 18 to 24 months.

Overview of IFC's Scope of Review

IFC’s review of this project consisted of appraising technical, environmental and social information submitted by the project sponsor, including a review of the following documents:

- The company’s business plan;
- Illumination (Nigeria) Ltd. 2006. “Star Paper Mill Limited (Owerrinta Factory): Environmental Audit Report, June 2006.” Port Harcourt, Nigeria: Illumination (Nigeria) Ltd.
- The company’s “Health, Safety and Environmental Management Manual.”
- The company’s “Staff Handbook.”
- Monthly “Effluent Monitoring Report”, prepared by Fugro Consultants Nigeria Limited, reports for June 2005 to May 2006.

Additionally, IFC’s social and environmental specialist carried out a visual inspection of the Owerrinta and Aba factory sites and interviewed the managing director, the executive director operations, HSE Supervisor, and factory manager, of the company and the paramount chief of the area.

E & S Project Categorization and Applicable Standard

The Performance Standards (PS) that apply to this project are:

- PS1: Social and Environmental Assessment and Management Systems;
- PS2: Labor and Working Conditions;
- PS3: Pollution Prevention and Abatement; and
- PS4: Community Health, Safety and Security.

The project appraisal also assessed the applicability of:

- PS5: Land Acquisition and Involuntary Resettlement;
- PS6: Biodiversity Conservation and Sustainable Natural Resource Management;
- PS7: Indigenous Peoples; and
- PS8: Cultural Heritage.

Land for the plant in Owerrinta was purchased through a willing seller/willing buyer arrangement. Thus, PS 5 does not apply. The project land was effectively vacant when acquired, but since it is located on the edge of a village with other small industrial developments, the project did not adversely affect natural habitats or biodiversity. There are no indigenous people, as defined in PS7, in the area. Nor were there cultural heritage sites associated with the acquired land.

As a result of IFC’s appraisal of the project, the following key social and environmental issues were identified:

- Health, safety and environment management systems;
- Health and safety monitoring; and
- Wastewater treatment.

These issues, and the impacts from the project, can be addressed through known procedures, practices and technology. The project has been operating for a long period of time and the company has demonstrated its capacity to manage the environmental, health, safety and social aspects of the project. Any impacts will be limited to the project site and will, in any case, be reversible. Thus, this is a category B project under IFC’s Environmental and Social Review Procedure.

Environmental and Social Mitigation Measures

As part of IFC’s appraisal of the project, the following issues were addressed:

- environmental, health and safety management systems;
- community expectations with respect to economic opportunities associated with the project;
- labor relations;
- sourcing of fiber, particularly any child labor associated with the collection of recycled fiber;
- occupational health & safety management, including fire & life safety;
- treatment and disposal of liquid effluent;
- disposal of solid sludges from the pulping process;
- the use and handling of hazardous materials;
- monitoring and control of air emissions from boilers and stacks; and
- use of security personnel.

The sponsor has presented plans to address these impacts and thereby 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.

- Performance Standard 1: Social and Environmental Assessment and Management Systems:

Nigerian national standards are applied to the project, but the responsibility for applying those standards rests with the Abia State government. Star Paper was required to carry out an audit of the project following completion, but did not have to carry out an environmental impact assessment. Based on this audit, the Star Paper Mill has a certificate, dated 22 September 2006, from the Abia State Environmental Protection Agency, stating that it has complied with the rules and regulations guiding environmental audit reports in Abia State and is therefore in compliance. IFC observed that the audit did not directly address issues with wastewater treatment raised by the environmental monitoring program. Additionally, the audit was not publicly released. Given the need for a publicly-released environmental and social assessment, IFC has requested that Star Paper publicly release this environmental and social review summary (ESRS) as a review of its on-going operations and the project.

The company has a health, safety and environment (HSE) management system. The HSE system has been formalized into a manual that spells out the company’s policy, lines of responsibility, and associated training. HSE matters are addressed through an HSE committee, headed by the managing director. The company has engaged an environmental consulting firm based in Port Harcourt to carry out periodic monitoring of its effluent. IFC’s review of these data and the environmental audit suggest that firm could strengthen its follow-up on consistent problems (see below under the discussion of Performance Standard.

To ensure that HSE matters are properly followed up, IFC has requested that the company institute environmental and social actions plans (ESAP) in which needed actions are identified, time bound targets are specified, and responsibilities for completion are identified. The HSE committee should review progress against these plans at its meetings. The company is in the process of seeking ISO 9001 certification. This demonstrates that the company is committed to continuous improvement in key areas of its operations. IFC has recommended that ISO 9001 certification could serve as the basis for eventual ISO 14001 or OHSAS 18001 certification.

The Star Paper’s primary community engagement has been through the provision of needed infrastructure: the company supports the local community through provision of a bore hole and a transformer. The latter has allowed the community to connect to the national grid. IFC has asked Star Paper to expand its community engagement to include information about its environmental performance. As noted, Star Paper will make this ESRS publicly available as part of the project. The Environmental Audit Report has recommended that the company provide more information about its health, safety and environmental performance to the local community in the form of a periodic newsletter. IFC has reinforced that recommendation.

As a requirement for IFC’s investment, Star Paper will improve its monitoring program to meet international standards, particularly in the area of health and safety statistics.

- Performance Standard 2: Labor and Working Conditions:

Star Paper has a human resources policy that is contained in a hand-book provided to workers. On joining the company, the staff member is given the book and must endorse it. Copies of the handbook are available to all employees. The hand-book clearly states to employees that the company follows national law, supports a policy of non-discrimination, defines a policy of merit-based promotion and pay-raises, and provides opportunities for training. Workers are represented by a labor union.

The company sources its paper from agents, who in turn pick up waste paper from examination boards and offices. Child labor is not usually associated with this type of paper recycling supply chain. Star Paper, in its own operations, does not hire workers below the minimum age specified by law.

The company provides training to workers on health and safety when they are first employed. IFC reviewed the health and safety statistics kept by the company and has requested that the company change its method of measuring accident rates to accord with international practice, particularly by tracking lost day accidents. Star Paper will then be able to benchmark itself against industry best practice and identify ways by which accident rates can be continuously improved. Star Paper also needs to ensure consistent use of personal protective equipment (PPE), particularly ear plugs, in the areas around the generating plant and boiler room where noise levels exceed IFC/World Bank standards for noise.

The company has an emergency response plan.

- Performance Standard 3: Pollution Prevention and Abatement:

The new paper recycling line uses modified natural and synthetic polymers for de-inking and natural and synthetic surfactants as an optical bleaching agent to make the paper surfaces brighter. According to the manufacturer’s safety data sheets, neither product is hazardous, but should be used according to elementary working practices to avoid dispersal to the environment. The process does not use chlorine. Both compounds are adequately treated in the existing wastewater treatment facilities.

Monthly monitoring of the wastewater treatment shows levels of phenol (also known as carbolic acid) that persistently exceed Nigerian government standards (but not World Bank Group standards, which are less stringent). Phenol is not typically removed by standard wastewater treatment. Thus, the company will need to determine the sources of phenol in its process water and reduce them to meet the Nigerian standard. The company also has occasionally high levels of BOD, which again exceed Nigerian government standards but not always those of the World Bank Group. The increased levels are probably coming from the old paper recycling line, rather than the project. The company will have separate samples taken from both the old and new lines (the samples are currently taken from the joint effluent discharge) to establish whether it is the older line and its smaller water treatment plant that are causing the problems. The company has plans to refurbish the older line with a new wastewater system that will include the recycling of process water back through the process, and a larger treatment plant. Until the refurbishment is done, the company will maintain the maintenance and management of the wastewater treatment plants to ensure that they achieve the effluent standards of which they are capable, and which meet both World Bank Group and Nigerian standards.

The factory has six diesel generators of 1500 Kv each, and one of 225 Kv. These generators are used for back-up to the national grid. They are operated and maintained according to the manufacturers specifications. They are below the size of generator generally subject to the World Bank Group standards. The factory also has two oil-fired boilers that produce 8 tonnes per hour of steam. They are also maintained and operated according to the manufacturer’s specifications. Star Paper will monitor the opacity of the air emissions to ensure compliance with the World Bank standard for air emissions.

The company will carry out a self-audit of its premises to identify areas where housekeeping needs to be improved to ensure that fuel, lubricants and other chemicals don’t leak into the ground or get carried into the drainage systems by rain. The company will also ensure that all fuel tanks are surrounded by walls to ensure that any spills can be contained.

Solid waste from the factory is taken by a third part to a state government approved disposal facility. Currently, the sludge from the wastewater treatment plants is being taken to the same facility. The company is looking into whether it can be recycled as a building material.

- Performance Standard 4: Community Health and Safety:

The company employs third party security guards for the factory. The company originally had its own security guards, but decided to hire a nationally-known security firm to ensure that the guards are professionally trained and follow well-defined procedures. The security firm is back up by a small contingent of Nigerian police, who permitted to carry guns.

Stakeholder Engagement

Star Paper will release this ESRS locally. It will be available at the following location for at least 30 days:

Chamber of Commerce Library
Aba
Abia State, Nigeria

In addition, Star Paper will make available its initial environmental and social action plan, following the 30-day disclosure.

To provide on-going information to the local community, Star Paper will provide occasional bulletins to its workers and local inhabitants to describe improvements in its management of environmental and social performance.

**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).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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