The IFC appraised the following social, environmental, health and safety issues:
- environmental and social assessment;
- project company environmental and social management systems, including environmental and social management, as needed, of the out-growers;
- human resources policy and labor management;
- incidence of harmful child labor among the out-growers;
- air emissions and liquid effluent from the oil palm mill;
- possible energy conservation measures;
- use of agro-chemicals and disposal of empty fruit bunches;
- land tenure status of both the plantation and out-growers;
- economic displacement as a result of land acquisition;
- protection of biodiversity and sustainable management of natural resources; and
- protection of cultural heritage located on the plantations.
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:
- Ghanaian laws and regulations and
- World Bank/IFC environment and social standards 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.
Further information is provided in the attached revised Resettlement Action Plan.
Performance Standard 1: Social and Environmental Assessment and Management Systems
Social and Environmental Assessment. The company has hired an external consultant to carry out Environmental Impact Statements (EISes), of both the refinery/fractionation plant at Kwae and the Okumaning oil palm plantation development. An external consultant prepared a resettlement action plan for Okumaning. These assessments were done to fulfill the requirements of the Ghana Environmental Protection Agency (EPA), but were not done with the Performance Standards explicitly in mind. Thus, the EISes are acceptable to IFC on several key issues, specifically pollution control, the impacts on the natural environment, and environmental management systems, but leave out such key areas of the Performance Standards as labor and working conditions, community health and safety (though the impacts appear to be minimal), and cultural heritage.
IFC''s review of the project found that the company''s performance in these areas is largely acceptable to IFC and that a limited number of supplemental actions are needed. IFC found that the resettlement action plan did not meet IFC standards because it focused on compensation rather than livelihood replacement, as required by Performance Standard (PS) 5. IFC has requested that the company undertake an assessment of past resettlement to determine the need for livelihood restoration measures and to set a framework for future resettlement. This assessment will also identify any vulnerable people who may be affected by the project. With the completion of this document, GOPDC will meet the PS requirement for social and environmental assessment.
Management Program. GOPDC has an acceptable management program that can identify risks and mitigation measures. The company must report to the EPA on an annual basis. Additionally, the parent company, SIAT, undertakes its own internal audit of the company''s environmental performance. The most recent audit (April 2007) recommends that the company improve its documentation system with respect to procedures in key areas (such as solid waste management) and to improve the collection of social and environmental data. As part of the project with IFC, the company will develop, at least annually, a sufficiently resourced and time-bound action plan (the ESAP) for addressing the recommendations of these reports. GOPDC management will review progress on this ESAP at least annually and will share each revision with the local communities.
Organization. IFC has reviewed the organization of the Company''s social and environmental management. The company has an Environment and Safety Committee chaired by the director of operations and including senior staff drawn from all areas of operation. The company also has an Environmental and Safety Officer. Environmental management appears to be integrated into the operations of the company, adequately staffed, and capable of addressing needed actions as resources permit. Given, however, the significance of community relations to a number of areas of operations, e.g., out-grower schemes, land acquisition, ensuring respect for cultural heritage, IFC recommended that GOPDC hire a dedicated community liaison officer with responsibility for tracking internally all of GOPDC''s community activities and tracking externally all local stakeholder engagements.
Training. Training in support of the social and environmental management system appears to be adequate.
Community Engagement. Ghanaian law requires that the EIS documents be available for 21 days and be subject to public hearings. Given that developments at GOPDC are on-going and will only be accomplished over a period longer than a year, the company needs an on-going process of consultation with the local communities. The annual ESAP will not only be available to the community, but will be an opportunity for on-going community consultations about the project. The company also needs to develop an explicit mechanism for the local communities to voice their grievances. The mechanism should have a clear point of contact - the community liaison officer - and a procedure for ensuring that the complaint is fairly and transparently treated and a response given within a defined time.
Monitoring. The client provides annual reports to the Ghana EPA on its environmental performance. The internal auditing mechanism also provides information on the environmental performance of the company.
Reporting. The annual environmental audit is given not only to senior management of GOPDC, but also to the parent company, SIAT.
With the additional measures of an annual ESAP, a dedicated community liaison officer and a formal grievance mechanism, the Project will meet the requirements of PS 1.
Performance Standard 2: Labor and Working Conditions
GOPDC has a human resources policy acceptable to IFC.
Ghana has ratified the ILO core labor standards, with the exception of ILO 138 on Minimum Age (of Employment). Ghana''s Children Act (1998) makes it illegal to engage a child in labor that deprives a child of her or his health, education, or development. GOPDC, by following Ghanaian law, meets the Performance Standard 2 requirements with respect to workers'' organizations and non-discrimination.
Child labor in agricultural activities is of concern in Ghana. Thus, IFC reviewed the risk of harmful child labor among the out-growers working with GOPDC. The company, along with four other oil palm and rubber plantations, has been the subject of a study on child labor by the Ghana Employers Association (GEA), carried out in cooperation with the ILO. The results were not broken down by individual plantations, but the final report makes it clear that GOPDC does not have children working on its plantation neither through direct employment nor through contractors. The report does conclude that the major risk for child labor is in the private plantations that sell their fruits to companies like GOPDC. GOPDC will include in its contracts with out-growers a provision ensuring that the out-growers are aware of Ghanaian law with respect to child labor and a commitment to avoid harmful child labor. The GEA report also recommends that the out-grower associations be strengthened to educate their members on the legal and other issues associated with child labor and to serve as an informal regulator of their members. IFC has requested that GOPDC assists in implementing these recommendations.
Both the Sponsor''s internal environmental auditor and IFC observed gaps in the company''s health and safety arrangements. The company will need to define appropriate personal protective equipment (PPE) for each work area, provide signage specifying what equipment must be worn within that work area, and ensure full compliance with these requirements. Use of proper PPE by contractors and sub-contractors will be improved so that the requirements of Performance Standard 2 will be met. The company will also need to increase the number of fire extinguishers in the mill and workshops, the location and type to be appropriate for the fire risk, and provide appropriate signage.
With these measures GOPDC will meet the requirements of Performance Standard 2.
Performance Standard 3: Pollution Prevention and Abatement
The Sponsor''s internal environmental auditor takes note of the need for the systematic collection of data on energy and water consumption. IFC agrees with the need for this data collection, and for its integration into the social and environmental management system.
The current system for wastewater treatment for the oil palm mill and refinery does not meet WB/IFC guidelines. Recent (September 2006) monitoring reports indicate that the biological oxygen demand (BOD), total suspended solids (TSS,) and oil and grease were 412 mg/l, 760 mg/l, and 86 mg/l, respectively at the exit of the treatment ponds. These figures are compared with WB/IFC standards of 50 mg/l, 50 mg/l and 10 mg/l, respectively. The same monitoring data also show that raw water from the boilers and factory floor, which does not go into the treatment ponds, can also exceed these parameters. The company has plans to develop a closed, zero effluent system based on the development of biogas plant that would use methane emissions to generate electricity. IFC, however, is requiring the company to take interim measures to address this problem and to make sure that effluent flowing into surface waters meets or exceeds the above standards. The company has installed a centrifuge and decanter to reduce the amount of suspended solids and oil and grease, respectively. Additional measures will include: increasing the frequency of sludge removal from ponds, using effluent for irrigation, digging an additional pond or ponds, and rerouting raw water from the boilers and factory floor into the treatment ponds.
The company depends on a boiler that burns husks and fiber for electrical generation in all of its operations and domestic accommodations at Kwae. These operations have just switched to a new boiler that will reduce the visibly heavy particulate matter (i.e., dark smoke) that came from the old one. The new boiler will have a multi-cyclone de-duster, dust collection funnel, flue gas collectors, high stack and automatic fly ash evacuation system. The plant is a pilot plant and the manufacturer cannot provide reassurance that particulate matter will meet acceptable levels. GOPDC has agreed with the Ghana EPA to monitor air emission quarterly once fully operational to ensure that the existing measures will reduce particulate emissions to meet EPA, and IFC, standards.
As a certified organic plantation, GOPDC uses an integrated pest management system (IPM) with no agro-chemicals. It does, however, use pesticides in the nursery, which is not part of the organic certification. These pesticides are acceptable to IFC; no WHO type 1a or 1b pesticides are used.
The company uses various elements of its by-products by either returning them to the land, such as with empty fruit bunches, or, in the case of shells and fiber, using them as fuel for the boilers. The company does, however, need to improve its handling of solid and hazardous wastes in other areas of its operations, such as at its disposal site and in its chemical storage area. Its internal environmental auditor has recommended that the company develop documented procedures and training to address the need for improved handling; IFC agrees and will require the company to do so.
Improvements are also needed in fuel handing and storage. In addition to developing documented procedures and training, the company will need to undertake such physical measures as building oil traps to make sure that wash water does not carry oil into the gutter and out into surface waters. The buried fuel tanks at the on-site petrol-diesel station do not have double walls and could be subject to eventual corrosion and leakage. These tanks will be dug up, any soil contamination removed, and replaced with above-ground or buried double-walled buried tanks.
With measures to reduce the pollutants in the wastewater from the plant and mill, to monitor air emissions and ensure that the new boiler meets IFC standards, and to develop new procedures and training with respect to the handling of hazardous materials, fuel, and solid waste, the project will meet the requirements of Performance Standard 3.
Performance Standard 5: Land Acquisition and Involuntary Resettlement
The development of the Okumaning plantation has involved both physical and economic displacement of people. GOPDC acquired the Okumaning plantation land from the Government of Ghana through the Divestiture Implementation Committee (DIC) in 1999. The total land area is 5200ha. The land had previously been acquired by government in 1974/5 by decree for the purpose of developing an oil palm plantation. When the plantation failed, people moved back onto the land to continue farming. At the time that GOPDC acquired the right to develop the land from the government, local communities raised the issue of whether the government still had rights to it. Local chiefs have subsequently agreed that the land belongs to the government and that GOPDC now holds the right to develop the land for agriculture.
The Government had the responsibility for carrying out compensation and resettlement, but the company has had to carry it out on its own because the Government lacked the funds to do so. In line with PS 5, the company paid compensation for lost crops and other assets, even though the land technically belongs to the Government. Though the state acquired the land long ago, fiduciary ownership still resides with the respective chiefs of whose lands the plantation land forms a parcel. Thus the company had to take up resettlement and compensation negotiation in consultation with the chiefs and project affected persons.
The majority of people were economically displaced. Four villages, however, had grown up within the plantation, Dwense I and II, Eha Nso De and Nkranfo (totaling 869 people) and they had to be physically located. These people were offered the option of relocation to a new resettlement village, but all of them accepted compensation instead. An appropriate cadastral survey has been done by the company and all crop compensation has been duly paid to all farmers whose crops were impacted before development took place. Valuation is done by Land Valuation Board, the authorized state institution. A resettlement action plan was developed in November 2002, but it did not envisage or provide for post-compensation monitoring and evaluation and livelihood restoration as required by PS 5. To meet the requirements of this Performance Standard, the company has provided a revised RAP with these issues addressed, as well as with basic information as to the number of people affected and the compensation package provided. Because the prior physical and economic displacement took place in the absence of PS 5, no adequate census or baseline study was undertaken. The RAP establishes a procedure for determining a baseline against which to determine livelihood restoration. The revised RAP is attached to this ESRS.
Additional land acquisition will take place and will be carried out according the objectives of Performance Standard 5. One community, Kusi, has so far chosen not to release part of its land within the concession, and the company has chosen not to force the issue. The company is additionally planning to convert 500 ha at the southern end of the plantation to small holders and 703 ha for biodiversity plots. The remaining villages in the concession will not be moved.
With the implementation of the measures in the RAP, and the future adherence to the resettlement framework contained therein, the project will meet the requirements of PS 5.
Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resources Management
The Kwae plantation was an established plantation when GOPDC acquired it, thus there was no impact on biodiversity or natural habitat. Okumaning was a mixture of limited natural and largely disturbed habitat, characterized by small scale farming with fallow land. The company is replanting native tree species along water courses in both the Kwae and Okumaning plantations to meet a requirement for a 30 meter buffer and to restore lowering water tables. All high hills have also been preserved as biodiversity set-asides to control erosion as well as to preserve and promote biodiversity. These conservation practices are expected to yield the twin benefits of water conservation and reduction in the incidence of leaf miner outbreak due to induced presence of leaf miner predators in the natural habitat. The Kwae plantation has 39.5 ha of land in biodiversity plots and Okumaning 93 ha, with an additional 703 ha planned for the southern section. In cooperation with the Ghana Wildlife Society, GOPDC has developed a Conservation Management Plan and a regular program of biodiversity monitoring for Okumaning. With the increase of natural habitat along streams and the protection of biodiversity plots within the plantations, the project has met the requirements of PS 6. IFC has encouraged the company to quantify the ecosystem services of the biodiversity plots, particularly with respect to pest management.
Performance Standard 8: Cultural Heritage
In keeping with established practice of its predecessor, GOPDC has preserved the community shrines within the plantation. These shrines and the forest engulfing them are also treated as biodiversity offsets. The Company plans to expand the land allocated to the Kwae and Anweam community for burial. The project meets the requirements of PS 8 to avoid impacts on cultural heritage and to consult with stakeholder communities.
