Maple has presented plans to address these impacts to ensure that the project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements contained in the ESAP, Peruvian laws and regulations and the IFC’s Environmental and Social Performance Standards and the Environmental, Health and Safety guidelines. The information about how these potential impacts will be addressed by Maple is summarized in the paragraphs that follow. Further information is provided in the attach ESAP, which is agreed between IFC and Maple and will ensure compliance with IFC’s requirements.
Maple holds 100% working interest in two mature crude oil producing properties located in the central east area of Peru (Blocks 31B and 31 D). Maple’s entire crude oil production, as well as natural gasolines supplied by Aguaytia Energy under a long-term sales agreement, is processed at Maple’s refinery in Pucallpa (a city 788 km east of Lima). Maple operates the Pucallpa refinery under a long-term lease agreement signed with PetroPeru (the Peruvian National Oil Company) in 1994. The refinery has a capacity to process up to 3,000 barrels per day (“bpd”) of crude oil when producing residual 6; 3,400 bpd of crude oil when producing residual 5; or 4,100 bpd of natural gasoline.
In 2007-08 the Company will conduct a comprehensive drilling and well work-over program, seeking to sustain and enhance production and reserves.
Maple has a minority economic interest in Aguaytia Energy, an integrated energy company engaged in exploration, production and processing of natural gas, gas-fired power generation and transmission, and marketing of liquid petroleum gas and natural gasoline. Maple also operates the gas and liquids facilities and pipelines under an operation and maintenance agreement with Aguaytia Energy.
Maple plans to pursue exploration opportunities through its interest in Block 31-E and through its interest, held through the Aguaytia project. In 2007 Maple will carry out environmental and social impact assessments to conduct seismic programs and drill exploration wells to advance the exploration activities.
Maple is developing an ethanol production project that comprises the development of land for sugar cane planting, construction of a distillery with a capacity to produce 30 million gallons of ethanol per year, and construction of related loading facilities. For this project Maple has signed a contract with the Regional Government of Piura to acquire 10,672 hectares of unused and uncultivated land (including rights for water reserves) in the northwest of Peru.
- Social and Environmental Assessment and Management System
E&S Assessment
Maple has prepared Environmental Impact Assessments (“EIAs”) of their operations since they took control from PetroPeru in 1994. In accordance with Peru’s environmental legislation, Maple has prepared (or is in the process of preparing) EIAs for every new exploration and/or expansion. Maple prepared a feasibility analysis for the ethanol project and is currently in the process of preparing the Environmental and Social Impact Assessment which is expected to be completed during 2007. The EIAs for Block 31-B, 31-C, 31-D, and 31-E are expected to be completed during 2007.
Additionally, Maple has conducted supplemental socio-economic surveys to identify the nearby communities that are either directly or indirectly affected by the project development, both in the oil fields and the ethanol project, including indigenous communities.
E&S Management and Organization
At the project level, Maple has an established Environment, Health and Safety (“EHS”) management system with full time senior managers to lead all EHS work.
Maple has a corporate level public relations manager with community relations and communication coordinators in the field. The focus of this department is to effectively communicate with the general public as well as to effectively develop and promote sustainable community development programs. The Company is improving its procedures for assessing social impacts, recording and responding to grievances with the goal of better engaging the nearby communities. These improved procedures will be captured as part of their Corporate Management System and will form part of the ESAP.
Action Plan
As part of the environment, health and safety assessments in their operations, Maple prepares mitigation measures during the annual monitoring programs which are closely reviewed by the Government of Peru. In order to obtain an environmental authorization for field development and as part of the environmental assessment, Maple will prepare an Environmental, Health and Safety Plan.
Training, Monitoring and Reporting
Maple has established a training program for its employees in environmental issues, occupation health and safety, as well as programs to manage and interact with nearby communities. Annual monitoring audits are performed by Maple on all of its activities and this is presented to the Ministry of Energy and Mines.
Disclosure and Consultation
Maple follows the Government of Peru legislation for disclosure and consultation. Draft EIAs are presented to potentially impacted communities and authorities for an initial review and consultation and are presented in a forum to communities. To date the Company has held seven initial consultation sessions in Blocks 31 B, 31 D and 31 E. Maple has maintained records of participants as well as their comments.
Maple will prepare a Public Consultation and Disclosure Plan (PCDP) for on-going interaction with communities.
- Labor and Working Conditions
Human Resources Policy
Maple is currently in the process of developing its Human Resource Policy and this will form part of the ESAP. This policy will specify employees’ terms of employment and working conditions including procedures for hiring and recruiting, probation periods, training, performance review, promotions, insurance, salary and compensation, leave and vacation as well as retirement. This policy will apply to all of Maple’s major activities and subsidiaries. Maple is expected to employ and/or contract approximately 1,500 and 400 people in the ethanol project during its construction and operation phases, respectively. At year end 2006, Maple employed approximately 400 persons.
Worker’s Organizations
Maple has stated its commitment to allow workers to form trade unions as indicated by the applicable laws of the Government of Peru. Maple currently has a collective bargaining agreement under a 2005 legislation. Maple manages employees unions in good faith, and has maintained a good record of union-management relations wherein all labor issues are resolved bilaterally. Training and learning opportunities are provided to all employees. Maple is in compliance in all material respects with Peruvian labor legislation. A grievance mechanism for employees will be incorporated into Maple’s procedures for labor.
Occupational health and safety (“OHS”)
Maple has an established OHS procedure at the corporate and project level. The onsite EHS manager conducts routine OHS inspections, and prepares a mitigation plan in the event of non-compliance. These are reviewed and approved by management. The company collects statistical data on all incidents, and the incidence rate is within normal levels for the industry.
- Pollution Prevention and Abatement
Pollution Prevention
Maple, during the design phase of its activities, limits it’s footprint to the required land-take and minimizes the opening of new access roads. Maple re-injects all produced water in the oil and gas fields and monitors ambient air emissions.
Drilling operations primarily use water-base drilling fluids which conform to the requirements of the Peruvian legislation, and the spent drilling fluids and cuttings are disposed of in accordance with the requirements of the Peruvian legislation.
Waste
Maple has an established waste management plan for all identified liquid, non-hazardous and hazardous waste. The plan identifies methods for handling, treatment, storage and disposal. The plan also outlines methods for segregation of waste and recycling where possible. Hazardous waste are collected and disposed of in a secure landfill managed and operated by a licensed third party.
Emergency Preparedness and Response
Maple has developed emergency plans for their facilities; including oil spills contingency plans and fire fighting protocols, both of which are validated through regular drills. Maple coordinates the emergency response plans with local authorities, and provides training to local communities that could be impacted by an incident.
Maple will develop a contingency plan for the transportation of crude via the Ucayali river which is currently done by a third party contractor. The contractor currently has complete responsibility from the loading point located in Puerto Oriente to the point of un-loading located in Pucallpillo and has its own contingency plan as required by law. The contingency plan will have components for the training of employees (contractors) for appropriate handling of crude, use of equipment to help in the event of a spill, coordination among appropriate authorities, and plans to conduct emergency drills. This will be part of the ESAP.
- Community Health, Safety and Security
Most of Maple’s operations in the oil and gas sector are isolated and thus the impact to communities is minimal. However, some communities are within the concession areas, and the Pucallpa Refinery is located within the city. Maple has taken caution in fencing the perimeter of the refinery and entrance to the facilities is only given to authorized personnel. In the oil and gas fields security gates are in place to monitor the safety of the personnel as well as the communities. Maple provides training to the communities on their emergency plans, and explanation of emergency response activities is done house by house.
Maple has an established on-site emergency plan for potential fires and explosions. All personnel as well as local hospitals and local fire department are invited to participate in the drills conducted on a regular basis.
-Land Acquisition and Involuntary Resettlement
Oil and Gas Fields
Maple commenced its activities in Peru in 1994 and obtained the concession rights to two existing oil fields, one gas field, and 2 facilities: Blocks 31 B, 31 D, 31C and the Pucallpa Refinery and Sales Plant through an international tendering process. As of December 2006, Maple had 55 active wells in Blocks 31 B and 31 D and has identified the potential to drill up to 31 development wells in these blocks in the future.
In March 2001 Maple obtained the rights to the concession of Block 31 E and plans to re-activate a number of existing wells and conduct exploration activities.
Ethanol
The ethanol project is located in the northwest coast of Peru, in the Piura region. On January 5, 2007 Maple signed a contract with the Regional Government of Piura to acquire approximately 10,672 hectares of unoccupied and unused governmental land. No communal or individual land will be affected as a result of this acquisition.
Compensation and Benefits for Affected People
Maple has paid reasonable compensation and in accordance with the Government of Peru legislation. Compensation was paid to communities for the loss of small portions of communal land in the oil and gas fields. The compensation rate is based on market value and negotiated with the owner. Maple has also developed community development plans for nearby communities.
Consultation and Grievance Mechanism
Maple conducts regular consultation with local communities. Maple will develop and implement a Public Consultation and Disclosure Plan (PCDP) for the construction, operations and closure phases of Maple projects. The plan will include a grievance mechanism. The plan will also include mechanisms for on-going consultation with key stakeholders.
The PCDP will be utilized by Maple’s contractors and Maple will assume responsibility for ensuring contractor’s compliance.
Physical Displacement
There was no physical displacement in the past and it is not expected that there will be any physical relocation of individuals or households during the expansion, workover or ethanol project.
Economic Displacement
The ethanol project was not awarded with any communal or individual land and it is not expected that there will be any economic displacement from the project site. However, in the oil fields there are some economic impacts associated with use of community land. Compensation is currently made according to Peruvian Government requirements.
Maple will formalize the procedures for land acquisition and compensation into a Land Acquisition and Compensation Framework Plan (LACP) to form part of the overall Management System, which will incorporate the Government of Peru regulations and IFC’s Performance Standard 5 on Land Acquisition and Resettlement. The LACP will be used for any future land acquisition.
-Biodiversity Conservation and Sustainable Natural Resource Management
Protection and Conservation of Biodiversity
Maple oil and gas activities are located in the Loreto, Ucayali and Huanuco departments of Peru and the Ethanol project site is in the department of Piura. The operational areas do not involve any protected areas under national or international legislation. However, in recent years some portions of Blocks 31-B, 31-D and 31-E are in the process of being classified as reserves. Maple’s current operations are not in these reserve areas and its future operations will not be conducted in these areas.
Maple minimizes the footprint of their activities in these areas and minimizes the construction of new access roads. Strict requirements of no hunting, poaching or logging are included in the training program for employees, as well as sub-contractors.
Maple as part of the revised procedures under the IFC Performance Standards 6 Biodiversity Conservation and Sustainable Natural Resource Management will develop a policy and procedure for biodiversity in sensitive areas.
-Indigenous Peoples
Maple’s Block 31B – Maquia is located in the Loreto region, approximately 130 km north of the city of Pucallpa. The field is located 9 km from the Ucayali River and hosts the Canaan Community, which is considered an indigenous community under Peruvian legislation. In July 2005, the Community of Canaan entered the installations of Maple without authorization and remained in the installation. The communities concern was that no appropriate compensation had been given to them by the Government of Peru or Maple and their activities were in their territory. As a result of this event, and even though Maple had only taken over pre-existing operations, Maple and the Community entered into a conflict resolution process in which the Government of Peru (MINEM), PeruPetro, indigenous community representatives, Maple and local representatives were present (Defensoria del Pueblo). An agreement which included monetary compensation was reached; additionally, a plan for the indigenous community entitled “Plan de Monitoreo Ambiental Participativo Maple Canaan” was agreed. This plan will continue through 2008, and provisions exist for continuing inputs to the indigenous peoples plan each year. Monetary compensation will continue until the end of the concession agreement.
Maple has a plan for consultation with this community and through the indigenous peoples development plan, Maple has established a sound dialogue with the Canaan community. All new activities in the area are communicated to the chief of the community and comments regarding potential mitigation measures are presented to Maple by the community representatives. Part of the development program includes the training in environmental aspects of monitoring water and soil, and agricultural techniques.
Maple will build on existing plans to develop an Indigenous Peoples Consultation and Disclosure Plan (IPCDP), which will include a process to achieve free, prior and informed consultation concerning any further developments, and will also include a culturally appropriate grievance mechanism.
Maple will also build on existing plans to develop an Indigenous Peoples Development Plan (IPDP) for communities whose traditional land and resources are affected by the project.
- Cultural Heritage
Maple is in the process of preparing a complete archeological assessment for their activities in the oil and gas fields. This assessment will be presented to the National Institute of Culture ( Instituto Nacional de Cultura - INC) for their approval and issuance of the CIRA clearance (CIRA) that no sensitive areas with respect to cultural heritage are in the new areas of the Project.
In the ethanol project site some minor archaeological finds were made during the pre-feasibility study. Maple will not cultivate these areas and they will be carved out of the project total area for cultivation. Maple will obtain an Archaeological certification from the INC prior to commencing the ethanol project.
Maple will develop a chance find procedures as part of their ESAP and in accordance with IFC’s Performance Standard 8 on Cultural Heritage.
