26172 - AEF FMEGAZ EXPANSION

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Environmental & Social Review Summary

Project Number

26172

Company Name

FME GAZ

Date ESRS Disclosed

Jun 22, 2007

Country

Cameroon

Region

Africa

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Oct 17, 2007
Signed : Oct 29, 2007
Invested : Nov 14, 2007

Sector

Industrial Gases

Industry

Manufacturing

Department

Regional Industry - MAS Africa

Project Description

The FME Gaz project consists of upgrading the main equipment of the company to produce better quality industrial gases, including oxygen, nitrogen and acetylene. The company also imports carbon dioxide and argon for re-sale. The project under consideration involves:

- upgrading of both the existing oxygen/nitrogen and acetylene process plants to produce a superior quality of gases;
- the acquisition of bulk tankers to transport products to neighboring markets of Chad, Equatorial Guinea, the Democratic Republic of Congo and Gabon;
- additional cylinders to accommodate higher throughput; and
- extension of the existing factory building to accommodate the new process plants.

Overview of IFC's Scope of Review

IFC’s scope of review included review of

- IFC technical specialist’s back-to-office report;
- FME Gaz’s (the company) permit to operate from the Ministry of Mines, Water and Energy;
- documents describing FME Gaz’s management structure, in particular the structure of its health, safety and environment committee; and
- work-related accident statistics.

IFC’s technical and environmental specialists made separate inspections of the site, and interviewed the managing director and the director of research and development.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFC’s social and environmental due diligence indicates that the investment will have impacts, which must be managed in a manner consistent with the following Performance Standards (PS):

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

The project is located at the company’s existing plant site in Bonaberi, in the 4th Arrondissement of Douala, Cameroon. The total plant site is 6,234m2 and has been the location of the company’s operations since they began in the early 1990s. No further land acquisition is necessary for the project, so PS 5 is not applicable. The site contains neither natural habitat nor cultural heritage, so PS 6 and 8 do not apply. While the region does contain people of Bakoka/Bagyeli heritage, and are therefore Indigenous People, none are affected by this project. Therefore, PS 7 does not apply.

The key environmental, health and safety issues for this project are:

- Road transport safety of the industrial gases, and
- Fire safety at the Douala production site.

This project has minimal social and environmental impacts; most issues are related to community health and safety. The company can carry out measures to adequately minimize road transport risks both inside and outside Cameroon. Fire safety at the Douala production site can also be addressed with known mitigation measures. As the adverse impacts are not expected to be diverse or irreversible, according to IFC’s Procedure for Environmental and Social Review Procedure, the project has been classified as a Category B.

Environmental and Social Mitigation Measures

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

The company has set up an advisory health, safety and environment committee, headed by the director of research and develop, which is responsible for implementing the action plans put into place by the Managing Director. This responsibility includes providing workers, on a weekly basis, with information on health and safety risks, inventorying dangerous situations, developing emergency response procedures, and providing training to personnel and clients. Recent client training has included procedures for the handling, transport, storage, and utilization of industrial gases. The IFC has advised the client to develop action plans at least annually and is requesting that the company make them public on their external website.

The company has, for its current operations, sufficient capacity for social and environmental assessments. To ensure that FME Gaz has sufficiently assessed the risk for road transport, which is probably the company’s greatest potential exposure on safety, IFC will require the involvement of a third party to help the company assess this risk. With this assistance, the company will meet the requirements of PS 1.

Performance Standard 2: Labor and Working Conditions:

The company has a human resources policy acceptable to IFC. The company does not have a union, but does not discriminated against those who may wish to form a union, nor seeks through other means to prevent its workers from joining a union. The company holds weekly meetings with its workers, which act as a way for management to hear grievances and to review issues related to worker health and safety. The company had no lost time accidents in the calendar year 2006. Most accidents result from the moving of gas cylinders. IFC observed during the site visit that improvements could be made in the storage of these cylinders, which the company will implement. The company’s objective is to have zero accidents of any consequence. FME Gaz is in compliance with Performance Standard 2.

Performance Standard 3: Pollution Prevention and Abatement:

Slaked lime [Ca(OH)2] is a by-product of the company’s manufacture of acetylene. The quicklime is settled out of the process water by passing the water through three concrete tanks. The quicklime, which is commercially valuable, is taken away by a specialized company. The remaining liquid effluent is put into the wastewater system of the industrial park, which eventually empties into the Wouri River. IFC has asked that the final wastewater be tested to ensure that it meets IFC standards for wastewater.

FME Gaz no longer packages refrigerants, but rather it imports ready-for-sale bottles and sells them on the local market. The company still sells ozone depleting substances, CFCs R-11, R-12, which are subject to phase out in Cameroon under the Montreal Protocol by 2010, and the HCFC R-22 which has a much longer phase-out timescale. FME Gaz is now selling, however, acceptable replacements for these gases: R-134A, R-404A, and R-407C. It sources these latter gases from Singapore, which is a state-party to the Beijing Amendment to Montreal Protocol. This amendment not only requires restrictions on the production of ozone depleting substances, but also restricts trade in these substances. IFC will monitor the project over the next three years to ensure that FME Gaz meets the Cameroonian requirements for the phase-out of ozone depleting substances. With this phase-out, and the monitoring of its wastewater, the project will meet the requirements of PS 3.

Performance Standard 4: Community Health, Safety & Security:

FME Gaz will be producing industrial gases in Douala and shipping them to Gabon, Equatorial Guinea, the Democratic Republic of Congo by sea. The risks associated with sea shipments of the industrial gases will be managed by the shipping company. Transport to Chad, and possibly some shipments to Equatorial Guinea, will be by road. FME Gaz is building dedicated trucks with bulk tanks for these road shipments and will manage the risks of these shipments itself. FME Gaz has a small fleet of trucks and has never had a road accident in all their years of operation. IFC is asking for additional measures, however, to ensure that the transport will be safe, particularly for communities along the route. The company will follow standard routes to the sites in other countries. It will develop an emergency response plan that will include a thorough risk assessment along the routes to be traveled by the trucks. The risk assessment will take into consideration densely populated areas, intersections, and other factors that may increase the likelihood of a road accident and/or increase the consequences of an accident. Drivers will be properly trained in defensive driving and emergency procedures. The drivers will be restricted in the hours that they can drive and the hours of the day. All trucks will be equipped with GPS systems for tracking, and the drivers will be required to periodically inform a central dispatcher as to their location. Finally, the company will work with local authorities along the route to integrate them into the emergency response plan.

In IFC’s site review, it was observed that signage associated with fire extinguishers could be improved. As the sale and maintenance of fire extinguishers are a business line for the company, IFC will provide guidance for appropriate placement and signage for the extinguishers, which the company will pass on to its own customers as part of the training provided them. With the improvements in the signage and placement of fire extinguishers, and with the road safety measures described in the paragraph above, the company will meet the requirements of PS 4.

Stakeholder Engagement

For the previous IFC project, FME Gaz released an Environmental and Social Review Summary, translated into French, in the local mayor’s office for a period of 30 days. The company will do the same for this project, along with making it available through its website. The company will also, as a result of the project, start placing its ESAP on the website for public viewing.

As part of the emergency response plan for road transport, the company will consult with local authorities at points along the routes that may represent particular risks to transport. FME Gaz will provide these authorities will provide these authorities with necessary training and equipment to ensure an immediate response to any accident or other incident involving the transport of industrial gases.

Client Documentation

File Name	Actions
CAP_FMEGaz_Extension.pdf

**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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Environmental & Social Review Summary

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Environmental & Social Review Summary

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