Information concerning how these potential impacts are addressed by the Group is summarized in the paragraphs that follow.
PS 1: Social and Environmental Assessment and Management Systems. IFC’s assessment considered the Company’s management of its environmental, health and safety performance in the establishment and operation of its facilities; compliance with national and local permitting requirements; and the Company’s engagement with local communities regarding environmental, health and safety performance.
- Social and Environmental Assessment and Management Program – The Company retained an independent consulting firm (Pakistan Engineering Services (Pvt.) Ltd.) to carry out an environmental and social impact assessment of the Project and to assist the Company to conduct public consultation. The EIA dated June 2010 was prepared to meet the Pakistan EIA requirements, and to demonstrate compliance with ADB’s Safeguard Policy Statement and IFC’s Performance Standards on Social and Environmental Sustainability. The Project is located on both KP Province and AJK, and therefore, the EIA is subject to review by the respective environmental protection agencies (EPA) of the two provinces. The EIA dated June 2010 was submitted to AJK EPA, the public hearing by AJK EPA was held on August 5, 2010, and the Company received the Environmental Approval on August 11, 2010. Two public hearings by the KP EPA were held on February 1, 2011 and February 18, 2011, respectively, and the Company obtained KP EPA approval on April 4, 2011. The Company further updated the EIA with supplemental Vegetation Study, and Fish Fauna Study in November 2010 and IFC’s review is based on these November 2010 assessment documents.
Alternative layouts of the Project identified during the feasibility study stage were further reviewed as part of the EIA. The final layout was selected taking into environmental and social factors besides technical considerations. The Project layouts which would involve high dam for water storage were removed from further consideration due to likely requirement for a large scale displacement of people, and four run-of-river project layouts with relatively low height overflow weir and a headrace tunnel were considered. The selected EPC Contractor further modified the layout to move the location of the powerhouse about 460 m downstream to an area on a lower and gentler slope, which further improves the safety of the powerhouse and reduces required excavation and slope protection.
The Project needs to build several access roads connecting to the existing highway systems to access the locations of weir, powerhouse and surge tank. The EIA reviewed the proposed access roads and identified the necessary mitigation measures. Development of the connecting transmission line from the Project site to the national grid is the responsibility of NTDC. Based on the available information from the Company, the options of the transmission line could be either at 132kV or 220kV voltage and a distance of 20 to 60km utilizing an existing transmission line right of way, suggesting that their environmental or social impacts would be manageable. NTDC will conduct environmental assessment for the transmission line in accordance with the Pakistan EIA requirements and applicable donor environmental and social requirements if the transmission line(s) is/are financed by a multilateral agency. (NTDC has developed significant portions of the national grid with ADB financing and complies with ADB environmental and social requirements in the implementation of ADB-funded projects). The Company will coordinate with NTDC to promote good environmental and social practice in the construction of the transmission line(s).
Potential environmental and social impacts and risks covered by the EIA include: project location impacts (land for construction of access roads, land for project structures, submergence of land by headpond, workers camp and storage areas, spoil materials, sanitary wastewaters, noise and pollution due to vehicles exhaust), impacts on physical environment (water resources and determination of minimum reserved flow, water quality), impacts on biological environment (forests, wildlife, fishery, reserves and protected areas), and impacts on socio-economic environment (physical relocation of people, compensation). Key areas are summarized under PS 2, PS 3, PS 4, PS5 and PS6 below.
A detailed Environmental and Social Management Plan (ESMP) was proposed in the EIA of November 2010 (Chapter 9 of the EIA). This includes a list of specific mitigation measures to be implemented during pre-construction stage, construction stage and operation stage and a list of monitoring parameters to be monitored with responsibilities, location and frequency. In addition, an Environmental and Social Action Plan was agreed with the Company which includes additional actions to ensure that the Project fully comply with IFC Performance Standards.
Cumulative Impacts of the Project and other projects under development: Since the Project draws water from Kunhar River and releases in Jhelum River after power generation, the EIA analyzed the cumulative environmental impacts of projects on both rivers. At present there is no hydropower plant in operation on Kunhar River. However, a feasibility study for an 840MW project (Sukhi Kinari) on the Kunhar River has been conducted and contractor bidding is underway. The Suki Kinari Project is located upstream of the Project and, considering the scheme of the two projects (both are run-of-the-river projects with limited reservoirs), the EIA concludes that the impacts of the both projects are mutually exclusive. On the Jhelum River, quite a few hydropower projects are planned. Among these, the EIA identified two projects under development, namely 969MW Neelum-Jhelum Project (under construction) and 1,100MW Kohala Project (in feasibility stage) that would directly affect the flow of Jhelum river at the tail race of the Project. Neelum-Jhelum project will divert waters of Neelum River (a tributary of Jhelum River) and Kohala project will divert waters from Jhelum River, both upstream of the Project’s tail race and release them into Jhelum river downstream of the Jhelum-Kunhar confluence. The EIA states that the city of Muzzafarabad will be impacted as the flow in Jhelum River will be reduced considerably from its present levels, however, the Project will have beneficial impacts as it would release a substantial amount of water into Jhelum River that would positively benefit the water supplies of the city of Muzzafarbad and the 7km stretch between the Project’s tail race and the Jhelum-Kunhar confluence.
- Management Systems and Organizational Capacity – The Company will create an Environmental Management and Monitoring Unit (EMU), headed by an Environmental and Social Expert to manage and monitor implementation of the proposed environmental and social mitigation measures. For the construction phase, the EMU will ensure that Engineering, Procurement and Construction (EPC) Contractor fully comply with construction safeguard requirements (mitigation measures and monitoring activities), liaise with neighboring communities to address their concerns and achieve timely solutions, and ensure proper disposal of construction spoil. The EMU will also play a key function to ensure proper, timely and transparent payment of compensation to affected people. For the operational phase, the EMU will manage implementation of operational phase Environmental Management Plan and liaise with Khjyber Pakhtunkhwa Environmental Protection Agency (KP EPA) and Azad Jammu and Kashmir Environmental Protection Agency (AJK EPA).
- Monitoring and Reporting: A detailed monitoring plan covering pre-construction phase, construction phase and operational phase was developed as part of the Environmental and Social Management Plan, which is included in the EIA. The monitoring plan includes a comprehensive list of the factors to be monitored and indicates the frequency and the roles of the Company, KP EPA and AJK EPA. In accordance with the requirement of AJK EPA, the Project’s monitoring reports will be submitted to AJK EPA on quarterly basis, and most likely the same submission would be required by KP EPA.
Construction phase monitoring features include: statutory requirements, landslides, vegetation clearance, erosion and sediment, muck disposal, hydrology (river flow volume), water quality, waste management, hazards/risks, workers health and safety, aquatic ecology, flora, noise and vibration, air quality, traffic/access, and complaints. Operational phase monitoring features include: statutory requirements, hydrology (river flow volume, especially the reserved flow of Kunhar River), village water supply, river bed degradation, headpond stability, water quality, aquatic ecology, hazards (landslides, structural soundness), noise, solid waste disposal, wastewater discharge, soil contamination and workers health and safety.
PS 2: Labor and Working Conditions. IFC’s review considered Star Hydro Power’s operations with regard to fair, safe and healthy working conditions in its operations. The Company currently employs 24 people, 10 of whom are professional staff, and is in the process of developing an HR policy, procedures and management systems. HR policies and procedures are detailed in "Employment Policy and Rules", a document that includes: guidelines for recruitment, selection and continuity in service; standardized skill competencies; salary scales and benefits; performance appraisal; career progression; professional development; rewards and recognition; and professional ethics. Salary and benefit packages for all employees are competitive and reviewed annually. The Personnel Policy is provided and discussed with each new employee during recruitment and induction. The Company, its Engineering, Procurement and Construction (EPC) Contractor and all sub-contractors will be subject to the prevailing labor and industrial relations laws of AJK that guarantee freedom of association, collective bargaining, non-discrimination, individual worker grievance resolution and arbitration of labor disputes. These laws include the AJK Industrial Relations Ordinance (1974), the AJK Industrial and Commercial Standing Orders Act (1973); and the AJK Minimum Wages for Unskilled Workers Ordinance (1973). The major laws of KP and Pakistan that apply to workers working in KP and/or Pakistan are the Industrial Relations Act 2008, the Industrial and Commercial Employment (Standing Orders) Ordinance 1968, the Workmen’s Compensation Act 1923, the Payment of Wages Act 1936, the Employment of Children Act 1991, the Bonded Labour System (Abolition) Act 1992, the Minimum Wages Ordinance 1961 and the Minimum Wages for Unskilled Workers Ordinance 1969. The EPC contractor will ensure that the relevant sections of these laws are posted where workers congregate and the Project’s EMU will monitor contractor and sub-contractor adherence to these requirements.
The Company estimates that the Project’s construction labor force will range between 300 and 1,000 workers and supervisory staff engaged over a period of four years depending on the pace and schedule of construction works. The personnel required for the Project O&M is estimated at 95. Star Hydro Power will expand its own professional staff as the project ramps up. The majority of the construction labor will be recruited from within Pakistan. Professional and construction management staff will be housed in a permanent colony near Chattar village that will serve as housing or the O&M staff after the project is commissioned. Temporary accommodations for approximately 1,000 workers will be established within the construction sites on the Kunhar and the Jhelum rivers. The Company will require the EPC Contractor to provide viable, serviced accommodations for all construction workers including drinking water, electricity, sanitation facilities and security. The Company has included prohibitions in its EPC contract to ensure that no child or forced labor is employed on the Project’s construction sites. Requirements for the monitoring and reporting of the conditions of EPC contract workers will be included in the scope of the Common Terms Agreement (i.e., key financing/investment agreement) and the TOR of the Lender’s Independent Engineer. Star Hydro Power will require the EPC contractor and its subcontractors to meet standards of occupational health and safety (OHS) consistent with the IFC General Environmental, Health and Safety Guidelines including hazard assessment, enforcement of the use of personal protective equipment, and Lost Time Incident reporting, analysis and corrective action. IFC’s previous experience with the nominated EPC contractors (a joint venture between Sambu Construction Company and Daiwoo Engineering and Construction) confirms that high standards of sub-contractor management, OHS and worker accommodation will be maintained throughout the construction phase of the project. The Company’s own EMU personnel will monitor the implementation of OHS safeguards on site on a day to day basis as will the Lender’s Independent Engineer on a quarterly basis.
PS 3: Pollution Prevention and Abatement. IFC’s review considered the Company’s plans for controlling the impact of the project’s construction on the surrounding natural environment.
Excavated Material: Excavation work including drill-blasting will result in spoil material. The Company will work with the EPC Contractor to use the spoil material as fill material, as far as possible, for structure of weir, powerhouse and the stabilization of the headpond banks, embankment of access roads, coffer dams and for terracing of hill slopes. The surplus amount will be disposed in the vicinity of weir and powerhouse sites. Disposal areas will be covered with top soil for vegetation growth and erosion control.
Erosion Control: Mitigation measures for erosion control include planning the alignment and construction activities to fit the topography, soils and waterways and natural vegetation at the site, exposing the smallest area of the land for work over shortest possible time, maintenance program after completion of the construction, protecting and preserving forest and vegetation cover as much as possible through proper control and management of the construction site, construction and maintaining temporary drainage channels around areas where major construction activity and construction spoils are located. The drainage system will lead the water to a temporary pool or swamp before it is properly discharged in the river.
Reserved flow for the downstream of Kunhar River: As described under PS 6, the Project will ensure that minimum 2 m3/s of flow be constantly discharged from the weir to sustain ecological river habitat.
Dust control: Sprinkling of water will be practiced frequently in areas where equipment like compressors, blowers, dumpers and excavators would be in use. All dust emitting activities will be sited at least 300 – 400m away from residential areas.
Tree cutting and planting: About 620 trees are estimated to be cut to clear the land for the construction of the headpond, powerhouse, construction and storage camps, and the access roads. To mitigate the negative impacts, the plantation program will be implemented to plant at least two trees for one removed. For the construction of the access roads, additional check posts will be established at vulnerable points so that more strict vigilance for loggers and poachers will be made.
Water Quality: During construction phase, it is expected that river water quality may deteriorate mainly due to the increase of suspended solids, turbidity and waste. The Company will work with EPC Contractor to achieve sound construction management to avoid river water pollution, to provide training on awareness for water pollution control, and implement oil spill prevention measures, and apply adequate sanitation facilities.
Emergency Preparedness and Response: The Company and the EPC Contractor will jointly develop and implement Emergency Response Procedures for the project construction prior to the commencement of construction. Similarly, the Company and the Operation and Maintenance (O&M) Contractor will jointly develop and implement Emergency Response Procedures for the project operation prior to the commencement of operation. Environmental emergencies such as toxic emission from facilities and required emergency evacuation will be covered under the procedures.
Greenhouse Gas Emissions: As a run-of-the-river hydropower plant without involving any new dam or reservoir, GHG emissions from the Project are expected to be minimal (e.g. emissions associated with submerged forest areas of the headpond, associated with operation and maintenance vehicles). The Company is planning to apply for United Nations Clean Development Mechanism (CDM) registration. According to the draft Project Design Document shared with IFC, the Project is expected to contribute to GHG emission reduction by displacing the electricity production requirement of fossil-fired power plants, with a total amount 1.97 million ton CO2 during the seven years from 2015 to 2022, or annually about 280,000 ton CO2.
PS 4: Community Health, Safety and Security. IFC’s review considered the Company’s capacity with regard to the impacts of the construction and operation of its facilities on the health, safety and security of surrounding communities. The most significant impact of the Project on local communities will be the increased flow of construction traffic: i) from the main highway (Hazara Trunk Road) through Tarcheela and Patrind villages to the Project’s headworks, ii) from Muzzafarabad town along the riverside boundary of Chattar village to the Switch Yard and powerhouse site; and iii) in and around Alora village during the construction of the powerhouse and Surge Shaft. The Company will improve the access roads, provide adequate barriers to protect village land and housing from traffic noise and dust, and require the EPC contractor to implement a traffic management plan, including enforcement of speed limits and prohibited operating times, to ensure the safety of those residents living near to and using access routes. Population settlements along the Boi Road and the Hazara Trunk Road beyond the Kunhar River impoundment will also be affected by high volumes of construction traffic disposing of excavation spoil at sites leased for that purpose located in Khyber Pukhtunkhwa Province. Safeguards similar to those noted above will be put in place by the EPC contractor to ensure the safety of, and reduce nuisance to, the people living in these areas.
The construction area at the Project’s headworks, powerhouse and switchyard will be secured with fencing and access will be controlled by unarmed security guards employed by the Company. Accommodations for construction workers will be contained within these restricted areas to minimize unnecessary contact between the workforce and local populations.
Temporary labor camps will be established near the headworks at Tarcheela and near the switchyard along the Jhelum riverbank at Chattar. The Company, in collaboration with the EPC Contractor, will prepare a plan for the accommodation and management of temporary workers to reduce the potential adverse impacts of an influx of labor on surrounding communities.
Star Hydropower will put in place appropriate safeguards to protect surrounding communities from hazards related to the handling and use of explosives during construction as well as an early warning system for downstream inhabitants to signal unplanned releases from temporary and permanent water diversion structures. The Company will develop and implement an emergency management plan in collaboration with the concerned local authorities in both AJK/Muzaffarabad and Khyber Pukhtunkhwa.
As noted above, the Company’s EMU will ensure EPC Contractor compliance with requirements for construction safety, traffic management, dust suppression, solid waste disposal, wastewater disposal, worker accommodations and public security through regular monitoring of construction sites and liaison with community representatives and local government authorities.
PS5: Land Acquisition and Involuntary Resettlement. IFC’s assessment considered the Company’s capacity to manage the physical displacement of occupants and users of land acquired for the construction and operation of Project facilities. Star Hydro Power will require 39.3 ha of land on a permanent basis for the construction of Project components (e.g., reservoir impoundment, diversion weir, sand trap, surge shaft, powerhouse, switchyard and access roads). Of this amount, 18.4 ha are privately held agriculture land, 15.6 ha are privately held non-agricultural land and 5.3 ha are public land (including riverbed). The Company will lease an additional 6 ha of land on a temporary basis from the government forest department for construction camps and materials lay-down areas, temporary diversion structures and the dumping of tunnel excavation spoil. These areas will be rehabilitated and landscaped following commissioning of the Project. A total of 136 households will be affected by land acquisition for the Project of which 52 households will be physically displaced. All privately owned land is being acquired by the Company on a willing-buyer/willing and informed seller basis within an established statutory framework of land acquisition that provides for grievance redress in cases of disputes related to valuation and compensation for lost land and assets.
According to the Company’s assessment, thirteen households in the village of Alda will be directly affected by the acquisition of land for the construction of the Project’s powerhouse, resulting in the displacement of 158 persons. In addition, one household in the village of Sarati will be directly affected by the acquisition of land for the construction of a diversion tunnel, to facilitate the construction of the Project’s diversion weir, resulting in the displacement of 17 persons. The Company engaged independent consultants to carry out a detailed socio-economic baseline study and establish a database of all households and individuals affected by the Project’s temporary and permanent land acquisition, and to devise a transparent land and asset valuation as a basis for cash compensation to be offered to those affected. The valuation process included the formation of a Land Valuation Committee made up of representatives of local government, the Company and the affected households, and a Grievance Redress Committee made up of representatives of district and local government and the affected households. The consultants subsequently undertook a detailed inventory of all standing crops, fruit and firewood trees and built up assets to determine the compensation package to be provided to each affected household. The final determination of land acquisition will be completed by the local government, which will match land ownership records with the land requirements of the Project.
Subsequent to the January 12, 2011 release of this ESRS, the Project Company identified an additional six households in the village of Sarati and two households in the village of Deedal, both in the province of Khyber Pakhtunkhwa, whose lands would be partially submerged by filling of the Project''s headpond. As a result, the Company and its consultants have engaged these households in the same consultations related to land valuation, asset inventory, determination of the compensation package and access to the Grievance Redress Committee that have been conducted for the affected households originally identified by the Company described above. A description of this process is founded in the Stakeholders Engagement Report: Addendum, March 2011, which has been added to the Project’s documentation disclosed with this ESRS.
Subsequent to IFC’s March 22, 2011 release of a revised ESRS for this Project, the Project Company received approval from the Environmental Protection Agency of Khyber Pakhtunkhwa Province (KP EPA) for the creation of the Project’s headpond. As a condition of this approval, the KP EPA required the Company to establish a two meter buffer zone above the high water mark of the headpond. Thus, the Company was required to acquire an additional 3.6 ha of land in Sarati village. As a result of this additional land acquisition, 28 additional houses in the area surrounding the headpond will be permanently displaced. In sum, a total of 52 households comprising 341 individuals will be permanently displaced by the Project.
In individual and focus group interviews with the Company’s consultants, all those affected by the permanent loss of land, homestead and other assets to the Project expressed a preference for cash compensation. Focus group discussions with affected villagers held by IFC during its due diligence confirmed this preference. None of the permanently affected households depend on agriculture or cattle grazing as a primary source of livelihood. Nor is there any evidence that people living in the vicinity of the Project area depend on the Kunhar or Jhelum rivers as a source of fish or irrigation water. Rather, each of these households derives income from businesses or employment in Muzaffarabad town or abroad (in Gulf states or the United Kingdom). Cash compensation at the levels being offered by the Company will enable the affected household members to purchase land and build homes closer to Muzaffarabad town and, thus, better avail themselves of public and commercial services.
Cash compensation is one element of an Entitlement Package that is being provided by the Company to persons who lose their land or other assets, or to those whose livelihood is directly affected by the acquisition of land for the Project, whether on a temporary or permanent basis. The Company intends to supplement these entitlements by offering training, employment and facilitation of access to working capital credit from local banks, and affected individuals will receive priority in hiring by construction contractors. The Project’s EMU will ensure the timely and transparent award of entitlements to all Project affected persons.
Details of the land and asset valuation process, the development of the entitlement framework and the resettlement plan implementation are presented in Chapter 5 of the Project’s Environmental Impact and Resettlement Plan. The implementation arrangements of this framework, as well as the monitoring and evaluation provisions, indicate that the efforts of the Company to address the impacts of the Project’s land acquisition will comply with PS 5.
PS 6: Biodiversity Conservation and Natural Resources Management. Determination of the reserved flow of Kunhar River: The Project will divert water at the weir to be constructed on the Kunhar River and discharge the water back to Jhelum River before its confluence with Kunhar River. About 13 km of the Kunhar River between the weir location and the confluence with Jhelum River will be affected because of a reduced river flow. The Kunhar Rivers’s monthly average flow is in the range of 24 m3/s (during dry season/winter months) to 280 m3/s (during monsoon season/summer months) with an annual average flow of about 104 m3/s. During the summer months, when the Kunhar River’s flow is higher, the Project will divert 153 m3/s to generate the Project’s maximum capacity of 150MW of electricity (gross). When the Kunhar River flow level is lower, a smaller volume of water is diverted and a smaller amount of electricity is generated. The current design is to ensure that the minimum 2 m3/s of flow be constantly discharged from the weir as a reserve flow to sustain ecological habitat of the 13km portion of the Kunhar River before it reaches the Jhelum River. Due to the height and steepness of the Kunhar River’s banks, river water is neither used for agricultural irrigation nor for domestic water supplies. A supplemental fish fauna study of November 2010 shows that due to limited population of fish in the Kunhar River flowing through the Project area, only occasional non-commercial fishing is conducted. It should be noted that Kunhar River is a well known river for trout fishing but trout species flourish much further upstream where water temperatures are much colder than in the Project area. The supplemental fish fauna study concludes that 2 m3/s from the Project’s reserved flow and additional flows from large streams (Bioda Kath 0.6 m3/s, and Salol Nullah 1.2 m3/s) and other numerous streams downstream of the weir flowing into the Kunhar River will provide sufficient flows to sustain aquatic flora and fauna for the 13km section of the Kunhar River. The ESAP that the Company will implement, and agreed with IFC, has an action to monitor the actual flow of the Kunhar River (2m3/s reserved flow from the project, plus additional natural stream flow) and the Project’s overall impacts on the 13 km downstream section of the Kunhar River.
Impacts on fishery, flora and fauna: The Project’s headpond will submerge about 57 ha of land along the Kunhar River by creating a deep, still water aquatic habitat, replacing about 7km of existing riverine habitat upstream of the weir. The supplemental vegetation study and fish fauna study, both dated November 2010, further reviewed the potential impacts on both the 7km upstream submerged areas and the 13 km downstream areas of reduced river flow. The supplemental vegetation study shows that the Project will not have any impacts on reserved or protected forests, and the vegetation of the area that will be submerged does not contain any specifies declared as endangered, threatened or rare. The study describes that the change of the Kunhar River habitat over the 7km upstream to a still water aquatic habitat with higher temperature will reduce the population of cold water species but a creation of the pond behind the weir will provide a large open water fish habitat that could be used for promotion of fish culture. The supplemental fish fauna study concludes that with the minimum 2 m3/s of water from the headpond as reserved flow throughout the year added by flows coming from large streams flowing into the 13km section of the Kunhar River (estimated as much as 1.8 m3/s) will provide mitigation measures for aquatic flora and fauna, and the impacts of the project on fishery would be insignificant. On the fauna other than fish, the EIA concludes that wildlife habitats with endangered exist in the Project region at higher altitude, but the wildlife habitats in general and endangered species in particular do not exist in the Project area.
