26312 - Drujba

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Environmental & Social Review Summary

Project Number

26312

Company Name

DRUJBA GLASSWORKS SA

Date ESRS Disclosed

Jan 11, 2008

Country

Eastern Europe Subregion

Region

Europe

Last Updated Date

Feb 19, 2017

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Mar 26, 2008
Signed : Mar 31, 2008
Invested : Jun 24, 2008

Sector

Glass and Glass Products (Including Glass and Mineral Wool)

Industry

Manufacturing

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

The project involves investments to increase manufacturing capacity at Drujba’s sites at Plovdiv, Bulgaria (Plovdiv) and at Buchansky Zavod Skolotary (Bucha), Ukraine, as follows:

- at Plovdiv, investment adding a furnace and associated forming line to increase annual capacity from 275,000 to 310,000 tons, associated infrastructure including a particulate filter and de-NOx system; new warehouse and working capital, and
- at Bucha, a loan to fund renovation of two existing production lines in order to increase capacity from 52,000 to 80,000 tons/year, installation of new forming lines, installation of QC inspection and automated packing machines, new warehouse, new Information Technology/ERP systems and a particulate filter and de-NOx system.

The project will also include installation of automatic cullet washing and sorting lines at Drujba’s Sofia site, and at Bucha, to increase use of external cullet, thus reducing raw material and energy use in glassmaking.

The Bucha and Drujba glassworks are owned and operated by the Greek glass company Yioula.

Overview of IFC's Scope of Review

The scope of IFC’s project review included:

- review of annual environmental reports provided by Drujba’s Plovdiv site to IFC under the terms of the previous project;
- visits to Drujba’s Plovdiv and Sofia sites and to the Bucha site including factory inspections and discussions on environmental and social (E&S) matters with relevant managers at each site, and with technical staff from Yioula, the parent company;
- review of additional E&S data provided by all sites; and
- review of Yioula''s HR department''s policies in respect of Performance Standard 2 requirements.

E & S Project Categorization and Applicable Standard

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

- 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 investments involve machinery replacement and addition within long established manufacturing sites which have limited off-site impacts. Impacts relating to IFC’s other Performance Standards are therefore not expected.

Key environmental and social issues associated with this project are:

- the companies’ management of environmental, health and safety performance in its operations; compliance with national and local permitting requirements;
- terms of employment and working conditions;
- occupational health and safety;
- emissions to the environment, particularly to air;
- energy use and greenhouse gas emissions.

This is a Category B project according to IFC’s Environmental and Social Review Procedure because the project has limited potential adverse social and environmental impacts that are few in number, site-specific, largely reversible and may be readily mitigated. In fact, the project will reduce emissions to air below current levels, and at Bucha the project will reduce energy consumption despite an anticipated increase in production output. Energy use will be further reduced through increased use of cullet at Sofia and Bucha.

Environmental and Social Mitigation Measures

- Environmental and Social Assessment:

At both sites under development, Bucha and Plovdiv, the proposed projects have been announced and agreement from relevant authorities has been received to proceed. The de-NOx and associated particulate control equipment will reduce air emissions well below current levels despite production increases. Environmental impacts at all three sites are regularly monitored and are known not to be of concern.

- Environmental and Social Management:

Yioula acquired the Plovdiv and Sofia sites in the late 1990s, while Bucha was acquired in 2006. E&S management systems vary in maturity according to the length of time that Yioula has owned the sites.

It is Yioula''s policy that all its manufacturing sites have ISO 9000, ISO 14001, OHSAS 18001 and ISO 22000 certifications of systems used to manage quality assurance, environmental impacts, occupational health and safety (OHS) and HACCP-based food safety systems respectively. Drujba’s facilities have all certifications except OHSAS 18001. At Plovdiv work commenced in 2006, with ISO 18001 certification expected during 2007. The Sofia factory plans an OHSAS 18001 certification audit in November 2007.

The Bucha site has ISO 9000 and is developing its environmental and occupational health and safety management systems which will be certified to ISO 14001 and OHSAS 18001 respectively during 2009.

Within Yioula, a Group Environmental Manager reports to the group Technical Director who has ultimate responsibility for environmental matters. An environmental manager within each factory reports to the Group Environmental Manager. These environmental managers'' main responsibilities are to ensure completion of environmental monitoring and reporting required for regulatory compliance, and IFC’s experience of Drujba has been that monitoring and reporting are comprehensive. Each site also has a safety manager who reports to the site-based Human Resources Manager.

The environmental and safety managers at all sites receive technical support as required from Yioula''s staff. In turn, operators are trained according to perceived need and covers issues such as emergency response planning, fire prevention and fire fighting, welding safety, safe use of hazardous equipment (e.g. cranes, pressure vessels), fork lift truck safety. Additionally, there has been training of internal auditors required for the ISO 14001 certified EMS and of lead auditors required by the OHS management systems.

All sites have regular monitoring and reporting of emissions to air and water, of ambient air conditions and of workplace conditions, at a frequency determined by the local regulatory authorities.

- Labor and Working Conditions:

Yioula has Human Resources (HR) policies and procedures which are applied throughout the group, with adaptations as necessary to meet specific legal requirements of the different countries in which the company operates. These policies and procedures are compliant with IFC’s requirements expressed in Performance Standard 2.

The terms of the working relationship are defined in written contracts between the company and the employee. The terms of these employment contracts have been agreed between the company and the workers’ union and also approved by the government authorities. The local factory HR departments provide written information to employees describing employees’ rights under national labor law. This information is communicated in written form to each employee at induction. The employment relationship is strictly based on the principles of equal opportunity and fair treatment of each employee irrespective of race, religion, sex etc.. A written grievance mechanism, based upon comment forms, has been established and is considered to work effectively.

Yioula has enjoyed a good relationship with labor unions which are present in the workplace. On annual or biennial basis there is a collective bargaining process between the company and the employees union covering all Human Resources issues.

There has been retrenchment of employment since Yioula’s takeover of Bucha, reducing employment from 860 at acquisition to 660 in June 2007, and additional retrenchment is possible. The retrenchment process is undertaken without discrimination and has been undertaken in discussion with and with the cooperation of the labor union, and is in full compliance with Ukrainian labor law and with IFC’s requirements.

Yioula’s HR policies strictly forbid the use of forced or child labor in its own facilities and this policy is repeated in contractual arrangements with suppliers.

- Occupational Health and Safety:

OHS management structures are in place, based upon hazard identification and elimination at each workplace, with regular checking for compliance with regulations and internal safety rules. Formal OHS management systems are under development and will be certified compliant with OHSAS 18001 requirements at all sites within two years. Of the three sites in 2006, Sofia recorded zero lost time accidents (LTAs) , Bucha 4 LTAs, equivalent to around 3 per million man-hours worked, while Plovdiv recorded 10 LTAs or 11 per million man hours worked. Differences between sites show that improvement is possible. Accidents recorded were relatively minor in nature. Accident causes are investigated and corrective actions undertaken with the intention of preventing recurrence.

Regular workplace monitoring is undertaken, and sites have medically-trained staff available during daytime working and ready access to first aid cover at other times.

- Emissions to Air:

Plovdiv currently has two furnaces, “Furnace 1” dating from 2003 which was financed by the earlier IFC project, and “Furnace 4”, dating from 1974 which was rebuilt in 2001 and 2005. A third furnace, “Furnace 2” is to be built as part of the project. All furnaces are fired by natural gas, so SO2 emissions are not of concern. Particulate emissions from Furnace 1 have been measured and are around 90 mg/Nm3. Data are not available for Furnace 4, but particulates are likely to be around 200 mg/Nm3. Furnace 1 NOx emissions have been around 1600 mg/Nm3 for the last two years, while Furnace 4 NOx is around 2500 mg/Nm3, both figures exceeding IFC''s guideline value of 1000 mg/Nm3 and local requirements.

All flue gases from Furnace 2 will be directed to a pollution abatement system which will include filtration and NOx remediation through addition of ammonia or urea - the technology choice has not yet been made. This will reduce PM concentration to some 20-25 mg/Nm3 and NOx to not more than 450 mg/Nm3, both figures well within Bulgarian limits and IFC guidelines. Furnace 4 is due for its next cold repair in 2010, at which time secondary PM and NOx mitigation will be included in the rebuild. Flue gases arising from Furnace 1 will be directed to the pollution abatement system when that furnace is shut for cold repair, which is currently expected in 2013.

Measured particulate emissions from Sofia''s furnace are 88 mg/Nm3 which slightly exceeds the local limit of 80 mg/Nm3, while NOx is reported at 1074 mg/Nm3, close to IFC''s guideline of 1,000 mg/Nm3but exceeding the Bulgarian limit of 850 mg/Nm3. SO2 is not of concern in this gas-fired furnace. Particulate and NOx mitigation systems will be added when the furnace is next cold repaired, which is currently expected to be in 2010.

Bucha has three glass furnaces, “Furnace 3”, likely to be closed in 2008, “Furnace 4” which will be replaced and expanded in 2008/09, and “Furnace 5” expected to start after cold repair in summer 2007.

All furnaces are gas fired hence SO2 emissions are not of concern. Particulate emissions are in the range 52-60 mg/Nm3, within IFC guidelines and local requirements for gas fired furnaces. NOx ranges from 1200 mg/Nm3 (expectation for rebuilt Furnace 5) to 1780 mg/Nm3 (Furnace 3). Furnace 4 NOx is currently around 1330 mg/Nm3 but is expected to be reduced to 800-900 mg/Nm3 after rebuild, when low NOx burners will be fitted. After rebuild of Furnace 4, expected to be complete by in 2008, Bucha will direct flue gases from Furnace 4 & Furnace 5 to particulate filters and NOx mitigation systems, as in Bulgaria.

- Emissions to Water:

Liquid wastes in Plovdiv and Sofia are discharged to sewer and treated by the city system. Sanitary wastes at Bucha are discharged to a sewer for further treatment. Cooling water is taken from and discharged to a nearby lake. Storm water is also discharged to the lake. Discharges to the lake are measured quarterly and meet IFC and Ukrainian requirements.

- Wastes & Hazardous Materials:

These are gathered, stored securely, and recycled where possible ( e.g. paper and cardboard waste), or disposed of to licensed sanitary landfill or by an authorized hazmat handler.

- Resource efficiency/GHG Emissions:

New and recent furnaces are efficient regenerative end-port designs, with a U-shaped flame. Upon project completion, fuel consumption will be at a level indicative of best practice in the sector. One site is developing water recirculation systems, and all sites are developing increased collection of external cullet. Upon project completion, annual GHG emissions from all energy and raw material sources will be around 260,000 tonnes CO2 equivalent.

- Community Health and Safety (CHS):

These sites have limited CHS impacts. The Bulgarian sites are located in industrial areas while the Bucha site is somewhat distant from residential areas. Environmental emissions including noise are well controlled and will be further reduced by the project. Road traffic is minimized by the use of rail transport or raw materials to the Bucha site.

Stakeholder Engagement

The Bulgarian factories are located in well-established industrial areas of their respective cities. The Bucha factory is located in a small village around 30 km from Kiev. There is little ongoing community engagement associated with manufacturing activities: there is not a well defined residential "community" at either Bulgarian site, and at Bucha the workers are local hence the community is aware of the manufacturing activities through this informal channel.

Project details may be viewed in local languages at the following locations:

- In Bulgaria:
Mr. Nikolaos Georgopoulos, Country Manager
Telephone: + 352 2 921 6551

Drujba Glassworks S.A.
15 G Benev Street
4003 Plovdiv, Bulgaria

and

Drujba Glassworks S.A.
1 Prof I Gheorgov Street
1220 Sofia, Bulgaria.

- In Ukraine:
Mr. Anastassios Poulopoulos, Country Manager
Telephone: + 38 050 446 14 15

Bucha Glass Factory Ltd
84, Kirova Street,
Bucha
Kyiv Region,
08294 Ukraine

Client Documentation

File Name	Actions
Environmental Action Plan.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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