Assan has presented plans to address the impacts of the project and to ensure that the existing and proposed operations will, upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the IFC environment and social Performance Standards and Environmental, Health and Safety Guidelines. The information about how these potential impacts will be addressed by the company is described in the paragraphs that follow and summarized in the attached Environmental and Social Action Plan (ESAP).
1. PS1: Social and Environmental Assessment and Management Systems
Environmental and Social Assessment:
The development of an Environmental and Social Impact Assessment (ESIA) for the proposed project is not required by the local authorities. Assan prepared an Air Emission Report for the Dilovasi plant in 2006 to develop a baseline before the completion of the modernization project. The local authorities have required the Company to submit a new emission assessment report at completion of the modernization and upgrade activities, and then to apply for the relevant air emission permit. Assan has applied for the same permit for the Tuzla plant and expects that it will be granted by the end of 2008. The Company holds the required discharge quality control certificates for both plants at Dilovasi and Tuzla.
Management Systems and Organization:
An Environmental Management System (EMS) consistent with ISO 14001 standard and an Occupational Health and Safety Management System (OHSMS) consistent with OHSAS 18001 are under development at Assan Dilovasi, which aims at obtaining both certifications by 2009. Assan Tuzla plant is certified ISO 14001 and OHSAS 18001 by the Turkish Standards Institution (TSE). Assan Tuzla’s integrated health, safety and environmental (HSE) management system documents, including 17 main procedures and 33 directives or working instructions, are available and easily accessible to all staff through Company’s intranet. Data recording and retrieval are effective at both plants.
The HSE department at Tuzla plant is well staffed and includes an HSE manager, an HSE specialist, 10 white-collar agents of HSE and 10 blue-collar agent of HSE (mechanical maintenance, electrical maintenance. R&D, storage depot, dispatching, mechanical workshop, casthouse, cold mill-annealing, sheet production, and foil production). The HSE staff reports to the Tuzla Production Vice President, and together they are member of an HSE Commission, which reports to Assan Executive Committee. A similar structure is being developed for the Dilovasi plant, for which the HSE department consists of an HSE manager, an HSE specialist and two technicians. Labor and labor relations are managed by the Human Resource (HR) Department. Consistent with the organization of the HR department, the Sponsor will review its organization to create a corporate HSE management function to ensure consistent HSE approach throughout its plants.
Training:
The Company has an established program to provide one-month job orientation and periodic training for all its direct employees on occupational health and safety aspects related to its operations, environmental management, and labor issues. Induction and periodic training is also provided to the staff of all key contractors. Basic HSE training includes basic safety rules, working in confined spaces, using right PPE for the job, fire safety, basic rules of Environment management system, first aid and advanced first aid, working safe with chemicals training and with cranes. Advance training is provided to specialized Company’s staff, including accidents prevention, emergency plans for fire and earthquake, waste management, chemical hazards, and occupational health.
2. PS2: Labor and Working Conditions
Human Resources Policy and Management:
Kibar Group employs approximately 2,900 people, of which 416 are employed at Assan Dilovasi and 604 at Assan Tuzla. The indirect employees (contractors) are approximately 2,500. Staff turnover in 2007 was 9%, but the blue-collar workforce is generally stable. The revitalization and expansion of Assan Dilovasi will create and enhance the security of employment for over 500 people.
The HR department is adequately structured and staffed. The Company has HR policy and procedures that cover all key aspects, including recruitment, induction and training, performance evaluation, promotion, disciplinary actions and dismissal. Company’s HR policy and labor relations policy are provided to the new staff and all procedures are readily available to staff. A one month orientation program is provided to new hires, which are in probation for one year.
HR management department provides the staff with clear terms of employment (position, salary and payment mode and time, fringe benefits including bonuses, private health insurance, covering also employee’s family, and fuel assistance, general and special conditions, termination of service, change in conditions of service, flexibility, security and confidentiality, labor relations). Copies of the Kibar Holding Personnel Regulation, providing additional information relevant to industrial relations, disciplinary code and procedure, roles and responsibilities within the organization, are also provided to the staff. Disciplinary actions are discussed in a specific committee, including employee representatives. A Performance Management System is in place for both white-collar and blue collar workers. The system allows evaluating personal targets, attitudes and competencies within the team, and calculating a performance score. Strengths and weaknesses of employees are determined from the performance scores, which are used in the remuneration and career maps, and to define occupation or competency-based training programs, as needed.
For all workers Assan guarantees minimum wages which are approximately 1.45 times the minimum wage as defined by the Government. Annual leave is paid and overtime is paid 100% of hourly rates. Extra-benefit provided includes a social package for an amount of 3,000 TL yearly.
Kibar Holding HR department oversees general employment policies and procedures adopted by the Group’s contractors, including compliance with labor regulations, salaries paid, tax payment, HR training, and social security.
The Sponsor will revise the Human Resources Policy and disclose the revised Policy at all plants, specifying rights and duties as an employee and as management staff. In addition, a number of administrative oversights will be corrected, as described in the attached Environmental and Social Action Plan (“ESAP”).
Worker’s Organizations:
Assan’s management has stated to IFC that each employee is free to join a worker organization. Some workers, now a minority of employees, are union members, and at the Dilovasi plant trade union membership has declined since 2005 to the extent that union membership is below the threshold at which an employer is required by Turkish law to negotiate a collective bargaining agreement. Historic anti-union activity has been alleged, though the third party audit identified no evidence of suppression of freedom of association. Going forward, freedom of association will be supported in the following ways: (i) Assan will ensure its Human Resources Policy explicitly includes that the Company respects freedom of association. (ii) In addition, the revised Human Resources Policy will be explained to Assan’s workforce through a program of training designed to raise awareness of the rights and responsibilities imposed on both the Company and employees by the Human Resources Policy. ESAP items 4, 6 and 7 refer.
Workers’ representatives are elected every two years to form a workers’ committee, consisting of 4 workers of Tuzla plant and 3 workers of Dilovasi plant. In Tuzla site, the employee representatives are selected for a period of two years and all employees have the right to vote. The announcement of the election is made one month before the election. The candidates apply during the first two weeks and they have the right to publicize for two remaining weeks. The winning candidates are officially announced and then take up their duties. These elected employee representatives are members of the disciplinary committee, health and safety committee, employee of the month committee and solidarity fund committee. For the Dilovasi site, the employee representatives were not selected by the employees in 2007, instead being assigned by the management team. Assan will organize elections to elect worker representatives at Dilovasi before July 2009, replicating the Tuzla arrangements.
Meetings with HR management are held monthly. The Company reports a stable industrial relations climate, with no significant impacts in terms of strikes or work stoppage. Surveys of work climate and employee satisfaction are annually conducted among all staff to develop HR action plans.
Retrenchment:
Due to the current global economic crisis, Assan Aluminyum has laid off 87 workers, implementing a retrenchment plan in accordance with PS2 and in consultation with the worker representatives.
Grievance Mechanism:
HR is responsible for managing grievances, but workers can present their concerns and complaints using several internal mechanisms, including the workers representatives. The Company adopts an open door policy and a formal employees’ grievance mechanism exists. Employees can directly raise concerns to their managers and/or use the employee satisfaction survey. The survey allows for anonymous comments from participating staff. External worker protection mechanisms are ensured by the national labor laws.
Non-Discrimination and Equal Opportunity:
Assan will ensure that its Human Resources explicitly states that the Company is an equal opportunity employer, and does not make employment decisions on the basis of personal characteristics unrelated to inherent job requirements. The Company complies with relevant legislative requirements. The HR department has developed training programs to support skills development, and opportunities for promotion exist and are adequately disclosed to the workforce, through intranet and announcement posting.
Occupational Health and Safety (OHS):
The HSE departments at both Dilovasi and Tuzla plants are supported by plant fire brigade with specifically trained staff and by HSE agents, who are plant workers with advanced safety and first aid training, selected in the different production areas. The medical staff consists of
- one full time and one part time medical doctor and four nurses at Tuzla plant, and
- one part-time doctor and two nurses in Dilovasi.
The Sponsor will ensure that medical staff and technical resources are consistently allocated in its plants. The Company also maintains agreements with external emergency and medical centers. Employee’s OHS training is conducted during induction and periodic refresher sessions.
Despite the efforts conducted in the recent years, the Company recognizes that safety performance needs to be improved at both Dilovasi and Tuzla plants. Implementation of OHSAS 18001 management system should allow improving performance in Dilovasi. The total recordable accident rates and the total lost time accident rates are recorded. Near misses are reported by staff and analyzed by the HSE departments. Accident investigations are performed, root-causes analyzed and preventive/corrective actions documented. The accident/incident reporting system is made available to the workforce at several locations. The most frequent types of accidents are injuries to hands and arms (e.g., cutting, pressing/squeezing), but also falls, strikes and burning. In 2007 one fatality occurred in a coil storage area at Tuzla plant and two fatalities occurred due to an accidental release of hot oil and subsequent ignition and fire during maintenance of foil mill No. 4 at Dilovasi plant. As a result of the investigations conducted, corrective actions are being implemented, including the installation of safer coil storage devices, including racks, saddles and prevention bars for coil deposits in Tuzla, and revision of the procedures and foil mill configuration in Dilovasi.
A basic emergency plan to respond to major accidents is in place. The plants are divided into several halls and every hall has at least two emergency exits to outside the building. Fire detection and alarm systems are installed all around the plants. Fire fighting equipment include:
- fire extinguishers,
- hydrants,
- CO2 fire suppression and control systems to protect foil and sheet rolling machines, oil pumps, foil slitting and foil doubling equipment areas,
- FM-200® (heptafluoropropane),
- argon suppression and control systems, and
- fully equipped fire truck.
Fire drills are conducted at both plants of Dilovasi and Tuzla, where three drills were conducted in 2007.
Physical protections (e.g., guard rails) are present in most areas, although some areas of improvement were identified, particularly at Dilovasi and Kartal plants. Some inappropriate behaviors of staff, approaching rotating and/or cutting parts were observed. Some inconsistencies in terms of enforcement of adequate personal protective equipment (PPE) were observed. Hearing protection was observed not to be consistently used by the staff of all three plants visited. The use of other safety gear is generally adequate. Emergency and area signage (including ways of pedestrian passage) are present, but can be improved. Housekeeping is generally adequate.
The Sponsor will hire external qualified consultants, acceptable to IFC, to conduct occupational safety and comprehensive fire and explosion safety assessments at Dilovasi and Kartal plants and develop an action plan, as needed. The OHS review will include:
- working procedures (including development and enforcement of a work permit program and lock out/tag out procedures),
- worker protection devices (including hearing protection, protection measures in coil storage areas, segregation of pedestrian areas and hoist movement areas, installation of guard rails and interlock systems for rotating, pressing and cutting parts of equipment),
- fire safety equipment, planning and emergency exits,
- explosion risks and explosion-proof / intrinsically safe devices,
- pressurized vessel conditions and verification, and
- improvement of ventilation at manufacturing areas.
The operations in Tuzla will be reviewed according to the findings of these assessments and measures will be taken if necessary. The configuration of the new induction furnace at Dilovasi will also be revised to ensure adequate protection of workers, including foremen’s locations, protective screens to prevent spattering of molten metal, and skimming-ladle use. The design of a molten metal transfer system for transporting liquid metal from induction furnace to melting furnaces will be reviewed. The Sponsor will ensure that safety of coil deposits at Tuzla, Dilovasi, and Kartal is reviewed and adequate safety measures consistently implemented.
A workplace monitoring program has been developed by the Company and is regularly implemented in Tuzla. It includes testing of water points (physico-chemical and microbiological testing) with respect to potable water limits for human consumptions, workplace air quality for particulate matter (inert and nuisance dust), and workplace noise. The most recent set of particulate matter measurements conducted in 2007 at Tuzla plant were below the relevant national limits and international guidelines defined by ACGIH. Noise monitoring show levels varying from 75 to 90 dB(A) in Tuzla. Medical examination of Company’s staff is conducted annually, including audiometric tests, blood tests, tuberculosis tests, electrocardiogram, urine and liver tests. A psychologist is available for staff once per week. The Company will review and develop the workplace monitoring plan to obtain consistent measurements in its plants. The plan will include monitoring and assessment of
- workplace air quality at selected locations for total particulate and respirable fraction, and oil mists; - noise;
- light intensity; and
- thermal load.
3. PS3: Pollution Prevention and Abatement
Pollution Prevention:
There are 36 air emission sources at Dilovasi plant. Air pollutant concentrations from combustion sources, measured in 2006 when the fuel source for furnaces was still partially fuel-oil and only some furnaces were converted to natural gas, were within the national limits for CO, NOx, SO2 and dust. Process source emissions were also within the national limits in terms of CO, NOx, SO2, dust, but they exceeded IFC guidelines, especially for SO2 from foil annealing furnaces. These measurements were not repeated in 2007 and 2008, following the instructions given by the national authorities that required the Company to repeat the campaign at Project’s completion. In 2007 the Company has completed the conversion of the plant from fuel oil/diesel/LPG to natural gas. NOx emissions in all melting furnaces (<150 mg/m3 in Low-NOx Injection mode) and heat treatment furnaces (<250 mg/m3) will be guaranteed under the applicable emission limits. The Company has rebuilt and upgraded foil annealing furnaces Nos. 4, 5 and 6 with high efficiency burners and new insulation, and has installed three new foil annealing furnaces (Nos. 1, 2 and 3). Oil separators are installed to treat the fume exhausts from the rolling mills. Although the emissions of the induction furnace in normal running conditions are reported under local emission limits, Assan Dilovasi will install a wet scrubber with venturi system to treat fumes from the newly installed coreless induction furnace, in addition to the existing cyclones.
The modernization and upgrade project will allow reducing the air emission levels at Dilovasi plant and meeting the IFC guidelines, in line with the emission levels achieved for the key emission sources at Tuzla plant. The Company will develop and implement an air emission monitoring program which will include all emission sources of the plant and the relevant parameters to verify compliance with IFC guidelines. The monitoring approach will be made consistent for both plants.
Tuzla plant process wastewater and sanitary wastewater are treated in biological and physico-chemical wastewater treatment plant (WWTP), located within property boundaries. The WWTP includes oil separation, equalization, coagulation and flocculation, neutralization, homogenization, aeration and filtration. The sludge is collected in a sludge tank, analyzed and disposed of at an offsite licensed facility, according to its classification as non-hazardous industrial waste. The treated effluents are discharged to the municipal sewer, managed by the Water and Sewage Administration of Istanbul Metropolitan City (ISKI), and comply with the relevant discharge limits. The concentrations measured for BOD5, COD, oil and grease and TSS are also within the IFC guidelines for discharge to surface water.
Dilovasi plant process wastewater is collected to storage tanks and conveyed to an offsite licensed treatment facility in Şekerpinar. Sanitary wastewater is conveyed to an internal biological treatment system, which is a pre-existing activated sludge facility with a clarifier. Treated effluents are discharged to Dilderesi River. The biological treatment facility discharges are periodically monitored by the local authorities.
The Company will install closed-loop water circuits with neutralizing and treatment systems to minimize water use and discharge at Dilovasi plant. Hot water hot spray no-detergent degreasing and cleaning section will also be installed, allowing for no-chemical additive use and zero discharge. Although it is planned that a physico-chemical treatment plant will be installed by the local Municipality for the wastewater streams of Dilovası Industrial Zone, the Company will review and revamp, as needed, the industrial and biological wastewater treatment scheme, to ensure that it meets applicable IFC guidelines. A disinfection unit will be added to the biological treatment unit, as needed.
Solid and Hazardous Waste Management:
Solid non-hazardous waste and hazardous waste management at all plants visited is adequate, involving waste segregation and reduction. Significant and regular increases in recycling rates of most waste material have been obtained at Tuzla plant. Waste generation is adequately monitored, the main streams of industrial waste being melting furnace dross/skimmings (approx. 2,000 tons/year from both plants), which is sold to secondary processors. Used rolling mill oil is collected and sent to an authorized recycling facility. Waste collection, storage and disposal are conducted according to the Company’s waste management plan and to specific procedures developed for non-hazardous and hazardous waste. Hazardous waste is also adequately handled, stored, transported and disposed of in licensed treatment facilities, although Dilovasi waste storage area has been identified as an area of improvement.
The Company will review the existing waste storage and sludge storage facilities at all plants, and will implement an upgrade program to ensure that they are adequately contained, covered and protected from third party entry. The Company will assess eventual presence and implement safe removal / disposal, as needed, of internationally banned/regulated hazardous chemicals including asbestos, PCBs, and CFCs in its facilities undergoing dismantling / revamping and modernization operations.
Energy Efficiency and Greenhouse Gas Emissions:
The proposed Project will positively impact energy efficiency at the Dilovasi plant. The modernization and new investment project will benefit from the energy efficiency program started in the Tuzla plant and will focus on highly energy efficient components and processes, the key ones being the following:
- Upgrade of furnace charging practice, including compaction of scrap, installation of charging cars to reduce loading time and limiting furnace opening, waste gas recovery from stack for pre-heating scrap and ingots to be charged to the furnace;
- Improved casting operations, including adoption of new ceramic tips, prevention of heat losses through insulated launder system design with precast refractory shapes and cover plates, ensuring that the temperature loss will remain within 1 – 2 °C/ meter length of launder;
- New coil annealing furnaces design to provide high thermal convection, reducing energy consumption and annealing cycle time;
- Installation of low NOx high efficient regenerative burners in all melting furnaces;
- Installation of high efficient fin or plain type recuperative burners in all new heat treatment furnaces;
- Installation of economizer for inert gas preheating in the new coil annealing furnaces;
- Installation of a new coreless induction furnace and a molten metal transfer system for transporting liquid metal from induction furnace to melting furnaces, minimizing melt loss;
- Installation of vertical high efficiency variable frequency drive pumps for rolling oil circulation;
- Replacement of the low-efficiency electricity motors;
- New lighting systems, installing fluorescent lamps with high efficient reflectors, arranged in zones with intensities specified separately for optimization for different working/process areas, and installing new roofing panels using polycarbonate linings for natural daylight illumination; and
- Installation of new air compressors.
Energy efficiency indicators are adequately monitored at both Tuzla and Dilovasi plants. Since the beginning of the Dilovasi modernization and upgrade project:
- Total energy consumption for cast coils has dropped from 1,620 kWh/ton of aluminum (ton Al) to 915 kWh/ton Al in the first five months of 2008, targeting at 870 kWh/ton Al at project completion (45 percent reduction).
- Total energy consumption for coil annealing furnaces has dropped from 790 kWh/ton Al to 280 kWh/ton Al in the first five months of 2008, targeting at 230 kWh/ton Al at project completion (70 percent reduction).
- Total energy consumption for foil annealing furnaces has dropped from 335 kWh/ton Al to 210 kWh/ton Al in the first five months of 2008, targeting at 185 kWh/ton Al at project completion (45 percent reduction).
Preliminary evaluation of total CO2 emissions has quantified a reduction of CO2 emission intensity from 1.05 tons CO2/ton Al in 2006 to 0.56 tons CO2/ton Al during the first five months of 2008, which is comparable to emission intensity reported for Tuzla plant. A further 10 to 12 percent reduction is expected at project completion. The Company will continue to annually monitor and report energy efficiency indicators and CO2 emissions.
PS4 Community Health, Safety and Security
Community Health and Safety:
Issues include emergency preparedness and response, transport of raw materials and products, and security. As discussed under PS2, the Company has an adequate emergency preparedness and response system in place, in coordination with the local authorities to cover for external emergencies. The Company will provide assurance that seismic safety criteria are included in the design and relevant responses considered in the emergency plans.
Raw materials and products are delivered via trucks. One of Group companies is a transport company having its own truck fleet and also contracting local transport companies to complement the fleet, based on need. Adequate internal controls are in place and implemented by the logistics department of the Company to ensure that vehicles and trucks entering and leaving Company’s facilities are in good conditions and documents are in good order. The Company will review its relevant loading and unloading facilities, and implement best practices to ensure safety in loading/unloading procedures.
Security Personnel Requirements:
Security functions are covered by private security contractors. The security staff is not authorized to use fire arms. The staff is periodically audited by the Company and is required to attend an initial training course and refresher courses.
