Altyn-Ajydar 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 project does not require a formal Environmental Impact Assessment (EIA). However, the company needs to apply for an environmental permit (the “Ecological Passport”) for this project, as well as a statement from the fire safety department during construction and installation, a municipal permit for the renovation of the industrial facilities and an act of the State Commission for commissioning the project. The company has indicated that they are in the process of preparing all needed supporting documents to apply for these permits. Altyn Ajydar has obtained the Ecological Passport in December 2007 for the packaging plant and the management reported that the facilities are periodically inspected by the local authorities in charge of occupational health and safety (State Inspectorate for Occupational Hygiene and Safety). Altyn-Ajydar will apply for the Ecological Passport for the project’s facilities and provide regular updates to IFC on the status of all permits for the Project.
- Management Systems and Organization:
Altyn-Ajydar does not have a formal environmental, health and safety (EHS) management system, but it monitors key indicators of EHS performance regularly and reports results to IFC on an annual basis. Each production unit develops its own safety instructions. After a draft instruction is coordinated with the company’s trade union and evaluated by the occupational safety unit against applicable and relevant rules, standards and norms of occupational safety, the instruction is approved by the company’s management. The head of the Occupational Safety and Environment Unit reports to the company’s president. This Unit needs to be adequately staffed to effectively perform its duties, especially due to the growing workforce and increasing complexity of operations with the new production lines. Based on the company’s new organization chart, the medical staff (a doctor and two nurses), which will be hired, will report to the Head of the Unit. The company will also staff the Unit with qualified professionals, initially consisting of an environmental specialist and a safety inspector.
- Training:
Altyn-Ajydar provides basic induction and periodic training to all its employees on occupational health and safety (OHS) aspects related to its operations and fire safety. More advanced OHS training has been recently provided to the shift managers by an external certified body. Arrangements are currently being made to start a first aid training program, for at least 10% of staff for each shift, with a qualified training provider in Bishkek. The company records all training performed and trainees, but a formal training plan does not exist. The company will formalize an EHS training plan, detailing internal and external training components, management roles and responsibilities, trainers, job functions attending the various training components, and relevant frequencies.
2. PS2: Labor and Working Conditions
- Human Resources Policy and Management:
There are approximately 450 employees working at the company, including approximately 390 workers at the corrugated cardboard and packaging plant. When the new production lines will be operational, it is expected that the total staff will increase to approximately 500 employees. Human resources (HR) management department provides new staff with terms of employment which refer to the International Labor Code. Worker’s position and responsibilities, employer’s responsibilities, wage and bonuses, annual leave, sick leave and hours of work, dispute resolution, termination of service, occupational health and safety, security and confidentiality are listed in the standard contract. Internal labor rules are available and describe procedures for recruitment, promotion, disciplinary action, dismissal, roles and responsibilities of employer and employees, working time and holidays. A labor inspection from the National Labor Inspectorate conducted in December 2007 identified some non-compliant conditions with regard to working and annual leaves, disciplinary penalties, keeping of individual labor books, and training, and the company has taken actions to correct the non-compliances.
Altyn-Ajydar is suffering from a high staff turnover (63% in 2007), mainly affecting unskilled or semi-skilled personnel, while skilled personnel is more stable. Out of a total number of 287 lost staff in 2007, approximately 65% were resignations, possibly associated to limited attractiveness of the offered salaries. The remaining 35% were dismissals for infringement of labor discipline, generally related to “no call, no show” infringements. The company’s procedure requires issuing counseling statements to employees, prior to proceed with employment termination. The current salary structure is based on base salaries, which are above the minimum wages, as defined by law, for both administrative and productive functions. Administrative employees are paid for overtime and production workers receive monthly salary adjustments through coefficients which are defined by their shift managers based on productivity criteria. An independent labor assessment will be performed to review employment policies and their compliance and identify areas of improvement to improve firm’s performance, particularly minimizing personnel turnover. As part of this assessment, the company will review the salary structure to ensure that there are transparent mechanisms to define monthly bonuses or salary adjustment, and leaves for illness and maternity are adequately compensated. The labor assessment will also allow the company to integrate its HR procedures in an Induction Manual which will include, in a single package made available and accessible to each employee, relevant information on their rights under national labor and employment law, including rights related to wages and benefits, terms of employment, procedures for recruitment, promotion, disciplinary, dispute resolution and dismissal, and grievance mechanism to address individual concerns and provide feedbacks.
- Worker’s Organizations:
The company has a trade union, which is a member of the Republican Committee of Trade Unions of industry workers. The corresponding agreement is in place and operational since 2005, and is annually prolonged. The union provides workers with assistance with health services and recreational services (“sanatorium” vouchers).
- Grievance Mechanism:
No formal employees’ grievance mechanism exists, although IFC’s review identified that staff knows that grievances may be submitted directly to shift managers or to the management team. External worker protection mechanisms are ensured by the national labor laws. Altyn-Ajydar will develop a formal internal grievance management policy and relevant implementation procedures.
- Non-Discrimination and Equal Opportunity:
Altyn-Ajydar recruitment policy and standard procedures indicate that it is an equal opportunity employer. Opportunities for promotion exist and approximately 50% of the company’s workforce are women. The company will ensure that promotion opportunities are adequately disclosed to the workforce, through easily accessible means (e.g., announcement posting in the administrative building and/or at the different production units).
- Occupational health and safety (OHS):
Basic OHS training is provided to new recruits. Regular safety briefings are undertaken, and training recorded. All accidents are recorded and reviewed to identify causes and means to prevent repetition, as required by the national law. Incident frequency and severity rates are high compared with international industry standards and generally consist of injuries associated to manual feeding. The Company is committed to improve health and safety performance in the production lines, particularly reviewing and strengthening protections against physical injuries due to cutting devices and rotating parts of equipment.
Workplace monitoring was conducted in April 2008 by inspectors of the national Sanitary and Epidemiological Surveillance Agency. Noise was found to exceed the limit of 85 dB(A) at some locations with an averaged maximum level of 88 dB(A) measured at the corrugated board production unit. Indoor air quality measurements for paper dust were at 4.8 - 6.9 mg/m3 with a national limit of 6 mg/m3. Welding fumes were measured at 1.8 – 4.3 mg/m3 below or at the national limit of 4 mg/m3, and within the ACGIH 8-hour TWA of 5 mg/m3. Manganese fume was measured at 0.11 – 0.28 mg/m3, slightly above the national limit and ACGIH Threshold Limit Value (TLV) of 0.2 mg/m3 at some locations, but always within US OSHA permissible exposure limit and NIOSH recommended exposure limit. Light intensity was found in compliance with the national limits. As a result, the company has provided hearing protection to the workers operating at the corrugated board line, and protective masks are being sourced. However, the use of personal protection equipment (PPE) is inconsistent throughout the plant, including for construction workers and at the aluminum panel production unit. The company will ensure that adequate and sufficient PPE, including protective clothing, hearing protection devices, protective gloves against cuts, safety boots, is provided to all workers involved in the production units, according to their functions and occupational risk profile, and its use is enforced. Safety signage is insufficient and the company will install adequate signage at all its facilities.
Fire protection is provided by a hydrant system, present in the production areas and in the warehouses. The company will ensure that hydrants are clearly identifiable and not obstructed, and that emergency drills, inspections and functional tests for the hydrants are conducted and recorded. The company will develop an emergency preparedness and response plan to address all potential accidental scenarios associated with its activities.
Altyn-Ajydar will audit its facilities in order to determine OHS hazards associated to each new production line, existing corrugated cardboard and packaging plant and ancillary facilities (i.e., raw material and product storage facilities, workshop, welding stations), and identify corrective measures both in terms of improvements to the equipment and in terms of personal protection needs. The audit will also assess the adequacy of the fire protection system, including status of electrical wiring, need for fire detection and alarm systems, at storage facilities and in production facilities, especially where gas welding is conducted and acetylene cylinders are stored and handled. Protective measures at new production lines, such as handling procedures of glass, aluminum coils and aluminum composite panels, polyethylene and PVC, ventilation and lighting, emergency exits, fire safety features, will be reviewed to ensure compliance with IFC guidelines. The audit will be conducted by a qualified OHS protection engineer, who will establish the scope of work of a Corrective Action Plan and a time frame for implementing the changes. The company will implement such corrective measures as this audit shows to be necessary.
All new recruits are required to undergo medical examination. The company has recently revised this procedure and made its control more stringent, through an agreement with a municipal hospital to which the recruits are addressed.
Employees’ facilities at the packaging plant are basic and insufficient. Altyn-Ajydar will install, in its new administrative building, adequate and modern facilities for its workers, including, as a minimum, a canteen, sanitary facilities and shower cabins, and changing rooms. Additional modern facilities will be installed at the new aluminum panel and tempered glass/window frame units.
3. PS3: Pollution Prevention and Abatement
- Pollution prevention, resource conservation, energy efficiency:
No significant emissions and effluents are expected as part of the new production lines. The main effluent associated to the new lines will be glass wash water for the double-glazed window units. Washwater will be recycled and no toxic additives will be used. The current treatment for papermaking effluents is a simple primary treatment consisting of two settling tanks from which 60% of water is recycled. The outlet of the settling tanks is connected to the municipal sewer and treatment works, which include primary and secondary (activated sludge) treatment. Water is obtained mainly from a 110 meter deep well owned and operated by the company. Water pumped from the well is not metered. A complementary source of water is the municipal network, although municipal water consumption is limited to approximately 2,000 cubic meters per month. Water consumption is approximately 10-15 m3/ton of finished product, which is slightly above industry benchmarks for corrugated packaging paper mills. The current system has the capacity to accommodate for the additional water needed for glass washing. Altyn-Ajydar will install flowmeters to measure water pumped from the well and discharged to the sewer.
Wastewater quality is not tested by the company. An analysis, done in August 2007 by the Municipality, met the acceptability criteria of the wastewater treatment plant for total suspended solids, pH, chlorides and permanganate oxidability. Altyn-Ajydar’s product is not bleached, although there are plans to install a white paper production machine. The company plans to conduct improvement works at the wastewater treatment unit to improve treatment, maximize water recycling and further reduce water consumption. The company will start monitoring of water discharges both in terms of quantity and quality, to develop a baseline for the new facilities and expanded production lines.
Point source air emissions are limited and no significant changes are expected from operation of the new production lines. Fumes from the polyethylene extruder in the aluminum panel production line are controlled through a fume hood and vented to air. Other existing emissions include welding fumes which are intermittently emitted from four movable welding stations and one fixed station. Paper dust is emitted from the corrugated package unit and collected through catchers. The facility operates a gas-fired steam boiler plant (two boilers, only one operating, and the other one as back-up), producing 6 tons steam/hour (with a maximum capacity 12 tons steam/hour). Electrical power is provided by the grid.
- Solid waste management:
Waste generation from the new lines will be very limited. Glass and plastic materials will be reused and recycled. Polyethylene (PE) discarded during the production of aluminum composite panels is ground and mixed with virgin PE and fed to the extruder. The main waste streams will continue to be associated to the papermaking process where the quantity of paper rejects is relatively significant, due to the poor segregation and quality of the raw material. Solid waste is collected and disposed of at the municipal disposal site. Sludge from the process wastewater treatment is also collected and disposed of at the municipal disposal site. Altyn-Ajydar is keeping track of the costs to dispose of its waste, but amounts generated are undifferentiated and are not recorded. The company will develop a waste register to adequately record volumes of the different waste streams which are reused, recycled or disposed of.
- Hazardous Materials:
No significant use of hazardous materials is expected for the operation of the new production lines. There is limited use of materials with hazardous or toxic properties in the current operations. Natural rosin is used as adhesive in the papermaking process. Water-based inks are used in the cardboard printing line. The most significant hazards will continue to be associated with storage, handling and transporting of acetylene gas cylinders needed for the welding stations. The OHS audit will review all aspects associated to this operation, including transport to the plant, and will define corrective actions as needed. Material safety data sheets will be consistently collected and available throughout the facilities.
The company has its own transformer substation, and additional transformer substations are required to be established for the new production facilities. The company will test the equipment potentially associated with PCB and ensure that PCB-free equipment is installed at their facilities and PCB-contaminated equipment is progressively phased-out.
PS4 Community Health, Safety and Security
- Community Health and Safety:
Issues include emergency preparedness and response to major hazardous installation risks, transport of dangerous goods (acetylene gas cylinders) and security. Acetylene gas cylinders are transported to the plant by company’s trucks: As discussed under PS2, the company will develop an emergency preparedness and response plan, which will review and cover, as needed, accidental events potentially involving external receptors.
- Security Personnel Requirements:
Private security is used by the company for its offices in Bishkek, while 20 permanent staff are assigned to security at the production facilities, working in three 24-hr shifts of six people. In each shift there are two armed guards. Security is in charge of area and property protection as well as fire fighting. Security guards are trained and only six of them possess an individual authorization by the Ministry of Interior to carry firearms. This authorization is reviewed and renewed annually. Rules of conduct on the use of firearms have been developed internally and approved by the management. Altyn-Ajydar will ensure that all security guards are annually trained by an external certified body to maintain high levels of technical and professional proficiency, particularly with regard to local use of force and appropriate use of firearms.
