The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host countries laws and regulations, IFC Performance Standards, and IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. Further information is provided in the attached Environmental and Social Action Plan (ESAP).
PS1 – Social and Environmental Assessment and Management System
- Social and Environmental Assessment
Cimos has a formal internal procedure requiring social and environmental (S&E) assessment, which is formalized in the certified EMS ISO 14001. Cimos has obtained ISO 14001, QMS ISO 9001, ISO TS 16949:2002 and OHSAS 18001 for most of its production facilities, and has developed plans to gradually introduce these international standards, specially ISO 14001 and OHSAS 18001, to the its regional production facilities that currently do not have them. Cimos is committed to comply with all permitting requirements imposed by the regulatory authorities in the countries in which the developments are made. Such assessments are a necessary precondition to issuance of the construction and ultimately operating permits. Cimos will ensure that the internal and formalized S&E screening methodology is applied to ensure that basic S&E issues and Performance Standard requirements are always considered irrespective of the regulatory environmental applicable to the project. For all its regional production facilities Cimos intends to develop internal EHS structure, improve efficiency of its operations through process innovations, improve working condition and consequently look for relevant international certifications. Gradacac plant is expected to be certified on ISO 14001 by October 2008 and Zenica foundry plant by October 2009. The management of these plants is fully committed to achieve OHSAS 18001. Zenica plant is developing project documentation for OHSAS 18001. Zenica foundry has completed Environmental impact assessments (EIA) for the planned operations as a precondition for public consultation and consequent environmental permit issuance, which are expected in October 2008. The environmental permit for Cimos new production facilitiy in Gradacac has been acquired. These actions are reflected in the Action Plan.
- Social and Environmental Management
Cimos has strong internal environmental, health and safety (EHS) management structure able to ensure, through constant supervision of the project implementation, that all EHS aspects of the project are being dealt with due attention and in accordance with EHS requirement of a host country and IFC EHS Performance Standards and guidelines. Most of the plants that we visited had designated staff with responsibilities to monitor and report on EHS performance, with the rest that will yet need to put in place formal EHS structure. Cimos headquarters staffs make regular visits to Cimos plants in the region to confirm that planned measures to manage environmental and safety issues in construction are in fact in place. Construction work is outsourced to local reputable contracting companies who have well developed quality and environmental management standards. These companies undertake their own assessment of S&E risk at the tender stage, and their offers include necessary resource to manage environmental risk during construction. In addition, local inspection agencies are authorized to do regular check ups of the EHS practices during the construction and operation phases.
- Organization and training
Cimos has done initial efforts to replicate EHS structure from the corporate level to its regional developments to ensure that day to day operations and the associated EHS impacts are dealt with due care by the local designated staff. Regular training, theoretical and practical, regarding handling of equipments and machines specific to work place for all new staff are conducted prior to their formal employment. However this local capacity is not adequate and therefore Cimos is committed to additional efforts to ensure that the EHS management capacity is developed in all other developments and adequate and regular trainings to the staff provided.
-Monitoring and reporting
Cimos EHS staff regularly monitors and reports back to senior management every three months on different EHS impacts of its operations in all Slovenian production facilities. This helps to design and timely implement corrective action where the malpractice has been observed. The regular reporting will need to be expanded to the new developments in the region and the quality of the monitoring and reporting will be enhanced once the appropriate qualified EHS structure in all production facilities is in place.
- Community engagement
One of Cimos`s corporate responsibilities is to be socially responsible to the communities where it operates and to provide timely information on its activities and potential EHS impacts. The communities that are potentially affected by the operations have right to provide comments and request clarification on every open issue through public consultations mechanism that is set up by the municipal authorities before every new development takes place.
- Cimos is planning to achieve ISO 14001 certification in its Zenica, Gradacac production plants, timing as per Action Plan
PS2 – Labor and Working Conditions
- Human Resource Policy and Management
Cimos has a Corporate Human Resources Policy which is designed to ensure compliance with Slovenian labor regulation and is compliant with IFC’s Performance Standards. The policy defines rights and responsibilities of the employee and employer, including terms of employment and working conditions, grievance mechanisms, and promotion of non-discrimination and equal opportunity. In every country in which Cimos has operations the referent document is National Labor Law.
Cimos operations in Slovenia uses specialized consulting contractor to hire additional temporary employees from mainly neighboring countries. In average approx 22% of work force in Cimos’s Slovenian plants is coming from mainly Bosnia, Serbia and Croatia, while between 5-8 % temporary workers out of total work force is usual benchmark for this industry. These workers are hired on 3, 6 and 12 months basis and if they prove themselves as good workers there is an opportunity for full time contract with the Cimos. According to the statement of the management of CIMOS these temporary workers enjoy all right as domicile Slovenian workers. Cimos`s plants in other countries have similar HR policies that complies with local Labor regulations.
Cimos requires its construction contracting companies to use similar labor and working conditions in its projects in the target countries. The contractors develop project–specific plans to ensure safety in construction, and following their internal procedures undertake regular checks to ensure compliance. These checks are supported by regular inspections undertaken by Cimos staff and/or governmental inspections.
-Workers` Organization
Total number of employees in the Group is 7840. In each of Cimos regional developments workers are unionized, as per provisions of relevant Labor laws. Approx 60% of work force in Cimos are member of metal industry branch union. Workers’ union in Bosnian Gradacac plant is in the negotiation with the industry branch union regarding the collective agreement. Zenica casting currently employees 51 worker, which are not unionized but there are no obstacles should they decide to form or join union. Planed number of workers in Zenica after the phase I is completed is 160, and at the completion of project total number of workers is expected to be around 600.
- Non-Discrimination and Equal Opportunity
Cimos Group’s policies and procedures outline the company’s human resource policy, commitment to non-discrimination and equal opportunity.
- Retrenchment
According to Cimos in some of their developments they employ at the moment more people than the production requires, rationale being that as soon as production increases they will have at their disposal, under the contract, trained professional staff ready to handle increased workload. In addition to that the cost of maintaining the current number of the staff is relatively low as compared to the cost of onboarding of new workforce at the moment when each of the development starts with full operation. While Cimos is not planning for retrenchment of any of its workforce there may be requirement for relocation of the specialized workforce within the different production units of Cimos Group.
- Grievance Mechanism
Cimos will ensure that all its new developments have HR policy in place and an appropriate grievance mechanism for the workforce to be able to raise reasonable workplace concerns, if needed.
- Protecting the Work Force ( child labor, forced labor , occupational health and safety )
The company does not engage children or forced labor and it complies with local labor laws and related PS2 requirements to protect the workforce. All employees are over the minimum required age of 18.
- Occupational Health and Safety
Health and safety of the workforce is of top priority for Cimos management. Most of Cimos’s production facilities in Slovenia and in Croatia posses OHSAS 18001 management system that includes policies and procedures for managing occupational health and safety issues within its facilities. For other existing production facilities which do not posses OHSAS certification and new expansions in different countries Cimos will initially need to develop occupational health and safety (OHS) plans which will identify all occupational health and safety aspects of its operations and to provide appropriate training and personal protection equipment (PPE) to the staff. Cimos d.d is committed to obtain OHSAS certification for each of new developments as per timeframe provided in the Action Plan.
Several improvement have been made in Cimos Slovenian operations (heat exchangers in the production facilities in Koper and Senozece,), improvements in air venting system in Maribor Al foundry, as well as in Gradacac operations through relocation of some production operations to better suited working premises thus improving working conditions. Appropriate plans for regular measurements of noise, ambient air emissions, lighting, and vibration are in place. Regular statistics on incidents are recorded and reported to the top management.
Cimos will require that the successful contractor and any subcontractors similarly develop and apply plans for healthy and safe working conditions. During construction of its new developments Cimos will be responsible for ensuring the security, safety, and safety training of contractors’ employees, according to the requirements of PS2.
Cimos will submit draft of HR policies, procedures and manuals for Gradacac, Zenica to IFC for review.
Cimos d.d will commission an experienced consultant to undertake an OHS risk assessment at each new development, and to develop OHS action plans which will provide technical control of risks identified. As an ongoing process Cimos is committed to improve health and safety conditions at the workplace, with provision of training and adequate personal protective equipment PPE in Zenica and Gradacac.
As per ESAP, Gradacac and Zenica will be implementing the OHSAS 18001 as an indicator that the OHS system is working well.
PS3 – Pollution Prevention, Resource Conservation and Energy Efficiency
Based on the environmental screening / assessments of new production facilities a set of corrective measures have been defined. The corrective measures and programs to prevent and mitigate potential impacts make part of the application for the environmental permits. For each of Cimos developments in the region a number of programs have been developed and implemented or are in the implementation phase i.e waste water treatment plant, air emissions, occupational health and safety plans for each plant, emergency preparedness, fire and life protection etc. Only when these plans are completed and implemented or specific date for implementation set than the environmental license is issued.
- Discharges to Water
E&S assessments have determined the sanitation infrastructure available to the developments. Industrial process waste water will be (pre)treated on site and after the treatment discharged off to either surface waters or for further processing in the municipal waste water treatment plants, satisfying both local and IFC EHS guidelines for waste water discharges.
Where there is a functional sanitary waste water collection and treatment system, project sanitary effluents will be discharged to this system for further treatment. If such infrastructure is absent, or if there is sewage collection but not treatment, then appropriate pre-treatments will be incorporated into project design to ensure that project effluents meet IFC guidelines for discharge to surface water. Gradacac plant has developed project design for new process water treatment plant on site. Construction is expected to start in late 2008. Sanitary waste water is being discharged off to municipal sanitary waste water treatment plant. Zenica foundry will have enclosed cooling water system. Process water that is used for washing of gases that are created in the process of production of lost-wax molds made of silica sand and clay bonded are collected in a tank of 6m3 volume, and after being neutralized disposed off at the industrial disposal site Raca.
- Discharges to Air
Given the nature of the industry the emissions are expected to be significant and Cimos has committed to introduce adequate pollution prevention and abatement techniques and regular monitoring to achieve compliance with host countries relevant regulations and IFC EHS guidelines.
Some Slovenian operations have already improved its operations; others are in the process e.g. increasing efficiency of dust collection system in sand/steel shot blasting operations. Bosnian Gradacac plant will use gas fired boilers for heating of the production facilities and for heating of sanitary water, and emissions will be below local and IFC guidelines for point source emissions. Zenica foundry plant will have off-gas treatment system for all production processes starting from melting, molding, casting, forming/sand blasting. Dust from the filters will be disposed at the industrial disposal site Raca. Cimos has plans to obtain IPPC-based permits for its operations in Slovenia (Kamnik, Maribor and Vuzenica) and consequently in its regional developments.
Non ozone-depleting refrigerants are used in heating and air conditioning systems.
- Solid and Hazardous Waste
Cimos will minimize the generation of hazardous waste material in its production processes. Where waste generation is unavoidable it will reuse or treat the waste in environmentally sound manner, or outsource the management of such waste to authorized agencies.
Several improvements have been made in recycling/recovery of the process oils/emulsion from scrap metal generated in the machining processes, with separation and recycling of emulsion back into the process. There are plans for scrap metal waste recycling and paper recycling. Cimos Maribor foundry in Slovenia is developing plans with local utility to use the waste sand from the molding operations mixed with the sludge from waste water treatment plant to reclaim some degraded areas in the municipality. It will only be possible if the testing proves that the mixed waste satisfies relevant Slovenian and EU regulating. Same plans exist for Zenica foundry operations in Bosnia. As an ongoing activity Cimos is developing plans to increase recycling of all waste streams in all their operations in the region.
Gas and oil tanks are properly secured in fenced aboveground or underground containment bunds
-Energy Efficiency
Cimos is very aware of the energy consumption of its production and the associated costs. A number of energy efficiency improvements have been made in the existing production facilities and there are plans to introduce these measures in every new production facility. Significant energy savings have been made in Cimos Slovenian and Croatia facilities through changes in the production processes, development of computer based control of energy utilization, selection of alternative fuels, change of lighting, investment in the new technologies with the increased efficiency, etc. and there are plans for implementation of the same in Bosnia. Cimos R&D center in Koper has gained considerable experience in improving efficiency of resource utilization and energy efficiency in car parts manufacturing, through set of improvement and changes in the selection of material, which should be recyclable and environmentally friendly, and in the production process improvement, which ultimately helps Cimos to reduce its Climate Change footprint.
Also considerable improvements are being planed for heat recovery in Cimos operations i.e recovery of heat waste back to the process and providing heating for production and business premises, change of fuel from heavy oil to propane gas in boiler houses, change of processes and equipment e.g. using heat waste from off-gas treatment in the furnaces for re heating of aluminum ingots, or replacement of 4,65 MW boiler with more efficient one of 2 MW which has an automated off – gas collection system in place. In addition Cimos is planning improvement in water usage through introduction of water recycling system in its operations, installing water meters on all main pipelines.
Annual energy consumption of all production facilities of Cimos d.d for CY2007 was 287.002 MWh, which presents equivalent in approx 146.698 tones of CO2/year, plus 72.239 tones CO2/year from the conversion of iron to steel. This is 762 kg CO2/MWh.
-Emergency Preparedness and Response
Cimos operations in Bosnia will need to assess the potential for emergency situations associated with the project hazards and develop plans that will include procedures, allocate responsibilities, and provide resources and training to the workforce. All elements of environmental management system and occupational health and safety system, usually referred as “plan for fire prevention and protection of work force in case of disease, flood, earthquake and other natural disaster”, will need to closely cooperate to be able to respond effectively to any emergency situation in the operations.
PS4 - Community Health, Safety and Security
Cimos operations have plans to address impacts to the health and safety of the affected communities during the construction and operation. Existing and new production plants and buildings are constructed to meet structural safety requirements in case of flood and earthquake. Most production facilities, mainly in Slovenia and Croatia, have appropriate fire prevention and fighting equipment and appropriate egress arrangements. Cimos operations in Bosnia have formal fire protection plans and plans for emergency. As part of the OHS risk assessment due attention will be given to the life and fire safety in these plants showing how building design and operations layout and processes will ensure adequate measures are implemented in providing safe working condition e.g. separation of flammable gases and oxygen pipelines, and storage tanks away from heat sources, as conditions of IFC disbursement. Regular trainings and fire drills for the workforce are to be performed.
Due care will need to be devoted to the management of hazardous materials which are used in the production process, by modifying, substituting or eliminating the substances that are potential threat to the community.
Contractors for the construction will apply sound principles of environmental engineering and safety engineering during the sitting and construction phase, and these principles will be stipulated between the contractors and Cimos .d.d. in their contracts, to prevent and/or avoid any reputation or other risk for Cimos associated with potential adverse environmental and social performance of the contractors’ activities.
An emergency preparedness and response plan covers potential incidents associated with the current operations. A monitoring and reporting system is in place to engage local government, as needed in the event of an emergency, and arrangements exist to engage assistance from the public fire brigades and the local health and environmental authorities as needed.
Security Personnel Requirements
Professionally managed and trained security personnel are hired to guard Gradacac operations 24 hours a day, 7 days a week. Zenica castings plant will employee professional service after the start up of the operations. Contracts include requirements to meet national laws and to provide appropriate training. Guards implement a visitor registration system and, as noted above, security staff guard entrances to the production facilities. Premises will be additionally secured by video surveillance equipment.
