- Social and Environmental Assessment and Management Systems:
Under the requirements of the 1973 Pakistan Environmental Protection Act (PEP Act), sponsors of new or expansion projects are required to conduct either an Environmental Impact Assessment (EIA) or an Initial Environmental Examination (IEE), depending on the nature and significance of potential project impacts, and to submit the requisite document to the Pakistan EPA (EPA) for clearance. For this Project, the EPA required preparation of an IEE, which was prepared by a third party consultant in March 2008. The IEE report forms part of the documentary evidence in support of an application to EPA for a permit to operate. The IEE was carried out by a qualified consultant team against the requirements of both host country regulations as well as IFC’s Performance Standards. The IEE report is quite comprehensive and detailed, and includes recommended mitigation measures, an Environmental Management Plan (EMP), as well as a recommendation that the Sponsor carry out a supplemental study on traffic impacts. The Sponsor has agreed to implement these recommendations in full. Copies of all subsequent EPA clearances and permits will be provided to IFC, as detailed in the attached Environmental and Social Action Plan (ESAP).
The company will adopt the same quality, environmental, and occupational health and safety management systems it has in place in the existing plant, which are certified by Lloyds Register Quality Assurance (LRQA) against ISO 9001:2000, ISO 14001:2004, and OHSAS 18001:1999 respectively. IIL has provided detailed written documentation on the performance of its management systems, including organizational charts, team composition and responsibilities, training programs and protocols, and the results of its most recent LRQA surveillance audits. The sponsor has agreed to provide IFC with the results of its next surveillance audit, which is scheduled for August 2008, as well as the audits taken of the new plant, as and when these are carried out to obtain certification. As has been done for the sponsor’s existing facilities, the project company will ensure that an environment, social and health and safety department exists at both the plant and corporate level. Quality, environmental and OHS issues will be managed at the company level by a single Manager, who will oversee a qualified and experienced team of senior and junior engineers to monitor performance and ensure compliance with government and IFC requirements. The company will provide Annual Environmental and Social Monitoring Reports (AMRs) to IFC to document the performance of these systems over the life of the investment. IIL has a demonstrated commitment to sound environmental and social management, and is one of only 52 companies in Pakistan that has joined the United Nations Global Compact, a voluntary international corporate citizenship network initiated to support the participation of both the private sector and other social actors to advance responsible corporate citizenship and universal social and environmental principles.
- Labor and Working Conditions:
Current employment in the company’s existing operations totals approximately 1000 employees and 425 contract workers over three shifts, providing support services including security, janitorial, logistics, packing and loading. When fully operational, the new project is expected to employ approximately 250 permanent jobs as well as 300 jobs on a contract basis. During the plant visit, the sponsor’s Divisional Manager for Human Resources provided copies of IIL’s Manual for Occupational Health and Safety Management System, Personnel Manual, and standard recruitment procedures, which are extremely detailed and conform to all relevant requirements of IFC’s PS2, including establishing, maintaining and improving employee-management relations; allowing for the formation of worker’s organizations if these are desired by its employees; promoting fair treatment, non-discrimination and equal opportunity of workers; ensuring compliance with national labor and employment laws; promoting safe and healthy working conditions; protecting and promoting the health of workers; and a mechanism that allows employee grievances to be articulated and addressed, as and when they may occur. The same systems will be adopted at the new plant, and the company will obtain OHSAS 18000 certification for the new facility within a timeframe agreed with IFC. Comparable labor standards and working conditions will be established at the new plant, where the company will adopt a Human Resource policy, procedures and management system based on the ones in place at the existing operations. A draft of the HR policies and procedures will be submitted to IFC for review within an agreed timetable, and will be finalized prior to the plant becoming operational.
IIL’s OHS management and monitoring programs appear to be exemplary, including a robust and effective program to ensure the use of requisite personal protective equipment (PPE), which extends to contract workers as well as employees, and includes both penalties for non-compliance as well as innovative incentives to encourage compliance. The IIL OHS team provides Induction training to all staff working on the premises (both employees and contractor’s employees), holds daily safety briefings for all units, and carries out periodic safety quizzes for illiterate workers, which provide cash payment for every correct answer. The company undertakes routine health screening to provide early detection for possible occupational illnesses. The sponsor holds an annual Family Safety Day, retains a doctor who visits the plant daily to see and treat workers, and provides medical coverage for all employees. The sponsor established a voluntary literacy program for employees 18 months ago, under which workers attend literacy classes two hours each day, for which they are paid their normal wages. A total of 120 workers have completed the program to date. IIL has a total of four unions at the existing plant, represented by one collective bargaining representative.
The sponsor has stated that it views excellence in EHS issues as essential not only in reducing accident rates, environmental impact and occupational hazards, but also in promoting a culture that result in high staff productivity and low staff turnover. The company has confirmed that it complies with all Pakistani labor regulations and standards including those relating to employment of minors. The minimum age of employees at the plants is 18 years of age, and extends to all contractor employees and casual workers. Security staff are required to check the national identify cards of anyone entering the plant premises to verify that they are 18 years of age or older. All machinery at the existing and new plants meet (or will meet) international safety standards and be equipped with protective screens and shutdown switches to prevent unsafe operation. Noise levels in the existing plant are tested regularly, as will be done at the new plant; recent test reports indicate that these will be within World Bank group limits in most areas. Employees will be required to wear hearing protection as and when they need to enter areas that exceed these levels, although in most instances the operations in high noise areas (e.g., the power plant) will be operated from the relevant control room, so potential exposure to high noise levels will be infrequent. The company will provide training to all employees in accident prevention, fire control and emergency response. As at the existing plant, a company-retained physician will be on duty daily to assist in minor health problems and to provide training and advice on health related issues. All full time employees above a certain grade will be covered under the company’s medical health program. Workers’ will be covered under the medical scheme of the Government for which the company will contribute. Both the existing and new plants are designed with strategically located fire exits and fire preventative and fire fighting measures in accordance with relevant laws and as advised by local fire authorities. Periodic training and drills are held. As it has done at its existing plant, the company will engage a fire consultant to develop appropriate fire prevention, detection response and life safety systems at the new project plant, and to develop an emergency fire evacuation plan.
IIL will ensure that all construction contracts include specific occupational health and safety (OHS) provisions, and that all contractors follow its safety manual, which contains all relevant laws, regulations and standards of the Government of Pakistan as well as a number of international best practices and guidelines pertaining to construction activities. Implementation of these requirements will be the responsibility of concerned contractor and will be monitored by the company’s EHS Department.
- Pollution Prevention and Abatement:
Pollution prevention and abatement at the new plant will be based on the same approaches and systems as at the existing plant. Power will be supplied by an 18 MW gas-fired captive power plant, which came on line in January 2008 and is presently selling all generated power to the national grid. The power plant’s emissions are monitored regularly meets all host country and World Bank Group emissions guidelines. Once the cold rolling mill (CRM) and Galvanizing Sheet Plant is commissioned, the company will continue to sell any excess power to the grid.
The IEE report notes that sources of air emissions at the new plant will include acid fumes (pickling line) and zinc and aluminum vapors and particulate matter (hot dip galvanized line). The plant design includes an acid regeneration unit, to recycle and reuse acid from the pickling line as well as cyclone and fabric filters to collect zinc and aluminum vapors, and the IEE report concludes that these measures will ensure compliance with Pakistani and World Bank Group air emissions limits. There are no detectable acid fumes in the existing pickling plant, and the sponsor has provided copies of recent emissions test results that confirm compliance with all relevant limits. No significant impacts on ambient air quality or ambient noise levels are expected to result from project operations. Nonetheless, the company will undertake annual ambient air quality testing and report these results to IFC and relevant regulatory authorities on an annual basis. In addition, prior to disbursement the company will provide written confirmation in the form of an air emissions dispersion model that emissions from IIL''s existing and proposed operations will constitute less than 25 percent of the total contribution to ambient air quality limits in the local airshed. Fuel and chemical storage areas are equipped with secondary containment structures, as will be the case at the new plant. IIL installed a waste heat recovery boiler at the existing plant, which is used to power the 25-tonne chiller unit. IIL has adopted a corporate energy saving program, wherein employees are encouraged to suggest energy efficiency measures and, if viable, these are adopted throughout the facility.
Water demand at the existing plant is met from municipal sources. The project’s daily water requirement (CRM and power plant) will be approximately 950 cubic meters (m3) and will be sourced from an on-site borehole, for which the company has obtained permission from the relevant authorities, and treated by reverse osmosis prior to use. Given long term concerns about sustainable water supplies in Pakistan, the company will monitor water use on a monthly basis and put in place an ongoing program to identify water minimization and recycling options for the plant. The plant design includes an effluent treatment plant capable of treating process effluents from all operations to meet all relevant host country and IFC guidelines. Treated process water will be recycled and reused in plant operations. Domestic waste water will be discharged to the municipal sewerage system.
The IIE report estimates that the production process will generate 4-5 tonnes of solid wastes daily primarily mill scale and iron oxide powder, which will be sold to paint manufacturers. Hazardous wastes such as used oils are disposed of to waste handling contractors. The company will identify the various categories of hazardous wastes generated on its premises (e.g., used oils and lubricants from machinery), in accordance with Pakistani law and seek authorization from EPA for generation, handling and storage of such hazardous wastes. The company will store identified hazardous wastes in designated areas with appropriate containment; maintain records of generation and disposal; and dispose of hazardous wastes only through authorized contractors in a manner approved by the regulatory authorities. Sludge from the ETP is currently, and will continue to be, tested to ensure compliance with local and World Bank Group discharge limits, prior to being disposed at a regulated landfill 40 km outside of Karachi. Non-hazardous solid wastes such as packing materials, paper, and scrap metal will either be recycled or sold. Environmental, health and safety during construction will be jointly managed by the IIL project team and the prime construction contractor, which has not yet been selected. As noted, IIL will ensure that all construction contracts include specific environmental management provisions, and that the prime contractor follows the Company’s environmental management procedures, to ensure compliance with all relevant laws and regulations of the Government of Pakistan, as well as internationally recognized good practice and guidelines pertaining to construction activities. Implementation of these requirements will be the responsibility of the contractor and will be monitored by the Company’s EHS Department.
- Community Health, Safety and Security:
Both the existing and new plants are located in industrial development areas surrounded by other similar industries. In the case of the new plant, there are some residential blocks located on the far boundary of the site. As part of its Environmental and OHS management systems, IIL has prepared Procedures for Emergency Preparedness and Response for its existing plant, including policies and procedures to prevent both on-site and community exposure to fire, explosions and hazardous materials under both normal and emergency scenarios. The Procedures are based on risk assessment and analysis, as well as Government requirements and with reference to IFC’s PS4 (Community Health, Safety and Security). Entry to and exit from all facilities is controlled carefully by 24-hour security personnel. IIL engages a private company to provide security services; contract provisions include guidelines on how security personnel shall interact with neighboring communities and industrial facilities surrounding the facility. The IEE report concludes that the new plant will comply fully with the provisions of PS4, and the IIL management team has confirmed its intent to comply with these requirements in full. Signboards will be posted at the entrance to both plants listing any hazardous materials in use, hazardous materials generated, and giving the name of contact persons who can respond to community concerns or questions. The company instructs security guards at plant entrances to refer inquiries to the relevant manager, given the nature of the inquiry. The company enjoys good relations with its industrial neighbors and participates in joint fire and emergency drills with both the local fire brigade and other nearby plants on a regular basis. IIL has hard and soft copies of all relevant material safety data sheets (MSDSs) on hand at each plant, and conducts detailed training for all workers who may be exposed to hazardous materials.
The IEE report outlines a number of mitigation measures to be implemented during the estimated 26-month construction period to minimize impacts on surrounding communities and industrial neighbors. Construction labor will be drawn largely from neighboring communities, which is expected to provide employment and skills training to an estimated 1000 residents for the duration of the construction effort. Given the large size of the site relative to the proposed built area, it will be possible to stockpile quantities of construction equipment and materials (cement, bricks, structural supports) on site, thus lowering the number of delivery vehicles that will enter and exit the site daily. Site access will be via a main road, and will not traverse nearby residential areas. The project team estimates that an average of 20-30 truck will enter the site daily during construction, which is not a significant increase over the usual amount of traffic on the access road. Nonetheless, upon the recommendation of the IEE report, the company will undertake a detailed traffic study and abide by its findings and recommendations, including additional traffic security along the access road to prevent accidents to residents, especially children; dust suppression activities; additional grading of roads, especially during the monsoon; and prohibitions on vehicle movement during evening and night time hours. The traffic study will also assess methods of evacuating product from the plant, and consider possible safety impacts and mitigation measures, including ensuring that products are securely fastened to transport vehicles to prevent injuries and accidents. The Project team will meet with local residents, town officials, and neighboring industries on a regular basis during construction to ensure that any construction-related concerns and nuisances are identified and promptly addressed.
- Land Acquisition and Involuntary Resettlement:
As noted above, the Sponsor does not intend to acquire additional land in the context of this Project. Nonetheless, the company will review its internal land acquisition procedures against the requirements of PS5 (Land Acquisition and Involuntary Resettlement) and to amend these procedures if necessary to ensure future compliance with PS5 requirements.
- Cultural Heritage:
The site for the new project is in a significantly modified, heavily populated peri-urban area, with no evidence of the presence of any monuments, temples or other cultural property that would be covered under PS8. However, the company will include in all of its construction contracts a standard procedure for assessing cultural heritage ‘chance finds,’ developed in consultation with IFC, that may be identified during either construction or operation to ensure that any such finds are not disturbed until they have been assessed and documented by a competent specialist.
