The company has provided information on its current practices and policies that seeks to address these risks and impacts to ensure that the proposed project complies with or, will upon implementation of specific additional agreed measures, comply with host country laws and regulations and the IFC Performance Standards on Social and Environment Sustainability and applicable sections of the general and sector specific environmental, health and safety guidelines. Environmental, social and health and safety issues that require ameliorative measures will be addressed by the company as part of IFC’s Loan Agreement.
- Social and Environmental Assessment and Management Systems:
South Pacific Viscose is an existing IFC client, and this is a repeat investment. SPV has been in compliance with national regulatory requirements and its E&S performance has been consistent with at approval requirements for the previous investments. SPV has a certified management system which includes ISO 9001, ISO 14001 and OSHAS 18001. Facilities are audited periodically to ensure compliance with certification requirements. SPV''s management program is consistent with that of its EU parent (Lenzing, Austria). SPV has a vice-president with responsibility for environmental matters. These include measures such as risk analysis, development of safe working procedures, a work permits system, staff training in areas such as basic safety awareness, use of personal protective equipment (PPE), hazard identification, housekeeping, use of MSDSs, and fire fighting, emergency response and first aid. Every accident and dangerous occurrence is investigated to identify what happened, the causes and action necessary to prevent repetition. SPV maintains accident frequency and severity statistics which is reported to be better than its EU parent. Accident frequency is satisfactorily low when compared with similar industries such as paper making.
Separate Environmental and Social Impact Assessments (ESIA) are currently being undertaken for the new manufacturing line and the power plant. The scope of the ESIAs will include among other things, establishment of recommended emission performance standards and consultation with the local community on potential project related impacts. On completion, the ESIAs will be disclosed publicly and require approval by the local government prior to commencement of activities for which an approved ESIA is required. Ongoing construction activities at the site, including altering grade of existing land that may alter natural drainage profiles, is being undertaken by professionally licensed engineers and approved by the local regulatory agency through the issuance of relevant permits.
Human resources are managed effectively at the corporate level and in compliance with Indonesian labor laws. The company is currently undertaking a review of its HR policies for consistency with that of the Lenzing Group. Training of staff is done on a routine basis in compliance with Indonesian workplace regulations. Facilities managers are responsible to ensure that employees are adequately trained to perform their work safely. SPV has a monitoring program for occupational health and safety (OHS) issues that are managed at the facilities level in compliance with Indonesian regulatory requirements. Facility managers monitor that standards are met and any reportable incidents are reported and follow up action taken when required. Reporting requirements comply with national laws and regulations, and are largely consistent with applicable sections of the IFC EHS guidelines for the sector. Moving forward, as described in the Environmental and Social Action Plan (ESAP), SPV will extend its oversight of its management system to include environmental, social and occupational health and safety to its subcontractors, and to the extent possible to its supply chain.
- Labor and Working Conditions:
SPV currently employs 1,456 employees and expects to hire in addition up to 150 new employees after expansion in production capacity. Labor practices and working conditions, including occupational health and safety, comply with local regulatory requirements, and largely consistent with IFC PS2 requirements. SPV policy on employment is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is provided in the form of an employee brief at the time of induction. The minimum employment age at SPV is 18 years. Child labor or forced labor is not employed directly, or by subcontractors or in the supply chain. Subcontractors are expected to comply with all local labor requirements specified in contractual arrangements. SPV is currently working on achieving consistency with policies and procedures established by the Lenzing group.
Occupational health and safety at SPV facilities are managed by designated health and safety staff. There is a plan for prevention and worker safety consistent with local regulatory requirements. All employees in the company have to undergo a full training program at induction and subsequently on worker health and safety relevant to their job activity. Health and safety procedures are consistent with that of the Lenzing group. Facilities are audited by regulatory agencies to monitor compliance with labor regulations, as well as by staff from Lenzing Austria. Workplace air quality and noise are monitored annually, and reported to be in compliance with local regulatory requirements and IFC guidelines. SPV is working toward improving its performance on the use of PPE, especially in work areas where chances of worker exposure to CS2/H2S are high.
Moving forward, as described in the Environmental and Social Action Plan (ESAP), SPV will review its policies and procedures to identify gaps with IFC PS2 requirements, and implement changes as necessary. The scope of review will include SPV’s own operations, as well as where relevant, services procured from subcontractors and to the extent possible its supply chain.
- Pollution Prevention and Abatement:
Liquid emissions from the SPV facility include wastewater from viscose manufacturing operations, sanitary wastewater, and stormwater. SPV currently discharges 1,000 cubic meters per hour of treated wastewater to the nearby Citarum river. The wastewater treatment plant receives effluent from process streams, blowdowns from utility areas, floor wash waters, chemical tanker truck unloading pads and other fugitive discharges that make their way to the treatment plant through uncovered collection drains. Treated wastewater quality is in compliance with Indonesian regulatory requirements, and IFC guidelines for the discharge of treated wastewater to surface water. After the increase in production capacity, it is anticipated that 1,250 cubic meters per hour of treated wastewater will be discharged to the river. River water is used for irrigation, marginal domestic and other recreational usage by villagers. Expansion in wastewater treatment facilities to meet the additional load will be completed prior to commencement of operations of the new production line. After the expansion of the wastewater treatment plant is complete, it is expected that the treatment system will continue to maintain compliance with Indonesian regulatory requirements which may be revised after completion of the ongoing ESIA. Final emission standards will be established per the ESIA which will include a cumulative impacts assessment on the Citarum river to which SPV discharges treated wastewater.
In compliance with local regulatory requirements, sanitary wastewater from SPV’s employee housing colony is treated in septic systems attached to each house. Sanitary wastewater from facilities within the production areas are also treated in septic tanks. Septic tanks are inspected and maintained on a regular basis to ensure efficacy of treatment. Stormwater (along with once through cooling water and other fugitive discharges or spills) is collected via an extensive system of stormwater drains that provides coverage to most of SPV’s operational areas. In compliance with Indonesian regulatory requirements, stormwater from the site is presently discharged directly to the Citarum river without further treatment. Final emission standards for stormwater will be established per the ESIA for the facility.
Air emission from SPV facilities are mainly exhaust gases discharged by the waste gas recovery plant and flue gas emissions from the power boilers. SPV’s consumes CS2 in their manufacturing process, and generates additional CS2 and hydrogen sulfide (H2S) during a later process stage. CS2 and H2S are removed from the process machinery and manufacturing building by ventilation systems. The exhaust stream containing a high concentration of CS2 is recovered for reuse in the process. The more dilute exhaust stream is sent to a waste gas recovery plant where its sulfur content is converted to sulfuric acid which is used in SPV’s process.
Emissions of particulates, sulfur dioxide and nitrogen oxides from existing power boilers and the waste gas recovery plant are in compliance with Indonesian regulatory requirements and consistent with applicable IFC guidelines. As part of its expansion program, SPV will build a new gas based CS2 plant and a 30MW power plant. The power plant will use mixed fuels including coal, flyash from the existing power plant, wastewater treatment plant residuals and biomass (in the future). Emission standards for the new power plant will be subject to IFC draft thermal power guidelines for thermal power plants with additional requirements for monitoring and control of metals, dioxins and furans as well as any potential persistent organic pollutants (POPs) that may be produced from incineration of process residue. Final emission standards for these facilities will be determined after completion of an ESIA which will take into account the mixed nature of feed to the power plant and include a cumulative impacts assessment. Flyash from the new power plant will be sold as feedstock to cement manufacturers in the region.
SPV makes special provision for the safe management of hazardous materials such as acids, alkalis and CS2. SPV assumes responsibility for these chemicals at its gate. Vehicles carrying these chemicals are marshaled to designated parking and unloading areas, where unloading is supervised and logged by trained members of staff. All hazardous materials storage areas have secondary containment, construction of some of which is being currently completed. Secondary containment around CS2 tanks contains water, so that any CS2 which should leak would not be in contact with air. This area, and the acid area have leak detection systems. An emergency response plan has been developed which includes means to contact the surrounding village in the event of a serious event, and a joint response to fire has been agreed with surrounding manufacturing sites. The function and environmental and safety issues associated with each component of the plant are assessed using a Reliability Centered Management system.
Recyclable solid waste is sold to vendors, while other solid wastes are disposed by licensed disposal companies in accordance with local regulatory requirements. Hazardous wastes and chemicals including used motor oils, lubricants, laboratory chemicals etc. are disposed by government licensed vendors. Sludge from the wastewater treatment plant produces about 30 tons of sludge per day, mainly consisting of hydrated lime with co-precipitated sulfates and metals along with biological material from the secondary clarifiers are incinerated in the existing power plant.
SPV has a landfill on site that was used in the past largely for the disposal of flyash, and a small section was used for disposal of domestic as well as non-hazardous solid waste from the plant & company’s employee housing colony. Although the landfill is no longer used for flyash disposal, a small portion of it continues to be used for disposal of domestic solid waste. The unused section which represents a majority of the landfill is undergoing a close out process with a permit from the Indonesian government which requires long term monitoring of groundwater quality. The domestic waste disposal site is operated under a permit from the local government, primarily to support 30 waste pickers from the neighboring community to earn a livelihood. SPV provides these pre-registered waste pickers with limited access to the site, and some PPE. Moving forward, as described in the Environmental and Social Action Plan (ESAP), SPV will evaluate options to assist these waste pickers to engage in alternative livelihoods so that the existing landfill can be closed entirely.
Fresh water for process and cooling needs is obtained from the Citarum river. Current water consumption is estimated to be about 52,000 cubic meters per day. An additional 14,000 cubic meters per day of fresh water will be required when the new production capacity comes on line. The withdrawal of fresh water from the river does not impact other beneficial use of water by local residents or villagers at any time during the year, and will be confirmed during the ESIA process.
SPV consumes about 190 giga-watts of electric energy annually, of which 69 giga-watts are obtained from the grid. The new power plant will add an additional 262 giga-watts generation capacity, some of which will be used for production of steam for process applications. Net green house gas (GHG) emissions attributable to SPV’s direct and indirect annual consumption of 452 giga-watts of electricity, is estimated to be in excess of 350,000 metric tons of carbon dioxide equivalents per year. Consistent with IFC PS3 requirements on GHG emissions, SPV will monitor and quantify GHG emissions annually in accordance with internationally recognized methodologies. In addition, SPV will evaluate technically and financially feasible and cost-effective options to reduce or offset project-related GHG emissions during the design and operation of the project.
- Community Health Safety and Security:
SPV is continually working toward improving its management and safe handling of the raw materials, some of which are transported by road over a distance of more than 150 kms from the nearest port. It is estimated that SPV can receive up to 100 truck loads per day of materials delivery to its facilities which requires careful management and planning. The procurement department at SPV coordinates the logistics of these operations with hauling company, while concerns from the local community are handled by the office of General Affairs and Community Relations. Based on feedback from the community, logistics of truck traffic and unloading activities have been scheduled to cause minimum disruption. To improve its management of increased truck traffic resulting from stepped up production capacity, SPV will review its procurement process/procedures and its logistics management plan to safely manage the increased truck traffic to its facility. SPV also has a medium term plan to provide a second access road to its factory.
Acquisition of land and construction of its new expanded facilities have resulted in some local residents being cut off from their traditional path(s) that were used to access either their agricultural lands or grazing areas. Although presently they are able to access their lands by passing through the construction site, this access will be restricted when a fence is erected to secure the construction site from unauthorized access. In consultation with the affected community, as described in the Environmental and Social Action Plan (ESAP), SPV will construct and maintain an access path that can provide a safe alternate route that the community can use.
