26858 - UABL II

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Environmental & Social Review Summary

Project Number

26858

Company Name

UABL PARAGUAY S.A.

Date ESRS Disclosed

Jun 25, 2008

Country

Paraguay

Region

Latin America and the Caribbean

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Aug 19, 2008
Signed : Sep 15, 2008
Invested : Sep 30, 2008

Sector

Water Transportation

Industry

Infrastructure

Department

Gbl Infrastructure & Natural Resources

Project Description

UABL Limited (UABL or the company) is the largest barge operator on the Paraná-Paraguay river system (the River System) in South America. The company primarily transports across the River System:

- soy products and iron ore from Paraguay, Bolivia and Western Brazil for final export markets in Europe and China, and
- petroleum products into Paraguay for internal consumption.

UABL is implementing an investment program in 2007-2010 to

- replace existing diesel engines with more efficient engines to consume less expensive fuel;
- enlarge and reinforce existing barges; and
- construct and acquire additional tugboats and barges.

The project will reduce UABL’s fuel cost and pollutant emission, improve its efficiency, extend asset life, and expand the capacity of its fleet.

Overview of IFC's Scope of Review

The environmental and social review consisted of appraising technical, environmental, health and safety (EHS) information submitted by UABL. The review also included monitoring reports and other relevant documents from 2002 to 2006 from a previous IFC investment. The appraisal included interviews with UABL’s management at the company’s offices in Buenos Aires, as well as technical discussions with staff in charge of environment, health and safety (EHS) and labor issues.

IFC’s review included the following topics: performance against requirements in the earlier IFC investment; EHS Management System (EHSMS); labor issues; operation and maintenance of fleet (tugs, push boats and barges) including liquid, solid and hazardous waste management; operations of on-shore terminals and shipyards; spill prevention and emergency response; cargo handling procedures; air emissions; and fuel efficiency.

E & S Project Categorization and Applicable Standard

IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security

No project-related land acquisition or involuntary resettlement is expected. No protected areas, sensitive natural habitats, cultural property, or Indigenous Groups are anticipated to be directly impacted by the Project.

This project is categorized as B. IFC’s previous review and supervision of the first investment with UABL showed the company met its environmental, health and safety, and social compliance obligations, including the at-approval applicable and relevant IFC policies and guidelines. Issues for this Project are similar to those identified for the previous financing and can be mitigated by adhering to generally recognized performance guidelines. The project will finance a more efficient vessel fleet which is expected to reduce UABL''s fuel consumption and most associated emissions. The investment program at this time does not include expansion or construction of on-shore facilities.

Environmental and Social Mitigation Measures

The company has presented plans to address environmental and social impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the applicable national laws and regulations and IFC’s Social and Environmental Performance Standards. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow.

- PS1: Social and Environmental Assessment and Management System:

Currently UABL operates a fleet of 591 barges and over 20 pushboats. UABL’s on-shore facilities on the Paraná River include: Tres Fronteras Port Terminal (Paraguay); Dos Fronteras Port Terminal (Paraguay); Wanda Port (Argentina); Pueblo Esther Shipyard (Argentina) and Puerto Martins Shipyard (Argentina). In addition to soy products, iron ore and petroleum products, UABL also transports vegetable oils, cement, fertilizer, flour and pellets.

Since 2002 the company has in place an Environmental, Health and Safety Management System (EHSMS) consistent with the voluntary standards of conduct established for the Responsible Carrier Program (RCP) by the American Waterways Organization (AWO). The EHSMS also covers, in all cases to the extent they are applicable to inland river transportation and as enacted in the countries of operation, IMO standards, including the ISM Code; SOLAS; MARPOL; the Code of Safe Practice for Cargo Stowage and Securing (CSS Code); and the Code of Safe Practice for Solid Bulk Cargoes (BC Code). In the same fashion, the Management System considers applicable components of other international standards, such as ILO Convention 147 on shipboard labor practices and the Standards of Training, Certification & Watchkeeping (STCW) for on-board crew.

UABL’s EHSMS covers terminals, shipyards and river operations, including: environmental and safety policies, occupational health and safety procedures, training, safety of fleet operations, waste management, cargo handling including flammable materials, emergency response, and maintenance and repairs. UABL has an organization with the appropriate responsibility and authority to manage EHS matters. The company relies on external expertise to cover specific environmental and safety issues on an as needed basis. EHS procedures are described in various manuals and other documents, including a management of change procedure to ensure that continuous improvements are captured by the system.

EHS performance is monitored through the company’s general internal control process and reports are produced annually. Non-conformities and accidents are investigated and corrected, as necessary. Senior management reviews performance results annually and ensures that appropriate adjustments to procedures are made. The company is also supervised by local and national authorities. Barges and terminals carrying hydrocarbons and grains undergo inspections by oil and agribusiness clients to ensure compliance with their own EHS, food safety, and cargo handling specifications. UABL will update its EHSMS to explicitly include reference to IFC’s Performance Standards.

As part of the environmental licensing process for each terminal and shipyard UABL has prepared environmental impact assessments and corresponding management plans. These plans include provisions for waste management, occupational health and safety, and spill control measures, among others. The development or operation of the terminals and shipyards do not require dredging.

- PS2: Labor and Working Conditions:

UABL has in place a Human Resources policy for its on-shore and on-board employees that is consistent with Argentinean and Paraguayan labor laws and, in general, aligned with IFC’s PS2. The company’s HR policy includes requirements for employee training, health benefits, safe work environment, non-discrimination and equal opportunity. As mentioned before, UABL’s EHSMS takes into consideration to the extent they are applicable to inland river transportation and in accordance with land local legislation, ILO 147 guidelines that cover basic labor ILO standards and also issues related to crew safety and maximum working hours. In order to improve its HR policy, UABL will develop a grievance redress procedure for its employees in accordance with international best practices.

As mentioned under PS1, UABL has in place a robust EHSMS that covers occupational health and safety issues. Additionally, contractors are required to show risk insurance covering their employees in UABL’s service, provide personal protection equipment (PPE) and follow UABL’s EHS procedures in accordance to the service being performed.

- PS3: Pollution Prevention and Abatement:

Fuel is UABL’s largest operating expense. The engine replacement project covered in this investment will replace existing EMD Marine Gas Oil (MGO) engines for more efficient MAN Diesel A/S Intermediate Fuel Oil (IFO) engines, reducing UABL’s fuel consumption by an estimated 18% per year accompanied by a reduction of carbon dioxide emissions (CO2). It is estimated that the engine replacement project will generate a reduction of Greenhouse Gases (GHG) of approximately 17,241 tons of CO2-equivalent per year. According to the technical specifications of the new engines, they are expected to comply with IMO’s emission standards for nitrogen oxides (NOx). The company will ensure use of low sulfur fuel oil which will also maintain sulfur oxides (SOx) emissions within IMO standards. Emissions of Particulate Matter (PM) from the new and re-engineered engines are expected to increase marginally, however the company will define alternatives to ensure the lowest economically achievable PM emissions levels. The lube system for the new engines incorporates a built-in automatic back flushing lubrication oil filter, which eliminates the need for paper filter elements that require special waste management treatment.

As mentioned before, UABL has prepared EIA and corresponding management plans for all terminals and shipyards. Slop and wastewater from vessels and shore-based repair facility waste are processed by certified third parties following national and MARPOL requirements as applicable to inland river transportation. The company has also implemented a waste segregation and recycling program for its terminals and shipyards facilities. Oil and hydrocarbon storage tanks at oil terminals are appropriately placed on second containment areas to avoid spill risks. Cleaning and disinfection procedures for storage facilities and machinery at grain handling terminals are conducted by trained staff using safe cleaning products only.

UABL has identified safety as the top priority and has in place an EHSMS to ensure a safe work environment for its employees and surrounding communities. For this reason, in addition to the measures described under PS1, the company has invested in a computerized navigation system that enables to continuously map on real time the safest routes and marks the channel with electronic buoys. This technology is supported by pilot and captain training in convoy simulators at institutions such as the “Center for Marine Education” (Kentucky, USA). UABL is also considering establishing a Seaman Training School in Paraguay to train current and prospective employees on barge operations, cargo handling, and occupational health and safety.

River transportation on the Paraná-Paraguay River System is regulated by an international Treaty signed by Argentina, Bolivia, Brazil, Paraguay and Uruguay. The Treaty includes specific provisions for oil spill prevention and international response coordination; vessel and cargo safety inspections; and waste management, among others.

Since 2001 the company has in place a Corporate Contingency and Emergency Response Plan approved by the Argentinean Coast Guard. Additionally, UABL has prepared health and safety risk assessments and corresponding contingency plans for each terminal and shipyard as part of the EHSMS and the certification process for the International Ship and Port Facility Security (ISPS) Code. UABL has also implemented Emergency Response Committees (ERC) in all its facilities and conducts periodic drills for spill and fire control in conjunction with the relevant local government agency. Additional spill response training is provided in coordination with the Argentinean Coast Guard’s Environmental Division. Each UABL pushboat carries the appropriate inventory of oil spill response equipment and materials. In case of a significant spill the Coast Guard, or relevant country authority, will coordinate a response using equipment from facilities in closest proximity.

- PS4: Community Health, Safety and Security:

Impacts on communities are expected to be minimal. Potential community health risks related to spill incidents has been mitigated through measures described above under PS1, PS2 and PS3. One potentially significant project impact is related to increased short-distance truck traffic generated by increased operations. UABL will update the existing traffic plans for all its on-shore facilities to cover measures such as driver training, speed limitations, limiting hours of facility operation, installation of cross-walks, signage, communication with communities and installation of traffic calming devices to help prevent accidents.

Stakeholder Engagement

As part of its EHSMS, UABL will implement mechanisms for communicating to the communities living in the vicinity of the company’s facilities the environmental and safety aspects of its operations and facilitate dialog with the communities through proper authorities to address their concerns. Additionally, the company will implement a system to document and address community concerns.

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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