26933 - PICT4

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Environmental & Social Review Summary

Project Number

26933

Company Name

PAKISTAN INTERNATIONAL AIRLINES CORPORATION

Date ESRS Disclosed

Apr 14, 2008

Country

Pakistan

Region

Middle East

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 18, 2008
Signed : Jun 25, 2008
Invested : Nov 26, 2008

Sector

Port and Harbor Operations

Industry

Infrastructure

Department

Regional Industry INF MCT

Project Description

Pakistan International Container Terminal Ltd. (PICT) operates a container terminal in the Port of Karachi under a 21-year Implementation Agreement signed in 2002 with the Karachi Port Trust (KPT). The Port of Karachi is the main port of Pakistan and handles about 60% of the country’s container traffic. The company itself is estimated to handle about 21% of the country’s container traffic. IFC has provided three financing packages to PICT since 2003 to support its development and expansion plans. Although Phase III investments are in progress, in order to further expand its operations to keep up with projected demand growth, PICT is executing Phase IV investments to acquire additional container handling equipment, including two ship-to-shore (STS) gantry cranes, ten rubber-tired gantry (RTG) cranes and other equipment (reach stackers, terminal tractors, trailer units, and generator sets); and complete civil works. The project is estimated to cost $30.7 million and increase PICT’s annual capacity to 750,000 20-foot equivalent units (TEUs).

Overview of IFC's Scope of Review

As a long-term client, PICT reports to IFC regarding the ongoing management of its environmental and social performance, which has been sound. IFC’s appraisal mission in March 2008 confirmed that the company is meeting the requirements of the original investment agreement and continues to demonstrate that its activities comply with applicable Pakistan laws and regulations, and World Bank requirements. In addition, the review of this project appraised technical, environmental and social information submitted by the project sponsor including its Integrated Management System Policy, EMS risk assessment checklists, summary of emergency response procedures in place, risk assessment methodology, recent independent laboratory results of drinking water tests, and recent vehicle emissions test results. IFC met with the project team in Karachi and toured the port facilities in March 2008.

E & S Project Categorization and Applicable Standard

While all Performance Standards (PSs) are applicable to this investment, 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, with particular regard to human resources policies and employment employee health, safety and training programs;
- PS3: Pollution Prevention and Abatement, with specific focus on maintenance, dredging and dredge spoil disposal; storm-water management; liquid, solid and hazardous waste disposal; oil/hazardous materials storage and handling; handling and storage of dangerous cargoes; ship support operations such as sewage disposal, bilge waste effluent; fueling services and spill response; and
- PS4: Community Health, Safety and Security, with specific focus on emergency response planning and preparedness.

The appraisal also assessed the applicability of PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples and PS8: Cultural Heritage. As no new land is being acquired and all facilities are located in urban industrial areas of the greater Karachi region, the project is not expected to result in impacts on biodiversity, indigenous peoples or cultural heritage.

This is a repeat investment involving equipment acquisition and limited civil engineering work to construct foundations for this equipment, resulting in no material changes to PICT’s operations. IFC’s ongoing review and supervision of its existing investments in PICT has shown that the company continues to meet its environmental, health and safety, and social compliance obligations, including the relevant IFC Performance Standards and guidelines. In light of the fact that mitigation measures can readily be designed, adverse impacts are not expected to be diverse or irreversible and will be limited to project site, the project has been classified as a Category B. The current Environmental and Social Risk Rating (ESRR) for the project is B-2 – Average.

Environmental and Social Mitigation Measures

The sponsor has presented plans to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with IFC’s environmental and social requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

- Social and Environmental Assessment and Management Systems

As a long-term client, PICT has been reporting to IFC annually for several years regarding the ongoing management of its environmental and social performance, which has been sound. In addition, IFC’s appraisal mission in March 2008 confirmed that the company is meeting the requirements of the original investment agreement and continues to demonstrate that its activities comply with applicable Pakistan laws and regulations, and World Bank requirements. PICT has adopted an Integrated Management System (IMS) to over see quality, environmental and health and safety, for which it has obtained certification from Desk Norske Veritas (DNV) against ISO 9001:2000, ISO 14001 and OHSAS 18001 respectively. PICT has a full-time safety officer and an environmental coordinator with responsibility for all safety and environmental matters at the terminal. The role of the Safety and Environment Officer is clearly defined within the PICT organizational structure, including a detailed written job description and clear reporting lines to senior management. Employees and contractors are trained on the key aspects of the IMS, which is posted prominently throughout PICT’s facilities and made available to staff and other stakeholders in both English and Urdu. PICT engages a third party (SGS Pakistan) to carry out regular testing of its generator emissions and drinking water quality.

Labor and Working Conditions:

Current employment totals approximately 650 people over three shifts. PICT’s Human Resources (HR) department oversees all aspects of employee recruiting, hiring, training, evaluation, remuneration and promotion. Its HR policies and procedures 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 establishing a mechanism that allows employee grievances to be articulated and addressed, as and when they may occur.

As noted, PICT has a long-standing Health, Safety and Environment (HSE) program that enables it to ensure the workplace safety of all employees, including pre-employment and periodic medical evaluations, provision of personal protective equipment (PPE), and regular training in hazards, safe work procedures, and emergency response activities. PICT’s HSE 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 requires contractors to provide all requisite PPE to their workers (the cost of this PPE is borne by PICT and PICT’s HSE team enforces its use among both employees and contractors). PICT has an interdepartmental Safety Committee, including staff from the HSE, Administration, Security, and Engineering departments, to review practices and performance on a monthly basis. Policies and supporting documentation (i.e., a detailed health and safety manual) have been developed and copies were provided to IFC during the recent site visit. PICT has implemented systems for measuring, monitoring and reporting on lost time injuries (LTIs) on a monthly basis; copies of recent LTI reports provided to IFC during the recent visit indicate that these are within industry norms. PICT 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 all of its operations 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 terminal premises to verify that they are 18 years of age or older.

Pollution Prevention and Abatement:

Ongoing maintenance dredging of the approach channel and harbor is the responsibility of KPT, who owns and operates a fleet of dredgers and hopper barges for this purpose. KPT disposes dredge spoil at two designated marine sites in the open sea away from the channel. Storm water is collected separately from the various operating areas of the terminal with uncontaminated runoff directed to the harbor through four outfalls. Leaking containers are segregated and stored on a platform in a designated area within the container yard provided with containment walls and a collection tank. Material collected in this tank is disposed through an approved, licensed waste disposal contractor.Because of the limited day-to-day maintenance activities conducted at the terminal, only incidental amounts of hazardous materials – paints, solvents, and petroleum lubricants – are stored and handled in the workshop areas. Operated by KPT, truck fueling facilities comprise two underground tanks located within a larger area surrounded by containment walls. There are ship fueling facilities at the terminal. Fuel tanks for the terminal’s standby power generator has appropriate containment features to prevent spills from being released to the environment. Sanitary sewage generated by employees is currently partially treated in septic tanks serving various buildings and areas of the terminal prior to eventual discharge to the harbor. PICT is currently completing work on a new administrative office block within the existing premises. The development includes a new sewage pre-treatment facility to treat these wastewaters to levels consistent with Pakistan laws and regulations prior to discharge to the municipal sewerage system, which is expected to be operational in May 2008. The specifications for the facility indicate that it will meet both Pakistani regulations and IFC guidelines for effluent discharge. Sludge generated by this new facility will periodically be removed by a licensed waste removal contractor. Oily wastewaters generated from the equipment washing area in the maintenance workshop are currently collected in a temporary separation pit, which will be replaced with a dedicated oil/water separator in 2006. The small amounts of solid and hazardous wastes generated by the workshop along with any oils recovered by the separation pit are collected by a licensed contractor and properly disposed at approved government-operated landfills or by authorized recyclers.KPT controls and has responsibility for vessel support operations involving bilge and other ship-generated wastewaters and wastes management, and relies on licensed contractors to provide these services to vessels. The ship''s agent arranges for supply of provisions, potable water, and fuel with responsible third parties while berthed at the terminal. KPT does not permit vessels to discharge oily bilges, sludges, and water containing oily mixtures into the harbor, and conducts inspections regularly to ensure that vessel operators comply with all laws and regulations.PICT stores containers in accordance with International Maritime Organization (IMO) conventions to prevent potentially dangerous combinations of goods coming into contact with one another. Customer-identified IMO Dangerous and Hazardous (D&H) containers are transferred to and stored in KPT''s designated D&H Container sheds (located at the east wharf and the west wharf) separated from PICT''s container storage yard. Each having capacities of 2000 tons, KPT''s D&H sheds have separate areas allocated for various categories of dangerous cargo, including appropriately ventilated areas for cargo with the potential to emit vapors. In the event any container is found leaking, trained KPT staff relocate it to a designated area where leaky cargo is removed and properly disposed according to applicable environmental requirements.
Community Health, Safety and Security:

KPT provides port-wide fire-fighting and emergency response services consistent with international maritime conventions (MARPOL 73/78) through its Marine Pollution Control Department (MPCD). Services include harbor oil spill response and clean-up, harbor water quality monitoring, vessel surveillance and inspection, and fire fighting. The equipment which MPCD employs includes specially provisioned ships, skimmers, and oil containment booms. PICT coordinates with KPT for responding to incidents that occur on the terminal property. PICT has its own emergency plans and procedures and the necessary equipment for preventing and combating oil and chemical spills and fires and major accidents during terminal operation, including coordination with KPT fire and spill response brigades. Over the last several years, the company experienced only minor incidents – equipment fires, small oil and chemical spills – all of which were properly responded to, documented and investigated. PICT''s emergency response program includes appropriate personnel training in emergency response for all employees, quarterly fire drills, and joint exercises with the local fire brigade.

Stakeholder Engagement

Because PICT’s operations are housed completely within KPT’s premises, it has no independent contact with external communities. KPT regularly makes information about new development at the port available via both public notices and through its website (http://www.kpt.gov.pk/). The company has excellent working relationships with KPT and other terminal services providers housed within the port premises.

**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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