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 country laws and regulations, IFC Performance Standards, and IFC environmental, health and safety (EHS) 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
CMCS has a formal internal procedure requiring social and environmental (S&E) assessment for various functional and operational facilities within CMCS, which is based on the Croatian requirements. Such assessments are necessary preconditions to issuance of the operational permits. CMCS will ensure that the internal and formalized S&E screening methodology is applied to ensure that basic S&E issues and IFC Performance Standard requirements are always considered in any future activities which may be part of the project. An integrated environmental permit based on IPPC process is expected to be obtained within three years. Environmental Protection Law and relevant Regulations require all existing and new installations to obtain IPPC permit using BAT practices, which are defined in BAT Reference Document (BREF) for steelmaking, dated March 2000.
- Social and Environmental Management
CMCS is managing its EHS aspects through several independent processes as per requirements of the local relevant laws. These processes prescribe activities that need to be done in order to be in compliances with the local regulations. In order to achieve more efficient management of EHS aspects and reporting internally and outside the company CMCS will develop a formal EHS structure based on the principals of ISO 14001, which will entail strengthening the capacity of the current EHS management team. This will facilitate much easier development, operation, supervision and monitoring of all environmental aspects of CMCS operations. CMCS will consider applying for formal ISO 14001 EMS system certification. CMCS has ISO 9001 quality management system in place.
In case where an outside contracting companies are performing work for CMCS the regular supervision visits are organized to confirm that planned measures to manage environmental and safety issues in reconstruction are in fact in place and to assist contracting companies to implement reconstruction works safely. These outside companies undertake their own assessment of S&E risk at the offering 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
CMCS has relatively small but strong environmental, health and safety (EHS) management structure with main function to ensure that all EHS aspects of the project are being dealt with due attention and in accordance with EHS requirement of the host country and IFC EHS Performance Standards and guidelines. 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. The limiting factor in the current organizational EHS scheme is that different segments of the EHS structure i.e. environmental, occupational health and safety and fire protections are managed by different units, which do not have clear internal formal reporting and coordination responsibilities. Although these units are placed relatively low in the current organizational scheme of CMCS they have direct reporting lines to the senior management. As the current EHS capacity and organization is not adequate IFC recommends CMCS to strengthen it.
-Monitoring and reporting
CMCS EHS staff monitors and reports back to senior management, as requested, on different EHS impacts of its operations. These reports help design and timely implement corrective action where the malpractice has been observed. The regular reporting will need to be established 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
CMCS operates in the industrial zone of Sisak city and no households are located near the site. One of CMCS’s corporate responsibilities is to be socially responsible partner to the community where it operates. CMCS will design a formal way and means to provide timely information on its activities and potential EHS impacts to the local community, through appropriate communication channels.
- PS2 – Labor and Working Conditions:
- Human Resource Policy and Management
CMCS has signed a “Collective Labor Agreement” with the workforce, which is designed to ensure compliance with Croatian labor regulation and is compliant with IFC’s Performance Standards. Each year a new collective agreement is negotiated or the existing one extended as per mutual agreement between the Unions and the management. The most recent collective agreement was signed with the unions on Sept 2006, based on which a “Regulation on Work and Salary” was drafted. The Regulation 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.
The sponsor CMi Switzerland, which owns 100 % of CMCS, in the next 2 to 3 years, intends to further develop new procedures, similar to ones in their production plant in Poland, which would enhance working conditions for the CMCS workforce. Actions introduced since the beginning of operation in Croatia included procedures for prevention of alcohol use and theft in the working place.
CMCS requires its construction contracting companies to use similar labor and working conditions in its project. 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 CMCS staff and/or governmental inspections.
-Workers` Organization
Total number of employees in the CMCS is 1156 and all except one, are employed under so called “contract with unspecified time duration”. The workers are organized in two unions.
- Non-Discrimination and Equal Opportunity
CMCS’s policies and procedures outline the company’s human resource policy, commitment to non-discrimination and equal opportunity. Most of the current work force has been hired on the basis of public invitation. Only managerial contract are based on a very competitive bidding and specialized head hunter organization is hired to find appropriate staff. Going forward CMCS has plans to enhance a number and scope of trainings for the workforce making it more competitive and thus eligible for promotions and salary increase.
- Retrenchment
231 workers of CMCS were subject to the retrenchment program. CMCS has been working closely with the Unions and Government of Croatia to ensure that the retrenchment process was done in transparent, equitable, consultative, objective and fair manner in compliance to Croatia Labor Law and IFC PS2.
- Grievance Mechanism
CMCS currently has a formal grievance mechanism for the workforce which enables them to raise reasonable workplace concerns, if needed.
- Protecting the Work Force ( child labor, forced labor)
The company does not engage children or forced labor and it complies with local labor law and related PS2 requirements to protect the workforce. All employees are over the minimum required age of 18.
- Occupational Health and Safety
CMCS places a very high priority on worker occupational health and safety issues (OHS) although the company does not possess a formal internationally certified occupational health and safety system such as OHSAS 18001. Under the current organization OHS, fire protection and security services are organized as one unit. According to the Croatian Law every company that has more than 250 workers has to have designated personnel in charge for OHS and the fire brigade. CMCS has developed, through a specialized company OHS risk assessment of current operational practices including risk from flooding and earthquake. The assessment includes consideration of protection of the workforce against heat exposure, mechanical risk, and risk of electric installations, noise and fire risk.
Based on the risk assessment a number of specific procedures such as fire protection, emergency response plan and use of PPE were developed to cover different OHS issues and there is extensive ongoing training for all staff on correct work practices. The work environment has been improved but as is the case elsewhere in the operations CMCS views worker health and safety as “work in progress”, for example in the seamless and welded pipe mills several hazards were observed in relations with the slippery walking pathways and elevated platforms as a consequence of fumes/emissions/condensates from the Mill’s reheat furnaces and annealing lines emissions.
CMCS management has plans to further strengthen OHS practices in its operations by implementing additional measures as per best practices existing in its parent company Commercial Metals Company (CMC). All accidents are reported with an incident investigation and follow-up action identified. In the past several years CMCS has managed to keep the number of accidents very low. There were no fatal accidents in the CMCS in the last 15 years (included operations under ex Zeljezara Sisak and Valjaonica Cijevi Sisak brand names).
According to the local OHS regulation one in every 20 workers has to be trained to provide first aid emergency service before a fully qualified first aid is provided by specialist. CMCS has an access to a nearby health clinic with a doctor and nurse (manned 24 hours per day) who can handle initial medical care and simple cases. More serious cases would be treated in Sisak hospital.
CMCS will require that any contractors working at site develop and apply plans for healthy and safe working conditions. Each contractor has to submit, in the offering stage, a proof of its good OHS practices in order to be short listed for work. During reconstruction of its new developments CMCS will be responsible for ensuring the security, safety, and safety training of contractors’ employees, according to the requirements of PS2.
CMCS has radiation screening of scrap material and finished products. Personnel involved in scrap handling undergo regular training and medical check ups for the presence of the radionuclide. Also they are equipped with individual detectors that are able to detect any significant level of radioactivity. So far there has not been any report on the presence of the excess radioactive contamination in the raw material due to the company’s stringent policy on the quality of scrap material that it purchases. However due to the planed increase in production and diversification of the supply of raw material from suppliers in different regions there seems to justifiable request for commissioning of the modern transport automatic radioactive detection system. This equipment would help CMCS control both raw material and finished products before shipping them to the customer.
CMCS will enhance its OHS management system and CMCS will consider applying for formal OHSAS 18001 certification.
- PS3 – Pollution Prevention, Resource Conservation and Energy Efficiency:
- Discharges to Air
Given the nature of the industry unabated air emissions would be significant. CMCS 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.
With the construction of secondary off-gas extraction system and canopy hood enclosure and sheeting of the steel shop CMCS will achieve complete control of emission from EAF, ladle furnace and continuous casting operations. The use of new burners and other features of the new unit will allow a 20% reduction in energy consumption per tonne of liquid steel.
Ozone-depleting refrigerants such as Freon are used in heating and air conditioning systems and there is plan for its control and management. CMCS will need to gradually phase out Freon and replace it with alternative media as per Croatian Law requirements.
- Solid and Hazardous Waste
CMCS has a “Regulation on waste management”, which is based on the Croatian Law, where all waste streams are defined and appropriate methods for managements defined for the period 2007-2011. Revised manufacturing processes will minimize the generation of solid and hazardous waste material.
The scrap yard has capacity of 13,000 tonnes. It is not paved and there is no rainfall/storm water management features, channels, manholes, etc. Smaller section of the yard is covered with the rest being exposed to the atmospheric elements. CMCS’s current policy of purchasing “clean scrap” will minimize risk of soil contamination, but the risk of historical contamination cannot be excluded. CMCS will review the scrap handling area for possible soil contamination, and rectify this if found.
CMCS should implement the best industry practice in managing scrap handling area, which includes storm water management improvements i.e. implement spill control plans, segregate contaminated from non contaminated stromwater, covering the yard area, paving the scrap handling plateau.
Within the CMCS premises there is a waste dump on a site of approximately 3 hectares area holding an estimated 700,000 tonnes of various solid waste including slag, mill scale, refractory materials, and other residues. CMCS premises will be fenced and guarded so that any authorized disposal of waste is prevented. Dump site will need to be cleaned and reconstructed, with soil remediation, if needed, to enable proper disposal of future quantities of EAF slag.
CMCS will revise its methods for handling and disposal of solid wastes namely slag from the melt shop, filter dust from the off-gas treatment system, and scale from the mills. Slag, a non-hazardous material, could be used in cement production and construction – the goal is to convert all the slag to marketable products. Scale could also be processed on-site and sold to the market (e.g. the cement industry as an additive). Oiled scale, which is generated in the mills after thermal treatment of pipes is collected in a settlement tanks and stored in a secured place awaiting further treatment. The filter dust in amount of 2,000 tonnes is placed in an open area adjacent to the existing filter bag house. This waste is classed as hazardous and needs to be managed in appropriate way. Soil remediation may be needed. Used filter bags classified as hazardous waste must be managed by an authorized agency.
CMCS will commission a study to assess the historical contamination of the existing scrap yard and solid waste dump site and recommend an action plan for implementation of appropriate waste management options, which may include remediation of the contaminated soil and reuse, recovery and final disposal of different waste streams.
Hazardous waste includes PCB oils and contaminated transformers and condensers containing PCBs. CMCS intends to replace all PCB containing equipment and used PCB oils by 2011. PCB-containing equipment must be located in the containment to prevent leakage to soil and need to be monitored regularly. Other hazardous waste, such as lead batteries, used heavy oil, emulsions; oiled mill scale and mixed oiled waste from seamless and welded pipe mill also need to be disposed off in a safe manner through outside licensed agency.
Asbestos sheeting is used be found in the cooling towers where the industrial water is treated. CMCS will make a plan for gradual phasing out of this asbestos.
The acid from the pickling operations and galvanizing operations are regenerated and that these operations satisfy industry standards. Based on the EHS assessment done by CMCS the existing quantities of neutralized acids, as well as any remaining sludge after the neutralization process and settling will need to be safely treated / disposed off. CMCS may consider replacing this with the new system for pickling and galvanization, depending on business needs.
Storage areas where the used oils, used waxes and grease, solvents are placed do not satisfy best practice. The storage is partly covered and fenced but doors are open for unauthorized entrances. Functional fire fighting equipment was not available at the site during the walkthrough, i.e. sand barrel was empty, no fire extinguishers placed near the site. CMCS will make sure that the provisions of the hazardous management plan are being implemented and regular supervision 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. Storage conditions of the hazardous materials, handling and the management will be upgraded. Gas and oil tanks are properly secured in fenced aboveground or underground containment bunds.
- Discharges to Water
CMCS has a mixed waste water collection and treatment system management and a discharge permit issued by local Ministry. Industrial process waste water from all production facilities (steel shop, seamless pipe mill, welded pipe mills, cold production) is pretreated (scale is removed in settlings ponds), and than mixed with sanitary waste water and storm water and, after mechanical filtering and oils and grease removal, finally discharged off to Sava River. The testing of waste water quality is done once a month according to the requirements of the “Regulation on operations and maintenance of the waste water treatment plant and collection system” and its quality satisfies both local and IFC EHS guidelines for waste water discharges to surface waters. Collected oils and grease is handed over to the supplier for reuse.
Cold processing and some facilities in welded pipes mill and the melting shop have closed water loop. Other facilities have open waste water system. CMCS will invest in closed circuit cooling water systems to reduce water use, by an estimated 40%. This will significantly reduce dilution of existing waste water streams, which will be monitored and treated if required to meet IFC’s quality requirements for discharge to surface water.
Many private companies operate on CMCS site and use the same infrastructure for waste water discharge; CMCS is responsible for overall discharge of waste water. This present potential liability for CMCS. CMCS will develop waste water acceptance criteria for its tenants and will monitor its own discharges such that any need for waste water treatment will be identified.
-Energy Efficiency
The new more efficient EAF, the ladle furnace, and waste heat recovery project will reduce energy consumption by about 20% per tonne of liquid steel. In addition, casting changes will increase yield, further reducing energy use per unit of saleable product. Annual CO2 emissions in 2007 arising from energy use were around 54,000 tonnes, though this will increase with expanded production levels.
-Emergency Preparedness and Response
CMCS has very detailed plans for potential emergency situations associated with the project hazards. The plans 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”, are very well developed. In this respect CMCS cooperates on regular basis, through joint fire drills, with the nearby fire brigade of INA (Croatian Petrol retailer) and Sisak fire brigade.
- PS4 - Community Health, Safety and Security:
CMCS has developed emergency preparedness and response plans to address impacts to the health and safety of the affected communities. Existing production plants and buildings are constructed to meet structural safety requirements in case of flood and earthquake. CMCS has a fire brigade, as per Croatian Law requirement, of 16 professionals and adequate equipment. Production facilities have appropriate fire prevention and fighting equipment and appropriate egress arrangements. As part of the emergency preparedness and response plan of CMCS a number of training and fire drills for employees need to be organized. IFC recommends that 2-3 fire drills annually for the employees are to be performed.
Contractors that will be hired for the reconstruction will apply sound principles of environmental engineering and safety engineering during construction phase, and these principles will be stipulated between the contractors and CMCS in their contracts, to prevent and/or avoid any reputation or other risk for CMCS associated with potential adverse environmental and social performance of the contractors’ activities. 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
22 professionally managed and trained security personnel are hired to guard CMCS operations 24 hours a day, 7 days a week. 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. Due to the fact that a number of different businesses operate within the same site where CMCS premises are located and use existing road network and other facilities CMCS has decided to introduce additional security measures through construction of fences around its premises and automatic gates to separate and protect, for example seamless pipe and welded pipe mills, from an authorized access.
