The Company will develop environmental and occupational health and safety management systems certified compliant with ISO 14001 and OHSAS 18001 respectively. This decision follows the Sponsor’s experience in the implementation of such certified management systems for its Turkish operations.
Social and Environmental Assessment:
Under the privatization agreement with Kosovo Trust Agency (KTA) the Company has been instructed to undertake environmental assessment in order to establish outstanding EHS liabilities (if any). However the Company did not undertake any pre-acquisition environmental due diligence, nor has it yet undertaken any formal assessment of environmental or occupational health and safety aspects of the site or manufacturing activities.. The Company will conduct an environmental audit and any corrective actions identified under this audit requirement will be combined with the Environmental and Social Action Plan (ESAP) attached to this document, which was established following IFC’s social and environmental review. The environmental audit will be undertaken before 31/07/2010 in order to confirm that the Company has satisfied its EHS obligations to KTA which in turn will trigger the transfer of a 1% “golden share” in the Company held by the KTA to the Sponsor. These audits are also necessary to plan the development of the certified EHS management systems.
The Company will obtain the necessary environmental permits/authorizations from the Environmental Ministry at the conclusion of this process.
Management and Monitoring Programs:
The Company has limited human capacity in place to manage its EHS performance, and there are no clear responsibilities for different aspects of EHS performance related to the production process.
However the Sponsor is committed to establish a proper EHS structure in the Newko Balkan company, and further develop Environmental Management Plan (EMP) that will define the implementation of the mitigation measures and will include ongoing environmental management activities.
Organization and Training:
Environmental, health and safety management is currently the responsibility of General Manager of the plant, under the supervision of the sponsor’s Factory Director. The Company will appoint an environmental management specialist in the Project’s organization structure to manage development and implementation of the EMP and the relevant monitoring programs. Additionally a dedicated professional selected from within existing workforce or a new hire will be appointed to manage health and safety responsibilities in the production process.
Stakeholder Engagement:
Consultation with national and local authorities was conducted as part of the privatization of the formerly state owned plant “Balkan”. In addition the Company’s General Manager is a member of Board of Suhareke Municipality so there is an open channel of information exchange between the Company and the Municipality. The Company will provide regular updates of the Project development to the local communities, through publications and coordination with the local authorities. Twice a year a local EHS inspection body visits to the plant and inspects EHS performance of the Company. Periodically UNMIK/NATO military base inspects raw material stocks inside the plant.
PS2 Labor and Working Conditions
Human Resources Policy and Procedures:
With regard to employment the Company and its contractors refer to the provisional Labor Law enacted by UNMIK (UN Interim Administration Mission in Kosovo) which articulates provisions regarding rights of association and collective bargaining, and other workers’ rights and prohibits the use of child labor, the use of forced labor, and discrimination in the workforce. A new Kosovo Labor Law is being drafted based on EU harmonization process requirements.
The Company will prepare a human resources policy based on the new Kosovo Labor Law and consistent with the requirements of IFC Performance Standard 2. Under the policy, the Company will provide employees with information regarding their rights under national labor and employment law, including their rights related to wages and benefits. This policy will be clear and understandable to employees and will be explained or made accessible to each employee upon taking employment.
As per current provisional labor regulations in Kosovo the Company is not obliged to make anycontribution for medical cost/insurance or contribution to pension funds for the workforce. Instead state owned and private companies pay 5% income tax for each employee to the Ministry of Finance which uses such revenues to provide medical and social benefits that are paid to all citizens. The new Labor Law is expected to develop new obligations upon industry for payment of medical and social benefits. The Company will review development of this law.
Currently the Company employees 376 workers, out of which 28 management and admin staff and 348 workers in the production, all of them are employed on full-time basis. Women comprise 16% of the workforce. Minimum salary is 160 euro, which is higher than a regional average salary.
The Company has a policy of not employing people less than 18 years of age.
The workforce is organized in a Union KSLK which does not have any role in bargaining, for example, the worker wages, but which collects 1% of a worker’s salary every month as members fee for a fund that helps the workforce as needed. The Company has not discouraged workers from joining workers’ organization or from bargaining collectively, and will not discriminate or retaliate against workers who participate, or seek to participate, in such organization and bargain collectively. In case of grievance mechanisms every employee has a right to go directly to one of two managers (Mr. Murat Simsek & Mr. Muhamet Shala) to settle an issue. There is not any formal grievance mechanism or system in place but rather an “open-door policy”. In hiring new workforce a non-discrimination policy will be respected. In case of retrenchment the company will draft retrenchment plan to mitigate the adverse impacts of retrenchment on employees. The plan will be based on the principle of non-discrimination and will reflect the client’s consultation with employees, their Union and, if appropriate, the government.
Occupational Health and Safety:
Although there have not been serious work related accidents since the Company started with its operations the current state of OHS affairs has room for improvement. The Company has agreed to commission an OHS audit of the existing operations based on which a corrective OHS management plan will be drafted with mitigation measures and monitoring plan, including specialized trainings for all workers. Appropriate PPE are provided to the workforce but further effort on behalf of the management is needed to ensure that the workers use them.
PS3 Pollution Prevention and Abatement
The main production processes in Newko Balkan include ( i) production of textile and steel cord reinforced belt and special type of conveyor belts , (ii) industrial textile production, (iii) V-belt production (iv) rubber boots&shoes production (v) rubber technical parts production and (vi) rubber compounds. All products are either end-products for market or semi finished products used in the production of end products in Newko Balkan.
Raw material and chemicals used in the production are supplied from within the Company’s own production or imported from EU and globally. Production processes comprise of number of different technological steps like mixing, milling, extruding, calendering, pressing, vulcanization and finishing.
Conveyor belt fabric, steel wire breaker fabric and single end cords are either produced in the company or imported from different markets.
Pollution Prevention:
Solid Waste Management: Solid waste is generated during different production processes in the plant. Waste from the dipping unit - the residue of liquid bath that remains in boiler turns into solid waste. The company cleans up the boilers weekly and places this solid waste into plastic black bags which are then handed over to Suhareke city utility for final disposal in the regional landfill site Landovica. Non-hazardous solid waste (i) generated after the trimming of vulcanized rubber belt, (iii) waste of defective v-belts, (iv) waste originating in the process of trimming and cutting of the undipped fabric to a preset width is temporarily stored within the plant premises i.e. building that was damaged during the conflict of 1999 and currently is not used for production. The Environmental Management Plan that Newko Balkan is committed to develop will include waste prevention, reduction, reuse, recovery and recycling options to ensure that all non-hazardous wastes are adequately collected, handled, stored, transported and disposed of in licensed facilities. Although this waste has a certain market value there is no local or regional facility that can utilize it. Export to more distanced markets is not financially viable due to high transportation cost. Temporary waste storage facility will be upgraded to satisfy basic housekeeping standards according to Kosovo Environmental requirements and relevant IFC EHS Guidelines.
Other solid waste comprises waste generated by cafeteria, offices, and apartments and from workshops.
- Wastewater Management: Process waste water is in a closed loop i.e recycled and there is no discharge off to the local sewage collection system. The existing collection and treatment system for sanitary waste water and small quantities of waste water from the workshops is not adequate because it does not treat the Company’s effluents to IFC discharge standards, and although effluent is discharged to sewer system of the municipality of Suvareke, there is no further treatment before discharge to surface water. The Company will commission the design of an appropriate pollution control/treatment technology and will install the resulting treatment system.
During operations, the Company will monitor wastewater discharge and quality, to ensure that it meets the pretreatment and monitoring requirements of the sewer collection system of Suhareke.
- Storm Water Management: The Company has a separate system for collection of storm water runoff. Such storm water is ducted and discharges off to a nearby stream without screening or filtering. The Company will develop appropriate systems such as a construction of a retention basin with sediment trap and/or oil and grease trap, as appropriate at refueling facilities, workshops, parking areas, fuel storage in order to pretreat storm water before discharge from the site.
- Air Emissions: The main sources of air emission are heaters that use heavy oil mazut as fuel. Burning is performed in three phases; in each phase burning temperature is gradually increased i.e. starting with 900 C, than increasing to 1100 C and reaching high 1300 C, which prevent generation and emission of hazardous gases. The boilers do not have pollution control devices/filters and no air emissions data were available. Mazut with low sulfur content i.e 0,2% is supplied to the Company by a contracted supplier which provides a certificate on sulfur content. Air emissions from boilers will be monitored as part of the preventive maintenance and pollution control program.
In addition the Company will implement an air quality monitoring program which will provide ambient air quality data and be made available to the local authorities. Periodically UNMIK/NATO military base uses the Company’s boilers to burn its own used oil. Air emissions are measured by UNMIK/NATO staff but the results were not made available to the Company.
Resource Conservation and Energy Efficiency:
- Water: The Company owns 7 groundwater wells located on-site from where the water is pumped for the production process. Potable water is supplied from the city supply system. At Korisha site located 12 km away from the plant there is another water source from where the water is supplied during summer period and, as-needed, sold to city utility. This scheme provides security in water supply, without impacting on potable water availability for the Suhareke city. Daily water requirements are estimated at around 20 liters /sec or 70 m3/hour.
- Power supply: The annual energy consumption in the company is 4,755,960 kWh supplied via National grid. There is no natural gas supply system available in Kosovo. The company has seven heaters of different capacities and sizes all of which use mazut oil as a fuel. Approximately 8 tonnes/day or 100 tonnes/month or 1200 tonnes/year of fuel is burned in the boilers. Annual emission of CO2 based on energy consumption is approximately 7,000 tonnes
- Energy efficiency: Electric energy “savers” have been installed onto power distribution units within plant which significantly reduced consumption. The company is also planning to install energy efficient lighting systems.
Site Remediation and Hazardous Materials Management:
The Company informed us that significant quantity of rubber and other waste was found on site during the reconstruction of the plant’s fence and said that this waste was deposited before the Sponsor acquired the plant. As per contract between the Sponsor and KTA it is clear that the Company is responsible for remediation of this site and for management of other EHS aspects.
The Company’s EMP will present, among other issues, remedial options for the identified waste deposits consistent with national requirements and international good practice. The Plan will include the requirements for environmental monitoring during remediation activities. The Company will ensure that a licensed contractor is hired for the site investigation and remediation activities.
In addition the Company will (i) monitor and use its reasonable endeavors to ensure that contractors handling, treating, and disposing of all waste streams are reputable and legitimate enterprises, licensed by the relevant regulatory agencies and following good international industry practice for the waste being handled, (ii) carefully examine any obsolete technical equipment such as transformers, or other equipment which may contain CFCs or PCBs and segregate, store and dispose off in a safe manner. The Company will ensure that all hazardous waste, if any, is stored on site according to best practice, during the time until the final solution for treatment and safe disposal of various wastes is selected.
Mazut fuel is stored in two steel tanks of 500 and 1000 tones capacity. The tanks are placed within the containment bunds to prevent leakage into soil in case of accident. A number of empty oil barrels are located in the open surrounded with other unidentified bulky material and waste with obvious signs of oil spillages and lack of any spill prevention measures, such as confinement bund.
As part of EMP a hazardous material management procedure will be established for appropriate selection, purchasing, storage and handling of fuels and chemicals which will be used on the site. Newko Balkan will prepare a fuel management plan and a spill control, prevention, and countermeasure plan as a specific component of their Emergency Preparedness and Response Plan.
The Company has not to date provided training in handling neither hazardous materials nor are Material Safety Data Sheets (MSDSs) used or available. The proposed environmental assessment will review all usage and storage of hazardous material such as used oils, toxic chemicals, solvents etc. are within the plant and will define Material Safety Data Sheet (MSDS). Based on the information an appropriate action for remediation of the site will be made a part of corrective Environmental and Social Action Plan (ESAP) for the Company.
PS4 Community Health, Safety and Security
Community Safety:
The Company has developed health and safety protocols for site visitors. An Emergency Preparedness and Response Plan is in place. The Company has on site emergency response team of 20 certified firefighters, two fire trucks, various fire extinguishers and refill unit and water hydrants located around the plant. In addition a local fire brigade is available in case of a major fire accident. However no formalized fire prevention and protection plan exist.
The Company will prepare a Life and Fire Safety Master Plan identifying major fire risks, applicable codes, standards and regulations, and prevention and response measures. The design will be in compliance with Kosovo Fire Codes and applicable European Norms.
Community safety issues are also associated to the increased traffic of the Company’s and contractors’ trucks and to the fact that the plant is located in the urban part of Suhareke City next to the main public road with private households surrounding the plant. Dust and noise pollution associated with the increased traffic and noise from the production processes present additional impacts on local communities. The company will use its reasonable endeavors to ensure that all noise generating equipment, including compressors, generators, ventilation are selected with lower sound power levels. Company will develop procedures to control maneuvering of the contractors’ vehicles with specific focus on truck fleet maintenance and driving behavior and training, and to regularly monitor ambient noise at nearest receptors.
Security:
Site access control and security procedures are in place. Security services are provided by the Company’s own staff for 24 hours /day. The Company will establish formal procedures and codes of conduct that dictate the conduct of its security forces to be maintained in all situations.
