The company 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 including: the host country laws and regulations; IFC’s Performance Standards; and the World Bank Group (WBG)/IFC environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow. Further information is provided in the attached documentation.
PS 1: Social and Environmental Assessment and Management System
IFC’s assessment considered the company’s management of its environmental, health and safety performance in the establishment and operation of its facilities; compliance with national and local permit requirements; and the company’s engagement with local communities as well as its suppliers, regarding environmental, health and safety performance and corporate social responsibility. - Environmental & Social Assessment: VW Group has articulated corporate level Environmental Group Principles including ‘General Principles’ and ‘Principles for Infrastructure’ and ‘Environmental Principles in the Manufacturing Process’. These principles provide several guidelines to minimize the environmental and social impacts of VW Group’s operations and are applied to the Project.
As the proposed facility is located in the specified industrial area, an EIA study was not required as per the local regulations. However, the company conducted an internal “Environmental Relevance Assessment” for the key activities and environmental impacts arising out of the proposed facility, which together with VW Group’s corporate Environmental Group Principles, formed the basis of the design of the Project and the specific technologies and utilities - such as paint shop emission control systems, water, wastewater treatment systems, fire prevention and control systems etc. Construction of the project facilities is being carried out under the requirements of applicable local, state and national regulations.
Management Systems:
The VW Group environmental policy commits to improvement of environmental compatibility of its products, reduction of the demand for natural resources, involvement of suppliers and partners and dialogue with public.
The project has demonstrated the capacity and the resources allocation, to implement comprehensive environmental, health, safety and quality management systems in line with VW Group’s internal corporate standards which are in turn aligned to international standards (ISO) and are consistent with IFC Performance Standards and relevant WBG/IFC guidelines.
In accordance with its corporate policy, the company has started implementation of quality (ISO9001) and environmental (ISO14001) management systems (EMS) for its upcoming facility in Pune. The company plans to have the EMS certification by end 2010 and has agreed to submit the copies of certification to IFC by December 2010.
Meanwhile, as a part of the EMS implementation, the company shall incorporate IFC Performance Standards and relevant WBG/IFC Guidelines as a part of applicable “Legal and other Requirements” under the ESMS manual prior to first disbursement. Also, the company shall submit the Environmental Action Plan and Management System Structure by December 2009 as an interim submission for the ESMS under development.
For the management of occupational health, safety and fire safety the company plans to implement VW Group’s internal corporate-wide systems and not go for any certification for that.
- Organization:
The company’s EHS management is overseen by General Manager – Security, (Fire) Safety and Environment, who is supported by Manager (Safety), Manager (Environment), Manager (Fire Safety) and Manager (Security). Each manager is supported by respective teams comprising of officers, supervisors, operators/guards as well as contractors in some instances.
Monitoring & Reporting:
The company’s EHS Management team is developing an EHS monitoring program (including procedures, checklists etc.) for its operations, based on the VW Group’s corporate as well as local regulatory reporting requirements. The VW Group corporate office regularly requires information related to regulatory compliance, resource consumption, waste management and lost time accidents etc., which is then used for benchmarking within VW Group companies across the world.
- Managing Supply Chain:
As mentioned earlier, the company is working on a high degree of localization of the supplier base. In addition to quality, cost and delivery issues, The company is closely working with its newly developing supplier-base on the aspects related to labor and EHS as well. It is mandatory for all the VW Group’s suppliers to follow the Code of Conduct. The company also has put in place a formal on-site supplier monitoring system for its supply chain, which is primarily handled by the quality department. However, if the quality department encounters any EHS issues during the supplier checks, they are flagged to the EHS team for necessary interventions. As a part of this vendor development program, the company is providing an extensive training to its future suppliers – including on-site training in VW Group’s overseas facilities.
- Community Engagement: The company occupies a section of a large industrial development zone and is primarily surrounded by other industrial units. As it is still in the process of establishing its operations, the company does not yet engage formally with the communities in the vicinity regarding its EHS performance or corporate social responsibility initiatives. However, it does engage with these communities to recruit employees and to assess appropriate CSR initiatives. Currently, company’s CSR activities are targeted to the construction labor, which include building and managing schools, supporting a temple in the labor camp etc.
In order to formalize and further enhance the community engagement, the company will develop a community engagement program as a part of its CSR activities. Through these planned CSR activities the company will proactively engage with the communities in the vicinity to build a long term relationships, once the plant is commissioned. This will also help the company to remain appraised of community concerns related to its operations.
In addition, once the Pune facility is operational, a formal and documented information disclosure and grievance mechanism will be developed for the nearby communities to address their concerns related to EHS performance, if any.
PS 2: Labor and Working Conditions
- Human Resource Policy, Management and Training
The company plans to have a total workforce of 2680 when the plant becomes fully operational. Of these, around 500 employees are recruited and 1077 total employees are expected till Dec. 2009.
The HR department is in the process of developing various HR policies and procedures for the company’s facility near Pune, building upon the corporate HR policies and guidelines as well as local regulations. This covers: terms of employment and working conditions including procedures for hiring, probation, training, performance review, promotion, insurance, salary and compensation, resignation, lay-off and firing, leave and vacation, and retirement, which are consistent with the national labor laws.
The company is committed to comply with all the local labor requirements, without restricting workers'' freedom of association, thereby allowing adequate representation of their interests.
As the company is a start-up operation in Pune area, it offers competitive salary and benefits to attract good workforce. The company shall incorporate all the IFC’s PS2 requirements in this system that is being developed and implemented.
Extensive induction training is being provided in their facility in Pune and in addition the new recruits are being trained in various VW Group’s facilities worldwide. As a part of formal induction program, all the new recruits undergo one day training on EHS issues.
- Occupational Health and Safety
The company combines adherence to the national industrial safety standards as well as the VW Group’s corporate standards for workplace health and safety. As such, the company is instituting very high standards of occupational health and safety at its upcoming facility in Pune. This includes standard safety protocols, operational control procedures, adequate signage, training of staff, and continuous monitoring.
Company’s On-site Emergency Response Plan also spells out the generic OHS management requirements at the Pune facility. It includes an extensive risk assessment covering hazard identification, frequency and consequence categories and risk matrix. These are used to develop necessary process design specification as well as standard operational procedures and systems and safety measures to improve the OHS performance in the day-to-day operations.
The company maintains its own firefighting and emergency response operation including its own fire engine. Elaborate fire fighting equipment is fitted across the facility in accordance with the potential fire risks. This includes: HI-FOG system (which uses ultra-high pressure water discharged as mist to take away the heat energy from fire) for the high-risk paint booth area, carbon dioxide based system for waxing room, argoanite fire suppression system for IT system rooms, and normal water sprinkler system and fire extinguishers in the other places. In addition, smoke detectors, central control room, sirens, PA system etc. have been provided to effectively handle any fire emergency. Fire exits and the locations of fire extinguishers are clearly marked.
Secure access to LPG and diesel fuel storage areas is maintained around the clock. Paint booths, LPG yards, electrical fittings are fitted with appropriate fire proof materials and practice strict access control procedures. Appropriate Personal Protective Equipment (PPE) is provided to, and worn, by all employees – with special overall gear available for the paint shop.
To ensure high safety standards during operations, the company is rolling out the “Safety Steward System” wherein at least two persons from each business unit would be trained on safety aspects and would ensure high safety standards in respective unit.
Once the facility is fully operational, the company plans to monitor noise levels, workplace air quality, temperature, and lighting levels to ensure that they all are within national limits and WBG / IFC guidelines for workplace environment, in addition to VW Group’s internal standards. Design specifications are compliant with these requirements.
- Labor Safety during Construction
The company has contracted one of the best and highly reputed construction companies in India who have articulated and formalized their own health and safety policies and management systems. The company has developed formal Contractor Rules which are being implemented in order to improve safety management.
Jones Lang LaSalle Meghraj has been appointed as third party supervision agency for the ongoing construction, which also monitors site and labor safety aspects. Formal procedure has been developed and practiced to levy a monetary penalty on the contractors who are found in deliberate violation of safety rules and regulation.
In addition, the company is in the process of appointing (at least) one of its own full time site engineer at each construction site throughout the construction phase to ensure quality and safety during construction. The company also requires that all construction and other service contractors who access the plant premises undergo in-house training in basic EHS procedures.
The current construction work at the Pune site is nearing completion as the company plans to start the operations by May 2009.
PS3: Pollution Prevention and Abatement
IFC’s assessment considered the company’s operations with regard to resources consumption (water, energy, fuel), efforts to optimize resource inputs, waste minimization and management practices as well as the storage, handling hazardous materials used in the construction and operations of facilities.
- Legal Compliance
The company has documented a compilation of all the statutory requirements related to EHS, to facilitate compliance for its upcoming facility. The company is currently in the process of procuring all the necessary approvals and permits related to EHS, hazardous waste storage and disposal etc. before the operations commence in May 2009.
- Pollution Prevention and Resource Conservation:
As the company commissions its new facility in Pune, pollution prevention and resource conservation has been an important focus. As outlined in the VW Group’s Environmental Group Principles, energy savings, sustainable water use, reduction in land consumption and preventive groundwater and soil protection are being adopted in the design of the Pune facility. As such, all resource inputs are planned to be monitored closely to maximize efficient use, and waste streams managed to minimize the discharge or disposal of hazardous substances.
- Water Supply and Effluent:
The company sources process water from a central water treatment plant operated by the industrial zone authority, though the company has its own reverse osmosis based water treatment unit for the paint shop. According to the water balance prepared by the company, the estimated water requirement at full operation will be approximately 1,500 cu.m/day, including the process, cooling, gardening and domestic requirements. The wastewater generation is estimated to be 1,000 cu.m/day and the entire wastewater is proposed to be recycled for cooling and gardening, resulting in a “zero-discharge” facility.
As per the approval from the state Pollution Control Board, the Company has constructed a small effluent treatment plant (ETP) for 150 cu.m/day capacity to treat the domestic and some process effluent (generated in the current phase of commissioning). The company is in the process of finalizing its plans for the 1,000 cu.m/day capacity ETP to handle the wastewater which would be generated once the facility starts operating at full capacity. Additional primary treatment would be provided for the effluent from the paint shop.
The company has confirmed that the ETP design will take into account the IFC guidelines and discharge limits in addition to the local regulations. Further, the company will submit to IFC by December 2009 a detailed note about the ETP design and wastewater management and the status of its compliance with IFC guidelines and discharge limits, together with the reports from wastewater monitoring.
- Energy Supply and Air Quality:
The company sources its electric power from the national grid and an 8.5MVA power sub-station has been provided on site for this purpose. In addition, the company maintains 2 diesel-fired generators of capacities 725 KVA and 500 KVA for emergency use only in certain critical areas. The company expects to have 600 lit of diesel storage for these generators, which would be secured with secondary containment. One propane / LPG-fired boiler is used for its paint drying units. Emissions from generator and boiler stacks will be regularly monitored as a part of VW Group’s EHS monitoring program.
The emissions of volatile organic compounds (VOC) from the paint shop are passed through afterburners at 780 deg C, which convert the VOCs to carbon dioxide. The heat generated from the afterburners is captured through heat exchangers and used for preheating the inlet water to boilers, which is a best practice
The company plans to start with the solvent based paints, as water based paints of acceptable quality are currently not available in India. However, the company is planning to work with the local paint suppliers to procure the water based paints of required specifications and plans to shift to water based paints in near future. For this purpose, the paint shop is designed to work with water based paints in addition to solvent based paints.
- Carbon Footprint:
VW Group is participating in EU carbon trading scheme at the corporate level, and has started the inventorization of Carbon dioxide emissions for all its facilities globally. The Pune facility will participate in this corporate program once it becomes fully operational.
- Solid and Hazardous Waste:
The company is in the process of ensuring the compliance with all national regulations for the storage, handling and disposal of hazardous materials used in the production process such as paints, solvents and other chemical additives. In addition, the company estimates to produce approx. 1,900 MT/year of hazardous waste and 12,850 MT/year of non-hazardous waste. It has developed an extensive solid and hazardous waste management plan, with a combination of technology options including recycling, landfill and incineration.
Non-hazardous waste shall be recycled and /or handled by a contractor to a solid waste management facility maintained by the industrial zone authority. Packaging materials, sheet metal scrap etc. shall be sold for recycling. Canteen waste shall be composted on site.
Hazardous waste, including paint sludge shall be removed from the site by a government certified contractor for disposal in an incinerator. In addition, the company is exploring the possibility of recycling paint sludge in environment-friendly manner. The company is currently evaluating one such service provider near Delhi, who has patented technology for paint recycling. Upon thoroughly checking the feasibility and environmental impacts of this operation, the company will decide on this option, subject to regulatory approvals.
PS4:– Community Health, Safety and Security
IFC’s assessment reviewed the company’s operations with regard to the impacts of the construction and operations of facilities, including: movement of vehicles to and from construction sites, explosion risk due to on-site storage of gas and diesel, containment of dust, noise and other nuisance factors; and use of security forces.
There is direct access to the industrial zone from a national highway so that the impact of vehicular movement during construction as well as during facility operations on surrounding communities is expected to be minimal. The company is in the process of setting up a Supplier Park in the spare space available at its Pune facility, which would minimize the vehicular movement for supplies, thus reducing the accident risks as well as carbon footprint.
The gas and diesel storage on-site has very high standards of safety with very strict operational control and necessary emergency response measures in place. A detailed On-site Emergency Response plan has been developed and is being rolled out across the various departments.
The company contracts with a nationally certified security agency for 24 hour surveillance of the facility, with unarmed security guards.
On the basis of the above information, and by implementing the Environmental and Social Action Plan it is concluded that the project has been designed and will be operated in compliance with IFC’s PS and relevant environmental, health and safety guidelines.
