PS1 – Social and Environmental Assessment and Management Systems
The project is a corporate-level capital investment in an operating utilities company that will be used to fund its existing electricity and water distribution and wastewater collection and treatment capital expenditure program (CAPEX). No major new infrastructure works are expected as part of this investment. The potential environmental, social, and health and safety impacts and risks associated with this Project are essentially minor increases on existing impacts and risks associated with continuity and expansion of business/service of both electric distribution and water and sanitation networks. These include (i) noise, vibration, dust, increased erosion, and other construction related impacts from earthworks and/or excavations as a result of new distribution lines and/or sewer installation associated to either distribution grid or sewer network expansion activities or maintenance and replacement of existing ones, (ii) solid waste and hazardous waste generation (including PCBs disposal of dielectric fluid of older transformers), (iii) impact on natural habitats during construction in newly developed rural or peri-urban areas, if any.
As a corporation EPM has a well developed and established environmental, social, and occupational health and safety (ESHS) management practice, with over 169 full time professionals, 13 contractors and 7 student interns. EPM’s ESHS issues are managed at an Institutional Level by two different groups, the Direction of Corporate Responsibility (Responsabilidad Empresarial) and Direction of Human Development and Organization (Gestión Humana y Organizacional). The first, defines the Environmental and Social Policies for the whole group and guides and manages inter-institutional and community relations. The latter defines the corporate HHRR, labor, as well as the occupational health and safety corporate policies and procedures, which functions will be further detailed under PS2. Additionally, within each of the two major business-sector units Energy and Water, there are functional units with ESHS responsibilities which are mandated to develop sector/project specific plans and procedures compliant with EPM Corporate ESHS policies, monitor compliance, and report back to the institutional groups. Furthermore, EPM has an inter-sector Environmental Committee (Comité Ambiental EPM) which meets periodically and assures that the company maintains a coherent approach to ESHS management at a corporate level and creates a formal space to capitalize/cross fertilize from experiences in all the business areas.
EPM does not have an ESHS management system, but a series of formal procedures to identify, dimension, assess, manage, and monitor the ESHS impacts and risks. These procedures are divided in two general categories, those related to construction activities and those related to maintenance and operations. The first includes activities associated with the environmental and social impact assessment process, such as baseline determination, impact assessment and mitigation, public consultation, monitoring and reporting, and environmental licenses and regulatory compliance. The latter includes execution of the environmental, social and health and safety plans and procedures of the individual project EIAs, as well as the application of generic good ESHS practices associated with pollution prevention, monitoring and control (e.g. air and dust emission monitoring and control, solid and hazardous material handling and disposal, erosion and drainage control, etc), community relations and communication, community safety, training, and reporting.
In its continuous management improvement process, EPM has developed a Strategic Environmental Management Plan (2008-2012) to assure the insertion of the ESHS policies and procedures within a company-wide Integrated Management System (SIG – Sistema Integrado de Gestión), which is articulated by developing specific “processes” for (a) environmental management, (b) occupational health and safety management, (c) community relation management, and (d) human resources management within EPM’s Process Model (Modelo de Proceso EPM). This initiative started in early 2009 and at the time of the signing the loan agreement with the IFC, EPM will present the plan of action for the SIG for 2010-2012.
EPM does generate an Annual Environmental Report, and provide via its internet site (http://www.eeppm.com/epm/institucional/index.htm) the Social Responsibility Report, as well as the general social, environmental, and community development directives of the company. This Annual Environmental Report includes GRI indicators as part of EPM’s commitments per the UN Global Compact as well as EPM’s contribution towards Colombian progress in meeting the Millennium Goals. GRI indicators include annual use of polluting contaminants such as SF6 gas, accounting of solid and hazardous waste generated, annual energy and water use, and contribution to climate change mitigation, to name a few. For 2009 some of EPM reported contributions towards the Millennium Goals include about 1090 ha of reforestation, the connection of 23,306 new users to potable water, and 27,170 new users to the sewage system, the connection of 12,091 new users to potable water, and 10,054 new users to the sewerage system and the installation of close to 27,470 pre-paid electricity meters at low income households.
PS3 Pollution Prevention and Abatement: As a public service / utilities and energy generation company, EPM bases its activities on the sustainable management of natural resources. The appropriate and sustainable use of water resources and efficient use of electricity and natural gas, are key for EPM’s business model to be successful. As part of its Water Business, EPM has the mandate to recover the Medellin River and the whole Valle de Aburrá basin, and as a matter of fact EPM currently treats approximately 22% of the wastewaters generated in the Valle de Aburrá, and is in the process of constructing a second wastewater treatment facility that will treat up to the remaining 80%.
EPM together with the local environmental authorities monitor surface water quality and air quality, and have a joined strategic vision to improve the environmental quality of EPM’s area of influence. Towards this goal, EPM closely monitors its environmental footprint, and has established very specific indicators and goals, as well as environmental clean-up programs. For instance, the Programa de Saneamiento del Río Medellín, focuses on the improvement of the Medellin River basin, and to date has constructed 34 km of collectors and 321 km of sewers, and the San Fernando Wastewater Treatment Plant. The final objective of this program is to remove 160 tons/day of BOD and increase to at least 5 mg/l the dissolved oxygen (DO) concentration of the Medellin River. In the last five years, this program has had great achievements, reaching less than 20 mg/lt BOD and more than 5 mg/l DO in 30 tributaries of the Medellin River. Other pollution prevention and control and environmental improvement initiatives include (a) the first phase of a corporate greenhouse gases inventory, and (b) forestation and erosion control programs that preserve the watershed associated with EPM’s reservoirs and promote good land management practices (e.g. re-vegetating and reforesting affected areas, establishing forest fire protection and control good practices and assuring adequate maintenance of ROW, levies and other infrastructure involving earthworks / movement). Additionally, EPM reported that its facilities consumed a total of 8,400 GWh from the grid and 41 million m3 of water in 2009.
In terms of solid waste EPM currently measures and documents solid waste generation in 193 facility (>80% of total), and has articulated a waste generation reduction plan. In 2009, EPM generated a total of 9,200,281 kg of waste, including 105,950 kg of hazardous waste. Only less the 1% has been stored for its eventual disposal by specialized providers. For 2009, approximately 44% of the waste was reused, 55% disposed and only 0,6% was stored for its eventual via specialized HAZMAT companies.
Polychlorinated Bi Phenyls (PCBs): The biggest pollution prevention and control challenge that EPM’s Transmission and Distribution business faces is to remove and appropriately dispose all PCB containing dielectric fluid in older transformers, to contribute to Colombian’s compliance with the Stockholm Convention on Persistent Organic Pollutants (POPs). According to this Convention, Colombia must achieve complete environmentally sound management and disposal of all of its PCB waste by 2028 (http://chm.pops.int/Programmes/PCBs/Overview/tabid/273/language/en-US/Default.aspx). Currently EPM operates an electric distribution network with approximately 101,035 transformers over all of its influence area (approximately 60,728 Km2), which need to be screened for PCB concentration above 50 ppm, and cleared, substituted and/or disposed accordingly. To date, this process has allowed for the appropriate disposal of 27.6 tons of wasted transformers with PCB concentrations of 370 and 390 ppm. Furthermore, EPM has initiated an Integral Plan to Manage Liquid and Oily Residues (PMIRL - Plan de Manejo Integral de Residuos Líquidos y Aceites), which presently process approximately 2,000 transformers per year. To speed up this process, and in coordination with local authorities, EPM has developed a tiered approach based on equipment origin, year of manufacture, type of dielectric oil used, and brand. Based on this tiered approach, EPM will provide evidence to the local authorities of the substitution and appropriate disposal of all transformers with PCB concentration higher than 50 ppm. Prior to first disbursement, EPM has committed to present the updated PCB PMIRL.
GHG / Climate Change: The climate footprint associated to EPM Transmission and Distribution business’ own energy consumption and approximately 2.5% efficiency losses in electric distribution are quite limited and in the order of 30,000 TCO2 per year. Additional reported GHG emissions come from SF6 leaks amounting to 60,7 kg/year or 1,451 TCO2 per year. EPM has several initiatives to reduce GHG emissions of its activities, including (a) the generation of 5,335,000 kWh/year for self-consumption from 4,263,565 m3 of biogas produced in the anaerobic digesters of the San Fernando Waste Water Treatment Plant, (b) the reduction of 14,706 TCO2/year by generating eolic energy in the Jepirachi Wind Farm, and (c) approximately 50,841 TCO2 reduced by generating energy in the La Vuelta and La Herradura hydroelectric plants.. Additionally, EPM’s natural gas distribution business contributes to the continued substitution of more polluting fuels with natural gas, reducing the climate footprint of the energy matrix of the Valle de Aburrá.
PS2 – Labor and Working Conditions
As noted above, EPM’s Direction of Human Development and Organization defines the corporate HHRR, labor, as well as the occupational health and safety corporate policies and procedures.
In terms of HHRR and Labor, EPM has a well developed Human Resources (HHRR) Department, staffed with a total of 506 professionals. EPM has a total of 5,748 employees. Almost 100% of EPM employees are unionized, and therefore the HHRR and labor policies and procedures are ruled by a collective agreement. There are only a handful of employees which are not unionized, but they received the same benefits and compensation packages as the rest of EPM’s employees. The collective agreement is public and available to all employees via the intranet and an the publication “Compilación de Normas Convencionales y Arbitrales Vigentes 1958-2010 Empresas Públicas de Medellín” subscribed between EPM and the Sindicato de Trabajadores y Empleados de Servicios Públicos, Autónomas, e Instituciones Descentralizadas de Colombia (Sintraemsdes). This agreement includes compliance with Colombian Labor Laws, non-discriminatory hiring and promotion policies, as well as a grievance mechanism involving both EPM and the union authorities. Based on this collective agreement HHRR Department manages (a) general employment terms and conditions, (b) position descriptions and requirements, (c) training, (d) social security and occupational health and safety, (e) work schedule, (f) wages and benefits, (g) vacation and leaves, (h) performance evaluations and promotions, (i) position changes, (j) termination and severance, (h) disciplinary conditions, among others. EPM has a total of approximately 885 labor lawsuits which are being managed via local courts, with approximately 64 billion Colombian pesos (@34 $ million) in liabilities. Prior to first disbursement EPM has agreed to provide a HHRR liabilities resolution plan, identifying all the pending legal processes, describing the reasons for the lawsuits, a tentative timetable for final resolution, and an independent third party legal opinion assessing the likelihood the courts would rule in EPM’s favor.
With regard to Occupational Health and Safety, EPM has a Health and Safety Corporate Manual (Manual Corpoartivo de Procedimientos de Seguridad) which defines occupation health and safety risk for the different tasks and activities and their associated safety procedures. This Manual includes three main sections: (a) Generalities, which outlines the occupational health and safety policies, current Colombian legal framework, responsibilities and sanctions, (b) Health and Safety Norms, which describes the standards procedures construction and maintenance including use of Personal Protection equipment (PEP), appropriate signalling at work sites, protection of other utilities and infrastructure, working at night or outside, safety of in-offices work, general housekeeping, storage procedures, transportation–transfer, fire prevention and control, and emergency plans and procedures, among others, and (c) High Risk Tasks, including procedures for work in confined spaces, working in heights, welding, sandblasting, pressurize gas, handling high voltage active and inactive lines, among others. EPM maintains statistics on occupational accidents with and without lost time (LTI). For 2009 EPM reported a total of 417 LTI, including the incidents/accidents recorded for first aid and long term disability. It is noted that almost half of the reported incidents are not related to work or occupational activities, but to in-company sports activities included as a benefit of the collective employment agreements.
