PS1: Social and Environmental Assessment and Management Systems
Environmental and Social Assessment:
An independent environmental consulting firm Halcrow Pakistan (Pvt) Limited was retained by the Company to prepare the Environmental Impact Assessment (“EIA”) for the Project, the final report for which was issued in January 2010 and a subsequent addendum in. Sep 2010. The EIA was prepared to meet the Pakistan EIA requirements. The EIA was also prepared to demonstrate compliance with the latest World Bank Group Thermal Power Guidelines of December 19, 2008. The Company also conducted a supplemental analysis to demonstrate that the Project is being designed to comply with IFC Performance Standards.
In accordance with the EIA regulations of Pakistan, the EIA was submitted to Balochistan Environmental Protection Agency (BEPA) on January 25, 2010, and the Balochistan EPA (“BEPA”) acknowledged its receipt on April 7, 2010. BEPA will hold a public hearing before they issue No Objection Certificate. As of September 2010, the Company expects that the public hearing will be held shortly.
The EIA reviewed the alternative options on fuel (low-Btu gas, LPG, coal, diesel fuel oil), power generation technologies (combined cycle gas turbines vs. conventional steam plants), alternative sites, water supply (Pat Feeder Canal vs. groundwater), wastewater treatment and disposal (evaporation pond with or without impervious liner), and air emission control. Use of low-Btu gas by combined cycle gas turbine technology within the existing UPL site, using evaporation pond without impervious liner were selected as the preferred project design.
The EIA has evaluated background environment (physical environment, biological environment, socio-economic environment, gender analysis) and concludes that the air shed of the Project’s area of influence is non-degraded with enough assimilation capacity to accommodate other facilities including Uch II. The EIA confirms that the Project area does not have any environmentally sensitive areas (e.g. forest, wetland, national park, wildlife sanctuary, or game reserve), and analyzes that the project area consists of semi-desert flat area, an evaporation pond within UPL’s site which serves as an artificial wetland for wintering waterfowl, and agricultural lands and settlements.
Impacts were assessed for the construction phase (construction noise, dust emission, land use, water sourcing, vehicle and equipment exhaust, soil contamination, drainage and storm water run-off, camp-effluent, community and power plant worker’s safety, traffic disturbance, local employment conflicts, archaeological and cultural resources, project and community interface, etc.) and for operational phase (air emissions, plant noise, wastewater, greenhouse gas emissions, water resources, hazardous materials, solid waste management, flooding, seismicity, occupational health and safety, monitoring requirements, environmental and social benefits – electricity supply to Pakistan, employment, and community development).
Proposed extraction of water from Pat Feeder Canal for Uch II is analyzed in the EIA to be around 0.08% to 0.37% of the monthly average of the canal flow, small enough to conclude that the impact of the Uch II project on the water source is minimal.
New 220 kV transmission lines will be developed by NTDC to evacuate power from Uch II. As per the Pakistan’s National Environmental Protection Agency Regulations, an EIA is required for transmission lines above 11kV voltage, and NTDC has informed Uch II that an Environmental Impact Assessment for their transmission lines is yet to be started. Uch II will receive gas from 15 new gas wells to be developed by OGDCL. OGDCL has recently issued request for proposals to carry out the Environmental Impact Assessments for its new gas wells.
Management Program:
For effective implementation and management of the mitigation measures, an Environmental Management Plan (“EMP”) has been proposed in the EIA. This also includes programs to meet the IFC Performance Standards requirements including the management program, organizational capacity, community engagement, monitoring and reporting.
The key mitigation measures are contained in the EMP for construction phase (construction noise, dust emission, land use, water sourcing, vehicle and equipment exhaust, soil and land contamination, drainage and storm water run-off, camp effluent, hazardous and non-hazardous waste management, disturbance to wildlife, community and power plant workers safety, traffic disturbance, local employment conflicts, archaeological and cultural resources, project and community interface) and for operational phase (air emissions, plant noise, wastewater, water resources, hazardous materials, solid waste management, flooding, seismicity, occupational health and safety).
The existing Uch I has been certified with ISO 9001, ISO 14001, and OHSAS 18001, and Uch II plans to establish the operational phase Environmental Management System which would also meet the requirements of these international standards. In accordance with the existing Uch I environmental, health and safety and quality management systems, Uch I is implementing a 2010 Safety Improvement Plan and 2010 Environmental Improvement Plan. International Power Plc has corporate wide environmental and health & safety objectives and targets, and Uch I has its own set of objectives and targets. Uch II will also have its own objectives and targets to ensure that its performance is in line with applicable IFC standards outcomes.
Organizational Capacity and Training:
In line with ISO 14001 environmental management system, UPL’s environmental management manual and safety management manual clearly indicate responsibilities of relevant officers (Plant Manager, Technical Services Manager, Operations Manager, Maintenance Manager, Finance Manager, Chief Administration Officer, Deputy Operations Manager, etc.) as well as that of the HSE Committee for implementation of the systems. Both manuals describe how the HSE training programs are to be provided to relevant personnel. For Uch I, the Operations Manager is also acting as the HSE officer. Going forward, a dedicated HSE officer would be hired, who would be responsible for both Uch-I & Uch-II.
The Project will provide environmental, health and safety training to selected management staff of Uch II and the contractor (instruction to project EIA and EMP), all site personnel including locally hired staff (introduction to health and safety and environmental management system at Uch Power Plant, communication of environmental problems to appropriate officers, waste disposal, oil spill contingency), construction supervisors and O&M contractor’s supervisors (EMP communication, documentation, monitoring requirements), emergency response teams (fire fighting, emergency response including oil and chemical spill), drivers (road safety, road restrictions, defensive driving, etc.), camp staff (waste disposal, housekeeping).
Monitoring and Reporting:
Uch I is monitoring various environmental emission parameters to confirm compliance with relevant Pakistan and international norms including (i) waste water quality (cooling tower blowdown, HRSG blowdown, evaporation pond inlet), (ii) air emissions (HRSG stacks – NOx, SO2, H2S, particulate matter, diesel generators, vehicular emissions), (iii) ambient noise levels, and (iv) soil samples from evaporation ponds. Monitoring reports provided to IFC confirmed that Uch I is currently compliance with the Pakistan environmental regulations the World Bank Group environmental requirements that were effective when Uch I was financed.
Uch I is regularly conducting various internal and external environmental, health and safety audits (e.g. internal procedure audits, International Power’s high level review of H&S management, external audit of risk assessment, safety rules review). The recommendations by these internal and external audits are reviewed and implemented by Uch-I to maintain high level of EHS performance. Uch II will follow the similar or better auditing practices to ensure its performance against IFC Performance Standards.
Environmental monitoring results by Uch I (air emissions – NOx and SO2 , wastewater quality entering evaporation pond – pH, TSS, Oil & Grease, solid and hazardous waste management status) are reported to the BEPA regularly. Environmental, health and safety performance statistics are reported to Uch I management on a quarterly basis along with key indicators including H&S statistics (lost time accident, medical treatment injury, high potential near miss, accident / incident profile, HSE challenges) & Environmental statistics (environmental incidents, training, audit findings, environmental initiatives / projects, progress against corporate environmental objectives and targets, community relations, environmental complaints). Uch I has a detailed safety reporting system (on a monthly basis) with safety statistics, accident details, near miss details, safety audit details, incidents analysis by category, minor vs. lost time incidents, O&M staff vs contractors, etc. Uch II will follow the similar reporting practices. Uch II will follow the similar or better reporting practices to ensure its performance against IFC Performance Standards.
PS2: Labor and Working Conditions
Working Conditions and Management of Worker Relationship:
Uch I has about 90 permanent staff and 270 contractors’ staff. Uch I has Employees’/ Corporate Policies & Procedures’ Manual that describes benefits, equal opportunity policy, non-discrimination policy and grievance mechanism, grievance settlement procedure. Until recently, Uch I was operated by and maintained by ESBI (Electric Supply Board of Ireland) team under Operations and Maintenance (O&M) Agreement. In developing Uch II, the sponsor of Uch I and Uch II changed the O&M arrangement from ESBI to Uch Power Station’s own O&M team. ESBI team members have been consulted in development of new policy, remuneration package and on integration of O&M arrangement. To-date, there has been no conflict and all ESBI personnel have accepted their new employment contracts with Uch Power (Private) Limited. At this moment, UPL or its contractors do not have unions. There are no pending / ongoing labor legal cases or complaints.
Uch II will establish a labor hiring policy and procedure that will be in compliance with the national labor law and international conventions, and in line with IFC Performance Standard #2 as reflected in the attached Supplemental Environmental and Social Action Plan. This will maximize hiring of local labor and offer the workforce for fair compensation. About 150 to 200 un-skilled employees will be sourced from local communities during the project construction. These will include ordinary labors, helpers, security guards, etc. Similarly, about 10-15 local job opportunities will be created during the Uch II operation including helpers, gardeners, security guards, and transporters for the transportation of the plant materials, etc. The Company will also take the necessary steps in order to avoid hiring of children and forced labor and will also require the sub-contractors to adopt the same approach.
Occupational Health and Safety:
Uch I has various health and safety measures already installed, and additional measures are being implemented to maintain and improve high performance. These include (i) fire detection system in hydrogen generation building, (ii) fire detection system on top of transformers, (iii) fire protection system in motor fire pump room, and (iv) fire detection system on boiler feed pups. Similar measures will be incorporated by Uch II.
Health and safety performance is closely monitored by Uch I. The records of 2009 show high performance with only one minor and one lost time incident with two lost days by O&M contractor, and 14 minor accidents and zero lost time incident with zero days lost by contractors. With the commitment of UPL’s management on health and safety, and based on their OHSAS 18001 system already established for Uch I, the occupational health and safety performance of Uch II is also expected to be high.
PS3: Pollution Prevention and Abatement
Pollution Prevention and Resource Conservation:
The key mitigation measures related to pollution prevention and resource conservation are contained in the EMP for construction phase (construction noise, dust emission, land use, water sourcing, vehicle and equipment exhaust, soil and land contamination, drainage and storm water run-off, camp effluent, hazardous and non-hazardous waste management) and for operational phase (air emissions, plant noise, wastewater, water resources, hazardous materials, solid waste management, flooding).
Similar to Uch I, the Project will use a combined cycle gas turbine configuration featuring two gas-fired combustion turbines, two heat recovery steam generators and single steam turbine, with high thermal generating efficiency of 50.25% (Net, Low Heat Value basis). This high thermal generating efficiency of Uch II (and Uch I) will contribute to achieving better emissions performance of NOx and CO2 per unit of electricity generated.
Uch I is zero liquid discharge facility. All the liquid effluents are treated at evaporation pond. Wastewater entering the evaporation pond is periodically monitored (effluent flow, temperature, pH, TSS, Oil & Grease). Soil contamination levels of the evaporation pond are also monitored. No appreciable sludge has been found in the evaporation pond. Uch II will follow the same design of zero liquid discharge system using evaporation pond. The EIA comments that the Uch I evaporation pond has created wintering habitat for a number of migratory birds.
Uch I is periodically using 10% of cooling tower blow down for irrigation purposes (within the premises of Uch Power Station). In case of Uch II, Reverse Osmosis is proposed that will recycle the evaporation pond water and will significantly reduce the water consumption. Uch I is currently extracting water from the nearby Pat Feeder Canal. The permitted amount of water extraction for Uch I is relatively small against the available flow of the Canal, and the Company explains that the use of additional water by Uch II will not compromise other water users. Among the permitted water extraction rate for UPL, Uch I is using only 25%, and considering that Uch II water usage will be about two thirds of Uch I consumption, UPL is of the view that Uch II water supply will be secured using the already permitted quota.
Using gas as fuel, Uch II will have minimal emissions of SO2 and particulate matter. NOx emissions are specified as maximum 77 mg/Nm3 at 15% O2, far below the World Bank Group NOx emission guideline limit of 152 mg/Nm3 at 15% O2 (for fuels other than natural gas). The fuel for Uch I and II (low-Btu gas) is considered as “fuels other than natural gas” to determine applicable NOx emission limit of the World Bank Group guideline limit. This approach is consistent with international practice such as US EPA New Source Performance Standards. It should be noted that US EPA defines natural gas as “either composed of at least 70% methane by volume or have a gross calorific value between 950 and 1,100 Btu/scf (HHV basis)”. The low-Btu gas for Uch II and Uch I has methane composition of only 41% and the HHV calorific value of 430 – 480 Btu/scf, and this will also be considered as “fuels other than natural gas” under the US EPA regulation. NOx emission level of Uch II (77 mg/Nm3 at 15% O2) will also meet the US EPA New Source Performance Standard which is about 86 mg/Nm3 (42 ppm) at 15%O2 for “fuels other than natural gas”.
Air dispersion modeling of the EIA shows that the incremental impacts of Uch II (11 ug/m3 for 1 hour, and 1 ug/m3 for annual average) will be below the 25% of the relevant NO2 ambient air quality standards (50 ug/m3 for 1 hour, and 25 ug/m3 for annual average). The cumulative impacts of ambient NO2 of Uch I and Uch II (43 ug/m3 for 1 hour, and 4.7 ug/m3 for annual average) will still meet the relevant ambient air quality standards of NO2 (200 ug/m3 for 1 hour and 100 ug/m3 for annual average).
Noise impacts are assessed in the EIA with the conclusion that the noise level would not breach World Bank Group noise guidelines for residential receptors. Some of the nearest communities are within 100m from the plant boundary wall. Although the detailed quantitative noise levels at the nearest receptors have not been assessed in the EIA, UPL is of the view that the noise levels of Uch II and I will be reduced due to presence of plant boundary wall which will act as a noise barrier. Existing ambient noise level monitoring results show that the current noise levels at boundary walls are within the applicable noise standards ranging 41 dBA to 44 dBA. At other boundary wall areas (four locations), noise levels were monitored as 53 dBA to 60 dBA, but the EIA analyzes that these levels are mainly due to bird activity and village noise.
Wastes and Hazardous Materials:
At Uch I, all waste is collected and segregated into hazardous, general, metal, biological, oil & medical wastes. General & hazardous waste is disposed in their dedicated landfill area within the premises of Uch I. Metal, waste chemical and waste oil are also stored in dedicated section of a specially built waste management area. All medical waste collected at site-clinic is sent to Agha Khan Hospital where it is disposed off through incineration. This practices is in line with IFC Performance Standard and Uch II will adopt the same or better practice to accommodate its wastes and materials.
Emergency Preparedness and Response:
Uch Power Station has a detailed emergency preparedness and response plan and procedures in place, including reporting lines, emergency evacuation procedures. Uch II will be incorporated into the overall preparedness and response plan of the station.
Greenhouse Gas Emissions:
Both Uch I and Uch II use a low-Btu gas from Uch Gas Field. The calorific value of the low-Btu gas is about 430 – 480 BTU/scf (HHV basis). The gas also contains about 35% (molecular percentage) CO2 in fuel, which is higher than pipeline quality natural gas. The CO2 emissions performance of Uch I is about 0.75 kgCO2/kWh (including CO2 from fuel) and 0.44 kgCO2/kWh (without CO2 from fuel). Both Uch I and Uch II are gas-fired combined cycle gas turbine plants with high thermal generating efficiency of over 50% (Net, Lower Heating Value basis). Annual CO2 emission from Uch II is estimated as 2,124,641 ton CO2/year, based on the estimated net annual generation (ambient corrected) of 2,838,906 MWh and using Uch I CO2 emissions factor (0.75 kgCO2/kWh).
PS4: Community Health, Safety and Security
Community Health and Safety:
In order to minimize the impacts of the Uch II construction activities on the local communities, the following mitigation measures will be implemented: (i) the non-local project staff will be housed in the construction camp established within the boundary wall of the Uch Power Station; (ii) the non-local project staff will be sensitized to local culture and norms; (iii) unnecessary interaction of local population with the non-local project staff will be avoided; and (iv) construction workers not belonging to the local area will be restricted to wander near the local communities.
Security Personnel Management:
In response to the security circumstances of the project area in Balochistan Province, Uch Power Station has well-organized security arrangements. They include (i) Government of Pakistan security arrangement that could be availed upon as per the Implementation Agreement (24 hours, 7 days a week pickets and patrolling brigade), (ii) Government of Balochistan security arrangement through Assistance Agreement (Police / Levies of 23 guards and emergency support if required), (iii) Off-shore security consultant, on-shore security consultant, a private security company – 70 full time guards, and (iv) Security Consultant (Advisory role).
Detailed security control and policy documents are in place. All the security guards are equipped with arms and detailed instructions are documented for the private security company to ensure appropriate use of force. To date, the Company confirms that there has been no security incident. Due to good relationship that the Company has established with the local community through Corporate Social Responsibility activities and utilization of Balochistan levies force which comprises mostly of locals and has better reputation and perception in the local community, there has not been any specific procedure established to minimize conflicts with local villagers. The Company is planning to establish one in line with IFC Performance Standards.
