The Company has presented plans to address these risks 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: Vicat Sagar has prepared an Environmental and Social Impact Assessment (ESIA), as part of the local approval procedure. Supplemental studies were also undertaken in order to validate any variations in the environmental impacts based on final design specifications, and also to estimate the cumulative impacts due to other cement operations in the vicinity of the proposed Project.
Based on this documentation (attached to this disclosure), Vicat Sagar has developed a detailed Environmental and Social Action Plan (ESAP) ensuring the project will comply with IFC requirements and international standards, and will include the following: integrated environmental, health and safety management systems; HR policies and procedures in accordance with IFC PS2 applicable to regular as well as contract employees and construction workers; a mechanism for managing internal labor grievances; management of occupational health and safety on the construction site and living conditions at the construction workers camp; monitoring and controlling waste discharges and emissions to comply with relevant IFC guidelines; an emergency management plan; community engagement and development programs; a grievance mechanism to manage community concerns and complaints; a code of conduct for security forces; and management of the impacts in nearby community due to the increase in vehicular traffic.
- Management Systems: Vicat Sagar will, in accordance with the ESAP, establish an environmental and social management system (ESMS) to ensure ongoing compliance with national and IFC environmental, health and safety and social performance requirements during construction and operation. The ESMS will apply to all aspects of the Project’s operations (such as quarries, production lines, power plant, railway line, transmission line and residential colony) and will apply to contractors and contract workers as well.
- Organization: Key roles and responsibilities will be identified and described in detail in the Project ESMS. Vicat Sagar will need to have a dedicated and professional environmental, occupational health and safety (EHS) and social team with sound professional experience. Vicat Sagar will establish an adequate organization to oversee the environmental, social, health and safety related issues associated with the construction -and in a second stage operation- of the Project. As part of their commitment to ensure sustainability of their operations, the Company will appoint full-time senior level EHS specialist. The Company will develop and document the roles and responsibilities and operational procedures for this department and its staff within three months of commitment.
- Monitoring & Reporting: During the project construction and commissioning, Vicat Sagar, with the help of independent external consultants as required, will undertake regular monitoring of the compliance of ESMS and relevant ESAP conditions.
During the operational phase, Vicat Sagar will implement continuous monitoring of particulate matter, nitrogen oxides, and sulfur dioxide of the kiln emissions. Moreover, the Company’s EHS team will develop an EHS monitoring and reporting program (including standard operating procedures, checklists and corrective action protocols) for the Project operations to collect information related to regulatory compliance, resource consumption, waste management and lost time accidents. Information related to air emissions and wastewater discharge as well as ambient conditions shall be regularly collected to ensure compliance with the local environmental regulations and the IFC industry guidelines.
- Community Engagement: Through the process of land acquisition for the Project (described in detail under PS 5 below), Vicat Sagar has been extensively involved with the community within the mine lease area. For the construction and operation of the project, Vicat Sagar will set up a community information program and a mechanism for addressing community grievances related to project construction and operation. A senior level staff will be assigned the responsibility of community liaison.
PS 2: Labor and Working Conditions
- Human Resource Policy, Management and Training: As a new joint venture company, Vicat Sagar will develop a Human Resources policy and procedures in accordance with national regulations and IFC’s Performance Standards. The Human Resources policy and procedures will specifically include provisions on non-discrimination and equal opportunity, wages and benefits, disciplinary practices, grievance mechanism and adequate working and living conditions. These procedures will be communicated to all employees in an appropriate manner. Local hiring is an important commitment made by Vicat Sagar to local communities and local government agencies. The Company will include local hiring provisions as part of their Human Resources Policy. Vicat Sagar will also collaborate with the local authorities to establish training and capacity building programs to enhance the skills of local job seekers to meet Project’s employment standards. Such training and capacity building programs will target unskilled, semi-skilled and skilled positions. As a part of community consultation and disclosure process, Vicat Sagar will clearly state the number of potential jobs for unskilled workers to manage employment expectations among the local population. - Occupational Health and Safety during Construction and Operation: Vicat Sagar is finalizing the selection of equipment suppliers and various contractors for the construction and commissioning of the Project. The Company will screen contractors for established site safety records. As part of the ESAP, through relevant clauses in the contract documents, Vicat Sagar will require all suppliers and contractors to comply with national labor laws, including those governing living and working conditions of the labor force and occupational health and safety.
For its own workers, Vicat Sagar shall review and adopt, to the extent feasible, international best practices for workers’ accommodation and living conditions – such as those included in the “Workers’ Accommodation: Processes and Standards: A Guidance note by IFC and the EBRD”. Through the contract clauses, contractors shall also be required to adopt similar practices for the labor camps during construction and commissioning phases.
PS3: Pollution Prevention and Abatement
IFC’s assessment considered Vicat Sagar’s compliance with environmental requirements, optimization of resource inputs, including energy efficiency and waste minimization practices as well as the storage and handling of hazardous materials used in the construction and operations of facilities.
- Legal Compliance: Vicat Sagar is in the process of procuring all the necessary permits and authorizations for establishing and operating the Project, in accordance with the Indian laws and regulations. The mining lease for the project has been notified by Mines and Geology Department, and the mining plan has been approved by Indian Bureau of Mines, which also includes a detailed quarry reclamation plan. The environmental clearance has been granted by the Ministry of Environment and Forests. Other permits and approvals necessary for the construction, commissioning and operation of the Project will be obtained in due course. The Company will allocate adequate resources to ensure compliance related to environmental and safety and labor issues as and when required.
- Pollution Prevention and Resource Conservation: The proposed plant is designed for efficient energy consumption, good emission controls with continuous monitoring of key pollutant emissions (particulate, nitrogen oxides, and sulfur dioxide), discharge of waste water treated to comply with the Indian regulations and IFC guidelines, and no significant amount of solid or hazardous waste generation, except for broken cement bags, canteen, office and laboratory waste, and maintenance wastes (used refractory bricks, lubricants, etc).
The project’s kiln operation will be highly efficient due to the application of best available technology, including: a six-stage pre-heater with pre-calciner for optimum operation at 750 kcal/kg of clinker; vertical roller mill or roller presses for cement, coal and raw grinding, ensuring a low 80kWh/t of cement energy consumption.
During the initial years of operation, Vicat Sagar plans to have a product mix comprising 45% as blended cement (Pozzolana Portland Cement or PPC) and 55% as ordinary Portland cement (OPC), though the Project is designed to handle 80% PPC at its maximum. Fly ash-based blended cement is environment-friendly as it helps in solving the serious waste disposal problem faced by thermal power plants, conserves natural raw materials and reduces energy requirement, and thus GHG emissions. As Vicat Sagar aims to gradually increase the percentage of blended cement in the product mix over time, enhanced efficiencies will be realized. Fly ash for blending will be sourced from the nearby thermal power plants.
- Water Supply and Effluent: The process used at the project is based on dry technology and the water needs will therefore be limited. Water demand is estimated at around 3000 m3/day for the cement plant (both the phases), captive power plant and the colony. The water demand is low compared to prevailing industry standards due to: absence of gas conditioning tower (utilizing bag filters on pre-heater exhaust, rather than an Electro-Static Precipitator); and the choice of air cooling for clinker cooler exhaust gases and air cooled condenser for the CPP.
The Project has received the approval from the state water authorities for drawing water from the Mullamari River, (which passes through the lease boundary) during the months of June to February. For the dry season months, when the river has very lean flows, the Project proposes to use the groundwater to meet the water demand. “Water availability Study for Proposed Cement Plant, Chhatrasala Village, Chincholi Taluk, Gulbarga District, Karnataka” conducted as supplement to ESIA study and disclosed together with this ESRS confirm the presence of adequate groundwater resources in the area. To substantiate these findings, Vicat Sagar shall conduct detailed field studies for the estimation of groundwater resources in the lease area during summer season in 2010.
A sewage treatment plant will be constructed to manage waste water produced by the plant and staff colony. This plant will treat the waste water to be suitable for used as greenbelt irrigation. There will be no discharge to the environment outside the Project boundary.
- Air Emissions and Ambient Air Quality: Particulate emissions will be controlled at the quarrying sites and in the general material handling systems by designs requiring minimal material drops during handling, fully enclosed conveying systems with bag filters installed at all transfer points, water based dust suppression, surfacing of internal roads in the plant and colony as well as development of green areas.
At the cement plant all operations will be fully equipped with particulate emission control systems. These systems will be based on bag filters and recycling of the captured materials to the feed stock for the kiln. All bag filters will be designed for maximum emissions of 30 mg particulate/Ncm and the single ESP filter, at the clinker cooler is designed for 50 mg particulate/Ncm in accordance with the IFC guidelines and the local requirements.
The sulfur dioxide emissions of the cement plant will be will be kept below the local requirements and the IFC guideline value of 400 mg/Ncm low because the alkaline conditions in the kiln will result in the absorption of the majority of the sulfur entering the systems either through the raw materials or the fuel.
Formation of nitrogen oxides is caused by fuel burning at high temperatures in the kiln. To minimize the formation of nitrogen oxides the kiln will be equipped with advanced burning principles, including the usage of low-NOx burners, which by controlling the flame shape is able to ensure a relative low core flame temperature. By applying these techniques the NOx emissions will be kept below the 600 mg/Ncm, as stipulated in the IFC guidelines.
To meet the project’s power requirements, an Atmospheric Fluidized Bed Combustion captive power plant will be built in two phases of 40 MW and 20 MW. This coal-based captive power plant will be equipped with adequate air pollution control equipment to ensure compliance with the national as well as IFC’s EHS guidelines for Thermal Power Plants. The fly ash generated from the power plant will be utilized as cement additive. Vicat Sagar is exploring the possibility of installing a 2-3 MW waste heat recovery system for the cement plant.
As a result of these well controlled air emissions and utilization of best available technology in the production process, the ESIA concludes that the incremental contribution by Vicat Sagar Project to the ambient air quality will be marginal.
- Cumulative Impacts on Ambient Air Quality (AAQ) and Water Resources: Cumulative Impact Assessment studies were carried out by the Company to estimate the impacts on the airshed and water environment assuming that all the cement plants and limestone quarries operating in the area, i.e., the Vicat Sagar Project, the existing Cement Corporation of India and Visaka Cement plants and the proposed Penna Cement and Chettinad Cement plants.
According to the EIA report, baseline ambient air quality in the study area is reported to be poor - especially with regard to suspended particulate matter (SPM), though it is within the national ambient air quality limits (165 µg/Nm3 at Nirgunda village at 4.3 km WSW from the plant site - compared to the standard of 200 µg/Nm3 for residential areas) and hence is not considered as a degraded airshed. Once all the cement plants and quarries in the airshed are operational at full capacity (including both the phases of Vicat Sagar) the ambient SPM values are projected to be 201 µg/Nm3 at 1 km SW from the operations, which is marginally above the prescribed national AAQ limits. All other AAQ parameters are expected to be well within the national AAQ limits.
The incremental contribution of SPM by the Project is expected to be marginal– with maximum predicted ground level concentration from operations of the cement plant and Captive Power Plant (for both Phase I & II) estimated at 5.02 μg/m3, and that from mines as 27.36 μg/m3.
While the contribution to AAQ by the Project emissions is expected to be marginal, the Company will institute strict operational controls to minimize SPM emissions during the Project construction and operations. Regular monitoring of SPM levels in the ambient air will also be undertaken to ensure ongoing compliance with the national AAQ limits and relevant IFC guidelines.
The water requirement, for the Project including the residential colony and landscaping, is estimated at 2000 m3/day and that for both the phases at 3000 m3/day. According to the Supplemental EIA study (viz. “Water Availability Study for Proposed Cement Plant, Chhatrasala Village, Chincholi Taluk, Gulbarga District, Karnataka”) the stage of groundwater development in the watershed is estimated at only 34%. As such, there is ample scope for exploitation of available groundwater for future development in the watershed. Thus, the cumulative impact of the Project and other existing and proposed cement plants on water resources in the study basin is expected to be marginal, even if all the current and projected cement plants meet their entire water need with the groundwater during the dry season months.
- Carbon Footprint: The primary fuel source for the Project will be coal (domestic as well as imported), as no other fuel source is reliably available. Vicat Sagar is also exploring the feasibility of implementing a 2-3 MW waste heat recovery power generation system (WHR).
Based on the currently forecasted product mix (45% blended cement - PPC and 55% as OPC.) the final CO2 emissions from a production of up to 5.5 mtpa (for both phases), inclusive of emissions of 60 MW CPP (for both phases) will be 3.85 M tons CO2 per year. This is equivalent to 809 kg CO2 per tons of OPC and 566 kg CO2 per ton of PPC.
- Solid and Hazardous Waste: Solid and hazardous waste generated during construction and operations will be disposed of in accordance with the conditions of the environmental permit. Solid waste will be handled by authorized waste handlers. Ordinary domestic waste will be disposed in approved local landfill operations based on agreement with the local authorities or recycled.
PS4: Community Health, Safety and Security
IFC’s review considered the risks and impacts to health and safety of the affected community during the design, construction, operation and decommissioning of the project, including emergency preparedness and response, as well as the security measures put in place by the client to safeguard its personnel, property and assets.
The main community safety risks associated with the project are related to: 1) the transport of construction materials, supply of raw materials for cement production and shipment of finished product by road and rail; and, 2) access to lands within the boundaries of the project’s cement production and limestone quarrying operations.
Approximately 90% of the material requirements and output of the Project (raw materials as well as finished product) will be transported by rail, thus minimizing truck traffic and its attendant impacts (e.g., dust, exhaust, road congestion, pedestrian safety, etc.). A number of motorable roads link the plant site from different directions to the national highway grid. Tertiary roads of poor condition pass through sparsely populated agricultural land and, existing cement manufacturing operations and working limestone quarries. Currently, Vicat Sagar is contributing towards the resurfacing of this road to reduce the impact of vehicular traffic during the construction period, which will benefit the local commuters as well.
For the operational phase, the Company will develop a traffic management plan that will account for vehicle movement, parking, accommodation and services for truck crews and pedestrian safety. The Company will also prepare a site specific emergency preparedness and response plan, specifically dealing with accidents involving the transport of explosive and other hazardous materials. A railway line will be constructed for the shipment of bulk and bagged cement, which will significantly reduce the requirement for truck transport to and from the plant.
Construction sites, labor camps and materials lay-down areas will be demarcated, fenced or otherwise protected from intrusion by the local population. A government licensed security contractor will be engaged by the Company during construction and operations to maintain controlled access to the plant and limestone mining areas.
PS5: Land Acquisition and Involuntary Resettlement:
Total land required for the Project is 1,790 acres of which, 1545 acres is private land and the remaining is village land. The Company has started acquiring land under private ownership and as of July 2009, it has entered into agreement for purchase of more than 70% of private land. All land being acquired belongs to residents of Chhatrasala village. No physical displacement is anticipated on account of the Project.
The Company has also initiated acquisition of land for further development of the Project for which a total of 1,380 acres is required from two villages called Kharchchkhed and Burugupally. As of July 2009, it has already entered into agreement for purchase of more than 20% of land.
A Socio-economic Baseline and Land Acquisition Study (appended to this ESRS) has been completed, which establishes the baseline and enables extrapolation of key impacts of land acquisition; and provides status of land acquisition and payment of compensation.
The land acquisition for the project will affect 315 (as per primary survey) landed families in Chhatrasala. A large part of the families surveyed in the three villages have land holding more than 1 acre (42% are small farmers owning land between 2.47 and 5.94 acres and 36% own land more than 5.94 acres). In Chhatrasala village, around 80% Project Affected Families (PAFs) are losing more than 75% of their land holding. Of the surveyed families in Chhatrasala, 13 are women headed, of which 10 own land.
Agriculture is main occupation in the village for 72% of the surveyed families for whom farming is the primary occupation. However, agriculture is not very remunerative in the region as it is dry and deficient in rain. Most of the farmers grow one crop of gram. The yields are poor as cultivation is totally dependent on the rains. In addition, the area exhibits outcrops of limestone intermittently making cultivation of large tracts of land difficult. 43% of surveyed families have more than one earning member.
According to the Socio-economic Baseline Report, there are a total of 18 landless families in the Chhatrasala. Most of the landless respondents work in the agricultural fields of others or work as labor in the many stone quarries operating in the area. However, they do not get regular work and find employment for only 10-12 days in a month. The Company is carrying out a Supplementary Social Assessment Study to determine and quantify impacts on landless families and it is committed to mitigate all identified impacts on the landless families to ensure compliance with PS 5.
After identification of land under mining lease, the Company identified the owners and started negotiations with the villagers on the land price. The Company and the land owners have arrived at a negotiated settlement on compensation amount for private land. The negotiated price is higher than the prevailing rates in the area and the land owners have expressed satisfaction with the compensation amount. Private land acquisition meets PS 5 provisions.
The Company is required under its Approval from Karnataka Government for Establishment of Cement Plant to provide employment to at least one member from each family losing land. The Company needs to make provision for this and will prepare a Local Employment Plan and Human Resources Development Plant to identify eligible PAFs for jobs, their training and capacity building. In addition, the Company will need to implement measures to ensure that members of the affected households obtain contract employment during the construction phase. This requirement is stipulated in the ESAP.
The Company will, in consultation with affected community, develop and implement programs for community development and will prepare a Community Development Plan towards this end.
The Company will ensure that all impacts resulting from land acquisition are managed in accordance with PS5 requirements.
