PS1: Social and Environmental Assessment and Management Systems
UF Moldova has a Committee for Quality and Environment chaired by the Executive President. This Committee approved UF Moldova’s Quality Policy in June 2008, and subsequently an Environmental Policy in 2009. On the Safety Policy, UF Moldova is using the Union Fenosa’s safety policy since privatization. UF Moldova started a project to integrate quality system and environmental management system in accordance with ISO 9001 (Quality Management System) and ISO 14001 (Environmental Management System). The Company is aiming to get the certification in June 2010.
UF Moldova has a Director of Quality and Environment, supported by two professional engineers – one in charge of environment management (Environmental Officer), and the other in charge of security of installation and safety monitoring (Safety Officer). The Environmental Officer’s roles include environmental monitoring and reporting, ensuring compliance with Moldovan regulations, obtaining operational authorizations for air emissions, checking oil storage facilities, management of analyzing transformer oil samples to identify possible contamination of PCBs (Polychlorinated biphenyls), analysis of exhaust gases from vehicles, checking installations of transformers against environmental requirements, management of environmental trainings for employees, and organizing environment-related corporate social responsibility programs (e.g. tree plantings, park cleanings).
The Safety Officer’s roles include analyzing the electrocution cases associated with the Company’s electricity network, and coordinating with relevant departments (High-voltage, Medium-voltage / Low-voltage, Public Relations, Human Resources, etc.) to effectively implement the safety improvement programs.
The Company’s environmental, health and safety programs are compiled as Environmental Action Plan (or EAP, dated November 6, 2009), detailing actions to be carried out with cost estimates and targeted implementation schedule. The EAP covers actions related to environmental management system, environmental treatment to reach compliance with EU standards (e.g. PCB analysis and replacement), waste management, oil storage improvement, safety systems improvement (e.g. upgrading fences, gates, locks, roofs of transformer stations and substations), safety awareness programs, contractor management to ensure that their operations and services comply with Moldovan and EU standards. The EAP is attached to this Environmental and Social Review Summary.
Upon completion of the integrated Quality and Environmental Management System in 2010, the Company is expected to conduct internal reporting more systematically than is currently done so through the Committee for Quality and Environment.
PS2: Labor and Working Conditions
The Company had around 3,100 employees in the year 2000 prior to the privatization. Over the period of nine years since 2000, the Company reduced the total number of employees to around 1,300 employees in 2009. The reduction was a result of a combination of natural retirement by age and the Company’s strategy to outsource works to help improve the overall efficiency and quality of service. As a result of outsourcing so far conducted, UF Moldova works with 7 to 8 companies providing service of maintenance and network development, 3 companies for meter reading, 2 to 3 companies handling work orders and 1 company to provide a 24-hour call center service. UF Moldova requires companies providing service to follow health and safety standards of UF Moldova and monitor and report accidents on their workers to UF Moldova.
UF Moldova and its labor union (one labor union at UF Moldova) have a collective agreement signed for the year 2008 – 2012. About 80% of employees are members of the union. This latest agreement was for five years, but the Company and the union negotiate annually on the economic aspects of the agreement. This agreement is in compliance with Moldovan labor code and regulations. It includes components such as management of organization and human resources, working days, model compensation payment, professional development, labor health and protection, social benefits, working conditions and terms of employment, and representation of workers. The Company also has internal human resources codes addressing areas such as work safety, industrial hygiene, principles of non-discrimination, working hours and conditions, rights and responsibilities of workers. The Company provides training to employees to enhance their skills and awareness of safe working conditions.
UF Moldova has three ways to receive employees’ concerns functioning as a grievance mechanism. These include through employees’ supervisors, through Human Resources (HR) unit, and through the labor union. The HR unit visits all the work places every year to ensure that employees’ concerns are understood. Through this exercise, safety of workplaces was identified as one of the concerns and follow-up actions are being undertaken. In addition, the HR unit conducts employee survey every two years. To implement outsourcing arrangements effectively without harming affected employees, the Company consults with affected unit and their employees, before outsourcing arrangements are made. The Company also requires outsourced companies to employ UF Moldova’s affected employees to the extent possible. One of recent areas that were outsourced was the meter reading. For this task, the safety of workers who enter customers’ premises was a major concern. The HR unit monitors the safety of not only the employees but also outsourced workers.
PS3: Pollution Prevention and Abatement
UF Moldova owns 10440 transformers and other equipment which contain more than 5 liters of transformer oils which according to the legal requirements should be verified with respect to PCBs (Polychlorinated biphenyls) content. UF Moldova had been conducting PCB screening as part of transformer rehabilitation program, which was one component of the Environmental Action Plan agreed in relation to the previous investment made by IFC in 2002. The Company is now participating in a national project of PCB inventory and elimination, directed by Minister of Ecology and Natural Resources, supported by the World Bank and Global Environment Fund. In 2009, the company plans to analyze 2,900 samples of transformer oil, and plans to complete analyzing all the samples of UF Moldova by the end of 2011. Once this inventory is completed by the end of 2011, the Company will estimate the cost of treating PCB contaminated equipment and oil, and will implement the treatment project.
UF Moldova plans to construct waterproof bunds around the oil storage tanks containing mineral oil for transformers. This is targeted to be completed in 2010 at the cost of US $33,000. UF Moldova’s wastes from operation include non-hazardous wastes (wood, ceramics, asphalt and concrete waste, rubber, scrap metal) and hazardous wastes (acid, transformer oils, fluorescent tubes, and silicagel). Waste management system (separation, recycling, proper disposal) has been improved since privatization, and the Company plans to continue to improve the practice.
In 2009, the Company’s energy losses in the distribution network is estimated around 14.5%, which is the total of technical loss and commercial loss (theft, or not billed). The Company plans to further reduce this technical loss. Under the tariff calculation scheme approved by the Government of Moldova, UF Moldova’s allowed losses (for the tariff calculation) are to improve from 14.41% in 2008 to 12.5% in 2009. Technical loss reductions will help reduce carbon dioxide emissions by displacing electricity purchase partly generated by fossil fuels, and commercial loss reduction will indirectly improve overall demand-side energy utilization efficiency – customers not charged for electricity tend to use electricity less efficiently. Improvement of distribution network losses is one of the major challenges of UF Moldova for the next several years to come.
UF Moldova’s own greenhouse gas emissions are minimal. The Company has about 400 vehicles but it has a plan to outsource the service of providing vehicles. The Company plans to plant around 80, 000 trees in 2009 as part of it corporate social responsibility program. This is to partly offset the Company’s GHG emissions. This reforestation program is expected to offset the Company’s indirect emissions due to clearing trees under distribution lines.
PS4: Community Health, Safety and Security
Electrocution by general public illegally accessing UF Moldova’s transformer stations or contacting distribution lines has been one of the major safety management challenges since privatization of the Company. Although the average number of fatalities showed decreasing trend due to the Company’s efforts to strengthen gates and fences to prevent general public from entering the hazardous areas of the transformer stations and substations, and to enhance safety awareness among the general public including school children, the Company still records several electrocutions every year. The average fatalities recorded by the general public between 2002 to 2005 were 10.8 fatalities per year, whereas the same between 2006 to 2009 (as of October 2009) was 6.6 fatalities per year. In 2009, the Company recorded three fatalities by the general public between January to October 2009.
In order to further reduce the frequency of this tragic electrocution by the general public, the Company plans to invest further in this safety improvement areas. The planned investment at MV / LV transformer stations and HV substations will ensure that all substations and transformers comply with good industry practice for public safety and security, including established security zones, adequate fencing, protection equipment improvement, earth connection improvement and protection and warning signs. The Company also plans to continue safety awareness programs on electrical safety, including TV and radio campaign, newspaper campaign, targeted programs for school children. In addition, the Company continues to monitor and analyze the recorded electrocution cases to evaluate the effectiveness of their efforts. The Company estimates that by the end of 2010, about 85,6 percentage of all the MV/LV transformers and 81,7 percentage of all the HV substations will be upgraded to good international industry level, with the remaining portion to be completed by the year 2014.
