While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

PS 1: Social and Environmental Assessment and Management System;
PS 2: Labor and Working Conditions;
PS 3: Pollution Prevention and Abatement; and
PS 4: Community Health, Safety and Security.

SP(KR1) project is sited on primarily agricultural land in the vicinity of an existing road. The land for the project was purchased on a willing seller/buyer basis and any significant impacts of the type contemplated by PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous People and PS8: Cultural Heritage, are not expected on account of the SP(KR1) project.

However, in view of the fact that location and siting of all projects, including SPC2, SPC3 and SPC4, to be developed by SPC are as yet not known, it is possible that some of the projects to be developed by SPC may result in impacts that will have to be managed in a manner consistent with IFC Performance Standards PS 3: Pollution Prevention and Abatement, PS 4: Community Health, Safety and Security, PS5: Land Acquisition and Involuntary Resettlement, PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous People and PS8: Cultural Heritage. Applicability of specific Performance Standards in case of each site and project will be established as part of the project specific social and environmental assessment. SPC will put in place a social, environmental, occupational health and safety management system (SEMS), consistent with IFC Performance Standards, to manage such project impacts.

The proposed project equity investment in SP(KR1) together with an option to invest in SPC is a Category B project because a limited number of specific environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The key aspects of relevance to the Project include social, environmental, health and safety management systems; the identification and mitigation of social and environmental impacts on account projects; site selection and land acquisition; community consultation and engagement; labor working conditions during construction and operation; pollution prevention and abatement during construction and operation; and community health, safety and security. Potential impacts in construction besides being mitigable are likely to be limited to project site; short term; and will likely not have any impact on environmentally sensitive areas. Further, it is possible to readily design and implement engineering and management measures to mitigate adverse impacts during construction and operations. SPC will manage its environmental and social performance in accordance with applicable local laws and regulations and international standards, including IFC’s Performance Standards on Social and Environmental Sustainability.

PS 1: Social and Environmental Assessment and Management System

SPC’s objective of developing grid connected solar power projects and SP(KR1) project itself are socially and environmentally desirable and the Sponsor is committed to ensuring high social and environmental outcomes. SPC’s present approach to managing social and environmental performance addresses some of IFC Performance Standard provisions but does not cover all the various relevant and applicable aspects contemplated in the IFC Performance Standards. As part of the Action Plan agreed with IFC, SPC will implement measures, discussed here, so as to ensure that its projects and operations result in outcomes consistent with IFC Performance Standards.

SPC will ensure adherence to IFC Performance Standards as applicable to its projects and operations by putting in place a company-wide (applicable to it and its subsidiaries) management system that integrates social, environment, occupational health and safety (SEMS) performance. SPC will, as part of the SEMS, put in place procedures for: identifying social and environmental risks and impacts of its projects and operations; undertaking appropriate social and environmental assessment of all of the projects it (and/or its subsidiaries) implements; development and implementation of social and environmental management plan; and development and implementation of a community engagement plan, all of which are consistent with IFC Performance Standards.
Further, SPC will, as part of the management program under the SEMS (applicable also to its subsidiary companies) develop and implement procedures to:
- review and screen projects it bids/applies for either as an owner/developer, EPC or O&M company. The review of projects under the screening procedures will lead to the following outcomes: (a) the acceptance of contracts in which SPC’s environmental and social standards (including those of IFC’s Performance Standards 1 through 8) can be met; and (b) the re-evaluation, renegotiation, or decision on rejection of contracts that cannot be implemented according to SPC''s requirements.
ensure that the environmental impacts associated with its projects and operations, are managed in accordance with good international industry practices including IFC Environmental, Health and Safety Guidelines and result in outcome consistent with IFC’s Performance Standard 3 provisions. Site specific pollution prevention and mitigation measures associated with each of SPC’s projects and operations will be identified and addressed through the social and environmental assessment and social and environmental management plan process.
identify and mitigate community health, safety and security impacts in accordance with IFC’s Performance Standard 4 provisions. Further, SPC will implement measure to minimize the risk of exacerbation of community exposure to disease due to influx of labor or due to changes in land/hydrologic or other terrestrial regimes. Additionally, where an influx of labor is expected, SPC will provide or require its contractors to ensure that: in the labor accommodation appropriate facilities and amenities are provided including housing, toilets, washing and cleaning water, potable drinking water and cooking fuel; treated sanitary waste water meets IFC requirements prior to discharge; and potential host community impacts on account of influx of labor are assessed and managed.
based on the project specific social and environmental assessment, implement appropriate measures including: material movement planning; barricading of excavated areas; safety signage; illumination; and other measures to mitigate the risk of accidents for general public during construction. In transmission line route planning, SPC will take into account risks and impacts including electrocution, as applicable. Further, for communities’ resident in the vicinity of the transmission line, SPC will implement a general awareness program detailing dos and don’ts to minimize electrocution risk. SPC will prepare and implement an onsite and offsite Disaster and Emergency Management Plan at each of its project sites.
ensure that land acquisition resulting in involuntary resettlement, in all projects undertaken by the SPC and/or its subsidiary companies, including impacts due to involuntary right of way acquisition/ restrictions in land use for associated facilities like transmission Lines or access roads and/or crop loss during construction or operation phases etc. are mitigated in a manner consistent with IFC’s Performance Standard 5. Further, in cases, where any of SPC’s projects is likely to materially transform, degrade or impact lands and resources on which indigenous peoples (“IP”) are dependant, SPC will ensure that the social and environmental assessment and mitigation is undertaken in accordance with IFC’s Performance Standard 5 & 7 provisions.
minimize and mitigate impacts on bio-diversity in a manner consistent with IFC’s PS6 provisions, particularly when its project sites/facilities are located in, pass through or are in the vicinity of: (a) critical natural habitat; (b) protected areas including wildlife sanctuary, national parks, reserved forests, breeding grounds of key species and archaeological monuments; and (c) other eco-sensitive areas like marine environment, rivers, streams and wetlands with aquatic or other flora-fauna. Further, SPC will, develop and implement a chance find procedure including for finds of archaeological (prehistoric), paleontological, historical, cultural, artistic, and religious values.
SPC will, to enable effective implementation of the SEMS, put in place a social and environmental organization and make available adequate resources including staffing of the organization with appropriately qualified social and environmental professionals. Under the corporate wide applicable SEMS, SPC will implement procedures for: (a) engagement with affected communities in accordance with IFC Performance Standard provisions; (b) ensuring that contractors meet relevant provisions of SPC’s SEMS; (c) environmental, occupational health and safety training of employees and contract workers; (d) recording, investigation and reporting of social, environmental, occupational health and safety incidents including those involving contractors’ labor; (e) periodic monitoring and assessment of social, environmental, occupational health and safety performance; (f) internal and external audits and implementation of corrective action; (g) management review of the management system; and (h) periodic reporting of social, environmental, occupational health and safety performance to SPC’s Board of Directors, regulators and investors.

SP(KR1) project

The Company has, to meet the national regulatory requirement, completed an Initial Environment and Safety Examination (ESA) prepared by a third party for the SP(KR1) project. The ESA addresses a limited number of social, environmental, occupational health and safety aspects and impacts associated with the SP(KR1) project construction and operation and includes: a baseline assessment of the SP(KR1) project site (soil, geology, water resources, meteorology, ambient air quality, landuse, accessing the site and traffic on the nearest highway); and a limited management plan that addresses wastewater, sanitary and sewage facilities, security, drinking water, garbage disposal, occupational health and safety. SP(KR1) will implement additional mitigation/management measures consistent with good international industry practices including those discussed below to implement and operate the Project in accordance with IFC Performance Standards. Further, in view of the fact that SPC proposes to install a second 6 MWp Korat 2 project at the same location, SPC will undertake a cumulative social and environmental assessment taking into account combined impact of both Korat 1 and Korat 2 projects and develop a social and environmental management plan consistent with IFC’s Performance Standards.

For purchase of land for the Project, SP(KR1) has authorized the head of the local village government to negotiate with willing farmers the price for the parcels of land. The village government head negotiated the price with willing farmers and the land was purchased first by the principal shareholder of SPC and then transferred to SP (KR1). The payment for land purchase was made by cheque to the 13 land sellers on October 15, 2009 in an event organized by SP(KR1). Further, SP(KR1) is engaging with Baan Donree village authorities to negotiate a contract for purchase of 20 m3/day of water.

SPC2, SPC3 & SPC4 projects

In case of SPC2, SPC3 and SPC4 projects, SPC will, in accordance with the provisions of IFC Performance Standards, for each of these projects respectively: (i) prepare conforming environmental and social assessments; (ii) include assessment findings into the design, construction and operation plans; and (iii) engage affected communities including public consultation and disclosure of social and environmental assessments. IFC will, as per an action plan agreed with SPC, determine conformance of each of these three projects to IFC Performance Standards.

PS 2: Labor and Working Conditions

SPC currently has 10 permanent employees on its rolls, which is expected to increase with increase in the number of projects under implementation as also due to the expected increase the EPC and O&M operations. To meet national legal requirements, SPC and SP (KR1) have developed HR Policies and Procedures Manual. The work rules and HR Policies and Procedures will be applicable to SPC, SP(KR1) and all its subsidiaries. SPC will review IFC Performance Standard 2 provisions and ensure that the work rules and HR Policies and Procedures are consistent with Performance Standard 2 provisions.

SP(KR1) will employ 16 persons on a permanent basis on its rolls and about 40 persons as contract workers for panel cleaning and other sundry work during operation and maintenance (O&M) stage of the SP(KR1) project. SP(KR1) will, prior to commencement of operations, put in place and communicate to all workers, detailed work rules required by labor laws.

In addition, during construction, at peak, about 250 workers are expected to be engaged at the Company’s project site. SP(KR1) has agreed with the local government/authorities that almost all the workers (more than 75% of the total workforce at site) during both construction and operation phases will be sourced from 13 local villages. The local government/authorities have a process in place to invite interested persons from the 13 villages to register themselves for working with SP(KR1). The local authorities provide a one day skill training to the registered interested persons, who are subsequently made available to SP(KR1) and its contractors for employment at the site. Further, local authorities are involved in ensuring that appropriate wage and working condition requirements are adhered to. Wages to the workers are disbursed by the Contractors through the local authorities. While most workers go home every day after work, some workers (engaged for land filling and pile driving) have setup family camp/accommodations on public land adjoining the SP(KR1) project site. Day workers bring their own food from home and a temporary canteen has also been set up at the site. Packaged potable water is provided to the workers. Further, the amenities and facilities available in the labor accommodation need to be improved. SP(KR1) needs to provide or require its contractors to make available living conditions with basic amenities and electricity; mess facilities for food; where workers desire self cooking, provision of fuel for cooking; appropriate sewage disposal facilities and/or septic tank and soak pit; and primary medical care for all workers engaged at site.

SP(KR1) has identified some occupational health and safety risks and mitigation measures as part of the assessment work. The workers are trained on occupational health and safety as part of the skill training imparted by local authorities. While use of personal protective equipment and safe work practices was generally adequate for all workers, use of appropriate PPE and safe work practices needs to be further enforced amongst workers involved in pile driving and land filling. Moreover, prior to commencement of work on transmission line and on testing/commissioning, SP(KR1) will put in place control procedures including for safe working near live equipment, work permit system, tag out/lock out procedures and institute training programs on working at height, electrical safety and emergency preparedness and response. SP(KR1) has deployed a safety officer at site and monthly safety assessment report is submitted to management by the safety officer. There have been no lost time accidents/incidents at the Project site.

SPC will, as part of the SEMS: identify occupational health and safety (OHS) risks both for construction and operation phases; develop operational control procedures to address the identified OHS risks; ensure adherence to good international industry practice (GIIP) as described in the applicable IFC Environment, Health and Safety Guidelines; ensure usage of appropriate personal protective equipment (PPE) by all contract workers and employees; and enforce adherence to all applicable operational control procedures. In addition to general occupational health and safety risks, SPC will in particular need to focus on risks including: working at height; working on live power lines and equipment; fire; exposure to chemicals; exposure to electromagnetic fields; and natural risks (e.g. snake bites etc.)

PS 3: Pollution Prevention and Abatement

The SP(KR1) project is a renewable energy project, which will contribute to GHG avoidance. While baseline ambient air quality has been assessed as part of the ESA, material impact on ambient air quality is not expected on account of this project. However, temporary impact on ambient air quality and noise levels may be expected during construction. Site level is being raised by 1.8 m, which requires nearly 61,000 m3 of earth filling. Earth for filling is partly sourced (29,000 m3) from a pond being excavated on the site and partly (32,000 m3) sourced, with government authorization, from a public site where pond/reservoir deepening is underway. SP(KR1) will implement measures during construction: for management of fill/excavated earth, construction rubble; and minimization of fugitive dust emissions. Further, SP(KR1) will ensure that other wastes (packing material, metal, debris, cement bags, drums/carbuoys etc.) are collected, stored and disposed off to re-users or in appropriate debris disposal areas.

No batching plant is proposed at site since significant concreting work is not expected. Pre-cast piles, sourced from a pile manufacturer, are driven and used as panel frame foundation. Limited concreting work is expected for sub-station, transformer yard and transmission line poles. Pile driving, use of earth moving equipment and increased traffic for material movement is expected to result in increase in ambient noise levels. However, this increase is short term during construction stage only. The construction work is carried out only during day time and no noise generating equipment will be operated at night.

Water use will be for domestic and panel washing purposes only. 20 m3/day of water is expected to be consumed for Korat 1 and an equal amount also for Korat 2. SP(KR1) is in the process of contracting with the local village government for purchase of this water. Moreover, SP(KR1) is developing a pond on its premises to store rain water and surface run off from its premises. The pond water will be used to meet part of the water requirement. Material impact on groundwater resources is not expected on account of the SP(KR1) project. SP(KR1) proposes to install a de-ionization facility for treating water to be used for panel washing and will put in place appropriate and corrosion resistant facilities for: storage and handling of acid and alkali solution; and for treatment, neutralization and disposal of resin regeneration/back wash water. Panel wash water will be used on premises for irrigation of grass. SP(KR1) will ensure that the water made available to workers meets national potable water quality norms. SP(KR1) however needs to put in place appropriate facilities for collection, treatment and disposal of sewage (septic tank and soak pit) both during construction and operation phases.

Significant quantities of hazardous materials (transformer oils, dielectric containing material, paints, batteries etc) and hazardous wastes (used oils, waste/residual paint, oil/paint soaked rags/material, filters, empty oil/paint/chemical drum/barrels etc) are not expected to be generated during construction or operation. However, SP(KR1) will ensure that hazardous material and hazardous wastes handled/generated at site (both during construction and operation) are: stored under segregation and containment; handled/used with appropriate care and personal protective equipment; and disposed off through entities authorized to handle and dispose hazardous wastes. Further, SP(KR1) will ensure that: transformers do not use PCB containing oils; and ozone depleting substances banned/phased out under Montreal Protocol are not used.

Any use of pesticides will be in conformance with Performance Standard provisions and in particular SP(KR1) will ensure that: these are applied by trained personnel wearing appropriate PPE; minimum effective doze is applied; WHO hazard class Ia, Ib and II pesticides are avoided; pesticides under international bans and phase-outs are not used; and good international industry practice as described in IFC’s Environment, Health and Safety Guidelines are adhered to.

PS 4: Community Health, Safety and Security

The nearest resident community to SP(KR1) site is about 500 m from the periphery of the project site. However, no equipment and material is expected to be transported through this community as the Project site is located on an existing highway. SP(KR1) will put in place appropriate measures including: barricading of excavated areas; safety signage; illumination; and other measures to mitigate the risk of accidents for general public during construction.

The project site is being raised by 1.8 m but it is not expected to affect the drainage pattern of the area. Surface runoff from within the Project site will be collected in a pond being developed on SP(KR1) premises. While the Project is not expected to exacerbate community exposure to disease either due to changes in land/hydrologic or other terrestrial regimes or due to influx of large pool of migrant laborers, in view of the fact that SP(KR1) proposes to develop a water pond on its premises, there is a need to ensure that it is maintained in a manner so as to prevent any increase in vector borne diseases like malaria etc.

SP(KR1) will engage security personnel on its rolls as permanent employees but they will not be armed. However, SP(KR1) will need to ensure that: past records of security personnel employed are screened; security personnel have clear objectives and permissible actions laid out; security personnel are trained in avoidance of human rights violations; security incidents are recorded, investigated and corrective action implemented; bona fide complaints against security personnel are investigated and appropriate disciplinary actions are implemented; and there is a grievance mechanism for aggrieved members of community or employees, in the event of a violation of the code for security personnel.

For projects being developed by SPC (or its subsidiary companies), SPC will, as part of its SEMS, implement a community engagement procedure in accordance with IFC’s Performance Standards. Further, SPC will implement procedures, applicable to all its operations (including subsidiary companies and EPC/construction and O&M), for receiving and responding to community interest, information request and grievances on an ongoing basis.

There are 3 villages Baan Donree, Baan Chok and Baan Som that adjoin the SP(KR1) project area. The nearest village Baan Donree is about 500 m from the SP(KR1) project boundary. A notice for public hearing was communicated including details of venue and time by posting notice at the Non Sung District Office. The public hearing was conducted by SP(KR1) and Don Chompoo Sub District Authorities on April 5th 2009 (April 5th, BE 2552) and April 6th 2009 (April 6th, BE 2552), at Wat Kilek, Baan Donree and Wat Baan Som, Baan Som respectively, each attended by more than 200 persons. A vote/consent for the project was obtained by “raising of hands”. In the public hearing, SP(KR1) management explained the project in detail to the participants. During the public hearing, the key concerns and expectations expressed by the participants pertained to management/disposal of: any polluted waste water and hazardous materials; used solar cells and batteries; risk of heat radiation; light reflection; and opportunities for jobs. SP (KR1) management addressed the concerns expressed by members of the local communities. Further, SP(KR1) has agreed with local authorities to: (a) engage all workers during construction stage from the neighboring thirteen (13) villages; and (b) employ 40 persons from these 13 villages during the operation phase as contract workers. The local district authorities have provided necessary skill/job training to the workers engaged by SP(KR1) and its contractors during construction. The 40 workers to be engaged during operation phase will also be provided skill/job training by the district/local authorities. While the village/local government is a community grievance mechanism, SP(KR1) will also put in place a community grievance redress mechanism and communicate the same to the neighboring villages and affected communities. In case of SPC2, SPC3 and SPC4, the Company will undertake engagement with the respective affected communities, including public consultation and disclosure of the social and environmental impact assessment, in accordance with country requirements and the provisions of IFC Performance Standards. In addition, the principal shareholder of SPC has commenced an active corporate social responsibility program focused on supporting education and health.

While SP(KR1) made a detailed presentation on the Project during the public hearings on April 5th 2009 (April 5th, BE 2552) and April 6th 2009 (April 6th, BE 2552), SP(KR1) will also make available the Environmental Safety Report and the Cumulative Impact Assessment Report for Korat 1 and Korat 2, at Non-Sung District Office, Ampur Non-Sung, Nakornrachsrima Province, a third party location for review by members of the local communities. The Company will engage with and locally disclose to the respective affected communities the social and environmental assessment documents for SPC2, SPC3 and SPC4 projects.

For Inquiries and Information about the Project Contact

Thamapon Supachanprapa
Finance Director
Solar Power Company Limited
946/7 Soi Sukhumvit 55
Klongton Nua, Wattana
Bangkok 10110 Thailand
Tel: +662-381-4504
Fax: +662-381-4507
Email: thamapon_s@solarpower.co.th