The sections that follow describe how TSSA expects to manage potential ESHS impacts and risks of the Project. Mitigation measures necessary to ensure compliance with the IFC Policy and Performance Standards on Environmental and Social Sustainability are summarized herewith and in the Environmental and Social Action Plan (ESAP)

PS1: Social and Environmental Assessment and Management Systems.

Management Program: TSSA has an Integrated Quality, Environmental and Health and Safety (QSMS) Policy, which outlines their commitment to operating the port in an economically, socially and environmentally sustainable manner, with principles of quality and safety. On the environmental arena, this Policy is supported by an Environmental Management Program (PMA) which contains a series of procedures to (a) identify applicable legal requirements, (b) assess the environmental impacts and risks and determine management measures, and (c) review and document performance, and correct any shortcomings or breaches. The procedure to assess environmental impacts and risks, contains a comprehensive list of all the port activities that generate environmental impacts, not only including the most significant activities such as dredging and vessel servicing and cargo loading and unloading, but also the administrative/office areas, restaurants, temporary storage, fuel storage, patio and berths operation, and general maintenance. This procedure provides a matrix to classify all identified impacts and depending on their probability of occurrence (high, medium or low) and the significance of potential impact (great, medium, and minor), prioritizes mitigation measures and management supervision. This PMA was developed about three years ago, and would be updated to reflect the new company’s Integrated QSMS structure.

In addition, TSSA also has a standard procedure associated to ESHS requirements of Contractors. This procedure has been applied in the civil and electrical infrastructure work contracts for the Project, where the contractors are required to have all the relevant ESHS permits, a QSMS Policy, and an Integrated ESHS management system with procedures commensurate to the expected impacts and risks. Furthermore, the contract stipulates that this procedure must include training, audit, and periodic reporting.

Organization: The QSMS Coordinator has the responsibility to develop, apply, supervise compliance, assure appropriate training and documentation of all integrated quality, environmental, and health and safety policies and procedures (QSMS – Qualidade, Saúde Ocupacional, Meio Ambiente e Segurança do Trabalho). The QSMS Coordinator reports directly to the Operational Manager who in turn reports to the Executive Director. The QSMS Coordination team is composed of a total of 10 professionals, including an overall coordinator with ESHS expertise, four occupational health and safety experts, an environmental quality specialist, one medical doctor, two quality supervisors, and one environmental analyst.

In addition, and in compliance with local regulation (Resolution CEPRAM nº 1050/97), TSSA has established a Technical Environmental Compliance Committee (CTGA - Comissão Técnica de Garantia Ambiental). The composition of this CTGA is officially communicated to the Environmental Authority (IMA – Instituto de Meio Ambiente). This is a five-member committee, coordinated by the environmental quality specialist, and includes a representative from the legal, maintenance, and civil works departments, as well as the QSMS Coordinator.

Training: The QSMS Coordinator designs and executes an annual training program, covering not only specific SMS and emergency control procedures, but also more general environmental stewardship and awareness. During 2010 TSSA delivered to all of its employees a specific training program on its Solid Waste Management Program (PGRS - Programa de Gerenciamento de Resíduos Sólidos – see PS3), including regulatory requirements, waste classification according to the applicable waste management Brazilian regulation NBR 10.004, and waste management procedures (e.g. segregation, packing, identification, collection and transport, storage and treatment/final disposal).

Monitoring: According to the PMA, there are third party ESHS compliance audits once every two years. The last audit was in 2009 and no major non-compliances were found. In addition, the CTGA meets once a month to review compliance with ESHS policies and procedure, discuss breaches or issues, develop continual improvement programs, and report status of ESHS compliance and performance to the IMA.

Reporting: There are several reports and record keepings. Every month there is a QSMS inspection. Records of ESHS indicators are kept including electricity and water consumption, fuel use, waste generated, total investment in ESHS activities (prevention and correction), occupational accidents (RIA – Relatorio de Incidente Ambiental), incident frequency and severity, and number of sanctions or notices of non-compliance by regulators. In addition TSSA prepares annual compliance report to the - IMA, and an annual ESHS compliance report to the IFC associated to the existing IFC loan. Furthermore the CTGA meets every week, minutes of the meetings are kept, specific actions are recorded and their execution monitored, supervised and reported to TSSA’s management on a monthly basis.

PS2: Labor and Working Conditions.

Human Resource Policy and Management: The Human Resources (HHRR) Manager reports to the Executive Director, and has a team of 6 professionals. Their main role is to assure compliance with local employment and labor laws and regulations and Wilson, Sons Ethics Codes, and assist TSSA in recruiting and retaining professionals, as well as developing competitive compensation packages. The Code of Ethics is the basic instrument guiding non-discriminatory hiring policies and human resources practices. At the time of appraisal TSSA had a total of 521 employees (85% male and 15% female). This male-biased distribution reflects TSSA’s business activity and not discriminatory policies. This ratio at managers and coordinator’s levels is closer to 60-40. Compensation packages per hierarchical and responsibilities are equivalent for women and men. Over 300 workers are expected to be on the Project site during construction. Once in operation TSSA expects to directly employ an additional 185 workers.

TSSA does not have a formal Internal Grievance Mechanism, but an established practice of managing grievances with supervisors or directly with the HHRR manager who has an open-door policy. The HHRR Manager is also planning training on how to deal with workers grievances. As part of the agreed ESAP, TSSA will develop and implement and Internal Grievance Mechanism.

Freedom of association and collective bargain are workers’ rights stated in TSSA’s Code of Ethics. A portion of the Company’s labor is legally required to be sourced from Órgão Gestor de Mão de Obra (“OGMO”), a Government-mandated organization for port workers. OGMO manages the supply of labor, registers workers, promotes training, and collects certain tax/welfare payments from the operators on behalf of the workers. TSSA is required to first source from the OGMO pool if qualified personnel are available, and if not, they can hire and train the personnel on their own. TSSA has three collective agreements with worker’s unions. The total number of employees currently belonging to unions is 133 (about 25% of total workforce), but this proportion is expected to increase to roughly 50% in the next two years. The HHRR Manager is actively engaged with Unions, and holds regular strategic and general coordination meetings every month with the chiefs of the three unions TSSA works with. Unionized workers get the same compensation package as non-unionized workers. Historically, TSSA has had a good working relationship with unions. Around a year ago there was a port strike, but it did not involve TSSA workers.

Wilson, Sons’ Ethics Code, specifically articulates non discriminatory policies with regard to gender, age, handicap, race, political orientation, or any other socio cultural characteristics.

Since TSSA’s start of operations ten years ago, the company has been increasingly and consistently hiring additional workers. No retrenchment is expected, and the company does not have a retrenchment procedure. Regardless, any retrenchment would be done in accordance with local law and include training of exiting employees in different tasks that would increase their opportunity to securing employment in other companies/sectors. Brazilian labor laws are very strict with regard to retrenchment requiring employers to actively inform and engage with workers and use best effort to provide alternative work opportunities, consistent with IFC’s Performance Standard 2.

Occupational Health and Safety: In terms of Occupational Health and Safety, TSSA has a Safety Engineer and four Safety Technicians managing OHS aspects of the operations. The Company has an effective employee health and safety program which is functioning in compliance with Brazilian requirements, which are consistent with internationally recognized norms and practices, including: (a) medical control and occupational health programs (PCMSO), (b) workplace risk prevention programs (PPRA), and (c) NR 29: personnel training about NR 29 requirements, which deal with mandatory protection against accidents and disease at work, and first aid to injured personnel. The PPRA identifies the intrinsic risks of the different activities, and outlines the required training, certifications and restrictions, PPE, work order procedures, accident prevention, incident with and without loss time documentation, and hazard correction. Additionally they have constant training, and an Occupational Health and Safety Day, where organizational wide training and entertainment activities are programmed to increase awareness on occupational risks.

TSSA has steadily reduced its frequency of Loss Time Incidents (LTI) and its 2010 results of 15.23 / million man-hours is about half of 2006 figures. There were no significant incidents.

In addition to mandatory occupation health and safety actions, TSSA also: (a) performs an Internal Week Program Prevention for Accidents in Port Activities – SIPATP – which takes place every year (latest in June 2010) and provides information about the risks of port activities among all Port collaborators, with the aim of raising awareness and prevent accidents; (b) implemented a signaling project for the entire terminal; (c) developed a training program for the handling of dangerous loads and fire protection and control, including a total of 12 practical and theoretical session with the emergency brigade; (d) executed several terrestrial emergency drills, evacuation of warehouse and administration building and the rescue of persons on board of ships; (e) performs Daily Safety Dialogs in all areas of the terminal (e.g. warehouse, maintenance and operations); (f) prohibits smoking in all areas of the terminal, with the exception of smoking pre-assigned spaces; (g) painted clear pedestrian crossing pathways for container patios, maintenance, and warehouses; and (h) implemented an Emergency extension.

Furthermore, as part of the Project, the Californian-based company Navis has been hired to develop a Traffic Efficiency Management Plan, which will include risk assessment and accident prevention criteria as an important element of the proposed new traffic flow design.

PS3: Pollution Prevention and Abatement.

TSSA has correctly identified the pollution generated and the resources used by all the different activities associated with its business. Even though it has not established specific reduction targets yet, TSSA does keep monthly records of all the waste and emission generated, as well as water, electricity and fuel use. For instance in 2010 the estimated GHG emission footprint of fuel use in operation was approximately 952,000 Tons of CO₂-eq.

TSSA does not perform regular dredging activities. CODEBA is responsible for port dredging and holds an approving license from IMA for such activity. The Project will require dredging of 26,000 m³ of sediment which is expected to be performed by TSSA in July 2011 under CODEBA’s existing license. IMA’s license provides authorization to CODEBA to dredge, and determines a disposal site where the
dredge material must be disposed, which is next to the Terminal, in an area destined for the future expansion of the Port of Salvador. The license determines a five-stage-sampling campaign before, during and after (six month, a year and eighteen months), that includes water quality at different depths as well as phytoplankton, zooplankton, and fish sampling. Sediment quality of the dredge material is also required for heavy metals, namely lead, copper, hexavalent chromium, zinc, cadmium and mercury. In addition, the license requires CODEBA to provide periodic reports of the dredging process and monitoring data, as well as a final report. Furthermore, CODEBA is also required to develop a Community Communication and Environmental Education Program associated to the dredging, and present a report 120 day after the dredging activities are completed. TSSA will be required to present, in form and substance acceptable to the IFC, the Dredging Management Plan associated with this Project.

The terminal does not provide ship support service such bilge waste removal or fuel bunkering. They, however have procedures that are required to the suppliers of these terminal services, and constantly supervise them to assure that all these services are provided according to good EHS practices and agreed written procedures. TSSA has procedures associated with solid and hazardous waste management, black smoke from equipment, and oil and water separation. TSSA wastewaters are treated in-situ with septic systems, and it is not yet connected to the City’s sewer system.

Oil and Water Separating System is sporadically used to treat either surface run-off or ship water that may be contaminated with oil. It essentially removes the oil by decantation. Oil is taken by an authorized service company and the water is treated as the rest of the domestic waste water of TSSA – septic system and then ground. Periodically, TSSA monitors the effluent of these separation systems to assure discharges are within specification to discharge in the septic tank. Additionally every year, traps and tanks are cleaned and structurally inspected to assure they are working properly and that there are no cracks that could compromise its integrity and eventual oil leaks into the ground.

Air Emissions from TSSA activities are monitored to limit exhaust emission from equipment (e.g. cars and diesel vehicles such as trucks, forklifts and large-sized cranes). A “black smoke” test consisting of monitoring opacity of exhaust takes place every six months, and the results are reported to the environmental authority in compliance with NBR 13037 and Resolution CONAMA 416/2009. As a result of this monitoring TSSA reports all mobile potentially polluting equipment in good working conditions, and when deviations are found vehicles are upgraded or replaced.

Waste: In Oct 2010, TSSA finalized a very detailed Solid Waste Management Program (PGRS – Programa de Gerenciamento de Resíduos Sólidos), to assure that all the solid waste generated at the terminal or received from ships is appropriately identified, characterized (physic-chemical), quantified, desegregated, reused, recycled and safely disposed, with clear chain of custody/tracking mechanisms, and developed waste generation reduction targets. The PGRS involves monthly inspections of the solid residues centers, to assure compliance and if breaches are detected, they can be immediately corrected with the areas involved. Waste management service (e.g. recycle, reuse, transport and/or dispose) suppliers are all registered at the State Sanitary Survellance (ANVISA – Agência Nacional de Vigilância Sanitária/BA) and thus subjected to regular audits. This program has been prepared in accordance with the Resolution - 56 of ANVISA, of August 06 2008, which provides the Technical Regulation of Practice on Sanitary Solid Waste Management in the areas of ports, airports, road / rail borders and customs.

Hazardous Materials: TSSA handles some hazardous and dangerous cargo, such as flammable gases, flammable liquids, and/or spontaneously combustible substances. These containers are stored by material class in a specially designed area within the container storage yard, which is surrounded by special containment, collection and drainage infrastructure. These facilities are equipped with spill control and emergency response equipment.

Emergency Preparedness and Response: TSSA has a spill and emergency response plan, which is coordinated with CODEBA and the different service suppliers (e.g. Petrobras fueling), and is managed in collaboration and support with and expert service company called Hidroclean. Additionally, the Company performs several drills a year, simulating different types of emergencies (e.g. fires, spills in land, spills at sea, etc) and often involving third parties (e.g. fire department, coast guard, etc). The main procedure guiding TSSA’s emergency response is the Programa Emergencias Internas (PEI), which identifies all the potential emergencies, and based on a frequency/severity risk matrix, outlines procedures to reduced/minimize/contain the effects of the accident, identifies emergency and contingency responses, people to be involved and informed, and equipment to be used. The PEI assigns a 24 hr emergency brigade composed of 13 people for three shifts. The main objective of the PEI is to limit the consequences of an accident, minimizing environmental consequences and mitigate potential effects on workers'' health. PEI trainings are conducted annually for all staff involved in the emergency response organization (ORE – Organização de Resposta de Emergências). In 2010, the ORE coordinators were trained on “On Scene Commander IMO level 2”, and all members of the Emergency Brigades were trained in all PEI’s procedures and practices. In addition TSSA performs several emergency drills every year, to verify the appropriate application of the PEI, and assure that the emergency response procedures are timely and affective. In 2010, TSSA conducted three emergency drill exercises to assure operators’ are knowledgeable and proficient to execute the PEI, and can timely and appropriately deploy and operate the emergency-adequate equipment.

PS4: Community Health, Safety and Security Community Health.

Safety and Security: TSSA applies the International Ships and Port Facilities Security (ISPS) Code to avoid and control any illicit activity or terrorist act involving international ships. Such acts include piracy, armed attacks, terrorism, sabotage (alteration or stealing of cargo), contraband and/or people’s trafficking. TSSA holds a Level I ISPS Code certification, which requires an access control system, electronic personnel identifications and guard patrols, internal cameras and TV 24/7 surveillance (27 cameras and 2 digital recorders), and specific security rules between terminal port and ships.

Emergency Preparedness and Response: Any emergency response that could affect third parties is coordinated as part of the CODEBA’s emergency response. TSSA is part of CODEBA’s Port Accident Safety Commission (CPTAP – Comissão de Prevenção de Acidentes em e Trabalho Portuário) as well as of the Emergency Response Plan and the Mutual Assistance Program (PCE-PAM – Plano de Controle de Emergências – Programa de Atendimento Mútuo). It must be noted that in the latter, TSSA has a leadership role, and CODEBA always uses TSSA emergency control and response equipment and expertise.

Security Personnel Requirements: TSSA outsources terminal security to MAP, a specialized contractor. This company provides security according to the federal policy of Ports Security Supervision, and it involves a total of 32 un-armed guards working in three shifts. The TSSA surrounding community is not hostile, and there have been no reported events in which security forces intervention has been required. At any case, in situations of protest or civil unrest, MAP is instructed to dissuade people, and elevate any major issues to the Port Guard and the Federal Police.