While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment in on-going exploration will have impacts that must be managed in a manner consistent with the following IFC Performance Standards on Social and Environmental Sustainability (“IFC Performance Standards”): PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement PS4: Community Health, Safety and Security The proposed expansion project will be developed within existing sites and no additional land will be required as a result of the development. This is a brownfield project in a populated area and there are also no endangered species or natural protected areas within or near the project sites. Indigenous Peoples were not identified in the project area and Cultural Heritage was not identified as an issue in the project area.

This is a Category B project according to IFC’s Environmental and Social Review procedures 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 proposed project will be implemented inside the existing boundary of Atul sites and the incremental environmental and social impacts are limited. Atul has an established EHS management system and E&S risks for the current operations are generally under good control based on IFC’s supervision visit for the initial investment and review of Annual Monitoring Report, submitted by Atul. There have been no serious environmental or social incidents in the past few years. This project has a major potential environmental opportunity by reducing raw water consumption significantly and at the same time increasing wastewater discharge quality. Mitigation measures for the potential environmental and social impacts have been identified and are incorporated into the attached Environmental and Social Action Plan (ESAP).

The key environmental and social issues for this project include the following:

- Process water consumption and water saving
- Wastewater treatment and discharge
- Air emissions and abatement
- Solid and hazardous waste management
- Occupational health and safety
- Operational hazards and emergency response
- Road transportation and community safety
- Community engagement and development

Atul has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements, the host country laws and regulations and the IFC Environment and Social Performance Standards and the World Bank Group (WBG) environmental, health and safety guidelines. The information about how these potential impacts will be addressed by Atul is summarized in the paragraphs that follow. Further information is provided in the attached ESAP, which has been agreed upon by IFC and Atul and will address the compliance gaps with IFC’s requirements.

1. Social and Environmental Assessment and Management Systems
Land and natural environment: Atul Ltd. owns two manufacturing sites in Gujarat State, India: the 1,250-acre main site and the 33-acre Ankleshwar site. There are five manufacturing divisions at the main site, which include agrochemicals, bulk chemicals & intermediates, colors, pharmaceuticals & intermediates, and polymers. The Aromatics division is located at the Ankleshwar site.

Atul’s main site is located by the Par River, which is approximately 8-km from the Arabian Sea and 180 km north of Mumbai. The majority of the main site is undeveloped, and within these areas Atul plants trees as a natural protection area, cooperating with World Wildlife Fund (WWF) – India. There is no other industry in the Atul area, the major land usage in the Par River basin being mango orchard, some agricultural cultivation and a fishing village at the coast. Atul’s main site is surrounded by local communities to the South and the West comprising approximately 5,000 rural households. There are approximately 1,100 houses in Atul’s residential colony inside the Atul main site. According to WWF-India, there are no endangered species in or near the Atul’s main site.

Atul’s Ankleshwar site is located approximately 280 km north of Mumbai and inside a chemical industry park – Ankaleshwar industrial estate which is one of the largest in India and well organized. Common infrastructure services are provided by the Gujarat Industrial Development Corporation (GIDC) whilst emergency operations in the area are coordinated through a Disaster Prevention and Management Center (DPMC).

Environmental and Social Assessment: Atul follows local regulatory requirements for conducting environmental and social impacts for various expansion/retrofitting projects. In accordance with the ESAP, Atul will contract external experts to conduct a cumulative impact assessment to evaluate and mitigate the environmental and social impacts for the proposed expansion projects at both main site and Ankleshwar site.

Environmental, health, and safety (EHS) management and organization: There is a corporate Safety, Health, and Environment (SHE) Department in Atul, which reports directly to the vice president of infrastructure. There are EHS coordinators in each of the manufacturing divisions and key operational processes. The SHE department also manages the onsite water treatment plant, the wastewater treatment plant, the waste incinerator, and the landfill site. Five manufacturing divisions have obtained ISO-14001 certification With the remaining color division working towards certification. Atul has established EHS auditing programs for all its operations, which include an internal EHS audit once per year and an operational safety audit once every two years by external contracted experts. Atul also contracts external experts for EHS audit, when necessary, to improve its EHS performance.

Training, monitoring, and reporting: Atul has an established program to provide training for all new employees in the field of environmental and social management related to its operations. As indicated in the ESAP, the SHE Department will also implement annual refresher training to ensure all employees receive training specific to their position. Atul conducts routine environmental, health and safety monitoring for its operations, and keeps records through its internal reporting structure. Atul also reports its monitoring results to the local authority monthly, and discloses some general EHS information on bulletin boards outside its main gate.

2. Labor and Working Conditions
Human Resources Policy and Management: Atul is one of India’s leading private chemical companies, currently having 2618 employees and an additional 1500 contractors working on three shifts. Each employee has been offered an open-ended position while contractors’ contracts are renewed annually. A Offer Letter is sent to a new worker at the time of employment, the letter spelling out terms of employment, fringe benefits, paid holidays, and terms of termination, etc. Atul has developed a comprehensive set of HR policies and a code of conduct governing employment, training, recognition and reward, use of company assets, grievance handing, equal employment opportunity, and has disclosed them on Atul’s intranet. These documents set out Atul’s commitments to fair, transparent and non-discriminatory HR practices in accordance with Indian law and IFC requirements.

Worker’s Organization: Atual respects the right of freedom of association and collective bargaining and there are six unions at Atul representing all employees and workers. Three joint committees have been established with equal representation from unions and the senior management to coordinate employee and contractors key concerns. A written collective demand regarding salary levels, safety, company accommodation, and catering is presented to the senior management team for consideration every four years. General employee and workers’ salaries are significantly above the regulated minimum wage and are within the high range for industrial type employment in India.

Non-Discrimination and Equal Opportunity: Atul’s code of conduct on equal employment opportunities sets out Atul’s commitments to fair, transparent and non-discriminatory HR practices in accordance with Indian law and IFC requirements. Atul has strived to promote employment for women and has significantly increased the percentage of female employees.

Retrenchment: Atul had retrenched about 300 employees in previous years to reduce operating cost. A Voluntary Retirement Scheme for Staff and Workers 2007-2008 (VRS) was developed in compliance with Indian laws and IFC’s requirements to manage a business need to reduce the workforce. The VRS is essentially a voluntary procedure for early retirement which includes applicability, incentives, application and criteria for eligibility. Criteria used in the scheme are work related only without discrimination against any group/individual and the VRS is accessible to any employees.

Protecting the Work Force: No forced labor or child labor is permitted by Atul at any of its operations. Atul also conducts internal labor audits on its key suppliers annually to ensure their labor practices stay in compliance with Indian law and Atul’s requirements.

Occupational health and safety (OHS): Atul has an established OHS management system and the SHE department conducts routine inspections across each division, with findings and corrective actions presented in a monthly management review meeting. There is an onsite clinic with three doctors for first aid. Personal protection equipment (PPE) is widely used but IFC is requiring Atul to review the PPE inventory, check PPE effectiveness, and improve PPE procedures for some critical processes, such as phosgene and chlorine manufacturing. Atul will also strengthen its OHS management for contractors in trainings and PPE enforcement.

3. Pollution Prevention and Abatement
Raw material and resource consumption: The main raw materials for the Atul plants include sulfur, sea salt, toluene, phenol, bisphenol, epichlorohydrin, methanol and anthraquinone. Most of the raw materials are purchased from local refineries with some being imported. The main site consumes approximately 15,000 m3/d water from the Par River and 750 ton/d coal for its power plant and steam generation. The Ankleshwar site consumes approximately 1,200 m3/d water, 15 million m3/y natural gas, and 2,259 MWhr/y electricity. To reduce water consumption, Atul has contracted external experts to undertake conduct water audits and once the audit is finished, Atul will conduct a water pinch analysis (WPA) and prepare a detailed water saving and pollution reduction plan..

Environmental Compliance: The ambient air quality and noise levels meet both local regulatory requirements and World Bank Group (WBG) EHS guideline limits. The monitored parameters for various emissions meet both local regulatory requirements and the WBG EHS guideline limits, with the exception of particulate matter (PM) and formaldehyde for the onsite waste incinerator, which exceed IFC limits by 40 and 2 mg/m3, respectively. Atul plans to increase the scrubber efficiency to reduce PM and formaldehyde emissions from the incinerator to ensure compliant with IFC requirements.

Atul discharges approximately 9,000 m3/d treated wastewater into the Par River. The monitored parameters meet both local regulatory requirements and WBG EHS guideline limits with the exception of BOD, COD, Total nitrogen, and TSS, which exceed IFC limits by 25, 50, 8, and 25 mg/l, respectively. IFC is requiring Atul to reduce the pollutant load from the process sources and increase treatment efficiency. To monitor the impact of effluent on the coastal fishing communities, Atul monitors the bioassay toxicity to fish, and the results meet both local regulatory requirements and WBG EHS guideline limits. To further ensure minimum impacts on local fishing grounds, Atul will monitor additional toxicity parameters such as bacteria, daphnia, or algae. Atul will also conduct an effluent characteristics study as part of the water saving and pollution reduction plan to identify means to further reduce contaminant loading in the effluent.

Solid and hazardous wastes: The major solid wastes generated onsite are non-hazardous packing waste and household waste, which are picked up and disposed of by municipal government contractors.

Atul generates mercury sludge from the mercury cells of the chlor-alkali manufacturing process. The mercury sludge is disposed at an onsite landfill and other inorganic hazardous wastes generated onsite and the sludge from the wastewater treatment plant are also disposed of in the landfill. The landfill has a triple concrete/HDPE composite lining with leachate collection system with the leachate transferred to the wastewater treatment plant. There are four groundwater monitoring wells at each corner of the landfill, which show no detection of mercury and other priority pollutant metals. Atul plans to phase out all the mercury cells by 2012.

Atul also generates approximately two tons of mixed organic waste per day. Those generated at the Ankleshwar site are disposed of at a licensed commercial incinerator, where the routine monitoring results show no detection of dioxins/furans. The organic wastes from the Atul site are incinerated at an onsite incinerator, and ashes are disposed of at the onsite landfill. Though the wastes from the Atul site do not contain organic chlorine, Atul still monitors for dioxins/furans from the incineration emissions, although none have been detected.

Hazardous materials and operational hazards: There is a phosgene plant and a chlor-alkali plant inside the Atul site as well as various other processes with operational hazards. Atul has hazard and operability studies (HAZOP) available for all the processes, which are jointly prepared by both external consultants and internal process safety specialists. Atul has a policy to update the HAZOP whenever a process is modified. The integrity of hazardous material tanks is checked periodically, and the groundwater and soil near the storage tanks are also monitored regularly.

Atul manufactures approximately 400 ton/y of phosgene, which is all used as an intermediate raw material and consumed internally at other plants within the Atul site. Phosgene is only stored onsite for a maximum of one day’s consumption. All the storage tanks are checked every two years for integrity. There are adequate safety procedures, protection equipment and PPE at the phosgene plant and there has been no recordable accident in the phosgene plant within the past 30 years. The phosgene plant has automatic monitoring/alarm system with extra ventilation and ammonia/water sprinklers, which can neutralize the toxicity of phosgene. The phosgene transferring line is jacketed with a nitrogen layer and computerized leak monitoring. Atul contracts external experts to conduct a process safety audit for the phosgene unit every two years with the last audit in Feburary 2008, and next scheduled audit in April 2010. Atul also contracts different external experts to conduct multiple quantitative risk assessments for the phosgene unit of which the latest was in March 2009. Atul is committed to follow recommendations madein the safety audits and quantitative risk assessments.

Chlorine is also manufactured as an intermediate raw material at the chlor-alkali plant, this is consumed internally at other plants within the Atul site. All the storage vessels are operated under negative pressure and tested for leaks every month and Atul has installed an online real-time chlorine monitoring network to monitor site chlorine concentrations and simulate ambient chlorine concentrations.

Due to the proximity to the sea shore and prevailing humid conditions, equipment and pipeline corrosion could have potential impacts on operational safety. Anti-corrosion coatings or paint are widely used for new production units and IFC has further required Atul to apply an anti-corrosion coating or paint to the older production units, starting with the phosgene and chlorine units.

Atul’s agrochemical division does not manufacture any banned chemicals, nor any pesticides listed in the WHO 1A and 1B categories.


Greenhouse Gases (GHG): Atul generates approximately 623,000 ton carbon dioxide (CO2) equivalent GHG per year, mainly from coal and natural gas consumption plus electricity consumption. Atul contracts external experts to conduct annual energy audits, and is reducing energy consumption wherever feasible. In the past few years, Atul has also planted approximately 160 ha of trees at the site as a carbon sink.

4. Community Health, Safety, and Security
Community health, safety and security: Atul contracts the India National Institute of Occupational Health (NIOH) to monitor any health impacts of its operations on employees and nearby residents. The results show no health impacts to the employees or nearby residents during normal operations. However, during extreme emergencies such as chemical leaks, there could be potentially significant impacts to the communities and therefore Atul has an on-going program to involve the communities in its emergency preparedness and response procedures.
Coal is transported to the site by rail whilstall other raw materials and products are transported by road using the busy highway adjacent to the Atul site. As indicated in the ESAP, Atul will require all its drivers to complete a recognized defensive driver training course and all the drivers should have an annual safe driver training refresher course. For Atul’s transportation contractors, the company will contract a transportation safety expert to audit its existing vehicle providers and only work with contractors that can demonstrate that their drivers have completed a recognized defensive driver training course.
Emergency preparedness and response: Atul has a well established on-site emergency management plan for fires or chemical leaks including a company fire brigade with fire engines and ambulances. Each production unit holds monthly emergency response (ER) drills. There are two onsite and one offsite plant-wide fire fighting / ER drills per year, in which local government agencies and the fire department are invited to participate. Atul also provides ER training for residents of its residential colony and involves the local hospitals in all plant-wide ER drills including release of all material safety data sheets (MSDS) to the participating hospitals. Atul will coordinate with local responsible agencies to expand its existing chlorine transportation ER program to all hazardous material transportation, and conduct off-site ER drills for hazardous material transportation with the responsible government agency, local hospitals, and community representatives.

Security personnel: Atul has its own security guards and also hires security guards from an external agency for plant security. The main tasks for the guards are to conduct routine ID checks at the gates and monitor plant security. For serious security issues, Atul reports directly to the local police station adjacent to its site.

Atul’s community engagement started some 50 years ago when the Atul plant was being built. The company has provided safe and clean drinking water though the weir constructed by them under two government-aided schemes, to 14 villages consisting of some 50,000 villagers whose alternative sources of drinking water are brackish due to the proximity of the coast. Company is also providing treated drinking water to the nearest village from its own treatment plant. Atul’s community development activities were formalized in 1978 when the company established a charitable fund known as the Atul Rural Development Fund (ARDF) to promote sustainable and equitable development of local communities in the Valsad District. The ARDF is managed by a team of community development specialists and has carried out considerable community engagement and development activities, mainly on improvement of healthcare, literacy, water management, income generation and public infrastructure through linkage programs and private and public partnerships. ARDF has developed several programs in line with local governmental initiatives to provide medical services to remote communities that are located in mountainous areas to the East. One of the extended programs covers annual eye exams with provision of free spectacles or free cataract operations at Valsad hospitals. On average, 200 people receive free cataract operations every year. Atul has developed a direct community engagement mechanism in which designated corporate social responsibility staff visit local communities twice a week to understand community needs or concerns and provide them with progress and feedback from Atul on company led initiatives. Local communities have also been engaged in the preparation of incremental Environmental Impact Assessments, Health Surveys, and community program development.

Atul will disclose the Gujarati version of this document and attached ESAP at East site security gate of Atul Limited, Atul, Distt. Valsad, Guajarat and Security gate of Atul Limited (Aromatic Division), GIDC, Ankleshwar, Distt. Bharuch, Gujarat. Please contact the following for inquiries or concerns about the environmental and social impacts of this project. S K Kharkwal General manager – Corporate SHE Atul Limited, Atul – 393020 Distt. Valsad, Gujarat Phone: 02632-230269 S K De General Manager – Projects and Technical Atul Limited (Aromatic Division) 297, GIDC, Ankleshwar-396002 Distt. Bharuch, Gujarat Phone: 02646- 229126