Key environmental and social issues associated with MUL’s business in providing services to the water/wastewater utilities sector are summarized below. Environmental, social and health and safety issues that require ameliorative measures are included in the Environmental and Social Action Plan (ESAP) and will be addressed by the Company as agreed in IFC’s investment documents and any associated agreements.
Social and Environmental Assessment and Management Systems:
MHL has a certified corporate management system (ISO 9000/14000/18000) to provide comprehensive oversight of its operations in the UAE. MUL is currently in the process of implementing Metito’s corporate management system; however, MUL’s two assets in China (NQP and HWC), are already ISO 14001 certified. The management program includes operational policies and procedures that are implemented at each of its facilities by a supervisor who reports to an EH&S manager. Metito’s environmental management team has overall responsibility for ensuring consistency and compliance with local regulatory requirements. Policies and procedures comply with applicable local regulatory requirements for operation of these facilities including those for human resources and labor, occupational health and safety, and environmental compliance. To ensure that policies and procedures are consistent throughout the organization, MUL will be integrated into Metito''s overarching Environmental and Social Management System (ESMS) to provide consistent oversight of environmental, social and health and safety for all its activities from construction management to operation of facilities, as well as screening of new opportunities in expanding its business. As part of the agreed ESAP, MUL will hire or designate a qualified individual to ensure complete and consistent oversight of these matters at the company and its subsidiaries, and report to Metito''s management on a regular basis.
Metito’s environmental management team has overall responsibility for ensuring consistency and compliance with local regulatory requirements and IFC’s Performance Standards and EHS Guidelines. Potential impacts of proposed projects are identified during the planning stage, and are used to prepare specific environmental control plans containing identified mitigation measures consistent with local regulatory requirements. IFC has reviewed the Environmental Impact Assessment (EIA) study for a recent project in the Gulf. Going forward, MUL will ensure that community consultations are included in all assessments of new developments in all of the jurisdictions in which it operates, in accordance with the requirements of IFC’s PS1.
In China, provincial governments select sites for locating water and wastewater treatment plants, and obtain documented approval from the impacted communities for location of the facility. Consistent with PRC regulatory requirements, environmental and social impact assessments are prepared by the government for all concession projects. The government ensures that potential impacts of the project are identified and addressed during the project planning stage, and are used to prepare specific environmental control plans containing identified mitigation measures. The concessions may be publicly bid or negotiated with the concessionaire, and terms of the concession agreements vary by project. MUL''s contractual obligation in the concessions through BCH is to comply with the requirements set forth in the concession documents. MUL’s environmental management team has overall responsibility for obtaining appropriate permits and approvals from various government agencies, and ensuring all operations are consistent with the terms of the concession agreement. Moving forward, MUL will ensure that compliance with IFC requirements is included throughout the project life cycle, from project selection through construction and operations. As agreed in the ESAP, MUL will prioritize, review and implement any ameliorative actions at sites where construction is already underway.
Human resources are managed effectively at MHL level, which oversees all Metito operations globally. Staff in China and Egypt is hired directly by the subsidiary companies, whose HR policies are consistent with Metito''s Group HR policy (employee handbook and specific HR policies tailored for each region) and will be implementing these at each subsidiary level. Training of staff is done on regular basis in compliance with local workplace regulations. Metito''s EH&S manager is responsible to ensure that employees are adequately trained and equipped to perform their work safely. Manpower providers are strictly selected based on having adequately trained labor force and in full compliance with Metito''s EH&S standards. Internal audits are conducted periodically and overseen by senior management. Routine monitoring and supervision activities are undertaken by operational staff according to established procedures, including periodic reporting on key environmental and safety control factors, such as effluent quality and employee-related incidents. The company’s EH&S management team periodically inspects facilities to verify performance of compliance with applicable requirements.
As a continued requirement, MUL and its subsidiary companies will adopt IFC’s environmental and social Performance Standards as part of the applicable legal and other requirements in its management system. In addition, the company will incorporate formal procedures for environmental and social screening of business opportunities and new projects into its marketing strategy, commercial planning, and project bidding processes. The management system will be extended to incorporate community engagement, including clear procedures on disclosure and consultation with potentially affected communities.
Labor and Working Conditions:
MUL employs 189 people directly, including 164 in China, 9 in the GCC, and 16 in Egypt. The number of sub-contracted employees can vary significantly depending on construction activities from a dozen to hundreds at any given time. MUL has a Human Resources policy that complies with local regulatory requirements, and is applied consistently to all direct employees. The policy is consistent with PS2, and includes an explicit commitment to meet all the core labor standards of the International Labor Organization (ILO), including non-discrimination, freedom of association, and protection of the workforce. As required by law, the policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is provided in the form of an employee handbook at the time of induction. As is common practice in China, although not explicitly stated, employment relationships recognize the principals of non-discrimination and equal opportunity. There is a trade union in HWC and, under PRC law, employees have the right to freedom of association and have the opportunity to collectively represent to the management any issues or grievances that they may have.
The minimum employment age at MUL is 18 years. MUL ensures that child labor or forced labor is not employed directly or by subcontractors through verification of relevant documents. Working hours on site vary by the nature of activity and phase of project, with most labor intensive phases being at the construction phase during which there are continuous operations. Construction activity is largely subcontracted, for which unskilled labor is often procured from nearby towns and villages. Managing the influx of labor into local communities and providing worker accommodation is the responsibility of the subcontractor. Regulatory requirements in PRC and other countries in which MUL operates do not require the Company to provide direct oversight of wages, working or living conditions of subcontracted labor. Wages are paid monthly and calculated on the basis of the hours worked, inclusive of overtime. Terms of employment for sub-contractors are as per host country laws and the Company relies on regulatory agencies for ensuring that sub contractors comply with applicable labor laws. Moving forward, MUL will review its human resources policy to ensure consistency with IFC Performance Standard 2 on labor, working and living conditions for any labor employed by MUL, either directly or through sub-contractors.
Occupational health and safety of employees at MUL is managed by the Human Resources and Administration department. There is a plan for accident prevention and worker safety consistent with local regulatory requirements. All employees in the company have to undergo a training program at induction and subsequently regarding worker health and safety relevant to their job activity. Facilities are audited yearly by regulatory agencies to monitor compliance with labor regulations. The Company has been in compliance with regulatory requirements and has recorded no significant lost time incidents or fatalities in its operational history. Although MUL has been in compliance with applicable regulatory requirements in China, there is variance between the Company’s regulatory obligations when compared to IFC Performance Standard 2 and Guidelines on Occupational Health and Safety (OHS). As part of the agreed ESAP, MUL will review and develop an implementation plan to achieve internationally acceptable standards for OHS for its employees and sub-contractors in China.
Pollution Prevention and Abatement
MUL primarily uses conventional secondary treatment technology for treatment of municipal wastewater. Treatment plant designs are typically developed by the client for EPC contracts, or specified in most concession agreements. The technology used is fairly basic (screening, primary sedimentation, secondary biological treatment with nutrient removal and secondary sedimentation, optional UV disinfection) and robust to provide reasonable assurance of meeting discharge standards when operated with adequate training. Effluent discharged from wastewater treatment facilities operated by MUL under the concession agreements either comply with, or for those under construction, are designed to comply with local regulatory requirements. Discharge standards are established by the host country government and vary by project location and receiving water quality standards, and are consistent with IFC guidelines for the discharge of treated municipal wastewater to surface water. The IFC guideline defaults to local regulatory standards, unless an environmental impact assessment shows otherwise. In some jurisdictions, limited effectiveness of industrial source control programs could result in industrial pollutants being discharged to wastewater treatment plants (operated by MUL) that are not equipped to treat such pollutants, resulting in a potential pass through to receiving bodies of water and contamination of treatment plant residuals. Concession agreements do not require monitoring of industrial chemicals in the influent or effluent. Moving forward, MUL will review industrial sources of wastewater at each of its operations and, if necessary, implement a monitoring program for contaminants relevant to the sources of discharge.
As is typical of wastewater treatment facilities, air emissions from MUL facilities may include nuisance odors, localized emission of VOCs and other aerosols. The Nanchang facility has been subject of some public complaints related to odors. The treatment facility in Hefei is also required to install odor control equipment. High noise levels are also typical in some operational areas of wastewater treatment facilities. Subsequent to the commissioning of the wastewater treatment plants at both Nanchang and Hefei, residential areas have been developed in close proximity to the treatment plants, and complaints have been reported from excessive noise at the Hefei facility. The Hefei government is currently working with the HWC management team to design and implement a technical solution to the noise concerns. As agreed in the ESAP, MUL will provide biannual updates to IFC on progress in addressing these concerns. In addition, MUL will work with local authorities to communicate details of the noise abatement measures to nearby communities.
Significant quantities of solid waste are generated as part of secondary wastewater treatment operations, mainly from primary and secondary clarifiers. Current annual production of sludge from the projects under consideration for financing by IFC is estimated to be in excess of 17,700 tons of dry sludge generated by HWC and NQP and 23,000 tons of wet sludge generated by Egypt projects. As per the terms of the concession agreements, MUL is required to deliver sludge at acceptable water content with no additional requirements on chemical or microbiological characteristics. All wastewater treatment plants operated by MUL are equipped with sludge dewatering facilities. Under the terms of some of its concessions agreements, MUL is responsible for the disposal of sludge at licensed sanitary landfills, on behalf of the municipal government. Under other concession agreements, including those for NQP and HWC, the municipal governments take responsibility for the dewatered sludge disposal. Although outside of its direct control, MUL’s practice is to work with all of its municipal clients to ensure that sludge is disposed of safely and in accordance with good industry practice. Sludge disposal practices will be reported on in the Annual Social and Environmental Monitoring Report (AMR) that MUL submits to IFC.
At facilities operated by MUL in MENA, discharged effluent complies with local regulatory requirements and is consistent with requirements of the IFC Performance Standards. Treated potable water complies with WHO standards for drinking water. Effluents from potable water treatment operations in the UAE are primarily reject brine from desalination processes which is discharged through reinjection wells under stringent regulatory oversight. A majority of wastewater treatment operations in the UAE and Egypt are for secondary treatment of domestic sewage using activated sludge processes. Newer facilities are being designed to use membrane bioreactors, which consistently produce better quality effluent. Treated effluent is reused for irrigation of parks and gardens, and for district cooling needs in the UAE. Management and disposal of sludge and other residue from water and wastewater operations is performed by licensed contractors and largely complies with local country regulations. Air emissions from Metito facilities primarily include odors which are typical to wastewater treatment operations. Odor control is achieved by optimizing operational conditions, and where necessary by covering aeration tanks and using odor control scrubbers.
Principal energy usage includes electricity procured from the grid. Total annual energy consumption from the state grid is 34,134,000 kWh for NQP and HWC. . The operations in Egypt utilize biogas for all energy needs. Although, GHG emissions from the projects being currently considered for IFC financing will not exceed 100,000 tons of carbon dioxide equivalents per year, MUL will continue to explore opportunities for energy efficiency in its operations to reduce operational cost and its carbon footprint. Further, consistent with IFC PS3 requirements on GHG emissions, MUL will monitor and quantify GHG emissions as well as those avoided, in accordance with internationally recognized methodologies. Should the level of GHG’s exceed 100,000 tons of carbon dioxide equivalents per year, MUL is required to evaluate technically and financially feasible and cost-effective options to reduce or offset project-related GHG emissions during the design and operation of the project.
Community Health, Safety and Security
Engineering controls and some staff training are provided to mitigate risks and issues associated with MUL''s operation of its concessions, which includes transport, storage and use of hazardous chemicals. At MUL''s facilities, the use and storage of hazardous chemicals are subject to stringent safety standards as required under host country law and consistent with international good practice in accordance with ISO 14001certification. The company ensures that chemical stores provide for adequate containment and neutralizing systems to minimize the impact of release. MUL is required to have emergency prevention and control plans which specifies responsibilities, ensures appropriate response equipment and materials are in place, and detail a set of procedures to be followed to minimize the harm of any potential accident. Going forward, MUL will review its scope of emergency response and update procedures as needed, including drills to test the effectiveness. MUL will also add a community involvement component that addresses appropriate behavior and safety measures to be implemented in the event of a hazardous chemical release beyond the plant boundaries.
Land Acquisition and Involuntary Resettlement
IFC’s assessment considered the potential displacement and compensation of occupants and/or users of land acquired for the construction and operation of MUL''s BOT concessions under consideration for IFC financing. For the PRC concessions, MUL was assigned sites by respective local governments for the construction and operation of wastewater treatment plants. Site selection and subsequent acquisition of land by local governments was done in documented consultation with potentially affected communities and in compliance with procedures in accordance with the Land Administration Law (LAL) of the PRC, local province''s implementation procedures of the LAL, and relevant laws, regulations and procedures of the local municipalities.
For NQP, the Nanchang Government acquired the land for the NQP Phase I, II and III in 2002 from approximately 2,500 villagers prior to construction. Acquired land was primarily barren land belonging to village collectives. Of the 2,500 affected villagers, about 20 persons physically relocated; the rest were economically impacted as a result of their collective land being acquired. The Government was responsible for compensation, which consisted of providing new housing for the 20 people who were physically relocated, and cash for the remaining villagers. Compensation rates were consistent with prevailing barren land values at the time of acquisition. At present, most of the affected persons derive their main incomes from non-agricultural sources.
Going forward for new projects, as part of the Integrated ESMS, MUL will ensure that any land acquisition and resettlement issues comply with all regulatory and IFC requirements.
