Stomana has presented information to demonstrate how its current practices and policies address potential adverse environmental and social impacts and to ensure that the proposed project will comply with the environmental and social requirements upon implementation of the specific agreed measures. The social and environmental requirements are (i) the host country laws and regulations, (ii) IFC Performance Standards, and (iii) the applicable IFC EHS guidelines. The information about how these potential impacts will be addressed by the company is described in the paragraphs that follow and summarized in the attached Environmental and Social Action Plan (ESAP). For information relating to the previous IFC investments in 2003 and 2006, please use the following links: Project 11227 and Project 25090.
PS1 Social and Environmental Assessment and Management System
Social and Environmental Assessment: The project is planned to take place in the current production facilities of the company. The existing plant has the locally required operation permits and licenses. The revamping of EAF3 did not require an individual Environmental Impact Assessment, according to local requirements; however the company included the project in the documentation submitted to the national authorities (Ministry of Environment and Water) for the renewal of the Integrated Pollution Prevention and Control (IPPC) permit. The national environmental protection law and relevant regulations require all existing and new installations to obtain an IPPC permit, consistent with the relevant European Directive. The permit renewal was granted to Stomana in May 2010 and includes specific provisions relevant to the revamped EAF3 and the new off-gas treatment system (Bag House 3).
Management Systems and Organization: Stomana places a very high priority on quality in their production processes and the company achieved ISO 9000 (Quality) certification in 1996, followed by ISO 14001 (Environmental Management) certification in early 2006 and OHSAS 18001 (Occupational Health and Safety) certification at the end of 2006. Both ISO 14001:2004 and OHSAS 18801:2007 certifications are for the “development, production and trade of semi-finished products (blooms, billets, slabs) and hot rolled steel products (heavy plate, merchant bars, special profiles, balls, bright bars, reinforcing bars, welded fabric, lattice girders)” and were renewed in 2009 for three years. Since their first project with IFC financing in 2003, Stomana has demonstrated to have adopted an approach of continuous improvement of their mill operations in terms of quality, efficiency and EHS performance.
Since 2009 Stomana plant has implemented an integrated management system of quality, occupational health and safety and environment. The integrated management system is functional, with well defined indicators, continuous improvement programs and measurable performance indicators including emissions, energy, water, and raw materials consumption. The company extends the requirements to its contractors performing core functions for the plant’s operation. An internal and external audit plan is part of the management system requirements, including management audits and specific technical audits focused on production equipment, cranes, and transport fleet.
Stomana has a relatively small, but adequate team to manage EHS and social issues, with the main function to ensure that EHS aspects of the plant’s operations, including projects, are being dealt with due attention and in accordance with EHS requirement of the host country. The Company’s EHS team is staffed with professionals with solid background and ample industrial experience, supported by the Viohalco’s corporate EHS management, which provides a valuable supervision role and ensures that good international industry practice is shared among the group and introduced in the Bulgarian operations.
Training: Stomana has an established program to provide necessary induction and periodic training for all its direct and contractor employees on EHS aspects related to its operations. Staff receives training to ensure continuing improvement. Emergency preparedness and response training, and first aid training are also consistently provided. The company records and reports all training performed and trainees.
Monitoring and Reporting: Stomana has a comprehensive monitoring program, which is essentially aligned with IPPC permit requirements. Parameters monitored include liquid effluents, air pollutant emissions (including particulate matter, combustion products, heavy metals, and greenhouse gas emissions), water discharge, waste generation, ambient noise, groundwater quality, occupational exposure and occupational accidents among others. Stomana takes corrective measures based on the monitored parameters and share experiences among the different production facilities. Reporting of EHS indicators is done internally per the requirements of the certified integrated management system and externally to those national agencies requiring EHS monitoring.
PS2 Labor and Working Conditions
Human Resources Policy and Management: Stomana has a human resources (HR) management component as part of its integrated management system and a HR department that informs employees on their rights under national labor and employment law, including their rights related to wages and benefits. Topics covered by HR management include terms of employment, working hours and shifts, internal and external recruitment, advancement, and training, ethics in the company, internal communications and safety elements. Existing management system, collective agreements and supplemental procedures cover the requirements of PS2. The company will continue to develop and implement its HR policies, following legal requirements and PS2 requirements, and to ensure that they are consistently communicated by the HR management to all new employees. The company will monitor to ensure that all contractors to whom certain activities are outsourced fully comply with national labor law, and ensure that specific provisions are included in the relevant contracts.
Terms of Employment and Workers Organizations: The Company is a party to a collective bargaining agreement with the workers’ unions, which is negotiated each year and was renewed in June 2010, and which explicitly address working conditions and terms of employment, including labor remuneration and salary management, professional qualification and re-qualification, safe and healthy labor conditions, protection of dismissals, hours of work, vacations and holidays, social benefits, and dispute management. Stomana meets or exceeds legislated standards of worker salary, which includes a service coefficient and a safety bonus, and benefits, which include additional health insurance, food stamps, support for summer vacations, summer camp for employee’s children, and free medical exams. The Company strictly enforces the minimum hiring threshold as mandated by national law and follows all legislative requirements relating to hiring, including equal opportunity. There is no evidence of discrimination based on personal characteristics or gender.
Retrenchment: In October 2008, at the onset of the global financial downturn, the plant had approximately 1490 employees. Due to a significant decline in the local demand and export market, caused by the financial crisis, in November 2008 the company had to announce plans to restructure, cutting production and making staff redundant. Since then over a period of 15 months, the company reduced its workforce to approximately 900 employees. Such reduction of personnel was done in accordance with Bulgarian legislation, working closely with local authorities as well as with the worker’s unions under principles of non-discrimination and equal opportunity. Personnel reduction was made according to a careful selection process, based on the review of all positions, identification of overlapping positions and obsolete positions, potential for outsourcing of non-core activities, and workers’ experience. Severance packages were defined in accordance with Bulgarian legislation (Art. 331) with a basic package including a minimum of four monthly salaries plus additional social bonuses. Since the beginning of 2010, Stomana’s workforce has increased by more than 90 persons to a total of approximately 990 employees, as of October 2010. Approximately 75 percent of the employees hired in 2010 are persons made redundant during the restructuring activities. Further workforce reduction is not expected from this project; however the company’s recovery has just started after the severe downturn in the steel industry, and there are still challenges to overcome. The company will develop a retrenchment procedural framework consistent with PS2 requirements and will include it in its HR policies. The framework will be based on the principle of non-discrimination; will include provisions for consultation with employees and their organizations, and where appropriate, with the government; will commit to explore alternatives to job losses; and will discuss priority for rehiring dismissed employees.
Grievance Mechanism: Plant management is responsible for managing employee’s grievances and mechanisms are in place to bring the matters to management’s attention. A formal employees’ grievance management procedure, however, does not exist, and the company will develop and implement such a procedure consistent with PS2 requirements. The procedure will be given to all staff, including contractors performing activities outsourced, and all staff will be made aware of this mechanism. External worker protection mechanisms are ensured by the national labor laws.
Occupational Health and Safety (OHS): The company’s OHS management system is OHSAS 18001 certified. Procedures are available on hazard identification and risk assessment, OHS resources, training and awareness, provision of safety and health at work, audits and inspections, working condition measurements and monitoring, health condition monitoring. Basic adherence to safety rules and adequate use of personal protective equipment, including hard hats, safety boots and gloves, respiratory, and heat protection, were observed among employees during the site visits, although the use of hearing protection will need to be strengthened and enforced.
Stomana’s employees also attend regular health and safety training – the type and frequency of the training depends on the nature of the work. Workers’ health and safety performance is regularly reviewed. Some inconsistent behavior was observed on site, especially in connection with the construction contractors’ work force, even though Stomana has contracts in place with its contractors that specify health and safety measures that need to be followed when performing work for Stomana. Stomana will develop a monitoring and enforcement program to ensure that all contractors (and their subcontractors) working at the plant, including construction contractors, consistently follow good industry practice and fully comply with OHS requirements.
The company maintains adequate statistics of accidental events and analyzes them to implement corrective measures. The 2009 accident statistics for the plant indicates decreasing frequency and severity rates, although the frequency rate and number of lost day incidents are still higher than international benchmarks based on good industry practice. Safety performance is expected to continue to improve with the implementation of the agreed ESAP and as the OHSAS 18001 management system gets further traction in the organization.
While EAF3, revamped as part of this project, and the new rolling mill, which was installed as part of the second IFC investment and started operations in 2008, are state-of-the-art facilities, some production facilities (i.e., the plate mill, the long products mill and the electric arc furnace 1 - EAF1) are older and need continuous attention to mitigate workplace hazards. The company will conduct a review of workplace hazards, focusing on the older facilities. The review will ensure that (i) physical protections are adequate and well maintained or upgraded as needed, including provision of grids, shields and rails with interlocked gates and/or sensors in areas where hot materials and items are handled or temporarily stored, (ii) emergency and area signage is sufficient, visible and adequately maintained, and (iii) housekeeping is adequate.
There is emergency response unit that is authorized to manage critical situation that may arise from the operations. As part of emergency preparedness and response plan a list of all critical focal points throughout the production process has been identified and appropriate mitigation measures designed. Availability of Material Safety Data Sheets (MSDS) has been recently improved. Although fire drill and other emergency response exercises are conducted per local requirements, some inconsistencies were observed in terms of implementation of emergency evacuation drills at the several production units. Stomana will ensure that these inconsistencies will be corrected and a specific schedule for emergency drills is developed for each production facility. Evacuation drills will be properly documented with observed issues and corrective actions identified.
Stomana has radiation screening of scrap material through two detector systems installed at the scales for both trucks and rail wagons. In addition, specialized personnel are equipped with portable detector units that are able to detect any significant level of radioactivity. Procedures are available and consistently implemented, including notification to the appropriate government agencies. Radioactivity measurements are adequately recorded. Personnel involved in scrap handling undergo regular training and medical examinations.
The company has recently implemented a workplace monitoring program, which included measurements of vibrations, noise, microclimate, dust and chemical substances, and lighting at 319 workplaces within the plant, and allowed to identify deviations at selected locations from the applicable occupational exposure limits. The company will identify corrective actions to ensure that potential worker exposure is reduced and will continue to periodically monitor workplace conditions. Fugitive dust is significant at the melt-shop, especially from the EAF1 operations, and represents a respiratory hazard to be further mitigated. Operation of the revamped EAF3, with the new canopy hood and the new off-gas treatment system (Bag House 3), will have a positive impact in reducing the fine dust generated by the melt-shop operations. The company will also implement a specific dust monitoring campaign at selected locations within the melt-shop to measure the concentrations of iron and metallic dust, including concentrations of heavy metals such as chromium, nickel, lead, manganese, zinc, and mercury, and to confirm the improved performance of the overall fugitive dust collection and abatement system.
Stomana has an on-site health clinic with a doctor and nurse (manned 24 hours per day) which can handle initial medical care and simple cases - the plant also has ambulances to take more serious cases to the local hospital in Pernik or to Sofia, for more severe cases.
PS3 Pollution Prevention and Abatement
Pollution Prevention and Resource Conservation: The main air pollutants associated with plant operations are particulate matter (and associated heavy metals) and combustion gases. Significant particulate matter (PM) emissions are generated by the EAFs during melting; oxygen injection and decarbonizing phases (primary off gas emissions); and charging / tapping (secondary off-gas emissions). Nitrogen oxides (NOx) emissions are caused by high temperatures associated with the operations of the reheat furnaces of the rolling mills. Other potential pollutants of concern include hydrofluoric acid, hydrochloric acid, organic compounds, dioxins and furans arising from EAF off gases, depending on the quality of the scrap charged.
Since the plant’s acquisition, Stomana implemented a series of improvements, including refurbishment of the off-gas handling and treatment system (Bag House 1) for EAF1 and upgrading of the scrap handling system. Both plate mill and long products mill reheat furnaces were also revamped. The proposed project will include the installation of a new state of the art off-gas treatment plant with a new canopy hood (Bag House 3) that will complement the existing treatments at the melt-shop, significantly improving the overall performance of off-gas emission control and abatement. The total installed capacity of Bag House 3 will be 1,500,000 Nm3/h, with an emission guaranteed of 12 mg/Nm3 of particulate matter at the stack outlet, below the limit of 20 mg/Nm3 of the IPPC permit and the IFC guidelines.
Both the existing and new off-gas treatment systems have a continuous emission monitoring system. Air emission measurements conducted at stacks (bag houses 1 and 2 at EAF1, shredder and oxy-fuel cutting, and reheat furnaces of the new rolling mill, plate mill, long products mill, and ball mill) show compliance with national limits and IFC EHS guidelines for particulate matter and nitrogen oxides, respectively. Additional pollutants of concern, including heavy metals, organic compounds and dioxins and furans, will be included in the monitoring suite per IPPC permit requirements.
Fugitive dust is recognized by Stomana as one of the main areas for improvement. Fugitive emissions appear to be adequately controlled in most of the plant areas, but they are significant in the melt shop area, including dust associated with EAF operations and with slag cooling and handling. Another area of concern is fugitive dust at the slag storage and management area. The revamping of the EAF3 and the new off-gas collection and treatment system, with a larger capacity canopy hood and which will allow the combined operations of bag houses 1 and 3, will enhance collection and abatement of the fugitive dust from the melting operations. The company will revamp the slag cooling area to reduce both dust generation and water consumption through improved application, containment and recovery of cooling water. The company will also develop and implement ambient air quality monitoring program (PM10 and NOx) at selected locations, taking into account the closest receptors, to verify compliance with the applicable standards and control potential impacts associated with air emissions.
Resources consumption is adequately monitored as part of the integrated management system. Although within the limits required by the IPPC permit, water consumption (total 8 m3/ton of rolled products and 3 m3/ton at the melt shop) is higher than industry benchmark and for other plants of the sponsor. High consumption is associated with operations of the older facilities, namely the long products mill and the plate mill, current practice for slag cooling, as well as possible leakage and ground infiltration from the existing water infrastructure (water circuit pipes and collection ponds). The ongoing revamping of existing water treatment plant will allow improving the make-up water treatment and reducing usage of water. In 2009 the company has implemented some measures to improve water usage efficiency, including replacement of water pipe sections, maintenance at the plate mill and long products mill, installation of new hydrants and valves, repairs of shafts and canals, installation of new flowmeters. The company will continue to study and identify additional corrective measures to reduce water consumption, including, but not limited to, revamping of the EAF slag cooling area with recycling of cooling water, assessment of water infiltration from cooling water ponds and installation of liners as needed, identification and replacement of leaking pipes. The company will continue to monitor groundwater quality through installed monitoring wells, and ensure that there is no adverse impact outside plant’s boundaries on local water resources.
Process water is treated to remove scale and any oils and re-circulated to the rolling mills. Similarly cooling water is treated and re-circulated to the rolling mills. There is no direct discharge of process or cooling water to the environment. Treatment facilities include primary horizontal and secondary radial settling tanks which are operational, although their oil removal efficiency can be improved. Sludge that is removed from the settling ponds contains high oil levels and is classified as hazardous waste. The company will review and improve the efficiency of the settling tanks, especially focusing on the dirty water circuits of plate mill and long products mill.
Stomana monitors stormwater discharge from its nine collectors to the Struman River, as required under the IPPC permit. Monitoring results reported by the company demonstrate compliance with relevant Bulgarian limits and IFC guidelines. Plant’s sewage is discharged to the municipal sewer and treated in the municipal wastewater treatment plant. Potable water is supplied by public sources.
Energy Efficiency and Greenhouse Gas (GHG) Emissions: Implementation of the project will improve energy efficiency at Stomana’s plant. The revamped EAF3 will have improved performance, decreasing the tap-to-tap time from 110 min to a normal standard furnace operation of 60 min and therefore increasing the productivity from 55 tons liquid steel/h to 100 t/h. Energy consumption at the melt-shop will decrease from 550 - 580 kWh/ton of liquid steel produced to 450 kWh/t, consistent with industry benchmark consumption. Other expected energy efficiency improvements will derive from (i) an additional reduction of 40 kWh/t for peripherals energy (water treatment plant, fume treatment plant, cranes etc.) due to better control and productivity increase, (ii) a decrease in oxygen consumption from 42 Νm3/t to 30 Νm3/t, and (iii) a decrease in natural gas consumption in the EAF from 10 Nm3/t to industry standard levels of approximately 5 Nm3/t.
As part of the project, a new scrap transportation system will be installed from scrap-yard to the melt-shop, including new scrap bucket cars and a rotating platform system. The new system, in addition to shortening the transportation time, will also have an environmental and energy benefit by eliminating the usage of old trucks and reducing fuel consumption.
The direct carbon dioxide (CO2) emission from Stomana plant was calculated at 136,700 tons for the production of 470,000 tons of product in 2009, equivalent to 290 kg CO2 per ton product. Indirect CO2 emission from electricity consumption was calculated at 299,600 tons, equivalent to 638 kg CO2 per ton product. All electricity used at Stomana’s facilities is sourced from the national grid. Overall, CO2 emission intensity have decreased about 15 percent since 2005 due to the modernization and revamping programs at the mill. It is expected that CO2 performance indicator will be further improved by the investment program, which will increase the productivity and efficiency of the EAF melting. The company will also review and improve the combustion efficiency, reducing gas consumption, at the reheat furnaces of the plate mill and the new rolling mill, both equipped with regenerative burners but with potential for better performance. Stomana is included in the national list for allocations of quotas for GHG according to Kyoto Protocol with an allocation of 234,902 tons for 2009.
Waste and Hazardous Materials: Solid non-hazardous waste and hazardous waste management at the plant was improved in the past decade, although general housekeeping is still affected by the presence of significant scrap material, demolition debris and obsolete buildings and processing facilities no longer in use, and the presence of other companies operating in the same brownfield site. Stomana is working on minimizing its generation of solid waste and will further characterize all waste streams and hazardous materials stored within the plant’s boundaries. Waste collection, storage and disposal are conducted according to the company’s waste management plan and to specific procedures developed for non-hazardous and hazardous waste. Any scrap steel from the operation is recycled back to the scrap-yard and melt-shop.
Slag from the melting process, a non-hazardous material, is crushed and processed for further use in cement production and the construction industry. It is expected that these measures will help reduce the slag deposits created by the plant’s operations in the past. Mill scale is processed on-site and delivered to an external company. Filter dust is classed as hazardous and is processed into pellets and stored in on-site covered storage areas. A limited quantity is delivered to an external company for zinc extraction, but demand is inconsistent and insufficient and therefore stored quantities are significant, as well as the amount accumulated of ladle slag (“white slag”). The company will improve collection practices at the filter dust pelletizer and will improve conditions of all the temporary storage areas to (i) prevent potential exposure to the environment, (ii) prevent water contact with the filter dust stockpiles, and (iii) adequately contain oily sludge generated by the process water and cooling water treatment systems. The company will review disposal alternatives for filter dust and other hazardous and non-hazardous wastes stored on-site (including, but not limited to, ladle slag and oily sludge) and design and implement the preferred option, in compliance with national and international requirements. Other hazardous waste such as waste oils, packaging containing residues of hazardous substances, fluorescent lamps etc, are collected and delivered to external companies for recycling or disposal.
Per requirements of the IPPC permit, the company will conduct soil sampling and testing at selected locations and assess the historical contamination of the site. Based on the results, the company will assess potential risks to human health and sensitive receptors and, as needed, recommend an action plan for implementation of appropriate remedial options.
PS4 Community Health, Safety and Security
Community Health and Safety: IFC’s review considered the company’s operations with regard to the potential impacts of the construction and operations of facilities, including movement of vehicles to and from construction sites and during operations, and containment of dust and noise.
Plant’s facilities have developed detailed emergency response plans for their respective operations. Stomana is paying due care in ensuring that the traffic to and from the plant does not have negative impacts on the local communities. Transport of part of raw materials and final products takes place with the railroad, reducing the truck traffic associated with Stomana’s operations. Moreover, access to the site from the state highway does not cross local communities, so that the impact of vehicular movement from facility operations on surrounding communities can be limited with the implementation of normal traffic management procedures.
In the past there have been a few complaints from the nearest community about excess noise associated with operations at scrap-yard. Since then, the company has implemented a series of corrective actions, including (i) preventing movements of railroad wagons during nighttime, other than in exceptional circumstance, (ii) removal of the scrap from an open air storage area previously used and located close to plant’s boundaries and nearest community/households, (iii) reduction of the maximum height allowed for scrap stockpiles, and (iv) reduction of quantities of scrap metals stored open air. Per IPPC permit, noise measurements are done every two years at 12 locations, including nearest households, and the most recent daytime measurements conducted in July 2009 showed compliance with national limits. Going forward, noise measurements will include both daytime and nighttime measurements, according to the national requirements. In order to further reduce potential noise impact and visually isolate the facilities from the residential area where the nearest households are located next to the east side of the plant, the company will plan and implement a tree planting along the plant’s boundaries. Implementation of the ESAP will also contribute mitigating potential impacts from fugitive dust.
