The Company has presented the information about how the E&S issues and impacts are being addressed, to ensure that the Project complies with the environmental and social requirements including: the host country laws and regulations; IFC’s Performance Standards; and the relevant World Bank Group (WBG)/IFC environmental, health and safety guidelines. This information is summarized in the paragraphs that follow.
PS 1: Social and Environmental Assessment and Management System
IFC’s assessment considered the Company’s management of its ESH performance in the establishment and operation of the facility in Thailand; compliance with national and local permit requirements; and Continental’s engagement with local communities, regarding ESH performance. - Environmental & Social Assessment:
Since the Project is located inside an industrial area and is not classified as polluting unit according to the Thai law, a formal environmental impact assessment study was not required. However, the Company has procured all the regulatory permits from the Department of Industrial Works and Pollution Control Department, and complies with the mitigation measures as per the permit conditions.
- Management Systems:
The Sponsor has articulated its Environment, Safety, Security and Health (ESH) policy covering all its operations worldwide. This forms the basis of the EHS management system implemented at the facility in Thailand. The Project has environmental management systems certified compliant with ISO14001 requirements and is part of the Continental Automotive matrix organization with its yearly internal ESH audit system.
In addition, Project has implemented a certified quality management system as per the ISO/TS16949:2009. This technical specification aims to develop a quality management system, emphasizing defect prevention and the reduction of variation and waste. This is critical for the Company that is engaged in very high-precision machining, as described in the following sections.
- Organization:
The ESH engineer is responsible for the day to day management of ESH issues in the Company. The EHS engineer has direct reporting lines to the plant manager and facilities department, and also has responsibility as management representative for the ESH management systems. The management system manual articulates the detailed organization chart and specific roles and responsibilities of the various other functional units in managing the ESH issues.
Monitoring & Reporting:
The Company has put in place an elaborate monitoring and reporting program as documented in the management system manual. This program covers air emissions, wastewater, solid and hazardous waste and workplace monitoring for oil mist, noise, and luminance. In addition, water and energy consumption are regularly monitored for internal benchmarking and reporting. Continental’s monitoring program is consistent with IFC requirements and the review of the monitoring records confirms Continental’s material compliance with relevant World Bank Group EHS Guidelines.
Since the facility is not classified as a polluting unit and is located in an industrial area, the regulatory monitoring and reporting requirements are limited to waste generation, recycling and hazardous waste. Much of the information is submitted to the regulatory agencies through an online system.
PS 2: Labor and Working Conditions
Continental currently employs around 400 employees, comprising shop-floor workers and management staff. Female employees constitute approx. 55% of total workforce. Continental hires very few temporary or casual workers (currently 7%), just to accommodate fluctuations in work load. At full capacity utilization, Continental expects to reach its headcount to approx. 800 in coming years.
In addition, approx 50-55 employees of six sub-contractors work for Continental for: transport, security, cleaning, gardening, canteen, and sorting work in stores.
- Human Resource (HR)Policy, Management
Continental’s HR policies and operational procedures are in line with Sponsor’s corporate policies and practices and Thai labor law requirements. The Rules and Regulations Manual documents the terms of employment, policies and procedures for compensation and other benefits, training, performance appraisal, and promotions. This manual is displayed on shop floor for the information of all the employees, who also receive a copy of the same at the time of joining, together with their appointment letter and contract.
There is no registered trade union at Continental’s Rayong facility, though the Company would permit this were it requested by employees. However, as per Thai labor law, workers’ Welfare Committee comprising of 5 elected representatives of the workers has been constituted and is active at the Company.
Additionally, Continental management has initiated a Workers Council, in order to discuss any grievances and issues related to workers welfare. This council comprises of workers representatives nominated by the Welfare Committee and management representatives such as General Manager, Chief Finance Officer and the HR Manager. The Council meets every month and the meeting minutes are maintained for follow-up actions and future reference.
- Training and Human Resources Development
Continental has an extensive human resource development and training program for its employees, which is managed by the HR department. Several structured training programs are developed for different levels of employees and covers behavioral aspects as well as technical/functional training.
The Thai labor law requires minimum 6 hours of training every year, for all the workers, but Continental’s training programs for its employees well surpasses this requirement. Training programs are delivered by internal as well as external trainers and the training records are submitted to Thai Ministry of Labor.
As Continental is developing this new facility in Thailand, many of the Thai recruits are sent to Germany for extended on-the-job training at the Sponsor’s group facilities there.
- Occupational Health and Safety
In line with Sponsor’s policies and procedures, Continental has put in place elaborate safety management system at the Company site. The Safety Policy guides the overall safety management at the facility. Safety orientation is an integral part of the induction training for all the new employees.
The shop floor has hi-technology; high precision machines designed and built in Europe, with automated operations. All the moving parts are enclosed and normal operation of the machines requires minimal contact with human body parts, thus minimizing the chances for an accident.
The Company is in the process of identifying potential risks for each machine – during operation as well as during maintenance operations - and accordingly developing lists of precautions, which is being integrated in the work instructions and Standard Operating Procedures. Shop floor supervisors and foremen will provide training to respective workers on the same.
Adequate fire detection and suppression equipment is fitted across the facility in accordance with the potential fire risks. Fire exits and the locations of fire extinguishers are clearly marked. Fire fighting training is provided to the employees twice a year and fire drills are conducted every year in December.
Personal protection equipment such as gloves, safety shoes, masks and glasses is provided to all the workers on the shop floor, which is commensurate with the nature of operation and potential safety hazards.
Due to all its efforts, Continental has a record of “zero accident” and “zero lost working days” since the facility became operational in June 2009.
- On-site Emergency Response Plan:
Based on the identified hazards and risks, an on-site emergency response plans has been developed by the Company. Accordingly, potentially hazardous areas have been identified and evacuation routes and assembly points have been designated and clearly marked.
PS3: Pollution Prevention and Abatement
IFC’s assessment considered the Company’s operations with regard to resources consumption (water, energy), efforts to optimize resource inputs, waste minimization and management practices as well as the storage and handling of hazardous materials and wastes.
The manufacturing process comprises of high-precision machining of metal pieces to produce various components such as nozzles, injector body, housing, cylinder etc. The process steps include: high precision grinding; honing; hydro-erosive rounding; soft machining; electro-chemical manufacturing; high pressure washing etc. Using these components, pumps and injectors are assembled in clean room conditions; and are tested before packing and shipping.
The process wastes comprise of metal waste as a result of grinding operation and waste cooling oils. Process emissions include a mist of machining oil. In addition, domestic solid waste (food waste, paper, cardboard etc.) and domestic wastewater is generated from the Project site.
- Pollution Prevention and Resource Conservation:
The manufacturing process is not resource intensive and the primary inputs are metal and electrical energy.
Thai Energy Conservation regulation requires the facilities to assign a responsible person and identify area for reducing energy consumption for different equipments. Accordingly, Company is working on identifying and implementing energy conservation measures in its Rayong facility. As one such measure, Company has installed energy efficient lighting fixtures throughout the facility.
- Water Supply and Effluent:
Currently, the daily water consumption for the Project is approx. 140-150 cu.m, which is sourced from the industrial area authority. The domestic wastewater is discharged in the sewers, which is treated in the centralized treatment plant. The cutting / lubricating emulsion containing fine metal particles from machining – is treated in a sophisticated treatment plant equipped with oil recovery unit (called “oil building”) to recover the metal pieces and oil. The final effluent is then sent to the central wastewater treatment plant in special trucks after due documentation.
- Solid and Hazardous Waste:
Continental complies with all relevant regulations for the storage, handling and disposal of hazardous materials used in the production process. The notified hazardous wastes (such as sludge from the effluent treatment unit after recovering metal fines) are disposed of through licensed waste management contractors, as per the regulatory authorizations. Adequate controls during the storage and handling are in place and the quantities of solid waste thus generated and disposed of are regularly monitored, documented and reported to Thai authorities through the online manifest system.
- Air Emissions
As indicated earlier, the primary emissions from the process include oil mists from cooling fluid required in the machining process. The oil mists are collected from all the machines through air suction system and are treated in the “oil building”, as described earlier. There are no other air emissions from the Project. Continental regularly monitors the suspended particulate matter (SPM) and oil mist escaping through exhaust stack emissions.
- Energy Sources and GHG Emissions:
Primary energy requirement for the project is that of electricity, which is procured from the national grid. No fossil fuels are used in the process. Small capacity diesel generators are installed on site as backup generators, for use in the rare case of power failure.
The GHG emissions of the Project are, therefore, dominated by those due to the electricity consumption, with a small contribution from loss of refrigerant from HVAC systems. The project had estimated emissions of 7,000 t CO2e during the year 2010.
While the project results in limited GHG emissions the Company’s products are essential components of high efficiency diesel engines, and therefore contribute to lower GHG emissions than would result from use of alternative engines. Diesel engines consume about 30% less fuel than gasoline engines do. Further, Piezo technology produces fuel savings of up to 5% relative to other diesel engines, reduces particulate and nitrogen emissions and makes engines quieter without any loss of performance. These components fulfill EURO 6 emission standards which will apply in Europe from 2014 onwards.
PS4:– Community Health, Safety and Security
As the project is located in the well established major industrial area (Amata City), impacts on the nearby communities – including increased vehicular traffic - due to Continental’s operations are minimal. However, Company has developed an Emergency Action Plan.
The Company contracts with a nationally certified security agency for 24 hour surveillance of the facility, with unarmed security guards.
On the basis of the above information, it is concluded that the Project has been designed and will be operated in compliance with IFC’s PS and relevant environmental, health and safety guidelines.
