Key risks and issues related to this investment include the Company’s capacity to: undertake adequate social and environmental assessment commensurate with the impacts of the Company’s projects during both construction and operations phases; manage the social, environmental, health and safety performance of its contractors in accordance with good international practice; consult and engage with project-affected communities in accordance with local requirements and IFC Performance Standards; ensure fair, safe and healthy working conditions during construction and operations for direct employees as well as for the contract workers; ensure proper handling of hazardous materials, and management of air emissions, wastewater, solid and hazardous waste during construction and operations; ensure proper management of the impacts of construction and operations on local ambient air quality, community health, safety and security as well as management of the potential impacts of the influx of construction labor during construction; minimize adverse impacts of construction and operations on the natural flora and fauna, including the maintenance of adequate ecological flows in the rivers utilized for power generation.
The Company 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 including: the host country laws and regulations; and IFC’s Performance Standards. The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow. Further information is provided in the attached documentation.
PS 1: Social and Environmental Assessment and Management System
Each project company implements procedures to meet national regulatory requirements and any additional requirement that they may have committed to (e.g. both the biomass power plants implement additional procedures to avail certified emission reductions as they are registered clean development mechanism projects under UNFCCC). In addition, several of NRPPL’s wind power projects are being implemented, and operated & maintained (O&M) by Regen Powertech Private Limited (Regen), which has an environment, health and safety (EHS) management system (covering also its installation, commissioning, and O&M operations) certified to ISO 14001:2004 and OHSAS 18001:2007 standards. Further, NRPPL has engaged a third party and commenced development of a corporate Social, Environmental, Health and Safety Management System (SEMS), which will be finalized within a timeframe agreed with IFC, to ensure that its individual projects are constructed and operated in a manner consistent with host country requirements, IFC’s Performance Standards and good international industry practice as detailed in IFC’s Environmental, Health and Safety Guidelines.
NRPPL will appoint an appropriately qualified individual, supported by adequate financial and professional staff resources, who will have overall corporate responsibility for the development and implementation of SEMS. Further, NRPPL will, within a timeframe agreed with IFC, ensure that each of the subsidiary companies implementing hydro projects deploys a dedicated qualified safety professional, a dedicated qualified environmental and social professional, and trained SEHS coordinators to manage project site construction and operations. In addition to the SEHS staff deployed by each of NRPPL’s subsidiary companies, NRPPL will require each major contractor engaged on hydro projects, to deploy three dedicated qualified safety professionals, one dedicated qualified environmental & social professional and site supervisors who are also trained as SEHS coordinators.
The SEMS will include policies and procedures that will require an environmental impact assessment or environmental audit consistent with IFC Performance Standards of all prospective projects, as appropriate, that results in the development of an Environmental and Social Management Plan (ESMP) setting forth: (a) measures to mitigate adverse impacts, (b) monitoring requirements for ensuring the mitigation measures are implemented effectively and in a timely manner; (c) organizational and financial resources for carrying out the measures; (d) an implementation schedule for these activities; and (e) an appropriate incentive structure (including provisions for reward and penalties) to ensure plans are implemented. If NRPPL proceeds with acquisition of existing or greenfield development of projects, this ESMP would then form the basis for the project company’s SEHS management system. In the case of Tidong 1, a medium scale run of river hydro project already under implementation by NRPPL, the Company has completed an environmental impact assessment (EIA) in 2005 as part of the regulatory approval process. The Company has engaged a qualified consultant and commenced updating this EIA, which will be completed within a timeframe agreed with IFC and the update will be based on a TOR provided by IFC, in a manner consistent with IFC Performance Standards.
For other projects under implementation in NRPPL’s pipeline and future projects to be implemented and/or to be acquired by the Company, NRPPL will engage qualified consultants, similar to those that are supporting the Company in development of the SEMS (and update of Tidong 1 and Tangnu Romai 1 EIA), to: (a) screen projects for SEHS risk; (b) review assessments for completeness and consistency with IFC’s Performance Standards and EHS Guidelines; (c) identify the need for supplemental studies; (d) undertake/carry out the supplemental studies, appropriate update of existing EIAs and/or undertake ESIAs in accordance with IFC Performance Standards; (e) undertake quarterly audit of hydro projects (including Tidong 1) during construction to assess status of implementation of the project specific ESMP and implementation of corrective actions identified in the previous quarterly audit; (f) undertake annual audit to assess effectiveness of the corporate SEMS and status of implementation of corrective actions identified in the previous annual SEMS audit; and (g) build the capacity within the Company for corporate-wide SEHS management. NRPPL’s corporate SEHS Manager and the SEHS staff assigned to each project Company will be responsible for ensuring that the ESMP and Corrective Action Plans are implemented by each respective project company throughout the construction and operations of the project.
Under the corporate wide applicable SEMS, NRPPL will implement procedures for: (a) ensuring that contractors deployed by each project Company meet relevant provisions of NRPPL’s SEMS and ensure implementation of the ESMP as applicable to their respective activities; (b) SEHS training of employees and contract labor; (c) procedures for recording, investigation, reporting and corrective action in relation to SEHS incidents including those involving contractors’ labor; (d) periodic monitoring of SEHS performance; (e) management review of SEMS effectiveness and implementation of measures for system upgrade; and (f) annual reporting of SEHS performance to NRPPL’s Board of Directors, regulators and investors.
Site specific pollution prevention and mitigation measures associated with each project are, and will be, identified during the project environmental assessment. At both the operating biomass plants, emissions to air and treated wastewater meet regulatory standards. Ambient air quality (PM, PM10, SO2 and NOx concentration) is well within national standards and procedures to handle, store and dispose hazardous and other waste are consistent with regulatory requirements. In case of the wind power project, environmental aspects are managed by Regen under the ISO 14001 certified EHS management system, which is adequately implemented to meet the national requirements including management of hazardous materials, hazardous and other waste, water and sewage. The Company will, as part of its SEMS, develop procedures to ensure that the environmental impacts associated with the construction and operation of it’s projects are managed in accordance with IFC’s Performance Standard 3 and applicable EHS Guideline provisions. While there are opportunities for improving implementation of the ESMP at Tidong 1 site, NRPPL will also ensure that in accordance with the respective ESMP, each project company will implement engineering and management measures to effectively manage: general housekeeping; storage, handling and disposal of hazardous materials, hazardous waste and other solid waste at all construction sites to satisfactory standard; collection, segregation and sale of recyclable solid waste; overflow and run-off from muck dumping sites onto slopes and into streams/surface water bodies; storage of excess muck until it can be used for back-filling at a number of the major civil-works sites; storage, handling and disposal of domestic/sanitary waste/garbage from labor camps and employee colony; treatment and disposal of domestic/sanitary wastewater from labor camp, construction sites and employee colonies; fugitive dust emissions and emissions from vehicles/equipment; and noise impacts. The project company will, in accordance with the ESMP, monitor ambient conditions including air quality, noise levels, stream water quality upstream and downstream of construction sites and/or water quality of water bodies at risk of impact from project construction and operation.
NRPPL ensures that all equipment, plants and infrastructure meet good industry practices. All project structures, including upstream water storage structures in case of hydro projects, will be designed in accordance with internationally accepted engineering standards for structural integrity that account for the geomorphologic conditions of Himalaya, including avalanches. The project company will obtain independent engineer certification for all structural designs prior to commencement of construction and will implement procedures to inspect all project works against design specifications on a quarterly basis. The project companies implementing hydro projects will ensure that blasting schedules are well established and publicized throughout the project area. In the existing wind power project reviewed, the wind turbine generators (WTGs) are located on top of a ridge at 2 to 3 km from the nearest habitation and there are no significant community health, safety and security impacts particularly those pertaining to noise and shadow flicker. However, respective project companies for the existing wind and biomass operations will, as part of the SEMS, upgrade their procedures to monitor and mitigate on an ongoing basis, unforeseen and other relevant community health, safety and security risks and impacts. Similarly in case of all wind power projects, besides using plant, equipment and infrastructure that meet good industry practices the project company will ensure: appropriate setbacks from property lines; safeguards against storm and seismic activity; mitigation of shadow flicker, visual, EMF and aviation impacts. Under the SEMS and as part of the project specific ESMP, measures to mitigate community health and safety risks during project construction and operation will be implemented including: movement of vehicles to and from construction site; operation of construction equipment; containment of dust, noise and other nuisance factors; control of public access to construction sites; appropriate material movement planning; provision of signage, traffic control, site barricading, reflectors, and other measures to mitigate the risk of accidents for general public during construction.
Each project Company will as part of the ESMP prepare and implement a labor influx management plan, including procedures to minimize the risk of incremental/accidental community exposure to disease and other potential host community impacts due to influx of labor. NRPPL will require project companies to ensure that appropriate medical facilities are available for employees and contract labor during construction and operation phases. Further, NRPPL will require project companies to ensure that all its employees and laborers undergo periodic health examinations (including for HIV/AIDS), and require contractors to implement a periodic health checkup program for contract labor as well. To ensure security of local communities faced with influx of labor, NRPPL will require the project companies to deploy unarmed security guards/staffed check posts at major civil works sites, along access roads and at labor camps throughout the project area to ensure both the security of the work sites as well as that of the surrounding communities. There has been no major compromise of public security in the Tidong 1 project area since the commencement of construction and relations remain amicable between the communities and the construction workforce. The Company will require each project company to put in place an appropriate disaster and emergency response plan.
The Company including each project company will develop and implement procedures for ensuring that: past records of security personnel employed are screened; security personnel have clear objectives and permissible actions laid out; security personnel are trained in avoidance of human rights violations; security incidents are recorded, investigated and corrective action implemented; bona fide complaints against security personnel are investigated and appropriate disciplinary actions are implemented; and there is a grievance mechanism for aggrieved members of community or employees, in the event of a violation of the code for security personnel.
Typically wind power projects do not result in involuntary resettlement as land is purchased on a willing seller/buyer basis and small parcels are required for each turbine. In small hydro projects limited scale involuntary resettlement or land acquisition could occur. NRPPL will as part of the SEMS put in place develop formal procedures to ensure compliance of its project companies with the applicable host country requirements as well as IFC requirements for the management of land acquisition, resettlement and rehabilitation of project-affected people. In Tidong 1, in all 8 acres of private land has been acquired from 29 households and no physical displacement took place. Families from whom the project acquired land were compensated at market rates and the Company has in place, as part of the Social Response Plan, livelihood restoration/enhancement (animal husbandry, medicinal plants, silviculture and ecorestoration etc) measures and initiatives for special assistance to families affected by land take (e.g., direct and indirect employment opportunities). It should be noted that the 29 families at Tidong who lost land have filed a court case against the Government of Himachal Pradesh and NSL claiming that their land was not correctly valued by the State Government and that they should be paid additional compensation. These families have nevertheless expressed unequivocal support for the project and are direct beneficiaries of the project through employment and construction contracts, for which they are prioritized ahead of other community members as agreed by the Panchayats. These families stated they will continue to support the project and will accept whatever the courts rule, as will NSL. At Tidong 1, there are processes in place through panchayat/village council, local area development committee and company liaison officers, to ensure that concerns of the affected community are addressed. The Himalayan regions in which the Company’s hydro projects are located are ethnically and culturally diverse. The Company has demonstrated sensitivity in its engagement with the ethnically distinct hill communities inhabiting the site of its Tidong 1 project. Where Projects are likely to materially transform, degrade or impact lands and resources on which indigenous peoples (IP) are dependant, the Company will, as part of the SEMS, implement procedures to identify and mitigate all identified impacts on IPs. The Company will ensure that the social and environmental assessment is undertaken in accordance with the provisions of IFC’s Performance Standard 7 and mitigation plans achieve outcomes consistent with PS 7 provisions.
Biodiversity protection measures specific to each project location will be identified during the project environmental assessment and implemented by the project’s SEHS team. [In the existing operational wind power plant, material adverse impact on biodiversity, particularly threatened species of avifauna is not expected. However, the project company is not currently monitoring bird/bat strikes but will implement procedures to commence the same as part of the SEMS. Further, the two existing biomass based power plants, in addition to agricultural waste (bagasse, rice husk, cotton stalk etc) as the primary fuel, also partly use prosopis julliflora wood (a high calorific value fast growing specie) as fuel. However, this is not expected to result in any adverse biodiversity impact as this wood is sourced entirely from exiting commercial/private biofuel plantations raised on existing marginal cultivated land/culturable wasteland and managed for commercial sales of this fuelwood.] The Company will require project companies to put in place procedures to : assess, avoid and where avoidance is not possible mitigate material impact, if any, on threatened species of flora and fauna; particularly in wind power projects, assess, and where required, mitigate impacts on avifauna; design hydro projects ensuring minimum ecological flow in the stream; where forest land is diverted to project, make appropriate provision including providing alternate land as required for compensatory afforestation; prepare and provide resources for catchment area treatment plan in hydro projects; deploy personnel at appropriate locations and implement procedures to discourage poaching and illegal use of firewood by construction workers; require contractors to supply their labor camps with kerosene/LPG for cooking and electricity for heating to reduce the demand on local wood and biomass resources; identify natural springs likely to be impacted, build protective structures around such springs and where communities are dependent on such springs that are impacted, provide supplementary piped water to communities; provide cross drainage structures and minimize changes to area drainage; and develop and implement construction demobilization and landscape restoration plan detailing a systematic restoration of the project area landscape following the completion of all civil works and the evacuation of all construction sites, including muck disposal sites, materials lay down areas and labor camps. 39.05 hectares of State forest land has been diverted for the for Tidong 1 project. The Company has paid Rs. 14.78 crores in fees to the Himachal Pradesh State Forest Department for compensatory reforestation and improvement of the catchment of the Tidong 1 project.
NRPPL will require its project companies to develop and implement a chance find procedure including for finds of archaeological, paleontological, historical, cultural, artistic, and religious values, as well as unique natural environmental features that embody cultural values, such as sacred groves. Further, the project companies will be required to put in place procedures to protect and enhance sacred sites (e.g., ponds, forest groves, etc.) in consultation with community members and through support for local religious institutions, festivals, ceremonies and local cultural heritage consistent with IFC’s Performance Standard 8.
PS 2: Labor and Working Conditions
NRPPL has 48 staff on its rolls and has a further 227 individuals hired in its project companies. The Company’s total employee strength, including employees in its project companies, is expected to increase to approximately 300 over the next 6 months. NRPPL has a basic set of HR policies and procedures including: working hours; leave; compensation; benefits and employee welfare; protection of company assets, confidentiality/interaction with media; security, conflict of interest etc. Working conditions are communicated to employees through their appointment letters/contracts. The HR policies and procedures need to be significantly upgraded to meet Performance Standard 2 provisions including amongst other requirements procedures for employee grievance redress, disciplinary action, prevention of harassment, non discrimination, and communication of HR policies and procedures to staff need to be implemented. The Company will, within a timeframe agreed with IFC, engage a third party and: undertake a comprehensive review of its existing HR Policies and practices; develop HR policy and procedures consistent with PS2 provisions and designed to address specific needs of the holding company and the project companies; and implement these upgraded HR policies and procedures in NRPPL including its project companies. Further, the HR Policies will be made available on the Company’s intranet and communicated to employees during induction.
It is expected that about 1500 contract workers will be engaged on its medium scale hydro project sites (e.g. Tidong 1) during construction. While construction workers are expected to be from outside the region, requiring setting up of labor accommodation/camps, the contract workers during operation phase are expected be from the local villages. The Company is, with independent and IFC inputs and within a timeframe agreed with IFC, implementing procedures to: obtain assurance that the contractors meet host country labor laws; and ensure that adequate facilities and amenities are provided in the labor accommodation including adequate living/sleeping facilities and space per person, potable water that meets national standards, proper sanitation and cleaning facilities, canteen/mess or fuel for cooking; locker/storage facilities, and facilities for management and disposal of garbage, sewage and other domestic waste. These procedures will be embedded in the SEMS as well to ensure adherence across all of NRPPL’s project companies.
NRPPL will, as part of the SEMS, put in place detailed procedures to address occupational health and safety (OHS) aspect associated with project construction and operation. The Company will implement an appropriate OHS organization at the holding Company and project company levels and specify the OHS organization and resources to be deployed by the construction contractors. Each project company will be required to implement measures and deploy adequate resources to monitor contractor compliance with NRPPL’s OHS guidelines at all construction sites including amongst other measures: control of tunnel access and restriction of access to various worksites; the prevention of children from entering active work sites; establishing crêche for the children of non-resident working families employed as casual laborers; monitoring worker exposure to hazardous working conditions (e.g., air quality in tunnels), enforcing the use of personal protective equipment and the observance of traffic safety protocols in the operation of heavy equipment; training and awareness efforts for employees and contract workers; emergency response plan implementation; making available ambulance and first aid facilities; and ensuring access to doctors/para medical staff.
