FV has presented plans to address the impacts of the Project and to ensure that the existing and proposed operations 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 Environmental, Health and Safety 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).
PS1: Social and Environmental Assessment and Management Systems
Environmental and Social Assessment: The development of an Environmental and Social Impact Assessment (ESIA) for the proposed project is not required by the local authorities. The Company holds the required permits for both plants of Villa Rosa and Florida from the local governments (Buenos Aires Province, Pilar and Vicente Lopez Municipalities), including environmental permits (Certificado de Aptitud Ambiental), gaseous emission discharge permits and liquid effluent discharge permits.
Management Systems and Organization: FV developed an Environmental Management System (EMS) consistent with ISO 14001 standard. The Florida plant acquired ISO 14001 certification in 2010 and Villa Rosa’s is scheduled for July 2011. The management system documents are available and easily accessible to all staff through Company’s intranet. Data recording and retrieval are effective. The Company has developed its Environmental Objectives, linked to the key components of the Company’s EMS, where the planned actions are described, responsibilities assigned, target dates, and progress documented. Adequate control of environmental, health and safety aspects is also in place for the other companies of the group, and similar systems are being implemented in the recently acquired Fiplasto.
FV created a corporate environmental, health and safety (EHS) management function to ensure consistent EHS approach throughout different companies and different plants of the group. The new department is well staffed and reports directly to the top management of FV. The Corporate EHS Department now includes the following sub-units: management systems, occupational health and safety, legal compliance, research and development, technical specifications and documentation. The Company developed and implement a system to systematically conduct environmental and social due diligence on all companies targeted for acquisition. Labor and labor relations are managed by the Human Resource (HR) Department.
Training: FV has an established program to provide necessary induction and periodic training for all its direct and contractor employees on occupational health and safety aspects related to its operations, environmental management, and labor issues. Emergency preparedness and response training, and first aid training are also consistently provided. The Company records all training sessions performed and trainees.
PS2: Labor and Working Conditions
Human Resources Policy and Management: The Company underwent a steady increase in its workforce in the past five years, growing to 1160 employees at Villa Rosa plant, approximately 295 at Florida plant, and 52 at local branches. The staff turnover fluctuated from 6% to 15% in the past five years, but the workforce is generally stable, particularly after the first year of employment in the Company and for the skilled positions. The occupational health and safety coordinator, medical staff, and security manager report to the HR manager. The Company has HR policy and procedures that cover all key aspects, including recruitment, induction and training, performance evaluation, promotion, disciplinary actions and dismissal. FV HR policy and labor relations policy are provided to the new staff and all procedures are readily available to staff. A three-day induction program is provided to new hires. Continuous training programs are well documented and comprehensive.
HR management department provides the staff with clear terms of employment, and a copy of FV’s Induction Manual with additional information regarding industrial relations, disciplinary code and procedure, and roles and responsibilities within the organization. For all workers FV guarantees minimum wages as agreed under the collective bargaining agreement; the average monthly salary for 50% of its production workers doubles the minimum wage.
Worker’s Organizations: The Company supports the freedom of association. FV is a party to a collective bargaining agreement with workers’ organizations (UOM, ASIMRA, and AVIC). The Company reports a stable industrial relations climate, with no significant impacts in terms of strikes or work stoppage. All unions are bound by the Company''s policies and procedures as well as specific substantive and procedural agreements. Union’s representatives are also part of the internal labor committees. The Company supports an open door policy and the organization of participatory groups, managed by the workers, to promote interchange and relations among workers and management, and recreational and cultural activities involving the workers and their families. Surveys of work climate are periodically conducted among all staff.
Grievance Mechanism: HR is responsible for managing grievances, but workers can present their concerns and complaints using several internal mechanisms, including the participatory groups. IFC’s review verified that the grievance procedure is provided to the staff during induction and that staff is aware of this mechanism. External worker protection mechanisms are ensured by the national labor laws, and a number of court cases are currently reported by the legal department, generally associated with unresolved claims for dismissal and/or for injuries/health problems.
Non-Discrimination and Equal Opportunity: FV is an equal opportunity employer, promoting fair and equitable treatment of employees. The Company complies with relevant legislative requirements. The HR department has developed training programs to support skills development, and opportunities for promotion exist and are adequately disclosed to the workforce, through intranet and announcement posting.
Occupational health and safety (OHS): OHS issues are handled through the Corporate EHS Department. The OHS section of the department has a coordinator, a technician and two apprentices. They are supported by a plant fire brigade with specifically trained staff and by safety leaders, who are plant workers with advanced safety and first aid training, selected in the different production areas. The medical staff at Villa Rosa plant consists of two medical doctors and three nurses; at the plant in Florida there is one medical doctor. FV also maintains agreements with external emergency and medical centers. Employee’s OHS training is conducted during induction and periodic refresher sessions.
Safety performance shows an improving trend although the Company aims at further reduce the accident rates. Accident investigations are regularly performed, root-causes analyzed and preventive/corrective actions documented. The accident/incident reporting system is made available to the workforce at several locations. In 2010 at the Villa Rosa plant, where most manufacturing activity takes place, the frequency index for work accidents was below the reference value for Argentina, but it is higher than the international reference value for foundries and for fabricated metal products. The company is currently undertaking programs in its two plants in Argentina to reduce accident rates consistent with international reference values.
An emergency plan to respond to major accidents in both plants is in place. The plants are equipped with fire and emergency alarms at different locations. Fire extinguishers and hydrants are positioned in the various production units. Automatic fire suppression systems are present in the painting booths (electroplating section) and in the storage areas. Fire safety inspections are annually conducted by the local Fire Brigade, which provides annual certificates of conformity. Control and maintenance of fire extinguishers and hydrants are conducted monthly by specialized firms. Fire emergency training is conducted, but general emergency drills have not been conducted until now. The Company will start conducting periodic drills.
The company has significantly improved its management of personal protective equipment (PPE) since the last IFC investment. Hearing protection is generally sufficient, and the use of hard hats and respiratory protection has improved. Physical protections are generally adequate, although some areas of improvement were identified, particularly in the furnace unit and electroplating unit. Emergency and area signage and guard rails are present and housekeeping is generally adequate.
A workplace monitoring program has been developed by the Company and is regularly implemented. It includes testing of water points (physico-chemical and microbiological testing) with respect to potable water limits for human consumptions, light intensity, air quality, noise and thermal load. Workplace air quality is conducted at Villa Rosa plant only and includes total particulate and respirable fraction at five locations in the foundry hall, and acid mist at one location of the electroplating section. The latest set of measurements show values below the relevant national limits.
Workplace air quality in the foundry is impacted by fugitive emissions (mainly dust) from the furnaces, which the company endeavors to improve. The installation of new furnaces, included in the FV Argentina II project, is helping to improve air quality in the melting shop, and the Company is also implementing improved exhaust ventilation and extraction of fumes. FV is undertaking an extensive monitoring campaign to assess workplace air quality in terms of total particulate, respirable fraction, and acid mists (sulfuric acid, hydrochloric acid, chromic acid and chromium). The Company regularly monitors the workplace concentration of nickel sulfate to ensure they meet international guidelines to ensure that the OSHA’s permissible exposure limit for hexavalent chromium is consistently met.
Available noise monitoring results show a number of locations exceeding the limit of 85 dB, with peaks at 110 dB. The Company conducted a detailed study of the workplace noise and is currently assessing measures to reduce the noise emissions and to limit worker’s exposure.
PS3: Pollution Prevention and Abatement
Pollution Prevention:
Air Emissions. These include particulate matter, generated in each of the process steps from thermal (melting furnaces) and chemical / physical processes (molding and core production, pickling, electroplating), and mechanical actions (e.g. handling of raw materials and finishing processes). Emission monitoring is regularly conducted and the results show consistent compliance with national and IFC standards.
Fume suppressants are used as additives to electroplating baths to reduce air emissions of chromium and/or in-line aspirators with scrubbers are operational to eliminate acid compounds. Other air pollutants, which are monitored by FV and comply with the national standards, include carbon monoxide, sulfur dioxide, lead, hydrochloric acid, formaldehyde, ethanol, nitrogen oxides. FV is also required to monitor copper, zinc, oil mist and nickel.
The Company developed a program to improve the control of air emissions, with specific reference to particulate matter and zinc oxide from furnaces, molding and pressing units, and to chromic acid and sulfuric acid from electroplating and pickling units, in order to bring the emissions into compliance with national standards. The program is conducted in coordination with the local authorities. To control and abate the emissions of chromic acid generated by the electroplating process, FV installed a highly efficient mesh-pad demister, which replaced the pre-existing scrubber. In addition, the organic additives in the chrome baths were changed to improve the efficiency of the surfactants with antifoaming agents and reduce emissions from the baths.
Wastewater Effluents. The industrial effluents of concern are from electroplating process and from metal shaping and surface preparation processes and they are treated in several steps within the facility. The Company constructed and begun operation of a new WWTP that became operational in mid-March 2011, allowing the treatment of 160 m3/day of electroplating effluents. The plant includes equalization, chromium reduction and precipitation, neutralization, flocculation and hydroxide settling to treat trivalent chromium, nickel and copper, effluent clarification, sulfide settling, final filtration and chlorination. The plant also includes a sludge conditioning process with ferric chloride and a filter press to dewater the sludge before off-site disposal. FV monitors the efficiency of the new plant and has developed a program to ensure compliance with applicable IFC guidelines for nickel, hexavalent chromium and copper.
Other industrial effluents contaminated with grease are combined with treated sanitary wastewater and discharged to a system of lagoons and chlorinated prior to discharge into surface water (arroyo Burgueño). Effluent monitoring is conducted monthly and consistently shows compliance with national standards.
The Company achieved complete separation of the different wastewater streams (industrial, sanitary and stormwater). The stream of potentially contaminated stormwater is subject to treatment whereas the clean stream is conveyed to the polishing lagoon prior to final discharge. Whilst the current wastewater treatment facilities comply with both national standards and IFC guidelines, the Company is studying the installation of a new biological system for sewage treatment to render the effluent suitable for discharge to surface water thus eliminating two of the treatment lagoons.
Solid and hazardous waste management: Solid non-hazardous waste and hazardous waste management at the plant is adequate, involving waste segregation and reduction. 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. Both non-hazardous and hazardous wastes are disposed of at off-site permitted treatment and disposal facilities.
Waste generation is adequately monitored, and the main streams of industrial waste include molding and core sand waste, sludge from electroplating process, and waste oil. Filter dust from abatement treatment is recycled in the furnaces. Metalworking oils and fluids from metal cutting and shaping are recovered from metal chips through the use of centrifuges, and recycled. After treatment, the metal particles contain approximately 3 to 4 percent of oil and are returned to the foundry. FV is investigating methods to reduce further the oil contain in the recovered metal particles, thereby reducing the emission of fumes at the foundry.
The new industrial waste storage area at Villa Rosa is adequately covered, paved, bunded and of sufficient capacity, allowing the storage of both liquid and solid residues. The waste storage area at Florida plant is adequate to handle the limited amount of industrial waste generated. FV increased the frequency of waste collection by the contractors from two weeks to one week in order to reduce quantities of industrial waste stored at the plants.
Hazardous Materials: The chemicals storage area at Villa Rosa and is adequately covered and contained, although some improvement is needed to separate and bund chemical containers. Chemicals management procedures have been developed and enforced throughout the plants. They include supply, acceptance, unloading, handling, storage and labeling of the chemicals. Specific detailed procedures are available for granular and powder chemicals, liquid chemicals, combustible materials, and oils. Tank tightness tests are periodically performed on the existing diesel fuel tanks.
Greenhouse Gas Emissions: Preliminary evaluation of greenhouse emissions has quantified them in approximately 19,000 tons CO2 equivalent per year. FV will annually quantify and report direct emissions from the facilities owned or controlled and indirect emissions associated with the off-site production of power used by its facilities, in accordance with internationally recognized methodologies.
PS4 Community Health, Safety and Security
Community Health and Safety: Issues include emergency preparedness and response, transport of raw materials and products, and security. As discussed under PS2, the Company has an adequate emergency preparedness and response system in place, in coordination with the local authorities to cover for external emergencies.
Transport of raw materials and products is mainly contracted to transport contractors. Adequate internal controls are in place and implemented by the security team to ensure that vehicles and trucks entering and leaving FV’s facilities are in good conditions, documents are in good order, and loading/unloading procedures are safely implemented.
Security Personnel Requirements: Security functions are covered by Company staff. The current protection services structure include 32 security staff, deployed in three shifts of eight hours, and managed by a security manager and a chief supervisor. The security staff is licensed to use fire arms, which are all registered by the national authorities and maintained in firearms storage. The staff is periodically audited by the Ministry of Defense and is mandated to attend an initial training course and refresher courses, provided by an external certified body. FV has developed an internal procedure for security staff, covering their functions, documentation, obligations, prohibitions, duties and code of conduct, including appropriate management of firearms.
