31500 - Alutech Expan

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Environmental & Social Review Summary

Project Number

31500

Company Name

THE ALUTECH GROUP

Date ESRS Disclosed

Mar 20, 2012

Country

Belarus

Region

Europe

Last Updated Date

Jun 12, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 5, 2012
Signed : Jun 15, 2012
Invested : Sep 4, 2012

Sector

Aluminum

Industry

Manufacturing

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

The Project is a proposed investment program of around Euro 90 million comprising expansion of production capacities. Alutech is aiming to expand the present production capacity of 22,000 tpa of extruded products and 53,000 units of door systems to 45,000 tpa and 150,000 units respectively (the Project). Production of extruded products (Alumin Techno) will be increased by construction of new workshops for foundry and anodizing works. Door systems production (Alstrong and Alutech Doors System), which is now operating at rented premises, will be also relocated to the new production facility. The Project will be implemented at two land plots neighboring Alutech’s existing site near Minsk, within the industrial zone “Shabany”.

Overview of IFC's Scope of Review

The proposed Project is with the Alutech group of companies (“the Company”, “Alutech” or “the Group”), the only producer of roller shutters accessories, sectional doors and aluminum extruded products in Belarus and an IFC client in good-standing since 2010. The Environmental and Social (E&S) review of the earlier investment (Project ID # 28684), as well as a short description of Alutech manufacturing facilities in Belarus, were disclosed on the IFC’s site and locally.
The existing investment is regularly supervised and its E&S performance has been determined to be in material compliance with at-approval agreements. The Group has completed all actions agreed with IFC in the Environmental and Social (E&S) Action Plan.
The most recent monitoring visit by the IFC’s E&S specialist to Alutech’s manufacturing enterprises in Minsk was conducted in December 2011. Meetings with the Group’s specialists were held to get the latest update on the current environmental and social performance; and to understand E&S implications of Alutech’s expansion project.

E & S Project Categorization and Applicable Standard

PS1: Social and Environmental Assessment and Management System
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement

The following Performance Standards were screened for but not found relevant for the actual project:
PS4: Community Health, Safety and Security. The Project will be implemented at Alutech’s site near Minsk, within a long-established industrial zone “Shabany”. There are no people living in buffer zones around Alutech’s plants and, thus, the Project is not likely to have an adverse impact on health of communities living in vicinity. The cumulative impact of the multiple business activities located in the industrial zone on the ambient air quality is monitored by local sanitary authorities. They are granting emission permits to tenants based on the estimated contribution to the "headroom" between pre-project background ambient air quality and limits defined by standards.
PS5: Land Acquisition and Involuntary Resettlement. The acquisition of the land plots for Project development through a long-term lease from the state did not cause physical or economic displacement of people or other businesses.

PS6: Biodiversity Conservation and Sustainable Natural Resource Management. The Project will not have adverse impacts on biodiversity as the project is being developed within a long-established industrial zone.

PS7: Indigenous People. There are no Indigenous People living in the project area.

PS8: Cultural Heritage. The Project will not have adverse impacts on cultural heritage as the project is being developed within a long-established industrial zone.

This Project is a Category B project according to IFC’s environmental and social review procedure. Alutech’s environmental and social performance is in material compliance with the regulatory requirements of the Belarus and relevant IFC’s Performance Standards and World Bank Group’s (WBG) Environmental, Health and Safety Guidelines. It is expected that Alutech’s environmental and social performance will be further improved as the result of the Project implementation. This is because the existing operations will be relocated to new facilities, which will be fully equipped with appropriate emission and effluent discharge control. The existing anodizing and foundry workshops of AluminTechno will be phased-out. Construction impacts associated with the Project are limited and can be readily mitigated by applying standard protection measures during construction.

Environmental and Social Mitigation Measures

PS1: Social and Environmental Assessment and Management System
Land plots for the Alutech expansion were allocated by the Government of Minsk Oblast within the industry zone Shabany. Land acquisition is possible through long-term lease only and is strictly regulated by the state. New land plots with designated zoning are offered through bidding procedures, carried out solely by the state authorities. Local authorities are responsible for initial assessment of the land plots before offering them for bidding, including environmental and social screening. The existing procedure guarantees that the provided land plots do not have environmental or social liabilities from past usage.

The company has obtained an approval from local authorities for construction of new facility for door systems’ production. The final land allocation for expansion of extruded products production will be possible only upon obtaining of positive opinion of the state regulators on design documentation, including environmental approval. To obtain the latter the Company would need to present the findings of the Environmental Impact Assessment of the proposed development, including air dispersion modeling; and mitigation measures to achieve local environmental, health and safety standards. Public consultations for this particular project are not required by the Belarus authorities having regard for the limited potential for adverse health impacts on local communities arising from the project.

The Group achieved a good progress in integrating Environmental, Health and Safety (EHS) aspects with the existing corporate ISO 9001 Quality Management System, as was agreed in the ESAP for the IFC’s earlier investment. In November 2011, Alutech commissioned an internationally recognized company to train ten of the Company’s specialists in ISO 14001 Environmental and Social Management System. EHS targets are now included into the Company’s Quality Management System, making those an integral part of the formal QMS.

In 2011 the company also hired a second environmental specialist, responsible for management of environmental, health and safety issues, including routine monitoring activities and periodic external and internal reporting on key environmental and safety control factors.

New facilities will be covered by the existing environmental, health and safety management system, which is consistent with PS1 requirements.

PS2: Labor and Working Conditions
In total, the entire Group employed 3,165 people in 2011. The largest entity in the Group is AluminTechno, which had about 700 employees at the end of 2011. The total workforce has increased by over 22 percent in 2011. Human resources managers expect this to continue to grow.

All employees in the Group are covered by the same Alutech Group human resources policies. The Alutech Group and each enterprise maintain a consistent grievance procedure throughout their operations, which is a part of the formal introduction to the human resources policies. All policies are presented at the time of hire.
Both Alutech Group and all individual entities have experienced human resources personnel. All entities base human resources policies and procedures on Belarusian national legislation, which is consistent with PS2. The Alutech Group has an in-house legal team that regularly reviews and updates procedures based on any changes in national legislation.
In August 2011, Alutech Group commissioned an independent consultant to conduct a labor assessment for Alutech’s operations in Minsk as was agreed in the ESAP. On the basis of the information obtained during assessment, there was no evidence of discouragement of the development of worker organizations, yet workers have not chosen to pursue collective bargaining.
There were only minor deficiencies identified during the assessment, all related to the need for minor revisions to existing policies and contracts.
Several areas of best practice that exceed the requirements of IFC Performance Standard 2 were observed, including a consistent application of Alutech Group polices at each facility, and regular efforts to assess worker satisfaction and strong internal communication. The Alutech Group human resources office has proactively developed employee feedback mechanisms to better manage employee issues, improve technical processes and retain workers. These feedback mechanisms are noted as efforts of best practice to improve business performance and improve worker satisfaction.

The Group has not pursued certification for international recognized management systems in health and safety such as the ISO 18001, but has take steps to comply with a Belarusian equivalent, which also seeks to develop a management system-approach to health and safety. In practice, this has involved developing formal risk maps related to all employee tasks, as well as appropriate mitigation steps to reduce risk. While managers state that they have no formal requirement to pursue certification, they are implementing risk maps for all sites and expect to complete this process in 2012.

Alutech continues to demonstrate a good OHS performance with only 1 lost time accident in 2011.

PS3: Pollution Prevention and Abatement
The Shabany industry zone, where Alutech’s existing and new production sites are located, is supplied with engineering infrastructure, including electricity, gas and water supply; and sewage system connected to public wastewater treatment plant. Space heating is provided by Alutech’s in-house gas fired boilers.
Air emissions at the Alutech’s facilities are mainly associated with foundry operations; casting; metal shaping and surface preparation; metal coating and painting operations.
The largest source of air emissions is a foundry shop producing aluminum billets for extrusion. Melting of aluminum is performed in 2 reverberatory (open hearth) furnaces (10 tonnes capacity each), which are not equipped with emission control. Although air emissions are within local permit levels, there was a concern raised previously about carbon monoxide (CO) and nitrogen oxides (NOx) emissions exceeding WBG’s guideline levels. Higher levels of these pollutants are mainly associated with combustion in oxygen starved environment to prevent oxidation of aluminum combined with use of nitrogen as a flux supplying agent. In January-February 2011 Alutech carried out a modernization of furnaces and, as a result, achieved lower CO and NOx emitted to the atmosphere and present in workplace air. Concentration of these pollutants is now constantly monitored for the purpose of technological and environmental control.

These existing furnaces will be phased-out by 2014 when a new foundry workshop will be started-up. Melting will be performed in new reverberatory furnaces with total capacity up to 50-55 tons. Reverberatory furnaces will be used in conjunction with fume extraction to collect diffuse emissions and secondary gas treatment techniques, and their design is expected to achieve WBG’s industry-specific guideline values for air emissions. The company will demonstrate compliance with local ambient air standards and confirm compliance with WBG’s air emissions guidelines.
Painting booths at all plants of the Group, except Alstrong, are equipped with secondary treatment, including cyclones and bag filters for capturing particulate matter (powder coating) and afterburning unit for thermal destruction of VOC emissions. Painting booth of Alstrong will be equipped with appropriate emission control after its relocation from rented premises to a new production facility in 2013.
Wastewater from anodic coating and other process wastewater are treated at internal wastewater treatment plants and is recycled as process water. Sanitary water is delivered to the municipal wastewater treatment systems. The company is carrying out frequent analysis of its waste water before it is delivered to the municipal treatment facilities to ensure it is within the norms these facilities can accept for treatment.

Secondary aluminum scrap generated during the production is recycled in the process. The permanent mold technique is used, without destroying the mold after solidification.
Non-recyclable solid waste streams are disposed at licensed landfills. Hazardous waste streams (e.g. used mercury lamps) are handled by licensed contractors.

A the combined CO2 emission from the 2011 operations of Alutech’ facility has been estimated to 25,700 tons.

Stakeholder Engagement

The procedure of receiving and addressing grievances from the communities is prescribed by the Belarus Law, adopted in 1996. The company is obliged to handle a grievance, take an action and/or provide a constructive feedback within 1 month upon its receiving. As of today, the company has not received any complaints in regards to its environmental, health or safety performance.

Since the Project is located within a long-established industrial zone and there are no people living in the Project’s area, public consultations are not required by the Belarus authorities. Upon completion, a copy of an Environmental Impact Assessment (OVOS) of expansion project will be available locally at the following location:

12 Selitskogo, 220075, Minsk, Belarus

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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