While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category B project according to IFC’s Environmental and Social Review Procedures. The Project will be located in an area designated for industrial purposes and within the wider Lázaro Cárdenas port area. Impacts related to the project will be time limited (short term during construction) and site limited (within the immediate project site) and not expected to result in significant long term impacts. Any environmental, health and safety issues linked to the project can be appropriately managed using accepted good engineering and environmental, social and health and safety practices.

IFC’s appraisal considered environmental and social management plans for the Project and gaps if any between these plans and IFC requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed Environmental and Social Action Plan (ESAP) disclosed in this review summary. Through implementation of these management plans and the ESAP the Project is expected to be designed and operated in accordance with Performance Standards objectives.

There are no communities in the immediate vicinity of the site and the access road to the Project is within land owned by the port authority. The Project will not require involuntary resettlement or land compensation as the future on-shore facilities will be constructed on land clear of any people and granted in concession to the Project by APILAC. Also, the Project will not have adverse impacts on indigenous peoples or over cultural property. Hence, PS4 (Community Health, Safety and Security); PS5 (Land Acquisition and Involuntary Resettlement), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) do not apply for the purpose of this review.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Management System: APM has in place a corporate Safety Policy and a Safety Management System (SMS) which governs its activities. APM has also developed a self-audited Safety Conformance System (SCS) to assure its operations are in conformance with the objectives of the Program. As part of its contract with the port authority, APMTLC will develop and implement ISO14001 and ISO9001 certified management systems and achieve certification as a Clean Industry (Industria Limpia).



The EPC Contractor (ICA) has in place an integrated Corporate Environmental, Health and Safety and Quality Management System which is certified under ISO14001, OHSAS18001 and ISO9001. As part of this System, the EPC contractor has developed a series of Programs based on the continuous improvement cycle (plan-do-check-act) and various Management Plans and Procedures (housed within a HSSE Plan) to address the risks and impacts related to site preparation and construction.



Site preparation, construction and dredging activities will be required to follow APMTLC’s commitments as stated in the EIA and any other local environmental, social and health and safety regulations and will be continuously supervised by APMTLC.

As part of IFC’s involvement, ICA’s existing EHS Management System for the Project (including its HSSE Plan) will be reviewed to align the System’s requirements with IFC’s Performance Standards, General and Sector Specific EHS Guidelines and good international industry practice (GIIP). In addition to this, the existing EHS auditing procedures used by the auditing consulting company (SEGA) will be reviewed to assure compliance with national requirements as well as IFC Performance Standards, EHS Guidelines and GIIP.



Environmental and Social Impact Assessment: The national environmental authority (“SEMARNAT”) awarded the project’s environmental license in October 2012 (through Resolution MICH/GA/04/5951/2012) based on a comprehensive EIA (MIA-R) prepared by Sistemas Estratégicos para la Gestión Ambiental S.A (“SEGA”) on behalf of the Company and following applicable Mexican requirements. As part of this process, the Company commissioned baseline and assessment studies including those for: hydrology, hydrogeology and geo-morphology, water and air quality, soils, sediments, biodiversity, landscape and socio economic parameters. Subsequent to the submittal of the initial EIA, an additional modification to the EIA was submitted to SEMARNAT due to changes of the terminal to an automated operation. This modification was approved by SEMARNAT on July 2013 (through Resolution MIXH/GA/04/5006/2023).



APILAC has also developed a Master Program for Port Development for 2011-2016 to guide activities for the wider port. APMTLC’s activities will follow the requirements of this Master Program.



As part of its Management System, ICA has procedures in place to identify both environmental and health and safety aspects and risks from its act
ivities to make sure mitigation measures are in place to manage these.



Organization: The EPC contractor’s ESHS organization includes one head (superintendent) who is responsible for environmental, health, safety and security and quality aspects for the Project. This superintendent, in turn has, either a responsible person or a supervisor to manage separately environmental, health, safety, security and quality matters.



While the contractor is required to ensure adherence to applicable environmental, social and health and safety requirements, as mentioned, APMTLC is also supported by SEGA who carries out monthly environmental supervisions and reports back to APMTLC on the environmental performance of the contractor.



More recently, APMTLC has also secured the presence of a Corporate EHS Manager who has relocated to Lázaro Cardenas to support development of the Project in alignment with APMTLC’s Corporate EHS requirements.



Monitoring and Reporting: As part of external monitoring, the Project is periodically supervised by APILAC and the government’s environmental authority (SEMARNAT’s Procuraduria Federal de Proteccion al Ambiente – “PROFEPA”) for compliance with the commitments included in the MIA-R. As part of internal monitoring, as mentioned, this is conducted by an external environmental consultant who reports to APMTLC.



With regards to external reporting, the Company is required to submit bi-annual environmental reports to SEMARNAT on environmental performance during the site preparation and construction phase. As part of its internal reporting, APMTLC, through its independent environmental consulting firm, develops quarterly environmental reports which are submitted to APMTLC’s EHS management.

Human Resources Policy and Management: It is expected that approximately 1000 direct workers will be deployed at the project site during the peak of construction (around 2Q 2014). During operations, it is expected that approximately 155 direct workers will be employed at the terminal. Mexican labor regulations prohibit all forms of forced or child labor and provides for the right for workers to form unions. The established Mexican labor regulation covers a broad range of labor matters including employment contracts and collective agreements, conditions of employment, insurance, social security and occupational health and safety.



The EPC Contractor has a collective work contract with the Union “STIAT” for securing laborers for the Project and contracts are aligned with the national labor law. These contracts specify labor conditions, rest and vacation days, bonuses, health insurance and training requirements, among others.



The EPC Contractor has in place a grievance phone line for workers to report concerns or complaints. To date grievances have been in the form of toll free, unanimous and confidential telephone number. Additionally the EPC has an email address where external concerns or complaints can be registered and evaluated by EPC Management.



As part of IFC’s involvement, the EPC Contractor will develop a formal Grievance Mechanism for workers in line with the requirements of Performance Standard 2 through which employees may raise workplace concerns. The mechanism will establish the policy and procedures for handling grievances (i.e., logging a grievance and mechanisms for their resolution). ICA will inform and train the employees on the availability of this mechanism. The procedure will recognize the rights of employees to access external administrative or judicial process such as an employment tribunal for resolution of complaints that is available under the national law (See Action 2 of ESAP).



During the operations phase, and as part of IFC’s investment, APMTLC has agreed to develop a Human Resources Policy specific to the Project which is aligned with PS2 to clearly define the rights and obligations of employees and the employers regarding compensation and benefits, working hours, occupational health and safety, grievance redress procedures, among others (See Action 2 of ESAP).



Occupational Health and Safety: It is the company’s policy to conduct its activities in a manner that promotes continual improvement, complies with applicable laws and regulations, protects the health and safety of its employees, and does not harm the health and safety of others, and therefore Occupational Health and Safety is a priority for APMTLC.



The EPC contractor is responsible for occupational health and safety matters during the construction phase. As part of this, ICA has developed a series of management plans and procedures to make sure risks to workers are identified and managed adequately. As part of the review
of the Operational Plans and Procedures of the ESHS MS for the EPC, the Company will review existing OHS procedures, including training in relevant hazards, emergency response procedures, among others, to make sure they are aligned with PS 2 and GIIP.

Given the nature of container handling and storage it is not expected that APMTLC will generate significant amount of gaseous emissions or effluents. Power consumption is expected to be moderated and will be supplied from the national grid. Greenhouse gas emissions associated with this project will be negligible. Non-potable water required for the administrative buildings and limited operational activities will be sources from the municipal water system.



According to the EIA, the site preparation and construction phases will generate short-term and in some cases permanent impacts related to the landscape and morphology, soils, flora and fauna, water quality, air quality, noise and employment. Accordingly, the EIA includes management actions to minimize and mitigate these impacts. The EIA also lists a series of positive impacts during these phases related to the generation of employment and enhanced local economic activities.



From a walk-through within the construction site, good practices were observed with some opportunities for improvements noted, mainly on housekeeping and pollution prevention issues.



Air Quality and Noise Control: As mentioned above, gaseous emissions during operations will be minimal. However, during construction activities some emission of gases and of particulates (dust) are expected and the EMP includes specific requirements to address this issue, including inspections and emissions certification of vehicles, keeping construction material wetted down while on storage, covering trucks transporting earth material and controlling dust on access roads through the use of water .



Noise generated during construction will include the use of heavy equipment such as front loaders and trucks. Also, temporary noise impacts will result from the installation of the piles at the pier. Some of the management and mitigation measures within the EIA include the adequate maintenance of vehicles and equipment, monitoring of the work environment to maintain noise levels within the established regulation, providing PPE for workers and carrying out monitoring of noise when new activities are introduced.



The area around the project does not have human settlements so there will be no impact to local communities. It is expected that during operations there will be continuous noise from the operation of cranes, transport vehicles, etc but these levels will be maintained below those established in local regulations. Proper PPE will also be provided to workers.



Erosion Control: During site preparation and construction erosion might be present from the clearing of vegetation and related earthworks. The EIA has specific requirements for the Company to follow during earthwork activities. Topsoil was salvaged and placed in “La Paloma” for future activities.



Solid and Liquid Waste Management: The Project is expected to generate moderate quantities of non-hazardous waste and limited amounts of hazardous waste during
site preparation, construction and operation. Currently waste is segregated by organic and inorganic characteristics and transported off-site by an authorized waste transportation contractor Sani Portátil del Pacifico to the waste water treatment plant (PTAR).



The environmental management plans/procedures to be revised for the Project will include specific requirements to establish a waste mitigation hierarchy to minimize, reuse, recycle and then dispose of wastes. Training requirements will also be included in the EMP to raise awareness on adequate waste management practices.



The terminal’s design includes measures and equipment to minimize, segregate and treat wastewater, storm water and runoff through the facilities and particularly in areas such as the vehicle maintenance areas. These measures include wastewater treatment plants, oil/water separators and grease traps. Liquid wastes generated during site preparation and construction will include those from portable toilets. Liquid wastes generated during operations will include those from workshops, office buildings and kitchen facilities. During operations, all effluents will be treated in a packaged aerobic wastewater treatment plant before discharge to surface waters in compliance with Mexican regulations and IFC EHS Guidelines. Prior to discharge, the appropriate discharge permit will be obtained from the relevant authority (CONAGUA). Rain water will not be mixed with effluents and will be channeled away from the site. The sludge produced in the treatment plant will be disposed of in an authorized sanitary landfill.



Also, during operations, liquid waste generated by ships (i.e., bilge waste, ballast water, sewage and used oils) will be managed by third parties that must be licensed, insured to cover potential damages and have in place environmental management plans. Any discharge of waste will also require permission from local authorities and APILAC.



Dredging: The channel to the TEC II location has been dredged to 16.5 m over a width of 180 meters by the port authority. No major dredging works are envisaged for the Project, except for the removal of material along the berth line and in the berth pocket. Maintenance dredging along the channel is responsibility of the port authority.



The Project is expected to use some of the dredge material produced as fill in the landscape program and platforms for the site. Dredge materials will be disposed of in area onshore designated by the port authority for the disposal of this material (La Paloma Site) following dewatering. The port authority has all the required authorizations to carry out disposal of dredge material at this site.



Dredging will be conducted with a suction dredge (Hopper Dredge) which will limit the amount of sediments which could be suspended from these activities.



Management of Hazardous Materials: During construction activities, maintenance of heavy equipment or light vehicles is no
t allowed within the site. Hazardous materials used during site preparation, construction and operation will include fuels, lubricants and other chemical products. Fuels and lubricants are stored in a designated bermed and covered storage area. This area is located away from sensitive environments (water courses) and is covered and adequately ventilated. Transportation of hazardous materials off site is conducted by an authorized waste handling facility (CARSA) and disposed in Reciclados y Destilados Monterrey SA de CV.



During site preparation and construction activities, the EPC contractor has developed an Emergency Preparedness and Reponses Plan to address incidents and accidents. Training is provided to workers on spill management and emergency response.

The Project is not located within any legally protected areas or internationally recognized biodiversity sensitive areas such as Ramsar Sites, Key Biodiversity Areas (KBA) or Important Bird Areas (IBAs). The Project is however located within the wider Balsas Region and Interior Oaxaca Endemic Bird Area (“EBA”) which stretches through Colima state in the west to interior Oaxaca in the east, and to Puebla and Morelos states in the north. This EBA lists 2 species of bird classified as Near Threatened (NT) and 8 species of bird classified as Least Concern (LC).



The Terminal site covers an area of 102 hectares comprising areas with no vegetation (59.47 hectares) as a result of previous disposal of dredge material in the area, herbaceous thorny tropical vegetation (32.06 hectares), tropical thorny shrub vegetation (3.67 hectares), induced grassland (3.54 hectares) and water body (3.26 hectares).



During field surveys as part of the MIA-R no species of flora were identified to be legally protected or listed in IUCN’s Red List. With regards to species of fauna, based on the field surveys, 3 species of birds were identified as being protected under Mexican legislation as of Special Protection (Proteccion Especial), 2 species of reptiles were classified as of Special Protection and one species of reptiles was classified as Threatened (Amenazada). All the species of birds noted above are classified as Least Concern (LC) in IUCN’s Red List of Threatened Species.



Based on the fact that, as part of construction activities, approximately 39.27 hectares of secondary vegetation will be impacted, and as part of the requirements in the EIA, the Company has committed to carry out a reforestation program in an area of 40 hectares in the Cerro del Punuato legally protected area (Area Natural Protegida – ANP). The program has a duration of 5 years and will include the planting of approximately 44,000 trees within this protected area. Also, as part of its requirements for approval of the EIA, the Company has developed, and is in the process of implementing, a Program for the Rescue, Management and Relocation of Flora and Fauna together with a monitoring program to assess the success of these activities over time.

As this project is located within an existing industrial (port) facility and is not located near any residences or settlements, there are no affected communities. The Company carried out its engagement process for the EIA in line with established Mexican regulations. This included publishing information on the Project in a local newspaper (La Voz de Michoacan) on August 08, 2012 and making the full EIA document and the executive summary available at SEMARNAT’s offices in Morelia, Michoacán on August 07, 2012. No comments from the public were received prior to granting approval.

The EIA was also submitted to the Secretaria de Urbanismo y Medio Ambiente del Gobierno del Estado de Michoacán del Ocampo (SUMA) on August 17, 2012 and to the Lázaro Cardenas Port Authority (APILAC) on August 24, 2012. Comments from both agencies were provided to SEMARNAT on September 4, 2012 and September 6, 2012, respectively.

The Company does not currently have a grievance redress mechanisms to receive, register and monitor complaints, claims and suggestions from third parties. As part of its commitments with IFC, APMTLC will develop and implement an external communications procedure for the Project in line with IFC’s PS requirements (see Action 1 of ESAP).

The Environmental License including a description of the Project’s environmental and social management policy will be available for the public in the APM Terminals Mexico City office and the APM Terminals Lázaro Cardenas office.
For additional information please contact:

Name: Naima Bhana
Address: Campos Elíseos 223 – 503 y 504. Colonia Polanco Mexico City, Mexico 11560
Phone: +52 55 91382803
E mail: mailto:naima.bhana@apmterminals.com
Website: http://www.apmterminals.com

Name: Raul McFaddin
Address: Campos Elíseos 223 – 503 y 504. Colonia Polanco Mexico City, Mexico 11560
Phone: +52 55 91382810
E mail: mailto:raul.mcfaddin@apmterminals.com
Website: http://www.apmterminals.com

Broad Community Support is not applicable for this project

Environmental and Social Action Plan (ESAP) Status Report (Client completes this report annually)
Project Name: APM TEC II	Project ID: 31939
Team Name:	Region: Latin America and the Caribbean
Country: Mexico	Sector: Port and Harbor Operations
Task Title/Description	Anticipated Completion Date
Develop and implement an External Communications Procedure in line with IFC requirements to receive, register, assess and address issues raised by external parties.	November 30, 2013
Develop a Grievance Mechanism for workers in line with the requirements of PS2.	November 30, 2013
Prepare a Human Resources Policy aligned with PS2 to clearly define the rights and obligations of employees and the employer regarding compensation and benefits, working hours, occupational health and safety, grievance redress procedures, among others.	Prior to the start of Operations