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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the above Performance Standards:

The five remaining Performance Standards are not applicable for purposes of this review. Because this investment activity does not involve the establishment of site-based assets, there is no associated community exposure to health and safety risks (PS4) or land acquisition impacts (PS5). Nor do railcar leasing activities involve major threats to biodiversity or habitat destruction (PS6). Moreover, there are no indigenous people or cultural heritage impacts associated with these activities.

This remains a category B project because IFC’s ongoing review and supervision of the Company’s railcar leasing activities indicates that this additional investment will not result in any material change in the associated environmental and social risks and impacts. The current Environmental and Social Risk Rating for the existing investments is Excellent. Finally, and in the context of their prospective investment, EBRD also considers this a category B project.

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. Key issues for this repeat investment are essentially the same as those previously identified and include: environmental and social organization and management of leased railcars, including relationships with manufacturers and lessees; employee working conditions, including health, safety and training programs; and pollution control and waste management activities associated with railcar maintenance. IFC’s ongoing supervision of the Company’s railcar leasing activities indicates that this new investment will not result in any material change in the management of environmental & social impacts and risks associated with the project.

As a railcar leasing company, Brunswick’s process of assessment and management of risks and impacts is confined to ensuring the cars and wagons it acquires and leases are designed and constructed to meet appropriate and relevant safety and environmental standards. These include those of the Ministry of Railways (MPS) and Russian Railways (RZD). Brunswick’s railcar designs are also generally consistent with the UN Model Regulations. Through its internal quality control procedures, the Company’s engineering staff and quality inspectors ensure that wagons are constructed by various licensed manufacturers in accordance with these requirements.

Each car will be fabricated by a government licensed manufacturer, and will have a technical passport and vehicle registration certificate, confirming that the car meets all required design specifications, such as material of construction, thickness, coatings and linings, etc. In addition, cars will be equipped with appropriate safety features, such as additional safety valves, automatic coupler restraining arms, shelf couplers (to prevent separation in an accident) and end shields, and appropriate top hatch seals and bottom valve controls. As appropriate, railcars will display labels describing the dangerous properties of the goods being carried (MPS hazardous index and UN hazardous class) to allow proper handling by transport personnel or emergency services in the event of an accident. Moreover, Russian regulations require railcars to undergo regular, frequent maintenance and repair at licensed maintenance depots where the entire wagon is disassembled and worn components are replaced or brought to standard.

As a railcar leasing company, BRHL currently has, and will continue to have, limited or no responsibility for managing the hazardous materials in transport. Instead, this responsibility lies with the actual carrier or operator of the railcar, from loading through transportation to unloading. The carrier will be responsible for monitoring the material during transport, such as inspecting for leaking valves in transit. The Company is introduced a status register containing for each leased railcar via ERP system: identification of lessee; railcar manufacturer specifications; duration of lease and intended use of railcar; description of cargo types and volumes; and dates of maintenance and repair activities. Prior to executing leases with railcar operators, Brunswick will use reasonable efforts to ensure lessees have the necessary capacity and procedures in place to operate the railcars in compliance with relevant environmental requirements.

Again, owing to its limited responsibility, BRHL will depend on its customers and government authorities for accident planning and response. In this capacity, the authorities will provide emergency planning and response coordination, emergency response equipment, and appropriate training of its employees. In the event of an accident, customer personnel or on-the-scene MPS staff will immediately notify MPS emergency management who in turn inform the impacted community in coordination with the Ministry of Emergency Situations (MChS). At the same time, MPS and MChS damage assessment and response teams will mobilize and respond to the damage and to eliminate risks posed within a matter of hours. MPS’ procedures also include extensive incident investigation protocols that establish the cause of the accident, impose penalties, if applicable, and identify the steps needed to prevent reoccurrence. There were 2 incidents during 2011 year period in which railcars were damaged with no associated personal injuries or environmentally damaging releases.

Going forward, Brunswick intends to create a new entity as an integrated maintenance cost center to carry out depot repairs and wheelset replacement for all group entities. The Company have to apply all applicable Performance Standards to the new entity, as appropriate.

Brunswick has a comprehensive Human Resources policy for its 83 employees. Conditions of employment, as well as wages and benefits, are appropriately communicated to employees. An equal opportunity employer, its procedures are designed to encourage equal opportunity and non-discrimination. The Company developed and implementing a grievance mechanism for its own employees and subcontractor employees that allows personnel to express their grievances and issues of concern, have them properly recorded and registered, and addressed, as appropriate. The grievance mechanism outline is available means for submitting complaints; description of procedures and time frame for formally logging complaints (maximum of 5 days); notifying personnel about the logging date and number of complaints; and follow-up and response measures and schedule, and an appeal procedure.

Employees are located in commercial office space; no employees are involved in workplaces where occupational health and safety pose significant risks or concerns. Instead, such activities will be conducted by employees of responsible railcar operators and RZD or private contractor workshops, as appropriate. These parties are responsible for providing the necessary programs and protections for employees in their respective workplaces.

The key pollution-related risk associated with BRHL’s leasing activities surrounds wagon maintenance-related effluents and wastes management. Here again, operators outsource all applicable railcar maintenance activities to selected RZD workshops or at licensed facilities owned and operated by private contractors. At these facilities, the insides of the cars are typically steam cleaned with aqueous-based cleaning solutions. Wash waters are then collected and treated in holding lagoons prior to surface water discharge in compliance with national and local environmental requirements. In some cases, railcar cleaning contractors employ more sophisticated wastewater management systems, whereby both oils and wastewaters are recycled, with zero discharge to the environment.

Owing to the nature of Brunwick’s railcar leasing activities, no local communities are directly affected by the business activity. Instead, any community-related risks and impacts associated with railcar operation are the responsibility of the operator and/or the relevant government authority as described above. As a result no formal information dissemination activities have been undertaken. Brunswick has established methods for communication of environmental and social aspects of its activities to external interested stakeholders and maintained procedures for receiving, documenting, and responding to concerns from any external interested parties. A formal information dissemination activities have been undertaken via special sustainability section on the Company’s website eng.brunswickrail.com/eco.php.
The Company has developed an Environmental Strategy which is available on-line: eng.brunswickrail.com/downloads/Environmental_Strategy_Brunswick_Rail_eng.pdf

Anders Lidefelt
Managing Partner
Brunswick Wagon Leasing
Paveletskaya Ploschad 2/2
Moscow, 115054, Russia

tel. +7 (495) 783-6700
fax +7 (495) 783-6701
mailto:alidefelt@brunswick-leasing.com

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.