Health, Safety and Environment (HSE) Policy and Management System
HSE Policy - President has an HSE policy through which the company is committed to maintaining high standards of health, safety and environmental performance across all its oil and gas exploration operations. President is committed to the goals of avoiding harm to all personnel involved in, or affected by, its operations; minimising the impact of its operations on the environment; complying with all the applicable legal and other requirements where it operates; having a positive impact on people or communities directly affected by its activities and achieving continual improvement in its HSE performance.
To achieve the abovementioned goals, President will ensure there is strong leadership and clearly defined responsibilities and accountabilities for HSE at all levels of the organisation; ensure that the necessary resources are made available for effective HSE management; implement an HSE Management System that provides guidance on objectives in compliance with IFC PSs; identify, assess and manage HSE risks to people, the environment and assets as an integral part of the business; select competent staff, contractors and suppliers to manage and support the business; invest in HSE training to ensure individuals can perform their work safely and with due regard for the environment; maintain procedures which will allow an effective response in the event of an emergency; continually evaluate and seek to improve its HSE performance through regular reporting, audits, reviews and external benchmarking.
President’s HSE policy states that the Company’s directors, employees and contractors have a responsibility for maintaining high HSE standards, and this policy will be used to guide their activities. President will develop and implement a code of conduct to be shared by President, its contractors and sub-contractors, to manage the behaviors of workers with/in local communities and minimize incidence of nuisances and negative social impacts.
HSE Management System - President has an HSE Management System that the company has implemented across its operations. Its HSE Polices sits at the top setting the strategic goals and commitments of the Company. The HSE Management System Framework provides guidance on the implementation of policy requirements across the Company. Beneath this sits the local HSE Manuals and Operational Procedures, which provide the specifics of how activities should be conducted within each operation. In most cases, these local HSE Manuals and Operational Procedures are contractor documents, which are augmented or replaced by President’s documentation as required, and/or by building a management system-bridging document.
President will engage and partner with contractors to execute all of its work in Paraguay, and maintain only a core team of professionals in its organization mainly to lead/manage contractors, monitor and report company compliance. Thus, par
ticular attention is placed to the Contractor and Supplier Management component of the Company’s HSE MS as it relates to selecting contractors and working together in a contract environment.
The contracting of services and the purchase, hire and lease of equipment and materials is and will continue to be managed in a manner that meets HSE expectations including: selecting the contractor in accordance with a formal process of contractor selection; ensuring that the contractor is competent to perform the tasks for which they have been contracted and have a good safety and environmental record; contracts specifically require contractors to implement systems consistent with the HSE policies and the level of risk involved in their respective tasks; HSE requirements for equipment and materials are specified prior to purchase and compliance with these requirements is verified prior to, or upon delivery; and HSE performance of suppliers and contractors, and their compliance with obligations specified in contracts or purchase orders, is monitored and reported.
The Company has in place Contractor Selection and Management Guidelines that establish a system for assessing, selecting and managing suitable contractors for President’s ongoing operations. Contractor selection takes into account technical ability, cost, and the HSE performance of contractors from those performing typically low risk activities (office purchasing) through to high-risk activities (drilling). The system aims to ensure that risks to personnel, environment, company assets and reputation arising from the contracting or supply of equipment, materials or services are reduced to a level that is as low as reasonably practicable (ALARP).
The above procedure in combination with the risk management procedure, defines the range of health, safety, and environmental controls that can be applied to achieve and maintain high standards of contractor HSE performance.
This procedure applies to all President activities occurring on President managed sites or performed by President personnel or contractors engaged in work related activities and includes guidance at all key stages of a project: contractor tender, selection and award; contractor operations, and project completion and close out.
President is committed to incorporating security and social matters as integral elements of a Health, Safety, Environment and Community (HSEC) Management System, including guidelines and procedures to address potential risks and impacts to the project and the communities.
An HSEC management position was created to oversee all aspects of HSE and social responsibility, ensuring that the project and its associated facilities are in alignment and comply with IFC PSs and World Bank Group Environmental Health and Safety (WBG EHS) guidelines throughout the life cycle of the project. President has hired a HSEC professional to fill this position for its operations in Paraguay. With additional support fr
om specialized consultants, the HSEC manager will continue to develop the management system procedures, HSEC programs and plans, conduct environmental and social impact assessments (ESIAs) to meet the requirements of IFC PSs, mechanisms for communicating, documenting, reporting, and monitoring E&S activities including but not limited to those identified in the ESIA.
As part of the roles of the HSEC manager, a Community Investment Policy and a long-term community investment strategy at the local levels will be developed. The strategy will identify areas of social investment based on an analysis of local community and President’s own corporate needs. Through consultation with stakeholders including local, regional and the national government institutions, NGOs and the local community, President will identify investment mechanisms and potential partners to increase benefits to the project area. The development and implementation of the community investment strategy will consider the local, regional and national development plans and initiatives.
Paraguayan Environmental and Social Legal/Regulatory issues, and Status of Environmental Assessment and Licensing
EIAs and Environmental Licenses - President (Pirity and Demattei) has EIAs approved by the Paraguayan Environmental Regulatory Authority (Secretaria del Ambiente, or SEAM) for Oil & Gas exploration activities (seismic and exploration drilling). Pirity Hidrocarburos and Crescent Global Oil conducted the EIAs, processed and obtained approvals for the environmental licenses for exploration of Pirity and Demattei concessions respectively.
The environmental license for the Pirity concession was initially granted to Pirity Hidrocarburos when SEAM approved the EIA through resolution N° 205/2.008 on June 2, 2008. Environmental licenses in Paraguay are typically valid for a period of two years, and requiring subsequent renewal/extension for the same periods. Thus, the last renewal and extension of the Pirity environmental license was approved through resolution N° 2633/2.012 on September 6, 2012, and is valid until September 2014.
The environmental license for the Demattei concession was initially granted to Crescent Global Oil when SEAM approved the EIA through resolution N° 255/2.010 on October 1, 2010. The last renewal and extension of the Demattei concession was approved through resolution N° 293/2.012 on October 5, 2012, and is valid until October 2014.
The EIAs presented to the Paraguayan authorities showed some gaps with respect to IFC PSs including (i) environmental and/or social baseline for the project area as part of the assessment; and (ii) lack of stakeholder engagement and/or consultation with local stakeholders. The SEAM requirement with respect to disseminating project information was limited to notifying the public regarding the existence of an EIA available for review and comments. The companies made this information available for the period of 15 days in nationa
l newspaper and local radio in accordance with SEAM’s requirements.
President will conduct an ESIA aligned with the IFC PSs and WBG EHS guidelines. The ESIA will consider the following environmental and social aspects:; defining the environmental and social direct and indirect influence areas of the project; conducting an environmental baseline for the rainy and dry seasons; conducting a social baseline, including stakeholder mapping; conducting a community health baseline; air emission inventory; detailed effluent inventory; detailed hazardous and non-hazardous waste inventory; analysis of cumulative impacts related to the Project (seismic, exploration wells, access roads, trails, base camps) and the presence of other activities such as cattle ranching, agricultural and/or any other activity (as applicable) in the area of influence; alternative analysis for selection of base camps, access roads, drilling pad locations, to avoid/minimize impacts; detailed Environmental and Social Management Plans specifying mitigation measures for each impact and risk; and stakeholder participation and consultation.
Biodiversity - Although the Project area is not located in a national park, the Natural Reserve of Palmar Quemado is located within the western zone of the Pirity concession. Palmar Quemado is a private domain fauna protection reserve under decree 8011. Decree 8011 includes the following provisions: to provide the benefits included in Articles 55, 56 y 57 of the law N° 352/94, Protect Fauna Areas (“Areas Silvestres Protegidas") in accordance with the terms of Article 30 of such law, and the owner of the private domain declared as natural reserve "Palmar Quemado", must present the Area Management Plan and a map indicating the coordinates that conform the reserve boundary within a period no greater than 6 months from the publication of this decree. President is in the process of clarifying the limitations and restrictions (if any) imposed by decree 8011, and is committed to develop and implement any necessary measures and environmental management plans.
The Paraguayan Chaco is a large geographic semi-arid region in Paraguay, and many of those living in the region are Indigenous Peoples. The vegetation of El Chaco varies from the east to the west, reflecting the changing nature of the soil. The trees in the area are short and thorny; there are brushwood and cactus, dunes and small hills, especially in the north of the department. Boqueron is also called Alto Chaco or Dry Chaco and in summer registers the highest temperatures in the country. El Chaco has an abundance of wildlife, a varied bird population, the streams host a variety of fish species, and the region is home to several species of insects and reptiles. The rain is scarce but when it does rain, normally from December to March, it causes flooding.
The Reserve “Palmar Quemado”, Private Domain Area Fauna Protection, is located in the western zone of President’s concession. Curre
ntly, President does not have any activities inside the reserve.
Water is scarce in the Project area, especially during the dry season. Exploration drilling operations will have a greater water demand than seismic activities.
The western region—Paraguay Occidental—with two percent of the Paraguayan population, produces nearly 65% of the country''s milk and meat. High output is linked to the advanced technology and industry of the Mennonite settlements. Further and most important, tracts of El Chaco are being deforested and used for cattle ranching, mainly by cattle ranchers from Brazil and Mennonites, who work as farmers and ranchers.
Considering the above information, President will conduct a field environmental baseline in the concessions considering season variations (dry and rainy seasons) before initiating the exploration drilling campaign. The environmental baseline will include field data to describe the status of the following environmental receptors: air; surface and ground water - quantity and quality; soil and geology; climatic factors; flora and fauna - split into freshwater and/or terrestrial, and split into separate habitats and species; landscape (including light pollution and tranquil areas); and noise.
The Company will incorporate the environmental data gathered during the baseline in the impact assessment process as well as documenting such data as part of its due diligence of pre-existing conditions before the drilling activities. President will also determine the source and volumes of water for drilling activities, including alternative analysis.
As stated above in IFC PS 1, President is in the process of clarifying the limitations and restrictions (if any) imposed by decree 8011, Reserve “Palmar Quemado”, and are committed to develop and implement any necessary measures and environmental management plans.
President will develop a biodiversity conservation plan for its operations, and will consider participation in biodiversity initiatives of El Chaco as an area of interest to support in the region.
Temporary Land Access - All President’s exploration activities have been conducted in private lands, and with previous agreement with landowners. The area currently affected by the project has very low population density and is either covered by natural vegetation with no or very limited use for the local community or has been cleared for grazing and cattle ranching. There is some, but very limited agriculture production in the region.
In Paraguay landowners are not required to register the transfer of land property. The company has consulted widely with the local residents to establish who is the rightful owner of the land of interest, and has established written access agreements with each of the affected landowners and occupants. Permissions to access the land has been sought and acquired with more than one “landowner” when uncertainty of the legitimate owner has arisen. Access agreements outline the
activities that will be conducted in the land, the potential impacts to property, a procedure to verify the condition of the property prior, during and after the work, and a list of rates for compensation of potential damages including fees for transportation potentially required by the owner. The procedure to verify the condition of the property includes the participation of a representative from the Ministry of Public Works and Communications. The land where the seismic camp is located is leased from a single landowner.
Rates are based on replacement cost and were previously negotiated with the landowners represented by the local Mennonite Cooperative of Neuland who owns a number of the affected properties. According to the agreements, President pays for the repair of any damage to property within 24 hours of the presentation of the invoice.
The indigenous community of La Princesa occupies land owned by the Association of Indigenous-Mennonite Cooperation Services (ASCIM), an NGO funded mainly by Mennonite colonies and cooperatives. ASCIM acquired the property to provide land to the Nivacle Community of La Princesa. Currently ASCIM is in the process of transferring the land title to the Community.
President engaged the indigenous community and landowners (ASCIM) prior to commencing the activities in their land, and signed an access and compensation agreement similar to the ones subscribed with other landowners.
In Paraguayan legislation the usage of land for hydrocarbon activities has predominance upon any other existing right and on that basis land is subject to expropriation. If the owner of the land and the concessionaire do not arrive to an agreement for temporary occupation, the concessionaire can request the Ministry of Public Works and Communications to constitute administratively the servitude and determine the indemnification to be paid by the concessionaire to the owner. To date, President has negotiated on a basis of access agreement with all landowners.
President will develop a formal Land Acquisition and Compensation policy applicable to permanent and temporary land acquisition and a grievance mechanism will be put in place prior to the establishment of future land use agreements.
Although physical and economic displacement is unlikely at the exploration stage President will develop a Resettlement Framework as part of their management system, so that if and when the project moves to an exploration and production stages this is necessary. A Resettlement Action Plan and a Livelihood Restoration Plan will be developed prior to any relocation.
Cultural Heritage - There are no records of archaeological or historical sites in the area of the project. However in the general area, El Chaco War was fought between Bolivia and Paraguay from 1932 to 1935. As part of the development of the ESIA, President will conduct the necessary archaeological baseline studies and address any findings in line with IFC PS 8. President will
develop a chance find procedure including appropriate training for all personnel that will be conducting works that may lead to the discovery or impact of archaeological or historical sites.
