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
The following Performance Standards were screened for but not found relevant for the actual project:
PS4: Community Health, Safety and Security. The project is being implemented at Alutech’s sites 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 expected 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. These authorities grant emission permits to tenants based on the estimated contribution to the "headroom" between pre-project background ambient air quality and limits defined by standards. Given the project location there are no traffic related issues and security is provided by unarmed guards.
PS5: Land Acquisition and Involuntary Resettlement. The acquisition of the land plots for project development through a long-term lease from the state has not caused physical or economic displacement of people or other businesses. Given the project location within the long established industrial area PS6: Biodiversity Conservation and Sustainable Natural Resource Management is not applicable and neither is PS8: Cultural Heritage. Finally there are no Indigenous Peoples in the project area thus PS7: Indigenous Peoples is not applicable.

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 due to relocation of the existing operations to new facilities which are fully equipped with appropriate emission and effluent discharge control, and possible phase-out of existing foundry workshop of AluminTechno. Construction impacts associated with the project are limited and can be readily mitigated by applying standard mitigation measures.

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.

Identification of Risks and Impacts

Land plots for the Alutech expansion were allocated to the company under a 99 year lease agreement with the Government of Minsk Oblast. 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 all necessary approvals from local authorities for construction of new workshops (door systems’ production, anodizing workshop, foundry workshop) including positive opinion of the state environmental regulators. To obtain the latter the company presented 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.



Management Programs

The Group has achieved good progress in integrating Environmental, Health and Safety (EHS) aspects with the existing corporate ISO 9001 Quality Management System (QMS), as was defined in the ESAP for IFC’s earlier investment: The latter included the need to supplement the certified quality management system with Environmental, Health and Safety objectives and targets and make these an integral part of the system. Further, management representatives responsible for overseeing EHS issues received training in the ISO 14001 Environmental and Social Management System by an internationally recognized company.



Organizational Capacity and Competency

The company has designated environmental and safety specialists, 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.



Supervision visit to the company’s operating facilities in Belarus indicates adequate implementation of the E&S management system aligned with PS1 requirements.



The existing EHS management system which is consistent with PS:1 requirements will be extended to the new facilities.

In total the entire Group employed 3,976 people in 2013. The largest entity in the Group is AluminTechno, which had about 1,000 employees at the end of 2013.



Human Resources Policies and Procedures

All employees in the Group are covered by similar Alutech human resources policies. Alutech and each associated 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 and individual entities have experienced human resources personnel. All entities base human resources policies and procedures on Belarusian national legislation, which is consistent with PS:2. Alutech has an in-house legal team that regularly reviews and updates procedures based on any changes in national legislation.

As the condition of earlier IFC’s investment, Alutech Group commissioned an independent consultant to conduct a labor assessment for Alutech’s operations in Minsk, which was part of labor-related requirements agreed with the International Confederation of Free Trade Unions in 2007 to ensure PS2 compliance in the Belarus context. 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.



Several areas of best practice that exceed the requirements of PS:2 were observed, including a consistent application of Alutech’s polices at each facility, and regular efforts to assess worker satisfaction and strong internal communication. Alutech’s human resources office has proactively developed employee feedback mechanisms to better manage employee issues leading to worker retention. These feedback mechanisms are noted as efforts of best practice to improve business performance and improve worker satisfaction.



Occupational Health and Safety

The Group has not pursued certification for international recognized management systems in health and safety such as the OHSAS 18001, but has taken steps to comply with a Belarusian equivalent and develop a management system-approach to health and safety in line with PS:2 requirements. In practice, this has involved developing a corporate OHS policy and risk maps related to all employee tasks, as well as appropriate mitigation steps to reduce risk.



Concentration of aluminum in a workplace air is reported not to exceed 0.55 mg/m3, which is within internationally adopted threshold limit value of 1 mg/m3.



Alutech continues to demonstrate satisfactory OHS performance with 1.14 Injury Incidence Ratio in 2013 (5 lost time accidents per 4,400,000 man-hours worked). This represents acceptable performance and in line with international benchmarking of the sector. The company reports on 3 lost time accidents in first half of 2014.

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 a sewage system connected to the municipal wastewater treatment plant. Internal heating is provided by Alutech’s in-house gas fired boilers.

Air Emissions and Ambient Air Quality

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 foundry shop is the primary source of air emissions and is used to produce aluminium 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. These furnaces are acceptable for minor non-ferrous production, and especially when they use pure aluminium such as in this case. Previously concerns regarding air emissions were noted in that while within local permit levels, carbon monoxide (CO) and nitrogen oxides (NOx) emission exceeded WBG’s EHS Guideline for Foundries levels i.e., 200 mg/m3 for CO and 120 mg/m3 for NOx. The higher levels of these pollutants were mainly associated with combustion in oxygen starved environment to prevent oxidation of aluminum combined with use of nitrogen as a flux supplying agent. Thus Alutech carried out modernization of the furnaces and, as a result, achieved lower CO and NOx emissions 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. There is no monitoring of particulate matter (PM) emissions as it is not required by local environmental authorities. Calculated PM emissions (52 mg/m3) are only slightly exceeding the WBG EHS Guidelines limits though (50 mg/m3).



In 2014 the new foundry workshop will be commissioned. Melting will be performed in new reverberatory furnaces with total capacity up to 40-45 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 EHS 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 and this has been agreed in accordance with the existing investment agreement.



Previously the company was planning to phase-out the existing furnaces, which are not equipped with emission control, by 2014. However, the company may decide to continue operating the existing foundry shop to produce aluminum billets and sell them externally as a semi-product. IFC will monitor this situation and in the event that the company decides to continue operating the existing furnaces, the need to improve fume extraction and the working environment ambient air quality in
relation to these furnances will be considered at such time.

Painting booths at all plants of the Group are equipped with secondary treatment, including cyclones and bag filters for capturing particulate matter (powder coating) and an afterburning unit for thermal destruction of volatile organic compounds (VOC) emissions.

Wet scrubbers are used in anodizing workshops to control emissions of chromic acid mist. Wastewater treatment facilities from the 2 anodizing workshops were visited in August 2014 (both supplied by ‘3 Aqua’ company, Poland). Wastewater quality after treatment complies with the pretreatment requirements of the sewer treatment system into which they discharge.



Wastewater Treatment,

Stormwater is collected in a sediment tank and then discharged to the sewerage treatment system along with sanitary water. A local operator carries out periodic analysis of Alutech waste water to ensure it is within the standards these facilities can accept for treatment.



Solid Waste Management

Secondary aluminum scrap generated during the production is recycled into 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. Storage of hazardous materials, such as sulfuric acid and others, is equipped with adequate spillage control.



GHG Emissions

The combined CO2 emissions from project facilities in 2013 were calculated as 37,200 tons. This number will increase with start-up of the new foundry workshop by the end of 2014. In accordance with IFC’s PS (2012 edition), the company will undertake its best effort to manage and ultimately reduce these emissions in a cost-effective manner. As the first step in this process the company will quantify its direct (combustion of fossil fuel) and indirect (purchases of electricity) GHG emissions annually.

External Communications and Grievance Mechanisms
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.

Consultation
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.

Environmental and social summary of Alutech operations will be available in Russian. Hard copies of this document will be made available to the local communities and employees at the entrance information desk of Alutech at Selitskogo street, 12 in Minsk.

For further environmental and social inquires about the project please contact:
Vladymir Kroshko,
Production Director of Alutech Group
12 Selitskogo, 220075, Minsk, Belarus
e-mail: mailto:kroshko@alutech-mc.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.