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 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
No land acquisition is expected as part of this project since the expansion of the refinery is taking place within the premises of the refinery. Therefore, PS 5 Land Acquisition and Involuntary Resettlement is not considered applicable. The refinery is located in an industrial area void of flora or fauna species of particular importance with significant anthropogenic alterations. Therefore PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable. Furthermore, the project’s area of influence is located in areas absent of communities that would be considered as ‘Indigenous’ as defined by the World Bank Group, thus PS 7 - Indigenous People is not considered applicable. Archaeological and historic sites were not found within the project site’s boundaries, thus PS8 - Cultural Heritage will not apply.

Key environmental and social impacts associated to this type of operation include particulate matter and hydrocarbon (HC) emissions, liquid effluents, noise and HC vapors exposure, handling of hazardous materials, transportation, land and marine, and community related impacts and risks.

The proposed project qualifies as a Category B project as defined by IFC’s Environmental and Social Sustainability Policy (2012) because of potentially limited environmental and social impacts that may result from the expansion and operation of the existing facilities, all of which can be avoided or mitigated by adhering to generally recognized good practices and design criteria. The company has objectives and plans in place that seek to address environmental and social risks and impacts in accordance with Argentinian laws, the relevant IFC PS, and the applicable elements of the World Bank Group (WBG) Environmental, Health and Safety Guidelines: (i) General EHS Guidelines, (ii) Petroleum Refining Guidelines, and (iii) Retail Petroleum Networks Guidelines, and the attached Environmental and Social Action Plan (ESAP.)

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.

PS1: Social and Environmental Assessment and Management Systems



Environmental and Social (E&S) Assessment

To comply with the Province of Buenos Aires Environmental Authority, (OPDS) regulatory requirements and as part of the project permitting process, Axion conducted an assessment of impacts and mitigation to obtain the relevant environmental permits from the Argentinian environmental authorities. In addition, the company commissioned a consulting firm to prepare an Environmental and Social Impact Assessment (ESIA) for the expansion project. As part of the increased need for electrical energy, the company was also required to complete a separate ESIA for this portion of the project and to conduct public disclosure; a copy of this document was submitted to IFC and it is being developed in accordance to IFC E&S requirements. The ESIAs cover potential impacts and risks for the expansion project and potential impacts on its area of influence. The ESIAs include frameworks for the Environmental and Social Management Plans (ESMPs), to be implemented at the various phases of the project, preventing and addressing key impacts as well as monitoring follow-up. The company received authorization from the Argentinian environmental authorities to proceed with the Project in January 2015.



Key environmental management plans include management of hazardous wastes, air emissions, liquid effluents treatment, occupational health and industrial safety, marine and land transportation, and emergency response plans. Axion will also develop the corresponding HAZOPs and coarse and detailed quantitative risk assessments (QRA), copies of which will be provided to IFC as indicated in the ESAP.



Previously, for the construction of the refinery, relevant studies to assess the likelihood and risks of hurricanes, tornados, cyclones and earthquakes in the study area were conducted. The assessment demonstrated that the geographic location of the site is sheltered from any of these potential negative impacts.



Environment Health, Safety and Social (EHS) and Management and Organization

AXION has a documented system of operational integrity and an EHS and quality management system that includes training programs; risk assessment, mitigation and validation; and adequate assessment performance tools for its refining, supply and distribution, and retailing operations. Axion’s EHS management system is based on Exxon Mobil practices and properly updated by Axion´s management on a regular basis. As part of the expansion project, Axion will further enhance this system to allow for more effective means of assessing the EHS performance of its operations and to prepare for the ISO 14000 and OHSAS 18000 certifications that it is planning to obtain in 2017. The refinery achieved ISO 9001 certification in December 2014 and the Lubricants Plant, located within the refinery obtained the ISO 14001 certification in August 2015.



Axion has established an EHS Department head
ed by an EHS Director who reports directly to the CEO of the company. This Department, composed of qualified engineers and technicians, is organized in seven teams; a refinery EHS Division (including process safety, environmental, and occupational health and emergency response); EHS Plants (other than refinery); EHS Retail & Marketing (gas stations); EHS Expansion Project; Environmental; Operation Integrity; and Occupational Health & Medical service. The EHS Department is responsible for the management of the health, safety, and environmental programs, health and safety training, overseeing of the EHS performance of the contractors, ensuring regulatory compliance, implementation of compliance audits, and EHS monitoring and record keeping, among others. In addition, the company has a Department of Corporate Affairs dedicated to community and external affairs in charge of social awareness, overseen social related performance of the contractors, stakeholder engagement, grievance management and documentation.



For the expansion project, Axion has appointed a dedicated EHS team to oversee the implementation of the project. This team will interface with day-to-day EHS personnel as the expansion project will occur while the refinery is in operation. For instance, a cross functional team is already working to ensure full alignment between the expansion project and the refinery tank repair plan.



Axion has already selected the engineering, procurement, and construction management (EPCm) contractors for the expansion. The requirements to comply with the ESIA findings including EHS and social management commitments and management planning as well as IFC E&S requirements are being included in the EPCm contracts’ agreements. The EPCm contractors selected have demonstrated international experience in the development of similar projects. They are required to operate an environmental management system in accordance with the international ISO 14001 and OSHAS 18001standard requirements, and to develop detailed project EHS Management Plans which will be submitted to IFC as indicated in the ESAP. The EHS Management Plans will include procedures for environmental management, traffic management, dust management, occupational health and safety, labor conditions, community engagement, grievance mechanisms, etc. Further to this, the EPCm contractors will give preference to directly and indirectly affected communities for employment. In addition, the EPCm contractors will have an EHS and Social organization consisting of a team of EHS professionals on-site throughout the project implementation. As currently done with its contractors, Axion will closely monitor the alignment of the EPCm contractors with the current EHS procedures the company already has in place as well as those needed for the expansion project.



Emergency Preparedness and Response

Axion has an Emergency Response Plan (ERP) that considers appropriate emergency preparedness and response m
easures to implement in the event of a fire, leak, spill, etc. In addition, Axion also makes part of the Comité Zonal de Seguridad e Higiene Campana-Zarate, which is an emergency response mutual aid organization established by the industries in the Campana-Zarate area. The company reported not ever having had a significant incident.



The current ERP will be updated to include the changes to the operation due to the expansion project. Once completed, Axion will provide a copy of the updates to the IFC as indicated in the ESAP. The update will ensure having well prepared emergency response plans, procedures, equipment and trained response personnel available at all time. As currently, it will involve the local authorities in the development of the emergency response planning as appropriate, and continue conducting periodic emergency drills. During the expansion, the company along with its contractor will also develop a relevant emergency response plan, as the refinery will be operating while the expansion takes place; and will have trained fire and emergency brigades available at all times. Periodic emergency drills will be also conducted while the expansion takes place.



Training, monitoring, and reporting

Axion has a well-established and effective training program through which it conducts routine (i.e., safety inductions) as well as specialized training (i.e., work at heights, confined spaces, safety audits, job hazard analyses, emergency preparedness, CPR, fire prevention, electrical hazard, chemical handling, etc.) as per needed requirements. For purposes of the proposed project, Axion hired over 80 new operators, between 2013 and 2014, and began their training in preparation for the refinery expansion. The expansion project start-up plan includes training programs until 2017 to develop new operators for all future positions.



Axion has a monitoring program to assess the performance of its operations. It currently measures, among others the air emission, liquid effluent, groundwater, workplace conditions, ambient noise, and marine water characteristics at the port. 



Axion will continue monitoring the ambient and workplace conditions while the proposed project is in implementation and will supervise the EPCm contractors to ensure its compliance with the contractually agreed EHS aspects. As indicated in the ESAP, Axion will submit to IFC a detailed monitoring plan measuring all parameters as per the IFC environmental requirements, which also include stack emission measurements, to be applied for the operation of the refinery once the proposed project is implemented. The monitoring plan will include parameters to be measured, frequencies, and monitoring sites locations to reflect the new potential sources and parameters needed to be measured to assess the performance of the proposed project. Axion is committed to periodically reporting the results of its environmental and social performance to the Argentinian environmental
authorities and IFC.



Engagement, Communications and Grievance Mechanisms

The project has clearly defined the areas of direct and indirect influence. The directly influenced communities include communities within a 5 km radius of the project site that may experience impacts such as those mainly related to noise, and dust.



Axion recently conducted stakeholder consultation activities that included plenary sessions and information in the City of Campana related to the completion process for the ESIA conducted for the energy supply project (Audiencia Pública or Public Hearing) as required by the Electricity National Board). A meeting was held on December 27, 2013 with an attendance of around 150 people. Also a stakeholder meeting was held on September 19 2013, with an attendance of 200 people. The public was given the opportunity to learn more about the project and proposed impact mitigation as well as to provide their opinion. Participants commented positively that this is the first time that they have been directly informed and had their opinion solicited prior to the project initiation. The purpose of this consultation was to inform stakeholders and affected communities about the project and to solicit feedback to be integrated into the ESIA design process. During this period baseline socio-economic data were also gathered. As required by Argentinean law, a written executive summary of the ESIA was provided to environmental authorities. Axion also has a community liaison group, GIIC, with three meetings held per year, in which community stakeholders are informed about project advance, and their opinions and eventual grievances are gathered. IFC’s team met with representatives of the municipal authorities during the project appraisal which expressed support for the project in anticipation of employment opportunities as well as support to other local government initiatives and praise the engagement of Axion with communities and government representatives.



Axion has successfully addressed community grievances in the past and aiming to maintain engagement with the communities. Axion shall adapt its current procedures taking into account applicable PS 1 requirements. A copy of the GM will be submitted to IFC as indicated in the ESAP.

Human Resource Policy and Management

Axion’s Human Resources (HR) policy and procedures include aspects related to equal opportunity employment, recruitment, employees’ conduct, employment regulations, salaries, disciplinary code, and performance management. Axion’s HR manager is responsible for ensuring Axion’s compliance with Argentinian laws and regulations affecting all employees including contractors. Axion’s HR policy is aligned with IFC PS2 requirements stating that Axion will not use forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise and will only hire employees who meet local minimum age requirements. This policy and its procedures are communicated to all employees. Axion’s HR practices are also applied to its contractors.



Axion currently has approximately 2920 employees (66% male and 34% female). For the refinery operations, Axion currently has approximately 1271 employees 650 own, and 621 contracted. Once operational, the refinery anticipates having combined, own and contracted a total of around 900 employees. Its fuel stations network currently has nearly 1400 employees. After the expansion project, it will create approximately 1.200 new direct and indirect jobs. Axion anticipates hiring close to 2,000 contracted workers at the peak of the implementation of the expansion project.



Working Conditions, Management of Worker Relationships and Protecting the Workforce

Terms of employment are defined in the internal employment rules and regulations (reglamento interno de trabajo) provided to each employee when contracted where benefits, hours of work and overtime compensation, among others are defined, and in the individual work contracts where their wages are defined.



Collective bargaining is in place in Argentina where labor rights and labor organizations are governed by labor law. For purposes of project implementation the EPCm contractors’ employees must belong to the construction union (Unión Obrera de la Construcción de la República Argentina), which has the authority to conduct collective bargaining. The collective agreement defines workers’ wages and benefits. The collective agreement requires blue-collar employees to join the union as soon as they are hired by the company. The company promotes transparent application of their labor policy through a series of measures including external labor assessments and audits, the creation of worker’s grievance mechanism as outlined below, and a campaign to broadly communicate Axion’s policies on anti-discrimination and local hiring practices and grievance mechanisms.



The HR policy also includes provisions relating to non-discrimination and equal opportunity, wages and benefits and occupational health and safety. Axion is an equal opportunity employer that extends equal employment opportunity to all applicants and its selection decisions are merit based.



The minimum hiring age of its direct workers and following national
laws, is 18 years old. All Axion contractor’s employees are also required to be older than 18 years old.



During the expansion, the EPCm contractors will be committed through the contractual agreements to ensure that labor conditions comply with the requirements of IFC Performance Standard 2. Axion will develop a plan to monitor the performance of the EPCm contractors to ensure that labor conditions are in compliance with the contractual requirements. Monitoring will include regular audits, review of the EPCm contractors’ internal monitoring reports and documentation as well as review of grievances logged by the contractors and subcontractors employees. The expectation is that no less than half of the labor force to be hired during the expansion will come from the city of Campana and nearby areas.



Axion has yet to enhance and formalize the workers grievance mechanism (GM). The company will develop and implement a GM scaled to the risks and adverse impacts of its operations to receive record and when appropriate facilitate resolution of own and contracted workers’ concerns and grievances in alignment with PS 2 requirements. A copy of the GM will be submitted to IFC as indicated in the ESAP. The mechanism will include: (a) methods of communication about the mechanism to employees (i.e. existence of the grievance mechanism); (b) means to present the grievances, process of resolution, etc.; (c) process of receiving and registering grievances/ complaints; (d) assessment and categorization of grievances; (e) prioritization and hierarchy of grievances and response time; (f) guidelines for resolution and response of grievance; (g) responsible personnel in charge of resolution; (h) documenting grievance/resolution; and (i) periodic monitoring of grievances. The GM will also address issues during the project implementation to address any issues raised related to the contractors’ activities. Axion will supervise the effective resolution of grievances raised during this phase.



Workers Accommodation

Workers’ Accommodation may be required during the implementation of the proposed project. If needed, Axion will develop a framework Workers’ Accommodation Management Plan outlining the expected quality of workers’ accommodation and the way they will be managed and monitored to ensure appropriate levels of safety and health among workers and local communities. Then, Axion, in close coordination with the EPCm contractors, will finalize and implement this plan and submit a copy to IFC as indicated in the ESAP.



Occupational Health and Safety (H&S)

Axion has a suite of programs, safety manuals and procedures to identify and avoid work related risks, including, but not limited to, established safety rules (risk analysis, hot work, confined space, fall protection, etc.), employee orientation procedures, equipment safety procedures, safe work practices, personal protective equipment, safety for non-employees (contractors), maintenance safety, and
vehicles/traffic safety Only designated walkways, stairs, ladders, roads or other access ways are allowed when entering or exiting work locations. Appropriate warning signs, barricades or barriers are used for any potentially hazardous conditions. Powered vehicles (i.e., forklifts, cranes, etc.) are operated by trained and authorized personnel only. All accidents/incidents as well as the identification of unsafe conditions and acts are required to be reported to the plant manager or supervisor immediately. Axion has a database where it systematically documents and investigates all incidents and near-misses to determine the underlying causes and contributing factors of the incident and implements corrective actions to prevent the recurrence of similar incidents. All observations and investigations results are shared with all site employees. In addition, Axion is committed to continue conducting periodic monitoring and measurement of the work place conditions at all its plants as per Argentinian and IFC H&S requirements. Current levels are in accordance with IFC requirements.



Axion also has an occupational health management team integrated by a medical staff and nurses who are in charge of conducting pre-employment examinations; examinations of personnel exposed to workplace related risks; and tests for post-prolonged absence, job transfers, and/or job termination; including monitoring of work place conditions in accordance with Argentinean and IFC requirements. Employees identified as been exposed to potential biological, chemical, and/or ergonomic work related risks receive frequent evaluations and close monitoring. Axion’s occupational health program also includes trainings about ergonomics, heat stress, infectious/contagious diseases, biosecurity standards, immunizations, etc. and along with the industrial hygienist conducts working environment assessment and provide recommendations for improvement.



The refinery is fitted with appropriate fire prevention and response services, including automatic sprinkler systems, water supply, water mains and fire hydrants, alarm systems connected to equipment, security measures and personnel guarding the facilities, and portable first aid and firefighting equipment. Axion conducts induction and annual fire and emergency response training courses for all its employees and contractors. Fire and emergency response drills are carried out periodically simulating scenarios resulting from the risks assessment conducted. The refinery is well signaled and is designated as a non-smoking facility.



The EPCm contractors have been required to develop an HSE plan for the construction program describing the processes that will be followed, the HSE personnel that will be on site, and the procedures to be developed. The contractor will demonstrate compliance with Axion’s policies and procedures through the monitoring program to be established. The procedures will also include the process to monitor and track a
ll incidents and near misses, conduct follow-up investigations and establish the means to prevent re-occurrences. In addition, the EPCm contractors will conduct H&S induction training for all site personnel as well as specific training to ensure that personnel have the necessary skills to identify hazards and carry out their work responsibilities safely. The EPCm contractors in conjunction with Axion will identify potential emergency scenarios during the project implementation and develop adequate emergency response measures.



Axion will update its H&S as well as emergency response plans and procedures, as needed, as a result of the expansion project. The Company will provide to IFC evidence of such updates prior the commencement of the operation of the expansion project as indicated in the ESAP.

The design of the proposed project is based on established state-of-art and worldwide applied technologies whose performances are both predictable and well proven in operation, so that no significant variations are expected to be found between predicted and actual performance in the field. The use of state of the art technology will also help the project making optimal use of energy and water. In addition, the project has been designed to comply with the most stringent of Argentinian Standards and applicable WBG EHS guidelines.

Resource Conservation, Energy Efficiency
As part of its EHS management, Axion has an Energy Management System in place to track and optimize energy usage. It conducts periodic monitoring of conditions and efficiency of the boilers, and assesses combustions controls, among others. For the current operation, Axions energy efficiency performance and water consumption can be considered satisfactory when compared with those parameters included in the WBGs Petroleum Refinery EHS guidelines. In addition, every two years, Axion participates in the Solomon refineries survey benchmarking, which includes 300 refineries worldwide. For the last eight years, Axion has been among the lowest energy and water refinery consumers among the 30 Latin American refineries part of this survey. IFC recommended the company to expand its benchmarking to refineries of other regions to compare its performance and further improve its energy and water consumption rates, if needed.

The energy demand due to the expansion will be twice the current demand, it will expand from the current 25 MW installed capacity to 50 MW; and it will be sourced from the public grid as well as from the onsite steam turbines power generation. . Currently, the plant is connected to the main grid through an underground cable. As part of the expansion, the company is adding an additional 60 MVA capacity to the existing internal/external electrical power supply. This additional capacity will be supplied from external and independent sources from the national grid. The connecting 5.5. Km lines will be underground, thus overall minimizing negative impacts.

However, as part of its energy optimization approach, Axion will identify the worst case energy consumption scenario and improve operations reliability, conduct energy improvements and optimize overall energy usage, it will conduct pinch analysis looking to improve the refinerys Energy Intensity Index (EII) and optimize the use of the available fuel gas stream.

Stack Air Emissions
Main sources of air emissions during the operation phase include the catalytic cracking unit, nine furnaces and five boilers. Although the air emissions currently comply with the local Argentinian regulations, they do not comply with the IFC requirements. However, as part of the expansion project, it will install controls to recover sulfur emissions, and control gases emissions prior being released to the atmosphere thus operating in accordance with the applicable IFC requirements.

The refinerys clean fuel project, part of the expansion, is primarily aimed to produce low sulfur liquid fuels (gasoline and diesel) and treating the total gas streams processed at the refinery. With this project, it will install two new hydro treating units to remove sulfur from all gasoline and diesel streams and reduce their concentration from 500 ppm to less than 10 ppm in the final products. The crude sulfur will be converted to hydrogen sulfide, removed from the gas stream, and sent to the sulfur recovery unit where it will be converted to elemental sulfur. In addition to the low sulfur content in the fuel gases, all heaters will be specified as low NOx burners and the additional power needed will come from the national grid. All point source emissions from the refinery will continue to meet Argentinian regulations and the IFC applicable requirements. The existing flare will be replaced by a new flare system to handle the additional loads from the new units. In addition to the main flare, Axion will also install an acid flare to collect the discharges from the fuel gas system. The flare system will be relocated to prevent any negative impacts to the neighboring industries surrounding the refinery. There will be no-routine steady-state flaring at the refinery. The flare will be used for maintenance and emergency flaring only.

Axion currently has controls in place to reduce the release of fugitive of dust and particulate matter emissions to the atmosphere. The coke produced is handled and stored in an open storage area from which it is loaded into trucks or ships through an enclosed conveyor. The coke stockpile is surrounded with a high mesh and it is periodically sprinkled with water, and it is taken via enclosed conveyors to the ships. The LPG loading station has a fluid and gas recovery arms with a protection system to prevent the possibility of unexpected gas leaks. Axion also has portable gas emission detection meters to support their "Leak Detection and Repair Program which aims to reduce fugitive emissions at the facility. It also has an storage tanks fugitive losses control program (e.g., floating roofs) based on the American Petroleum Institute (API) and the US Environmental Protection Agency (EPA) to prevent release of fugitive volatile organic compounds (VOCs) to the atmosphere.

Ambient Air Quality Impacts
Axion has an ambient air quality monitoring program in place to routinely measure air quality in proximity to the refining operations. In addition, to assess the air quality and to confirm compliance with air quality requirements, the company periodically models its emissions (particulate matter, nitrogen dioxide and sulfur dioxide and carbon monoxide) using the USEPA AIRMOD air dispersion model. The most recent model run was conducted in 03/2015. None of the modeled concentrations exceeded the correspondent Argentinian guidelines for ambient quality.

After the project, the Argentinean as well as the IFC ambient air quality requirements will be satisfied. Once operational the proposed project will bring positive cumulative effects to the local air quality. After the expansion, the refinery will not only recover the emitted stack sulfur but it will also produce liquid fuels, for local consumption, with much lower sulfur concentrations. As a whole it is expected it will recover around 30 Tons/day of elemental sulfur.

Axion will complete the installation of the VOC control measures systems for all the existing storage tanks and as indicated in the ESAP, it will provide IFC with a copy of an evidence document.

Expected air emissions from the construction phases include mainly particulate matter, noise, and combustion gases from vehicles and machinery. Key control measures to be implemented during this phase includes dust suppression though covered transport of excavated earth; water spraying during the dry season, especially during strong wind conditions; regulated vehicles speed; regular road maintenance; grading and compacting road surfaces, as needed, to prevent uneven running surfaces thus preventing both noise and dust impacts. In addition, mandatory preventive vehicles and equipment maintenance to reduce generation of combustions gases will be also implemented.

Water Usage and Liquid Effluents
The raw water to satisfy the refinery water, which include cooling water, process injection water, and water for the boilers steam generation is obtained from the Parana River. The refinery recycles water as part of its process, for which it uses a closed cooling water system including a cooling water tower and four circulation pumps. As part of the expansion project, Axion will incorporate new air fin coolers that will not only reduce the specific consumption of cooling water, as well as of total energy since there will not be a need to pump additional quantities of water.

The refinery liquid effluents include cooling waters, process wastewaters, sewage waters, and storm waters. Each one receives appropriate treatment and are monitored prior to being release to the Parana River. Since the cooling water have no contact with process flows, there are discharged to the river without any prior treatment. As the process wastewater comes from different sectors of the refinery, they are segregated and treated separately. Once monitored, the treated wastewaters are released into the Parana River through a 150 meters long underground channel. Axions liquid effluents comply with the Argentinian requirements.

Potential additional wastewater treatment requirements from the expansion project will be assessed and as needed additional control treatment will be installed. Once identified, the final design wastewater treatment control specifications for the operation of the expansion project will be submitted to IFC as indicated in the ESAP. This system will be designed based on achieving compliance with Argentinian standards and the WBG EHS Guidelines.

The project implementation which will require water for sanitary needs, dust suppression, and hydro testing of equipment and tanks will also source the water from the Parana River which it is expected it will not negatively affect this water source. The principal wastewater generated during this phase will be sanitary waters. The treatment option selected will be in accordance with effluent standards and a monitoring program will be developed to monitor compliance. Once decided Axion will inform IFC as indicated in the ESAP.

As part of its commitments with OPDS, Axion has been conducting soil and groundwater monitoring to determine potential impacts and remediation measures. The monitoring results indicate that there are no exceedances of hydrocarbons and chemicals in soil or groundwater, as well as any presence of hydrocarbon in groundwater is confined within the site boundaries.

Waste Management
The refinery generates industrial hazardous (i.e., industrial, medical), non-hazardous wastes, and domestic wastes.  Axion has in place a waste management plan to manage, store, and dispose all wastes generated.  The plan procedures include a tracking system for the collection, transportation, treatment and disposal of all hazardous waste streams leaving the site.  Only government approved facilities are used for waste treatment and disposal and Chain-of-Custody and Duty of Care procedures are in place for all waste streams leaving the refinery.  The residues sent for incineration and those send for disposal in a secure landfill are collected, treated, and disposed by OPDS certified companies. 
 
Axion has built a dedicated roofed well ventilated hazardous waste management area in the downstream wind direction, meeting all relevant fire code requirements, with impervious sloped floor, drainage channel, and sump and pump system. The materials are segregated by chemical characteristics and the area has restricted entrance/exit.

For the project implementation phase, Axion is requiring the contractor to establish a waste management system.  The waste generated during this phase will be segregated and stored in roll-off containers at waste yards managed by the EPCm contractors.  Domestic solid waste will be stored in waste skips and disposed of in an authorized landfill. Hazardous wastes generated at construction such as used lubricating oil, batteries, empty drums of paint/solvent/additives, floor sweepings from material storage yard, oily sludge, contaminated soils from spills, off-specification materials, electrical and mechanical components, etc. will be stored in drums and containers at the waste yard established by the EPCm contractors, and then transferred to licensed waste treatment contractors. 

Axion currently has 5 remaining transformers with PBC levels below 10 ppm and 3,100 liters of oil with a PCB concentration of 14.8 ppm, securely stored in drums.  Axion is currently in the process of selecting the firm that will conduct the final treatment. Details of this process will be submitted to IFC as indicated in the ESAP. 

Hazardous Materials
Axion ensures proper handling of hazardous materials (i.e., additives, resins, catalysts, etc.) The refinery has a dedicated roofed storage area without walls to allow ventilation, with cement floor and gutter edge to avoid potential soil contamination in the event of a spill. Storage tanks have double containment, there is a database accessible to all employees with the Material Safety Data Sheets (MSDS) for all hazardous materials; all hazardous liquids are segregated and securely stored with appropriate secondary containment. In case of spillage incidents, Axion has the appropriate prevention measures to absorb or contain liquids so that they do not enter drains, ditches or waterways compliant with the required safety measures. Any additional storage as regards of the expansion project will be to the same standard as above described.



Noise
Noise generation is mainly associated with equipment such as compressors, turbines, pumps, electric and motors as well as flow of gases and vapors through ducts and during emergency de-pressurizations. Axion has measures (noise barrier/insulation, periodic maintenance plans) to limit noise disturbance outside the site boundary. In addition, Axion has a noise monitoring program at the facility boundaries to ascertain the projects compliance with Argentinian standards. Noise monitoring will also be routinely carried out during the facility construction program and measures will be taken to minimize noise disturbance where necessary. Axion will install, as needed, additional controls to ensure that after the expansion project, the noise levels will be in compliance with both the Argentinian as well as the IFC noise requirements.

Operational Safety
Axions design philosophy is to provide sufficient process safeguards to protect personnel, equipment and the surrounding communities. These include, but are not limited to, smokeless elevated flares; installation of emergency isolation valves, as per design codes; de-pressurization facilities; hazardous emission detectors; protective instrumentation and controls with sufficient redundancy; emergency shutdown instrumentation; emergency alarms; installation of fire protection systems, etc.

Axion has an operation integrity system that combines standard operations with reliability management systems including risk analysis, mechanical integrity, work permits program, incidents investigation, and daily inspections among others. Its inspection programs are risk based focused on risky and vulnerable areas, it has an inspection data management system for pressure vessels, heaters and boilers, heat exchangers, tanks and atmospheric vessels, and piping circuits. The maintenance program is risk based and conducted by dedicated team such as mechanical integrity, tank repair, process safety to resolve HAZOP identified issues, etc.

As part of this project, Axion will establish additional upgrades to the existing operation control system, impacting on the refinery reliability with a more stable operation, and indirectly driving to a reduction in unplanned emergency releases to the environment. Additionally, Axion has doubled the number of shift supervisors starting in the second semester of 2014 from 10 to 20, it will continued with the signed agreement it has with Exxon Mobil to support as needed in technical aspects as well as operational safety, and it will continue adopting the U.S. Occupational Health and Safety Administration (OSHA) and API 75 requirements for operation safety and API 653 requirements for tanks handling.

As previously indicated Axion will complete the hazard and operability (HAZOP) and layers of protection analysis (LOPA) studies for the expansion project and submit them to IFC. In addition, it will also conduct coarse and detailed quantitative risk assessment (QRA) of potential hazards and consequences of accidental impact sources to assess the risk associated with catastrophic incidents (explosion, fire, toxic release etc.) The initial results will lead as appropriate to implement design changes such as relocation of the flare, etc. Once the detailed engineering is concluded, the company will conduct a refined qualitative risk assessment to ascertain that final operational data will not pose negative risks to communities or environment as indicated in the ESAP.

Axion will complete the installation of the VOC control systems for all existing storage tanks and as indicated in the ESAP it will provide IFC with a copy of an evidence document. The VOC control measures consist of installing membranes where absent, or replacing where damaged, in the vertical tanks of the tank farm as a part of Axions ongoing tanks safety program.

For the construction phase the EPCm contractors will be required to develop and implement an Emergency Response Plan and have qualified personnel and equipment response to potential emergencies. For the operation phase, Axion will develop an Emergency Response Plan and Oil Spill Contingency and Prevention Plan. This plan will identify likely emergency scenarios, appropriate response equipment, calibration and maintenance of the equipment, emergency training and drill frequencies, identification of appropriate supporting parties, etc. Qualified personnel to respond to any emergency will be available at all times. Axion will submit a copy of this plan prior to operations to IFC as indicated in the ESAP. Axion will also become active participant of the already established Emergency Response Mutual Aid Organization established by the industries in the area.

Greenhouse Gas Emissions
Greenhouse gas contributions from the facility will be routinely monitored and recorded during operations.  The commitment to install best available technologies in relation to the expansion will provide higher energy efficiency which will reduce the CO2 emissions generated from 3.17 to 3.14 Kg CO2 Equivalent.  

The CO2 currently generated by the hydrogen manufacturing unit, which is operated by Air Liquide and uses natural gas as a raw material, is all recovered and sold for use in the nearby industries, for medical purposes and soda manufacturing. The additional CO2 will be recovered as well.

At preliminary design stage, the company identified several energy optimization measures and conducted a site wide energy assessment to identify areas of energy optimization such as the installation of high efficiency combustion system with low NOx burners; application of pinch technology to determine external heat inputs and heat sinks, and installation of high efficient heat exchangers (high flux tubes). At detailed engineering design stage Axion will confirm these measures and seek additional energy optimization measures as appropriate.

The company will develop and submit to IFC as indicated in the ESAP, (a) an energy balance assessment including the energy consumption of each key process unit, and (b) benchmarking energy and water use of these key process against good international comparable industry practice in the sector.

The technology to be used by Axion will be based on internationally accepted refinery practice. The technologies selected for the major process units are based on Best Available Technology which have been used in refineries for many years and have been proven to be safe. Additional safety measures will include hazard emissions detection; alarm systems; pressure relief devices; emergency isolation valves; and, shutdown equipment in accordance with international design codes.



Based on the analysis of the social impacts of the project, it can be concluded that the expansion project will have direct positive social impacts due to the reduction in emissions in general, the avoidance of releasing sulphur dioxide and the public access to more advanced fuels produced by the refinery. In addition, during the construction phase, it is estimated that the project will generate approximately 2,000 jobs and that it will also increase its manpower for the operation.



In addition to the health and safety of Axion’s workforce, the health and safety of the neighboring communities near to the refinery is of paramount importance to Axion. Thus major potential risks will be assessed by conducting a quantitative risk assessment. The risk assessment will consider worst-case scenarios such as explosion, fire and leaks based on the facility layout and technology to be used to determine potential impacts and at the design stage make the corresponding adjustment to ensure that in the event of such incidents, off-site risks to the public will be negligible.



Axion’s emergency response planning for their activities will be developed in conjunction with the emergency response mutual aid organization established by the industries in the Campana-Zarate area will involve the local authorities. In addition, Axion’s emergency response plan establishes organization and responsibilities of those involved in controlling emergencies, detailed procedures to be followed, and guidance for communication to all potentially involved stakeholders including communities.



Construction activities will result in some community disturbance and nuisance, mainly in relation to noise, dust and project related traffic. Noise will be continually monitored and mitigation measures applied where necessary which may include the erection of temporary noise barriers, the scheduling of the noisiest activities during daylight hours and the notification of residents prior to the specific activities. Dust suppression methods such as dampening down working areas will be employed. Traffic volumes to transport workers, equipment and materials to the construction site will be considerable. The traffic related impacts such as traffic volumes, the possible transportation routes, etc. are also being considered. Project–related vehicles will be modern and they will be continuously monitored to ensure their quality to minimize noise and vehicle emissions.



Hazardous materials will be safely transported to and from site using vehicles and procedures that are in accordance with international standards during both construction and operations. Storage of hazardous materials will also follow international standards whereby adequate, secure and fully contained storage facilities in separate designated areas will be used on site.



Logistics and Transportation

Logistics and transportation of products and goods to and from the refinery is a critical component of Axion operations and for which it relies on both, land and fluvial transportation. The transport of raw materials is done by pipeline and the transport of end-products by ships and trucks. For the products distribution it has two terminals for dispatch of solvents and fuels to trucks, coke loading area to trucks and then via enclosed conveyors to the ships, four decks for dispatch of products, to pitch to cistern tanks loading, the LPG loading dock, and a lubricant to cistern trucks loading. Coke is taken from the storage pile to trucks and then via enclosed conveyors to the ships thus minimizing the emission of dust and particulate matter into the atmosphere.

The raw material is provided by two Panamax vessels that transport crude oil from the areas of production to the Ebytem Terminal in Puerto Rosales from where it is pumped to the refinery by a pipe system. In addition, three additional vessels move products from the refinery to the terminals of San Lorenzo and Galvan plants and also to be used as power plants fuel. All maritime transport is hired under charter agreements. The refinery terminal has approximately 700 charge/discharge operations per year, almost 60% of the products leaves via ship. For its maritime transport, Axion has a detailed quality maritime management program, including a review system to each vessel arriving to Axion’s terminal to reduce risks from the maritime operations, which it fully aligned with the Oil Companies International Maritime Forum / Ship Inspection Report Program (OCIMF/SIRE) guidelines. In addition, all ship operators as evaluated as per the Tanker Management Self-Assessment (TMSA) guidelines. All fluvial and maritime operations are subject to a rigorous system of assessment and control through Axion’s seas system of "best in class" vetting to ensure the integrity of the operations at the terminal and the vessel as well as ensuring the proper response to potential contingencies in compliance with the regulations of the Argentina Naval Prefecture, international maritime best practices and the IFC PS requirements.



For the distribution of its end-products, Axion does not have an own fleet of trucks, but it has developed long-term partnerships with leading companies of logistics and distribution of major fuels in the country looking to align the carriers’ with the company''s procedures including those related to environment, community, and safety. The more than 200 trucks contracted have the Axion logo and make approximately 4,600 trips per month. An additional 100 trips per month are conducted by unmarked trucks managed by Axion’s clients. Axion conducts annual operational and safety assessments to all its transport companies including equipment and technical aspects and security procedures; as needed, Axion agrees with the transport company on corrective actions. The company also conducts quarterly assessments to the drivers on safety driving, emergency response, etc. as well as to the trucks as it expects that 100% of the trucks used comply with legal as well as Axion’s safety requirements; Axion conducts technical check-ups to each truck twice a year. In addition, the transport company also has its own supervision processes as it oversees the trucks practices through GPS, rigorous follow up on overtime hours, rest periods, etc. The trucks have GPS system and on-board computer that continuously records sudden braking and speeds used in high/low speed demarcations. All units are subject to a regular preventive maintenance program based on time and mileage traveled and are inspected before every trip. Each truck carries onboard a spill response kit, and have access to a special service of emergency response, capable of working anywhere in the country. Though not foreseen on impacts by the expansion of the refinery, additional transportation requirements will be covered by adding to the ship leased fleet.



Security Personnel

Axion has hired private security contractors for the vigilance and security of Axion’s personnel and property for both the refinery and the terminals. In addition, at the terminal, there is public security support provided by the Prefecture Naval Argentina. As part of its security management, the company conducts background checks, training of private and public forces, rules of engagement as well as monitoring and reporting plans. As part of this project, Axion will enhance the current trainings to be aligned with the Voluntary Principles towards employees and the neighboring communities as indicated in the ESAP.

Axion is committed to productive community relationships through meaningful community engagement. The company has carried out considerable community engagement activities aiming to ensure that communities are aware of the project, listen to concerns and issues raised by the local communities and offer opportunities to affected people so that they may provide suggestions and recommendations to Axion.

Axion is developing community development initiatives in five strategic areas: (i) education, (ii) environment, (iii) health, (iv) infrastructure, and (v) inclusion. The company has allocated a budget for these activities and as appropriate partners with local NGOs and local authorities to implement specific community development programs. The Department of Corporate Affairs is central to the identification and delivery of these programs.

Axion will disclose this document in Spanish language in the community of Campana. Shortly after publication in IFC’s website, the document will be available at the following locations for a period of 30 days.

Please contact the following for enquiries or concerns about the environmental and social impacts of this project:

Location
Contact
Campana
Daniel Santamarina
Corporate Affairs
Axion Energy Argentina SA
Emilio Mitre 574 – Campana
03489-492024

City of Buenos Aires
Pedro Lopez Matheu
Corporate Affairs
Axion Energy Argenina SA
Carlos M. Della Paolera 265 – CABA

4705-7548

Broad Community Support is not applicable for this project

Axion(36221) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1. Provide IFC with a copy of the Environmental, Health and Safety (EHS) procedures for the project to be developed by the EPC contractor that are aligned with IFC’s requirements	30-Mar-2016	Completed	Completed	7/30/2016
2. Conduct an assessment of the resulting impacts due to the additional crude needed for the project, define mitigation actions, and provide IFC with a copy of such assessment	30-Jun-2017	Completed	Completed	7/30/2017
3. Develop the corresponding (a) coarse quantitative risk assessments (QRA),	31-Dec-2017	Completed	Completed	7/30/2017
3. Develop the corresponding (b) detailed QRA;	31-Jul-2017	In progress	Under discussion with IFC Client
3. Develop the corresponding (c) HAZOP recommendations and provide IFC with a copy of these reports assessment	31-Mar-2018	Completed	Completed	6/18/2018
4. Update the Emergency Response Plan to include new/upgraded procedures due to the project and provide IFC with a copy of the document assessment	30-Dec-2017	In progress	Due date revised as agreed with IFC Client
5. Update the Monitoring Plan including all applicable parameters, sampling locations, and monitoring frequencies for air emissions and work place conditions, air quality conditions for the project’s operation phase in accordance with the IFC and Argentinian regulatory requirements and provide IFC with a copy of the document	30-Jun-2017	Completed	Completed	7/30/2017
6. Update the Community Grievance Mechanism taking into account applicable IFC standards and provide IFC with a copy of the document	30-Jun-2016	Completed	Completed	7/30/2016
7.a) Update the current Employees Grievance Mechanism taking into account applicable IFC standards and provide IFC with a copy of the document	30-Jun-2016	Completed	Completed	7/30/2016
7.(b) Submit evidence of implementation of Employee Grievance Mechanism	31-Dec-2016	Completed	Completed	1/26/2017
8. Develop a Workers’ Accommodation Management Plan for the arrangements made for the housing of the construction phase workers and provide IFC with a copy of the document	30-Jun-2016	Completed	Completed	7/30/2016
9. Complete the installation of the VOC control systems for all existing storage tanks and provide IFC with a copy of an evidence document.	31-Mar-2018	Completed	Completed	7/30/2018
10. Specify wastewater treatment applied to treat additional wastewaters generated by the project to comply with Argentinean and IFC regulations. Submit a copy to IFC of an evidence document describing: a) conceptual design;	30-Sep-2016	Completed	Completed	11/30/2016
10. Specify wastewater treatment applied to treat additional wastewaters generated by the project to comply with Argentinean and IFC regulations. Submit a copy to IFC of an evidence document describing: b) detailed design;	15-Oct-2018	In progress	Due date revised as agreed with IFC Client
10. Specify wastewater treatment applied to treat additional wastewaters generated by the project to comply with Argentinean and IFC regulations. Submit a copy to IFC of an evidence document describing: c) implementation,	30-Jul-2019	In progress	Due date revised as agreed with IFC Client
10. Specify wastewater treatment applied to treat additional wastewaters generated by the project to comply with Argentinean and IFC regulations. Submit a copy to IFC of an evidence document desribing: d) monitoring report confirming compliance with applicable requirements.	31-Mar-2020	In progress	Due date revised as agreed with IFC Client
11. Specify sanitary wastewaters treatment and provide IFC with a copy of a document describing: a) conceptual design;	30-Dec-2016	Completed	Completed	1/26/2017
11. Specify sanitary wastewaters treatment and provide IFC with a copy of a document describing: b) detailed design, parameters, sampling locations and targets to be monitored	30-Jun-2017	Completed	Completed	7/30/2017
12. Complete the decontamination of the last remaining five PCB oil transformers and provide IFC with a copy of an evidence document	31-Mar-2017	Completed	Completed	3/30/2017
13. Update the security procedures aligned with the requirements of the applicable IFC Performance Standards and provide IFC with a copy of the document	30-Sep-2016	Completed	Completed	1/26/2017