Environmental and Social Assessment, Management System & Policy: Environmental and social regulatory approvals have been achieved for the BNGL project in compliance with Law No (27) of 2009 on ‘Environmental Protection and Improvement’ and structured in accordance with the Ministry of Environment’s ‘Sector-specific EIA Guidelines for Oil and Gas activities in Iraq’.
A “BNGL” environmental, social and health impact assessment (“ESHIA”) was completed in July 2018, and subsequently approved in December 2018. The BNGL ESHIA accompanies this disclosure. The ESHIA has been undertaken to comply with the PSs, incorporating the WBG general EHS guidelines and sector specific guidelines, including the WBG EHS guidelines for onshore oil and gas development. The BNGL ESHIA drew from baseline information collated in a preceding ESHIA for a larger scale plant in 2014, also developed to comply with the same standards as the BNGL project ESHIA. As required by BGC’s management system, described further below, the findings of ESHIAs feed into BGC’s project decision-making process and engineering processes, including the requirement for a completed and regulatory approved ESHIA ahead of BGC’s internal project approval.
Under the terms of its shareholder agreement, BGC is required to implement and maintain health, safety, security, environment and social performance (“HSSE&SP”) policies, standards, procedures and practices which are consistent with internationally accepted petroleum industry practices. To achieve this, BGC have developed a policy on health, security, safety, the environment and social performance. To implement the policy, BGC have adopted the Shell HSSE&SP Control Framework as its overarching management document.
Both the HSSE&SP policy and management system includes specific requirements regarding leadership commitment, policy, standards, manuals and specifications which apply to the BNGL project development and operations. The HSSE&SP management system defines organizational responsibilities and resources, emergency response, monitoring and reporting, with additional management system elements including, i) health, including alcohol and drugs, fitness to work and human factors engineering, ii) process safety, including asset integrity, iii) personal safety including confined space work, electrical safety, excavation, hot work, personal protective equipment (“PPE”) and working at heights, iv) security including adherence to the Voluntary Principles on Security and Human Rights (“VPs”), v) environment, including biodiversity management, flaring and venting, greenhouse gas (“GHG”) management, waste and waste waters, vi) contractor health, safety, security and environmental (“HSSE”) management, vii) impact assessment vii) transportation including road, driver and professional driver safety, viii) social performance, and ix) product stewardship including supply chain management.
As required by BGC’s HSSE&SP management system, BGC have developed a comprehensive procedure for the development of greenfield projects, referencing all Performance Standards, WBG EHS guidelines and applicable WBG industry sector EHS guidelines (including the WBG onshore oil and gas development EHS guidelines). These requirements are to be adopted and integrated into greenfield project design and construction. The procedure defines greenfield project development standards, applicable to the BNGL project, including design and construction requirements addressing i) health, including health risk assessment, hazards, noise, and thermal stress, ii) security, including adherence to the VPs and contractor security plan review, iii) environment, including soil and groundwater protection, waste, emissions and biodiversity, iv) social performance, including community engagement, human rights, social investment and cultural heritage, and v) impact assessment, vi) safety, including process, personal and road safety.
A construction and installation contractor and pipeline installation contractor have been selected to develop the BNGL project through a competitive bid process. Ground works and foundations are underway with delivery of all equipment modules expected by mid 2020, and commissioning scheduled to commence during the first half of 2022. Appraisal and monitoring of contractors are carried out throughout the life of contract. Contracts are required to include requirements for management of HSSE&SP risks and BGC’s contractor selection is dependent on this. As required by BGC’s HSSE&SP management system and supporting procedures, contractors are required to implement their own environmental and social management system (“ESMS”) that are linked to BGC’s HSSE&SP management system via an agreed bridging document. BGC’s procedures also require contractors adhere to applicable Performance Standards and WBG EHS Guidelines.
Identification of Risks & Impacts: BNGL’s power requirements are proposed to be supplied via an 8 km overhead power line from the existing Rumailah independent power producer (“IPP”). The overhead power line is considered an associated facility to the BNGL project. The BNGL project ESHIA assessed the potential impacts of the overhead power line to be of low significance. In the event where Rumailah IPP is offline, BNGL would draw power from the national electricity grid via the Rumailah IPP. The BNGL plant will have diesel-powered emergency generators to supply power to safety critical equipment and to safely shut down facilities in case of loss of outside power supply.
Sulfur will be recovered at the BNGL plant during the processing of associated gas via a sulfur recovery unit (“SRU”). The SRU is expected to produce up to 43 metric tons per day (MT/day). To facilitate the sulfur production a temporary storage and research facility for agricultural field trials will be developed. The facility is considered to be an associated facility to the BNGL project. An environmental, social and health impact assessment (“ESHIA”) has been developed for the temporary storage and research facility project referencing i) the Performance Standards, ii) the World Bank Group’s (“WBG”) general environmental, health, and safety (“EHS”) guidelines and iii) the WBG's EHS guidelines for waste management facilities. BGC shall, seek to ensure the power line and sulfur management facility installation and operations are undertaken in a manner consistent with the requirements of PS1, Guidance Note 1 (GN52) and applicable WBG EHS guidelines, per environmental & social action plan (“ESAP”) item #1a.
The majority of the wider BGC facilities were developed in the late 1970’s and early 1980’s and are not associated facilities to the BNGL project.
Management programs: BGC have developed a corporate wide implementation roadmap to ensure compliance with the HSSE&SP management system. BGC shall roll out the HSSE&SP CF Implementation Road Map elements applicable to the BNGL project, supported by appropriate resources and training, and provide updates to IFC per reporting schedule per ESAP #2.
The BNGL project ESHIA has developed an environmental, social and health management plan (“ESHMP”). Complementing the ESHMP, additional framework plans have been developed including i) a security, road traffic, social performance and local content management plan; ii) a general emergency response plan; and iii) a community liaison, community health safety and security management plan, all of which have been developed in alignment with Performance Standards requirements. The management plans define potential environmental and social impacts and proposed mitigation measures and provides the framework for implementing and monitoring those measures.
The framework action plan (or environmental commitments register) for the BNGL project is integrated into the project obligation register. The ESHMP allocates commitments that have been identified in relation to the ESHIA management plans and describes how adherence to the plans will be monitored and audited. The definitive source for all commitments made in the ESHIA is the commitments register (Appendix 8 of the Basrah NGL ESHIA), supplemented by the environmental monitoring plan. The ESHMP is a tool designed to help implement those commitments. The constructing contractor, and subcontractors, will be required to develop topic-specific management implementation plans, including construction environmental management plans or method statements including control / mitigation measures that address the commitments and requirements in the ESHMP as described in ESAP item #3a.
Organizational Capacity and Competency: At the corporate level, BGC has implemented a Higher Management Committee composed of ten members representing the shareholders’ interests. Reporting to BGC’s High Management Committee are a number of technical committees which provide E&S oversight across the BGC business, including i) a human resources discipline committee; ii) the “make it safe” steering committee; iii) joint planning and coordination committee; iv) audit committee; v) tender committee; and vi) a projects review board.
At the BGC corporate level, the health, safety and environment (“HSE”) department is led by an HSE director supported by 464 staff working across the BGC business. As part of the BNGL project, the HSE department will be responsible for and have HSE staff dedicated to the project development and operations. The corporate HSE department has a number of sub-functions which report to the HSE director, including i) occupational health and medical services; ii) technical process safety; iii) environment, including personnel responsible for air emissions management, soil & water management, ESHIA development and implementation; iv) emergency response; v) safety discipline including incident investigation, competency and road safety; vi) an HSE management system assurance team; and vii) operational project HSE.
BGC’s security function is led by a corporate security manager, supported by an additional 507 security personnel covering all operational aspects of the BGC business. A separate corporate affairs department is led by a corporate affairs manager which includes responsibility for social performance. The social performance team has in place a function lead and is supported by field-based community liaison officers. BGC has developed a social performance and local content plan defining the roles and responsibilities for the development of the BNGL project.
Emergency Preparedness and Response: BGC has developed and implemented a three tier emergency response plan applicable to all operations including the BNGL project, namely i) minor emergency such as a local incident, considered to be a non-escalating situation to be managed by existing asset resources; ii) a major emergency where there may be moderate to significant threat to safety and the environment requiring the oversight and intervention of BGC’s incident command team or where external assistance may be required; iii) a crisis situation where an event has or could cause significant disruption to normal business activities. BGC has developed a number of memoranda of understanding with the Iraqi emergency response services to support BGC’s emergency response plans.
Monitoring and Review: As required by BGC’s internal audit charter, BGC has in place a rigorous audit program supported by periodic shareholder audits against BGC’s HSSE&SP management system requirements. Similarly, as required by BGC’s HSSE&SP management system, BGC has developed a performance monitoring and reporting procedure and specifications manual defining key criteria for monitoring E&S performance requirements applicable to all BGC projects and operations. The BGC HSSE&SP management system and supporting procedures defines how contractors will be monitored, as well as requirements that need to demonstrate compliance with Iraqi laws, international laws, and GIIP.
Decommissioning: The BNGL ESHIA considers decommissioning activities and includes decommissioning in the assessment of impacts and development of proposed mitigation. Specifically, at the end of the BNGL 25-year design life, or later should the life of the plant be extended, the operator will plan the decommissioning of the plant. BGC seeks to return the BNGL site to its pre-development condition following decommissioning, including the areas where the broadcut pipeline passes through agricultural land. The approach to decommissioning and schedule will be determined in a decommissioning program to be developed toward the end of the BNGL plant’s operational life. The BNGL ESHIA commits to ensuring decommissioning procedures will reflect industry best practices and the Iraqi Ministry of Environment regulations in place at the time of decommissioning as reflected in ESAP #3a.
Grievance Mechanisms: BGC has developed a community grievance mechanism in a manner consistent with PS1 requirements, seeking to record, address and resolve individual, stakeholder group and community concerns. The grievance mechanism is applicable to all BGC operations. The social performance function is responsible for reviewing grievances monthly to ensure timely actions and close-out along with undertaking trend analysis. A dedicated email and phone number are in place and have been shared with the communities in which BGC operates to allow grievances to be communicated via a variety of avenues. Providing oversight of the grievance mechanism’s implementation, BGC collates and tracks grievances and reports to BGC’s leadership team monthly. The BGC HSSE&SP management system and supporting procedures also defines monitoring and use of a community grievance mechanism to monitor any issues that may arise between contractors and local communities. These measures comply with PS1 requirements and GIIP.
Gender: Based on IFC’s Gender Based Violence (“GBV”) Risk Screening Tool, the project is located in a region and country where the risk of gender-based violence is substantial. BGC shall undertake a BNGL gender impact assessment, the scope of which shall include GBV and will complement the BNGL ESHIA. BGC shall develop an action plan based on the results of the gender impact assessment where applicable, per ESAP #1c.