This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

Zorlu Osmangazi started its operations in OEDAS and OEPSAS in February 2017. At the time of project review, E&S management system and relevant documentation were under preparation. Therefore, key Environment and Social (E&S) issues associated with this project as identified during IFC’s review are related to the company’s corporate organizational capacity and competence and implementation of an Environmental and Social Management Systems (ESMS) to manage E&S risks in its current and future operations. Associated risks include: environmental and social management system, procedures and technical capacity for its effective implementation and continuous monitoring/reporting; hazardous and non-hazardous waste management; air emissions; greenhouse gas (GHG) emissions; wastewater and storm water management; occupational health and safety (OHS) as well as labor and working conditions of employees; including contractor employees; community health and safety; and stakeholder engagement.

Environmental and Social Assessment and Management System:   

Policy 

Through IFC’s investment in the previous two projects (135MW Rotor Elektrik wind project in Turkey (Project #27191) and 56MW wind project in Pakistan (Project #29251), the sponsor’s environmental and social performance has been strengthened to meet IFC’s Performance Standards. The sponsor’s existing Environmental and Social Policy is to be applied to OEDAS and OEPSAS as well as their respective contractors. As described in ESAP item #1, the company will develop and implement a project Environment, Health, Safety and Social (EHSS) policy including management commitment which will be signed by all employees and displayed across OEDAS and OEPSAS facilities.

Identification of Risks and Impacts 

Electricity distribution lines and relevant facilities are exempted from Turkey’s Environmental Impact Assessment (EIA) Regulation, therefore, OEDAS operations are not required to undertake local EIAs. As described in ESAP item #2, the company will develop and implement an E&S (Environmental and Social) risk and impacts analysis procedure in line with IFC PS1.

Management Systems and Organizational Capacity and Competency 

OEDAS currently has operational procedures, instructions and other relevant documents related to OHS issues.  OEDAS certified for ISO 9001, ISO 14001 and ISO18001 management system standards at the end of 2017. At the time of appraisal, OHS related operational procedures including work permit, LOTO (Lock Out Tag Out), dangerous works, working at height, lifting loads, MSDS (Material Safety Data Sheets) and chemical safety, repair and maintenance, construction activities, vehicle driving and maintenance, first aid, PPE (Personal Protective Equipment), night work, emergency response, work with electricity and network maintenance, OHS committee, and land acquisition were readily available.

The integrated QMS is planned to be certified in the first quarter of 2018. OEDAS has a written Occupational Health and Safety (OHS) Internal Regulation. OEDAS will review, update and formalize its EHS management system in line with IFC PS1 to include environmental procedures such as environmental risk and impact assessment, waste management, hazardous waste oils disposal, waste water and storm water monitoring/management and internal audit as per ESAP item #3. The company will also develop and implement a standard procedure for construction works in forest areas that identifies contractor EHS requirements, as per ESAP item #4 In addition, as construction activities may accidentally lead to the uncovering of cultural heritage, a chance find procedure will be developed and implemented by OEDAS and its construction contractors as per ESAP item #5.

OEPSAS, the electricity retail company, has a formal EHS management system in place which has been certified by external party accreditation VERICERT until 2020. OEPSAS holds an ISO 9001 Quality Management System, an ISO 14001 Environment Management system and OHSAS 18001 OHS Management System. QEHS Policy is available on the OEPSAS website (http://www.oepsas.com.tr/MisyonVizyon). 

Responsibility for OHS management documentation resides with the QHSE Manager for OEDAS. The QHSE Manager directly reports to the Electrical Distribution Director, who oversees OHS issues in OEDAS operations region. The QEHS department comprises of a total of 16 internal and 6 external employees including the QHSE Manager, Quality Expert, Environment Expert, three internal OHS Experts, six external OHS Experts, five part-time doctors and five health officers. The day-to-day OHS issues at each site are handled by the three OHS Experts with support of the other team members. All preparation works prior to land acquisition including rights-of-way are carried out by real estate construction and expropriation department. Preparation of plans, valuations of subject land and other immovables are carried out by the valuation experts in this department.

The company will restructure the QHSE department to develop and implement an integrated QHSE management system with documented job descriptions and increased capacity  as per ESAP item #6.  This capacity increase will allow the upper management of OEDAS to better manage the EHS aspects of their business associated with constructions, operations and maintenance.

Emergency Preparedness and Response 

OEDAS has an Emergency Response Plan which sets instructions to assist employees and the emergency response teams in case of an emergency. Emergency procedure includes fire and explosion, serious work injury accident, natural disaster (earthquake) sabotage and terror, flood, chemical spill, food poisoning, traffic accident and evacuation.

Turkey is a seismically active area within the complex zone of collision between the Eurasian Plate and both the African and Arabian Plates, it is seismically one of the most active countries in Europe. Earthquake may occur in the areas where OEDAS has operations. The company is aware of the seismic risks but a detailed survey was not conducted to assess the seismic risks for OEDAS facilities. The company will conduct a seismic risk survey  a priori   for all of the operational buildings and facilities in line with the Regulation on Buildings to be Built in Seismic Zones (Official Gazette date/no:06.03.2007/26454), develop and implement an action plan to mitigate seismic risks in high risk areas as per ESAP item #7.

Training is provided for emergency response team members according to legislation requirement. Certified first aiders and fire wardens are listed on the boards located at several locations, such as warehouses, auxiliary buildings, workshops, canteens, etc. Portable first aid kits are available in offices, auxiliary buildings, workshops and medical rooms. Review of the emergency response plan and relevant documentation revealed that the evacuation leaders and all workers are trained in case of fire. Emergency drills were performed annually. Emergency response team members (fire, first aid, evacuation) and evacuation plans are included in the Emergency Response Plans and displayed at each site. Fire exit signs are displayed adjacent to the exits. OEDAS prepared an Exceptional Circumstances Plan for severe weather condition which covers alternate routes, emergency contact cards that contain information about company OHS contacts, municipality contacts, first aid, vehicle rescue services, repair and maintenance services, and road safety in winter conditions.  

Monitoring and Review 

Safety and maintenance equipment/vehicles, employee health examinations, non-technical electricity losses and lost time accidents are among regularly monitored parameters.

The company will develop a comprehensive EHS monitoring program covering EHS performance and relevant Key Performance Indicators (KPIs); near miss accidents, community accidents, training, OHS and labor conditions of subcontractors, air quality measurements of boilers, testing of runoff in areas where potential contamination occur, electromagnetic field measurements at operations and at locations with risk of public exposure, personal exposure for high risk employees, employee grievances, as per ESAP item #8.

Training 

According to the relevant legislation, workplaces conducting ‘very dangerous works’ are required to ensure that the employees who are engaged in these tasks receive necessary vocational trainings, as well as standard 16-hour OHS training every two years. Induction and periodic OHS trainings are provided to the OEDAS employees within the relevant regulatory framework. Yearly training programs are prepared by the Quality Manager. The operation and safety training programs cover the following subjects: Regulatory OHS trainings (including OHS law, legal rights and responsibilities of employees, safety rules and culture, personal protective equipment, electrical hazards and risks, accident prevention measures); operation simulation training for circuit breakers; grounding of electrical pole (wooden, metal and concrete) installations; connection/disconnection in electrical installations; meter reading operations in electrical installations; work at heights; arc flash and electrical safety training; and emergency response plan.

A new training center (3 training fields and one conference room) in Eskisehir is under construction. All OEDAS electrical technicians hold valid EKAT certificates (i.e. vocational certification required as per the Regulation on Electrical High Current Facilities) and attend refreshment courses offered by TEDAS every 5 years, as legally required. There is a budget planned this year for the renewal of the certificates, as well as new personnel training and EKAT training.

OEDAS will prepare a EHS training matrix which includes subcontractors and will identify potential risks to third parties and associated actions that need to be taken within the scope of the risk assessment process. Relevant trainings and awareness programs will be provided to the public as per ESAP item #9.

As of the end of 2017, the total number of employees working for OEDAS was 1,227 and for OEPSAS was 282. There are 210 women employed in the two companies representing 14% of the total workforce. OEDAS contracts out meter reading services to a contractor with around 284 full time employees while OEPSAS have a total of 31 subcontracted workers for cleaning and security services. At any point in time, there may be an average of about 25 construction workers in each investment project, including both above and below ground facilities. As per the 2017 annual investment program of OEDAS which includes 123 projects, the estimated number of construction workforce is around 3,000 throughout the year. The majority of the construction contractor workforce are sourced from local villages and nearby settlements, hence there is no need for providing temporary construction worker accommodations. OEPSAS also outsources call center services from a company with 125 staff, based in Adiyaman province in South Eastern Turkey.

Working Conditions and Management of Worker Relationship 

OEDAS and OEPSAS manage labor and working conditions in line with national regulatory requirements through their human resources departments. There have been no administrative, civil or criminal actions against the companies in respect to labor related issues and the companies were not cited or penalized for non-compliance related to employment standards in the past. The wage system of OEDAS and OEPSAS are well defined and communicated to employees through their employment contracts.

Human Resources Policies and Procedures   Zorlu Enerji, the sponsor, has a Human Resources (HR) policy which covers the recruitment, dismissal, performance appraisal, equal opportunity and non-discrimination, right to collective bargain, commitment to provide accommodation as per international standards, commitment to health & safety at work, and sub-contractors requiring compliance with international health & safety standards, compensation systems, etc.

OEDAS and OEPSAS do not have written HR policy and procedures in place. As indicated in ESAP Item #10, the companies will adapt the sponsor’s HR policy and develop relevant procedures to meet the requirements of IFC PS 2 including such elements as contracts and terms of employment, minimum wages, working hours and overtime, grievance redress and disciplinary action. The HR policy will also refer to such aspects as freedom of association, non-discrimination, equal opportunity and sexual harassment, and include specific procedure related for managing grievances per IFC PS2.

Workers’ Organizations   There is presently no evidence that the company restricts employees’ rights to associate or join workers’ unions as a total of 788 OEDAS operational employees are members of the Trade Union of Energy, Water and Gas Workers of Turkey (TES-IS). The most recent collective agreement between OEDAS and TES-IS is valid up to end of 2019. To help ensure that workers the HR policy (ESAP item #10) will include language that the company does not impede workers from freedom of association and collective bargaining.

Grievance Mechanism   OEDAS and OEPSAS do not have formal grievance mechanisms for their employees and subcontractors. Employees can voice their complaints verbally to their superior or to labor representative. The HR policy (ESAP item #10) will include a worker’s grievance mechanism which will address managing anonymous complaints as well, employees are to be informed about channels for raising grievances and the grievance mechanism is to be extended to contractor workers.

Protecting the Work Force   OEDAS and OEPSAS verify the age of new employees and ask contractors to do the same and therefore do not engage in child or forced labor. There are no employees under the age of 18. The youngest employee is 21 years old.

Non-discrimination and Equal Opportunity   There are 95 women employed in OEDAS and 115 women in OEPSAS, representing 7.8 percent of the total OEDAS workforce and 40.7 percent of the total OEPSAS workforce. Majority of women (190; 90 percent) are working in administrative affairs. The number of woman engineers (13) represents 15 percent of total engineers in both companies. OEDAS is to develop and implement an equal opportunities action plan to promote good human resources practices with respect to gender and equal opportunities in the company’s workforce and to increase the share of its female workforce (ESAP #11).

Occupational Health and Safety 

OEDAS and OEPSAS have a written ‘OHS Policy’ statement in place showing the management’s commitment to protect health and safety of its employees and stakeholders in line with Turkish OHS Law (No: 6331) depending on the danger class of the workplace operations. Accordingly, site operations are classified as ‘very dangerous’ for OEDAS and as ‘less dangerous’ for OEPSAS. According to the law, obligations that apply depending on the danger class of operations include employment hours of relevant OHS management staff such as certified OHS specialists and workplace doctor and health officer or nurse. To meet minimum regulatory requirements, OEDAS obtains supplementary services from six external OHS specialists for all five regions.   A doctor and nurse from an authorized Joint Health and Safety Unit are employed at each operational region of OEDAS/OEPSAS   in line with labor regulations.

OEDAS has established OHS Committees at each of five regions in line with the legislation. The committee consists of a regional operation director, three employee representatives (including union representatives), one OHS expert, three chief engineers from each operation units, a workplace doctor, a health officer, an HR & Administration Supervisor, subcontractor representative (subcontractors with a minimum of 50 employees – e.g. Korfezim) and representatives from each district. OEDAS have appointed workers’ representatives for OHS related activities, risk assessment and meetings.

OHS performance of OEDAS was inspected by the Ministry of Labor and Social Security in July 2016 through several comprehensive audits to the Eskisehir, Bilecik and Kutahya maintenance facilities, and the subcontractor Korfezim’s facilities. Inspection reports indicated that there were non-compliance issues, including for example: missing insulating floor materials, electrical service panels were not installed with ground fault interrupter (GFI) circuit breakers, and no pedestrian walkways in loading and unloading areas. Implementation of Fine & Kinney Method of Risk Assessment were asked for evaluating risks from regular and non-regular activities and identification of applicable 'corrective and preventive actions' for facilities in three regions. Based on limited observations during the IFC appraisal visits, most of the audit findings appear to have been addressed. 

Accident and Near Miss Recording   OEDAS has an accident reporting and accident investigation system that meets regulatory requirements. Respectively, a total of 29 and 9 reportable accidents occurred in 2016 and during the first six months of 2017 including contractor employees, with 262 and 70 lost days. The latest occupational fatality occurred in 2015 in Alpu district of Eskisehir, due to electrocution. According to company records covering the last 5 years, the main types of accidents are electrocution, road accidents, fall from heights, slip/trip/cut/hit and animal attacks. Accident statistics for OEDAS employees and contractors for the last five years indicate that both lost time injury frequency rates and lost time severity rates for employees have decreased over the years.

As set forth in ESAP item 12, OEDAS will incorporate indicators in its Key Performance Indicators System for monitoring and improving OHS management practices in place which will include clear targets to further reduce employee and contractor lost time injury rates, and implement related actions. This will also include LTIFR (Lost Time Incident Frequency rate) calculation and comparison against international sector benchmark; a detailed accident investigation/analysis program focusing on root cause analyses; a near miss reporting system developed through relevant awareness studies; and installation of near miss reporting boxes at locations where site employees can easily access.

Risk Assessment   According to the local legislation, workplaces classified as conducting ‘very dangerous work’ are required to perform OHS risk assessments and conduct reviews/revisions every two years. An initial risk assessment for the head office in Eskisehir and operation sites was carried out in October 2016 as required by the government audits and using Fine & Kinney method.

Risk assessment documents reviewed cover risks and identify corrective and preventive actions related to OEDAS employees, contractor employees, as well as third parties. Going forward, OEDAS will perform “Job Safety Analyses” for several high severity and high frequency critical tasks performing repair/maintenance works per ESAP item #13.

Personal Protective Equipment (PPE)   During the site visits, proper use of personal protective equipment (PPE) was noted by OEDAS and sub-contractor employees. PPE provided to repair and maintenance staff include, but not limited to: hard hats, goggles, rubber insulating gloves for both low and high voltage applications, gloves for mechanical work, electrically insulating shoes, safety belts, torches, safety vests, arc flash protection clothing (EN ISO 1149), and LV/HV detectors and sticks. Trainings are provided to employees about PPE usage in accordance with the ‘PPE Procedure’ of OEDAS. With ‘Work Site Periodic Inspection’ program: PPE usage, safety equipment and procedural implementation for workforce and subcontractors are regularly inspected in working sites.

Workplace Exposure   OEDAS will develop and implement an industrial hygiene management plan to cover occupational exposures to noise and vibration, illumination, thermal comfort and electromagnetic field. The illumination survey, thermal comfort and other parameters will be identified and measured at all sites  as per ESAP item #14. 

A lighting system will be provided in all work areas. Where there is a risk for any employee in the lighting system required, a backup lighting system will be provided for emergency and sufficient illumination during night work at the field. If there is no possibility, they will use personal lighting devices for employees. Illumination parameters will be measured for faults and repair areas and minimum parameters will be defined at night operations as per ESAP item #14.

Resource Efficiency 

In 2017, the Company’s energy losses in the distribution network was estimated around 7.6%, which is the total of technical loss and commercial loss (theft, or not billed). The average losses among all 21 distribution companies in Turkey was about 12%. The company has a team responsible for monitoring technical and commercial losses by performing regular inspections of the distribution network and there are ongoing efforts to decrease the technical losses in each province. The company targets to reduce the losses to 6.6% till 2020, in particular by improvements at the networks of the two largest and most urbanized Provinces; Eskisehir and Afyon.

Water, Waste Water and Storm Water  

Water is supplied from city network and mainly used for domestic purposes in the OEDAS/OEPSAS facilities. OEDAS/OEPSAS operations are not under the scope of Environmental Permit and License Regulation and there is no direct discharge of wastewater into receiving bodies that would require control under an environmental permit. Industrial wastewater is not generated in the facilities. Domestic wastewater generated from the office buildings and other facilities is discharged to municipality sewer lines.

A storm water management procedure/program will be developed and implemented by OEDAS that would include verification and update of wastewater connection permits, installation of oil/water separators as necessary and periodic testing of the runoff in areas with potential contaminated runoff in all of the facilities including transformer storage areas  as set forth in ESAP item #19.

Hazardous Wastes 

Waste Oil   The distribution network includes approximately 22,450 of transformers ranging in age from 0 to 55 years.   An inventory of transformers containing PCBs has not been prepared to date and waste oils have been typically disposed of based on a one-time analysis of a composite of oils from different transformers.  The use of PCBs in new electrical equipment has been prohibited in Turkey since 1996 by the  Hazardous Materials Regulation  . The PCBs are currently regulated under the  Regulation on the Control of Polychlorinated Biphenyls and Polychlorinated Terphenyls  , which requires the development of an inventory program for identifying PCB levels in transformer oils to ensure the protection of the environment and human health. In accordance with the regulation, PCB containing materials and equipment should be purified or disposed of until 2025 .  TEDAS has requested from each regional electricity distribution company to identify the transformers with PCB content that are installed before 1990 by checking their tags. There are transformers dating back to 1960s in the OEDAS network which may probably include PCB containing oil. OEDAS should make an inventory of transformers with PCB content. It is suggested that random sampling in 10% of the old transformers is conducted to analyze the PCB content in transformer oils and to develop a relevant phase out plan for transformers, if necessary.  PCB content in transformer oils will be analyzed and waste oils will not be mixed and will be analyzed prior to disposal, then will be disposed based on PCB content of the oil into a licensed hazardous waste disposal facility.  The company will develop and implement a management plan and procedures to test and manage insulating oil whenever maintenance or replacement activities take place and as part of the management plan,  will  develop an inventory of transformers containing PCBs, analyze the PCB content in transformer oils and develop a relevant phase-out plan for such transformers as per ESAP item #20.

Asbestos   Asbestos  containing roofing materials were encountered in the facilities (e.g. Eskisehir Head Office, Sultandere Main Warehouse in Eskisehir, Kutahya Main Warehouse; Step-down transformer and energy maneuvering station in city center district of Kutahya) during the site visit. In addition, there were dismantled asbestos roofing materials with broken parts used for different purposes in the warehouses.

OEDAS will conduct an asbestos survey to identify those roofing materials in use that are broken and/or have cracks; develop a replacement plan to remove those roofing materials, dismantling and disposal in line with the requirements of local Regulation on Health and Safety Measures for Working with Asbestos by the authorized experts. All dismantled asbestos roofing materials will also be disposed of immediately as per ESAP item #21. In addition, an Asbestos Containing Material (ACM) removal and replacement plan for the rest of the facilities will be developed as indicated in ESAP item #22.

OEDAS,  to improve chemical storage practices including secondary containment, will develop  an inventory of materials and chemicals used in all operations , ensure that MSDS forms of all chemicals (e.g. transformer oil, diesel oil, engine oil, paints, lubricants and cleaning agents) are available in Turkish at the facilities in accordance with the relevant regulation; and will develop hazardous material handling procedures which will include requirements for housekeeping and storage conditions. as per  ESAP item 23.

Air Emissions 

OEDAS/OEPSAS operations are not under the scope of Environmental Permit and License Regulation and there are no industrial emissions of concern that would require control under the ‘Environmental Permit’. Nevertheless, OEDAS should have an inventory and then identify the thermal power and fuel type of all boilers for heating purposes and also identify requirements for necessary air quality testing with respect to WBG General EHS Guidelines (Table 1.1.2 Small Combustion Facilities Emission Guidelines applicable for facilities > 3MWth  and operating more than 500 hours per year with an annual capacity utilization factor of more than 30%)  as per ESAP item #24.

Over the last three years, a number of incidents occurred in facilities which belong to OEDAS with the potential to affect members of the local communities. No injuries or fatalities were reported as a result of these incidents which consisted primarily of some transformer fires and explosions.  A community accidents investigation and reporting system will be established to identify and take actions to prevent recurrences. The emergency response plan and risk assessments will also be updated to cover third party accidents. Additionally, relevant safety precautions will be taken during construction activities to protect members of the public from construction hazards as set forth in ESAP item #27.

Facilities located in residential/commercial areas or at open public space have safety warning signage to remind the public of potential hazards associated with these facilities. There has never been a third party fatal incident to date. However, it was observed that there are transformers located adjacent to children’s playgrounds, parks, and in apartment basements. In this regard, OEDAS will identify potential risks of facilities located in public areas to communities and associated preventive actions that need to be taken, develop and implement an awareness raising training program for the public as per ESAP item #28 .

OEDAS and subcontractors use a large number of operational vehicles. In the last 5 years, OEDAS has experienced over 50 road accidents (no third party injury reported). The company will develop a road and driving safety policy and procedures including periodical defensive driving training for drivers including sub-contractors as indicated in ESAP item #29.

Security 

OEDAS has their own 88 security personnel who work full time in three shifts whereas OEPSAS outsources the security services. OEDAS security staff carry fire arms. They are certified and regularly trained as per the local regulatory requirements. As indicated in ESAP item #30, the company is to develop a security policy including requirement for background screening to ensure that candidates do not have any criminal record or record of abuse or violation of human rights and to provide relevant trainings to security personnel on; conflict resolution, crowd management, restraint exercise of the security activity, proportional use of force (if allowed) and basics of human rights; and keep records of training sessions.

• OEDAS transmission lines are generally co-located along highway, road, and other rights-of way to minimize costs and disturbance to ecological, socio-economic, and cultural resources. Also, where sensitive areas are identified, slight route modifications or specific mitigation solutions are generally available to avoid impacts on such areas. Nevertheless, in certain cases, forest areas are used as right of way for electrical distribution lines within the OEDAS system.  The construction of these lines does not fall within the Turkish EIA regulations since the OEDAS distribution lines are below 154kV (lower limit for EIA studies).  T he  Turkish Forest Law No:6831   stipulates that investors must obtain permission from the Ministry of Forestry and Water Affairs to perform activities in forests and national parks. All damages to public forests and national parks caused by the investment activities are required to be compensated for. According to Law, the Ministry has the authority to give permission for the use of forestland. This permission cannot be longer than 49 years. Also, the regulation on “Permits to be Given on Land Considered Forest Areas” defines the provisions for approvals, permits and easement rights to be given.  
• As per ESAP item 32, in order to properly identify and manage potential risks to biodiversity in future, the company will develop a biodiversity screening procedure and conduct high level assessments on a site-by-site basis in order to understand the ecological importance of the area (considering national and international regulations) and whether additional biodiversity field surveys and specific prevention and mitigation measures are needed prior to and during the construction of the distribution line. This will include a regional bird survey based on desk top assessment (e.g. Integrated Biodiversity Assessment Tool (IBAT)). Moreover, the procedure for construction works in forest areas that will be developed as per the ESAP item 5 will identify specific EHS requirements for contractors to ensure appropriate preventive measures are taken during constructions.