There are no impacts of concern associated with the following Performance Standards: PS5: Land Acquisition and Involuntary Resettlement – all WtE facilities currently in operation and those under development are either existing facilities or WtE site locations for which land acquisition was undertaken by the government many years ago dating back to the early to mid- 2000s. Generally, for those projects under Build-Operate-Transfer BOT, the land is owned by the government and no new land acquisition is planned. IFC is not aware of any disputes, outstanding legal challenges or legacy issues related to land acquisition at any of the sites in control of Canvest. If additional land for expansion is required during the concession period, the company will ensure compliance with PS5 requirements if applicable; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources – all aspects of concessions including those related to biodiversity and conservation are reviewed through government led impact assessments, no negative impacts on conservation or biodiversity within the projects’ area of influence have been identified; PS7: Indigenous People  –  no indigenous people are known to have been in areas or affected by Canvest projects; PS8: Cultural Heritage – Canvest projects are not located in areas of known historical or cultural significance. 

 This is a Category B project in accordance with IFC’s Policy on Social and Environmental Sustainability because it will create a limited number of specific environmental and social impacts that can be minimized, avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. The WtE facilities owned and/or operated by Canvest, and those currently in development have a limited footprint, use contemporary technology that meets performance standards established by the European Union (Directive 2010/75/EU and relevant Annexes/Amendments), and applicable WBG guidelines for incineration of MSW, to significantly improve on emissions performance of existing WtE facilities that are being upgraded by Canvest.

Key E&S issues associated with this investment include: the company’s environmental and social management capacity; monitoring and performance of environmental, health and safety and social management systems; specifications and operating procedures for WtE facilities, including emission control equipment, performance and operational standards, and alignment with internationally recognized practices for the sector. Community acceptance of waste to energy facilities has been a contentious issue at some locations in China, making community engagement a key E&S risk that needs to be adequately managed by the company through the life of the project.

 Canvest's operating plants have ISO 14001 and OHSAS 18001 certified corporate management system which includes oversight of environmental, social, health and safety (ESHS) issues. Among other things, this ensures the operations comply with all applicable laws and regulations. The existing management system includes a series of procedures, work instructions, and reference documents which, when combined with the findings of the project-specific assessments, comprise a program of mitigation and performance improvement measures and actions necessary to effectively manage the E&S risks and impacts of its projects. For new projects, assessments are periodically aggregated and summarized for senior management review. Through management meetings and written documents, project and site managers periodically report to senior management at the company on environmental, health and safety performance, as well as accidents and incidents on existing projects.

Selection of sites is carried out by respective local governments, and its approval for use as waste to energy facilities is confirmed after completion of environmental and social impact assessments (ESIA), and for expansion beyond existing approved capacity, ESIAs are updated prior to regulatory approval. Consistent with the PRC laws and requirements, project ESIAs are prepared by the company and approved by the government. The ESIA process complies with PRC requirements and is consistent with IFC PS1 requirements. The impact assessment process included detailed assessment of potential environmental and social impacts, as well as extensive consultation on various aspects of the project – from site selection, availability of water, and land acquisition through conditions for project operation, monitoring and reporting. ESIAs have been completed for all projects in operation, and under development or under review for approval for those under contract negotiation/planning. As required by PRC law, project development can commence only after an ESIA is approved by the competent regulatory authority. Recommendations from the impact assessment process and requirements from applicable regulatory framework are incorporated into the concession agreement(s), and are used at project definition and planning stage, and as may be applicable through the life of the project.

The company adopted IFC Performance Standards (PS) as part of company’s legal requirements. The company's environmental and social management system (ESMS) includes an integrated approach to managing environmental, social, health and safety functions for all its operations consistent with the principles of IFC PS. The company’s management program includes operational policies and procedures that are implemented at the facility level by supervisors who report to management on an as needed basis. Policies and procedures comply with applicable local regulatory requirements for operation of these facilities including those for human resources and labor, occupational health and safety, and environmental compliance. The Vice President, Human Resources has responsibility for overseeing matters related to labor, working conditions and health and safety. The company provides professional training to key personnel to ensure they have relevant skills and adequate training to perform their work. Assisted by qualified personnel, project managers for each project company are responsible for day-to-day implementation of project-level programs and plans. In accordance with the project-specific work plans, project or site managers are responsible for providing environmental and health and safety training to employees, including contractor personnel.

The company monitors environment, health and safety performance for each project according to the procedures established in their existing management system. In addition to standard procedures detailed in the existing management system, project specific procedures are developed to comply with provisions contained in E&S impact assessments and concession agreements with local governments. For example, certain identified major environmental, health and safety risks and impacts, measurable targets (such as on atmospheric emissions for particulates, hydrogen chloride, oxides of sulfur and nitrogen) are established as compliance benchmarks. If monitoring results indicate nonconformance with standards or deviations from established benchmarks, appropriate corrective or preventive actions are initiated. A similar approach is adopted for unplanned events such as accidents where the events are investigated, and corrective or preventive actions initiated to prevent recurrence. Engineering controls and staff training are provided to mitigate risks and issues associated with the company's operation of WtE facilities. The use and storage of hazardous chemicals are subject to stringent safety standards as required under PRC laws. The company has an emergency prevention, control and response plan which specifies responsibilities, ensures appropriate response equipment and materials are in place, and detail a set of procedures to be followed to minimize the harm of any potential accident. Emergency response plans are consistent with applicable provisions of IFC PS4 on Community Health Safety and Security. 

Performance of the company’s existing environmental and social management system is largely consistent with IFC PS 1 requirements in providing adequate oversight, comprehensive risk assessment, monitoring, reporting and training. As part of the previous investment in the company, the following actions were agreed upon and completed by Canvest:

1. Integrated Environmental and Social Management System (ESMS)

Canvest has integrated ESHS functions into its existing management system to provide robust oversight of ESHS for all its operations and those of its subcontractors. The management system currently ensure consistency with good international industry practice for ESHS performance and maintain compliance with all regulatory and IFC requirements. Additionally, the company has adopted IFC Performance Standards as part of company’s management system requirements.

2. Update Emergency Response Procedures

The company updated its procedures, training and infrastructure to ensure safe operations and emergency response associated with (a) operation of its facilities, and (b) transportation and handling of hazardous gases/chemicals. Updated procedures include a community involvement component that addresses appropriate behavior and safety measures to be implemented in the event of accident at the facility or during transportation/handling.

3. Working and Living Conditions of Sub-Contracted Labor

The company has updated its policies and procedure to ensure compliance with applicable labor laws for sub-contractors such as on working hours, payment of wages and overtime, use of appropriate PPE, working and living conditions.

4. Emission Control and Compliance

All Canvest facilities have continuous inline monitoring equipment that can reliably and accurately measure relevant parameters (such as particulate matter, hydrogen chloride, oxides of nitrogen and sulfur). Other parameters (such as dioxins, furans, heavy metals) are monitored on a periodic basis and reported to the regulatory authorities 

 Currently the company employs 901 staff, the number of sub-contracted employees can vary significantly depending on construction activities at any given time. The company has a Human Resources policy that complies with local and PRC regulatory requirements, and is applied consistently to all direct employees across all its business lines and (subsidiary) project companies. As required by law, the policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. This information is provided in the form of an employee handbook at the time of induction. As is common practice in China, employment relationships recognize the principals of non-discrimination and equal opportunity. Although there is no labor union at the company, under PRC law, employees have the right to freedom of association and can collectively represent to the management any issues or grievances that they may have. Canvest HR policy has provisions for protection from discrimination, harassment and workers can report instances via various methods including the HR manager, collective representation, or through the grievance mechanism. Canvest has a grievance mechanism for all employees that allows for anonymous complaints and has different levels depending on the severity of the issue. All complaints are reviewed, root-causes assessed, and a response provided. The company maintains a record of all grievances and resolution at each facility. There are currently no outstanding grievances.

The minimum employment age at the company is 18 years. The company ensures that child labor or forced labor is not employed directly or by subcontractors through verification of relevant documents. Working hours on site can vary by nature of activity and phase of project, with most labor-intensive phases being at the construction phase during which there are continuous operations. Construction activity is largely subcontracted for which unskilled labor is procured locally. Regulatory requirements in PRC do not require the company to provide direct oversight of wages, working or living conditions of subcontracted labor. Wages are paid by subcontractors to labor monthly and calculated with basis on the hours worked, inclusive of overtime. Terms of employment for sub-contractors are as per PRC laws and the company ensures compliance with applicable labor laws for sub-contractors such as on working hours, payment of wages and overtime, use of appropriate PPE, working and living conditions.

Human resources are managed at corporate level with oversight of the company facilities and operations. Training of staff is done on a routine basis in compliance with local workplace regulations. The department of human resources is responsible to ensure that all employees are adequately trained to perform their work safely. Supervisors monitor that standards are met and any reportable incidents are reported and follow up action taken when required. The company’s training, monitoring and reporting framework is consistent with PRC requirements, and with IFC requirements.

Occupational health and safety of employees at the company is managed by the Human Resources and Administration. There is a plan for accident prevention and worker safety consistent with local regulatory requirements. All employees in the company must undergo a training program at induction and subsequently regarding worker health and safety relevant to their job activity.  Facilities are audited yearly by regulatory agencies to monitor compliance with labor regulations. The company monitors health and safety data and has follow up root cause analysis, mitigation and training procedures consistent with good international industry practice. The company recorded some lost time injuries during 2017 which were followed up with corrective actions such as enhanced training on job safety and use of personal protection equipment (PPE) to avoid recurrence. The company is in compliance with regulatory requirements and its performance is consistent with IFC PS2 requirements on labor and working conditions 

 As indicated under the ESRS of the previous investment, recovering energy from the incineration of MSW is being widely adopted in China as a technology of choice for the management of MSW. Incineration with adequate engineering/ emission controls can provide an environmentally acceptable solution for significant reduction in disposal volumes, and generate energy that can potentially offset usage of coal and other non-renewable energy sources.

Bottom ash from waste combustion in the incinerator is transported away from the plant after cooling, most commonly for use as additives in the road and construction industry. Fly ash from the FGT system is collected separately and disposed of as hazardous waste by licensed vendors in landfills designated by the local government. No effluent is discharged to the environment from any WtE facility operated by the company.

  Impact to community health from incineration of MSW are considered as part of the ESIA process, and mandatory setbacks (buffer zone) are required for WtE facilities. Engineering controls and staff training are provided to mitigate risks and issues associated with the company's operation of its WtE facilities. The use and storage of hazardous chemicals are subject to stringent safety standards as required under PRC laws. Risks to the community include those from the operation of the WtE facility as well as those from the transportation and handling of MSW and hazardous gases/chemicals. The company has emergency prevention, control and response plans which specifies responsibilities, ensures appropriate response equipment and materials are in place, and have a set of procedures to be followed to minimize the harm from any unplanned release beyond the plant boundaries due to either irregular plant operations or an accident at the facility, or during transportation of material destined for the facility. A limited number of security personnel are employed by the company mainly for access control and perimeter safety. Security personnel do not carry any firearms and no adverse interaction with members of the community is anticipated

 The WtE facilities operated by Canvest and those under development are not located close to communities or settlements which may be affected by the operations of the company. Canvest WtE facilities use contemporary technology that meets performance standards established by the European Union (Directive 2010/75/EU and relevant Annexes/Amendments), and applicable IFC/WB guidelines for incineration of MSW. The WtE facilities operated by Canvest have not been subject to any public complaints or disputes regarding its environmental or social performance. The company works with the local government at project locations in making available relevant E&S information.

In China, dialogue and communication with relevant stakeholders and disclosure of environmental and social impact assessment occurs through procedures established by PRC regulations. As a result, information dissemination activities have included those undertaken by the local government, which includes stakeholder consultation during project development and operational phases. Public consultation is undertaken for the WtE projects as part of the ESIA development process, and is documented in the ESIA for each project. As part of the enhancement to its environmental and social management program from the previous IFC investment, the company has established methods for communicating environmental and social aspects on an ongoing basis to external interested parties and maintain procedures for receiving, documenting and responding to concerns from any external interested parties relating to the project. The company will continue to work with local governments in this regard to ensure that any necessary follow-up with the community is handled properly. 

  George Law

Address: Unit 6803B, Level 68, ICC, 1 Austin Road West, Kowloon, Hong Kong

Telephone no.: (852) 2668 6596

Fax: (852) 2668 6597

Email: george.law@canvest.com.hk

Website: www.canvestenvironment.com