The proposed project is predominantly located within an existing operational facility. The new refinery project (trains 2 & 3) required a total of 3 hectares of additional land, leased from local communities on a willing buyer, willing seller basis. Similarly, the land originally acquired in 2005 as part of the construction of the of Ogbele facilities was also leased from local communities on a willing buyer, willing seller basis in line with applicable Nigerian regulations for a 25-year lease. NDEP’s operations are not located within or near areas of known biodiversity sensitivity, and do not result in impacts to biodiversity, indigenous peoples or cultural resources. Thus, PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7: Indigenous Peoples and PS8: Cultural Heritage, are not currently applicable to the project.

This is a Category B project according to IFC’s Policy on Social and Environmental Sustainability because the project is an incremental expansion of an existing facility which may result in a limited number of environmental and social impacts, which can be avoided, minimized or mitigated through the implementation of recognized good international industry practices, as well as designing the expansion in accordance with international norms and specifications.

The key E&S risks and issues associated with the project include: Company’s capacity and systems to assess and manage the project in accordance with good international industry practices, Operational hazards including potential gas leaks, fires and explosions, Occupational health and safety, Construction hazards, community health and safety and Emergency preparedness and response.

 Identification of Risks and Impacts: NDRe has undertaken the installation of its modular mini-refinery in a manner consistent with the requirements of the Nigerian Federal Ministry of Environment (“FME”) and the Department of Petroleum Resources’ (“DPR”). NDRe coordinates with these supervisory agencies and et Regulatory Authority (EMRA) local municipalities, for obtaining licenses and authorizations ahead of the mini-refinery installation and operation. The modular mini-refinery is designed and installed to meet good international industry standards including the American Petroleum Institute standards, and Nigeria’s industry standards. As part of the modular micro refinery design, appropriate HAZID/ HAZOP studies have been undertaken to identify, reduce and manage operational process risks.

The NDRe project is located within the boundary of the existing Ogbele processing facilities which has a total footprint of approximately 25 hectares. The group’s development of the Ogbele field in OML 54 and installation of the flow station was completed in 2005, and the gas processing plant completed in 2012. Environmental impact assessments (“EIA”) for the various projects in Ogbele were completed in 2003, 2012, and 2017 and approved in December 2018 consistent with the requirements of the Nigerian Federal Ministry of Environment (“FME”) and the Department of Petroleum Resources’ (DPR) Environmental Guidelines and Standards for the Petroleum Industry in Nigeria, EGASPIN (2002). The existing 1,000 bpd mini refinery was included in the 2003 EIA for the entire Ogbele facilities. An EIA for the modular mini refinery expansion, referencing the Performance Standards, was completed in December 2017 and provisionally approved by the DPR in December 2018. The Nigerian approval system provides final and full operating permits prior to plant commissioning.

At the group level NDEP operates an HSE management system to identify and manage operational HSE hazards and risks or controlling such to as low as reasonably practicable. NDEP has developed and pursues HSE objectives and targets geared towards zero incident, as part of its HSE management system. The management system has been organized to conform with ISO9001 and ISO14001 certification standards for all operational assets and are currently undertaking a renewal of the management system.

As part of IFC’s financing, NDRe shall engage a qualified consultant to assist in updating the group environmental and social management system (ESMS), commensurate with the installation and operations of mini-refinery operations. As part of NDRe’s ESMS, the company will adopt NDEP’s corporate E&S standards and develop standard operating procedures relevant to the mini refinery operations that clearly articulate the requirements of the ESMS and ensure consistency with NDRe’s E&S policies. Specifically, this will involve the development of a set of NDRe standards and/or management plans tailored to the operation of the mini-refinery and address mitigation of the following impacts and risks defined in NDRe’s E&S policies and consistent with the Performance Standards requirements. The ESMS will be organized in a manner consistent with the Performance Standards, good international industry practice and the World Bank Group (WBG) Environmental Health and Safety (EHS) general guidelines and EHS guidelines for petroleum refining [ESAP #1b].

At the group level, the company has developed a community affairs, health, environment and security manual addressing health and safety risks and interaction with host communities. The manual commits NDEP, its operating subsidiaries and all contractors to limiting risk to the environment, staff and host communities. As part of NDRe’s ESMS development, NDRe shall adopt and augment where necessary the NDEP community affairs, health, environment and security manual in a manner consistent with the Performance Standards [ESAP #2k].

Policy: At the group level, NDEP has adopted a health, safety and environmental (HSE) policy applied to all NDEP companies, including NDRe. Complementing the overarching HSE policy, the company has developed and implemented several additional policies including i) a drug, alcohol and smoking policy, ii) contractor HSE management policy, iii) a training and competency development policy, iv) a journey management policy, and v) a personal protective equipment policy. The integrated HSE policy covers overarching environmental, health, safety and community principles and commitments that apply to all company operations. The NDRe E&S policies will be communicated directly to employees when they are hired, and through regular training programs.

Organizational Capacity & Competency: NDEP senior management have an extensive breadth of experience in the application and operation of good international industry health, safety, security and environmental practice. The NDEP organizational structure includes a chief executive officer, chief operations officer, a chief financial officer, and human resources (HR) manager. A director for engineering and operations oversees the work on environmental, safety, security and community. Regarding health, safety, environment, security and community personnel, NDEP has an HSE manager, a security manager and community affairs manager directing the social and community development programs. NDEP senior management values a relationship with IFC to assist the company carry out its activities in line with good international industry practice.

As part of IFC’s investment, NDRe will review, strengthen as necessary and maintain an organizational structure that defines roles, responsibilities and the authority to implement NDRe’s ESMS [ESAP #3a]. Key E&S responsibilities will be defined and communicated to the relevant personnel and to partners and contractors alike. Appropriate management sponsorship and human and financial resources will be provided on an ongoing basis to achieve effective and continuous E&S performance. As part of this action, NDRe will hire an appropriately qualified HSE manager to oversee the construction of the final train construction ongoing operations to meet the NDRe E&S policy commitment [ESAP #3b].

Emergency Preparedness and Response: As part of IFC’s investment, NDRe will augment the group’s emergency response plan (ERP) relevant to the NDRe facility outlining emergency scenarios and response actions, key contacts, and responsible staff to complement wider corporate emergency response plans. The company will also provide training to employees and contractors on the information within this plan [ESAP #2c].

Monitoring, Review & Training: At the group level, NDEP’s HSE policy, objectives and procedures are regularly audited and reviewed by management to continually improve the management of health, safety and environment risks. As part of the development of the NDRe E&S policy, a monitoring, inspection and audit program will be developed [ESAP #2b] together with key performance indicators (KPIs) to track information on environmental, health and safety and social management, training, and incidents. Senior management will review and set E&S KPI’s no less than annually and will be approved by its board [ESAP #4a]. NDRe will also establish formal E&S board reporting requirements to communicate E&S performance at an appropriate frequency [ESAP #4b]. Any amendments to NDRe’s HSE policies will be approved by the NDEP board and notify IFC. NDRe will also develop an Environmental Monitoring Plan to establish monitoring requirements for its operational activities [ESAP#4c].

External Communications and Grievance Mechanisms: At the group level, the company has developed a community affairs, health, environment and security manual addressing health and safety risks and interaction with host communities. The manual commits NDEP, its operating subsidiaries and all contractors to limiting risk to the environment, staff and host communities. As part of IFC’s financing, NDRe shall adopt and augment the NDEP community affairs, safety, health, environment and security manual to complement the existing corporate grievance mechanism in a manner consistent with the Performance Standards [ESAP#2i].                                                  

Human Resources Policies and Procedures: The existing refinery (train 1) employs 8 direct workers. Following the installation and commissioning of trains 2 and 3, approximately 50 additional personnel will be employed, including a plant manager, operators, technicians, quality assurance laboratory personnel, process engineers and an HSE manager.

At the group level, NDEP has implemented a corporate human resources policy and comprehensive code of ethics aligned with national labor laws and consistent with the requirements of IFC PS2. These are applied across all the subsidiaries of the group including NDRe and cover all workers, including subcontractors. Specific conditions of employment are included in the worker’s contract and an employee handbook, such as: terms of employment; reference and background checks; the work environment (including health, safety and security); payroll; holidays; vacation; sick leave; maternity and paternity leave; leaves of absence; benefits and employee terminations. Supporting the employee handbook is a rigorous induction programme which all employees attend at the point of hire. Depending on job type, the induction programme lasts up to 12 weeks.

Non-discrimination, Equal Opportunity: The HR Policy and code of ethics contains non-discrimination and equal opportunity conditions to avoid bias. NDRe’s staff is comprised of 8% female and 92 % male employees, who are compensated equally. Sexual harassment in the workplace is also covered under NDRe’s non-discrimination policy. NDRe employs staff based on merit, with recruitment based on a role profile for each position and the completion of a pre-employment checklist that includes checking age, qualifications and experience prior to offering a position. NDRe does not employ staff younger than 18 years old.

Freedom of Association: At the group level, and consistent with the Nigerian Trade Unions Act (2005), NDEP makes provisions for workers wishing to establish and join a labor union. At present there are no labor unions set up within NDRe, although the company supports worker freedom of association and initiatives by workers to set up a labor union should there be a wish to do so. In view of NDR’s expansion activities, there have been no instances of major retrenchment in the past and there are no plans by NDRe to do so in the future.

Occupational Health and Safety: At the group level, NDEP understands that employees and contractors involved in construction, maintenance, repairs and emergency response can potentially be exposed to risks related to hydrocarbon leaks, fire explosions and road traffic incidents. Occupational Health and Safety (“OHS”) is a key component at NDEP operated assets. Activities are subject to hazard identification and risk assessment to ensure that OHS controls to manage risk are in place prior to starting the activity and necessary competency requirements for key roles are specified. Individual job methods are reviewed through standard job safety analysis so that the safety management procedures and practices in place are correctly planned and implemented. The strict enforcement of OHS procedures is reflected in the positive safety statistics reported for NEDP’s operations which are well within industry norms. Incidents, including near misses, are reported to management on a daily, weekly, monthly and quarterly basis and each is investigated. NDEP has not experienced any fatalities in its operating history with LTI and incident rates well within industry norms. As part of NDRe’s ESMS development, existing NDEP OHS hazard identification and risk assessment processes, permit to work, and standard operating procedures shall be adapted and implemented specific to NDRe’s operational risks [ESAP #2a].

NDEP collects and monitors health and safety performance data across its operations for both direct staff and its contractors. Across the NDEP group, NDEP has achieved over 9,000,000 working hours without a Lost Time Injury placing the group health and safety performance well within industry norms. NDEP conducts audits of all contractors and report on their HSE performance indicators.

Contractors, Third Party Workers: NDEP’s contractors undergo a thorough evaluation prior to their selection and throughout their contractual relationship with the company. Upon selection, contractors are required to sign and uphold NDRe code of conduct and HSE policies and procedures and, where required, undergo the same training programs offered to NDRe’ direct employees that conduct similar duties. Contractors who do not meet basic standards are removed from the list of service providers.

Grievance Mechanism: At the corporate level, NDEP has established a worker grievance mechanism through which employees are able to raise their workplace concerns. The mechanism defines the appropriate level of management to address concerns promptly, using an understandable and transparent process that provides timely feedback to those concerned, without retribution. As part of IFC’s investment, NDRe shall adopt and augment the existing corporate grievance mechanism and include provisions for employees to raise anonymous complaints, and company actions to address any anonymous complaints. NDRe will inform and train the employees on the availability of this mechanism [ESAP #5].                                                  

The environmental regulator, the FME, has regulatory control relating to pollution prevention in Nigeria. Operators are subject to routine audits on their environmental performance by the FME’s impact mitigation and monitoring function which includes environmental monitoring as defined in the approved environmental management plan. During operations the FME also regularly sends inspectors (usually on an annual basis) to NDEP producing facilities to audit and inspect the facilities, collect samples of effluent for analysis and check waste tracking records.

Resource Efficiency and Greenhouse Gas (GHG) Emissions:

Consistent with the characteristics of Nigerian crude, the Ogbele marginal crude is light and sweet producing very little heavy residues. Quantification of GHG emissions will be conducted by NDRe annually in accordance with internationally recognized methodologies and good practice.

Air Emissions: Power to the NDRe processing operations is supplied by feed gas generators, with diesel back-up from the Ogbele production facility within which the NDRe modular micro refinery is located. The main air emissions from the modular mini refinery operations are SOX, NOX, H2S, particulate matter (PM), heavy metals, benzene, and other volatile organic compounds (VOCs). The modular mini refinery was designed and constructed in the USA to meet Nigerian emissions limits  and will meet the WBG General EHS guidelines for emissions limits (table 1.1.2). The Ogbele site is compliant with the Nigerian Federal Gas Flares Out policy and the WBG’s Zero Routine Flaring by 2030 Initiative.

As part of NDRe’s ESMS development, the company shall develop an emissions and ambient air quality monitoring program to check that the facilities are performing within vendor emissions guarantee limits and consistent with Nigerian and WBG General EHS Guidelines parameters. The program will also include fence line monitoring of benzene concentrations consistent with internationally recognized methodologies, per the WBG EHS Guidelines for petroleum refining (paragraph 69).  As part of NDRe’s ESMS, the company shall also develop an auditable procedure to monitor fugitive emissions, with complementing asset integrity maintenance inspection procedures [ESAP #2d].

Waste Water: The NDRe facility does not employ the use of steam or water in the refinery process. The minimal water generated at the NDRe plant from condensation will be returned to central water disposal unit at the flow station; no process water will be discharged to the environment.

Solid and Hazardous Waste: During construction, limited amounts of solid waste are generated, which is managed and disposed of in accordance with good practices and host country requirements. NDRe disposes hazardous waste that is not returned to the manufacturer / vendor (e.g. used lubricating oil) or collected by FME (e.g. used batteries) to an approved hazardous waste facility. As part of NDR’s ESMS development, NDR will develop a hazardous waste chain of custody procedure to track waste consignments from the originating location to the final licensed waste treatment and disposal location in a manner consistent with Nigerian law, the Performance Standards, WBG general EHS guidelines and EHS guidelines for refineries [ESAP #2e].

The hazardous waste management procedure will form part of a general waste management procedure making provision for audits of associated waste management facilities to be regularly conducted by NDRe, the corporate NDEP level or by qualified specialist consultants, where required. Waste management procedures will incorporate chemical handling procedures to handle all hazardous chemicals that are produced, used, or stored during all activities, ensuring consistency with IFC’s guidelines. Transportation of hazardous material will comply with Nigerian regulatory requirements and applicable international requirements. Specific training will be provided to all relevant personnel. These waste management procedures will apply to all NDRe contracted resources and will be audited by the NDRe and/ or NDEP HSE department personnel.

Noise: Noise from the construction of the remaining train 3 may also be generated during the final phase of construction. Overall, NDRe’s activities during construction and normal operation/maintenance have limited potential for environmental pollution and are managed in accordance with good international industry practices. As part of the development of NDRe’s ESMS development, the company shall develop an OHS noise monitoring program which shall also monitor fence line noise levels [ESAP #2f].                                                  

Communities in the company’s region of operations have a long history of exposure to the oil and gas industry and have a developed awareness of the associated risks. Historically, the region has experienced tensions relating to incidents associated with attacks to surface oil processing and pipeline infrastructure. To address this, at the group level NDEP operates and implements a stakeholder engagement program to maintain good relationships with host communities. The program also seeks to create awareness within communities of the risks relating to NDEP’s operations.

As required by NDEP’s community affairs, health, environment and security manual, emergency preparedness and response plans have been developed containing strategies to respond to specific emergency situations. An extensive programme of community consultation involving community awareness meetings are undertaken via the host community trust (see stakeholder engagement) to ensure host community awareness of oil and gas operations.

At the group level, and as part of the community affairs, safety, health, environment and security manual, procedures have been designed to protect company assets including property, personnel and proprietary information. Consistent with Nigerian law, all personnel including security personnel hired by NDEP are forbidden to use or carry weapons. However, NDEP recognizes that the security situation in the region remains uncertain. As such, the need to provide national armed security forces is standard practice for the oil and gas sector in the regional context. In accordance with Nigerian policy, public security forces such as the police and army provide services to facilitate safe and secure operations of the oil and gas industry.

As part of NDRe’s ESMS development, NDRe will adopt the group security policy and code of conduct for security personnel and public security forces consistent with the requirements of PS 4 and incorporating the relevant guidelines of the Voluntary Principles on Security and Human Rights. The code of conduct shall set clear objectives for the work of security personnel and permissible actions and be based on applicable law and professional standards. These instructions will also be communicated as terms of employment and through periodic training [ESAP #2k].

Both the scale and duration of the mini refinery construction is limited. Workforce accommodation and the management of solid waste and effluent pose minimal health risks to the communities residing in project’s area of influence.

Community Health and Safety and Equipment Design and Safety – there are some risks associated with the construction and operation of modular micro refineries, mainly potential hydrocarbon leaks, fire and explosion. NDR has designed and constructed the modular mini refinery in the USA and in full compliance with Nigerian regulatory requirements and consistent with good international industry practices.

Road safety: As part of the NDRe project, an upgrade of the existing ~4.6km road to the Ogbele site is required to facilitate customer (tanker) access. During operations, NDRe estimates that approximately 50 tankers per day will require access to the site. The site access road joins the main highway connecting to Port Harcourt. As part of IFC’s investment, the company shall engage a qualified independent third-party consultant to review NDRe’s access road designs. The review shall ensure the interface between the site access road and the main highway is designed in a manner which ensures accident risk for tankers exiting and entering the public highway is reduced to as low as reasonably practical [ESAP #6]. As part of NDRe’s ESMS the company shall also develop traffic management policies and procedures applicable to third party customers accessing the site [ESAP #2h].                                                  

NDEP has directed 5% of its profits from Ogbele site to a Host Community Development Trust, with emphasis on community development projects for the benefit of all the members of the community around the site. In addition to providing substantial development impact in the form of new schools and medical aid, amongst other programs, the trust activities motivate host communities to curb vandalism towards NDEP assets. During the past 12 years of NDEP production operations, there have been no community related production interruptions.

NDPR has in place a community grievance mechanism to capture and address concerns and complaints from affected communities and wider external stakeholders. NDPR has developed a mechanism for managing grievances from stakeholders in a planned, fair and transparent manner. The mechanism is designed to the scale of the risks and impacts of the NDPR operations and have been developed to be culturally appropriate, understandable, and readily acceptable to all segments of affected communities, at no cost and without retribution. NDPR communicates the grievance procedure to its external stakeholders to raise awareness and offer transparency of how stakeholders are expected to channel grievances.

The grievance mechanism sets out the process to be followed to resolve grievances, the responsible person and timeframes to resolve grievances. As part of the wider ESMS revision and expansion, NDRe’s operations shall also be captured within the grievance mechanism per ESAP 1b & 2i. Similarly, NDPR has in place a draft stakeholder engagement plan.  As part of IFC’s financing the NDPR shall finalize and expand the stakeholder engagement plan to include the NDRe asset per ESAP 2j.

ND Refineries Limited and Niger Delta Exploration & Production Plc contacts are:

Manager, HSE  

Tunde Alagbe

ND Refineries Limited  PLC

15, Babatunde Jose Road

Victoria Island, Lagos

Nigeria

tundealagbe@ngdelta.com

Corporate Head, Engineering & Projects

Femi Olaniyan

Niger Delta Exploration & Production Plc

15, Babatunde Jose Road

Victoria Island, Lagos

Nigeria

femiolaniyan@ngdelta.com