PS5 (Land Acquisition and Involuntary Resettlement) is not applicable because the project is implemented inside the land, already owned and occupied by Engro Corporation. The site is located in a large 4,500 ha Port Qasim industrial area, set up in 1970s, and in a well-developed industrial neighbourhood, therefore, impacts related to PS6: Biodiversity and Natural Resource Management, PS7: Indigenous Peoples and PS 8: Cultural Heritage are not expected.                                                  

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability as the E&S impacts are mostly site specific and localized and can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria and adequately managed through the implementation of an expansion work specific Environmental and Social Management Plan.

The investment involves incremental increase of PVC production and enhanced productivity of an existing plant, and upgrading of a gas turbine to reduce gas consumption, all within Engro’s industrial plant footprint. The project site is located in a massive industry park, established in 1970s, with the nearest community approximately six km away. There is mangrove marsh near the project location, however assessment has shown that the project does not have direct impacts to the mangrove. Mitigation measures for the potential environmental and social impacts are identified and incorporated into the attached Environmental and Social Action Plan (ESAP).

Specific key environmental and social issues reviewed include: i) project sponsor’s corporate environmental and social management capacity to operate in a manner consistent with IFC Performance Standards; ii) environmental and occupational safety aspects typically associated with operations of chemical plants; iii) efficient use of energy and water resource in operational phase; iv) life and fire safety (LFS) conditions of the project; and v) wastewater treatment and disposal.                   

Land and natural environment:

EPCL’s manufacturing facility spans over 68 acres and is located in the Eastern Zone of the 4,500 ha industry park, managed by Port Qasim Authority (PQA), approximately 30 km east of Karachi, Pakistan. The project will be set up inside the EPCL’s existing fence line and on additional land adjacent to its existing site owned by Engro Chemicals Pakistan Ltd.  The PQA industry park was set up in early 1970s and there is no residential community inside the industry park. The nearest community to EPCL is approximately six km away. There are mangroves and mud flats to the south of the PQA industry park. According to the Environmental Impact Assessment (EIA) of the previous expansion project, there are abundant flora/fauna communities associated with the mangrove forest. The Eastern Zone of Port Qasim is distant from the mangrove forests and no direct impacts on biodiversity are anticipated from the expansion project.

Environmental and Social Assessment:

EPCL has initiated a comprehensive environmental and social impact assessment (ESIA) of the extension project engaging an external expert/consultant who will present a draft report by end of June 2018. The ESIA is being conducted according to the Pakistan regulatory requirements, IFC Performance Standards, and WBG EHS guidelines. The ESIA will include a qualitative and quantitative analysis for PVC plant, VCM plant, caustic soda flakes conversion plant and other associated ancillary works and upgradations that the project will undertake. The ESIA will also review the anticipated impact of the project on the area’s natural and socioeconomic environment and will identify the mitigation measures need to be implemented to remain in acceptable limits. There will be a process of public consultation on the ESIA in July 2018 as part of the process of approval by the local authority (EPA).

HSE policy and management:

EPCL has a Corporate HSE and Social Policy in place which requires conducting business in a manner that protects the health and safety of employees, contractors, others involved in EPCL operations and the community in which EPCL operates. EPCL also has a fully established Integrated Management System, certified through URS in 2017 for ISO 14001, ISO 9001 and OHSAS 18001.  EPCL is the only company in Pakistan to achieve Level-4 rating from DuPont for PSM-Behavioural (personal safety management) and PSRM-Process (process safety & risk management). EPCL also received Level-3 rating from DuPont for OHIH (occupational health and Industrial hygiene) and rating of 3 Star from British Safety Council. Management structure for the EPCL HSE systems is in line with the requirements of the PSM elements/procedures, namely integrated safety organization, safety line function responsibility and supportive safety personnel. EPCL has implemented 22 different elements as part of its safety management system called Process Safety Management (PSM). The system covers both Process and Personnel Safety aspects. Top level to shop floor level procedures and checklists are part of the system.

HSE team and organization:

EPCL has a qualified and experienced HSE team, headed by Manager HSE and 6 other staff personnel including safety advisor and environmental engineer, medical doctor and supervisors.  The Corporate HSE committee headed by the company President reviews HSE performance quarterly and provides vision and direction to the operating Divisions. A manufacturing HSE committee headed by Vice-President Manufacturing meets every month to review safety and environment performance at manufacturing level. Several sub committees at department manager level (B level) and at shop-floor level (D level) carryout HSE related discussions, share experiences and review department/section specific issues. The EHS department also involve in the decision-making on new projects to ensure that the new projects meet both local regulatory and IFC requirements.

Emergency Preparedness and Response:

EPCL has in place a site-specific Emergency Preparedness and Response Plan (EPRP) for implementation by the facility management team for emergencies relating to natural calamities, fire, medical, chemical/fuel spillage, physical aggression, etc. EPRP is an integral part of the EPCL’s HSE management system. All necessary associated tools, procedures, and organization is available for meeting any emergency at site. Drills are conducted weekly by the squad members, whereas the company level drills are undertaken quarterly to review preparedness and response for various emergency scenarios including chlorine leakages. EPCL site has a full-fledged fire water network which is compliant with US NFPA for the entire plants. The facility has a comprehensive and well-maintained fire detection, suppression and firefighting equipment and hazardous gas monitoring systems (including LEL detectors, and chlorine and VCM detectors) in existing facilities and a network of fire call points at critical locations.

There is a 24-hr onsite clinic for both routine first aid and emergency care.

EPCL has contracts with other chemical companies inside PQA industry park, which have their own fire brigades, to provide ER services. EPCL conducts routine drills for firefighting and potential chemical explosion/releases, including weekly ER drills within each operation unit and quarterly corporate ER drills, which invites safety management staffs from neighboring companies and PQA as well as observers from outside of the PQA industry park. The company also holds joint ER drills with other companies in the PQA industry park. For the expansion project, EPCL will conduct a Fire Safety Study through an external expert who would identify the appropriate firefighting equipment required and to be purchased by the EPC Contractor as part of the Project.

Ethylene is imported through the jetty and stored at the tanks of EVTL before transferred to EPCL through pipeline. The EVTL facility is also located inside the PQA industry park. The facility is certified by ISO 14001 and OHSAS 18001. The fire prevention and ER program at EVTL is similar to the ones in EPCL. The EVTL facilities are routinely audited by Vopak, Engro Chemical, and external safety consulting firm.

Training, monitoring, and reporting:

EPCL has an established program to provide the necessary EHS training for all its employees, including the initial orientation and annual refresher training. EPCL conducts routine EHS monitoring for its operations. HSE performance is monitored using varied tools. Both lagging & leading indicators in process, personnel safety areas, environment and OHIH performance are based upon international standards including OSHA; CCPS; BSC and Dupont. Monitoring of these indicators is done at all critical levels of Management Safety Organization including Board of Directors, Corporate & Manufacturing HSE committees and departmental HSE committee meetings). EPCL requires the contractors to meet all its EHS requirements during the construction phase and will provide appropriate guidelines for the contractors. EPCL also has an appropriate monitoring and reporting procedures to track human resources issues. It keeps its E&S performance records through its internal reporting structure. To demonstrate its social responsibility, EPCL also publishes its sustainability report every two years and share with employees and shareholders and disclose these reports on its website.                                                   

Human Resources Policy and Management:

The Company has a Human Resources (HR) policy which specifies the terms of employment and working conditions at EPCL. These include procedures for hiring and recruiting, probation, training, performance review, promotion, insurance, salary and compensation, resignation, lay-off and firing, leave and vacation, and retiring, which follow Pakistan labor law. All the employees have access to the human resources policy and procedures over the company’s network. A monthly schedule of short re-fresher courses is run by HR team to keep the employees abreast on policies. Labor inspections are done annually by the relevant government agency, which reviews wages, working hours, benefits, etc. On joining EPCL, employees undergo an orientation cycle which enables them to get acquainted with core values and HR/HSE policies and employment terms are clearly communicated in writing. EPCL strictly follows Government of Sindh labor laws and ensures that its contractors also follow the same.

Workers Organizations:

EPCL currently has 437 regular employees (including ~ 70 head office staff) and 700 contract workers (including workers at Head Office and Marketing Offices) being engaged for two operational shifts of 12 hours each. The contracted workforce falls under two categories: (i) General Shift Employees who work for 5 days/week and 8hrs/day and (ii) Shift Employees who work for 4 days/week and 11hrs/day (excluding 1hr for break for both categories). EPCL’s contracts with the 3rd party contractors clearly spell out the mandated requirement of ensuring that under no circumstances should the contracted workforce work for more than 48hrs in any given week. The contractors are required to ensure that no employee works for more than 56 hrs in a given week (excluding 1hr/day of break). The overtime is compensated at two-times to four-times of the actual hourly wages, depending on the nature of the trade and worker’s skill. EPCL keep a record of the total number of hours being spent in a week by the contract workers through an automatic time-in and time-out logging system.

There are no migrant workers at EPCL site. The expansion project will be conducted through an EPC Contractor who will be responsible to arrange and manage the required construction work force which is expected to rise to 500 workers in peak time.

All the company’s employees are employed in management grades and are not members of any form of no association or labour union.  However, EPCL allows collectively bargaining for both employees and contracted labours. The company management engages with the employees and contracted labour through formal quarterly open-house and informal direct complaints by the employees and contracted labour, which are used by the human resources as the grievance mechanism.

Workers Engaged by Third Parties:

Operations and maintenance activities requiring extensive labour input are contracted out through Services Contracts. Through contractual conditions and HR policy, EPCL will ensure that its human resource (HR) provisions extend to the contractors with clear guidelines on labour performance consistent with the company’s HR policy and IFC PS2 requirements.

EPCL conducts annual in-house audits of all contractors to ensure compliance of labour laws including working hours, wage rate, overtime hours, overtime rate and payments and annual leaves. The provincial government also conducts annual audits under the local labour laws. To procure the desired products, a few of the EPCL’s customers (e.g. Unilever) conduct EPCL’s compliance audit through a 3rd party auditor which includes assessment of compliance with the labour laws.

Non-Discrimination and Equal Opportunity:

EPCL provides equal opportunities for its employees. All the hiring and promotion process are free of ethnic, religious and/or gender biases and are strictly on merit. Hiring processes are subject to policies and audited by Internal Audits/HR and is done on merit. The additional labors for the expansion will be primarily hired from local area if the qualifications can be met. EPCL will plan to hire more female employees for suitable positions during the expansions. 

Retrenchment:

It is not anticipated that there will be any retrenchment. As a result of IFC’s financing for the expansion project, more jobs will be created. Regular employees have an annual attrition rate of 6% in 2017.

Protecting the Workforce:

There is no child or forced labor in EPCL. Holding of national identity cards (issued at 18 years of age) is a mandatory requirement for a job at EPCL. EPCL’s Supply Chain interacts only with reputed vendors who are not expected to be engaged in Child and/or Forced labor. The company also checks the contractors to make sure that all the contracted labors are at least 18 years old.

Workers’ Grievance Mechanism:

Grievance mechanism is in place and communicated to the employees through web portals and refresher trainings. The CEO of the Company also formally engages with the employees regularly to take direct feedback and initiate corrective actions, where required. All Departmental Heads also carryout regular Time Outs to receive any grievance, complaint and suggestions. EPCL will extend the grievance mechanism to contracted workers.

 Occupational health and safety:

The HSE department leads the occupational health and safety (OHS) works. Job Hazard Analysis is part of EPCL’s Risk Assessment and Management plans and covers the entire operations/site for any modifications, routine/non-routine operations and instrument/electrical system changes and evaluations. Annual audit plans are developed for overall site to manage risks. Additionally, for moderate to higher risk activities, separate Job Safety/Hazard Analysis are done in multi-functional teams and mitigatory action taken to make it safe. No Lost Workdays (LWD) have been recorded in last three years of operations at EPCL for contract workers and employees and 14.0 million safe man-hours completed without a lost work incident.

There are effective OHS procedures such as safe operational procedures and personal protection equipment requirements for each position; electrical lockout, tag-out and try-out procedure; valve tagging and lock-out procedures; work permit systems which are implemented strictly during operations. There is routine OHS training including annual refresher courses for its employees and contracted laborers. Besides the intergrade management system external audits, EPCL plans schedule audits/monitoring for PPE compliance, housekeeping, Job Cycle Checks (JCC) for routine operations and Job Safety Analysis (JSA) for non-routine operations. The workplace air quality and noise levels meet both local regulatory requirements and the WBG/IFC guideline limits. IFC will require EPCL to extend the monitoring for chlorine, VCM, ethylene dichloride (EDC) for the workplace air quality at the appropriate sections of the new project/installation. The drinking water quality onsite meets both local regulatory requirements and WHO guideline limits.                         

Raw materials and resource consumption:

The major raw material consumption in production of 195,000 tons/y of PVC at EPCL is 195,000 ton/y of VCM and 110,000 tons/y of EDC. The Company imports around 72,000 ton/y of ethylene required for production of EDC. The proposed extension project would increase PVC production by 100,000 tons/y and VCM capacity by 50,000 tons/y. Raw water is supplied by Port Qasim Authority(PQA). Water consumption for present operations is around 3.0 mgd and expected to increase by 0.5-0.8 mgd with new expansion project. Power is supplied through a gas fired combined cycle power plant of 65 MW capacity (including 15 MW from steam turbine) with an overall efficiency of 58% (31% for Gas Turbines alone). EPCL consumes 5,024 MMSCF/y of natural gas provided by Government supply system.

Resource conservation:

EPCL has energy efficiency and water saving programs, which consists of reduction targets for each year and which is monitored closely by management. To reduce the cost of production, surplus hydrogen produced at the chlor alkali plant is also used as fuel in EDC cracking furnaces. Through recovery of condensate, about 15% of water is recycled/recovered. With implementation of Six Sigma projects resulted in savings of: (a) 3.3 MMBTU/hr of natural gas supply by optimization on reactors, furnaces and incinerators, and (b) 40,000 tons/y (0.028950 mgd) of water conservation at EVCM plant through steam reduction to columns and condensate recovery improvements. Heat Recovery systems are integral part of the plant design at many locations including Gas Turbines exhaust, EDC Cracking furnaces convection section, Oxy Reactor heat recovery and incineration units. Under new expansion project the membrane replacement of caustic soda plant and upgradation of gas turbines will reduce natural gas overall consumption by 4.3% and 2.6% respectively.

Liquid Effluents, Air Emissions, and Ambient Conditions:

EPCL generates about 180 m3/hr of wastewater from present operations which is discharged into the sea after onsite treatment. The new expansion project is expected to increase wastewater treatment plan load by around 10%.  For present operations the, monitored parameters in the wastewater effluents meet all the local regulatory requirements and the WBG/IFC guideline limits. In accordance with ESAP, EPCL will ensure that the wastewater treatment plant have adequate capacity for 10% increase in influent load and will continue to monitor absorbable organic halides (AOX), total nitrogen, and coliform bacteria, besides other parameters, in the wastewater effluents to ensure effluents meet all the WBG EHS guideline values. Air emissions from the power plant and various processes meet all the local regulatory requirements and the WBG EHS guideline values, with the exception of VCM. As summarized in the ESAP, for the expansion project the company will transfer VCM from the process vent to the incinerator, for conversion to HCl, which will then be scrubbed.

The geotextile membrane lined evaporation pond (EP) on 9 acres is monitored using in-house laboratory for EDC contamination through 8 well, each 14 meters deep. The plant is designed to emit less than 5 ppm of EDC under normal operating conditions, however, steam stripper is used to strip off EDC from effluent and recycled back to process thus reducing the EDC levels in the influent of evaporation pond to very low levels. With process improvement, the quantity of influent discharged into the EP has been reduced considerably and EPCL plans to rehabilitate the existing EP by reducing its size and replacement of lining. ESAP requires groundwater monitoring of the rehabilitated EP for EDC levels to meet the WBG guideline values and the good international industry practice and reporting the results in quarterly reports and AMR.

Solid and hazardous wastes:

The solid wastes generated onsite, including household wastes and industry wastes are collected by the Government authorized contractors for recycling or off-site disposal. In 2016, out of ~3,300 tons of heavy ends hazardous waste produced from EDC/VCM plant around ~1,300 tons were incinerated in-house and ~1,800 tons disposed of using off-site incineration facility of a contractor. EPCL enhanced its in-house incineration capacity through several improvements including replacement of internal brick lining, resolving frequent seal leaks issues from scrubber recirculation. ESAP requires EPCL to monitor dioxin/furan in incinerator emissions and to ensure that emission meet WBG guideline values and good industrial practice and report records for disposal of hazardous waste and incinerator emissions in quarterly reports and AMR.

Hazardous materials and operation hazard:

EPCL’s raw materials and intermediate products comprise significant amounts of hazardous materials. Ethylene handling is a major risk due to chemical properties of ethylene. However, ethylene is imported and stored at Engro-Vopak terminal at Port Qasim. The ethylene is only piped to the site when needed and there is no ethylene storage at the polymer site. IFC has previously found safety management at the Engro-Vopak terminal to be satisfactory. The company has management programs and a detailed procedure for operation safety and hazardous material handling.

The company has management programs and a detailed procedure for operation safety and hazardous material handling. Hazard operability (HAZOP) studies will be conducted for the expansion projects and EPCL is committed to implement all its recommendations. EPCL has already initiated Quantitative Risk Assessment (QRA) and Fire Risk Assessment studies for expansion project through third party consultants/external experts and is committed to implement all its recommendations. EPCL conducts routine internal safety inspection and routinely hires external experts to conduct safety auditing, including PSRM-Process (process safety & risk management) from DuPont.

Greenhouse gases (GHG):

EPCL generates approximately 256,000tons carbon dioxide (CO2) equivalent per year from present operation which is expected to increase to 308,000 tons of CO2 equivalent with new project. However, with the new expansion work a 6% reduction in total gas consumption is targeted through replacement of membrane at caustic soda plant and upgradation of gas turbine and 21% reduction from the increase in VCM and PVC production while the consumption of gas/ton (MMbtu/ton) remains constant thus resulting in overall reduction of Total t-CO2/t-PVC from 1.4 (in 2017) to 1.0 (in 2020 with completion of new project). EPCL also has an ongoing energy saving program to reduce electricity consumption and is committed to monitor annual GHG emissions.                                               

The project site is located in the 4,500 ha PQA industry park, with the nearest community approximately six km away. The hazardous raw material, ethylene, is transferred to the site thorough pipeline from the EVTL facility, whereas EDC/VCM is produced in-house. Both the EVTL facility and the entire pipelines are located in the PQA industry park, which are far away from any residential communities. The other hazardous by-products, non-hazardous raw materials and majority product of PVC are shipped in and out by contracted trucking companies. Both EPCL and EVTL have procedures to contract transportation to qualified companies and provide defensive driving trainings for its contracted drivers. Therefore, the project has limited impacts to the community.   

Security Management:

EPCL has a well-organized security management system in place using a private security company to secure the plant’s premises and to provide a safe environment within the facility. Security Management Plan is integrated with emergency response plan. The existing security protocol will be applicable on the EPC contractor and sub-contractors engaged for the new expansion project.                                                  

 EPCL is located within a designated industrial park of Port Qasim Authority and there is no community settlement within the industrial park. No direct impacts on community or nearby industries is envisaged from the new expansion work, which would be carried out within the premises and at land owned by EPCL. EPCL has engaged an external expertise to conduct a detailed Environmental and Social Assessment of the proposed new extension project. Stakeholders consultation will be conducted during ESIA study at scoping session and during due course of ESIA review and decision making process in compliance with local regulations. 

EPCL sustainability report 2017 – https://engrocorp.s3.amazonaws.com/engropolymer.com/engro-polymers-chemicals-annual-report-2017.pdf