No land acquisition is expected as part of this project since the expansion of the refinery is taking place within the premises of the refinery. Therefore, PS 5 Land Acquisition and Involuntary Resettlement is not considered applicable. The refinery is in an industrial area void of flora or fauna species of importance with significant anthropogenic alterations. Therefore PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable.  Furthermore, the project’s area of influence is in areas absent of communities that would be considered as ‘Indigenous’ as defined by the World Bank Group, thus PS 7 - Indigenous People is not considered applicable.  Archaeological and historic sites were not found within the project site’s boundaries, thus PS8 - Cultural Heritage will not apply.

Environmental and Social Assessment and Management System

IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps between the actual processes followed and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period, are summarized in the paragraphs that follows and in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.

Policy

PAE has an overarching E&S policy and principles that guide the management of the E&S issues across its operations based on the IFC PSs. The policy has been developed based on values of integrity, excellence, responsibility & respect; driving the business in a responsible and ethical way, personal and professional excellence, superior quality and competitive prices; maintaining its commitment to the health and safety of its employees, contractors and social communities in the areas in which they operate.

Management Programs 

The refinery is currently upgrading its health and safety procedures (i.e., risk assessment, contractors’ management, performance-based culture, etc.) following DUPONT’s methodology. Moreover, the Company is also harmonizing PAE’s and the refinery’s former E&S management system and procedures. Currently, both systems include the policies and procedures to comply with the local requirements, as well as, IFC Performance Standards and WBG EHS Guidelines. Furthermore, the Company is in the process of certifying its Environmental and Social Management Systems (ESMS) as follows:

• Refinery - ISO 14001:2015 (environmental management system) certification by 3Q 2019
• Refinery Terminal & Lube Plant - ISO 14001:2015 (environmental management system) certified during 4Q 2018
• San Lorenzo, Galván & Caleta Paula Terminals -  ISO 14001: 2015 (environmental management system) certification by 3Q 2019
• Upstream – Downstream - ISO 45001 (health and safety) certification by 4Q 2020
• Upstream – Downstream - ISO 39001:2012 (road traffic safety) certification by 4Q 2019.

For this proposed project, the Company will extend the E&S procedures already in place for the on-going expansion. These procedures include management and monitoring of contractors, recordkeeping and follow-up of all incidents and near misses, conducting workplace and environmental monitoring, training for all site personnel, auditing for hazards identification and confirmation that contractors E&S compliance, among others. Detailed pre-commissioning/commissioning environmental, health, and safety (EHS) procedures are also being developed for the ongoing expansion.

Relevant EHS procedures will be updated for the operation phase of the project, focusing on the newly added units in the expansion program including management of hazardous wastes, air emissions, liquid effluents treatment, occupational health and industrial safety monitoring, marine and land transportation, emergency response plans, etc. (see Action No. 1 of the ESAP.)  

Organizational Capacity and Competency

PAE has corporate E&S departments supported by refinery’s E&S qualified personnel. PAE also contracts additional external consultants for activities such as environmental assessments, environmental audits, and environmental monitoring, as needed. PAE maintains a ratio of 25 EHS personnel per each 1,000 workers.  Labor and social issues in PAE are managed by the Human Resources and Community Relations Departments, respectively.

Emergency Preparedness and Response

As part of the harmonization of procedures and systems of PAE with the refinery´s former procedures and systems, the refinery is currently upgrading its emergency response plan (ERP) to include people, environment, installations and company relevant aspects to be addressed in any emergency (i. e., fire, leak, spill, etc.), it is also establishing a system for crosschecking emergency drills. Similarly, it is upgrading its practices   for emergency response drills (two/year) based on those established by PAE such as formalization of training curriculum for fire response team, assessment of medical and emotional qualifications of the fire response team members, etc. 

Furthermore, as part of the proposed project, the refinery will upgrade and develop as needed, new procedures for the ERP of the upgraded/new built installations.  The upgraded plan will include the needed organization and infrastructure to handle any emergency events and the procedures to be followed to control or limit potential impacts. They will cover potential emergency events such as toxic and flammable gas releases and spread, liquid hydrocarbon spill, fire, gaseous & liquid hydrocarbon leaks, explosion of vapor cloud or pressure vessel, etc., and include community consultation and training procedures (see Action No. 2 of the ESAP.) Furthermore, the EPCm contractor will implement the Emergency Response Plan (ERP) prepared for the construction phase of the on-going construction. 

The refinery will continue being part of the Comité Zonal de Seguridad e Higiene Campana-Zarate (emergency response mutual aid organization established by the industries in the Campana-Zarate area.) As currently, the refinery will continue conducting periodic emergency drills on its operations while, the EPCm contractor will conduct those relevant for the construction phase.

The refinery shall prepare the hazard and operability studies (HAZOP) for the process units being established as part of the project, during the detailed engineering stage.  In addition, it will also carry out a coarse qualitative risk assessment (QRA) first, which will be refined once the detailed engineering is concluded. This will ascertain that final design will not pose negative risks to communities or environment (see Action No. 3 of the ESAP.)

Human Resources Policies and Procedures

PAE has a Human Resources (HR) department responsible for the overall management of human resources of all its operations. This department is supported by the refinery’s HR team.  PAE’s Human Resources policy and procedures include aspects related to equal opportunity employment, recruitment, employees’ conduct, employment regulations, salaries, disciplinary code, and performance management. PAE also has an Employee Handbook that sets out the terms and conditions at the company and commits to meeting national labor law requirements. PAE’s HR policy is aligned with IFC PS2 requirements including not use of forced labor (i.e., prison labor, indentured labor, bonded labor or otherwise); only hiring employees who meet local minimum age requirements, established workers conditions (compensation, benefits, etc.) workers’ rights to freedom of association and collective bargaining, and grievance mechanisms, among others.

There is also a Code of Conduct that sets out in more detail, specific policies and requirements, including the Human Resources Policy and commitments and requirements around processes and behaviors including discrimination, harassment and inappropriate physical conduct. All direct employees receive a copy of the Employee Handbook and the Code of Conduct, and a signed letter of employment when they join the company. The existing policies, procedures and approaches to employment as described above will be applied to the employees to be hired for the operation phase.

Management of Contractors

PAE will maintain the same EPCm contractor for the entire expansion, who has demonstrated international experience in the development of similar projects.  It is required to have an ESMS in accordance with the international ISO 14001 and OSHAS 18001standard requirements. The workforce for this expansion will reach a peak of around 1,500 personnel, and it will continue being sourced mostly from the surrounding areas. PAE will continue monitoring the alignment of the EPCm contractor with the national laws and IFC PSs requirements. Furthermore, the EPCm contractor will be required to develop a demobilization Plan after the completion of project commissioning. (See Action No. 4 of the ESAP) 

Occupational Health and Safety

PAE’s design philosophy is to provide process safeguards to protect the environment, personnel, equipment and the surrounding communities. For its current operations, the refinery has a suite of programs, safety manuals and procedures aligned with IFC PS2. PAE is committed to continue conducting periodic monitoring and measurement of the work place conditions of its operations as per Argentinian and IFC H&S requirements. The EPCm contractor’s health and safety management plan aligned with IFC PS2 requirements will continue its implementation during the entire project expansion.

The design of the project is based on established state-of-art and good international industry practices, whose performances are both predictable and well proven in operation, so that no significant variations are expected between predicted and actual performance in the field. The use of state of the art technology will also help the project making optimal use of energy and water.  In addition, the project has been designed to comply with the most stringent of Argentinean Standards and applicable WBG EHS guidelines.

Energy and Material Efficiency Projects

For the current operation, the refinery’s energy and water consumption can be considered satisfactory compared with the WBG’s EHS Guidelines for Petroleum Refinery. In addition, every two years, the refinery participates in the Solomon refineries survey benchmarking, which includes 300 refineries worldwide.  For the last eight years, the refinery has been among the lowest energy and water refinery consumers among the 30 Latin American refineries that participate in this survey.

For the ongoing expansion, PAE is commissioning an energy assessment of its upgraded/installed units to ascertain its energy consumption and once again benchmark its operations with the Solomon refineries survey benchmarking and the WBG’s EHS Guidelines for Petroleum Refineries Table 3.  The assessment will include an energy balance including the energy consumption of each key process unit, and the benchmarking energy and water use of these key processes against good international comparable industry practice in the sector.

Water Consumption

The water needs for the expansion (i. e., dust suppression, hydro testing of equipment and tanks, etc.) is also sourced from the Parana River as it is the operation. Drinking water needs are satisfied with commercial potable water. Sanitary needs are provided by well water.

GHG Emissions

The baseline GHG emissions from the refinery prior to the expansion were about 926,000 tons/year. After completion of the expansion project the additional GHG emissions are estimated to be 374,000 tons/year.

The refinery has been gradually reducing its GHG generation since 2016 and it is anticipated that with the expansion this trend will continue. Once the detailed engineering is completed, the Company will reassess the GHG emissions from the project to accurately estimate the values based on expected performance data. The commitment of the Company to install state of the art technology will ensure high energy efficiency and this will optimize the GHG emissions from the project. The Company will monitor and report to IFC the annual GHG emissions inventory using internationally accepted protocols.

Air Emissions and Ambient Air Quality

The current ambient air quality concentrations are significantly below the Argentinean local environmental requirements as well as WBG General EHS Guidelines, Table 1.1.1. These will be further improved with the proposed project as among other aspects, the sulfur emissions to be emitted will be significantly reduced.  The estimated ambient air sulfur concentration reduction will be from 0.50 mg/m3 to 0.014 mg/ m3, which is equivalent to a reduction of nearly 75 percent over an average 24-hour period and is significantly below the recommended WHO sulfur oxide ambient air concentrations.  It is expected that PAE will recover around 30 Tons/day of elemental sulfur.

Wastewater and Water Quality

The refinery liquid effluents are currently treated with chemical oxidation of organic compounds plus an oil water separator. Once monitored, the treated wastewaters are released into the Parana River through a 150 meters long underground channel. The refinery’s liquid effluents comply with the Argentinian requirements but not with IFC WBG EHS Guidelines for Petroleum Refining. Table 2. However, PAE is currently completing the detailed design for the installation of a new wastewater treatment plant (WWTP) to include an oil water separator, primary treatment, and secondary biological treatment. Once treated, this wastewater will be combined with the effluents from the existing oil water separator prior to being discharged. It is anticipated that the plant’s design capacity will be 199 m³/h and that it will be aligned with the Argentinian standards and the WBG EHS Guidelines for Petroleum Refining Table 2. Once the WWTP is installed, the wastewater generated will be handled as follows: all continuously oil contaminated and chemical contaminated streams will be treated in the new wastewater treatment plant. Accidentally contaminated liquid effluents and chlorinated domestic effluents from the satellite control rooms will continue be sent to the existing oil water separator. In places where storm water can be segregated (i. e, new expansion units, off-sites), it will be collected in a new sump and stored in an existing tank for further reuse and the excess storm water will be sent to the existing oil water separator (see Action No. 5 of the ESAP.)

Noise

PAE will install noise reduction measures (noise barrier/insulation, periodic maintenance plans), as needed, to limit noise disturbance outside the site boundary from new/upgraded units (see Action 6 of the ESAP.) Noise monitoring will also be continued during the construction and control measures will continue be taken to minimize noise disturbance where necessary.

Wastes

The refinery completed the removal of the five remaining transformers with PCB levels below 10 ppm and the 3,100 liters of oil with a PCB concentration of 14.8 ppm. Thus, the site is free of PCBs and it is waiting for the confirmation certification from the local environmental authorities.

As part of the expansion, PAE will continue upgrading as needed the existing systems and procedures to continue adequately handling and disposing its solid and hazardous wastes.  The EPCm contractor will maintain the ongoing sound waste management practices. 

Hazardous Materials

PAE will extend the same hazardous materials practices to the upgraded/installed units.

Community Health and Safety

The health and safety of the communities near its operations is of paramount importance to the company.  Major risks to the surrounding communities from the facility will be further assessed by the QRA as described earlier.  The risk assessment, at detailed engineering design stage, will consider worst-case scenarios such as explosion, fire and leaks based on the facility layout and technology to be used and as needed, it will implement the needed measures. Similarly, as part of the emergency response procedures, the emergency response plan to be upgraded will include the communication to and training of the communities related to response to emergencies and will involve the local authorities in the development of community preparedness planning in the event of a major accident, as appropriate.

Logistics and Transportation

Logistics and transportation of products and goods to and from the refinery is a critical component of the refinery´s operations and for which it relies on both, land and fluvial transportation.   The transport of raw materials is done by pipeline and the transport of end-products by ships and trucks.  

PAE will maintain the sound practices established for fluvial and maritime transportation of raw materials and 60 % of its products as per the detailed quality maritime management program in place which is aligned with the Oil Companies International Maritime Forum / Ship Inspection Report Program (OCIMF/SIRE) guidelines, the regulations of the Argentina Naval Prefecture, international maritime best practices and the IFC PS requirements. Furthermore, all ship operators as evaluated as per the Tanker Management Self-Assessment (TMSA) guidelines. For the remaining 40% of its products, which are transported via truck long-term partnerships with leading companies of logistics and distribution of major fuels in the country, PAE has a robust safety transportation system.

Security Personnel

The refinery has unarmed private security contractors for the vigilance and security of the refinery’s personnel and property for both the refinery and the terminals.  In addition, at the terminal, there is public security support provided by the Argentine Naval Prefecture (Prefectura Naval Argentina).  The refinery has a security management plan guided by the Voluntary Principles on Security and Human Rights as per IFC PS4.

PAE is committed to productive community relationships through meaningful community engagement. The company has carried out considerable community engagement activities aiming to ensure that communities are aware of the project, listen to concerns and issues raised by the local communities and offer opportunities to affected people so that they may provide suggestions and recommendations to the company.

The refinery has a community grievance mechanism in line with IFC PS 1. In 2018, it had 4 complaints compared to 10 in 2017; they were related to noise and odors. They were timely and properly addressed.

 The refinery has been developing community development initiatives in three strategic areas: (i) education, (ii) environment and (iii) community strengthening initiatives.  The Company has allocated a budget for these activities and as appropriate partners with local NGOs and local authorities to implement specific community development programs.  The Department of Corporate Affairs is central to the identification and delivery of these programs.                                                   

PAE will disclose in Spanish language the following documents:

- Environmental and Social Review Summary (ESRS)

- Environmental and Social Action Plan (ESAP)

Shortly after publication in IFC’s website, the document will be available at the following locations for a period of 30 days.

Location: HSE Site Campana 

Address: Av. Ing. Emilo Mitre 574 – B2804ABACampana, Provincia de Buenos Aires, ARGENTINA                                                                                                    

Website: https://www.pan-energy.com/Paginas/Inicio.aspx

Please contact the following for enquiries or concerns about the environmental and social impacts of this project:

Contact Person:   Daniel Santamarina

Company Name: Pan American Energy SL, sucursal Argentina

Address:              Av Leandro N Alem 1134

Email:                  dsantamarina@pan-energy.com

Phone:                011 4 7057143