Performance Standards 5 through 8 are not applicable to this investment, since the project activities will be carried out within existing facilities and will not require any new land to be acquired. As the project is located in a developed area and designated industrial zone, the project will not have an impact on biodiversity or living natural resources and indigenous people and does not impact any cultural assets.  

This proposed investment is expected to have limited environmental and social impacts, which are expected to be site-specific and none is expected to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. The project is designed to avoid, minimize, and manage E&S risks and impacts of the company’s operations in compliance with Argentinian legal and regulatory requirements, IFC Performance Standards (PSs) and applicable World Bank Group (WBG) General and sector-specific (Glass Manufacturing) Environmental, Health and Safety (EHS) Guidelines.

The main E&S risks and issues for this project relate to the ability of VASA to manage and monitor the E&S risks associated with glass manufacturing during both the construction and operation phases of the new facility, which include: air emissions, electricity consumption, and occupational health and safety (OHS).

    Environmental and Social Assessment and Management System

NSG has a comprehensive corporate environmental and social management system (ESMS) that applies to all its operations worldwide and has been ISO 14001 certified at 81 sites (equivalent to 70% of all production output). This includes detailed policies and procedures that ensure that all facilities, irrespective of their geographical location, are following the same high standards. These policies and procedures are publicly accessible on the Group’s website. The elements of this framework can generally be considered to be consistent with the requirements of this Performance Standard. VASA implements systems and controls related to the management of environmental, and OHS issues, which have been certified as compliant with ISO 14001:2015 and OHSAS 18001:2007 at the Llavallol site. Implementation of the ESMS was deemed to be robust, with clear adherence to corporate policies and standard operating procedures, displaying work instructions, tracking injuries and incidents, good housekeeping, and clear segregation of work areas marked for vehicle circulation and pedestrian activities. The ESMS will be rolled out to the Cardales site as soon as it becomes operational and VASA will initiate the process for obtaining both ISO 14001 and OHSAS 18001 certifications.

Policy

NSG Group supports the principles of the UN Global Compact and sustainability is at the core of its way of doing business. As a global glass manufacturer, NSG Group is committed to help reduce greenhouse gas emissions and mitigate the effects of climate change through both the production and use of its products. The Group’s vision, mission, values and principles, code of ethics, and supporting policies (sustainability, environmental, and health and safety) and procedures are articulated on its corporate website (https://www.nsg.com/en/sustainability). NSG Group was given a gold rating for corporate social responsibility (CSR) by Ecovadis in 2018 and is considered in the top 7% of companies involved in glass manufacturing. Based on IFC’s appraisal of the previous project (#38822), the commitment of NSG Group in managing E&S risks and the performance at the operational level (Brazil and Poland) were deemed to be excellent. VASA has an Environment, Health, Safety, and Quality Policy, which outlines the company’s commitment to managing risk in its operations and is consistent with the Group’s overall approach to sustainability.

Identification of Risks and Impacts

In compliance with the regulatory requirements of the countries in which NSG Group facilities operate, an environmental impact assessment is undertaken prior to building a new plant. As part of VASA’s ESMS, a process is in place for identifying environmental risks and impacts in operations. In accordance with Argentinian law, VASA prepared an Environmental Impact Assessment (dated August 2011) for the new plant at the Cardales site and an environmental audit of the site was completed in March and April 2014. VASA was granted an environmental permit by the national authorities, which will need to be renewed every two years.

Management Programs

As part of the ESMS, VASA has specific management programs in place to manage environmental aspects (such as electricity consumption, air emissions, and wastewater discharge) and OHS aspects (such as accident prevention) of operation, which are described in further detail in the sections below. As part of the EIA approval process for the Cardales site, VASA is required to implement specific Environmental Management Plans to manage and monitor environmental aspects related to the construction and operations of the site.

Organizational Capacity and Competency

At the corporate level, there is a centralized EHS organization with highly experienced staff that oversee the Group’s corporate policies and their implementation across all facilities. There are three EHS Management Committees (on Sustainability, Safety, and Energy) that meet twice a year and discuss the Group’s global environmental and social performance, set targets, and track progress. VASA has a Sustainability Committee comprising 10 people, which meets every three months. This includes an experienced EHS Manager, who has been designated for overseeing day-to-day operational matters related to the management of environmental, and OHS issues at the plants, including compliance with regulatory and corporate standards. He is supported by a Safety Coordinator at each site, who in turn is supported by several safety technicians. A comprehensive training matrix has been developed, which identifies the training needs by position/function. This has been implemented at the Llavallol site and moving forward will also be implemented at the Cardales site.

Emergency Preparedness and Response

At the corporate level, there are emergency response plans as well as in-house medical personnel at the facility level, who are specialized in emergencies arising from the manufacturing and handling of glass. VASA has procedures for evaluating emergencies, dedicated and trained personnel, and an emergency plan; the existing Llavallol site is equipped with the necessary fire detection and firefighting system and is in compliance with legal requirements. The design of the Cardales site considered the same emergency response principles and was approved by a qualified fire engineer; once operational, the necessary emergency response plans will be developed and implemented in compliance with legal requirements.

Monitoring and Review

At the corporate level, the Group has developed an online data collection system to track globally the performance of all facilities on identical key performance indicators (KPIs), thereby allowing benchmarking as well as quick identification of any deviations from normal performance for immediate follow-up action. EHS-related KPIs typically monitored across all NSG Group facilities include safety incidents including near misses, minor incidents, lost day accidents, equipment damage, emissions, discharges, waste generation, and other relevant parameters. Furthermore, the Group publishes annually its aggregated EHS performance in a sustainability report, prepared in accordance with the Global Reporting Initiative (GRI) reporting standards, as part of its stakeholder engagement activities (see section below on Stakeholder Engagement). At VASA, KPIs (including those related to energy efficiency, normalized energy consumption by ton of product, and safety) are reviewed and discussed every day to rapidly detect any deviations from normal operations. All deviations are monitored for follow up and registered in the online recording system, for reporting at the corporate level. Once operational, the same process will be implemented at the Cardales site.

  Labor and Working Conditions

NSG Group employs approximately 27,000 people worldwide across manufacturing operations in over 27 countries, of which about 16% of the employees are women and 13% of the managers are women. VASA currently has 437 employees (most of which currently work at the existing site at Llavallol) and moving forward plans to hire a further 165 employees to work at the Cardales facility once this becomes operational. The recruitment process has already started and for certain types of positions (for example, line managers), these have already been filled and new employees are being trained on the job at the Llavallol site.

Human Resources Policies and Procedures

At the corporate level, the Group has developed policies and procedures to manage human resources, health and safety, working conditions, terms of employment, non-discrimination, freedom to establish or join unions, equal opportunity, and grievance mechanism. NSG Group has a corporate human resources function that ensures that all facilities apply the same human resources standards, despite the fact that local regulatory requirements might be less stringent. The elements of this framework can generally be considered to be consistent with the requirements of this Performance Standard. At VASA, the implementation of HR policies and procedures is overseen by an HR Director. The same will be extended to the new facility.

Working Conditions and Terms of Employment

The Group has corporate standards for employment that apply to all facilities worldwide and include clear employment contracts, stipulating: i) the terms and conditions of employment; ii) compensation; iii) benefits; and iv) employee obligations to follow corporate EHS standards. Upon employment, every new employee receives the training necessary to perform their job satisfactorily and safely.

Workers’ Organization

At the corporate level, the Group respects the freedom of association of its workforce. VASA’s workers are members of unions and management engages with union representatives every 6 months to discuss issues, primarily related to wage increases to offset inflation. A collective bargaining agreement is in place for VASA’s workers at the Llavallol site and will be adapted for workers at the Cardales site once this becomes operational.

Throughout the construction phase of the new Cardales facility, VASA management has actively engaged with UOCRA, which represents construction workers in the context of concerns around wages and inflation, and the overall political context. VASA management has also started to engage with SOIVA and SEIVARA, which represent workers in the glass industry, in order to negotiate new collective bargaining agreements once the Cardales site becomes operational.

Non-discrimination and Equal Opportunity

At the corporate level, there is an Equal Opportunity and Diversity Policy, which prohibits discrimination based on race, colour, creed, religion, age, gender, sexual orientation, national origin, disability, union membership, political affiliation or any other status protected by law, for all employment-related decisions. Furthermore, the Group has stated goals with respect to gender equality, although given the nature of the glass manufacturing sector, there tend to be more male than female employees as reflected in the overall distribution of gender across all production operations, with on average only about 16% women in the workforce and the lowest representation being in South American operations. At VASA, the current breakdown by gender is 32% female. To promote diversity within its operations, VASA recently created an Inclusion and Diversity Committee in 2019, which aims to create awareness about all aspects of diversity ranging from gender and race to educational background and personality.

Grievance Mechanism

At the corporate level, there is a formal and well-established grievance mechanism, which is based on a corporate set of guidelines covering areas such as anti-bribery/anti-corruption, competition compliance, and trade regulations. There is a dedicated department, which focuses on corporate standards of ethics and compliance with these principles across operations. To this end, there is an ethics and compliance hotline available to all staff, including those at VASA and its subcontractor employees, should anyone need to report a non-compliance. The Group conducts an annual employee satisfaction survey; in 2017, over 9,000 employees from 14 countries participated (representing an 87%-response rate) and the findings revealed an increase in employee motivation and satisfaction compared to the previous year but also the ongoing need for continued emphasis on safety.

At VASA, all workers are able to voice concerns either directly to management or the unions (as stated above). VASA management maintains an open-door policy for voicing all types of workplace concerns. Moving forward, VASA will provide a grievance mechanism for workers to raise workplace concerns. The company will inform the workers of the grievance mechanism at the time of recruitment and make it easily accessible to them. The mechanism will involve an appropriate level of management and address concerns promptly, using an understandable and transparent process that provides timely feedback to those concerned, without any retribution. The mechanism will also allow for anonymous complaints to be raised and addressed. The mechanism will not impede access to other judicial or administrative remedies that might be available under the law or through existing arbitration procedures, or substitute for grievance mechanisms provided through collective agreements.

Protecting the Work Force

NSG Group has stringent policies against the use of both child labor and forced labor. These principles are disclosed locally at each facility and on the website. The minimum employment age at VASA is 21 years and there have been no cases of child labor or forced labor.

Occupational Health and Safety

The biggest OHS risks to workers are related to cuts caused from handling broken glass during production and glass cutting. At the corporate level, OHS standards and principles have been developed, which apply across all operations. This was recently deployed across the Group operations (pending implementation at all facilities by the end of 2020) through NABIS (NSG Anzen Bunka Improvement Strategy), which focuses on instilling an employee safety culture. A centralized corporate EHS function (which reports directly to the Group’s Chief Operating Officer) oversees these and monitors their implementation at the facility level by designated staff. As part of the Group-wide approach to managing OHS, all new employees receive safety training during their induction and regular refresher training. Furthermore, managers are trained to display behavior that encourages consistent safe work principles. All incidents from near misses, minor injuries, to injuries resulting in lost worktime are recorded in a central online system that enables the centralized EHS function to rapidly detect the occurrence of unexpected events and helps prevent a facility from falling below acceptable standards. The Group has set a sustainability target for 2020 to reduce the Significant Injury Rate (SIR, injuries resulting in lost time/treatment beyond first aid and based on 200,000 hours of work) by 10% per year with no fatalities.

All the incidents are systematically investigated in order to develop action plans to reduce the likelihood of future recurrence. At the global level, there have been zero fatalities since 2015, when an incident led to the re-enforcement of safety measures related to working at heights. Based on IFC’s experience with NSG Group operations in Eastern Europe and Russia over more than 10 years, the Group has consistently exhibited a strong focus on the safety of its employees, which has resulted in very low accident rates.

VASA has procedures for evaluating risk in the workplace by activity sector, which is used for developing the necessary approaches to reducing risk to workers by following the hierarchy of risk control (elimination, substitution, engineering controls, operating procedures, and use of Personal Protective Equipment, PPE). Based on observations at the existing facility in Llavallol, it was confirmed that workers adhere to stringent safety principles through the practices in place, including, for example, the clear separation between areas for vehicle/machinery movement and people movement, strict housekeeping standards, consistent use of PPE, and operational safety systems. A nurse is on-site 24 hours a day and a doctor stops by on every week day. At the Cardales site, VASA has implemented a robust health and safety program, which entails among other, two designated safety staff on-site, strict controlled access to the site, induction trainings for all contractors working on site, and monitoring for non-compliances. To date, there has been one reportable incident (entailing a small finger fracture) during the construction phase.

Workers Engaged by Third Parties

Glass manufacturing is a highly specialized activity, requiring a significantly trained workforce. Therefore, the use of third-party workers across NSG Group operations is minimal except for non-manufacturing-related activities such as operation of the canteen, landscaping, and security, which require a different skillset from glass manufacturing. Specialized contractors are occasionally called in for specific equipment needs or repairs. In all cases, suppliers are required to comply with the Group’s labor standards including the reporting of any accidents or incidents, which is entered into the Group’s OHS online tracking system. Since the start of construction at the Cardales site, VASA has hired approximately 700 subcontracted workers. VASA’s safety team communicates its safety requirements at the start of each work contract and reviews the safety aspects of each task to be undertaken. Each week a different safety behavior or topic is selected and discussed. VASA completes a safety audit every 3 months, which also includes verifying equipment on the site.

Supply Chain

NSG Group relies on suppliers of relatively few different types of raw materials (primarily sand, soda ash, and dolomite), specialized equipment, and services; given the Group’s worldwide operational footprint, this entails over 20,000 suppliers. To date, the Group has evaluated over 350 suppliers against its corporate Supplier Code of Conduct, which outlines the standards and requirements that suppliers have to comply with when doing business with NSG Group operations. The Code’s intent is for suppliers to conduct their business operations in a safe, professional, legal, and ethical manner, and in compliance with modern slavery and human trafficking legislation as well as to prevent the sourcing of conflict minerals. VASA shares the NSG Supplier Code of Conduct every year with its main suppliers during the annual supplier evaluation process, asking for demonstration of compliance. Also, all new suppliers have to agree to and sign the Code of Conduct. 

    Resource Efficiency

The production of architectural and automotive glass requires a substantial volume of inert raw materials in addition to large amounts of energy to generate sufficiently high temperatures. NSG Group uses natural gas as the fuel of choice; the Group is in the process of gradually converting furnaces from heavy fuel oil to gas where this is feasible, which has helped to reduce carbon emissions by around 50% over the past 40 years. The Group is highly resource-conscious throughout the world and is implementing its own technological designs at facilities to maximize resource efficiency in glass melting and handling operations. Production losses in glass manufacturing facilities are also minimized through recycling clean glass waste back into the production process; this significantly reduces waste generation and also reduces overall energy consumption for melting operations. Furthermore, the Group is a leader in developing glass products that limit heat intrusion in hot climates and heat losses in cold climates, which results in significant energy saving at the user end.

NSG Group has a core team, which oversees energy consumption and efficiency across operations including dissemination of “step change” initiatives; the managers of each facility are responsible for overseeing performance against established targets with the support of local energy champions.

VASA has an Energy Management Committee, which meets on a monthly basis to review energy consumption, and analyse and implement energy saving projects. To date, 20 such projects have been implemented at the Llavallol site, resulting in savings of 2,731 tons of CO2 per year. The Cardales site will be equipped with a dual-firing furnace, which will be powered by natural gas. Natural gas at both sites is sourced from the national grid.

Air and GHG Emissions

The process of melting raw materials to transform these into liquid glass requires large amounts of energy to generate the necessary high temperatures. The primary sources of GHG emissions across NSG Group operations are related to this process (primarily high energy consumption but also the decomposition of the raw material). Given the need for reaching relatively high temperatures, NOx is generated during the combustion process. The decomposition of the raw material during the melting process also generates particulate matter. The preferred source of fuel is natural gas because it burns more cleanly and results in the least air pollution compared to other sources of fuel but also contributes to the overall quality of the glass product. To minimize GHG emissions, NSG Group has made technological upgrades to optimize fuel utilization and recover heat in the production process; the Group has set a sustainability target to reduce CO2 intensity by 1% each year by 2020 across glass manufacturing operations. Furnace regenerators are designed in an optimized shape that ensures that as much as possible the heat from the fuel is radiated back into the melting batch and outgoing gas passes through heat recovery systems, which can be recovered and reintroduced making use of oscillating firing directions rather than being lost. Most facilities are equipped with secondary abatement technologies to remove remaining air pollutants from furnace waste gas before being emitted to the atmosphere; this may include acid gas scrubbers, electrostatic precipitators and selective catalytic reduction units, or more recently a catalytic ceramic filter.

As reported in the corporate sustainability report for 2018, NSG lowered CO2 emissions per ton of glass produced to just 0.75 tons of CO2 per ton of product in 2018, representing a 1.4% improvement compared to 2017; the Group emitted a total of 2.9 million tons of CO2 from operations of its furnaces and the fuel used for bending and toughening furnaces in 2017. NSG Group participates in the CDP (Carbon Disclosure Project) and has been rated B for managing climate change across operations in 2018.

NSG Group has a well-defined strategy and approach to reducing air emissions, which applies to its operations worldwide and is deemed to be consistent with the requirements of WBG EHS guidelines. All facilities are required to meet all legislative standards at a minimum, and when local requirements are deemed to be insufficient, the Group’s corporate standards take precedence. Furthermore, the Group maintains a centralized inventory of all furnaces, associated permits, and relevant legislation and air pollution abatement capabilities, to make decisions about proposed changes in operations or design of a facility.

At VASA, it is estimated that 111,000 tons of CO2 (gross) will be emitted from operations of the new float glass line at the Cardales site. Air emissions from the new plant at the Cardales site will be treated through the installation of catalytic ceramic filters and will be in compliance with both the national standards and the WBG sector-specific (Glass Manufacturing) EHS Guidelines. Furthermore, increased domestic production at the new furnace will eliminate the need for transportation by sea and significantly reduce ground transportation of glass in the region, which further reduces CO2 emissions.

Water Use and Wastewater

Water in glass manufacturing is used primarily for batch preparation, furnace cooling (typically operating in a closed loop system, which has been installed across most of the Group’s operations), and glass washing, which requires the use of treated water that is typically reused. Globally, water is primarily sourced from surface water sources, followed by the municipal water authority, and groundwater wells. NSG Group tracks water usage aggregated across operations; in 2017, total water withdrawal accounted for 17.6 million cubic meters from all three sources, which accounted for an 11%-improvement over the previous year. Through the participation of NSG Group in the CDP, the company was rated B- for managing water across operations in 2018. The generation of wastewater is typically limited and only associated with domestic wastewater from on-site kitchens and bathrooms. Wherever NSG Group facilities operate, wastewater is typically discharged to a municipal sewage system or connected to the system of an industrial park; when this is not possible, wastewater is treated on-site. At the Cardales site, a closed loop system will be used for furnace cooling and all wastewater will be treated through an on-site wastewater treatment system prior to discharge; a permit is pending issuance by the national authorities. VASA will obtain the necessary permit to extract groundwater. 

Wastes

NSG Group generates very limited quantities of waste in its manufacturing process because clean glass waste can be recycled back into the production process. Facilities operations typically generate limited quantities of other forms of solid waste (office and domestic), which is sorted and recycled as possible or disposed of by approved local waste management companies. VASA has a procedure for waste management, which outlines how different types of waste are to be collected and disposed of; this also includes efforts to recycle (polystyrene, and paper and cardboard) and reuse (of non-conventional recyclable plastics) through external companies. Small quantities of hazardous waste (such as used solvent and used oil) are also generated and are disposed of through a licensed contractor. Moving forward, similar practices will be implemented at the Cardales site once this becomes operational.

Hazardous Materials Management

The production of architectural and automotive glass entails minimal use of hazardous materials. However, at the Cardales site, diesel will be stored on-site in above-ground storage tanks, used for powering two on-site back-up generators (1.5 MW each) during dips in the power output from the municipal power grid. Storage tanks are appropriately managed with the necessary secondary containment structures. Small quantities of hazardous materials (such as paints, thinners, and mineral oils) are stored in a dedicated, fire-retardant storage container. VASA has procedures for preventing and managing spills. At the Cardales site, LPG will be used as the backup fuel for the furnace; this will be delivered by vehicle to the site and stored in three large LPG tanks.

  Community Health and Safety

NSG Group facilities are typically located in designated industrial zones, which limits the impacts of production activities on neighboring communities. Impacts caused by the operations of facilities are related primarily to the transportation of raw materials to the facilities and finished products away from the facilities for distribution. At the corporate level, standards for transportation have been developed, which are expected to be implemented at the facility-level. The Cardales site is located in a designated industrial zone, and currently does not have any immediate neighbors (the closest one being a food manufacturer). At VASA, all raw material is delivered by truck for storage in on-site silos. The Cardales facility is located off a major road outside the city of Cardales and will be accessible by a dedicated turn off road, which will be able to accommodate truck traffic. VASA retains the services of a specialized glass transportation contractor who is responsible for the logistics of transporting finished glass product off-site. Although no written procedures are in place, all drivers are required to take a safety course, which needs to be refreshed every two years. Furthermore, safety concerns related to transport are discussed at monthly meetings.

Security Personnel

NSG Group does not use armed security at its facilities. At VASA, security services are provided through an external contractor; the Cardales site is surrounded by a perimeter fence with strict control points for access to the site and equipped with a CCTV system. VASA has procedures, which outline the roles and responsibilities of security personnel at both sites.