PS5 (Land Acquisition and Involuntary Resettlement) is not applicable because the project is being 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.

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 resources and raw materials; iv) life and fire safety (LFS) conditions of the project; and v) wastewater treatment and disposal.

 Environmental and Social Assessment:

EPCL has identified an external consultant to conduct an environmental and social impact assessment (ESIA) of the extension project and onboarding is in process. The ESIA shall be conducted according to the Pakistan regulatory requirements, IFC Performance Standards, and WBG EHS Guidelines. The ESIA will include a qualitative and quantitative analysis for hydrogen peroxide expansion project and other associated ancillary works and upgradations that the project will undertake. As per ESAP#1 EPCL will include in ESIA an EHS quantitative risk assessment for hydrogen peroxide production, storage and transportation procedures. There will be a process of stakeholders’ consultation in due course of preparation of ESIA report and, subsequently, its approval from provincial regulatory authority (Sindh Environmental Protection Agency) in compliance with prevailing local regulations.

Policy and Management Systems:

EPCL has a Corporate EHS 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 compliant with the requirements of ISO 14001, ISO 9001 and ISO-45001. EPCL is one of the few companies in Pakistan affiliated with DuPont for it’s Health and Safety programs and has attained 3.9 rating from DuPont for Process Safety Management (PSM) EPCL also received 3.5 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.

EPCL’s existing policy and the management systems will be extended to the new facility being developed under the project, once it is operational.

EHS Organization:

EPCL existing facility has a qualified and experienced Health, Safety and Environment (HSE) team, headed by General Manager HSE with support from 10 other staff including safety advisor, process safety engineer, environmental engineer, medical doctor and supervisors. The H2O2 expansion project team of 16 persons includes an EHS personnel to oversee project specific EHS matter and coordinate with the base plant team.

To oversee HSE standards, procedures and systems compliance status during operation a Manufacturing HSE Committee, headed by Vice-President Manufacturing meets every month and reviews 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 Corporate HSE committee headed by the company President reviews HSE performance quarterly and provides vision and direction to the operating Divisions. The EHS department also involves in the decision-making on new projects to ensure that the new projects meet both local regulatory and IFC requirements.

Emergency Response Plan:

EPCL has in place a site-specific Emergency Response Plan (ERP) for implementation by the facility management team for emergencies relating to natural calamities, fire, medical, chemical/fuel spillage, physical aggression, etc. ERP 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. IFC will require the EPCL to update its ERP to respond to the emergencies related to H2O2 expansion project.

There is a 24-hr onsite clinic for both routine first aid and emergency care. Moreover, 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, as per ESAP #4, 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 shares with employees and shareholders and disclose these reports on its website.                                                  

 EPCL currently has around 463 regular employees (including ~ 63 head office staff) and 88 contract workers (including 8 workers at Head Office, being engaged in 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. Construction for expansion work under previous Polymer-III project (#41160) is in progress and the engaged EPC Contractor has developed its own labor camp for approximately 200 workers within the land earmarked for the project. The H2O2 expansion project will be erected through a Contractor who will be responsible to arrange and manage the required construction work force which is expected to rise to 300 workers in peak time. For the expansion project, as per ESAP #3, EPCL will ensure that the EPC contractor establish on-site workers accommodation as per PS2 requirements and Good Practices Notes. H2O2 project would create employment opportunity for around 40 permanent staff. 

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 Organization:

All the company’s employees are employed in management grades and are not members of any form of association or labour union. However, EPCL allows collective 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 employees for the project will be primarily hired from local area if the qualifications can be met. EPCL plans to hire more female employees for suitable positions during the expansions. 

Protecting the Workforce:

There is no child or forced labor in EPCL operations. 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:

A documented procedure for 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 (2016-2018) at EPCL for contract workers and employees and 16.7 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. As per ESAP #3, EPCL will 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 hydrogen peroxide is hydrogen gas, which is produced as a by-product during production of caustic soda. The existing PVC manufacturing plant has capacity to produce around 3000 tpa of hydrogen.

During EPCL operations in 2017 out of the total hydrogen produced 46% was utilized internally as fuel, 11% used in HCl production process, 7% sold in local market, whereas 36% was vented. Under the expansion project the hydrogen, a lower value by-product, will be utilized for conversion to hydrogen peroxide, a value added product thereby avoiding the venting of hydrogen to the environment.

Under the Oxy Vent Recycle (OVR) component of the expansion project the EDC process will be modified with OVR-technology to improve raw material efficiency. It will enable EPCL to achieve around 2% saving in ethylene consumption, which is most expensive raw material for PVC production.

For production of 195,000 tons/year of PVC, EPCL requires 195,000 ton/year of VCM and 110,000 tons/year of EDC. The Company imports around 72,000 ton/y of ethylene required for production of EDC. Under ongoing Polymer-III expansion, the company would increase PVC production by 100,000 tons/y and VCM capacity by 50,000 tons/y.

Raw water to EPCL is supplied by Port Qasim Authority (PQA). Water consumption for present operations is around 3.0 mgd with expected increase by 0.5-0.8 mgd at commencement of Polymer-III operations.

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 over 5,000 MMSCF/year of natural gas provided by Government supply system.

The H2O2 expansion for per ton of production of hydrogen peroxide would require 1.6 MT of steam, 367 m3 of cooling water, 8.8 m3 of chiller water, 2.8 m3 of demineralized water, 9.2 Mm3 of Nitrogen and 312 kWh of power which would be provided from the existing utilities at EPCL.

Resource Conservation:

EPCL has energy efficiency and water conservation programs, which consist of reduction targets for each year and which is monitored closely by management. Through recovery of condensate, about 15% of water is recycled/recovered. Implementation of Six Sigma projects resulted in savings of 3.3 MMBTU/hr of natural gas supply by optimization on reactors, furnaces and incinerators, and 40,000 ton/year 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 Polymer-III 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 240 m3/hr of wastewater from present operations which is discharged into the sea after onsite treatment. The H2O2 expansion project is expected to increase 0.625 m3/Hr of wastewater treatment plan load. For present operations the monitored effluent parameters in the meet all the local regulatory requirements and the WBG EHS Guideline limits.

In hydrogen peroxide production process, the main components of working solution include catalysts (Palladium), EAQ and solvents (non-polar and polar). The catalyst is separated via primary filters from the working solution and returned to the hydrogenator for reuse.

The air emissions from oxidizer and drying unit are circulated through Solvent Recovery Unit to recover some traces/vapours of working solution. The life of activated carbon adsorbent is 5-6 years and after that it will be disposed of using services of authorized vendors as per local laws. A Regeneration Unit prevents accumulation of undesirable compounds in working solution by converting them in active quinones. The spent alumina (Al2O3) from regeneration column has potential of reuse in cement or tile industry as raw materials. In case any impurities are detected in hydrogen, that portion of gas will be purged from the hydrogenator.

The existing wastewater treatment plant has adequate capacity to receive the influent load from H2O2 expansion and EPCL 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 boilers/furnaces meet all the local regulatory requirements and the WBG EHS guideline values.

Solid and hazardous wastes:

The solid wastes generated onsite, including household wastes and industrial wastes are collected by the Government authorized contractors for recycling or off-site disposal. EPCL has an incineration unit to dispose of hazardous waste produced from EDC/VCM plant. EPCL enhanced its in-house incineration capacity through several improvements including replacement of internal brick lining, resolving frequent seal leaks issues from scrubber recirculation. EPCL also uses an off-site incineration facility of a contractor for disposal of its hazardous waste.

Waste from the H2O2 expansion project would include exhausted activated carbon adsorbent (once in 5-6 years) and the spent alumina (Al2O3) from regeneration column which has potential of reuse in cement or tile industry as raw materials.

Hazardous Materials:

Catalysts and solvents would be the major of hazardous materials handled at H2O2 expansion project. At EPCL, 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 H2O2 expansion projects and EPCL is committed to implement all its recommendations. EPCL conducts routine internal safety inspection and routinely hires external experts to conduct safety auditing, including PSM-Process (process safety management) from DuPont.

Greenhouse gases (GHG):

EPCL generates approximately 256,000 tons carbon dioxide (CO2) equivalent per year from present operation which is expected to increase to 308,000 tons of CO2 equivalent with commencement of Polymer-III project operations. The H2O2 expansion project is expected to produce gross GHG emissions of about 120 tons of CO2 equivalent whereas GHG emission reduction from the project is expected to be around 17,000 CO2 equivalent per year. 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 H2O2 project would not produce any significant hazardous product. At the EPCL existing operations, the hazardous raw material, ethylene, is transferred to the site through 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 related to PVC manufacturing 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 H2O2 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 H2O2 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