IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) 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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
Kucukcalik identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. The company has a corporate Environment Policy, Social Compliance (SC) Policy, Human Resources (HR) Policy as well as Occupational Health and Safety (OHS) Policy. The company has implemented integrated management system (IMS) certified as per ISO 9001 (quality), ISO 14001 (environmental), and ISO 50001 (energy management) standards. The IMS is regularly audited internally and externally by independent certification institutions. Kucukcalik, as per ESAP item #1, will revise its corporate E&S management policy including HR and SC policy and procedures as per IFC PS requirements, get management approval and disclose the policy documents on the Company’s website.
The company undertakes identification of E&S risks and impacts for new investments such as new polymerization plant at the Sakarya plant, in line with the Environmental Aspects and Impacts Procedure. Plant based risk assessment meetings are held regularly by the involvement of OHS specialists, environmental specialist, unit chiefs and managers in order to identify emerging E&S risks and impacts and necessary measures where needed.
As per the Ministry of Environment, Urbanization and Climate Change (MoE) of Turkiye (EIA Regulation, official gazette no:29186 of 2014), the greenfield polymerization plant was exempted from the E&S impact assessment (EIA) requirement. Kucukcalik, as per ESAP item #2, will develop and implement a construction phase E&S management plan (CESMP) to ensure construction E&S risks are assessed, managed, monitored and reported in line with WBG Environmental Health and Safety (EHS) Guidelines and Good Practice Note (GPN) on Managing Contractors’ Environmental and Social Performance. This will include, but not limited to the provisions for OHS hazards and risk prevention, working instructions, hazardous and non-hazardous waste management, environmental monitoring, spill management, emergency preparedness and response.
Kucukcalik, as per ESAP item #3, will also develop and implement an operational phase E&S management plan (OESMP) for the polymerization plant to ensure operational E&S risks are assessed, managed, monitored and reported in line with the local regulatory requirements and the requirements of WBG EHS Guidelines for Petroleum-based Polymers Manufacturing applicable to the plant operations. This will include, but not limited to the provisions for i) EHS Policies aligned with IFC PSs; ii) risks assessment and management procedure for environment, OHS, and labor risks and impacts; iii) organizational EHS/HR function, including capacity and competency for effective implementation; iv) workplace air emissions measurement program to include measurement of mono-ethylene glycol (MEG); v) hazardous material management procedure including storage and transportation instructions; vi) annual workplan for EHS training of employees and contracted workers; vii) emergency preparedness and response; and vii) monitoring and reporting of EHS performance.
Kucukcalik’s Sakarya and Inegol plants has established EHS organizational structure composed of, an environmental engineer and two OHS specialists. The two OHS specialists at Sakarya plant have Occupational Safety Specialist A-class and B-class national certificate, while the two OHS specialists at Inegol plant have B-class certificate and one OHS specialist has C-class certificate from the Ministry of Labor and Social Security. There are full-time medical doctors and nurses employed at each plant.
Kucukcalik has documented plant specific emergency preparedness and response (EPR) plans including evacuation, fire prevention, first aid, and response to fire and explosion, accidental release of chemicals, natural disasters including earthquake and flood, work accidents and engagement with respective authorities for any emergency case. Emergency response teams, roles and responsibilities and response plans for each emergency scenario are detailed in the plans. The life and fire safety, spill prevention and control measures (such as flame detectors, smoke detectors, water and foam-based sprinkler systems, emergency showers, absorbents) are available at each plant. Fire detection and protection systems as well as fire alarms and distinguishers are regularly inspected by an external accredited company in line with the national regulations. The last inspection was conducted in February 2023 and the next inspection is planned for February 2024. Furthermore, plant OHS specialists conduct monthly inspection of fire distinguishers.
According to the climate change projections, the region may experience hotter temperatures, heat waves and short-term drought. The company will conduct a climate risk assessment to address the E&S risks and i) update its Emergency Response and Preparedness Plan and OHS procedures; and ii) develop necessary management plans including water management, as per ESAP item #4.
PS 2 – Labor and Working Conditions
Kucukcalik employs 1,417 direct workers in the Inegol plant of which 571 (40 percent) are female and 264 in the Sakarya plant of which 92 (35 percent) are female. The project is expected to create 52 additional employments. There are 87 contracted workers in Kucukcalik across all operations to provide catering and security services. The construction efforts will involve additional 50 contracted workers at the peak time at the Sakarya plant.
Kucukcalik has corporate HR and Social Compliance policies and associated procedures in place that relate to recruitment, training, performance evaluation, career development, terms of employment, disciplinary rules and job descriptions, and these are, in general, in line with IFC Performance Standard 2 requirements. Kucukcalik’s HR procedures cover aspects on equal opportunities and non-discrimination on race, ethnical origin, nationality, religion, age, gender and/or physical disability in line with Turkish labor laws requirements and prohibits explicitly employment of child and forced labor. The harassment and abuse at the workplace are clearly prohibited by the business ethics policy and disciplinary code of the Company. The policy and procedures are available to all employees as an internal directive.
As per ESAP item #5, in order to raise corporate awareness of gender aspects including gender-based violence and sexual harassment at workplace, Kucukcalik will engage with an external expert to develop and implement a training program for managers and a training of trainers program for the HR personnel to provide further trainings to all its employees. The training program will also include Kucukcalik’s respective policy and procedures, including grievance mechanism, code of conduct.
Employees involved in actual plant operations work in three 8 hours shifts per 24-hour cycle, whereas the administrative / office employees work during the weekdays and a maximum 45 hour per week. All employees have written contracts where the working conditions, terms of employment, wages and benefits provided, working hours, overtime and annual leave are defined.
There are no labor unions or collective bargaining agreements in place but there is a worker representative mechanism which enables the workers to raise their claims and concerns via 10 elected representatives (6 in the Inegol plant of which 2 are woman and 4 in the Sakarya plant of which one is woman) to HR department and the respective Plant Manger during monthly meetings. Kucukcalik, as per ESAP item #1, will ensure that its HR and SC policies clearly states that the Company respects freedom of association and collective bargaining rights of its workers.
The company has a formal grievance mechanism for workers where employees can anonymously or directly raise concerns to their managers or to HR department. Complaint boxes were placed at the entrances of change rooms in each plant. Contractor employees during construction will be provided access to the same grievance mechanism.
OHS Management System is composed of OHS policy, OHS manual, procedures, instructions and emergency action plans. OHS risk assessment in line with the regulatory requirement has been prepared and updated every 4-5 years and on demand in case of any modification of production process. Specific Personal Protective Equipment (PPE) such as dust masks, earmuffs plug etc. are provided to workers used when it is not feasible to eliminate the hazard by engineering and management measures. During the IFC site visit, it was observed that OHS risk assessments are available for all working areas and Operational OHS procedures and a hazardous work permit system is in place (hot work, confined spaces, work at height etc.).
Records related to OHS accidents, incidents and near-misses are kept at plant level. Workers are instructed to report near-misses through submitted near-miss forms. The Company provides regular OHS trainings (general OHS awareness, chemical hazards/material safety data sheets (MSDS), forklift and trans pallet operations, emergency response, work at height, etc.) to its workers. At each unit and shift, one operator is assigned as OHS responsible reporting to the plant OHS officer.
The lost time injury frequency rate (“LTIFR” – number of lost time injuries per 1.000.000 worked hour) for 2022 is calculated as 14 for the Sakarya plant and 16 for the Inegol plant which are significantly above the international benchmark of 5 for manufacturing and 3.5 for chemical production and textile mills. Therefore, as per ESAP item #6, Kucukcalik will complete third party OHS audits of the operational plants and develop and implement a time-based OHS corrective action plan, acceptable to IFC, to reduce the current LTIFR of both plants to align with the respective sector international industrial benchmarks. As per ESAP item #7, the Company will complete an OHS risk assessment to identify potential OHS risks associated with the polymerization plant operations and develop a plant specific OHS management plan identifying measures to be taken, required competencies of OHS specialists, PPE requirements, training programs for the employees and monitoring and evaluation procedures.
Workplace monitoring program includes noise, volatile organic compounds (VOC), air quality (Co, CO2 and O2) and dust. The measurement results are in line with local legislations and WBG’s General EHS guideline values. The workplace monitoring program to be developed for the polymerization plant will also include measurement of mono-ethylene glycol (MEG) as per the ESAP item #3.
Process Safety: The PET synthesis route is the reaction between PTA and MEG which happens under moderate pressure (3-5 atm) and high temperature (220-260°C). In addition, MEG is toxic and flammable. As per ESAP item #8, the Company will conduct a Hazard and Operability (HAZOP) and Layers of Protection (LOPA) analyses for process safety management and emergency response requirements of the polymerisation plant and make sure that sufficient fire/smoke detection, firefighting systems and sprinkler systems were installed in line with the national building and fire safety codes as well as GIIP throughout the plant and MEG and PET storage area. Futhermore, the Company will conduct a pre-startup safety review (PSSR); develop a detailed operational readiness and process start-up program to be fully implemented before commissioning/ commencement of operation of polymerization plant; all actions from HAZOP and LOPA will be timely completed (ESAP item #9).
There are contractual requirements referring to Turkish E&S laws and they include clear covenants to ensure that contractors will follow Kucukcalik’s E&S management system requirements. The construction contractor of the polymerization plant, and the contractors who may provide installation services for the project will have the same contractual requirements. Compliance is monitored by Kucukcalik’s E&S staff.
Kucukcalik sources key raw materials (PET chips, yarn and fabric) from China, Turkiye and Malaysia. In addition, the Company is planning to assess the possibility of use of post-consumer PET as a raw material for the new polymerization plant through its Research and Development process by taking into account requirement of IFC PSs. Kucukcalik has a supply chain policy outlined in its Child Labor Policy supported with a vendor selection process which is compliant with IFC PS2 requirements on use of child or forced labor and OHS risk management aspects in the primary chain. Kucukcalik’s purchasing department is responsible for implementation of this policy requirements. As per ESAP item #10, the Company will i) develop a standalone supplier code of conduct that addresses Child Labour (CL), Forced Labor (FL) and significant safety issues as per PS2, ii) include contractual clauses in agreements with tier 1 suppliers requiring compliance with the code of conduct and a requirement for tier 1 suppliers to require their suppliers to prohibit child labor and forced labor in their supply chains; iii) revise risk screening and mitigation procedures to include a risk-based monitoring of child labor, forced labor and OHS risks in its primary supply chain; and iv) establish a formal process for engagement, remedy and disengagement in case of non-compliance with the code of conduct in line with IFC PS2 requirements.
PS 3 – Resource Efficiency and Pollution Prevention
Kucukcalik’s current operations include yarn production, dyeing, weaving, printing, embroidery?, cutting and sewing. The new polymerization plant will produce PET chips using purified terephthalic acid (PTA) and MEG which will help the Company reduce imported raw materials. Furthermore, increase of dope dyed yarn capacity will result in reduction of water consumption by 65%, energy consumption by 60% and chemical consumption by 99%. The use of recycled PET will increase by 40-50%, as recycled raw material sourced from domestic vendors can be used in the new polymerization plant. The company holds valid certificate by Textile Exchange confirming the compliance of its products with Organic Content Standard (OCS) (Version 3.0) and Global Recycled Standard (GRS) (Version 4.0).
The plants rely on natural gas and electricity for regular operations while diesel generators are operated only in emergency. Due to operation of the new polymerization plant, annual electricity consumption of Sakarya plant would increase 18% while natural gas consumption would significantly increase by 32 times as well as diesel consumption by back-up generators will increase by 25% due to additional back-up generators. The Company is certified as per ISO 50001 and has initiated energy and resource efficiency projects aiming reduction of natural gas demand of hot oil boiler; reuse recycling wash waters; reduction of chemical, energy and water demand by introducing digital printing; reduction of faulty products rates in stenter machines to reduce energy and water demand.
The company holds necessary permits for water supply from the municipal network. Water demand is projected to increase from 70,500 m3/year to 141,000 m3/year after the completion of the polymerization plant. Process water demand of Inegol plant is 3,500-4,000 m3/day.
The process wastewater and sanitary wastewater from both plants discharged to the industrial zone sewage system and treated in industrial zones’ wastewater treatment plants (WWTP). The effluent quality of the WWTP is monitored by local authorities and is in line with the local regulatory requirements. The wastewater discharge permit of Sakarya plant will be updated to cover wastewater that will be generated by the polymerization plant. As per ESAP item #11, Kucukcalik as part of the technical design phase will undertake process wastewater quality and quantity assessment for the new polymerization plant and identify and design on site wastewater treatment plant (WWTP) to ensure the quality of treated wastewater meets the required effluent for discharge to industrial zone sewerage system and treatment in the central industrial zone WWTP.
The company does not quantify Greenhouse Gas (GHG) emissions from its operations. The annual GHG emissions after the project realization are expected to be 6,973 tons CO2e consisted of 6,972 tons CO2e/yr Scope 1 and 1.24 tons CO2e/yr Scope 2 emissions resulting in 13,450 tons CO2e/yr reduction from the Company’s current emissions. The Company will quantify direct emissions from the facilities owned or controlled within the physical project boundary (Scope 1) as well as indirect emissions associated with the generation of purchased energy (Scope 2) and all other indirect emissions (Scope 3). Quantification of GHG emissions will be conducted annually, using internationally recognized methodology.
The Company monitors air emissions at 59 stacks at the Inegol Plant. Air emissions monitoring include the following parameters: COx, NOx, SO2, PM (Particulate Matter), and VOCs. Monitoring results for 2023 indicates compliance with the national regulations and WBG General EHS Guidelines and WBG EHS Guidelines for Textile Manufacturing.
At the Sakarya Plant, air emission monitoring covers three stacks and measurements for CO, NOx, SO2, PM, and VOCs will start upon assignment of the external laboratory by the MoEU and carried out every two years as per the new local regulation. The company will report measurement results and compliance status (with limit values set by local regulations, WBG EHS General Guidelines and EHS Guidelines for Textile Manufacturing) to IFC once available. For the new polymerization plant, ESAP item #12, the Company will design and perform air emission monitoring measurements quarterly in the first year of operation to ensure the measurement results are consistent with local regulatory requirements and WBG General EHS guideline values as well as EHS Guidelines for Petroleum-based Polymers Manufacturing.
Textile fiber wastes, metals, packaging waste, electronic wastes, hazardous wastes, plastics, medical wastes are generated at both Kucukcalik plants. During the site visit, proper implementation and practices were observed at Sakarya Plant in line with WBG EHS General Guidelines while there are areas for improvement at the Inegol Plant. Wastes are segregated and stored in temporary storage areas with proper containment (110 percent coverage capacity). Domestic waste is collected by municipality and disposed of to the municipal landfill. As per ESAP item #13, Kucukcalik will develop and implement a timebound action plan, acceptable to IFC, for improving the solid waste storage and general housekeeping conditions in Inegol plant.
Hazardous waste is stored separately from non-hazardous waste in special labelled containers and disposed to licensed companies authorized by regulatory agencies at both plants. Kucukcalik engaged with an external consultancy company for the management of hazardous materials. Trainings related to hazardous material storage, handling, transportation and disposal are provided by the external consultant and plant OHS Specialist. Hazardous material storage and transportation instructions are in place. The company will develop hazardous material storage and transportation instructions for the hazardous material management requirements of the polymerization plant (ESAP item #3). MSDSs were translated into Turkish, and emergency absorbents were observed to be readily available in all required areas.
PS 4 – Community Health, Safety and Security
Both operational plants of Kucukcalik are located within special industrial zones in Bursa and Sakarya and the greenfield polymerization plant will be constructed within the premises of Sakarya plant, which are not surrounded by community settlements, hence no significant impacts on health, safety and security of the local community are expected due to operations of these plants.
The plants are located within the known earthquake zone. The polymerization plant building is designed in line with the national Regulation on Buildings to be Built in Seismic Zones (Official Gazette date/no:18.3.2018/30364).
Raw materials and products are delivered via trucks, by contracted transportation companies as need basis. Kucukcalik requires the transportation companies have documented transport management plans which defines vehicle, driver, and journey related practices and ERP plans for spill and accident scenarios.
Plant specific Emergency Preparedness and Response Plan in line with the local regulation is in place. Emergency Response Team, roles and responsibilities and response plans for different emergency scenarios including natural hazards are included in the plan. Drills are conducted annually. The latest fire drill was conducted at Sakarya plant in July 2023 and at Inegol plant in June 2023.
Kucukcalik will ensure that the new polymerization plant, including MEG and PET storage areas, will be designed, constructed and operated in full compliance with Regulation on Protecting Buildings from Fire (Official Gazette date/no:19.12.2007/26735) and Regulation on Protecting Workers from the Hazards of Explosive Environments (Official Gazette date/no:30.04.2013/28633), local fire department requirements and GIIP including fire alarms, passive and active Life and Fire Safety systems as per the ESAP item #8.
