This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Based on information reviewed by IFC, the proposed project will have limited adverse E&S impacts that are few, site specific, largely reversible and readily addressed through existing mitigation measures and good international industry practices (GIIP).  Key E&S issue and risks associated with the project include: (i) facility level EHS organizational and management aspects, (ii) resource efficiency & pollution prevention measures (iii) hazardous material management, (iv) effectiveness of emergency preparedness and response planning and (v) community health, safety issues. SRF manufactures fluorochemicals, hence the focus of appraisal was compliance of the SRF production with the objectives of the Montreal protocol, the Kigali Amendment to the Montreal protocol and related regulations enacted by the Government of India (GOI).

E&S Policies: SRF has overarching environment, health and safety (EHS) policy consistent with the principles of the Performance Standards at the corporate level and site specific EHS policy for the Dahej facility.

E&S Management System: SRF 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. Dahej facility established an integrated management system (IMS) in line with ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 with the objective of bringing a standardized management system in line with the good international industry practice. Based on the IMS, specific EHS management programs and procedures have been developed to avoid, minimize and mitigate EHS risks including, but not limited to: product and process safety risk assessment for new products; screening procedure for new products; environmental management and monitoring (air, noise, water and waste management); management of change, occupational health and safety assessment and mitigation; trainings; and community impact assessment including qualitative risk assessment. Details of these programs and procedures are described in respective sections of this ESRS. In addition, IMS internal audit is undertaken on a regular basis to cover various manufacturing lines in the plant.

Identification of Risks and Impacts: SRF follows the local legal requirements for design, development and operation of fluorochemical and specialty chemical manufacturing, including the requirements defined by the Ministry of Environment, Forest and Climate Change (MoEFCC). An environment impact assessment (EIA) has been developed for the Dahej site and Environmental Clearance (EC) was approved from the Gujarat State Level Environment Impact Assessment Authority in December 2020. In addition, SRL has adequately obtained other permits and certificates as per the regulatory requirements including fire no-objection certificate (NOC),consent to establish (CTE), factory license and others. In addition, SRF regularly conducts hazard identification and risk assessment (HIRA) to contain the risk factors under suitable levels. Processes undergo hazard and operability study (HAZOP), and bulk storage areas are assessed through quantitative risk assessment (QRA).

HAZOP is applicable for carrying out risks assessment for new plants, new product, modification in existing plants and production process planned at specialty chemical business. Standard operating procedure (SOP) on HAZOP is in place defining procedures and responsibilities of staffs involved in HAZOP study.

Details of HIRA and QRA are described in detail in respective sections of this ESRS.

Organizational Capacity and Competency: At the corporate level, SRF has a dedicated EHS team with clearly defined roles and responsibilities and reporting lines ultimately overseen an EHS director at the board level. At the Dahej facility , safety officers undertake day-to-day activities related to EHS risk management who report to EHS manager, which is further reported to the Site Head.

Emergency Preparedness and Response: SRF has documented an emergency response plan for its operations. The Dahej facility has documented an emergency preparedness and repose (EPR) plan based on the HAZOP and QRA undertaken as part of risk assessment. The EPR covers emergency situations of fire, flammable release and toxic release/spillage covering emergency response procedure, emergency contact and communications, training and drills, installation of fire equipment (e.g., fire extinguisher, alarm)medical rooms, ambulance van, automated external defibrillator, and others. Mock drills are carried out at least quarterly. Inspection of utility and equipment is carried out daily, weekly, or monthly depending on items, which is also audited by a third-party safety auditor as described under “EHS Monitoring and Review” section. Facility and equipment were observed to be adequately installed during the site visit.

Manufacturing lines at the Dahej facility are controlled by distributed control system (DCS) control rooms located closed to the lines where parameters are continuously monitored recorded and controlled automatically. Parameters include both safety parameters to detect any failures (e.g., pressure, electricity failure) and environmental monitoring (e.g., chemical leakage). Multiple alarm system has been installed to handle any deviation in terms of operation and safety. For areas where toxic gases are stored (e.g., chlorine, HF), gas detection and control system are in place for early detection and control of emissions, and water curtain system is installed to prevent leaked HF from spreading out to larger area. The detection system automatically triggers the water curtain where any leakage is detected. 

EHS Monitoring and Review: As part of IMS, regular EHS monitoring practice is in place lead by safety officers. Key performance Indicators (KPIs) such as incident (e.g., reportable incident, first aid, near misses), training (e.g., training hour provided to employees), environment (e.g., air, noise, wastewater) by a third party as per the regulatory requirements, automated continuous environmental monitoring of each manufacturing line, and others. Details of these monitoring are described in the respective sections of this ESRS. These KPIs are compiled and shared with the Site Head, which is ultimately reported to the corporate level EHS team.

As of May 2022, SRF, the Dahej facility employs approximately 2,500 direct workers (98% male and 2% female) and approximately 2,000 third-party workers (96% male and 4% female).

HR Policies and Procedures: SRF is a SA8000-certified entity which manages social aspects practices in line with international standard.SA8000 is a certification standard that encourages organizations to develop, maintain, and apply socially acceptable practices in the workplace. While SRF has a set of overarching HR policies at the corporate level, HR function is largely decentralized to each manufacturing plant. Accordingly, the Dahej facility also has a set of HR policies including code of conduct, non-discrimination, freedom of association, prevention of sexual harassment, prevention of child labor and forced, and grievance redress. Details of each policy (at the Dahej site level) are described in the respective sections as follows.

Working Conditions and Terms of Employment: SRF shares the documented HR policies and manuals with the employees at the time of joining, and issues appointment letters to all direct employees in which the working conditions and terms of employment are defined. Working conditions and terms of employment are aligned with the statutory requirements set by the local regulatory framework including minimum wage, working schedule, overtime, social security benefits (e.g., employees' provident fund, employee's, state insurance), and others. SRF monitors working hours of its employees and keeps records to ensure that excess wages are adequately paid and to ensure that employees do not work more than that allowed as per the regulatory requirements. Employees engaged with manufacturing line operations work in shift.

Worker's Organization: SRF fully respects freedom of association and right to collective bargaining power with established policy in place, and in compliance with legal requirements as the Constitution of India provides for freedom to assembly and association. The policy respects freedom of expression and association without any direct or indirect impediment or negative consequences for any employees.

Non-discrimination and Equal Opportunity: SRF has a set of policies related with non-discrimination and equal opportunities (e.g., code of conduct, non-discrimination, compliance with SA8000 certificate). In these policies, SRF clearly commits to zero tolerance of discrimination on the basis of caste, creed, religion, gender, colour, political affiliation and age with respect to hiring, training, compensation, promotion and transfer or any other situations at workplace.

Retrenchment: SRF has not undertaken collective dismissals in recent years even during the COVID-19 pandemic, and collective dismissals are not anticipated hereafter as well. All possible alternatives to retrenchment are considered in coordination with employee if any retrenchment is unavoidable, and the dispute is settled based on the regulatory requirements such as Industrial Disputes Act as well as in compliance with practices of SA8000.

Grievance Mechanism: Formal procedure of employee's grievance mechanism is in place describing detailed time bound steps upon receipt of grievance including formation grievance committee comprised managements and representatives of employees.

As ESAP #1, SRF will update its policy on grievance redressal procedures (at the Dahej site level) in line with the IFC PS2 provisions by enabling various grievance raising channels in addition to verbal grievance raising to managers (e.g., helpline, email complaint box) to allow anonymous grievance raising. SRF will also make this formal grievance mechanism accessible to workers engaged by third parties, contractors, suppliers and all the other stakeholders.

Prevention of Sexual Harassment: SRF commits to prevention of sexual harassment in its policy pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 as well as Sexual Harassment to Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013. The policy prohibits any verbal, written, provocative behavior or physical harassment and internal committee is established to handle and resolve issues related with sexual harassment.

Protecting the Workforce: Considering the nature of SRF's business and the workforce, child labor or forced labor is not expected at SRF's operation. SRF ensures that no child/forced labor will be employed by checking age proof documents, adhering to the regulator requirements (e.g., India Child Labour Act) as well as provisions in the code of conduct policy as described in the “Non-discrimination and Equal Opportunity” paragraph above.

Workers Engaged by Third Parties: Approximately 45% of staffs working at the Dahej site are engaged by third party agencies or contractors who perform work related to the core business activities for a substantial period. SRF ensures adequate management of workers engaged by third parties and regulates their working conditions by strictly adhering to the Contract Labour Act in India. An EHS guideline for contractor is in place mainly stipulating safety aspects for workers engaged at the Dahej site.

To strengthen its practice related with third party labor working conditions, as ESAP #2, SRF will update its existing guideline with respect to the IFC PS2 requirements and take commercially reasonable efforts to ascertain that the third parties who engage these workers are reputable and legitimate enterprises and have an appropriate EHS management system, including compliance with applicable Indian labor and OHS requirements. This may include unannounced visits and visual inspections at the core business processes.

Occupational Health and Safety (OHS): HIRA is undertaken both for routine and non-routine activities, product and service to assess OHS risks and hazards. For introduction of new chemical/activity/machine operation or any modified/changed practices, SRF undertakes HIRA to keep registered OHS risks and hazards updated based on findings of any on-site/off-site accident.

Exposure to hazardous chemicals is the major risk associated with SRF's business operation. SRF has established procedures for OHS management which are appropriate to the nature and scale of its business operation and have been certified to ISO45001:2018 Standards for both fluorochemical and specialty chemical manufacturing facilities. SOPs on OHS are in place (e.g., HAZOP, HIRA, hazardous chemical management, use of personal protective equipment, emergency preparedness and response) to prevent exposure to hazardous chemicals. Quantitative exposure assessments (HIRA) have also been undertaken considering exposure patterns, hazard rating, risks of chemicals, threshold values, existing control measures and others. Internal workplace air quality monitoring is undertaken monthly and external audit is implemented annually including chemicals (particulate, gas, vapor), noise, illumination level, and hazardous waste. Workplace safety audit is also carried out by an independent consultant as per IS14489:2018 on a monthly basis covering compliance at raw material area, manufacturing line, finished goods storage and other utilities. These monitoring results and reports indicate that Dahej facility and operating systems are adequate for handling chemical materials with adequate preventive measures in place. Adequate use of PPE was observed during the visit to the site.

As for OHS statistics, incidents are recorded and maintained on a regular basis based on SOP for incident reporting procedures. Incidents are investigated, and root cause analysis records are maintained. Major incidents reported include mechanical injury (e.g., cut, hit), physical (e.g., slip) and chemical exposure.

Impact of COVID-19 Pandemic on Workforce: SRFL has not implemented significant reduction of personnel, salary and benefit cuts, or changes to vendor contracts due to COVID-19. Employees were supported through regular briefings and contingency measures for preventing COVID-19 risk in accordance with the Ministry of Health's instructions such as provision of PPE (e.g., face masks, gloves, sanitizers) at their respective workplace. A SOP on precautionary measures for COVID-19 at workplace is also in place to promote COVID-19 free, safe and healthy workplace.

Resource Efficiency: SRF is committed to promoting resource efficiency through adopting good international industry practice (GIIP) to achieve energy and water efficiency and promoting climate smart interventions in its business operations. To reduce its overall resource consumption, SRF is undertaking various resource efficiency measures including use of LEDs, sourcing electricity from renewable energy (e.g., 5MW onsite solar, 14 MW offsite wind, biomass), improvements to equipment efficiency (e.g., boilers, motors), rain harvesting and others. The Dahej facility source water from the industry park supply network for process steam requirement and other general purposes. Annual consumption of water in the recent year was approximately 2,700,000 m3. Electricity is sourced from grid (21MW including up to 10MW from renewables) and generated by on site coal-based co-generation (20MW) for both steam and electricity purposes. Co-generation plant technology is circulating fluidized bed combustion and efficiencies meet applicable international standards. Annual consumption of electricity in the recent year was approximately1,100,000 MWh. The Dahej facility continues improving its energy efficiency through optimized energy managements and new technologies, and energy intensity has dropped by 12%  in the past two years.

GHG Emission: The Dahej facility’s total GHG emissions are estimated at 718,000 tCO2e in 2022 mainly due to electricity purchase from the grid (Scope 2) and coal-based co-generation of steam and electricity (Scope 1).Energy efficiency of the coal co-generation plant, from which electricity is sourced for the Dahej facility operation, is 79-81%.

Air Emission Monitoring and Ambient Air Quality: Major sources of emission include process emission, incinerator emission, and fugitive emission (e.g., leakage through valves, pumps, emission from open drum containing chemicals).SRF monitors Stack, ambient air quality and workplace air emissions in accordance with the operational permit requirements monthly by a third-party, a third-party environmental audit annually, and established continuous air emission monitoring using through DCS as described in PS1 section. .Monitoring parameters established include: 1) PM2.5, PM10, sulphur dioxide, nitrogen oxide, ammonia, lead, nickel, arsenic, ozone, hydrocarbon, hydrochloric acid, chlorine, carbon monoxide, benzene, benzo(a)pyrene, hydrogen sulphide, carbon disulphide, hydrogen fluoride and bromine for ambient air monitoring; 2) hydrogen fluoride and hydrochloric acid for stack monitoring; and 3) volatile organic compounds, ammonia, chlorine, methanol, toluene for workplace monitoring. Samples of monitoring results indicate that all the parameters are compliant with local regulatory requirements and applicable WBG EHS Guideline.

As for thermal oxidation facility (incinerator) which incinerates R23 refrigerant gas generated as a by-product of R22 manufacturing process, technical specifications shared from SRF indicate that the design meets good international industry practice with 2 seconds of residence time at 1200 °C and quick water quencher. The thermal oxidation facility is expected to be in operation by the end of September 2022. SRF will undertake stack emission monitoring, including dioxins and furans, as per the requirements of CTE, and the WBG EHS Guidelines (Waste Management Facilities).

SRF will operationalize the thermal oxidation (TO) facility (ESAP #3 for TO1 and ESAP #4 for TO2), and undertake stack emission monitoring for thermal oxidation facility (TO1) to demonstrate that emissions are compliant with local regulatory requirements and applicable WBG EHS Guideline within 6 months after starting the thermal oxidation facility operation (ESAP #5).

Additionally, as ESAP #6, SRF will install chlorine sensor system along the fence line of the facility on top of existing environmental air quality monitoring.

Ambient Noise: The Dahej facility is located in the industrial zone. Major sources of noise include mechanical movements, boiler operation and materials handling. Noise generating equipment is designed, maintained and operated to ensure that noise levels does not exceed permissible level as per the regulatory requirement. Samples of recent ambient noise monitoring indicate compliance with the regulatory requirements and WBG EHS Guidelines of ambient noise parameters at industrial and commercial zones. 

Wastewater Management: The Dahej site facility has separate process and sewage wastewater treatment plant (WWTP). Treated wastewater is reused at the side in processes of cooling tower, humidification, gardening, and cleaning. Remaining effluent is discharged to industrial zone sewer system. Monitoring of treated wastewater performed by a third-party indicate compliance with the regulatory requirements and WBG EHS Guidelines. The Dahej facility has storm water drainage system, and collected contaminated rainwater is transferred for further treatment  into the to process wastewater treatment plant. Treated stormwater is utilized for cooling tower makeup an excess water is disposed to sewer of the industrial estate. 

Solid and Hazardous Waste Management: Hazardous wastes generated from the site operation typically include sludge from onsite WWTPs, spent solvents/catalysts, used oil, e-waste, etc. Non-hazardous solid waste includes scrap and domestic wastes. Both hazardous and non-hazardous wastes are segregated, labelled and stored in designated locations with use of secondary container or dyke for liquid where needed. Weekly inspection of waste storage areas is undertaken based on SOP. The disposal methods include reuse as raw materials, recyclable waste was collected and treated by licensed third-party companies , and using government approved landfills. Other organic waste, and other non-recoverable solvents are incinerated of at the onsite thermal oxidation facility (incinerator).Used catalysts are sent back to eh manufacturers for regeneration or disposal. Non-hazardous are collected by municipal waste collection system for disposal. Hazardous wastes are disposed through authorized contractors for recycle, incineration, and secured landfill. E-waste is normally generated due to discarded electronics which is sold to authorized dealers for recycling in compliance with the prevalent e-waste management rules.

Hazardous Material Management and Operational Safety: SRF is the largest manufacturer of refrigerants in India and fully compliant with the national plan to phasing out R22 by complying with the guidelines of Montreal Protocol, Kigali Amendment, and related regulations enacted by the Government of India (GOI). In accordance with the phase out requirements prescribed by the protocols, SRF has begun transitioning from old generation molecules with GWP to new generation/climate friendly substitutes. SRF is the only Indian manufacturer of ozone friendly refrigerants, namely R134a and R32, both of which it has developed using its own technology. 

SRF manufacture molecules with high Global Warming Potential (GWP) such as i) R22, a hydrochlorofluorocarbon (HCFC), and ii) hydrofluorocarbons (HFC) which are subject to phase out by  under Montreal Protocol. SRF currently uses R22 only as a feedstock for production of fluoropolymers and specialty chemicals intermediates. R22's application as feedstock is exempted under the Montreal Protocol/Kigali amendment.

As per the regulatory requirement, SRF is required by GOI to record, report and certify all R22 use as feedstock for production of controlled substance. In this regard, SRF is registered in and certified by MoEFCC in accordance with the Ozone Depleting Substance (Regulation and Control) Rules, 2000 including statutory requirements on reporting. Under the statutory requirement, SRF annually monitors data in accordance with Article 7 of the Montreal Protocol (data on production, import, export and feedstock of CFCs, Halons, CTC, HCFC and Methyl Bromide), and reports to the Ozone Cell, a national ozone unit set up by MoEFCC to render necessary services for effective and timely implementation of the Montreal Protocol and its ozone depleting substance phase-out program in India.

Besides routine EHS management, SRF has scheduled inspections for all critical equipment and pipelines, including hydrogen fluoride and chlorine pipelines. SRF also organizes annual EHS audits of all operations, which rotate between internal and external EHS audits. HAZOP is conducted for all automatic operations during the design phase and updated whenever the process is modified or every 5 years. HIRA is conducted for all manual operations before commissioning, then updated every six months. For specialty chemical productions, lab testing and pilot production are also conducted before scaling-up or commercial production.

As part of post-pandemic improvement programs, SRF will conduct a comprehensive safety audit and prepare an enhanced maintenance plan based on the audit results to ensure operation safety in the future (ESAP #7).

Infrastructure & Equipment Design and Safety: The Dahej site is located in the industrial area, and infrastructure is constructed in accordance with the National Building Code 2016 in India. The nearest community to the site is at least 1km away which is out of the impact areas as defined in QRAs.

Transport and Traffic Safety: SRF does not operate its own fleet and transport of products/chemicals outside the site is outsourced to third-party contractors. Functional head is responsible for conducting risk assessment, ensuring hazardous material transporters compliance (e.g., possess necessary shipping documents, comply with the relevant regulations and guidelines), and making sure that shipping/receiving procedures of such materials are observed by SRF's personnel. For transport of high-risk chemicals (e.g., hydrogen fluoride), SRF undertakes journey risk management assessing transport route and identifying emergency service contact details along the route. GPS tracking is also installed for such transport vehicles.

As ESAP #8, SRF will update its SOP on material transport by incorporating procedure to check outsourced contractors' , their legitimacy, possession of licenses from regulatory body, chain of custody documents, and compliance with contractual requirements (e.g., development of road safety plan, emergency plan on the road, regular maintenance of vehicles, OHS of drivers) in line with the World Bank Group Environmental, Health, and Safety Guidelines (Community Health and Safety) under “3.4 Traffic Safety” and “3.5 Transport of Hazardous Materials.” 

Security Personnel: Unarmed security guards are employed through licensed service providers. Training is provided to security personnel on a regular basis by SRF's EHS and HR personnel for fire and safety, handling of complainant to register grievances at security gate, and others. There has been no incidents of security and local community conflict in the recent years.

Emergency Preparedness and Response: Significant impacts may occur if communities are in close proximity to the Dahej site in case of accidental release. However, the nearest community is at least 1-2km distant from the site according to the EIA report, and in QRA study samples of chlorine, anhydrous hydrogen fluoride (AHF) and ethylene dichloride, it is assessed that risk on populated area outside the site periphery is not significant.

IFC reviewed samples of HIRA, HAZOP and QRA, and confirmed that they are appropriate to the nature and scale of its business operation. As ESAP #9, SRF will undertake QRA for chloroform to assess its impact on communities in case of accident.

While off-site emergency plan is primarily a responsibility of local authority, SRF suggests in its on-site emergency response plan aspects to be included in off-site emergency response plan to be considered by local authority. In the State of Gujarat where the Dahej site is located, district emergency control plans have been formulated for some districts.

To ensure safety of local communities, it is suggested that as ESAP #10, SRF will develop off-site emergency response plans in line with the IFC PS1 provisions and WBG EHS Guidelines (Community Health and Safety: Emergency Preparedness and Response) for the communities within the impact zones as indicated by various QRAs. Based on the developed plan, SRF will undertake off-site emergency response drill jointly with local community, public facilities (e.g., hospitals and clinics), other industries and fire brigade. In case where such off-site emergency drill is not feasible, SRF will take alternative measures to minimize/avoid negative impacts on local community in case of emergency situation based on QRA outcome such as proposing off-site emergency plans to support local authority’s emergency preparedness efforts and join emergency drills, stakeholder meeting, focus group discussion, etc.

SRF places emphasis on the need to balance the interests of its business activities with the environment and society considering that stakeholder engagement is a key strategy in demonstrating the integrity of its business. SRF's corporate social responsibility (CSR) programs include but not limited to, afforestation, education and skill development support.

SRF publishes and discloses annual sustainability report once in 2 years on its website at https://www.srf.com/sustainability-chemical-business/ which includes sections on CSR and communicates with stakeholders. The publication of this ESRS will be one of the commitments of SRF's initiatives toward EHS information disclosure.

Community Grievance Mechanism: Community grievances are received and registered by security personnel at the site gate and handled by the respective staffs of SRF, hence, a formalized procedure is not in place. As ESAP #11, SRF will develop and implement a community grievance mechanism aligned with the IFC PS1 provisions stipulating the process by which individuals may raise grievances including who receives grievances, how and by whom grievance will be resolved, and how the response will be communicated back to the affected party.

Contact Person: Sugandha Singhal

Company Name: SRF Ltd.

Address: Block C, Sec 45, Gurgaon

Email: sugandha.singhal@srf.com

Phone: +91-9818664652

Facsimilie: +124-4354600