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.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Novatex has adopted a Safety Policy at the corporate level, aiming to provide an occupational health and safe and clean working environment for workers by eliminating all potential hazards. As per ESAP #1, Novatex will augment its overarching policy consistently with the principles of the IFC Performance Standards (PSs).
The company has established an Integrated Environmental and Quality Management System (IMS) certified as per ISO 9001:2015 (quality management) and ISO 14001:2015 (environmental management). The company is also certificated as per HALAAL 3733:2019 (Pakistan Standard for Halal Food Management System), Ocean Bound Plastic (V2 and V2.1) ( https://www.obpcert.org/ ) and Global Recycled Standard (V4.0). The company’s IMS is broadly aligned with the requirements of IFC PSs and commensurate with the scale and E&S impacts of its operations. However, the company will augment its IMS in line with the requirements of IFC’s PSs, WBG General EHS guidelines (2007), and WBG EHS Guidelines for Metal Plastic and Rubber Products Manufacturing (2007) (ESAP #2). As part of the IMS improvements, the company will focus on EHS procedures for environmental monitoring, waste management, management of hazardous materials, and effluent monitoring. The company also needs to strengthen occupational health and safety (OHS) risk assessment and management procedures as reflected in WBG General Environmental, Health, and Safety (EHS) Guidelines (2007).
The head of the environmental health and safety (EHS) compliance team, assisted by the EHS Manager, has been designated for the implementation of IMS. EHS Head reports directly to the CEO. A Steering Committee has also been established by the Executive Director to oversee the IMS implementation, compliance status of the company operations with the applicable national standards and E&S regulatory permits and requirements. At G&T Group level, the Divisional EHS Head oversee the EHS affairs of member entities.
The company 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 IMS also includes a documented process for the identification of E&S risks and impacts from the Company’s operations. A Risk Register is in place that identifies, and controls measures to mitigate risks in overall company activities as well as the risks specific to the manufacturing process. Hazard Analysis and Critical Control Point (HACCP) is conducted for the manufacturing process.
As part of the IMS, the company defined Key Performance Indicators (KPIs) for EHS performance, which are being monitored, these include consumption of water, power, fuel per unit product and occupational workplace injuries and incidents. The EHS team conducts regular internal audits to review and ensure the effectiveness of IMS. The outcomes of internal and external audits have been satisfactory with no major non-conformance raised that required corrective action.
The company has annual EHS training plans for the workers which include regular EHS induction training sessions and refresher training.
The company has documented an Emergency Response Plan and Business Continuity plan addressing emergencies relating to natural calamities, fire, chemical spillage, medical, and terrorism, however, it needs to address emergency related to chemical leakages/exposures. Emergency Squad has been designated as being responsible for emergency declaration, guiding during emergencies, develop post-emergency formal reports to identify areas that need improvement and require training. As per ESAP #2, as part of ESMS, Novatex will update the site-specific Emergency Response Plan (ERP), including response to emergencies relating to potential chemical leakages and workplace exposure; dissemination of emergency to the stakeholders and community; periodic review; documentation and reporting consistent with IFC PSs.
PS2: Labor and Working Conditions
The company has a documented Human Resource (HR) Policy Manual to guide the Admin & Personnel Department compliant with national law. The manual specifies terms of employment, wages and benefits, working hours and overtime, working conditions, medical assistance, disciplinary actions, etc. The company has a policy of no discrimination (based on ethnicity, gender, religion, community, or sect, etc.) at hiring process, elimination of child/underage or force labour, and equal opportunities for its employees. The HR policy manual is communicated to the employees through information posted at company’s intranet and emails and pasting on the notice boards. Formal contracts with the contract staff and appointment letters to the employees also include general HR policy guidelines. The company recognizes the lawful right of freedom of association and collective bargaining for all its employees. However, the HR Policy Manual needs to be augmented to address the requirements of IFC PS2. As per ESAP #3, Novatex will develop a formal overarching Human Resource (HR) policy consistent with the requirements of IFC PS2 addressing the working conditions and terms of employment for contracted and third-party party workers, forced labor, gender-based violence (GBV), retention, retrenchment and grievance mechanism for workers.
The company’s Karachi facility employs 720 direct and 1084 contracted workers. Faisalabad facility employs 46 direct and 52 contracted workers. The company employs about 22 female staff in HR, Admin and Finance departments. In 2023, the Company’s employees and contract workers worked for about 1.53 and 2.76 million hours, respectively, without any lost time incidents or lost workdays. All employees are covered by compulsory Group Insurance.
The company has a documented grievance mechanism (GM) procedure for workers to raise complaints verbally, through the installed complaint boxes or via email. As per ESAP #3, Novatex will augment its GM for workers to submit anonymous complaints in line with the requirements of PS2.
The company established Occupational Health and Safety (OHS) procedures consistently with the applicable national standards and OHS regulatory permits and requirements. The Company performs Job Safety Analysis (JSA) as a systematic method to ensure safe operations at all workplaces. Contractors Code of Conduct provides precautionary directions to prevent accidents that may result in injuries to contracted workers or Company’s employees. The risk assessment procedure includes the identification of OHS hazards and are documented in the Risk Register. The OHS Risk Assessment Report for 2022 identified high noise exposure in the workplace at the powerhouse room and suggested additional control and mitigation measures. Complying with the local regulations, the company maintains certificates of medical examination of its workers. The company maintains a record of work-related injuries and recorded 6, 13 and 7 workplace occupational injuries in 2023, 2022 and 2021 respectively. No Lost Time Injury (LTI) was recorded in 2023 and 2022. In 2021, one LTI was recorded in the contract workers resulting in 3 lost workdays, with LTIFR of 0.31 which is well below international sector benchmark (5.5). As per ESAP #2, Novatex will augment the occupational health & safety management procedures including applicability on the contracted workers engaged in the expansion work within the company premises, to be aligned with IFC’s Performance Standards 2 and WBG General Environmental, Health and Safety Guidelines (2007).
The company has 9 registered local vendors for procurement of about 1000 to 3000 tons per month of used PET bottles for the recycling plant. Three supplies have level of traceability available for the used PET being certified for Ocean Bound Plastic (OBP). In 2022-23 period the company procured about 23,000 tons of PET from its suppliers who acquire the material from scrap collection stream and self-collection. The company does not acquire any PET from the municipality waste streams. The company acquires undertaking from its suppliers confirming the exclusion of child labor from waste supply chain and (procurement and quality assurance teams) visit the suppliers’ PET processing sites to verify that no child labor is involved in the operations. As per ESAP # 4, Novatex will develop: (i) a Supplier Code of Conduct which prohibits the use of child labor and forced labor, significant OHS issues and includes other requirements of PS2 relating to management of workers, working conditions, etc.; (ii) incorporate contractual clauses in agreements with its suppliers requiring them to comply with the Supplier Code of Conduct. Novatex will augment the monitoring of suppliers and report on results from monitoring activities associated with PS2 requirements as part of its IMS.
PS3: Resource Efficiency and Pollution Prevention
The company acquires about 1.0 million cubic meters of raw water annually from the municipality for its main plant in Karachi. As a backup to the shortage in municipality supply, four boreholes are installed with Reverse Osmosis (RO) units to produce the required quality of water. As per ESAP #2, Novatex will develop a plan for optimizing and conserving groundwater usage.
Power requirements for the facility at Karachi are met primarily using inhouse generators of 29MW overall capacity operating on natural gas supplied by the local utility company. Six small generators (7 MW overall capacity) operating on diesel and three small generators (6 MW overall capacity) on HFO fuel are installed as a backup power source. At present, the Company does not use any grid electricity supplied by the utility company in the area. The company is also ascertaining the cost-effectiveness and feasibility of installation of a 5 MW solar plant within the footprint of the existing facility.
The company has 5 heaters/ovens with 48 MW of total thermal install capacity. The heaters have dual-fuel burners (Natural gas/ HFO). Three heaters are operated under normal production operations and two are installed at standby. The company has also installed two heaters/ovens of 28 MW capacity, each operating on coal as a backup energy source during the outage of gas supply. The average coal consumption is about 40 to 50 tons/day for each coal-fired heater/oven. In the 2021-2022 period, the annual percentage of coal consumption remained at about 17%, whereas in 2022-2023 period, due to a shortage of natural gas supply, the coal consumption increased to 40% while the natural gas consumption was 36%, and HFO 24%. The Company has installed a waste heat recovery boiler of 5400 kg/hr capacity on the power generators exhaust gases facilitating the process heating, steam generation, and chillers operations for the production plants. Two additional waste heat recovery (WHR) steam boilers of 2000 kg/hr capacity each are installed on the exhaust system of the coal-fired heaters providing about 2.5% average gain in efficiency.
The company conducts monitoring of stack air emissions from the power generators and boilers through an authorized third-party laboratory. The monitoring of emission levels for NOx and SO2 in generator and boiler exhausts conducted in 2022 comply with national air emission standards and WBG General EHS Guidelines (2007). As per ESAP #2, Novatex will update the environmental monitoring plan as part of the IMS update to include monitoring of the process stack emissions from polymerization, molding and BoPET operations units in line with the WBG EHS Guidelines for Metal, Plastic, and Rubber Products Manufacturing (2007).
Effluent Treatment Plant (ETP) is installed to treat 75 m3/h of process wastewater discharge prior to disposal into the municipality sewerage system. The treated effluent quality complies with the local standards for discharge in the municipal sewerage system. About 60-70% of discharge from the ETP is recycled back through a process of ultra-filtration and RO unit (52 m3/hr) as a measure to conserve raw water usage. Sludge from ETP operations, after processing through sludge drying beds, is disposed of at a municipal sanitary landfill.
Wastes produced from the routine plant operations include lube oil, chemicals, acetaldehyde, metalized BoPET films, glass, and other non-hazardous wastes. The company has engaged a government licensed vendor for off-site disposal of waste. Ash produced from the operations of the heaters/ovens is collected and stored in bags for off-site disposal using the services of a licensed vendor. As per ESAP #2, Novatex will update the IMS’s waste management procedure to align with IFC PS3 requirements for waste characterization and procedures for monitoring, handling, and disposal including disposal of ash produced from operations of the standby coal heaters/ovens.
PS4: Community Health, Safety and Security
Novatex’s main facility in Karachi and the smaller facility in Faisalabad are located within designated industrial areas and there is no community settlement or sensitive social receptors in the vicinity.
The company uses its own fleet and contractors’ vehicles for handling and transportation of raw materials and finished products. Own fleet include 28 prime-mover trucks, 6 bowsers, and 11 trolleys of various capacities. A transport management plan is yet to be developed, however, the company conducts trainings of its own fleet drivers on safe driving. As per ESAP #2, Novatex will (i) develop a formal Transport Management Plan which will include transport safety relate practices for the Vehicles, Drivers, and Journey/Trip, and (ii) develop and organize, as part of annual training plan, trainings for its transport contractors on vehicle’s safety checklist, defensive driving, and other transportation safety related requirements in line with WBG General EHS guidelines.
Emergency Preparedness and Response Plan is in place that provides for apprehending information about the environmental sensitive features in the neighborhood. As per ESAP #2, Novatex will update the Emergency Response Plan (ERP) including procedure for dissemination of emergency to the stakeholders.
Life and Fire Safety (L&FS management: The company’s facilities are equipped with passive and active L&FS systems which includes pumps, fire hydrants, sprinklers, handheld fire extinguishers, and trolleys (Dry Chemical Powder, Carbon Di-Oxide, and AFFF Foam type) and a central fire detection and alarm system comprising of smoke, heat and gas detectors and manual call points at different locations in the factory including the PET storage and processing sites. A fire tender and emergency van also remain available 24/7 for emergency response. Dedicated HSE staff are assigned to each shift, ensuring continuous workplace monitoring around the clock. All fire safety equipment (portable or fixed) undergo daily visual, weekly, monthly, and annual inspections and testing, as per the Planned Preventive Maintenance Schedule on Company’s SAP System. An Emergency Response Team has been established who conduct department-wise weekly emergency trainings and mock drills for effective preparedness. A Permit-To-Work System is in place for critical and spark potential activities with fire/safety watch. The company has a contract with a 3rd party firm for inspection of L&SF systems, and refiling of fire extinguishers. The firm also conducts annual performance tests for fire pumps and develops Head Curve reports. The Insurance Teams also conduct Fire Safety Audits once every two years. The company maintains records of fire incidents and recorded 4 incidents in 2023, 5 incidents in 2022 and 14 in 2021.
The company outsourced licensed security company to safeguard its personnel and properties. Security personnel are armed.
As per ESAP #5, Novatex will prepare a Security Management Plan (SMP) guided by the principles of proportionality and good international practice such as the United Nation (UN) Code of Conduct for Law Enforcement officials and UN Basic Principles on the use of Force and firearms by law enforcement officials.
