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
PCR Renewables has issued an integrated quality, environment, health and safety policy stating its relevant commitments for developing and operating their renewable energy projects. The policy and ESMS had been implemented and in line with the relevant ISO requirements for managing quality, environment, health and safety risk and impacts, in line with PS1.
The EIA for the Olavarría wind farm and its associated overhead transmission line (OTHL) was developed in accordance with local regulations and also aligns with the requirements of the WBG EHS Guidelines, identifying risks, impacts, and mitigation measures for the Project and has obtained its environmental license. Similarly, the EIA for substation expansions complies with local regulations and has also received environmental licenses. These assessments include general plans and measures to address identified risks. While the studies are generally adequate, the identification of risks and mitigation measures related to social aspects and management requires improvement. As part of the ESAP #1, PCR will undertake a supplemental risk assessment focusing on social aspects of the Project and develop relevant mitigation measures to align the Project with PS1.
PCR Renovables has developed an ESMS and a number of relevant management programs for developing and managing wind energy projects, including identification and evaluation of aspects and impacts, internal monitoring, waste management and EHS training, among others. PCR has a qualified EHS team with coordinators responsible for Occupational Health and Safety (OHS), Environmental Management, and Management Systems, reporting to the Manager for Operations. Performance evaluation of the Manager for new developments includes Project’s E&S performance related objectives.
There is an internal monitor and review program in place to measure ESMS effectiveness, with scheduled activities per month. There are tailored emergency response plans for each facility for events such as: medical emergencies, environmental spills, turbine malfunction, (e.g. blade detachment, fall), and fire. The plan defines roles and responsibilities, communication protocols and contact information. The company’s E&S management systems were noted to be commensurate with the scale and E&S risks and impacts of its operation, with adequate implementation in line with IFC Performance Standards. Nevertheless, PCR will develop a project environmental and social management plan (ESMP), where it will gather the relevant mitigation measures identified in the EIAs, supplemental assessment (noted on ESAP #1) and additional requirements, as relevant, so that the project construction and operation activities comply with IFC PS requirements and WBG EHS Guidelines (ESAP #2).
PCR has laid out detailed general EHS requirements for contractors undertaking construction and maintenance activities, namely: to implement an EHS program and undertake activities following PCRs ESMS, compliance with local laws, social security and health insurance among others, so that projects comply with relevant regulations and PCR EHS commitments. As part of the ESAP #3, PCR will include in EPC contracts a Contractor Management Plan (CMP) that is aligned with IFC PSs and WBG EHS Guidelines and IFC's Good Practice Note on Managing Contractor E&S Performance, requiring the implementation of an ESMS to address Project E&S risks impact and to implement the Project ESMP. The CMP will include a budget and resources, a detailed plan for implementation explaining the process of how ESHS requirements from the company will be embedded in the various phases of procuring, bidding and contracting of contractors and subcontractors.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures
PCR’s Human Resources Management System for Renewable Energy Farms is built upon the Integrated Policy on Quality, Health, Safety, Environment, and Social Responsibility; the Code of Ethics and Conduct; and the Contractor Management Procedure. This system aligns with Performance Standard 2 (PS2), relevant ILO Conventions, and local labor laws. Each worker receives a written contract outlining their working conditions and terms of employment. During the induction program, workers are informed about the Group’s HR policies and the Code of Ethics and Conduct, both of which also apply to contractors.
At the end of 2023, PCR had a total of 898 employees (753 male, 145 female). Both employees and contractors receive annual refresher training in the Code of Ethics and Conduct. For project activities, it is expected that there will be approximately 250 employees and subcontractors at the peak of the construction phase. Workforce will be sourced from local communities and no workers accommodations will be used. All employees are enrolled in the mandatory social insurance scheme. As per ESAP #4, PCR will develop and implement the necessary site-specific HR related procedures appropriate to its size and workforce. The procedures will provide a description of working conditions and requirements for Project staff and contractors, ensuring compliance with IFC PS2, local labor regulations and PCR’s policies regarding freedom of association and collective bargaining, prohibition of child and forced labor, working conditions, terms and duration of the employment relationship, wages and benefits, wage calculation and pay slips, working hours, overtime, rest days, breaks, deductions, termination procedures, health insurance and pension. These procedures will be written in such a way as to be easily understood by workers. HR policies will be applicable to and widely disclosed among all direct and indirect workers.
The company does not prohibit the freedom to associate and workers right to form and join workers organizations. At the end of 2023, 41% of the Company’s employees were covered by collective bargain agreements. The company policies encourage non-discrimination and equal opportunity and prohibit harassment for its on-roll staff, contract staff and contractor workers. PCR’s HR policies prohibit engagement of child, forced or bonded labor practices.
PCR has a documented workers grievance mechanism the “Ethical Line”, that has multiple reporting channels, including phone numbers for the different countries where the Company operates and a website (https://etica.resguarda.com/PCR/main.html.) The grievance mechanism allows for submission of anonymous grievances and is also available to the contractors’ workers who are included in related training and awareness campaigns conducted by the HR department. The Ethical Line is managed by a third party (Resguarda System) that receives the reports, and submits them to the Ethics Committee, which together with the Legal and Compliance Management Department implement the grievance procedure to investigate and close grievances. The Code of Ethics and Conduct includes considerations on non-retaliation and confidentiality. As per ESAP #5 PCR will update its grievance management procedure (included in the Code of Ethics and Conduct) to (i) document precise detail on the receipt and handling of grievances, outlining the step-by-step pathway and timeframes for the receipt, investigation, response and closeout of grievances; and (ii) ensure gender-based violence and harassment (GBVH) grievances are adequately addressed with a survivor-centered approach, managed by a designated team that has received specific GBVH training.
PCR requires its contractors to comply with national labor laws through specific contract clauses. The labor engagement practices, and statutory documentation maintained by the contractors are subjected to monthly labor audits undertaken by independent third-party agency.
The scope of the integrated management system includes OHS aspects for all PCR Renewables activities, based on workplace risks assessment. Incident statistics are collected on each facility and a training schedule that includes safety topics. As part of the ESAP #6, PCR will include in its contractor management program, procedures to monitor OHS performance with relevant KPIs and periodic reviews.
To address labor risks in its supply chain, PCR requires in its contract with service and equipment suppliers to follow Argentinian regulations on forced labor. Nevertheless, as part of the ESAP #7, PCR will develop a supply chain management system aligned with PS2 supply chain requirements and acceptable to IFC that includes: i) a supplier code of conduct with prohibition of Forced labor, child labor and significant safety issues; ii) contractual clauses in supplier agreements requiring compliance against the supplier code of conduct; and iii) update existing supply chain procedures to add qualification of supplier's compliance against the Supplier Code of Conduct before selection.
PS3: Resource Efficiency and Pollution Prevention
Project activities involve the construction of access roads, laying foundations and building and upgrading of substations. PCR has committed, through its sustainability policy, to managing resources efficiently, preventing pollution, and adhering to local regulations. The project’s electricity will be generated by the wind farm. The project will not contribute to greenhouse gases (GHG’s) other than during construction activities due to the burning of fossil fuels from the use of vehicles and heavy machinery.
Water use will not be significant and limited to construction activities and domestic and sanitary purposes. The project will obtain municipal permits for well water extraction and use, if required. Wastewater will be disposed in septic tanks and following local requirements.
Air quality levels will be impacted during construction activities and monitored in accordance with local laws and EHS Guidelines during construction activities, as part of the projects ESMP. There are three inhabited dwellings on the project site (farm facilities). The project’s preliminary design includes noise modeling and predicts that daily values will comply with local requirements and WBG EHS guidelines for daytime limits (<45dBA) but not for nighttime (49 dBA vs 45dBA). Thus, the project will implement mitigation measures to reduce noise impacts to meet WBG EHS Guideline requirements, including adequate setbacks (e.g. barriers, turbine siting) and will monitor effectiveness as part of regular monitoring (ESAP #8). A shadow flicker analysis shows that exposure to the closest neighbors are between 31 and 41 hours per year in the worst-case scenario, affecting the three dwellings in the project area. PCR will implement mitigation measures to reduce shadow flicker impacts (e.g. barriers, turbine siting) (ESAP #9).
Non hazardous and hazardous wastes such as paint, lubricants, batteries, spent lubricant fluid containers, among others are generated during construction, and operation of assets and will be segregated, labeled and stored in a designated area for adequate disposal as per local requirements with licensed providers, and this will be included in the project’s ESMP (ESAP #10).
PS4: Community Health, Safety and Security
The project is located in a rural area accessible via a public road, situated 24 km from the nearest human settlement, the town of Olavarría. The main impact of the project to the public will come from disruptions to local transit and traffic during the transportation of turbines, heavy machinery, workers and other materials via state roads during the temporary construction period. The project’s ESMP, will include requirements to implement a traffic management plan that ensures safe transport routes to the site as well as safe truck loading practices. The plan will identify high-risk areas requiring improvements or additional safety measures, installing safety signage on public roads, enforcing driver codes of conduct and a transport schedule that minimizes impacts to the community (ESAP #11). PCR will establish direct contact and coordinate with the relevant public utilities during any construction works that may result in the interruption of services. This will be included in the Stakeholder Engagement Plan.
The project will engage a private security company during both construction and operations to manage access control and protect assets. Security personnel will remain unarmed. Since the project site is not surrounded by communities and the area's security risks are assessed as low, the client will require the security contractor to perform background checks. Security personnel will also receive training on respectful interaction with workers and community members.
PS5: Land Acquisition and Involuntary Resettlement
For the project development, PCR requires approximately 4,446.00 hectares located within three parcels (Huachipampoa, La Cartila and Los Ganchos) belonging to three different landowners. The net area to be used for the project will be 55.65 hectares, 1.25% of the total area. PCR does not have a specific policy on Land Acquisition and Involuntary Resettlement. However, for new land requirements, PCR follows a process, in line with local regulation, according to which the Company engages with the landowner to present the project. If agreement on land access is reached, the Company establishes a temporary Agreement for four years or the duration of the project’s pre-feasibility stage. This agreement includes a one-off payment for the duration of this stage. Once the project is confirmed and construction is to begin, a Usufruct or Land Lease contract is established with the landowner for a duration of 30 to 40 years, which includes the land for the installation of the turbines, pathways for access to the turbines, and other infrastructure and operation facilities. The usufruct contract also includes conditions and restrictions for the use of the land by the landowner. Usufruct or lease rates are determined based on (i) the megawatts (MW) produced on the property, (ii) the land's market value, and (iii) the negotiation with the landowner. This rate is updated annually as per the country’s Consumer Price Index (CPI). Expropriation and other compulsory legal procedures are considered as the last resort in compliance with local laws
Based on the information gathered from the Company, there is no potential physical or economic displacement for the Project. However, the Company will require new land rights for the Project’ construction, including the approximately 4 Km transmission line in a new right of way and 20 km next to an existing transmission line, which will potentially entail restrictions on land use. Areas visited during the appraisal, corresponding to the land leased for the wind farm, were secured by PCR through negotiations with private landowners, are located in rural zones, and are used for agribusiness. The Company implements social programs for the benefit of neighboring communities affected by the construction of the Company’s facilities/assets. As per ESAP #12, PCR will develop a land access procedure for evaluating land use and implementing land acquisition, resettlement action plan (RAP), and livelihood restoration plan (LRP) in alignment with IFC PS5, with the support of the required additional resources (e.g expert consultant) to mitigate any impacts of planned land acquisition on affected people in the Project. The procedure will include (i) gap analysis between local regulations (applicable to land acquisition and establishing usufructo with the landowner) and PS5; (ii) implementation, when necessary, of economic surveys of landowners and users with and without legal rights; (iii) considerations on vulnerable groups (impacts and mitigations); (iv) provisions to identify and address potential impacts of physical and/or economic displacement, restrictions on land use, or exercise of expropriation in alignment with PS5, through the development of RAP, LRP and other applicable plans; and (v) means to ensure stakeholder engagement and an external grievance mechanism to address complaints associated with land acquisition and involuntary resettlement.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
The site that has been selected for the Olavarría wind energy facility is located within the Humid Pampas temperate grasslands, savannahs and shrublands biome (WWF), in the center of a flat, agricultural plain in central Buenos Aires province, Argentina, roughly 20 km to the southwest of the town of Olavarría. The wind farm, and its associated 24 km OHTL segment, are located at least 50 km from any Legally Protected Areas or Internationally Recognized Areas. The project prepared an ESIA following national standards, which included a 4-season bird and bat baseline study, broadly encompassing the complete annual cycle of seasonal variation in bird and bat communities at the site. The survey methodologies in this baseline study were aligned with GIIP for three of the four seasonal studies. Per ESAP #13, the Company will conduct a supplemental bird and bat baseline study covering the austral summer season.
The project area (including the OHTL route) features both Natural and Modified Habitats, influenced by cattle grazing intensity, roads, exotic tree plantations, and agricultural fields. Natural Habitats include small ponds with reedbeds. The bird and bat baseline study found significant seasonal concentrations of large-bodied waterbirds at the site, attracted to the wetlands and waterbodies scattered throughout the broader project region. Although none of the recorded or likely present waterbird species are listed as vulnerable (VU) or higher on national or IUCN red lists, the seasonal concentrations pose a risk for these birds. They are known to be susceptible to collisions with overhead transmission lines (OHTL) and may also be at risk of collisions with wind turbines.
The Project is likely to cause fatalities of birds and bats during operations, as a result of collisions of flying animals with operating wind turbines (birds and bats) and the Project’s associated OHTL (birds). In order to manage such impacts in a manner that is aligned with PS6, per ESAP #14, the Company will employ a qualified, independent contractor to develop and implement a Biodiversity Management Plan, consisting of i) a bird/bat post-construction fatality monitoring (PCFM) protocol, to be implemented for a minimum of 3 years starting at the beginning of Project operations; and ii) an adaptive management framework (AMF), elaborating a set of science-based, Project- and receptor-specific fatality thresholds which, if exceeded, will trigger a requirement for the Project to implement additional collision impact mitigation measures. Both the PCFM protocol and the AMF will conform to the guidance presented in IFC-EBRD-KfW’s (2023) Good Practice Handbook (GPH) for post-construction bird/bat fatality monitoring.
Furthermore, risk of waterbird collisions with wind turbines and potential impacts to NH will be mitigated by the incorporation of a 250 m minimum setback of all wind turbines from wetlands that are likely to attract substantial waterbird concentrations, to be delineated and mapped by a qualified expert, per ESAP #14. Risk of waterbird collisions with the Project’s OHTL segment will be mitigated by installation of bird flight diverters (BFD) on the overhead wires of the OHTL over a roughly 1500m section of the OHTL that includes the entire portion of the OHTL that comes within 500m of a large marshy pond near the southern end of the OHTL, per ESAP #15, with the type and spacing of BFD to be aligned with GIIP.
