Environmental & Social Review Summary
Project Number
9486
Company Name
FAPLAC S.A.
Date ESRS Disclosed
Feb 5, 2010
Country
Argentina
Region
Latin America and the Caribbean
Last Updated Date
Jan 2, 2017
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Nov 8, 1999
Signed : Dec 9, 1999
Invested : Mar 17, 2000
Sector
Wood Panels and Engineered Wood Products
Industry
Agribusiness and Forestry
Department
Regional Industry MAS LAC & EUR
Project Description
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Argentina - Faplac
Region Latin America and Caribbean
Sector Timber, Pulp and Paper
Project No. 009486
1. The project consists of an investment in Faplac S.A. (the Company). The investment includes the construction of a plant in Zárate, (an industrial zone located in the province of Buenos Aires) with an initial capacity of 600 m3/day, with the possibility of expanding the same production line at minimal incremental cost to increase capacity to 1,000 m3/day. The Zárate plant will replace Faplac’s existing particle board plant at Tigre. Two other plants (Calchaqui and General Pacheco) will be retained.
2 This is a category B project according to IFCs environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information provided by the Company. The following potential environmental, social, health and safety impacts of the project were analyzed:
· Plantation management (including pest control) and sustainable harvesting issues;
· Environmental issues associated with closure of the existing plant at Tigre;
· Acquisition of new processing site at Zarate;
· Compliance with World Bank Group (WBG) environmental requirements at existing and new sites: air emissions, water use and waste water management, solid waste management and hazardous material and waste;
· Fire protection and emergency response;
· Occupational health and safety;
· Social issues relating to change of processing location and any retrenchment.
The information provided about how these issues and potential impacts have been addressed in the development of the project are summarized in the paragraphs below.
3 Plantation management (including pest control) and sustainable harvesting issues: The Company has three plantations which service c50% of existing and proposed future wood demand (details in table). Remaining raw wood is obtained from other plantations or from slab and waste plantation wood from nearby sawmills. No process wood is obtained from natural forest.
4 The plantations are long established and well managed with appropriate fire-breaks and control systems. There is very limited use of agrochemicals at any of the plantations (Granular Mirex is used immediately after planting to control ants – 0.5kg/10ha block) and Integrated Pest Management systems are applied. Vegetation control is achieved by manual labor and cattle grazing and harvesting is undertaken by third party contract staff at all sites and the plantations have not resulted in drawdown of local water tables. The Company is considering acquisition of other plantations and concession areas set aside for plantations close to the existing Delta plantation. These would be managed in the same way as existing Faplac plantations and would not result in significant adverse impacts to natural habitats. Small quantities of oak and cedar veneer are imported from Brazil and this material is obtained from sustainably managed plantation sources in southern Brazil.
5 Environmental issues associated with closure of the existing plants at Tigre: The Tigre site will close in September 1999 and will subsequently be developed as a leisure facility by others. Existing buildings and plant will be taken down and removed, sold on to others, relocated or recycled. The site and surrounding land was reclaimed from low lying wetland areas between 1910-1950 and dredge material comprising river sediments and sludges was used as fill material. Subsequently other parties developed a small wood processing plant which used phenolic glues on part of the site now owned by Faplac. The Company acquired the site in 1961 and constructed the existing plant on contaminated land. Assessment of the site in 1997 indicated elevated levels of phenols and hydrocarbons in soils and groundwaters and independent assessment of the sources of these contaminants confirms widespread pollution by hydrocarbons and phenols in the Tigre area that is not attributable to Faplac. Local planning and environmental authorities have been informed of these findings and are content that Faplac has no liabilities with regard to the contaminated land at Tigre.
6 Acquisition of new processing site at Zarate: The new production site at Zarate is within a designated industrial development area west of the city. It occupies an area of 86 ha (of which 40 ha will be developed for the processing facility and associated infrastructure) and has direct access to the Parana river. A small wooden docking area will be developed (100mx50m) to offload raw wood from the delta plantation and also possibly to export processed wood products. The site was formerly farmland, no resettlement has been required and no economic displacement occurred.
7 Compliance with World Bank Group environmental requirements at existing and new sites : Air Emissions: Potential air emissions from the new plant at Zarate will include boiler and dryer emissions as well as fumes from glue making and application. The site has a small (6tons steam/hour) boiler which will be fired by a combination of light diesel, natural gas and sanding dust. The design specifications guarantee compliance with WBG requirements. The same material fuels the two dryers which are fitted with cyclones and have continuous monitoring of flue gases to ensure effective combustion and reduced emissions. The design specifications for the dryers guarantee a particulate emission of less than 100mg/Nm3 and at the operating capacity proposed, will ensure compliance with WBG requirements. Fumes from glue making and process lines at Zarate will be controlled through state of the art ventilation and technology and will be in compliance with WBG requirements. Wood products from the plant will be E1 certified.
8 Air emissions from the Tigre plant arise from similar sources (boiler, dryers and glue shop) but the plant has limited pollution control technology and boiler and dryer emissions fail to comply with WBG requirements. Ambient air quality in the glue room and forming lines is not up to standard with level of formaldehyde above WBG guidelines. Closure of the plant in September will result in significant improvements in local air quality and should be seen as a clear environmental improvement.
9 At General Pacheco, the small (6tons steam/hr) boiler is gas fired and operates in compliance with WBG requirements. Phenolic resins are used in the laminating lines, these are adequately vented and the plant is in compliance with Argentinean and WBG requirements. At Calchaqui, there is a small (8 tons steam/hr) oil and wood dust fired boiler and emissions are insignificant. However ambient dust levels within the site are high and the Company has undertaken to improve dust control and management to ensure compliance with WBG requirements.
10 Water use and waste water management: The only process waters used at any of the sites are for boiler waters and glue forming (at Zarate glue forming will comprise 1800 l/h) and the only effluents produced are small quantities of wash-waters and septic waste. These are disposed of to septic tanks and there is no direct discharge to receiving water courses.
11 Solid waste management: Solid waste from all sites is either recycled (paper at General Pacheco and Tigre), incinerated according to government regulations or disposed of to landfill.
12 Hazardous material and waste: Sources of hazardous material include fuel oil, glues and resins, small volumes of solvents for equipment cleaning and polychlorinated biphenyls (PCBs) in transformers (at General Pacheco). There is appropriate control and management of all hazardous materials (secondary containment, secure storage and isolation etc) at all sites. PCBs in transformers are monitored and maintained annually by local professional companies. The Calchaqui site has an ammonia based cooling system that controls the fluidity of glue compounds and setting rates. The system is well maintained and there is an emergency contingency plan. At Zarate there is a comprehensive chemical storage and management system and the site will achieve all Argentinean standards and WBG requirements when it becomes operational in August.
13 Fire protection and emergency response: At Zarate, a comprehensive fire control system has been installed throughout the plant (sprinklers, spark detectors, hoses, CO2 extinguishers) and fire control systems are adequate at other sites.
14 Occupational health and safety: The Company provides appropriate training and provision of personal protective equipment to staff and there are adequate occupational health and safety controls. Ambient air quality at Calchaqui (dust) and Tigre (glue fumes) will be addressed through closure of plant (Tigre) and improved dust control measures (Calchaqui).
15 Social issues relating to change of processing location and any retrenchment: The Tigre site employs 165 staff of which c120 will become redundant when the site is closed and operations are moved to Zarate. A compensation program has been developed and severance payments will be paid in accordance with Argentinean requirements. All employees are aware of the plans to close the site and a total of US$1.2million has been set aside for retrenchment costs. Key staff will be relocated to Zarate others will become redundant either through early retirement or severance packages.
16 IFC will monitor ongoing compliance with World Bank Group environmental, social, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Faplac and by conducting periodic supervision. In particular, IFC will require annual details of:
· pesticide (and other agrochemical) use and management practices as well as details of pests controlled;
· plantation management at any new plantations acquired or developed by the company;
· E1 certification (annual compliance certificate).
17 Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Faplac''s proposed project will meet World Bank Group environmental, social, health and safety policies and guidelines and host country requirements.
Plantation
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
