Environmental & Social Review Summary
Project Number
9739
Company Name
Wood Agency Credit Line Vrbas m.d.p.
Date ESRS Disclosed
Feb 5, 2010
Country
Bosnia and Herzegovina
Region
Europe
Last Updated Date
Jan 2, 2017
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Mar 12, 1998
Signed : Jun 5, 1998
Invested : Dec 21, 1999
Sector
Furniture and Related Products
Industry
Agribusiness and Forestry
Department
Regional Industry MAS LAC & EUR
Project Description
Environmental Review Summary (ERS)
Project Name BOSNIA-HERZEGOVINA - Vrbas
Region Central & Southern Europe
Sector Timber, pulp and paper
Project No. 009739
1. This Project, under the Bosnia –Wood Agency Line, involves the provision of working capital and the modernization of Vrbas, an existing vertically integrated wood processing company in the industrial area of the city of Banja Luka. Approximately one hundred meters from the Vrbas River, the project site is located on 23 hectares of land with 6.5 hectares of covered areas. Vrbas’ production facilities on the site consist of:
· Hardwood Sawmill – processing predominately beech
· Solid Wood Furniture Factory
· Veneer Furniture Factory
· Upholstery Operations
· Interior Furnishing Operations
All of thermal energy is produced in company boilers, while part of the water and all of the electricity are supplied by the Banja Luka utility infrastructure. The company’s existing workforce is 1,170 people.
2. This is a category B project according to IFC’s 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. IFC’s Environment Division’s review of this project consisted of appraising technical and environmental information submitted by IFC field staff and Vrbas. The following potential environmental, safety and health impacts of the project were analyzed:
· wood supply source and management
· chemical usage, storage and handling
· air emissions and workplace air quality
· water supply and effluent
· solid and hazardous waste management
· emergency response and fire protection
· employee health and safety, and training.
The information provided about how these potential impacts are addressed by Vrbas is summarized in the paragraphs that follow. Vrbas is developing plans to address outstanding issues and to demonstrate that the proposed project will comply with the host country’s applicable laws and regulations and the World Bank Group’s applicable policies and guidelines. The company has appropriate permissions in compliance with national and local laws and regulations for 1st stage of project and will receive permits for each new machine or construction throughout the project. As a result of the IFC loan and the accompanying Technical Assistance program, Vrbas will develop a formal environmental management system addressing compliance, monitoring, cleaner production and energy efficiency.
3. Wood Supply, Source and Management. Vrbas has a reputation for producing some of the highest quality steamed beach lumber on the European market. The company acquires beech logs from the state-owned logging company Srpske Sume, based on yearly contracts. The logs are delivered mainly from the division located in Ribnik. At present Vrbas is purchasing about 26,000 to 30,000 m3 of logs a year. As a result of the proposed IFC loan, Vrbas would increase its production up to an installed sawing capacity of 50,000 m3 of logs a year. Srpske Sume is professionally organized and managed, working according to annual forest management and reforestation plans.
4. Chemical Usage, Storage and Handling. Chemicals used in production include finishing lacquers, dyes, hardeners, and associated solvents. These chemicals are separately stored in a segregated, flammables/explosives storage warehouse. Equipped with fire alarms and sprinklers, the storage facility for lacquer, paints and oils is in good condition with no war damage. Lacquers are stored in metal barrels and transferred through piping to finishing stations where the coatings are applied with airless spray-guns. The room for lacquer transfer requires a ventilating fan, and the storage area in general requires cleanup and organization. As part of the project, Vrbas will install proper ventilation in the storage room and improve housekeeping to ensure that chemicals are stored in a manner to prevent spills and accidents.
5. Air Emissions and Workplace Air Quality. The potential sources of air emissions at the facility include two (2) wood-fired boilers used to generate process steam; cutting, milling and sanding operations; and furniture finishing processes.
6. Each boiler has a capacity of 12 tons of steam (equivalent to approximately 8 MWe), burns wood waste, and is permitted by local authorities. Vrbas has arranged for the performance of stack emissions tests. If warranted by results of these tests, Vrbas will prepare a plan regarding upgrade of the boilers in order to meet the World Bank Group’s applicable guidelines.
7. Particulates from wood-cutting, milling and sanding areas are controlled through the use of a dust collection system. Sawdust and wood waste from all the factories are transferred to central sawdust silos. The central sawdust silos and feeding system of boiler No.1 are damaged causing sawdust leaks. In addition, the grounds in the area of the boiler house are littered, and significant volumes of sawdust have collected nearby. Further, a relatively large volume of sawdust in the interior of the boiler plant presents a potential fire hazard. By the second disbursement, Vrbas will have prepared the plan, in which they will explain intentions to purchase dust collection systems, which would control workplace air quality. In addition, Vrbas will improve housekeeping and the maintenance of dust handling systems to prevent potential fires or explosions.
8. Lacquers and other coatings are applied to furniture by hand-held, spray-guns in ventilated stations using water curtains to collect overspray. Volatile organic compounds (VOCs) are exhausted to the exterior of the building. By the second disbursement Vrbas will prepare a plan on upgrade of the current spraying systems, which will considerably reduce emissions of VOCs, as well as result in the more efficient use of coatings.
9. Water Supply and Effluent. Water for industrial process is drawn from the Vrbas River through company’s own system, while water for restaurant and other general and worker needs is supplied from municipal water supply system. Sources of liquid effluents include log treatment (debarking); closed-loop, water curtains for finishing operations; truck washing; sanitary waste; and storm events. Log treatment wastewater, truck washwater and stormwater are discharged directly to the Vrbas River. The balance of effluent is discharged directly to the town’s municipal sewerage system, which drains to the local publicly-owned wastewater treatment plant. Local authorities reportedly have inspected the facility and granted permission for all discharges. Nevertheless, Vrbas will engage the Ecological Institute in Banja Luka to collect and analyze samples of the direct discharge(s) to the Vrbas River. In addition, Vrbas will confirm to the Agent Bank, via a report from the municipality, whether the process effluents require pre-treatment prior to discharge to the municipal system. Based on analysis performed by the Ecological Institute and the report from the municipality, Vrbas will undertake corrective action to ensure that its direct discharge(s) to the Vrbas River and discharges to the municipal sewerage system meet the World Bank Group’s applicable guidelines.
10. Solid and Hazardous Waste Management. Solid waste generated include sawdust, wood off cuts, veneer and particleboard chips; cardboard and other packaging materials; sanding materials; boiler ash; sludge from water curtains; and general plant trash. As noted previously, while wood waste and other dust particles are collected and transferred to boiler silos to be used as fuel, Vrbas will as part of this project improve its housekeeping with respect to these wastes. Other general waste is collected and removed by the municipality in one container a week, while packaging and sanding trash is removed in three containers per week. Boiler ash is collected in closed containers and disposed by the municipal authorities. Spent solvents and automotive waste oils are transferred to recyclers and salvagers. The sludge from water curtains is containerized and taken to a licensed municipal disposal area.
11. Emergency Response and Fire Protection. The Fire Prevention System includes a complete series of hydrants around all factory buildings at a distance of every 50 meters. In factory areas, hydrants with hoses are installed at proper distances. The hydrant system is independent from the municipality for both water and electricity. The water is drawn from the Vrbas River through the company’s own system by using its own pump station built on the river. The station is equipped with a diesel generator, with power of 315 kWh and 4 pumps for direct pumping of water into the hydrant network. There is a fifth pump installed as spare capacity and a primer. Each factory has an electronic fire warning system under roof, which, after registering the smoke, automatically alarms the city fire department for intervention. In addition there is a complete network of CO2 canisters throughout the entire company. The company maintains a fire truck and a voluntary fire brigade who undergo regular training. The fire protection system undergoes inspection annually by the local fire department. All workers are trained in fire prevention and emergency response procedures.
12. Employee Health and Safety and Training. Vrbas has a worker health and safety (H&S) training plan and program. The company is updating its H&S plan to address all aspects of employee health and safety including workplace air quality and noise, and general health and safety and training. Hearing protection is provided, as appropriate, to affected employees. All staff receives training on the company’s policies and procedures in general safety upon employment. Vrbas has access to a medical center within 300 meters of the site for regular medical checks as well as emergencies.
13. Banjalucka Banka, as agent for IFC, will monitor compliance with the relevant environmental, health and safety policies and guidelines during the lifetime of the project. Vrbas will provide an annual report to Banjalucka Banka that includes details of environmental and social issues, and Banjalucka Banka staff will conduct periodic supervision missions to the project. Banjalucka Banka will provide an annual environmental performance report to IFC covering this project.
14. Based on its review of available information regarding potential environmental and social impacts and proposed mitigation measures, IFC concludes that this proposed project will meet the World Bank Group’s applicable environmental, health and safety policies and guidelines and the applicable requirements of Bosnia-Herzegovina.
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
