ENVIRONMENTAL AND SOCIAL REVIEW SUMMARY (ESRS) PROJECT: HIB Petrol. Disclaimer

Transcription

1 ENVIRONMENTAL AND SOCIAL REVIEW SUMMARY (ESRS) PROJECT: HIB Petrol Disclaimer This Environmental and Social Review Summary (ESRS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board of Director's decision. Board dates are estimates only. Any documentation which is attached to this ESRS has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. 1 Project Description: HIB Petrol ( HIB or the company - was established in 1990 as a trading company for oil and oil derivatives and has now grown to be one of largest companies in Kosovo. Its current sales are split among three business lines as follows: (i) 55% from the petroleum wholesale business with a fuel depot, where HIB has long-term contracts with over 300 gas stations and the major government and international institutions in the country; (ii) 45% from its own retail network of 13 gas stations across the country; and (iii) 5% from its boutique hotel with 72 rooms and event facilities. The proposed IFC investment is to finance HIB Petrol s expansion of (1) two new gas stations (ii) adding 45 rooms and conference center/restaurant for the existing hotel ( the project ). The fuel depot is located in an industry warehouse area, surrounding by other warehouses and farms. All existing and planned gas stations are along major highways, and there is no residential community nearby. The HIB hotel is also along a major highway and operational since 2004 in Pristina, Kosovo. The proposed expansion will be next to the existing hotel within the land owned by the company. Overview of IFC s Scope of Review: The review of this project consisted of appraising technical, environmental, health, safety (EHS) and social information submitted by the company, which included documents related to fuel whole sale/retail/logistics, hotel management, corporate EHS policies and procedures, corporate EHS management system, the corporate human resources (HR) policy, stakeholder engagement, security management etc. were reviewed and discussed during the appraisal., The environmental and social (E&S) appraisal team also conducted E&S background researches in English media. The E&S team visited HIB headquarter in Pristina, Kosovo, and HIB s fuel storage depot, three gas stations, and its hotel during January The E&S team also held meetings with the corporate, fuel depot/retail, and hotel management teams and interviewed employees at fuel depot and hotel. Identified Applicable Performance Standards: While all Performance Standards are applicable to this investment, IFC s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards PS1: Assessment and Management of Environmental and Social Risks and Impacts PS2: Labor and Working Conditions 1 Sentences in italics are standard language and cannot be modified.

2 -2- PS3: Resource Efficiency and Pollution Prevention PS4: Community Health, Safety and Security The new gas stations and hotel expansion are all along the major national highways. The land pieces for gas stations are small and purchased from individual land owners through willingbuyer/willing seller process. Similarly, the hotel expansion will be within the existing land owned by the company since There will be no involuntary resettlement because of the project. Hence, PS5: Land Acquisition and Involuntary Resettlement, PS6: Conservation and Sustainable Management of Living Resources, PS: 7 Indigenous Peoples, and PS8: Cultural Heritage are not considered to be applicable to the project If IFC s investment proceeds, IFC will periodically review the project s ongoing compliance with the Performance Standards. Environmental and Social Categorization and Rationale: The project includes wholesale/retail distribution of fuel and hotel expansion and the emission/effluent/waste generations are limited. All fuel depots and gas stations were built in recent years on non-industry lands following strict safety design requirements. Key E&S risks and issues associated with this project include: the company s capacity and management systems to asses and adequately manage the E&S impacts of its operations, labor and working conditions including workplace occupational health and safety (OHS), resource efficiency and management of wastes and emissions from the fuel depot, gas station and the hotel in accordance with applicable local requirements and the World Bank Group (WBG) EHS Guidelines, life and fire safety at the hotel and impacts of the transport infrastructure for fuel distribution. Mitigation measures for the potential E&S impacts have been identified and are incorporated into an Environmental and Social Action Plan (ESAP). The potential adverse E&S impacts of this project are considered few in number, of limited significance and readily mitigated through the company s existing robust systems and procedures. This is therefore a Category B project according to IFC s Environmental and Social Sustainability Policy. Environmental and Social Mitigation Measures 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 the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. PS 1 - Assessment and Management of Environmental and Social Risks and Impacts Environmental and Social Assessment and Management System All HIB s projects are small. According to local regulations, HIB provides documents for E&S analysis and risk mitigation plans. Local authorities will review the documents against related regulation and conduct field inspection before issuing E&S permits. HIB has detailed

3 -3- environmental, OHS, fire safety, and Human Resources (HR) requirements in its E&S management programs. For the proposed project, applicable IFC Performance Standards and WBG EHS Guidelines will also be applied in the E&S risk assessments and operations. Policy: HIB has a corporate E&S policy to maintain human health and the environment through professionalism and fairness in services. HIB s policy ensures that its operations have no negative impact on the environment and communities. New employees are trained on the corporate E&S policy during new employee orientation. Identification of Risks and Impacts: HIB screens the environmental and social risks for the new gas stations, and the assessment is registered according to local regulations. To minimize potential risks related to historical contamination, HIB does not purchase old gas stations or industrial lands. All the new gas stations are located along major highway and away from residential areas. HIB has contracted external experts to audit its HR management against local regulatory requirements and international best practices. As part of this project and as indicated in the ESAP, HIB will expand this external auditing to an annual EHS auditing program against local regulations, the applicable requirements of IFC s Performance Standards and the World Bank Group (WBG) EHS Guidelines, and other good international industry practices (GIIP). The program will include both internal and external EHS and HR audits. Management Programs: The company has documented standard operational procedures (SOPs) with well-defined roles and responsibilities and training requirements for EHS management of its operations. Managers at fuel depot, gas station and the hotel all are responsible for educating, training and motivating employees to understand and comply with the EHS performance procedures. Organizational Capacity and Competency: HIB has a corporate liaison for EHS and HR issues at its head office. Managers at hotel, fuel depot, and gas stations have their operational teams to manage the EHS issues at each facility respectively and report the EHS/HR performances to the head office liaison monthly. Monitoring and Review: HIB has an operation control center for fuel business, which has access to all critical locations of the depot and gas stations through closed-circuit television (CCTV). The control center can also talk to each manager on duty and all tanker drivers for routine operational managements and emergency responses. HIB retains its environmental and social performance records through its internal reporting structure. Significant E&S issues are discussed in weekly corporate management meeting. For monthly manager meetings, each manager report E&S performances. All non-compliances identified are recorded and followed up for mitigations. Corporate management periodically inspect each facility. Non-conformities identified are recoded in the corrective action plans, and followed up in details by the management in the future inspections.

4 -4- As part of the project, HIB is currently working to establish an intranet database to better document, report, and improve EHS and HR performances. For the fuel depot and gas stations, currently there are no workplace and ambient air quality monitoring programs at HIB. As indicated in the ESAP, HIB will start monitoring gasoline and propane levels at the fuel storage depot and each gas station for both workplace and ambient air quality. Emergency Preparedness and Response: HIB has fire prevention rules and emergency response (ER) plans for the fuel and hotel businesses. There is a standby firefighting team around the clock at the fuel storage depot. Firefighting equipment is installed at each site and all storage tanks equipped with water sprinkling/cooling system. As indicated in the ESAP, HIB will install foam firefighting capacity at the fuel depot. If needed, the fire trucks from local fire departments can reach the various HIB sites within five to 10 minutes. At both the fuel storage depot and gas stations, there are annual fire drills. As part of the project, HIB will increase the fire drill frequency to quarterly for the fuel depot and semiannually for gas stations. The HIB hotel also has its own ER plan and conducts firefighting and evacuation drills twice per year. The hotel evacuation drills also involve the customers in the hotel. Two local fire brigades are 2 and 4 km away from the hotel, respectively. PS 2 Labor and Working Conditions HIB currently employs approximately 770 employees and plans to hire approximately 150 new employees for the expansion project. An undetermined number of employees will be hired for construction through contractors. Human Resources Policy and Management HIB Petrol has a corporate HR policy that specifies the terms of employment and working conditions. These include procedures related to recruitment, probation, training, performance review, promotion, insurance, salary and compensation, resignation, lay-off and firing, vacation, other leave, and retirement. The company provides training about HR policy and procedures as part of the new employees induction, and all employees have access to this policy. HIB is committed to comply with IFC Performance Standard 2 (PS2) for labor requirements. Through contract documents and inspection, HIB will require construction contractors to comply with the applicable requirements of IFC PS2 regarding working and living conditions and OHS on construction sites. Working Conditions: All workers are on HIB payroll as term employees and there is no temporary labor. Under the employment terms that strictly follow the national labor law, workers are employed on fixed term contracts which are renewable subject to satisfactory performance and availability of work. Overtime work is uncommon and is usually only associated with emergencies. Overtime work during weekends and holidays is compensated on the basis of 1.5 to 2 times of base salary. The average salary at HIB is higher than the salary of similar industries.

5 -5- Workers Organization: There is no independent labor union at HIB. The management has no restriction on labor union and allows collective bargaining. Non-Discrimination and Equal Opportunity: The HR policy articulates the company s commitment to non-discrimination and equal opportunity. No procedures and/or practices were identified as discriminatory during the site visits. All hiring and promotions are merit-based, and race and religion are not in the hiring considerations. Currently, only 15% of the employees are female. As indicated in the ESAP, HIB will develop a program to hire more female employees in the expansion project. Retrenchment: As the company is expanding its operations, no retrenchment is expected at HIB. Grievance Mechanism: The grievance mechanism is introduced during the new employee induction. The employees can report their grievances to HR manager. All the grievances and the mitigations are recorded. The HR manager shall report to the senior management if they could not solve the grievance. HR address and suggestion box are available for anonymous grievances. Protecting the Work Force: HIB complies with national law and does not hire workers below the age of 18 years. HR checks birth and school certificates during the hiring process. No forced labor practices are used by HIB. Occupational Health and Safety: HIB has OHS procedures for different tasks and activities, including rules for the use of personal protective equipment (PPE) and those related to hazardous material handling, working at height or in confined spaces, etc. The OHS procedures are implemented strictly, and OHS accident rates are consistent with good international industry practices (GIIP). There have been no fatal or serious accidents in HIB operations history. OHS training is part of the new employee induction. As part of this project, HIB will also implement annual refresher training for employees in fuel depot and gas stations, and all employees will have to pass exams at inductions and annual refreshers to be able to work at the depot and gas stations. As described earlier, HIB will ensure adequate OHS management by its contractors during construction PS 3 Resource Efficiency and Pollution Prevention Raw Material and Resource Efficiency: The resource consumptions in this project are mainly electricity and water in hotel business. The resource consumptions for fuel storage/whole sale/retail are limited. Water is supplied by the municipality and electricity is purchased from the local grids. HIB hotel management has various programs to reduce the resource consumption. Both the water consumption rate (m 3 /guest/night) and energy consumption rate (kwh/m 2 service space) meet WBG EHS Guideline benchmarks. Effluent and Emission Compliances: Sanitary wastewater from fuel depot and gas station is discharged to municipal sewage system for treatment. Wastewater from current hotel and future expansions are typical domestic wastewater, and HIB has permits to discharge to municipal sewage system for further treatment at municipal

6 -6- wastewater treatment plant. Contaminated rainwater at gas stations is collected for oil separation before discharged. Car washing wastewater is primary treated through onsite filtration before discharged to the municipal sewage system for further treatment. Since there is no manufacturing process, there is no point source emission. HIB does not have vapor recovery installations for its gasoline storage tanks at the fuel depot and gas stations. Fugitive emissions are generated from gasoline filling process. As required in the ESAP, HIB will install gasoline vapor recovery system at fuel depot. As part of the project, gasoline vapor recovery will be incorporated in the new gas stations and existing gas stations will be upgraded with vapor recovery system during future renovations. Fuel Management The fuel depot and all the gas stations were built on non-industry lands and there is no historical contamination. For the future expansions, HIB will also only purchase small portions of agriculture land to avoid historical contamination. All underground tanks have double steel layers, and there is secondary containment dyke with sufficient holding volume for above ground storage tanks at the fuel depot. Valves, connections, and electric groundings for all the tanks are checked monthly by HIB staffs. External specialized company is contracted to clean the tanks and check tank integration every five years. The latest cleanup and integrity check were conducted in All the loading and unloading are automatically controlled. The vaporized LPG during loading and unloading processes is compressed/liquefied and piped back to the tanks. Hotel Management Hotel kitchen employees have annual physical checks and there is no food poisoning accident in the hotel operation history. There is only laundry service at hotel and all the dry cleaning is subcontracted out. Pesticide management is subcontracted to an international pest control company. According to the contract, only environmentally friendly pesticides are allowed. HIB also keeps the material safety data sheets (MSDS) of all the pesticide used. There are always staffs available at the hotel pool and the pool water quality is monitored very two hours. As part of this project, HIB will implement indoor volatile organic compounds (VOCs) monitoring program for both existing hotel and the expansions. Greenhouse gases (GHG): HIB generates approximately 12,000 ton CO2 equivalent per year at current stage, or 18,000 ton after the Project is implemented, mainly from electricity consumption at hotel and depot/gas stations. PS 4 Community Health, Safety and Security The fuel depot is located in a rural area with no community nearby. The filling stations are located along the major highways. Operations of the depot/filling stations have limited impacts on distant communities. HIB has its own logistic department for fuel transportation. All the road tankers were manufactured in West Europe with standard safety features for fuel tankers, including GPS tracking system. HIB fuel transportation management strictly follows requirements of European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR). All drivers have ADR certificates and renewed every five years. According to ADR, all road tankers are inspected annually for tank integrity and go through specified maintenances for every 15, 000 km.

7 -7- Internal reviews and external checks are conducted periodically to ensure HIB s transportations be compliant with ADR requirements. All the truck drivers are required to have necessary trainings and keep valid licenses as required by ADR. All employees are required to have annual medical checks. There are 30 min daily safety briefings for all drivers and 15 min safety briefing for all depot/gas station staffs. Life and Fire Safety Management in Hotel: Life and fire safety elements are included in the existing hotel. Smoke detectors and sprinklers are installed at each hotel room and conference facilities. There are fire hydrants and emergency exits at each floor. Special fire extinguisher system is installed in the commercial kitchens. In line with the ESAP, HIB will contract external expert to prepare a Life and Fire Safety (L&FS) Master Plan and provide certification that L&FS systems for the hotel expansion project will be designed, constructed, and operated in full compliance with local requirements, and in accordance with an internationally accepted L&FS standard, as per the requirements of the L&FS Section of the WBG General EHS Guidelines. Once construction is completed, the expert should confirm that the systems were built as per agreed L&FS design. Security Personnel: HIB has its own security staffs for the fuel depot and the hotel security. The security staffs are not armed. For serious security issues, HIB reports directly to the local police stations. Stakeholder Engagement: HIB engages the stakeholders actively and has routine meetings/contacts with nearby communities. All new/renovation projects are announced at local newspapers and public consultations were held for these new projects. Contact information for community grievances are published at each gas station and corporate website. Each grievance is recorded for followup. HIB has established programs with specified budget for community engagement and development. HIB has a program to support disable people s welfares, including vacations, parties, etc. HIB also support local communities for sport activities and special art programs. Local Access of Project Documentation: HIB will disclose this document at its website ( For inquiries or concerns about the environmental and social impacts of this project please contact: Contact Person: Hysen Lajqi CEO Address: Talinoc I Muhaxhereve, Ferizaj Republic of Kosovo Hysen.lajqi@hibpetrol.com Phone: Facsimile: