Punta Cana Airpt

Environmental & Social Review Summary

This Environmental and Social Review Summary 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 Environmental and Social Review Summary 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.

Project number	27883
Country	Dominican Republic
Sector	Transportation and Warehousing
Department	Infrastructure
Company name	Corporacion Aeroportuaria del Este, S.A.
Environmental category	B
Status	Pending Signing

Date ESRS disclosed	March 27, 2009

Previous Events	Approved: November 16, 2009

View Summary of Proposed Investment (SPI), click here

Overview

Category & Applicable Standards

Key Issues & Mitigation

Community Engagements

Client's Documentation

Overview of IFC's scope of review

IFC’s appraisal of this project consisted on an extensive review of environmental, social, health and safety, and labor information, including the revision of the Environmental Impact Assessments for the existing airport and proposed expansion, and the Environmental Management Plans (Plan de Manejo y Adecuación Ambiental - PMAA) approved by the local environmental authorities. Furthermore, on February 10-12, 2009, an environmental specialist performed a site visit to the Punta Cana International Airport’s (“PCIA” or the “Airport”) facilities, property, and surrounding areas, including wastewater treatment plan (WWTP) and incinerator, as well as the (Esso-Texaco) fuel storage and distribution facilities. Face-to-face meetings with Corporación Aeroportuaria del Este, S.A.’s (“CAE” or the “Company”), technical/environmental/social and operational management staff took place during the site visits. In addition, the IFC team held meetings with (a) Grupo Punta Cana’s (GPC) HHRR personnel to understand HHRR Policy and Procedures, including employee’s freedom to collective bargain, grievance mechanisms, and non-discriminatory practices, and (b) Esso-Texaco personnel to review ESH procedures and safety and emergency preparedness procedures associated with the airports fuel storage facility.

Project description

The proposed investment is to help CAE finance its 2009-2010 capital expansion program. CAE operates the PCIA located on the east coast of the Dominican Republic. The airport serves the Punta Cana and Bavaro regions and is the country’s busiest and fastest growing airport. During 2008, CAE handled approximately 4 million passengers and accounted for 42.4% of total air passengers in the Dominican Republic.

Punta Cana is one of Dominican Republic’s key tourist areas along with Puerto Plata, La Romana and the developing Samaná area. As passenger arrivals increase with the growing popularity of tourist resorts in Punta Cana and Bavaro, CAE needs to invest in new infrastructure and facilities to expand its capacity and manage the increasing demand. The capital expansion program is expected to include (i) the construction of a new runway and taxiway suitable for larger aircraft, (ii) the expansion of the existing passenger terminal, (iii) the installation of additional safety equipment, and (iv) the repair of the existing runway.

Identified applicable performance standards

The Airport is located in a relatively remote and already intervened area, which is fully owned by the Sponsors, and where the airport has been operating for over 25 years. The new runway is being designed to reduced noise to closest receptors, which are sparse high-end residential or vacation homes within the Punta Cana Resort and Club complex. Because the Project is limited to the construction of a new runway and upgrade of an existing terminal and related infrastructure at an existing and operating airport, there is no need for additional land acquisition or the construction of new access roads. There are no threats to biodiversity and no significant habitat destruction is expected. There are no indigenous peoples or sites of cultural or archeological importance affected by the airport’s development. Therefore, the applicable Performance Standards are:

- PS1 – Social and Environmental Assessment and Management Systems
- PS2 – Labor and Working Conditions; and
- PS3 – Pollution Prevention and Abatement.

The following Performance Standards have not been triggered:

PS4 - Community Health, Safety and Security. PCIA operates in compliance with the Civil Aeronautics of the Dominican Republic, as well as with all internationally accepted standards of airport safety and security, and does not involve a specific safety or security risk to a particular community or group. Airport security is coordinated with a special branch of the military know as CESA, and CAE’s own security forces provides guards who receive training on emergency and security procedures and on how to respond commensurate with the risk or security issue at hand.

PS5 - Land Acquisition and Involuntary Resettlement. The Project does not involve land acquisition or the physical or economic displacement of people.

PS6 - Biodiversity Conservation and Sustainable Natural Resource Management. The Project’s direct and indirect influence areas are not likely to impact any ecologically sensitive area or natural habitat. The EIA reports the presence of two plant species under protected CITES status: Brougtonia domingensis (Flor de Mayo) and Guaiacum sanctum (Vera). These two plant species are reported to have stable populations in the Dominican Republic, and its presence is considered rare in the airport direct influence area. At any case the PMAA include a program to identify and transplant any individuals of these two species encountered during the construction of the new runway.

PS7 - Indigenous Peoples. The Project’s direct and indirect influence areas will not impact indigenous peoples or territories.

PS8 - Cultural Heritage. The Project’s direct and indirect influence areas are not likely to impact any site of cultural or historical importance.

Environmental and social categorization and rationale

This is a Category B project because a limited number of specific environmental and social impacts may result from upgrading existing airport facilities and constructing and operating the new runway. CAE has prepared and presented an Environmental Impacts Assessment to the Environmental Authorities of the Dominican Republic and has developed extensive Environmental Management Plans (Plan de Manejo y Adecuación Ambiental - PMAA) to appropriately address these impacts and risks.

Key environmental and social issues and mitigation

PS1- Social and Environmental Assessment and Management Systems:

The GPC is committed to protecting the environment and the health and safety of its employees, contractors, customers, and the public by complying with all applicable legal requirements, and conducting business in a safe and environmentally sustainable manner. The Company has a written Environmental Policy (Declaración Ambiental) which recognizes the importance of environmental protection, natural resources conservation, and community health and well-being as crucial elements for the sustainability of their business. A pivotal element of the written policy focuses on the importance of conservation of energy and water resources, as well as the need to minimize the generation of solid waste and wastewater. The GPC sets energy efficiency, water saving, and solid waste reduction targets every year.

GPC has a centralized Environmental and Social Management Direction, which supervises EHS aspects in all of the GPC companies, including the PCIA. There is, as a minimum, one professional with environmental responsibilities in each of the GPC companies, which indirectly report to the GPC Environmental Director. The GPC has an ad-hoc Environmental Committee made-up by one representative from each company, which meets on a weekly basis to assure all GPC companies are in compliance with local regulation and are appropriately implementing the procedures established in their respective management plans. Furthermore, these meetings are also a place to discuss any unpredicted issues or problems, as well as to set-up water and energy saving practices and eco-efficiency goals for the whole Group. The Environmental Director holds updating meetings with top management on a regular basis, and assures funding to be able to execute the PMAA and other environmental initiatives (e.g. waste reduction, energy efficiency, water conservation, etc).

The Environmental Director also heads the Punta Cana Ecological Foundation, which supports and/or manages (a) a Private Ecological Reserve of approximately 800 hectares, (b) the Partnership for Ecologically Sustainable Coastal Areas – PESCA, which together with the University of Miami promotes research in marine ecosystem management, studies methodologies and techniques for the restoration of beaches, mangroves, and corals, monitors marine water quality, and provides environmental education in local schools, and (c) the Center for Sustainability, which has exchange programs with ten top U.S. universities, including VirginiaTech, Cornell, Duke, and Harvard, supporting the research and educational projects in sustainable tourism of @ 150-200 students per year.

With regard to the PCIA, and consistent with the Dominican’s Republic Environmental Law 64-00 and with the official memorandum from the Sub-secretariat of Environment (Sub-secretaría de Gestión Ambiental - SGA) DEA 0719-04 dated September 13th, 2004; the CAE hired a local Environmental Consulting Firm (AECOMAR S.A) to prepare an Environmental Impacts Assessment (EIA) to identify the environmental and social impacts and risks associated with existing PCIA’s operations, as well as with the construction and operation of the upgraded terminal and new runway. As a result of this process, CAE developed an Environmental Management Plan (Plan de Manejo y Adecuación Ambiental PMAA) in December 2004, which was updated and improved in July 2006 upon the request from the SGA. The SGA granted CAE’s Environmental License No 0568-07 on May 25th, 2007, with the requirement to comply with the PMAA presented and submit environmental reports (Informe de Cumplimiento Ambiental – ICA) every six months.

The EIA includes a description of the existing baseline environment and social conditions, expected impacts and risks, and developed an extensive environmental management plan (PMAA). The principal environmental and social impacts and risks associated with the project are those typically associated with expansion of an existing airport, and include: (a) potentially pre-existing environmental contamination, (b) construction impacts, (c) noise and vibrations, (d) air emissions, (e) energy and water consumption, (f) storm-water and waste water handling and disposal, (g) solid and hazardous waste handling and disposal, and (h) fuel handling and storage (including emergency response). The PMAA developed takes into account all these potential impacts and risks, and include programs to appropriately manage them. The PMAA include: (i) program to mitigate noise and air emissions, (j) water pollution prevention and control program, (k) program to store, use, and dispose solid waste, (l) program to store, use, and dispose of oily residues, (m) program to store, use, and dispose HAZMAT, (n) occupational health and safety program, (o) landscaping, re-vegetation, and erosion control program, (p) environmental education program, and (q) environmental monitoring program. The latter, aims to measure the environmental quality of the entire area covered by the airport, including noise, air pollution, water use, waste management, energy use, and vegetation and erosion control. Frequent internal inspections will be performed to ensure compliance with policies and procedures. In addition, a reporting activity will ensure that monthly results are collected and analyzed by the Environmental Committee.

The CAE is in the process of updating written procedures and work instructions for Environmental, Social and Occupational Health and Safety management consistent with the PMAA, OSHA, as well as the International Civil Aviation Organisation (“ICAO”) safety and security regulations, and is working towards future certification to ISO 9001, 14001, and OSHA18000. This process may require CAE’s to include an EHS Airport’s manager, who will assure the continued application -and required documentation thereof- of the environmental, social, and health and safety management plans required under OSHA’s and ISO’s certifications.

PS2 – Labor and Working Conditions:

Human Resources / Labor: Based on the ratified ILO Conventions that guide this Performance Standard, the Dominican Republic Labor Law provides an adequate framework for protection of the basic rights of workers. GPC has a well developed HHRR department, which provide competitive a compensation package which is permanently bench-marked against multinational competitors and the local tourism industry. The HHRR Policy and Procedure define aspects of recruitment, working hours and overtime, holidays, sick and annual leave, wages and benefits, employees’ and employers’ responsibilities, disciplinary practices, promotion, and a grievance mechanism, among others. Furthermore, these policies and procedures include (a) diversity and equal employment opportunities, stating non-discriminatory practices in terms of socio-cultural aspects such as gender, age, race, religion, etc, (b) disclosure practice requiring that all contracts clearly state terms of employment and working conditions, and (c) the prohibition to hire minors and/or the use of force and/or prison labor. Even though, CAE’s employees have the right to establish and join unions and exercise their rights to bargain collectively, there is no unionized employees currently working for any of the GPC Companies. Nevertheless, the HHRR Director as well as the CEO of the GPC are in constant communication with union leaders, and informally agree on best practices and salary/compensation packages for the sector. Even though GPC does not have a Retrenchment plan or procedure, in the 25 years of operation it has never had the need to massively fire personnel. GPC employees pride themselves of belonging to a big family, and as a matter of fact during the devastation of Hurricane Jeanne in September 2004, when many of the GPC hospitality-related companies ceased operations for nearly three months, not a single employee was let go. The GPC has a total of approximately 1800 direct employees. Pre-employment and subsequent periodic medical checks are performed for all staff.

During construction, the Project is expected to provide a total of 80 direct employees, 300 indirect employees, and 100 temporary employees. All construction workers will come from the surrounding areas, and no workers camps are expected to be built. The total CAE’s workforce is not expected to increase as a consequence of the project, and involves a total of 322 direct and an estimated of 3000 indirect employees. Regular airport operations require approximately 200 CAE employees working at the airport during peak hours. The airport operates 24 hours a day. Employees work three 8-hours shifts, and extra hours are compensated according to the local law (1.35 hours salary per extra hour).

Occupational Health and Safety: The Company is in the process of developing a robust employee occupational health and safety program consistent with the plan described in the PMAA, as well as the International Civil Aviation Organisation (“ICAO”) safety and security regulations, Annex 14, Volume 1 on Aerodrome Design and Operations. PCIA will fully comply with ICAO Annex 14 requirements by December 2009, and already has an initial draft of the Airport’s Safety Management System. Many of these procedures are already applied, but their application has not consistently and systematically been documented and monitored. All personnel are already properly trained in the relevant hazards, safety procedures, and emergency response associated with the tasks they perform, but the documentation is scattered and not systematized. The proposed written system will use risk analysis to develop operating procedures for each task, and will establish the appropriate documentation and operational procedures, training, as well as Personal Protection Equipment (PPE) needed to minimize dangers and risks.

CAE has the highest fire protection and emergency preparedness standards and state-of-the-art fire prevention and fighting equipment (see PS3).

PS3- Pollution Prevention and Abatement:

Pollution prevention and abatement issues of concern at PCIA include: (a) potentially pre-existing soil and ground water environmental contamination, (b) construction impacts, (c) noise and vibrations, (d) air emissions, (e) energy and water consumption, (f) storm-water and waste water handling and disposal, (g) solid and hazardous waste handling and disposal, and (h) fuel handling and storage (including emergency response). The new construction will directly impact 929 m2 of highly intervened land within the existing property of the PCIA.

Pre-Existing Subsurface Contamination: CAE performs monthly water quality analysis at sites all over the property including, water wells, lagoons, water disposal places and potable water for homes and offices, and no PAH or heavy metals contamination has been detected. Even though it may be assumed that because of the volumes of Jet Fuel handled over the last 25 years the Airport has been operating there should be contamination of subsurface soil and ground water due to spills in areas where planes are fueled, CAE management has been extremely careful from the start, given the soil permeability and the importance of the preservation of a clean aquifer for the GPC survival and business continuity.

Construction Impacts: The potential environmental impacts from construction renovation, expansion activities, and the construction of the new runway include fugitive emissions and dusts, vegetation cover removal and soil erosion, noise, waste management, and additional vehicle traffic movement on the airport highway. The EPC contractor and subcontractors are expected to be legally bound to control these to acceptable levels through application of standard construction environmental controls. CAE Environmental Director will supervise appropriate implementation of pollution prevention and control measures, specially spill prevention and protection of the ground water. The relevant recommendations and mitigation measures outlined in the PMAA will be incorporated into the construction contract documents. For example, contractors are required to “wet down” dirt piles to help control dust.

Noise and Vibrations: During the EIA process an extensive noise evaluation was performed, and a complete iso-lines profile was developed for the airport and surrounding areas. In general the average noise levels at the nearest receptors (close to the runway by gate 3) without aircraft traffic is around 50dB[A], during landing and take-off (LTO) noise is at the highest levels of 90dB[A], and during aircraft movements and servicing in apron and parking areas it ranges between 60-74 dB[A]. The noise profile for the airport is not expected to change once the new runway is operating, and if there is any impact it will be a positive one, as the new runway is to the north of the existing one, farther away from the nearest receptors. As a matter of fact, the existing runway is at the end of a set of 140 new residential lots that Punta Cana Resort wants to sell (2-4 US$ million homes), and the new runway will be favorable to reduce the noise levels at these new lots. At any case, the PMAA outlines measure to mitigate noise impacts including (a) implementation of preferred procedures and routes for LTO to minimize potential noise from approaching and departing, (b) adopt noise abatement measure proposed by the aircraft manufacturers such as Low Power / Low Drag (LPLD) procedures to fly aircrafts in “clean” conditions (e.g. no flaps or wheels deployed) as long as possible to minimize airframe noise, (c) minimize braking and reverse thrust on landing, (d) minimize nighttime operations, (e) installation of vegetation sound barriers on the perimeters of the PCIA, (f) provide sound insulation in airport buildings, and even (g) an increase in the LTO fees for older aircrafts which have noisier engines.

Energy and water consumption: All power demand of GPC is self-supplied by two power plants owned by the GPC. The main one, CTSPC, supplies about 95% of the demand, and it is a Wärtsilä fuel-oil power plant with a power generator of 7.2 Megawatts @ 12.47KV and an efficiency of 17.3KWh/gallon. The other 5% is supplied by EMD power plant, composed of five diesel generators with 9.8 MW @ 480Volts and an efficiency of 11.0Kwh/gallons. The average daily fuel oil consumption is 7,200 gallons, for an average of 2.63 million gallons per year (approximately 15% corresponds to PCIA electricity consumption at peak demand). Additionally, as mentioned above, the PCIA has a 450 Kw emergency generator that may be used in case of emergencies. Energy consumption for the GPC is about 135,000 Kwh/day, and for the PCIA is about 21,500 Kwh/day (at peak demand).

The GPC manages generous underground water resources, with twenty seven wells divided in two systems. Ground water is chlorinated and conducted to the GPC areas via a main 24-inch-4 km long pipe, and two 16-inch-4.5-km long secondary pipes. The system produces approximately 31 million gallons of potable water per week, which is enough to supply a demand for the whole complex. Water quality meets Dominican Republic drinking water standards. Daily water demand of PCIA is approximately of 1,400 Mt3. During construction the water usage is expected to range from 6 to 20 m3/day.

The GPC is very resources efficient, and the ad-hoc environmental committee is constantly looking for measure to reduce energy use and water consumption.

Air emissions: The PCIA is located near the coast in a well ventilated region, so in general air quality is good. During construction there will be an increase in dust and particulate matter emissions, but this will be temporary and controlled using standards practices. The air emissions associated with the PCIA operations are those related to the combustion exhaust from aircrafts during LTO and ground operations, from ground service vehicles, vapors from fuel storage and handling, and emissions from local ground transportation activities servicing the airport. All aircraft which use the PCIA belong to internationally recognized and FAA regulated airlines, and comply with the engine emission standards of their manufacturers. The only other relevant point source air emission generators associated with the PCIA are the energy generation plants and the incinerators. The emissions from these point sources are constantly monitored and comply with Dominica Republic air emission regulations. The CTSPC is state-of-the-art plant and generates low NOx that meet applicable PPAH World Bank guidelines. The incinerator SO2 emissions used to exceed the allowed levels imposed by the Dominican Republic, but the GPC has recently purchased two state-of-the-art incinerators which are expected to comply with Dominica Republic emission standards as well as applicable WB PPAH recommended values. Ground service infrastructure is optimized to reduce aircraft and ground vehicle movements on taxiways and idling at the gate, to reduce air emissions as much as possible.

GHG: Since the GPC generates all of the electricity it consumes, the GHG emissions for the PCIA were calculated as an estimated 15% of the total GHG emission generated by the CTSPC generation plant, plus the estimated use of gasoline of automobiles servicing the airport. The estimated climatic footprint for the PCIA activities is very low, or approximately 5,151 tCO2/year.

Storm-water and waste water handling and disposal: Sewage generated at the terminal and service areas, is collected and treated in a secondary Waste Water Treatment Plant (WWTP), with an anaerobic digestor connected in series with two aerobic oxidation ponds. This WWTP is one of the three WWTPs owned and operated by the GPC. Treated effluents from these WWTPs are used for irrigation of the golf courts and landscaping through GPC’s property. These WWTPs jointly produce approximately 12 million gallons of recycled effluent per week, which is used to irrigate the golf courts and other green areas through the resort and GPC companies.

Residual waters from the aircrafts average about 710 m3/day; these blue-waters are collected in special sanitary residues reception trucks (trade name “Green Monster”), which provide a captured flow of all aircraft waste water and materials directly from the service vehicle, chemically treats /neutralizes it with FAA approved materials prior to their release to the GPC domestic waste water collection and treatment system. With appropriate maintenance and operating improvements, the additional hydraulic and pollution loads generated by the terminal expansion can be adequately managed and treated in the existing facility.

PCIA has a surface and storm water collection and drainage system, which will be sufficient to manage surface water runoff from the existing and new runways, aprons, car parks, and maintenance and ground handling areas. The airport storm and surface water collection systems, separate from the waste water system described above, goes directly to ground. Ground water is periodically monitored for contaminants.

Solid and Hazardous Waste Handling and Disposal: Solid wastes generated by airport operations is collected and taken to a GPC owned and operated recycling and incinerator facility (CRI – Centro de Reciclaje e Incineración). On average, the airport generates 111,463 kilos of solid waste per month of which 49% is incinerated, 39% recycled, and 12% directly sent to the landfill. Recyclables (e.g. glass, cardboard, aluminum cans, etc) are compacted and sold. The incinerator facility has an area of approximately 2,000 m2, and is equipped with two Sprong incinerator, each with capacity to process 1,600 kg/day. There are a total of six full-time employees at the CRI, which operates seven days a week. Ashes and solid waste that cannot be incinerated are compacted and collected by GERON S.A., a licensed contractor, and disposed off-site at government-approved landfill sites. The relatively small amounts of hazardous wastes generated – primarily waste oils from ground vehicles maintenance operations – are stored in drums and periodically collected and recycled by a licensed contractor called SERVAMAR. S.A.

Fuel/Hazardous Materials Storage and Handling: The principal hazardous material handled at the PCIA is Jet A-1 Fuel. The Airport has a central fuel storage and distribution facilities (operated by Esso-Texaco), located 200 meters east of the terminal building in an area of approximately 6,400 m2. This facility contains three above ground Jet Fuel A-1 storage tanks, with capacity of approximately 750,000 gallons (enough for about 5 days of operation). There are plans to build a fourth tank, to increase capacity to 1 million gallons. Texaco operates the fueling activities under the highest international industry standards, with appropriate spill containment infrastructure and emergency procedures. All personnel involved in fueling activities are trained under NFPA 407 and NFPA 30 for handling fuel at airports. Texaco has three ground water monitoring wells, and ground water quality is constantly monitored to assure there are no leaks or seepage.
Fuel is distributed to the aprons by a fuel hydrant system and trucks. EHS risk management practices include secondary containment and prevention of leaks, spills, and overflows.

Emergency Preparedness and Control: CAE takes aircraft emergency preparedness very seriously, and has a specific Fire and Emergency Response Division which is staffed with a total of 25 fully trained employees per shift, which have coordinated a joint emergency response plan with Higüey’s Fire Department, Red Cross, and Defensa Civil. CAE’s fire-fighting and emergency control facilities have state-of-the-art equipment, including 4 ambulances, 1 Oshkosh Snozzle fire truck with 3000 gallons of water plus foam and dry chemicals; 1 Snozzle fire-truck with 1500 gallons water plus foam and dry chemicals; 2 T-3000 fire trucks with 3000 gallons of water, plus foam and dry chemicals; 1 Striker 1500 gallons Rapid Intervention Vehicle with foam and dry chemicals; 2 water tankers, each with 5000 gallons of water and a Pierce Wildland Structural truck with 650 gallons of water plus foam. Additionally, there is a water storage tank at the airport with capacity for 390,000 gallons.

CAE reports on average 80% of airport emergencies are aircraft related, such as hot brakes, flight control, smoke in cockpits, fuel spills, tire problems, hydraulics, etc. The remaining 20% of emergencies deal with small fires in residential areas, automobile accidents, truck turnovers, vehicle fires, passenger illnesses, etc.

CAE’s Emergency Response Plan was developed in compliance with ICAO’s Annex 14, Volume 1 on Aerodrome Design and Operations and Airport Service Manual, Section 9, relative to airport emergency preparedness and response. This plan is fully integrated with the National Emergency Plan for the Dominican Republic, and includes procedures to react to both, airport operation emergencies (e.g. aircraft accidents inside and outside of the airport, airport fires, etc.), and catastrophic or illicit events (e.g. bomb threats, hurricanes, earthquakes, etc). The plan includes a 911 phone system, the location of the Operations Center in cases of emergencies, the different levels of alert, chain of command, procedures, and the contacts of the different groups to take action. CAE holds small simulated and desk-top emergency drills two or three times a month, a desk-top full drill once a year, and a real full scale drill every two years. The last annual drill was performed on October 2008, and included SSEI (Servicio de Salvamento y Extinción de Incendios) emergency response drill to assess timed response, a bomb threat drill, and a mass casualty emergency drill. The next bi-annual full scale exercise will be in 2009, and will involve the COE (Centro Operacional Emergencia), and will include communications, coordination of emergency data, family support, press room briefings, and the participation of airlines to activate their emergency operations center so that Punta Cana and the airlines can simulate what coordination, communications, family care, go-team coordination, and national aeronautic safety investigations will be needed to be efficient and effective should a real disaster occur.

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