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| ERSA Energias |
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| 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 | 27870 |
| Country | Brazil |
| Sector | Electric Power |
| Department | Infrastructure |
| Company name | Empresa de Investimentos em Energias Renovaveis S.A. |
| Environmental category | B |
| Status | Pending Signing |
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| Date ESRS disclosed | July 31, 2009 |
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| Previous Events | Approved: September 10, 2009 |
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| View Summary of Proposed Investment (SPI), click here |
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| Overview | Category & Applicable Standards | Key Issues & Mitigation | Community Engagements | Client's Documentation |
| Overview of IFC's scope of review |
IFC reviewed a series of documents describing ERSA’s (“ERSA” or the “company”) environmental, health, and safety and social management systems as well as corporate social responsibility programs, including:
- EIAs for a sample of hydroelectric projects under construction and planned wind projects
- Environmental and social action plans for a sample of hydroelectric projects under construction
- Status report for environmental permits
- Examples of construction contractor legal agreements
- Examples of environmental consultants legal agreements
- Monthly land purchase report issued to the electric utilities regulatory agency
- Environmental regulatory agency quarterly reports
- CESBE (construction contractor) environmental, health and safety (EHS) management system
- Individual labor contract used by CESBE to hire project labor
- Training record of CESBE (example of daily training talk record)
- ERSA Employee Code of Conduct
- Occupational health and safety (OHS) audit/monitoring reports prepared by CESBE
IFC representatives visited some of ERSA’s operating plants, all located in the Irani River in the State of Santa Catarina, consisting of a 13MW project under construction (Arvoredo) and a two operating facilities, the 21MW Alto Irani and the 16MW Plano Alto plants. IFC interviewed Company officers and key management staff involved in the Company’s environmental and social management. |
| Project description |
The Project consists of an equity investment in Empresa de Investimento em Energias Renovaveis S.A. (“ERSA” or the “company”), a company established in 2006 to explore renewable power generation opportunities by developing, building and operating a portfolio of small hydropower plants (“SHPs”, defined by Brazilian regulation as those with less than 30MW of installed capacity) and wind farms and biomass-fired plants. ERSA has a portfolio of 512.5MW of installed capacity with plants located in the states of Minas Gerais, Sao Paulo, Santa Catarina and Rio Grande do Norte (in Brazil’s Northeast). The current portfolio is comprised of: three SHPs in operation (47MW); nine SHPs under construction (125.5MW); eight SHPs (128.5MW) under development; and nine wind farm projects (211.5MW) under development.
In addition, the company is prospecting approximately 3,000 MWs of new hydro electric and wind power potential, including small and medium size facilities across the country.
The company has obtained ISO 9001:08 certification and is preparing itself to obtain ISO 14001 and OHSAS 18001 certifications. |
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| 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: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
- PS5: Land Acquisition and Involuntary Resettlement
- PS6: Biodiversity Conservation and Sustainable Natural Resource Management
- PS8: Cultural Heritage
PS7: Indigenous Peoples does not apply as ERSA conducts a screening process early in the project identification and development stage with the objective of avoiding indigenous lands and legally protected areas. |
| Environmental and social categorization and rationale |
The project is categorized B according to IFC’s Environmental and Social categorization process as its consists of an equity investment in a company focused on the development of small hydroelectric power as well as wind power projects. In the development process, the company screens potential project locations for numerous criteria which include avoidance of legally protected areas and indigenous peoples’ lands. The company is demonstrating a clear commitment to prevention and mitigation of environmental and social impacts of its projects as evidenced by the dedication of adequate financial and human resources to the management of these issues. The company has a team of environmental and social specialists led by some the most experienced technical experts in Brazil who are implementing a well organized management plan to effectively manage potential environmental and social impacts.
ERSA is dedicated to the development of hydroelectric and wind power projects nationally in Brazil. The hydroelectric projects developed by ERSA are defined as small hydroelectric projects (Pequenas Centrais Hidroelectricas or PCHs) by Brazilian legislation as they are limited to less than 30 MW total power and have reservoirs of approximately up to 300 ha in surface area. Most of the hydroelectric power projects of ERSA’s portfolio have the typical layout of small run-of-river projects, with relatively small (hourly-daily) storage at the headworks generating basically with the available river flow at any time and spilling any flow which exceeds the capacity of the waterways. The headworks sometimes consist of a weir or small dam to divert water into the waterway or dams with a total height of up to 40 meters and a length of about 100 meters. The waterways conduct the water from the headworks to the powerhouse, and then on to the discharge point (in the same river). In schemes where the generating head is provided by the dam, the waterways are usually short. However, in most ERSA projects the head is created through by-passing a steeply falling reach of river, or by transfer from a high elevation river point to a low elevation site, with longer waterways. The waterways of the ERSA projects comprise tunnels, canals or pipelines, depending largely on the topography, but also on the construction cost and economics.
Key environmental and social issues are mostly centered about the construction phase of the hydroelectric projects and include: potential social and health impacts on small rural communities arising from the temporary influx of construction labor during the construction phase; potential, but very limited, involuntary physical or economic displacement arising from the creation of reservoirs in some of the projects; occupational health and safety issues during construction phase; and potential impacts on biodiversity from land clearing and inundation activities. |
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| Key environmental and social issues and mitigation |
PS1: Social and Environmental Assessment And Management Systems:
- Environmental and Social Assessment - ERSA complies with the Brazilian requirements to conduct environmental and social impact assessments for hydroelectric, wind, and biomass energy projects. ERSA develops as well as acquires project development rights from companies who have already obtained the water rights and environmental licenses. Therefore, environmental and social impact assessments (ESIAs) are typically conducted by the other developers prior to project acquisition. Although the actual requirements vary slightly from state to state, the state of practice for environmental and social impact assessments throughout Brazil is fairly uniform following a stepwise licensing process applicable to all industrial activities and entailing the preparation of feasibility studies in order to obtain preliminary licenses. This is normally followed by more detailed environmental and social impact assessments required to obtain first, a construction license (based on the regulator’s review of project impacts and mitigation measures), followed by an operating license that is issued after regulatory inspection of the fully constructed project, just before initiation of operations. According to Brazilian law, wind power projects are only required to have a limited environmental impact assessment (Relatorio Ambiental Simplificado or RAS) as a condition for obtaining the environmental license. ERSA’s investment plan includes development of nine (9) wind projects with a total capacity of 211.5 MW in the State of Rio Grande do Norte.
ERSA reviews the ESIAs and RASs to identify any gaps in the assessment and to ensure that the information is current to satisfy the needs for the preparation of project-specific environmental and social management plans. As part of this review, the company identifies gaps in the scope of the assessment to ensure that it includes the information required to evaluate compliance with IFC’s Environmental and Social Performance Standards (PSs).
- Management Program – ERSA has an environmental and social policy published on its external website which focuses on the following aspects: commitment to sustainable development; emissions and waste management; supply chain management; protection of natural resources; respect for communities; and communication and transparency. Environmental management programs are organized at the corporate level by an environmental management group with the support of external technical consultants who assist ERSA in the preparation and implementation of environmental management and monitoring plans at the project level. The company’s environmental and social management program includes a review of the environmental assessment documents, contracting and supervision of consultants to assist in the preparation and monitoring of environmental and social management plans, and input into the construction contractor legal documents to ensure compliance with environmental permit requirements.
Construction and operational phase environmental management plans (PCAs) are prepared for each project based on the information presented in the ESIAs and the identification of any other potential environmental and social impacts. During the construction phase, contractors are assigned responsibility through contracts requiring compliance with applicable environmental license conditions and other management plan requirements. The PCAs include specific management programs for such aspects as: liquid effluents and solid wastes; noise and vibrations; erosion management; reinstatement of soil and vegetation in affected areas; limnology and water quality monitoring; vegetation removal; reinstatement and enrichment of riparian vegetation; fauna and flora rescue programs; herpatofauna management; ictiological conservation (including monitoring, rescue, and transfer); environmental education; community communication and engagement; coordination with local authorities and community organizations; repair of affected infrastructure; epidemiological monitoring; archeological resource management; workforce mobilization and demobilization; community safety; vegetation management in the watershed and along the stretch of river affected by reduced flows; environmental conservation in the areas surrounding the reservoir; etc.
The company will develop and implement a program to address the occupational health and safety (OHS) and labor aspects applicable to the construction and operational phases of its projects to address Brazilian legal requirements and IFC’s Performance Standard 2 – Labor and Working Conditions. Through the OHS and labor program, ERSA will ensure that health and safety requirements are effectively incorporated into the project at the design stage.
- Organization – Responsibility for the management of environmental and social aspects at the Corporate level is assigned to a Sustainability and Environmental Officer, who belongs to the company’s senior management team, reports directly to the Company CEO. The company relies on the services provided by specialized consulting companies in the preparation and implementation of environmental and social impact studies, environmental and social management plans, and monitoring activities. The company’s Sustainability Officer oversees an Environmental Unit responsible for the management of the environmental permitting process, land acquisition process, community engagement activities, and environmental and social monitoring and reporting activities through preparation of consultant terms of reference and review and follow-up of consultants’ reports. Community engagement activities (described under the “Client’s Community Engagement” section below) are mainly organized and managed through the Environmental Unit with support from external consultants, construction contractors, and company representatives at the construction sites.
ERSA acts as its own general contractor managing both the bidding and implementation of construction contracts which are implemented by well established Brazilian construction companies, such as CESBE (the construction company present in the only site visited during construction activities). This policy aims to keep the company close to the day to day of the construction in order to mitigate risks, assure adequate management as well as to reduce project development and construction costs. ERSA also contracts the operation and maintenance services of power equipment providers such as Alstom for the newly constructed facilities for an initial period of up to 5 years. ERSA contractually requires the operating company to comply with applicable labor and occupational health and safety standards. Construction contractors interviewed by IFC during a field visit were found to have a team dedicated to the management of occupational health and safety as required by Brazilian Law including a Health and Safety Supervisor and Health and Safety Technicians.
Going forward, ERSA will contract the services of a qualified Coordinator of Occupational Health and Safety (OHS) to supervise the OHS aspects of construction and operational projects at the Corporate level. This new position will report either to the Environmental Unit or to the Corporate Human Resources Department.
- Training – ERSA hires trained and experienced professionals who as part of the Environmental Unit oversee consultants’ and contractors’ preparation and implementation of environmental and social management programs. Consultants are selected based on their qualifications and training; they must also be professionally registered under the Federal Technical Registry of the Ministry of Environment. Construction companies are contractually required to comply with regulatory requirements regarding worker training. ERSA requires construction and operations contractors to comply with Brazilian training standards. CESBE’s training program applied to all construction workers includes induction on the construction company’s Safety Policy as well as Brazilian labor law and Regulatory Norms and covers the following aspects: use of Personal Protective Equipment (PPE); electrical safety; machine safety; unhealthy and hazardous activities and operations; ergonomics; civil works services; fire safety; sanitary and welfare conditions at work; unsafe practices; implications of personal safety factors in accident / incident rates; safe work permits; housekeeping practices; safety signage; work in heights and use of personal fall protection; use of lifting equipment; and emergency planning (including first aid and rescue operations). CESBE maintains registries of the training courses recording attendance and topics covered.
At the Corporate level, ERSA has a Training Policy applicable to management level employees which outlines eligibility criteria for the pursuit of Masters in Business Administration (MBA) studies, technical courses and seminars, and English language training. In addition, the company provides internal training programs to all its employees, including subjects such as regulation, commercialization, geology, hydrology, electrical equipment, operation and maintenance, wind projects, environmental studies, contracts, mechanical equipment, internal processes, quality, etc.
As part of the implementation of the OHSAS 18001 the company will implement an occupational health and safety program.
- Monitoring – ERSA has a well established monitoring program covering key environmental, health, safety and social indicators applicable to its operations. Monitoring activities are consistent with the aspects covered by aforementioned construction and operational phase management programs and include such aspects as: liquid effluents and solid wastes; noise; vegetation management; limnology and water quality; ictiological conservation (including monitoring, rescue, and transfer); community communication and engagement; etc. IFC found evidence that the company’s general construction contractors (CESBE) conduct occupational health and safety (OHS) monitoring activities as required by Brazilian Law. These activities include such aspects as workplace exposures to noise and dust to help determine the level of protection required as well as employee compliance with the required use of personal protective equipment (PPE). Contractors also monitor the frequency and severity of accidents among the workforce to evaluate the effectiveness of preventive measures.
- Reporting – ERSA receives monthly or more frequent reports prepared by external environmental consultants covering the aforementioned construction and operational phase environmental monitoring activities. Results of these monitoring activities are compiled and summarized into an internal Management Report on Sustainability, prepared monthly. The internal management report is organized by each facility either under construction and operation and covers a wide range of activities further organized under a summary of key accomplishments and proposed future activities. The internal report specifically includes such aspects as: status of environmental licensing; community engagement activities; audits and other supervisory activities of regulatory agencies; and status of engagement with local public authorities (on such aspects as health and security), among others.
In order to report the results of environmental and social monitoring activities, the company prepares and distributes to the community brochures and newsletters. Moreover, the company representatives promote contacts and meetings with the community in order to answer questions and to disclose actions of other environmental programs and the progress of works.
ERSA will complement these external reporting activities with standardized environmental and social monitoring reports which may include printed media available in centrally located points in local communities; summaries through company’s external websites, and/or summaries in company Annual Reports.
As part of the implementation of OHSAS 18001 certification ERSA will ensure that the results of OHS monitoring activities are compiled into internal reports, that are reviewed by corporate officers who have ultimate operational responsibilities, and externally.
PS2 - Labor and Working Conditions
- Human Resource Policy and Management – The company has a total of 99 direct employees, 59% of who are dedicated to operational activities with the remainder dedicated to administrative functions (i.e. project planning, accounting, human resources management, etc). Company operations have grown significantly over recent years. As a result, the number of employees grew from 23 in December 2007 to 83 in December 2008 and to 99 in June 2009. The company currently communicates employee rights and responsibilities through employment contracts and through a Company Code of Conduct. The Code of Conduct covers company policy regarding ethics; commitment to sustainable development; respect for the law; relations with shareholders and investors; relationships with service providers; relationships with clients; relationships with project affected communities; position on child labor and slave labor; corruption; moral and sexual abuse; drugs and alcohol; use of firearms; conflicts of interest; right of privacy; use of company assets; and grievance process.
ERSA has developed a Human Resources Procedure designed to orient the work of the Human Resources Department. The procedure covers such aspects as staff recruitment and selection; contracting; job descriptions and salary structures; promotions; performance evaluations; holidays; responsibilities; benefits; and end of employment.
The company will develop a formal Human Resource Policy consistent with local labor law and IFC’s Performance Standard 2 to complement the information provided to employees through the labor contracts and Code of Conduct. The company will ensure that the Human Resources Policy clearly communicates to employees such aspects as: entitlement to and payment of wages; permissible wage deductions; overtime payments; hours of work and any legal maximums; entitlement to leave for holidays, vacation, illness, injury, and maternity and other reasons; entitlement to benefits; employees’ right to form and join workers’ organizations of their choosing and to bargain collectively with the employer; disciplinary and termination procedures and rights; conditions of work; promotion requirements and procedures; and vocational training opportunities.
- Worker’s Organizations – IFC found no evidence that ERSA restricts employees’ rights to freedom of association and collective bargaining.
- Grievance Mechanism – The company employees are currently able to lodge complaints internally through the Human Resources department and Company management, although there are no written procedures or formal mechanisms, and externally through the public Labor Rights system (Justica de Trabalho). The company will create and implement a formal internal grievance process which will allow: (a) any employee grievance by individuals or groups (including anonymous complaints) to be presented verbally or on in writing, without the risk of reprisals; documented and reviewed by company management and subject to a timetable for formal response and resolution; (b) workers the opportunity to meet with management, accompanied by a representative or companion; and (c) an appeal mechanism. The company will make the grievance procedure available to all existing and new employees at the time of hire (as part of its Human Resource Policy or other document).
- Occupational Health and Safety – Although the construction and operational phase contractors visited during IFC’s appraisal have formal occupational health and safety (OHS) management programs, ERSA will develop and implement a corporate OHS program which includes a set of operating objectives based on the identification and quantification of workplace risks coupled with applicable legal and other requirements. As one of its central objectives, the program will help ensure consistent application of worker accident prevention programs, particularly by construction contractors, monitoring contractors compliance with applicable Brazilian Regulatory Norms (NR) including those related to such aspects as: identification and monitoring of chemical and physical hazards through a Workplace Environmental Risk Prevention Program or PPRA (“Programa de Prevenção de Riscos Ambientais”); use of personal protective equipment (PPE); emergency preparedness and response; medical surveillance (PCMSO or “Programa de Controle Médico de Saúde Ocupacional”); and joint health and safety committees (CIPA). In addition to the work conducted by the contractors’ CIPA committees, ERSA will also monitor information from occupational accidents, incidents, and health issues provided by contractors and will audit contractors’ compliance with applicable requirements.
PS3: Pollution prevention and abatement:
ERSA requires that all construction contractors comply with the Environmental License conditions and the requirements of detailed, project-specific, Environmental and Social Management Programs, covering such aspects as fugitive dust from earth moving activities; noise and exhaust from construction machinery; sanitary effluents from worker facilities, and non-hazardous and hazardous solids wastes.
-Water quality management – Construction activities for both hydroelectric and wind projects require the temporary storage and use of fuel and lubricants for heavy equipment. Fuel is delivered by authorized service companies and stored in portable aboveground storage tanks with secondary containment. Environmental management plans include spill prevention and contingency measures to prevent potential impacts to soil and water resources from storage and handling of fuel, including the construction of secondary containment areas for fuel loading activities.
ERSA’s current and planned hydroelectric power projects fall under the category of small hydroelectric projects, meaning that they have relatively small (hourly-daily) storage at the headworks to regulate flow through the power station. This type of project design tends to have less of a negative impact on the quality of surface waters such as changes in water temperature or those related to inundation of vegetative biomass (i.e. dissolved oxygen, total dissolved gases, and water clarity) or those associated with watershed runoff. Additionally, ERSA’s environmental management plans address such issues as conservation and enhancement of forest cover riparian areas or through educational programs with owners and occupants of lands in project watersheds to help preserve forest cover and minimize sources of contamination from agricultural and other activities specifically identified in the project area of influence.
- Waste management – The main sources of waste generation during the construction of hydroelectric and wind projects occur during the construction phase and include excavated materials from civil works site preparation (e.g. soil and rock materials); miscellaneous organic and inorganic domestic waste from work campsite food service and offices (e.g. food, paper, and plastics); equipment shipping materials (e.g. wood crates, cardboard, etc); and construction equipment maintenance wastes (e.g. waste lubricants, used oil filters, etc). Additionally, wastewater treatment sludge and other sanitary wastes are respectively generated from the temporary operation of a sanitary wastewater treatment plant in the construction site and the use of portable toilets in field construction areas. Based on a review of a representative sample of waste management plans prepared for projects under construction or already under operation at the time of IFC’s appraisal, all of these wastes are managed according to Waste Management Plans specifically prepared for each project. Soil and rock materials are placed in designated disposal areas and later reinstated with native vegetation. Recyclable portions of domestic and equipment shipping materials are recycled where feasible based on the availability of local markets while remaining portions are transported by authorized service provider to authorized municipal waste disposal sites. Waste lubricants and other potentially hazardous materials are temporarily stored in closed containers and placed in specially designed areas with impermeable floor and protection against the rain / elements, accessible only to authorized persons. They are managed by licensed transport contractors and treated or disposed of in licensed facilities. Sanitary wastewater and its treatment sludge are disposed of at the nearest facilities from the public sanitary waste management entities.
- Management of emissions and discharges – The main sources of emissions and discharges from both hydroelectric and wind power projects occur during construction activities and include dust emissions from site construction activities following vegetation clearing including equipment traffic in internal roads and dust emissions from placement of excavated materials in approved excavation fill disposal areas. Construction projects also generate effluents from the day work camp sanitary wastewater treatment facility. Dust emissions are minimized by humidifying dirt roads and other exposed materials such as excavated materials and soil / rock accumulation sites as well as by limiting the speed of heavy equipment transit on dirt roads. Sanitary wastewater from workers camps is typically treated via temporary sanitary water treatment plants to meet Brazilian water quality standards. During the operational phase, sanitary wastewaters from the control rooms are typically disposed of via on-site septic systems.
Ambient Noise – During the construction phase, ambient noise concerns are managed by proper maintenance of construction equipment exhaust noise controls and through restrictions on construction site operating hours. Ambient noise issues applicable to the operating phase of future wind projects will be managed through assessment of potential impacts to nearby communities / residents, if any, and placement of proposed generators in consideration of required distances to avoid negative impacts.
PS4: Community Health, Safety and Security
- Infrastructure and Equipment Safety - During the construction phase, the principal risk to health and safety of the community typically consist of traffic and pedestrian safety from the transport of construction materials, equipment, and workers to and from the construction sites and potential for structural damage to local housing located adjacent to transport routes. Other potential impacts include hazards associated with the transport and use of explosives for site excavation activities. ERSA evaluates potential impacts from transport activities and performs limited access route improvements to ensure the safety of access of transport equipment to the project sites. ERSA requires contractors to adhere to driver safety programs requiring transport equipment operators to respect speed limits according to local requirements and consistent with the quality and location of local roads.
Access to dams and water diversion structures and other project infrastructure (i.e. surge shafts) are protected from public access with warning signs and fencing to discourage and prevent unauthorized access. Civil works are designed and constructed according to good international practice to address potential risks associated with natural hazards such as floods and seismic activities, as identified in the project feasibility studies. Dams and other structural elements are designed by qualified and experienced professionals with proven experience in projects of a similar complexity. The designs are reviewed by experienced project managers hired by ERSA and then monitored during construction by external, internationally recognized geotechnical safety and concrete specialists. A dam safety report is then issued to ANEEL, the electricity sector regulatory agency, documenting engineering and construction supervision results.
Other possible risks to communities near the project include drowning hazards due to the new reservoirs or to downstream users of the river or a passerby due to discharge of water in the tailrace during normal or emergency events. This is typically handled by warning signs along the shore of the reservoir as well as access control (fencing) to prevent access into high risk areas. The company prepares emergency preparedness and response plans for the operational phase of projects. Site access control and security are provided by private companies and unarmed security guards although ERSA also enters into cooperative agreements with public security forces to ensure coordination due to increased need for public services arising from influx of project labor.
- Communicable Diseases - Most projects include the construction and operation of labor camps although workers also originate or are housed in space available in urban centers located near project sites, taking as much advantage from the availability of local labor. In such cases, construction contractors also provide daily transport from these population centers and appropriate amenities/facilities during work hours. Due to the influx of project labor, ESIAs typically include assessment of potential epidemiological impacts as well as potential impacts on existing public health services. In order to minimize negative health impacts ERSA undertakes community engagement activities, particularly coordination with public health and educational services entities and assists them in increasing their capacity to meet the project-related demands. Additionally, ERSA requires contractors to adhere to Brazilian worker housing standards which provide detailed health and comfort specifications for worker housing facilities.
PS5: Land Acquisition and Involuntary Resettlement
ERSA’s initial approach during every project design is to avoid social impacts, particularly physical or economic displacement. Where displacement cannot be avoided, ERSA’s policy is to acquire properties or establish right-of-ways through direct negotiations with the landowners. ERSA then makes offers to the landowners based on the market value of the land following title verification, a property survey, and a commercial / reference valuation (following Brazilian Technical Norm 14.653-3/2004). The valuations provided to landowners are performed by registered contractors and include an explanation of the reasons for the assessed value. ERSA resorts to judicial expropriation through a Declaration of Public Utility only as a last resort in cases where it is not possible to reach an agreement with the landowner.
ERSA maintains continuous communications with local communities about matters that concern them, including land acquisition. ERSA documents all land transactions and payments for damages in written agreements or contracts as required by the electricity sector regulatory agency ANEEL. Where resettlement is required, relocation plans are based on consultations and agreements with displaced persons and communities.
The small hydro projects usually have small flooded areas, where the productive standards of the land commonly are not affected and in most cases the families do not need to be displaced. However, in cases there is a need for physical or economic displacement, the company adopts criteria to compensate the families involved, either socially and/or financially. The starting point is based on the social-economical study of the area, called “Cadastro Econômico”, which reveals the identity and the way of life of the families, as well as determines the best compensation alternatives. The negotiation process and the definition of the compensation varies according to the degree the families are affected. In the land which does not have its production and habitability capacity affected, the financial indemnification is adopted in order to compensate the economic loss. In cases where the land which the production and habitability capacity is affected, besides the financial indemnification, the social compensation is applied, through benefits such as acquisition of land to form rural group resettlement areas or self resettlement, when the family receives a Letter of Credit to acquire another property. In the acquisition of new areas the company makes the best efforts to keep the same characteristics of the old property, preferably in the same region, in order to minimize the impacts, providing better adaptation.
In order to respond to the community requirements, the company has offices in each municipality of its plants with professionals from areas such as agronomy, social and legal.
In the case of the small hydros Corrente Grande and Barra da Paciência, the social benefits extended to the families affected were defined in an agreement (“Acordo Social”) signed with the members of the community involved, contemplating owners and not owners (renters, employees, etc). These projects resulted in the need to resettle approximately 32 families whose livelihoods will be successfully re-established as foreseen in respective Resettlement Action Plans.
ERSA will prepare a formal Land Acquisition and Resettlement Framework in alignment with IFC’s Performance Standard 5 and local requirements to help ensure a consistent approach to these processes in all projects.
PS6: Biodiversity Conservation and Sustainable Natural Resource Management:
Brazilian environmental regulations include requirements for the assessment of potential impacts to biodiversity and implementation of preventive and corrective actions. ERSA is supported by external experts to implement biodiversity conservation programs which may include rescue of fauna and flora from potentially impacted areas and offsetting or conservation mechanisms required by Brazilian law. These conservation mechanisms include replacement of riparian vegetation on reservoir areas, creation of legal reserves, and interconnection of legal reserves to create wildlife corridors and otherwise enhance the biodiversity conservation value of protected areas. ERSA ensures that environmental impact assessments where potential impacts to biodiversity are identified include identification of the presence of IUCN Red-listed critically-endangered or endangered species, concentrations of nationally listed threatened species, endemic or restricted-range species, migratory or congregatory species; description of whether the site is located in an rare, threatened or endangered ecosystem; and other information necessary to evaluate the presence and potential impacts to biodiversity resources of critical importance to biodiversity or local communities in compliance with IFC’s PS6 requirements.
ERSA’s environmental management plans (EMPs) include detailed biodiversity protection programs addressing such aspects as the protection and control of vegetation cover; forest potential; habitat; wildlife loss; alteration of aquatic ecosystems; and potential impacts to protected areas. Where necessary, EMPs further include detailed plans for the rescue and relocation of wildlife in the project affected areas. ERSA’s project selection process includes screening to avoid development of projects in legally protected areas.
Ecological flow of hydroelectric projects – ERSA conducts baseline assessments of hydrologic resources and aquatic ecology in all projects to evaluate potential impacts and to help establish the minimum ecological flow. Assessment activities include identification of aquatic species, including micro-invertebrates, plants, and fish species. The ecological flow, or minimal residual flow, is a reference value that must be kept in the river after the dam and before the power house of the plant. According to the current legislation, the ecological flow is established by the hydrologic method of the Q7.10, meaning the minimal flow of seven days in a recurring period of 10 years, guaranteeing 70% of the Q7.10 in the minimal residual flow. Currently there are several arguments against this methodology as it is focused only on a minimal flow and not in hydrological regimes. Different hydrological regimes make it difficult to adopt the same criteria in different regions. Moreover, the diversity of human uses for the water and the existent impacts require the criteria adopted to be different in each region, or even in each basin. Therefore, the project owners seek to do the analysis on a case by case basis, presenting in the environmental studies other reference values and methodologies. Such studies aim to analyze the specificities of each region and to determine ecological flows coherent with the energy generation, as well as with the socio-economic aspects.
- PS8: Cultural Heritage:
In compliance with Brazilian regulatory requirements, ERSA identifies the potential presence of archeological sites during the Environmental and Social Assessment process and, where required, prepares and implements rescue plans ahead of construction activities after it is concluded that no other alternatives exist to avoid disturbance of these archeological sites. Rescue plans are approved by the competent authorities. Professional archaeologists monitor project construction periodically and construction contractors are required to implement chance find procedures that preclude disturbance of any chance finds until a professional archaeologist has assessed the site and recommended actions consistent with Brazilian regulations. |
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| Client's community engagement |
Brazilian environmental licensing requirements include a comprehensive public consultation process beginning with the publication of a summary of the environmental and social impact studies in the local government offices, such as municipal offices, for a period of public review, together with an announcement soliciting comments from the public. This publication and announcement are followed by dissemination of project information to residents of potentially affected communities and invitation for a public audience held before the environmental regulatory agency responsible for the issue of environmental license. Records of the consultation and permitting processes are kept by the relevant regulatory agency and are available to public inquiries.
ERSA further includes in its Environmental and Social Management programs a social communication and environmental education component designed as outreach activities to communicate construction and operational risks of the projects. Communication programs are also intended to ensure that local residents are aware of the project point of contact to communicate concerns and grievances. The company prepares educational materials for distribution in project affected areas including environmental education guides for teachers, simple ecological education materials for school children, and project-specific information guides or news releases providing updates on the implementation of environmental and social programs, descriptions of the environmental licensing process, information on reforestation and watershed conservation programs, and about safety issues along the reservoirs.
ERSA demonstrates evidence of successful management of community grievances. During the implementation of construction activities, the company provides various means for members of the community to place inquiries or communicate concerns. The company develops a Social Communication Program for each project, whose target is to reach the land owners affected, the communities where the plant is inserted and the representatives and associations of the municipalities where the plant will be implemented. For the projects located in Minas Gerais state, the company also has a Social Assistance Program that consists of the implementation of a Social Assistance Center (Posto de Atendimento Social - PAS) to the community, where a social assistant, a lawyer and a psychologist are available to assist and advise the population. Community activities, such as Awareness Raising, Environmental Education, Health and Leisure Activities, are also conducted as part of PAS activities. The PAS is also where the community inquires about jobs opportunities during the construction phase and where any member of the community can ask questions, solve doubts and register grievances or complaints. For each project under implementation, ERSA has already implemented the respective PAS.
In order to ensure that the above-described approach is consistently applied across all projects, ERSA will develop and implement a formal, documented, process that records grievances received and responses provided (such as the name of the individual or organization; the date and nature of the complaint; any follow up actions taken; the final decision on the complaint; how and when relevant project decision was communicated to the complainant; and whether management action has been taken to avoid recurrence of community concerns in the future), and reported back to the affected communities periodically. For each project, ERSA will designate a point of contact who is familiar with the company’s formal grievance procedure, such as a community liaison officer (or another experienced and qualified person within the institution not directly involved with the operation of the facilities under question), to whom project-related views and concerns of the affected community can be addressed.
Besides, the company implemented the Environmental and Patrimonial Education Program, whose objective is to pass on to the community information and knowledge about the main social and environmental themes of the region including the importance of preservation of the natural heritage. Educational events with the community are carried out with the distribution of environmental education books, talks on themes about the local environment and participation in the community schools for awareness raising and education of students. The most frequent themes include: recycling, soil conservation, forest preservation, silting-up of rivers, water use and conservation, and biodiversity. |
| Local access of project documentation |
Marcelo Souza
ERSA - Energias Renováveis S|A
Tel.: (11) 3039-7404
Av. Brig. Faria Lima, 1.309 . 1º andar
São Paulo|SP . 01452-002
www.ersabrasil.com.br |
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| Availability of Full Documentation |
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| Information Disclosed |
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