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| Santa Marta International Terminal Company, S.A. |
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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 | 28544 |
| Country |
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| Region | Latin America and the Caribbean |
| Sector | Port and Harbor Operations |
| Department | Reg Ind, Infra & Nat Res, CAF/CLA |
| Company name | Santa Marta International Terminal Company, S.A. |
| Environmental category | B |
| Status | Active |
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| Date ESRS disclosed | November 5, 2009 |
| Last Updated Date | February 9, 2012 |
| Previous Events | Invested: May 20, 2010
Signed: April 12, 2010
Approved: March 18, 2010 |
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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’s appraisal of this project consisted of a review of environmental, social, health and safety (ESHS) information provided by Santa Marta International Terminal Company S.A. (“SMITCO”) and the Sociedad Portuaria de Santa Marta (“SPRSM”). It included a site visit to SPRSM’s facilities in the port City of Santa Marta, Colombia, where SMITCO will be located.
IFC reviewed the effectiveness of SMITCO’s and SPRSM’s ESHS and labor management activities and the ability of the organizations to ensure compliance with Colombian regulatory requirements and IFC’s Performance Standards during the project’s construction and operation. Specific items reviewed include: (a) Project’s environmental impact assessment and corresponding Environmental Management Plan (EMP) as currently approved by the local environmental authorities (b) human resources policies and management; and (c) ESHS management system and performance for the various existing operations in the SPRSM. ESHS performance of previous and existing IFC projects with Carrix Inc., one of SMITCO’s sponsors, and the operator of the container terminal, was also reviewed.
Even though there are grain and carbon handling and storage operations being conducted within the Port by Operadora Logistica de Santa Marta S.A. (“Operlog”) and Carbosan S.A. (“Carbosan”) that are not related to this project, IFC also conducted a quick review of their ESHS documentation and procedures. |
| Project description |
The Project involves the refurbishment and operation by Santa Marta International Terminal Company, S.A. (“SMITCO”) of a container terminal inside the Port of Santa Marta, which is located on the Caribbean coast and is Colombia’s third largest port. The Project includes (i) the refurbishment of 2 berths with a combined total length of 322 meters; (ii) the installation of two Post-Panamax Ship-to-Shore cranes, four Rubber Tired Gantries cranes, and other terminal handing equipment to complement an existing mobile harbor crane; and (iii) the demolition of existing buildings and expansion of the container yard from 4 hectares to 8 hectares. Upon completion, the terminal’s container handling capacity will increase from 120,000 twenty foot equivalent container units (“TEUs”) to 300,000 TEUs.
SMITCO is 51% owned by SPRSM and 49% owned by Carrix, Inc. (“Carrix”) subsidiary SSA Holdings International Colombia, Inc. (“SSA”). Within the existing Port, SPRSM provides cargo handling services and operates its grain and coal terminals through two subsidiaries, Operadora Logistica de Santa Marta S.A. (“Operlog”) and Carbosan S.A. (“Carbosan”), respectively. The Port also has a passenger terminal for cruise ships.
Carrix is the world’s largest privately-held container terminal operator and cargo handling company, handling approximately 22 million TEUs per year at more than 180 locations worldwide, including 11 container terminals. IFC has a long-standing relationship with Carrix and has invested in 4 of Carrix’s terminals in the past 8 years, all of which have been compliant with IFC’s environmental and social standards. |
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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 Project 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
No project-related land acquisition or involuntary resettlement is required given that the Project will be built within the existing Port. No protected areas or sensitive natural habitats are anticipated to be impacted by the Project. There are no known indigenous or Afro-Colombian peoples’ traditional or customary lands or Cultural Property in the Project’s direct area of influence. Hence, PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) do not apply for the purpose of this review. |
| Environmental and social categorization and rationale |
| This is a Category B project according to IFC’s Environmental and Social Review Procedures. The Project will be located within the existing Port of Santa Marta and will not modify the Port’s current footprint. The nature of container handling and storage operations and the construction activities included in the Project are such that impacts and emissions are expected to be minimal. No dredging will be required. Any environmental, health and safety issues linked to the Project can be appropriately managed using accepted good engineering practices. |
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| Key environmental and social issues and mitigation |
Environment, health, safety, and social development are at the core of SMITCO’s and SPRSM’s philosophy for its operations. The information about how these potential impacts will be addressed by SMITCO and SPRSM is summarized in the paragraphs that follow.
PS1: Social and Environmental Assessment and Management Systems
SPRSM has conducted a comprehensive assessment of the Project, identifying potential environmental and social impacts, and has in place plans and procedures to manage them accordingly, ensuring compliance with host country environmental and social regulations and IFC’s Social and Environmental Performance Standards.
The Project’s environmental, health and safety issues during construction and operation will be managed under SPRSM’s Environmental Management Plan (EMP) and the existing Integrated Management System (IMS) which has been certified ISO 9000 (for quality), ISO 14001 (for environment) and complies with Colombian requirements on health and safety management. SPRSM is also certified as compliant with the International Ship and Port Facility Security (ISPS) Code and is an active member of Business Alliance for Secure Commerce (BASC).
The EMP was updated and approved by the Ministry of Environment, Housing, and Territorial Development (MAVDT) on May 2008. The EMP was updated based on an environmental and social impact assessment conducted by SPRSM based on terms of reference provided by the MAVDT. The EMP includes ESHS management procedures for SPRSM’s operations and 3 phases of construction activities planned for the coming years, of which the Project is included under phase 1.
The EMP includes management procedures that covers the Project’s construction and operation activities in the following areas: (i) air ambient quality, (ii) in-land and marine water quality; (iii) sustainable use of water and power; (iv) integrated solid waste management; (v) management of debris from building demolition and construction; (vi) fauna and flora; (vii) landscaping; (viii) traffic management; (ix) safety of small fishing and tourist boats; (x) community engagement and grievance redress; and (xi) community development. It must be noted that coal handling and storage operations conducted at the Port are not linked to SMITCO and are managed independently by Carbosan through a separate EMP.
The Demolition and Construction Contractors for works related to SMITCO are contractually required to follow SPRSM’s environmental and health and safety procedures described in the EMP and comply with local environmental and social regulations, and are continuously supervised by SPRSM’s ESHS Department.
SPRSM’s ESHS department acts as SMITCO’s ESHS Department, and it consists of a senior environmental manager and a senior health and safety coordinator who are supported by 3 supervisors. SPRSM also engages specialized local consultants on per needed basis. The Construction and Demolition Contractors are also required to have on-site ESHS coordinators and supervisors.
SPRSM’s management system includes an Environmental Monitoring Program aimed at verifying compliance with the EMP and local regulations, and to evaluate ESHS performance in order to identify corrective actions, if required. This program includes procedures and indicators to monitor the following elements: (i) air ambient quality; (ii) in-land and marine water quality; (iii) soil quality; (iv) flora and fauna; and (v) social.
The Port is periodically supervised by the MAVDT and the local environmental authority (Departamento Administrativo Distrital de Santa Marta – DADMA). The SPRSM is required to submit annual ESHS compliance reports to the MAVDT. The latest external audit of SPRSM’s management system was conducted on December 2008 and it was found to be satisfactory. SPRSM also produces regular internal reports regarding the ESHS performance of its operations which are submitted to management for review.
>> PS2: Labor and Working Conditions
SMITCO will generate 150 direct and 750 indirect jobs during construction and it is expected to generate 100 direct and 500 indirect jobs once it becomes operational. SMITCO gives priority to hiring local people when skills match available jobs.
SMITCO has submitted for Government approval an Internal Labor Policy –ILP- (Reglamento Interno de Trabajo) that is consistent with Colombian law and IFC’s PS2 requirements. The ILP clearly defines the rights and obligations of employees and the employer, including: compensation and benefits; working hours, overtime and leave policy; occupational health and safety policy; grievance redress procedure; and harassment policy, among others. According to local labor law, all employees must be covered by health insurance and receive copies of their contracts upon being hired. Although workers are not currently unionized, SMITCO, in compliance with the ILP and Colombian law, will allow workers to form or join worker’s organizations and to bargain collectively. The Construction and Demolition contractors are contractually required to comply with local labor laws. Neither SMITCO nor its Contractors engage in harmful child or forced labor.
As mentioned above, SMITCO’s Health and Safety (HS) issues during construction and operation will be managed under SPRSM’s existing management system. SPRSM has in place a comprehensive Health and Safety Management Program based on local requirements. In accordance to Colombian law, all employees including contractors and their employees, are covered by an Occupational Risk Insurance and are required to abide by SPRSM’s HS guidelines. The Occupational Risks Insurance Company, Colmena Riesgos Profesionales, conducts periodic risk surveys, audits and provides recommendations for corrective actions. Additionally, in compliance with Colombian law, SPRSM has in place an employer-employee committee on health and safety oversight (Comité Paritario de Salud Ocupacional – COPASO). All employees, direct and indirect, are provided with training and personal protective equipment (PPE) relevant to their assignment.
>> PS3: Pollution Prevention and Abatement
Given the nature of container handling and storage it is not expected that SMITCO will generate significant amounts of gaseous emissions or effluents. Power consumption is expected to be moderate and will be supplied from the national grid, with 2 back-up generators with a combined capacity of 2 MVA each. Greenhouse gas emissions associated with this project will be negligible. The water required for the administrative buildings and limited operational activities will be sourced from the municipal water system.
Air Quality Control: As mentioned above, gaseous emissions during operations will be minimal. However, during demolition and construction activities some emissions of particulates (dust) are expected and the EMP includes specific procedures to address this issue, including covers for trucks transporting materials and debris, and water suppression. Additionally, all trucks are required to comply with local emissions certificates and continuous maintenance of equipment.
It must be noted that the other sources of particulate emission in the Port of Santa Marta, mainly coal and grain handling and storage, are not part of SMITCO’s operations. Notwithstanding, these are managed and monitored following best available technology and good practices to minimize and control dust emissions (i.e. covered conveyor belts, direct ship loading and unloading, secluded storage areas, water sprays, covered transport vehicles, among others).
Sediment Control During Construction: The Project requires the refurbishment and extension of a section of the berth for the installation of the new Post-Panamax cranes. The berth will be extended 4.85 meters on the water side and 3.4 meters on the land side for the back rail resulting in a gage width of 23.1 meters and a combined total length of 322 meters. The berth expansion will be supported by 500x500 mm concrete piles and, even though no dredging will be required, some sediment removal will take place (barrenado). For this reason the EMP requires that, when feasible, sediments are used for yard conditioning and that any surpluses are tested for salinity and concentrations of heavy metals –particularly lead- and disposed of accordingly. If high concentrations are found, the sediments must be handled by an authorized waste management company.
The EMP also requires that during construction work the site is surrounded by a silt curtain to minimize and contain any re-suspension of solids in the water column towards the Bay. Additionally, before, during and after operations, the water column inside and outside the silt curtain must be monitored for quality, turbidity, suspended solids, pH, concentrations of heavy metals, and benthic communities.
Liquid and Solid Waste Management: SMITCO’s offices and container yard will have in place wastewater and storm water collection systems which discharge to the municipal sewerage system. Vehicle maintenance and other activities that involve use of grease or oils will be conducted at an onsite location that is equipped with wastewater collection and pre-treatment equipment (i.e. grease and oil traps).
All operations generating solid wastes (construction and operations) must comply with the procedures included in the Integrated Waste Management Plan. SMITCO is not expected to generate a significant amount of solid waste during operation, and any solid waste generated (i.e. office paper) will be managed by a recycling and waste management cooperative (Asociacion Precooperativa de Reciclaje Fenix y Renacer). This cooperative is composed by members of neighboring communities. All solid waste that cannot be recycled will be delivered to the municipal waste management company (ESPSA S.A). Sources and final disposal of solid wastes are registered and monitored on weekly and monthly basis. Special procedures are in place to manage hazardous wastes such as spent solvents, oily rags, empty paint cans, chemical containers, and used lubricating oils which are disposed of by a specialized waste disposal company.
During operation, liquid and solid wastes generated by ships (i.e. paper, bilge waste, ballast water, sewage, and used oils) will be managed by third parties that must be licensed, insured to cover potential damages, and have in place environmental management plans. In accordance with MARPOL guidelines and under the Port Authority (Capitania de Puerto de Santa Marta) supervision, a Pollution Auditor will be present during these operations. SMITCO will require these third parties to dispose of all waste in accordance with municipal requirements at designated sites.
Debris management - demolition: The yard expansion involves the demolition of two warehouses and office buildings totaling a constructed area of approximately 15,000 m2. In order to manage, handle and dispose of the materials that cannot be recycled or salvaged, the EMP includes a Debris Management Plan being implemented by the Demolition Contractor that is supervised by SPRSM’s ESHS Team. This Plan includes procedures for storing and transporting the debris (i.e. dust control), verification of the environmental management and licenses of final disposal sites, and specific measure to avoid any debris from falling into the Santa Marta Bay. According to the EMP the final disposal site must include drainage system and a closure plan (i.e. revegetation).
Management of Hazardous Materials (Hazmats): During operations it is expected that handling and storage of hazmats will be only an incidental part of SMITCO’s activities and that a minor fraction of the total containers handled will be considered dangerous. SMITCO will not handle or store bulk cargo or oil or liquid fuels. The EMP includes a Hazmat Management Plan and procedures designed based on local requirements and the UN Model Regulations. SPRSM’s emergency response and HS plans include specific provisions to respond to incidents involving hazmats. Protective equipment and training for hazmats management is provided to employees. As condition of IFC’s investment, SMITCO will define a segregated area to store and handle hazmats and dangerous cargo that must be compliant with local requirements and internationally recognized standards and provisions on this regard.
Emergency Preparedness and Contingency Plan: SPRSM has in place a Contingency Plan for all activities within its premises, including the Project. The Contingency Plan includes SPRSM’s policy regarding emergency preparedness and response, provides an overview of expected risks and scenarios, defines responsibilities, detailed emergency response procedures and protocols, drills and training program, spill prevention and control measures, and is implemented in close coordination with the Municipality of Santa Marta and the Port Authority. The area that will be occupied by SMITCO will have in place fire protection systems and firefighting equipment that will become operational once construction is completed.
>> PS4: Community Health, Safety and Security
Community Health & Safety: No significant risks or impacts on community health and safety are expected as result of project activities, and those that were identified are being mitigated through the EMP and the Contingency Plans described in PS1 and PS3. The primary risk to community health and safety could be associated to traffic safety, vibration and dust generated by the transport of construction materials, equipment, and workers to and from the terminal during construction and by an increased volume of truck traffic during the operation phase. The EMP includes a Traffic Management Plan that requires close coordination with local traffic authorities and traffic signs around the Port. SMITCO will use an existing remote truck staging area located 6 kms away from the terminal and a scheduling system that will allot specific hours for trucks to pick-up or deliver cargo to minimize congestion at the terminal gate.
Security Personnel Requirements: SMITCO security will be managed by SPRSM’s corporate security department, who in turn will engage the services of a security firm that will provide guards who receive training on emergency and security procedures and on how to respond commensurate with the risk or security issue at hand. As required by local law, the private security company will be certified and supervised by the National Superintendence for Security Companies (Superintendencia de Vigilancia y Seguridad Privada). Custom and Anti-Narcotics teams from the Colombian police are based in the Port and will act in close coordination with the security company. |
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| Client's community engagement |
The Port of Santa Marta is located in the urban area of the city port of Santa Marta (pop. 414,000) and the terminal’s direct area of influence includes the neighborhood of San Martin, research facilities of the National Institute of Marine and Coastal Research (INVEMAR) and fishermen and tourist boats operators.
The EMP requires that the SPRSM engages continuously with local authorities and communities and keep them informed about any construction works and operations and the environmental measures being implemented. Accordingly, the EMP includes an Authorities and Community Engagement Plan that defines a chronogram of activities (meetings, workshops and information disclosure) and to date the SPRSM has conducted various informational meetings with local authorities, surrounding communities and the fishermen association. Information about the expansion project has been published in national circulation newspapers since June 2007. The EMP also includes a Grievance Redress mechanism to receive, document and process comments and claims by local communities. Finally, the EMP requires that SPRSM announces the criteria and procedure to hire non-skilled workers from the project’s area of influence.
SMITCO will contribute to the social development programs being developed by SPRSM’s Fundación Social, which has been working for the development of Santa Marta, and particularly the communities neighboring the Port, over the last 13 years. The Fundación supports different programs on education, health, micro-credit and other initiatives with partner organizations aimed at improving the social development of the area.
The EMP requires a bi-annual monitoring of all community-related activities including community engagement (i.e. number of meetings held), grievances received and processed, local jobs created and social development initiatives. |
| Local access of project documentation |
SPRSM’s Modified Environmental Management Plan (EMP) - MAVDT’s Resolution 0794 of May 2008 – including activities related to SMITCO was publicly disclosed in the MAVDT’s website on June 2008 (http://www.minambiente.gov.co/documentos/res_0794_160508.pdf) .
Other relevant project information, including the EMP and key management plans, will be made available at SMITCO’s offices in Santa Marta.
For additional information please contact:
Santa Marta International Terminal Company S.A.
Contact Person: Jaime Sasso Perkins
Address: Carrera 1a No 10 A 12 Santa Marta, Colombia
Phone: +57 5 432 8115
Website: http://www.smitco.com.co/ |
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| Availability of Full Documentation |
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| Information Disclosed |
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