Key environmental and social issues relating to the project are summarized below along with specific information on how potential impacts will be addressed by the company. Upon implementation of the mitigation measures described below and in the attached Action Plans, the project will comply with environmental and social requirements, namely the laws and regulations of Peru, IFC’s Policy and Performance Standards on Social and Environmental Sustainability and applicable World Bank/IFC environment, health and safety guidelines.
Performance Standard 1 Social and Environmental Assessment and Management System:
Environmental and Social Impact Assessments (ESIA)
The technical studies for the Project started with the Analysis of Alternatives (2001) and the Basic Engineering (2002). Based on these documents the company started the ESIA studies in 2002.
LNG Plant’s ESIA: The ESIA for the Plant and the adjacent marine facilities was completed in July 2003 and approved by Peruvian authorities in August 2004 after two rounds of observations and feedback. The public consultations were carried out in three phases: a) during the baseline studies (May-November 2002); b) during the assessment of the E&S impacts and for the management plan (April 2003); and c) once the final report was ready (August-September 2003). After modifications to the Basic Engineering during 2004 and 2005, a complementary ESIA study was presented to the authorities in November of 2005 and a new round of consultation with stakeholders was carried out. As a result an amended ESIA was approved in September 2006.
The current site for the Plant and the adjacent marine facilities was selected after an extensive alternatives analysis which included 17 different locations between the cities of Lima and Pisco. The main criteria applied to screen the potential coastal sites were:
- Minimum of 100 hectares (ha) of land space available;
- Avoidance of locations of high degree of environmental sensitivity;
- Avoidance of densely populated areas;
- A minimum site elevation of 20 meters above mean sea level, to mitigate tsunami effects;
- Exclusion of areas with potential for soil liquefaction, soil instability or nearby faulting to minimize seismic impacts;
- Exclusion of marine areas where intensive dredging will be required;
- Preference of areas with oceanic conditions suitable for reliable tanker berthing operations; and
- Preference of locations relatively close to commercial centers that can provide raw materials and labor.
Three sites were pre-selected for further studies. The first one Punta Corriente (122 km south of Lima) was discarded for the limited space availability and for being in a heavily developed area. The second one Pampa Clarita (154 km south of Lima) was considered unsuitable because of poor soil foundation conditions and the high potential for some significant archaeological sites. The third one Pampa Melchorita (170 km south of Lima) was the preferred site even though the site is 135 meters above mean sea level and required additional earth movement for road coastal access. This portion of the Project is located along the central coastline of Peru which is a known seismically active region that could also be affected by tsunamis. However, the high topographical location above sea level will keep the plant facilities safe from wash-out effects. The bathymetric conditions for the siting of marine facilities are reported to be exceptionally uniform with a relatively horizontal seafloor and therefore considered optimum for the project.
Quarry’s ESIA:
The company completed an ESIA for the quarry in April 2005, which includes the quarry location and development activities, construction of an access road and the transportation of the rock material for the marine facilities construction. Following two sets of observations from the Ministry of Energy and Mines (MEM), the Ministry approved the ESIA in June 2006.
The alternatives analysis identified four potential sites for the quarry location:
a) GNL and GNL-2 located relatively close to the future LNG Plant in the Department of Lima;
b) Los Molinos located 150 km south east of LNG Plant;
c) El Sol-Punta Olleros 200 km south of the LNG Plant; and
d) Jatun in the desert valley of the Rio Seco (Department of Ica).
This analysis concluded that only GNL-GNL2 and Jatun were suitable locations. Further analysis demonstrated that the GNL-2 site was the best environmental, social, technical and cost-effective option because:
a) its relative proximity to the plant site will reduce transport distance, improving costs and safety;
b) it is 7 km away from the closest community and thus blasting noise impacts are limited;
c) potential impacts on groundwater are minimal, if any; and
d) impacts on local fauna will be temporary and reversible and will be minimized through the implementation of the environmental management plans.
A 25 km long access road is being constructed to access the GNL-2 site. The quarry development will be done by surface mining including grading, drilling, blasting, loading, and transportation activities.
PERU LNG Pipeline’s ESIA: In May 2004 the company completed a preliminary study on the pipeline corridor alternatives analysis which addressed four key areas: biological sensitivity, geomorphology, archaeology and social issues. The assessment compared two corridors as follows:
(i) following the direct route (between Huayahura or pipeline kp0 and Melchorita); and
(ii) the parallel route that approximately follows the route of the RoW of the existing TgP pipeline.
The study showed that the corridor with the fewest impacts on the environment was the parallel route, as it uses the same RoW and much of the existing infrastructure (roads, yards, camps, etc.) as the pre-existing pipeline. The alternative analysis was revisited for the ESIA (November 2005) and alternative routes within the parallel corridor were further assessed. An optimized route minimizing river crossings, Andean wetland crossings, and archaeological site impacts was selected. The MEM approved the ESIA after PERU LNG addressed all the ESIA observations in September of 2006.
The above mentioned ESIA fulfilled the local legislation requirements and were thus approved. However, their scope does not fully address the requirements of the IFC’s Performance Standards; therefore, supplemental reports and management plans were prepared by the company. These supplementary documents called “SLIP” (supplementary lenders’ information package) were issued as follows: LNG Plant and Marine facilities SLIP was issued in June 2007, Pipeline SLIP was issued in June 2007, and Quarry SLIP was issued in July 2006. The ESIA and the SLIPs are publicly accessible at the PERU LNG webpage
(http://www.perulng.com).
Cumulative Effects Assessment:
A Cumulative Effects Assessment (CEA) was prepared by the company in August 2007. The assessment describes the potential cumulative effects directly related to the PERU LNG Project within its area of influence, and the potential cumulative effects driven by induced actions in the Upstream Projects (Block 56 and the Malvinas Gas Separation Plant and expansion).
- CEA in the Project’s area of influence:
The project’s area of influence is defined as the area that extends approximately 20 km to either side of the pipeline,including the LNG Plant, the marine facilities, and the quarry. It also covers the area occupied by the existing TgP pipeline, in those places where both pipeline’s RoWs are less than 20 km apart.
In order to assess the interactions with other projects in the PERU LNG’s area of influence the project company reviewed more than 2,000 plans, programs, and projects in the Departments of Ayacucho, Huancavelica, Ica, and Lima. A total of 35 of those projects were identified as potentially relevant and thus further assessed. The assessment concluded that only four of those are likely to have any interaction with the pipeline, but none of them could result in medium to long term adverse cumulative impacts.
The CEA concludes that no significant adverse cumulative effects are likely in relation to the PERU LNG Project due to the lack of significant interactions with third party projects. However, from a regional and national perspective, the PERU LNG Project is expected to have a net positive cumulative impact as a result of a combination of factors: tax revenues, royalties, job creation, and export revenues. The regional significance of the job creation opportunities, and any inward investment resulting from linkage and additionality programs or other sources could serve as an important stimulus given the depressed socio-economic condition of the area.
The TgP pipeline is the most relevant project in terms of interactions with the PERU LNG pipeline. The CEA identified four main aspects of interactions, namely: erosion and sedimentation, sensitive ecosystems, visual impact, and impacts on social resources. Of particular concern are the potential impacts along the pipeline in areas of “bofedales” or peat bogs, which are critical habitats. The following Contractor Management Plans (CMPs) specifically address these potential impacts: Ecological CMP, Biorestoration CMP, and Erosion Control and Reinstatement CMP.
No significant cumulative effects would arise from interactions with the Port of San Martin and Paracas Bay, given the distance from PERU LNG Project activities. The increase in marine traffic in the area is considered relatively low.
- CEA in the Upstream Project:
The study area for the Upstream Projects encompasses the drainage basins of all tributaries of the Lower Urubamba, from the Pongo de Mainique (which is the upper end of the Lower Urubamba River) as far as the mouth of the Sepahua River. In relation to the potential cumulative effects on the upstream facilities, the CEA concludes that third party projects, including the development of Block 88, exploration activities in Blocks 57 and 58, and management of protected natural areas that lie partially within or about portions of Block 56, have the potential to interact with the Upstream Projects and result in cumulative effects on social resources, biological resources, water quality, and air quality. Specifically, the analysis indicates that the cumulative effects on biological resources, water quality, and air quality would be minor. Cumulative effects are expected to impact social resources, especially at the local community level; however, with mitigation, the cumulative effects on social resources are considered moderate to minor.
Environmental and Social Management System:
Construction phase:
The company has developed an Environmental, Social, Health and Safety Management System (ESHS-MS) following the specifications of the ISO 14001 and OHSAS 18001 standards. The system comprises three different document tiers as follows:
- Tier 1: includes the ESHS policies, ESHS management manual, ESHS legal and adopted standards, and the commitments register (ESHS commitments are compiled in a single document);
- Tier 2: includes PERU LNG Management Plans, the CMPs, and the Contingency Plans; and
- Tier 3: includes the Environmental and Social Implementation Plans (ESIPs) prepared by the contractors and approved by PERU LNG, the ESHS performance reports, and the ESHS records.
The ESHS-MS is in its implementation phase for construction activities and the company has prepared an implementation timeline to ensure that all relevant management tools are applied in a timely manner. Compliance with this implementation timeline is included as part of the attached Action Plan. During the transition from the construction phase to the operation and maintenance phase, the company will adapt its management plans to address the potential impacts of the new phase. Preparation of this new set of management plans is also included as a requirement of the attached Action Plan.
A procedure to ensure ongoing compliance with existing and emerging government laws, regulations, and industry standards is being applied. The company procedures will undergo a periodic review to address any new requirement from applicable legislation and adopted industry standards, and changes to procedures will be communicated to employees and contractors for compliance.
The company conducted a review of all potentially applicable environmental, social, and occupational health and safety standards and prepared a comprehensive summary of these standards in a management document called ‘Project Environmental and Social Standards’. This document includes references to environmental and safety laws, guidelines, conventions, policies, international treaties, voluntary codes, and corporate policies. Compliance with some standards are mandatory (e.g. national law, IFC’s Performance Standards), while others are voluntarily adopted. Industry best practices have been incorporated as project standards.
Each contractor is required to develop ESHS plans that are aligned with the company’s ESHS-MS requirements. Prior to engagement, each contractor presents to PERU LNG its ESIPs, which include procedures and method statements that specify how the activities relevant to their area of work will be carried out. The ESIPs are based on the requirements of PERU LNG CMPs. All contractors’ ESIPs are approved by the company prior to implementation. This condition has been already fulfilled by the LNG Plant, marine facilities, and quarry construction contractors. The pipeline construction contractor has been selected and is currently preparing the ESIPs to be submitted to the company for approval. These ESIPs are required as part of the Action Plan.
Compliance Assurance:
To ensure that all the requirements within the ESIAs and CMPs have been met, the company has developed an Environmental and Social Compliance Assurance Plan including such management tools as site supervision, monitoring, inspections, and audits.
The methods used depend on the scope of the assurance activity from management review down to checking individual activities, which may be short lived or continuous during construction. Monitoring is an ongoing activity, whereas inspections are more formal but less frequent. Inspections will be carried out in the form of a site walk-around, observing conditions, and identifying non-conformances. Inspections will be conducted as part of the routine work of the field staff and will cover all areas of construction and operation.
Audits are carried out less frequently than inspections but are also aimed to identify the adequacy of management systems. Environmental, social, and occupational health and safety Key Performance Indicators (KPIs) were established for the most significant aspects of the Project construction. Each audit carried out will be documented in the form of a written report. This will include all identified non-compliances and observations. All non-conformances identified during audits will be recorded into an action tracking system. The system will allow supervisors to act timely upon any outstanding corrective action.
The company has defined a Management Review procedure to assess the ESHS-MS strengths and weaknesses and to determine if there is a need to adjust PERU LNG’s policies, objectives, and standards of operation. The review process takes into account the results of performance measures, inspections, and audits. The company’s Senior Management will review the ESHS-MS on a regular basis (at least annually during construction) for further improvement if needed.
In order to develop the management tools to implement the requirements of:
a) the legal requirements;
b) the ESIAs environmental, social, and health and safety management plans;
c) the Project adopted standards; and
d) the IFC Performance Standards requirements, the company prepared the following PERU LNG management plans:
- Environmental and Social Compliance Assurance Plan;
- Health and Safety Plan;
- Environment, Social, Health and Safety Training Plan;
- Transport Management Plan;
- Framework Plan for Investment in Community Development;
- Security Management Strategy;
- Contingency Plans;
- Pipeline Compensation Plan;
- Fishermen Compensation Plan;
- Rural Andean Communities Management Strategy;
- Stakeholders Engagement Plan;
- Cultural Heritage Management Plan;
- Community Health Guidance Document;
- Local Hiring and Purchasing Plan;
- Biodiversity Action Plan; and
- Marine Monitoring Program.
PERU LNG is also developing an Environmental Investment Plan and a Biodiversity Monitoring Program. In addition, PERU LNG is developing a Corporate Ecological and Biorestoration Management Plan for the pipeline construction phase. A description of all four of these documents is presented in the Biodiversity Action Plan. Their completion is a requirement of the attached Action Plan. The respective Ecological and Biorestoration CMPs have been completed and have been provided to the pipeline construction contractor.
- Operation and maintenance phase:
During the transition period from construction to operation and maintenance the company will need a program to develop new plans and procedures to address the potential impacts associated with the new phase. This program has been included in the Action Plan. Operation and maintenance contractors of the PERU LNG facilities will develop or adapt their management system to satisfy the company’s ESHS requirements for operation and maintenance activities.
Organizational Capacity:
Key roles and responsibilities are identified and described in detail in the ESHS-MS Manual. The company has a dedicated and professional ESHS team with sound experience at local and international levels. For the construction phase the entire ESHS management team will consist of approximately 30 people for Community Affairs (currently there are 22 people and the full team will be completed before the pipeline construction starts) and 20 people for environmental, health and safety (EHS). A team of 5 archaeologists will be responsible for supervision of the Cultural Heritage Management Plan. Additionally, several consultants have joined the company to serve as advisors and to conduct studies when needed. The ESHS management team for the operation and maintenance phase would be significantly smaller; however, this will be defined during the transition from one phase to the next.
Training:
The company has developed an ESHS training program for its own personnel and will provide oversight for contractor training to assure that the workers have the skills to perform their activities in a safe, healthy and environmentally responsible manner. The training includes new or transferred worker orientation, regulatory training, and operator skills training. An ESHS training matrix has been developed and is based on the “Needs Assessment” documented in the ESIA and hazard analysis. The training matrix is updated annually or when required by new legislation or industry standards. All new contractors will receive an orientation on ESHS management prior to starting work, and new or transferred workers will receive a work-site orientation and on-the-job or formal training prior to being assigned a job. Contractors and subcontractors must provide proof of certification to PERU LNG that their workers are competent to do their jobs safely.
Monitoring:
The project’s ESIAs have established the environmental baseline for its area of influence. This baseline is used as a reference to assess the results of the environmental monitoring program. The company has procedures in place that describe how to measure and monitor the implementation of its operational control tools and their effectiveness in minimizing the identified potential impacts. The performance measures are reported monthly to ensure that PERU LNG’s management can compare outcomes against the set goals and to act promptly to solve deviations.
The KPIs, and leading and lagging metrics, are used to track ESHS performance to ensure planned objectives and targets are achieved, and that operations are in compliance with the ESHS-MS. Leading metrics indicators include scheduled training versus completed training, number of audits, job observations, critical task analysis, risk management, and contractor evaluations. Lagging metrics include the number of incidents, medical or first aid treatment, spills, temporary work suspension notices, corrective action requests, work improvement notices, and observations. In addition, recordable and reportable incident rates track man-hours since last incident.
Current monitoring programs at the LNG Plant site include air emissions, Cañete river water quality, potable water quality, wastewater, noise, solid wastes and biological monitoring (terrestrial flora and fauna).
PERU LNG has commenced a Marine Monitoring Program in the coastal waters adjacent to the LNG Plant site. The objectives of the program are to:
(a) characterize the coastal environment and local artisanal fishing activities; and
(b) allow for early detection of any potentially significant impacts related to construction of the breakwater and loading trestle.
- The Marine Monitoring Program includes the following components:
- Marine ecosystem (which includes seawater quality, sediments, microbiology, and organic contamination);
- Biology (plankton, macrobenthos, fish);
- Hydro-biological monitoring (abundance of fish, plankton, and selected benthic communities, diversity, spatial and temporal distribution, chemical contaminants of fish tissue, quarterly ranking of commercial fish species); and
- Artisanal fishing with the aim of estimating the amounts of fish captured seasonally, including the variety of species, and to identify any changes attributable to the marine facilities construction activities.
The information will help to estimate relative abundance of fish, seasonal distribution, community composition, and population dynamics.
The Marine Monitoring Program is conducted on a quarterly basis at sampling stations near Pampa Melchorita and at control stations 2.5 and 5 km to the south and north of the trestle location.
The company is carrying out a groundwater monitoring program at Topará Valley, since impacts from quarrying activities on local water quality and yields was a potential issue of concern raised by the local population. Topará Valley is 7 km away from the quarry site and studies performed during the ESIA showed that impacts to water supplies linked to the quarry are unlikely. However, the company started monitoring in January 2007, before opening the quarry, in order to respond to the concerns of the local population. The development of the monitoring program has involved consultants, representatives of local communities, and government agencies. The program consists of monthly water table measurements and quarterly water quality analysis from 8 groundwater wells.
Reporting:
The ESHS-MS Manual divides the reporting system into internal reports and external reports. The internal reports include KPIs, monthly ESHS statistical report, community relations report, and an archaeological report. The external reports include the reports required by OSINERGMIN (Peruvian Environmental Regulator for Hydrocarbons) and waste management reports required by DIGESA (Peruvian Environmental Health Regulator).
The company has currently disclosed through its internet webpage (http://www.perulng.com) relevant information about the Project, including the approved ESIA, the CEA, and the SLIPs for the LNG Plant and for the pipeline. The company will prepare on an annual basis an Environmental Report, which includes the description and results of the environmental monitoring programs, the description of environmental incidents, and the corrective actions taken and the relevant environmental authorizations and permits obtained. This report is presented to OSINERGMIN for review and approval.
Community Engagement:
Consultation:
The PERU LNG Project has raised a significant level of interest, in particular amongst some national and international NGOs, not only for its potential social and environmental impacts, but also for its relation to the Camisea Project and TgP pipeline. For this reason the project has been under extensive public scrutiny. Taking this into account, PERU LNG conducted an early and comprehensive consultation process designed in accordance with Peruvian regulations and international best practice (including IFC’s Performance Standards). A Stakeholder Engagement Plan (SEP) was developed describing the consultations that were conducted for each one of the ESIAs (Plant, Plant Amendment, Quarry, and Pipeline); the consultations that have occurred since each of the ESIAs was disclosed, and consultations that have been planned for the future. Project information is also disclosed in the website of the MEM (http://www.minem.gob.pe/).
In total, the consultation process for the four ESIAs included 171 workshops, conducted from June 2002 to March 2006, involving over 15,000 people from communities located in the project’s area of influence, and representatives from local and national authorities, NGOs, and other institutions. Twenty-one out of these 171 workshops were with various NGOs, authorities, and government institutions. In the coastal area a total of 11 districts within the Provinces of Pisco, Chincha, and Cañete took part in consultation meetings and workshops. This consultation process also included specific meetings with local fishermen. In the Andean segment, 34 directly affected Rural Andean Communities (RAC), subdivided into 36 annexes, distributed in 16 districts, took part in the consultation process. In addition PERU LNG also consulted with some communities outside the direct area of project influence. In addition to the workshops, informal consultations were conducted during the pipeline route selection process and archaeological evaluations. Workshops were announced in advance through coordination meetings and invitation letters to local authorities and land owners, posters in community areas, leaflets, radio, and newspaper advertisements. Community members located far from the workshop sites were offered transportation, lodging, and subsistence to facilitate their participation.
For each ESIA, the consultation process included different rounds of meetings to discuss scoping of the ESIAs, description of findings, development of mitigation measures, and discussion of the final ESIAs. The concerns, comments, and on-going feedback from participants were documented and considered by the ESIAs. As an example, additional studies on potential impacts of the pipeline on spring water sites in the Andean section were commissioned to address community concerns and the resulting pipeline re-routing recommendations were followed. Consultations were undertaken mainly through workshops, but also included focus groups and in-depth interviews with key stakeholders. Special measures and methodologies were adopted for the RACs to ensure that all consultations were conducted in a culturally appropriate manner, and took into consideration the low literacy levels in the area and the logistical difficulties posed by the mountainous landscape. In this region consultations were conducted at the district level, qualitative data collection techniques such as Participatory Rural Assessment Workshops (PRAW) were used and presentations and documentation were provided in Quechua and Spanish.
PERU LNG is also conducting extensive additional on-going consultations for the easement acquisition along the pipeline’s RoW in the Andean section (more than 400 workshops and meetings). PERU LNG’s Pipeline Compensation Management Plan (PCMP) includes an information and consultation component aimed at ensuring that Project affected people (PAP), households, and communities are aware of the process and have opportunities to have their concerns heard and addressed. This component includes provisions to ensure that consultations are easily accessible; inclusive of men and women; culturally appropriate; respectful of communities’ decision-making procedures; free of external coercion; and that the information is accurate, relevant and understandable (in Spanish and Quechua) and provided in a timely manner. PERU LNG prepared a “Guide to Land and Easement Acquisition and Compensation.” This easy-to-read brochure designed for use by affected local households has been, and is still used, in these on-going consultations with local communities. In addition, PERU LNG encourages Project affected households and communities to seek external advice during the negotiations and helps to pay the transportation costs of some outside advisors. The whole process is being thoroughly documented by PERU LNG. IFC witnessed negotiations being conducted in the Departments of Ayacucho and Huancavelica wherein the above described measures were applied.
As part of its SEP, PERU LNG is engaging and training representatives from government agencies and local fishermen associations to participate in its Marine Monitoring Program for the Plant. PERU LNG has also engaged communities and authorities around the Quarry to become active participants of the Groundwater Monitoring Program in the area. Community participation is also considered in other key documents and programs of its ESHS-MS (i.e. Pipeline Compensation Plan, Grievance Procedure, Local Hiring and Purchasing Plan, Framework Plan for Investment in Community Development, Biorestoration Plan, Biodiversity Monitoring Program, Contingency Plans, and Cultural Heritage Management Plan).
PERU LNG has to-date conducted the consultation process for the ESIAs and all land acquisition in a manner consistent with Free, Prior and Informed Consultation (FPIC). In the case of the RACs, the land easement acquisition process also included consultation measures consistent with “good faith negotiations.” The consultation process included on-going reiterative contacts with communities and individuals over long periods of time; signing of formal agreements with communal counsels demonstrating that at least two thirds of community members agreed with commencing negotiations through community-elected representatives (as is required by Peruvian law for transactions involving communal lands); provision of timely information and time for decision-making according to local cultural practices; and registering of signed agreements in public registries, including the outcome of negotiations and clear commitments for all parties involved. PERU LNG will also implement procedures in line with its SEP to ensure that communities are informed and consulted on an on-going basis throughout the life of the project.
- Grievance Redress:
PERU LNG has designed a procedure to receive, register, redress, and monitor grievances as part of its ESHS-MS for the project, with specific considerations for the pre-construction, construction, and operational phases of the project. This procedure has been designed to be easily accessible at no-cost for complainants, and to be efficient and to respond to grievances in a culturally suitable way. Complaints are received through PERU LNG offices located in the project’s area of influence, by PERU LNG Community Relations personnel, as well as by phone, internet, and through suggestion boxes located in the communities. This process is being publicized to ensure that communities are aware of its existence and how to use it. A specific grievance redress procedure has been designed for the land acquisition process and is being communicated to those directly affected as part of the information phase of the negotiation process.
- Community Relations Team:
Currently PERU LNG has a Community Relations field team of 22 persons, 9 for the coastal region and 13 for the Andean region. All are Peruvian and the personnel working in the Andean region are Quechua speakers. Some of them are members of communities located in the project’s area of influence and interact with community members on a daily basis.
In August 2005, PERU LNG established two permanent public information offices for the coast, one in the city of Cañete and another in the city of Chincha. To date these offices have received nearly 20,000 inquiries, most of them related to employment opportunities. Through the Chincha and Cañete offices, PERU LNG provides information and attention to questions and concerns from local stakeholders. In the Andean highlands the rugged landscape, long distances, and rough roads make it difficult for the largely rural population to visit project offices in Ayacucho, so PERU LNG conducts visits to the communities, which are planned and scheduled in advance by Community Relations officers with local leaders.
- Community Development:
PERU LNG developed a Framework Plan for Investment in Community Development (FPICD) to support sustainable and community needs-based projects. These will be implemented in the project’s area of influence and will be aligned with regional and national priorities through expert implementing partners (including NGOs with local experience). As part of the FPICD, PERU LNG commissioned a study of needs and opportunities, which included the identification of potential community development projects and detailed profiles for two priority projects, called “Vientos del Mar” for the communities of Cañete and Chincha with the participation of key local stakeholders. This process was conducted following a participatory planning approach and included capacity building workshops, consultations and surveys. Community priorities and potential pilot projects were identified as a result of this process. In response to the August 15th, 2007 earthquake that had disastrous impacts in these communities, PERU LNG and its construction contractors, in coordination with local authorities, provided emergency support mainly through supplying machinery to move debris and repair roads and bridges. PERU LNG also provided emergency meals and set up field kitchens in the critical first few days after the earthquake. PERU LNG is in the process of incorporating post-disaster reconstruction and rehabilitation considerations and is reassessing community priorities for the FPICD in the coastal region.
- Local hiring:
PERU LNG has developed a Local Hiring and Purchasing Plan (LHPP) to be implemented by PERU LNG and its contractors, aimed at enhancing local benefits by maximizing local hiring and by purchasing supplies in the project’s area of influence. Local hires will receive all the benefits to which they are legally entitled and all employees will receive similar pay for similar work, with no discrimination against local hires. While the communities understand that most of the local hiring will be of unskilled workers, appropriately qualified and experienced local people will also receive preferential hiring for semi-skilled and skilled jobs. PERU LNG has clearly communicated the number of potential job openings to local communities in order to avoid raising expectations that cannot be met. For the Plant and Quarry, PERU LNG will hire unskilled workers in equal numbers from Chincha and Cañete, based on an agreement with the local population and elected officials. In the pipeline section, provisions are in place to ensure that jobs are distributed proportionately among local villages and communities, particularly those directly impacted. The LHPP will be implemented in close co-ordination with the Community Relations Team, and includes clear recruitment criteria, particularly for the Andean section, where traditional decision making mechanisms and cultural particularities are addressed. For example, contractors will communicate their labor needs to the Community Relations Team, who will meet with local communities in order to request workers. The communities will propose a list of job candidates to the Community Relations Team. This will help to ensure community participation and will help to minimize bringing outside laborers into vulnerable communities.
- IFC Additionality:
IFC and PERU LNG are exploring opportunities to build on the ’s existing social investment programs and develop new areas for collaboration to enhance local benefits. The following areas have been identified:
(i) develop a program to further develop local government capacity in managing the use of revenues and enhance social accountability to improve the impact of local public investments, building on previous IFC experience in the mining sector in Peru;
(ii) improve PERU LNG’s social investment strategy and enhance stakeholder participation in its design and implementation, including discussion of developing third party evaluation and monitoring capacity; and
(iii) enhance PERU LNG’s strategy for local procurement and promotion of small and medium enterprises (SMEs) to include SMEs in the supply chain, helping to ensure long term sustainability and contribution to the local economy.
Performance Standard 2: Labor and working conditions:
PERU LNG has developed Human Resources policies and procedures in accordance with local regulations, ILO Conventions, and IFC’s Performance Standard 2, and these are appropriately communicated to employees. The company protects the integrity of its workforce by imposing best practice occupational health and safety management plans. Local employees will receive the same personal safety equipment as other employees. Local employees will also receive safety training to minimize work-related accidents. Local employees will be transported to the work site in project vehicles, which will also help to minimize the risk of traffic accidents.
Occupational Health and Safety:
One of the key components of the company’s ESHS-MS is the Health and Safety Plan. This is particularly critical during the construction phase because of the diversity of contractors and subcontractor, activities, and work fronts. The peak demand for workers at the LNG Plant & marine facilities is expected to be 3,245 workers during construction activities. During the operational phase the average number of employees and contractors is expected to be less than 130 people. The pipeline construction phase will have a peak demand of 3,750 workers. The influx of new workers and the spread of different work fronts make the health and safety performance a key challenge for the project.
This Health and Safety Plan includes provisions for effective communication of health and safety policies, plans and procedures, safety performance measurement, hazard assessment and risk management programs; incident reporting and investigation, personal protective equipment, hazardous material controls, traffic safety regulations, workplace violence and harassment, ergonomics, excavations and openings, electrical equipment, emergency response plans, medical and first aid services, alcohol and drugs, and fire prevention and protection programs. It is the responsibility of PERU LNG and its contractors to ensure that all their workers are adequately trained for the job to be performed, that all potential hazards are reviewed, and that all measures are taken to eliminate or minimize the hazards prior to starting the job. The Health and Safety Plan applies to PERU LNG, contractor and subcontractor staff.
There are provisions for contractor selection ESHS criteria and for contractor ESHS performance assessment, based on demonstrated commitment, incident records, outcomes of inspections and audits, training and experience, emergency response plans, and when applicable the specific contractor’s Health and Safety Plan. Even though subcontractors are defined as part of the prime contractor, major subcontractors will be approved by PERU LNG before starting work. Contractors are obliged to comply with PERU LNG ESHS requirements and to avoid operational risks, preventing injuries to persons, damage to properties or adverse effects on the environment.
Contractors will conduct work site hazard assessments (including, physical, chemical and biological hazards) and implement a Safe Work Permit system. Pre-job or tailgate safety meetings will be part of the contractor’s training plan.
- Safety Properties of LNG:
There is a very low probability of release of LNG during normal industry operations due to the safety systems that are in place. Methane gas ignites only if the ratio of gas vapor to air is within the limited flammability range. The flammability limits of methane, the dominant component of LNG vapor, are 5 % and 15 % by volume, respectively. When fuel concentration exceeds its upper flammability limit, it cannot burn because too little oxygen is present. This situation exists, for example, in a closed, secure storage tank where the vapor concentration is approximately 100 % methane. When fuel concentration is below the lower flammability limit, it cannot burn because too little methane is present, LNG is less dense than water, and LNG vapors are relatively hard to ignite. Above -110°C LNG vapor is lighter than air. If LNG spills on the ground or on water and the resulting flammable mixture of vapor and air does not encounter an ignition source, it will warm, rise, and dissipate into the atmosphere.
Use of personal protective equipment:
The procedure for use of Personal Protective Equipment (PPE) is compulsory to all employees of PERU LNG, contractors, and visitors. All employees sign a PPE policy notification and a PPE reception note. Records of this are kept to track compliance.
- Transportation management:
As failure to adhere to vehicular safety procedures is commonly one of the more frequent causes of personal incidents, the company has developed a Transport Management Plan. This plan specifies responsibilities for drivers and operators of heavy equipment, their supervisors, the contractors ESHS department as well as passengers. As management tools, the plan includes route selection, traffic management, real time GPS tracking, vehicle condition and safety equipment, transportation risk assessment, and emergency procedures.
Hazardous substances:
The Health and Safety Plan states that a hazard assessment must be carried out for every substance brought into the work site. Copies of the assessment and Material Safety Data Sheets (MSDS) are available for PERU LNG to examine and are accessible at work sites as needed. No chemical or any other hazardous material should be brought into PERU LNG facilities unless approved in writing by PERU LNG’s management.
Occupational Health:
A preventive program to ensure occupational hygiene (personal and environmental hygiene, vision, noise, ergonomics, etc.) has been established and conducted by the Health and Safety Department. Pre-occupational medical evaluations, annual control evaluations, and retirement evaluations are performed for all employees. An inoculation plan applies to all employees and visitors to the project. PERU LNG strictly requires that no alcohol and/or nonprescription drugs be consumed by any worker while they are on duty (including PERU LNG’s own personnel and contractors).
Employment Conditions:
PERU LNG is an equal employment opportunity employer, and its Human Resources (HR) policy includes specific provisions on sexual harassment, non-discrimination, fair salaries, preferential local hiring, recruitment transparency, and health and safety. As part of this project, PERU LNG has a Code of Conduct that outlines employee entitlement to lodge a claim in case of work related disagreement and will develop a grievance procedure for employees based on international best practices. As part of its policy of not engaging in forced or manipulated labor, PERU LNG does not hire workers through unauthorized third parties, such as job brokers, and does not engage any child labor. Peruvian national law provides for non-discrimination and protects freedom of association and collective bargaining. The reputation and previous work of all contractors is assessed, prior to awarding them work, through the completion of a health and safety questionnaire , and all of them are contractually obliged to comply with local labor laws and PERU LNG’s HR and ESHS policies (which include IFC’s Performance Standard 2). Should any contractor breach the policies of the project or any legislative requirements, PERU LNG has the ability to employ disciplinary action up to and including removal from the project or termination.
Performance Standard 3: Pollution Prevention and Abatement:
As part of its ESHS-MS the company has developed Pollution Prevention CMPs for the LNG Plant, the marine facilities construction, the quarry, and for the pipeline construction. Contractors have to submit to PERU LNG for approval a Pollution Prevention ESIP before starting their jobs. The management plan addresses as needed, air emissions, campsites management, dust control, water abstraction procedures, wastewaters management, river crossings, noise abatement, vehicle maintenance, fuel and chemical storage and handling procedures, and oil spill control management.
The investment decision for PERU LNG was made in December 2006 and the notice to proceed on the LNG Plant EPC contract was given in January 2007. Long lead equipment has thus been ordered and is being manufactured to the project specifications in force at the time, that is, World Bank Pollution Prevention and Abatement Handbook (July, 1998). This Handbook has since been superseded by the IFC Industry Sector Environmental, Health and Safety (EHS) Guidelines (April, 2007). PERU LNG has performed a review of the adopted project Standards against these latest IFC EHS Guidelines. The project complies with most of the IFC EHS Guidelines and with the EHS Guidelines for Liquefied Natural Gas (LNG) Facilities. There are two exceptions one is related to the quality of the sanitary sewage treatment effluents, described in the following paragraph, and the second is related to noise described in the section on ‘Noise’.
With regards to the sanitary sewage treatment plant, the manufacturer warranties a performance that will produce an effluent with chemical oxygen demand (COD) of 250 mg/L and a biological oxygen demand (BOD) of 50 mg/L (which were the former WB/IFC standards) and not the new requirements which are COD of 125 mg/L and BOD of 30 mg/L. The equipment could reach these values under optimal conditions subject to careful management. However, the manufacturer does not warranty such performance. The company will do its best to operate the wastewater treatment equipment at such optimum conditions, however, cannot commit at this stage to comply with this standard. This deviation does not pose a major environmental risk as the treatment plant discharge will be used for irrigation of green areas in the plant site.
Atmospheric emissions:
- Construction phase:
The LNG Plant project site is located in a rural area where the air quality is considered representative of arid areas with wind-transported particulate matter. There are no major sources of air pollution other than motor vehicle emissions. Construction equipment used to prepare the site will produce emissions to the atmosphere from the combustion of fuels such as diesel and gasoline. These gases include nitrogen oxide (NO2), carbon monoxide (CO), particulate matter (PM10), and sulfur dioxide (SO2). The emissions are expected to be temporary and intermittent during the construction phase, producing minimal air quality impacts. Dust will be controlled by periodically wetting access roads and RoW areas and by imposing vehicle speed restrictions in the work and nearby areas. Proper and systematic maintenance will be carried out on vehicles, power generators, and heavy machinery to improve combustion efficiency and emissions quality.
For the pipeline, a specific risk study will be conducted by the Contractor to identify sensitive areas along access roads (near towns, crops, etc.). For these areas, the contractor will propose specific mitigation measures tailored to those identified sensitive areas.
Air quality impacts during construction are considered to be local, since the dispersion of dust will be less than 1 km from the site. Ambient air quality impacts associated with the construction phase are considered insignificant.
Operation and maintenance phase:
As reported in the ESIA, the maximum NO2, PM10, SO2, and CO concentrations predicted for the LNG Plant comply with the IFC EHS General Guidelines (2007), the Peru Air Quality Standards, and U.S. Ambient Air Quality Standards. The concentrations predicted to occur within 1 km of the site are only 66 % of the ambient air quality limits. The air quality modeling during the operation phase for the proposed Plant indicates that the total air quality concentrations on site for NO2, SO2, and CO are predicted to be less than 20 % of the ambient air quality guidelines or standards. The project sources contribute less than 1 % to the total PM10 concentration, as the majority of the PM10 is due to background concentrations estimated from monitoring data. Similarly, the majority of the total SO2 and CO concentrations are also due to background concentrations; the project sources contribute 30 % or less to the maximum total concentrations.
The potential incremental concentrations of other pollutants at the closest human receptors (the two closest communities are approximately 4 km and 8 km to the south of the project respectively) are expected to be much lower than the maximum pollutant concentrations reported for the project.
Fugitive emissions:
Sources of fugitive emissions of volatile organic compounds (VOCs) during commissioning, start-up, and operations are typically from valves, flanges, pump, and compressor seals. Measures taken to minimize emissions from these sources include:
Valves – All cryogenic valves will be tested in shop to ensure zero leakage (<0.0005mL/s) to atmosphere by pressuring to 1.1 times design pressure with helium, and measuring leakage with a mass spectrometer;
Flanges – These are minimized, especially in the cryogenic sections of the plant as per NFPA 59A;
Pumps – All pumps in hydrocarbon service have either tandem seals or are canned pumps with the motor submerged in the can; and
Compressors – All compressors in hydrocarbon service have dry gas seals with the hydrocarbon contaminated seal gas being piped to the flare system.
In addition all drains and vents to atmosphere are blinded and all gas sampling points are routed to the flare system.
Boil-Off Gas (BOG) Control:
LNG loading facilities include four 16 inch specialty pipe-and-swivel LNG loading arms. Three arms will normally be used for LNG loading and the fourth one will be used to return vapor to the plant's BOG Compressors.
BOG is generated by a heat leak into the storage tanks and LNG lines, flash from LNG rundown, and vapor return from the LNG ship during ship loading mode. The priority for LNG vapor disposal is the vapor return to the LNG tank by pressure differential; or the vapor return to plant for fuel gas using BOG compressors. Venting of the vapor from the LNG storage tank to the BOG flare may take place in the rare event that all boil-off compressors are down.
Greenhouse Gas Emissions:
During operations the primary combustion emissions from the LNG Plant will be through the turbine, compressor, and gas-fired heater exhaust stacks.
Vented emissions from the LNG Plant will be the acid gases removed from dry natural gas. The acid gas will be largely CO2 (no sulfur content has been detected in the raw gas) which will be vented to the atmosphere.
Approximately 1,150,000 tonnes/year of CO2 equivalent will be emitted in total (inclusive of 56,000 tonnes/year of CO2 vented from the AGRU; and 7,500 tonnes/year of methane via fugitive emissions converted to CO2 equivalent).
Pressure relief valves are routed to the flare header, with the exception of the pressure relief valve to the inlet KO drum.
All power needs will be generated at the LNG Plant site using part of the natural gas received from Malvinas Gas Separation Plant (refer to next heading). High efficiency gas turbines for power generation will be installed. The company will monitor its GHG emissions and will report these emissions annually to IFC through the Annual Monitoring Report (AMR).
The company will also provide dual fuel generators and an early fuel gas line for the construction camp to reduce the level of emissions that would have been generated by diesel driven generators. In addition, during construction and commissioning the ompany will use nitrogen rather than refrigerant for initial compressor run-in, limiting refrigerant flaring during commissioning.
Energy Efficiency:
The volume of feed gas that will be used to power the LNG Plant is approximately 47 MMCFD. This equates to approximately 7.6 % of the 620 MMCFD of feed gas delivered to the LNG Plant. The following measures have been taken as part of the design of the LNG Plant to maximize energy efficiency and minimize consumption of feed gas:
Gas turbine generators will have high fuel efficiency, and will have a lower heat rating than the turbines used in the original design and lower emissions with dry, low-NOX burners on generators and compressor drivers;
A burner management control systems will be installed for the gas-fired oil heaters and the dehydrator regeneration heater;
A policy of no flaring during ship loading operations has been adopted, with boil-off gases being compressed and re-circulated into the fuel system; and
A proprietary energy efficient Amine system, designed by BASF, has been selected for the project.
The ompany has also reduced the length of time for the permanent power generators to run during commissioning by 8 months, thus reducing natural gas usage. The ompany has not identified any other cost effective means to improve efficiency during operations other than those previously identified. However, energy and emissions savings will be continuously evaluated in the operational phase.
Pollution Prevention:
Major natural hazards:
The LNG Plant and the LNG storage tanks will be located at a site sufficiently elevated to withstand a tsunami. The foundation design, particularly for the LNG storage tanks, and the improved slope stability measures are planned to avoid serious damage including spills, after foreseeable earthquake impacts. The trestle is designed to withstand earthquake loadings, as well as the force of a tsunami wave.
LNG Tanks Safety:
The tank’s pressure is controlled by the operation of the BOG compressors. When outside of the BOG compressor control range, other control systems like relief valves are used to protect the tank. The tank venting control valve opens on high pressure sending tank vapor to the BOG flare. Relief valves on the tank open to control the maximum pressure.
To avoid any roll-over situation at the LNG tanks, density and temperature measurement devices throughout the full working volume of the tanks will be installed on each tank to ensure no component stratification, or significant LNG temperature variances developing within the tanks. Pump withdrawal is from the bottom of each tank. The top fill from the LNG rundown line and a top return of the cooling recirculation line ensure that adequate mixing of the tank contents prevents any stratification of LNG.
LNG loading pollution control:
At the LNG loading system two dedicated liquid loading arms, plus one arm dedicated for vapor return, are to be installed on the jetty. One additional dual use arm will be provided, which can operate as either a LNG loading arm or vapor return arm. All four LNG loading arms will be provided with powered emergency release couplings (PERC) that have two valves mechanically interlinked that will close within 5 seconds. Upon closure, the PERC can then release along with the operation of quick disconnect mooring line couplings to enable the ship to move away from the berth quickly, if required, due to wave conditions or other circumstances. For the PERC on each loading arm, one valve would go with the ship to maintain the ship LNG containment while the other valve remains with the loading arm to maintain the plant LNG containment.
Pipeline pollution control:
The pipeline design has provisions for preventing external corrosion effects by cathodic protection and a 3 layered polyethylene coating. Internal coating for flow enhancing is part of the design. As part of the maintenance infrastructure, scraper traps will be installed and block valves will be located approximately every 30 km. A System Control and Data Acquisition (SCADA) system independent from the existing TgP system shall provide monitoring and control abilities for supervision. The pipeline will have a natural gas leak detection system based on pressure sensors situated along the pipe. Blocking valves are planned all along the pipeline to minimize significant loss of inventories due to any breakages. The pipeline will be buried and the minimum depth in normal soil conditions will be 0.9 meters. In rock areas the minimum depth of cover will be 0.6 meters.
Noise:
During the construction phase a temporary increase in noise levels will take place in all work areas. However with proper motor maintenance, and the use of mufflers on exhaust pipes and acoustic insulation of generators, the noise will be mitigated to acceptable occupational health levels. Those areas near equipment where hearing protection may be required when in operation are required to be identified by signs. Personnel will be trained on the consequences from exposure to excessive noise levels and the correct use of hearing personal protective equipment, such as ear plugs or suitable ear protectors.
The project is unlikely to increase background noise levels by 3 dB; however, this may prove difficult to achieve in some circumstances, especially during construction. The project is committed to constructing and operating the facilities in accordance with OSHA, wherein exposure to impulsive or impact noise is limited to a 140 dB peak sound pressure level. In emergency or upset conditions the pressure relief valves (PRVs) and ground flare at the LNG Plant have the potential to exceed the IFC EHS Guidelines (April 2007), but will be compliant with OSHA requirements.
Current noise monitoring campaigns demonstrate compliance with noise level standards for ambient noise and occupational health requirements.
The ESIA for the Plant and the Marine facilities considers that underwater noise produced by piling and other construction activities will be localized, intermittent, and of short-term duration. The company has adopted a soft start procedure for pile driving to reduce the underwater noise impact.
Marine Environment:
The main potential environmental impacts identified for the LNG Plant relate to potential impacts to the marine environment associated with dredging, the potential for spills, and ship traffic.
Intertidal and subtidal planktonic and benthic communities will support impacts from dredging activities assessed as moderate. Local fishing activity is more likely to suffer impacts due to substrate removal and increased turbidity; however, these impacts would be temporary and localized. Dredging will be another source of impacts for the marine area of influence because it will increase turbidity levels. Management plans require the contractor to conduct physical and chemical analyses of sediments prior to commencing dredging operations, and to implement measures to minimize sediment re-suspension. Dredging will be planned to take place during low flow and turbidity levels will be below 200 m/L, as much as local conditions allow. The dredged material will be placed in a designated area located 6.5 km southwest of the dredging area. In this case the same standard applies to maximum turbidity levels at the disposal site.
Project Footprint:
Plant and quarry sites:
The total area available for the LNG Plant site is 520 ha, and since the plant site is in an arid area with little or no vegetation the impacts of clearing and grading activities will be relatively small. No natural or critical habitats have been identified in the area occupied by LNG Plant site, quarry or its access road. Impacts to some endemic plant species in the area have been addressed in the Ecological Management Plan. The site selection criteria to minimize the footprint are described in the Performance Standard 1 section of this document.
Pipeline RoW:
The risks of slope instability during pipeline construction will be reduced by cutting, filling, land leveling, appropriate methods of trench excavation, construction of shooflies, and establishment of areas for deposit of excess material. Erosion may be significant due to relatively high rainfall in the highlands and strong winds along the coast that may temporarily affect exposed and unprotected soils. PERU LNG has committed to implement measures for erosion control to mitigate the impact, and this will be addressed in the pipeline CMPs.
Mitigation procedures will be put into effect during trench excavation, pipe installation, and pipe covering at river crossings to preserve aquatic habitats, minimize diversions, maintain uninterrupted water flow, avoid water use conflicts, and preserve the landscape in crossing areas. Areas with erosion problems, steep slopes, and a high risk of landslides will be avoided wherever possible. This includes areas that are currently cleared of brush with a slope exceeding 50 %. Grading will follow the natural contours of the land wherever possible.
Field surveys identified some 40 river and seasonal creek crossings along the pipeline, of which 9 are significant: namely the Altomayo, Torobamba, Yucay, Vinchos, Palmitos, Pampas, Pisco, Matagente, and Chico perennial river crossings. Detailed studies were undertaken in order to design adequate and environmentally safe crossings. Water bodies within 100 meters on each side of the pipeline route were identified and classified as wetlands, aquifers, rivers, and/or irrigation channels. River crossing procedures and special measures to protect stream banks and nearby water bodies will be part of the pipeline CMPs. In addition, specific method statements will be prepared by the pipeline construction contractor and approved by PERU LNG for wetland crossings.
During construction downstream flow will be maintained to avoid serious impacts to streams. All water diversion structures and dikes will be removed once river crossing installations are completed in order to restore the normal flow. In small water courses culverts and other materials will be used temporarily to avoid sediment disturbance due to vehicular and machinery transportation. All temporary crossings will be removed once construction activities are completed.
Topsoil will be salvaged where feasible from disturbed areas, including the RoW, access roads, camps facilities, and all other project facilities. Areas subject to topsoil stripping will be identified prior to starting grading activities. Topsoil will be stockpiled separately from subsoil for the pipeline trench and will be protected by diversion ditches, slope breakers, and silt fences, as needed. Restored soil cover will be stabilized and seeded as soon as possible after construction. Existing agricultural land will be impacted during pipeline construction, particularly in the Pisco, Torobamba, Vinchos, Alfarpampa, and Sachapampa Valleys. Restoration measures will be taken shortly after pipeline burial, to return the land to its previous agricultural yields.
Erosion control matting will be used as required to protect slopes, and ensure adequate drainage, soil reinforcement, erosion control, and subsoil stabilization. Impermeable, contoured crowned channels will be constructed at the top of the cut-bank in order to adequately intercept and rapidly evacuate rainwater, so as to avoid possible water logging and soil instability.
The number of shooflies and access roads will be limited in order to minimize footprint impacts. It is estimated that 85 % of roads used by the project will be existing roads (which will be improved or restored as necessary) and 15 % of project access roads will be newly constructed. Any new road required by the pipeline construction contractor will be previously assessed to identify its potential environmental, social, and archeological impacts and justify the need to open a new access. PERU LNG has the final decision to approve or not the new road request.
Special measures will be undertaken to limit impacts to movement and access by local communities, domestic stock (including cattle, goats and high Andean camelids) and wildlife. These measures will include ensuring periodic gaps during construction, constructing temporary cross over facilities and limiting the time during which each section of trench will be open.
Excess material from RoW leveling will be used in backfill or in re-contouring in the same locations, and may be temporarily stockpiled in stable areas with adequate erosion and sediment control. Sites for storing excess excavated material will be situated away from settlement areas, channels, water bodies, reservoirs, public service infrastructure, ecologically sensitive areas (i.e. wetlands, nesting areas and areas of high biodiversity), cultural or archaeological sites, and cultivated areas. Reasonable best efforts will be made to restore the natural slope of the land, replace topsoil, and re-vegetate as close to native conditions as possible.
Construction camps:
Impact mitigation measures will be implemented to minimize the environmental, social, and archeological impacts of camps. The camp setup will conform to the topography of the natural terrain as closely as feasible, and soil will only be moved or graded when approved infrastructure is being built or set up. Excessive earth moving is to be avoided. Wastes and wastewaters generated in the camp will be managed in accordance with the Waste Management CMP. Machinery washing, refueling, and oil changing will be conducted in the machinery yards built on impervious surfaces specific for the purpose. Fuels and lubricants will be stored in adequately labeled drums in properly designed areas. Oil and fuel depots, as well as refueling areas, will be designed to avoid leaks. Camps will be dismantled once construction of a particular spread or section of RoW has been completed. All the equipment will be cleaned and any type of waste present in the machinery maintenance and fuel storage areas will be removed and disposed. After all wastes have been removed and properly disposed, soils will be treated to alleviate compaction in those areas that have suffered the greatest soil compaction. The disturbed surface will be tilled and topsoil replaced. The surface will then be fully re-vegetated in accordance with Biorestoration CMP.
- Quarries and Borrow Pits:
All new quarries opened exclusively for and by the project used for extracting materials during pipeline construction will be closed with the land surface being naturally contoured using leftover waste rock. Quarry recontouring work (and if necessary terraces) and topsoil reinstatement will be undertaken to ensure slope stability. Finally, the layer of topsoil will be reinstated and re-vegetated as appropriate.
- Revegetation:
The Biorestoration CMP describes site surface preparation, plant species selection, planting procedures and the type of monitoring that should be applied in different environments. The re-vegetation program will use native or naturalized species, based on an existing assessment of re-vegetation projects implemented in the Andean valleys and cloud forest areas, particularly with respect to practices such as species used, seeds and seedlings, plantations, and direct sowing. The re-vegetation program will include the participation of local communities to build on their experience and knowledge of the area. Advice has also been provided by the Ministry of Agriculture through PRONAMACHCS (National Program of Hydrographic Basin Management and Soil Conservation).
Water Use:
The LNG Plant site is located between the Topará Valley (12 km to the southeast) and the Cañete River (15 km to the northwest). These rivers predominantly recharge from precipitation in the Andean mountain range and recharge from the arid lower basin is insignificant.
In the medium to long term all water required for plant operations and for on-site project personnel will be processed from raw seawater. A system of reverse osmosis will be used to produce potable water, demineralized water, service water and firewater. In the short term initial fresh water abstraction from the Cañete River will be temporarily used (through 2008) until the desalinization plant is installed. Fresh water will be abstracted from near the Cañete River mouth and will neither impact other users of this resource nor biotic life. Polymers will be used for dust control along the quarry access road. Any impacts on the groundwater quality or level in the Topará Valley (located 7 km away from the quarry) due to the ground vibrations generated by the quarry exploitation are highly unlikely due to the large distance, and that the aquifers at GNL-2 Quarry and Topará are not hydraulically connected.
Waste Management:
The Waste Management CMP focuses on the incorporation of both general and specific practices including: minimization of residues, segregation at source or other appropriate point, temporary storage, collection, transport, treatment, reuse and recycling, and final disposal. Any onsite contractors who generate hazardous waste will submit to PERU LNG ESHS Department a specific waste management plan, which will incorporate guidelines and procedures to manage and control this waste (solids, semi-solids, and liquids) as outlined in PERU LNG’s Waste Management CMP. Contractors’ Waste Management ESIP will comply with relevant environmental legislation that controls the final disposal of waste, such as regional and municipal by-laws, including by-laws established by DIGESA. A survey and assessment was undertaken of all available contractors and their capability to comply with PERU LNG standards, prior to final selection of qualified waste management contractors.
Waste oils, lubricants, and fuels will be stored in clearly marked drums which will be treated by a waste services provider approved by DIGESA.
Wastewaters:
For the treatment of domestic liquid wastes, a package treatment plant (or plants) will be utilized, which use an activated sludge treatment process with extended aeration. The sludge will be treated through processes of dehydration, biological or chemical stabilization before its final disposal. Treatment plant discharge will be used for irrigation of green areas in the plant site. Portable toilets for the use of work personnel in the dock area will be installed.
As mentioned previously the sanitary sewage treatment plant was ordered prior to the release of the IFC new guidelines in April 2007. The manufacturer warranties a performance that will produce an effluent with COD of 250 mg/L and BOD of 50 mg/L (which were the former World Bank/IFC standards) while the Guidelines new requirements are COD of 125 mg/L and BOD of 30 mg/L. The equipment could reach these values under optimal conditions subject to careful management. The company will undertake best efforts to operate the wastewater treatment equipment at such optimum conditions, but cannot commit at this stage to comply with this standard.
Oily water from the process units, the loading dock area, and the drainage of paved areas will be conveyed and treated in API/CPI separators. Oily effluents from the API/CPI systems will be stored in a slop oil tank for their subsequent transportation in trucks to incineration facilities or external treatment/recycling. Treated water from the separation process in the API system will be mixed with brine from the desalinization plant, and will then be discharged to the ocean through an effluent outfall. Water from the CPI separator process will be reprocessed in the API separator system. This wastewater will meet project environmental standards after treatment and prior to being discharged.
Waste streams from the desalination unit will be concentrated brine (up to 60 m3/hr), and filter backwash (intermittent flow), and since this is non-hazardous effluent it will be discharged via an outfall sewer to the sea.
Used lubricants, hydraulic liquids, and solvents will be collected in suitable containers and placed in a hazardous waste storage area, with an impermeable secondary containment system, until final transportation to a recycling or disposal site.
- Hydrotest Plan:
Prior to commencing any hydrostatic tests, the contractor will prepare a Hydrostatic Test Water ESIP for review and approval by PERU LNG. The Hydrostatic Test Water ESIP will follow internationally accepted hydrotest practices such as the Code of Practice for the release of Hydrostatic Test Water from Hydrostatic Testing of Petroleum Liquid and Gas Pipelines, Alberta Environmental Protection, 1999; Hydrostatic Test Water Management Guidelines from Canadian Association of Petroleum Producers, 1996.
Hydrostatic test headers will not be placed within wetlands. Once the test sections have been identified, full information on the water requirements, specific water intake points, and the final disposal of the used water will be obtained and evaluated. Sections of pipeline crossing major rivers will be hydrostatically tested prior to installation to identify any leaks.
All abstraction and disposal sites will be subject to an environmental risk assessment. The risk assessment must demonstrate that abstraction and discharge will have minimal environmental effect on the receiving waters prior to commencing activities. Water for hydrostatic testing will not be sourced from potable water supplies but from watercourses. Where possible, test water will be reused in adjacent test segments. Abstraction rates from surface water bodies such as streams and rivers will not exceed 10 % of the flow rate of the stream or river at the time of abstraction, nor cause an effect on the water level in a natural water body. However, in some areas along the RoW abstraction levels may be up to 30% of the flow rate of the stream or river, although the project is committed not to impact water availability for users upstream or significantly impact wildlife.
The water to be used for hydrostatic testing purposes will only be treated with oxygen inhibitors. No biocides or chemicals will be required for treatment unless detailed studies and justification are carried out by PERU LNG’s Pipeline Contractor and approved by PERU LNG. Prior to the discharge of treated test water, field sampling will be conducted to ensure that the quality of such water complies with the established standards.
Hazardous Material Management:
Fuel is required to be transported from local supply centers located in Lima, Pisco, and Ayacucho to storage areas in each camp, and from the storage areas to the work site. Only authorized companies registered with the General Bureau of Hydrocarbons (DGH) of the MEM can be used as fuel suppliers and transporters. Fuel trucks must be duly identified with safety signs or warning signs from the National Fire Protection Association (i.e. “danger, fuel” or “danger, flammable”), and must be equipped with the appropriate safety equipment. The trucks have to carry MSDS and relevant permits. Fuel truck drivers are certified and trained by the project for the specific activity and in compliance with the project Health and Safety Plan. Drivers are trained in initial emergency response for spills, and all trucks are equipped with a communication system connected to the base camps and refueling areas.
Fuel storage facilities are equipped with a containment basin with impervious lining and compacted base. The minimum volume of the containment area will be 110% of the volume of the largest tank or container. In areas prone to electrical storms (especially between Huaytará to Chiquintirca) facilities will be equipped with lightning rods and all electrical equipment and motors will always be grounded.
All project chemicals must be stored in covered and lockable buildings equipped with shelves or pallets with plastic liners, and a containment feature to prevent any spill from reaching a floor drain. Temperature, ventilation, and humidity conditions are monitored when such conditions are important for chemical safety. Staff is trained on the proper handling of these products. During pipeline construction a machinery yard will be set up in the camps to perform maintenance work on construction machinery and vehicles, as needed. As lubricants, fuel and other potentially hazardous substances are handled in these areas, the machinery yard will be protected by gutters or berms and other containment measures in the event of a spill incident.
Decommissioning:
The ESIA and the ESHS management plans make provision for decommissioning. The final abandonment of the project facilities is expected to depend on the duration of existing natural gas reserves as well as the possibility that additional natural gas reserves are found. Other factors, such as economic or market conditions, may also play a role in determining the timing of abandonment. The final abandonment will consist of dismantling permanent installations that were used during the project’s operations, permanent closing of the RoW and the final pipeline abandonment.
All infrastructures that can be dismantled will be disassembled and transported to PERU LNG’s warehouses. Cement slabs can be left in a designated area with the landowners’ consent or will be demolished and fragments will be buried in waste pits or separate pits prepared for this purpose that comply with PERU LNG safety, location, and design requirements. The piping that connects surface installations with the pipeline will be cut under the surface, sealed with cement stoppers at their openings, and covered with soil for revegetation.
The evacuation of natural gas in the pipeline will begin through depressurization by opening blocking valves or specific valves installed for this purpose. This operation will be implemented with strict safety controls and will use equipment to measure explosive mixing to identify risk. Once the natural gas is evacuated, the pipeline will not present a risk to the population or environment because of its inert nature. Leaving pipes buried will have the least social and environmental impact of any alternative, and would only require some work in specific places to reduce pipe interference in future land use. Therefore, impacts of decommissioning are likely to be limited.
PERU LNG will inspect the area during and after final abandonment to confirm the effectiveness of restoration and closure of the pipeline. Monitoring activity will be carried out in places where closeout activities are implemented to verify the fulfillment of plan objectives. Monitoring of the RoW will include an evaluation of the correct functioning of necessary geotechnical control, erosion and re-vegetation measures. PERU LNG will inventory affected areas and newly identified areas. Once stability is accomplished, evaluation and monitoring activities will be terminated.
A detailed Closure and Abandonment Plan will be submitted to the national authorities. Article 56 of the Regulations for Environmental Protection in Hydrocarbon Activities (DS No. 046-96-EM) stipulates that an abandonment plan must be presented to the proper authorities 45 calendar days before the end of operational activities. The plan will include description of existing environmental conditions, actions to remediate any contamination, and details of the abandonment process. Prior to abandonment the company will establish a fund to provide for closure of operations.
Emergency Response:
PERU LNG has developed a Contingency Plan for the construction phase of the LNG Plant based on a risk analysis of identified potential hazards, which were classified and ranked as follows:
- hazards to people;
- hazards to environment;
- hazards to property;
- hazards to production; and
- hazards to reputation.
The Contingency Plan presents details for initial response to any incident at a construction site, and roles and responsibilities in the event of an emergency. Additionally, the Contingency Plan describes different emergency scenarios including: vehicle incidents, fires, explosions, natural disasters, landslides, social disturbance, sabotage, storm and windy conditions at sea, and spills. The Contingency Plan for the pipeline construction will be completed prior to the commencement of construction in 2008 and is committed in the Action Plan. The Contingency Plan for the operations phase for the entire project will be prepared prior to commencement of operations and will be subject to an expert review as noted in the Action Plan.
Performance Standard 4: Community Health, Safety and Security:
The closest community to the LNG Plant is located 4 km to the South and the quarry is located approximately 7 km South of the nearest villages. Groups of make-shift huts around the LNG Plant site are not occupied permanently and are located beyond the defined buffer zone, which was designed to minimize safety risks. The pipeline does not cross through any villages; however there are a few houses in the vicinity of the pipeline’s RoW (but more than 25 meters away from it).
Community Safety:
project vehicular traffic has been identified as the main area of risk for community safety. PERU LNG’s Transport Management Plan (TMP) includes the following provisions:
(i) supply communities affected by traffic with sufficient information on project-specific traffic patterns and an opportunity to participate in finding solutions to any traffic-related problems;
(ii) ensure limitations on the size, number, frequency, and timing of project-related vehicles on specific roads, to minimize any negative impacts;
(iii) control hazards through the establishment of speed limits, driver training, journey management protocols, and appropriate signage; and
(iv) reduce impacts through effective emissions control, adequate vehicle maintenance, adherence to relevant standards including noise emissions, and defined working hours.
The contractor will ensure communities are advised in advance of near term activities where transport issues have the potential to impact local communities.
PERU LNG has constructed two underpass accesses to the LNG Plant below the Pan-American Highway to ensure traffic safety and avoid disruptions generated by project-related traffic, especially traffic from the quarry site. During preparation and operation of the quarry site, noise will be generated locally in the quarrying zone, particularly by shallow blasting. Noise levels will be significant, though of short duration, and restricted mainly to the quarrying area. Given that the quarry area is over 7 km from populated areas and because of a natural acoustic barrier formed by the presence of intervening high ground, impacts to surrounding communities will be low. For the same reasons, noise impacts related to traffic on the access road will also be low.
Risks associated with natural gas pipeline breaks and explosions are of very low probability, however redundancy monitoring and safety measures were incorporated in the design and the contingency plan; these will have provisions for drills in which the potentially affected population will take part. The pipeline will be segmented with valves located all along it, in order to minimize the amount of natural gas that could leak. A system using real-time leak detection implemented by the SCADA is used to detect a leak in the pipeline. The system detects variations in volume, pressure, and temperature all along the pipeline. This detection system receives information from instruments installed in the field, then processes, analyzes, and detects a leak, should one exist:
All pipeline valves have a rupture detection system, which automatically closes the valves if a leak is detected;
After the system has closed a valve, the valve inhibition system can be reset manually;
The rupture detectors report to SCADA to provide immediate notice to the operation control center; and
The Leakage Detection Procedure outlines the procedure for locating a natural gas leak.
The following steps are taken when a leakage of considerable size is detected:
All valves (via SCADA) will be closed automatically or remotely; and
All station entry and exit valves will be closed, so as to completely block each pipeline station.
This will completely stop natural gas transportation. As the natural gas moves from greater to lesser pressure, the entire content of the section will leak through the puncture that caused the initial discharge. The volume lost is calculated using the diameter of the pipe in the sector with the least thickness. As the NG is lighter than air, in the event of a leak, it will dissipate into the atmosphere, and therefore the risk decreases dramatically in a short time once the natural gas flow is stopped. The risk of explosion is relatively low as an ignition source is needed close to the explosive atmosphere. This has happened on other pipeline projects only in some exceptional cases.
Community Health:
An inoculation and vaccination strategy has been implemented by PERU LNG to protect local communities from the possibility of outbreak of infectious diseases. Pollution control management and monitoring programs will minimize any potential incidence of water-borne or water related diseases for communities along the pipeline RoW. PERU LNG has established a Code of Conduct for project workers that among other things, limits interaction between non-local project employees and local communities. For example, non-local employees will be confined to the camps when not on the work site. They will not be allowed to interact with local people or to visit local communities for recreation in an effort to avoid disease transmission, including sexually transmitted diseases.
Security:
PERU LNG will communicate frequently with local communities regarding security issues using a participatory approach. PERU LNG security arrangements will follow principles of proportionality, best international hiring rules of conduct, training, equipping and monitoring of security personnel. None of the private security groups working for PERU LNG, or contractors’ security staff, will be armed. Private security groups will observe the policies of PERU LNG regarding ethical conduct and human rights, Peruvian law and international humanitarian law. All allegations of human rights abuses by private security personnel will be recorded and properly investigated. If allegations against private security providers are reported to the national law enforcement agencies, PERU LNG will monitor the status of the investigation for full and proper resolution.
Performance Standard 5: Land Acquisition and Involuntary Resettlement:
Pipeline Land and Easement Acquisition:
The RoW land and easement acquisition process commenced in April 2006. Construction is due to commence in January 2008 and restoration is expected to be completed by April 2010. By October 2007, the project had acquired 53% of the land and easement required by the project and was on schedule to acquire all land for construction. A PCMP has been prepared which includes procedures to conduct consultations, appraisal, negotiation, and compensation for land acquisition in the pipeline RoW, and also for use of local roads, infrastructure, and natural resources such as water, rock, timber, and other removable resources. The PCMP includes a Monitoring and Evaluation Framework with specific indicators aimed at measuring livelihood restoration. PERU LNG is conducting an additional household baseline survey to form the basis for ongoing monitoring and to allow for a conclusive PCMP Completion Audit to be conducted approximately 36 months after completion of construction.
The pipeline routing was designed to minimize impacts and no physical resettlement is expected. To date, 61 micro re-routings have been implemented to avoid impacts such as resettlement, disruption of water supply and irrigation channels, and impacts to archeological sites. Most of micro re-routings have been implemented in areas utilized by communities that have been identified as highly or moderately vulnerable. In general, expected impacts of land take for pipeline construction on directly affected households and communities are relatively limited (mostly short-term temporary disruption of farming, herding, and grazing activities). Although physical resettlement is unlikely, in case it becomes necessary PERU LNG will develop a Framework Resettlement Action Plan in accordance with the IFC Performance Standard 5, favoring land-for-land approaches as detailed in the attached Action Plan.
The most common land acquisition activity will be easement acquisition for the RoW. The RoW strip for the construction period (3 years) is 25 meters wide along the pipeline’s 408 km length (1,020 ha in total extent). During the operation period (37 years after construction), the RoW strip will be 20 meters wide (816 ha in total extent). However, during the operation period land users may make use of the surface of the soil in the RoW, with the following restrictions:
a) only erecting buildings or fences with PERU LNG’s authorization;
b) only growing farm crops with shallow roots; and
c) not planting trees in a 15 meters wide strip within the center of the RoW.
A limited number of sites will experience permanent loss of use of land that is required for the above ground installations, totaling a combined area of 2.6 ha.
Approximately 66% (673 ha) of the land within the pipeline’s RoW is community owned, 25% (255 ha) is owned by the State and 9% (92 ha) is privately owned. The RoW traverses the Departments of Ayacucho, Huancavelica, Ica, and Lima and intersects 1,580 land parcels belonging to 34 Rural Andean Communities and 36 Annexes (sub-divisions of communities), including approximately 1,296 possessors (community members with land use rights but not property ownership rights), 187 individual owners, and the State.
Compensation procedures and valuation methodologies are described in the PCMP, which has been developed and disclosed in accordance with local regulations and IFC Performance Standard 5 guidelines. In addition, PERU LNG has developed a “Guide to Land and Easement Acquisition and Compensation” a brochure which has been distributed amongst affected communities describing the process in Spanish and Quechua. PERU LNG is making efforts to acquire all easements through negotiated settlements thereby avoiding the need to establish easement rights by administrative means. Compensation for land easement is paid to land owners. Compensation for crops and improvements are paid to those parties currently using the land, including land owners, possessors, and including persons with no recognizable legal rights occupying the RoW prior to the cut-off date. Valuation of properties, improvements, and crops are based on full replacement cost assessed by both the Ministry of Housing and by a private contractor (Meridian Proyectos S.A.C) using land experts and agronomists. When these two appraisers offer different estimates of values, PERU LNG accepts the higher of the two figures to start the negotiation process.
Those households directly affected by land acquisition for pipeline construction are being engaged individually and in a culturally appropriate manner before, and during, the negotiations process. These households are provided the opportunity to obtain advice from external independent parties of their own choosing (e.g. local leaders, NGOs, family members). The negotiation process is duly documented. PERU LNG has also defined a specific grievance mechanism for land and easement acquisition issues. PERU LNG will identify and coordinate suitable means to address outstanding issues where the TgP pipeline is in close proximity to the PERU LNG pipeline and where these issues also affect PERU LNG’s PAPs. This is in an effort to learn and benefit to the greatest degree possible from TgP’s experiences in dealing with landowner issues and challenges with re-instatement.
PERU LNG makes provision for assistance programs for PAPs on a voluntary basis aimed at enhancing opportunities arising from the compensation process, through coaching in decision taking to maximize use of compensation for livelihood re-establishment, to improve farmland productivity and cattle husbandry, or to develop alternative income generating activities. As a requirement of the Action Plan more detailed plans will be prepared to provide independent advice to local households and for livelihood restoration assistance. All communities in the RoW will also be considered for PERU LNG’s Framework Plan for Investment in Community Development (FPICD).
Fishermen Compensation Program:
For safety reasons, PERU LNG and contractors must restrict access to the beach area adjacent to the Pampa Melchorita Plant site, and to the sea around the marine facilities. This will divide a 28 km section of the beach in two, preventing some movement of fishermen who occasionally walk along the beach seeking fishing sites. The restrictions will result in some negative impacts on the livelihoods of local small-scale artisanal shore fishermen from the cities of Chincha and Cañete. However, realizing the importance of the beach to these artisanal fishermen, PERU LNG has posted Community Relations Officers (CROs) at either end of the restricted zone. The CROs coordinate access by fishermen to the beach with the construction supervisors.
These impacts were identified during the ESIA process and PERU LNG has engaged consultants to conduct complementary social baseline studies and to use participatory means to develop a Fishermen’s Compensation Management Plan (FCMP) in accordance with local and IFC Performance Standard 5 requirements. The FCMP includes, among other aspects, the description of the measures adopted to avoid and minimize economic displacement, the identification of impacts and corresponding compensation and mitigation measures, and a Monitoring and Evaluation Framework with specific indicators aimed at measuring livelihood restoration and satisfaction.
A Completion Audit of the FCMP will be conducted and PERU LNG will consider that livelihood restoration is completed when the catch-effort ratio has been restored and/or alternative sources of income have been secured. The Completion Audit is a requirement of the attached Action Plan.
To date approximately 700 people and 14 fishermen organizations, including individual non-affiliated fishermen, have been engaged since the early stages of the process and have been participating in the identification of affected groups, potential impacts and mitigation alternatives, such as: i) technical assistance to strengthen productive capacities, improve catch, improve storage, etc.; ii) support for the sustainability and effectiveness of fishermen’s associations; and iii) support for groups of affected fishermen, such as provision of fish storage facilities; and scholarships for the sons and daughters of fishermen. PERU LNG will select jointly with the fishermen which activities to implement through experienced partners (such as locally experienced NGOs).
Regular meetings are conducted with these groups and the process is being fully documented and supervised by local and national authorities. In addition, representatives from the fishermen’s associations have been participating in the Marine Monitoring process being conducted by PERU LNG for the construction of the marine facilities.
Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resources Management:
Biodiversity baselines of the different facilities locations were described and assessed as part of the three ESIA reports. In the case of the pipeline a second study called “Ecological Field Survey” (EFS) provides a more detailed survey and assessment and complementary preventive and corrective action to those proposed by the ESHS management plans.
LNG Plant and Quarry:
No critical habitats have been identified in the area occupied by the LNG Plant, the quarry and the quarry access road. They do qualify however as natural habitats. The only impact identified is the loss of Tillandsia latifolia, a small bromeliad (members of the pineapple family) which form carpet patches or mats in coastal desert areas of Peru and north of Chile. Vegetation clearing will be a significant impact to the sparse plant coverage during construction. Tillandsia latifolia is not classified as endangered and its presence at the plant and quarry sites is not considered an indication of the presence of a critical habitat. The company has plans to establish a nursery area to supply this species for replanting purposes. Specifically, at the quarry area, similar considerations apply to some cactacea species (gen. Haageocereus and Nolana). Impacts on fauna within the LNG Plant and quarry area of influence are considered moderate, but of short-term. Lower mobility animals such as some reptiles and amphibians, would be more vulnerable but the impact will not threaten their populations.
Marine facilities:
The ESIA for the LNG Plant states that there are no formally designated marine critical habitats and no sea grass communities or any other sensitive biological community within the project area. Intertidal and subtidal planktonic and benthic communities will be affected by dredging activities; however, dredging impacts were assessed as moderate. The company has developed a Dredging CMP to minimize the potential impacts and a monitoring plan to control turbidity and physical and chemical properties of suspended sediments.
Pipeline:
The baseline biological study has identified a number of sectors of the pipeline as being ecologically sensitive. In general terms, the most sensitive ecosystems are the dry forest river valleys of the Apurimac and Mantaro basins, the western Andean scrublands and cactus formations, the hydromorphic habitat islands of the Pisco sand plains, and the riverine ecosystems of the coastal plain.
The EFS, completed in May 2007, identified 14 Ecological Landscape Units (ELUs) within the 50 meter width of the 408 km pipeline RoW, based on bio-geographical information and ecological criteria. Habitats within every ELU were identified by association with specific vegetation units, and relative sensitivity of each habitat was determined by considering the species sensitivity. Species sensitivity was determined for each species documented by the EFS on the basis of four characteristics:
- protected status;
- geographic distribution;
- use by local communities; and
- mobility (ability to flee from a disturbance).
The overall results in terms of habitat sensitivity along the RoW can be found in the Sensitivity attachment under "Full Documentation":
The designation of High Sensitivity Habitat Type used by the EFS report is relatively closely aligned with the designation of “critical habitats” of Performance Standard 6. The EFS identified 7 highly sensitive habitats that are described as follows:
1. Torobamba River Valley Cultivated Areas.
Patches and corridors of native vegetation are observed between the crop fields. These patches contain listed and endemic species typical of dry forests and scrublands of the Apurimac Dry Forest System. Among these species are the endangered cactus Corryocactus quadrangularis and the critically endangered rosaceous shrub Kageneckia lanceolata.
2. Torobamba River Valley Thorny Scrub.
Higher up the valley slopes, patches of thorny scrub harbor the critically endangered rosaceous shrub Kageneckia lanceolata and other sensitive dry forest and scrub plants, as well as the endangered white-tailed shrike tyrant, a bird of the flycatcher family.
3. Yucay River Valley Resinous Scrub.
The dry Yucay River Valley contains patches of native vegetation belonging to the Mantaro Dry Forest System, including populations of the endangered cactus Corryocactus quadrangularis and the vulnerable cactus Echinopsis peruviana puquiensis.
4. Pisco-Ica Watershed Divide Mixed and Thorny Scrub.
The upper slopes of the western Andes which drain to the Pacific Ocean support highly adapted plant species such as the critically endangered composite shrub Chersodoma arequipensis and the regional endemic Aequatorium tovarii. Also, these habitats may support populations of the endangered rufous-breasted warbling finch, as documented by the ESIA.
5. Coastal Bat Hills Desert Scrub and Columnar Cacti.
The lower desert slopes of the Andean foothills support sparse yet diverse vegetation with various threatened and endemic species of cacti and shrubs, including the endangered Cleistocactus acanthurus. This habitat supports populations of the critically endangered long-snouted bat (Platalina genovensium), a species that feeds exclusively on the pollen and nectar of night-blooming cacti.
6. Pisco Sand Plains Hydromorphic Islands and Lagoons.
Among the sand dunes south of the lower Pisco River, there are small oases of wetland vegetation, often surrounding small permanent waterbodies such as the Bernal and Moron lagoons. These unusual habitat islands support fauna that could not otherwise survive in the surrounding desert environment. For example, the vulnerable slender-billed finch, an endemic coastal desert bird that nests only in hydromorphic thickets and riparian areas. While not containing any highly sensitive species, these habitats are considered to be highly sensitive due to their uniqueness, limited geographic distribution, presence of various medium sensitivity species, and loss of similar habitats in the region to agricultural conversion.
7. Ica-Lima Coastal Plain Riverine Corridors.
The coastal plain of south-central Peru is traversed by various highly seasonal rivers and streams. The natural vegetation along these streams was formerly a dense riparian woodland and thicket, but these have largely been lost with the development of irrigated agriculture in the narrow river valleys. Only small fragments of these habitats remain. The rivers themselves have been affected by agriculture and urbanization. Nevertheless, the Pisco River supports a critical species from a socioeconomic perspective, the freshwater river shrimp Cryphiops caementarius, an important fishery species with an important contribution to the local economy.
Of particular concern are the Andean wetlands or “bofedales” which the EFS considers as a component of the identified ecological landscape units. “Bofedales” are found throughout Peru’s Central Andes and have high biological sensitivity.
The ESIA reports that the “bofedales” cover approximately 6,330 ha of the corridor (4.15% of its total) and 30.8 ha in the RoW (2.55%). The “bofedales” are described as peat bogs located in depressions and undulations on the Andean plateau, and in valleys containing hydromorphic soils perennially saturated with water, small lakes and runoff channels. These peat bogs are recognized sensitive features of the region and are of social, hydrological, and ecological value. These are commonly the only source of water during the dry season for the local population, domestic livestock, and wild life. Peat bogs occur in seven of the fourteen ELUs, east of kp 250 which forms the edge of the Andean high plains and ridges. The peat bogs are hydrologically critical for their high water retention and storage capacity, serving as sources and regulators of water for the lower reaches of the basins. Their biodiversity significance can also be demonstrated by the presence of locally adapted species, e.g. small orchids of the genus Myrosmodes occupy some peat bog wetlands (cataloged by INRENA as near threatened). Mineral-rich peat bogs are the sole habitat of the white-bellied cinclodes (Cinclodes palliatus), an IUCN-endangered, and INRENA-critically endangered bird, endemic to the central Peruvian Andes. Therefore the “bofedales” are considered critical habitats.
None of the critically endangered plant or animal species has a distribution restricted to the PERU LNG Pipeline RoW area of influence and the construction and operation of the PERU LNG Pipeline will not affect the routes of any migratory species.
The “bofedales” will require special consideration and measures to avoid and minimize impacts by construction works, including accelerated construction work programs to limit the period of disturbance and to protect the topsoil and the natural vegetation during the construction phase, in order to restore the habitat as close as possible to its pre-construction condition. The Action Plan includes a company commitment to avoid the construction of temporary facilities at “bofedales” unless there are no other feasible options.
The EFS proposed a set of actions and procedures to be implemented during the pipeline construction that will ensure that there are no adverse impacts to the habitats to support their current species abundance and composition (even when some individuals would be sacrificed) so that no measurable impacts on biodiversity will be noticed. The recommendations from the EFS, along with some good practices for biodiversity conservation, were included in the Ecological CMP and the Biorestoration CMP.
Overall, PERU LNG seeks to restore all habitats to pre-construction condition to the extent practicable, and will take actions appropriate to protect threatened species during all phases of the project. Monitoring of biodiversity during construction and operation of the project will be carried out by PERU LNG to ensure that the project does not result in any significant adverse impacts on ecosystems, habitats, and species.
PERU LNG’s Ecological CMP is a preventative plan that covers flora and fauna protection, wetlands, water crossings, top soil management, and pollution protection and was designed to interact with the Biorestoration CMP. This Plan also addresses planning/design/pre-construction stages of the construction phase. The scope of the plan at field level includes the RoW, borrow pits, roads, shooflies, pipeyards, campsites, storage areas, and any other off-RoW sites. The main mitigation measures include: taking cognizance of biological seasonal factors (e.g. mating, nesting, and migration) in planning construction activities, pre-construction surveys, pre-clearance surveys, wetland crossings, river crossings, cross-over above pipeline trenches, noise abatement, flora protection, animal protection, signage (prohibition of fires, hunting, fishing, and collecting plants or animals). The Plan contains measures to protect streams, lagoons, and bogs along the RoW as well as procedures for the protection and maintenance of topsoil and natural vegetation during the construction phase, in order to restore the habitat as close as possible to its pre-construction condition.
The Biorestoration CMP is complementary to the Ecological CMP and is specifically designed to mitigate impacts on flora and fauna. The plan describes the actions to be taken for physical reinstatement and biological restoration of the RoW, borrow pits, access roads, shooflies, pipeyards, and campsites.
The main objectives are:
- Restore the land affected by project activities along the RoW, campsites, surplus material depots, access roads, and other work areas;
- Protect the topsoil and restore vegetation cover as quickly as possible after construction in order to stabilize the ground surface, avoid soil erosion and mass wasting, and protect pipeline integrity;
- Return the ground to its original pre-construction condition to re-establish original biodiversity, natural habitats or human land use activities; and
- Promote re-vegetation as quickly as possible to protect the soil against erosion and safeguard sensitive ecological habitats, such as water bodies and wetlands, against sediment deposition.
The company has not yet put together the corporate Ecological and the Biorestoration Management Plans which are parent documents for the Contractor Plans. While the existing CMPs satisfy the needs for the pipeline construction phase, the corporate plans will be useful to guide the development of new Contractor’s Ecological or Biorestoration ESIPs for the operation and maintenance phase, or the building of new facilities. The Action Plan has provisions for the completion of the above mentioned PERU LNG’s Ecological and Biorestoration Management Plans.
A detailed Biodiversity Monitoring Plan (BMP) is currently being prepared. PERU LNG is currently working with some national and international scientific and institutional communities to design a BMP that is consistent with accepted standard international monitoring and assessment practices, and also to ensure that the results of the monitoring are made available in an open and timely fashion to researchers and policy makers, in addition to the general public and local communities.
Field monitoring will be performed by Peruvian consultants and researchers, with PERU LNG oversight and international expert quality control and verification. Preparation of a final detailed version of the BMP is a requirement of the Action Plan.
Invasive alien species:
The Biorestoration CMP for the pipeline proposes the use of native or naturalized species favorably adapted to the local environment without being invasive or intrusive. Additional detailed evaluations will be carried out as part of the Corporate Biorestoration Management Plan to make sure the most appropriate species are selected along the RoW, based on such aspects as topographical conditions, precipitation, and erosion risk areas.
Re-vegetation of the RoW will comprise natural re-vegetation based on the seed bank preserved within topsoil stockpiles, that will be prepared during the preliminary clearing and grading activities of construction, and also assisted re-vegetation using a combination of naturalized species from commercial sources and native species collected from the pipeline route and surrounding area. Assisted re-vegetation will aim to be representative of the natural and original biodiversity of the area prior to construction. There will be no use by of non-native, invasive species by contractors in any reinstated areas.
Performance Standard 7: Indigenous Peoples:
- Rural Andean Communities (RAC)
As stated in Performance Standard 1, the Andean section of the proposed pipeline crosses the departments of Ayacucho and Huancavelica and involves 34 RACs and 36 subdivisions (annexes) of those communities. Communal land ownership and community use of natural resources (e.g. pasture lands), and traditional decision-making arrangements are common in RACs. Quechua and Spanish are their spoken languages (both recognized as official by the Peruvian Constitution). Most RACs are poor, vulnerable, and dependent on small-scale farming, herding, and grazing and agricultural wage labor for their livelihoods. RACs have different levels of access to social services, roads, and markets. The Peruvian legal framework recognizes and protects the land rights and cultural particularities of the RACs.
The identification of RAC members as indigenous peoples is a complex issue that is subject to on-going debate, given the different levels of integration of these communities into the broader society and the fact that generally the members of these communities do not self-identify as indigenous. However, given the above described cultural and socioeconomic characteristics of the RACs, the project will treat them in accordance with the requirements of IFC’s Performance Standard 7.
Accordingly, PERU LNG has prepared a Rural Andean Communities Management Strategy (RACMS) aimed at minimizing and mitigating potential impacts and enhancing benefits in accordance with Performance Standard 7 objectives. The RACMS includes culturally appropriate provisions for: minimizing impacts and mitigating unavoidable impacts; continuous and on-going information sharing and consultation; free and easily accessible attention to grievances; preferential hiring of local people; and compensation at full replacement cost for the use of land and other resources (refer to Land Acquisition and Involuntary Resettlement section) as required in Performance Standard 1, Performance Standard 5, and Performance Standard 7. PERU LNG has also included specific considerations regarding RACs in other key documents of its ESHS-MS (i.e. Pipeline Compensation Plan, Grievance Procedure, Local Hiring and Purchasing Plan, Framework Plan for Investment in Community Development, Stakeholder Engagement Plan, and Cultural Heritage Management Plan).
The process of community engagement described in Performance Standard 1 has been designed to be culturally appropriate and to enable an on-gong process of free, prior, and informed consultation with participation by local community representative bodies, and inclusive of both women and men and various age groups. Agreements concerning the nature of the on-going consultation and land acquisition process were signed with each community representative body prior to detailed discussions with land users. Specific measures have been taken to minimize impacts, including micro-rerouting after discussion with communities to avoid built structures, cultural property and other sensitive areas.
In addition to the ESIA, PERU LNG has conducted a Social Vulnerability Analysis for the RACs with input from local experts. The analysis was based on potential impacts, recovery capacity, use of resources, and socioeconomic standards, to design specific procedures for those that were found to be most vulnerable. Six RACs were found to be highly vulnerable; 23 to be of moderate vulnerability and 4 of low vulnerability. There is still one RAC under analysis. These communities were consulted during the ESIA process and their concerns addressed, including small-scale pipeline re-routes to avoid impacts on sacred sites, wells, and houses (refer to Community Engagement section). As a requirement of Performance Standard 7, and as part of the Rural Andean Communities Management Strategy (RACMS), a socio-cultural assessment will also be conducted to identify if there are any cultural particularities, including sacred sites and land uses, in these communities that would make them more vulnerable and to define mitigation measures accordingly (refer to attached Action Plan).
As described in Performance Standard 1, PERU LNG has developed a Framework Plan for Investment in Community Development (FPICD), and this involves a participatory planning approach to ensure free, prior and informed consultation with affected communities, and their informed participation in identifying opportunities for culturally appropriate development benefits. This consultation process will be followed in the on-going detailed planning and implementation of development projects.
As part of the Action Plan requirements, a Community Environmental Monitoring program will be prepared to ensure participation of the community in verifying compliance with environmental and social standards and commitments. Communities will choose their own representatives, who will be trained to monitor the environmental and social impacts of the project in their area, and they will provide feedback to their communities.
Performance Standard 8: Cultural Heritage:
LNG Plant:
Archaeological surveys of the Pampa Melchorita LNG Plant site undertaken prior to construction encountered no remains or artifacts. A Certificate of Non-existence of Archaeological Remains (CIRA) was issued by the INC (Peruvian National Cultural Institute) on 8 January 2003. During construction of the LNG Plant one isolated burial site with skeletal remains was encountered as a chance find and this discovery was appropriately reported and rescued by the INC. Ongoing construction work continues to follow protocols for chance finds.
Quarry:
Cultural resource management activities are almost complete in the area of the quarry as well, except for possible chance finds, and a small rescue project is currently underway along the haul road which proved unavoidable. In the area of the quarry and along the quarry access road, many archaeological sites were identified during the ESIA field surveys. An ancient road was identified and marked to protect it during the construction phase. The access road was rerouted as much as possible to avoid these sites. The INC has approved the archaeological assessment and provided PERU LNG with the required CIRA certificate. Subsequently, PERU LNG has provided monitoring reports to the INC.
Pipeline:
The area surveyed for the purpose of the ESIA is the pipeline RoW and an adjacent 50 meter wide strip. Additional sites identified (through bibliographic review or previous projects) have also been included within the ESIA corridor. Archaeological information from the TgP project was used as a reference point due to its proximity to the future PERU LNG pipeline.
A total of 465 archaeological sites were identified in the corridor during the ESIA. Of these, 132 were sites previously recorded during construction of the TgP pipeline and have been included in this study due to their proximity to the area of direct impact. The remaining 333 archaeological sites were recorded during field work for route selection. Of the total sites identified, most were avoided during the route selection but 177 are located directly within the current route. These 117 sites are being rescued (totally or partially) according to the INC requirements. There are also 170 sites adjacent to the current RoW. A total of 156 sites were registered adjacent to access roads. Along the pipeline route, detailed and well organized archaeological studies are currently ongoing with the intent of mitigating the sites that cannot be avoided. It is expected that INC will issue the CIRA before the end of 2007.
PERU LNG and contractor archaeological work is done in consultation with area communities with public meetings attended jointly by PERU LNG Community Relations staff and the archaeologists.
- Cultural Heritage Management Plan:
PERU LNG has prepared a Cultural Heritage Management Plan to describe the management tools and procedures that will be applied during the construction phase. PERU LNG currently employs an archaeologist for the Plant and the quarry areas who work with the contractors during ground disturbing construction activities. This arrangement is according to the guidelines established by the INC.
Three full-time field based archaeologists along the pipeline RoW, supervise the handling of any unexpected finds to prevent damage. In the event that any artifacts are found, construction work will be stopped to allow for inspection and appropriate notifications in accordance with INC requirements. A PERU LNG policy that no worker may possess or remove an archaeological artifact from the project area will be strictly enforced. Technical staff of PERU LNG and its contractors will regularly attend seminars to learn to recognize archaeological material, how to care for it, and the steps to take in the event of a chance find.
The pipeline Contractor’s Cultural Heritage ESIP will identify, at a minimum, the following:
Close coordination with PERU LNG pipeline archaeological staff;
The monitoring process that will report and record such chance finds;
Internal and external finds recording and notification procedures to be followed;
Contractor actions that may be required to minimize impacts to the chance finds, and the relevant responsibilities of the project’s personnel; and
Contractor’s Chance Find Procedure.
The Pipeline contractor staff counterparts will include a project Cultural Heritage Manager and a Field Cultural Heritage Manager/Supervisor. The contractor will also ensure that there are adequate field-based cultural heritage officers to undertake monitoring, especially during intrusive or earth-handling construction activities such as clearing and grading, topsoil stripping, and trenching.
Any proposals by the contractor to undertake works outside the project-defined RoW footprint (e.g. for borrow pits, access roads and shooflies, rock disposal sites, topsoil, subsoil and temporary rock storage areas especially at steep slopes, side slopes and river crossings) require the contractor to consult with INC and obtain a CIRA for each area.
Cultural Heritage Chance Find Procedure:
PERU LNG has prepared a procedure to manage late chance finds and this forms part of the Cultural Heritage Management Plan. In the case of a Chance Find, activity will cease and the area will be marked for avoidance; supervisors, field personnel, and project and government cultural heritage representatives will be notified; and appropriate treatment strategies developed. Site treatment scenarios to be considered will include preservation in place through rerouting or specialized construction techniques, and rescue excavations in advance of additional construction work, if avoidance is not possible. Only after all treatment work is agreed and any required excavations carried out, will project activity be allowed to resume in the area.
Upstream Facilities Assessment:
The Upstream Facilities are not funded as part of the IFC’s financing, and are composed of Block 88, Block 56, the Malvinas Gas Separation Plant, and the TgP pipeline facilities. Under Performance Standard 1 Social and Environmental Assessment and Management Plan, IFC has determined that these facilities are not “associated facilities” because they do not meet the definition which requires that “associated facilities that are not funded as part of the project (funding may be provided separately by the client or by third parties including the government) and whose viability and existence depend exclusively on the project and whose goods or services are essential for the successful operation of the project.” In other words, these facilities would exist even if the PERU LNG project was never constructed and implemented. However, as there might be significant business risks for the PERU LNG project arising from actions or non-performance of these upstream facilities, and as part of IFC’s due diligence process they have been examined on a risk basis.
In the event that a risk is considered as high for the project, and when the company has control or influence over the actions and behavior of the third party, IFC requires the company to collaborate with the third party to achieve the outcomes consistent with the Performance Standards (IFC’s Policy on Social and Environmental Sustainability).
Pluspetrol’s and TgP’s operations (Block 88, Block 56, Malvinas Gas Separation Plant, and TgP pipeline) were assessed through a review of environmental and social issues and their related relevant management actions. The focus of the review was limited to those activities which may cause (or contribute to cause) significant impacts and constitute a high risk, and did not cover in detail all other potential environmental and social impacts and their mitigation plans for the entire scope of the upstream projects.
The review involved interviews with Pluspetrol and TgP key personnel; field visits (one in 2006 and two in 2007); and the review of environmental and social impact assessments for upstream facilities and other documents provided by the project, including recent independent evaluations and audits of the Camisea project.
Pluspetrol, the operator of Block 88, Block 56, and the Malvinas Gas Separation Plant (herein referred to as the Operator) has implemented Environmental, Health and Safety, and Social Management Plans in accordance with ISO 14001 and OSHAS 18001 standards and international best practices. The review of the Operator’s management system was limited to an assessment to identify significant risks and thus did not cover every aspect in detail. The Operator’s management system has been in operation for several years and consequently has evolved and improved its control over social and environmental impacts. The operational aspects of environmental, social, health and safety management have a sound level of supervision and control. The Operator has Contingency Plans that are adequate to deal with different possible emergency scenarios. This management system includes a plan to address biodiversity issues based on biological information obtained from the current Biodiversity Monitoring Program (BMP). Social issues and impacts on local indigenous peoples are complex. The Operator has developed a detailed Social Relations Plan and assembled an experienced team of social development specialists to work with local communities using participatory methodologies to address these issues and impacts.
Two high risk aspects were identified from the review, namely existing and potential impacts to the biodiversity and indigenous peoples of the area. These issues are discussed in the following sections. PERU LNG, working with the Operator, will undertake best efforts to address these risks by building on existing activities as well as mitigation measures as detailed in the attached Upstream Facilities Action Plan, which has been developed by PERU LNG with extensive consultation and input from the Operator.
Block 56 and 88:
The Block 56 field license area is located in the Lower Urubamba Region of the Cusco Department in southeastern Peru, and has a total surface area of 58,500 ha and comprises two natural gas fields, Pagoreni and Mipaya. Block 56 is adjacent to the existing Block 88, and therefore has many similar biophysical characteristics.
The majority of the Indigenous Peoples of the Machiguenga population within Block 56 is located in settlements along the banks of the Urubamba River. These communities hold legal land titles to about 82.5 % of the Block. Of the remaining land, 12.5 % is comprised of lands reserved for the Government and this area is known as Shintorini, a small portion of which is occupied by colonist farms. The remaining 5 % of the area is made up of various water bodies, mainly the Urubamba River.
The natural gas reserves of the area, (including reserves in Block 56 and 88) are located in the rainforest of the Amazon Basin, a globally recognized center of biodiversity because of its biological richness, high number of endemic species, and the presence of threatened species.
The BMP for 2006 indicates that the estimated project footprint for Block 56 is as follows: 63 ha used for seismic lines; 8.8 ha for heliports and camps for seismic development; 14.3 ha for Pagoreni A (7.1 ha for the well pad and 7.2 ha for the surrounding disturbed area); 14.4 ha for Pagoreni B (6.6 ha for the well pad and 7.8 ha for the surrounding disturbed area); 0.85 ha for Pagoreni heliport and base camp; 59.7 ha of flowline; 54.7 ha for additional facilities and earthworks associated with the flowline (e.g. pipeyards, shooflies, directional crossings). Excluding the seismic lines (which have been completed), the total project footprint is 153.1 ha. This represents 0.26 % of the total 58,500 ha concession. The Lower Urubamba Region is part of the 74.9 million ha Southwest Amazon Moist Forest ecoregion, which extends over much of lowland eastern Peru, northern Bolivia, and western Brazil.
In Block 56 the Pagoreni field is being developed by directional drilling of wells from two platforms (Pagoreni A and B) and the development of a flowlines system from the natural gas platforms to the cryogenic separation facility located in the Malvinas Gas Separation Plant. The flowlines subproject, with a total length of 25.6 km of 24 inch pipe, will be constructed from the Malvinas plant to the two drilling platforms. The NGL generated from the separation of the natural gas from Block 56 will commence production in April 2008, more than two years before PERU LNG natural gas is produced and transported. Once the PERU LNG facility is operational, natural gas from Block 56 will serve as feedstock to the PERU LNG Plant, but in the meantime natural gas will be re-injected.
Block 88 comprises 120,000 ha and two fields, San Martin and Cashiriari, and is located adjacent to Block 56. Both blocks are located between two areas recognized for their high bio-diversity: the Machiguenga Communal Reserve on the West and the Manu National Park to the East.
Currently, Block 88 production is generated from the San Martin field, which started producing hydrocarbons (NGL and natural gas) in 2004. This field has 8 wells, 5 for NGL and natural gas production and 3 for natural gas injection. The drilling operations have been developed using the “offshore-inland concept” where all wells were drilled as clusters using only two wellpads and equipment and personnel accessed the site via helicopter to avoid the need for any access roads.
As part of IFC’s risk-based review, all aspects of the Upstream Facilities activities have been examined, and it has been determined that high risk issues associated with impacts to the biodiversity and indigenous peoples in Block 88 and 56 have high significance to the PERU LNG project. The Operator of Block 88, 56, and the Malvinas Gas Separation Plant has in place programs to address these two areas of concern, including a BMP and various indigenous peoples programs. Direct impacts identified that have a high risk include:
(i) invasive species used for cover control in the Malvinas Gas Separation Plant with the potential of spreading to other areas;
(ii) potential loss of fauna and flora in Blocks 88 and 56;
(iii) potential erosion and sedimentation during construction of flowlines;
(iv) socio-economic and cultural transformations; and
(iv) potential impacts to hunting and fishing livelihood activities.
The Operator of Block 88, 56, and the Malvinas Gas Separation Plant has developed plans to mitigate and monitor these aspects. The direct, indirect, and cumulative impacts will require additional studies and assessment to show that no significant impacts have resulted from the project activities.
The Operator of Block 88 and 56 has developed and is in the process of implementation of a BMP which is being carried out by a group of experts in the various fields of biodiversity, including Universities from Peru, Argentina, and Spain. The gathering of data and analysis is conducted every year and a report is then prepared and made available through the BMP website. Early results indicate that Block 88 and Block 56 activities have not had a significant impact to the biodiversity in the direct area of influence; however, the report also presents recommendations for actions to minimize further impacts.
Regarding indigenous peoples in Block 88 and 56, a number of efforts have been underway for several years regarding consultation and provision of development opportunities for indigenous peoples in the rainforest. Despite these efforts there are currently some negative perceptions amongst some local stakeholders and outsiders concerning the consultation process, benefits, and community development in the area. In order to address these issues and reduce risk for local people and the project, the Operator will integrate all ongoing efforts in Block 88 and 56 into a robust Indigenous Peoples Development Plan (IPDP) according to IFC’s Performance Standard 7 on indigenous peoples.
This Plan will seek to improve existing mechanisms and procedures to ensure that on-going consultation concerning future activities will allow for prior, free and informed consultation (FPIC), and that indigenous peoples are actively engaged in development projects through participatory methodologies to maximize opportunities and benefits. The IPDP will also include long term objectives to:
i) ensure adequate on-going coordination and synergy among existing development projects;
ii) provide an integrated development framework to enhance positive impacts and attract and facilitate input from a wide range of relevant stakeholders (local people, community based organizations, government, non-governmental organizations, international aid organizations, etc);
iii) identify potential inputs and projects and provide an action plan with targets, schedule, budget, and responsibilities; and
iv) establish a monitoring and evaluation framework to assess outcomes and provide feedback.
PERU LNG with assistance from the Operator of Block 88, Block 56, and Malvinas Gas Separation Plant has developed an Upstream Facilities Action Plan which addresses these issues and which will enhance the current programs for biodiversity protection and indigenous peoples.
The Malvinas Gas Separation Plant:
The raw natural gas production from Block 88 and Block 56 will be transported to the Malvinas Gas Separation Plant located 50 km away from the natural gas wells. The plant is located at the Malvinas site on the eastern bank of the Urubamba River, but outside the boundaries of Blocks 88 and 56.
The Malvinas Gas Separation Plant will require additional capacity to process the natural gas delivered by Block 56. The Malvinas Gas Separation Plant expansion activities are planned within the currently occupied property and footprint. There will be no impact to the local flora and fauna as a result of the expansion. The Operator of Block 88, Block 56, and the Malvinas Gas Separation Plant has management plans in place to address any potential impacts that may result from these activities.
Increased river traffic is one of the activities that represent a potential significant risk in regard to disturbance to aquatic fauna. River traffic will be mainly concentrated on the Ucayali and Urubamba Rivers due to their location in relation to the plant. The Operator has a Fluvial Transportation Management Plan in place. This includes a River Transportation Surveillance Program, which monitors the convoys (barges plus a tugboat) used by the Operator in the Lower Urubamba Region, both for upstream and downstream trips. In addition, local communities have their own surveillance program which includes community monitors that report the compliance to the fluvial transport procedures.
With the exception to those impacts related to the river traffic increase, all other ESHS impacts related to the Malvinas Gas Separation Plant expansion are of local, temporary, and manageable nature. The impacts associated with an increase in river transportation are significant, but temporary, because they are mostly limited to the construction phase. The Malvinas Gas Separation Plant Operator has developed management plans and monitoring programs to minimize the potential impacts on aquatic fauna.
TgP Pipeline:
The natural gas is transported by TgP from the Malvinas Gas Separation Plant. The TgP natural gas export pipeline is 700 km long, commencing at Malvinas in the Cuzco Department and traverses Ayacucho, Huancavelica, Ica and Lima Departments. The rainforest portion of this pipeline (from Cuzco to near Ayacucho) was oversized to avoid the need of new pipelines if the natural gas demand increased. This is the section of the pipeline (approximately 200 km long) that will service PERU LNG up to Ayacucho. From this point, a new 408 km long 34 inch pipeline will be constructed and operated by PERU LNG to provide the required natural gas to the LNG Plant. The TgP natural gas pipeline does not require any new facilities to transport the natural gas from Block 56, and therefore no additional footprint is triggered from the needs of the PERU LNG project.
Though not directly associated with the PERU LNG project it is noted that TgPs NGL are transported along the same RoW as the TgP natural gas pipeline. TgPs NGL pipeline has suffered six leak events of different magnitudes during the operating period since 2004. The leaks to date have been in the rainforest portion and, apart from one leak caused by a welding failure, all the rest were related to landslides and/or flash flooding. The TgP natural gas pipeline has suffered no leaks or failures. TgP has adopted a geotechnical risk assessment methodology and has classified the risks identified along the NGL pipeline according to a categorization system. Subsequently implementation of mitigation activities, based on the risk assessment, has substantially eliminated most of the sites currently considered to be high risk. Mitigation programs for TgPs NGL pipeline are being implemented for the natural gas pipeline as well, and this will contribute to further reduce the probability of failures. Geotechnical stabilization measures constructed during 2006 are considered reliable and robust by technical consultants to the operators and lenders. |