INTEGRATED SAFEGUARDS DATASHEET
APPRAISAL STAGE
Report No.:64726
Date prepared/updated: 22 September 2011
I. Basic Information
1. Basic Project Data
Country: Vietnam
Project ID: P115762
Additional Project ID (if any):
Project Name: HCFC Phase-out Project Stage I
Task Team Leader: Qing Wang
Estimated Appraisal Date: Oct. 10-14, 2011
Estimated Board Date: December 2011
Managing Unit: EASVS/EASER
Lending Instrument: Specific Investment Loan
Sector: Other industry (90%); Central government administration (10%)
Theme: Pollution management and environmental health (50%); Environment policies and
institutions (50%)
IBRD Amount (US$m.):
IDA Amount (US$m.):
GEF Amount (US$m.):
PCF Amount (US$m.):
Other financing amounts by source: Ozone Trust Fund: US$ 9,763,820 (approved at the April
2011 Executive Committee Meeting of the Montreal Protocol Multilateral Fund)
Environmental Category: B
Is this a transferred project
Yes [X]
No [ ]
Simplified Processing
Simple [ ]
Repeater [ ]
Is this project processed under OP 8.00 (Rapid Response to Crises
Yes [ ]
No [X]
and Emergencies)
2. Project Objectives:
To assist the Government of Vietnam to comply with its Montreal Protocol phase-out obligations
for HCFCs with (i) a reduction in HCFC consumption to meet a freeze in consumption at the
2009-2010 average baseline level by 1 January 2013; and, (ii) a subsequent reduction of 10% of
the freeze level by 1 January 2015.
3. Project Description:
The proposed project covers only Stage I of the HCFC phase-out, focusing on the foam sector. It
is considered as a continuation of the National CFC and Halon Phase-out Plan in that it will
employ the infrastructure and capacity established under the previous project to deliver the
required assistance to beneficiaries and stakeholders. The project proposes a combination of
policies, regulations, technical assistance activities, and financial incentives to the foam
industries at the sector level, which are embedded in an overarching framework that leads to
global ozone and climate co-benefits while permitting the country to meet its development
objectives of sustained levels of economic growth and industrial modernization and expansion.
The project consists of the following three components:
1
Component 1: Investment in HCFC-141b Consumption Phaseout (MLF US$ 8,876,200)
This component will consist of a series of investment activities (mainly procurement of
equipment) at twelve foam producers. In response to Decision XIX/6 which requires that climate
impacts be taken into account when phasing out HCFCs, the project will promote the adoption of
hydrocarbon technology in the foam sector, except in the manufacturing of integral skin shoe
sole, where water blown (CO2) system was found as the most cost-effective conversion method.
In this regard, an analysis of eligible incremental capital and operating costs for each enterprise
has been conducted on the basis of a conversion cost structure relevant to hydrocarbon/water
blown (CO2) technology and subsequently approved by the Multilateral Fund Executive
Committee.
Component 2: Supporting Policies and Regulations and Technical Assistance Activities
(MLF US$ 355,048)
It is proposed that an import quota system to curb the supply of HCFCs be established and
operational by 2012. This is critical for ensuring sustainable phase-out of HCFCs. A ban on the
establishment of new or the expansion of existing HCFC-141b-based manufacturing facilities
(including the use of HCFC in pre-blended polyol) starting in 2012 has been put into place
during preparation. In addition, a total ban on the use of bulk HCFC-141b in the foam sector
will be put in place by January 1, 2015.
Technical assistance (TA) activities to support implementation of investment interventions,
awareness campaigns on the need to phase out HCFCs and on future regulatory measures to
eliminate HCFC use will be carried out with target groups. Capacity building of customs officers
will be carried out in order to ensure effective control of import of HCFCs and products
containing HCFCs. Training activities will be conducted to increase the technical capacity of
local authorities to allow them to become more effective agents in identification and delivery of
needed assistance to foam enterprises in their localities. TA activities in the residential air
conditioning (RAC) manufacturing and servicing sectors will also be undertaken to control the
demand of HCFC-22, although there will be no phase-out investment activities to be financed by
the MLF under the project.
Component 3: Project Management (MLF US$ 532,572)
The project management unit (PMU), set up under the National CFC and Halon Phase-out Plan,
will continue to be financed to implement and coordinate new project implementation and to
assist MONRE to put into place both overarching regulations and sector specific policies.
4. Project Location and salient physical characteristics relevant to the safeguard analysis:
The project covers 12 foam enterprises. They are located in Hanoi, Da Nang, HCM City and
Long An, Binh Phuoc and Ba Ria Provinces. Six enterprises (6M, Huu Nghi, Searee Danang,
TST, Vietrust, Hoa Phat) are located in industrial areas and four (Saigon, Searefico, Glory Tabi)
in residential areas. The four enterprises in the residential area have intentions to move to
industrial areas before or during the project implementation stage expected to take place in late
2
2011 or 2012. These enterprises’ lands have been acquired from the IZ Management Bodies for
at least three years already. A due diligence review on land acquisition was carried out during
project preparation by reviewing red books, purchasing/renting contracts for plots of land and
site visits to five enterprises and confirmed that there are not any legacies or outstanding issues
regarding the land acquired or occupied. One other enterprise (Thanh Canh) is located in a rural
area; on land the company purchased in 2007. Thanh Canh is to build a new and larger factory
on the same site where the local government has decided to turn the rural area into an industrial
zone. The remaining enterprise (Minh Dieu) is located in a residential area but relocation to an
IZ is not needed because the HCFC alternative technology that will be applied in this case does
not have safety issues as would be the case for HC technology.
5. Environmental and Social Safeguards Specialists on the Team:
Douglas J. Graham
Thuy Cam Duong
Nguyen Van Trung
75790
390844
14108
Environmental Specialist
Environmental Specialist
Social Safeguard Specialist
EASVS
Consultant
Consultant
3
6. Safeguard Policies Triggered (please explain why)
Environmental Assessment (OP/BP 4.01)
Yes
X
No
The project will have a positive impact on the global environment by
reducing the use of HCFCs, which are ozone-depleting substances and
greenhouse gases with a global warming potential (GWP) ranging from
several hundred to several thousand times that of CO2. While HCFCs have
an impact on the global environment, they have no adverse local impact as
these chemicals are stable and not considered toxic or otherwise dangerous
for the environment.
As described in more detail in Section II, minor environmental impacts
could result from mishandling of some of the chemicals that are already
used in foam production and which will be used to replace HCFCs. The
manufacturing process also involves potential occupational and health
safety issues. Therefore, OP 4.01 is triggered under the project.
Natural Habitats (OP/BP 4.04)
X
The project will be implemented in industrial areas (except one enterprise
in residential area), thus there is no impacts on natural habitat.
Forests (OP/BP 4.36)
X
The policy is not triggered since there is no proposed investment involving
forest harvesting or forest management.
Pest Management (OP 4.09)
X
The policy is not triggered as the project does not involve the procurement
or use of any pesticides or herbicides.
Physical Cultural Resources (OP/BP 4.11)
The policy is not triggered as the project area does not have any
impact on any PCR.
Indigenous Peoples (OP/BP 4.10)
X
X
The policy is not triggered since no ethnic minority communities are
present in or have collective attachment to the project area.
Involuntary Resettlement (OP/BP 4.12)
X
All of the enterprises involved are either located on private land which
they own or they are located on (or will move to) established industrial
zones. A due diligence review of land issues for all 12 enterprises was
carried out by the World Bank and confirmed that there are not any
legacies or outstanding issues regarding the land acquired or occupied.
Therefore, the policy is not triggered.
Safety of Dams (OP/BP 4.37)
The policy is not triggered since there is no construction or
rehabilitation of dams or dykes.
Projects on International Waterways (OP/BP 7.50)
The policy is not triggered as the project does not have any impact
on any international waterway.
Projects in Disputed Areas (OP/BP 7.60)
The policy is not triggered as the project is not located in any
disputed areas.
X
X
X
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II. Key Safeguard Policy Issues and Their Management
A. Summary of Key Safeguard Issues
1. Describe any safeguard issues and impacts associated with the proposed project. Identify and
describe any potential large scale, significant and/or irreversible impacts:
There are no large-scale, significant and/or irreversible impacts caused by the project or caused
by foam production. The following texts describe small-scale (and easily mitigable) impacts.
Hydrocarbon and CO2 have been selected as blowing agents to replace HCFC-141b that is being
used in the foam sector. Hydrocarbon has a Global Warming Potential of less than 25.
Hydrocarbon (cyclopentane) is classified as a Volatile Organic Compound (VOC), but its use
results in very low levels of emissions of about 2-3% of the blowing agent, which results in
minuscule emissions, compared for example, to emissions from two-stroke motorcycle traffic in
urban areas. Therefore, there is no significant environmental impact from the cyclo-pentane
itself.
The other chemicals involved in foam production are MDI, polyol, amine catalysts and fire
retardants. The 12 foam enterprises purchase pre-formulated polyol (blended with or without
HCFC-141b) and polymeric MDI (isocyanates) for their rigid foam production. The probability
that a spill of polymeric MDI - a liquid at room temperature - contaminates the soil and water is
very low, because the floor of the foam production areas consists of cement coated with an antileakage, low permeability/chemical layer such as epoxy. In the case that MDI leaks into the soil,
it will react with moisture, and the reaction would result in CO2 and insoluble polyurea
compounds, which are not biodegradable but chemically inert. MDI may cause health impacts
such as eye, respiratory system and skin irritation. Exposure via skin contact and inhalation can
result in respiratory sensitisation.
Fire retardant and amine catalysts (very limited amount) are mixed/pre-formulated in the polyol
at the system houses (pre-blended polyol suppliers), from which the foam enterprises purchase
pre-blended polyol and MDI, so the foam enterprises will not handle these toxic chemicals
directly. Fire retardant and amine catalysts will remain in the final foam products and are not
likely to be emitted to the environment during the foam production or later. Therefore, there are
no anticipated legacy environmental contamination issues that are associated with foam
production.
Methylene chloride is the cleaning agent now used in the foam production process. It can affect
the body if it is inhaled or if the liquid comes in contact with eyes or skin or is swallowed.
Methylene chloride can be a hazardous waste but only when present in large quantities and high
concentrations, as defined in Vietnamese regulations. However, only small quantities are used in
foam production and the mixing heads for the new cyclopentane based foaming units to be
purchased under the project will facilitate the phase-out of the use of methylene chloride as a
cleaning agent.
There are minor environmental and OHS risks associated with inappropriate handling of the
various foam production chemicals or which could be caused by spills. The project itself will not
result in any additional impacts or risks as all these chemicals are already in use at the plants.
Nevertheless, good operational procedures and mitigation measures must be in effect at all
facilities supported by the project.
5
As a result of new processes and chemicals introduced by the project, there are however
additional safety requirements regarding fire and explosion risks associated with the adoption of
the hydrocarbon (cyclopentane) technology during the foam production process.
Finally, there is non-hazardous solid waste generated during foam production process which
needs to be adequately disposed of.
2. Describe any potential indirect and/or long-term impacts due to anticipated future activities in
the project area:
There are no indirect, cumulative, or long-term impacts caused by the project.
3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse
impacts:
The technology choices for Phase 1 are well proven and robust, which would be feasible from a
technical or economic point of view. And they are all “low” GWP options. Continuing with the
use of HCFCs is not an option for Vietnam due to its obligations under the Montreal Protocol.
4. Describe measures taken by the borrower to address safeguard policy issues. Provide an
assessment of borrower capacity to plan and implement the measures described:
An Environmental Management Plan (EMP) has been prepared by the Borrower to guide foam
enterprises to address all of the issues noted above relating to environmental or OHS risks. The
EMP was prepared following relevant national legal documents, the Bank’s OP 4.01 and The
World Bank Group OHS guidelines. The World Bank has reviewed and found acceptable the
EMP.
Some of the most typical mitigation measures are the following:
-
Proper design and construction of foam workshop and proper chemical storage
-
Good practice of chemical handling; specifically, careful cyclopentane handling to avoid
uncontrolled reactions and conditions resulting in fire and explosion and careful MDI
handling to avoid inhalation and skin contact resulting in eye, respiratory system and
skin irritation and respiratory sensitisation
-
Communication and training workers about the potential risks
-
Preparation of appropriate emergency preparedness and response measures
-
Use of proper labor safety devices
-
Using of efficient and adequate extraction ventilation
-
Conduction of safety audit at each foam production workshop before foam production
start-up
-
Putting in place appropriate measures for solid waste collection as per legal requirements
of the Government of Vietnam
Each participating enterprise in the project will be legally required to follow the environmental
and safety provisions of the EMP. The EMP describes the measures that will be taken by the
project implementing agency, the Ministry of Environment and Natural Resources, to monitor
compliance and to ensure enforcement.
6
The World Bank has evaluated the capacity of both MONRE, the implementing agency and that
of the foam production companies, each of which has been visited by technical specialists. The
project management unit falls under the National Ozone Unit set up in MONRE. This Unit has
been implementing for almost 5 years a similar project, the CFCs and Halon Phase-out Project,
so they are very familiar with relevant World Bank and GoV requirements. Their capacity has
been evaluated and appropriate training on safeguards has been carried out under the CFCs
Project.
The foam production companies have good operational procedures in place and are in
compliance with good-practice occupational, health and safety measures as well as with
environmental requirements. However, before most project financing is released to these
companies, an audit of the production facility will be carried out and they will also be legally
required to follow the OHS and environmental requirements of the EMP. The project will
support training and capacity building for the foam enterprises in these areas.
5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on
safeguard policies, with an emphasis on potentially affected people:
Because there are no likely impacts of the foam production enterprises that extend beyond the
plant itself, the stakeholders from an environmental perspective are the enterprises themselves
and their labor force.
The EMP has been disclosed in Vietnamese and in English in the Vietnam Development
Information Centre (VDIC) and in English in the Bank InfoShop before appraisal.
B. Disclosure Requirements Date
Environmental Assessment/Audit/Management Plan/Other: EMP
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
For category A projects, date of distributing the Executive
Summary of the EA to the Executive Directors
Resettlement Action Plan/Framework/Policy Process: N/A
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Indigenous Peoples Plan/Planning Framework: N/A
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Pest Management Plan: N/A
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Yes
9/19/2011
9/23/2011 in English;
9/27/2011 in Vietnamese
9/23/2011
7
Date of "in-country" disclosure
Date of submission to InfoShop
* If the project triggers the Pest Management and/or Physical Cultural Resources policies,
the respective issues are to be addressed and disclosed as part of the Environmental
Assessment/Audit/or EMP.
If in-country disclosure of any of the above documents is not expected, please explain why:
C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is
finalized by the project decision meeting)
OP/BP 4.01 - Environment Assessment
Does the project require a stand-alone EA (including
EMP) report?
If yes, then did the Regional Environment Unit or Sector
Manager (SM) review and approve the EA report?
Are the cost and the accountabilities for the EMP
incorporated in the credit/loan?
OP/BP 4.04 - Natural Habitats
Would the project result in any significant conversion or
degradation of critical natural habitats?
If the project would result in significant conversion or
degradation of other (non-critical) natural habitats, does
the project include mitigation measures acceptable to the
Bank?
OP 4.09 - Pest Management
Does the EA adequately address the pest management
issues?
Is a separate PMP required?
If yes, has the PMP been reviewed and approved by a
safeguards specialist or Sector Manager? Are PMP
requirements included in project design? If yes, does the
project team include a Pest Management Specialist?
OP/BP 4.11 – Physical Cultural Resources
Does the EA include adequate measures related to
cultural property?
Does the credit/loan incorporate mechanisms to mitigate
the potential adverse impacts on physical cultural
resources?
OP/BP 4.10 - Indigenous Peoples
Has a separate Indigenous Peoples Plan/Planning
Framework (as appropriate) been prepared in
consultation with affected Indigenous Peoples?
Yes [X]
No [ ]
N/A [ ]
As a transferred project, the SM
reviewed and approved the EMP.
Yes, financing for EMP
accountabilities are included in the
financing agreement to be signed
with each participating enterprise.
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
8
If yes, then did the Regional unit responsible for
safeguards or Sector Manager review the plan?
If the whole project is designed to benefit IP, has the
design been reviewed and approved by the Regional
Social Development Unit?
OP/BP 4.12 - Involuntary Resettlement
Has a resettlement plan/abbreviated plan/policy
framework/process framework (as appropriate) been
prepared?
If yes, then did the Regional unit responsible for
safeguards or Sector Manager review and approve the
plan/policy framework/process framework?
OP/BP 4.36 – Forests
Has the sector-wide analysis of policy and institutional
issues and constraints been carried out?
Does the project design include satisfactory measures to
overcome these constraints?
Does the project finance commercial harvesting, and if
so, does it include provisions for certification system?
OP/BP 4.37 - Safety of Dams
Have dam safety plans been prepared?
Have the TORs as well as composition for the
independent Panel of Experts (POE) been reviewed and
approved by the Bank?
Has an Emergency Preparedness Plan (EPP) been
prepared and arrangements been made for public
awareness and training?
OP/BP 7.50 - Projects on International Waterways
Have the other riparians been notified of the project?
If the project falls under one of the exceptions to the
notification requirement, has this been cleared with the
Legal Department, and the memo to the RVP prepared
and sent?
What are the reasons for the exception? Please explain:
Has the RVP approved such an exception?
OP/BP 7.60 - Projects in Disputed Areas
Has the memo conveying all pertinent information on the
international aspects of the project, including the
procedures to be followed, and the recommendations for
dealing with the issue, been prepared
Does the PAD/MOP include the standard disclaimer
referred to in the OP?
The World Bank Policy on Disclosure of Information
Have relevant safeguard policies documents been sent to
the World Bank's Infoshop?
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [ ]
No [ ]
N/A [X]
Yes [X]
No [ ]
N/A [ ]
N/A
9
Have relevant documents been disclosed in-country in a
public place in a form and language that are
understandable and accessible to project-affected groups
and local NGOs?
All Safeguard Policies
Have satisfactory calendar, budget and clear institutional
responsibilities been prepared for the implementation of
measures related to safeguard policies?
Have costs related to safeguard policy measures been
included in the project cost?
Does the Monitoring and Evaluation system of the
project include the monitoring of safeguard impacts and
measures related to safeguard policies?
Have satisfactory implementation arrangements been
agreed with the borrower and the same been adequately
reflected in the project legal documents?
Yes [X]
No [ ]
N/A [ ]
D. Approvals
Signed and submitted by:
Task Team Leader:
Environmental Specialist:
Social Development Specialist
Additional Environmental and/or
Social Development Specialist(s):
Name
Qing Wang
Douglas J. Graham
Nguyen Van Trung
Thuy Cam Duong
Date
9/22/2011
9/22/2011
9/22/2011
9/22/2011
Approved by:
Regional Safeguards Coordinator:
Comments: Does not need to be approved by RSC as this is a transferred project.
Sector Manager:
Jennifer Sara
Comments:
9/27/2011
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