Forestal Trillium

completed

Environmental Review Summary (ERS)Project Name: Venezuela- Trillium Region: Latin America and CaribbeanSector: Timber, pulp and paperProject No. 0094631. This greenfield operation involves the construction and operation of a plant to produce oriented strand board (OSB) and high density fibreboard (HDF) from a government-owned Caribbean Pine plantation north of Puerto Ordaz, Venezuela. The plant will use excess fiber from this plantation, in the form of pulp logs and residual output from a local saw mill, to create value-added products for export, initially to the U.S. The OSB and HDF plants will be co-located at a greenfield site approximately 20km north of Puerto Ordaz. The plantation will remain in the ownership of CVG-PROFORCA, however because the mills are dependent on wood from the plantation, this Environmental Review Summary (ERS) has also addressed the environmental and social issues associated with the plantation.2. This is a category B project according to IFCs environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information provided by the sponsor. The following potential environmental, social, health and safety impacts of the project were analyzed:· Plantation management (including pest control) and sustainable harvesting issues;· Site acquisition;· Air emissions from processing facility;· Water use and waste water management;· Solid waste management and disposal;· Adequacy of transport and infrastructure to export;· Fire protection and emergency response;· Occupational health and safety.The information provided about how these issues and potential impacts have been addressed in the development of the project are summarized in the paragraphs below.3. Plantation management (including pest control) and sustainable harvesting issues: The plantations from which the sponsor will obtain raw wood cover an area of approximately 800,000ha - of which 450,000ha have been planted with Caribbean Pine over a period of 30 years. The management of the plantation is defined by a series of principles and operational systems that were developed when the plantation was established and include: retention of 135,000ha (15%) of the area under permanent natural vegetation cover, restriction of planting adjacent to rivers and streams or within 300m of natural forest, detailed guidance on erosion control and harvesting practices, conservation of biodiversity and on the use of agrochemicals as well as afforestation of 880km of living barriers utilizing native tree species.4. With regard to pest control, insect attack is monitored regularly and only insecticides authorized by the Ministry of Environment and Natural Resources are used (see table at end). The sponsor has confirmed that an integrated pest management approach to controlling insect and other pest species is being developed by CVG-PROFORCA and that agrochemical application will be is used as part of the wider IPM system.5. With regard to sustainable harvesting issues, a forest management plan has been developed and implemented in compliance with CVG-PROFORCA''S research center and according to international standards. 6. Site Acquisition: The sponsor has acquired a 70ha site and planning permission to develop the OSB and HDF mills adjacent to an existing saw mill which will provide some of the sponsor''s wood requirements. The construction of the mill sites will not result in damage to ecologically sensitive habitats and has not required resettlement or economic displacement. The sponsor may also develop a docking facility on the Orinoco River. The final location of this potential site has yet to be agreed but the sponsor has confirmed that any development of such a facility will be in accordance with World Bank Group (WBG) requirements. 7. Air emissions from the mills: Electricity for the processing site is supplied from the municipality and the company will use gas fired burners and presses for processing. Control of particulate emissions will be achieved through primary and multi-cyclone particulate control devices and emissions from processing activities will be in compliance with World Bank Group (WBG) requirements. Currently, surplus solid wood waste (fines, bark etc.,) from the sawmill is disposed of through uncontrolled burning. The sponsor has committed to install a dedicated on-site incinerator and to achieve WBG air emission standards or to find an alternative disposal route for this material. Phenolic (PF) glues will be used in the OSB mill and urea formaldehyde (UF) resin will be used in the HDF mill. The latter site will be E1 certified and air emissions and workplace air quality will be within WBG requirements for both mills. 8. Water use and waste water management: Water supply for the mills will be drawn from an on-site well (82l/min) and both products will be produced through "dry processing". The only wastewater that will be generated from processing is clean up water (which will be re-used in the manufacturing process) and septic waters from bathroom facilities which will be discharged to a septic tank. Remaining water will be lost as vapor and steam from production activities. Long term monitoring of the plantation and underlying aquifer indicates that there has not been any significant impact on groundwater resources.9. Solid waste management and disposal: Surplus solid waste will comprise bark/process fines which cannot be used for OSB or HDF (estimated at 58,000 tons/yr.). The sponsor has considered disposal and further use options for this material and has concluded that the most cost effective solution is to burn this material in an incinerator and to dispose of the ash as soil conditioner. The sponsor has confirmed that continuing efforts will be made to reduce the volume of material burnt and to find alternative uses for surplus wood fines and bark. Other waste arisings are small and include scrap metal and office materials, which will be disposed of in a municipal landfill. Limbing and thinning operations in the plantations will generate organic solid waste and this will be chipped and buried to improve soil quality.10. Adequacy of transport and infrastructure to export: The project will result in an increase in truck movements to and from the site (from 12 to 70 per day) and will require expansion of port facilities on the Orinoco river (discussed above). The increased vehicle movements are not considered significant.11. Fire protection and emergency response: The OSB and HDF mill buildings will be sprinklered throughout and a complete 8-inch fire main will surround the buildings. The HDF and OSB process may use Methyldiethalene isocyanurate (MDI), in addition to PF and UF, which will be stored in a tank charged with nitrogen. This containment system will be certified after installation and will meet all international standards. Fire risk is minimized in plantations through codes of conduct and provision of appropriate fire breaks.12. Occupational health and safety: The mill will be operated in accordance with a health and safety plan with standards equal to or exceeding those recommended by the American Panel Board Association model guidelines and as part of the plan, a safety committee will be established. Workplace dust levels will be low and the mill will not generate excessive noise. 13. IFC will monitor ongoing compliance with World Bank Group environmental, social and health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by the Trillium Corporation and by conducting periodic supervision. In particular, IFC will require annual confirmation that:· the company is achieving WBG requirements in regard of waste water, air emissions and solid waste management as well as all relevant occupational health and safety requirements;· pesticides used in the plantation continue to conform with World Bank Group requirements;· the company retains E1 certification for formaldehyde use and management and also remains certified for MDI use (if appropriate).14. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the Trillium Corporation''s proposed project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.Agrochemical Use and Application RatesAgrochemical and Application rate