MFL Vinh Phat Company Ltd.

completed

REVISED Environmental Review Summary (ERS)Project Name VIETNAM: Vinh Phat Company Ltd.Region AsiaSector TextilesProject No. 009092 1. This project is to expand an existing cut-make-trim (CMT) textile manufacturing operation from 170,000 units per year to 300,000 units over two years by expanding production space, improving facilities and productivity, and increasing the number of sewing machines by 46%. One hundred and five more machines will be installed in two new buildings to be constructed at the company''s existing location. These would include both basic and specialized sewing machines that will address the company''s bottlenecks. By expanding its capacity and improving productivity, Vinh Phat will be able to not only meet the demand for bigger order quantity and higher quality by international buyers, but also to move into higher-margin and more complex segments. 2. This is a category B project according to IFC’s 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 submitted by MPDF and its consultants as part of their technical appraisal, and a site review. The following environmental, health and safety impacts of the project were reviewed: indoor air quality; wastewater treatment and discharge; workplace health and safety conditions; and fire protection and safety systems. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.3. As the plant expansion will occur on Vinh Phat''s existing property, and as the production operation does not produce any liquid or air emissions, no impacts to the surrounding community are anticipated. The CMT operation may produce some waste scraps, but these are sold, thus the amount of solid waste produced will be insignificant with no adverse environmental impacts. 4. The major environmental concerns for this project relate to worker health and safety and waste generated from toilets and kitchens designed to serve the production workers. The additional workers will impose an added burden on existing toilet facilities. As part of the expansion, the project sponsor has agreed to construct a new toilet block and an enlarged septic tank to meet Vietnamese discharge standards.5. The additional workers will also impose an added burden on the existing canteen. As part of the expansion, the canteen will be moved, expanded and upgraded to ensure proper food hygiene. The existing canteen used coal as the primary heating source, which resulted in air emissions and presented a potential fire hazard. After pricing coal and gas, the project sponsor has agreed to invest in gas cookers. This will greatly reduce air emissions, provide a safer working environment, and reduce operating costs.6. There is a potential health risks due to worker exposure to lint and fibers from the CMT operations. The project sponsor has agreed to install a ventilation system in his facility in order to ensure that workplace air quality meets World Bank Group guidelines.7. As the expansion involves the addition of a second floor on the existing facility, there is an increased need to consider fire safety procedures and exit routes. The project sponsor has installed fire extinguishers in existing rooms and will install in the additional rooms once construction is complete. Marked fire exit routes from the second floor Sewing Units are included in the construction plans. The facility is regularly inspected for fire safety by local officials and staff receive training in fire safety procedures. Finally, the project sponsor is attempting to locate a Vietnamese source for smoke detectors and has agreed to install, if he can procure.8. Under Vietnamese law on Environmental Impact Assessment (No. 175/CP, 1994) an Environmental Impact Assessment is not required for this project.9. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Vinh Phat Company Ltd. and by conducting periodic supervision.10. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the Vinh Phat Company Ltd. proposed project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.Date sent to Infoshop May 5, 1998Revised on May 7, 1998 to reflect correct project number.