Sao Paulo Alpargatas

completed

Environmental Review Summary (ERS)Project Name Brazil- Sao Paulo Alpargatas (SPASA)Region Latin America and CaribbeanSector TextilesProject No. 007141 1. This project will assist Sao Paulo Alpargatas (SPASA) to implement a three-year modernization program estimated to cost US$116 million. SPASA has 13 plants and about 13,000 employees manufacturing footwear, textiles and garments. SPASA’s product lines include: (i) rubber, plastic, leather and fabric footwear; (ii) canvas and synthetic tarpaulins and other covering products; and (iii) garments. In 1987 IFC provided a loan of US$30 million to support SPASA in modernizing and expanding its textile operations. The present investment program includes major expenditures for molds, machinery and equipment for the footwear and textiles facilities as well as the restructuring and consolidation of facilities into 10 major plants. The program is aimed at meeting the growing demand for shoes and textile goods in Brazil, increasing productivity, installing environmental improvements, and reducing fixed and variable costs. The investment in facilities includes about US$3.5 million for the installation of environmental improvements and new control equipment.2. About half of the investment will be made in the northeastern region of Brazil. This region has traditionally been among the country’s least developed and by financing this program, IFC will be meeting IBRD’s and Brazil Government’s objective of reducing poverty and stimulating development in this region. In addition, IFC’s financing will help SPASA remain competitive in face of increased competition (particularly from imports) and will allow the Company to provide basic goods for the population, particularly sandals, at better quality and lower coast.3. 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 the project sponsor, and the technical appraisal and site review completed by IFC’s Technical and Environment Department staff. The following potential environmental, health and safety impacts of the project were analyzed:· air emissions;· liquid effluents;· solid wastes; · fire prevention;· emergency response; and· employee exposure to noise, dust and chemical substances.The sponsor has presented plans to address these issues and demonstrate the proposed project will comply with applicable governmental and World Bank requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.4. In order to assess the environmental, health and safety (EH&S) status of the existing operations, EH&S reviews were conducted at various SPASA plants with the technical and environmental assistance from IFC technical staff. The objective of the reviews was to identify needed environmental and occupational health and safety improvements required at the facilities to ensure ongoing compliance with governmental requirements and applicable World Bank environmental, health and safety guidelines. As a result of the studies, areas identified as requiring improvements were:· liquid effluents treatment and monitoring;· control of stormwater runoff;· material control and spill prevention;· waste management and minimization;· employee exposure monitoring and control;· contractor safety;· hazards recognition and control; and· to a lesser extent, air emissions control, and employee and supervisory safety and health training.5. The results of the EH&S reviews served as the basis for SPASA establishing an Environmental Improvement Plan (EIP) for each major plant to ensure continuing compliance with governmental regulations and the installation of improvements to meet the additional World Bank requirements. The EIP addresses the above issues and is satisfactory to IFC. The EIP identifies the specific actions required at each plant as well as the estimated cost and implementation schedule. The EIP will be implemented during 1996, 1997 and 1998. 6. SPASA’s plants do not produce significant quantities of process air emissions. Steam boilers at the plants are operated to minimize air pollution through combustion and fuel quality controls; few boilers are larger than the 4.2 tons of steam/hour threshold level for application of the World Bank air emissions guidelines for boilers. The few boilers with a capacity above 4.2 tons of steam/hour will be fired with natural gas or, if fired with fuel oil, the fuel oil will contain a controlled Sulfur content and equipped with pollution controls in order to control the stack emissions of Particulate Matter (PM) and SO2 to levels below the World Bank guidelines of 75 g/million BTU and 230 g/million BTU, respectively. The World Bank has not established a guideline for NOx emissions for the liquid fossil fuel firing of relatively small boilers.7. SPASA’s facilities generally comply with the governmental standards for process liquid effluents. However, the EIP includes actions to ensure all domestic sewage and process wastewater as well as all contaminated stormwater and wash waters will be treated to meet the World Bank guidelines, including: (i) pH of 6 to 9; (ii) BOD5 of less than 50 mg/l or 10,000 g/mt product; (iii) COD of less than 250 mg/l or 50,000 g/mt product; (iv) Oil and Grease of less than 10 mg/l or 2,000 g/mt product; and (v) Total Suspended Solids of less than 50 g/l or 10,000 g/mt product. The wastewater treatment operations for new facilities will be fully operational before SPASA begins commissioning such new facilities.8. Solid waste generated by the plants consists of waste plastics and synthetic rubber, conventional trash, effluent treatment plant sludge, and waste fiber and fabric. The company recycles most waste fiber and fabric into other products, such as cleaning cloths. The other wastes are disposed of in approved landfills. Treatment plant sludge is currently disposed of in accordance with local requirements. SPASA is currently evaluating the potential recovery of energy from waste materials.9. Existing fire protection and emergency response programs will be applied to the modernization program for continuing ongoing compliance with local requirements and World Bank guidelines. SPASA’s facilities include internationally recognized provisions for fire prevention and fire fighting. Fire safety systems include emergency exit signage, emergency lighting, use of fire/smoke detectors, fire alarms, fire extinguishers and hoses, automatic sprinkler nozzles in selected areas, emergency power, and a protected emergency water supply. All plants have an Emergency Response Plan. These plans were developed with the involvement and cooperation of local authorities and available emergency services. Employees are trained for proper response to emergencies, including the use of fire extinguishers and hoses, and the procedures for evacuating the facility during an emergency. Emergency evacuation drills are periodically conducted in accordance with recognized international norms.10. SPASA has an established program for employee health and safety. SPASA recognizes that the key elements for an effective health and safety program includes clear policies, adequate resources, effective procedures, employee training and management oversight. SPASA has established an organization and program based on these elements. The program is provided with sufficient professional support and funding. The workplace is monitored for employee exposure to noise, dust and chemical substances. Employees working in areas with noise levels above 85 dBA, nuisance dust levels above 10 mg/m3 or cotton fibers above 1 mg/m3 as well as chemical substances above internationally recognized control levels are provided with and required to use appropriate personal protective equipment (PPE). Employees are trained with regard to plant safety rules, workplace safety procedures, hazards of the workplace, accident prevention, chemical handling and the proper use of PPE. Clinics have been established at each plant and trained medical personnel are available to monitor employee health and respond to plant emergencies.11. SPASA has identified, however, several health and safety actions for inclusion in the EIP, including: (i) improving contractor safety performance; (ii) strengthening monitoring and inspection systems for the identification and elimination of workplace hazards; (iii) further improvements in employee and supervisory safety and health training; (iv) expanding the improvement program for the labeling, handling and storage of hazardous materials and (v) instituting measures to achieve greater employee adherence to plant rules, especially the use of PPE.12. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that, with the implementation of the EIP, the proposed project is being designed to meet Government of Brazil requirements, and World Bank policies, and environmental, health and safety guidelines.13. IFC will monitor SPASA’s progress of implementing the EIP as well as ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.L:\WPEU\JOHN\BRAZIL\SPASA.ERSApril 11, 1996 9:35 AM