Wood Standard -

completed

4 June 18, 1999International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name Bosnia and Herzegovina - StandardRegion/Country Central and Southern EuropeSector Timber, Pulp and PaperProject No. 9968 (under Wood Agency Line #8344)1. This project, under the Bosnia –Wood Agency Line, involves the provision of working capital and the upgrading of an existing furniture manufacturer, Standard, in Sarajevo. The site is located on a 50 hectare land parcel with 20 hectares of covered areas. Standard produces principally:· Veneer and Laminate Furniture· Upholstered FurnitureAll of the thermal energy is produced in company boilers, while water and electricity are supplied by the existing utility infrastructure. Standard had 1,000 workers on its payroll prior to the civil war and currently employs approximately 250 people. One employee has full-time employment dedicated to environment, health and safety matters.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. IFC’s Environment Division’s review of this project consisted of a site visit and the appraisal technical and environmental information supplied by Standard and the IFC Field Office. The following potential environmental, safety and health impacts of the project were analyzed:· wood supply source and management· chemical usage, storage and handling· air emissions and workplace air quality· water supply and effluent discharge· solid and hazardous waste management· emergency response and fire protection· employee health and safety, and training.The information provided about how these potential impacts are addressed by Standard is summarized in the paragraphs that follow. Standard is developing plans to address outstanding issues. Standard has or will demonstrate that the proposed project complies with the applicable laws and regulations of the Federation of Bosnia and Herzegovina (BiH) and conforms to World Bank Group’s applicable policies and guidelines.3. Wood Supply, Source and Management. Standard does not own or operate a sawmill. Most of Standard''s furniture is produced from particleboard purchased from Slovenia and Croatia and from medium-density fiberboard (MDF) purchased from a producer in BiH. Solid wood is purchased from several local sawmills which source logs from the Kantonal state-owned logging company which is professionally organized and managed, and working according to annual forest management and reforestation plans.4. Chemical Usage, Storage and Handling. Chemicals used in production include glues, coatings (e.g., lacquers) and associated solvents. Standard maintains a running inventory of these materials through a management information system. Hazardous materials are separately stored in four (4) modified shipping containers located outdoors. The furniture coatings operations include one (1) flat-line system and two (2) separate spray booths equipped with hand-held spray guns and water curtains. Standard will evaluate its materials storage and transport practices (from storage to usage) and revise its procedures accordingly to reduce the potential for accidents.5. Air Emissions and Workplace Air Quality. The potential sources of air emissions at the facility include two boilers (of approximately 2.5 and 5.0 MWe capacity) used to generate process steam; cutting, milling and sanding operations; and furniture finishing processes. The boilers are permitted by local authorities. One is configured to burn wood waste, while the back-up unit is coal-fired. Both are equipped with a cyclone and filter system. The company will engage the Ecological Institute in Sarajevo to conduct stack emissions analyses on the upgraded boilers, to determine whether the boilers meet the World Bank Group guidelines for emissions of particulates, SO2 and NOx. If warranted by these analyses, Standard by final disbursement will have in place a corrective action plan to improve boiler operations in order to ensure compliance with the World Bank Group guidelines. The company plans to shut down the existing wood burning boiler and install a natural gas-fired boiler, which will meet the World Bank Group guidelines. This investment is a key part of the business plan.6. Particulates from wood cutting, milling and sanding areas are controlled through the use of a dust collection system. The system is in fairly good working order with relatively minor leaks. The system keeps the air in the workplace clear of excessive dust and also feeds saw dust to boiler silos where it is stored as fuel. 7. All coatings are applied in one of three finishing rooms. The main room houses a flat line system utilizing ultraviolet-cured coatings which result in low emissions of volatile organic compounds. Each of the other rooms contains a spray booth equipped with a hand-held spray gun and a water curtain. Ventilation in one of the spray rooms was poor. As part of the proposed project, Standard will upgrade the ventilation in this finishing room.8. Effluent Discharge. The water for industrial processes is supplied from the municipal water supply system. The water is used for water curtains in lacquer facilities, for boiler feed water, potential fire fighting and general washing or rinse operations. Water is discharged to an on-site septic system or to the sewer leading to the municipal system and then to the Miljacka River. The on-site septic system handles sanitary waste. Water in lacquer stations is in closed circulation, but is discharged periodically to the sewer (overspray sludge is collected prior to effluent discharge). In addition, Standard discharges rinsewater from a glue mixing unit to a settling system prior to discharge to the sewer. The Ecological Institute collected water samples during IFC’s visit, and IFC has requested the results of the analyses. Standard has permits for the discharges and will provide a letter report from the Ecological Institute indicating that the discharges are being managed in accordance with all applicable requirements of the Federation of BiH. 7. Solid and Hazardous Waste Management. Solid wastes generated include wood off cuts; veneer and particleboard chips; cardboard and other packaging materials, sludge from water curtains containing overspray, spent solvents and automotive waste oil, and plant trash. The wood dust particles are collected and transferred through the negative pressure ventilation system to a boiler silo to be used as fuel. Other wood off-cuts and residuals are chipped and then burned as fuel. Spent solvents are soaked up with rags and burned as fuel. Sludge is collected from the spray booths weekly and placed in containers for disposal with trash. Plant trash is collected and removed by the municipality.8. Emergency Response and Fire Protection. All employees receive biannual training in emergency response and fire prevention. The Fire Protection System includes CO2 canisters, wall hydrants and sprinklers. The CO2 canisters are labeled with dated municipal inspections. The sprinkler system was damaged during the civil war and in need of repair. As part of this project, the fire protection system will be upgraded: the sprinkler system will be repaired and a CO2 system will be installed in finishing areas in accordance with the requirements of the municipality.9. Employee Health and Safety, and Training. The company is addressing all aspects of employee health and safety including workplace hygiene, and general health and safety and training.. As noted, Standard employs a full-time manager for environment, health and safety (EH&S). The EH&S manager maintains Material Safety Data Sheets. All staff receives training annually, and a file is maintained for each employee. All departments have first aid kits. The Institute of Work Safety inspects all equipment every three years in order to certify safety. The Institute also performs periodic monitoring of air quality in the workplace.10. Market Bank, as agent for IFC, will monitor compliance with the relevant environmental, health and safety policies and guidelines during the lifetime of the project. Standard will provide an annual report to Market Bank that includes details of environmental and social issues, and Market Bank staff will conduct periodic supervision missions to the project. Market Bank will provide an annual environmental performance report to IFC covering this project.11. Based on its review of available information regarding potential environmental and social impacts and proposed mitigation measures, IFC concludes that this proposed project will meet the World Bank Group’s applicable environmental, health and safety policies and guidelines and the applicable requirements of the Federation of Bosnia and Herzegovina.