4.2

Comparison between the Equator Principles and Indian Legislation

COMPARATIVE ANALYSIS OF THE EQUATOR PRINCIPLES AND INDIAN LEGISLATION

Prepared By

Rupanwita Dash

February 2008

Centre for Development FinanceInstitute for Financial Management and Research

24, Kothari Road, Nunganbakkam, Chennai, INDIAhttp://ifmr.ac.in/cdf/

Contact author Rupanwita Dash ([email protected])

1

mailto:[email protected]

http://ifmr.ac.in/cdf/


TABLE OF CONTENTS

Executive Summary 4

1. The Equator Principles – an Introduction1.1 What are Equator Principles (EPs)? 51.2 Status of adoption of EPs by Financial Institutions 7

2. Indian Policy, Legislation and Regulatory System 2.1 Relevant Policies, Acts, Rules, Notifications 82.2 Concerned Authorities and governance 9

3. Comparison of Equator Principles and Indian Legislation 3.1 Comparison of procedures

3.1.1 Categorization 113.1.2 Environment Impact Assessment (EIA) 133.1.3. Environmental Management Plan (EMP) 143.1.4 Comparison of EIA Report 153.1.5 Comparison of Authorities and Agencies 163.1.6 Public consultation 163.1.7 Comparison of Monitoring Mechanisms 17

3.2 Comparison between standards 3.2.1 General Environmental Standards 193.2.2 Health and safety 19

3.3 Sector/ Industry Specific Comparisons Chlor-Alkali Industry 22

Cement Industry 22Aluminum Industry 23Pesticide Industry 24Petroleum Refining 25Pharmaceutical Industry 26

4. Conclusion 27

References 29

Annexures 30

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LIST OF ANNEXURES

Annexure 1(a): The Equator Principles

Annexure 1(b): Significant Changes in the Latest Revision of EPs

Annexure 1(c): List of EPFIs (As of February 2008)

Annexure 1 (d): Top Project Finance EPFI in 1st Half of 2006

Annexure 1 (e): Top Project Finance Non-EPFI in 1st Half of 2006

Annexure 2: List of environmental legislation in India

Annexure 3(a): List of projects requiring environmental clearance from central government

Annexure 3 (b): List of 17 Major Polluting Industries in India

Annexure 4: Checklist of Information to be furnished before EIA

Annexure 5: Procedure for Public Hearing

Annexure 6: General Environmental Standards in Indian Context

Annexure 7: General Environmental Standards as per PPAH, World Bank

Annexure 8: Risks to Environment and Human Health

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Executive Summary

The Equator Principles are a set of voluntary guidelines for environmentally and socially responsible project finance. The principles came out in 2003, and within 5 years 58 banks from all over the world has signed onto the Equator Principles. However none of the Indian Banks have become a signatory to the EPs. In India there are several requirements, regulations and systems which are intended to assess and manage the environmental risks of project finance. Since India does not fall within the definition of a high-income OECD country, compliance with both host country legislation and with the relevant IFC and World Bank guidelines will be a requirement. It is important therefore to ascertain the extent to which Indian procedures and standards meet with the IFC and World Bank requirements. In this paper a comparative analysis of the Equator Principles and Indian environmental regulations is presented. The first two sections briefly outline the Equator Principles and the Indian regulations. In the third section the same are compared with each other with respect to procedures, standards and practices.

In India the project developer is required by regulation to undertake an Environment Impact Assessment (EIA) in order to obtain Environmental Clearance, which is the major prerequisite for starting projects. The compliance standards are set by the Central Pollution Control Board and the Ministry of Environment and Forestry; regulation and compliance is carried out by the same agencies, which are representatives of the state/government and thus are perceived as neutral third parties. Banks’ involvement here is minimal and banks are not required to spend any resources on investigating environmental and social issues, since the state body is responsible for the initial risk assessment and compliance. For the same reason, the banks face greater risks since they have no say or role in the assessment and management of a project’s environmental risks which may affect them later.

For the EP banks, each project is screened and categorised depending on the environmental and/or social risk. Based on the environmental assessment, the borrowers are required to prepare an environmental and social action plan to mitigate the risks, and ensure that communities affected by the project are duly consulted. If the environmental and social action plans are not followed, the banks reserve the right to declare the project loan in default.

The procedural requirements such as categorization, environmental impact assessment, environmental management plan and public consultation are similar in EP and Indian regulation. The major differences are found in the pollution standards where Indian standards are more lenient and in social standards and labor, health and safety issues, where Indian norms are inadequate.

The Equator Principles are a broadly accepted framework that can assist Indian banks in addressing environmental and social risks in project finance. Such guidelines which emphasize the role and responsibilities of banks (which is lacking in the present system where banks are satisfied by receiving an environmental clearance certificate from the client) will facilitate better control over project risks from the bank’s perspective and will help banks work closer with their clients.

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I. THE EQUATOR PRINCIPLES – AN INTRODUCTION

What are the Equator Principles?

The Equator Principles (EP or Principles) are a set of voluntary guidelines for the categorization, assessment and management of social and environmental risks in project finance. The EPs were announced in 2003 as a joint initiative by 10 leading banks1 and the International Finance Corporation (IFC), and were subsequently revised in 2006. The latest version comprises 10 Principles (please refer to Annexure 1(a) and 1(b)). Equator Principles Financial Institutions (EPFIs) commit to apply extensive environmental and social due diligence to all project loans exceeding US$ 10 million, across all industries. The Principles serve as a common baseline and framework for EPFIs to develop individual internal practices and policies.

The environmental and social screening process for projects is based on that used by the IFC. Projects are categorised as A (high), B (medium) or C (low) depending on the nature of environmental and/or social risk. For all Category A and B projects an environment assessment is required to address the potential environmental and social impacts, and propose appropriate mitigation and management tools according to the impacts of the project.

Based on the environmental assessment, the borrowers are required to prepare an environmental and social action plan to mitigate the risks, and to ensure that stakeholder consultation with affected communities is undertaken. If those plans are not followed, the banks reserve the right to declare the project loan in default. The Principles also require borrowers to agree to enter into certain covenants in its financing documents.

For all Category A projects, and as appropriate for Category B projects, the borrower needs to retain qualified and experienced external experts to monitor project compliance, or appoint an independent expert in environmental and social issues to do so. Thus the banks are actively engaged in the entire process of risk management in a project.

The EPFIs are required to report publicly regarding their processes and experiences in implementing the Principles. A template for minimum reporting requirements was developed in 2007.2 The mandatory requirements are: (1) An annual report, (2) Number of projects screened each year, (3) Category and number of projects reviewed, (4) Discussion on EP implementation (scope of this is left to the concerned bank). The template also has formats for providing optional regional and sectoral information.

Figure 1: The Equator Principles1 The 10 original Equator banks are : ABN AMRO Bank, N.V., Barclays PLC, Citigroup, Inc., Credit Lyonnais, Credit Suisse Group, HVB Group, Rabobank, Royal Bank of Scotland, WestLB AG, and Westpac Banking Corporation2 http://riskybusiness.wordpress.com/2007/09/17/banks-meet-to-discuss-one-year-of-epii-implementation/

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¹ PPAH: Pollution Prevention and Abatement Handbook² ESH Guideline: Environment, Health and Safety Guidelines ³ Only for projects located in non-OECD/ Medium, low income OECD countries as defined by World Bank development Indicators

Status of Adoption and Implementation of EP by Financial Institutions

Principle 1. Review & Categorisation of projects

Category A Category B Category C

Principle 2. Social & Environmental Assessment

Using E&S screening criteria of IFC

Principle 3. Applicable social and environmental standardsFor high income OECD countries: host country laws/regulations. For all other projects: (i) host country laws/regulations (ii) World Bank PPAH¹ (iii) IFC Performance standards(iv) IFC EHS² Guidelines³

Principle 4. Prepare Action Plan, E&S Management System

Describes / prioritises actions for mitigation, corrective actions and monitoring measures for managing the risks identified

Principle 5. Consultation and Disclosure Principle 6. Grievance Mechanism

The borrower, government or third party expert should consult the affected public and provide a non-technical summary of assessment report in local language and inform of the grievance mechanism.

Principle 7. Independent review An expert not directly associated with borrower shall review the environmental assessment and Action Plan in order to assist the EPFI’s due diligence

Principle 8. Covenants linked to compliance

The borrower will be required to covenant compliance with host country laws and the Action Plan, to provide periodic reports, to decommission facilities where applicable

Principle 9. Independent monitoring and reporting

The EPFIs will require appointment of an independent E&S expert or require that borrowers retain such expert for monitoring

Principle 10. EPFI reportingEPFIs commit to report at least annually about Equator implementation process and experience

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In 2003, ten international commercial banks signed the EPs and currently (February 2008) 58 institutions have voluntarily adopted the Equator Principles. The list of these 58 EFPIs are provided in Annexure 1(c). By 2006, The Principles governed over 80% of all project finance lending. Of the total project finance debt, US$ 49 bn (62%) and US$ 38 bn (38%) went to the High income OECD and Non and Low income OECD countries (emerging markets), respectively. In the emerging markets, the total debt amount for Equator Principle debt financing was US$28 billion or 93 per cent of the market. Whilst the EPFIs command 34% of the loans, non-adoptees underwrote 59 per cent of emerging markets project finance debt within Equator-compliant deals, and a further seven per cent of debt was raised in non-Equator assessed projects3. EP financing is most active in the petrochemicals industry followed by power, transport and oil & gas. Annexure 1(d) and Annexure 1 (e) provide details on the finance by EPFIs and Non-EPFIs respectively.

3 A study conducted by Infrastructure Journal, “IJ first half review: Equator Principles financing”, 17 August 2006

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II. INDIAN POLICY AND REGULATORY SYSTEM PERTINENT TO PROJECT FINANCE

In India the environmental aspects of project finance deals are governed primarily by environmental legislation of the Ministry of Environment and Forestry (MoEF) and the Central Pollution Control Board (CPCB). A project developer is required by regulation to undertake an Environment Impact Assessment (EIA) in order to obtain Environmental Clearance, which is the major prerequisite for starting projects and thus is demanded by banks in all project finance deals in India.

Relevant Policies, Acts, Rules, Notifications

The National Environmental Policy and a set of Acts, Rules and Notifications related to water pollution, air pollution, hazardous substances management, eco-sensitive zones and environment protection govern the environmental and social aspects related to project approvals. There are specific clearance requirements (environmental clearance, forests clearance, genetic engineering approval committee clearance) and standards for compliance (emission standards, effluent standards, solid waste management) for each project. The standards are set by the Central Pollution Control Board of India. The regulatory authorities (Ministry of Environment & Forest and State Level Impact Assessment Authority) are responsible for monitoring the compliance of the project activities. The details of the regulations are provided in Annexure 2 in four sections such as general legislations, forest and wildlife related, water related and air related legislations.

All proposed projects require prior environmental clearance from concerned authorities (as discussed in the next section of this chapter); project developers must conduct a detailed environmental impact assessment, hold a public hearing and prepare an environmental management plan in order to obtain project clearance. This is applicable for all new projects/activities, expansion of existing activities and change of product mix in existing projects. Environment Impact Assessment (EIA)4

EIA is a decision making tool to predict the effect of a proposed activity or project on the environment. It assesses the impact of the project on human beings, natural resources and resource use, flora and fauna, cultural heritage assets, local culture and economy, and health and safety. The process consists of two major stages—the feasibility test and design engineering—as well as several sub-stages. The various steps of the EIA process are shown graphically below. The EIA process mirrors to a large extent the steps of the Equator Principles with minor differences in magnitude, scale and aspects of detail.5

EIA process in India4 “Introduction to Environment Impact Assessment (EIA)”- Presentation by Ms. Radhika, Centre for Science and Environment, New Delhi, Aug 20075 For details please refer to “Comparative Analysis of the Equator Principles and Indian Legislation” - A draft report prepared by Ms. Rupanwita Dash, Centre for Development Finance, IFMR, Chennai, Oct 2006

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Concerned Authorities and governance

The Ministry of Environment & Forests (MoEF)

The Ministry of Environment & Forests is the nodal agency for the planning, promotion, co-ordination and overseeing of the implementation of environmental activities, prevention and control of pollution, protection of environment etc. All Category A6 projects are directly regulated by the Ministry.

State Environment Impact Assessment Authority (SEIAA)

This is the regulatory authority for all projects in Category B and grants environmental clearances based on the recommendations of the State Expert Appraisal Committee (SEAC).

Expert Appraisal Committee (EAC) and State Expert Appraisal Committee (SEAC)

These are committees formed at national and state level respectively for screening, scoping and appraising of the projects. They recommend projects based on the environmental

6 Project Category A and B are as per given Schedule in EIA Notification 2006

Project concept and site selection

Proposal of project

Project ‘A’, Get clearance from MoEF Project ‘B’, Get clearance from state

Submission of form & relevant information to Expert Appraisal Committee for project ‘A’ &‘B’

Screening(Applicable for ‘B’ category project)

EIA not required(Called ‘B2’ project)

EIA required(Called ‘B1’ project)

Scoping(For both ‘A’ & ‘B’ category project)

Impact assessment

Draft EIA followed by public consultation

Submission to appraisal committee and decisionNot approved

Approved

Post monitoring

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impact assessment report and environmental management plan for getting clearance from the MoEF and the SEIAA.

National Environment Appellate Authority

This is a national level authority formed to hear appeals with respect to restriction of areas in which any industries, operations or processes or class of industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986 and for related matters.

National Environment Tribunal

National Environment Tribunal is formed for effective and expeditious disposal of cases arising from any accidents occurring while handling any hazardous substances, to giving relief and compensation for damages to persons, property and the environment and related matters.

Central Pollution Control Board (CPCB)

Central Pollution Control Board is a statutory organization at the national level that provides technical services to the Ministry of Environment & Forests. The major functions of the board are:

• Advise the Central Government on any matter concerning prevention and control of water and air pollution and improvement of the quality of air.

• Lay down, modify the pollution standards• Collect, compile and publish technical and statistical data relating to pollution and

the measures devised for their effective prevention, control or abatement• Prepare manuals, codes and guidelines relating to treatment and disposal of sewage

and trade effluents • Co-ordinate the activities of the State Pollution Control Board• Disseminate pollution related information, create awareness

State Pollution Control Boards

Each state has a pollution control board that acts in accordance with the CPCB and the MFoE. These boards function as the state level agency for enforcement, advisory services, monitoring, research and creation of public awareness. They also conduct the public hearing part of the environmental clearance of any project.

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III. COMPARISON BETWEEN THE EQUATOR PRINCIPLES AND INDIAN REGULATIONS

The EPs are a set of voluntary guidelines that provides a broad framework for assessing the environmental and social risks of a project. The Principles refer to the World Bank Group Pollution Prevention and Abatement Handbook, and the IFC Performance Standards and EHS Guidelines for particular standards of compliance to be achieved. Whilst these are indicative in nature and do not provide legal commitments, the standards have been developed through a multi-stakeholder approach and are accepted as industry practice. In addition to complying with local environmental and social regulations in each country where a project occurs, the Principles also ensure that industry good practice is applied where local regulations may be deficient. Through the application of Principle 8 entitled “Covenants”, the EPFIs, by ensuring compliance both with local laws and with environmental Action Plans, effectively ensure that environmental and social risk are appropriately managed.

Indian regulations are very specific and provide detailed accounts of the activities to be carried out, the procedures, the acceptable environmental standards, the authorities and division of power and responsibilities. This fundamental difference has to be recognized at subsequent comparisons between the EPs and the Indian regulations.

The comparison is carried out for both the procedures and standards of compliance. The standards are quantitative and objective, which makes the comparison easier; whereas the procedures though similar at the conceptual level are more difficult to compare since the proper comparison lies in the actual implementation of the stated framework. Six sectors--Aluminium, Chlor-Alkali, Cement, Pesticide, Pharmaceutical and Petroleum Refining--are compared below in further detail.

Comparison of Procedures

The comparison is done for each of these steps: 1. Categorization of the projects, 2. Environmental clearance and environment impact assessment (EIA), 3. Environmental Management Plan (EMP)4. Comparison of Authorities and Agencies 5. Public consultation and monitoring requirements6. Comparison of Monitoring Mechanisms

1. Categorization

Indian Regulations Equator PrinciplesCategory Category A, B1, B2

Category A and B is defined by the Schedule provided in EIA by Ministry of Environment and Forest. There can be A or B or both

Category A, B,C

• Category A – Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or

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categories for each industry, e.g.,

Mining of minerals Category A: ≥ 50 ha. of mining lease area Asbestos mining irrespective ofmining areaCategory B: <50 ha ≥5 ha .of mining lease area

Oil and Gas (Offshore and onshore exploration, development &production); all projects come under Category A

unprecedented

• Category B – Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures

• Category C – Projects with minimal or no social or environmental impacts.

Criteria/Basis of Categorization

Based on the spatial extent of potential impacts and potential impacts on human health and natural and man made resources.

Based on the magnitude of potential impacts and risks in accordance with the environmental and social screening criteria of the IFC

Time of Categorization

Ex Ante The Schedule to EIA Notification lists out Category A and B

Ex Ante and Ex Post If financing is sought at an early stage in project development, the categorization determines the appropriate impact assessment requirements.

If the impact assessment has already been developed, the project may be retroactively categorized and changes to the impact assessment made as required.

Purpose of categorization

All Category A projects require prior environmental clearance from the Central Government in the Ministry of Environment and Forests (MoEF) on the recommendations of an Expert Appraisal Committee (EAC)

All Category B will require priorenvironmental clearance from the State/ Union Territory Environment Impact Assessment Authority (SEIAA). The SEIAA shall base its decision on the recommendations of a State or UT level Expert Appraisal Committee (SEAC)

For all Category A and Category B projects located in non-OECD countries/OECD countries not designated as High-Income7, the Principles require compliance with the IFC Performance Standards and EHS Guidelines, and with the World Bank PPAH.

For projects located in high-income OECD countries, compliance with local regulations will suffice

7 as defined by the World Bank Development Indicators Database

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2. Comparison of Environmental Impact Assessment

Indian Regulation Equator PrinciplesAll Category A projects are required to submit the EIA report. Based on Form 1, Category B projects are further divided into B1 and B2 Categories. Category B1 requires further EIA report and B2 projects can directly apply for clearance without EIA study. This facilitates screening out small projects which can be judged based on the information furnished and eliminates the scope of detailed EIA study, time and cost thereof.

All projects provide project specific details to the concerned authority in Form 18, based on which they are further screened (details given in Annexure 4). For all projects, Form 1 and a copy of the pre-feasibility study report have to be submitted. For construction projects (item 8), Form 1, Form 1A and a copy of the Conceptual Plan are to be submitted. The reports submitted with the application shall be evaluated and assessed by the Impact Assessment Agency and a committee of Experts.

Checklist provided by the MoEF for assessing impact on land, water, vegetation, fauna, air, aesthetics, socio-economic aspects, building materials, energy conservation, etc.

The Impact Assessment Agency shall prepare a set of recommendations based on technical assessment of documents and data furnished by the project authorities, supplemented by data collected during visits to sites or factories, if undertaken, and details of public hearing. The assessment shall be completed within a period of ninety days from receipt of the requisite documents and data from the project authorities and completion of public hearing, and a decision shall be conveyed within thirty days thereafter. The clearance is granted after two months of submitting the final reports and shall be valid for a period of five years for

All Category A, and select Category B projects (in non OECD countries and non high-income OECD countries) are required to undergo EIA. Category C projects do not require a detailed assessment.

For projects in high-income OECD countries, compliance with local regulations will suffice, and may or may not include a full EIA.

For projects in high income OECD countries, the environmental assessment or equivalent must show that the project complies with host country laws, regulations and permits required for the project. For all other projects, in addition to host country law compliance, projects must comply with the IFC Performance Standards and EHS Guidelines and with the World Bank PPAH.

The borrower shall prepare the EIA and EMP based on the host country laws, regulations and permits, IFC Performance Standards and EHS Guidelines and World Bank PPAH, as required. An independent expert opinion may be required.

No formal clearance is granted as there is no authority involved here.

The EPFIs screen the project for financing based on the EIA and EMP reports and details relating to public consultation.

8 Form 1refers to Appendix 1 of EIA Notification 2006

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commencement of the construction or operation of the project.The EAC/SEAC determine detailed and comprehensive Terms of Reference (ToR) addressing all relevant environmental concerns for the preparation of an Environment Impact Assessment (EIA) Report for the project by the scoping process.

The borrower or consultant will ensure that, if EPFI financing is to be sought, the ToR is consistent with EP requirements. If this has not occurred by the time an EPFI considers a project for financing, the EPFI will specify appropriate ToR to address any shortfalls in assessment.

3. Comparison of Environmental Management Plan (EMP)

Indian Regulations Equator PrinciplesThe Environment Management Plan would consist of all mitigation measures for each item-wise activity to be undertaken during the construction, operation and the entire life cycle to minimize adverse environmental impacts as a result of the activities of the project.The EMP should specify mitigation measures including prevention and control for each environmental component and rehabilitation and resettlement plan.

It would also delineate the environmental monitoring plan for compliance of various environmental regulations. It will state the steps to be taken in case of emergency.

The action plan will describe and prioritize the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment, and corrective actions required to comply with applicable host country social and environmental laws and regulations, and requirements of the applicable Performance Standards and EHS Guidelines.

EP requires that the client has in place an Environmental Management System that addresses the management of these impacts.

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4. Comparison of detailed EIA Report Indian Regulations Equator PrinciplesUnder Indian regulatory requirements, the Environmental Assessment report should be structured as follows:

1. Introduction Purpose of the reportIdentification of project & project proponentBrief description of nature, size, location of project and its importance to the country, regionScope of the study – details of regulatory scoping carried out (as per Terms of Reference)

2. Project Description Description of those aspects of the project

that are likely to cause environmental impacts.

Description of mitigation measures incorporated into the project to meet environmental standards, environmental operating conditions, or other EIA requirements

Assessment of new & untested technology for the risk of technological failure

3. Description of the Environment Establishment of baseline for valued

environmental components Base maps of all environmental

components

4. Anticipated Environmental Impacts & Mitigation Measures Details of investigated environmental

impacts Measures for minimizing and /or

offsetting adverse impacts identified Irreversible and irretrievable commitments

of environmental components Assessment of significance of impacts Mitigation measures

5. Analysis of Alternatives

As per Equator Principles, the EIA report should include:

1. Relevant social and environmental impacts and risks of the proposed projects

2. Proposed mitigation and management measures relevant and appropriate to the nature and scale of the proposed project.

It provides an illustrative list of issues as given below:

a. Assessment of the baseline social and environmental conditions

b. Consideration of environmentally feasible and socially preferable alternatives

c. Requirements under host country laws and regulations, applicable international treaties and agreements

d. Protection of human rights and community health, safety and security (including risks, impacts and management of project’s use of security personnel)

e. Protection of cultural property and heritage

f. Protection and conservation of biodiversity, including endangered species and sensitive ecosystems in modified, natural and critical habitats, and identification of legally protected areas

g. Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems)

h. Use and management of dangerous substances

i. Major hazards assessment and management

j. Labor issues (including the four core labor standards), and occupational health and safety

k. Fire prevention and life safety

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Description of each alternative Summary of adverse environmental

impacts of each alternative Mitigation measures proposed for each

alternative and selection of alternative

6. Environmental Monitoring ProgramTechnical aspects of monitoring the effectiveness of mitigation measures (incl. measurement methodologies, frequency, location, data analysis, reporting schedules, emergency procedures, detailed budget & procurement schedules)

7. Additional Studies Public consultation, risk assessment, Social Impact Assessment and resettlement and rehabilitation action plans

Standards are set by the Central Pollution Control Board.

l. Socio-economic impactsm. Land acquisition and involuntary

resettlementn. Impacts on affected communities, and

disadvantaged or vulnerable groupso. Impacts on indigenous peoples, and their

unique cultural systems and valuesp. Cumulative impacts of existing projects,

the proposed project, and anticipated future projects

q. Consultation and participation of affected parties in the design, review and implementation of the project

r. Efficient production, delivery and use of energy

s. Pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management

Standards are the World Bank PPAH and IFC EHS guidelines.

5. Comparison of Authorities and Agencies

Indian regulation Equator Principles For Category A:Regulatory Authority: Ministry of Environment and Forests (MoEF)Assessment Agency: Expert Appraisal Committees (EACs)For Category B: Regulatory Authority: State Environment Impact Assessment Authority (SEIAA)Assessment Agency: State Level Expert Appraisal Committees (SEACs)

Compulsory independent expert reviews of EAs and EMPs for Category A projects (and as appropriate for Category B) and an independent expert review of compliance, when judged necessary. The Principles do not specify under which conditions independent monitoring will be considered necessary for Category B.

6. Comparison of Public consultation

Indian Regulation Equator Principles Agency Responsible

State Pollution Control Board (SPCB) or the Union Territory Pollution Control Committee (UTPCC)

The government, borrower or third party expert

Procedures (a) a public hearing at the site or in Project affected communities are to be

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its close proximity (district wise), to be carried out for ascertaining concerns of local affected persons;(b) Obtain responses in writing from other concerned persons having a plausible stake in the environmental aspects of the project or activity.

Details are provided in Annexure 5

consulted. Assessment documentation and Action Plan, or non-technical summaries thereof, have to be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner.

Time Should occur after the screening and scoping are complete but before the appraisal phase.

Should occur early in the assessment process and inany event before the project construction commences, and on an ongoing basis

Post-consultation After completion of public consultation, the borrower shall address the concerns expressed during this process, make appropriate changes in draft EIA and EMP, and prepare the final reports.

Borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation.

Grievance mechanism

Absent It shall be part of Environment management system.Borrower shall receive and facilitate resolution of concerns and grievances about the project’s social and environmental performance.

7. Comparison of Monitoring Mechanisms

Financial institutions, borrowers, agencies setting the standards and the compliance authority are the major agencies involved in the environmental and social issues of project finance. The interactions and responsibilities are shown in Figure 2 below. The first part represents the scenario in the context of EPs. In addition to adhering to host country compliance requirements, the borrower has to adhere to the requirements stipulated in the EMP and covenanted in loan documentation. Borrowers take responsibility for providing external or independent monitoring.

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Figure 2: Roles, Responsibilities and Relations between Agencies Involved

In the Indian context, standards are set by the CPCB and MoEF, and the regulation and compliance is performed by the same agencies; as representatives of the state/government they serve as a neutral third party. The banks are not required to spend any resource investigating E&S issues, since the state body ensures the initial risk assessment and later the compliance. As a result, banks face greater risk since they take no role in assessing the environmental risks of the project which may affect them later.

Standards and Regulation

Agency Providing Standards and guideline: Host country regulator and IFC/World Bank

Agency for Compliance Monitoring (EFPI/Independent Expert/ Expert from Borrower

Environmental & Social issues of a

Project

Financial Institutions

Clients

Financial Institutions

Clients

Agency for Compliance Monitoring (EFPI/Independent Expert/ Expert from Borrower

(State Body)

Agency Providing Standards and guideline (CPCB: State Body)

Environmental & Social issues of a

Project

Standards and Regulation

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Comparison of Standards

Indian regulation Equator Principles Environmental

The standards are divided into Effluent standards, Emission standards, Noise standards and Hazardous Waste Management.

Details in Annexure 6.

The quantitative comparison of these standards is provided in the next section.

Health and safety Issues

List of possible onsite and offsite risks due to a project are provided. Also a list of most probable hazards/risks is outlined by the MoEF. The details are in Annexure 8.

Onsite risksExposure to fugitive dust, noise, gases, thermal and other emissionsHousekeeping practices requiring contact with solid and liquid toxic wastesEmission/spillage etc. from storage & handlingExposure to explosive materialExposure to toxic chemicals

Offsite RisksExposure to toxic releases from offsite storage or related activitiesContamination of ground/drinking water due to accidental releases or normal release in combination with natural hazard Deposition of toxic pollutants in vegetation or other sinks and possible sudden releases due to accidental occurrences

Environmental

The standards are divided into Effluent standards, Emission standards, Noise standards and Hazardous Waste Management.

Details in Annexure 7

Health and safety Issues

There are elaborate conditions, requirements and management systems for both occupational and community health and safety issues. The outline is given here.

Occupational Health and Safety General Facility Design and Operation Communication and Training Physical Hazards Chemical Hazards Biological Hazards Radiological Hazards Personal Protective Equipment (PPE) Special Hazard Environments Construction and Decommissioning Monitoring

Community Health and Safety Water Quality and AvailabilityStructural Safety of Project InfrastructureLife and Fire Safety (L&FS)Traffic Safety Transport of Hazardous MaterialsDisease Prevention Emergency Preparedness and ResponseConstruction and Decommissioning

Comparison of General Standard - Emission Standards

The PPAH and the CPCB have set different standards for permissible emissions. Only one parameter—particulate matter—is common in both; it can be seen from the table that the

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PPAH sets a more stringent standard of 50 and 100 mg/m³ whereas the Indian regulations permit up to 150 mg/m³.

World Bank PPAH Indian CPCB standard Pollutant Concentration (micrograms per cubic meter)Particulate mater 50 (units with ≥ 50

MWe input)100 (units with < 50 MWe input)

150

Annual arithmetic mean 50 - Max. 24 hour average 70 -Nitrogen oxides, Max. 24 hour average

150 -

Sulphur oxide Not to exceed 2000 - Annual arithmetic mean 50 - Max. 24 hour average 125 -Total fluoride - 25

Asbestos - 4 Fibres/cc Dust <2 mg/Nm3

Mercury - 0.2Chlorine - 15Hydrochloric acid vapor and mist - 35Sulphuric acid mist - 50Carbon monoxide 1%Lead 10

Comparison of General Standard - Effluent Standards

The pollutants and parameters are mostly the same in the case of both the PPAH and Indian standards. However the permissible limit in Indian standards is more in almost all pollutants in comparison to the PPAH standard, as shown in the following table. This implies that if the project has to be assessed by the PPAH guidelines under the EPs, more stringent PPAH standards must be followed.

World Bank PPAH Indian CPCB standardPollutant Concentration (micrograms per cubic meter)pH 6-9 5.5 - 9.0BOD 50 30COD 250 250Oil and Grease 10 10TSS 50 100Metals Heavy metals, total 10 -Arsenic 0.1 0.2Cadmium 0.1 2Chromium

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Hexavalent 0.1 0.1 Total 0.5 2Copper 0.5 3Iron 3.5 3Lead 0.1 0.1Mercury 0.01 0.01Nickel 0.5 3Selenium 0.1 0.05Silver 0.5 -Zinc 2 5Cyanide Free 0.1 0.2 Total 1 -Ammonia 10 5Fluoride 20 50Chlorine, total residual 0.2 1Phenols 0.5 1Phosphorus 2 5Sulphide 1 2Coliform bacteria <400 MPN/100 ml -Temperature increase Maximum 3۫ C Maximum 5 ۫ C

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Industry Specific Comparisons

The Central Pollution Control Board in India has developed standards for effluents, emissions, waste and noise taking into account different industries, their operations and the nature of pollutants generated. Similarly the Pollution Prevention and Abatement Handbook of the World Bank Group has an exhaustive list of industry- specific standards. The CPCB has identified 17 industries as the most polluting industries in India (Annexure 3 b). In this section, pollution standards for 6 such industries are compared.

1. Chlor Alkali (Caustic Soda) Industry

The Indian standards specify three major pollutants: mercury, chlorine and hydrochloric vapor and mist. For chlorine, the permissible standard is more than that of the PPAH. For effluents, all the parameters are different in the two cases; hence it is not possible to compare.

Emission Standards

Parameter PPAH/IFC Indian Emission limit (mg/Nm3)

Mercury - 0.2Chlorine 3 15Hydrochloric vapour and mist - 35

Effluent Standards

Parameter PPAH/IFC Indian Maximum Limits, mg/l

pH 6-9 5.5 to 9.0Total concentration of mercuryin the final effluent

- 0.01

Mercury bearing wastewatergeneration (flow)

- 10 kl/tonne of causticsoda produced

TSS 20 -COD 150 -AOX 0.5 -Sulfites 1 -Chlorine 0.2 -

2. Cement industry

The emissions standards maintained by PPAH/IFC and CPCB for the cement industry focus on different parameters. The Indian regulation specifies the permissible level of particulate matter emitted whereas the IFC guidelines specific limits for maximum emissions, oxides, pH and suspended solids in effluent.

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Emission Standards

PPAH/IFC IndianEmission limit (mg/Nm3)

Particulate Matter - -

400 (capacity ≤200 t/ay)250 (capacity>200 t/day)

pH 6-9 -Maximum emission 50 milligram/ Nm3 - sulfur oxides 400 mg/Nm3 -nitrogen oxides 600 mg/Nm3 -Suspended solid in effluent 50 milligram/lit -

3. Aluminium Industry

For the aluminium industry, most of the parameters are again different except the level of particulate matter. The limit for particulate matter set by Indian regulation is up to 150 mg/cubic meter whereas in PPAH it is only 30 mg/cubic meter. Although the Indian regulation does not set any standards for liquid effluents, overall it has a much more detailed set of standards.

Emission Standards

IFC/World Bank IndianParameters Emission limit (mg/Nm3)Particulate matter 30 150Hydrogen Fluoride 1 -Total Fluoride 2 0.3 kg/tonne of AluminiumVOCs 20 -

Effluent Standards

Pollutants IFC/World Bank IndianMilligram/liter

pH 6-9 -TSS 50 -Fluoride 20 -Aluminium 0.2 -

Indian Emission Standards for Aluminium industryAlumina Plant Pollutants Emission Limits Raw Material Handling Particulate Matter 150 mg/Nm3

ii) Precipitation Areas Calcinations

Particulate Matter Carbon Monoxide Stack Height

250 mg/Nm3 1 % max. H=14 (Q)0.3 where, Q is emission rate of SO2 in kg/hr and H is stack height in

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metresSmelter Plant Green Anode Shop Particulate Matter 150 mg/Nm3Anode Bake Oven Particulate Matter 150 mg/Nm3 Total Fluoride (F) 0.3 kg/tonne of AluminiumPot-room Particulate Matter 150 mg/Nm3 VSS 4.7 kg/tonne of Aluminium produced HSS 6.0 kg/tonne of Aluminium produced PBSW 2.5 kg/tonne of Aluminium produced PBCW 1.0 kg/tonne of Aluminium produced Stack Height H=14 (Q) 0.3 , Q -emission rate of SO2

in kg/hr, H -stack height in mts.

4. Pesticide industry

The Indian regulation does not provide any emission standards for the pesticide industry. The effluent standards are stricter in comparison to PPAH for pH and include a few more parameters such as presence of tin, zinc, arsenic, cyanide, nitrate and phosphate.

Emission Standards

Parameter PPAH/IFC Indian Maximum Limits, mg/l

Particulate matter 20 -VOCs 20 -Chlorine/ Chloride 5 -

Effluent Standards

Parameter PPAH/IFC Indian milligram/liter

pH 6-9 6.5-8.5BOD 30 100COD 150 -AOX 1 -TSS 10 100Oils and grease 10 10Phenol 0.5 1.0Arsenic 0.1 -Chromium 0.1 -Copper 0.5 1.0Mercury 0.01 .01Tin - 0.1Zinc - 1.0Arsenic as As - 0.2Cyanide as CN - 0.2Nitrate as NO3 - 50

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Phosphate as P - 5Active ingredient (each) 0.05 -

Bioassay test Minimum 90% survival of fish after 96 hrs with 90% effluent and 10%

dilution water.

5. Petroleum refining

For the petroleum refining industry, PPAH guidelines are more comprehensive than Indian emission standards, which specify only sulfur oxide limits. The Indian effluent standards are stricter, although Indian regulation omits parameters such as COD, Chromium, Benzene, and Nitrogen.

Emission Standard

Parameter PPAH/IFC Indian Milligrams/normal cubic meter

Particulate matter 50 -Nitrogen oxides 460 -Sulfur oxides 150 Distillation: 0.25 kg/tonne of feed

Catalytic Cracker: 2.5 kg/tonne of feedSulphur Recovery Unit: 120 kg/tonne of sulphur in the feed

Nickel and vanadium (combined)

2 -

Hydrogen sulfide 152 -

Effluent Standards

Parameter PPAH/IFC Indian milligrams per liter

pH 6-9 6-8.5TSS 30 0.5BOD 30 15COD 150 -Oil and Grease 10 10Chromium hexavalent 0.1 -Chromium total 0.5 -Lead 0.1 -Phenol .5 1Benzene .05 -Benzo(a)pyrene .05 -Sulfide 1 0.5Nitrogen (total) 10 -Temperature increase ≤3۫ C ≤5۫ C

6. Pharmaceuticals Industry

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For the pharmaceutical industry, the PPAH has set emission standards, while Indian regulation has not. By contrast the Indian regulation stipulates limits on more metal residue effluents than the PPAH. It has additional parameters such as lead, cyanide, sulfide, phosphate, bioassay test whereas it lacks few parameters such as COD, AOX and Cadmium. For a few parameters like BOD, TSS, phenol and Arsenic the PPAH standards are stricter.

Emission Standards

Parameter PPAH/IFC Indian Milligrams/ cubic meter

Active ingredient (each) 0.15 -Particulate matter 20 -Total Class A 20 -Total Class B 80 -Benzene, vinyl chloride, dichloroethane (each)

5 -

Effluent Standards

Parameter PPAH/IFC Indian milligrams per liter

pH 6-9 6-8.5BOD 30 100COD 150 -AOX 1 -TSS 10 100Oil and grease 10 10Phenol 0.5 1Arsenic 0.1 0.2Cadmium 0.1 -Chromium (hexavalent) 0.1 0.1Mercury 0.01 0.01Lead - 0.1Cyanide - 0.1Sulfides (as S) - 2.0Phosphate (as P) - 5.0Active ingredients 0.05 0.5Bioassay test - 90% survival after

96 hours in 10% effluent

IV. CONCLUSION

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The Equator Principles as a set of guidelines have the advantage of flexibility. The requirements for assessing environmental and social risks and ensuring mitigation are well described, through compliance with host country laws, appropriate IFC or World Bank standards, legal covenants, and the independent monitoring of compliance throughout the duration of the project loan. The biggest cause for concern is the self-governing nature of the principles. In Kimberley Gaskin’s words, there is the carrot of responsible behaviour yet it might not be sufficient to ensure compliance without the stick of regulations and punitive punishments. 9

The Indian regulations are detailed and unambiguous. The responsible authorities, accountability systems and monitoring mechanisms for compliance are well placed. The regulations are mandatory and legal action can be taken against the party who violates the same. All the same, there is a high degree of non-compliance. Although the process appears sound, there are loopholes in implementation. In many cases the EIA reports are not authentic; the public consultation does not take place as per the act; and the EIA reports are so voluminous and technical that it is not clear what impacts the project will actually have on local communities and the surrounding environment. Corruption and poor monitoring on the one hand, and strict actions against the polluters on the other, make the system even more inefficient. Clearly the Indian system is not working as intended. Since India does not fall within the definition of a high-income OECD country, compliance with both host country legislation and with the relevant IFC and World Bank guidelines will be a requirement should the Principles be applied. It is important therefore to ascertain the extent to which Indian procedures and standards meet with the IFC and World Bank requirements. Several aspects such as the environment impact assessment and environment management plan are similar in both cases. However, the PPAH and IFC EHS standards are more stringent and more comprehensive than the Indian Standards. In fact, emission standards are not specified for many industries in Indian regulations. The PPAH sets very specific standards for a long list of industries; there are two different sets of guidelines, for example, for pesticide formulation and pesticide manufacturing, whereas the CPCB standards have defined a common set of standards for the “pesticide industry.”. Similarly the PPAH has different guidelines for different kinds of fertilizers while Indian regulation sets standards only for the “fertilizer industry”.

Consequently, adopting the Equator Principles will likely propel Indian banks to develop a more detailed and uniform risk appraisal process for reducing environmental and social risks, which, in turn, should protect and improve banks’ reputation and public image. At the same time, compliance with the Principles may lead to additional responsibilities and demand more human and financial resources for banks and their clients. Indian banks will no doubt have to develop internal policies to govern EP implementation. However, with a significant portion of the global project finance market applying the Equator Principles, and with the challenges of managing environmental and social risks becoming clearer, Indian banks should take concrete steps to integrate sustainability concerns into their project finance operations.

9 Article “A Question of Principles” by Kimberley Gaskin, Infrastructure Magazine, July 2007.Source: http://www.equator-principles.com/documents/A_question.pdf, accessed on 6th Feb 08

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http://www.equator-principles.com/documents/A_question.pdf


The Equator Principles offer an enhanced and broadly accepted framework to assist Indian banks in addressing the environmental and social impacts of project finance. The participation of Indian banks in drafting the next iteration of the Equator Principles would ensure guidelines that make sense for India. For example, the emission and effluent standards to which the EPs adhere are stricter than the current Indian standards; thus banks may find it difficult to ensure compliance with the EP standards from their clients. Applying the more stringent standards to established projects would be difficult, as cleaner technologies, improved efficiency and better recycling/waste management systems would require additional financial investment and time. Therefore, placing responsibility on banks for ensuring that their clients adhere to the stricter standards might be unreasonable in the present scenario. However, if Indian banks agree to accept guidelines that clearly delineate their roles and responsibilities in ensuring environmental and social risk mitigation and management (which seems to be missing in the present system where the bank plays a passive role of receiving an environmental clearance certificate from the client), this would enable banks to retain better control over project risks and would improve bank-client cooperation. Indian Banks might collectively agree upon a set of guidelines that provides direction for banks to develop capabilities to assess, mitigate, manage and monitor environmental risks in their project finance operations; establishes a system of active engagement with clients; and fosters transparency to ensure compliance.

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REFERENCES

1. www.equator-principles.com2. http://cpcb.nic.in3. http://www.envfor.nic.in4. http://edugreen.teri.res.in5. www.planningcommission.nic.in6. http://www.mppcb.nic.in7. http://kspcb.kar.nic.in8. http://wmc.nic.in9. http://www.rbs.com/content/corporate_responsibility/policies/downloads/equato

r_principles.pdf#search=%22equator%20principles%20filetype%3Apdf%20standards%22

10. http://www.banktrack.org11. http://www.environmental-finance.com/2006/0607jul/equator.htm12. http://www.environmentaldefense.org13. www.dams.org 14. www.globalpolicy.org15. www.personal.barclays.co.uk16. www.ifc.org17. www.answers.com

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Annexure 1(a): The Equator Principles

PREAMBLE

Project financing, a method of funding in which the lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure, plays an important role in financing development throughout the world.1 Project financiers may encounter social and environmental issues that are both complex and challenging, particularly with respect to projects in the emerging markets.

The Equator Principles Financial Institutions (EPFIs) have consequently adopted these Principles in order to ensure that the projects we finance are developed in a manner that is socially responsible and reflect sound environmental management practices. By doing so, negative impacts on project-affected ecosystems and communities should be avoided where possible, and if these impacts are unavoidable, they should be reduced, mitigated and/or compensated for appropriately. We believe that adoption of and adherence to these Principles offers significant benefits to ourselves, our borrowers and local stakeholders through our borrowers’ engagement with locally affected communities. We therefore recognise that our role as financiers affords us opportunities to promote responsible environmental stewardship and socially responsible development. As such, EPFIs will consider reviewing these Principles from time-to-time based on implementation experience, and in order to reflect ongoing learning and emerging good practice.

These Principles are intended to serve as a common baseline and framework for the implementation by each EPFI of its own internal social and environmental policies, procedures and standards related to its project financing activities. We will not provide loans to projects where the borrower will not or is unable to comply with our respective social and environmental policies and procedures that implement the Equator Principles.

SCOPE

The Principles apply to all new project financings globally with total project capital costs of US$10 million or more, and across all industry sectors. In addition, while the Principles are not intended to be applied retroactively, we will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact.

The Principles also extend to project finance advisory activities. In these cases, EPFIs commit to make the client aware of the content, application and benefits of applying the Principles to the anticipated project, and request that the client communicate to the EPFI its intention to adhere to the requirements of the Principles when subsequently seeking financing.

STATEMENT OF PRINCIPLES EPFIs will only provide loans to projects that conform to Principles 1-9 below:

Principle 1: Review and Categorization

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When a project is proposed for financing, the EPFI will, as part of its internal social and environmental review and due diligence, categorise such project based on the magnitude of its potential impacts and risks in accordance with the environmental and social screening criteria of the International Finance Corporation (IFC) (Exhibit I).

Principle 2: Social and Environmental Assessment

For each project assessed as being either Category A or Category B, the borrower has conducted a Social and Environmental Assessment (“Assessment”) process2 to address, as appropriate and to the EPFI’s satisfaction, the relevant social and environmental impacts and risks of the proposed project (which may include, if relevant, the illustrative list of issues as found in Exhibit II). The Assessment should also propose mitigation and management measures relevant and appropriate to the nature and scale of the proposed project.

Principle 3: Applicable Social and Environmental Standards

For projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the Assessment will refer to the then applicable IFC Performance Standards (Exhibit III) and the then applicable Industry Specific EHS Guidelines (“EHS Guidelines”) (Exhibit IV). The Assessment will establish to a participating EPFI’s satisfaction the project's overall compliance with, or justified deviation from, the respective Performance Standards and EHS Guidelines.

The regulatory, permitting and public comment process requirements in High-Income OECD Countries, as defined by the World Bank Development Indicators Database, generally meet or exceed the requirements of the IFC Performance Standards (Exhibit III) and EHS Guidelines (Exhibit IV). Consequently, to avoid duplication and streamline EPFI's review of these projects, successful completion of an Assessment (or its equivalent) process under and in compliance with local or national law in High-Income OECD Countries is considered to be an acceptable substitute for the IFC Performance Standards, EHS Guidelines and further requirements as detailed in Principles 4, 5 and 6 below. For these projects, however, the EPFI still categorises and reviews the project in accordance with Principles 1 and 2 above. The Assessment process in both cases should address compliance with relevant host country laws, regulations and permits that pertain to social and environmental matters.

Principle 4: Action Plan and Management System For all Category A and Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the borrower has prepared an Action Plan (AP)3 which addresses the relevant findings, and draws on the conclusions of the Assessment. The AP will describe and prioritise the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment. Borrowers will build on, maintain or establish a Social and Environmental Management System that addresses the management of these impacts, risks, and corrective actions required to comply with applicable host country social and environmental laws and

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regulations, and requirements of the applicable Performance Standards and EHS Guidelines, as defined in the AP.

For projects located in High-Income OECD countries, EPFIs may require development of an Action Plan based on relevant permitting and regulatory requirements, and as defined by host-country law.

Principle 5: Consultation and Disclosure

For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the government, borrower or third party expert has consulted with project affected communities in a structured and culturally appropriate manner.4 For projects with significant adverse impacts on affected communities, the process will ensure their free, prior and informed consultation and facilitate their informed participation as a means to establish, to the satisfaction of the EPFI, whether a project has adequately incorporated affected communities’ concerns.

In order to accomplish this, the Assessment documentation and AP, or non-technical summaries thereof, will be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. The borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation. For projects with adverse social or environmental impacts, disclosure should occur early in the Assessment process and in any event before the project construction commences, and on an ongoing basis.

Principle 6: Grievance Mechanism

For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, to ensure that consultation, disclosure and community engagement continues throughout construction and operation of the project, the borrower will, scaled to the risks and adverse impacts of the project, establish a grievance mechanism as part of the management system. This will allow the borrower to receive and facilitate resolution of concerns and grievances about the project’s social and environmental performance raised by individuals or groups from among project-affected communities. The borrower will inform the affected communities about the mechanism in the course of its community engagement process and ensure that the mechanism addresses concerns promptly and transparently, in a culturally appropriate manner, and is readily accessible to all segments of the affected communities.

Principle 7: Independent Review

For all Category A projects and, as appropriate, for Category B projects, an independent social or environmental expert not directly associated with the borrower will review the Assessment, AP and consultation process documentation in order to assist EPFI's due diligence, and assess Equator Principles compliance.

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Principle 8: Covenants

An important strength of the Principles is the incorporation of covenants linked to compliance. For Category A and B projects, the borrower will covenant in financing documentation:

• to comply with all relevant host country social and environmental laws, regulations and permits in all material respects;

• to comply with the AP (where applicable) during the construction and operation of the project in all material respects;

• to provide periodic reports in a format agreed with EPFIs (with the frequency of these reports proportionate to the severity of impacts, or as required by law, but not less than annually), prepared by in-house staff or third party experts, that i) document compliance with the AP (where applicable), and ii) provide representation of compliance with relevant local, state and host country social and environmental laws, regulations and permits;

• to decommission the facilities, where applicable and appropriate, in accordance with an agreed decommissioning plan.

Where a borrower is not in compliance with its social and environmental covenants, EPFIs will work with the borrower to bring it back into compliance to the extent feasible, and if the borrower fails to re-establish compliance within an agreed grace period, EPFIs reserve the right to exercise remedies, as they consider appropriate.

Principle 9: Independent Monitoring and Reporting

To ensure ongoing monitoring and reporting over the life of the loan, EPFIs will, for all Category A projects, and as appropriate, for Category B projects, require appointment of an independent environmental and/or social expert, or require that the borrower retain qualified and experienced external experts to verify its monitoring information which would be shared with EPFIs.

Principle 10: EPFI Reporting

Each EPFI adopting the Equator Principles commits to report publicly at least annually about its Equator Principles implementation processes and experience, taking into account appropriate confidentiality considerations.Exhibit I: Categorization of projects

As part of their review of a project’s expected social and environmental impacts, EPFIs use a system of social and environmental categorization, based on IFC’s environmental and social screening criteria, to reflect the magnitude of impacts understood as a result of assessment.

These categories are:

° Category A – Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented;

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° Category B – Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures; and ° Category C – Projects with minimal or no social or environmental impacts.

Exhibit II: Illustrative list of potential social and environmental issues to be addressed in the Social and Environmental Assessment documentation

In the context of the business of the project, the Assessment documentation will address, where applicable, the following issues:

a) Assessment of the baseline social and environmental conditions b) Consideration of feasible environmentally and socially preferable alternatives c) Requirements under host country laws and regulations, applicable international treaties and agreements d) Protection of human rights and community health, safety and security (including risks, impacts and management of project’s use of security personnel) e) Protection of cultural property and heritage f) Protection and conservation of biodiversity, including endangered species, sensitive ecosystems in modified, natural, critical habitats, and identification of legally protected areas g) Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems) h) Use and management of dangerous substances i) Major hazards assessment and management j) Labor issues (including the four core labor standards), and occupational health and safety k) Fire prevention and life safety l) Socio-economic impacts m) Land acquisition and involuntary resettlement n) Impacts on affected communities, and disadvantaged or vulnerable groups o) Impacts on indigenous peoples, and their unique cultural systems and values p) Cumulative impacts of existing projects, the proposed project, and anticipated future projects q) Consultation and participation of affected parties in the design, review and implementation of the project r) Efficient production, delivery and use of energy s) Pollution prevention and waste minimisation, pollution controls (liquid effluents and air emissions) and solid and chemical waste management

Note: The above list is for illustrative purposes only. The Social and Environmental Assessment process of each project may or may not identify all issues noted above, or be relevant to every project.

Exhibit III: IFC Performance Standards on Social and Environmental Sustainability

As of April 30, 2006, the following list of IFC Performance Standards was applicable: ° Performance Standard 1: Social & Environmental Assessment & Management System ° Performance Standard 2: Labor and Working Conditions ° Performance Standard 3: Pollution Prevention and Abatement

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° Performance Standard 4: Community Health, Safety and Security ° Performance Standard 5: Land Acquisition and Involuntary Resettlement ° Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resource Management ° Performance Standard 7: Indigenous Peoples ° Performance Standard 8: Cultural Heritage

Exhibit IV: Industry-Specific Environmental, Health and Safety (EHS) Guidelines

EPFIs will utilise the appropriate environmental, health and safety (EHS) guidelines used by IFC which are now in place, and as may be amended from time-to-time. IFC is using two complementary sets of EHS Guidelines available at the IFC website (www.ifc.org/enviro). These sets consist of all the environmental guidelines contained in Part III of the World Bank’s Pollution Prevention and Abatement Handbook (PPAH) which went into official use on July 1, 1998 and a series of environmental, health and safety guidelines published on the IFC website between 1991 and 2003. Ultimately new guidelines, incorporating the concepts of cleaner production and environmental management systems, will be written to replace this series of industry sector, PPAH and IFC guidelines.

Where no sector specific guideline exists for a particular project then the PPAH’s General Environmental Guidelines and the IFC Occupational Health and Safety Guidelines (2003) are applied, with modifications as necessary to suit the project. The table below lists both the World Bank Guidelines and the IFC Guidelines as of March 1, 2006.

Industry Specific EHS Guidelines:

World Bank Guidelines (PPAH) IFC Guidelines 1. Aluminum Manufacturing 1. Airports 2. Base Metal and Iron Ore Mining 2. Ceramic Tile Manufacturing 3. Breweries 3. Construction Materials Plants 4. Cement Manufacturing 4. Electric Power Transmission &

Distribution 5. Chlor-Alkali Plants 5. Fish Processing 6. Coal Mining and Production 6. Food and Beverage Processing 7. Coke Manufacturing 7. Forestry Operations: Logging 8. Copper Smelting 8. Gas Terminal Systems 9. Dairy Industry 9. Geothermal Projects 10. Dye Manufacturing 10. Hazardous Materials Management 11. Electronics Manufacturing 11. Health Care 12. Electroplating Industry 12. Life & Fire Safety 13. Foundries 13. Occupational Health and Safety 14. Fruit and Vegetable Processing 14. Office Buildings 15. General Environmental Guidelines 15. Offshore Oil & Gas 16. Glass Manufacturing 16. Polychlorinated Biphenyls (PCBs) 17. Industrial Estates 17. Pesticide Handling and Application 18. Iron and Steel Manufacturing 18. Plantations 19. Lead and Zinc Smelting 19. Port and Harbor Facilities 20. Meat Processing and Rendering 20. Rail Transit Systems

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21. Mini Steel Mills 21. Roads and Highways 22. Mixed Fertilizer Plants 22. Telecommunications 23. Monitoring 23. Tourism and Hospitality Development 24. Nickel Smelting and Refining 24. Waste Management Facilities 25. Nitrogenous Fertilizer Plants 25. Wastewater Reuse 26. Oil and Gas Development (Onshore) 26. Wildland Management 27. Pesticides Formulation 27. Wind Energy Conversion Systems 28. Pesticides Manufacturing 28. Wood Products Industries 29. Petrochemicals Manufacturing 30. Petroleum Refining 31. Pharmaceutical Manufacturing 32. Phosphate Fertilizer Plants 33. Printing Industry 34. Pulp and Paper Mills 35. Sugar Manufacturing 36. Tanning and Leather Finishing 37. Textiles Industry 38. Thermal Power Guidelines for New Plants 39. Thermal Power Rehabilitation of Existing Plants 40. Vegetable Oil Processing 41. Wood Preserving Industry

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Annexure 1(b): Significant Changes in the Latest Revision of EPs

The Equator Principles Financial Institutions (EPFIs) launched a revised version of the Equator Principles (EPs) on 6 July 2006. Significant changes to the Equator Principles include:

1. They now apply to projects costing upwards of US$ 10 million instead of US$ 50 million.

2. They apply to projects covering expansion or upgrade of an existing facility, and extend to project finance advisory activities (formerly they applied to new projects only).

3. They refer to the recently revised IFC Performance Standards in addition to the applicable Industry Specific EHS Guidelines (IFC is currently updating these guidelines and the roll-out will be over the next 6-9 months, in the interim, the environmental, health and safety (EHS) guidelines are those of the 1998 Pollution Prevention and Abatement Handbook).

4. They clarify how the EPs should be applied in countries that are not defined as low and middle income by the World Bank. Under the old EPs projects in high income countries would have had to make reference to the IFC’s EHS Guidelines, but not the old IFC Operational Policies. Under the revised EPs, projects in non-OECD (Organisation for Economic Co-operation and Development), and OECD countries that are not ‘high income’, need to make reference to both the new IFC Performance Standards and the applicable EHS Guidelines (2).

5. They clarify requirements on consultation and disclosure, independent review and covenants.

6. They include new principles on grievance mechanisms for projects as well as public reporting by EPFIs on the implementation of the EPs.

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Annexure 1(c): List of EPFIs (As of February 2008)

1. ABN AMRO Bank, N.V. 2. ANZ 3. Banco Bradesco 4. Banco de la República Oriental del

Uruguay 5. Banco do Brasil 6. Banco Galicia 7. Banco Itaú 8. BankMuscat9. Bank of America 10. BMO Financial Group 11. BTMU 12. Barclays plc 13. BBVA 14. BES Group 15. Calyon 16. Caja Navarra 17. CIBC 18. CIFI 19. Citigroup Inc. 20. CORPBANCA 21. Credit Suisse Group 22. Dexia Group 23. Dresdner Bank 24. E+Co 25. EKF26. Export Development Canada 27. FMO 28. Fortis 29. HBOS 30. HSBC Group

31. HypoVereinsbank 32. ING Group 33. Intesa Sanpaolo 34. JPMorgan Chase 35. KBC 36. la Caixa 37. Lloyds TSB 38. Manulife 39. MCC 40. Mizuho Corporate Bank 41. Millennium bcp 42. National Australia Bank 43. Nordea 44. Nedbank Group 45. Rabobank Group 46. Royal Bank of Canada 47. Scotiabank 48. SEB 49. Societe Generale 50. Standard Chartered Bank 51. SMBC 52. TD Bank Financial Group 53. The Royal Bank of Scotland 54. Unibanco 55. Wachovia 56. Wells Fargo 57. WestLB AG 58. Westpac Banking Corporation

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Annexure 1 (d): Top Project Finance EPFI in 1st Half of 2006

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Annexure 1 (e): Top Project Finance Non-EPFI in 1st Half of 2006

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Annexure 2: List of environmental legislation in India

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1. General Legislation

1986 - The Environment (Protection) Act authorizes the central government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds.

1986 - The Environment (Protection) Rules lay down procedures for setting standards of emission or discharge of environmental pollutants.

1989 - The objective of Hazardous Waste (Management and Handling) Rules is to control the generation, collection, treatment, import, storage, and handling of hazardous waste.

1989 - The Manufacture, Storage, and Import of Hazardous Rules define the terms used in this context, and sets up an authority to inspect, once a year, the industrial activity connected with hazardous chemicals and isolated storage facilities.

1989 - The Manufacture, Use, Import, Export, and Storage of hazardous Micro-organisms/ Genetically Engineered Organisms or Cells Rules were introduced with a view to protect the environment, nature, and health, in connection with the application of gene technology and microorganisms.

1991 - The Public Liability Insurance Act and Rules and Amendment, 1992 was drawn up to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident while handling any hazardous substance.

1995 - The National Environmental Tribunal Act has been created to award compensation for damages to persons, property, and the environment arising from any activity involving hazardous substances.

1997 - The National Environment Appellate Authority Act has been created to hear appeals with respect to restrictions of areas in which classes of industries etc. are carried out or prescribed subject to certain safeguards under the EPA.

1998 - The Biomedical waste (Management and Handling) Rules is a legal binding on the health care institutions to streamline the process of proper handling of hospital waste such as segregation, disposal, collection, and treatment.

1999 - The Environment (Siting for Industrial Projects) Rules, 1999 lay down detailed provisions relating to areas to be avoided for siting of industries, precautionary measures to be taken for site selecting as also the aspects of environmental protection which should have been incorporated during the implementation of the industrial development projects.

2000 - The Municipal Solid Wastes (Management and Handling) Rules, 2000 apply to every municipal authority responsible for the collection, segregation, storage, transportation, processing, and disposal of municipal solid wastes.

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2000 - The Ozone Depleting Substances (Regulation and Control) Rules have been laid down for the regulation of production and consumption of ozone depleting substances.

2001 - The Batteries (Management and Handling) Rules, 2001 rules shall apply to every manufacturer, importer, re-conditioner, assembler, dealer, auctioneer, consumer, and bulk consumer involved in the manufacture, processing, sale, purchase, and use of batteries or components so as to regulate and ensure the environmentally safe disposal of used batteries.

2002 - The Noise Pollution (Regulation and Control) (Amendment) Rules lay downsuch terms and conditions as are necessary to reduce noise pollution, permit use of loud speakers or public address systems during night hours (between 10:00 p.m. to 12:00 midnight) on or during any cultural or religious festive occasion

2002 - The Biological Diversity Act is an act to provide for the conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of the benefits arising out of the use of biological resources and knowledge associated with it

2. Forest and wildlife

1927 - The Indian Forest Act and Amendment, 1984, is one of the many surviving colonial statutes. It was enacted to ‘consolidate the law related to forest, the transit of forest produce, and the duty leviable on timber and other forest produce’.

1972 - The Wildlife Protection Act, Rules 1973 and Amendment 1991 provides for the protection of birds and animals and for all matters that are connected to it whether it be their habitat or the waterhole or the forests that sustain them.

1980 - The Forest (Conservation) Act and Rules, 1981, provides for the protection of and the conservation of the forests.

3. Water

1882 - The Easement Act allows private rights to use a resource that is, groundwater, by viewing it as an attachment to the land. It also states that all surface water belongs to the state and is a state property.

1897 - The Indian Fisheries Act establishes two sets of penal offences whereby the government can sue any person who uses dynamite or other explosive substance in any way (whether coastal or inland) with intent to catch or destroy any fish or poisonous fish in order to kill.

1956 - The River Boards Act enables the states to enroll the central government in setting up an Advisory River Board to resolve issues in inter-state cooperation.

1970 - The Merchant Shipping Act aims to deal with waste arising from ships along the coastal areas within a specified radius.

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1974 - The Water (Prevention and Control of Pollution) Act establishes an institutional structure for preventing and abating water pollution. It establishes standards for water quality and effluent. Polluting industries must seek permission to discharge waste into effluent bodies.The CPCB (Central Pollution Control Board) was constituted under this act.

1977 - The Water (Prevention and Control of Pollution) Cess Act provides for the levy and collection of cess or fees on water consuming industries and local authorities.

1978 - The Water (Prevention and Control of Pollution) Cess Rules contains the standard definitions and indicate the kind of and location of meters that every consumer of water is required to affix.

1991 - The Coastal Regulation Zone Notification puts regulations on various activities, including construction, are regulated. It gives some protection to the backwaters and estuaries.

4. Air

1948 – The Factories Act and Amendment in 1987 was the first to express concern for the working environment of the workers. The amendment of 1987 has sharpened its environmental focus and expanded its application to hazardous processes.

1981 - The Air (Prevention and Control of Pollution) Act provides for the control and abatement of air pollution. It entrusts the power of enforcing this act to the CPCB .

1982 - The Air (Prevention and Control of Pollution) Rules defines the procedures of the meetings of the Boards and the powers entrusted to them.

1982 - The Atomic Energy Act deals with the radioactive waste.

1987 - The Air (Prevention and Control of Pollution) Amendment Act empowers the central and state pollution control boards to meet with grave emergencies of air pollution.

1988 - The Motor Vehicles Act states that all hazardous waste is to be properly packaged, labeled, and transported.

Annexure 3 (a): Projects requiring environmental clearance from central govt10

1. Nuclear Power and related projects such as Heavy Water Plants, nuclear fuel complex, Rare Earths.

2. River Valley projects including hydel power, major Irrigation and their combination including flood control.

3. Ports, Harbours, Airports (except minor ports and harbours).4. Petroleum Refineries including crude and product pipelines. 5. Chemical Fertilizers (Nitrogenous and Phosphatic other than single superphosphate).

10 Source: Schedule, EIA Notification 2006, Ministry of Environment and Forestry

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6. Pesticides (Technical). 7. Petrochemical complexes (Both Olefinic and Aromatic) and Petro-chemical

intermediates such as DMT, Caprolactam, LAB etc.and production of basic plastics such as LLDPE, HDPE, PP, PVC.

8. Bulk drugs and pharmaceuticals. 9. Exploration for oil and gas and their production, transportation and storage.10. Synthetic Rubber. 11. Asbestos and Asbestos products. 12. Hydrocyanic acid and its derivatives. 13. (a) Primary metallurgical industries such as production of Iron and Steel, Aluminium,

Copper, Zinc, Lead and Ferro Alloys(b) Electric arc furnaces (Mini Steel Plants).

14. Chlor alkali industry. 15. Integrated paint complex including manufacture of resins and basic raw materials

required in the manufacture of paints. 16. Viscose Staple fibre and filament yarn.17. Storage batteries integrated with manufacture of oxides of lead and lead antimony

alloys. 18. All tourism projects between 200m—500 metres of High Water Line and at locations

with an elevation of more than 1000 metres with investment of more than Rs.5 crores. 19. Thermal Power Plants. 20. Mining projects (major minerals) with leases more than 5 hectares.21. Highway Projects (except projects on improvement work including widening and

strengthening of roads with marginal land acquisition along existing alignments provided it does not pass through ecologically sensitive areas)

22. Tarred Roads in the Himalayas and or Forest areas.23. Distilleries. 24. Raw Skins and Hides 25. Pulp, paper and newsprint. 26. Dyes.27. Cement. 28. Foundries (individual) 29. Electroplating 30. Meta amino phenol

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Annexure 3 (b): List of 17 Major Polluting Industries in India11

1. Aluminium2. Caustic soda (Chlore alkali) WB3. Cement WB4. Copper and zinc smelting WB5. Distilleries6. Dye and dye intermediates7. Fertilizer industry8. Iron and steel WB9. Oil refineries petroleum refining WB10. Pesticides WB11. Petrochemicals WB12. Pharmaceuticals WB13. Pulp and paper WB14. Sugar WB15. Tanneries WB16. Thermal power plants17. Zinc

11 Source: http://cpcb.nic.in/Charter/charter.htm, http://pib.nic.in/feature/feyr2003/fjun2003/f030620031.html

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Annexure 4: Checklist of Information to be furnished before EIA

1. Basic information on the project

2. Activities (general environmental information)• Use of natural resource for construction and operation • Risk to human health• Solid waste • Release of pollutants, hazardous and toxic substances to Air• Noise pollution, vibration, light and heat• Contamination of land or water • Risk of accidents and safety issues • Any consequential development which could lead to environmental effects

3. Environment Sensitivity in particular cases• Protected areas • Ecologically sensitive areas • Water bodies • State, national boundaries • Places used for public access, recreation, tourist or pilgrim areas • Sensitive man-made land uses (hospitals, schools etc)• Areas containing important, scarce resources • Over polluted areas • Areas susceptible to natural hazards

4. Proposed Terms of References (ToR)

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Annexure 5: Procedure for Public Hearing

Process of Public Hearing

Whoever apply for environmental clearance of projects, shall submit to the concerned State Pollution Control Board twenty sets of the following documents namely:

(i) An executive summary containing the salient features of the project both in English as well as local language.

(ii) Form XIII prescribed under Water (Prevention and Control of Pollution) Rules, 1975 where discharge of sewage, trade effluents, treatment of water in any form, is required.

(iii) Form I prescribed under Air (Prevention and Control of Pollution) Under Territory Rules, 1983 where discharge of emissions are involved in any process, operation or industry.

(iv) Any other information or document which is necessary in the opinion of the Board for their final disposal of the application.

Notice of Public Hearing The State Pollution Control Board shall issue a notice for environmental public hearing which shall be published in at least two newspapers widely circulated in the region around the project, one of which shall be in the vernacular language of the locality concerned. State Pollution Control Board shall mention the date, time and place of public hearing. Suggestions, views, comments and objections of the public shall be invited within thirty days from the date of publication of the notification.

All persons including bona fide residents, environmental groups and others located at the project site/sites of displacement/sites likely to be affected can participate in the public hearing. They can also make oral/written suggestions to the State Pollution Control Board.

For the purpose of the paragraph person means: (a) any person who is likely to be affected by the grant of environmental

clearance; (b) any person who owns or has control over the project with respect to which

an application has been submitted for environmental clearance; (c) any association of persons whether incorporated or not like to be affected by

the project and/or functioning in the filed of environment; (d) any local authority within any part of whose local limits is within the

neighbourhood, wherein the project is proposed to be located.

Composition of public hearing panel

The composition of the Public Hearing Panel may consist of: (i) Representative of State Pollution Control Board; (ii) District Collector or his nominee; (iii) Representative of State Government dealing with the subject; (iv) Representative of Department of the State Government dealing with Environment;

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(v) Not more than three representatives of the local bodies such as municipalities or panchayats;

(vi) Not more than three senior citizens of the area nominated by the District Collector.

Access to the Executive Summary

The concerned persons shall be provided access to the Executive Summaryof the project at the following places, namely:

• District Collector Office; • District Industry Centre; • In the Office of the Chief Executive Officers of Zila Praishad or Commissioner of the

Municipal Corporation/Local body as the case may be; • In the head office of the concerned State Pollution Control Board and its concerned

Regional Office. • In the concerned Department of the State Government dealing with the subject of

environment.

Time period for completion of public hearing

The public hearing shall be completed within a period of 60 days from the date of receipt of complete documents as required under paragraph 1.

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Annexure 6: General Environmental Standards in Indian Context

A. Effluents

Parameter Inland surface water

Public sewers Land for irrigation

Marine/coastalareas

Suspended solids mg/l, max.

100 600 200 (a) For process waste water(b) For cooling water effluent 10 per cent above total suspended matter of influent.

Particle size of suspended solids

shall pass 850 micron IS Sieve

- - (a) Floatable solids, solidsmax. 3 mm(b) Settleable solids, max 856 microns

pH value 5.5 to 9.0 5.5 to 9.0 5.5 to 9.0 5.5 to 9.0 Temperature shall not exceed 5oC

above the receiving water temperature

shall not exceed 5oCabove the receiving water temperature

Oil and grease, mg/l max, 10 20 10 20Total residual chlorine, mg/l max

1.0 - - 1.0

Ammonical nitrogen (as N),mg/l, max.

50 50 - 50

Total kjeldahl nitrogen (as N);mg/l, max. mg/l, max.

100 - - 100

Free ammonia (as NH3), mg/l,max.

5.0 - - 5.0

Biochemical oxygen demand (3 days at 27oC), mg/l, max.

30 350 100 100

Chemical oxygen demand, mg/l, max.

250 - - 250

Arsenic(as As). 0.2 0.2 0.2 0.2Mercury (As Hg), mg/l, max.

0.01 0.01 - 0.01

Lead (as Pb) mg/l, max 0.1 1.0 - 2.0Cadmium (as Cd) mg/l, max

2.0 1.0 - 2.0

Hexavalent chro-mium (as Cr + 6),mg/l, max.

0.1 2.0 - 1.0

Total chromium (as Cr) mg/l, max.

2.0 2.0 - 2.0

Copper (as Cu)mg/l, max. 3.0 3.0 - 3.0Zinc (as Zn) mg/l, max. 5.0 15 - 15Selenium (as Se) 0.05 0.05 - 0.05Nickel (as Ni) mg/l, max. 3.0 3.0 - 5.0Cyanide (as CN) mg/l, max.

0.2 2.0 0.2 0.2

Fluoride (as F) mg/l, max. 2.0 15 - 15Dissolved phos- phates (as P),mg/l, max.

5.0 - - -

Sulphide (as S) mg/l, max. 2.0 - - 5.0Phenolic compounds (as 1.0 5.0 - 5.0

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C6H50H)mg/l, max.Radioactive materials: (a) Alpha emitters micro curie mg/l, max.(b)Beta emittersmicro curie mg/l

10-7

10-6

10-7

10-6

10-8

10-7

10-7

10-6

Bio-assay test 90% suivival of fish after 96 hours in 100% effluent

90% suivival of fish after 96

hours in 100% effluen

90% suivival of fish after 96

hours in 100% effluent

90% suivival offish after 96 hoursin 100% effluen

Manganese 2 mg/l 2 mg/l - 2 mg/l Iron (as Fe) 3mg/l 3mg/l - 3mg/l Vanadium (as V) 0.2mg/l 0.2mg/l - 0.2mg/l Nitrate Nitrogen 10 mg/l - - 20 mg/l

B: Wastewater Generation Standards

Industry Quantum Integrated Iron & Steel 16 m3/tonne of finished steelSugar 0.4m3/tonne of cane crushed Pulp & Paper Industries(a) Large pulp & paper (i) Pulp & paper (ii) Rayon grade pulp

(b) Small pulp & paper (i) Agro-residue based (ii) Waste paper based

175 m3/tonne of paper produced150 m3/tonne of paper

150 m3/tonne of paper produced50 m3/tonne of paper produced

Fermentation Industries(a) Maltry (b) Brewer (c) Distillery

3.5 m3/tonne of grain processed0.25 m3/KL of beer produced12 M3/KL of alcohol produced

Caustic Soda(a) Membrane cell process

(b) Mercury cell process

1m3/tonne of caustic soda produced excluding cooling tower blowdown

4 m3/tonne of caustic soad produced (mercury bearing). 10% below down permitted for cooling tower.

Textile Industries: Man-made fibre(i) Nylon & Polyster (ii) Voscose Staple Fibre (iii) Viscose Filament Yarn

120 m3/tonne of fibre produced150 m3/tonne of product500 m3/tonne of product

Tanneries 28 m3/tonne of raw hide Starch Glucose and related products 8 m3/tonne of maize crushed Dairy 3 m3/kl of MilkNatural rubber processing industry Fertiliser(a) Straight nitrogenous fertiliser (b) Straight phosphatic fertiliser (SSP & TSP) excluding manufacture of any acid(c) Complex fertiliser

4 m3/tonne of rubber

Biochemical oxygen demand (3 days at 27oC), mg/l, max.

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(a) Straight nitrogenous fertiliser

(b)Straight phosphatic fertiliser (SSP & TSP) excluding manufacture of any acid

(c)Complex fertiliser

5 m3/tonne of urea orequivalent produced

0.5 m3/tonne of SSP/TSP

Standards of nitrogenous and phospathic fertilisers are applicable depending on the primary product

C: Emission Standards

Parameter Concentration not to exced (in mg/Nm3)Particulate matter (PM) 150Total fluoride 25

Asbestos 4 Fibres/cc and dust should not be more than 2 mg/Nm3

Mercury 0.2Chlorine 15Hydrochloric acid vapour and mist 35Sulphuric acid mist 50Carbon monoxide 1%Lead 10

Annexure 7: General Environmental Standards as per PPAH, World Bank

Emission standards

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Parameter/ Pollutant Limit (milligrams per normal cubic meter)Particulate mater Nitrogen oxides, as NO2Coal fired 750 (260 ng/J)Oil fired 460 (130 ng/J)Gas fired 320 (86 ng/J)Sulphur oxide Not to exceed 2000

Ambient Air Conditions

Pollutant Concentration (micrograms per cubic meter)Particulate mater Annual arithmetic mean 50Max. 24 hour average 70Nitrogen oxides, Max. 24 hour average

150

Sulphur oxide Not to exceed 2000Annual arithmetic mean 50Max. 24 hour average 125

Effluent Standards Pollutant/Parameter Limit pH 6-9 BOD 50COD 250Oil and Grease 10TSS 50Metals Heavy metals, total 10Arsenic 0.1Cadmium 0.1Chromium Hexavalent 0.1Total 0.5Copper 0.5Iron 3.5Lead 0.1Mercury 0.01Nickel 0.5Selenium 0.1Silver 0.5Zinc 2Cyanide Free 0.1 Total 1Ammonia 10

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Fluoride 20Chlorine, total residual 0.2Phenols 0.5Phosphorus 2Sulphide 1Coliform bacteria <400 MPN/100 mlTemperature increase Maximum 3۫ C

Annexure 8: Risks to Environment and Human Health (Indian Context)

Impacts to environment and human health can occur from accidents (both on-site and off-site) or through general environmental degradation. Thus the potential for human/

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environment exposure and the type of risks inherent in a particular activity should be considered.

List of Activities involving Hazards/Risks

Activity Significant probability of Hazard/AccidentSchedule I of EIA Notification Nuclear Power Plant Pressure Wave / Toxic Gas Release / Heat

Radiation/ Radioactivity/Accidental ReleasesRiver Valley Project Flooding, RISAir Ports, Ports/Harbours Accidents, Natural Atmospheric hazardsPetroleum Refinery Pressure Wave / Toxic Gas Release / Heat

RadiationChemical fertiliser Pressure Wave / Toxic Gas Release / Heat

RadiationPesticides Toxic Gas Release / Heat RadiationPetrochemical Complex Pressure Wave / Toxic Gas Release / Heat

RadiationBulk Drugs & Pharmaceuticals Toxic Gas Release / Heat RadiationExploration of Oil & Gas and their production, transportation and storage

Pressure Wave / Toxic Gas Release / Heat Radiation

Synthetic Rubber Toxic Gas Release / Heat RadiationAsbestos and Asbestos product Toxic Gas Release / Heat RadiationHydrocyanic acid and its derivatives Pressure Wave / Toxic Gas Release / Heat

RadiationMetallurgical industries Pressure Wave / Toxic Gas Release / Heat

RadiationElectric arc furnaces Pressure Wave / Heat RadiationChlor-alkali industry Pressure Wave / Toxic Gas Release / Heat

RadiationIntegrated paint complex Pressure Wave / Toxic Gas Release / Heat

RadiationViscose Staple fibre and filament yarn

Toxic Gas Release / Heat Radiation

Storage batteries Pressure Wave / Toxic Gas Release / Heat Radiation

Tourism Project Human AccidentThermal Power Plants Pressure Wave / Toxic Gas Release / Heat

RadiationMining Activities Pressure Wave / Heat Radiation/ Radio Activity/

Tailing dam failure/Inundation/Subsidence/Acid Drainage

Highway Projects Heat Radiation/ Traffic AccidentsTarred roads in Himalayas Heat Radiation/Landslides/Traffic Accidents Distilleries Pressure Wave / Heat Radiation

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Raw Skins and Hides Heat RadiationPulp and Paper Pressure Wave / Toxic Gas Release / Heat

RadiationDyes Heat RadiationCement Pressure Wave / Heat RadiationFoundries Pressure Wave / Toxic Gas Release / Heat

RadiationElectroplating Toxic Gas Release / Heat Radiation

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4.2

Documents

Transcript of 4.2