CONTRACTOR CONTROL PLAN OIL SPILL RESPONSE

Contractor Control Plan ACG Phase 1 Project Oil Spill Response Final

Final 30th May, 2003

CONTRACTOR CONTROL PLAN

OIL SPILL RESPONSE

Azeri, Chirag & Gunashli Full Field Development Phase 1 Project

Construction Programme

Contractor Control Plan ACG Phase 1 Project Oil Spill Response Final Page i

TABLE OF CONTENTS

Page No. 1. INTRODUCTION.................................................................................................. 1

1.1 Purpose............................................................................................................. 1 1.2 Objectives ......................................................................................................... 1 1.3 Performance Based Approach to Impact Mitigation ............................................. 1 1.4 Scope ................................................................................................................ 2

2. RELATIONSHIP TO OTHER PLANS AND OTHER DOCUMENTS ............... 3 3. POLICY AND CONTROL STANDARDS ............................................................ 4

3.1 Policy................................................................................................................ 4 3.2 Control Standards............................................................................................... 4

3.2.1 National Laws ............................................................................................ 4 3.2.2 International Guidelines ............................................................................... 6 3.2.3 Contract Operator Health, Safety and Environmental Requirements ............... 6

4. ROLES AND RESPONSIBILITIES...................................................................... 8 5. IMPACT MITIGATION ....................................................................................... 9

5.1 Impacts ............................................................................................................. 9 5.2 Mitigation and Management................................................................................ 9

5.2.1 Introduction ................................................................................................ 9 5.2.2 CIPP content.............................................................................................10 5.2.3 Spill Response and Notification ...................................................................10 5.2.4 Small Spills: Tier 1.....................................................................................12 5.2.5 Tier 2 Spills ...............................................................................................14 5.2.6 Equipment .................................................................................................16 5.2.7 Workforce Training....................................................................................16

6. Verification and Monitoring ................................................................................. 18 6.1 Contractor Compliance......................................................................................18 6.2 Key Performance Indicators..............................................................................19 6.3 Action Tracking System....................................................................................20 6.4 Contractor Inspections and Audits......................................................................20

7. REPORTING........................................................................................................ 21 Tables

Table 5.1 Spill Tier System................................................................................... 10 Table 6.1 Key Performance Indicators Relevant to Spill Response.................... 19 Appendices

Appendix 1 Commitments Register-Spills ............................................................... 22 Appendix 2 Applicable IFC Policies and Guideline s ............................................... 23

Contractor Control Plan ACG Phase 1 Project Oil Spill Response Final Page i

Acronyms ACG Azeri, Chirag and deep water Gunashli BP AzBU BP Azerbaijan Business Unit CAM Contract Accountable Manager CCP Contractor Control Plan CIPP Contractor Implementation Plan and Procedures ERP Emergency Response Plans ERT Emergency Response Team ESIA Environmental and Social Impact Assessment ESMS Environmental and Social Management System FFD Full Field Development HSE Health, Safety and Environment IFC International Finance Corporation IMP Incident Management Plan KPI Key Performance Indicator OSRP Oil Spill Response Plan PPE Personal Protective Equipment PSA Product Sharing Agreement SLIP Supplementary Lenders Information Pack STERP Sangachal Terminal Emergency Response Plan

Contractor Control Plan ACG Phase 1 Project Oil Spill Response Final Page 1

1. INTRODUCTION This document is the Contractor Control Plan (“CCP”) for response to land-based spills for the Azeri, Chirag and Gunashli (ACG) Full Field Development (“FFD”) Phase 1 Project (the “Phase 1 Project”) construction programme. It forms part of the Environmental and Social Management System (“ESMS”) for the project. The Contractor will be required to develop their own site-specific contractor Implementation Plan and Procedures (“CIPP”) document for spill response for their activities as appropriate to meet the requirements of this plan. The site-specific CIP will need to be approved by the Operator.

1.1 Purpose The CCP is a management control document that fulfils the following purposes: • Serves as an important part of the environmental management process to translate

commitments made in the Phase 1 Project Source Documents (Environmental and Socio-economic Impact Assessment (“ESIA”) and Supplementary Lenders Information Package (“SLIP”)) with respect to spill response into contractor actions. Commitments relating to spill response are attached (Appendix 1).

• Serves as a key tool by which the Operator can check the CIPPs and specifically the procedures and method statements that specify how the activities described in their contracts will be carried out in compliance with project commitments.

• Provides transparency to the Lending Agencies that commitments for the Phase 1 Project are being met and are being translated through to the Contractor who is responsible for implementation.

It presents: • References to control guidelines and standards; • Responsibilities for the implementation of the plan; • Mitigation measures to be implemented by the contractor during construction and/or

installation works to meet the project commitments and eliminate or reduce potential impacts;

• Verification and monitoring requirements; and • Reporting requirements.

1.2 Objectives The broad objective of this CCP is to describe the approach and procedures to be followed by contractors for response to land-based spills during the Phase 1 Project construction programme. The CCP also assists the Operator in ensuring that the intended outcomes of the proposed spill response measures are achieved and assures compliance with legal and policy obligations and lender requirements.

1.3 Performance Based Approach to Impact Mitigation The approach to impact mitigation is to describe the performance targets to be met by the contractor when implementing mitigation measures and to outline the procedures to be adopted to ensure that the mitigation performance is met or exceeded. Where possible and


appropriate, performance targets are defined in terms of numerical standards contained within legislation, regulations or guidelines. In instances where such standards have not been developed or are not defined, qualitative measures based on industry best practice will be used to form the basis of an auditing programme. The means by which performance targets are to be met will be determined by the individual contractors and described in detail in their CIPP. This inherently flexible approach is essential to accommodating individual contractor preferences and experience and in recognising the critical importance in accounting for local conditions in the design and implementation of the mitigation measures.

1.4 Scope This CCP sets out the requirements for measures required to respond to land-based spills during Phase 1 Project facility construction activities. This plan addresses spills of: • Diesel and other fuels; • Lubricants and hydraulic fluids; • Solvents and chemicals; and • Hazardous liquid wastes.

The CCP specifically covers the activities associated with the construction and installation of the following: • The Phase 1 Project terminal area and designated access to these areas including, but

not limited to, the construction camp, drainage channel, access roads, storage areas and office facilities;

• The Phase 1 Project topsides construction assembly yards and associated facilities; • The Phase 1 Project jackets construction assembly yard and associated facilities; • The pipelay barge upgrade yard and associated facilities; • Transport and installation activities onshore Azerbaijan; • Installation of the onshore section of the Phase 1 Project marine pipelines between the

landfall and the terminal; and • Onshore facilities for the nearshore section Phase 1 Project marine pipelines installation

and installation at the beach. This plan does not address fuel or chemical spills from vessels at sea. Response to these spills will be managed in accordance with the provisions of the BP Azerbaijan Business Unit (“AzBU”) Oil Spill Response Plan (“OSRP”) (Ref: HSE-ER-129-E).


2. RELATIONSHIP TO OTHER PLANS AND OTHER DOCUMENTS This CCP should be read in conjunction with the project ESMS that specifies project wide requirements for environmental and social management. Project Environmental and Social Management Plans, including this CCP, are integrated with the ESMS. Those environmental plans most relevant to this CCP include: • The Pollution Prevention CCP covering correct storage and handling of fuel, oil and

chemicals on site; • The Waste Management CCP covering the collection, re-use, recycling, storage and

disposal of waste (including oily waste) during construction activities; • The Transport Management CCP covering transport and traffic management

procedures during Phase 1 Project construction activities; • The Nearshore Pipeline Installation Environmental CCP covering pollution and

nuisance prevention during pipelay activities on the coast and in the nearshore; • The Onshore Pipeline Installation Environmental CCP covering pollution and

nuisance prevention during pipelay activities within the onshore pipeline right-of-way between the landfall and terminal site;

• The Resettlement Action Plan covering the framework and procedures that are being followed to address land acquisition and resettlement required for ACG Full Field Development as well as the Shah Deniz Gas Export Project; and

• The Oil Spill Response Plan (BP Azerbaijan Business Unit, Manual No. HSE-ER-129-E) covering spill response at sea.


3. POLICY AND CONTROL STANDARDS

3.1 Policy BP’s business policies and commitments apply to all aspects and phases of BP business operations and are clearly set out in the BP document “What We Stand For”.

The Health Safety and Environment (“HSE”) policy objectives within ‘What We Stand For’ are translated in the BP HSE Management System Framework “Getting HSE Right” into a series of thirteen Elements, each Element having its own set of Expectations. Individual Operating Companies and Business Units are responsible for implementing “Getting HSE Right” through local management systems. All aspects of the Phase 1 Project will be managed in accordance with BP’s HSE policies and standards and the specific HSE Design Standards for the project. In addition the project is committed to conducting its business in a manner which: • Ensures that all facilities are designed, constructed, commissioned, maintained and

operated to high and consistent standards; • Complies with the requirements of the Production Sharing Agreement (“PSA”) (Section

3.2.1); • Meets the HSE requirements of the Lending Agencies (Section 3.2.2); and • Is compatible with the balanced economical and environmental needs of the community.

3.2 Control Standards

3.2.1 National Laws National Azerbaijani law, as it pertains to the Phase 1 Project, is embodied in the PSA. As such the Phase 1 Project is subject to the terms and conditions of the PSA and with respect to the environment is subject to the Environmental Protection and Safety Standards agreed within Article 26. Paragraph 26.3 in Article 26 of the PSA states:

What we stand forOur business policies focus on five areas. They apply to all our activites world wide.

We are committed to:

Ethical conduct

Respect the rule of law,conduct our business

with integrity, and showrespect for human

dignity and the rights ofthe individual wherever

we do business

Employees

Develop employmentpractices which create a

stimulating workingenvironment in which

diversity is valued andencouraged

Relationships

Create mutualadvantage in all ourrelationships so that

people will trust us andwant to do business

with us

Health, safetyand environment

Demonstrate respectfor the natural

environment and worktowards our goals of noaccidents, no harm topeople and no damage

to the environment

Control andfinance

Manage our financialperformance to

maximise long-termvalue for ourshareholders


“[The PSA Parties] shall comply with present and future Azerbaijani laws or regulations of general applicability with respect to public health, safety and protection and restoration of the environment, to the extent that such laws and regulations are no more stringent than the then current international Petroleum industry standards and practices being at the date of execution of this Contract those shown in Appendix IX with which [the PSA Parties] shall comply.”

With respect to spills, Sub-article 26.1 “Conduct of Operations” states:

“[The PSA Parties] shall conduct the Petroleum Operations in a diligent, safe and efficient manner in accordance with generally accepted international petroleum industry standards and shall take all reasonable actions in accordance with said standards to minimise any potential disturbance to the general environment, including without limitation the surface, subsurface, sea, air, lakes, rivers, animal life, plant life, crops, other natural resources and property. The order of priority for actions shall be the protection of life, environment and property.”

In regards to liabilities in the event of a spill, sub-article 26.5 (a) states:

“[The PSA Parties] shall be liable for those direct losses or damages incurred by a Third Party (other than the Government) arising out of any environmental pollution determined by the appropriate court of the Azerbaijan Republic to have been caused by the fault of [The PSA Parties]. In the event of any environmental pollution or environmental damage caused by the fault of [The PSA Parties], [The PSA Parties] shall reasonably endeavour, in accordance with generally acceptable international petroleum industry practices, to mitigate the effect of any such pollution or damage on the environment.”

The Environmental Strategy in Appendix IX outlines the environmental programme to be followed for the Project with respect to environmental data collection and monitoring including a list of requirements with respect to oil spill response planning, although these are predominantly relating to marine spills they include: 1. Sensitivity mapping

− Habitats;

− Fisheries;

− Birds;

− Animals;

− Benthic Organisms;

− Marine Flora.

2. Risk assessment 3. Prediction modelling 4. Equipment and material resourcing 5. Evaluation of chemical treatments 6. Response organisations


7. Treatment and disposal of oil and chemical contaminated material

3.2.2 International Guidelines Beyond the framework of the PSA, the Phase 1 Project will also be carried out according to Applicable IFC Policies and Guidelines. A list of the policies, guidelines and procedures applicable to the Phase 1 Project are included in Appendix 2. Relevant to this CCP, a general policy to report spills is included in the: • World Bank Group General Environmental Guidelines, July 1998; and • IFC General Health and Safety Guidelines, July 1998.

The World Bank Group Guidelines for Oil and Gas Development (Onshore), July 1998 states that:

“Pollution prevention programs should focus on reducing impacts of wastewater discharges, oil spills...”

IFC Hazardous Materials Management Guidelines, December 2001 includes guidelines for an “Emergency Preparedness and Response Plan” in:

- Guidance Note A: “Outline of a Hazardous Materials Risk Management Plan” - Guidance Note B: “Outline of a Hazmat Transportation Plan” - Guidance Note C: “Outline of a Hazardous Waste Management Plan”

3.2.3 Contract Operator Health, Safety and Environmental Requirements All Operator Contractors are required to comply with Operator Requirements as set out in their contracts. These requirements stipulate the need to have effective and workable HSE systems in place that ensure that risks associated with project activities are identified and that appropriate measures are put in place to mitigate identified risks. Such measures should include appropriate equipment design and safe work place practice and should be supported by appropriate response arrangements in the event of an accident. In regards to chemical and oil spill contingency planning, Section 3, Sub-section 3.6, Parts (b) and (c) state:

“3.6 CONTRACTOR’s HS&E Management System shall:- (b) include measurable and realistic targets for HS&E performance covering, but not necessarily limited to:- “…the frequency of chemical and oil spills.” (c) include a follow-up system to ensure that all remedial actions identified by reviews and investigations are closed out, including accidents, incidents and HS&E audits.”


The Environmental Standard Section 7(p) states the following:

“CONTRACTOR shall comply with all regulations governing Hazardous Materials and will ensure prompt and proper response to any spill. Copies of written spill reports regarding action taken will be forwarded to COMPANY by Contractor as soon as they become available to CONTRACTOR.”

Incident reporting requirements for spill events are covered in Section 11, Sub-section 11.1, Parts (g) through (i) as follows:

“11.1 CONTRACTOR’s shall submit a monthly report to the COMPANY REPRESENTATIVE, summarising HS&E performance in the preceding report period and attend meetings as required to satisfy the requirements of the Phase 1 Project Area HS&E Plan. The report shall record performance against agreed/planned HS&E targets including but not limited to, the following:- (g) any other accidents, spills, or unplanned discharges which either result in, or have the potential for significant injury/damage/loss. (h) a summary of the status of any remedial actions. (i) a summary of monitoring activity, reviews, inspections and audits. An accident/incident reporting procedure identifying incidents requiring immediate notification to COMPANY will be agreed prior to commencement of the work.”


4. ROLES AND RESPONSIBILITIES The roles and responsibilities with respect to this CCP are described below: The contractor will be responsible for the following: • Development of site-specific spill response procedures in a CIPP document to

implement the requirements of this CCP; • Implementation of and adherence to all of the requirements and mitigation measures

outlined in this CCP and in the CIPP; • Communicating to the workforce the contents and requirements of the CIPP; • Workforce training and ensuring that all personnel are aware of their responsibilities; • The performance of all sub-contractors with respect to the requirements of the CIPP; • Compliance with all project standards and statutory requirements; • Implementation of an appropriate inspection and monitoring programme; • Implementation and upkeep of an Action Tracking System; and • Record keeping and reporting as required to the CAM.

Specific individual contractor personnel roles and responsibilities including spill notification responsibilities will be provided in the CIPP. The Contract Accountable Manager (“CAM”) for each contract will be responsible for: • Receipt and maintenance of records from the contractor; • Communicating performance to the Phase 1 Project; and • Maintenance of records.

The Operator will be responsible for: • Communicating the contents and requirements of this CCP to the contractors; • Advising the contractor on spill response; • Approval of the contractor’s site-specific CIPP; • Ensuring that the contractors are able to effectively implement the provisions of the

CIPP; • Assurance of contractor performance with respect to the requirements of this CCP; • Coordination and supervision of the Operator inspection and audit programme; • Determining appropriate corrective action for non-compliance and for opportunities for

continuous improvement; • Consultation with the Azerbaijan environmental authorities and agencies as appropriate;

and • Maintenance of records.


5. IMPACT MITIGATION

5.1 Impacts The primary impact addressed by this CCP, is the risk of accidental and uncontrolled release of oil, fuel and/or chemicals to the environment that causes environmental and/or human health impacts. Spills can arise as a result of: • Transportation or refuelling accidents; • Improper storage or packaging practices; • Rupturing of tanks, drums or other storage containers; • Improper handling of hazardous materials during loading and/or off-loading; and/or • Accidents during use.

The commitments for the Phase 1 Project relating to spill response are included in Appendix 1. The measures outlined below are the mitigation requirements to be put in-place by each contractor in their site-specific CIPP in order to effectively achieve the commitments as well as eliminate or minimise any unacceptable impacts resulting from their activities.

5.2 Mitigation and Management

5.2.1 Introduction The contractor will conduct a spill risk assessment for the site. The risk assessment will identify the materials inventory and all site hazards that could potentially result in a spill to enable spill pre-planning and prevention measures to be implemented and ensure that the adequate type and quantity of spill response materials and equipment are readily available to respond to potential spills. The primary mitigation measure for spills is prevention through inclusion in facility design of spill prevention measures and implementation of appropriate operational management systems. Spill prevention measures are included in the Pollution Prevention CCP for the project and include: • The requirement for a complete inventory of hazardous materials (chemicals and fuels)

stored on-site along with Material Safety Data Sheets (“MSDS”); • Storage requirements including adequate bunding, storage location, valve locks, refuelling

procedures, drip trays, etc.; • Practical measures for preventing or limiting spills and leaks; and • Regular inspections of equipment and facilities.

Regular inspection is a key element of sound operational management arrangements for spill prevention as it provides the early identification of warning signs of hazardous conditions or practices that may lead to a spill. The following are considered to be typical indicators: • Poor container conditions such as excessive rust, dents or puncture marks; • Non-segregated, incompatible materials stored in the same area; • Material storage areas without bunding; • Containers stored near moving or vibrating equipment;


• Containers lacking or having insecure lids; • Materials placed in inappropriate containers (i.e., corrosives in metal); • Improperly labelled containers; • Inappropriate materials handling/transferring operations; and • Leaking equipment (i.e., fuel, transmission and hydraulic systems).

The following sections describe the measures to be taken by the contractor as response in the event of a spill. Detailed procedures and responsibilities will be included in each contractor CIPP. The required content of each CIPP is also described below.

5.2.2 CIPP content The required contents for each site-specific CIPP is as follows: • Roles and Responsibilities; • Contact details of all dedicated spill response personnel on site; • Contact details for further spill response personnel offsite in the event of a large spill; • Contact details of relevant authorities and third parties (landowner, fire fighting team,

police, etc.); • A clear communication protocol; • Internal notification procedures; • External notification procedures (including AzBU incident response); • Locations in the vicinity of the construction site that would be sensitive to spills (as

appropriate); • Spill response techniques; • Location of spill response equipment; • Disposal of wastes; and • Pro-forma Spill Incident Report sheets.

5.2.3 Spill Response and Notification Responsibility for spill response during the construction programme rests with the contractor although depending on the specifics of a spill, additional resources may be sought from agreed spill response contractors and/or the Operator. The type of response to be mounted in a spill event is determined by the size of the spill. BP AzBU uses the internationally recognised “tier” system for ranking spill size. Table 5.1 describes the tier system. Table 5.1 Spill Tier System

Tier 1: Operational-type spills that may occur at or near an oil company’s own facilities as a consequence of its own activities. An individual company would typically provide resources to respond to this size of spill.

Tier 2: A larger spill on the vicinity of a company’s facilities where resources from the company, industry and possibly government response agencies in the area can be called in on a mutual aid basis. The company may participate in a local co-operative where each member pools their Tier 1 resources and has access to any equipment which has been jointly purchased by the co-operative.

Tier 3: The large spill where substantial further resources will be required and support from a national (Tier 3) or international co-operative stockpile may be necessary. It is likely that such operations would be subject to government controls or even direction.


During the construction programme there will be no risk of a Tier 3 spill due to the small inventories of fuels and chemicals stored on site.


5.2.4 Small Spills: Tier 1 Tier 1 spills include splashes and drips resulting from broken oil lines or hoses, leaking plant, vehicles and equipment, hydraulic fluid or coolant hose leaks and/or inadequate storage. For the purposes of the Phase 1 Project construction programme Tier 1 spills have been set at <25 litres in volume. Response to Tier 1 spills will be immediate and will be undertaken by the personnel involved in the incident. All site personnel will be trained in response and clean-up procedures for Tier 1 spills. In the event of a Tier 1 spill, the contractor HSE Manager will be notified. The contractor HSE Manager will record the time and date of receipt of notification and the name and position of the reporting party. The contractor HSE Manager will report the incident to the CAM. Tier 1 spill response procedures will include: • Removal of potential sources of ignition from within and near the spill area; • Isolation of the source; • Containment of the spill; • Access the MSDS for special hazards associated with any spilled chemicals; • Ensure personnel are wearing the appropriate PPE; and • Mopping up of the spill.

Wastes generated as a result of the spill clean-up will be placed in clearly labelled containers for storage and final disposal in accordance with the requirements of the Pollution Prevention CCP and Waste Management CCP. A Spill Incident Report will be completed using a proforma Spill Incident Report sheet and submitted to the Contractor HSE Manager. The Spill Incident Report will at a minimum include: • Spill source (e.g., broken hose; ruptured drum, tank or pipe; refuelling accident; vehicle

accident); • Spill location; • Details of spilt substance including any pertinent elements from the substance’s MSDS; • Spill volume; • Site conditions (i.e., open area; confined space; sealed or unsealed surface); • Details of any personnel injuries; • Details of any vehicle/equipment/plant damage; • Response measures being implemented; and • Details of any threatened or damaged resources.

The proforma Spill Incident Report sheet used for recording the above information will be included as part of the site-specific spill response CIPP.


Tier 1 spill incident reports will be provided to the CAM who will report these monthly to Operator HSE.


5.2.4.1 Post Incident Investigation Following completion of response and clean-up activities, the contractor HSE Manager will conduct an investigation into the incident to include: • Route cause of the incident (e.g., failure of equipment; human error); • Spill response resources used and consumed (to be replaced); • Adequacy of available spill response resources to combat the spill; • Performance of spill response crew; • Site conditions post clean-up; and • Required corrective action(s) and deadline for implementation.

The contractor HSE Manager will report the findings to the CAM and agree on the implementation of any required remedial measures. These actions will be tracked in the contractors Action Tracking System (see Section 6).

5.2.5 Tier 2 Spills Tier 2 spills would result from events such as the loss of containment of large bulk fuel or liquid chemical storage tanks, accidents involving fuel and/or liquid chemical transport vehicles and rupture of major oil, fuel or liquid chemical transfer pipes. For the purposes of the Phase 1 Project construction programme Tier 1 spills have been set at >25 litres in volume. In the event of a Tier 2 spill, attendant personnel will immediately notify the contractor HSE Manager, using the site emergency notification procedures. The contractor HSE Manager will: • Immediately deploy contractor personnel trained in Tier 2 spill response; • Go to the spill site; and • Assume responsibility for scene management. .

Once on site, the contractor HSE manager will notify the CAM (or delegate) of the incident providing information on the following: • Spill source; • Spill location • Spilt substance; • Spill volume; • Spill status (terminated, ongoing); • Site conditions; • Potential for fire or explosion; • Details of any personnel injuries; and • The number of suitably trained contractor personnel that can be made available to the

response effort. On the advice received from the contractor HSE Manager, the CAM (or delegate) will determine the necessity or otherwise of initiating additional spill response including:


• BP AzBU Incident Management as per the provisions of the AzBU Incident Management Plan (“IMP”) and mobilisation of the Operator Emergency Response Team (“ERT”);

• The provisions of the BP AzBU OSRP and Emergency Response Plans (“ERP”) (e.g. the Sangachal Terminal Emergency Response Plan (“STERP”) (NS-S-A-RH-001));

• Emergency Services (fire fighting team, ambulance, police) . In the event that the AzBU IMP, OSRP and/or ERPs are activated, spill response organisational arrangements will conform to the Incident Command Structures presented in the above plans. Tier 2 spill response procedures will include: • Secure the area and establish perimeter control; • Remove all non-essential staff from the area; • Eliminate any potential sources of ignition; • Access the MSDS for special hazards associated with any spilled chemicals; • Ensure personnel are wearing the appropriate PPE; • Contain the spread of the spill using absorbents, sand bags or other appropriate

techniques; • Excavate trenches downhill of the spill with absorbent material in trench as appropriate; • Prevent spills from reaching drains and surface waters and dike with absorbent or soil;

and • If the spill reaches surface waters:

− personnel trained in spill response on water will be used;

− booms will be deployed in appropria te configurations to contain the spill;

− skimmers will be deployed as appropriate; and

− floating absorbents will be used to remove the pollutant.

Solid and liquid wastes generated during clean-up of a spill will be placed in suitable containers, clearly labelled and stored in the hazardous waste storage area until final disposal in accordance with the requirements of the Pollution Prevention CCP and Waste Management CCP. A Spill Incident Report sheet will be completed as for Tier 1 spills (above). The contractor HSE Manager will complete reports for Tier 2 spills. Tier 2 spill incident reports will be provided to the CAM who will immediately submit these to Operator HSE. Notification of, and reporting to local and national authorities will be the responsibility of the Operator. Contact with the media will only be as authorised by the Operator.

5.2.5.1 Post Incident Investigation Following completion of response and clean-up activities, the contractor HSE Manager will conduct an investigation into the incident to include:


• Route cause of the incident (e.g., failure of equipment; human error; accident); • Spill response resources used and consumed (and to be replaced); • Adequacy of available spill response resources to combat the spill; • Performance of spill response crew; • Effectiveness of AzBU IMS, OSRP and/or ERPs in assisting a rapid response (if

activated); • Effectiveness of clean-up; • Operability of interface of contractor and AzBU spill response arrangements (if

required); • Site conditions post clean-up; and • Required corrective action(s) and deadline for implementation.

The contractor HSE Manager will report the findings to the CAM and agree on the implementation of any required remedial measures. These actions will be tracked in the contractors Action Tracking System (see Section 6).

5.2.6 Equipment The contractor will ensure that appropriate spill response equipment is located at the following locations: • At each construction camp; • At all fuel and chemical storage facilities; and • At re-fuelling points.

As a minimum, the following spill response equipment will be held and maintained by the Contractor on site such that it can be deployed to the spill scene: • Absorbent pads; • Appropriate Personal Protective Equipment (PPE); • Chemical resistant storage drums; • Sandbags; • Dry granular absorbent; • Shovels made or coated with polyethylene (non-sparking material); • Corrosion resistant pump; • Hoses; and • Warning tape, traffic cones or temporary barricade fencing.

In addition, inflatable booms, pumps and skimmers will be available for use where contractor sites are near or adjacent to water bodies. The contractor will establish protocols and procedures with other contractors and the Operator for immediate access to additional spill response and containment equipment in the event of larger spills when the Contractors equipment is inadequate.

5.2.7 Workforce Training


Spill prevention training will be presented to individuals working on site (refer to the Pollution Prevention CCP). This will include identification of all spill risks. All personnel will also receive awareness training in spill notification procedures and spill response techniques for small spills. The awareness training will be supplemented with regular refresher training sessions through tool-box talks. Selected personnel will be trained in emergency and spill response techniques including the use of spill response equipment. Spill response exercises will be conducted.


6. VERIFICATION AND MONITORING The principal objectives of the verification and monitoring programme is to provide assurance that: • The contractor and its subcontractors are adhering to the requirements of the ESIA,

their contract, legislation, Lending Agency policies and guidelines, the BP AzBU expectations and BP’s corporate policies;

• The contractor and their subcontractors are in compliance with their approved spill response CIPP; and

• Evidence is demonstrated as to whether relevant Phase 1 Project commitments and measures relating to spill response and preparedeness are effective and appropriate for the site.

The specific objectives of the verification and monitoring programme can be summarised as follows: • Monitor the timely completion of site-specific Spill Response CIPP; • Verify the performance of the contractor in implementing the measures documented in

the CIPP; • Monitor the need for, and implementation of, corrective action in the event that the

described measures do not, or appear unlikely to, meet the nominated level of performance; and

• Provide a mechanism for implementing new measures, or altering existing practices, based on performance, thus facilitating continual improvement.

6.1 Contractor Compliance Contractor compliance will be assessed through a combination of site inspections and formal audits. Site inspections of response equipment condition and location will be employed by Operator personnel to assess the preparedeness of the contractor for responding to a spill event. An audit programme, developed within the Phase 1 Project ESMS will monitor and evaluate implementation and compliance with the CCP and site-specific CIPPs. Audits will include an assessment of the spill risks, adequacy of the response procedures and equipment and documentation. Spill prevention measures will be audited as part of the pollution prevention procedures as described in the Pollution Prevention CCP and the management of wastes arising from any spill clean-up procedures will be audited as described in the Waste Management CCP. The inspection and auditing results will be documented and used to indicate areas of non-compliance to allow for corrective measures to be implemented using an Action Tracking System (see section 6.3). The decision on the use and frequency of inspections and audits which are applied to spill response will be based on the necessity of repeat audits as indicated by actions and follow-up


from previous inspections and audits as well as the results of the monitoring of the spill response Key Performance Indicators (“KPIs”) (see below). Operator personnel may, in addition to the inspection and audit functions described above, conduct random, independent checks.

6.2 Key Performance Indicators A series of KPIs with related performance targets have been developed to monitor site spill response performance and these are included in Table 6.1. The frequency of monitoring of each KPI to be carried out by the contractor is also included. These will form the basis upon which their execution of and compliance with the spill response measures can be monitored. Table 6.1 Key Performance Indicators Relevant to Spill Response

ID KPI/Measure Rationale Performance target

Monitoring frequency

SR1 Review emergency response procedures

Provides an indication of spill response preparedness, the viability and approval of response procedures, a clear allocation of responsibilities for oil spill clean-up operations and the availability of clear spill alert and evaluation procedures.

1 Annually

SR2 Hazardous spills to land, number of incidents <25l.

Indication of maintenance, awareness training, and performance with respect to spills.

Less than 6 per annum

Daily

SR3 Hazardous spills to land, number of incidents>25l.

Indication of maintenance, awareness training, and performance with respect to spills.

Less than 2 per annum

Daily

SR4 Number of repeat spills/leaks to land from the same source.

Gives an indication of “learning from events”

Zero Daily

SR5 Inventory checks to ensure access to spill combating/response equipment and PPE

Ensures equipment is accessible and appropriate.

4 per annum Annually

SR6 Review and record training of emergency response crew

Ensures qualified response personnel are available at site.

100% compliance 6 monthly

SR7 Conduct spill response exercises.

Provides an indication of spill response preparedness and incident reporting/investigation effectiveness.

2 per annum Annually

Operator personnel will monitor progress against the KPIs as part of its overall assessment of the contractor’s performance.


6.3 Action Tracking System All non-compliance with the spill response procedures identified during audits and inspections will be followed up and required corrective actions provided to the contractor. The contractor is responsible for managing and tracking the actions in an Action Tracking System. Spill response action tracking, including close out of actions (solutions and preventative actions taken), will be reported monthly to the CAM for onward reporting to AIOC Phase 1 Project. Identified non-compliant activities and procedures during internal contractor inspection and audit (see below) will also be recorded in the Action Tracking System.

6.4 Contractor Inspections and Audits In addition to monitoring performance against the stated spill response KPIs, the contractor will also be responsible for monitoring site performance of the response measures, and will implement their own internal inspection and audit system within their site-specific CIPP to ensure compliance and control. All non-compliances will be reported and corrective actions including solutions and preventative actions taken recorded on the contractor Action Tracking Sstem and will be reported to the CAM. The cntractor will report on inspection and audit results and the close out of corrective actions to the CAM.


7. REPORTING Records will be kept at two primary levels: • On-site by the cntractor; and • Off-site by Operator HSE Phase 1 Project.

The initially agreed reporting frequency in this CCP will be assessed as the project progresses and the reporting frequency changed depending on performance. Contractor reporting on a monthly basis includes: • Training records; • Spill incident reports; • The Action Tracking System; and • Performance against the KPIs.

The contractor will report to the CAM who will copy the reports to the Operator HSE team for recording as part of the project ESMS.


Appendix 1 Commitments Register-Spills Note: The commitments listed are for the whole Phase 1 Project (construction and operations)

ID Target Area Commitment

Oil Spill Prevention and Response

OR1 General Spills All spill releases however small, will be recorded and reported.

OR2 Fluid Spillage Procedural measures will be designed to minimise spillages such as fluid transfer procedures and inspection of transfer hoses and joints.

OR3 Spill prevention equipment maintenance

The integrity and stability of the pipelines will also be regularly monitored using intelligent pigging and external visual surveys will be carried out using a remote operated vehicle (ROV) with onboard camera.

OR4 Spill prevention equipment maintenance

Regular inspections and testing programmes will be conducted for spill prevention equipment such as blow out preventors and shutdown control sub sea valve’s (SCSSV’s) to ensure that they are properly maintained and in good working order.

Oil Spill Response Framework

OF1 Oil Spills on International Waters (sensitivity studies)

Operator to undertake sensitivity studies of the coastline between Azerbaijan and Iran, in order to identify areas of vulnerability and assist in oil spill response planning.

OF2 Oil Spills on International Waters (regional Oil Spill Contingency Planning)

Operator will assist where possible in the development of regional Oil Spill Contingency Planning.

OF3 Oil Spills Operator will produce a Phase 1 Project Oil Spill Contingency Plan (OSCP).

OF4 Oil spill response Operator will assist in discussions with neighbouring countries to ensure cooperation and coordination of international effort on spill response.

OF5 Oil Spills in International Waters

Financial and technical support and involvement in the delivery of the National Oil Spill Plan Workshop in Baku (November 2001).


Participation in the Caspian mutual aid initiative and workshop (November 2001).


Financial and technical input with the industry ‘steering group’ looking at spill response preparedness and mutual aid in the Caspian and Black Sea region.


Appendix 2 Applicable IFC Policies and Guidelines IFC and EBRD have informed the Financing PSA Parties that they will apply relevant IFC environmental and social policies and guidelines for purposes of project assessment and require ongoing compliance with those policies and guidelines. These policies and guidelines, in the form attached to the CTA and as interpreted by IFC as at the date of the CTA, are referred to as the “Applicable IFC Policies and Guidelines”, and are listed below:

• World Bank Operational Policy Note 11.03 “Management of Cultural Property” (September 1986) (“World Bank OPN 11.03”)

• World Bank Operational Directive 4.30 “Involuntary Resettlement” (June 1990) • World Bank Group Guidelines for Oil and Gas Development (Onshore) (July 1998) • World Bank Guidelines: Thermal Power (July 1998) • World Bank General Environmental Guidelines (July 1998) • IFC Guidelines for Oil and Gas Development (Offshore) (December 2000) • IFC Operational Policy 4.04 “Natural Habitats” (November 1998) (“IFC OP 4.04”) • IFC Policy Statement on Forced Labor and Harmful Child Labor (March 1998) • IFC Hazardous Materials Management Guidelines (December 2001) • IFC General Health and Safety Guidelines (July 1998) • IFC Waste Management Facilities Guidelines (July 1998)

If any of these policies or guidelines change between the date of the mandate letter for the Phase 1 financing and the date of the CTA, or new policies or guidelines are adopted, the policies and guidelines in effect at the date of the mandate letter between IFC and EBRD and the Financing PSA Parties, dated December 2001, shall apply.

In addition, the Operator has and will continue to take into account a number of good practice guides and manuals prepared by the Lending Agencies, including the following: • IFC Doing Better Business Through Effective Public Consultation and Disclosure:

A Good Practice Manual • IFC Handbook for Preparing a Resettlement Action Plan • IFC Investing in People: Sustaining Communities Through Improved Business Practice

The Lending Agencies have also informed the Financing PSA Parties that they have applied a number of policies in the course of their review and appraisal of the Phase 1 Project, including policies relevant to the preparation of the ESAP, including the following:

• Policy on Disclosure of Information (IFC; September 1998) • IFC Operational Policy 4.01 “Environmental Assessment” (“OP 4.01”), including

Guidance Note C: Outline of an Environmental Action Plan • IFC Operational Policy 7.50 “International Waterways” (November 1998) • IFC Operational Policy 7.60 “Projects in Disputed Areas” (June 2001) • EBRD Environmental Procedures (1996)

These polic ies do not constitute “Applicable IFC Policies and Guidelines” because:

• The policies are reflected in the ESAP or another finance document relating to the Phase 1 Project,

• The policies’ requirements have been met prior to the date of the CTA, or


• The policies are relevant to project appraisal and review and do not constitute a source of ongoing requirements.