E- /E7

Sea Launch Environmental Executive SunmmayJanuary 16, 1997

A. Introduction

1. Starting in mid-1998, Sea Launch Limited Partnership (SLLP) intends to launchprivate commercial satelites into orbit from a large, mobile, semi-submersible launchplatform positioned on the equator in an isolated area of the Pacific Ocean. The proposedlaunch site is relatively isolated from human populations and other life forms, and isremoved from cormercial shipping and air transport lanes. The launch platform and acommand and support ship are currently being built in Norway and Scotland, respectively,by affiliates of Kvaerner ASA ofNorway. The launch vehicle and launch technologies willbe built by Korelev RSC Energia (Energia) of the Russin Federation, and ProductionAssociation Yuzhnoye Mashinostroitelny Zavod (Yuzhnoye) of Ukraine. The satelliteadapter and fairing, described below, will be built in the State of Washington by BoeingCommercial Space Company and The Boeing Company, both of the United States. Thesatellites themselves will be maured and owned by a variety of internationalcompanies who will pay Sea Launch to place them into orbit. Final assenbly andintegration of the three stage launch vehicle, satellite adapter and fairing, and satellite willbe accomplished at SLLP's home port in Long Beach, California, and on the ship andplatform.

2. SLLP is seeking partial risk guarantees from the International Bank forReconstruction and Development, commonly referred to as the World Bank. Theguarantees would protect commercial lenders finding specific project activities in Russiaand Ukraine against a specific list of "political" or "non-commercial" risks associated withthe production and export of launch vehicles, launch systems and components from Russiaand Ukraine. The guarantee would not cover any of the commercial or technological risksassociated with the project nor would it carve out any special commercial privileges inRussia and Ukraine for Sea Launch. This Executive Sunaary outlines the environmentaland workplace aspects that will apply to all stages of the Sea Launch project, including theproduction and export of launch vehicles in Russia and Ukraine, their transportation, andthe actual launch operations in the Pacific Ocean.

3. For purposes of World Bank enviromnental screening procedures pursuant to OD4.01, Sea Launch activities have been divided into two analytic components:

* The launch vehicle production activities undertaken by Energia in Russia andYuzlmoye in Ukraine are the project activities funded in part by the commercial loanswhich are covered by the World Bank partial risk guarantees. They have beenidentified as Component A by World Bank and given a Category B environmentaldesignation, consistent with environmental screening procedures used for Bankprojects involving production from edsting facilities Environmental issues associatedwith this component are being addressed in environmental audits, indicating that E

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World Bank GuaranteeSea Launch Environmental Executive Summary

January 16, 1997

Energia and Yuzhnoye have proper enviromnental licenses and permits to conductthese activities and that the production activities supported by the World Bankguarantees meet with the approval of national and local environ Iental authorities.The environmental audits are nearing completion. They are being prepared byconsultants under contract to EBRD, based on terms of reference reviewed andapproved by the World Bank. Prelininary results indicate that the production facilitiesare operating with required environmental licenses and permits.

* The ocean transport of Sea Launch assets, their assembly and deployment at thelaunch site, and the launch operation itself have been identified as Component B bythe World Bank and given a Category A designation for purposes of the Bank'senvironmental screening. Although the World Bank is not direcdy supporting any ofthese activities, as a condition for issuing its guarantees, the Bank has required thatthey be subject to detailed environmental scrutiny and that they comply with allapplicable national and international environmental rules, regulations, and laws. Tosatisfy this requirement and to identify the relevant scope of issues inherent in theseactivities, Sea Launch prepared an Environmenta Management Plan (EMP) forinternal review by the World Bank. In addition to World Bank review, the USGovernment (specifically the US Department of Transportation/ Federal AviationAdministration, or DOT/FAA), must issue a launch license before Sea Launch cancommence launch operations. The USG has initiated its detailed environmental reviewand assessment, which will be completed prior to the issuance of a launch operatorslicense. During this process and following issuance of the launch license, USG officialswil ensure compliance with the enironmental safeguards identified in the license, andcan withdraw the license or refuse to issue licenses for subsequent launches ifenvironmental compliance is folmd deficient. A World Bank review of USGenvironmental procedures and standards for issuing a launch license concluded thatthey meet or exceed all applicable international treaty obligations and are consistentwith World Bankl environmental requiaments. As a further safeguard, the WorldBank guarantee could be revoked if Sea Launch fails to obtain the necessary launchlicense or if the USG determines that Sea Launch has failed to comply with theprovisions of the launch license.

B. Proposed Sea Launch Program

4. Sea Launch plans to satis a growing demand for commercial launches byproviding state-of-the-art launch technology from the Russian Federation and Ukraine toits launch customers, and by launching its custonmrs' satellites from a location thatmnis risk to the natural and human environment. A mobile launch service, stagedfrom a refurbished North Sea drilling rig, is unique in the commercial space business. Itoffers flexibility and efficiency for the launch customer, a fact affirmed by initial marketinterest. In effect, by building a new launch facility utilizing rockets powered by safe,easily handled, and environmentaily benign fuels (iquid oxygen and kerosene), Sea Launch

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will quickly, safely, and substantially increase world launch capacity in an enviromnentallyresponsible manner.

5. The current business plan calls for three launches in 1998, and six per yearthereafter; this rate could be increased depending on market deannd and operationalconditions. Under this business plan, Sea Launch will provide a new and significantconmnercial application for space launch vehicles and technologies developed in the 1980sby the former Soviet Union, and provide a steady, long term source of employment forthousands of underutilized, highly skilled engineers and manufacturing workers in Russiaand Ukraine. Sea Launch operations will not require development or construetion of newproduction facilities in either Russia or Ukraine. However, the project will bring foreignexchange into the local economies, and establish a much needed revenue stream forexisting facilities, which are currently under-utilized and which, to remain viable andproperly maintained, must now rely primarily on civilian projects and revenues.

6. Sea Launch operations will utilize a self-propelled launch platform (LP), anAssembly & Command Ship (ACS), and a smaUer satellite tracking ship. The LP is afloating drilling platform previously used in the North Sea, which has been cleaned of allwastes from its previous operations, and is being enlarged and refirbished in Norway. TheACS is being built in Scotland for Sea Launch. The adapter, which holds the satellitepayload on the rocket's third stage, and the nose cone firiing, which shields the satellitefrom the atmosphere during launch, will be m in the Seattle, Washington areaby Boeing Commercial Space Company and The Boeing Company. Following completionof the LP, ACS, and the first payload adapter and fiiring, a fill system test will beconducted (without firing the engines) to validate the system and identify neededmodifications if any to equipment and procedures.

7. During routine operations, all components will be delivered to the SLLP's homeport in Long Beach, California, integrated with the customees satellite, and prepared fortransport to the launch site (Figure 1). During transport to the Pacific Ocean launch site,located at 152 degrees west on the equator, electrical systems on the integated launchvehicle will be checked and charged, and launch command processes and confingencyneasures (including environmental and safety measures) will be rehearsed. Approximately

seventeen hours prior to launch, the LP will be lowered to a more stable, semi-submergedposition. The rocket will be placed in a vertical position on the deck of the LP and thenmated to remotely operated systems for fueling and engine ignition.

8. All personnel on the LP will tmsfer to the ACS which is located five Idlometersuprange from the LP. Subsequent commands for fueling and launch are initiated from theACS. A few seconds prior to ignition of the stage one engine, control from the ACS isrelinquished, and an automated, computer-controlled launch sequence is iniated. Anysystem failure prior to stage one igmtion is detected remotely from the ACS, prompting

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World Bank GuaranteeSea Launch Envinmmental Executive Summary

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commands to transfer fuels remotely to on board tanks and stabilize the rocket. Afternormal ignition and lift-ofl computers automatically monitor rocket performance andazlmuth; system failures and uncorrectable deviations from the flight plan initiate steps tocontrol the final trajectory and descent of the rocket. Controls on airspace and vesseltrffic are coordinated through the USG in accordance with normal safety procedures.

Fairing tmnsdtrob and - -------- ACM and olt _ _adapter _ Pwidlc omponet transport Pt d y 1

Norumalia~traafnst

Launch site\

\ r / b~~lunch pbform

Figure 1. Sea Launch Global Picture.

9. The Zenit rocket itself and the third stage booster are standard designs, have beenused successflily snce the mid-1980s, and have been produced in the same industrialfaciiFties that will now supply Sea launch. Some minor structural modifications arecontemplated to enable the Zenit to be launched from a sea-based platform and to fly withthe third stage booster produced by Energia As discussed below, these ficilities alsosupply other commercial space programs separate from Sea Launch, and produce a widevariety of other producer and consumer goods.

10. The rockefs first and second stages, known as the Zenit, are produced inDnepropetrovsk, Ukraine, by KB Yuzlnoye and Yuzhn% Masbinostroitelny Zavod. This

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firm is the leading Ukrainian aerospace organization, and was the principal designer andproducer of ballistic missiles and other launch vehicles for the former Soviet Union. Theproduction complex was commissioned in 1944 for production of land vehicles, e.g., cars,trolley buses, and farm tractors, and has subsequently produced other heavy industrialitems such as food and tetile processing equipment, household durable appliances, andsatellites. Roughly 20% of the Yuzhnoye/Yuzhny complex supports rocket production.Associated facility operations are typical of any heavy industrial operation, i.e., thetreating, machining, fabrication, assmbly, cleaning, and surface coating of metal, plastic,ceramic, and composite materials and structures.

11. The third stage booster, known as the Block-DM, is built in the Kalingraddistrict of Moscow by RSC Energia, the premier Russian space company known for itsmanned space operations, including the development and operation of the MIR spacestation. The Energia complex was commissioned in 1946 to provide for the design andproduction of satellites and rockets for military, communication, and space explorationapplications. Recent facility conversions to meet the needs of civilian markets have led tothe production of light industrial and consumer goods such as small kitchens appliances,artificial limbs, air compressors, and small power systems. The Energia complex wasorginaly built as a secured city, and includes residential and commercial sections, schools,a hotel, and a hospital. Roughly 3% of the Energia complex is associated with rocketupper stage production. Assciated facility operations are typical of any heavy industrialoperation, i.e., the treating, machining, fabrication, assembly, cleaning, and surface coatingof metal plastic, ceranic, and composite materials and stntres.

12. YuzhnoyelYuzhny and Energia will deliver rocket components via speciallyadapted trains to sea ports. Al that point, the components will be transported to the homeport on specially designed roll-on, roil off cargo vessels. Air transport may also be usedfor delivery. In addition, the Russian and Ukrainian partners will support rocket-sateliteintegration at the Long Beach home port, and provide launch and range tcking servicesduring Sea Launch operations at sea.

C. Applicable Environmental Policies and Procedures

13. Sea Launch activities are subject to an extensive anray of environmental statutes,rules, and implementing regulations, including local, regionaL national and internationalnules and laws concerning the various production activities, ocean transport, and launchoperations. Component A activities implemented in Russia and Ukraine will be subject toapplicable national licensing and permitting procedures. Sea Launch, as part of the USGlicensing process, will ensure that all Component B activities will be in compliane withapplicable national and international enironmental and workplace legisltion, regulations,and standards. Annex I identifies the principal statutes and rles that form the legal andenvironmental framework of Sea Launch Component B operations and that have largelydriven Sea Launch policy and administrative approaches to enionmental manageme.

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Many of these statutes are supplemented by reaions issued by agencies charged withimplemnentation and enforcement of the statutes.

D. Component A - Launch Vehicle Production

14. As indicated above, the parficular facilities allocated to the production oflaunch vehicles have supported a wide variety of research programs and manufcturingoperations over more than four decades. In addition, current factory utilization related toproduction for Sea Launch is small relative to total factory throughput and will not requireany changes in facility uiliion, macri processes, materials, or procedures. As aresult, rocket component production for delivery to Sea Launch is subject to the sameenvironmental laws, regulations, and enforcement practices established over the years bythe former Soviet Union.

15. Nevereless, in order to determine the environmental status of the facilities thatare being utilized for Sea Launch production, an environmental audit is being prepared ofthe launch vehicle production facilitfes of both Energia and Yuzhnoye. The audits areexamini environmetal and workplace licenses and permits held by Energia andYuzhnoye for these activities, and are checking that they meet with the approval ofnational and local authorites.

16. Specifically, the audits are addrssing the following eironmtal aspects of SeaLaunch production facilities:

o Background and history of all facilities;* Environmental management stnctures;e Discharges and emissions: air, water, waste;* Identification and management of major waste streams;* Description of chemical, waste, fuel, and otber storage areas;* Identification of any hazardous industrial materials;* Workplace health and safet,* Chemical handling, storage, and disposal practices.

17. In preparing the audits, the consultants are meeting with national and localenviromnent and sa£fty and health authorties and regulators to examine lioensing andpermitting requirements. Based on audit findings, the consultants are identifyiing andlisting priority issues of enronmtal and worker health and safet. The consultants arealso providing best practical options, if requred, to address these issues in anEnvironmental Action Plan, including estimated costs and timefiames associated withimplementation of the recommended options.

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World Bank GuarnteeSea Launch Environmental Executive Summary

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E. Component B - Launch Operations

18. Component B, as defined by World Bank, consists primarily of the ocean transportof the launch vehicles, the LP and ACS, and the launch of the rocket and satellite from alocation in the central equatorial region of the Pacific Ocean. Some key highights of theenvironmental issues associated with these activities are as follows:

* The fuel, kerosene, is the same fuel used by commercial airliners. When burned withoxygen, primary enmssions are water and carbon dioxide. Since kerosene dispersesrapidly, there are no long term impacts associated with an accidental discharge into anopen ocean enviroment. The fuel is safer to store, handle, and use than solid fuelstypically used in other space launch vehicles.

* The proposed launch site is in international waters in a remote portion of the PacificOcean that is relatively free of life forms and isolated from migratory mammal, reptile,and bird routes. The launch operation complies with applicable international treatiesand agreemernts.

* All vessels will comply with intemational standards established for their respectivecargoes.

20. Sea Launch must be licensed under US law, even though the launch will take placein intemational waters. Sea Lauch must secure a Launch Certificate, which would beissued by the Federal Aviation Administration of the US Department of Transportation(DOT/FAA). DOT/FAA licensing requiremes and procedures involve the following:

* DOT/FAA must complete its enviromnental review prior to issuing a launch license. Ithas six months from the time a complete application (mcluding all necessaryenvironmental documentation) is received to issue a final demination. Sea Launchsubmitted the final package of environmental documentation to DOT/FAA onDecember 2, 1996.

* DOT/FAA and Sea Launch have held discussions based on a preliminayemironmental data package submitted by Sea Launch, and have begun discussions onthe final data package. Based on discussions to date, DOT/FAA has indicated it doesnot expect any serious issues to emerge. The proposed launch site in the Pacific Oceanwas selected because, in part, it was determined to be substantially safer (and moreremote from human life and property) than other launch sites currently in use. Inaddition, the technology is not considered to present any significant threat to theenmironment.

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* Prior to the issuance of a launch license, DOT/FAA, with input from Sea Launch, willbe required to undertake an environmental assessment (EA) pursuant to US law (42U.S.C.). If necessary, an Environmental Inpact Statement (EIS) would be prepared.

* The Launch License issued by DOT/FAA would stipulate that Sea Launch is requiredto conduct its operations in a manner consistent with the requirements andrepresentations in the license. This would include reporting requirements concerningaccidents, mishaps, record keeping, third party liability, deviations from the initialenviromnental plans, etc. In addition, Sea Launch will be required to comply with allapplicable US legal requirements including those relating to the transportation ofhazardous materials and Coast Guard regulations which, inter alia, cover pollution ofinternational waters. The Coast Guard may apply all IMO Conventionsm including1973/78 MARPOL, to the marine transport of the vessels involved in Sea Launch.Although the direct enforcement jurisdiction of the Coast Guard orly runs to the outeredge of the 200 nautical mile limit, they will nevertheless expect the primary vessels tocomply with NA4O conventions while on the high seas.

* Afer a license is issued, Sea Launch cannot significantly change the scope ofoperations or enironmental measures without notifying US officials and obtaining anynecessary amendments to the license. The license can be revoked if Sea Launch isfound to be in violation of its launch license obligations. Also, the Secretary ofTransportation can halt all operations without going through formal revocationprocedures if he or she determines that the lanch constitutes a hazard to human life,property, or the environment.

* DOT/FAA can be expected to implement a highly specific and tailored program tomonitor health, safety, and environnme compliance and ensure compliance with allrequirement. DOT/FAA will also have detailed information regarding the ownershipand purpose of each satellite placed into orbit. Prior to a launch, DOT/FAA officialswill assess the licensee's readiness for the launch, including its compliance with health,safety, and enviromental requirements. The launch could be delayed if readiness is notsatisfaictory.

* DOT/FAA wil also assess the route ofthe rocket, the purposes of the mission, andcompliance with applicable inteional treaties and laws prior to a launch to assurecomplae.

F. Environmental Monitoring

21. Environmental conditions associated with SLLP activities supported underComponents A and B will be monitored in a maner consstenth qir s ofapplcable government envonment, occupational health, and safety agencies. Monitoring

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of activities in the Russian and Ukraine facilities, including those related to the prodactionof launch vehicles for delivery to Sea Launch, is conducted according to eachGovernment's Nature Conservation standard. Aspects monitored by governmentauthorities include the use of resources, e.g., land, raw materials and energy; atmosphericemissions, waste generated and their disposition, wastewater generated and their treatmentand discharge; and emissions, waste and wastewater resulting from accidents, andhandling and management of hazardous materials. Since factory utilization specific torocket production for delivery to Sea Launch is very small relative to total factorythroughput, the monitoring for production specific to Sea Launch would be done as partof the monitoring done for the entire faeility.

22. Monitoring associated with ocean and air transport and launch site activities(Component B) and the home port occurs in several ways. First, the Sea Launch programhas incorporated many integrated and largely automated systems for preventing, deteeting,and controlling potential sources of pollution and ensuring safety. Second, the Sea Launchprogram has instituted an accountable process to effectively control the design,construction and operation of mechanical systems during both normal and emergencysiuation. Both systems will be tested and enhanced as necessary to maximize programsuccess for all stakeholders. Third, as indicated above, DOT/FAA is expected to developand implement a highly specific and tailored program to monitor health, safety, andenvironment compliance.

G. Institutional Strengthening

23. The Sea Launch Limited Partnership is an organization with defined processes forits major activities, including environmental and safety management of SLLP activities.This initial and ongoing investment by the partners drives a culture of self-assessment andimprovement with the purpose of providing the best value to its launch customers.

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Annex I

2.0 POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK

Sea Launch aciviies are subject to an extensive array of environmental statutes, rules andimplementing regulations, including local, regional, national and international laws andrules. The following identfifies the principal statutes and rules that form the legalfranework for Sea Launch operations and that have largely driven Sea Launch policy andadministrative approaches to environmental management. Many of these statutes aresupplemented by regulations issued by agencies charged with implementation andenforcement of the statutes.

2.1 Production

2.1.1 United States

Activities under this section include production of fairings and adapters plus Home Portoperations. The laws and other govening documents listed below are issued at the federallevel. Under the United States system of environmental reglation, many of these lawshave counterparts at the state level, and enforcement has been delegated from the federalgovernment to the sates. The states in turn may delegate administative authority andresponsibility to local or regional regulatory agencies. Because of multiplicity of possiblejurisdictions, the state and local laws and regulations are not listed.

National Environmental Policy Act (NEPA)Clean Air Act (CAA)Coastal Zone Management Act (CZMA)Clean Water Act (CWA)Ocean Dumping ActResource Conservation and Recovery Act (RCRA)Comprehensive Environmental Response, Compensation, and Liability Act -

Superfimd (CERCLA)Superfind Amenent and Reauthorization Act (SARA)Emergency Planning and Community Right-to-Know Act (EPCRA) (part of

SARA)Pollution Prevention Act of 1990Ports and Warways Safety ActHazardous Materials Transportation Act (JTA)

Endangered Species Act (ESA)

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Bald and Golden Eagle Protection ActMarine Mammals Protection Act (MMPA)Fish and Wildlife Coordination ActMigratory Bird Treaty Act

Toxic Substance Control Act (TSCA)Occupational Safety and Health Act (OSH Act)

National Historic Preservation Act (NBPA)Archeological and HIstoric Data Preservation Act (AHDPA)Archeological Resources Protection Act (ARPA)Native American Graves Protection and Repatriation Act (NAGPRA)

Commercial Space Launch Act

Executive Order 11988, Floodplain ManagementExecutive Order 11 990, Protection of WetandsExecutive Order 12856, Federal Compliance with Right-to-Know Laws and

Pollution Prevention RequirementsExecutive Order 12873 Federal Acquisition, Recycling, and Waste

Prevention

Federal Aviation Agency, Coast Guard, Space Command and State DepartmentProcedures for Launch Notification

These laws and orders each apply to Sea Launch to varying degrees, and are beingaddressed as part ofthe planning process with the applicable jurisdictional authorities.

2.1.2 Commonwealth of Independent States (CIS)

Production of the Zenit stages one and two and the Block DM Upper Stage occurs in theUkraine and Russia, respectively. The govening regulations are discussed in theenvironmental audit performed under a separate World Bank Terms of Reference specificfor this purpose.

2.1.3 Scotland and Norway

The ACS is under construction at a shipyard in Scodand, and the LP is being refiubishedin Norway. These actvities are governed by the laws and regulations in effect in thesecounties, including an extensive set of environmental and safety rules.

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2.2 Ocean Transport

The transportation phase of the Sea Launch Program is covered by a wide body ofinternatonal maritime law that has developed over centuries to safeguard people andproperty and, more recently, to protect the ocean itself Some of the applicable laws andregulations are given below.

2.2.1 Assembly/Command Ship (ACS)

The ACS, with its inventory, equipment and machinery, is being built and wilH bemaintained in accordance with the rules and regulations of Det Norske Veritas, with thefollowing notations:

DNV + lAI General Cargo Carrier RO/RO EO-ICEIC HELDK DYN POS AUTS

In addition, the following regulations will be complied with:* International Convention of Load Units, 1966* IMO Resolution A.534 (13), Code of Safety for Special Purpose Ships/International

Convention for the Safety of Life at Sea (SOLAS), 1974* IMO Resolution A.649 (16), Code for Construction and Equipment of Mobile

Offshore Drilling Units regarding helicopter faclities* National Regulations, relevant to the Flag under which the Vessel will operate

(probably Liberian Flag)* Suez and Panama Canal Navigation Rules, including tonnage measurement and

certification* International Convendon for the Prevention of Pollution from Ships, 1973* International Convention on Tonnage Measurement of Ships, 1969* ELO Code prctice, Safety and Health in dock work, 1958* US Coast Guard Regulations, relevant for foreign vessels trading in US ports* Safety and Health regulations for longshoring, US Deparutent of Labor (OSHA)* Vibration level testing to ISO guidelines 6954* IMO Resolution A468(XII), "Code on Noise Levels onboard Ships", except for

certain special spaces* Certificate of Financial Responsibility (COFR), US OPA 90 law* Marine Manager: See under Section 2.2.4 below

2.2.2 Launch Platform (LP)

The LP, with its inventory, equipment and machinery, is being refirbished and will bemaintined in accordance with the rules and regulaions of Det Norske Veritas, with thefollowing notations:

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January 16, 1997

The Office of the Associate Administrator for Commercial Space Transportation (AST), issubject to the National Environmental Policy Act (NEPA) and the provisions of ExecutiveOrder 12114, Environmental Effect Abroad of Major Federal Actions. Accordingly, thesuite of environmental laws that govern United States domestic launch operation indetail, e.g., the Clean Air, Clean Water, Endangered Species, and Marine MammalProtection Acts, are addressed in the environmental analysis prepared for the UnitedStates.

In addition broad array pf intemational enronmental agreements has been developedover the last centwy, with most being coordinated in the past few decades under theauspices of the United Nations. Their purpose has been to protect soverein and globalcommons ecosystems, to establish aRd enforce processes to administer the commercialexploitation of sovereign and global commons resources, and to promote peacefilrelations between neighbors that share a regional environment. Of these, the followingmay directly or indiectly apply to Sea Launch activities at-sea (isted in no particularorder): - -

1. The Convention on Conservation of Nature in the South Pacific (12 June1976);

2. Economic Commission for Europe ReSlations Concening GaseousPollutan Emissions from Motor Vehicles (20 March 1958);

3. Outer Space Treaty (27 January 1967);

4. Amnex 16 on Environmetal Protection, to the 1944 Chicago Convention onnternational Civil Aviation;

5. Convention on Long-Range Transboundary Air Pollution (13 November1979);

6. Vienna Conventon for the Protection of the Ozone Layer (22 March 1985)and subsequent protocols;

7. Convention on the Prevention of Marine PoRution by Dumping of Wastesand Other Matter (29 December 1972);

8. International Convention for the Prevention of Pollution from Sbips (2November 1973);

9. United Nations Convenion on the Law of the Sea (10 December 1982);

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DNV + IAl Column Stabilized Unit BO HELDK DYN POS

In addition, the following reSlations will be complied with:* International Convendon of Load Lines, 1966* IMO MODU Code (which incorporates SOLAS)* National Regulations, relevant to the Flag under which the Vessel will operate

(probably Liberian Flag)* International Convention for the Prevention of Pollution from Ships, 1973* International Convention for Tonnage Measurement of Ships, 1969* ILO Code prctice, Safety and Health in dock work, 1958* US Coast Guard Regulations, relevant for foreign vessels trading in US ports* Safety and Health regulations for longshoring, US Department of Labor (OSHA)* IMO Resolution A468(XI), "Code on Noise Levels onboard Ships", except for

certain specl spaces• Certificate of Financial Responsibility (COFR), US OPA 90 law* Marine Manager: See under Section 2.2.4 below

2.2.3 Component Transport Ship (CTS)

As the CTS has not yet been selected (the current plans calls for chartering eisting shipsfrom the market), the details of its Class and its certification cannot yet be listed. The shipwill, however, be classed with a recognized Classification Society and comply with allrelevant national and intemational rles and regulations for the intended transportation.

2.2.4 Marine Manager

The Marine Manager of the ACS and LP has not yet been selected. The Marine Managerwill, however, comply with the requieets for ISMA certification (ISM Code), eventhough this certificate is not mandatory at the time of the first Transportation Phase.

The Marine Manager of the CTS comes with the Vessel, wherefore a total evaluation willbe made at the time of CTS chartering.

2.2.S Crew

All officers and other manne crew members will comply with the new Standard forTraining, Certification and Watchkeeping (STCW) Code coming into effect in 1997.

2.3 Launch Operations

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10. Convention for the Prevention of Marine Pollution by Dumping from Shipsand Aircraft (15 February 1972); and

11. Convention for the Protection of the Marine Environment and CoastalAreas of the South-East Pacific (12 November 1981).

These agreements apply in varying degrees to launch operations and have been addressedin the Sea Launch plaming process. It should be noted that some of the agreements onthis list, e.g., numbers 1, 5, 9, and 11, apply to governments and do not, directly or evenindirectly, impose specific requirements on Sea Launch operations per se. The aspects ofactivity at the launch site that can be characterized as normal marine operations are subjectto the regulations discussed in Section 2.2 above.

Appendices

A. List of Preparers

Will Ernst, Corporate Enviromnental Affairs, The Boeing Company

B. List of key publications

Nature Conversation - Ecological Cerdificate of an Industrial Enterprise former SovietUnion State Standard, 17.0.0.04-90

C. Selected US Government documents

National Environment Policy Act (NEPA), as implement by 40 CFR 1500-1508.

Environmental Effects Abroad of Major Federal Actions. Executive Order 12114.

Guideines For Compliance With The National Environmental Policy Act and RelatedEnvironmental Review Statutes for the Development of Commercial Space Launch Sites.OCST-RD-ENVO1-95, Office of Commercial Space Transportation, U.S. Departnent ofTransportation, May 1995, Revised.

Programmatic Environmental Assessment of Commercial Expedable Launch VehiclePris!M. Office of Commercial Space Transportation, U.S. Deptment ofTransportation, February 1986.

Commercial Space Transportation Licensing RegulationL Final Rule, (14 CFR, Ch. M1),Federal Register, April 4, 1988.

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ENVRONMENTAL DATA SREET FOR PROIECISIN THE IBRD/IDA LENDING PROGRAM

County: UGRANEIUSSIAN FEDERATION Project ID No.: LEN-43433Project Name: Comerciul Space Launch GuaranteeAppraisd Date: Fdeuary, 1997 IBRD Amount (Sm): 200.0Board Date: May, 1997 IDA Amount ($m): -

ManagingDivision: EMTIE Sector: IndustryLending Instument: Partial Risc Guarnte Status: PreparationDate for receipt of EA by Bank (Category A projects): See discusion belowEA Category: Part A-Category B

Part B-Caegowy A Date Assigned: August, 1996

Major Project Components: lhe Goenent of the Russan Federion (GOR) and the Goarmnt of Ukraine(GOU) have asked the World Bank to provide patal risk guarantee to protect comm al lends fimding specficprqc activites in Rumia and Ukrae against a specific list of political or hon-c il"risks associated th fteproduction and eXpot of lamch veices, launch stm, and componets frm Russia and Ukaine Thsceningprocedure, which was mutually agreed upon by ENV, EMrEN, EMTIE and LEG, divided fth pe nto CompwoetA and B. Component A was placed into Envinmnl Scenig Catqpry 3 and Component B was plaed intoEnvirnmetl ScreeningCaftory A. Desrpto ofeach componen foUwo

CoopmentA. The launch vebidce production activites undertaken at exisling fahilities by KoNel RSCEneri (Energia) in Russia and and UkminePrduction Association Yuzhnoye Inatoitey Zavwod(Yuzhnoye) in Ukraie Thes prducn acivits must commence por to the first launch and are the onlyactities cwveredbythe Wodd Bank guanees.

C.tment B-: The ocen transport of Sea Launch asses, their assembly and deployment at the launchsit-, and the lamnch operation itsel

Major Environmental Issues: (idenified or smpected in project):

CWtqwwmtA: Ma of industria ateas s wodheralthdsafcty

CG 1pmgLt A, Prtcto of nmae ecobl ding transpot or mpon (accide spils of propellanttcl.) and duing rocket laumncg of satelliles (noise, vExto t)

Other Environmental Issues: (of lsser scope associdated with prqect)

CompmentA. Atmospheric emissiao oforgmaic sohlets, waewatr a

C.uuymautB Risltohuman andnualenviomentasocatdih abodlanches

Proposed Actions: (to mitigate nm ental issues descnrbed above)

Coe dpmei A. An Enviromeal Auidit is under prpari, wbich would include (if necesry) anenv nm action plan Agment to impemen the action plan will be a rqiment f the Wodd BankGu2M.

CqKmentik The US Government (USG) must issue a launch license beifre Sea aumnch can commencclaunch operaions. The USG has initiated its deild enviomental review and asessnent, which will

be conpleted prior to the issuance of a launch operators license. During this procs and followingissuance of the lnch licenso, USO officials will enure compliance with the envionmental safeguardsidantried in the license, and can withdraw the license or refSue to issue liHcnses for subsequent launchs ifenvironm tal compliance is found deficient. The World Bank guaantee culd be revokd if Sea Launchfails to obtain the necessary launch licenso or if the USG detmines that Sea Launch has failed to complywith the provisions of the launch license.

Justfication/Rationde for Eironment Categry: (presents reasons fo enronnl categoryselected and explanation of any change from initia classification, incuding whether any changes relateto alenatvs)

Caxasai A: Categoy B was demed approprie because racks components wiDl be proded by exisingprodution facilities The only pob impVs would be thos assodaed with thc ant nufmdurigprocess for the Sea Launch rodckt components New prdon facilities will not be cosltucted.Cosqu environmetal auits to camanr that these facities have alid eniomt and ohealth and saft prmits and that prduin activities for Sca Laumch are pefmed in a manner conistwith inntional prcic wouldbe appriatt

Compmw & Categoy A was chosen because of the inteatonal aspects, and the ned to comply withinternational envromental laws, tnaties etc associatd with the martime opeatos, location of the launchplaStom, and rocket launching T.he World Bank team review the applicle environmental aspects of theUnitd States Gvement pocebdes for issuing the Lauch Cerificat, and found them to be satfo andonsistent with Wodd Bank enionmtl review poceds. herore, the World Bank has taken the

positon that issuance of a valid Lamch Certificate by the Unid Stes Govement wold de_nmeadequatc environental safegurds for this cmponent and would bc accepible in stislng Wodd Bmakreqirements for a Caegoy A prqedt

Reporting Schedule:

Cern pmatkA Einmental Audits and Em MAcion Pns are to be completed and finalzd bymid April 1997.

Crmeaat &r Sea Laumh shnitted its final pge of Iro nta o the Dqa f; edera- Aviation on Dcember 2, 1996. The United Ses Gement msat

provide a tra deemihnaion withn six (6) months.

Remarks: (gives sta of any other sdni ies, lists local groups and local NGOs consultedand where category A nro al sments were made publc locally, tells whether borrower hasgnlenpernissionto release EA, etc.)

None

Signed by: (Opeado Division Chef)

Signed by: (Regional Envionment Division Chie)

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