Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 13260

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

JUNE 30, 1994

Operations Evaluation Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CUR NCY EQUIVALENTS

Currency Unit = Rupees (Rs.)Rs. 1.00 = Paise 100US$ 1.00 = Rs. 28.01Rs. 1,000,000 = US$35,702

(As of June 1992)

LIST OF ABBREVIATIONS AND ACRONYMS

BPCL Bharat Petroleum Corporation Ltd.C2/C3 Ethane/PropaneEG Ethylene GlycolEL Engineers India Ltd.EO Ethylene OxideERR Economic Rate of ReturnFCC Fluidized Catalytic CrackingFRR Financial Rate of ReturnGOI Government of IndiaHAZOP Hazards and OperabilityHDPE High Density PolyethyleneIPCL Indian Petrochemicals Corporation Ltd.ICG Internal Cash GenerationLDP Low Density PolyethyleneLLDPE Linear Low Density PolyethyleneLPG Liquified Petroleum GasMGCC Maharashtra Gas CrackerMPCB Maharashtra Pollution Control BoardOGL Open General LicenseONGC Oil and Natural Gas CommissionOSBL Off Site Battery LimitPP Polypropylene

FISCAL YEAR

April 1 - March 31

FOR OFFICIAL USE ONLYTHE WORLD BANK

Washington, D.C. 20433U.S.A.

Office of Director-GeneralOperations Evaluation

June 30, 1994

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Environmental Impact Evaluation on India - MaharashtraPetrochemical Project(Loan 2505-IN)

Attached is the Environmental Impact Evaluation on India - Maharashtra Petrochemical Project(Loan 2505-IN) prepared by the Operations Evaluation Department.

This project was conceived in the early 1980s to make use of natural gas liquids for themanufacture of ethylene and propylene and their derivatives. The main objective of the project was toimprove the competitiveness and productivity of India's basic petrochemical sector. The project wasimplemented by Indian Petrochemical Corporation Limited (IPCL) at Nagothane, located some 120kilometers to the south of Bombay.

The preparation and implementation of this project coincided with the period of heightenedresettlement and environmental awareness both at the Bank and in India. On the one hand, legislation withrespect to water and air pollution had been put on the books in India since 1974, culminating with theEnvironment (Protection) Act of 1986; and on the other, the Bank issued its first Operational ManualStatement (OMS-2.36) entitled: "Environmental Aspects of Bank Work" in May 1984, which wasfollowed by a more elaborate and comprehensive OD 4.00 in 1989. In addition, the Bank's views aboutresettlement issues had been articulated in OMS-2.33 (1980) and its successor OD 4.30 (1990). As aresult, the project received considerable attention regarding these issues during its preparation andappraisal.

Before the commissioning of the complex, an Environmental Impact Assessment was conductedin 1988 in connection with the expansion project of the Nagothane plant. This formed the baseline dataagainst which the corporation's environmental protection achievements were evaluated. On the whole,IPCL is a company with excellent environmental credentials and it is in compliance with all environmentalrules, regulations and standards. It has been the recipient of many environmental awards and is justlyproud of its impressive afforestation achievements (352 hectares of planted area in a total site area of 818hectares - nearly a million trees).

Despite the measures introduced to facilitate resettlement and interaction with the surroundingcommunities, the company eventually agreed to provide employment for some 600 villagers in order toease the tension with the community. There was also an unfortunate explosion during the commissioningof the plant in 1990 which led to many fatalities. These events have made the cooperation extremelysensitive to hazard and accident prevention as well as to the need for harmonious relationship with thesurrounding community.

Robert Picciottoby H. Eberhard K6pp

Attachment

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contentsmay not otherwise be disclosed without World Bank authorization.

FOR OFFICIAL USE ONLY

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

TABLE OF CONTENTS

Page No.

PREFACE ..............................................BASIC DATA SHEET ..........................................EVALUATION SUMMARY ................................... vii

PART I: Project Background. ................................. 1

PART II: Evolution of Involuntary Resettlement and Industrial Sector Environmental ProtectionPolicies in the Bank - Operational Manual Statements 2.33 and 2.36 . .. 2

PART III: Environmental Protection Policy in India .................... 4Guidelines for Siting of Industry ......................... 5

PART IV: Procedure Adopted For Maharashtra Complex ................. 6

PART V: Environmental Impact Assessment for Maharashtra Gas Cracker Complex atNagothane ....... .................................... . 7Project Site's Natural Resources ....... ...................... . 8Baseline Data ....... .................................. . 8Environmental Impacts ............................... 8Mitigation Plans ................................... 10

PART VI: Environmental Protection Achievements ..................... .11Overall Assessment ................................. 12Lessons Learned and Recommendations ..................... 14

This Report was prepared by Farrokh Najmabadi (Task Manager) and Abbas Gholi Bakhtiar (Consultant)who audited the project in March 1994. Eneshi Davis provided word processing assistance.

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

ANNEXES

Annex 1: Letter of location approval from Department of Environment and Forest to the

Department of Energy ................................ 16

Annex 2: Maharashtra Pollution Control Board ............................ 19

Annex 3: Impact of Activities on Environmental Parameters ............... .. 22

Annex 4: Impact Matrix Severity Assessment ............................. 23

Annex 5: Osha Noise Exposure Limits ................................. 24

Annex 6: Ambient Air Quality ...... ............................... 25

Industrial Effluents ....................................... 25

Annex 7: Water Quality in the Amba River Estuary Measured at Station 4 ...... 26

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ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

PREFACE

1. This is the Environmental Impact Evaluation for a loan extended by the World Bank to India in1985 for the construction of a petrochemical complex at Nagothane in the State of Maharashtra. Theobjective of the project was to improve the competitiveness and productivity of India's basicpetrochemical sector. The loan for US$300 million was fully disbursed and closed in September 1991.

2. This Environmental Impact Evaluation focusses on resettlement and environmental aspects of theproject, documenting the results of the mitigation plans and the overall success of the environmentalprogram.

3. The Environmental Impact Evaluation was prepared by the Operations Evaluation Department(OED). An OED mission visited India in March 1994 and discussed the environmental impact of theproject with the Government of India, the Maharashtra State Government and the Borrower. Their kindcooperation and assistance is gratefully acknowledged.

4. The draft Environmental Impact Evaluation was sent to the Borrowers for comments and thosereceived have been reflected in the report.

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ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

BASIC DATA SHEET

LOAN POSITION(amounts in US$ million)

As of March 31. 1994

L&n Original Disbursed Cancelled R.aid Outstanding2505-IN 300.00 300.00 0.00 79.80 220.20

CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS

Bank Fiscal Year ................ (Disbursements in US Dollars Million)and Semesterending

Estimated Actual Actual % of Estimated

1986 December 31 - 6.3 -June 30 18.9 9.9 52

1987 December 31 32.7 20.0 61June 30 51.6 41.3 80

1988 December 31 85.4 71.8 84June 30 134.5 147.0 109

1989 December 31 208.4 214.1 103June 30 253.5 242.4 96

1990 December 31 274.7 245.4 89June 30 289.1 282.4 98

1991 December 31 300.0 288.9 96June 30 - 293.8 98

1992 September 30 - 300.0 100

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PRJECT TIMETABLE

Item Date Planned Date Revised Date Actual

Identification Sept./Oct. 1980 - Sept./Oct.1980

Appraisal Jan. /Feb. 1981 Oct./Nov.1982 Oct./Nov.1982

Post Appraisal August 1984

Board Presentation June 1981 June 1983 March 1985

Loan Signature May 1985

Loan Effectiveness August 1985

Loan Closing Sept.30, 1990 Sept.30, 1991 Sept.30. 1991

Loan Completion Sept.13, 1991

Planned dates are as in the Project Brief. Revised dates are as in the Issues Paper. Delay betweenidentification and post appraisal was due to time taken by government for project approval and decisionon ownership. Post appraisal, among other issues, reviewed technology selection.Loan amount was fully utilized with the last disbursement on September 13, 1991.

PROJECT IMPLEMENTATION

Project Components Mechanical Completion Commissioning

SAR assessment:

Process Plants October 1989 December 1989Utilities Plant August 1989 End 1989

Actual Performance:

Contract ActualGas Cracker Feb. 1989 Oct 1989 July 1991LDPE Dec 1988 Oct 1989 Sep 1991PP Dec 1988 Mar 1989 April 1989EO/EG Nov 1988 Oct 1989 Nov 1991LLDPE/HDPE Feb 1990 Apr 1992 Being commissionedUtilities Mid 1988 Sep 1989 Dec 1989

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STAFF INPUTS(in staff weeks)

Fiscal Year Prearaisal Appraisal Negotiation Supervision Qth IQW1980 .6 - - - - .61981 11.4 - - - 2.7 14.1

1982 .1 - - - .2 .3

1983 16.0 85.8 - - 4.3 106.1

1984 1.5 - - 4.0 5.5

1985 42.7 6.0 .8 18.5 67.9

1986 - 9.6 - 9.6

1987 - 19.0 - 19.0

1988 - 20.8 1.3 22.2

1989 - 14.6 - 14.6

1990 - 5.7 - 5.7

1991 - 9.7 - 9.7

1992 - 24.0 - 24.0

1993 - 5.4 - 5.4

Total 28.1 129.9 6.0 109.6 31.0 304.6

MISSIONS

Stages in Month/ SW in Specialization PerformanceProjectCycle Year Persons Field represented Rating Problems

Through Appraisal

Preparation 9/80 2 2 Eng, FA

Appraisal 10/82 4 5 Eng, Eco, FASector Spec.

Post Appraisal 7/84 4 3 Eng, Eco. FA Updating, Technologyreview

Supervision

1 3/86 1 1 Eng 12 9/87 1 3 Eng 13 10/88 3 2 Eng, FA 14 9/90 1 2 Eng 2 Explosion,

LLDPE5 5/91 3 3 Eng, Eco, FA 2 delays6 11/91 3 2 Eng, Eco, FA 3

Project Completion

1 4/92 1 2 Eng

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SUPERVISION RATINGS(Form 590)

Evaluation Development Legal Management AvailabilityI&l Qvrall Obiectives Covenants Performance Funds1985 1 1 - 1 11986 1 1 - 1 11987 2 1 - 2 11988 1 1 - 1 11989 1 1 1 1 11990 2 1 1 1 11991 2 2 1 1 21992 3 3 1 2 1

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ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

EXECUTIVE SUMMARY

Introduction 2. The project for which a loan in theamount of US$300 million was approved inMarch 1985, was prepared by Indian

1. With an increasing quantity of Petrochemical Corporation UPCL) and appraisedgas liquids becoming available from the Bombay during a heightened resettlement andHigh operations, the Maharashtra Petrochemical environmental consciousness both at the BankProject was conceived in the early 1980s to and in India.make use of these natural gas liquids for themanufacture of ethylene and propylene and their 3. The new OMS 2.33 was issued inderivatives. The main objective of the project February 1980 in order to alert Bank staff towas to improve the competitiveness and possible hardships and adverse socialproductivity of India's basic petrochemical consequences of involuntary resettlement thatsector. This was to be achieved by constructing may be occasioned by certain types ofa world scale ethylene plant using gas liquids development projects such as construction ofwhich are the most economic feedstocks. The dams, new ports and towns, large miningproject was designed to produce, as marketable operations, construction of canals, highways,products, low density polyethylene (LDPE) , electric transmission lines and the like. Itlinear low density polyethylene/high density required that all large construction projects,polyethylene (LLDPE/HDPE), and similar to those mentioned earlier, should bepolypropylene (PP), to be sold to the examined by Bank staff at the time ofconversion industry; ethylene glycol/ethylene identification and appraisal to determine whetheroxide (EG/EO) which are intermediates for people must be displaced, and, if displacementsynthetic fibre and detergent industries; a small is unavoidable, to reduce it to a minimumamount of acetylene black, which would be sold compatible with the purpose of the project.to the tire manufacturing as well as printing andink industries. 4. The OMS 2.33 was superseded in

June 1990 by OD 4.30 which enlarged the scopeof resettlement screening by requiring that:

Evolution of Involuntary Resettlement and "any operation that involves land acquisition orIndustrial Sector Environmental Protection is screened as a category A or B project forPolicies in the Bank - Operational Manual environmental assessment purposes should beStatements 2.33 and 2.36 reviewed for potential resettlement requirement

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early in the project cycle", thus making it pieces of legislations have been enacted in India:mandatory for all large industrial projects. (i) The Water (Prevention and Control of

Pollution) Act of 1974; (ii) The Air5. Although environmental issues had (Prevention and Pollution Control) Act of 1981;been receiving ample attention in the Bank and finally, (iii) The Environment (Protection)projects, the first Operational Manual Statement Act of 1986.(OMS - 2.36) entitled: "Environmental Aspectsof Bank Work" was issued in May 1984. The 8. In 1981, the Indian Department ofOMS articulated the reasons why attention to Environment and Forests was created in theenvironmental considerations was necessary and Central Government in order "to provide explicitdiscussed the Bank's policy and approach. recognition to the pivotal role that environmentAccording to this OMS, the review of the conservation must play for sustainable materialenvironmental aspects of projects, sector and development".economic work, including the adherence to Bankpolicy and its conformity with environmental Guidelines for Siting of Industriesstandards and guidelines was entrusted to theEnvironment, Science and Technology Unit. 9. Upon the initiative of the IndianThe important step taken by the Bank was to Department of Environment, an expert teambring the treatment of environmental issues into formulated a comprehensive set of guidelinesthe project cycle. (which were issued in 1985) for the siting of

industries including areas to be avoided, siting6. The consideration of environmental criteria, environmental impact assessment arisingissues continued to receive increasing attention out of air pollution, liquid effluents, noiseas the Bank's organization evolved with the pollution, vibration and occupational safety andcreation of an Environmental Department. The health. An important aspect of these newabove-mentioned Statement was also superseded guidelines was the necessity of preparing anin 1989 by the issuance of a new Operational Environmental Impact Assessment (EIA) toDirective (OD) 4.00 which, once again, defined identify the potential impacts of large industrialthe Bank's approach to environmental issues and projects on the environmental system. Thethrough its Annexes, laid out the procedure to be guidelines further required that through thefollowed in the project cycle. In the new OD, ElAs, baseline data would be established so thatEnvironmental Assessments (EAs) became the the environmental impact of executed projectsmajor tool for addressing the environmental could be compared with such data. Theissues of large industrial projects. Such EAs approaches adopted towards environmentalwere expected to identify ways of improving the screening of the projects were almost parallelprojects environmentally by preventing, and simultaneous both in the Bank and theminimizing, mitigating or compensating for Government of India.adverse effects and to propose environmentalmanagement, training and monitoring plans.

Procedure Adopted for Maharashtra Complex

Environmental Protection Policy in India 10. In 1980, the Government of Indiaappointed a site selection committee, including

7. Despite the evolving policy in the environmental experts, to investigate theBank, the environmental considerations in this suitability of several sites in the vicinity of Uranproject were more influenced by the gas separation plant. The recommended site wasenvironmental protection legislation and located about 2 kilometers from the village ofactivities in India. Since 1974, these major Nagothane in Maharashtra State's Raigad

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District. The site area chosen (around 567 which deals with rural development andhectares) consisted of predominantly assistance to the resettled population. Theagricultural, but very rocky, land. It was afforestation and horticultural developmentexpected that only two villages would be directly constitutes a part of this plan. Dairy farmingaffected by the project and there would be need was selected as one of the activities with goodfor the resettlement of nearly 2150 persons. potentials for the region. Accordingly, a cattleSubsequently in 1984, the Department of development center was established inEnvironment issued its final approval of the site Nagothane to provide breeding services for theand stipulated a series of environmental cattle, free of cost at the farmgate. IPCL alsoguidelines that had to be followed by IPCL. In arranged for free vaccinations. Trainingpractically all respects these guidelines were in programs for economic milk production wereline with those of OMS 2.36 (1984) which was, organized in order to improve the skills of localat the time, applicable to this project. farmers.There is also a section in the EIA which

deals with rural development and assistance

Environmental Impact Study Environmental Protection Achievements

11. The application for expansion of the 13. IPCL has successfully implementedMaharashtra Complex in 1988 prompted the its resettlement and environmental protectionneed for a comprehensive Environmental Impact plans. It has in place air quality monitoringAssessment. The Assessment prepared by stations, situated at specific locations, thatEngineers India Limited (EIL) built on the automatically measure various air qualitybaseline data already collected by IPCL since parameters including pollutants and transfer the1986 and methodically addressed the various results to a central station for collation,issues as if it was dealing with the first phase of averaging, conversion and reporting. Thethe project (it should be noted that in 1988/89 effluent water quality is also regularly measuredthe first phase had not, as yet, been and analyzed in water quality reports. Suchcommissioned). The Assessment started by reports are submitted to the Maharashtradescribing the project, the natural resources at Pollution Control Board as evidence ofthe site, the baseline data on the physical and compliance. The corporation periodically has tobiological conditions (the ambient air quality, file an application and receive a 'consent towater quality in the Amba river and the estuary operate order'.where industrial effluents would be discharged),the resettled population, the expected 14. The above measurements areenvironmental impact of the plant, the mitigation supplemented by studies carried out by theplans, management and training plans and the National Oceanographic Institute at six stationsmonitoring procedures. The Assessment also over a distance of 30 kilometers in the Ambacontained a section on risk analysis based on river estuary. The last study between Octoberthree worst case scenarios, discussing the 1990 and May 1991 indicated that the water andconsequences of equipment failures on the plant, sediment quality were close to the baseline,personnel, structures and the population outside within the natural variability expected for thethe plant. This Assessment, which formed a estuarine environment. Moreover, variations inpart of the project preparation documents, is the phytoplankton pigments, zooplankton biomassbackground study against which the and microbenthic biomass compared well withcorporation's environmental protection the results of the earlier studies.achievements will be evaluated.

15. IPCL has carried out a most12. There is also a section in the EIA impressive afforestation program at Nagothane.

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More than sixty species of fast growing and 18. IPCL is a company with excellentresistant plants have been planted. The total environmental credentials. Its health, safety andafforestated area now approached 352 hectares environmental policies are both comprehensive(94% of the available land area of 375 hectares). and demanding in that it requires that its variousThe average survival rate has been two thirds units comply with all environmental regulations(940 thousand trees out of 1.41 million planted) during design, construction and operation of allwith a survival per hectare rate of around 2670. facilities of the corporation. IPCL has been theThe program also covers demonstration fruit winner of many awards in the past, most notablyorchards where mango, coconut, guava, citrus the 1989 FICCI (Federation of India Chamber ofand pomegranate trees are planted. IPCL is Commerce and Industry) award in "recognitionassisted in the efforts by BAIF Development of outstanding contribution to EnvironmentResearch Centre (an NGO). Preservation and Pollution Control". Recently

Nagothane was awarded the third prize of the16. With the help to BAIF, IPCL is also Maharashtra State Government's Vanashreeengaged in other community development Award for its afforestation efforts.activities such as training of villagers in first aidtreatment, soap and detergent powder making, 19. The plant was supposed to eventuallymango graft preparation, pre-primary use the effluent water for the irrigation of itseducational methods of teaching, handicraft greenbelt. This has not been totally achieved,preparation, masonry and carpentry skills, use though various species are being tested for theirof plastic mulching, kitchen garden promotion, response. The plant needs to continue with suchnon-farm skills for the youth such as mechanical demonstration projects, not only to conserve rawand electrical repairs, water resource water, but to convince the villagers about thedevelopment, self help group formation, dairy safety of using the effluent water for agriculturalcattle development through insemination (nearly purposes. In addition, the construction of a fish2300 cases achieved), environmental awareness pond will go a long way in allaying the fears ofprograms, extension services and, even, sports the surrounding population about the quality ofcompetition amongst neighbouring village the treated water from the plant.schools. This program appears to have alreadyhad some positive results in that the average 20. Notwithstandingtheriskanalysisandannual income from dairying has risen by 84% Hazop studies and other measures taken for theand 76% the resettled families are now engaged early detection of hazards, the failure of a flangein the sale of milk. in the gas cracker unit offsie battery limit

(OSBL) area led to a very serious accident in17. At Nagothane, the environmental September 1990 with many fatalities. Since theactivities are supervised by Health, Safety and accident, IPCL has further reinforced its safetyEnvironment (HSE) Department headed by a efforts and instituted many programs aimed at aDeputy General Manager reporting directly to heightened safety consciousness among thethe Executive Director in charge of the whole personnel. In addition to regular monitoring,operation. On the environment and ecology inspection and safety auditing, IPCL has aside, the HSE is manned by environmental comprehensive emergency program in case ofengineers and horticulturalists. The Department accidents. These efforts appear to haveregularly runs training courses in variety of improved the situation: in 1993 the severity rateenvironmental subjects for the plant personnel at of accidents - number of days lost per millionNagothane. man hours -- has dropped to 42 from 663 in

1992. While all this indicated the efficacy of themeasures taken by IPCL, it is still a matter of

Overall Assessment concern that despite several requests by the

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Bank, the Government of India has not yet results. The corporation has a serious andsubmitted a copy of the report of the Mashelkar businesslike attitude to this important aspect ofCommittee to the Bank, though the relevant its activities and is not willing to cut corners. Itauthorities in the Government of India have knows that it is cheaper, in the long run, toinformed the Bank that the report has not yet bring in the environmental considerations intobeen made public and they have yet to take a the design of potentially polluting industrialfinal view of the findings. activities such as petrochemical units at the very

earliest state. The staff of the corporation are21. Despite all the measures taken by the constantly reminded about their responsibilitiesMaharashtra State Government in terms of in this area, through publications, seminars,compensation, provision of alternate land, etc., training courses and other means. Any furtherand the rural development activities by IPCL elaboration on the lessons learned would be aincluding all the confidence building measures repetition of the subjects discussed in the Bank'sand interaction with the surrounding Operational Directive 4.00 and what itcommunities, some two years ago, the villagers recommends.staged a three day lock-in of the plant managersand operators, demanding employment. Aftertense negotiations and the intervention of the Lessons Learned and RecommendationsState Government, the two sides came to anagreement, whereby some 600 villagers (one 23. There is, however, an areamember from each resettled family) entered the where both the Bank and the Borrower fell shortplant's employment. Given their lack of skills, of applying the lessons of experience. To beginmany are employed in gardening and other non- with, there was little follow up on OMS 2.33skilled activities, while a few of the younger (Involuntary Resettlement - 1980) by the Bankelements have been trained for semi-skilled jobs. staff who appear to have been satisfied with theIn a densely populated country where title to compensation scheme provided by theland (even if it is rocky and of not much use for Maharashtra Industrial Development Corporationagriculture) is very precious and the Government to the villagers whose land was taken (SAR parahas historically been the largest provider of 7.04) in accordance with the provisions of theemployment for people, incidents of this nature Maharashtra Resettlement of Project Displacedare not rare. While it is always difficult to Persons Act of 1976. A better familiarity withstrike a reasonable balance between the the OMS 2.33 would have alerted the staff thatimperative of cutting costs (especially under the resettlement of some 2150 persons requiredcompetitive and liberalized conditions) and the a plan which should, inter alia, have addressedneed for harmony with the surrounding the issues of training and employment.community, the essence of a good resettlement Conversely, in a country such as India where theplan is to detect such dissatisfaction and quickly Government owns little land, but has historicallydevise means of diffusing the problem. In the been very active in economic development, thereevent, the matter was amicably resolved and is a long experience in involuntary resettlementrelations have gradually improved with the which should have been tapped by thesurrounding community. Borrowers. The objective of providing people

displaced by a project with the means to22. All in all, from the environmental improve, or at least restore, their former livingpoint of view (in its wider sense encompassing standards, earning capacity, and productionthe resettlement results), this project has had an levels requires serious planning and follow upoutstanding outcome. The mindset, the through implementation. This is not a subjectcommitment and the rational planning at IPCL that can be treated as an afterthought because thehave all been responsible for the remarkable costs of inattention are normally high.

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24. Despite the foregoing, IPCL is a dialogue so that their wishesa company that has historically been actively are understood at the earliest stage;involved in the community at Vadodara and hasbeen responsible for many bridge-building acts (2) Attention to integrating the affectedwith the resettled community at Nagothane. communities in the activities of theMany of the resettled group were employed by enterprise is the surest way ofthe contractors during the construction period enlisting their goodwill;and the corporation has provided shelter,infrastructure and social services. The (3) Along with the environmentalcontribution of the corporation in terms of considerations, the humanenvironmental protection and management was dimensions of the Bank's projectdocumented earlier and evaluated. On the work should be internalized andwhole, what has been achieved is creditable more rigorously pursued throughoutbecause IPCL realizes that its eventual success the project cycle. If a plan isdepends on harmony with the surrounding designed and agreed to, it shouldcommunity. There are a few lessons that are receive full attention duringworthy of reemphasis: supervision and be monitored

regularly.(1) Although civil servants are generally

well intentioned, they sometimes fail (4) Good practices should beto communicate with those who are disseminated throughout the Bankdirectly affected by their actions. and the Borrowing countries, so thatFor successful resettlement, the costly inattention is eliminated.affected groups must be brought into

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

I. Project Background

1. With an increasing quantity of gas liquids becoming available from the Bombay Highoperations, the Maharashtra Petrochemical Project was conceived in the early 1980s to make use of thesenatural gas liquids for the manufacture of ethylene and propylene and their derivatives. The mainobjective of the project was to improve the competitiveness and productivity of India's basicpetrochemical sector. This was to be achieved by constructing a world scale ethylene plant using gasliquids which are the most economic feedstocks. The project was designed to produce, as marketableproducts, low density polyethylene (LDPE) , linear low density polyethylene/high density polyethylene(LLDPE/HDPE), and polypropylene (PP), to be sold to the conversion industry; ethylene glycol/ethyleneoxide (EG/EO) which are intermediates for synthetic fibre and detergent industries; a small amount ofacetylene black, which would be sold to the tire manufacturing as well as printing and ink industries.

2. The project for which a loan in the amount of US$300 million was approved in March,1985, was prepared by Indian Petrochemical Corporation (IPCL) and appraised during a period ofheightened resettlement and environmental consciousness both at the Bank and in India. As a result, theenvironmental issues received a fair amount of attention right from the beginning. In the section onEnvironmental considerations, the SAR (para. 8.06) addresses issues of air and water quality and relatesthe measures that would be taken by the project to mitigate air and water pollution in order to complywith the rigorous Maharashtra State standards. Of equal concern was the resettlement of nearly 300families (from two hamlets - Velshet and Ambeghar) whose land was to be purchased by The MaharashtraIndustrial Development Corporation (MIDC) for the project (initially 567 hectares - SAR para 7.04 -which was subsequently enlarged to 818 hectares). The SAR also addressed the safety consideration inthe following section and stated that "assurances have been obtained that IPCL will carry out a detailedsafety audit by qualified consultants prior to commissioning of the project to assess the impact of the risksof the project area, and to the surrounding community" (para. 8.09).

3. The project's environmental and resettlement design was initially more affected by theexisting legislation in India than the demands of the Bank. The mission reports, up to the end of 1982,referred only to the question of site selection and the manner in which the location of the plant would bedetermined by a site selection committee. Subsequently and before final appraisal, the Bank received anote on environmental consideration from IPCL, particularly addressing the organizational aspects of airpollution monitoring and liquid effluent disposal. But the detailed standards that were eventually adoptedwere prescribed by the Maharashtra State Pollution Control Board, in pursuance of legislations enactedin 1974 and 1981 regarding water and air pollution control (these legislations will be discussed later).

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II. Evolution of Involuntary Resettlement and Industrial Sector Environmental Protection Policiesin the Bank - Operational Manual Statements 2.33 and 2.36

4. The new OMS 2.33 was issued in February 1980 in order to alert Bank Staff to possiblehardships and adverse social consequences of involuntary resettlement that may be occasioned by certaintypes of development projects. It articulated the Bank policy with respect to projects which requiredinvoluntary resettlement and gave guidance in the preparation, negotiation and implementation of aresettlement plan. While defining the type of projects, the OMS referred to those that entailed a majorchange of land use such as construction of dams, construction of new ports and towns, large miningoperations, protection of grazing areas, construction of canals, highways, electric transmission lines andthe like.

5. Generally, the Bank required that all large construction projects such as dams, irrigationschemes and so on, should be examined by Bank staff at the time of identification and appraisal todetermine whether people must be displaced, and, if displacement is unavoidable, to reduce it to aminimum compatible with the purpose of the project. It was, therefore, necessary to have a resettlementplan in which various issues would be discussed and the resettled populations' help sought in designinga series of actions for smooth resettlement of the community. As for compensation, the OMS recognizedthat payment of cash compensation alone may not be adequate and that other measures should beintroduced in order to enable the resettled population to have income-generating assets and opportunities.It is clear from the foregoing that industrial projects (even large plants) did not completely fall within thepurview of the OMS 2.33. It, nevertheless, sensitized the Bank staff to the issues of involuntaryresettlement and, in the case of this project, the fate of the villagers inhabiting the hamlets of Velshet andAmbeghar.

6. The OMS 2.33 was superseded in June 1990 by OD 4.30. This document enlarged thescope of the resettlement screening by requiring that: "any operation that involves land acquisition oris screened as a category A or B project for environmental assessment purposes should be reviewed forpotential resettlement requirements early in the project cycle". Through this OD the resettlement issueswere enlarged and the resettlement plans were required to address matters related to environmentalprotection and management. Moreover, all large industrial projects that involved land acquisition, suchas this Petrochemical project, needed a thorough review through the project cycle.

7. Although environmental issues had been receiving ample attention in the Bank projects,the first Operational Manual Statement (OMS 2.36) entitled: "Environmental Aspects of Bank Work" wasissued in May 1984. This OMS articulated the reasons why attention to environmental considerationswas necessary and classified the environmental problems in the following categories: global, regionaland local. The Bank had found that projects in most economic sectors might have significantenvironmental implications especially in agriculture, energy, transportation industry and urbandevelopment. The Bank maintained that, in principle, prevention would be preferable and generally lesscostly than remedial action. The Bank's approach would, therefore, be tailored to local circumstancestaking into account the vast differences among the developing countries; and the Bank would periodicallypublish environmental guidelines which would suggest acceptable ranges to be followed by the Bankoperations, unless in borrowing countries' standards were stricter.

8. According to this OMS, the review of the environmental aspects of projects, sector andeconomic work, including the adherence to Bank policy and its conformity with environmental standardswas entrusted to the Environment, Science and Technology Unit. This Unit was expected to provide

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training, advice and operational assistance on environmental matters in order to enhance theenvironmental quality of projects. The statement also brought the treatment of environmental issues rightinto the project cycle by requiring that: (i) projects be reviewed by regional staff in conjunction withthe Unit to identify, as early as possible, those which, if carried out, would probably have significantenvironmental effects; (ii) the Project Brief to outline the measures needed to avoid or mitigate seriousenvironmental risks; (iii) during the appraisal phase, the projects staff to evaluate the future magnitudeand timing of adverse effects and assess whether the preventive, mitigating or remedial measuresrecommended would be adequate; (iv) the loan agreements may contain covenants or other provisionsconcerned with the environmental aspects of the project; and (v) environmental aspects be regularly androutinely reviewed with the borrower by supervision missions. The cycle would be completed by theOperations Evaluation Department (OED) undertaking, at its discretion, reviews through its own staff orin collaboration with the Unit or by hiring suitable consultants to work with OED staff.

9. These statements were superseded in October 1989 by the issuance of OperationalDirective (OD) 4.00 which, once again, defined the Bank's approach to environmental issues and, throughits Annexes, laid out the procedures to be followed in the project cycle. In the new OD, environmentalreview remained an integral part of project identification, preparation, appraisal process and theEnvironmental Assessment (EA) became the major tool to be used for addressing the environmentalissues. Thus, the Task Managers were directed to assign, on the basis of the nature, magnitude andsensitivity of the environmental issues, one of the four categories', to the project in the Initial ExecutiveProject Summary (IEPS). Among the type of projects which fall under category A and for which thepreparation of EAs became mandatory, large scale industries and industrial estates were included.

10. In defining the purpose and nature of EAs, the OD has the following to say: "The purposeof EA is to improve decision making and to ensure that the project options under consideration areenvironmentally sound and sustainable. All environmental consequences should be recognized early inthe project cycle and taken into account in project selection, siting, planning, and design. EAs identifyways of improving projects environmentally, by preventing, minimizing, mitigating, or compensating foradverse impacts. These steps help avoid costly remedial measures after the fact. By calling attention toenvironmental issues early, EAs (a) allow project designers, implementing agencies, and borrower andBank staff to address environmental issues in a timely and cost-effective fashion; (b) reduce the need forproject conditionality because appropriate steps can be taken in advance or incorporated into projectdesign, or alternatives to the proposed project can be considered; and (c) help avoid costs and delays inimplementation due to unanticipated environmental problems. EAs also provide a formal mechanism forinteragency coordination on environmental issues and for addressing the concerns of affected groups and

Category A: EA is normally required as the project may have diverse and significantenvironmental impacts.

Category B: More limited environmental analysis is appropriate, as the project may have specificenvironmental impacts.

Category C: Environmental analysis is normally unnecessary as the project is resolving tohave significant environmental impacts.

Category D: Environmental projects for which separate EAs are not required, as environmentis a major focus of project preparation.

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local nongovernmental organizations (NGOs). In addition, the EA process plays an important role inbuilding environmental management capability in the country. Like economic, financial, institutional,and engineering analyses, EA is part of project preparation and is, therefore, the borrower'sresponsibility. Close integration of EA with these aspects of project preparation ensures that (a)environmental considerations are given adequate weight in project selection, siting, and design decisions;and (b) EAs do not delay project processing".

11. The Operational Directive further defined the outline of a Project Specific EA Report.It suggested that the EA report should include the following items: (i) an Executive Summary; (ii) thePolicy, Legal and Administrative Framework in the Borrowing country; (iii) project descriptionespecially in the geographic, ecological, social and temporal context; (iv) baseline data of physical,biological and socioeconomic conditions; (v) environmental impacts including identification andassessment of the positive or negative consequences likely to result from the implementation of theproject; (vi) analysis of alternatives; (vii) mitigation plan consisting of feasible and cost effectivemeasures that may reduce potentially significant adverse environmental impacts to acceptable levels; (viii)environmental management, training and monitoring plans.

12. The above is a shortened version of a highly elaborate and comprehensive set of directivesthat have gone a long way to sensitize the Bank and its staff to the environmental issues and become anintegral part of project screening, all the way to implementation. The directives set out very clearly theprocedure that needs to be followed in the case of large industrial projects, similar to the one that is thesubject of this Environmental Impact Evaluation. Although the project was prepared in the early 1980sand, therefore, prior to the issuance of OMS 2.36, the project staff were, nevertheless, mindful of theenvironmental implications. But, as was pointed out earlier, the environmental considerations in thisproject were more influenced by the environmental protection legislations and activities in India.

III. Environmental Protection Policy in India

13. India's attention to environmental issues may be traced to its constitution in which theState is directed "to protect and improve the environment and to safeguard the forests and wildlife of thecountry". During the last two decades, India has made considerable progress in the establishment of apolicy and regulatory framework for protection of environment. The important legislations in this areaare: (i) The Water (Prevention and Control of Pollution) Act of 1974; (ii) The Air (Prevention andPollution Control) Act of 1981; and finally, (iii) The Environment (Protection) Act of 1986.

14. This attention to the protection of environment and the preservation of the quality of lifehas also become a part of the Indian economic development plans since the early 1970s. With eachsuccessive plan, the emphasis has become greater and more demands are now being placed for adherenceto the environmental norms and guidelines in the choice of locations and operation of developmentprojects.

15. In 1981, upon the recommendations of a Special Committee, the Department ofEnvironment and Forests was created in the Central Government in order "to provide explicit recognitionto the pivotal role that environment conservation must play for sustainable material development"'. This

2 Report of the Tiwari Committee, September 15, 1980.

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department was intended to serve as the focal point in the administrative structure of the CentralGovernment for planning, promotion, and coordination of environmental and forestry programs. Themain activities of Department included conservation and survey of flora, faura, forests and wildlife,prevention and control of pollution, afforestation and regeneration of degraded areas and protection ofenvironment.

Guidelines for Siting of Industry

16. Already in 1980, the Industrial Policy Statement by the Government of India recognizedthe need for preserving the ecological balance and improving the living conditions in the urban centersof India. On the basis of this Policy Statement, indiscriminate expansion of the existing industries andthe setting up of new industrial undertakings within the limits of metropolitan cities and larger town cameunder strict control. But the policy had not touched upon the implications of setting up an industry inecologically sensitive areas which would have an effect on the overall development process.

17. Upon the initiative of the Department of Environment, an expert team formulated acomprehensive set of guidelines for the siting of industries including areas to be avoided, siting criteria,environmental impact assessment arising out of air pollution, liquid effluents, noise pollution, vibrationand occupational safety and health. These guidelines, issued in 1985, set up a procedure for a selectgroup of industries (metallagical, mining coal, petroleum, pulp and paper, fertilizer, cement, chemicaland petrochemical, pharmaceuticals, fermentation, rubber, paints, leather and tanning, electroplating,insecticide, synthetic resins and plastics, synthetic fibre) whereby such industries would only be licensedafter: (a) the State Director of Industries confirms that the site of the project had been approved fromenvironmental point of view by the competent State Authority; (b) the entrepreneur commits both to theState and the Central Government that he will install the appropriate equipment and implement theprescribed measures for the prevention and control of pollution; and (c) the concerned State PollutionControl Board has certified that the proposal meets with the environmental requirements and that the

equipment installed or proposed to be installed are adequate and appropriate to the requirement.

18. An important aspect of these new guidelines was the necessity of preparing anEnvironmental Impact Assessment (EIA) to identify the potential impacts of large industrial projects onthe environmental system. The guidelines, therefore, recognized that not all projects required suchelaborate EIAs, but that large industrial projects or industrial estates invariably needed the assessment inorder to establish the baseline data and later measure the environmental impact against such data. TheEIAs were also required to address other topics such as an environmental management plan, disposal ofliquid effluents, air pollution, abatement, disposal of solid waste, noise and vibration, occupational safetyand health, maintenance and operation of environmental control systems, housekeeping, humansettlements and housing areas, transport systems, recovery and reuse of waste products, afforestation anddisaster planning.

19. The latest legislation is the Environment (Protection) Act of November 1986. This actdoes in no way abrogate the previous legislations regarding water and air pollution (especially the partsthat deal with the Central Board for the Prevention and Control of Water Pollution as specified in the1974 Act and the State Boards for the Prevention and Control of the Water Pollution and Air Pollutionas created by the 1974 and 1981 Acts), but specifies standards for emission or discharge of environmental

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pollutions for the purpose of protecting and improving the quality of the environmente. It furtherdelegates authority to the Central and State Boards referred to above to negotiate with industry and arriveat a time bound program for the treatment of environmental pollutants to bring them in line with nationalstandards. It also permits the Central and State Boards to specify more stringent standards, on a case bycase basis, if the conditions so warrant, provided that the reasoning is recorded in writing. The Act hasmany articles dealing with the procedures for sampling, submission of samples for analysis, the functionsof environmental laboratories, etc. It has a section that deals exclusively with the factors that may betaken into consideration for the Central Government in prohibiting or restricting the location of industriesin different areas. In its Schedules I and II, the Act prescribes emission and discharge standards for 31industries. These standards are, in general, similar to those adopted in the Industrialized countries.

IV. Procedure Adopted For Maharashtra Complex

20. In 1980, the Government of India (GOI) appointed a site selection committee, includingenvironmental experts, to investigate the suitability of several sites in the vicinity of the Uran gasseparation plant (located on the coast to the south of Bombay). Under the then applicable rules, theNagothane site was recommended by the committee taking into account the following site selectioncriteria: (i) reasonable proximity to natural gas supplies and to the merchant ethylene market inBombay; (ii) a sparsely populated area where the adverse social and environmental effects on theexisting population should be minimal; (iii) consistency with the Maharashtra State Government's policyof encouraging industrial development in the most backward areas of the State; and (iv) the availabilityof abundant water supplies and necessary transport facilities (PR, para 48). The recommended site waslocated about 2 kilometers from the village of Nagothane in Maharashtra State's Raigad District. Thetotal land area requirement was put at around 567 hectares including about 100 hectares for the township.

21. The site area chosen consisted of predominantly agricultural, but very rocky, land andwas relatively sparsely populated. It was expected that only two villages would be directly affected bythe project and there would be need for the resettlement of nearly 2150 persons. The major part of landwas owned by villagers; a small portion was under State Government forests. The Maharashtra StateGovernment had announced in March 1982 certain areas in and around the project site as industrial foracquisition, and proceedings were started for the purchase of the land and resettlement shortly thereafter.Despite the rocky nature of the terrain which necessitated considerable amount of excavation, earthworkand site levelling, this site was selected because it affected only a relatively small number of people.While the resettlement of the affected population was carried out in accordance with the provisions of TheMaharashtra Resettlement of Project Displaced Act of 1976 (in terms of compensation and other pertinentissues) and physical possession was taken by 1985, there were other mitigating activities by IPCL whichwill be discussed under the Environmental Impact Assessment section below.

Water and air quality standards and water discharge effluent are regulated for all industries. The effluentdisposal standards are in effect for the following categories (i) standards for disposal of effluent form specificindustries including the chemical industry based on Minimum National Standards (MINAS); (ii) standards fordisposal of effluents for all industries depending upon the ultimate point of disposal of effluent; for example,standards are set for disposal in surface water, onto open land, public sewers, agricultural land and marine andestuary areas; (iii) standards for disposal of sewage; and (iv) standards for effluent disposal of toxic effluentunder the provisions of the Environment (Protection) Act of 1986.

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22. Upon the acceptance of the site by the Department of Petroleum and based on theinterministerial discussions, the Department of Environment gave its final approval in December 1984.But from the environmental point of view, it made a number of conditions that the petrochemical complexhad to meet (Annex 1). As can be readily seen from these stipulations, the complex had to meet verygeneral but stringent standards which were very much in line with the recommendations of the Bank'sthen applicable OMS 2.36 dated May 7, 1984 and its pollution control guidelines. The technical designof the project and its component plants proceeded on the basis of these guidelines. With the plant'sconstruction approaching completion, the Maharashtra Pollution Control Board issued a letter of consentin January 1988, specifying exactly the emission, effluent and other standards with which the plant hadto comply (Annex 2).

23. Subsequently, when the Indian Petrochemical Company applied to the Authorities toexpand its cracking and downstream capacities in 1988, it was asked, in line with the prevailinglegislations and rules, to prepare an Environmental Impact Assessment of the project. This job wasentrusted to Engineers India Limited (EIL) who finished their report in 1989. By this time, the treatmentof environmental issues had also taken a leap in the Bank. In addition to the issuance of EnvironmentalGuidelines by the Environment Department in August 1988, setting out the pollution standards for 55large industries, the procedure for environmental screening of industrial projects had become an importantpart of project preparation. As a result, the Environmental Impact Assessment was also required by theBank, before the expansion project could be processed. In the event, it came as a part of the preparationwork submitted by IPCL for the Second Petrochemicals Development Project (Loan 3258/3259-IN).

V. Environmental Impact Assessment for Maharashtra Gas Cracker Complex at Nagothane

24. Since the Environmental Impact Assessment was undertaken and completed before thecommissioning of the First phase of this complex, it provides the baseline data against which the impactof this project can be measured. As noted earlier, the legislative requirements and the operationalguidelines at the inception of the First phase only called for compliance with certain standards in termsof site selection, water and air pollution. Through time, with the changes in legislation, IPCL wasrequired to submit an EIA, explaining, in detail, all its mitigation plans including the environmentalmanagement and monitoring procedures it would adopt in order to safeguard the environment. Thisevaluation, therefore, takes as its point of departure the EIA, rather than the less comprehensiveframework in force during the early 1980s.

25. The EIA was prepared with the intention of its eventual submission to the MaharashtraState Pollution Control Board for the issuance of the permit and as a part of the documents required atthe project preparation stage. After a general description of the existing plant and the expansion project,the EIA contained the replies to an exhaustive questionnaire which the company was required to file withthe State authorities. The questionnaire had several sections dealing with general information, details ofthe site, process details, energy requirements, details of the construction plan, meteorological datapertaining to the proposed site, water requirements, waste water details, solid waste, sewage and domesticwaste, atmospheric emission, ambient air quality within 10 kilometers of the plant site, otherenvironmental considerations such as noise and odor, pollution control measures, work environmenthygiene and housekeeping, greenbelt development, environmental management and cost estimates.

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Project Site's Natural Resources

26. Nagothane is located some 120 kilometers south of Bombay on the highway to Goa.Water resources in the Nagothane region are relatively abundant and have already been tapped for otherindustrial uses. The Amba river is the main source of water supply to the project. The district isrelatively deforested, except for an area southwest of the plant where timber is being exploited. Wildlifeis not abundant save in those areas under forest cover. Areas north of plant (downstream the Amba river)are under agricultural cultivation.

Baseline Data

27. The report provided a comprehensive set of baseline data on the physical and biologicalconditions. The ambient air quality had been measured during a 24 months period (May 1985 to May1987) on a continuous basis through one stationary and one mobile measurement units. This consistedof the recording of meteorological (temperature humidity, rainfall, etc,) and air pollution (suspendedparticles, sulfur dioxide S02 nitrogen dioxide NO2, etc) parameters at the plant site and within a radiusof ten kilometers from the plant. The data were then analyzed to determine the climatic behavior, itsseasonal changes and the background pollution level at the Nagothane site.

28. A similar process of data collection was undertaken for the baseline water quality at fourlocation in the Amba river, including measurement of temperature, salinity, pH, inorganic nitrates,phosphates, ammonia, dissolved oxygen, biochemical oxygen demand (BOD), trace metals and suspendedsolids. In addition to hydrographic study of this river (which would supply process and township waterto the complex), the biological characteristics were also determined for the estuary section where the planteffluents were expected to be discharged. Since the treated effluent is discharged through a pipeline intothe estuary, the actual point of discharge was selected after a hydrographic and oceanographic study wascompleted in the area by the National Oceanographic Institute. As a result of the study, a point ofdischarge was selected that maximizes disposal into the bay waters and diminishes the likelihood of backmixing into the estuary area.

29. The report also contained a census of the affected population residing within a radius of2 kilometers from the center of the site (13539 persons) and between 2 kilometers and 5 kilometers fromthe centre of the site (a further 6481 persons). Of this total, the resettlement of only 2153 persons wasanticipated as the complex would only affect three villages out of a total of 24 within the five kilometersradius. A baseline survey was also conducted by Bharati Agro-Industries Foundation (BAIF) in 26villages around Nagothane which indicated the extremely poor productivity of the land and the need forintroducing appropriate agro based technology to generate employment and income in the region. Areport prepared on the basis of this survey identified the need for organizing training of the village youthin both agro and non-agro based activities to enable the villages to raise their level of skills required forself employment.

Environmental Impacts

30. The EIA had two large sections dealing with atmospheric emissions and liquid effluentsfrom each single process unit as well as the offsite facilities and utilities. This was accompanied by adetailed water balance and a water budget indicating the requirements for domestic (sanitary and

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drinking), industrial (make-up for cooling towers, water plant, hose stations, tanker washing and make-upfire water), agricultural (gardening and horticulture) and township water. The report, thus, predicted thephysical, chemical and biological characteristics of the effluents to be treated before discharge into theestuary.

31. While the activities during construction were expected to have some transitory impactson the environment, the more sustained and permanent impact was expected for the operational phase.In this respect a matrix of activities and their impact on environmental parameters was constructed inorder to highlight the most deleterious activities and the pressures on resources (Annex 3). This wasfollowed by a detailed quantification of the impact of each activity on the environmental parameters(negative impact was quantified using scores 0, 1, 2, 3, 4 and 5 in the increasing order of severity): rawwater resources, ground water resources, air quality, noise and odor, water quality, land use pattern,human resettlement, Forests/National Parks/Sanctuaries, housing, infrastructure, services andenvironmental hazards (Annex 4). The result of this impact assessment is given in the table below:

Table 1. Impact of Activities on Environmental Parameters

Activity Cumulative Score

Air Quality 13Noise and Odor 9Water Quality 8Land Requirement 7Infrastructure 9Services 10Environmental Hazard 12

32. The EIA also contained a section on risk analysis which had been carried out by an expatriate(US) engineering company. Based on three worst case scenarios, the consequences of equipment failureson the plant, personnel, structures and the population outside the plant were evaluated. Therecommendations of this study were incorporated in the design of the complex. The mainrecommendations consisted of: (i) provision of adequate distance between process units; (ii) provisionof gas detectors and low emission level alarms at strategic locations; (iii) construction of blast wallsaround the ethylene oxide storage vessels; (iv) provision of water curtain around the furnaces; (v) blastproofing of all process unit control rooms; (vi) use of double wall cryogenic tanks for the storage ofethylene/propylene feedstock; and (vii) fireproofing of the support structure of flare line.

33. In addition to the above, IPCL has already carried out HAZOP (Hazard and Operability)studies on all the major process units of the complex. These Hazop studies have indicated the need forminor modifications to the plant. Much of this work has been completed and others are underimplementation. While the risk analysis has shown that the risk to outside population due to accidentsin the complex is low and within the acceptable limits, there is need to keep the population density in theethylene oxide/ethylene glycol, polypropylene and gas cracker process units as low as possible.

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Mitigation Plans

34. The gaseous wastes from petrochemical plants are sulfur dioxide, oxides of nitrogen,particulate matter, odorous materials and lighter hydrocarbons. Since the feedstock (a mixture of ethaneand propane) contains negligible sulfur, emissions of S02 in flue gas will be in traces. Processtechnologies and equipments were selected in a manner as to minimize fugitive emissions. Besidesproviding adequate stack height for the captive power plant (100 meters, beyond the inversion zone inthe region) which might burn Low Sulfur Heavy Stock (LSHS) in periods of low natural gas availability,cyclones separators were used for the removal of fine powders e.g. in the polymer plants.

35. Air pollution monitoring is carried out by two fixed and one mobile analyzer stations.The two fixed stations are located in the material stores area and near the township. The mobile van ismounteO on a trolley attached to a prime mover and is fully air-conditioned with a power generator. Allthe instruments in all the thiree stations are provided with particulate filters. For accurate flowmeasurement, laser drilled critical orifices are used. A central station that continuously receives the dataconsists of an Enviro-logger. This device converts the data to the corresponding units, calculates periodicaverages and can prepare reports in the format specified by the Maharashtra Pollution Control Board.

36. As for the effluent discharge, an attempt was made in the design of the plants to reduceleakage, minimize production of wastes, recirculate the wastes and separate the pollutants to the extentpossible. Based on their treatability the separated pollutant streams were: storm water from theproduction units and offsite areas; process industrial effluents comprising oil contaminated streams;chemicals contaminated streams; spent caustic streams; and sanitary wastes. For the treatment of theeffluents, the process waste water is pumped to an equalization tank from where the waste water goes foroil removal. The contaminated rain water also joins this flow. Thence the pretreated spent caustic wasteis mixed with the oil-skimmed process and rainwater in the flash mixer. The flow then passes theclariflocculator and pH adjustment tank in which chemicals are added for chemical treatment. Theprecipitates formed due to chemical reaction and coagulation are allowed to settle in the clariflocculatorunit where additional oil-skimming facilities are provided. After chemical treatment, the effluent issubjected to biological treatment in an Extended Aeration tank where the treated sanitary waste water isalso introduced. This treated effluent is finally transferred to a clarifier unit in which sludge is allowedto settle. The clarified effluent from this clarifier is collected in the Guard Ponds where it is mixed withthe waste water from cooling tower blow down. From the Guard Ponds the effluent is pumped to theestuary after once more flowing through filters to remove any traces of oil. The treated effluent can bereturned to the system if its quality is not found to be suitable for disposal.

37. As for the sludge, it is accumulated from various sources in the sludge thickener unit.The sludge from the final clarifier is also taken to an Extended Aeration tank and then conveyed to thethickener unit. This thickened sludge is subsequently pumped to sludge drying beds.

38. To reduce the noise level due to compressors, pumps and other machinery, emphasis wasput on good preventative maintenance and avoidance of equipment failure. Noise was contained by theproper design and engineering practices and the use of silencers, sound proof materials, sound absorbersand mufflers. The mitigation plan aimed at achieving a noise level in the plants in accordance with noiselevels prescribed by Occupational Safety and Health Administration (OSHA) of the United States as givenin Annex 5.

39. There is also a section in the EIA which deals with rural development and assistance to

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the resettled population. The afforestation and horticultural development constitutes a part of this plan.Dairy farming was selected as one of the activities with good potentials for the region. Accordingly, acattle development center was established in Nagothane to provide breeding services for the cattle, freeof cost at the farmgate. IPCL also arranged for free vaccinations. Training programs for economic milkproduction were organized in order to improve the skills of local farmers.

VI. Environmental Protection Achievements

40. Annex 6 shows the actual ambient air and effluent water quality as measured at the plant.It is quite clear that the plant meets the pollution standards in all respects. This compliance was recordedin the latest consent that was issued by the Maharashtra Pollution Control Board in December 1993 forthe plant to continue its operation. The environmental laws of India require that IPCL periodically filefor a 'consent to operate order' at which time the company has to provide the relevant Pollution ControlBoards with comprehensive environmental audit statements.

41. The studies carried out by the National Oceanographic Institute at 6 stations over adistance of about 30 kilometers in the Amba river estuary were reported for a period of 8 months fromOctober 1990 to May 1991. These studies involved detailed investigations with respect to water quality,sediment quality and biological characteristics and their tidal variability, in order to evaluate changes, ifany, in the environment quality due to the release of waste water. The data was then compared with thebaseline data collected before the commencement of waste water discharge. These studies indicated thatthe water and sediment quality were close to the baseline within the natural variability expected for theestuarine environment. Variations in phytoplankton pigments, zooplankton biomass and microbenthicbiomass compared well with the results of the earlier studies. Moreover, the fish catch compositionremained comparable with that of the earlier study. In effect the impact of the waste water discharge intothe Amba river estuary at Kankule has been negligible (Annex 7). This study has been repeated oncemore in the second half of 1993 and the report will be available sometime later this year4 .

42. IPCL has carried out a most impressive afforestation program at Nagothane. Theobjective of this program was to develop a greenbelt around the plant to act as bufferzone, scavenger ofair pollution, absorbent of noise pollution, etc. By using a part of the treated effluent for irrigation, theprogram also aimed at reducing water pollution and generally improving the overall ecosystem. Morethan sixty species of fast growing and resistant plants have been planted with 29 species falling undereffluent water irrigation experiment. In this experiment 73% of the saplings have responded very well(growth of 120 centimeters in one year). The total afforestated area now approached 352 hectares (94%of the available land area of 375 hectares). The average survival rate has been two thirds (940 thousandtrees out of 1.41 million planted) with a survival per hectare rate of around 2670. The program alsocovers demonstration fruit orchards where mango, coconut, guava, citrus and pomegranate trees areplanted. IPCL is assisted in these efforts by Bharati Agro Industries Foundation (BAIF) DevelopmentResearch Center that has been engaged in rural development, animal production and cattle breeding, agroforestry and afforestation and other similar activities for two decades.

The Scientist at the National Oceanographic Institute reported that these later investigations have notindicated any deterioration in the estuarine environment.

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43. With the help of BAIF, IPCL is also engaged in other community development activitiessuch as training of villagers in first aid treatment, soap and detergent powder making, mango graftpreparation, pre-primary educational methods of teaching, handicraft preparation, masonry and carpentryskills, use of plastic mulching, kitchen garden promotion, non-farm skills for the youth such asmechanical and electrical repairs, water resource development, self help group formation, dairy cattledevelopment through insemination (nearly 2300 cases achieved), environmental awareness programs,extension services and, even, sports competition amongst neighbouring village schools. This programappears to have already had some positive results in that the average annual income from dairying hasrisen by 84% and 76% the resettled families are now engaged in the sale of milk.

44. At Nagothane, the environmental protection activities are overseen by Health, Safety andEnvironment (HSE) Department headed by a Deputy General Manager reporting directly to the ExecutiveDirector superintending the whole Nagothane operation. The department has a staff of more than 20persons in four divisions: Health, Safety, Environment and Ecology and Fire. The Environment andEcology is manned by two environmental engineers, two horticultural ists and four horticultural assistants.The department also has functional links with several other divisions which fall under a different linemanagement, but supply the environmental data to the HSE Department. These divisions are the EffluentTreatment Plant which comes under Operations and Utilities; the Air Quality Monitoring Stations whichcomes under Instrumentation; and Laboratory which comes under the Quality Control. The departmentis also functionally linked with the Executive Director - Technical - at the corporate level.

45. The HSE Department has been running training courses for the plant personnel atNagothane. The courses cover a wide range of subjects such as: applicable statutory rules onenvironment, water pollution control and management, air pollution monitoring, solid waste management,risk analysis, emergency management plans, safety, afforestation , socio-economic activities in thesurrounding communities. The number of personnel attending these diverse training courses has increasedfrom 372 in 1990 to 419, 439 and 405 in 1991, 1992 and 1993, respectively.

Overall Assessment

46. IPCL is a company with excellent environmental credentials. Its health, safety andenvironmental policies are both comprehensive and demanding in that it requires that its various unitscomply with all environmental regulations during design, construction and operation of all facilities ofthe corporation. IPCL has been the winner of many awards in the past, most notably the 1989FICCI (Federation of India Chamber of Commerce and Industry) award in "recognition of outstandingcontribution to Environment Preservation and Pollution Control". Recently Nagothane was awarded thethird prize of the Maharashtra State Government's Vanashree Award for its afforestation efforts.

47. While the disaster at Bhopal in the mid 1980s has resulted in an increased awareness ofthe potential adverse environment impact of the petrochemical projects, the consciousness at IPCL datesback to the early days of constructing the Vadadora complex in Gujarat which also received accoladesin connection with its environmental performance'. The corporation continues to pioneer work in the

5 See the BTOR dated May 22, 1984 in which the following statement appears: "IPCL is one of the mostenvironmentally conscious companies I have visited anywhere". The BTOR then goes on to enumerate IPCL'svarious programs aimed at enhancing the quality of environment.

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environmental field, e.g. by the sponsorship of R & D efforts for the development of waste treatmenttechnology for the chemical sector. To supervise the environmental performance of the variousprocessing units, IPCL maintains a department at headquarters staffed with scientific and technical teamsqualified in waste treatment and disposal, water ecology and environmental chemistry.

48. As noted earlier, the Nagothane plant is equipped with automatic and continuous airquality monitoring stations. The system is so designed as to collect data from three stations placed farapart, to analyze and collate the data and automatically transfer the results to the control room. For waterquality monitoring, the laboratories operate in parallel with the water treatment plants, regularly analyzingsamples from various parts of the process for chemical and biological parameters. Such data is routinelyused to adjust and correct the operation treatment parameters of the treatment plants.

49. Notwithstanding the risk analysis and Hazop studies and other measures taken for the earlydetection of hazards, the failure of a flange in the gas cracker unit offsite battery limit (OSBL) area ledto a very serious accident in September 1990 with many fatalities. Since the accident, IPCL has furtherreinforced its safety efforts and instituted many programs aimed at a heightened safety consciousnessamong the personnel. In addition to regular monitoring, inspection and safety auditing, IPCL has acomprehensive emergency program in case of accidents. These efforts appear to have improved thesituation: in 1993 the severity rate of accidents -- number of days lost per million man hours -- hasdropped to 42 from 663 in 1992. While all this indicated the efficacy of the measures taken by IPCL,it is still a matter of concern that despite several requests by the Bank, the Government of India has notyet submitted a copy of the report of the Mashelkar Committee to the Bank, though the relevantauthorities in the Government of India have informed the Bank that the report has not yet been madepublic and they have yet to take a final view of the findings.

50. The experience with afforestation has been highly successful. The recent demonstrationshould open a new area of activity for the horticulturalists at the plant, with a possible spin off in theneighbouring villages. The plant was supposed to eventually use the effluent water for the irrigation ofits greenbelt. This has not been totally achieved, though various species are being tested for theirresponse. The plant needs to continue with such demonstration projects, not only to conserve raw water,but to convince the villagers about the safety of using the effluent water for agricultural purposes. Inaddition, the construction of a fish pond will go a long way in allaying the fears of the surroundingpopulation about the quality of the treated water from the plant.

51. Despite all the measures taken by the Maharashtra State Government in terms ofcompensation, provision of alternate land, etc., and the rural development activities by IPCL includingall the confidence building measures and interaction with the surrounding communities, some two yearsago, the villagers staged a three day lock-in of the plant managers and operators, demanding employment.After tense negotiations and the intervention of the State Government, the two sides came to anagreement, whereby some 600 villagers (one member from each resettled family) entered the plant'semployment. Given their lack of skills, many are employed in gardening and other non-skilled activities,while a few of the younger elements have been trained for semi-skilled jobs. In a densely populatedcountry where title to land (even if it is rocky and of not much use for agriculture) is very precious andthe Government has historically been the largest provider of employment for people, incidents of thisnature are not rare. While it is always difficult to strike a reasonable balance between the imperative ofcutting costs (especially under competitive and liberalized conditions) and the need for harmony with thesurrounding community, the essence of a good resettlement plan is to detect such dissatisfaction andquickly devise means of diffusing the problem. In the event, the matter was amicably resolved andrelations have gradually improved with the surrounding community.

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52. All in all, from the environmental point of view (in its wider sense encompassing theresettlement results), this project has had an outstanding outcome. This is due to the fact that there isan environmentally friendly management culture in IPCL. The corporation takes pride in its achievementand is mindful of the need to preserve and enhance the environment. Those that are closely involved withenvironmental issues are knowledgeable, conscious, dedicated and motivated. As one high official in theMinistry of Environment and Forestry put it: "no less can be expected from the public enterprises thatshould be at the forefront of this awareness". Though the environmental record of many Indian publicenterprises does not fit this expectation, that of IPCL is a remarkable example. Given the philosophy,the policies, the effective monitoring and management, this performance is regarded as highly sustainable.

Lessons Learned and Recommendations

53. The environmental achievements of IPCL constitute a good checklist of do's and don'ts.The mindset, the commitment and the rational planning have all been responsible for the remarkableresults. The corporation has a serious and businesslike attitude to this important aspect of its activitiesand is not willing to cut corners. It knows that it is cheaper, in the long run, to bring in theenvironmental considerations into the design of potentially polluting industrial activities such aspetrochemical units at the very earliest state. The staff of the corporation are constantly reminded abouttheir responsibilities in this area, through publications, seminars, training courses and other means. Anyfurther elaboration on the lessons learned would be a repetition of the subjects discussed in the Bank'sOperational Directive 4.00 and what it recommends.

54. There is, however, an area where both the Bank and the Borrower fell short of applyingthe lessons of experience. To begin with, there was little follow up on OMS 2.33 (InvoluntaryResettlement - 1980) by the Bank staff who appear to have been satisfied with the compensation schemeprovided by the Maharashtra Industrial Development Corporation to the villagers whose land was taken(SAR para 7.04) in accordance with the provisions of the Maharashtra Resettlement of Project DisplacedPersons Act of 1976. A better familiarity with the OMS 2.33 would have alerted the staff that theresettlement of some 2150 persons required a plan which should, inter alia, have addressed the issues oftraining and employmente. Conversely, in a country such as India where the Government owns littleland, but has historically been very active in economic development, there is a long experience ininvoluntary resettlement which should have been tapped by the Borrowers. The objective of providingpeople displaced by a project with the means to improve, or at least restore, their former living standards,earning capacity, and production levels requires serious planning and follow up through implementation.This is not a subject that can be treated as an afterthought because the costs of inattention are normallyhigh.

6 This was elaborated in OD 4.30 para. 18: Access to Training, Employment and Credit - Normally,general economic growth cannot be relied upon to protect the welfare of the project-affected population. Thus,alternative employment strategies are needed for nonagricultural displaced people, or where the land that can bemade available is not sufficient to accommodate all the displaced farmers. The resettlement plan should, wherefeasible, exploit new economic activities made possible by the main investment requiring the displacement.Vocational training, employment counseling, transportation to jobs, employment in the main investment project orin resettlement activities, establishment of industries, incentives for firms to locate in the area, credit and extensionfor small business or reservoir aquaculture, and preference in public sector employment should all be consideredwhere appropriate.

- 15 -

55. Despite the foregoing, IPCL is a company that has historically been actively involved inthe community at Vadodara and has been responsible for many bridge-building acts with the resettledcommunity at Nagothane. Many of the resettled group were employed by the contractors during theconstruction period and the corporation has provided shelter, infrastructure and social services. Thecontribution of the corporation in terms of environmental protection and management was documentedearlier and evaluated. On the whole, what has been achieved is creditable because IPCL realizes that itseventual success depends on harmony with the surrounding community. There are a few lessons that areworthy of reemphasis:

(1) Although civil servants are generally well intentioned, they sometimes fail tocommunicate with those who are directly affected by their actions. Forsuccessful resettlement, the affected groups must be brought into a dialogue sothat their wishes are understood at the earliest stage;

(2) Attention to integrating the affected communities in the activities of the enterpriseis the surest way of enlisting their goodwill;

(3) Along with the environmental considerations, the human dimensions of theBank's project work should be internalized and rigorously pursued throughout theproject cycle. If a plan is designed and agreed to, it should receive full attentionduring supervision and be monitored regularly.

(4) Good practices should be disseminated throughout the Bank and the Borrowingcountries, so that costly inattention is eliminated.

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Annex 1

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

LETTER OF LOCATION APPROVAL FROM DEPARTMENT OFENVIRONMENT AND FOREST TO DEPARTMENT OF ENERGY

Subject: Location of Petrochemical Complex at Nagothanebased on Bombay High Gas as Feed Stock

Dear Sir:

The proposal of locating the petrochemical complex at Nagothane, Maharashtra has beenconsidered by the Appraisal Committee of the Department of Petroleum.

Based on the opinion of the Committee and the discussion that have taken place, the siteselected is acceptable to this Department. This Department has the following observations fromenvironmental angle with regard to the proposed Petrochemical Complex:

i) The proposed plant should utilise sweet natural gas only practically free from Sulphuras feed stock for petrochemicals, power generation and other utilities.

ii) The project authorities should establish and maintain the air and water pollution controlfacilities at the highest efficiency at all times. Records of performance should beperiodically and regularly supplied to the department of environment and the concernedstate authorities. Before final disposal, effluents should conform to the limits prescribedby State/Central Board Prevention and Control for different parameters.

iii) All possible efforts should be made to use the treated effluent for agriculture andafforestation purposes. They should maximise the recycling/use the treated effluentwithin the plant. The discharge to the Amba River should be in such a manner that itshould not upset the conditions normally existing in the river in an adverse manner.

iv) The detailed plan for the disposal of solid wastes and waste materials of toxic natureshould be drawn out in detail and furnished to this department and other regulatoryagencies of State/Centre.

v) The spent catalysts disposal should be carefully regulated and they should not be mixedwith other solid wastes for disposals in low lying area. They may be sent back to themanufacturer for recycling and records maintained for this purpose.

vi) The proposed flare system design should be smokeless at all times even during shut downand start up operations and should be maintained luminous at all times.

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vii) The height of the stack should be a minimum of 100 metres, to achieve the properdispersion of emissions. A gaseous dispersion model is advocated. The levels of SO 2NO. and SPM should be within the MINAS standards stipulated for such plants byCentral Board of the Standards prescribed by State Board till such time.

viii) Micrometereological observations of the proposed site should be made from the pre-construction stage and should be continued.

ix) The air and water quantity (including ground water) in this region should be monitoredat regular intervals from the pre-construction stage and continued thereon. For thispurpose, the number of monitoring stations for air and water quality monitoring stationsshould be decided in consultation with State and Central Water Pollution Control Boardsbased on the metereological considerations and the water regime and tidal conditions.

x) Noise and Vibrations within the plant environment require attention and they should bebrought down to safe levels to avoid occupational hazard to the individuals workingwithin the plant.

xi) Out of the total area required, part of it comes under the reserved forest category. Theplant authorities should develop/undertake compensatory afforestation of an equivalentarea in the nearby lands. The development and maintenance of these will be theresponsibility of the plant authorities.

xii) The development of a green belt and in township areas around the plant site betweenthe plant should be the responsibility of the plant authorities. While taking the land useplan of the area for the plant as well as the township, amenities and social facilities careshould be taken at the planning stage itself to avoid cutting down of the existing oldtrees within the area to the maximum possible extent. The trees chosen for developmentof green belt and afforestation should be such that they will be able to offer maximumgreen cover (canopy).

xiii) During the construction phase, large amount of labour force is going to be deployed atthe site. Their fuel requirements places a great demand and destruction of the nearbytrees. The fuel supply or requirements of the labour should be arranged by theproponent/contractor. This should be suitably built into the Contractual obligations.

xiv) Details of pollution control devices and methodologies of treatment should be providedto department when finalised.

xv) The standards laid down by occupation health of the workers should be adopted andfollowed. If Indian standards in this regard are not available the relevant standards ofOSHA/ILO/WHO should be followed.

xvi) Proper safety precautions, fire hazard precautions should be planned and implemented.Various precautions to prevent accidents should be provided with alternate arrangementsand they should be constantly reviewed and updated.

xvii) The project proponents should prepare an environmental management plan for theproposed activities and their long term plans envisaged in this regard, incorporating thevarious suggestions made to minimise the impact of pollutants (due to setting of this

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industry) in the region. The environmental management plan shall clearly indicate thebudgetary provisions to implement the various stipulations made above and sent to thisDepartment and regulatory authorities. These provisions shall also include therequirement in respect of families displaced from the site or due to the location of theunit. The measures taken in this regard and benefits provided to such displaced familiesby the project authorities should be communicated to this Department.

Report on the implementation of various suggestions and the data gathered as aboveshould be submitted to the Department at regular intervals.

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Annex 2

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT

(LOAN 2505-IN)

MAHARASHTRA POLLUTION CONTROL BOARD

Consent to: IPCL - Maharashtra Gas Cracker Complex at Nagothane, Raigad District

Consent is hereby granted under the provisions of the Water (Prevention & Control ofPollution) Act, 1974 (hereinafter referred to as "the Act") to M/s. Indian Petrochemicals CorporationLtd. (Maharashtra Gas Cracker Complex Division), Nagothane, Distt. Raigad (hereinafter referredto as "the applicant") to discharge the effluent from their proposed factory in the water pollutionprevention area of the Konkan Coastal Area Basin subject to the provisions of the Act and the Rulesand Orders that may be made thereunder and further subject to the following terms and conditions:

1. The Consent is granted for a period up to 31-8-1990.

2. The Consent is valid for the manufacture of 1) Ethylene - 300,000 MT, 2) Propylene - 90,000MT, 3) Ethylene Glycol - 50,000 MT, 4) Ethylene Oxide - 5,000 MT, 5) LDPE - 80,000 MT,6) LLDPE - 135,000 MT, 7) Polypropylene - 60,000 MT, 8) Butene-I - 15,000 MT, 9)Acetylene - 3,000 MT, 10) Wire & Cable Compound - 25,000 MT, 11) Acetylene Black -2,400 MT, 12) Pyrolysis gasolene - 17,000 MT, 13) C, Cut-- 18,000 MT, 14) Di-ethylene glycol- 4,245 MT - all in MT/annum.

3. The daily quantity of industrial effluent from the factory shall not exceed 14,400 in'.

4. The daily quantity of domestic effluent from the factory shall not exceed 2,640 m, that fromthe township being 5,000 in'.

5. Treatment, disposal and implementation period

i) Domestic effluent:

a) Treatment: It shall be treated in properly designed and well maintained septic tankfollowed by filters, so as to bring the quality of treated effluent as:

1. Total Suspended Solids Not to exceed 100mg/liter.2. B.O.D. 5 days 200C Not to exceed 100mg/liter.

b) Disposal: The treated effluent shall be used for gardening on the green belt as muchas possible, remaining should be disposed in the saline zone of Amba River at thespecified point.

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c) Implementation Period: The arrangement for treatment and disposal shall becompleted before commissioning of the plant.

ii) Industrial effluent

a) Treatment: The applicant shall provide the required treatment to bring the finaleffluent to the following standards:

1. pH Between 5.5 & 9.02. Suspended Solids Not to exceed 100mg/liter3. B.O.D. 5 days 20*C Not to exceed 100mg/liter4. C.O.D. Not to exceed 250mg/liter5. Dissolved oxygen Not less than 5mg/liter6. Oil & Grease Not to exceed 10mg/liter7. Phenolic compounds Not to exceed 1mg/liter8. Carbon Chloroform extract Not to exceed 0.05mg/liter9 Sulphides Not to exceed 2.0mg/liter10. The Bio-assay test on fish shall show 90% survival in 96 hrs.

b) Disposal: The treated effluent shall be used on green belt as much as possible.Remaining should be disposed in saline water zone of Amba River at the specifiedpoint.

c) Implementation period: The arrangement for treatment and disposal shall becompleted before commissioning of the plant.

6. The factory authorities shall comply with the provisions of the Water (Prevention & Controlof Pollution) Cess Act, 1977. They shall regularly submit to the Board the returns in theprescribed form and pay the cess as specified under Section 3 of the said Act.

7. The factory authorities shall comply with the conditions for air pollution control as below:

i)a) The applicant shall establish at least one year before commissioning of themanufacturing plants a minimum of 3 ambient air quality and micrometeorologicalmonitoring stations to monitor Sulphur Dioxide, Nitrogen Oxides, SuspendedParticulate matter and Hydrocarbons just outside the factory premises in threedirections and submit the report thereof to the Board every month.

b) The temperature inversion studies shall be carried out regularly for one year andintermittently for next 2 years and data submitted to the Board.

ii) The Acetylene Black plant shall be provided with dust collector of sufficient capacityto limit the emissions of particulate matter to 150 mg/Nm.

iii) All the outlets of waste gases from the process shall be connected to the flare stack.The flame stack height shall not be less than 100 metres.

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iv) The flare provided shall ensure complete combustion of the Hydrocarbon/CarbonMonoxide and other combustible matter.

v) In case of episodal pollution the process plants shall be shut down and controlmeasures taken immediately. The occurrence of such episodal emissions shall bereported to this Board within 24 hours.

vi) A continuous monitoring system shall be provided for Oxygen and Carbon Dioxidefrom the flare stack and report submitted to Board every month.

vii) The captive power plant shall be operated on lean gas or LSHS (not exceeding 10%of time).

viii) The applicant shall maintain green belt round the factory having minimum width of100 metres.

ix) The applicant shall install the alternate electric power source sufficient to operate allfacilities installed by the applicant to maintain compliance of consent conditions.

x) Clearance of M.P.C. Board shall be obtained at every stage i.e. Design specifications,Installations and performance test of the air and water pollution control equipmentsetc.

8. The factory authorities shall install a separate meter showing the consumption of energy foroperation of domestic and industrial effluent treatment plants. The quarterly returns of thisenergy consumption shall be submitted to Board under intimation to respective Regional andSub Regional Officer on 10th of January, April, July & October.

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Annex 3

0 ~ 0

Plant Commissioning

Water Requirements

Effluent Discharge

Gascous Emissions

0>

Fugitive Emissions

Raw Material Storage

Raw Material Handling z

Product Storage

Product Handling

Spills and Leaks

Shutdown/Start-up

Equipment Failures

Plant Operations

Solid Waste Disposal

Transport of Workers

Movement of Vehicles

Housing of Workers

Medical & Other Needs

L -

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Annex 4

00

Movement of Vehicles

Housing Needs

Water Requirement

Effluent Discharge

Gaseous Emmissions

Fugitive Emmissions- 0 0 0 0 -

Raw Material Storage

Raw Material Handling

Product Storage

Product Handling

Spills and Leaks

Shut down/Start-up

Equipment Failure

Plant Operations

Cumulative Score

- 24 -

Annex 5

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

Osha Noise Exposure Limits

DURATION SOUND LEVELHOURS PER DAY (dBA

8 906 924 953 972 1001 105

0.5 110Less Than 0.5 115

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Annex 6

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

Ambient Air Quality

Parameter Permissible limit At Nagothane Plantmilligram/cubic meter milligram/cubic meter

Sulfur dioxide (SO2) 120 10-20

Nitrogen Oxide (NOJ 120 15-25

Suspended Particulate Matter (SPM) 500 70 - 100

Total Hydrocarbons 160

Industrial Effluents

Parameter Permissible limit Treated Effluent Quality atmilligram/liter Nagothane Plant

Suspended solid 100 (max) 2-90

BOD 50 (max) 2-30

COD 250 (max) 4 - 50

Phenolic compounds 1 (max) nil

Sulfides 2 (max) 0-1

Oil and grease 10 (max) 0-4

Dissolved oxigen 5 (min) 5-7

Total Disolved Solids 1500 (max) 500

Hexavant chromium 0.1 (max) nil

pH 6.5 -8.5 7-8.5

Bioassay test of fish 90% survival 100%min. (96 hours)

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Annex 7

ENVIRONMENTAL IMPACT EVALUATION

INDIA

MAHARASHTRA PETROCHEMICAL PROJECT(LOAN 2505-IN)

Water Quality in the Amba River EstuaryMeasured at Station 4

(milligram/liter except pH)

Parameters Before Discharge of After Discharge ofNagothane Wastewater* Nagothane Wastewater

Nov-Jan 1986/87 Jan-May 1990Mean Mean

Suspended solids 110 194

Salinity 35.4 35.7

Dissolved oxygen 6.6 6.0

BOD 1.3 (max) 1.9

NO3 338 409

NO2 20 31

NH 4 36 10

pH 8.0 8.0

* This estuary was under the influence of pollutants from other industries in the Bombay area.