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NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure

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NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure 17 November 2017 Linde AG Mott MacDonald 71 Sadovnicheskaya Embankment Moscow 115035 Russia T +7 (495) 981 5665 F +7 (495) 981 5666 mottmac.com NKNK EP-600 Plant ESIA 386570 Volume II Mott– MacDonaldImpact Assessment Draft for Lenders Disclosure 17 November 2017 Mott MacDonald R LLC registered in Russia number 1077758264165, INN 7706664782. A member of the Mott Linde AG MacDonald Group. Mott MacDonald | NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure Issue and Revision Record Revision Date Originator Checker Approver Description A 2 Sep 2017 S Goncharov S Goncharov R Watson First Draft ESIA for Client review E Petruneva C Mills A Strokina M Coroi J Brookes J Dottridge W Kerr A Monk-Steel N. Francis A Dal Mut T Ellis B 06 Oct 2017 S Goncharov S Goncharov Second Draft ESIA for Client E Petruneva C Mills review A Strokina M Coroi J Brookes J Dottridge W Kerr A Monk-Steel N. Francis A Dal Mut T Ellis C 17 Nov 2017 S Goncharov R Watson Third revision Draft ESIA for A Strokina Lenders Disclosure Document reference: 386570 Information class: Standard This document is issued for the party which commissioned it and for specific purposes connected with the above-capti oned project onl y. It shoul d not be r elied upon by any other par ty or used for any other purpose. We accept no r esponsibility for the consequences of this document being reli ed upon by any other party, or being used for any other purpose, or containi ng any error or omission which is due to an error or omission in data suppli ed to us by other parties. This document contai ns confi denti al infor mation and pr opri etar y intellectual property. It should not be shown to other parti es without consent from us and fr om the party which commissioned it. This report has been prepared solely for use by the party which commissioned it (the ‘Client’) in connection with the captioned project. It should not be used for any other purpose. No person other than the Client or any party who has expressly agreed terms of reliance with us (the ‘Recipient(s)’) may rely on the content, information or any views expressed in the report. We accept no duty of care, responsibility or liability to any other recipient of this document. This report is confidential and contains proprietary intellectual property. No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by us to any party other than the Client or any Recipient(s), as to the accuracy or completeness of the information contained in this report. For the avoidance of doubt this report does not in any way purport to include any legal, insurance or financial advice or opinion. We disclaim all and any liability whether arising in tort or contract or otherwise which it might otherwise have to any party other than the Client or the Recipient(s), in respect of this report, or any information attributed to it. We accept no responsibility for any error or omission in the report which is due to an error or omission in data, information or statements supplied to us by other parties including the client (‘Data’). We have not independently verified such Data and have assumed it to be accurate, complete, reliable and current as of the date of such information. Forecasts presented in this document were prepared using Data and the report is dependent or based on Data. Inevitably, some of the assumptions used to develop the forecasts will not be realised and unanticipated events and circumstances may occur. Consequently Mott MacDonald does not guarantee or warrant the conclusions contained in the report as there are likely to be differences between the forecasts and the actual results and those differences may be material. While we consider that the information and opinions given in this report are sound all parties must rely on their own skill and judgement when making use of it. Under no circumstances may this report or any extract or summary thereof be used in connection with any public or private securities offering including any related memorandum or prospectus for any securities offering or stock exchange listing or announcement. 386570 | 17 November 2017 Mott MacDonald | NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure List of Abbreviations Abbreviation Description ACs − Affected communities ZoI − Zone of influence CLO − Community Liaison Officer Consultant − Mott MacDonald Limited E&S − Environment and social EHS − Environmental, health and safety EIA − Environmental impact assessment EP − Ethylene plant EPRP − Emergency Preparedness and Response Plan EqPs − Equator Principles ESIA − Environmental and social impact assessment ESMMP − Environmental and Social Management and Monitoring Plan GRI − Global Reporting Initiative HSRA − Health and safety risk assessment IFC − International Financial Corporation km − kilometres KTA − Thousand tons per year LTP − Local wastewater treatment plant MD − Municipal District MML − Mott MacDonald Limited NKNK − Public Joint Stock Company “Nizhnekamskneftekhim” NTS − Non-Technical Summary OECD − Organisation for Economic Co-operation and Development OHS − Occupational health and safety PFO − Privolzhsky Federal Okrug PE − Polyethylene PMC − Permissible maximum concentrations of pollutants PP − Polypropylene PSs IFC Performance Standards RT − Republic of Tatarstan SEP − Stakeholder Engagement Plan SPZ − Sanitary Protection Zone WWTP − Wastewater treatment plant 386570 | 17 November 2017 Mott MacDonald | NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure Contents 1 Introduction 1 1.1 General Information and Background 1 1.2 Project Parties 1 1.3 Financing of the Project 1 1.4 Purpose of this Document 2 1.5 Structure of the ESIA Report 2 2 Project Description 4 2.1 Overview 4 2.2 Project Location 4 2.3 Project Components 6 2.3.1 Main Production Sections 6 2.3.2 Advantages of Steam Cracking 7 2.3.3 Material Balance 8 2.3.4 EP-600 Feed Stock 8 2.3.5 EP-600 Products 10 2.3.6 Transportation 10 2.3.7 Project Local Wastewater Treatment Plant 11 2.3.8 Waste Management 11 3 Need for the Project and Analysis of Alternatives 12 3.1 Introduction 12 3.2 Project Need 12 3.2.1 Overview 12 3.2.2 Ethylene Uses and Markets 13 3.2.3 Global Ethylene Consumers and Producers 13 3.2.4 Future Ethylene Production in Russia 14 3.3 ‘No Project’ Alternative 15 3.3.1 Overview 15 3.3.2 Environmental Perspective 15 3.3.3 Economic Perspective 15 3.3.4 Social Perspective 16 3.3.5 Conclusions 16 3.4 Location for the Project 16 3.4.1 Overview 16 3.4.2 Availability of Feedstock 16 3.4.3 Existing Infrastructure 16 3.4.4 Environmental Perspective 17 3.4.5 Conclusion 17 386570 | 17 November 2017 Mott MacDonald | NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure 3.5 Assessment of Project Technology Selection 17 4 Legal and Institutional Framework 19 4.1 Introduction 19 4.2 National Requirements 19 4.2.1 Environment Protection 19 4.2.2 Best Available Techniques 20 4.3 Regional Legislation of the Republic of Tatarstan 21 4.4 National EIA Process 21 4.5 Labour Legislation 21 4.6 Cultural Heritage 22 4.7 Applicable International Requirements 22 4.7.1 Introduction 22 4.7.2 Euler Hermes and OECD Requirements 22 4.7.3 International Finance Corporation 22 4.7.4 Equator Principles 23 5 Assessment Scope and ESIA Process 24 5.1 Introduction 24 5.2 Scoping Phase 24 5.3 Scoping and ESIA site visits 24 5.4 Potential Impacts 25 5.4.1 Overview 25 5.4.2 Air Quality 25 5.4.3 Noise and Vibration 25 5.4.4 Hydrology 26 5.4.5 Hydrogeology / Land Contamination 26 5.4.6 Ecology 26 5.4.7 Waste 26 5.4.8 Social Impact Assessment 26 5.4.9 Traffic and Transport 27 5.4.10 Cultural Heritage 27 5.4.11 Landscape and Visual 27 5.4.12 Cumulative Effects 28 5.5 Impact Assessment Methodology 28 5.5.1 Introduction 28 5.5.2 Baseline 28 5.5.3 Spatial scope 28 5.5.4 Temporal scope 29 5.5.5 Zone of Influence 29 5.6 Assessment of Effects 29 4.6.1 Overview 29 5.6.1 Magnitude 29 5.6.2 Sensitivity of Recipients 30 386570 | 17 November 2017 Mott MacDonald | NKNK EP-600 Plant ESIA Volume II – Impact Assessment Draft for Lenders Disclosure 5.6.3 Impact Evaluation and Determination of Significance 30 5.6.4 Assessment of Cumulative Impacts 31 5.6.5 Proposals for Monitoring 31 6 Information Disclosure, Consultation and Participation 32 6.1 Overview 32 6.2 Principles of Consultation 32 6.3 Consultation Requirements 33 6.3.1 Overview 33 6.3.2 National Consultation Requirements 33 6.3.3 International Consultation Requirements 35 6.4 Stakeholder Identification 36 6.5 Project Consultation Activities and Outcomes 40 6.5.1 Overview 40 6.5.2 Local Community Representatives 40 6.5.3 Web Resources 40 6.5.4 Community Liaison Officer 40 6.5.5 ESIA Consultation and Disclosure 40 6.5.6 Consultation Planned throughout the Lifetime of the Project 44 6.6 Project Grievance Redress Mechanism 44 6.6.1 Overview 44 6.6.2 Confidentiality and Anonymity 44 6.6.3 Grievance Reporting and Resolution 44 7 Social Impact Assessment 47 7.1 Introduction 47 7.1.1 Overview 47 7.1.2 General Approach 47 7.1.3 Spatial Scope of Assessment 47 7.1.4 Temporal Scope of Assessment 51 7.1.5 Structure of the SIA Chapter 51 7.2 Relevant National Legislation, Regulations and Lenders’ Requirements 51 7.2.1 Overview 51 7.2.2 National Legislation and Regulations 52 7.2.3 International Requirements 54 7.3 Methodology and Assessment Criteria 56 7.3.1 Desk Study and Field Reconnaissance
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