REPORT NO 70016996-001 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT - GAP ANALYSIS AND AUDIT GOLDMAN SACHS GAS STORAGE PROJECT, UKRAINE MARCH 2016 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT - GAP ANALYSIS AND AUDIT GOLDMAN SACHS GAS STORAGE PROJECT, UKRAINE Draft Version 5 Project no: 70016996-001 Date: March 2016 WSP | Parsons Brinckerhoff The Victoria, 150-182 The Quays Salford Quays, Greater Manchester, M50 3SP Tel: +44 (0)161 886 2400 Fax: +44 (0)161 886 2401 www.wsp-pb.co.uk QUALITY MANAGEMENT ISSUE/REVISION VERSION 1 VERSION 2 VERSION 3 VERSION 4 VERSION 5 Remarks Draft for Review Draft for Review Final Draft Final Final Date February 2016 March 2016 March 2016 March 2016 March 2016 Prepared by Susan Wood Susan Wood Susan Wood Susan Wood Susan Wood Rukhsana Faiz Rukhsana Faiz Rukhsana Faiz Rukhsana Faiz Rukhsana Faiz Sejal Dixon Sejal Dixon Sejal Dixon Sejal Dixon Sejal Dixon Sarah Trevarthen Sarah Trevarthen Sarah Trevarthen Sarah Trevarthen Sarah Trevarthen Colin Chambers Colin Chambers Colin Chambers Colin Chambers Colin Chambers Signature Checked by Neal Barker Neal Barker Neal Barker Neal Barker Neal Barker Signature Authorised by Neal Barker Neal Barker Neal Barker Neal Barker Neal Barker Signature Project number 70016996 70016996 70016996 70016996 70016996 Report number Draft Version 1 Draft Version 2 Version 3 Version 4 Version 5 File reference E09\projects\2015 E09\projects\2015 E09\projects\2015 E09\projects\2015 E09\projects\2015 ii PRODUCTION TEAM CLIENT Gary Hayes Vice President, Corporate Environmental Management Goldman Sachs Yoric Perrin Executive Director Goldman Sachs WSP | PB GLOBAL INC. (WSP | PB) Project Director Neal Barker Project Manager Susan Wood ESG Auditor ESG Auditor Sarah Trevarthen Occupational and Process Colin Chambers Safety Auditor Occupational and Process Sejal Dixon Safety Auditor Occupational and Process Rukhsana Faiz Safety Auditor Environmental and Social Impact Assessment – Gap Analysis and Audit WSP | Parsons Brinckerhofff March 2016 Project No 70016996, Goldman Sachs Gas Storage, Ukraine iii TABLE OF CONTENTS ABBREVIATIONS .......................................................................................1 1 EXECUTIVE SUMMARY ..............................................................3 1.1 BACKGROUND .............................................................................................. 3 1.2 PROPOSED INVESTMENT ............................................................................ 3 1.3 AUDIT SUMMARY .......................................................................................... 3 2 INTRODUCTION AND PROJECT APPROACH ...........................7 2.1 PROJECT BACKGROUND............................................................................. 7 2.2 SCOPE OF WORK ......................................................................................... 7 2.3 OBJECTIVES ................................................................................................. 7 2.4 AUDIT TEAM AND AUDITEE INVOLVEMENT ............................................... 9 2.5 SITES VISITED AND STAKEHOLDER MEETINGS ........................................ 9 2.6 LIMITATIONS ............................................................................................... 10 2.7 REPORTS AND OTHER INFORMATION CONSULTED ............................... 10 3 PROPOSED INVESTMENT AND REGULATORY REQUIREMENTS .......................................................................12 3.1 COMPANY OVERVIEW ................................................................................ 12 3.2 GAS STORAGE FACILITY OPERATIONS ................................................... 13 3.3 GAS STORAGE / TRANSMISSION ASSET DETAILS .................................. 15 OPARSKE FACILITY .................................................................................... 15 UHERSKE FACILITY .................................................................................... 15 DASHAVSKE FACILITY ................................................................................ 15 BOGORODCHANY FACILITY ....................................................................... 16 BILCHE-VOLYTSKO-UHERSKE FACILITY ................................................... 16 3.4 DETAILED INVESTMENT PROGRAMME OVERVIEW ................................. 16 INVESTMENT PLANS................................................................................... 16 SITE IDENTIFICATION PROCESSES........................................................... 16 3.5 REGULATORY REQUIREMENTS ................................................................ 17 NATIONAL PLANNING REGULATIONS ....................................................... 17 Environmental and Social Impact Assessment – Gap Analysis and Audit WSP | Parsons Brinckerhofff March 2016 Project No 70016996, Goldman Sachs Gas Storage, Ukraine iv UKRAINIAN REQUIREMENTS FOR SANITARY PROTECTION ZONES (SPAS) .......................................................................................................... 19 OTHER NATIONAL REGULATIONS ............................................................. 19 3.6 OPIC AND IFC REQUIREMENTS ................................................................. 20 OPIC ENVIRONMENTAL AND SOCIAL POLICY STATEMENT .................... 20 WORLD BANK GROUP EHSS STANDARDS................................................ 20 4 PROJECT SETTING ...................................................................23 4.1 SITE LOCATIONS ........................................................................................ 23 4.2 LAND OWNERSHIP ..................................................................................... 26 LAND ACQUISITION AND ASSOCIATED RESETTLEMENT ........................ 26 4.3 SITE GROUND CONDITIONS....................................................................... 26 HISTORICAL LAND USE .............................................................................. 26 HYDROGEOLOGY AND GEOCHEMISTRY .................................................. 26 4.4 NATURAL ENVIRONMENT .......................................................................... 27 4.5 BUILT ENVIRONMENT AND CULTURAL HERITAGE ................................. 28 BUILT ENVIRONMENT ................................................................................. 28 CULTURAL HERITAGE ................................................................................ 28 5 ENVIRONMENTAL, HEALTH, SAFETY AND SOCIAL MANAGEMENT ARRANGEMENTS ..........................................29 5.1 EHSS RESPONSIBILITIES ........................................................................... 29 NAFTOGAZ .................................................................................................. 29 UKRTRANSGAZ ........................................................................................... 30 REGIONAL ................................................................................................... 31 5.2 EHSS MANAGEMENT SYSTEMS ................................................................ 31 EHSS MANAGEMENT SYSTEMS OVERVIEW ............................................. 31 EHSS INSPECTION AND AUDIT PROGRAMME .......................................... 35 5.3 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT ......................... 36 5.4 ACQUISITIONS / DIVESTMENTS ................................................................. 36 6 SITE ENVIRONMENTAL PERFORMANCE ...............................37 6.1 PERMIT COMPLIANCE OVERVIEW ............................................................ 37 6.2 APPLICABLE REGULATORY REQUIREMENTS AND STANDARDS .......... 39 6.3 ENVIRONMENTAL ISSUES ......................................................................... 49 RAW MATERIALS......................................................................................... 49 Environmental and Social Impact Assessment – Gap Analysis and Audit WSP | Parsons Brinckerhofff March 2016 Project No 70016996, Goldman Sachs Gas Storage, Ukraine v UTILITIES & GREENHOUSE GAS EMISSIONS ............................................ 49 AIR EMISSIONS ........................................................................................... 50 WATER USE AND WASTEWATER............................................................... 53 WASTE GENERATION AND DISPOSAL ...................................................... 57 HAZARDOUS MATERIALS MANAGEMENT ................................................. 58 ENVIRONMENTAL NOISE EMISSIONS AND CONTROL ............................. 61 DELETERIOUS MATERIALS MANAGEMENT .............................................. 61 7 SITE HEALTH AND SAFETY PERFORMANCE ........................62 7.1 ACCIDENT REPORTING AND INVESTIGATION ......................................... 62 SIGNIFICANT INCIDENTS ............................................................................ 62 7.2 HEALTH AND SAFETY TRAINING .............................................................. 63 COMPANY STAFF ........................................................................................ 63 7.3 AUDITS, PROGRAMMES AND INSPECTIONS ............................................ 65 7.4 HEALTH AND SAFETY RISK MANAGEMENT ............................................. 67 PERSONAL PROTECTIVE EQUIPMENT (PPE) ........................................... 67 WORKING AT HEIGHT ................................................................................. 67 CONFINED SPACES AND CONFINED SPACE ENTRY ............................... 67 PRESSURE SYSTEMS ................................................................................