Cambodian Transmission Limited

MIGA has been asked to provide a guarantee for a period of up to ten years to cover loans provided by Mizuho Bank Ltd. of Japan and other international lenders (to be determined) to Cambodian Transmission Limited (CTL). CTL, who’s ultimate parent company is HNG Capital Sdn. Bhd., is an operator and owner of an existing 110 km double circuit 230 kV transmission line between North Phnom Penh and Kampong Chan substations (which are also owned and operated by CTL) (the Project). The Project is a build, own, transfer project which is designed for 25 years of operation and sells power to the state-owned company Electricité du Cambodge (EDC) under a power transmission agreement. Since it commenced operations in 2013, the Project has been providing reliable electricity to the national grid.

The North Phnom Penh substation is located approximately 50 km northwest of Phnom Penh city and includes a small workers’ accommodation.  The second substation, located near Kampong Cham, is about 80 km northeast of Phnom Penh. Both sub-stations include storage areas for equipment. The transmission line passes three provinces:  Kampong Spue, Kandal, and Kampong Cham.  It has 279 transmission towers and a 30 meter right-of-way. From North Phnom Penh substation, the transmission line passes through a rural area (predominantly rice fields), then crosses the Tonle Sap River near Ponhea Lue Commune.  It then runs along the National Highway No 61 and continues to National Highway No 7 to Kampong Cham substation.

The Project is categorized as Category B according to MIGA’s Policy on Environment and Social Sustainability (2013). Key potential operational environmental and social (E&S) risks and impacts relate to hazardous materials management (including herbicides and pesticides), erosion, bird and bat collision, invasive species management, and worker and community health and safety. Impacts can be readily mitigated based on good international industry practice.

While all Performance Standards (PSs) are applicable to this investment, our current information indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

• PS1:  Assessment and Management of Environmental and Social Risks and Impacts
• PS2:  Labor and Working Conditions
• PS3:  Resource Efficiency and Pollution Prevention
• PS4:  Community Health, Safety and Security
• PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resources.

As this is an existing asset not undergoing expansion, PS5 Land Acquisition and Involuntary Resettlement is not applicable. Historical resettlement is covered under PS1. PS7 Indigenous Peoples is not applicable to the Project as there are no Indigenous Peoples, as defined under PS7, in the project area. PS8 Cultural Heritage is not applicable as there is no planned soil disturbance activities.

The following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project:

• General EHS Guidelines (2007)
• Guidelines for Electric Power Transmission and Distribution (2007).

The following documents were reviewed by MIGA:

• Independent Environmental and Social Due Diligence Report (confidential draft). Poyry, March 2019

• Findings of the Independent Environmental and Social Consultant site visit conducted December 11-14, 2018 (confidential). Poyry. December 2018
• CTL E&S Plans and Procedures (e.g., Health and Safety Manual Procedure, Grievance Mechanism, Security Management Plan, Emergency Response Procedure, Hazard Material Communication, etc.)
• CTL E&S Documentation (e.g., CTL Safety Committee meeting minutes, Incident Report form and procedures, near miss report, E&S monitoring reports, etc.)
• Summary of Compensation for GS6_GSKC and River Crossing Tower, and Tower Footing and Right of Way
• Initial Environmental and Social Impact Assessment (IESIA) for Power Transmission Line Project 230 kV from North Phnom Penh to Kampong Cham Province.  Green Consultancy Firm.  November 2010 (English version translation 2011).

An Independent Environmental and Social Consultant (IESC) was engaged by potential lenders to assist with the E&S due diligence to assess compliance of the Project against the PSs. MIGA, potential lenders, and the IESC participated in a due diligence visit in December 2018. The visit comprised of visiting the two substations, select transmission line footings locations, and workers’ accommodations. MIGA also met with CTL staff and managers responsible for E&S matters and community members near North Phnom Penh substation.

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Project, and identified gaps, if any, between these and MIGA’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period, are summarized in the paragraphs that follow and in the Environmental and Social Action Plan (ESAP) attached to this ESRS. Through the implementation of these measures, the Project is expected to be designed and operated in accordance with the Performance Standards.

Key environmental and social (E&S) issues associated with the Project business activities are summarized in the paragraphs that follow. 

PS1:  Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Policy:  CTL has established an Environmental, Health and Safety (EHS) Policy for the Project dated January 18, 2019 which details CTL’s commitment to EHS including management’s commitment, statutory and moral responsibilities, EHS information disclosure to staff and training requirements.  The EHS Policy specifically mentions that the directors of CTL are responsible for the implementation, maintenance and review of the EHS Policy and contains a commitment to continuous improvement.  The Policy is communicated to workers via the safety induction and is posted on display boards at the work areas.  As per the ESAP, the Policy will be updated to include CTL’s commitment to applicable laws and regulations.

Environmental and Social Assessment:  An initial environmental impact assessment (IEIA) was submitted in line with applicable Cambodian regulation, and an Environmental Protection Contract dated March 2011 was issued by the Ministry of Environment (MoE) which defined EHS aspects to be preserved and protected. In this document, the North Phnom Penh substation was called Udong substation The EHS protection measures were predominantly related to the construction phase.  Operational EHS risks have also been identified in the CTL Health and Safety Manual dated December 5, 2018 for the main office, transmission line, and two substations.  Operational risks and impacts include those associated with waste management, hazardous materials (including waste), and health and safety. CTL is currently preparing for certification audits for its EHS management system to ISO 9001 (quality management) and ISO 14001 (environmental management), with the goal to achieve certification by end of 2019.  CTL’s management system is supported by various plans and procedures outlining roles and responsibilities.

Management Program:  Operational EHS risks are managed through the mitigation and management measures specified in the CTL Safety Manual. Compliance with this Manual is demonstrated in the E&S Assessment Monitoring Report prepared every 6 months and submitted to the MoE.  In addition, the following procedures have been recently developed as part of the Project’s commitment to comply with the PSs and in preparation for ISO management certification:  Corporate Social Responsibility (CSR) Procedure (for stakeholder engagement), Grievance Mechanism Procedure for external stakeholders, Security Management Plan, Patrolling of Transmission Line, Health and Safety Manual, Personal Protective Equipment Procedure, and Health and Hygiene Procedure.  CTL will need to prepare a decommissioning plan before carrying out any decommissioning related activities.

Organizational Capacity and Training:  CTL has established Safety Committees at both substations which includes a fire brigade team, evacuation team, first aid / rescue team, and chemical spill team.  A Safety Committee has also been established at the CTL main office which includes the same functions, except for the chemical spill team.  The mandate of the Safety Committee includes functions for safe working at CTL office and substations, organizing safety campaigns and evaluating EHS performance; this mandate will be included in the Health and Safety Manual (as per the ESAP).  In addition to the General Manager as the Safety Committee Chair, CTL has a designated a safety officer who has strong support from senior management and specialists assigned to assist with the ISO certification.  CTL supports training of its staff through inductions and specific trainings based on work related tasks.  A CTL EHS Training Plan for 2019 has been developed. 

Emergency Preparedness and Response:  An Emergency Action / Response Plan has been prepared for the CTL office and substations. This Plan provides definitions and types of emergencies, communication procedures, evacuation procedure, evacuation route and muster point, emergency telephone numbers, details of emergency back-up system, emergency drills, response to fires and response to heavy rains/flood.  The CTL Safety Training report for April 2018 provides details of emergency preparedness & response (e.g., evacuation, first aid, fire brigade & chemical) awareness training conducted for the main office and the substations. In addition, an Emergency Response Procedure and Emergency Drill Plan was developed in 2018 for the substations and transmission line. The content of the Emergency Response Procedure is appropriate. An emergency drill matrix form has been provided to show the timing of future emergency drills (day shift and night shift).  CTL recently communicated to the neighboring operator co-located in the same fenced area at Kampong Cham substation to coordinate responses should an emergency occur at both facilities and will reflect this cooperation in its Emergency Response Procedures (see ESAP).  CTL uses nitrogen for fire suppression at the transformers and carbon dioxide at the low voltage step down at the substations.

Monitoring and Review:  The CTL’s Safety Manual outlines that evaluation of EHS at the CTL office and substations is undertaken by the Safety Committee at least once per month. CTL prepares monthly internal safety reports which detail all safety inspections, safe man hours, near miss reporting, safety training, safety tests, safety meetings and environmental issues.  CTL’s Safety Committee prepares operational E&S Assessment Monitoring Reports every 6 months for the MoE which also monitors EHS performance. The content of these reports will be augmented to include topics related to community health and safety matters (as per ESAP).  CTL also reports to its ultimate parent company, HNG Capital Sdn. Bhd., on a monthly basis on EHS matters.  CTL will submit periodic monitoring reports to MIGA on the Project’s E&S compliance with PSs.

Stakeholder Engagement:  Stakeholder engagement was undertaken as part of the IEIA.  Ongoing engagement is managed as part of the Project’s corporate social responsibility procedure. The Project has continued with community engagement throughout operations primarily when patrolmen regularly verify the transmission line’s integrity and safety. CTL has updated its procedure on patrolling of the transmission lines and rights-of-way to reflect that the patrol also serves as a focal point to receive grievances from villages as they interact with communities on a frequent basis as part of their patrol duties. Any illegal activities being carried out within the right-of-way (including encroachment) are reported to the CTL engineer and general manager, who then raises the matter with EDC to work to resolution.

CTL has remained actively supporting the nearest communities through its corporate social responsibility (CSR) initiatives. CSR activities have included donating computers to a local high school in Kampong Speu Province and annual donations to the Red Cross. As per its procedure on CSR, CTL is committed to meet with the chief of village or commune, village officials and stakeholder twice a year to discuss key issues, concerns raised, and CSR requests.  Should stakeholders have concerns, the company’s external grievance mechanism can be used to raise an issue.  As presented in the ESAP, CTL is committed to strengthen its stakeholder engagement by carrying out a stakeholder mapping exercise to complement its existing CSR procedure for community engagement and to review and update such exercise on an annual basis.  CTL has communicated its grievance procedure to its external stakeholders and will ensure consistency of the grievance procedures within its procedures (see ESAP).

External communications and grievance mechanism: CTL has an ongoing dialogue with nearby communities as part of its patrol program for the transmission lines and to date, there are no unresolved grievances.  The external grievance mechanism was communicated, posted on sign boards at the Project site, and explained to its neighbouring communities to raise awareness and offer transparency how stakeholders can raise their grievances.  Various channels include telephone and face to face communications, as presented in CTL’s grievance mechanism procedure dated December 18, 2018. 

Identification of Other Risks and Impacts – Historical Resettlement: Prior to starting construction in September 2010, CTL (through EDC) acquired the land for the substations, transmission tower footings, and rights-of-way. A land acquisition team was appointed in February 2009 which comprised of representatives from EDC and CTL to carry out resettlement to meet Cambodian and Asian Development Bank requirements. With the assistance of the local authorities, land owners were identified and negotiations on compensation price were carried out to reach agreed selling-buying price, based on replacement value. Fifteen families were subject to physical resettlement.  CTL confirmed that the families have rebuilt homes, some of which are close to the location of their original property. It is understood that 250 families were compensated for loss of agricultural land within the rights-of-way and underneath the transmission towers. CTL has provided land purchase summaries to show the persons affected and the agreed compensation provided. Land within the rights-of-way can still be used for low growing agricultural crops. As part of the resettlement process in 2009-2010, CTL engaged with affected communities, as evidenced in a summary report.

PS2:  Labor and Working Conditions

Working Conditions and Management of Worker Relationship

The Project employs 53 direct employees and approximately 64 contractor employees. CTL has developed Internal Rules and Regulations which are consistent with national law and will be reviewed to ensure requirements of PS 2 are incorporated (see ESAP). These Rules and Regulations include details on working hours and holidays, wages, bonus payments and other benefits. The Rules and Regulations also include equal opportunity statements and that males and females can apply for all jobs. Although there are no unions, CTL workers are able to form workers associations and can collectively bargain with management. CTL provides a small workers’ accommodation for workers at the North Phnom Pen substation as the commute back to Phnom Penh is not doable on a daily basis. Currently, four staff stay in the workers’ accommodations which are located next to the substation. Workers’ families staying at these accommodations have been recently trained on emergency response.  CTL is committed to improve hygiene standards at the workers’ accommodations (see ESAP) in line with the IFC/EBRD Guidance Note on Workers’ Accommodations.

Protecting the Workforce:  Workers must be a minimum of eighteen years of age.  CTL will strengthen its Human Resources procedures to explicitly clarify it will not employ forced labor and that it will not tolerate sexual harassment (as per ESAP).  CTL will strengthen and formalize its grievance mechanism (as per ESAP).

Occupational Health and Safety (OHS): Key OHS risks related to the Project primarily comprise of working with live power lines, working at heights, grass fires, electric and magnetic fields and exposure to chemicals. CTL has established several plans and procedures related to OHS, including a Health and Hygiene Procedure to control health hazards and to prevent sickness or illness while working; Health and Safety (H&S) Manual Procedure to provide H&S guidelines to employees, contractors, visitors, and suppliers who are visiting and working in CTL premises; Safe Work Procedure to guide how to work safely; Emergency Response; and Hazard Identification Risk Assessment & Control for operations and maintenance of substations and transmission lines.  CTL is maintaining a right of way of 30 m for the transmission line to minimize grass fire risk. As per the ESAP, CTL is committed to revise its Health and Safety Manual to ensure key OHS risks are reflected. CTL provides workers with appropriate personal protective equipment and training. Accident / incident reporting procedures have been implemented as part of the Project’s ESMS.  CTL also encourages the reporting of near misses.

CTL follows a permit-to-work system when carrying out maintenance tasks, and all routine and non-routine activity should have an approved risk assessment This system requires a method statement, job hazard analysis and isolation checklist to be developed. The work schedule and list of workers also need to be provided for review and approval by the General Manager. Safety inductions are carried out for contractors coming onsite to perform work. Supervision is provided by the CTL Senior Engineer during works.

As described under PS 1, H&S committees have been established.  Their roles and responsibilities are defined in the CTL Health and Safety Manual and will be expanded as per ESAP. In 2018, CTL had zero reported lost time incidents and zero environmental incidents.

PS3:  Resource Efficiency and Pollution Prevention

Resource Efficiency:  The Project has insignificant consumption volumes of resources including energy and water. CTL does not have specific resource efficiency targets although it is promoting energy efficiency initiatives within its premises.

Pollution Prevention: Impacts during operations are limited. Soil erosion is monitored at the transmission tower foundations as part of regular patrols.  Fire hazards such as cut vegetation is removed from the safety zone and a right of way of 30 m is maintained. Vegetation maintenance including managing invasive plant species within the rights-of-way are carried out by appointed contractors on a yearly basis.  Most work is carried out by hand and herbicides are not used.

CTL carries out regular maintenance of back-up batteries at the substations and disposal of old batteries is by licensed waste disposal companies.  Used oil from the transformers is disposed by licensed waste disposal companies.  Oil water separator systems are used at the substations.  Sulfur hexafluoride (SF6) is being used as a gas insulator at the substations and is sealed and enclosed in the electrical equipment.   During maintenance, SF6 is captured in empty cylinder containers.

Hazardous materials such as insulating oils and fuels are stored in designated storage areas which require improvements such as provision of secondary containment and availability of spill kits. CTL is committed to improving storage of hazardous materials at the substations (as per ESAP). CTL does not use polychlorinated biphenyls in its operations. Substation sites are covered with gravel.

Minimal hazardous waste is associated with the operation of the Project. Currently CTL is storing the small quantities of hazardous waste onsite and when there is sufficient volume, will contact one of the licensed contractors identified by the Ministry of Environment in Cambodia.  CTL has agreed to develop a waste management plan which identifies various waste streams, defines hazardous waste, includes disposal/recycling options for various waste streams, clarifies chain of custody requirements for transportation and disposal, etc. (as per ESAP).  Equipment such as transformers and insulators still have significant lifespan left; however, when the time comes for disposal CTL will follow its internal procedures for disposal. 

PS4:  Community Health, Safety and Security

Community Health and Safety:

The Project is located primarily in agricultural lands (rice fields). CTL confirmed that the Project complied with the transmission grid code for Cambodia and the International Electrotechnical Committee for electromagnetic pulse. The Project maintains a right-of-way of 30 m for the transmission line and a safety perimeter of 5 m away from the land boundaries belonging to the substations, which CTL has confirmed is in compliance for safety standards for nearby communities (including for EMF).  Barbed wire is installed on transmission towers to discourage uncontrolled access.  Danger signs for electrocution are posted on transmission towers, and information boards in the local language are erected at each tower explaining the dangers to community members. CTL holds village briefings to explain safety signage and risks related to transmission towers. CTL has installed lightning protection on every tower in order to protect people who have rice fields or plantations under or near the rights-of-way. CTL is committed to update its Health and Safety Manual to reflect community health and safety measures concerned with electrocution (as per ESAP).

During design and construction, the Project raised the height of one of the transmission towers to 78.5 m and increased the distance between the two towers to facilitate crossing the Tonle Sap River in a single span. Based on a 10 year cycle, CTL elevated the height of the foundations for the two transmission towers closest to the Tonle Sap River about 1 m above the high-water mark during flood events to take into account potential changes in frequency and intensity of precipitation events.

All transmission towers and the rights-of-way are inspected during routine patrols for a variety of conditions, including integrity, deformation, degradation, wire breaks, soil erosion, vegetation height, and illegal activities (including encroachment within the rights-of-way). Patrolmen regularly interact with community members to explain activities allowed under the transmission lines and remind communities of the hazards of live electricity. Cropping is allowed within the right-of-way as long as vegetation is under 3 m tall. Vegetation above 3 m in height is manually cleared annually during operations.  After a natural hazard event, system upsets or accidents, special patrols are carried out to assess the condition of the Project.

Security Personnel:  The substations are fenced and monitored through closed circuit cameras. Third party security guards are stationed at the substations to control access and CTL has confirmed that hours of work for security guards is in compliance with host country regulations. A security management plan (December 2018) has been developed for the Project and includes commitments to protect CTL employees, contractors, visitors, suppliers, facilities, property and other assets from security threats. CTL will strengthen the plan to reflect training requirements for third party security providers (as per ESAP). CTL’s grievance mechanism will be revised to address security-related concerns (as per ESAP).

PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resources

A bird and bat baseline assessment was not undertaken in the IEIA to identify any significant species of birds and bats which may be impacted by the Project and the need for mitigation or management measures. Although the Project is not located in or near ecologically sensitive areas and CTL has not identified concerns in the first five years of operation, the Project has committed to prepare a bird and bat evaluation risk report prior to MIGA taking the Project to Board. The report will consolidate information based on CTL observations of bird nesting, bird carcasses, and bird and bat observations since the transmission line and sub stations became operational five years ago. The report will also provide context for the location of the project in proximity to environmentally protected areas, important bird areas, etc. and will include information describing design mitigation features.  As per the ESAP, CTL has committed to carry out a desk-based review of bird and bat sensitivity in the Project area.  Based on the findings of the review, related procedures and plans will be reviewed, and mitigation and monitoring measures will be developed as necessary.

The main law regarding environmental impact assessment in Cambodia is the 1996 Law on Environmental Protection and Natural Resources Management (No: NS/RKM/1296/36).  The Ministry of Environment (MoE) is the designated authority concerning EIAs in Cambodia.  In 1999, the Sub-Decree on Environmental Impact Assessment Process was passed which supports the law. It sets out institutional responsibilities, impact assessment requirements and the procedures for undertaking environmental assessment process. The annex to the sub-decree lists all projects (public or private) for which environmental assessment is required (i.e., EIA or initial environmental and social impact assessment, IESIA). Public consultation is required as part of the EIA / IEIA process.

According to Cambodian EIA requirements, the Project did not require an EIA; however, CTL prepared an IEIA and the IEIA was approved by the MoE on March 17, 2011. The IEIA process included community engagement with various government and community representatives, including district governor, deputy district, district environmental office, district agricultural office, district land office, Sangkat forest administration, district industry mine and energy office, chief of commune and assistant, chief of village, and families affected by the right-of-way and transmission tower locations. The IEIA reports that generally people had a positive attitude toward the Project as they saw the Project as an opportunity to improve the living standard for people (provision of reliable and cheaper electricity than what was currently available) and that construction impacts would only be temporary. Affected persons provided feedback that compensation should be agreed and paid at a reasonable market price.

MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail: cao-compliance@ifc.org

The following documentation is available electronically as PDF attachment to this ESRS at www.miga.org:

• Initial Environmental and Social Impact Assessment (IESIA) for Power Transmission Line Project 230 kV from North Phnom Penh to Kampong Cham Province.  Green Consultancy Firm.  November 2010 (English translation version 2011).
• Final

The above report is also available for viewing at the following locations:

• Mr. Gan Boon Hean, CTL Director and Mr. Felimonito Cuevas Lirasan, CTL Deputy General Manager
  • CTL Office contact number: T +855 23 221703, F +855 23 221783

CTL Office address: No 113, Corner of Norodom Boulevard, Sangkat Chaktomuk, Khan Daun Penh, Phnom Penh, Kingdom of Cambodia.