E465 REPUBLIC OF GUINEA-BISSAU PRIVATE SECTOR REHABILITATION AND RESTRUCTURING PROJECT (PSRRP) ENVIRONMENTAL PRE-AUDITS OF PUBLIC ENTERPRISES A~~~ ,- -a. .: Nfarch 200] FILE CurY REPUBLIC OF GUINEA BISSAU PRIVATE SECTOR REHABILITATION AND RESTRUCTURING PROJECT (PSRRP) ENVIRONMENTAL PRE-AUDITS OF PUBLIC ENTERPRISES (SELECTION OF FACILITIES FOR AUDITS) SUBMITTED TO: THE MINISTRY OF ECONOMICS AND FINANCE THE PRIVATE SECTOR DIVESTITURE PROJECT PROJECT COORDINATOR OFFICE BISSAU, GUINEA BISSAU AND THE WORLD BANK PRIVATE SECTOR DEVELOPMENT DEPARTMENT 1818 H STREET, N. W. WASHINGTON, D.C. 20433, USA SUBMITTED BY: MARCH 2001 2 TABLE OF CONTENT LIST OF ACRONYMS: ............................5 ECT E SMARY: ........................................................ 6 I. PREAMHLE........................................................ 6 II. ENVPRONMENTAL SETT N G:........................................................ 6 II. SELECTION OF FACILITIES FOR ENVRONMENTAL AUDITS:.7................................................................................... 6 IV. RATING COMPONENTS:............................................ 7 V. WEIGNG COMPONENTS: ............................................ 8 VI. RESUTS ........................................... 8 VII. SU S MRY OF PRE.AUDIT FINDINGS:..................................... VIII. DECOMMSSIONING PLANS .................................... 11 IX. STATUTORY FRAmEWORK: ..................................... II X. COST ESTMATES FOR CONDUCTING AUDITS: ..................................... 12 XI. RECOmENDATiON: ..................................... 12 I. INTRODUCTION: .................................... 14 1.1 BACKGROUND: .....................................14 1.2 LIST NGS:..................................... 14 1.3 TH E NAT R AND SCOPE OF SUPPORT: ..................................... 15 1.4 MEETNGS AND ACTIVITiES ....................................................... ....... I .. .... 15 H1. AUDIT OBJECTIVES: ............................16 1IT. ENVRONMENTAL SETTING: ......................................................16 3.1 INITIALRCON IT.ONS: ................................... 16 3.2 OVERVIEW OF THE ECONOMIC ENVIRONMENT:. ......... .............................................. 17 3.3 ENVIRONMENTAL CONCERNS: ....................................................... 18 IV. RANKING .8....................................................... 4.1 THE ENVIRONMENTAL PRE-AUDIT EVALUATION CRITERIA:.9 .................................................. ... 19 4.1.1 Rating Components: ......................................................... 19 41.2 WeghtingComponents: .......................................................... 9 V. RESULTS OF RANKING: ............................20 5.1 ENTERPRISES REQUIRING FULL (OR COMPREHENSIVE) AUDITS: .................................................... .. 20 5.2 ENTERPRISES REQUIRING PARTIAL AUDITS: ....................................................... 22 5.3 ENTERPRISES REQUIRING No AUDITS:.23 ........ ..._.................................. 23 5.4 ENTERPRISES IN SPECIAL CATEGORY: ....................................................... 24 5.5 INSTUTONS REQUIRING MOST STRENGTHENING: ....................................................... 24 VI. SECTOR A.NALYSIS: ............................25 6.1 ELECTRICITY AND WATER UTILITIES: ....................................................... 25 6.2 TELECOMMUNICATIoN UTILITY: ....................................................... 26 6.3 PORTS AND FISHERIES: ............................27 6.4 TRANSPORTATION INDUSTRY: ....................................................... 28 6.5 LIGHT MANUFACTURING INDUSTRY: ....................................................... 29 6.6 HOSPITALITY INDUSTRY: .............................................. .................................................. 30 6.7 OTHER SECTORS: ....................................... ..... 30 VII DESCRIPTION OF KEY PRE-AUDIT FINDINGS ............................................ 31 7.1I EAGB FACILITIES:.......................3 1 7.1.1 ELECTRICITY.1 .................................... 31 7.1.2 WE TER SUPPLY: .................................... 33 7.2 G UINE-TE LECOMMUNICATIONS ...................................... 36 7.3 PORTS AND FISHERIES ENTERPRISES: .................................... 39 7.3. IAPGB - POR.TS AUTHORY... ................................... 39 7.3.3 GUINA VE.............. _ ... , . ,. 40 7.3.3 GUIALP ........ ,.,., ,,,, ,, ,,,, ,.,.,:.,,.,,.,,,,.,, ,,,.,. 41 VIA DECOMMISSIONING PLANS: .................................................................. 42 IXL STATUTORY FRAMEWORK: ................................................................ 42 9.1 LEGAL FRAmEwoRK ON LIABILITIES: ................................................................ 43 9. 2 MONITORNG PROTOCOLS:................................................................ 44 X. TRAINING AND CAPACITY BUILDING: ................................................................ 44 X. INTER-AGENCY RELATIONSHIPS: ................................................................. 45 XII. COST ESTIMATES FOR CONDUCTING AUDIT ................................................................. 46 A CTION ITEMS: ................................................................ 46 12.1 COST FOR EAGB UTILIT MES: .......................................................................................................................4.............. . 46 12.2 COST FOR GUINE-TELECOMM: ...............46 12.3 COST FOR PORTS AND FISHERIES ENTERPRISES: .............................................. 46 12. 4 HOTELS: ............................................... 47 12.5 LIGHT MANUFACTURING INDUSTRIES: .............................................. 47 12.6 COST FOR HIRING ENVIRONMENTAL ADVISOR .............................................. 47 12.7 COST FOR DECOMMISSIONING PLANS: .............................................. 47 12.8 COST FOR TRAINING AND CAPACITY BUILDING: .............................................. 48 12.9 CLARIFICATION OF COST ESTIMATES: .............................................. 48 12.10 SUMMARYOFCOSTS: ....................................................................................4..........................9.. ................. ....... 49 XIII. A ROAD MAP FOR ENVIRONMENTAL MANAGEMENT OF DIVESTITURE PROCESSES OF PUBLIC ENTERPRISES: ............................................................................................................... .................................................................................................................... eo 13.1 ENVIRONMENTAL GUIDELS AND REQuREENT: ................................................................................ 50 13.2 PROPOSED ROADMA: ................................ 50 3. CONSULTATION WITH STAKEHOLDER ............5..................................................... XV. RECOMMENDATION: ................................................................. 51 XVI. LIST OF PUBLICATIONS USED FOR THE REPORT: ................................................................. 55 XVII. PERSONS CONTACTED: ................................................................ . 57 ANNEE A: ................................ 60 A. I GUIDELINES FOR ENVIRONMENTAL AUDITING: ...........60......................................................................................... 60 A .]..I B ackground: ........................................................... .................................................................. ......................................................................... 60 A.1.2 COMPREHENSIVE (FULL) AUDITS AND PARTIAL AUDITS: .60 APPENDIX.63 TERMS OF REFERENCE.63 A CKNOWLEDGEMENT.66 4 LIST OF ACRONYMS: AIDS Acquired Immunodeficiency Syndrome AIF Audit Index Factors AST Aboveground Storage Tank BOD Biological Oxygen Demand BTEX Benzene, Tulane, Ethylene and Xylene CAS Country Assistance Strategy COD Carbon Oxidation Demand C02 Carbon Dioxide CO Carbon Monoxide DP Decommissioning Plan EAT Environmental Audit Team EDP Enterprise Development Program EET Environmental Evaluation Team EIA/S Environmental Impact Assessment/Statement EMP/S Environmental Management Plan/System GTC Geomatric Technology Corporation HIV Human Immunodeficiency Virus IDA International Development Agency IFR Infrastructure Framework Report ISO International Standards Organization MEF The Ministry of Economics and Finance MP Monitoring Protocol MINRE The Ministry of Natural Resources and Environment NGO Non Governmental Organization Nox Nitrous Oxide; Nitrogen Dioxide ODC Other Direct Costs O & M Operation and Maintenance PCD Project Concept Document PE Public Enterprise PPD/E Personal Protective Device/Equipment PPM Parts Per Million PPSCP Privatization and Private Sector Competitiveness Project PRCBP Privatization and Regulatory Capacity Building Project (Cape Verde) PUSRP Privatization and Utility Sector Reform Project (Uganda) S02 Sulfur Dioxide TOR Terms of Reference TTL Task Team Leader UNIDO United Nations Industrial Development Agency USAID United States Agency for International Development USEPA United States Environmental Protection Agency UST Underground Storage Tank VOC Volatile Organic Compounds WB The World Bank WHO The World Health Organization 5 EXECUTIVE SUMMARY: L. Preamble 1. Seventeen (17) Public Enterprises (PEs) are being privatized under the Guinea-Bissau Private Sector Rehabilitation and Restructuring Project (PSRRP) by the Government of Guinea-Bissau (GGB) and financed by the International Development Agency (IDA) of The World Bank. The enterprises are: EAGB (Electricity and Water), Guine-Telecomm, Guinave, Guialp, Complexo de Pesca, Complexo de Bolola, APGB, INACEP, Estrella de Mar, ENAG, BIGB, Hotel "24 Setembro", Hotel Bissau, Transter, Guimetal, Ceramica de Bafata, and SAGB de Bafata. 2. The Office of Private Sector Divestiture (PDSP, also known as the Privatization Unit) at the Ministry of Economics and Finance (MEF), formerly known as the Ministry of Economics and Regional Development (MEDR), is responsible for the privatization and commercialization processes of the PEs. As part of the divestiture processes, the environmental issues at the enterprises are being addressed during the project preparation by including environmental audits to analyze existing conditions at and around specific sites and facilities of the enterprises. 3. The assignment was carried out in two phases: phase I involved review of all existing documentation and historical information, as well as, performing visual inspection of selected sites and facilities; and phase II comprised assessment of risks, prioritization of pollution concerns, and ranking of sites according to the need for auditing at divestiture. Hence, this report is the result of environmental pre- audits carried out to rank and prioritize the PEs with respect to those requiring comprehensive (full) audit, partial audit and no audit. The report has been prepared for the Privatization Unit (Dr. Issufo Sanha, Program Coordinator) and the World Bank, Private Sector Development Department (Iradj Alikhani, the Task Team Leader). The pre-audit assessment was conducted by Geomatric Technology Corporation (Geomatric) with an Environmental Audit Team (EAT) comprised Dr. Kobina Atobrah, president and Boukari Tare, vice-president. 4. The enterprises for the pre-audit assessment were from the following sectors: power and water utilities; ports and fisheries; telecommunications; transportation (airports and public transport); and light industry. The pre-audit was carried out to develop a prioritized list of concerns related to past and on- going activities in the privatization candidates; and a review of the capacity of the PDSP, as well as the Ministry of Natural Resources and Environment (MNRE) and the Port Authority (APGB) to monitor and enforce existing regulations as well as the capacity to execute remediation plans. 11. Environmental Setting: 5. The major environmental issues of concern in Guinea-Bissau include soil degradation, overgrazing and over-fishing. There are also brush fires and hot, dry, dusty Harmattan haze during the dry season. Mines explosives were located throughout Bissau during the war that occurred in 1999, causing dangerous threat to life and property. Furthermore, constraints in the generation, transmission and distribution of electricity to the national grid from the thermal (diesel) plant are causing disruptions to the national economy. The national environmental issues and concerns can be exacerbated through the privatization of public enterprises and the accelerated industrialization of Guinea-Bissau. Some of the immediate problems could be: the health impacts of pollution derived from inadequate water supply and shortage of electricity supply; air and 6 noise pollution; poor sanitation, drainage and solid waste services and management; poor industrial hygiene; and poor industrial waste management. 6. In general, there was very poor management of municipal wastes with numerous point- and non-point sources of pollution in Bissau. Raw sewerage from individual septic systems seeped into the sea. There were relatively low coverage and access to basic services such as water supply and sanitation, drainage, solid waste collection and disposal. Hence, the health and safety issues, including medical monitoring and providing appropriate industrial hygiene for workers, would be essential in minimizing the negative effects deriving from the environmental concerns affecting the country, including the prevention of HIV/AIDS exposure to the larger population. Ill. Selection of Facilities for Environmental Audits: 7. Rankings of the enterprises were undertaken based on the degree of risk to the environment emanating from the facilities and sites. The risk characterization was a process of estimating the probable incidence of adverse impacts to potential receptors under various exposure conditions, including an elaboration of uncertainties associated with such estimates. The ranking process applied in the pre-audit assessment involved the qualitative estimation of the potential risks and/or hazards due to activities of the enterprises. 8. The PEs were assigned scores on the basis of Audit Index Factors (AIF) which have been determined for the sites. The AIF was the degree of pollution potential for an enterprise by which assessment for full audits could be determined. The Audit factors were incorporated into a relative ranking scheme that used a combination of weights and ratings to produce a numerical value called Audit Index. To obtain the number from each Audit factor that determined the index for the pollution potential, the weight was multiplied by the rating. The total of the numbers for individual Audit factors gave the Audit Index. Evaluation of the Audit Index with respect to the PEs provided the relative significance of each site with respect to pollution potential. The cumulative scores for each PE were determined, and the ones with the highest score assigned the most likely enterprise to require a full audit to be undertaken. The ranking procedure is similar to the scoring process of the DRASTIC Index (Aller and Others, 1987; Atobrah and Others, 1989; Atobrah, 1990; Asante-Duah, 1993; and Asante-Duah and Others, 1996). The Audit Index gives a measure of whether a site is located in a generally sensitive or vulnerable area and has a significant potential to pollute the environment. IV. Rating Components: 9. The criteria considered to have little impact on the environment were ranked by assigning the lowest rating of one (1), and the criteria with significant impact on the environment were assigned the highest rating of ten (10). The rating components for evaluating and characterizing the audit potential of a site were as follows: * Type of Enterprise (i.e. activities at facilities); * Air Emissions (i.e. impact on air quality); * Wastewater (i.e. impact on surface water and groundwater receptors); * Solid Waste (i.e. impact on the environment); * Noise; * Occupational Health and Safety Issues; * Environmental Management and Regulatory Framework; and * Level of Capacity Building, Training and Awareness. 7 V. Weighting Components: 10. Each Audit factor was assigned a relative weight ranging from one (I) to five (5); the least significant with a weight of I and the very significant with a weight of 5. For example, a factor such as 'Air Emission' is assigned a weight of 5 if the impact is very significant and a weight of I if the impact is of least significance. The weighting was assessed on the overall affects on pollution potential for the sites by considering weighting components such as: * Depth to water; * Soil and aquifer media; . Topography; * Impact on land-use and planning; * Impact to wetlands and water bodies; and * Impact on workers. VI. Results 11. The PEs were ranked into categories of those that required full audits, those requiring partial audits and those requiring no audits, based on the cumulative Audit Index Factors (AIF) for the sites. The rankings were categorized as follows: - PEs with Audit Index Factors of cumulative scores above 140 were considered high risk and would require full audits; - PEs with Audit Index Factors of cumulative scores ranging from 100 - 140 were considered medium risk and would require partial audits; - PEs with Audit Index Factors of cumulative scores less than 100 were considered low risk and would require no audits. 12. Based on the field assessments and on the scores for the Audit Index Factors, the PEs have been ranked as follows (see Exhibit 1 below): 8 SCREENED PE 18o 160i 140~ 120 ~100- qj 80~ 40~ I- -JD 'C 2a 4 0 z TYPE OF AUDrT A. Facilities Requiring Full Audits: * EAGB (Electricity) (172) * EAGB (Water) (150) * GUINAVE, Ship Repair Dock (164) D GUIALP, Fish Storage (165) * GUINE-TELECOMM (145) * 24 SETEMBRO HOTEL (154) B. Enterprises Requiring Partial Audits: * HOTEL BISSAU (106) * COMPLEXO de PESCA Semi-Industrial, Fish Storage (132) * INACEP, Newspaper (126) * SAGB (ALGODOEIRA), Cotton Enterprise (137) C. Enterprises Requiring No Audits: * BIGB, Commercial Bank (66) * ENAG, Airport Facilities (97) D. Enterprises in Special Category: a) Screened for Full Audit: 1. GUIMETAL, Steel Plant, bombed 2. COMPLEXO de BOLOLA, Fisheries, shut down 3. TRANSTER, Military use 4. CERAMICA de Bafata, shut down b) Screened for No Audit: 1. ESTRELLA de MAR, Office Building 9 E. INSTITUTIONS Requiring Most Strengthening: 1. APGB, Ports Authority 2. MNRE, Ministry of Natural Resources and Environment VII. Summary of Pre-Audit Findings: 13. The significant environmental pre-audit findings for EAGB Electricity requiring comprehensive (full) audits indicated that waste (used) oil was getting into the down-gradient receptors, with no spill contingency plan for prevention and control, and poor management of waste oil. 14. The pre-audit findings for EAGB water could be summarized as follows: poor sampling and monitoring of water quality in the system; lack of capacity to carry out sampling and laboratory access; piping made up of asbestos must be replaced; wellhead locations must be protected from point- and non- point sources of contamination and pollution; the well located at the EAGB electricity plant compound must be either regularly monitored for hydrocarbons, BTEX and TPH, or shut down; environmental management and capacity building must be strengthened, and there should be closer liaison with MNRE and the Ministry of Health. EAGB Water scored AIF of 150, would require comprehensive (full) audit to be undertaken. 15. The key pre-audit findings for the Guine-Telecomm indicated that several equipment had been cannibalized or destroyed due to the civil unrest that affected the country in 1999; lack of contingency plans for oil spill control and protection measures; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as batteries, old cross bar exchanges; abandoned or discarded analogue equipment and materials; absence of coherent and consistent environmental management plan/system; weak contacts with the Ministry of Natural Resources and the Environment (MNRE); lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. 16. In general the Ports and the Fisheries enterprises indicated that the significant pre-audit findings included: lack of overall environmental management plan/system for the port, and liaison with MNRE, the municipality of Bissau, and the Ministry of Health was weak and non-existent; problems of pollution and contamination from sources in the city of Bissau affecting the port and the enterprises located near the sea like GUINAVE and GUIALP, such as, effluent of raw sewerage, drainage and runoff from garbage and dumpsites; pollution from point- and non-point sources of contamination from the city, especially when it rained; no contingency plans for oil spill prevention and control; poor fire services and security services; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as batteries, engines, vehicles; lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. 17. Consultations: Consultation with stakeholders were carried out whenever possible during the field inspections of various facilities and sites for the enterprises. In general, there was knowledge about the privatization and commercialization processes currently being pursued by the Privatization Unit at most of the enterprises. Furthermore, the team met with the president of Workers Union for the Ports who explained the concerns of the workers on health and safety issues at the ports. In addition, the team participated in the celebrations of the Women 's Day activities in Bissau, and discussed with a group of women on environmental activities pertaining to sustainable development, particularly in the rural areas. 18. Divestiture Guidelines: A 'road map' or guidelines, consisting of about fourteen (14) steps, have been proposed to assist the Privatization Unit in determining when to conduct environmental audits and decommissioning plans during the divestiture of privatization candidates. The steps include when to 10 conduct various plans, such as contingent liabilities, sampling protocol, performance indicators, and environmental management. Also the steps show at what stage to develop terms of references (TOR) for environmental audits. Vil. Decommissioning Plans 19. During the pre-audit assessment it was observed that most of the enterprises would require decommissioning plans to dismantle, remove, and transport to safe disposal sites obsolete plants and equipment. The need for decommissioning plan must be evaluated during the full audits of the facilities. When the need is determined, the decommissioning plan must be conducted separately from the environmental audit, and must adhere to the World Bank regulations that demand a decommissioning plan (DP) with a full environmental assessment and properly carried out cost estimates. IX. Statutory Framework: 19. Environmental management is gradually being integrated into the national policies for development in Guinea-Bissau. These initiatives are summarized as follows: a political and governing paper on the environment, providing a summary of objectives and goals for sustainable development within the context of stable political governance that guaranteed conservation and equilibrium of the ecosystem in Guinea- Bissau; an assessment (in September 2000) on the capacity of the Ministry of Natural Resources and Environment (MNRE). 20. In general, it can be concluded that there was a lack of resources, such as human and equipment, for conducting coherent monitoring and enforcement of environmental management in Guinea-Bissau. For instance, there were no methodologies for monitoring projects, in particular, for the sectors of agriculture, fishing, tourism and infrastructures. Finally, diagnostic studies have been carried out (Sept. 2000) of the urban environmental management in Guinea-Bissau that concluded that poor solid waste management plans were in place for the city, especially the hospitals. 21. The guidelines and standards must be developed for Guinea-Bissau under the instructions and environmental assessment procedures described in the World Bank operational policy, bank procedures, good practices and safeguard policies (i.e. OP/BP/GP4.01). Until these standards are developed specifically for Guinea-Bissau, it would be advisable to adhere to the standards by the World Health Organization (WHO), European Union Standards, and the United States Environmental Protection Agency (USEPA). 22. Legal Framework on Liabilities: The Privatization Unit must work closely with the Ministry of the Natural Resources and Environment (MNNRE) to ascertain who assumes the responsibilities for environmental liabilities at the PEs. For instance, do the liabilities fall on the new owners or on the former owners? It appears the laws of Guinea-Bissau are silent on these issues, and hence both the Privatization Unit, APGB and NfNRE should work jointly in order to determine the appropriate law(s) covering environmental liabilities with respect to: privatization policy, due diligence, and indemnification, so that there would be a clear understanding of who is liable for contamination, both past, current and in the future, i.e. during and after divestiture. 23. Monitoring Protocols: There were lack of standards for monitoring environmental parameters, i.e. measuring physico-chemical and microbial parameters for water quality and air quality for Guinea- Bissau. As a result, the enterprises have not adhered to any standards that were consistent. The MNRE 11 must be responsible for determining and preparing guidelines and environmental performance indicators that are measurable for monitoring sites and facilities of the PEs. X. Cost Estimates for Conducting Audits: 24. The overall cost estimates for carrying out all relevant tasks associated with the environmental management of the PEs, with respect to the privatization processes, is not to exceed nine hundred thousand dollars (US$900,000.00). The stated amounts refer to the following audit action items: * conduct of the full audits for EAGB (US$120,000.00); * conduct of the full audits for GUINE-TELECOMM (US$60,000.00); * conduct of full and partial audits for Ports and Fisheries enterprises (US$240,000); * conduct of full and partial audits for hotels (US$90,000.00); * conduct full and partial audits for light industries (US$240,000.00); * hiring of Environmental Advisor for two years (US$150,000.00). 25. The costs do not include implementation of any mitigation measures. The key remedial and mitigation measures stated in the report are the measures being recommended to be investigated, at the minimum, that would require to be confirmed during the full environmental audits at the various sites for each PE, for example the decommissioning plans. The costs for implementation and financing of mitigation measures will be determined separately in each audit as appropriate Xi. Recommendation: 26. Based on the environmental pre-audits conducted for the selected seventeen (17) public enterprises in Guinea-Bissau, it is recommended that comprehensive (full) audits be undertaken for the following nine (9) PEs: EAGB (Electricity & Water), APGB, GUINAVE, GUIALP, GUINE-TELECOMM, 24 SETEMBRO HOTEL, GUIMETAL, TRANSTER, and CERAMICA de BAFATA 27. Partial audits must be carried out for the following facilities: HOTEL BISSAU, [NACEP, SAGB (ALGODOEIRA) de BAFATA, COMPLEXO de PESCA (SEMI-INDUSTRIAL), and COMPLEXO de BOLOLA. 28. No audits were required for the following: ENAG, airport facilities; ESTRELLA de MAR, office for fisheries operations; and BIGB, the commercial bank. 29. Decommissioning Plans: It is recommended that undertaking actual decommissioning plans for each site must be evaluated and the costs be determined during the comprehensive audits. 30. Legal Framework and Contingent Liabilities: It is recommended that the former owners bear the liabilities of past actions before they hand over to the private sector, or the cost for remediation/mitigation measures must be deducted out of the privatization cost 31. Guidelines and Environmental Performance Indicators: The Privatization Unit must hire an Environmental Advisor who will assist in providing guidance on determining and preparing environmental guidelines and performance indicators that are measurable and monitorable for the privatization candidates. The Environmental Advisor must assist in using the guidelines to determine the 12 environmental requirements of future privatization candidates. The Environmental Advisor can be hired for at least a period of two years. 32. The Ministry of Natural Resources and Environment (MNRE) must be supported to provide the following assistance: - assess the present level of expertise available to carry out environmental audits; - prioritize the sectors in which audit procedures need to be developed and define achievable audit goals for the sectors; and - define for all stakeholders practical plans and targets, frequency of conducting audits so as to categorize high and low risk operations with a view to incorporating viable risk reduction and environmental impact mitigation measures. 33. Guidelines for Environmental Management in Divestiture: As part of the divestiture of public enterprises, the 'road map' or guidelines proposed (see also Annex A) should be used by the Privatization Unit to assist in supporting the integration of environmental management within the privatization processes for the current and future candidates. 34. Training: It is recommended that the Environmental Advisor of the Privatization Unit, working closely with the Ministry of Natural Resources and Environment (MSNRE), should develop an appropriate training program for the senior management of all the enterprises as part of the guidelines for environmental management in the divestiture processes for the privatization candidates. The training could consist of workshops or seminars, with the initial training provided by a qualified local environmental management firm supported by intemational consultants. 35. Environmental Management Systems/Plans: Each enterprise must have on its premise a Senior Official responsible for environmental management activities, and liaise with the Environmental Advisor of the Privatization Unit and MNRE on environmental laws and regulations pertaining to the activities of the enterprise, participate in training, and participate in the capacity building for environmental management. 36. The Environmental Advisor to be hired must coordinate and support the development of contingency plans that link city/urban contingency plans with that of the enterprise. Furthermore, it is recommended that the enterprises develop and incorporate environmental management systems/plans (EMS/P) into its management structure. 37. Period of Performance: The comprehensive and partial environmental audits of the enterprises must be completed prior to the divestiture of each enterprise. However, the implementation of the audit action plans and decommissioning plans must be negotiated with the appropriate interested partners as part of the full divestiture of each enterprise. This means that the execution of any proposed audit action plans need not be completed prior to negotiations. The implementation schedules can be determined during the negotiation of the loans in the privatization process. 39. Cost Estimates: The overall costs for conducting the necessary and appropriate elements of the Environmental Auditing Programs for Privatization are not to exceed nine hundred thousand dollars (i.e. US$900,000.00). 13 I. INTRODUCTION: 1.1 Background: This report is an environmental pre-audit assessment of seventeen (17) Public Enterprises (PEs) in the Republic of Guinea-Bissau that are being privatized under the Private Sector Rehabilitation and Restructuring Project (PSRRP) by the Government of Guinea-Bissau (GGB). The pre-audit is part of the processes for the privatization and commercialization of State-owned enterprises, and is being conducted by the Office of Private Sector Divestiture (Projecto de Desenvolvimento do Sector Privado, PDSP) at the Ministry of Economics and Finance (MEF). The report has been prepared for the PDSP (with Dr. Issufo Sanha, the Program Coordinator) and the World Bank, Private Sector Development Department (with Iradj Alikhani as the Task Team Leader, TTL.) The Country Assistance Strategy (CAS) for Guinea-Bissau focuses on sustainable development and social development. GGB's strategy includes measures to encourage private sector development (allowing exporters to compete by financing reform and investment) in infrastructures for transport and communications, telecommunications, power, rural electrification, water resources and sanitation, and environmental sustainability. Therefore, the Government of Guinea-Bissau has decided that it will transform its role from owner, financier and operator of PEs to that of policy maker and regulator for the provision of public services. The goal is to create an enabling environment for the provision of infrastructure services that improves corporate governance and promotes private sector participation in the key sectors to stimulate social development and economic growth. The assignment was carried out in two phases: phase I involved review of all existing documentation and historical information, as well as, performing visual inspection of as many facilities as possible across in located in Bissau, the capital city of about 350,000 people. Phase II comprised assessment of risks, prioritization of pollution concerns, and ranking of facilities according to the need for comprehensive (full) audits, partial audits and no audits at divestiture. 1.2 Listings: As indicated in the Terms of Reference (TOR, see Appendix) the key enterprises for the pre-audit assessment were: * EAGB, The Electricity and Water Enterprise * Guine-Telecom, Telecommunication Enterprise * INACEP, Newspaper * Guinave, Boat Repairs * Complexo de Bolola, Fisheries Cold Storage * Guialp, Fish Industry * Complexo de Pesca - Semi Industrial, Fish Storage Enterprise * Estrella de Mar, Fisheries Enterprise * ENAG, Airport Enterprise * BIGB, Commercial Bank * Hotel " 24 Setembro" * Hotel Bissau 14 * Transter, Public Transport Enterprise * Guimetal, Steel Manufacturing * Ceramica de Bafata * SAGB, Fabrica de Algodao, Bafata, Cotton Enterprise The above listing was provided by the Privatization Unit of Guinea-Bissau for Public Enterprises to be liquidated up to 2001 and for Public Enterprises partly owned by the private sector and/or to be liquidated up to 2005. In addition to the listing the team evaluated the capacity of the Ministry of Natural Resources and the Environment (MNRE) and the Ports Authority (APGB). 1.3 The Nature and Scope of Support: The proposed privatization support for the project included the following components: * strengthening of the overall institutional and policy framework for PE divestiture, including streamlining of procedures for divestiture execution, capacity building at the Project Coordination Unit of the Private Sector Development (PDSP), the Ministry of Economics and Finance of Guinea- Bissau, and strengthening of coordination between sector reforms and privatization; and adoption of consistent overall policy for PE retrenchment; - implementation of telecommunications sector liberalization, and regulatory reform, aimed at major expansion in connectivity through private investment and entry of new private operators, improved service quality and more affordable tariffs, due to competition and market liberalization; - implementation of transport sector restructuring, through privatization of Guinea-Bissau Port and Airport, in context of adoption of phased program for sector liberalization, aimed at improved reliability, safety and efficiency of international air transport services, and expanded opportunities for private entry and competition; - implementation of privatization and commercialization programs for the utilities of water and electricity, industry and service sectors, aimed at improved economic efficiency and expanded private- sector led growth. 1.4 Meetings and Activities: Several meetings were held with the Senior Officials of the PDSP that included the Project Coordinator, Dr. Issufo Sanha and Mr. Walter Vieira Tavares, Privatization Officer. Also the meetings included Mr. Iradj Alikhani, the Task Team Leader of the World Bank and his associate, Ms. Shenhua Wang. The meeting agreed upon the following tasks to be included in the general assignment for the pre-audit assessment: * ranking of all the enterprises on the list for privatization (sixteen PEs) would be carried out based on their activities and their potential impact on the environment. The ranking would group the enterprises into those requiring comprehensive audits, partial audits, and no audits, * consultation with stakeholders would be carried out whenever possible during the field inspections of various facilities and sites in Guinea-Bissau; 15 * guidelines would be proposed to show a road map that would enable the PDSP determine the environmental requirements of the future privatization candidates. Meetings were also held with the Director-Generals and Senior Officials of the enterprises, as well as, with the Directors and Senior Officials of the Ministry of the Natural Resources and the Environment (MNRE). A debriefing/presentation of the probable results were provided to the Minister of Economics and Finance and the top management of the Public Enterprises (see appendix for list of attendees). The field assessments for the environmental pre-audits were conducted during the month of March 2001, with a visit to as many sites as possible all located at Bissau, the capital city and Bafata, the second large city. The exercises focused on determining which of the enterprises required full audits to be undertaken. In arriving at the selection criteria, a system involving the rankings of the PEs using Audit Index Factors was developed for the facilities of the PEs. The methodology worked very well, and was found to be consistent with similar ranking formats by the United States Environmental Protection Agency (US. EPA) and other recognized authorities (see the reference used for the report). This report has been prepared by the Geomatric Environmental Audit Team (EAT) comprised Dr. Kobina Atobrah, President (Team Leader), and Boukari Tare, the Vice-President and Principal Environmental Engineer. The team worked closely with the Project Coordinator, Dr. Issufo Sanha and Mr. Walter V. Tavares, Technical Assistant of PDSP, particularly in obtaining the necessary and appropriate letters authorizing the visits to the facilities of the public enterprises. The team visited facilities in Bissau and Bafata, the second city of Guinea-Bissau. Both Walter Tavares and Mr.Pereira Simoes Domingos of the Privatization Unit, as well as, Mr. Alexandra Cabral (former Director General of MNRE), accompanied the team on the various visits to the facilities of the PEs. ll. AUDIT OBJECTIVES: The primary objectives of the pre-audit assessment were to: o carry out an environmental pre-audit of the thirteen public enterprises listed for divestiture; * develop a ranking that determined the need for a comprehensive (full) audit, partial audit or no audit before divestiture; * determine the environmental conditions of the enterprises and the probable mitigation measures that may have to be undertaken; * review the national environmental legislation and administrative framework and capacity for enforcement and compliance, in conjunction with the relevant safeguard policies of the World Bank Group. The goal of the pre-audit assessment is to providing the necessary information for internal planning before divestiture and for external reporting, as well as, indicating the 'road map' for determining the environmental liabilities and audit studies for future privatization candidates. III. ENVIRONMENTAL SETTING: 3.1 Initial Conditions: The Republic of Guinea-Bissau (RGB) is located in western Africa, bordering the North Atlantic Ocean, between Guinea and Senegal. The capital city is Bissau and the country has nine administrative regions. 16 Guinea-Bissau covers an area of 36,120 sq. km, with land coverage of 28,000 sq. km and water coverage of 8,120 sq. km. The country is relatively flat (less than 100 meters above sea level) with the highest location at the northeast corner of 300 meters. The country is characterized by rich soils and extensive system of meandering rivers that flow into expansive saltwater marshes and mangroves. Just off the coast lies the Bijagos archipelago, a group of largely unspoiled islands that offer long stretches of deserted beaches. The ecology varies from tropical forest in mostly low coastal plains rising to savanna in the east, yielding a diverse mix of plant and animal life. The climate is tropical; generally hot and humid; monsoonal-type rainy season (June to November) with south-westerly winds; dry season (December to May) with northeasterly harmattan winds. The population of Guinea-Bissau is 1,285,715 (July 2000 est.), about 42% under the age of 15, and the growth rate is about 2.4% (2000 est.). There are five main African ethnic groups, with the Balanta (30%) and the Fula (20%) the majority. European and mulatto make up less than 1%. The languages spoken are Portuguese (official and commercial), Crioulo, and African languages, although a sizable number of professionals are tri-lingual speaking English and French as well. French is also spoken by many people in business and government officials. The gross domestic product (GDP) of Guinea-Bissau, with purchasing power parity is $1.1 billion (1999 est.) and the real GDP growth rate is 9.5% (1999 est.) with agriculture 54%, industry 11%, and services 35% (1996 est.). The electric generation capacity of Guinea-Bissau is 40 million kWh (1998 est.) and production by source is 100% fossil fuel (diesel). The natural resources of Guinea-Bissau are fish, timber, phosphates, bauxite, and unexploited deposits of petroleum both offshore and possibly onshore. Guinea-Bissau is party to major international environmental agreements including: Conventions on Biodiversity, Climate Change, Desertification, Endangered Species, Law of the Sea, and Wetlands (signed but not ratified). 3.2 Overview of the Economic Environment: The Government of the Republic of Guinea-Bissau (GGB) has taken a number of steps to address various environmental problems in the country. In September 2000 the government completed separate studies on the diagnostics of environmental requirements for both the urban and rural areas of the country. Also, the Ministry of Natural Resources and the Environment (MNRE) developed a paper on the political governance of the Environmental Sector that provided responsibility towards ensuring a good quality environment for Guinea-Bissau. Guinea-Bissau depends mainly on farming and fishing. Cashew crops have increased remarkably in recent years, and the country now ranks sixth in cashew production. Guinea-Bissau exports fish and seafood along with small amounts of peanuts, palm kernels, and timber. The tightening of monetary policy and the development of the private sector had also begun to reinvigorate the economy. It is being reported by the press during the mission that unexploited offshore oil reserves could provide much-needed revenue in the long run. 17 3.3 Environmental Concems: The major environmental issues of concern in Guinea-Bissau include deforestation, soil degradation, overgrazing and over-fishing. There are also brush fires and hot, dry, dusty harmattan haze that may reduce visibility during dry season. The current national environmental issues and concerns of Guinea-Bissau are very similar to those of its neighbors, i.e. Senegal and Guinea (Conakry). These include: overpopulation and movement of refugees into its borders, notably from the Cassamance region to the north and east of the country's borders; draining of wetlands for agricultural use; soil erosion; overgrazing; and the continuing spread of HIV- AIDS related problems and malaria. The industrialization of Guinea-Bissau could become accelerated through the privatization of public enterprises. This could give rise to critical and most immediate problems such as: * the health impacts of pollution derived from inadequate water supply and shortage of electricity supply; * poor sanitation, drainage and solid waste services; * poor urban and industrial waste management; * air pollution; * noise pollution. In general, there is relatively low coverage and access to basic services such as electricity, water supply and sanitation, drainage, and solid waste collection. For instance, controlled landfills, incineration and resource recovery facilities are few. Hence, health and safety issues, including medical monitoring and providing appropriate industrial hygiene for workers, would be very necessary in order to minimize the negative effects deriving from the environmental concerns affecting the country. IV. RANKING In order to determine which of the public enterprises (PEs) required a full and comprehensive audit to be undertaken, rankings have been carried out of the facilities based on risk characterization. The risk characterization is a process of estimating the probable incidence of adverse impacts to potential receptors under various exposure conditions, including an elaboration of uncertainties associated with such estimates. The ranking process applied in this assessment involves the qualitative estimation of the potential risks and/or hazards due to activities carried out by the PEs. An adequate characterization of risks and hazards at a potentially contaminated site allows for a comprehensive (full) environmental audit to be performed during which the site remediation process can be better focused, and cleanup criteria can be developed based on the 'acceptable' level of risks to potential receptors. Furthermore, during the comprehensive audits the greatest risk can be identified and the site mitigation measures selected to address those issues. The ranking procedure was similar to the scoring using the DRASTIC Index (Aller and Others, 1987; Atobrah, 1990; Atobrah and Others, 1989), and was based on risk characterization of hazardous wastes (Asante-Duah, 1993; Asante-Duah and Others, 1996). The ranking approach provided indication on whether the site was located in a generally sensitive or vulnerable area and has a significant pollution potential to the environment. 18 4.1 The Environmental Pre-Audit Evaluation Criteria: The public enterprises were assigned scores on the basis of the Audit Index Factors (AIF) developed for the various sites. The AIF is a degree of pollution potential for a facility by which assessment for comprehensive audits can be determined. The criteria considered to have little impact on the environment were ranked by assigning the lowest score of one (1), and the criteria with significant impact on the environment were assigned the highest score often (10). The scores for each enterprise were then summed and the site with the highest score assigned the most likely site to have full audit to be undertaken. 4.1.1 Rating Components: The rating components for evaluating and characterizing the audit potential of a PE were as follows: * Type of Enterprise (i.e. activities at facilities and sites) * Emissions and Air Quality Wastewater (i.e. impact on surface water and groundwater receptors) * Waste Oil and Spill Control Measures * Solid Waste * Noise * Occupational Health and Safety Issues * Environmental Management and Regulatory Framework C Capacity Building, Training and Awareness The audit evaluation factors were assigned rating components ranging from one (1) to ten (10); with the least significant rated as 1 and the very significant rated as 10. The Audit Factors were incorporated into a relative ranking scheme that used a combination of weights and ratings to produce a numerical value called Audit Index. 4 A . 2Weightin g Components: The weighting was assessed on the overall affects on pollution potential for the sites and facilities of the PEs by considering the weighting components as follows: * Depth to water; * Soil and aquifer media; + Topography; * Impact on land-use and planning; * Impact on wetlands and water bodies; and * Impact on workers Each audit factor was assigned a relative weight ranging from one (1) to five (5); the least significant with a weight of 1 and the very significant with a weight of 5. For example, a rating component such as 'Air Emission' was assigned a weight of 5 if the impact to the environment was very significant and a weight of 1 if the impact to the environment was of least significance. To obtain the number for each Audit Index Factor (AIF) that determined the degree of the pollution potential, the weight was multiplied by the rating. The total of the product for individual Audit Factor 19 gave the Audit Index. Evaluation of the Audit Index for the PEs provided the relative significance of each facility or site with respect to the pollution potential. Based on the cumulative Audit Index Factors derived for the different sites, the PEs have been ranked into categories of those that required comprehensive (full) audits, those that required partial audits and those that did not need any audits to be undertaken at this moment. The rankings were categorized as follows: - Enterprises with Audit Index Factors of cumulative scores above 140 were considered as high risk that would require comprehensive (full) audits; - Enterprises with Audit Index Factors of cumulative scores ranging from 100 -140 were considered as medium risk and would require partial audits; - Enterprises with Audit Index Factors of cumulative scores less than 100 were considered as low risk and would require no audits. V. RESULTS OF RANKING: Based on the cumulative scores for the Audit Index Factors (AIF), the PEs have been ranked as follows: 5.1 Enterprises Requiring Full (or Comprehensive) Audits: As indicated in Exhibit 2 below, the enterprises for full audits are: 1. EAGB (Electricity) (172) 2. EAGB (Water) (150) 3. GUINAVE, Ship Repair Dock (164) 4. GUIALP, Fish Storage (165) 5. GUINE-TELECOMM (145) 6. 24 SETEMBRO HOTEL (154) 20 PE SCREENED FOR FULL AUDIT 200 180 __ 172- 164 165 160 __ _ 1 50__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __14 5 o 0 0- __ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___ _ ___l __ 120~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~2 go 0 EAGBELECTRICITY EAGBWATER GUINAVE-SHIP GUIALP -FISH GUINE-TELECOMM 24 SETEMBRO REPAIR DOCK STORAGE 2 1 5.2 Enterprises Requiring Partial Audits: As indicated in Exhibit 3 below, the enterprises for partial audits are: 1. HOTEL BISSAU (106) 2. COMPLEXO de PESCA Semi-industrial, Fish Storage (132) 3. INACEP, Newspaper (126) 4. SAGB (ALGODOEIRA), Cotton Enterprise (137) PE SCREENED FOR PARTIAL AUDIT 132 137 140 106 120 /' ,_ _ _ 10 0 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ HOTEL BISSAU ECOMPLEXO DE PESCA IO INACEP OSAGB~~~ ~ 2 22 5.3 Enterprises Requiring No Audits: As indicated in Exhibit 4 below, the enterprises for no audit are: 1. BIGB, Commercial Bank (66) 2. ENAG, Airport Facilities (97) PE SCREENED FOR NO AUDIT 100_ 90 - 80 / I 70 w x 60 0 u 50 -=L=HX_ 40- 30- 20X- 10- 0 BIGB _ENAG 23 5.4 Enterprises in Special Category: a) Screened for Full Audit: 1. GUIMETAL, Steel Plant, bombed 2. TRANSTER, Military use 3. CERAMICA de Bafata, shut down b) Screened for Partial Audit: 4. COMPLEXO de BOLOLA c) Screened for No Audit: 5.ESTRELLA de MAR, Office Building 5.5 Institutions Requiring Most Strengthening: 1. APGB, Ports Authority 2.MNRE, Ministry of Natural Resources and Environment. 24 VI. SECTOR ANALYSIS: 6.1 Electricity and Water Utilities: The Thermal Power Station located at Bissau for EAGB provided the highest cumulative scores for the Audit Index Factors (AIF) of 172. The facility would require full environmental audit to be undertaken. The EAGB Water sub-sector had major problem of asbestos piping and pollution from point and non- point sources. The AIF of 150 for the water facilities would require full audit to be undertaken for the enterpnse. A ¢/-.3 E I~~~~~~~~~~~I. Plate 1: Water Reservoir at Downtown Bissau. 25 6.2 Telecommunication Utility: The telecommunicatibn sector comprised primarily of'GUIJNE-TELECOMM enterprise with the main facilities in Bissau and subsidiary ones at Bafata. The telecommunication enterprise had high cumulative score for the AIF of 145, qualifying it for full audits to be undertaken of its facilities. Plate 2 below shows the satellite dish ridden with bullets. Plate 2. Satellite dish ridden with bullets at Guinee-Telecom, Bissau. 26 6.3 Ports and Fisheres: The general distribution of the AIF for the enterprises inspected in the sectors, ranging from 132 to 165. Complexo de Pesca (with AIF of 132), a semi-industrial fish storage facility, would require a partial audit. The facilities for GUINAVE (164), a ship repair facility, and GUIALP (165), a fish storage and refrigeration unit, would require comprehensive audits to be undertaken. Plate 3 below shows the many discarded equipment and materials at GUINAVE that would need to be decommissioned. In general, the facilities were found to be old and dilapated. There were several pieces of obsolete and discarded equipment that would require decommissioning. Two enterprises were placed in the special category: Pesca de Bolola was shut down, and Estrella de Mar was only an office building. - . Plate 3: The discarded equipment at GUINAVE would need to be decommissioned. 27 64 Transportation Industry: The TRANSTER facilities were currently being used by the military and could not be inspected, however, they would require full audits to be undertaken. The airport facilities of ENAG scored low AIF of 97, and would not require any audit at this time. Plate 4: The Airport Facilities at Bissau belonging to ENAG. 28 6.5 Light Manufacturing Industry: The SAGB (Algodoeira), cotton enterprise and the Ceramica enterprise were located in Bafata, the second city of Guinea-Bissau. The Ceramica facility has been shut down, but based on the impact of land-use on the surrounding areas, it would require a full audit to be undertaken before any operations resumed. The SAGB, with AIF of 137, would need a partial audit to be undertaken because of basic problems of emission, dust, and worker health and safety monitoring. GUIMETAL, a steel manufacturing enterprise, was shut down due to the civil unrest that occurred in 1999 (see Plate 5 below). Based on the past activities, and based on the fact that the facilities could have been mined, the enterprise had been placed in special category requiring full audit to be undertaken when it was safe to do so. . , Z1::''~~~~~~~~~~~~jp~ Plate 5: The abandoned facility for GUTIMETAL would require full audit. 29 6.6 Hospitality Industry: The "24 SETEMBRO" HOTEL, with AIF of 154, would require a full audit because of serious problems including effect of poor habitation adjacent to the hotel which was breeding rats and mice; emission of soot and leaking oil to the environment from the generator at site; poor laundry facilities; no water quality monitoring of the borehole being used at the facility; poor worker health and safety awareness; and poor storage and refrigeration facilities. The HOTEL BISSAU, with AIF of 106, would require a partial audit to be undertaken. Since the hotel was occupied by the military during the civil unrest in 1999, several pieces of equipment were destroyed. The central air-conditioning system was not functioning, and several pieces of heavy equipment would have to be decommissioned. 6.7 Other Sectors: The newspaper publishing enterprise, INACEP, had AIF of 126 and would require partial audit to be undertaken. On the other-hand, the banking/financial institution, BIGB had AIF of 66, would not require any audit at this time. Plate 6: The social effect of squatters near the public enterprise, GUIALP, would require the development of relocation/resettlement plan during the full audit assessment. 30 VII DESCRIPTION OF KEY PRE-AUDIT FINDINGS 7.1 EAGB FACILITIES: 7.1.1 ELECTRICITY: Background and Initial Conditions: The enterprise began in 1983 and currently has a staff of 416. The activities were limited to only Bissau. The EAGB (Electricity) had at the time of the pre-audit assessment, eight generators that used diesel oil to produce electricity. However, during the pre-audit only one generator was working with capacity of 250 kva, with the rest under repairs. The electricity consumption was 37 million kWh. (1 998 estimate) with a production capacity of 40 million kWh. However, at the time of the pre-audit the production was only 1.7 million kWh. The enterprise purchased incinerator for burning the waste (used) oil but was never utilized because of the civil disorder that occurred during 1999. Key Pre-Audit Findings: Waste (Used) Oil. Waste (used) oil and oil spills from the turbines and general operations were found seeping into the general surroundings, both on the EAGB property and unto adjacent properties to the site. No contingency plans were available for spill prevention and control. A significant amount of oil/lubricant spills was observed at the compound and the soils at the subsurface have been saturated with hydrocarbons. In addition, oil sheens were observed in ponds and surface water bodies down-gradient of the site, several kilometers away near the United Nations headquarters buildings. The oil seepage into the drainage off the property had affected the smallholder farmers using the fields near the facilities, and they have complained to the enterprise to stop polluting their soils. *1~~~~~~~~~~~~~~~~~~~~3 jj _r- _ B I w = w.~~~~~4- Plate 7 Poor waste oil handling and management at the EAGB Electricity Plant. 31 Wastewater: All the wastewater from the operations of the turbines and for cleaning activities was discharged freely into the environment. There was no attempt to collect and either re-cycled or pre-treated the wastewater. There was a well (borehole) recently installed (in December, 2000) on site belonging to the EAGB city water-well supply system. This well was not being monitored for parameters, such as TPH, BTEX, and Dissolved Hydrocarbons. Environmental Management (Including Regulatory Framework, Capacity Building): There was very little environmental management system or plan in place for the power station. The liaison between the Ministry of Natural Resources and the Environment (MNRE) and the station was weak, and there was little knowledge on the regulatory framework with respect to environmental management that could guide the activities of the station. Furthermore, there was no senior personnel directly responsible for environmental management of the station, and hence the need for capacity building in that regard. Health and Safety Issues: The power station was laxed in enforcing the health and safety of the workers and visitors seriously. No hard hats were provided to all workers and visitors, and few (if any) protective protection devices (PPD), such as boots, goggles, ear plugs, gloves and clothing were seen to be used by the workers at all times inside the plant. Decommissioning of Equipment and Materials: Several pieces of equipment would need to be dismantled and transported to safe disposal sites, including obsolete engines, machines, old and abandoned generators, etc. Summary: The significant environmental pre-audit findings included the following: waste (used) oil getting into the down-gradient receptors, such as the ponds and surface water bodies; no spill contingency plan for prevention and control, and poor management of waste oil; wastewater disposed into surrounding areas without pre-treatment; solid wastes consisting of metal scraps from abandoned engines and vehicles, pile of discarded metal pieces and old rusted equipment at maintenance areas; no environmental management plan/system available for station, including lack of knowledge on regulatory framework, no liaison with Ministry of Natural Resources and the Environment (MNRE), and no capacity building for environmental services and requirements. The score for the environmental Audit Index Factors was 172, which placed the station in the highest risk category and would therefore require a full (comprehensive) audit to be undertaken. 32 7.1.2 WATER SUPPLY: Background and Initial Conditions: The enterprise produced water for only Bissau from ten (10) boreholes located throughout the city. Water quality was not monitored regularly, however, there was cooperation with the Ministry of Health to assist with occasional sampling whenever problems were identified in any section of the network. About 70% of the piping in the network was made of asbestos. Several corrosive parts of the pipes were observed during the pre-audits. The depth of the wells ranged from 200m to 220m. There were ten (10) reservoirs, including two big ones of high level concrete tanks located near the hospitals in the city. There was no sewerage system in the city, only individual septic units. The groundwater was impacted by several point- and non-point sources of contamination and pollution, such as, randomly placed garbage dumpsites, municipal waste dumps, septic tanks and excavations, sewerage excavations, and solid waste manholes. Plate 8 shows the borehole located at EAGB Electricity Plant which is prone to contamination and pollution from waste oil seepage in the subsurface. This borehole requires sampling and monitoring on regular basis. AR~~~~~~~~~~~~Y su~~~~~~~~~~L :~~~~ : . ,, _;-.1,,- la,7 - - -, ,__ aj w X -s, 0 W:'~~~~~~~~2 X - Plate 8: The borehole above is located at EAGB Electricity Plant 33 Key Pre-Audit Findings: The significant findings were as follows: Water Quality: There was no coherent groundwater sampling and monitoring protocol, and considering that the city had several point- and non-point sources of contamination that could pollute the groundwater, it was important to establish a proper water quality assessment of the water sources. The well that was installed in December 2000 on the grounds of the EAGB electricity plant must be monitored for microbial, primary and secondary parameters, including dissolved hydrocarbons, BTEX, and TPH. Network Piping Infrastructure: About 70% of the piping in the network was made of asbestos (see Plates 9 & 10). There should be a diagnostic study undertaken to determine how to replace the entire asbestos pipes. Also, it was observed that the pipes have been greatly corroded and rustic, affecting the iron content and color of the water in some sections of the network. These problems were impacting the general water quality of the entire system. 1, m~~~~~~q Plate 9: Asbestos piping in the water supply network for Bissau. 34 F K' Plate 10: The pipes were old and severely corroded. Environmental Management (Including Regulatory Framework, Capacity Building): There was very little environmental management system or plan in place for the water sub-sector of EAGB. The liaison between the Ministry of Natural Resources and the Environment (MNRE) and the enterprise was weak, and there was little knowledge on the regulatory framework with respect to environmental management that could guide the activities of the sub-sector. Occasional cooperation with the Ministry of Health in carrying out chlorination was not effective and efficient. Furthermore, there was no senior personnel directly responsible for envirTonmental management of the sub-sector, and hence the need for capacity building in that regard. Summary: The findings could be summarized as follows: poor sampling and monitoring of water quality in the system; lack of capacity to carry out sampling and laboratory access; piping made up of asbestos must be 35 replaced; wellhead locations must be protected from point- and non-point sources of contamination and pollution; the well located at the EAGB electricity plant compound must be either regularly monitored for hydrocarbons, BTEX and TPH, or shut down; environmental management and capacity building must be strengthened, and there should be closer liaison with MNRE and the Ministry of Health. EAGB Water scored AIF of 150, would require comprehensive (full) audit to be undertaken. 7.2 GUINE-TELECOMMUNICATIONS Background and Initial Conditions: Guinea-Bissau Telecommunication enterprise had the main facilities in Bissau with additional ones in Bafata and other areas. There were about 13,120 telephone lines (1995 estimate), but during the period of the pre-audit there were only 10,600 lines. Three types of lines were in use, i.e. type- 20s, 21s, and 25s. Currently, it had been estimated that there were as many as 3000 lines being requested, and the enterprise could not meet the demand. Equipment for mobile cellular system had been purchased prior to the civil unrest that affected the country in 1999, but had never been installed. It was confirmed that several old cross bar exchanges existed (especially to the south of the country and at the border with Senegal in the north) although the number and the locations could not be determined. The satellite transmission began in 1992, but the monitors had been stolen during the war. Therefore, equipment was being leased from Portugal Telecomm. The analogue systems were gradually being replaced by digital systems, and at the Bissau facilities the system was digital. In general, the facilities consisted of a combination of microwave radio relay, open wire lines, radiotelephone, and satellite communications. The facilities also had television broadcast stations (2 in 1997), radios (49,000 est. in 1997), and radio communications to boats and marine transport. Since the war, the communications systems to the boats have been cannibalized and no longer available. Also, as a result of the war the surrounding compound of the Bissau facilities have been mined with dangerous explosives, one of which was detonated while the mission was visiting. A general map of the mines in Bissau was obtained from the UNDP (see Plate 11). 36 Plate 11: A general distribution of the UXO Mines in Bissau. (Compiled by the LJNDP, February 2001). SITUACAO DE MINAS/ UXO NA CAPITAL DE BISSAU tjf@ Mine UXO Situation in Bissau Capital l ~~~~~~~~~~PONTA LEIO B EtANHA DEf ANTULA o Bairro e referenciast Quarters and references Areas SuspeitastSuspect Areas: * AP MINE - ECOMOG & AP MINE - HUMAID 6 AT MINE - ECOMOG 6 ATMINE- HUMAID ,- Uxo - Riosi rivers \ Canal CemiterioJ Cemitery Bairrosi quarters \ REINO DE ANTULA| REINO JIAL REINOJAL ~~~~~JOLO PAPEL ) f / 01 ' E IUPATEMANE PAPEL / S ~ t -1 /SP -La:- 37 Key Pre-Audit Findings: The significant findings were as follows: Solid Waste Management and Decommissioning of Equipment: Discarded materials and equipment, such as underground cables and wires, and batteries were found at the facilities, including analogue equipment not in use and other obsolete instruments. It was reported that there could be old cross bar exchanges at some locations that would require to be decommissioned. The war had caused several equipment to be destroyed, and there were pieces of discarded equipment and materials, including assortment of batteries, plugs, telecom devices, etc. that needed to be disposed off properly. Environmental Management (Including Capacity Building and Regulatory Framework): No personnel (or senior staff) had been assigned with the responsibility for environmental management at the facilities. There was no coherent and integrated environmental management plan or system for the activities pertaining to environmental management, including viable and executable contingency plans. The liaison between the management and the MNRE was non-existent. Furthermore, there was a lack of awareness on the environmental laws, regulations and guidelines by the management of the enterprise, and hence, the regulatory framework for environmental management was virtually non-existent at the facilities. There was no sufficient training or awareness workshops or seminars on environmental management provided to the staff and workers of the PE. Emission and Air Quality: The generators in the engine room at the site were emitting soot and gaseous materials into the environment. Furthermore, there were problems of noise and oil leaking to the environment. In addition, ventilation in some of the rooms was found to be inadequate. There was not enough air circulation and the air conditioners were not functioning properly. Therefore, the humidity was relatively high making the room temperature above normal and could impact the delicate instruments and equipment. Health and Safety Issues: Workers were encouraged to make use of personal protective equipment (PPE) such as boots, hard hats, gloves and goggles. Workers laying cables and working on transmission lines and towers were supposed to wear protective clothing but did not have good supervision to enforce the discipline. Waste Oil and Spill Control/Prevention: Spill contingency plans were unavailable for containing oil spills (including diesel oil for the generators). Generators were used constantly and oil/lubricants for the equipment were sometimes spilled on the floors and the areas where the generators were located. Summary: The key pre-audit findings included: several equipment had been cannibalized or destroyed due to the civil unrest that affected the country in 1999; lack of contingency plans for oil spill control and protection measures; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as batteries, old cross bar exchanges; abandoned or discarded analogue equipment and materials; absence of coherent and consistent environmental management plan/system; weak contacts with the Ministry of Natural Resources and the Environment (MNRE); lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. The score for the environmental Audit Index Factors was 145, making it qualify for comprehensive (full) audit to be undertaken. During the audit the other facilities throughout the country must be assessed. 38 7.3 PORTS AND FISHERIES ENTERPRISES: 7.3.1 APGB - PORTS AUTHORITY: Background and Initial Conditions: APGB is responsible for managing the ports in a capacity as the port authority. The enterprise supervises all activities at the ports, together with the marine ports authority. The enterprise is a management service company and manages the warehouse and workshop facilities, as well as handles general cargo and containers. The cargo is stored on pallets, plastic bags, and drums. Furthermore, it is responsible for proper handling of any dangerous and hazardous materials at the ports, and overseeing the cleaning operations of ships, boats, tankers, and other mechanized vehicles, machinery and equipment. In addition, the enterprise is responsible for fire protection, security, and health and safety issues at the ports. Fuels and oil were stored in tanks and drums. Solid wastes were collected into containers and drums and sent to the city dumpsites. Key Pre-Audit Findings: Wastewater: The wastewater were generated from sources not belonging to APGB, such as, the ballast from ships and tankers, cleaning and washing operations of ships and boats, and tankers. The ballast water was used to balance the ships, but over a period of the ship's journey the water could be contaminated from cleaning and washing activities and could get mixed with oil. When the ships got to the ports the contaminated water was emptied to the sea for a re-fill with fresh water. Although the sources of pollution did not belong to APGB, the enterprise had the responsibility to police the actions of the polluters. Drainage, Sewerage and Run-off: One of the greatest problems facing APGB was the control of the point- and non-point sources of pollution to the sea coming from the city of Bissau in the form of raw sewerage, runoff and drainage problems (especially when it rained). There was no sampling and monitoring protocol either by the MNRE or by the municipality of Bissau. The situation had created an environmental hazard to the port. Waste Oil: There was no spill prevention and contingency plans in place for handling oil and fuel. Occurrences of oil spills and leakage from ship, boats and tankers, as well as, from various machinery and equipment, generators, and motorized vehicles at the ports, were allowed to escape into the sea. Health and Safety Issues: Workers were encouraged to make use of personal protective equipment (PPE) such as boots, hard hats, gloves, goggles, and ear plugs/muff, but there was no supervision to enforce the use. Medical monitoring of staff and workers were not carried out. Environmental Management (Including Capacity Building and Regulatory Framework): No personnel (or senior staff) had been assigned with the responsibility for environmental management at the facilities. There was no coherent and integrated environmental management plan or system for the activities pertaining to environmental management, including viable and executable contingency plans. The liaison between the management and the MNRE, the Ministry of Health, and the Municipality of Bissau was non-existent. Furthermore, there was a lack of awareness on the environmental laws, regulations and guidelines by the management of the enterprise, and hence, the regulatory framework for environmental management was 39 virtually non-existent at the facilities. There was no sufficient training or awareness workshops or seminars on environmental management provided to the staff and workers of APGB. Summary: The significant pre-audit findings included: lack of overall environmental management plan/system for the port, and liaison with MNRE, the municipality of Bissau, and the Ministry of Health was weak and non-existent; problems of pollution and contamination from sources in the city of Bissau affecting the port, such as, effluent of raw sewerage, drainage and runoff from garbage and dumpsites; pollution from point- and non-point sources of contamination from the city, especially when it rained; no contingency plans for oil spill prevention and control; poor fire services and security services; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as batteries, engines, vehicles; lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. Although the environmental Audit Index Factors for the site were not determined, the port facility at Bissau should undergo comprehensive (full) audit, since the site was a sensitive area to the operations of the other public enterprises. 7.3.2 GUINAVE Background and Initial Conditions: GUINAVE, an enterprise for boat repairs, had main facilities in Bissau, with other facilities for small boats located at Cumere. The enterprise was started in 1974 and currently had permanent staff of 150. GUINAVE had three boats with only two working at 10% capacity. There was a training center on site that had been shut down. The enterprise had a carpentry shop, and used materials for restoring boats and ships, such as, sheets of iron plates, steel tubes, iron rods, non-ferrous materials, paints, diluents, varnish and water. Several equipment and materials would need to be decommissioned or repaired, including an oxygen making equipment. An old building originally used for toilets had been abandoned and the sewerage had seeped into the bay affecting the working areas. There were four generators with only one working. The emission escaped directly into the atmosphere, and used (waste) oil from the operations and activities were allowed to drain into the sea. Wastewater derived from the washing and cleaning activities was discharged into the sea. Key Pre-Audit Findings: Wastewater and Sewerage: The raw sewerage from the toilets have drained into the bay area affecting work. The working docks had been filled with the sewerage water and very unpleasant to work in. Wastewater derived from activities at the site was allowed to drain into the sea. Solid Waste. Scrap metals and materials had been discarded at the site. Several pieces of equipment need to be decommissioned or repaired, including an oxygen making machine. The carpentry shop had many mal-functioning equipment, and there was poor management practices. Environmental Management (Including Capacity Building and Regulatory Framework): There was no awareness of environmental management as part of good management practices. No personnel (or senior staff) had been assigned with the responsibility for environmental management at the facilities. There was no coherent and integrated environmental management plan or system for the activities pertaining to environmental management, including viable and executable contingency plans. The liaison between the 40 management and the MNRE, the Ministry of Health, and the Municipality of Bissau was non-existent. Also, there was a lack of awareness on the environmental laws, regulations and guidelines by the management of the enterprise, and hence, the regulatory framework for environmental management was virtually non-existent at the facilities. There was no sufficient training or awareness workshops or seminars on environmental management provided to the staff and workers of GUINAVE. Health and Safety Issues: Many workers had no personal protective equipment (PPE) such as boots, hard hats, gloves, goggles, and ear plugs/muff. There was no medical monitoring of any kind carried to evaluate the health of the workers. The site was not conducive for working because of the sewerage at the waterfront and the docking areas. Summary: The significant pre-audit findings included: lack of overall environmental management plan/system for the facilities, and liaison with MNRE, the municipality of Bissau, and the Ministry of Health was weak and non-existent; problems of pollution and contamination from effluent of raw sewerage, drainage and runoff affecting the working docks; no contingency plans for oil spill prevention and control; poor fire services and security services; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as old engines, oxygen making machine, wooden materials, and vehicles; lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. The score for the environmental Audit Index Factors was 164, which placed the enterprise in the highest risk category and would therefore require a full (comprehensive) audit to be undertaken. 7.3.3 GUIALP Background and Initial Conditions: The enterprise was established in 1957 and now has 40 permanent staff under the ministry of Agriculture and Fisheries. The enterprise was involved in the storage and preservation of fish. Ice making was an essential part of the operations and the enterprise had generators and ice-making equipment with production capacities ranging from 20 MT to 40 MT. There were several pieces of discarded equipment and materials, as well as, mal-functioning equipment. Key Pre-Audit Findings: Waste (used) Oil: The waste (used) oil derived from the operations of the generators and the equipment was allowed to drain off the property. There were no contingency spill prevention and control measures, and there were spills all over the facilities. Wastewater: Wastewater was derived from the cleaning and washing operations and from the refrigeration and ice making processes. The wastewater was discharged to the surrounding property. Emission: Emission from he exhaust of the generator engines was a problem, as well as the noise. The facilities used about 7OMT of freon for the refrigeration and considering the smell of the area, it appeared the systems were not efficient in preserving the fish. The ventilation inside the plant must be improved by installing new air conditioners or air blowers, or by repairing the existing ones, in order to remove the noxious smell in some sections of the facilities. 41 Health and Safety Issues: Many workers had no personal protective equipment (PPE) such as boots, hard hats, gloves, goggles, and ear plugs/muff. There was no medical monitoring of any kind carried to evaluate the health of the workers. Environmental Management (Including Capacity Building and Regulatory Framework): There was no awareness of environmental management as part of good management practices. Also, no personnel (or senior staff) had been assigned with the responsibility for environmental management at the facilities. There was no coherent and integrated environmental management plan or system for the activities pertaining to environmental management, including viable and executable contingency plans. The liaison between the management and the MNRE, the Ministry of Health, and the Municipality of Bissau was non-existent. Also, there was a lack of awareness on the environmental laws, regulations and guidelines by the management of the enterprise, and hence, the regulatory framework for environmental management was virtually non-existent at the facilities. There was no sufficient training or awareness workshops or seminars on environmental management provided to the staff and workers of GUIALP. Summary: The significant pre-audit findings included: lack of overall environmental management plan/system for the facilities; liaison with MNRE, the municipality of Bissau, and the Ministry of Health was weak and non-existent; problems of pollution and contamination from effluent of wastewater to the surrounding property; no contingency plans for oil spill prevention and control; poor fire services and security services; inadequate solid waste management including disposal (decommissioning) of obsolete equipment, such as old engines, ice-making machine, refrigerators, air conditioners, and trucks; lack of knowledge on regulatory framework; no capacity building program for environmental management; and poor supervision of worker health and safety issues. The score for the environmental Audit Index Factors was 165, which placed the enterprise in the highest risk category and would therefore require a full (comprehensive) audit to be undertaken. VIII. DECOMMISSIONING PLANS: During the pre-audit assessment it was observed that all the enterprises would require some form of decommissioning of old equipment and materials. Some of the equipment comprised: old plants, control panels; vehicles; tanks; and buildings that may need demolishing. It is recommended that undertaking actual decommissioning plans for each enterprise must be evaluated and the costs be determined during the comprehensive audits. IX. STATUTORY FRAMEWORK: This chapter has been devoted to reviewing and evaluating the laws and regulations by which the Privatization Unit and the relevant government agencies, such as the Ministry of the Natural Resources and the Environment (MNNRE), would have the capacity to monitor and enforce existing regulations and execute remediation plans within the process of privatization of Public Enterprises. The policy initiatives of the Government of Guinea-Bissau (GGB) were gradually being geared into the framework of the country's natural resource management policies for integrating environmental concerns into development programs and actions. These initiatives are summarized as follows: 42 * A political and governing paper on the environment: provided a summary of objectives and goals for sustainable development within the context of stable political governance that guaranteed conservation and equilibrium of the ecosystem in Guinea-Bissau. Some of the issues to be addressed were: - deforestation; - soil degradation and erosion; - stop the advance of desertification; - degradation of coastal zones and marine life protection; - avoidance of excessive development of the urban areas to make hospitable living conditions; - preservation of the groundwater and surface water of the country; and - protection of the air, sea and ozone layers. A study was undertaken with the assistance of The World Bank (Sept. 2000) to assess and make recommendation for the Ministry of the Natural Resources and the Environment (MNRE). The study involved: - review of existing institutional framework regarding environmental and natural resources management; - review and assessment of the environmental regulations and procedures; - evaluation of MNRE's capacity in terms of staff and equipment; - assessment of the planning and implementation of capacity for environmental management within the central government, local governments, NGOs, research institutions and the civil society. In general, it was concluded that there was a lack of resources, such as human and equipment, for conducting coherent monitoring and enforcement of environmental management in Guinea-Bissau. For instance, there were no methodologies for monitoring projects, in particular, for the sectors of agriculture, fishing, tourism and infrastructures. Finally, diagnostic studies have been carried out (Sept. 2000) of the urban environmental management in Guinea-Bissau that concluded that poor solid waste management plans were in place for the city, especially the hospitals. Furthermore, socio-economic and environmental impact studies have been carried out for the electricity sector in Guinea-Bissau by the Center for the Environmental and Appropriate Technology Institute of the National Institute of Research (INEP), Guinea-Bissau (March, 1997). In addition, with the support of the United States Agency for International Development (USAID), a paper on investing in Guinea-Bissau was prepared for the Ministry of Economics and Finance (MEF), and the Private Investment Promotion Office (DPIP). These initiatives, coupled with the policies on energy and electricity, provided a strong linkage of the utility reform and re-structuring with the environmental management of Guinea-Bissau appropriate for the privatization and commercialization of the enterprises within the sectors. At least, it is now being recognized that the actions and activities designed to increase the productivity of the society and meet the essential needs of the populace must be reconciled with environmental issues that had hitherto been neglected or not given sufficient attention. In combating environmental problems, sustainable development practices and policies are becoming integral parts of the planning process of the GGB. Redressing the backlog of environmental problems, however, remains a central concern for both the people and the different levels of government. 9.1 Legal Framework on Liabilities: The Privatization Unit must work closely with the Ministry of the Natural Resources and the Environment (MNRE), the municipality of Bissau City and other relevant government agencies, to ascertain who 43 assumes the responsibilities for environmental liabilities at the PEs. For instance, do the liabilities fall on the new owners or on the former owners? It appears the laws of Guinea-Bissau are silent on these issues, and hence the Privatization Unit and MNRE must deterrnine the appropriate law(s) covering environmental liabilities with respect to: privatization policy, due diligence, and indemnification, so that there would be a clear understanding of who is liable for contamination, both past, current and in the future, i.e. during and after divestiture. 9.2 Monitoring Protocols: The capacity for environmental management in Guinea-Bissau is still low at both the regulatory and private sector levels. In the few cases that have carried out environmental audits the enterprises have relied on overseas auditors, a situation that is not economically sustainable. Hence, capacity building must be created at all levels for environmental audits in Guinea-Bissau. There were lack of standards for monitoring environmental parameters, for instance, for measuring water quality and air quality for Guinea-Bissau. Therefore, the individual PEs have not adhered to any standards that were consistent. The MNRE must be responsible for determining and preparing guidelines and environmental performance indicators that are measurable for monitoring sites and facilities of the PEs. The performance indicators can serve as the instrument for responding to any potential environmental hazard that may occur as a result of activities by the enterprises. Furthermore, MINRE must set up a monitoring and accountability protocol that would require either monthly, quarterly or yearly reporting from the PEs with respect to addressing significant mitigation measures and meeting the environmental management challenges of the enterprises. X. TRAINING AND CAPACITY BUILDING: A "training of trainers" program should be developed and provided to the personnel of the enterprises, preferably the senior management staff, on environmental management in the context of good management practices. The "train the trainers" sessions for the senior officials in the short term would provide the vehicle to provide, in turn, long-term training to the staff and workers of the enterprises. The training could also form the basis for developing capacity building within the enterprises. The initial training could be provided by a qualified local/national environmental management consultant/firm, with support provided by an international consultant. The training must be a part of the environmental auditing for the privatization process. The relevance of the training program is to ensure that the management personnel of the PEs appreciate the need for environmental auditing and monitoring. Also the training will ensure that conditions of good management practices are adhered to, mitigation measures are effectively applied and the benefits expected from environmental management are achieved in order for the privatization processes to be sustainable. . The targeted audience should be the senior management of all the PEs. It is anticipated that the training will be initiated after the completion of the audits. The training should be seen as part of capacity building for the environmental auditing in the privatization processes, and therefore, should be borne or financed by the enterprises. The following are the details for conducting environmental training and awareness workshops/seminars for the management staff of the PEs, as part of the environmental audits of the enterprises. Since environmental management is absent at majority of the enterprises, it is highly recommended that the senior management be provided with training on environmental management practices that will underpin the desired environmental audits of the PEs. It is suggested that this "train the trainers" format be extended to the senior management of all the four key enterprises. 44 The components should cover the following areas: - information on national Environmental Regulations and Guidelines for the enterprises of Guinea- Bissau; - training and awareness of Environmental Management and Good Practices for the enterprises through national workshops, seminars and train the trainers sessions; - institutional strengthening and capacity building of Ministry of the Natural Resources and the Environment (MNRE) to coordinate with enterprises on environmental management; - how to conduct environmental auditing every year of all enterprises, followed by training sessions on good practices for environmental management. Training Programs Description of Technical Assistance: The Training and Awareness Programs on Environmental Management and Good Practices should be held after the completion of the environmental audits of the PEs. Participants for the workshops and seminars should be drawn from the management of the various privatization candidates/ enterprises, as well as those already privatized. The Train the Trainers sessions should cover: - the management of environmental information, - applicable environmental laws and regulations of Guinea-Bissau, - international environmental assessments and auditing, - environmental management systems/plans (ISO 9000, 14000) The training may cover areas such as, compliance with company policies, procedures and good management practices; land-use planning, social and resettlement issues; regulations on the environment with respect to health and safety issues for workers; medical monitoring; hazardous materials handling, safe disposal and transportation; and environmental database management, information technology, and reporting. XI. INTER-AGENCY RELATIONSHIPS: An inter-agency cooperation, especially between the Ministry of the Natural Resources and the Environment (MNRE), the Ministry of Health and the Privatization Unit of the Ministry of Economics and Finance (MEF), would provide the best means of coordinating, supervising and benefiting from the various actions being conducted by different agencies and institutions relating to the environmental management of public enterprises. Ideally, the inter-agency relationship (working through committees) should be formally instituted under the leadership of the Privatization Unit, and should involve national, municipal (city), and local government agencies and institutions which have interests, skills and experience to deal with the wide range of complex environmental and social issues associated with significant environmental management issues, such as for example, the Ports and the Fisheries management, as well as, the water and electricity utilities. The relationship should include agencies that comprise: water; electricity; sanitation, solid waste and sewerage management; telecommunications; transportation (ports, airports, public transport); agriculture; physical planning; human resettlement and land use planning; health and labor; finance; and regulatory framework. The Privatization Unit should liaise with the Ministry of Natural Resources and the Environment (MINRE) by setting up advisory panels or committees. The activities of the panel could be expanded to accommodate the appropriate areas of concern for the Privatization Unit. For instance, the geographical information system (GIS) capabilities of the Ministry of Natural Resources and the Environment may be 45 utilized to develop a pollution potential mapping and the characterization of contamination vulnerability for the vicinities of the public enterprises. XII. COST ESTIMATES FOR CONDUCTING AUDIT ACTION ITEMS: 12.1 COST FOR EAGB UTILITIES: The cost estimates for addressing the audit action items for EAGB are not to exceed two hundred thousand dollars (i.e. US$120,000.00). The cost includes estimates for carrying out comprehensive audits for the Electricity Plant and the Water Supply sub-sector. The details of the cost estimates are as follows: a) Electricity Facilities US$60,000.00 b) Water Supply Facilities 60,000.00 Sub Total for EAGB Utilities: US$120,000.00 12.2 COST FOR GUINE-TELECOMM: The cost estimates for conducting full audit for the Guine-Telecommunication facilities are not to exceed one hundred thousand dollars (i.e US$60,000.00). Sub Total for Guine-Telecomm US$60,000.00 12.3 COST FOR PORTS AND FISHERIES ENTERPRISES: A: Full Audits: The cost for conducting full audit for GUINAVE US$60,000.00 The cost for conducting full audit for GULALP US$60,000.00 The cost for conducting full audit for APGB US$60,000.00 The cost for conducting partial audit for COMPLEXO De BOLOLA US$30,000.00 Sub Total US$2 10,000.00 B. Partial Audits: The cost for conducting partial audit for: COMPLEXO de Pesca, Semi-Industrial US$30,000.00 Sub Total US$30,000.00 Overall total for Ports and Fisheries USS240,000.00 46 124 HOTELS: A. Full Audit: The cost for conducting full audit for 24 SETEMBRO US$60,000.00 B. Partial Audit: The cost for conducting partial audit for HOTEL BISSAUUS$30,000.00 Overall total for conducting audits for Hotels US$90,000.00 12.5 LIGHT MANUFACTURING INDUSTRIES: A. Full Audits: The cost estimates for conducting full audits for the following light industries are: * GUIMETAL US$60,000.00 * TRANSTER US$60,000.00 * CERAMICA de BAFATA US$60,000.00 Sub total of cost estimates for light industries US$180,000.00 B. Partial Audits: The cost estimates for conducting partial audits for the following: - TNACEP, Newspaper publishing US$30,000.00 - SAGB (ALGODOEIRA) de Bafata US$30,000.00 Sub total of cost estimates for partial audits US$60,000.00 Overall total cost estimates for light industries US$240,000.00 12.6 COST FOR HIRING ENVIRONMENTAL ADVISOR: The cost estimates for hiring an Environmental Advisor will not exceed one hundred and fifty thousand dollars (US$150,000.00). The advisor will provide assistance to the Privatization Unit on the environmental management requirements of the due diligence on privatization, as well as on environmental management matters in the preparation for the divestiture of public enterprises, for a two year period.. .US$150,000.000 Total cost estimates for the Environmental AdvisorUS$150,000.00 12.7 COST FOR DECOMMISSIONING PLANS: The cost estimates for the decommissioning plans must be assessed during the environmental audits at the enterprises. 47 12.8 COSTFOR TRAININGAND CAPACITYBUILDING: The cost estimates for providing training and awareness programs on environmental laws and regulations and on good management practices to the senior management of the PEs must be assessed by the Environmental Advisor to the Privatization Unit. 12.9 CLARIFICATION OF COST ESTIMATES: The overall cost estimates for carrying out all relevant tasks associated with the environmental audits of the PEs, with respect to the privatization processes, is not to exceed nine hundred thousand dollars (US$900,000.00). The stated amounts refer to the following audit action items: * conduct of the full audits for EAGB (US$120,000.00); * conduct of the full audits for GUINE-TELECOMM (US$60,000.00); * conduct of full and partial audits for Ports and Fisheries enterprises (US$240,000); * conduct of full and partial audits for hotels (US$90,000.00); * conduct full and partial audits for light industries (US$240,000.00); * hiring of Environmental Advisor for two years (US$150,000.00). The costs do not include implementation of any mitigation measures. The key remedial and mitigation measures stated in the report are the measures being recommended to be investigated, at the minimum, that would require to be confirmed during the full environmental audits at the various sites for each PE, for example the decommissioning plans. The costs for implementation and financing of mitigation measures will be determined separately in each audit as appropriate During the conduct of the full audits, the cost evaluations would include estimates of capital and operating expenses associated with remedial actions along with an implementation schedule. In general, if at all possible the cost data on operation and maintenance (O & M) and other recurrent costs should be made available during the full audits. It may be difficult to separate operating and recurrent costs from capital costs during the audits. However, it is important to obtain the information to make meaningful cost compansons between simplified systems and other alternatives. The cost estimates for the proposed full environmental audits and partial audit will involve the following: Number of consultants: For each full audit and/or partial audit, at the most, two Environmental Professionals with knowledge on technical, engineering, economic, financial, legal, labor and sociological background drawn from international firms, supported by local experts with similar background and as part of the international team. Other Direct Cost (ODC). These charges or costs consist of travel and subsistence expenses, laboratory analysis where needed, local transportation, report preparation, leasing of field equipment and instruments where appropriate, etc. The ODC would be from 15% to 20% of the overall costs. Period of Performance: The period of performance for each audit will be from six to ten weeks, covering about sixty to hundred person days with the professional rates to be negotiated. 48 12.10 SUMMARY OF COSTS: ENTERPRISE FULL AUDIT PARTIAL AUDIT OTHERS EAGB ELECTRICITY $60,000.00 - - EAGB WATER $60,000.00 - GUINE-TELECOMM $60,000.00 - GUINAVE $60,000.00 - GUIALP $60,000.00 - APGB $60,000.00 - 24 SETEMBRO HOTEL $60,000.00 - GUIMETAL $60,000.00 - TRANSTER $60,000.00 - CERAMICA $60,000.00 - COMPLEXO de PESCA - $30,000.00 - COMPLEXO de BOLOLA - $30,000.00 - HOTEL BISSAU - $30,000.00 - INACEP - $30,000.00 - SAGB de BAFATA - $30,000.00 - Environmental Advisor - $150,000.00 Sub Total $600,000.00 $150,000.00 $150,000.00 ''' . '-' ,, f *,s,, ,>i 't: a" i.t ms: t SS9QX.IJ/. /P4 49 XIII. A ROAD MAP FOR ENVIRONMENTAL MANAGEMENT OF DIVESTITURE PROCESSES OF PUBLIC ENTERPRISES: 13.1 Environmental Guidelines and Requirement: The Privatization Unit, with the support of the Ministry of the Natural Resources and the Environment (MNRE), must prepare the guidelines for environmental audits of future privatization candidates. The exercise must be carried out under the auspices of the Environmental Advisor to be hired, and while working closely with both local and international consultants. At best, the terms of reference (TORs) could be prepared by the Privatization Unit for the procurement of services requiring environmental demands within the privatization process. However, a road map (together with the Annex A) detailing the steps to be undertaken by the Privatization Unit in determining action items with respect to environmental management in the privatization process has been provided as follows: 13.2 Proposed Road Map: As part of the divestiture of public enterprises, the following steps would be required: 3 Conduct pre-audit assessment by ranking the enterprises for the need to undertake comprehensive audits (CA), partial audits (PA), and no audits (NA); - Prepare the Terms of Reference (TOR) for CA and PA; * Prepare procurement/bidding packages for audits and partial audits; * Conduct Comprehensive (full) audits and Partial audits; * Indicate key audit findings and action plan for mitigation; 3 Prepare cost estimates for each action plan; At this point inter-agency cooperation is needed, especially with the Ministry of the Natural Resources and the Environment: * Develop plan for Contingent Liabilities; * Develop plan for Sampling Protocol; * Develop plan for Performance Indicators; * Estimate costs for all recommended action plans; * Develop plan for environmental management system/plan for facilities; * Develop plan for job safety and health protection. At this stage it is essential to determine the need for decommissioning of equipment (either old, obsolete, or alternative usage). The decommissioning plan must adhere to the World Bank standards and guidelines that require that a fully costed environmental assessment be conducted for the dismantling, packaging and disposal of materials to safe sites and locations. * Identify need for decommissioning plans (DP); * Develop TOR for DP; * Prepare procurement/bids for DP. 50 XIV. CONSULTATION WITH STAKEHOLDERS: Consultation with stakeholders were carried out whenever possible during the field inspections of various facilities and sites across the country. Most of the PEs was aware about the privatization and commercialization processes currently being pursued by the Privatization Unit. The team met with the officials removing mines planted at some of the surrounding areas of the enterprises during the war in 1999, especially in the vicinity of Guine-Telecommunication facilities. Furthermore, the team met with the president of Workers Unionfor the Ports, Mr. Julio Carort Quade, who explained the concerns of the workers on health and safety issues at the ports. In addition, the team participated in the celebrations of the Women 's Day activities in Bissau, and discussed with a group of women on environmental activities pertaining to sustainable development, particularly in the rural areas. Finally, the consultation indicated that the smallholder farmers adjacent to the EAGB electricity plant were being unduly affected by oil seepage and leakage from the operations of the plant. XV. RECOMMENDATION: As indicated on Exhibit 4, the distribution of the audits for the PEs were spelled out as follows: enterprises requiring full audits (50%), partial audits (33%) and no audits (17%). 1. Based on the environmental pre-audits conducted for the selected sixteen (16) public enterprises in Guinea-Bissau, it is recommended that comprehensive (full) audits be undertaken for the following nine (9) PEs: - EAGB Electricity and EAGB Water - APGB - GUINAVE - GULkLP - GUINE-TELECOMM - 24 SETEMBRO HOTEL - GUIMETAL - TRANSTER - CERAMICA de BAFATA 2. Partial audits must be carried out for the following facilities: - HOTEL BISSAU - INACEP - SAGB (ALGODOEIRA) de BAFATA - COMPLEXO de PESCA, SEMI-INDUSTRIAL - COMPLEXO de BOLOLA 3. No audits were required for the following: - ENAG, airport facilities - ESTRELLA de MAR, office for fisheries operations 51 }F ' X , ~~~~~~t X 4 . - rPE F U .2 - -~~~~ ~~~~ ~AUDITI PE.~ ~ ~ ~ . > - woud'equresomfrmfecomso ofoleqipentan materials.Someo' . c n rfeo oge r,- , p , v and ' J is -PE- that -; X - . ,l- ' A N woud rquie sm omoeomsinn oft,> old eqimn an mteras Soeo h qimn comprisd rergrtr, ol eeaosS, ol pat, vhce,_ an bat,s t is reomne tha undertaking actual decommissioning plans for each site must be evaluated and the costs be determined during the comprehensive audits. 5. Legal Framework and Contingent Liabilities: The Privatization Unit must work closely With the Ministry of Natural Resources and Environment (NMNRE), the Ports Authority (APGB), and other appropriate and relevant government agencies, in order to determnine whether the liabilities fall on the new owners or on formner owners at the time of divestiture. It is recommended that the former owners bear the liabilities of past actions before they hand over to the private sector, or the cost for remediation/mitigation measures must be deducted out of the privatization cost 52 6. Guidelines and Environmental Performance Indicators: The Privatization Unit must hire an Environmental Advisor who will assist in providing guidance on determining and preparing environmental guidel.ines and performance indicators that are measurable and monitorable for the privatization candidates. The MINRE can be contacted to provide supervision where appropriate in the monitoring of the measurable environmental indicators for the sites. The Environmental Advisor must assist in using the guidelines to determine the environmental requirements of future privatization candidates. The Environmental Advisor can be hired for at least a period of two years. 7. Furthermore, MNRE must be supported to provide the following assistance: - assess the present level of expertise available to carry out environmental audits; - prioritize the sectors in which audit procedures need to be developed and define achievable audit goals for the sectors; and - define for all stakeholders practical plans and targets, frequency of conducting audits so as to categorize high and low risk operations with a view to incorporating viable risk reduction and environmental impact mitigation measures. 8. Guidelines for Environmental Management in Divestiture: As part of the divestiture of public enterprises, the 'road map' or guidelines proposed should be used by the Privatization Unit to assist in supporting the integration of environmental management within the privatization processes for the current and future candidates. 9. Training: It is recommended that the Environmental Advisor of the Privatization Unit, working closely with the Ministry of Natural Resources and Environment (MNRE), should develop an appropriate training program for the senior management of all the enterprises as part of the guidelines for environmental management in the divestiture processes for the privatization candidates. The training could consist of workshops or seminars, with the initial training provided by a qualified local environmental management firm supported by international consultants. 10. Environmental Management Systems/Plans: Each enterprise must have on its premise a Senior Official responsible for environmental management activities, and liaise with the Environmental Advisor of the Privatization Unit and MNRE on environmental laws and regulations pertaining to the activities of the enterprise, participate in training, and be part of the capacity building for environmental management. 1 1. The Environmental Advisor to be hired must coordinate and support the development of contingency plans that link city/urban contingency plans with that of the enterprise. Furthermore, it is recommended that the enterprises develop and incorporate environmental management systems/plans (EMS/P) into its management structure. The EMS/P must include elements such as: - execution of environmental monitoring programs for the enterprises; - knowledge and compliance with applicable environmental laws and regulations; - conduct occasional drills to alert the staff and workers on how to react and operate in cases of emergencies; - conduct training and awareness programs as part of good management practices while promoting capacity building within the enterprise; - develop the capacity to execute coherent sampling and monitoring programs as part of remediation plans; and - carry out medical monitoring, while including HIV/AIDS awareness programs. 12. Period of Performance: The comprehensive and partial environmental audits of the enterprises must be completed prior to the divestiture of each enterprise. However, the implementation of the audit action plans and decommissioning plans must be negotiated with the appropriate interested partners as part of the full divestiture of each enterprise. This means that the execution of any proposed audit action 53 plans need not be completed prior to negotiations. The implementation schedules can be determined during the negotiation of the loans in the privatization process. 13. Cost Estimates: The overall costs for conducting the necessary and appropriate elements of the Environmental Auditing Programs for Privatization are not to exceed nine hundred thousand dollars (i.e. US$900,000.00). The cost estimates can be broken into: a) For Full Audits: EAGB ELECTRICITY $60,000.00 EAGB WATER $60,000.00 GUINE-TELECOMM $60,000.00 GUINAVE $60,000.00 GUIALP $60,000.00 APGB $60,000.00 24 SETEMBRO HOTEL $60,000.00 GUIMETAL $60,000.00 TRANSTER $60,000.00 CERAMICA $60,000.00 b) For Partial Audits: COMPLEXO de PESCA $30,000.00 COMPLEXO de BOLOLA $30,000.00 HOTEL BISSAU $30,000.00 INACEP $30,000.00 SAGB de BAFATA $30,000.00 Hiring of Environmental Advisor to develop guidelines, monitoring protocols, and training ----- $150,000.00 54 XVI. LIST OF PUBLICATIONS USED FOR THE REPORT: Aller and Others (1987): DRASTIC developed by the National Water Well Association (NWWA) with support of the United States Environmental Protection Agency (EPA Document #600/285/018) Asante-Duah, D.K. (1993): Hazardous Waste Risk Assessment. Lewis Publishers, Boca Raton, USA., 384pp Asante-Duah, D.K., D.M. Kargbo, and Kobina Atobrah (1996): How Clean is Clean ? Soil clean-up levels estimation for protection of groundwater quality. A short course designed for every professional involved in risk assessment and/or making risk-based decisions. KENCON Environmental Inc., Philadelphia, PA. Atobrah, K. (1990): Evaluation of Groundwater Pollution Potential in the Western Part of Howard County, Using the DRASTIC Index System. Technical Report Prepared by Geomatrix, Inc. to the Howard County Department of Planning and Zoning, and the Department of Public Works, 3430 Courthouse Drive, Ellicot City, Maryland. Atobrah, K., D.A. Jackson and J. Keiller (1989): Characterization of Pollution Potential Using Hydrogeologic Settings for the Fractured Rocks near the Potomac River, Montgomery County, Maryland, in Ground Water Issues and Solutions in the Potomac River Basin/Chesapeake Bay Region. George Washington University, Washington, D.C. Atobrah, Kobina and Malick John (2000): Environmental Pre-Audit of Enterprises, Privatization and Private Sector Competitiveness Project in Kenya, Submitted to The Privatization Unit, Ministry of Finance, Kenya and The World Bank, Washington, D.C., 52pp Biggs, Tyler and John Nasir (2000): Background Note on Kenya's Private Sector. Regional Program on Enterprise Development. Prepared for the World Bank, Thyra A. Riley, The Task Manager, 7pp Cahill, L.B. (1996): Environmental Audits Government Institutes, 7th Edition, Rockville, Maryland, 727pp C.D.M. (1987): Data Quality Objectives for Remedial Response Activities, Development Process Prepared for U.S. EPA, Office of Emergency and Remedial Response, OSWEER Directive 9355.0-7B, EPA/540/G-87/003, Washington, D.C. Geomatric Technology Corporation (1999): Environmental Analysis of Power IV Extension, Owen Falls Dam, Uganda. A World Bank Document, Energy Sector, Infrastructure Group, Africa Region. Submitted to Uganda Electricity Board (UEB), Amber House, Kampala, Uganda. 73pp Geomatric Technology Corporation (1999): Assessment of Y2K Risk Exposure of World Bank- Financed Projects in Sub-Saharan Africa. A World Bank Document, Knowledge Management and Learning Center, Africa Region, Washington, D.C. Geomatric, Fairfax, Virginia, USA. 13pp Geomatric Technology Corporation (1998): Environmental Audits of Public Enterprises, Privatization and Regulatory Capacity Building Project (PRCBP) for Cape Verde. A World Bank Document, Private 55 Sector Finance, Africa Region. Submitted to the Coordinating Unit, Privatization Dept., Office of Prime Minister, Cape Verde. Submitted by Geomatric, Fairfax, Virginia, USA. 77pp USAID (1996): Environmental Guidelines for Small-Scale Activities in Africa: Environmentally Sound Design for Planning and Implementing Humanitarian and Development Activities. Technical Paper No. 18, Office of Sustainable development Bureau for Africa, USAID, Wash. D.C. U.S.EPA (1988): Guidance for Conducting Remedial Investigations and Feasibility Studies under CERCLA. Interim Final. Office of Emergency and Remedial Response, OSWER Directive 9355.30, EPA/540/G-89/004, Washington, D.C. U.S.EPA (1987): Data Quality Objectives for Remedial Response Activities. Example Scenario: RI/FS Activities at a Site With Contaminated Soils and Ground Water. Office of Emergency and Remedial Response, OSWER Directive 9355.0-7B, EPA/540/9-87/004 56 XVII. PERSONS CONTACTED: Jose Alves MEF/CNPE, Bissau. Antonio Cabral Avelino Director of Services, Ports Authority, Bissau. Karamba Badjo Portfolio Assistant, Regional Mission in Senegal, IFC, Dakar, Senegal. Mamadu Balde Financial Administrator, BIGB, Bissau, Guinea-Bissau. Tcherno Mamado Balde Administrative and Financial Officer, SAGB, Bafata. Namadi A. Balde Administrative Executive, BIGB, Bissau, Guinea-Bissau. Alexandra Cabral Former Director, Ministry of Natural Resources and the Environment, Bissau, Guinea-Bissau. Braima Camara President, Association of cashew Nuts Exporters, Bissau, Guinea-Bissau. Bernardino Cardoso Deputy Resident Representative, UNDP, Bissau. Bubacar Djalo Technical Director, Complexo de Pesca - Semi Industrial, Bissau. Mamadi laia Djalo Assistant Administrator, BIGB, Bissau, Guinea-Bissau. Abdulai Djarra Satellite Station Technician, guinee-telecom, Bissau. A. Djaquite Refrigeration Technician, GUIALP, Bissau. Mamadu Djau Care Taker/Watchman, Complexo de Bolola, Bissau. Pereira Simoes Domingos Technical Officer, Privatization Unit, Ministry of Economics and Finance, Bissau. Ramiro Busalas Embalo Technical Officer, Maritime Communications, Guinee-Telecom, Bissau. Suzete Lopes F. S. Da Gama Director of Production, 24 Setembro Hotel, Bissau. Alfredo Antonio Gomes Deputy Administrator, Guinee-Telecom, Bissau. Anselmo B. Gomes Lopes Technical Officer, GUINAVE, Bissau. Augusto Gomes Assistant Administrative Manager, BIGB, Bissau. Dr. Fernando Gomes Administrative and Financial Director, APGB, Bissau. 57 Lourenco Gomes Technical Director, GUINAVE, Bissau. Mamadi Indjai Director General of Production, SAGB, Bafata, Guinea-Bissau. Julio Malam Injai Director General, Ministry of Agriculture, Bissau. Francis Correia Junior Commercial Director, BIGB, Bissau, Guinea-Bissau. Armando Mandica Administrative and Commercial Manager, Bissau Hotel, Bissau. Mantinho Technical Director of Operations, APGB, Ports of Bissau, Guinea-Bissau. Fvaba Nabaque Industrial Service Director, SAGB, Bafata, Guinea-Bissau. Verissimo Naulassa MEF, Bissau, Guinea-Bissau. Margaret Ochanda Commercial Liaison, HSBC Equator Bank, Abidjan, Cote d'Ivoire. Marcesono M. Peredra Representative from ENAG, Bissau. Julio Porcel Officer in Charge of Energy, Guinee-Telecom, Bissau. Julio Carort Quade President of Union of Port Workers, Bissau. Dr. Usna Antonio Quade Administrator, BIGB, Bissau, Guinea-Bissau. Cesairo Sa Director of Water Production, EAGB, Bissau. Victor Manuel Sa Pilot, APGB, Bissau. M. Batista Sanca National Economist, UNDP, Bissau, Guinea-Bissau. Francisco H. Sanca Director General, GUIALP, Bissau. Dr. Issufo Sanha Project Coordinator, Privatization Unit, Ministry of Economics and Finance, Bissau, Guinea-Bissau. Jacques Dos Santos Director-General, Afri-Finance Senegal, Dakar, Senegal. Emilio Sariot D. G. I., Bissau Adfo Seidi Satellite Station Technician, Guinee-Telecom, Bissau. Fatima Maria Vaz Sila Commercial Director, Electricity and Water Enterprise (EAGB), Bissau, Guinea Bissau. Alziro da Silva Director-General, Ministry of Natural Resources and the Environment, Bissau, Guinea-Bissau. 58 Walter V. Tavares Technical Assistant for Privatization of Enterprises, Privatization Unit, Ministry of Economics and Finance, Bissau, Guinea-Bissau. Luis Teixeira Chief of General Services, EAGB, Bissau. Estacos Terrena Satellite Station Technician, Guinee-Telecom, Bissau. Jose Vaz Chief of Central Station, EAGB, Bissau. Ms. Shenhua Wang Private Sector Development Specialist, The World Bank, Africa Region, Washington, D.C. USA 59 ANNEXE A: A.1 GUIDELINES FOR ENVIRONMENTAL AUDITING: A.1.1 Background: These guidelines have been developed for use in conjunction with the 'road map' (Chapter 13 of this report) for conducting environmental audits as part of the due diligence preparation in the divestiture of public enterprises. A.1.2 COMPREHENSIVE (FULL) AUDIT) S AND PARTIAL AUIMTS: The environmental comprehensive (full) audit must provide support and guidance in the preparation of the due diligence liabilities in the divestiture of privatization candidates. The objectives must include the following: * determine the potential pre-existing, on-going, and future environmental liabilities prior to divestiture; * measure the enterprise environmental conditions against the risk of being held responsible for contingent damages after privatization; - review the national legislative framework to ascertain the roles of the privatization candidate and the new investors on clean-up responsibilities at divestiture. Specific environmental indicators should include the environmental audit index factors that comprise: * Type of Enterprise (i.e. activities at facilities and sites) * Emissions and Air Quality * Wastewater (i.e. impact on surface water and groundwater receptors) * Waste Oil and Spill Control Measures * Solid Waste * Noise * Occupational Health and Safety Issues * Environmental Management and Regulatory Framework * Capacity Building, Training and Awareness The above factors must be assessed against the overall affects on pollution potential for the sites and facilities by considering the following components: * Depth to water; * Soil and aquifer media; * Topography; * Impact on land-use and planning; * Impact on wetlands and water bodies; and # Impact on workers 60 Also, the factors should include solid waste management and sanitation; land-use and habitation management (i.e. settlement/resettlement issues); occupational health and safety issues; wastewater and sewerage management on properties; emission and air .quality management; used oil and waste oil management; and the overall environmental management (including capacity building, regulatory and legislative framework) of the privatization candidates. The environmental full audits must be carried out in two phases: first phase to collect historical information and documentation; phase two should involve detailed physical sampling and where contamination is identified, the issue of remediation and clean-up will be dictated by the number of factors such as legislation, future land use, risk of contaminants spreading and possible impacts on human health and the environment. Specifically, the environmental full audit must include the following: * Carry out a detailed assessment of the biophysical, geological and geophysical issues pertaining to the privatization candidate, such as land-use and planning alternatives that directly or indirectly impact on the environment; * Identify all significant environmental and occupational health and safety concerns related to both past and on-going activities; * Prepare a prioritized list (i.e. high, medium, and low) of concerns related to past activities; * Prepare a prioritized list (i.e. high, medium, and low) of concerns related to on-going activities; * For both past and on-going environmental concerns, provide recommendations and estimated costs on what rehabilitation and clean-up measures are required in view of privatization; * Develop job safety and health protection, including occupational health and safety measures at the privatization candidates; * Review the capacity of the Government (Privatization Unit of the Ministry of Economics and Finance) and the Ministry of Natural Resources and Environment (MNRE) capabilities to monitor the responsibilities for known or contingent environmental damages and pre-existing environmental problems; Determine who assumes the cost for liabilities; * Provide recommendations and cost estimates for the past and on-going activities in relation to Guinea-Bissau and The World Bank safeguard policies; * Determine who is responsible for developing measurable and monitorable environmental performance indicators for the privatization candidates; and * Determine who enforces the monitoring of the audit action items. Decommissioning Plans: If it is determined that equipment needs to be dismantled, packaged and transported to safe disposal sites, a decommissioning plan must be developed, adhering to the World Bank Safeguard policies with fully undertaken environmental assessment and fully developed cost estimates. Training and Capacity Building: Training of personnel for environmental management for the Privatization Candidates must be assessed as part of the full audit, and if found to be necessary, training programs must be developed for the enterprise personnel. The cost estimates must be provided for the training and awareness programs on environmental laws and regulations and on good management practices for the privatization candidates. Institutional Strengthening: The full audits can be used to develop institutional strengthening of the country's environmental management (i.e. the Ministry of Natural Resources and Environment) capabilities by retaining technical assistance (through the hiring of an Environmental Advisor to the Privatization Unit) in order to develop measurable performance indicators for the various facilities, 61 conduct sampling protocols, and develop monitoring schedules for enforcement of audit actions, both currently and in the future. The technical assistance can be acquired from local/national environmental consultants and from research institutions like the local/national institutions of higher education. 62 APPENDIX Terms of reference Guinea Bissau Private Rehabilitation and Restructuring Project Background. Considering the positive results achieved in a number of countries with increased private participation in the supply of public services, coupled with the continued poor PE performance and limited managerial capacity, the Government's reform strategy is to undertake a broad -based program aimed at the improving efficiency, promoting transparency and realizing results within a phased time frame. The Government of Guinea Bissau has decided that it will transform its role from owner, financier and operator of PEs to that of policy maker and regulator for the provision of public services. The Project development objective is to create an enabling environment for the provision of infrastructure services that improves corporate governance and promotes private sector participation in the telecommunications, power and air transport sector to stimulate social development and economic growth. Given the Government's priority for early results and limited capacity to undertake a comprehensive PE reform program, the proposed privatization support project includes the following components: * Strengthening of the overall institutional and policy framework for PE divestiture, including s streamlining of procedure for divestiture execution, capacity building in legal and judicial system, and strengthening of coordination between sector reforms and privatization ; and adoption of consistent overall policy for PE retrenchment; * Implementation of telecommunications sector liberalization, and regulatory reform, aimed at major expansion in connectivity through private investment and entry of new private operators, improved service quality and more affordable tariffs, due to competition and market liberalization; * Implementation of transport sector restructuring, through privatization of Guinea Bissau Port and Airport, in context of adoption of phased program for sector liberalization, aimed at improved reliability, safety and efficiency of international air transport services, and expanded opportunities for private entry and competition; * Implementation of privatization program in industry and service sectors, aimed at improved economic efficiency and expanded private-sector led growth; The main objective of the assignment: The main objectives of this assignment is to carry out a partial audit of the public enterprises to be privatized and develop a ranking to determine which need full, partial or no environmental audit/assessments before divestiture; Determine the potential liabilities of Privatization candidates and rank them in order of priority of Full audit, and No audit required; 63 Measure the enterprises environmental conditions against the risk of being held responsible for damages after privatization; Use the baseline data to assist the Borrower prepare guidelines which will ensure that the privatization candidates will undertake the necessary audits according to the ranking study and the guidelines should be able to help with the determination of environmental liabilities and audit studies for future privatization candidates; Review the national legislative framework to ascertain the roles of the PE and the new investor on clean- up responsibilities and for determining the future responsibilities of the Public Sector and the new investors. Scope of Work Since the proposed Project would finance divestiture work on PEs in the power, telecom, air transport and Lagos Water sectors, environmental pre-audits will be undertaken on the PEs concerned prior to IDA credit negotiations and consultants will be in the field at time of appraisal. For the other PEs (still to be identified) to be selected later for divestiture with support from the proposed project, the government will adopt environmental guidelines goveming its overall privatization program. There will be initial briefing meetings between the consultants, senior management of the privatization unit, staff of the PEs as well a with relevant govemment officials; With assistance of the Privatization Unit and in collaboration with the privatization candidates, the consultants will (i) review all existing in-house documentation, including compliance records, (ii) study available historical information of the PEs as they relate to environmental management, enforcement and compliance; (iii) perform visual inspections of the site to help determine the pre-existing liabilities thereby help in the ranking of the PEs; The consultants will visit areas where practices of waste management, storage and use of dangerous substances may have caused contamination, and /or damage to human health and the environment; Assess hazards or risks for local communities and the adequacy of procedures for warning and emergency response systems; Prepare a prioritized list of concerns related to past or ongoing activities in the PEs; Review the capacity of the Privatization unit as well a the national environment agency to monitor, and enforce the regulations put in places as well as execute remediation action plans. Based on these reviews and assessments, rank the privatization candidates according to their potential environmental liabilities and requirements for full, partial and no audit/assessment prior to divestiture. In collaboration with the Privatization Unit, the consultants will prepare guidelines, which will enable the Unit to determine the environmental requirements of the future privatization candidates. 64 Reporting The consultants will prepare a draft environmental partial audit report before February 15, 2001 for comment and review by the World bank and the Government of Guinea Bissau. The report should include and Executive Summary in English and will be finalized only after approval by the Government of Guinea Bissau and the World Bank. Audit Team Skill. A lead environmental specialist and an audit specialist, will be responsible for all phases of the audit and both should have relevant competence for environmental auditing. The team should have sufficient knowledge of working in Africa and good knowledge of the environmental aspects of the sectors considered for privatization. 65 ACKNOWLEDGEMEENT The Environmental Audit Team (EAT) wishes to thank Dr. Issufo Sanha, Project Coordinator of the Privatization Unit, Mr. Walter V. Tavares, the Technical Assistantfor Privatization of Enterprises, Mr. Pereira Simoes Domingos of the Privatization Unit and all the senior staff who ably assisted in making the mission successful. Furthermore, the team appreciates the technical assistance, review and evaluation of the project carried out by Serigne Omar Fye, Senior Environmental Specialist of the Africa Region of the World Bank, Iradj Alikhani, the Task Team Leader (TTL) of the Private Sector Development Department of the World Bank, and Ms. Shenhua Wang, associate of the TTL. Finally, the team is grateful to the staff of Geomatric Technology Corporation of Fairfax, Virginia, USA, particularly, Mr. Boureima Ouedraogo for supporting the assessment and analysis of the data for the pre-audit via the Internet media. 66