Public Disclosure Authorized - World Bank...operates three existing geothermal sites (Kamojang,...

Indonesia

Proposed Geothermal Clean Energy Investment Project

Environmental and Social Impact Assessment (ESIA) Executive Summary

Ulubelu Units 3&4

Lahendong Units 5&6

Adapted from ESIAs prepared by Mott MacDonald Ltd. for Pertamina Geothermal Energy

March 2011

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Table of Contents

1. Introduction 3

1.1 Overview __________________________________________________________________________ 3 1.2 Pertamina Geothermal Energy ________________________________________________________ 3

2. Description of the Projects 3

2.1 Geothermal Power Generation in General _______________________________________________ 3 2.2 Lahendong Units 5 & 6 ______________________________________________________________ 4 2.3 Ulubelu Units 3 & 4 _________________________________________________________________ 7

3. Analysis of Alternatives 10

4. Social and Environmental Baseline Information 11

4.1 Lahendong Units 5 & 6 _____________________________________________________________ 11 4.2 Ulubelu Units 3 & 4 _________________________________________________________________ 13

5. Managing Environmental and Social Impacts 15

5.1 Safeguards Policies Triggered _______________________________________________________ 15 5.2 Results of the Social and Environmental Impact Assessments ____________________________ 15 5.3 Management Measures for Impacts of Major or Critical Significance: Construction _______________ 19 5.4 Management Measures for Impacts of Major or Critical Significance: Operation __________________ 25 5.5 Institutional Arrangements to Implement the ESMP ________________________________________ 29

6. Stakeholder Consultations 29

6.1 Consultation and Disclosure Events at Lahendong Units 5 & 6 ________________________________ 29 6.2 Consultation and Disclosure Events at Ulubelu Units 3 & 4 __________________________________ 30

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1. Introduction

1.1 Overview

This Executive Summary presents the main findings, recommendations and conclusions of the two separate Environmental and Social Impact Assessments (ESIA) undertaken for the construction and operation of two geothermal power plants being developed by Pertamina Geothermal Energy (PGE): Lahendong Units 5 & 6 Geothermal Power Project and Ulubelu Units 3 & 4 Geothermal Power Project. The ESIAs were publicly disclosed as preliminary drafts, along with non-technical summaries, in Indonesia and the InfoShop and were the subject of public consultation meetings in the project-affected areas in October 2010. The drafts were extensively revised to take into account the comments received from stakeholders, the World Bank, and PGE, as well as design changes, and reissued as final drafts in February 2011. This summary is based on the final drafts.

The projects are also subject to Indonesian environmental assessment legislation and procedures. For Ulubelu, a full Analisis Mengenai Dampak Lingkungan, or ANDAL (the Indonesian equivalent of a full ESIA) was prepared. Because of its smaller size, Lahendong required less extensive assessment -- Upaya Pengelolaan Lingkungan(UKL) and Upaya Pemantauan Lingkungan (UPL) – which are respectively the equivalent of the environmental mitigation and monitoring plans that are often prepared for projects supported by the Bank that are in environmental assessment Category B. The Bank considered both projects to be Category A, and PGE therefore engaged international consultants to prepare full ESIAs using the ANDAL and UKL/UPL as starting points but conducting additional analyses and adding new material to meet the requirements of Bank safeguards policies.

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1.2 Pertamina Geothermal Energy

Pertamina Geothermal Energy (PGE), a subsidiary of the Indonesian national oil company PT Pertamina (Persero), was established in 2006 with a mandate from the Government of Indonesia (GoI) to develop 15 Geothermal Business Working Areas in Indonesia. PGE operates three existing geothermal sites (Kamojang, Lahendong Units 1 – 4, and Sibayak), which have to date generated over 9.5 million tons of steam, converted to over 1.3 TWh (terawatthour) of electricity, and is developing others. Lahendong Units 5 & 6 and Ulubelu Units 3 & 4 will be among the first projects in which PGE will generate electricity for sale to the national electric company, Perusahan Listrik Negara (PLN). In the earlier projects, PGE has sold steam to PLN, and PLN has developed and operated the power plants.

2. Description of the Projects

2.1 Geothermal Power Generation in General

Figure 1 presents a high level summary of the overall geothermal power plant process. To utilise geothermal energy, production wells are drilled down into the heated water contained within the Earth's crust - the geothermal reservoir. Once these geothermal reservoirs are tapped into, the heated water and steam rise to the surface where the steam is separated and used to power steam turbines, which then generate mechanical energy that can be converted to electricity. Brine and condensate are returned via reinjection wells back to the geothermal reservoir.

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Figure 1: Geothermal Power Plant Process Summary

Source: PGE, Tompaso Feasibility Study and Primary Data

The development of a geothermal resource is a sequential and lengthy process. Steps that lead up to the drilling and testing of the first production well include exploration for potential geothermal reservoirs, water and gas testing, geophysical surveys, and determination of temperature and geothermal gradient. The first well is subjected to extensive testing of characteristics such as yield and temperature, and water and steam chemistry, culminating in a reservoir response evaluation and capacity assessment. If results are favourable, drilling of production and reinjection wells proceeds. Wells are usually drilled in clusters, using directional drilling, to a maximum depth of approximately 2,400 m in the case of these particular projects. Production well clusters are connected to the power plant, once it is constructed, by above-ground steam gathering pipelines, and additional pipelines return condensate from the cooling towers to the reinjection wells.

Both Lahendong Units 5 & 6 and Ulubelu Units 3 & 4 are in the drilling stage, and the production wells are undergoing testing and monitoring to provide more reliable data on steam characteristics and well yields. The components for which PGE has requested funding support from the Bank are the power plants and steam and condensate pipelines as well as the transmission lines to deliver the power to PLN. PGE’s engineering consultants are preparing the front-end engineering design (FEED), and PGE will engage EPC (engineering, procurement and construction) contractors to produce the final designs, procure the equipment, and construct the facilities.

2.2 Lahendong Units 5 & 6

The Lahendong Units 5 & 6 project is located about 30 km South of Manado, in the province of North Sulawesi, Indonesia (see Figure 2). It stretches across the villages of Sendangan,

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Pinabetengan, Tompaso, and Kanonang (I and II), Tomsewer, and Talikuran in the Tompaso and Kawangkoan sub-districts of the Minahasa District.1

Figure 2. Lahendong Project Location

Source: National Coordinating Agency for Surveys and Mapping

The Project consists of three existing well clusters (groups of wells gathered on a wellpad), up to three additional well clusters and one power plant of two 20-MW steam turbine generator

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1 Although the Project is referred to as Lahendong Units 5&6, it is located on the Tompaso geothermal reservoir

which is 10 to 15km distance from the separate Lahendong geothermal reservoir where the existing Lahendong Units

1, 2 and 3 and future Lahendong Unit 4 power stations are located. The Project is therefore distinct and isolated

from these other power units, and they are sufficiently far away that no significant cumulative impacts are expected.

Site Location

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units (Units 5&6). The Project will also include steam, condensate and brine interconnection pipelines between the various clusters and the power plant location. Each cluster will comprise up to six wells. Of the existing clusters, two (26 and 27) will be used for steam production and one (32) for condensate and brine reinjection. The construction of these three cluster wellpads has been completed and drilling of four production wells at Cluster 27, two production wells at Cluster 26 and two reinjection wells at Cluster 32 is complete.

Figure 3. Lahendong Units 5 & 6 Components

Legend:

Source: Mott MacDonald

The preliminary data from production testing suggests that there is a potential need for an additional well production cluster and an approximate preferred location has been identified for consideration within the ESIA. The preferred location for a potential additional production cluster is referred to as Potential Additional Production Well Cluster 1. An alternative potential additional production cluster location has also been identified for consideration. This location is called Potential Additional Production Well Cluster 2. In addition, preliminary well test data suggests that the reinjection wells at Cluster 32 may be unsuitable for reinjection. Therefore a potential additional reinjection cluster has also been identified. This is hereafter referred to as Potential Additional Reinjection Cluster 1.

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All of the above-mentioned elements of Lahendong Units 5 & 6 are shown in Figure 3. Not shown is a transmission line, approximately 2.7 km in length, from the power plant to PLN’s existing Kawangkoan Substation, located 500 m directly north of Cluster 27. The line is an ancillary facility of the power plant that is being constructed exclusively for the purpose of evacuating the power it produces. Its corridor is therefore considered to be part of the area of influence of the Bank-financed project components, and it is accordingly part of the scope of the ESIA.

2.3 Ulubelu Units 3 & 4

Figure 4. Ulubelu Project Location

Source: National Coordinating Agency for Surveys and Mapping

The Project is located 80km west of Bandar Lampung, in South Sumatra, Indonesia. The project will affect the villages of Datarajan, Gunung Tiga, Karang Rejo, Pagar Alam, and Muara Dua. The Project area is located in the Tanggamus district which was separated by law in 1997 from the territory of the South Lampung District. The area is a cultivated (rice and plantations) undulating basin surrounded on the western, northern and eastern sides by mountainous areas. The Project site is bordered by areas of watershed protection forest (Hutan Lindung) on the steep slopes to the north and south. Figure 4 is a regional map showing the project location.2

_________________________ 2 In Indonesia, there are four broad categories of forest: conservation forest including national parks and various

types of nature reserves, production forest, conversion forest available for plantation and other development, and

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PGE’s project involves the development of a steam field including six well clusters and a geothermal power station of two 55 MW units, referred to as Ulubelu Units 3&4 (Project total power output 110 MW). Four of the clusters (B, E G, and H) will be used for steam production and two (A and F) for condensate and brine reinjection. PLN is developing two other 55 MW generating units in a separate power plant (Units 1 & 2) on the same geothermal field, with financing support from JICA. PGE is drilling the wells for PLN’s plant, which is expected to be commissioned in 2012, approximately two years before Units 3 & 4 will be completed. Units 1 & 2 will be supplied with steam from two separate well clusters, and Units 1 & 2 and Units 3 & 4 will share three well clusters. However, in the shared clusters, individual wells are dedicated to one plant or the other; wells and associated piping are not shared.

Access roads to all clusters have been completed and drilling has at least started at Clusters A, B, E and F. Drilling is currently being planned for Cluster G and Cluster H. It should be noted that, of all the wells on wellpad B, only one well (referenced as UBL 15 or B4) has been developed to provide steam to Units 3 & 4. In addition, two wells on Cluster A and two wells on Cluster F are dedicated to Units 3 & 4 for reinjection. Other wells exist on both Cluster A and Cluster F dedicated to Units 1 & 2 for reinjection although these wells are outside the project finance scope. The steamfield above-ground system (SAGS) for Units 3 & 4 will consist of a separator station serving Clusters B and G and two other separators located on Clusters E and H. Steam pipelines will run from the separators to the power plant and brine pipelines will run from the separators to the reinjection Clusters A and F. For clusters without separators, two-phase pipelines will connect the cluster to the separator station. Condensate pipelines will connect the power plant to the reinjection Clusters A and F. The facilities of Units 3 & 4 are distinguished from those of Units 1 & 2 in Figure 5.

PGE will construct a 500-m transmission line (not shown in Figure 5) from its power plant to the switchyard at PLN’s Units 1 & 2, which is the point in its system at which PLN wants PGE to deliver the power from Units 3 & 4. This line is an ancillary facility of Units 3 & 4, constructed exclusively to evacuate the power it produces to the grid, and its corridor is therefore included in the project area of influence for the purpose of the ESIA.

Independently from the project under consideration for Bank financing, PLN is already constructing a 150-kV transmission line 26 km in length to extend the South Sumatra grid from a point near the Batu Tegi hydroelectric plant westward to Units 1 & 2. The transmission line is ancillary to Units 1 & 2, and its corridor is not considered to be part of the area of influence of Units 3 & 4. It is expected to be completed in mid-2011, before construction of Units 3 & 4 begins; it is not being built exclusively or even primarily for Units 3 & 4 (in fact, it was planned in 2004, when Units 1 & 2 were the only developments planned for the Ulubelu field); and neither the construction of Units 3 & 4 nor the transmission of the power they generate will result in any additional environmental or social impact in or along its corridor. The 26-km line is therefore not included in the scope of the ESIA.

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protection forest. Protection forest is to be maintained in forest cover for erosion control, slope stabilization, and watershed protection; unlike conservation forest, its main purpose is not for biodiversity conservation.

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Figure 5. Ulubelu Units 3 & 4 Components

Legend:

Source: Mott MacDonald

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3. Analysis of Alternatives

The Project development and the ESIA process included consideration of alternative sites, configurations, technologies and designs.

Search for potential geothermal prospects is carried out through geological mapping, geochemical sampling of springs and streams along with geophysical surveying. Shallow wells are used to map the extent of the geothermal site and slim holes may be drilled down to 500-1000 m depth to investigate temperatures at depth prior to location and drilling of production and re-injection wells. The general location of geothermal power stations is initially constrained by the overall geothermal resource. However the physical footprint of the power station, well pads, and access roads required are small in comparison to the overall exploitation area. The use of directional drilling of wells to reach the geothermal resource allows for the adjustment of well cluster locations to minimize land acquisition and avoid resettlement and physical cultural resources or sensitive environmental features. At Lahendong, the possible locations for the potential additional well clusters have been subject to a site selection process taking into account topography and existing landuses. In particular, PGE has not taken the option to develop more preferable locations from a technical drilling perspective in order to avoid sensitive areas of paddy field, the development of which would have caused in land severance issues and risk of more severe community impacts in the event of an accidental effluent discharge from a cluster development. Technical considerations indicated that there were better resources in the northern area, but due to environmental considerations PGE decided not to undertake this option.

The preferred site of the Ulubelu Units 3 & 4 Power Plant has been identified as close as possible to the PLN power plant Units 1 & 2, thus reducing not only the length and cost of the transmission link required but also the amount of land to be acquired for tower footings and right-of-way. At the time of draft ESIA disclosure in October 2010, there were three potential locations for the Lahendong Units 5 & 6 powerhouse. The location finally selected (and presented in the final draft ESIA) is preferable mainly for topographic reasons. However, it is also the most favourable from an environmental and social perspective as it is located further away from local villages.

The consideration of alternative technologies began with the fact that the additional generating capacity needed in northern Sulawesi and southern Sumatra is for base load rather than peak load, which rules out two of the other renewables, solar and wind (geothermal is considered renewable). Hydropower and gas-fired, coal-fired and diesel-powered thermal plants were considered, and coal-fired was determined to be the most probable alternative for the areas. The technical, environmental and social impacts of geothermal and coal-fired generation were compared and both projects scored better than coal on most categories except for financial cost (on levelized basis). It is worth noting that greenhouse gas emission per unit of power from geothermal generation is on the order of 10 percent or less of that from coal-fired generation.

Single flash steam plants were selected for both plants after consideration of a variety of other options. The single flash steam plant is the most commonly installed configuration in the geothermal power industry and is often the first power plant installed at a newly developed liquid dominated geothermal field. Single flash plants constitute over 42 percent of the total installed geothermal power capacity in the world. Other plant configurations include double flash, binary, combined flash binary and even hybrid solar geothermal systems that are being developed. New fields are generally initially exploited using single flash configuration given the potential uncertainty of how the resource will react. From an environmental perspective

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the different configurations do not introduce any significant advantages or disadvantages over other configuration types.

4. Social and Environmental Baseline Information

The social baseline sections of both ESIAs describe the existing social context for the Project in terms of the following aspects:

Demography; Ethnicity and religion; Poverty, deprivation and vulnerable groups; Gender equality; Economic environment and livelihoods; Project employment and public relations; Natural resources, land use and agriculture; Access to healthcare; Access to education; Access to electricity; Governance arrangements; Equity and social conflict; Land acquisition; and Sensitive Potentially Project Affected Persons

The environmental baseline section in each ESIA covers the following aspects: Water quality and hydrology; Groundwater; Noise; Ecology; Air; Waste; Geology and erosion; Land contamination; Traffic; Archaeology and cultural heritage; Climate change.

. Salient features of the baselines for each location are summarized below.

4.1 Lahendong Units 5 & 6 The population in the ESIA study area is 20,800 distributed among 15 villages. The majority of local people make their livelihood through agriculture; in most villages more than half of the population’s main occupation is farming, and 76 percent of the village land is used for crops or grazing. Another 14 percent is in tree crops or community forest plantations. Approximately 40 percent of the farmers own their land; the rest are tenant farmers. Health indicators show that the population of the region enjoys better health than the national average. There are a total of 23 health facilities in the assessment area, the majority of which are Integrated Health Centres, at least one of which is found in each village. However, they are not all open throughout the year due to a shortage of government funding, so the majority of people who are able to travel go to either of the two District Community Health Centres. There are 37 schools – 11 kindergarden, 18 elementary, 5 junior high, and 3 high schools – approximate evenly divided between state-operated and private. According to census data,

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all households are connected to PLN’s electric system, but power supply is low and unreliable to the extent that in one village where consultations were held, half the households consider that they do not have access to electricity. Household waste is generally managed by burying or burning on site. Access to latrines or toilets was reported for the majority of the consultation respondents, but there is no developed sanitation system available for all households. Sensitive potentially project-affected persons in the social impact assessment are those people who are considered to be vulnerable and likely to have less means to absorb adverse impacts and socio-economic shocks/risks or changes to their access to or control over socio-economic resources that ultimately affects their well-being, poverty levels and health, safety and security. At the same time, sensitive or vulnerable people may be less able to make the most of potential beneficial effects of a project; for example illiteracy may restrict the opportunity of people to apply for jobs. The sensitive potentially project affected people identified in the socioeconomic baseline can be summarised as follows:

Those villagers living and farmers / land owners working closest to the construction sites, especially the most vulnerable (impoverished, landless, elderly, children, disabled, female-headed households, etc);

Farmers who require road access to markets; Existing employees and job seekers; Those whose land has been or will be acquired; Users of social and community facilities (e.g. health, education) and services; and Agricultural and domestic users of water resources downstream from project areas that

could potentially be affected through water pollution or reduction in flow/groundwater levels.

The study area includes several small rivers, some of which irrigate local rice paddies. In addition to private wells and springs, public water supply is sourced from springs along on the Maasem and Panasen Rivers. The Maasem River is the main water source for several stages of the construction of the Project and is also at risk from possible accidental discharges of drilling fluids or brine. Local communities do not use water from it for irrigation or drinking due to its acidity, but it is used for washing. Surface water quality generally meets standards for water use for recreation, aquaculture, animal husbandry, irrigation, etc. Water quality at some of the small wells and springs sampled does not meet drinking water standards, but 2004 data shows that water from the Maasem spring public supply does meet the standards. Measurements at a number of sites including springs used for irrigation show consistently low pH and high H2S concentrations, evidence of the influence of natural geothermal activity. The surface manifestations of this activity consist of steam vents (fumaroles), hot springs and mud pools with steaming altered ground Surface temperature in areas with active steam vents and hot springs commonly exceeds 90°C. The study area is characterised by relatively high levels of ambient noise for a rural environment, but baseline noise levels measured in 2009 comply with Indonesian and World Bank standards mainly due to vehicle traffic. Air quality is generally good, typical of rural environments, but the area is subject to natural emissions of pollutants such as hydrogen sulfide (H2S), sulfur dioxide (SO2) and particles due to volcanic activities -- fumaroles, hot springs, eruptions. H2S concentrations of 7 micrograms per cubic meter (µg/m3) have been consistently monitored across the site, and this value has been used as the baseline for the purpose of air quality modelling. Aquatic habitat in the study area is of low to medium ecological value; the biota of the four main rivers is characterized by low populations and low diversity. In terms of terrestrial habitat, the footprint of the project area lies entirely within non-natural habitats, mainly agricultural land which comprises the following sub-categories: rice paddy, other agriculture

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(fruit and vegetables) and pasture. The project area also supports scattered trees, the dominant species being coconut palm Cocos nucifera and bamboo Bambusa sp. Small patches of native forest trees are also present, but none of them is larger than 1 ha.

The project area is located near a Hutan Lindung boundary (closest point approximately 500 m to the southwest, shown in Figure 3). Hutan Lindung translates as “protection forest” that is controlled by the Ministry of Forestry and usually located on steep slopes that should remain in forest cover for the maintenance of life support systems and the management of water systems, flood prevention, soil erosion and soil fertility. None of the project facilities is located in the protection forest, and the site layout recognizes a 500-m separation from it. No project component involves forest management. Air quality modelling described in the next section shows that plant emissions will have no impact on the forest vegetation. Accordingly, neither OP 4.04 Natural Habitat nor OP 4.36 Forests is triggered for this project. The only physical cultural feature identified in the study area is Watu Pinawetengan Rock, an ancient relic that is protected by law. There are some stone carvings in the rock that are believed to represent the faces of the original ancestors of the Minahasa tribe. A spiritual monument has been built around the rock for the purpose of traditional worship and healing ceremonies. It is situated next to a hot spring and is 1.1 km away from the nearest Project facility. Since the Project will have no impact on it, OP 4.11 Physical Cultural Resources is not triggered by the project, but a chance finds procedure is outlined in the Environmental and Social Management Plan (ESMP).

4.2 Ulubelu Units 3 & 4 The assessment area consists of five villages, the total population of which is 8,719, with an average population density of 64 people/km² . There is a high turnover of workers both entering and leaving the area to seek employment opportunities. In-migration into the area usually increases prior to the coffee harvest and decreases at the end of the harvest season. Most of the local villagers (60-65 percent of family heads and 20 percent of family members) currently make their living in small-scale commercial agriculture and agricultural processing. The latter has created a number of small businesses, the most numerous of which is coffee milling (117 mills). Most other villagers are employed in transportation services, industry, craftsmanship and trading/selling. A few (4 percent of family heads and 3 percent of family members) are professionals, such as teachers and paramedics. In the Project area, approximately 70% of people own their own land (land owners) and 30 percent work on the land of others (tenant farmers), based on rental or commission systems on mainly coffee farms (80 percent) as well as rice paddies (20 percent). In consultations, road improvements were cited as the main benefit of the project, enabling them to get their produce to market a great deal more easily.

The people in Tanggamus District have poorer health and shorter life expectancy than the Indonesian population as a whole. There are no hospitals, maternity centers or practicing doctors in the villages. There is one community health center in a nearby town, and two of the villages have sub-centers. Four midwives serve the communities. There are 15 elementary schools in the assessment area, one private junior high school and one private senior high school. PGE has recently made significant inputs into education, including investment in school buildings and teachers’ salaries, provision of scholarships, school uniforms and bags. The project’s road improvements also benefited students by making it easier for them to get to school.

Most households are not connected to PLN’s electric system. In some of the communities, homes are self-supplied, including one micro-hydro project constructed and operated by three

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households near well cluster D. Household waste is generally managed by burying or burning on site. Access to latrines or toilets was reported for the majority of the consultation respondents, but there is no developed sanitation system available for all households. Sensitive, potentially project-affected persons in the social impact assessment are in the same categories as those identified for Lahendong Units 5 & 6.

The study area is drained by two river systems. Overall, surface water quality is relatively poor due to natural contamination of ground/surface water from volcanic rocks and highly mineralised water from the deep aquifer, and due to anthropogenic discharges from domestic wastewater, cattle waste, and the use of fertilisers and pesticides. The dissolved oxygen concentration is generally too low to support many fish species. The unconfined shallow aquifer in the study area is used by the local community as a domestic and irrigation water supply. Groundwater quality in general is also relatively poor, with low pH and dissolved oxygen and high biological oxygen demand (BOD) and chemical oxygen demand (COD) when compared to the Indonesian water quality standards. Data from the wells that were sampled indicate pollution from domestic wastewater, suggesting that either the wells are poorly sealed at the surface or that groundwater interacts with the rivers in this area.

The study area is characterised by relatively high levels of ambient noise, however, this may be considered typical of a rural environment with existing transportation infrastructure. Baseline data show that Indonesian noise standards and World Bank daytime and night-time standards are exceeded at a number of locations. Air quality is generally good, typical of rural environments. The area is however subject to natural emissions of pollutants such as H2S, SO2 and particulates due to volcanic activities -- fumaroles, hot springs, and eruptions. A background H2S level of 4.7 µg/m3 has been assumed for air quality modelling purposes.

The waters of the study area streams generally have a muddy brown colour, especially after rainfall, an indication of significant erosion from the surrounding slopes. Most of the streams are shallow (<1 m depth, with rocks visible in most places), and it is unlikely that these could sustain larger fish species, or maintain a significant flow all year round. Aquatic vegetation is absent, although remnant emergent wetland species occur in valley bottoms. As far as terrestrial habitat is concerned, there is considerably plant species diversity, but the ecosystem has been highly modified. Most of the flat valley bottoms have been converted to rice paddies, served by small irrigation channels and interspersed with trees that are mainly planted by the local farmers. In the past there would have been numerous small wetlands, but these have been obliterated by the conversion to rice paddies. In pools along rice paddies remnant wetland species are found. Close to cluster F, there is some secondary scrub with small trees. Although appearing green and tree-covered from a distance, all smaller hills have been converted to mixed plantations. A few shade trees have been either left or planted, but the canopy cover is sparse. The dense understory consists of a mixture of coffee shrubs (dominant in all areas), along with cocoa, guava (jambu batu), betel nut (pinang), banana, and some pepper and vanilla. The tops of some smaller hills are covered with low secondary forest (e.g. south of Cluster F), where the vegetation is dominated by only a few tree species.

Two endangered primates, the endemic leaf monkey Presbytis melalophos and the siamang Symphalangus syndactylus have been recorded in the area, but the project site itself does not offer attractive habitat for them. Forests in the assessment area are limited to areas of higher altitude and steep slopes adjacent to the project site to the north and south. Much of this forest is designated as Hutan Lindung (watershed protection forest, explained above in the baseline summary for Lahendong Units 5 & 6). Some of the protection forest has been degraded by encroachment for agriculture and logging and by soil erosion. As is the case at Lahendong 5 & 6, the project is maintaining a 500-m separation between any of its facilities and the protection forest boundary. Because the forest is not physically affected by the

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project or by emissions from it (as explained below), and there is essentially no natural habitat on site, OP 4.36 Forests and OP 4.04 Natural Habitat are not triggered for Ulubelu Units 3 & 4 Only one physical cultural feature was observed in the study or reported during consultations. It is a mystical hill, Bukit Duduk, where it is believed that a religious leader is buried. The existence and location of the site has been communicated to PGE, and it will not be affected by construction activities or plant operations. Since the Project will have no impact on it, OP 4.11 Physical Cultural Resources is not triggered by the project, but a chance finds procedure is outlined in the Environmental and Social Management Plan (ESMP).

5. Managing Environmental and Social Impacts

5.1 Safeguards Policies Triggered

Two of the safeguards policies are actually “triggered” for the Project based on the site visits and assessments undertaken during preparation of these ESIAs: Operational Policy 4.01 Environmental Assessment is triggered and the Project falls into

Category A, which implies a full assessment to be carried out. It is the basis of the ESIAs. Operational Policy 4.12 Involuntary Resettlement is triggered. No involuntary resettlement

has taken place to date or is expected as part of the Project development. However, land acquisition is required to facilitate the Project’s development. Although PGE undertakes this on a “willing buyer - willing seller” principle, it can request expropriation as a last resort and therefore World Bank OP 4.12 is triggered. To comply, a Land Acquisition and Resettlement Policy Framework has been developed for the Project that explains PGE’s normal land purchase process but also defines the procedures to be followed in the case of expropriation. The Policy Framework is an appendix found in Volume III of both ESIAs. .

5.2 Results of the Social and Environmental Impact Assessments

Beneficial impacts are similar for the two geothermal developments. They will provide reliable power to their respective regional grids, with greenhouse gas emissions that are approximately 10 percent of the emissions that would be released by a coal-fired thermal plant which is the most likely alternative to geothermal in these areas; negligible emissions of the sulphur dioxide, nitrogen oxides, and particulates that are typical from coal-fired plants; and no production of ash. Employment opportunities for local workers are substantial during construction and available but in more limited numbers during operation. PGE has improved local road infrastructure to permit site access for heavy equipment and delivery of materials and plant components, and the local communities consider this a substantial project benefit, particularly in Ulubelu where produce formerly had to be transported to market over a dirt track. PGE as part of its corporate responsibility program assists with community development projects as well, such as water supply, mosque improvements, and school upgrading.

With the notable exception of air quality, the potential adverse impacts of Lahendong Units 5 & 6 and Ulubelu Units 3 & 4 are also similar. Social impacts were assessed in the following areas, separately for impacts of construction and operation:

Employment generation Well-being of workers Community health, safety, security and well-being

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Land acquisition Investment in communities

Environmental impact assessment covered the following areas, also differentiating between impacts of construction and operation:

Surface water quality and hydrology Groundwater quantity and quality Noise Aquatic and terrestrial ecology Air quality Climate change Waste production Geology and soil erosion Land contamination Traffic Archaeology and cultural heritage

Impacts are characterized in the ESIAs in five levels of significance:

Negligible: No detectable impact – i.e. effects are within the range of normal natural variations in the system. No mitigation is required.

Low: Short time scale of the activity or event. Area over which the activity or event may occur is <5 % of the area occupied by the resource of concern. Impacts a specific group of localised receptors / population only. Activity does not exceed statutory limits. No mitigation is required.

Moderate: Time scale of the activity or event is 5-10% of the regeneration time of the resource of concern or a critical sensitive period. Area over which the activity or event may occur is 5-10% of the area occupied by the resource of concern. Affects a portion of a population and impact may bring about a change in abundance and/or distribution over one or more generations, but does not threaten the integrity of that population or any population dependent on it. Affects users of natural resources, but only in the short term, or resources used by a minority of local people (<10%). Some mitigation will help minimise impacts.

Major: Time scale of the activity or event is >10% of the regeneration time of the resource of concern or a critical sensitive period. Area over which the activity or event may occur is >10% of the area occupied by the resource of concern. Causes a decline in abundance/distribution of an entire population or species, beyond which natural recruitment would not return that population or species, or any population or species dependant upon it, to its former level within several generations without mitigation. Users of natural subsistence or commercial resources (on which more than 10% of local people depend) are affected to the degree that their well being is affected over a long term, if mitigation not applied. Activity occasionally exceeds statutory/regulatory limits, and mitigation is required.

Critical: Event or activity is considered significant and may not be amenable to mitigation. Affects an entire population or species to cause a decline in abundance and/or change in distribution beyond which natural recruitment would not return that population or species, or any population or species dependent upon it, to its former level. May affect a subsistence or commercial resource (on which more than 10% of local people depend) use to the degree that the activity is no longer viable. Activity regularly exceeds statutory/regulatory limits, and changes to project design may be required.

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Impacts rated as “major” or “critical” are described below.

Potential Impacts on Surface Waters. Water is abstracted from the rivers during drilling, and this could affect availability for downstream users. Surface water quality and aquatic habitat could be degraded by sediment eroded from the site during and after clearance and grading. Drilling muds and released during well testing could affect surface water quality if not properly contained and treated. A well blowout, though rare, could also result in water quality degradation if fluids overflow settling ponds at the well clusters. Spills and leaks of fuel and chemicals used during construction or operation have the potential to pollute surface waters. Mitigation measures have been identified that will reduce the significance of all potential impacts to negligible or low.

Potential Impacts on Groundwater. Groundwater quality is also vulnerable to contamination from spills and leaks of fuel or other chemicals during construction and operation, directly or in stormwater runoff. There is the potential for cross-contamination of wells in the shallow aquifer that are used for drinking water by water from the deep, geothermal aquifer as a result of drilling the geothermal wells. The water level in local water supply wells could be reduced as a result of excavation during construction or abstraction for plant needs during operation. These impacts will be reduced to negligible or low by the identified mitigation measures.

Impacts of Noise on Local Communities. Noise modelling shows that there will be no major or critical noise impacts during operation at either site or during drilling and construction at Lahendong Units 5 & 6. At Ulubelu, however, a number of houses close to well clusters and to the power plant site are predicted to experience noise in excess of Indonesian and World Bank Group standards, albeit for relatively short periods of time. The general mitigation measures identified will reduce the impacts to low to negligible except in one village where impacts will be moderate and an isolated house near well cluster G at which the impact will be of critical significance. Noise levels will be monitored, and sound barriers will be installed to protect that house if necessary.

Aquatic and Terrestrial Ecology. No impacts of major or critical significance are predicted to occur at either site.

Air Quality. One air pollutant has the potential to cause adverse impacts that are or major or critical significance – hydrogen sulfide (H2S). Geothermal steam contains a small fraction of so-called “non-condensable gases” (NCG) that are released to the atmosphere when the steam is condensed for reinjection into the geothermal reservoir after it has passed through the turbines. A small fraction of the NCG is H2S. H2S causes nuisance odors at very low concentrations (as low as 7 µg/m3) and is often detectable by smell at locations where there is geothermal activity. At high concentrations, upwards of 200 milligrams per cubic meter (mg/m3) such as may accumulate in confined spaces in a work environment where the gas is present, it is extremely dangerous. WHO has identified the lowest concentration at which adverse health effects are known to occur as 15 mg/m3 and has issued a conservative guideline of 150 µg/m3 on a 24-hour average as the limit for H2S concentrations in the ambient air. Since neither the Government of Indonesia nor the World Bank Group has a specific health-related ambient standard for H2S, the WHO value has been adopted by PGE for the project as recommended in the World Bank Group Environment, Health and Safety Guidelines. Dispersion modelling using the AERMOD model developed for the United States Environmental Protection Agency indicates that H2S emissions from Lahendong Units 5 & 6 would not cause ambient concentrations to exceed 150 µg/m3 in communities around the power plant. It would be sufficient to ensure that emissions do not exceed the Indonesian emission limit for H2S, which is 35 mg/m3, and the plant is being designed to comply with that

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limit. At Ulubelu, however, AERMOD results show that by the time PGE’s Units 3 & 4 are ready to operate, H2S concentrations would already be exceeding 150 µg/m3 at a number of nearby residential receptors because of emissions from PLN’s Units 1 & 2. The additional emissions from Units 3 & 4 would cause new exceedences of the standard at residential receptors nearest to them and would contribute to higher concentrations at some receptors already affected by PLN’s plant. This impact is of critical significance at Ulubelu.

Joint action by PGE and PLN would be necessary to abate the critical adverse impact. PGE and PLN have set out their commitments to joint H2S quality monitoring at Ulubelu and to undertake abatement measures as necessary at their respective power plants in order to comply with the ambient H2S guideline in a Joint H2S Abatement Agreement. AERMOD results based on the best available data (admittedly conservative) on the H2S content of the steam at Ulubelu indicate that 60 percent reduction in H2S emissions at both plants will be sufficient for compliance. PGE is designing its plant to incorporate equipment that will achieve that level of abatement. PLN’s plant is already under construction, and so abatement equipment will be retrofitted. As more data on H2S content become available through additional well testing, PLN will be able to determine the level of abatement it will need at Units 1 & 2, and PGE can refine its specifications for abatement at Units 3 & 4.

Climate Change. Avoided greenhouse gas (GHG) emissions are major beneficial impacts of the project. At Lahendong, the estimated GHG emission is 16,589 tCO2/yr compared to 381,093 tCO2/yr that would be released from a coal-fired plant of comparable size. The savings would be 1051 tCO2 per megawatt hour (MWh). For Ulubelu, the estimated GHG emission is 95,651 tCO2/yr compared to 1,030,684 tCO2/yr for a comparable coal-fired plant, for a savings of 997 tCO2/MWh.

Waste Production. There are no potential impacts of major or critical significance.

Geology and Soil Erosion. There are no potential impacts of major or critical significance.

Land Contamination. There are three sources of potential major impacts at both locations: drilling mud used and recycled but eventually treated and disposed of, cuttings produced during drilling, and fuel and chemicals stored on site. Spills or accidental releases of any of these would cause land contamination. Mitigation measures identified in the ESIAs reduce the significance to low.

Traffic. There are no potential impacts of major or critical significance.

Archaeology and Cultural Heritage. There are no potential impacts of major or critical significance.

The sections of the ESMP including mitigation and monitoring measures that PGE has committed to undertake are presented for impacts rated as critical or major before mitigation in Sections 5.3 for construction and 5.4 for operation. PGE’s commitments to the complete set of mitigation measures appear in the Environmental and Social Management Plan (ESMP) presented in Volume IV of each ESIA. In general, the impacts and mitigation and monitoring measures are similar for both sites. Where there are differences, they are identified in the tables. Section 5.5 is a summary of the institutional aspects of ESMP implementation.

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5.3 Management Measures for Impacts of Major or Critical Significance: Construction

Potential Impact Activity Mitigation / Enhancement Standards Responsibility Timescales Monitoring / KPI

Reduction of surface water supply for local users and aquatic ecosystem

River abstraction for drilling activities

Prior to any new river abstractions, identify any local users downstream as far as Tompaso II (Maasem River), Tember (Panasen River) and Kanonang I (Ranaan and Tempok Rivers) for Lahendong 5&6, and as far as Karang Rego for Ulubelu 3&4.

Choose abstraction flow rate and timing to minimise impacts on water course and to ensure minimal stream flow maintained.

Where this cannot be achieved, before drilling construction, PGE to construct new water supply pipeline from alternative source to ensure community water supply unaffected.

World Bank Group EHS General Guidelines on Community Health and Safety / Geothermal sector specific guidelines.

PGE PRO / Project Manager / Environmental Engineer

EPC Contractors and drilling contractors

Monitoring throughout Construction

Contractors to record quantity of water abstracted and timing of abstractions.

PGE to review Contractors abstraction records.

PGE to undertake river flow measurements before, during and after abstraction periods.

No complaints from downstream users (as recorded under Community Perception in UKL/UPL).

Degradation of surface water quality affecting local users and aquatic ecosystem

Vegetation clearance, earth moving

Use good construction practices to prevent erosion and sediment reaching water courses, including:

Bunding off the working area to avoid any sediment from the workings entering local water courses;

Minimising vegetation clearance; and

If any temporary or permanent diversion of water courses or natural flow paths ensure that diversion works are of adequate capacity.

Government Regulation No. 82 of 2001 regarding the Management of Water Quality and Water Pollution Control.

PGE Project Manager / Environmental Engineer


Mitigation throughout Construction.

Monitoring on quarterly basis (as per UKL/UPL).

Collection of surface water samples and analysis by accredited laboratory (as per monitoring locations in Figure 5.1, Volume IV of each ESIA which are in addition to current UKL/UPL monitoring).

No deterioration in pre-project river water quality.

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Pollution of surface water from drilling muds or water from testing wells

Use of water based drilling muds as opposed to oil-based drilling muds.

Recycling of drilling muds.

Design adequate capacity of treatment ponds / water filters to safely manage quantities of waste water arising.

Storage ponds to have concrete impermeable lining to ensure water-tightness.

Ponds monitored and cleared of silt periodically to maintain integrity of treatment and drainage system.


World Bank Group EHS General Guidelines on Wastewater and Ambient Water Quality / Geothermal sector specific guidelines.

PGE Project Manager, Environmental Engineer

Drilling contractors

Mitigation throughout construction. Monitoring on quarterly basis (as per UKL/UPL requirements)

Requirement for contractors to implement mitigation as part of drilling contracts.


No incidents of discharge of incompletely treated effluent.

Regular review by on-site environmental engineer. Quarterly on-site audit by head office staff.

Well blow out / overflow of settling ponds

Drains from wells to route effluent fluids to settling ponds. In case of an overflow, PGE to determine whether downstream users affected and if required construct new water supply pipeline from alternative source to ensure community water supply unaffected.


World Bank Group EHS General Guidelines on Wastewater and Ambient Water Quality / Geothermal sector specific guidelines.

PGE site manager / PRO / OHS Engineer, Environmental Engineer


Mitigation throughout construction.

Monitoring following well blow out / overflow events.

Collection of surface water samples and analysis by accredited laboratory (in the event of overflow). Monitoring locations dependent upon area of overflow using professional judgement with typical sampling points including representative upstream location, immediate downstream location from overflow, prior to nearest downstream community and after confluence with other tributaries.

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Surface or ground water contamination from chemical spills and leaks

Storage, transportation and use of chemical and fuel on development site

Development of relevant procedures to avoid and minimise risk of spills, including but not limited to the following.

All chemicals and fuels are to be stored in designated sites with impermeable surface and adequate bunding to prevent accidental contamination.

Storage areas to be located away from surface waters.

Suitable spill kits to be provided within storage areas and near any fuelling/ loading areas.

Government Regulation No 74 of 2001 regarding Hazardous and Toxic Material Management.


World Bank Group EHS General Guidelines on Wastewater and Ambient Water Quality; Hazardous Materials Management / Geothermal sector specific guidelines.




Daily inspections by PGE of Contractor (observations of non-compliance will be reported only); At least two formal audits of Contractor by PGE during contract scope.

As part of CSMS (Contarctor Safety Management System) Audit Program.

Requirement for contractors to implement mitigation as part of EPC / drilling contracts.

No spills affecting surface water quality.

PGE to audit Contractor storage areas against mitigation requirements, for example, check availability of spill kits, adequate bunded storage for chemicals and fuels.

Cross-contamination of surface aquifer

Drilling of new geothermal wells

Well designs to employ deep set surface casing to prevent blow outs (the uncontrolled discharge of deep aquifer water/steam into the upper aquifer or to the surface).

World Bank Group EHS Geothermal sector specific guidelines.

PGE project manager, drilling manager, drilling engineer



Daily inspections by PGE of Contractor (observations of non-compliance will be reported only).

Requirement for contractors to implement mitigation as part of drilling contracts.

PGE undertake daily inspection of drilling contractors activities against well design.

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Noise from construction and drilling activities exceeds GOI and WB standards

Site preparation excavation and foundations, construction and drilling

Position noise generating plant as far from the edge of the site as possible.

Construction machinery and vehicles that may be in intermittent use to be shut down between work periods.

Material stockpiles and other structures effectively utilised, where practicable, to screen sensitive receptors from noise from on-site construction activities.

Construction machinery with directional noise features positioned to minimise the potential for noise disturbance.

Hours of general construction activity (excluding specific drilling activities) restricted to avoid sensitive periods of the day (e.g. religious event) and also to avoid night working typically following World Bank night-time noise guidelines (22:00 to 07:00).

If construction activities cause breaches of Indonesian and World Bank standards as identified through monitoring, noise barriers of no less than 10kg/m2 surface density should be put in place at properties (ensuring that the noise source is entirely hidden from the receptor).

Minister of the Environment Decree No. 48 Year 1996 regarding Noise Standard.

World Bank Group EHS General Guidelines on Noise Management



Mitigation to be included as requirement of all new EPC / drilling contracts.

Monitoring frequency: weekly or upon receipt of noise complaints via community grievance mechanism.

Requirement for contractors to implement mitigation as part of EPC / drilling contracts.

PGE to monitor noise levels using sound level meter at the nearest residential properties to construction activities for comparison against standards.

Record and investigate complaints using sound level meter via the community grievance mechanism.

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Degradation of soil by contamination from drilling mud and cuttings and other potential hazardous wastes

Collection, storage, transport of drilling muds and cuttings.

Use of water based drill muds and recycling of drill muds.

Storage of muds in concrete lined ponds and of cuttings in dedicated houses;

Regular removal of muds from the settling ponds for re-injection into total loss wells where available or storage and subsequent treatment of the muds as relevant waste category as determined by Indonesia regulation;

Government Regulation No. 18 of 1999 as amended by No 85 of 1999 regarding Management of Toxic and Hazardous Wastes.

MOE Regulation No. 18 of 2009 on Licensing Procedures for Management of Hazardous and Toxic Waste.

BAPEDAL Decree No. KEP-01 – 05 / 1995 on Technical Procedures and Requirements on Storages and Collections of Hazardous and Toxic Wastes; Wastes Manifests; Wastes Management.

Bank Group EHS Guidelines on Contaminated Land / Geothermal Power Generation.

Dutch Soil Quality Standards


Contractor

Mitigation throughout construction phase.

PGE daily inspections (observations of non-compliance will be reported only).

Toxicity testing of drilling muds prior to removal from ponds when not re-injecting.

To be defined under PGE HSE requirements. PGE to review Contractors HSE Plan to ensure continuity with PGE HSE requirements (including commitment to this ESMP with inclusion of a Waste Management Plan as identified in Section 6.5, Volume IV of each ESIA

PGE review / audit of contractors HSE plan including waste management procedures as part of audit programme (CSMS).

Toxicity testing of hazardous wastes such as drilling muds.

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Degradation of land and soil by contamination from fuel or chemical storage facilities or spent oils, lubricants storage

Storage, transport and use of chemical and fuel on development site

Appropriate facilities / containers for segregation and temporary storage of chemicals / fuel on site including impermeable surfaces and adequate bunding.

Training of Contractor employees by Contractor.

Government Regulation No. 74 of 2001 regarding Management of Hazardous and Toxic Material

World Bank Group EHS General Guidelines on Contaminated Land / Geothermal Power Generation.


Contractor

Mitigation throughout construction phase.

PGE daily inspections (observations of non-compliance will be reported only).

To be defined under PGE HSE requirements. PGE to review Contractors HSE Plan to ensure continuity with PGE HSE requirements (including commitment to this ESMP with inclusion of a Waste Management Plan as identified in Section6.5, Volume IV of each ESIA).

PGE review / audit of contractors HSE plan including waste management procedures as part of audit programme (CSMS).

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5.4 Management Measures for Impacts of Major or Critical Significance: Operation


Surface water degradation from discharges of brines and condensate

Reinjection Minimise risk of brine / condensate discharge through implementation of reinjection system and provision of adequate sized concrete lined storage ponds / system shut down in case of reinjection failure.

Develop brine management plan to minimise risk of brine discharges.

In the event of emergency discharge of brine / condensate to surface waters, treatment will be undertaken prior to discharge of effluent to comply with Indonesian discharge geothermal effluent standard.

Specifically, for Lahendong 5&6, protect paddy area from failure of 2.5km brine pipeline stretch south of Kamanga I and II through routing along line of Panasen River with 25m buffer zone between pipeline and river.

MOE Regulation No.04 of 2007 regarding wastewater quality from oil and gas and geothermal exploration and production

Government Regulation No.82 of 2001 regarding the Management of Water Quality and Water Pollution Control.

Government Regulation No.35 of 1991 regarding Rivers.

Regulation of Minister of Public Works No. 63 of 1993 regarding Line Border Rivers, Regional Benefits River, River Region, and Former River courses.

World Bank Group EHS Geothermal sector specific guidelines.

PGE Vice President to Management Operations and Utilities / General Manager / Operations Manager / Maintenance Manager / HSE Manager

Mitigation throughout Operation.

Monitoring on quarterly basis (as per UKL/UPL).

PGE to implement Brine Management Plan.

Regular review of brine management plan implementation by on-site environmental engineer during operation. Audit of brine management plan under annual HSE and Operations head office visit.


No deterioration in pre-project river water quality as result of PGE effluent discharges.

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Degradation of surface waters by contamination from fuel or chemical spills

Storage, transportation and use of chemical and fuel on development site

Development of relevant procedures to avoid and minimise risk of spills, including but not limited to the following.

All chemicals and fuels are to be stored in designated sites with impermeable surfaces and adequate bunding to prevent accidental contamination.

Storage areas to be located away from surface waters.

Suitable spill kits to be provided within storage areas and near any fuelling/ loading areas.

Government Regulation No 74 of 2001 regarding Management of Hazardous and Toxic Material


World Bank Group EHS General Guidelines on Wastewater and Ambient Water Quality; Hazardous Materials Management / Geothermal sector specific guidelines.

PGE General Manager / HSE Manager

Mitigation throughout Operation.

Daily internal inspections by PGE HSE staff (observations of non-compliance will be reported only); Annual HSE audit during Operation.

PGE to implement mitigation as part of operational procedures.

No spills affecting surface water quality.

PGE HSE staff to inspect storage areas against mitigation requirements, for example, check availability of spill kits, adequate bunded storage for chemicals and fuels.

Lahendong Units 5 & 6: Health effects of hydrogen sulphide (H2S) on the surrounding communities.

Operational emissions from Power Plant site

H2S monitoring of the steam line serving the power plant and cooling tower emissions (as required by national legislation).

Ambient Air Quality / H2S Monitoring Programme

MOE Regulation No. 21 of 2008, on Air Emissions from Thermal Power Plants.

WHO ambient air quality guideline for H2S.

PGE General Manager / Operations Manager/HSE Manager

Initial year of ambient monitoring to be reviewed after first year of operation. If measured concentrations well within WHO guideline, discontinue monitoring and revert to UKL/UPL requirements

Monitored ambient H2S concentrations to meet the WHO ambient air quality guideline at residential receptors and not result in health effects on the local community.

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Ulubelu Units 3 & 4: Health effects of H2S on the surrounding communities

Operational emissions from the power plant site

H2S monitoring of the steam line serving the power plant and cooling tower emissions (as required by national legislation).

Ambient air quality/H2S monitoring program including meteorological monitoring

Health data collection program.

H2S emergency response plan

60% abatement of emissions from cooling towers using integrated removal technology.

MOE Regulation No. 21 of 2008, on Air Emissions from Thermal Power Plants.

WHO ambient air quality guideline for H2S.

PGE General Manager / Operations Manager/HSE Manager

Monitor steam line for H2S content in NCGs on monthly basis. Monitor H2S content of emissions from the cooling towers on a biannual basis. Air Quality / H2S Monitoring Programme (including meteorological monitoring) and Health Data Collection Programme to begin no later than December 2011. H2S Emergency Response Plan to be implemented upon operation. Abatement equipment to be operated throughout project life.

Monitored H2S emission concentrations to meet the emission limit standard and estimated removal efficiency of abatement systems. Monitored ambient H2S concentrations to meet the WHO ambient air quality Guideline at residential receptors and not result in health effects on the local community

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To protect land and soil from contamination from fuel or chemical storage facilities or spent oils, lubricants storage

Storage, transport and use of chemical and fuel on operational sites

Appropriate facilities / containers for segregation and permanent storage of chemicals / fuel on site including impermeable surfaces and adequate bunding. Temporary storage facilities available for maintenance periods.

Internal training of PGE operational shift staff / maintenance staff.

Government Regulation No. 74 of 2001 regarding Management of Hazardous and Toxic Material

World Bank Group EHS General Guidelines on Contaminated Land / Geothermal Power Generation.

PGE General Manager / HSE Manager

Mitigation throughout operation phase.

HSE monthly housekeeping walkover (observations of non-compliance will be reported only),

Internal annual HSE audit.

Requirement for PGE to implement mitigation as part of operational procedures.

Monthly HSE manager site walkover to observe site housekeeping.

PGE internal audit reports, including photographs where relevant and documentation of suitable storage measures, inventory of chemical storage maintained, documentation of spills / clean up / corrective actions.

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5.5 Institutional Arrangements to Implement the ESMP

The key parties and their primary roles in implementing the ESMP are summarised as follows: PGE – responsible for overseeing compliance with environmental policy and monitoring

compliance of the Project with the obligations set out in the ESMP on a day to day basis during the construction phase and operation phase;

EPC Contractors (power plant and steam systems) - responsible for implementing the site specific construction ESMP via their own environmental, health and safety (EHS) management system to be approved by PGE; and

Drilling Contractors – responsible for following and complying with construction ESMP requirements set out by PGE.

PGE’s existing Environmental, Health and Safety System will form the basis of the EHS management for the development and operation of the geothermal power plants. During the construction phase of the Project the EPC contractor will be required to develop a health, safety and environmental (HSE) plan which will be co-ordinated with the requirements of PGE’s System. The Contractor EHS management system (EHSMS) will include an EHS Policy for the Project and procedures outlining how it is intended to implement EHS management requirements through the design, construction and commissioning stages of the Project to ensure that works are executed in a responsible manner, and are in compliance with the national and World Bank standards. PGE currently employs one environmental specialist reporting to a manager in the head office in Jakarta. The company is in the process of filling a new position for environment manager and recruiting and additional environmental specialist. Figures 6 and 7 below are organograms showing the placement of environmental management functions at the individual project level in the field.

6. Stakeholder Consultations

The international ESIA team undertook two site visits to both Lahendong Units 5 & 6 and Ulubelu Units 3 & 4 during the early phases of the ESIA process in order to inform the inception (scoping) processes, to assist PGE in disclosing the inception (scoping) findings to local communities and NGOs and to support PGE in gathering comments used to inform the preparation of the draft ESIA (2010). After the draft ESIAs had been disclosed in country and in the InfoShop on October 7, 2010, PGE and the consultants made another visit to each site for consultation on the drafts. An additional site visit was undertaken by the international ESIA team at Lahendong to collect information for revisions to the draft ESIA necessitated by a revision in the project scope. The details are listed below.

6.1 Consultation and Disclosure Events at Lahendong Units 5 & 6

ESIA Inception (Scoping) Site Visit Stakeholder Interviews between 19th - 20th March,

2010; ESIA Main Site Visit Stakeholder Interviews between 7th - 10th June, 2010; ESIA Main Site Visit Consultation and Disclosure Events on 7th and 8th June, 2010; Disclosure of Draft ESIA for a 120-day period on 7th October 2010; Draft ESIA Consultation and Disclosure Event on 28th October 2010; ESIA Revision Site Visit Stakeholder Interviews on 8th January 2011; and

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ESIA Revision Site Visit Consultation Event on 10th January 2011

6.2 Consultation and Disclosure Events at Ulubelu Units 3 & 4

International ESIA Inception (Scoping) Site Visit Stakeholder Interviews between 22 - 23

March, 2010; International ESIA Main Site Visit Stakeholder Interviews between 13 - 15 June, 2010; International ESIA Main Site Visit Public Consultation and Disclosure Meeting on 14 June,

2010; Disclosure of the Draft ESIA for 120-days period commencing in September 2010; and Draft ESIA Consultation and Disclosure Event on 26 October 2010.

Figure 5: PT PGE Typical Project Construction Organogram

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Source: PGE

Figure 6: PT PGE Typical Project Operation Organogram

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