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Case Study: Braskem-Idesa

Background

Braskem-Idesa Etileno XXI Project is a Major Capital Project promoted by the Mexican-Brazilian joint-venture of Braskem-Idesa, consisting in the construction and operation of a polyethylene plant in Veracruz, Mexico. With an investment of more than $4.5 billion USD, Braskem-Idesa represents the largest petrochemical investment for the last decade in Latin America and for over 30 years in Mexico.

Located in a highly industrialized area, the Project is being built adjacent to an important petrochemical cluster. This has made it subject to public scrutiny due to legacy environmental and social issues such as a history of spills and explosions causing environmental and health-related damage, a lack of confidence by affected communities towards the performance of industrial activity; constant blockades and strikes from community members and workers demanding transparent communication and improved working conditions and wages. Such issues have led to a general discontent and societal disapproval of industrial activity.

ERM was commissioned by Braskem-Idesa to design an Environmental and Social Management System (ESMS) that would properly identify and overcome issues like those mentioned in a proactive and preventative manner.

Financial Institutions providing funding for the Project included: the International Finance Corporation (IFC), the Inter-American Development Bank (IDB), Export Development Canada (EDC), SACE Bank of Italy, the Mexican National Bank of Exports, and the Nation Development Bank of Brazil (BNDES). Given that the Project would receive financing from international institutions, the ESMS was also designed to be based on international best practices.

ERM’s Role

ERM provided Braskem-Idesa with several areas of knowledge and expertise that resulted in a successful financial close by said institutions in December 2012. Key areas of expertise included:

Support in relations with Lenders

  • Review and negotiation of an Environmental and Social Action Plan (ESAP)
  • Participation in follow-up visits and audits from third party consultants
  • ESAP follow-up

Support in relations with Archeological Authorities

  • Human and material resources provision
  • EHS field supervision

Implementation of Environmental Programs

  • Air-environment quality monitoring
  • Noise monitoring
  • Surface and groundwater monitoring
  • Air monitoring network design
  • Endangered flora relocation and monitoring
  • Fauna rescue prior and during site preparation
  • Wood release before Federal Environmental Agency
  • Critical habitat offset plan development and start-up
  • Risk assessment of adjacent facilities

Implementation of Social Programs

  • Identification of potential projects for social investment
  • Training of social team personnel 
  • Continuous support in relations with the community
  • Participatory monitoring program
  • Community Health Impact Assessment

ERM’s support continues on both environmental and social aspects of the Project and its associated off-site constructions during the Site Preparation, Construction and Operation phases.

Social Management Activities
Key social activities include: the definition of the direct and indirect social area of influence, identification and mapping of key stakeholders, categorization and prioritization of affected communities, identification and analysis of vulnerable groups or those at risk of vulnerability, potential interaction with the Project, and political configuration.

An IFC Performance Standard compliant Social Impact Assessment was completed and, based on its findings, programs, policies and protocols were designed to be an intergral part of the ESMS. Examples of these policies and protocols included: Stakeholder Engagement Program; Community Investment Program; Labor Conditions Program; Local Hiring Policy; Cultural Heritage Protection Program and Chance Findings Protocol; and a Land Acquisition Program, among others.

Key to the design of the Stakeholder Engagement Program is the Public Participation Program (PPP), the tool used by Braskem-Idesa to foster and build efficient and solid relations with key stakeholders by transparently disclosing relevant Project information and allowing them to take part in the Project’s development phases. The stakeholders – mainly community members – are regularly updated with information regarding the Project, including: activities to be implemented as well as expected impacts and their respective mitigation measures, amongst others. The PPP is composed of a series of interrelated activities and mechanisms: community meetings, open houses, easy-access grievance mechanism, and environmental monitoring participatory activities.

ERM has also been involved in ongoing training for Braskem-Idesa’s personnel in order to get them acquainted with the implications of applying international best practices, including Human Rights and Stakeholder Engagement, in their procedures and daily operations.

Environmental Management Activities
Key environmental activities included: the definition of the environmental area of influence; environmental impact assessment; identification and mapping of flora and fauna species against the International Union for Conservation of Nature Red List, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, and local legislation; the implementation of a complex flora and fauna rescue program (including a cycad rescue program of special interest to the Financial Institutions); and a robust Risk Impact Assessment.

Management programs and monitoring activities have been conducted, including a Reforestation and Compensation Scheme, Environmental Monitoring for water, air and noise quality. ERM has also provided Braskem-Idesa personnel with technical assistance on environmental management and has participated in the supervision of the Project’s contractors in charge of collecting biotic and abiotic data.

Benefits to the client

Braskem-Idesa Etileno XXI Project SMS has achieved the following significant goals:

  • Benchmarking standards for engaging with communities and other stakeholders have been set, not only regionally, but nationally
  • General trust from affected communities and society as a whole has been gained despite the complicated legacy issues surrounding the petrochemical industry 
  • The social license to operate has been acquired, and to date, maintained
  • International standards for rescuing and protecting flora and fauna have been set in the region

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