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CSPC ESIA Workshop Report 17 June 2002 Produced by Civic Exchange Workshop Objectives: 1. To clarify stakeholder questions about the project and to gain understanding of stakeholder concerns. 2. To receive comments from stakeholders on the ESIA 3. To get stakeholder suggestions on possible solutions to issues of concern to them. 4. To learn how stakeholders would like to be engaged in the future. Civic Exchange Aims: 1. To build trust. 2. To make the most of the time available. 3. To allow participants to speak about their concerns and questions and to raise possible solutions. 4. To allow ADL and CSPC to respond to stakeholder comments. Participants Name

Organization

BARCLAY, Robert

Planning & Resettlement Solutions (ADL team)

CADMAN, Victoria

ADL

CHAN, Alan CHAN, Alex

Agriculture, Fisheries and Conservation Department (AFCD) HKSAR Government The University of Hong Kong

CHENG Lok Keng

Green Power Hong Kong

CHEUNG, Lister

The Conservancy Association

FU, Dora GILKES, Julia

Sustainable Development Unit HKSAR Government Civic Exchange

HAN Boaxin

South China Institute of Environmental Sciences

HO Kin Chung

Green Power & Open University of Hong Kong

HUANG Chuang Liang

HUTTON, Elizabeth

Ocean and Fishery Bureau Guangdong Province Environmental Protection Department (EPD) HKSAR Government Civic Exchange

JOHNSON, Steve

CSPC

KILBURN, Mike

Hong Kong Birdwatching Society

HUI, Garry


CSPC ESIA Workshop Report 17 June 2002 KU, Andy

Shell

KU, Kay

Hong Kong Council of Social Services

LAM Chung Wah, James

City University of Hong Kong

LAM Wing-man LAU, Alexis

Planning Department HKSAR Government Hong Kong University of Science and Technology

LAU, Edwin

Friends of the Earth Hong Kong

LAW, Winnie LAY, Avis

Centre of Urban Planning and Environmental Management The University of Hong Kong Shell

LEE, Jennifer

Civic Exchange

LEE Yok Shiu

The University of Hong Kong

LI Xiu Feng

Nanhai Project Preparation Headquarters (NPPH)

LIU, Howard

Oxfam Hong Kong

LOH, Christine

Civic Exchange

LUO, Peter

CSPC

MA, Daphne

Friends of the Earth Hong Kong

NG Mee Kam NG Mei

Centre of Urban Planning and Environmental Management The University of Hong Kong Friends of the Earth Hong Kong

QUICK, Polly

Bechtel International (BSF)

RADIS, Steve

ADL

SO, Judy

Hong Kong University of Science and Technology

TANG Zhao Kai

CSPC

TILLSON, Timothy

ADL

UEBERGANG, Kylie

Civic Exchange

VAN GUNSTEREN, Frans

CSPC

WANG Guo Man, Charles

Civic Exchange

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CSPC ESIA Workshop Report 17 June 2002 WANG, Henry

Shell

WEN Wei Ying

South China Institute of Environmental Sciences

WINGES, Kristi

Civic Exchange

WONG, Dickson

Hong Kong Marine Conservation Society

WONG, Eric WONG Hiu Lam

Agriculture, Fisheries and Conservation Department (AFCD) HKSAR Government City University of Hong Kong

WONG M.H.

Hong Kong Baptist University

WONG, Nicholas

Hong Kong Marine Conservation Society

WOOD, Nick

Shell

WU Renhai

Zhongshan University

YIP, Miranda

Greenpeace

ZENG Xingzhou

Zhongshan University

Fishbowl – Moderator: Christine Loh 1. Introduction of key ADL and CSPC team members: Robert Barclay (Planning & Resettlement Solutions, ADL) – Resettlement consultant. Steve Johnson (CSPC) – Liaison with ADL in ensuring CSPC commitment to mitigation measures. Peter Luo (CSPC) – Liaison with local government and onsite representative for the project. Polly Quick (Bechtel International, BSF) – Ensure appropriate mitigation measures are put in place. Tim Tillson (ADL team leader) – Leader of international team of experts producing the ESIA report. 2. How will the issues and concerns raised in this workshop be incorporated into the final ESIA report? CSPC and ADL are in the process of finalizing the needed mitigation measures and developing a longterm environmental and social management plan. This document will identify the major activities associated with the proposed facility and the kinds of detailed procedures needed to manage the impacts of the project. The final ESIA report will be produced in mid-July 2002 and will be available to the public online at http://www.cnoocshell.com. [Civic Exchange editorial note: CSPC recently published a report entitled “Final Draft of Supplementary Note to ESIA”, prepared by ADL, which is available on the website. This report describes and analyses the ongoing work in relation to the project]. Site preparation will begin in late June. The draft version of the ESIA was published online on 16 April 2002. 3. This is an international joint venture project under Chinese jurisdiction. What regulatory standards are CSPC and ADL working towards? CSPC suggested that Chinese technical standards are often comparable to standards in other countries. However, for each aspect of the project, Chinese standards have been compared to a suite of international

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CSPC ESIA Workshop Report 17 June 2002 standards, including World Bank standards. In each case the project has adopted the more stringent standard. CSPC and ADL are committed to going beyond compliance – the standards used in the project are “voluntary” targets in the sense that they are not required by Chinese law. (See Appendix A of the ESIA for project standards and their derivation.) 4. What have been some of the more significant challenges in completing the ESIA? The most significant challenge was the lack of China expertise in socioeconomic analysis and the lack of a baseline for assessing the social impacts of the project. International standards of data collection for social analysis are not well developed and the process of data collection is very different from that used in environmental analysis. For the ESIA, ADL compiled a basic characterization of the community and its needs and used this to make certain estimates and assumptions. 5. What other community consultations has CSPC done as part of this project? There have been a number of levels in the in-country consultation. Starting 18 months ago, CSPC began discussions regarding the resettlement plan with the local planning department, housing department, health department and other relevant government agencies. As part of the community consultation, CSPC met with the village councils of the two villages that will be directly affected by the project and held interviews with 450 households. The Daya Bay consultation has also involved discussions with over 350 area stakeholders, including key local officials, designated fishing villages and representatives from other marine-dependent industries. CSPC will maintain communication with the different groups in the area using a variety of means, such as a newsletter. On a broader level, Shell has consulted a number of international organizations that have an interest in the project. In 2001, five Hong Kong nongovernmental organizations (NGOs) were involved in developing the terms of reference for the project. The overall consultation process is described in the Summary of Stakeholder Consultation, Appendix C of the ESIA Primary Consultation Report. 6. How will CSPC and ADL assure workshop participants that their concerns will be addressed? The timing of the Hong Kong consultation raised some questions about the sincerity of the workshop and CSPC’s commitment to incorporating stakeholder suggestions in the final ESIA report. Steve Johnson stressed that CSPC views discussion with various stakeholders as the cornerstone of the consultation process and sees Hong Kong stakeholders as very important to this process. Christine Loh noted that developing trust between CSPC and stakeholders and identifying ways to maintain communication were key goals of the workshop. Hong Kong stakeholders are impacted by events across the border and need to feel their concerns are taken seriously and integrated into long-term management strategies. Small group discussion – Morning session Air – Moderator: Christine Loh (see pages 16-18 for a list of small group participants) 1. ADL presentation on air issues: The proposed CSPC facility would comply with all applicable air quality standards in the PRC and would not adversely impact air quality in Hong Kong under normal or abnormal operating conditions [Alexis Lau comment: Reservations were expressed by the group in relation to the above statement. Alexis further explained that under certain wind conditions, which occur a number of times per year, pollutants from the plant will impact both Hong Kong and the PRD. Whether there would be adverse impacts depend on the total amount of emissions at the time, which can be very high in abnormal/catastrophic failure events] . The Hong Kong EPD recently conducted a study of air quality in the Pearl River Delta (PRD), which looked at the macro movement of air in the South China system. The findings indicate that the impact of emissions in the Daya Bay area on the Hong Kong airshed is very minimal. Pollutant

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CSPC ESIA Workshop Report 17 June 2002 emissions from the facility would be less significant for air quality in Hong Kong than emissions from developed areas in the PRD [Alexis Lau comment: The EPD study focused on past conditions when emissions from the CSPC plant were not in existence. Alexis is also concerned that the finding that the emissions from the facility will be “less significant” for air quality in Hong Kong than emissions from developed areas in the PRD does not mean that emissions from the CSPC plant are insignificant]. 2. What is the anticipated typical pollutant load from the facility, particularly for toxic emissions of dioxins, ethylene, propylene etc? Some information about air quality and emissions is provided in the ESIA report, but stakeholders felt that the level of detail was insufficient. The report indicates that additional data on air issues exists, but this data has not been made available. Stakeholders were specifically interested in more data on the different processes and units in the facility, toxic chemicals to be stored on site, the sources of emissions and waste disposal methods. Steve Radis of ADL stated that more specific data on air issues had not been included in the ESIA report because this would provide competitors with information about specific processes, product quality and other confidential aspects of the project. Christine Loh suggested that there is a balance between disclosure of proprietary information and access to basic data about emissions. [CSPC editorial note: The ESIA provides information about toxic air pollutants and sources in terms normally used for ESIA’s. More detailed information will be published when it becomes available later in the project].

3. What process was involved in the selection of the Huizhou site and what other sites were considered? CNOOC and Shell were interested in locating a facility in southern China to process offshore oil and invited a number of Chinese oil groups and local government authorities to jointly undertake this project. They then identified a number of potential sites and a government-approved design institute carried out research on each of these sites in 1992 and 1993. Two other sites were considered in addition to the Huizhou site: a site closer to the seaport and a site further to the east. The final site selection was based on a range of considerations, including environmental and social factors and the distance to the Daya Bay nuclear plant. These considerations are outlined in a 1993 feasibility report that included a very technical Environmental Impact Statement (EIS). This has been classified as a confidential state document by the Chinese authorities and is not available to the public. An Environmental Impact Statement Amendment (EISA) was prepared in 1997 in order to assess the current scope of the project. This document was reviewed internally by the State Environmental Protection Agency (SEPA) and externally by six Chinese environmental experts. (See page 8 for more information on the site selection process) Biodiversity – Facilitator: Jennifer Lee 1. What is the background for the ESIA and when did data collection begin? A 1993 Environmental Impact Statement (EIS) of on-shore facilities was prepared by the project sponsors, Shell and CNOOC, and subsequently approved by the State Environmental Protection Agency (SEPA). In 1998 SEPA approved a 1997 Amendment to the EIS that included changes to the project scope and some new environmental data. SEPA required preparation of an additional Marine Environmental Impact Assessment (MEIA) once the marine facilities of the project were clearly defined. The project was temporarily put on hold from 1998-2000 but data collection resumed in 2001 after the joint venture was formed between Shell and CNOOC. In addition to the MEIA (submitted in June 2002), CSPC also committed to prepare an Environmental and Social Impact Assessment (ESIA) to international standards in order to fulfill its own corporate obligations. The ESIA updates baseline information for both on-shore and off-shore facilities and also contains the information presented to SEPA in the MEIA.

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CSPC ESIA Workshop Report 17 June 2002 2. What data collection processes and methods were used in the ESIA? (a) Terrestrial Ecological / Wildlife Data A reasonably precautionary approach was used to evaluate the risks to the terrestrial ecology/wildlife. Primary data included interviews with local residents regarding fauna and habitat surveys (including pollution sampling in trees, crops etc.) undertaken in November 2001. This updated previous data presented in the 1993 EIS. Long-term data on fauna are not available for the Daya Bay Economic Trade Development Zone (ETDZ). Data from 1992 and 1993 were also used to distinguish seasonal trends where possible, together with additional data available from local scientists at the Zhongshan University and Academy of Aquatic Product Science. ADL also undertook a literature search on marine and terrestrial data using sources such as the World Conservation Monitoring Centre (WCMC), the IUCN ‘Red List’ for Hong Kong and the China Red Data Book of threatened species. These sources offer regional rather than local data but were used to identify other potential protected species. (b) Water Quality Data Assessment of impacts to water was based mainly on data collected for the feasibility study in 1993 and groundwater and marine quality sampling undertaken by Zhongshan University in 2001. Additional groundwater sampling was undertaken during geotechnical surveys on site. Water quality data for the ESIA were compiled and analyzed in government laboratories (all Chinese cities have an environmental monitoring agency that collects and analyzes water quality data according to certain state procedures). (c) Marine and Fish Stock Data Data used in the ESIA was based mainly on data collected in 1993 and 2001, including ecological surveys of plankton, benthos, fish, fish catches, cephalopods etc. Marine physical data were collected at the same time and augmented with vibracoring samples and a month-long marine survey undertaken by Bechtel Sinopec Engineering Foster Wheeler (BSF), a consortium of international engineering contractors acting as Project Management Contractor for the CSPC project, in February 2002. ADL also commissioned remote sensing (Sediment Profile Imaging [SPI]) to detail sediment characteristics and benthic successional stages for the entire Daya Bay area. Traditional grab sampling was also used at selected sites to confirm the remote sensing. Only one area of hard substrate, located away from the construction area, was detected among 190 sites investigated. This supports earlier suggestions that corals are located in shallow environments fringing the islands in Daya Bay. All marine and fish stock data was provided by the Chinese Academy of Fisheries. Work included the analysis of tissues in benthos, fish and cephalopods to document current levels of contamination in Daya Bay. CSPC has committed to further surveys on coral and other marine species to record baseline conditions and monitor disturbance impacts from dredging. Mitigation measures such as silt curtains could be used to minimize the impact of dredging. 3. Data collection began in 1993 - why was CSPC unable to finish collecting ESIA baseline data? There is a distinction between the kind of data needed as a baseline for an ESIA and the kind of data needed for a baseline against which ongoing monitoring and compliance programs will be measured. Further baseline monitoring is designed to address long-term impacts based on the areas of risk identified by the ESIA and a greater level of detail is necessary. 4. When was bird data collected and why is there no summer baseline or breeding data? Experts from Zhongshan University and a local Hong Kong bird expert undertook two bird surveys in September and November 2001. The bird experts also identified the species likely to breed in and migrate to and from the area. Specific data on the summer baseline has not been collected, but further bird studies will be carried out during the creation of the monitoring plan. Based on the ‘precautionary principle’ CSPC and ADL believe they have collected sufficient localized baseline information on birds to allow a risk-based impact assessment to be made.

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CSPC ESIA Workshop Report 17 June 2002

5. What is the timing of the final decision on the project? When will construction begin? The ESIA needs to be finalized by 15 July 2002 and CSPC shareholders will make their final decision on whether or not the project proceeds in September 2002. Resettlement of villagers has already commenced and the site is now being flattened and fenced off. Dredging will not begin until CSPC receives approval for all site facilities. A dolphin berth will be built (next to the existing Mabianzhou oil import terminal) and an approach channel to the new Donglian Harbor will be dredged. Additional dredging will be needed for the new ships turning circle at Mabianzhou. It is expected that the Donglian harbor and approach channel will be completed in 2004 and the Mabianzhou turning circle in 2005. Shoreline dredging will commence in January 2003 for construction of the harbour causeway and jetty. Certain facilities needed for the operation of a marine terminal are already in existence, such as the deep water shipping channel to Mabianzhou. The construction schedule allows for some alteration in the location of one of the pipelines if required and the development of a Dredging Management Plan (DMP) for each phase of dredging. 6. Why is CSPC doing an ESIA? It seems like the project will go ahead anyway. The findings of the ESIA will not be used to determine whether or not the project will go ahead. However the ESIA report represents a corporate commitment to sustainable development and does have some bearing on investment decisions. Preparation of an ESIA to international standards is a prerequisite for shareholder approval of the project. The ESIA process helps CSPC to understand the impacts of the project and develop appropriate mitigation measures, including monitoring. The ESIA report codifies the mitigation measures to be undertaken by CSPC and engages stakeholders in consultation on potential problems and solutions. It also demonstrates publicly that the project design meets international standards. As in all projects of this nature, the biggest challenge will be managing and monitoring impacts based on the ESIA recommendations, which will lead the way for proper operational procedures in the future. 7. The ESIA uses baseline data to determine impacts and consider mitigation, monitoring, implementation and enforcement – how can it be effective if baseline data is not sufficient? Baseline data was seen to be particularly lacking for bird and coral species. Although additional surveys will be conducted, CSPC and ADL believe that sufficient baseline information has been collected for a risk-based impact assessment (see questions 2(c) and 4). There is potential impact to water quality through effluent discharge over the long-term. This will be monitored, although the quantitative impact should be small. Conservative modeling also shows that there is good dilution and dispersion from the effluent discharge outfall and that for all except two parameters for six hours over a spring-neap tidal cycle in ‘worst-case’ (neap tide, no residual flow) conditions, forecast effluent discharges are at Class 1 while the bay is already at Class 2. This is discussed in more detail in Chapter 6 of the ESIA. [Mike Kilburn editorial note: Within the workshop ADL acknowledged that baseline data was insufficient, particularly for birds, for the purposes of developing biodiversity-monitoring programs].

8. Does the ESIA include baseline information of migratory species such as the humpback whale? The Hong Kong Marine Conservation Society (HKMCS) referred to recent evidence suggesting that the humpback whale is returning to the area in higher numbers. The whales use the path between Hong Kong and Taiwan, including Daya Bay, in migration. ADL committed to obtaining and considering this information and integrating it into impact evaluation and mitigation measures where appropriate.

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CSPC ESIA Workshop Report 17 June 2002 Social – Facilitator: Julia Gilkes 1. Overall project timing: The research for this project started in 1989 when CNOOC submitted a proposal to the Chinese government. The proposal was approved in January 1991. An internationally prepared Enviromental Impact Statement (EIS) was delivered to the State Bureau of Environmental Management in 1993. An Amendment (EISA) was submitted and approved in 1997. Both the 1993 EIS and the 1997 EISA were done according to Chinese government EIA standards and focused primarily on the on-shore environmental impact of the project. Throughout this period, Shell and CNOOC were in consultation with different levels of the Chinese government. The joint venture contract was approved by MOFTEC in November 2000 and the joint venture company (CSPC) was created in January 2001. CSPC then made the decision to conduct an ESIA using World Bank standards. (See pages 5 and 7 for more information) 2. Site selection: [CSPC editorial note: After discussion with people involved at the time and consulting records, the following is an accurate description of the site selection process] The complex site for the Nanhai Petrochemicals Project was jointly selected and confirmed in 1988 to 1989 by the project sponsors: CNOOC, CNPC, SINOPEC, CMHC, Guangdong Province and Shell. The Complex Site Selection Report is an integral part of the Project Proposal, which was approved in January 1991 by the Chinese government. As per the procedures specified by the state, the Beijing Design Institute of China Petrochemical Corporation, a qualified PRC professional design institute, was appointed to complete the Complex Site Selection Report. The site was selected with reference to the national industrial development plan, the national chemical industrial feed stock and product market balance as well as the Guangdong provincial economic development plan, after making a detailed study of the geographical, geological and seismological conditions; environmental factors; meteorological and hydrological conditions; water, land and air transportation conditions; power supply conditions; water supply and return conditions; jetty and channel conditions of the sites available for the complex construction; and considering other factors such as the proximity of feed stock and product markets, social environment and living conditions. Experts from PRC design institutes, universities and relevant government authorities were engaged in a review of the report before its submission to the PRC State Planning Commission for approval. In 1992, during the Feasibility Study Report, the location of the site in the Daya Bay Economic Development Zone was evaluated in detail, as per the procedures specified by the Chinese government, by the Beijing Design Institute of China Petrochemical Engineering Corporation, which completed a Daya Bay Site Selection Report. The existing site at Daya Bay was selected as it represented the optimal fit in terms of the national industrial development plan; the Guangdong and Daya Bay master plans; geographical, geological and seismological conditions; environmental and social factors; meteorological and hydrological conditions; utility supplies and local infrastructure; and the impacts of and relationships to other industries around the Daya Bay area. The PRC State Development and Planning Commission approved the Feasibility Study Report, including the Site Selection Report, on 30 December 1997. 3. What is the role of the Chinese authorities? There are three main stages of the project that must be approved by the Chinese Central Government: the project proposal (submitted in 1989), the feasibility study report and the joint venture agreement (signed in November 2000). The ESIA should be regarded as part of the feasibility study, but is not required under Chinese regulations. The CSPC ESIA is the first ESIA that has been conducted in Guangdong Province and there has been anxiety on all sides about the process [CSPC editorial note: Shell also prepared an ESIA for a previous project in Changbei]. It is also the first time that the local government

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CSPC ESIA Workshop Report 17 June 2002 has worked directly with a foreign consultancy. However, the local government has accepted international practice on this project. Local authorities in the Daya Bay area have jointly set up the Nanhai Project Preparation Headquarters (NPPH) to facilitate execution of the project. NPPH has worked closely with the ADL consultants on the social analysis and visited each household in the two villages that will be directly affected. The local government views the project as a positive development that will have important bilateral benefits for the local community. With China’s entry to the WTO, international practices, such as completion of an ESIA, will apply to more projects. Chinese exposure to the kinds of issues addressed in a social assessment has been a positive learning experience. 4. What is the attitude of the local community? When the initial project proposal was submitted 10 years ago, the two villages that will be directly affected were informed and have been updated on subsequent project development. Although the villagers have tended to focus on more pragmatic issues such as health, housing, income, and lifestyle, a recent consultation programme conducted by CSPC shows that villagers are also concerned about environmental protection and sea water quality. Local people have been active in seeking more information about the project. The area has already experienced considerable development impacts, mainly as a result of the economic boom in 1992 and 1993. At that time, the government acquired land from rural communities for industrial development and a large number of outside workers migrated into the area. Some 25 per cent of the current Donglian population arrived in the area 12 years ago. 5. What measures have been taken to ensure that resettled residents have a sustainable livelihood? The resettlement plan includes provisions to address the needs of low-income households and takes into account the needs of each resettled household. The poor and vulnerable groups of the population will also do well in terms of asset replacement and income. Under the resettlement plan, ancestral residents and new settlers will receive 200 RMB a person per month for two years as a transitional allowance for loss of earnings until replacement income is developed. The ancestral households are also guaranteed a minimum size house of 84 square meters, even if the compensation payment for their original homes is inadequate to cover the cost of a new house or apartment. The two population groups that are particularly vulnerable are those with ill health, including the disabled and the elderly, and the new settlers who have arrived in the area since 1992. A small number of these people are not registered and are therefore temporary residents. In total, the compensation for the resettled population is higher than for other projects in Guangdong Province of which CSPC is aware. In first stage of resettlement, 1,485 households were moved into new communities by 6 February 2002. The second stage of resettlement is for households within the 500-meter exclusion zone for the project and will occur at the end of 2002. Small group discussion – Afternoon session Air - Moderator: Christine Loh 1. What methods of waste treatment will be used? Minimization, recycling and reuse of waste are the preferred methods, although incineration will be necessary in some cases, for example, in treating biosludge. The chemical processes used on site do not use chlorine, so CSPC will not generate the sort of waste that tends to produce the toxic chlorinated compounds commonly called ‘dioxins.’ In addition, incineration of chlorine-containing materials from other sources (for example, PVC packaging) will be avoided to the greatest extent possible. In total, several thousand tons of waste will be incinerated each year. The incinerator is not commercial and will be used only for disposing of waste from the facility.

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CSPC ESIA Workshop Report 17 June 2002

2. What is the process for developing the environmental and social management plan? CSPC commitments under the management plan will be adjusted on the basis of stakeholder and government feedback. In terms of air monitoring, CSPC must meet a number of requirements, such as the implementation of a leak detection and repair program. The site will employ both continuous emissions monitoring (CEM) equipment as well as fixed perimeter monitoring to detect flammable and toxic fugitive emissions quickly. The management team at the facility will then regulate these kinds of programs and policies. Construction of the plant will take another three to four years and CSPC will use this period to design the optimal monitoring program based on industry experience and best practice. The standards used in the plant will be equivalent to European standards and the technology will be the same as that used in other Shell plants. This technology will ensure that emissions are as low as reasonably possible without jeopardizing the functionality of the plant. Stakeholders requested the monitoring plans for each chemical and information about when the monitoring plans would be finalized.[Judy So editorial comment: European standards are not necessarily the highest international standards Furthermore there was limited information provided on the standards used in other Shell plants and there was no confirmation that standards used in other Shell plants were of the highest international standard.] 3. What particulate standards will be used? Is there a PM2.5 standard? The more stringent standards for particulates and other pollutants will be used. There is currently no PM2.5 standard in China or in Hong Kong. It is not clear whether the facility will set its own PM2.5 standards or monitor PM10 only. Although the US Environmental Protection Agency is now developing methodologies to test PM2.5 emissions, these apply to ambient air quality and not to emissions. Most of the downwind particulate emissions from the facility will be sulfate and nitrate generated by combustion. 4. What data distribution processes will be implemented? Shell policy stipulates that all relevant data that is collected will be released to the relevant authorities, the public and to the Shell group worldwide. This also applies in abnormal circumstances; for example, when a leak is detected. These policies apply to all Shell facilities and to affiliates in which Shell holds 50% or more of the shares. The joint venture has adopted an HSE commitment, policy and management system that complies with Shell requirements. This includes the requirement to report publicly on the company’s performance. CSPC is unable to make a definite commitment as to the precise data that will be released without detailed discussions with the local authorities and a clear understanding of Chinese regulations regarding the disclosure of information. 5. What options does CSPC have for the release of information? How can the joint venture help to improve regional air quality? It was mentioned in the group that China has stringent environmental standards and strong expertise on environmental issues but some participants were less confident about regulation and monitoring. For this reason, the release and distribution of information about the operations of the facility is particularly important. Sharing data is also a crucial step in lowering emissions in the PRD. Data sharing between Hong Kong and Guangdong Province is typically very difficult as some data is classified as confidential by the Chinese government. One way to circumvent government obstacles is to conduct a joint study on air quality with a major Chinese university. Although the data will not be available to Hong Kong experts, it will be reviewed by Chinese experts. Releasing information in the scientific realm is one way of disclosing it to the public. This would also be a way for the joint venture to fund scientific research on air quality management.

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CSPC ESIA Workshop Report 17 June 2002 Biodiversity – Facilitator: Julia Gilkes, Translator: Jennifer Lee 1. What dredging methodology will be used and what are the impacts of dredging? Dredging will be used for the shipping channels and in digging trenches for the feedstock pipeline and the effluent pipeline. Dredging in the Donglian Harbor and approach channel will begin sometime in early 2003. For modeling purposes, the ESIA assumes the suction hopper method of dredging will be used. This method minimizes impacts at the excavation site but spillover from the barges causes high turbidity. CSPC are committed to producing a Dredging Management Plan (DMP), which must be completed before dredging begins. In trying to minimize dredging impacts, the ESIA and DMP will consider both the financial and technical feasibility of mitigation measures. Where possible, CSPC hopes to minimize the amount of dredging and to schedule it for less sensitive times of the year. The DMP will be prepared in consultation with appropriate parties, although it is not clear whether public consultation will be included in this process. 2. Is the marine mud contaminated? There are elevated levels of heavy metals in the mud, although the levels in vibrocore samples do not exceed the London Dumping Convention (LDC) standards, which are similar to those used in Hong Kong. The vibrocore samples indicate dredged sediment is suitable for dumping in the open sea. Analysis of surface sediments shows arsenic levels exceed the LDC at four sites: Yaling Bay, south of Mabianzhou, Mangzhou and near to the effluent discharge outfall. However, these sites are not in areas where dredging will occur; moreover, vibrocores taken along the proposed route of the dredging channel show no exceedences of the LDC. Vibrocore samples are more representative than surface grab samples as they are representative of the full depth of dredging rather than the surface layers. CSPC will evaluate the impact of dumping at the sites that have been identified by the Chinese State Oceanic Administration. Regular monitoring of water quality will be incorporated into the DMP. Dredging mud is not suitable for reclamation as good sand is needed for a strong foundation. The CSPC project will not involve any reclamation, although the local government does have separate plans for possible future reclamation. 3. How will CSPC mitigate and monitor the impacts of dredging for sensitive receivers such as spawning nurseries, fish eggs and coral? Sensitive receivers in Daya Bay include corals, mangroves, spawning areas and fisheries. Impacts to fixed species such as coral may be mitigated somewhat through the use of silt curtains and by using trenching rather than dredging where possible for pipelines. Eggs and larvae are more difficult to protect, as the places where they are concentrated are highly variable year on year. The dredging schedule will take into account sensitive spawning periods for local species. A difficulty is the fact that local species spawn at different times of the year – CSPC welcomes information on this issue to determine which species are particularly vulnerable. Impacts to sensitive receivers will be determined by evaluation of overall ecosystem health and monitoring of water quality, turbidity and other physical indicators. If dredging does impact the livelihood of fishermen and aqua-culturists, appropriate compensation will be provided. 4. How will the effluent be treated and what is the long-term impact on biodiversity? Details of effluent treatment are provided in Chapters 3 (technical details), 6 (modeling) and 7 (impacts) of the ESIA. CSPC will collect and treat contaminated rainwater runoff from the site before discharge. The possibility of recycling effluent as cooling water make up is being investigated. A sewage treatment plant with two independent lines and significant overcapacity will be located on site. Treated effluent from plant operations will be released offshore into Daya Bay via an effluent pipeline 22 km long. At the end of the pipeline there will be a specially designed 400-meter long effluent diffuser to ensure good dispersion of the treated effluent. The impact of effluents on coral and other species is complex – stakeholders are requested to contact ADL for more information on this issue. Shifting the location of the effluent outfall might mitigate the minor short-term impacts to ambient water quality at the current site,

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CSPC ESIA Workshop Report 17 June 2002 but would create similar short-term changes in ambient water quality that might potentially impact other areas, such as the turtle reserve. Given the adequacy of dispersion in Daya Bay, the impact to Hong Kong is considered to be almost non-existent. 5. What are the potential sources and impacts of an oil spill? What contingency/precautionary measures have been developed? An oil spill contingency response plan will be developed by CSPC in cooperation with local authorities. However, the difficulty in modeling is that the effect of each spill will be dependent on specific conditions at the time, for instance, wind and tidal conditions. Hundreds of modeling runs have been made but no consistent impact patterns have emerged. CSPC therefore needs to create a plan that provides for different sets of responses depending upon the specifics of each spill. One potential source for an oil spill is the oil import terminal. A permanent oil boom is already in place at the existing oil import terminal at Mabianzhou to contain any spillages. In addition there will be two boats – one fireboat and one clean-up boat – based at the terminal. A second source is oil from the port, including oil from ships cleaning out their oil tanks. Regulation of these practices will be covered by a Port Management Plan. It is unclear whether Hong Kong port regulates this practice. Accumulative, undetected, small-scale spills could lead to deterioration in the environmental situation. CSPC management will be working to minimize this risk and the water quality monitoring scheme will be designed to detect early warning signals. The overall aim is to improve the water quality within Daya Bay, but this will require government assistance and collaborative monitoring. 6. Is there an eco-toxicology plan? An eco-toxicology plan will be integrated into the overall monitoring plan. CSPC intends to take a leading role in monitoring chemical spills as it has greater expertise in this area. Responsibility for monitoring oil spills can be shared with the Chinese authorities. 7. What is the ecological loss on site and will there be any compensatory planting? Data on the ecological value of the farmland is absent and analysis of this issue has been limited. However, there are only 4 hectares of primary forest on the site. The remaining area is agricultural land with some secondary coniferous forest of lower productivity. The ecology on-site has also been impacted by past DDT use in the area. There are no current plans to replant the area and stakeholders suggested that this should be considered further. CSPC also welcomes suggestions on other initiatives that will have long-term positive impacts to Daya Bay. Social Issues - Facilitator/translator: Charles Wang 1. What employment and livelihood compensation will be available for the resettled villagers? The resettlement plan will shift more than 8,000 people from a rural to an urban environment. However, about 40 per cent of this population is already engaged in urban employment activities. After physical relocation, there will be a two-year transitional phase during which the resettled households will receive 200 RMB per person per household per month as livelihood compensation. They will also have access to opportunities for retraining and alternative employment. In total, 2,900 villagers of wage earning age will be resettled; of these 1,600 are expected to need assistance with livelihood restoration. Since all resettlers will be formally transferred from rural to urban registration, they will not be confronted with the restrictions regarding urban employment that are applied to rural workers. They will also have access to better medical and educational facilities. People who moved in the first phase of resettlement are already benefiting from improvements in living conditions in terms of quality of housing and access to better educational and medical facilities. The

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CSPC ESIA Workshop Report 17 June 2002 resettlement town has two elementary schools, three kindergartens, two clinics, two village council buildings and two markets. These facilities have been built specifically for the resettled population. Resettled villagers are also guaranteed housing in the resettlement villages. There are also facilities for small businesses in the resettlement community, including shops and a market. Small business is the preferred employment option for the local population and so CSPC will be providing some training in basic business planning. In addition, a specified quota of jobs in the construction and ongoing operations of the plant are to be filled by directly affected local residents. CSPC has focused on people over 40, who are a more vulnerable group in terms of employment. Men over 40 and women over 45 often find the transition to a new livelihood difficult. There are a number of security and maintenance roles within the plant and those in this age group will have priority for those jobs. CSPC will be monitoring livelihood restoration and putting out a quarterly newsletter that advertises jobs. The agricultural land acquired for the project site is collectively owned. According to the Chinese land code, the remuneration for this land must be used to develop alternative employment. Villagers will be compensated on a communal basis through the award of 35 hectares of land in an industrial estate. The government will then facilitate meetings with potential investors and villagers can build factory shells for a variety of industries. This is a significant asset and could potentially more than replace the value of the agricultural land. Villagers will also receive compensation at the upper level of the national compensation policy for land acquired by the project. The compensation deed on each productive package of land is based on average production over a three-year period. The compensation for the productivity of the land itself is eight to ten times the actual production value. This money goes to the local village councils and will be used for livelihood restoration on a communal basis. Villagers who raise pigs, fish or other livestock or are involved in farming are compensated according to yearly production based on average production over a three-year period. For example, they are compensated for the yearly production of fruit trees, fish ponds etc. 2. What is the role of the Chinese government in the resettlement plan? Resettlement is the responsibility of the government. The local government will distribute compensation to villagers and assist with transition stage arrangements by monitoring the overall employment process. The government will also provide new opportunities to villagers by granting them 35 hectares of industrial land (see above) and facilitating meetings with potential investors. In addition, the local government has built some of the new facilities in the resettlement communities, although CSPC covers the cost of construction through the land contract. In total, the government has contributed 1.3 billion RMB for resettlement. CSPC meets with the local government once a month to liaise on the details of the resettlement. Both CSPC and Huizhou government representatives described cooperation on this project as a very positive and valuable experience. 3. How will CSPC communicate with the local community and pass on information? CSPC will communicate with local residents through various channels and keep a record of their concerns and questions. The CSPC newsletter informs residents about the general progress of the project, employment opportunities and the possible impacts of the project on their lives. It also provides them with information about how to approach CSPC. Community members can approach CSPC directly and get information from the on-site notice board, which has information about the different services available to them. A Public Consultation Plan has been developed which includes regular face-to-face meetings with Daya Bay stakeholders. In order to provide residents with a basic understanding of the project,

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CSPC ESIA Workshop Report 17 June 2002 CSPC has produced a simple, easy-to-read booklet for the community that outlines the project process and the social and environmental impacts. The booklet includes the contact details for everyone involved in the project and a feedback sheet. In the future, CSPC plans to put the information in the ESIA report into a textbook to be used in the local schools. On a more international level, people can communicate with CSPC through its website at http://www.cnoocshell.com. 4. Who initiated the consultation process and what are the long-term benefits for CSPC? The ESIA consultations were initiated by Shell as part of its corporate obligations. As the Chinese government does not require an ESIA for projects, identifying and establishing contact with the relevant government agencies was somewhat difficult. The challenge throughout has been to integrate international standards and Chinese practice. The ESIA report represents the joint efforts of ADL, CSPC and the local government. The decision to conduct an ESIA has affected the overall budget for the project. However, the ESIA is part of CSPC’s social commitment in China and the budget has been approved by its Board of Directors. Robert Barclay of Planning & Resettlement Solutions (ADL) noted that the economic benefits of the project to the community should be understood in the context of the multiplier effect. The flow-down benefits of an investment are typically ten times greater than the direct cost of the investment. In China, this multiplier may be even higher. Government also benefits significantly from this investment through downstream economic benefits. 5. What is the social impact of the project in broader, regional terms? What about Hong Kong? The ESIA does not address the large-scale, regional impacts of the project. One of the challenges in analyzing the social impacts was deciding what boundaries should be used in defining the scope of study. CSPC can control or dictate the impacts on a local level, but when the scope becomes too broad, it is much more difficult to identify impacts and their causes, which are often complex, or implement the appropriate mitigation strategies. The data becomes less reliable and more speculative. However, the general feeling is that the impact for the region as a whole will be positive - economically, environmentally and socially. Li Xiu Feng of the NPPH noted that the regional impacts of the project should be considered from both a short- and a long-term perspective. In the short-term, there will be an investment of 1-2 billion RMB. This will generate more revenue within 10 years. The tax revenue for the project is equal to the current income of the county government. The project will have a positive impact for neighboring cities, including Hong Kong, both through raw material supply and through the consumption of services. For example, Hong Kong is a service and logistics center and will be a supplier for the facility. The project may also raise Hong Kong’s awareness of social development issues and result in a transfer of tools and experience. 6. Have there been any objections to the project from the local community? Most of the objections have been from residents who moved into the area within the past 12 years. Many of their complaints deal with specific aspects of the resettlement plan, such as housing. Newer residents are not given first priority in assigning housing and may be assigned to an apartment rather than a house. 7. What framework and indicators were used in the social analysis? The EIA process has been well defined and documented over the past 20 years. However, ADL advised that there is no well-established and consistent international framework for social impact assessment (SIA). The World Bank mechanism focuses on the resettlement action plan rather than impact assessment. CSPC and ADL have developed their own methodology for the ESIA project through trial and error. There is a wide variety of data to be analyzed and often the data is not in a form that can be put in a report – the level of detail and analysis is limited. Part of the assessment process involves analyzing other projects and then using this data to make recommendations about the management and containment of impacts. The actual impacts are unpredictable. However, this uncertainty can be addressed by the ongoing development of mitigation strategies. These strategies will become more focused as more data becomes

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CSPC ESIA Workshop Report 17 June 2002 available. The validity of an assessment report as a document lies in the use of a structured systematic approach. As far as possible, the project ESIA uses a consistent approach throughout and identifies certain socioeconomic factors as indicators. On some fundamental issues, there is no data or access to data has been limited. It may be that in this respect, China is lagging behind other countries. CSPC, ADL and the Huizhou authorities have collaborated in essentially inventing methodologies for data collection and analysis. Secondary data from Mainland authorities regarding the population affected has been used in the ESIA. Surveys were then carried out to collect information to fill the data gaps. Evaluation and Closing Remarks – Moderator: Christine Loh Several stakeholders expressed dissatisfaction with the timing of the workshop and the level of information made available to the public. Certain key data about the project process are missing from the report, particularly in terms of air issues. Greenpeace stated that they did not regard the workshop as a consultation and did not wish to be listed as a consultant to the project. Representatives from the Hong Kong Government also noted that the workshop should not be regarded as a formal consultation between the HKSAR and CSPC, which should be done through established channels, if necessary. CSPC representatives responded to these concerns by noting that corporate commitment to the consultation process will be evident in the finalized ESIA report, which will be published on 15 July 2002. The representatives thanked participants for their contribution and said that the workshop had been a positive and valuable experience. This workshop record will be included as an addendum to the final ESIA, available via the CSPC website at http://www.cnoocshell.com. Stakeholders should contact Peter Luo, Public Affairs Manager for the project, with any further comments and questions. Peter Luo’s contact information is: Email: Tel: Fax: Address:

Guangdao.G.D.Luo@cnoocshell.com +86 752 2392949 +86 752 2392950 RM1516-18, Noble Hotel, 22 Maidi Road, Huizhou City, Guangdong, P.R. China, Post code: 516001

Post-workshop Comments and Information CSPC has recently released a report entitled “Public Comment Consultation Final Report” and prepared by ADL (available at http://www.cnoocshell.com). This report summarizes all pre-workshop questions posed by Hong Kong stakeholders and includes responses to these questions. This report also provides further information from CSPC and ADL on specific questions raised during the workshop. CSPC has also recently published a report entitled “Final Draft of Supplementary Note to ESIA”, prepared by ADL, which is also available on the website. This report describes and analyses the ongoing work in relation to the project.

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CSPC ESIA Workshop Report 17 June 2002 CSPC has also confirmed that this report “CSPC ESIA Workshop Report� which was prepared by Civic Exchange, will be included on the website.

Small Group Participants Morning session Air Facilitator/translator: Christine Loh, Civic Exchange Recorder: Kristi Winges, Civic Exchange Participants:

Cheng Lok Keng, Green Power Hong Kong Gary Hui, Environmental Protection Department (EPD), HKSAR Government Steve Johnson, CSPC Andy Ku, Shell Alexis Lau, Hong Kong University of Science and Technology Lee Yok Shiu, The University of Hong Kong Mei Ng, Friends of the Earth Hong Kong Steve Radis, ADL Judy So, Hong Kong University of Science and Technology Henry Wang, Shell Wong Hiu Lam, City University of Hong Kong Miranda Yip, Greenpeace

Biodiversity Facilitator/translator: Jennifer Lee, Civic Exchange Recorder: Kylie Uebergang, Civic Exchange Participants:

Victoria Cadman, ADL Alan Chan, Agriculture, Fisheries and Conservation Department (AFCD), HKSAR Government Williams Cheung, World Wide Fund for Nature Lister Cheung, The Conservancy Association Han Boaxin, South China Institute of Environmental Sciences Huang Chuang Liang, Ocean and Fishery Bureau, Guangdong Province Mike Kilburn, Hong Kong Birdwatching Society Avis Lay, Shell Peter Luo, CSPC Daphne Ma, Friends of the Earth Polly Quick, Bechtel International, BSF Frans Van Gunsteren, CSPC Wen Wei Ying, South China Institute of Environmental Sciences Eric Wong, Agriculture, Fisheries and Conservation Department (AFCD), HKSAR Government Dickson Wong, Hong Kong Marine Conservation Society Wu Renhai, Zhongshan University Zeng Xingzhou, Zhongshan University

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CSPC ESIA Workshop Report 17 June 2002 Social Facilitator: Translator: Recorder: Participants:

Julia Gilkes, Civic Exchange Charles Wang, Civic Exchange Elizabeth Hutton, Civic Exchange Robert Barclay, Planning & Resettlement Solutions, ADL team Alex Chan, The University of Hong Kong Dora Fu, Sustainable Development Unit, HKSAR Government Kay Ku, The Hong Kong Council of Social Services Lam Wing-man, Planning Department, HKSAR Government Edwin Lau, Friends of the Earth Hong Kong Winnie Law, The Centre of Urban Planning & Environmental Management, The University of Hong Kong Li Xiu Feng, NPPH, Hui zhou Ng Mee-kam, The Centre of Urban Planning & Environmental Management, The University of Hong Kong Tang Zhao Kai, CSPC Tim Tillson, ADL team leader Nick Wood, Shell

Afternoon Sessions Air Facilitator/translator: Christine Loh, Civic Exchange Recorder: Kristi Winges, Civic Exchange Participants:

Cheng Lok Keng, Green Power Hong Kong Gary Hui, Environmental Protection Department (EPD), HKSAR Government Steve Johnson, CSPC Alexis Lau, Hong Kong University of Science and Technology Avis Lay, Shell Daphne Ma, Friends of the Earth Hong Kong Lee Yok Shiu, The University of Hong Kong Steve Radis, ADL Judy So, Hong Kong University of Science and Technology Henry Wang, Shell Wong Hiu Lam, City University of Hong Kong Miranda Yip, Greenpeace

Biodiversity Facilitator/translator: Jennifer Lee, Civic Exchange Facilitator: Julia Gilkes, Civic Exchange Recorder: Kylie Uebergang, Civic Exchange Participants:

Victoria Cadman, ADL Alan Chan, Agriculture, Fisheries and Conservation Department (AFCD), HKSAR Government Williams Cheung, World Wide Fund for Nature

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CSPC ESIA Workshop Report 17 June 2002 Lister Cheung, The Conservancy Association Han Boaxin, South China Institute of Environmental Sciences Huang Chuang Liang, Ocean and Fishery Bureau, Guangdong Province Mike Kilburn, Hong Kong Birdwatching Society Peter Luo, CSPC Polly Quick, Bechtel International, BSF Frans Van Gunsteren, CSPC Wen Wei Ying, South China Institute of Environmental Sciences Eric Wong, Agriculture, Fisheries and Conservation Department (AFCD), HKSAR Government Dickson Wong, Hong Kong Marine Conservation Society Wu Renhai, Zhongshan University Zeng Xingzhou, Zhongshan University Social Facilitator/translator: Charles Wang, Civic Exchange Recorder: Elizabeth Hutton, Civic Exchange Participants:

Robert Barclay, Planning & Resettlement Solutions, ADL team Alex Chan, The University of Hong Kong Dora Fu, Sustainable Development Unit, HKSAR Government Kay Ku, The Hong Kong Council of Social Services Lam Wing-man, Planning Department, HKSAR Government Edwin Lau, Friends of the Earth Hong Kong Winnie Law, The Centre of Urban Planning & Environmental Management, The University of Hong Kong Li Xiu Feng, NPPH, Huizhou Ng Mee-kam, The Centre of Urban Planning & Environmental Management, The University of Hong Kong Tang Zhao Kai, CSPC Tim Tillson, ADL team leader Nick Wood, Shell

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CSPC ESIA Workshop Report  

HUANG Chuang Liang Ocean and Fishery Bureau Guangdong Province HUI, Garry Environmental Protection Department (EPD) HKSAR Government HUTTON,...

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