March 2007

REPORT OF THE

EXTERNAL COMPLIANCE MONITORING GROUP (ECMG) THIRD SITE VISIT – POST-PROJECT COMPLETION FEBRUARY 2007

Chad Export Project

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This report has been prepared by:

D'Appolonia S.p.A. ECMG members:

Roberto Carpaneto – Team Leader, Pipeline Engineering, HSE Specialist Paolo Lombardo – Team Coordinator, Environmental Engineer Frédéric Giovannetti - Socio-Economic Specialist Eugenio Napoli - Environmental Specialist1

SUBJECT: THIRD POST-PROJECT COMPLETION VISIT OF THE D’APPOLONIA ECMG, FEBRUARY 2007

INTRODUCTION 1. This report summarizes observations made during the third Post-Project Completion

field visit (February 12 to February 21, 2007) of the Environmental Management Plan (EMP)2 External Compliance Monitoring Consultant for the Chad/Cameroon Oil Development and Transportation Project (referred to as the External Compliance Monitoring Group – ECMG)3 related to the assignment of monitoring the Chad/Cameroon Oil Development and Transportation Project.

2. Consistent with the ECMG Terms of Reference, D’Appolonia has been contracted to

continue its monitoring during the operations phase and to conduct Post-Project Completion Services for the Chad Export Project. The scope includes one site visit to

1 Section 27 has been prepared with the contribution of Ms. Lori Anna Conzo (Natural Resources Management

Specialist) 2 The list of acronyms is at the end of the text. 3 Under contract by the International Finance Corporation (IFC), D’Appolonia S.p.A. (D’Appolonia) of Genoa, Italy,

as the Environmental Management Plan (EMP) External Compliance Monitoring Consultant for the Chad/Cameroon Oil Development and Transportation Project (referred to as the External Compliance Monitoring Group – ECMG), is responsible for providing an independent assessment of the compliance of the development Consortium [Esso Exploration and Production Chad Inc. (EEPCI), Petronas Carigali (Chad EP) Inc., and Chevron Petroleum Chad Company Ltd.], the Tchad Oil Transportation Company S.A. (TOTCO) and the Cameroon Oil Transportation Company S.A. (COTCO) with obligations under the EMP and the relevant Environmental Commitments in the Finance Documents and the World Bank Project documents. Since 2001, D’Appolonia has also been responsible for monitoring performance on two World Bank Technical Assistance/Capacity Building (WBTA) projects. This monitoring has been conducted under a parallel agreement between the World Bank and D’Appolonia. Under this agreement D’Appolonia monitored the Petroleum Sector Management Capacity-Building Project for Chad and the Petroleum Environment Capacity Enhancement Project (CAPECE project) for Cameroon from 2001 until November 2005. At the instruction of the World Bank, D’Appolonia did not include the two WBTA projects in the February 2007 visit. The Lender Group and the World Bank will use the information provided by D’Appolonia, as well as other available relevant information, to determine, subject to provision of the Finance Documents and the World Bank Project Documents, whether it finds the Consortium, TOTCO and COTCO are in compliance with the EMP and the relevant Environmental Commitments. The World Bank, subject to provisions of the World Bank Project Documents, will similarly determine if the Capacity Building programs are being implemented in a timely manner and, in particular, if the specific EMP obligations of the respective Governments are being met. D’Appolonia’s engagement as the ECMG does not affect the continuation of the current practices of the World Bank Group and the Lender Group for consultation with Non-Governmental Organizations (NGOs), both local and international, universities, governmental agencies and other resources.

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Chad and Cameroon facility sites per twelve month period following Project Completion Date until full repayment of the Senior Project Indebtedness. A second site visit may be conducted during the same period at the discretion of the Lender Group.

3. Under its contract between the Lender Group, the World Bank and the Consortium,

D’Appolonia, as the EMP Compliance Monitoring Consultant (ECMG), has also the obligation to continue to review, comment and report on the two World Bank Technical Assistance/Capacity Building (WBTA) projects for Chad and Cameroon project compliance throughout the lives of these projects. Activities include those carried out during the construction phase of the project with the following changes: 1) site visit frequency reduced to one per year (scheduled) and a second per year (discretionary); 2) reporting frequencies reduced accordingly. At the instruction of the World Bank task leaders for the Chad and Cameroon WBTA programs, the ECMG services to monitor the programs for this year were not required.

4. The Chad/Cameroon Oil Development and Transportation Project (referred to as the

Chad Export Project) is fully operational. Ongoing activities relate primarily to the continuation of drilling of additional wells in the three fields (Komé, Bolobo and Miandoum) of the Oil Field Development Area (OFDA), and connecting them to the crude oil processing facilities. This ongoing process is called infilling. Since 2005 this infilling program has been implemented to maintain oil production to the desired level and is being supported by the addition of the two satellite fields (Nya and Moundouli) already in production (not part of ECMG scope of work) and a third one (Maikeri) which has been recently approved by the Government of Chad. The EMP estimate was 287 wells and the current plan is for approximately 450 wells. At the time of the visit, there were 339 production wells in the OFDA (217 in Komé, 61 in Bolobo and 61 in Miandoum) and 35 injection wells (total 374 wells). This third Post-Project Completion visit focused on the actions taken by COTCO in Cameroon and EEPCI/TOCTO in Chad for managing both social and biophysical aspects related to the Operations phase and to the additional construction activities ongoing in the OFDA. The visit also monitored the effectiveness of the EMP organizations in issue management and linking with the other Operations teams. Specific activities conducted during this mission included4:

• visit the sites of the Project fixed facilities in both Chad and Cameroon; • visit the OFDA installations and Project affected villages; • visit some communities affected by the implementation of the Indigenous Peoples

Plan (IPP), and meet with the Environmental Foundation (Foundation for Environment and Development in Cameroon [FEDEC]) in Cameroon;

• meet with COTCO and EEPCI/TOCTO teams responsible for EMP compliance monitoring and review relevant monitoring records in both countries;

• conduct a closeout meeting covering the Chad Export Project and FEDEC, with EEPCI/TOTCO and COTCO management and EMP personnel, Chadian Government officials, and Lender representatives from the International Finance Corporation (IFC), focusing on key findings, correction of any factual inaccuracies and possible corrective/upgrade actions.

4 See Appendix A for the detailed Daily Activity Summary

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5. The closeout meeting for the Chad Export Project was conducted in N’Djaména, Chad on February 21, 2007. The information presented in these meetings has formed the basis for this report. The information, observations, and opinions presented in this document are those of D’Appolonia and are independent of those of the development Consortium, EEPCI/TOTCO, COTCO, the institutional stakeholders of Chad and Cameroon, and the Lenders and World Bank Group.

6. As indicated in the previous ECMG review, Project activities with the greatest

potential direct environmental and social impact are relevant to the ongoing work in the OFDA associated with additional well pad construction and connecting gathering lines and flow lines, drilling, and associated access roads.

EMP OBSERVATIONS The EMP organizations for the Operations phase in both Chad and Cameroon are in place and appear to be adequately staffed to perform their duties. Monitoring and management of biophysical and socioeconomic aspects are ongoing. As discussed in detail in the following sections, there are still important social and environmental issues in the OFDA to be managed. Since early 2006, the Consortium has implemented a significant program of corrective actions, which is still ongoing. Nevertheless, the actual development of the Project and production strategies, with the continuing oil well infill program and the three satellite fields, have required an expansion of the oil fields and their infrastructure (e.g., oil wells, access roads, flowlines, electric lines, etc.) with drilling and construction activities well beyond pipeline completion and First Oil. The intensity and pace of OFDA activities are significantly higher and more complex than expected for a routine operations phase project. Issues such as land needs, community safety, waste management, and associated gas flaring, among others, require a significant effort and strong commitment by the Consortium. As a consequence of this activity, ECMG recommends that a mechanism be developed to update several components of the EMP, including the following:

• Land issues have been underestimated and livelihood restoration strategies can be improved, as detailed in the following sections;

• Project responses to other issues such as flaring, waste management, community safety and produced water management have changed and need to be improved now that greater detail and knowledge are available;

• The Management of Change (MOC) procedure has been used by the Project as the only tool available to address issues that were not clearly spelled out in the EMP.

Now that the project is three years into the Operations phase, the ECMG recommends re-evaluating these aspects of the EMP, according to best international practice in the Oil and Gas sector. Best practice is to develop an Operations phase EMP, also recognizing the need for managing residual construction issues. Specific observations and issues of concern are highlighted in the following sections of this report.

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7. EMP Organization

Observations: The EMP teams for the Operations phase in both Chad and Cameroon are in place. Since the previous ECMG visit, it is recognized that the EEPCI and COTCO have worked to achieve a better integration between the EMP and Operations teams. The Cameroon EMP organization is consistently staffed by Cameroonian specialists, with the exception of the EMP Manager. As indicated during the previous ECMG review, the organization appears to be capable of providing sufficient oversight to Project EMP activities. The team appears to be motivated and knowledgeable. In Chad, the situation continues to be complicated in the OFDA as significant construction and drilling activities are still ongoing. However, the EMP organization is fully mobilized in the field and has undergone another substantial review and reorganization since the previous ECMG visit. The EMP team in the field was found to better organized than in November 2005. The current organization is significantly more integrated in terms of supervision of operations activities and infill construction / exploration activities. The number of expatriate specialist staff is still considered to be limited for the level and pace of activities ongoing in the OFDA and additional fields, but the national field staff has reached a higher capacity, also to deal with Contractor organizations. The Esso Drilling Company and its Contractors (Pride/Foresol and Schlumberger) continue to have their Safety, Health and Environment (SHE) teams in place, reporting to the EEPCI EMP organization on EMP issues. Although day-by-day monitoring appears to be adequately conducted, a systematic approach to a comprehensive environmental and socio-economic monitoring by EEPCI is still lacking. Documentation, although available, is scattered, and analyses and evaluation of the large amount of data / information collected are not fully documented. Local contractors in the OFDA also appear to be better organized, trained and with higher environmental awareness. The “activity zone”, delineated by the CTNSC in 2003 in Mainani village next to the spine road between Komé Base and Komé 5, was found to be improved with more developed construction yards and improved housekeeping. Recommendations: 7.1 EEPCI/TOCTO and COTCO should continue to ensure common objectives

and integration among the EMP and Operations / Infill teams. A strengthened level of oversight should be ensured at least until the end of the infilling program.

7.2 Data collection, cross-checking and analysis require an experienced and focused team, given the high level of ongoing activities and large amounts of data collected in the OFDA and to be interpreted. EEPCI should develop a regular and consistent evaluation and reporting system, as achieved by COTCO in its quarterly reports.

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Socio-Economic Issues 8. Resettlement and Compensation Evaluation (OFDA – Chad)

Observations: Following a recommendation of the last ECMG review (November 2005) and the EMP provision for an evaluation of the Consortium’s resettlement and compensation activities «at the end of the first agricultural cycle after the construction of the fixed facilities has been completed», the Consortium commissioned this evaluation in the OFDA. This evaluation was carried out between April 2006 and August 2006 by a team of two independent consultants based on Terms of Reference that were discussed between EEPCI, the IFC, and the Government of Chad. The draft report provided by the consultants in August 2006 was reviewed and discussed on several occasions by the above-mentioned parties, and a final version was provided by the consultants in January 2007. The consultants’ report is based on qualitative and quantitative socio-economic investigations, presents a thorough and comprehensive assessment of past and ongoing compensation and resettlement activities, and results in a set of recommendations, including a preliminary action plan for their implementation. The ECMG generally concurs with conclusions and recommendations of the consultants’ report. Most importantly, the ECMG concurs with its “primary recommendation”: “revise the livelihood restoration program and make land replacement its primary focus.” The ECMG understands that a process is in place at EEPCI’s and the IFC’s initiative to agree on an EEPCI-proposed action plan addressing most of the recommendations of the consultants’ report. Since the draft report was released by the consultants in August 2006, the Government of Chad has been consistently involved, through CTNSC, in the review of this report and has had opportunities to provide its input to the action plan preparation process. The ECMG observes that some of the recommendations of the consultants’ report have started to be implemented by EEPCI, particularly those related with so-called “just-in-time” land acquisition, with a new, revised land acquisition process that gives more time to the affected people, and with the gradual establishment of a revisited database and Geographic Information System (GIS) that allows more effective management of impacts and of compensation information. The ECMG concurs with a specific recommendation in the consultants’ report that this action plan should be reflected in an addendum or a revision to the Chad Resettlement and Compensation Plan (Volume 3 of the EMP – Chad Portion) to ensure that a common understanding is reached and made contractual among the different parties involved.

Recommendations: 8.1 The Consortium and other interested parties should complete the process of

agreeing on an action plan based on recommendations of the consultants’ report.

8.2 The Consortium should prepare an addendum or a revision to the Chad Resettlement and Compensation Plan (CRCP). This could include a Resettlement Action Plan (RAP) for the five villages recognized as most

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impacted (Ngalaba, Dokaidilti, Dildo, Bero, Madjo), established in compliance with applicable policies and available guidance for preparation of RAPs, particularly the 2001 IFC handbook “Preparing a Resettlement Action Plan”. This RAP should present at a minimum: • practical arrangements for land replacement as highlighted by the

consultants’ report for the five above-mentioned villages, including its identification and arrangements for making it available to most impacted farmers,

• a clear entitlement matrix (“who gets what entitlement as a result of what impact”), also addressing the backlog of people significantly impacted in the past, to eliminate discrepancies between new and old entitlements without creating grounds for grievances from the other compensation recipients.

8.3 CRCP terminology should be clearly defined to the extent practical based on the definitions presented in the IFC handbook.

9. Project Land Use and Return of Land Use Rights in the OFDA (Chad)

Project Strategy: Well Pads According to the EMP5, well pads are to be partially reclaimed. After final reclamation, their dimensions should be between 58m x 47m (2,700 m2) and 94m x 47m (4,400 m2). The reclaimed portion is to be returned to pre-construction users. Overall Project Footprint in the OFDA According to estimates presented in the EMP6, the project footprint in the OFDA was anticipated to be broken down as follows: • Total land needed: 2,133 ha • Land permanently needed for operations: 756 ha • Land reclaimed and made available to pre-construction customary

rights users: 1,377 ha Including: - Reclaimed land made available with some restrictions: 591 ha - Reclaimed land made available with no restrictions: 786 ha

Observations: Size and Reclamation of Well Pads The Consortium has now started reclaiming well pads to a final dimension of about 5,200 m2. This is close to dimensions stated in the EMP. As of the ECMG visit, about 50 well pads in the Miandoum oil field and 20 well pads in the Bolobo oil field had been reclaimed to these dimensions with some of them already cultivated during the last rainy season. About 350 well pads are scheduled to be reclaimed to the agreed dimensions by 2007. The ECMG was satisfied that a plan is in place to continue this progress with reclamation.

5 EMP, Chad Portion, Volume 3, section 3.4 6 EMP, Chad Portion, Volume 3, section 3, Table 3.1.

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Return of Land Rights While previously noted to have progressed too slowly, the EMP organization was observed during this ECMG visit to focus on the return of land rights to communities, through the “quitus” process described in the November 2005 ECMG report. This process appears to be satisfactory. Overall Project Footprint in the OFDA According to figures provided by the Consortium during the ECMG’s February 2007 visit, the current overall Project footprint is as follows: Land needed permanently for improvements and/or project facilities (ha: hectare):

Actual – November 2005 1,395 ha Actual – February 2007 1,352 ha EMP estimate 756 ha

Land used during construction, returned or to be returned to pre-construction users – Without restrictions

Actual – November 2005 341 ha Actual – February 2007 470 ha Of which already returned 196 ha EMP estimate 549 ha

Land used during construction, returned or to be returned to pre-construction users – With some restrictions

Actual – November 2005 1,181 ha Actual – February 2007 1,059 ha Of which already returned 201 ha EMP estimate 354 ha

Non-viable Households The current number of households recognized as non-viable7 according to EMP criteria is reported by the Consortium to be 577 (initial EMP estimate: 150). The following observations were made by the ECMG: • Slightly conflicting numbers were provided by different EEPCI EMP staff; • The consultants’ report on the evaluation of the CRCP provides a nutritional

assessment8 of the criterion used by the EMP (see footnote 7) to assess a household as “non-viable”, and confirms that this criterion is sound and can be used further as a valid threshold.

Recommendations: 9.1 The Consortium should maintain the effort made over the last year to reduce

the extent and duration of temporary land occupation.

7 Households affected by land acquisition are deemed “non-viable” when their remaining land is not sufficient to

sustain them based on traditional agricultural practices. This is the case when the surface of land available is below the threshold of 2/3 of a “corde” per individual (about 3,300 square meters). Per the currently applicable EMP, a non-viable household is eligible to livelihood restoration measures, in addition to individual cash compensation served to any household that loses land to the Project.

8 Appendix C of the consultants’ report.

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10. New Land Acquisition Process in the OFDA (Chad) Observations: To address concerns expressed in the consultants’ report on CRCP evaluation and related with so-called “just-in-time” land acquisition, the Consortium has developed and has started to implement a new land acquisition process. The ECMG recognizes that this process is better structured than the previous one and allows EEPCI to address the above-mentioned concerns. Specifically, this process intends to allow for a better integration of the socio-economic assessment of affected people in the land acquisition process through a socio-economic survey in the early stages of the process. This socio-economic survey intends to allow the team to check if land acquisition can proceed and to assess potential eligibility to one of the livelihood restoration options, if the household is assessed as non-viable (see previous section). According to the Consortium, land acquisition would not proceed if the household was to experience serious hardship due to lack of land before a livelihood restoration solution is found or the facility would be relocated. The critical step in this process is the socio-economic survey. A review of the first set of surveys undertaken by the socio-economic staff was conducted and the following was observed: • The questionnaire used by EEPCI was found to be cursory; it is administered in 5

to 10 minutes; • The current survey procedure does not include any verification; in fact, the socio-

economist fully relies on the affected persons’ statements, particularly with respect of how much land they have available for cultivation and of the number of dependents. Based on a review of a few compensation files, however, it was found that inconsistent statements were made by some respondents with respect to the surface of their land (sometimes in a range of 1 to 10), while this is the critical factor in assessing eligibility and potential hardship.

Recommendations: 10.1 The Consortium should use a more structured socio-economic questionnaire

(for example, based on the questionnaire used in several occasions by the GEPFE9 team) and include a count and identification by name of dependents.

10.2 The Consortium should include in the process a field verification of declared land plots (e.g., with GPS measurement).

10.3 The Consortium should consider, in the five most impacted villages, the establishment of cadastral maps identifying the users of plots visible on satellite images.

11. Livelihood Restoration in the OFDA (Chad)

Project Strategy: Based on estimates of impacts made at the time when the EMP was prepared, several livelihood restoration strategies have been devised and implemented, including the possibility for non-viable households to choose among the following options:

9 Groupe d’Etude des Populations Forestières Equatoriales.

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• physical relocation (i.e. construction of a new house in a place of their choice in a neighboring village),

• access to an “improved agriculture techniques” training program, • off-farm training (i.e. training in a non-agricultural income generating activity),

and • on-the-job training, which was mainly implemented at the time of the project

construction. Observations: Breakdown by Program of the Eligible Farmers As indicated in Section 9, the total number of non-viable households is currently estimated at about 577 (483 at the time of the previous ECMG review in November 2005) The distribution of the numbers of eligible households by livelihood restoration option is shown in the graph below.

Non Viable Households' Options

Resettlement7%Land transfer

4%Employment

2%

Improved agriculture42%

Off-farm training45%

Resettlement (Physical Relocation) The Consortium has continued rebuilding old resettlement houses that were not satisfactorily built. This is a positive effort. It is now understood that this reconstruction is complete. An additional four people were resettled in 2006. Land Transfer As mentioned in the previous ECMG report, and confirmed in the consultants’ report on CRCP evaluation, this category includes people who are deemed eligible (non-viable) to livelihood restoration, but manage in some way to secure new land for cultivation, usually from relatives. The consultants’ finding is that such arrangements are generally temporary, and that transferred land is not a viable livelihood restoration option. After making sure that new land could be secured (‘transferred’) by these households, the Consortium’s policy was not to provide them with any livelihood restoration benefit, without, however, making sure that these households were sustainable in the long term. This option has been described by the ECMG as well as by the consultants’ report as not acceptable, as it was implemented. The Consortium

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needs to make sure that its socio-economic staff is aligned in terms of eliminating this option. People who supposedly chose this option need to be reintegrated into other livelihood restoration options. Improved Agriculture Program Previous ECMG reports have provided descriptions of this option, implemented by ORT. The following observations were made by the ECMG during the February 2007 mission: • As already mentioned in the November 2005 ECMG report, some positive results

are visible, particularly in the fields of improved organic matter management, market gardening, and poultry rearing;

• While the ECMG fully recognizes that agricultural development takes time, it also expresses doubts with respect to some aspects of the approach to agricultural development adopted by the ORT team. Where a full understanding of the farmers’ production system would be necessary before a new technique is introduced, it was observed that the ORT team does not necessarily try to assess the proposed innovation in view of the farmers’ constraints and system. An agricultural innovation that does not account for the agricultural production system into which it is introduced has few chances to succeed;

• A typical example is the consideration that should be given to the agricultural calendar and to the priorities that farmers give themselves. For instance, the introduction of early onions (planted in October) is considered by ORT to allow farmers to benefit from high prices if they harvest their onions earlier than other producers. The problem is that October is a period when most farmers are still busy harvesting their rainfed crops, where in systems like in the OFDA they are likely give absolute priority. It is the ECMG’s opinion that it would be more appropriate to encourage farmers to plant onions when they are available to do so in January and to assist them in improving their storage techniques, so that they market them at higher prices after the peak production period;

• Another observed deficiency of the improved agriculture program is monitoring, which is far from systematic; ORT has, however, made some commendable attempts to investigate incomes generated by cash crops and production of self-consumed crops. The results are the following: • For 19 households engaged in rainfed agriculture:

• The yearly 2005 cash income is about USD 140 per beneficiary in average, essentially generated by the cultivation of groundnut, which is the main rainfed cash crop;

• The production of cereals for self-consumption is about 700 kg per household, which represents the food required to sustain 4 people for a year;

• The 10 households engaged in gardening that were monitored generate a cash income of about USD 275 per beneficiary;

• There is no pre-project baseline with which these results can be compared, but further monitoring will nevertheless be useful to follow livelihood restoration.

Off-farm Training Off-farm training is under the responsibility of a consulting company, JMN Consultants. Some positive developments have been initiated by JMN over the past year:

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• Trainees have been consistently monitored during the past year and where deficiencies were observed in the training, they were corrected;

• JMN has initiated an aggressive search for employment opportunities that could benefit former trainees, particularly with companies working as contractors or sub-contractors for the oil project. For example, opportunities have been identified for trained tailors and electricians. The results are limited as yet, but the approach is promising and should be sustained further;

• JMN has developed training sheets that describe training courses and related professions in detail that can be used in support of course selection by potential trainees;

• Trainees have received their equipment at the end of their training session without delay;

• Although this has not been implemented, the EMP team has proposed that eligibility to off-farm training could be transferred by the beneficiary to a younger or more capable family member. This is a useful suggestion and should be implemented for the next campaign.

Some payment issues were observed that resulted in several training organizations not being paid for some time. Livelihood Restoration Monitoring As already mentioned in the previous ECMG report, there is no systematic monitoring of livelihood restoration. The Project has been monitoring inputs, but there has never been a comprehensive monitoring of outcomes. This is a deficiency that should be corrected. The corrective Resettlement Action Plan mentioned in Section 8 must include monitoring provisions, specifically the following: • Input, output and outcome indicators10 and frequency of measurement for each of

the major components of the program; • Arrangements for monitoring (staff involved, reporting, documentation, database). Recommendations: 11.1 Consortium should ensure personnel’s alignment on the elimination of the

“transferred land” option. People who supposedly chose this option should be reintegrated into other livelihood restoration options.

11.2 Consortium should make sure that ORT’s approach takes into consideration the production systems, particularly agricultural calendars, in devising proposed innovations.

11.3 Consortium should develop and implement an internal monitoring mechanism, including input, output and outcome monitoring.

10 Input monitoring measures whether inputs are delivered on schedule and as defined in the plans. Inputs are the

services, processes, or goods that contribute to achieving outputs and, ultimately, desired outcomes. Examples of inputs include numbers of trainees, compensation paid, etc… Output monitoring measures the direct results of the inputs, for example people completing livelihood restoration training courses. Input and output monitoring together keep track of project implementation efficiency, and indicate whether changes need to be made to make the program operate more efficiently. Outcome monitoring seeks to define the extent to which the inputs are achieving the objectives of a program. Affected persons achieving a certain level of livelihood restoration, or employed by the Project or elsewhere, or affected persons’ businesses established and earning acceptable returns are examples of outcomes.

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12. Regional/Community Compensation

Project Strategy: This component of the Project's compensation program is mainly intended to offset community losses such as impacts to non-timber forest products (e.g., nuts, fruits), other wild resources (e.g., honey) and various inconveniences. Observations: Cameroon Deficiencies that were observed during the November 2005 ECMG mission have reportedly been fixed. Chad JMN was tasked by EEPCI to complete a few projects that had been left incomplete. JMN reports that all pending projects have indeed been completed.

13. Management of Grievances Project Strategy: The Project developed and implemented a social closure process in Cameroon, involving both the Government and the Consortium, and witnessed by independent NGOs. Another process, called “Social Statement”, was developed in 2005, whereby NGOs, COTCO and the CPSP (Government of Cameroon) together review on a periodic basis the status of grievances identified by NGOs or by COTCO as pending. In Chad, the social closure process was prepared, but was not implemented for various reasons. Observations: Cameroon The Social Statement process was observed to be well managed and it has obviously played a significant role in improving relationships between COTCO and the participating five Cameroonian NGOs. Chad In Chad, a systematic process similar to the Cameroon “Social Statement” is not in place. The ECMG would not advise to proceed with the “social closure” as it was initially envisioned, as this was a process mainly intended at closing construction-related grievances, which are now of limited interest.

14. Temporary Facilities in Cameroon Project Strategy: The EMP11 provides that “as the infrastructure, logistics and pipeline Contractors move from areas where construction has been completed, the support facilities will be decommissioned if no further use is warranted.” The EMP further states that these areas will be reclaimed except in cases where the Government or local communities wish to retain a Project facility for continued use (Environmental Assessment - Executive Summary and Update, Page 3-11). Temporary bridges built in defined

11 EMP, Supporting documents, Volume 1, Section 8

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ecologically sensitive areas in Cameroon to support pipeline construction should have been removed when construction was complete, in accordance with the Induced Access Management Plan12 and/or because their design as temporary structures does not, in principle, allow for long-term safety and reliability. Observations: Camps, Storage Yards and Temporary Bridges An agreement between COTCO and CPSP for ceding temporary facilities installed during the Construction phase back to the Project was reached in July 2004. These facilities include: • Eight facilities (former storage yards) situated on private property of the State, • Six facilities (including former construction camps and airstrips) situated on

National Domain, and • Three temporary bridges. Although the process has been slow, land return of sites situated on private property of the State is proceeding and six Project temporary facility sites have been recently returned to the Government, after the relevant Dis-allocation Decrees were signed by the Government in April-May 2006. Two Dis-allocation Decrees remain to be signed and COTCO expects that this will be completed in 2007. Progress was also reported on the return of the sites situated on National Domain, although the process is still to be finalized and none of the sites was actually returned. In August-September 2006, the National Valuation and Verification Commission visited the sites and this step allowed drafting of the Incorporation Decrees. In February 2007 the draft Incorporation Decrees were reportedly ready for review by the responsible Ministry (MINDAF) of Government of Cameroon. When this review is completed, the Decrees should be signed by the Prime Minister. With respect to the three temporary bridges (Mbah, Lokoundje and Mougué), the situation appears to be more critical. The process chronology has been as follows: • In 2003 the three bridges were visited by representatives of the Ministry of Public

Works; • In 2004 CPSP and COTCO agreed on modifications relevant to the agreement

protocol; • In June 2005 a joint inspection by COTCO and CPSP (involving representatives

of Ministry of Public Works) was conducted to assess environmental issues; • In February 2006 CPSP launched a tender for feasibility studies for the

reinforcement of the three bridges; • In January 2007 a CPSP/COTCO meeting was held in Yaoundé to discuss the

status. The ECMG is concerned about the delay to resolve the retrocession of the three temporary bridges, as they represent a third-party safety and liability issue for the Project.

12 EMP, Cameroon portion, Volume 1, Appendix D

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Recommendations: 14.1 CPSP should expedite, facilitate and monitor of the ownership transfer process

to the Government of Cameroon to ensure the effective final use of the temporary facilities in accordance with the agreement protocols signed - Repeated recommendation.

14.2 CPSP should expedite the reinforcement of the three bridges to prevent third-party safety issues and provide the local communities with safe and useful infrastructure.

15. Mitigation of Archaeology-Related Level III Non-Compliances in Cameroon

Project Strategy: Following the two archaeology-related Level III non-compliances declared by the World Bank Group in mid-2003, COTCO was requested to develop and implement an acceptable mitigation program. As indicated by the World Bank Group Cover Note for Archaeology Non-Compliance/Cameroon, “COTCO is committed to do so in collaboration with the Government of Cameroon”. COTCO has made firm commitments to a three-part mitigation program. First, COTCO will publish a comprehensive scientific report that summarizes the findings and opportunities for future archaeological research in the regions traversed by the pipeline. This report will be peer reviewed locally and internationally. In addition, a seminar is to be held in Cameroon to discuss various aspects of the Project's archaeology program with the Cameroonian archaeological community. Second, COTCO will provide funding to support the post-graduate studies of two Cameroonian archaeology students, including some assistance for field studies and the further analysis of propitious sites discovered during pipeline construction. Third, a curation facility is to be established by COTCO to house the recovered artifacts and support future archaeological work in the country. Observations: The status of the archaeological program in Cameroon is as follows: • The acceptance certificate for the curation facility in Cameroon was signed by the

Government on February 15, 2005. Official handover of artifacts to the Government of Cameroon was in June 2006 (handover in Chad was in January 2007).

• The Archaeological Book manuscript is available in English and has been transmitted to the Government of Cameroon. The French version is to be finalized. A coordination meeting involving the four co-authors, the scientific publisher, the Government of Cameroon and COTCO is planned in March-April 2007 to finalize the manuscript. The peer-review will be then organized by the publisher. COTCO envisions that the publication will be issued by early 2008.

• Results of the work in Cameroon have not been presented yet to the Cameroon archaeology community in the required archaeological seminar. To date, COTCO plans to make a proposal on the organization of this seminar to the Ministry of Culture as soon as the Archaeology Book is published.

• The two Cameroonian students, selected by the Ministry of Culture, started their studies in Biology, sponsored by the COTCO Fellowship, at the Université Libre de Bruxelles (ULB) in November 2006. A first Ph.D. student, who already started his fellowship sponsored by COTCO, is still supported by COTCO, reportedly received an award at the last biennial meeting of the Society of Africanist

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Archeologists in June 2006, and is back to Cameroon for the preparation of his Ph.D. thesis.

Health and Safety 16. Worker and Community Safety

Project Strategy: Health and safety procedures are currently implemented based on the Project Safety Management System and according to Project commitments to provide a safe working environment with appropriate Personal Protective Equipment (PPE) at all levels, including Contractors and their subcontractors. The Project has committed to implement construction safety signage, signals, and barricades around all construction areas and facilities to avoid injuries and accidents. The Project has also committed to avoid the creation of vector habitats, including limiting the creation of standing water ponds. Observations: The use of PPE continues to be widespread and generally appropriate, particularly where significant work forces are present. Local subcontractors working for the Project were also observed to use PPE during their duties in the field. Occupational health and safety measures have been implemented or are under implementation at several Project facilities and appear to be adequate. As discussed in Section 20, two treated wastewater lagoons are now present in the proximity of Komé Base. At both locations, standing water was observed. In order to be compliant with the EMP, standing water should be avoided as it creates a favorable environment for malaria and may promote the breeding of mosquitoes when other stagnant water deposits near villages have already dried up. The Project reported that larvicide is being injected in the wastewater stream before discharge, and that the drilling lagoon is checked on a weekly basis, monitoring the effectiveness of the larvicide treatment. During November 2005 ECMG observed unsafe conditions at several well pads in the OFDA due to the lack of fences of well heads, which were reportedly stolen and not replaced, and due to unprotected high tension cables. In February 2007, operational well pads continue to be neither fenced nor guarded, including several pads located in proximity of occupied dwellings. Unprotected high tension cables continue to be present at most locations and their presence represents a risk to community health and safety. The high number of well pads creates a risk for the local people that cannot be underestimated and is non-compliant with EMP principles and industry good practice. During the visit, well completion activities were ongoing in close proximity to occupied dwellings near Komé 5. The well pad was guarded, but not fenced and potential for third party intrusions appeared to be high. In November 2005, several reserve pits had not been reinstated several months after well drilling and completion. They were observed to be unfenced and unguarded,

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either filled with water/mud or unused with near vertical slopes more than one year after their excavation. In February 2007, the number of well pads unused and not reinstated was found to be reduced (16 sites vs. 24 sites in 2005) and only one site was found to have two unprotected open pits. As discussed in Section 20, food waste, in addition to non-recyclable waste wood, was found to have been dumped and buried in an active borrow pit (KBP6 ext.3) in October 2006. Based on the paper trail available, the decision to bury the waste outside project fences appears to have been made with insufficient attention to environmental and community safety issues. The ECMG visited the site and waste was found to be partly exposed, next to the public road. The selected site for waste dumping is also in the vicinity of Bero I village. Recommendations: 16.1 Adequate corrective measures should be urgently and consistently undertaken

at all OFDA well pads and unfenced facilities by EEPCI to minimize community safety risks (repeated recommendation). Standard industry practice is to fence and guard the well pads prior to drilling at locations near to dwellings. The Consortium should consider and propose alternative measures, such as: a) Fencing and protecting the main electrical hazard sources at each

operational well pad b) Guarding all operational sites c) Involving villagers who may form associations to guard potentially

critical well pad sites in the vicinity of communities or occupied dwellings.

16.2 Well pad approval requires minimum distances from dwellings for community health and safety protection. The Consortium should ensure that minimum distances are met before approving a location and that applicable and relevant noise and vibrations criteria are assessed, met, and monitored during drilling. If the minimum distances cannot be met, the well pad should be moved away from dwellings or not approved for drilling.

16.3 The Consortium should adopt good industry practice and implement noise and vibration mitigation at locations near to sensitive receptors, as needed.

16.4 Waste should not be disposed outside of Project facilities. If disposal of innocuous waste is implemented, careful consideration should be given to community health and safety aspects, ensuring that all potential sources of hazards are removed, sanitized or adequately covered.

17. Dust Control in the OFDA Project Strategy: Since 2004, the Project has implemented a Dust Control Strategy for the OFDA including watering and the application of molasses as a temporary mitigation measure and the Double Bitumen Surface Treatment (DBST) as permanent measures. The portions of the OFDA to receive temporary or permanent treatment have been selected by the Project according to specific criteria taking into account future construction activities, actual and anticipated traffic volumes, location of receptors and safety aspects. CTNSC is involved in the decision-making process.

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As part of the planned air quality monitoring actions to be conducted in compliance with the EMP and Schedule 17 of the Credit Coordination Agreement (see Section 23), the Project is currently implementing the following studies, which are aimed at supporting the assessment of the potential effects of Project-generated dust and, therefore, at providing a quantitative support to the dust control: • A PM10 Monitoring and Potential Human Health Impacts Study at OFDA

villages; • An Ambient Air Quality Monitoring at Komé Operations Center and at the

Miandoum Gathering Station; • A Dust Impact Study on Crop Cultivation in the OFDA (still to be conducted and

planned for April 2007). Observations: In 2005 the ECMG reported a significant non-compliance and a serious breach of Project’s commitments in terms of community and occupational safety and health protection due to inadequate dust control. In response to this observation, EEPCI has revitalized and strengthened its dust control and mitigation program. The amount of paved road surface in the OFDA has remarkably increased since November 2005. At the time of the ECMG visit, DBST application was ongoing with 25.5 km of the OFDA roads already completed with an additional 20 km planned for 2007 and 13 km for 2008, although with different priorities. Molasses have been applied in the OFDA at the beginning of the dry season, and road watering was ongoing during the visit. During the mission, the ECMG had the opportunity to observe improved conditions in terms of visibility and dust impact on the vegetation along the main spine road traversing Doba, Komé 5, Komé Base and Miandoum. Dust control along the spine road and in the OFDA appears now to be adequate and compliant with Project commitments. Preliminary results from the ongoing air quality monitoring studies, relevant to the 2006 wet season, were also provided to the ECMG. The studies, which are currently ongoing to monitor conditions during the 2006-2007 dry season, indicated the following: • Detected PM10 concentrations were generally found below relevant Schedule 17

limits and within occupational exposure limits; • Transport and deposition of dust generated along OFDA roads are generally

limited to distances comprised between 200 and 300 meters from the road edge. While total dust deposition is more significant at the border of the roadway, PM10 concentrations were measured to be higher in the 200 meter distance range from the spine road;

• Background concentrations at selected monitoring locations (e.g. far from OFDA roads and other potential sources related to Project activities) were found at significant concentration levels.

A specific analysis of potential village level and worker human health impacts associated with general dust exposure, regardless of source, was also performed by a specialized consultant. The study indicated that background village PM10 levels were

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low across the entire OFDA. PM10 levels appear to be strongly affected by routine human activities such as cooking, milling or bush burning. Indoor levels are often very high. Effects due to road traffic were reported to be low to non-significant. Currently ongoing monitoring activities are aimed at providing a suitable set of data for the dry season when the PM10 and dust effects may be more significant. Additional monitoring activities are also being planned to: • Quantify the PM10 background values at non-impacted monitoring locations in

order to support the re-evaluation of the adopted Schedule 17 reference limits; • Evaluate the beneficial effects of the paved road surface on the areas surrounding

the OFDA roads. The dust impact study on the vegetation and crop cultivation in the OFDA, which should start in spring 2007, will be aimed at evaluating the effects of PM10 and heavier particulates on the agricultural activities due to the OFDA roads in Komé 5 and between Komé 5 and Bébédjia. The monitoring activities will be performed by targeting various cultivated areas or pilot crop fields, located within the 200 m radius from the spine roadway edges, where the maximum dust fall-out was detected. Recommendations: 17.1 The implementation of the planned DBST extension for 2007 and 2008 would

be a commendable effort to provide with a long term solution. It is therefore recommended the dust control program continued, along with the periodic monitoring of PM10 in the areas of Project influence.

17.2 Following the ongoing PM10 assessments and planned vegetation impact study, the preparation of a summary report would be beneficial to integrate all the results and analyses performed and draw conclusions that demonstrate the effectiveness of the measures implemented and prevention/mitigation of potential community health and safety impacts.

18. Hygiene and Recreation Facilities in Camps

Project Strategy: The Project's strategy is to provide safe living quarters for Contractors’ employees and visitors. The General Project Specification GPS-001, which offers specifications for camps and facilities, requires that doors have locks (either keyed or automatic, punch-coded locks) and shall open from within (outwardly). The EMP establishes requirements for space between beds, but does not limit the number of occupants per building. It also establishes the minimum number of washrooms, as well as a number of other facilities, to satisfy the religious needs and customs of its work force. GPS-001, Camps and Facilities, also requires that recreation rooms be provided with books and periodicals in appropriate languages. Observations: During this visit, the ECMG did not perform a systematic assessment of camp facilities in terms of hygiene, housekeeping and living conditions. A concern raised in November 2005 was relevant to poor hygienic conditions found in some barracks and lack of repairs and maintenance of hygienic facilities at Komé Base. A specific observation was made with respect to the conditions within 60-men buildings at the

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camp, which were found to be very poor, with minimal comfort and basically no privacy from one another. The basic observation in February 2007 is that the 60-men buildings inspected in November 2005 no longer exist. The current configuration of the camp includes barracks with maximum 18 occupants, which is a remarkable improvement of living conditions in the camp.

Biophysical Environment and Environmental Management 19. Water Resource Protection

Project Strategy: The EMP contains requirements for groundwater resource protection that includes the installation of monitoring wells around engineered solid waste landfills, as well as the monitoring of community water wells to assure that Project water supply wells and Project activities do not adversely affect local water quantity or quality. The EMP also has a requirement for limiting withdrawals of surface water to no more than 10 percent of a surface water body’s flow or volume. Water resource protection is a key requirement for the entire Project, which has developed a Water Monitoring Program (WMP) consisting of the following eight components: 1 Surveying of local surface water and groundwater usage practices prior to the

commencement of Project-related surface water and/or groundwater withdrawals; 2 Monitoring of local surface water and groundwater resources while Project-related

construction phase water withdrawals are occurring; 3 Monitoring of water for human consumption obtained from Project-installed

groundwater source wells/boreholes; 4 Regional groundwater monitoring program in the OFDA (Chad) or at Permanent

Facilities (Cameroon); 5 Groundwater monitoring at the Project’s engineered solid waste landfill sites

(KWMF at Komé and PS3 Landfill in Bélabo); 6 Monitoring of liquid effluents discharged directly to onshore surface water bodies; 7 Monitoring of liquid effluents discharged directly from the Floating Storage and

Offloading (FSO) vessel. Observations: The water monitoring programs developed by the Project for the OFDA, the permanent facilities and the solid waste landfills in Cameroon and Chad were consistently implemented in 2006 and record-keeping is adequate. In the following sections the data relevant to the sampling events performed in 2006 according to each different component of the WMP are reviewed. Component # 2 – Surface water and groundwater withdrawals in the OFDA Records relevant to the water consumption at the OFDA have been provided by the Project.

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The total amount of water intake, with the exception of oil wells drilling, is reportedly 582,000 m3 in 2006. Drilling operations required up to 30,000 m3 of fresh water in 2006. Approximately 26,800 m3 were reportedly used to perform watering activities over active runway and OFDA roads, as well as during construction activities performed by EEPCI local contractors. No effects were reported on groundwater levels, as discussed below. Component # 3 – Monitoring of water for human consumption obtained from Project-installed groundwater source wells Chemical testing of potable water for general parameters (pH, residual or free chlorine, conductivity, turbidity and fecal coliforms) was performed in accordance with Component # 3 of the WMP at all Project facilities in Chad and Cameroon. Few minor exceedances of relevant pH and turbidity reference limits, set by the World Health Organization (WHO) guidelines for drinking water, were detected during the monitoring events performed at the Miandoum Gathering Station and at Komé 4 Waste Management Facility (KWMF). Overall the purification of fresh water appears to be adequate at all the Project facilities where fresh water is treated for potable uses. Component # 4 – Regional groundwater monitoring program in the OFDA (Chad) or at Permanent Facilities (Cameroon) Groundwater testing at OFDA and Permanent Facilities in Cameroon was performed in compliance with the requirements of Component # 4 of the WMP, as follows: • Groundwater level measurements on a monthly basis; • Groundwater sampling at PS2, PS3 and PRS piezometers and at local village

wells (located within the 1 km radius from permanent facilities) in Cameroon, performed between November and December 2006, and including testing results for metals, benzene, toluene, ethylbenzene and xylenes (BTEX), polynuclear aromatic hydrocarbons (PAHs), volatile organic compounds (VOCs), semivolatile organic compounds (SVOCs) and Total Petroleum Hydrocarbons (TPH);

• Groundwater sampling at the OFDA traditional wells and Project piezometers, performed quarterly in 2006 using field test kits;

• Groundwater sampling at the OFDA traditional wells and piezometers, performed in December 2006, for the collection of water samples to be tested for the extended TerrAttesT® set of analytes, including TPH. Four surface water monitoring points (Nya, Loule and Pende Rivers) were also included in this sampling event.

Based on the results provided, the following observations are made: • Measured groundwater levels at the Permanent Facilities and OFDA reflect the

fluctuations due to wet and rainy season and do not show patterns that may be related to Project water withdrawals;

• No evidence of potential impact on groundwater quality due to the Project activities was found in any of the collected samples with respect to the adopted reference WHO drinking water standards;

• Fecal coliforms, often reported as “Too Numerous To Count (TNTC)”, represent the major concern for the water quality at the traditional wells at the OFDA and

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surrounding villages. An official communication dated 10 November 2006 was submitted by EEPCI to the CTNSC in order to make the sampling results available to the local authorities and plan possible mitigation actions in agreement with local health institutions.

Component # 5 – Groundwater monitoring at the Project’s engineered solid waste landfill sites (KWMF at Komé and PS3 Landfill in Bélabo) Component # 5 of WMP provides guidelines and commitments relevant to groundwater monitoring at the project’s engineered landfills. The sampling schedule anticipates one sampling event per year with a set of parameters that includes those monitored during regional or Permanent Facilities groundwater monitoring programs. Piezometers located at the KWMF are included in the list of groundwater monitoring points to be sampled within Component # 4 of WMP. No specific issue was reported for these monitoring points. Results for groundwater sampling at PS3 landfill monitoring wells in Bélabo, performed in December 2006, showed that all the tested parameters, which included metals, BTEX, PAHs, VOCs and SVOCs and TPH, were found below relevant method detection limits or applicable WHO reference standards for drinking water quality. Component # 6 – Monitoring of liquid effluents discharged directly to onshore surface water bodies According to Component # 6 of WMP, a chemical characterization of non-continuously discharged effluents shall be performed prior to discharging the water to the surface water bodies for a set of parameters as listed in the WMP (pH, BOD5, COD, oil and grease, metals, etc.). Most of the Project wastewater effluents derived from sewage treatment systems, as well as storm water runoff collection systems, are discharged using leach field systems or open drainage ditches. Details concerning monitoring actions implemented for liquid effluents discharged from sewage treatment units are discussed in the Waste Management section of this document. Both EEPCI and COTCO have developed oil-water separator (OWS) monitoring plans establishing the surveying and effluent monitoring criteria for all the OWS installed at the Project Facilities as follows: • Routine Inspection: to be performed on a daily basis; • Documented Inspection: to be performed on a weekly basis; • Effluent Oil and Grease Analysis: to be performed prior to each planned

discharge; • Soil and Effluent Analysis for Heavy Metals, Phenolic Compounds, Mercury

Cadmium, TPH and pH: to be performed once every two years. Sampling results obtained are conservatively compared to the applicable effluent limits set by WMP Component #7 for discharges to onshore surface water bodies. If any exceedance of the adopted reference limits is detected, the wastewater produced is collected for subsequent re-injection into the treatment units and, for OFDA facilities only, in the injection wells or at the K223 disposal site.

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During 2006 no exceedance of the relevant reference limits was detected in any of the collected samples at the OWS outlets at the Permanent Facilities in Cameroon. Collection and disposal of liquid effluent through re-injection wells was performed several times for the Central Treatment Facility (CTF) OWS in Komé due to relatively high concentrations of oil and grease (concentrations exceeding the limit of 20 mg/L indicated in the WMP and set by the World Bank Liquid Effluent Criteria). Component # 7 – Monitoring of liquid effluents discharged directly from the Floating Storage and Offloading (FSO) Vessel Component # 7 of the WMP refers to liquid effluents discharged (e.g., produced water) from the FSO, derived from the on-board oil-water separator unit. Compliance with MARPOL 73/78 standards for oil and grease is evaluated before allowing any overboard discharge. A Management of Change (MOC) request was approved by COTCO in 2006 to modify the sampling and analytical procedure as set in the Component # 7, eliminating the provision for a composite sample collected twice a year and allowing for grab samples taken whenever effluent from the FSO OWS is discharged. Crude oil treatment on-board is performed whenever water-in-oil content, higher than 1%, is detected in order to comply with crude oil market requirements. The OWS unit at the FSO is also used to treat potentially impacted ballast water. Although the water content in the crude oil stored on board is generally lower than 0.7%, produced water was reportedly discharged from the FSO in late December 2006. Six effluent samples were collected prior to effluent discharge and tested using both the FSO oil detection monitoring equipment and a portable oil-in-water detector. A confirmatory chemical characterization was also performed by an off-site certified laboratory. The results obtained showed that all samples complied with the MARPOL 73/78 reference limits. Recommendations: 19.1 Consider amending the existing WMP by adding TPH as a standard parameter

to be tested in selected monitoring points, other than the K223 site, during each quarterly groundwater sampling campaign (performed with the field test kit) at the OFDA and at Permanent Facilities (repeated recommendation).

19.2 An assessment to determine if additional monitoring wells are needed should be conducted by EEPCI, based on the increased number of oil wells in the OFDA (repeated recommendation).

20. Waste Management Project Strategy: Waste management as defined in the EMP includes a comprehensive list of activities: education and training; recycling; transport, treatment, storage, disposal, and monitoring of non-hazardous and hazardous wastes; groundwater monitoring at engineered solid waste landfills; sewage collection, treatment and effluents monitoring.

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Several waste management facilities are currently employed by COTCO and EEPCI/TOTCO to dispose of all the produced wastes both in Cameroon and Chad. The main waste management collection and disposal facility in Chad is represented by the Komé Waste Management Facility (KWMF), which collects both hazardous and non-hazardous wastes generated in the OFDA. Two domestic waste incinerators are deployed at KWMF and Komé Base. At Bélabo PS3, COTCO is operating an engineered solid waste landfill for both non-hazardous and hazardous wastes (HW). A domestic waste incinerator is also available at the site. A third-party hazardous waste incinerator (BOCOM) is being used by COTCO in Douala to dispose of its incinerable hazardous wastes collected from all the Permanent Facilities in Cameroon. Observations: Waste Management, Cameroon The ECMG visited the Bélabo Waste Management Facility (WMF) located close to the PS3. The Bélabo WMF is organized into three main areas: • An innocuous waste dump site, where non-hazardous, non-incinerable wastes

such as cement, debris, non-recyclable plastic and glass, scrap metals and tires, as well as ash from the domestic waste incinerator at PS3 are buried;

• The hazardous waste temporary storage area, from where all segregated wastes received from the Permanent Facilities (including the FSO) are sent to the Bélabo HW landfill or to the Douala third party incineration facility;

• The HW landfill, provided with the leachate collection and an active resins treatment system.

The following waste management records were provided to the ECMG: • Quantities of restricted and non restricted wastes produced at Permanent Facilities

in 2006 and relevant disposal options selected; • Analyses of treated leachate effluent at the Bélabo WMF and compliance with

WMP effluent limits for treated wastewater effluents discharged to surface water bodies (conservative approach);

• Data relevant to the groundwater analyses at the PS3 landfill site (discussed in the previous section).

• Data relevant to the quantities of used oil and relevant percentage of disposed oil through re-injection into the oil pipeline or through recycling by approved third party contractor.

The overall amounts of waste produced in 2006 are proportioned as follows: • Around 37,800 kg of HW (15,000 kg disposed by BOCOM); • Approximately 1,111,000 kg of non-restricted wastes, of which:

- 3% incinerated on site - 6% buried at PS3 WMF - 2% recycled to local communities

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- 80% reused by third party commercial facilities - 9% sent to approved third party disposal facilities.

During the WMF visit the following observations were made: • Hazardous waste cell: the cell appears to be well maintained. Leachate is

collected by two submerged pumps and sent to an active resins treatment unit after being stored in a tank. The adjacent tank collects treated water that is then sent to the sewage treatment unit at PS3. Storm water runoff over the impermeable cover liner is collected with a pump and discharged to the outside ditch that collects the facility storm water runoff and conveys it to discharge into the bush. During 2006, around 56 tons of HW were reportedly disposed at the site. The cell, since the quantity of HW generated is limited, is reported to have sufficient capacity to manage the wastes for the upcoming years. An area between the HW cell and non restricted wastes dumping area is also available and may be used for constructing a new cell, if needed.

• Non restricted waste dumping area: COTCO report that this area has nearly reached its capacity. The COTCO EMP organization is currently considering the opportunity of developing a new non-restricted landfill at the PS3 camp, even if the precise location has not yet been identified.

• Storm water drainage system: storm waste drainage ditches appear to be in good condition. The ECMG observed that emergency valves or containment are not present at the main drainage outlet.

• Empty oil drums recycling program: COTCO, in agreement with the Cameroon Government, is currently implementing a recycling program for used oil drums that will be used, after clean up and painting, for urban trash collection in Douala.

Waste Management, Chad Waste Management Facilities and Practice The OFDA area has a dedicated waste management facility (Komé Waste Management Facility - KWMF) and two domestic waste incinerators. The KWMF is provided with the following units: • Waste segregation area, where collected waste are manually segregated for

subsequent disposal or storage; • Waste compaction area; • Municipal waste incinerator; • Hazardous waste incinerator; • Non-hazardous waste disposal cell, where the ash produced by the domestic waste

incinerators is disposed; • Hazardous waste disposal cell, where at the present time the soil impacted by

petroleum hydrocarbons recovered from the K223 site clean up and upgrade has been stored since 2005;

• Two landfill leachate collection tanks; • Used oil storage tanks; • Several unpaved storage areas.

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The area selected for land farming of hydrocarbon contaminated soil, prepared in 2004 but never fully operational, was recently closed and the contaminated soil temporarily stored in the HW cell. A new designated bioremediation area has been designed and is planned to be installed at the Komé 5 batch plant area. Records relevant to the amount of waste produced and disposed or recycled at the KWMF in 2006 were provided by the Project: • Around 6,700,000 kg of wastes were received at the KWMF in 2006; • Approximately 2,700,000 kg (40%) were processed on site; • The remaining 4,000,000 kg (60%) were recycled through the recyclable waste

donation programs of wood, waste tires, metal scraps, cables, PVC pipes, etc. The following observations were made during the ECMG site visit: • Housekeeping is adequate and the overall capacity has increased compared to

2005, given the space available from areas formerly occupied by waste drums and by the land farming site;

• The hazardous waste incinerator was found to be finally operational since December 2006. New stack emission tests are planned for June 2007;

• The leachate collection system is operational and is being used to collect liquors from the HW incinerator scrubber. The liquor is periodically sent with tank trucks to the K223 site for re-injection;

• The HW cell is full with hydrocarbon contaminated soils and sludge, which are temporarily stored and should be remediated in the planned land farming facility;

• Volumes of petroleum hydrocarbon contaminated soil were also observed to be temporarily stored at two concrete paved areas located at the main entrance of Komé 5;

• EEPCI reported that a chemical characterization of the contaminated soil stockpiled is being conducted in order to determine the applicability of selected remedial options;

• The domestic waste incinerator was found to be non-operational due to a breakage of the main combustion chamber. Similar problems have occurred at the domestic waste incinerator operating at Komé Base, which was also found to be non-operational. The failure of both incinerators (both aged and with limited capacity) is a significant issue to be resolved. As a result, food and incinerable domestic waste, produced at an approximate rate of 2000 kg/day, is accumulating on site and stockpiled in overpack drums;

• Ash disposed of in the non hazardous waste cell was found not to be covered with soil as required;

• A large number of shipping containers stored at Komé 5 batch plant area were found to contain significant amounts of Project operation wastes (such as rods, caps, joints, paint cans, etc). Segregation and labeling of these wastes were often questionable.

The main observation is that waste management system in place in the OFDA appears to be undersized to handle all waste streams produced, including operation phase waste and waste from the extended construction phase associated with the infill program. In at least one event, lack of functional equipment caused the Project to dispose of food waste outside of Project facilities. The observed accumulation of putrescible food waste is a concern.

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Waste Recycling Program Recycling program is being implemented and new opportunities are under development by EEPCI. The wood donation program appears to have been very effective. A tender for plastic waste recycling and food waste composting services was recently won by a joint venture of a Chadian company based in Moundou and the Cameroonian contractor BOCOM (which should provide technical support for the facility design and management). The new facility is currently under construction in Bébédjia, at the location of the composting platform built by the Government of Chad under the WBTA program, and was visited by the ECMG. Estimated construction completion date is May to June 2007. The facility will be provided with: • A food waste drying unit; • A leachate collection system connected to a concrete holding pit. Leachate should

be used for irrigation purposes in an experimental plot; • An area for composting; • A storage site; • A plastic recycling area. Wastewater Management Sewage Treatment Units The ECMG visited the treatment units at the Bélabo PS3 in Cameroon and at Komé 5, Komé Base and the Esso Drilling Camp in the OFDA. Each sewage treatment facility consists mainly of a primary aerobic digestion unit. Treated effluent is disposed through leach fields or open lagoons for evapotranspiration. A sludge drying bed is also present at both Komé 5 and Bélabo PS3 plants. The dried sludge is collected and sent for disposal at the Project waste management facilities, while wastewater collected below the filtering unit of the drying bed is pumped and recycled upstream the treatment unit. The following observations were made: • Bélabo PS3 Unit: reportedly the unit had some operational problems with one of

the internal separation chambers. The plant is currently working, but with a reduced efficiency and an excessive production of sludge. Weekly testing of effluents for pH, chloride and fecal coliforms shows compliance within Project standards.

• Komé 5 Unit: The facility was recently provided with a new leach field, built according to EMP specifications and sized based on a population equivalent to Komé 5. Effluent chlorination is performed. Both fecal coliforms and suspended solid content are within Project requirements.

• Komé Base Unit: a new lagoon for evapotranspiration of treated wastewater was installed in 2006, as the existing leach field is reportedly saturated and no longer effective. Treated effluent overflows from the leach field area into the lagoon. The lagoon consists of a fenced and guarded pit provided with a non-woven tissue on the side slopes for erosion prevention. Stagnant water was observed during the visit.

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• Esso Drilling Camp Unit: the plant treatment capacity was recently enhanced by adding two fractionation tanks, which provide a preliminary sedimentation and pre-treatment stage and also work as equalization tanks for the plant. The treated effluent is discharged to a disposal lagoon. The sludge is periodically disposed of at the Komé 5 drying beds. The lagoon consists of two annular basins, each provided with two inlets from the treatment unit. The camp personnel rotate the discharges to the lagoon on a weekly basis to limit the presence of stagnant water in each basin and allow for rapid evapotranspiration.

Although effluent testing results are within the Project requirements, the treatment systems in use are package units designed for construction camps and temporary facilities. They are not designed for the consistently high number of residents present in Komé 5 and also Komé Base, although the drilling camp unit was recently upgraded as discussed above. The treatment units are also not provided with pre-treatment units or equalization tanks that could help to reduce the load to the treatment unit, providing first separation of coarse material, and supporting long-term use. Management of Drilling Fluids All the tests performed on the drilling mud were reported to be compliant with the 3,000 ppm maximum allowable concentration for chloride. Produced Water Reuse After a pre-feasibility study conducted in 2006, EEPCI plans to perform a pilot study for the use of treated produced water from crude oil dewatering operations at the CTF. The treated water could be treated in a constructed wetland system to abate TPH levels, and then reused for irrigation. The pilot scale project would be 1/100 scale of the full scale application and be sized to handle approximately 1,500 barrels (240 cubic meters) of produced water per day. As reported by EEPCI, target quality levels would be based on US regulatory limits for discharge to surface water bodies. The cost of the pilot application is estimated to be around USD 10 million. EEPCI indicated that the land needed for the pilot project would be obtained from the Chadian Government. Currently, the proposed location of the pilot test is under review by EEPCI. K223 Well Testing Mud Management Facility The K223 well testing mud management facility collects the first surge oily sand from OFDA wells. Once dried into an open double lined concrete pit, the mud is collected and dried over a lined area provided with a leachate collection drum, while the oily water recovered is pumped and stored into several tanks, before being reinjected through the injection well at a depth of approximately 1600 m below ground surface. Samples from dried mud have been collected and sent to an external laboratory to assess their treatability with bioremediation techniques. Following the upgrade performed in March 2005, the facility was found to be in good order and with excellent housekeeping. Recommendations: 20.1 COTCO should consider implementing simple measures (such as the addition

of emergency valves or a containment gate at the main drainage outlet) at PS3 WMF to allow containment of storm water runoff in case of potential

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contamination due to accidental spills or leakage. COTCO should ensure that all outlet valves from containment systems (such as the leachate tank concrete containment area) are kept closed at all times.

20.2 Waste management from operation at full scale and extended construction activities in the OFDA should be reconsidered. EEPCI should revise and enhance the overall OFDA waste management capacity in terms of human resources, equipment and space available. As envisioned in the EMP Vol. 1, Section 7.8, the Waste Management Plan (EMP Vol. 5) should be modified and expanded to adequately address all construction and operations-specific waste streams.

20.3 EEPCI has the final responsibility for ensuring that construction, commissioning and operation of the Bebedjia waste recycling facility are compliant with Project specifications, taking into consideration that the facility is devoted to treat Project waste. EEPCI should ensure that the site is adequately protected, commissioned and compliant, before it becomes operational. Surface discharges of leachate produced at the site should not contain compounds of concern above allowable concentrations for the receiving land or water. Leachate from the composting facility should meet international standards for crop irrigation. Vector control, hygienic conditions, prevention of third party interaction, and making sure the facility does not become a community nuisance should be ensured as well.

20.4 Suitable treatment for the growing amount of hydrocarbon-contaminated soil and sludge temporarily stored should be implemented as soon as practical. Although chemical testing of stockpiled impacted soil is ongoing and a new land farming site has been designed, the Project strategy that will be adopted for remediating the soil is still not clear and should be clarified. In addition to land farming, EEPCI should take into consideration alternative techniques based on treatability study results.

20.5 As discussed in Section 16, allowing water to pond next to camp facilities at the sewage effluent disposal lagoons should be avoided so as not to create additional vector habitats, consistent with EMP commitments. Improved design features, such as placing a gravel layer on the pit bottom, should be considered to improve infiltration and reduce the amount of standing water.

20.6 Use of produced water for irrigation purposes should be fully evaluated, not just in terms of effluent quality and waste management, but also with respect to the management of the overall footprint of the full scale project, actual interest of local farmers, vector control and operational aspects.

21. Oil Spill Prevention and Response Project Strategy: The EMP contains requirements for responding to fuel spills and mitigating the environmental impact of such spills. Area-Specific Oil Spill Response Plans (ASOSRPs) were developed by the Project in accordance with the EMP for each defined Project area and spill response teams in Chad and Cameroon are available on site and operational.

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Observations: FSO Oil Spill Event and Response On the 15th of January 2007 an estimated 220 barrels crude oil spill occurred at the FSO. The leak took place because of a punctual corrosion of the outlet pipe of the main FSO Oil/Water Separation unit, crossing one of the external crude oil tanks of the vessel. The leak started at night and was not visually detected until morning due to its small flow rate and insufficient sensibility of remote level indicators connected to the main control room. The event was initially classified as Tier 1 and then raised up to Tier 2 in accordance with the OSRP procedures. It is noted that a Tier 1 event can be managed by facility emergency response team only, while a Tier 2 event involves the COTCO regional emergency support team, if the spill response actions require mobilization of personnel and equipment not directly available on site. Emergency response actions implemented by COTCO included the following: • Lowering the level of the oil in the tank below the sea level in order to balance the

pressure head at the outlet and stop the oil flow; • Starting oil spill response actions consisting of booming and application of crude

oil dispersants; • Mobilization of external support from other Oil Companies present in the region; • Mobilization of the international specialized emergency response organization

from United Kingdom (OSRL Ltd); • External tank emptying and assessment of the corroded pipe through video

inspection; • Closing the outlet of the OWS discharging pipe; • Communication actions with local authorities and stakeholders; • Continuous surveying of scenario development and plume fate and transport. Copies of the records relevant to accident notification, observation and management were provided to the ECMG. No effects on coastal environment have been reported. COTCO has indicated that environmental conditions caused the plume to be transported and dispersed away from the coast (at beginning towards North-West, then towards West). COTCO indicated that a root cause analysis was conducted and that, starting from May 2007, COTCO will upgrade of the OWS system, disconnecting and decommissioning the existing outlet pipes and installing new discharge pipes, running over the main deck. The cause of the spill is, in fact, due to an FSO design issue. It was reported that the outlet pipe of the OWS unit was connected to the existing overboard discharge line (water ballast line), where corrosion occurred. This potential incidental hazard was not identified during the design phase. Although the spill scenario was not specifically addressed in the ASOSRP, the spill event appears to have been adequately managed by the FSO and COTCO personnel.

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Oil Spill Response Plans and Organization During the ECMG site visit the following documentation was made available: • The list of reportable spills (e.g. greater than one barrel) occurred in the OFDA

and at the Cameroon Permanent Facilities in 2006; • The list of oil response drills performed in 2006; • The current version of the OFDA ASOSRP (Revision 2, dated June 2006).

Oil spill response drills appear to be consistently implemented throughout both countries. Their frequency is significant and should ensure rapid and effective mobilization. Oil and hydrocarbon spills are consistently recorded. The updated list of oil spill control points for the OFDA is included in the ASOSRP. Recommendations: 21.1 Based on the experience achieved during the January 2007 FSO spill event,

the relevant ASOSRP should be reviewed and amended, as needed, to update the spill scenarios and plume migration model, identify data gaps and update the emergency response procedures.

21.2 A full Hazard and Operability (HAZOP) study should be conducted for the FSO in order to review and identify credible incidental hazards for spills and other accidental event scenarios and relevant mitigation measures.

22. Land Resource Protection Project Strategy: EMP requirements relevant to the Operations phase include a continuous monitoring process of the land resources exploited by the Project. Specific design features should be implemented to address the use of lands already impacted by human activities in terms of locating Project infrastructure and oil production facilities. Interference with former land users to resume their activities on the Transportation System's land easement should be monitored as well. Project requirements have been generated to limit soil-related impacts, including management of construction and road maintenance material extraction sites, and land clearing, as well as to control and mitigate erosion and to reclaim lands disturbed by the Project along the pipeline ROW, at the OFDA and at temporary facilities. Observations: Observations relevant to Project land use and return of land use rights in the OFDA, conditions of temporary facilities in Cameroon are discussed in Sections 8, 9, 10 and 14. The ECMG visited several well pads and borrow pits in the OFDA. The new well pad size after reinstatement is now consistent with EMP commitments. The ECMG acknowledges the effort EEPCI is making to return to the originally planned footprint for each individual pad. Several reinstated well pads were visited where land is now used for crops. The number of well pads with open pits appears to be now under control, and only a limited number of well pads in Komé field remain to be reinstated. Reinstatement activities of the well pads are proceeding at a satisfactory pace.

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The ECMG visited some aggregate extraction sites and borrow pits located in the OFDA. The borrow pits status at the OFDA is adequately monitored by the EMP team, and information relevant to the total surface, the surface to be restored, land restoration and return percentages is available. A borrow pit reinstatement program was presented and there are some improvements since the previous ECMG visit in November 2005, although site closures are still proceeding at a relatively slow pace: • Eight additional borrow pits have been opened since November 2005; • Active borrow pits are currently eight, versus 10 in November 2005; • Borrow pits not reinstated and not in use are 13, versus 19 in November 2005; • Approximately 255 hectares are still to be reinstated (approximately 58 percent of

total land used for borrow pits since Project beginning); • Some large borrow pits, which have been open for more than five years still need

to be reclaimed (e.g., KBP1, KBP9); • There are borrow pits which have been continuously in use, through various

extensions (e.g., KBP6) and which are partially reinstated; • A few discrepancies in information provided were still apparent, although land use

control appears to be improved. A positive observation was made at the Madjo sand pit, which was in operation during the ECMG visit. The local contractor was found to be well aware of the environmental sensitivities of its work and the site was found adequately managed with a correct delineation of the work area. Recommendations: 22.1 EEPCI should expedite the implementation of borrow pit reinstatement actions

to minimize impacts on land and local communities. 22.2 EEPCI should require and approve a reinstatement plan and timeline before

any additional permit to exploit an extraction site is given (repeated recommendation).

23. Air Quality Protection Project Strategy: Air quality protection commitments relevant to the permanent facilities in Cameroon and Chad are provided by the EMP and by the Schedule 17 of the Credit Coordination Agreement, which indicate the following routine monitoring activities to be performed starting from the Project Physical Completion Date (fixed at 28 October 2004 by the Project): • Stack emission monitoring campaign for sulfur dioxide (SO2), nitrogen oxides

(NOX) and particulate matter (<10 µm) [PM10] once every third year. Source emission tests are scheduled for June 2007;

• Update of the air dispersion modeling of emissions from the Central Treating Facility on a yearly basis;

• A quarterly monitoring program of ambient air quality for sulfur dioxide and particulates by the mobile ambient air quality monitoring (AAQM) trailers available in Chad and Cameroon;

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• A continuous monitoring program of ambient air quality for nitrogen oxides by the AAQM trailers.

Both stack emission and ambient air quality testing results need to be compliant with the limits for nitrogen oxides, sulfur dioxide and PM10 specified in Schedule 17. If a non-compliance with the applicable limits is detected, the stack emission monitoring shall be performed on an annual basis until the non-compliance is resolved. Observations: Air Dispersion Model Update at Permanent Facilities and OFDA The update of the air dispersion model for the all stack emission sources of the permanent facilities was presented to the ECMG. The model results show that maximum predicted pollutant concentrations at the ground level never exceed the maximum concentration levels set by Schedule 17 for the Project for NOX, SO2 and PM10. According to the model, maximum fallout locations are located in the vicinity of the permanent facilities and at significant distances from nearest human receptors. Ambient Air Quality at Permanent Facilities in Cameroon Ambient air quality monitoring was conducted at both PS2 and PS3 locations. Due to reported operational problems experienced with the AAQM trailer, an MOC request was approved in June 2006 by COTCO to introduce the use of passive diffusion tubes for air quality monitoring purposes. Diffusion tubes work by means of selective adsorbent chemicals for NOX and SO2 which are then tested at an off-site laboratory. Scope of the MOC was to approve the use of a less sophisticated instrumentation which does not require maintenance and can also be easily deployed at various locations of COTCO facilities, including their potential for simultaneous measurements at several locations. PM10 continue to be monitored with the AAQM trailer. Although air quality monitoring was not simultaneously performed with diffusion tubes and the AAQM trailer at the same location due to operational problems of the AAQM trailer, the available air monitoring results obtained with the diffusion tubes were compared with previous AAQM trailer monitoring results, showing the following: • Diffusion tube results appear to be conservatively higher than the AAQM trailer

measurements, but NOX and SO2 concentrations are significantly below the applicable limits at any of the monitoring locations, regardless of the monitoring technique adopted;

• Both annual and 24-hours average values detected for PM10 were found above the recommended limits at PS2, due to significant concentrations measured during the first quarter of 2006 and reportedly due to high background values of dust in the region.

Ambient Air Quality at the OFDA, Chad As already implemented in Cameroon, EEPCI is in process of starting an MOC process for the use of diffusion tubes instead of an AAQM trailer. At the time of the ECMG visit, a comparative sampling campaign with AAQM trailer and diffusion tubes was ongoing to support the proposed MOC. EEPCI also commissioned a desk study on diffusion tubes. The AAQM trailer coupled with diffusion tubes was found

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operational and located in the vicinity of the Miandoum Gathering Station, at the maximum fallout location predicted by the air emission dispersion model. As previously described in Section 17, EEPCI is also implementing studies aimed at understanding the effect of the OFDA activities including vehicular traffic on PM10 and dust concentration in the surrounding areas. Scope of the study is also to re-evaluate the background concentrations of PM10 for the area, which were taken into account to define the Schedule 17 limits. Available results indicate the following: • No exceedance of relevant Schedule 17 limits for NOX and SO2 were detected; • Several PM10 measurements were instead found above Project limits, both for 24-

hours and annual average; • Background PM10 concentrations were reportedly found at significant levels at all

the monitoring locations; • As already discussed, the highest PM10 fallout was found approximately at 200

meters away from the OFDA laterite spine road. Lower PM10 concentrations along road sections with DBST were reportedly measured.

Flaring Flaring volumes of natural gas associated with the produced crude oil raised up to 234.4 mscf/month (approximately 7.5 mscf/day, well above the Project target level of 1.1 mscf/day) in December 2006 (maximum volume ever recorded from Project Completion date) and, as reported by EEPCI, may continue to increase due to the continuation of the OFDA infilling and the development of the Maikeri satellite field. Associated gas is being partially used for power generation at CTF. A Level I Non-Compliance for excessive flaring was raised by the EMP team in August 2006. EEPCI has identified a corrective and enhancement measure which consists of upgrading of the capacity of the existing compression station at the Miandoum Gathering Station. This upgrade would create a reserve for future power supply needs and to lower the flaring volumes down to the Project target level of 1.1 mscf/day. The implementation of this measure is planned for 2008. It is an EMP commitment to minimize flaring and maximize recovery and utilization (as fuel) of natural gas associated with produced crude oil (EMP, Chad Portion, Volume 1, Chapter 2). Recommendations: 23.1 There is a concern related to the applicability of diffusion tubes in severe

weather conditions like those experienced in both Cameroon and Chad (humidity <20% or >80%, temperature >30°C), which may affect the adsorbents’ efficiency. EEPCI and COTCO should ensure the representativeness of the measurement methods selected, such as by obtaining ad-hoc support from diffusion tube manufacturers, feedback from specialized consultants, reference studies conducted in similar climates. A technical evaluation of the capability of diffusion tubes to achieve representative mean concentrations, without being affected by cumulative effects, should be developed.

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23.2 The MOC approved by COTCO and under evaluation by EEPCI for the introduction of passive tubes should be complemented by a technical specification to define a standard procedure on how to measure Schedule 17 standards (24 hour and annual means) throughout the Project.

23.3 PM10 measurements throughout the Project have frequently shown exceedances of the Schedule 17 limits. The Project should evaluate the results from background value studies prior to proceed with any proposed modification of Schedule 17 limits.

24. Erosion Control Management Project Strategy: Based on EMP requirements concerning erosion control management and following the implementation of the Erosion Control Monitoring and Maintenance Plan (Appendix H in the COTCO Operations ROW Plan [April 2004] and Appendix I in the TOTCO/EEPCI Operations ROW Plan [July 2004]), both monthly aerial surveillance and routine ground monitoring inspections of the ROW are conducted by the Project in both Cameroon and Chad. In particular, post-wet season erosion control monitoring is conducted by the Project that identifies corrective actions to be undertaken along the easement. Based on these surveys, erosion and sediment control measures for the entire length of the pipeline easement are being implemented or maintained. The monthly aerial surveillance and routine ground monitoring inspections are conducted by COTCO and TOTCO/EEPCI EMP staff. In Cameroon, where erosion is more likely to be problematic, data collected during aerial surveillance and ground monitoring inspections are stored in the ‘COTCO Monitoring Database’. This database contains information related to erosion control and management, induced access management, and revegetation of the ROW. Follow-up corrective actions are specified, and the database is updated regularly. A status column shows if issues are open, closed, or being managed. This ‘action tracking system’ approach allows the Project to follow through on new and existing observations along the ROW. In Chad, information is also compiled by TOTCO/EEPCI staff. Observations: During this visit, the ECMG did not conduct a detailed review, with field observations, of the ROW erosion control management. The largest problem area for erosion control in Cameroon since the onset of Project activities has been the M’bere Rift Escarpment located at KP 255 (i.e., ‘the Big W’) in MA-2. The Project implemented a significant program of erosion repairs and ROW maintenance to prevent further erosion on these steep slopes. The erosion control measures, such as the construction of diversion dikes, gabions and erosion blankets, back-filling and seeding in the escarpment area, were reviewed. Results of the extensive stabilization and revegetation measures, performed through a national contractor and employing local villagers, appeared to be encouraging. The ECMG acknowledges the remarkable effort sustained by COTCO EMP team to resolve this long-standing issue.

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25. Revegetation Project Strategy: The Project’s strategy to monitor revegetation of the ROW during the Operations phase is covered under several different sections of both the COTCO and TOTCO/EEPCI ROW Plan. For example, for Cameroon, the Erosion Control Monitoring and Maintenance Plan (Appendix H), the Induced Access Management Area Plan (Appendix N), and the ROW Maintenance Activities within Wetlands and Waterbodies (Appendix L) cover aspects of revegetation and can be found in the COTCO ROW Plan. For Chad, the Erosion Control Monitoring and Maintenance Plan (Appendix I) and the ROW Maintenance Activities within Wetlands and Waterbodies (Appendix K) cover certain aspects of revegetation and can be found in the EEPCI/TOTCO ROW Plan. Revegetation along the ROW is monitored as part of quarterly aerial surveillance and routine ground monitoring inspections. Data collected along the entirety of the pipeline easement are compiled by COTCO and TOTCO/EEPCI EMP personnel. For ROW maintenance, Operations maintenance personnel hire local contractors, who in turn hire local village (unskilled) workers, to cut the ROW vegetation growth to knee-height once a year. These activities take place just after the rainy season. CROs in Cameroon and LCCs in Chad work with the contractor to assist with the hiring of local villagers and to ensure that they are hired according to EMP standards. Observations: During this visit, the ECMG did not conduct a detailed review, with field observations, of the ROW revegetation. Records from ground and aerial monitoring of the ROW were reviewed. Limited locations visited along the ROW between Kribi and Lolodorf (MA-4) confirmed significant vegetation regrowth with good encroachment of woody species and shrubs. Recovery of natural landscape was observed to be very good at selected locations. Revegetation of the ROW between the Lom River and Pangar River was reviewed by the ECMG during a ROW fly-over. ROW appears to be generally covered and well revegetated at wetland and stream crossings, but there are also areas of bare soil, with limited revegetation along relatively long sections of the ROW between these two rivers. This observation is not fully consistent with the revegetation status reported in the COTCO EMP quarterly reports. A Revegetation Management Plan is ongoing. Seed and organic fertilizer collection was just completed in December 2006. A second revegetation campaign, after a first campaign conducted by a local contractor in June 2006, is scheduled for June 2007. The third and last campaign, scheduled in the current Revegetation Management Plan, should be conducted in June 2008. COTCO originally established a Chromoleana odorata Monitoring Plan after the ECMG had raised the concern regarding the revegetation of the pipeline ROW with this invasive species. During the previous EMCG visit, COTCO reported that Chromoleana was being identified north of Lom River, and even as far north as the M’bere Rift Valley area. During this review, COTCO indicated that a study will be

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sponsored to review the presence of Chromoleana along the ROW and in background locations throughout Cameroon. Recommendations: 25.1 COTCO should continue with implementation of active revegetation

campaigns and should review revegetation in critical areas, including the Lom Pangar induced access management area, where areas of bare soils continue to be present.

25.2 COTCO should ensure that adequate scientific review is provided for the ongoing Chromoleana study.

26. Induced Access Management Project Strategy: In accordance with the EMP, the Induced Access Management Plan (IAMP), designed specifically for the Construction Phase, was updated for the Operations phase, and included as part of the COTCO’s ROW Plan (April 2004, Appendix N). This updated Plan, now referred to as the COTCO Induced Access Management Area Plan (IAMA Plan), was developed to “…continue to assess the effectiveness of access inhibition measures implemented immediately following pipeline construction and… …document the modifications made to the IAMA control measures in the initial period of the Operations phase.” The monitoring schedule for the induced access management areas (IAMAs) is similar to what was described for erosion and revegetation monitoring. Aerial surveillance and verification ground monitoring are performed monthly and a comprehensive ground survey of the induced access management areas and access roads is performed quarterly. Results from induced access monitoring are logged in the COTCO Monitoring Database and incidents are tracked through time until the issue is considered closed. Ground monitoring is jointly performed by EMP monitors and CPSP field inspectors. When an illegal activity such as logging or poaching is recorded on the ROW or on the access roads, the formal procedure is to send a letter to CPSP headquarters in Yaoundé, informing the Government of the incident and requesting their intervention on the issue. Observations: The ECMG reviewed the IAMA monitoring records provided by COTCO. The number of gates bypassed by unauthorized vehicles, logging activities, roads crossing the ROW and huts along the ROW are recorded. As reported by COTCO, the absence of access roads in the Lom Pangar IAMA has apparently prevented induced access in this area. COTCO has started an MOC process to open two accesses in the Lom Pangar IAMA to allow emergency response, modifying the current status for potential access to the ROW, which is now only possible by helicopter at two block valve locations. The proposed MOC request is based on an Operations risk assessment conducted in 2005 to determine if additional safeguards or gaps exist in the operations portion between

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PS2 and PRS. COTCO EMP organization has developed some supporting documentation, but the MOC process is not closed yet. Recommendations: 26.1 Since the beginning of the Operations Phase, the Management of Change

process has been used on numerous occasions to re-open access roads in the IAMAs that were reinstated at the end of the Construction phase and originally supposed to be left closed according to the EMP. Taking into consideration the difficult management of currently open accesses and the commitment to mitigate potential impacts in terms of increased poaching, logging or agricultural exploitation of these sensitive habitats, re-opening of additional roads is not advised in any of the induced access management areas (repeated recommendation).

27. Environmental Foundation Objectives and Responsibilities: As indicated in Section 7, “Impacts and Mitigation Measures”, of the Executive Summary and Update of the Environmental Assessment for the Chad Export Project, the Environmental Foundation (Foundation for Environment and Development in Cameroon [FEDEC]) is listed among the project’s plans for mitigating the potential impacts that cannot be avoided. The mitigations include the following: • Development of the Indigenous Peoples Plan (IPP) and its funding over a 28 year

period by a $600,000 contribution by COTCO; • Offsite Environmental Enhancement Program (OEEP) for the two national parks

of Campo Ma’an and Mbam Djerem (additional $2,900,000 contribution by COTCO).

The EMP for Cameroon provides in Volume 4 details on FEDEC’s role, responsibilities and operation procedures, as well as COTCO’s capital contribution to FEDEC. FEDEC has the goal of providing long-term financial support for ecological conservation and enhancement programs in two newly established National Parks and for Bagyeli/Bakola (Pygmy) development programs. Observations: Foundation Significant difficulties with FEDEC management and for the implementation of the two programs (IPP and OEEP) were observed by the ECMG in November 2005. The ECMG was concerned that those difficulties could pose a risk to the effectiveness of the planned mitigations. FEDEC is the tool and approach devised by the Project to meet the Bank’s Operational Policies related to Natural Habitats (OP 4.04) and Indigenous Peoples (OP 4.20). During this visit, the ECMG had the opportunity to meet with FEDEC and the following positive observations were made:

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• Issues relevant to Board composition and administrative function are reportedly resolved;

• Campo Ma’an and Mbam Djerem Master Plans were found to be finalized and approved;

• A new implementing organization was hired to develop the actions under the IPP; However, the ECMG is concerned about the persisting lack of a fund raising plan and FEDEC long-term impact, particularly for the IPP. Fund raising is an important aspect discussed in the EMP, and was expected to contribute for the self-sustainability of this mitigation measure. IPP program The previous ECMG review in November 2005 found that implementation of the IPP had been de facto interrupted since mid-2005, and urged FEDEC to take steps to restart it. The ECMG has indeed observed during this review that the IPP has re-started – since July 2006, and has been able to review IPP’s activities in the field with professionals involved in its implementation. This new phase is based on the same principles as before and includes the same components: • Education, mainly including the facilitation and support to schooling Bagyeli-

Bakola children at dedicated boarding schools, through FONDAF, a local NGO, • Health, mainly the provision of free-of-charge health care to Bagyeli-Bakola

community members at the Ngovayang private hospital, • Citizenship, the continuation of activities already carried out before aiming at

providing identity documents to members of the Bagyeli-Bakola community (ID cards, marriage certificates, birth certificates),

• Agriculture, through the provision of inputs (seeds, seedlings, small hand tools). One new development is that the IPP has now identified “focal persons” in each of the Bagyeli-Bakola settlements it works with, which appears to greatly help in delivering benefits. The implementation arrangements have, however, been changed. The former Community Development Facilitator (who in the previous arrangement was hired by FEDEC and whose salary was directly supported by COTCO) is now hired through an NGO (RAPID), which also provides the services of another full-time field worker and of two occasional agricultural extension workers. RAPID has established a small office in Kribi. RAPID’s contract also includes the cost of inputs delivered to members of the Bagyeli-Bakola community (particularly for the agricultural component), and for sub-contracts related to certain components, such as the one with FONDAF for the accommodation of Bagyeli-Bakola children educated at boarding schools, and with the Ngovayang Hospital for free-of-charge health care to the Bagyeli-Bakola community. In effect, the implementation of the IPP is entirely sub-contracted to RAPID. In 2004, a joint IFC/FEDEC evaluation took place (Dr. Alain Froment, late 2004). It appears that the recommendations of Dr. Froment’s report (joint IFC/FEDEC exercise, late 2004) have been only partially implemented: • The implementation team is now based in Kribi as mentioned above,

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• Some effort has been placed into facilitating Pygmies’ access to land – but activities in this respect still do not reflect the strong priority recommended by Dr. Froment’s report (and supported by the ECMG).

A number of Dr. Froment’s report recommendations, however, are yet to be implemented: • The establishment of a baseline database of Bagyeli-Bakola settlements, • The establishment of a steering committee for the IPP with Bagyeli-Bakola

representation, • A better coordination between the different actors active in the area in support of

development of the Bagyeli-Bakola community. The IPP budget is USD 78,000 for 2006, and 86,000 for 2007. It appears from interviews held by the ECMG in the field that some components may be under-funded, specifically health care at the Ngovayang hospital (which receives about USD 5,000 per year, whereas the hospital administrator estimates that the budget required to meet healthcare needs is about USD 20,000). In this respect, the ECMG notes that there may be a problem with scale. The IPP is currently quite small, and it is likely that for the same running costs, a significantly larger volume of activities could be done. From a broader perspective, the value added by FEDEC’s involvement with the IPP is not clear, particularly since those activities where Dr. Froment’s report recommended that FEDEC take responsibility have not yet been implemented. Mbam-Djérem National Park In the ECMG’s report for the field visit of November 2005, it was noted that a draft Management Plan for Mbam-Djérem park was planned for submission, although there appeared to be “…still along road ahead to its finalization.” The Wildlife Conservation Society (WCS) (implementing organization for the park) has now completed the draft park Management Plan, although review and signature by Cameroon’s Ministry of Forests and Fauna (MINFOF) are pending. The five-year Management Plan (2007-2011) is an extensive document, which presents a comprehensive background, containing the park’s history; the legal and institutional framework; a description of nearby infrastructure; a description of the natural and socio-economic environments of both the park and its periphery; demographics; and the current anthropogenic stressors, threats, and modes of exploitation. Although Mbam-Djérem park contains an impressive array of fauna and flora (with 60 mammals, including at least ten diurnal primates) and unique gallery forest and savanna-forest ecotone habitats, the park suffers from poaching, logging, extensive grazing and uncontrolled burning. The Lom Pangar dam project and a bauxite mining project also present significant threats. The overall goal of the Management Plan is clearly stated as the “conservation of the park’s biodiversity and ecological integrity and their contribution to socio-economic development at the local, regional, and national levels.” The objectives of the Management Plan are as follows: 1) protect biodiversity, especially of vulnerable species and park ecotone habitat; 2) strengthen biological, ecological, and socio-economic research both in the park and in its periphery; 3) involve relevant

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stakeholders to manage the park and promote local sustainable development initiatives; 4) reinforce and operationalize the institutional, logistical, and financial capacity necessary for effective park management For each of the objectives, the Management Plan outlines a series of activities, indicators, the party responsible for implementation, and partners. The Management Plan introduces three management zones; these include an intensive-protected zone with limited access; a buffer zone, which contains a multiple-use management zone; and the park’s periphery. Both the intensive-protected zone and the buffer zones comprise the protected areas of the park. The intensive-protected zone is comprised of three blocks and is accessible only by the pre-existing footpaths; access to this zone will be limited to research purposes only, and two research posts will be constructed. The buffer zone or multiple-use management zone will be dedicated to experimental forms of local, community sustainable development. Six control posts will be established in this zone, and a number of footpaths will be created to support park management. In the periphery, six zones will be dedicated to agriculture, pastoral activities, animal husbandry/breeding, sustainable collections of forest products, and fish farming/production, amongst others. Also contained in the Management Plan is a section on the evaluation of environmental impacts and associated mitigation measures. This section presents an overview of the potential negative and positive impacts associated with nearby industrial activities (such as the Lom Pangar and Natuchigal dams). While this section notes some positive impacts, such as a potential rise in local employment and improvements to infrastructure, these projects will likely increase ongoing threats to local resources such as poaching, habitat fragmentation, and land use conflicts. A short discussion is presented on technical and institutional mitigation measures. Notably, this section highlights the creation of the Lom Pangar Park and the Deng Deng UTO (unité technique opérationnelle) as two initiatives intended to allow integrated management and conservation of forest resources and fauna. One of the last sections of the document provides a brief and general overview of the management structure and components necessary to carry-out the objectives as listed in the Management Plan; these include 1) a management committee; 2) a scientific and technical committee; 3) a conservation (administrative) department; and 4) a platform to promote collaboration. An annual budget with respect to the four objectives was also included. Although some indicators are identified, the document does not include a monitoring and evaluation framework. Some recent achievements include the recruitment and training of 25 ecoguards, the monthly staff planning and evaluation meetings, and local environmental education initiatives for school children. The Wildlife Conservation Society also noted a good working relationship with the local administrative and traditional authorities. A park logistical base and office have been constructed and operational, along with an education and training center complex and three guard posts. Park staff have completed a survey to confirm and demarcate the park boundary, and law enforcement patrols are routinely taking place. The first comprehensive biological survey of the park has been completed, and baseline data is available. A small-scale livelihood program on fish farming and bee keeping has also been initiated.

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Important next steps include increased collaboration and partnership building with governments, private sector, and other organizations; recruitment and training of local staff; capacity building of park staff and local partners, such as local NGOs; defining priority research topics; developing a monitoring and evaluation program; developing a livelihood program; strengthening traditional institutions; defining and creating management structures; and, fundraising, amongst others. In order to fulfill these and other objectives as listed in the Management Plan, the mobilization of resources vis-à-vis the WCS, the Government, the Consortium, and/or the World Bank will be critical. Recommendations: 27.1 FEDEC should focus on activities with the most constructive impact, such as

coordination, including the establishment of a steering committee with external stakeholders, and establishing the baseline of Bagyeli-Bakola settlements in the area affected by the pipeline and beyond.

27.2 As indicated in the EMP Vol. 4, Section 7.3, FEDEC Board needs periodically commission an independent review of impact of the Foundation’s activities as a whole. FEDEC impact and its added value to the activities of the three IOs should be evaluated. The FEDEC objectives, plan and development role should be realistically revisited as a result of the review.

28. CTNSC In Chad, the ECMG was able to meet with CTNSC’s Executive Secretary both in Komé and in N’Djamena, and get an update on CTNSC’s current situation. Because the ECMG was not responsible for detailed monitoring of the status and progress of the two World Bank Technical Assistance (WBTA) Projects in Chad and Cameroon during this mission, this report only presents a factual update on the current status of CTNSC and WBTA project, as reported by the CTNSC’s Executive Secretary. Observations: The previous ECMG mission in November 2005 noted that the WBTA project was short of funds, and that a supplemental grant of USD 10 Million was being discussed between the World Bank and the Government of Chad. Since then, the relationship between these two institutions has been difficult, and these difficulties have apparently prevented progress on the grant negotiations over the past 15 months. If an agreement is not reached by 30 April 2007, this supplemental grant will reportedly be lost to the WBTA project, which will in effect be terminated. CTNSC has reported that it has been operating with minimal resources over the past year: • Contracts for the remaining field staff finished in December 2006 and there is no

budget for logistics, vehicles, etc… • The logistical support agreement from EEPCI to CTNSC has also come to an end,

but CTNSC is still using limited office space at Komé 5. • CTNSC’s Executive Secretary has, however, managed under difficult conditions

to maintain a minimal level of activity, with periodic missions to the OFDA (and

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other areas in Chad with oil-related activities), with the preparation of periodic monitoring reports.

FACIL has been inactive for more than one year. CTNSC reports that minimal staff is still in place (the FACIL director and one accountant), with their salaries currently covered by Government funds. No operating budget is available. Neither the micro-credit component, nor the infrastructure component are currently operational and no money is available for any field activities, including monitoring of past activities. According to CTNSC, CTNSC and FACIL together have a debt of about USD 1.8 million to contractors, consultants and service providers related to construction projects (“emergency measures”), various consulting contracts, as well as general services (offices, etc…). According to CTNSC, FACIL is owed about USD 800,000 by the micro-credit intermediary agents and legal action is ongoing. Recommendations 28.1 The Government of Chad and the World Bank should find an agreement on

the USD 10 Million supplemental grant to prevent termination of the WBTA project.

28.2 The priorities recommended by the ECMG for this USD 10 Million grant are the following: • Continuation of field monitoring, particularly in the OFDA, • Some limited additional technical training focused to oil and gas industry

monitoring and compliance assessment, • The legal effort needed to clarify Chadian national permitting procedures

related to the oil sector, particularly the development of implementation decrees for Law No. 14.

28.3 EEPCI and CTNSC should renew their logistical agreement.

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List of Acronyms and Abbreviations

AAQM: ambient air quality monitoring (trailer) ASOSRP: Area-Specific Oil Spill Response Plan CAPECE: Cameroon Petroleum Environment Capacity Enhancement Project CDF: Community Development Facilitator COTCO: Cameroon Oil Transportation Company S.A. CPSP: Comité Permanent de Pilotage et de Suivi du Pipeline CRCP: Chad Resettlement and Compensation Plan CRO: Community Relations Officer CTF : Central Treatment Facility CTNSC: Comité Technique National pour le Suivi et le Contrôle (CTNSC Chad) DBST: Double Bitumen Surface Treatment ECMG: External Compliance Monitoring Group EEPCI: Esso Exploration and Production Chad Inc. EMP: Environmental Management Plan (PGE in French) FACIL: Fonds d’Actions Concertées d’Initiative Locale FEDEC: Foundation for Environment and Development in Cameroon FSO: Floating Storage and Offloading (vessel) GPS: General Project Specification HW: Hazardous Waste IAMA: Induced Access Management Area IFC: International Finance Corporation IPP: Indigenous Peoples Plan (IPP Cameroon) KWMF: Komé Waste Management Facility LCC: Local Community Contacts MA: Maintenance Area MINFOF : Ministère des Forêts et de la Faune (Cameroon) MOC : Management of Change NGO: Non-Governmental Organization OEEP: Offsite Environmental Enhancement Projects OFDA: Oil Field Development Area ORT: Organisation internationale de Recherche et de formation Technique OWS: Oil/Water Separator PAH: Polinuclear Aromatic Hydrocarbons PM10: Particulate Matter (<10 µm) PPE: Personal Protective Equipment PRS: Pressure Reducing Station PS1: Pump Station No. 1 PS2: Pump Station No. 2 PS3: Pump Station No. 3 RAP: Resettlement Action Plan ROW: (pipeline) Right-of-Way TOTCO: Tchad Oil Transportation Company S.A. TPH: Total Petroleum Hydrocarbons ULB: Université Libre de Bruxelles UTO: Unité Technique Opérationnelle WB: World Bank WBTA: World Bank Technical Assistance/Capacity Building WCS: Wildlife Conservation Society WHO: World Health Organization

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WMF: Waste Management Facility WMP: Water Monitoring Program WWF: World Wildlife Fund

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APPENDIX A DAILY ACTIVITY SUMMARY

Between February 12 and February 21, 2007, the D’Appolonia ECMG conducted the thirteenth mission (third visit, post-Project Completion) to monitor the Chad Export Project in Chad and Cameroon. Activities are specified below:

February 12 — Three members of the ECMG arrived in Douala, Cameroon. February 13 — Meeting in Douala with the COTCO EMP team. One member of

ECMG traveled to the FSO in the morning and returned to Douala. February 14 — Two members of ECMG departed from Douala and flew to

Bélabo and then conducted a flight over of the ROW between the Lom River and the Pangar River. Then visited PS3 permanent facilities. The ECMG socio-economist traveled to Kribi and visited Kribi, Bagyeli communities and IPP projects.

February 15 — Two members of ECMG visited the PS3 Waste Management Facility (WMF) and the ROW south of PS3. Subsequently, they flew to Yaoundé and attended a meeting with FEDEC, COTCO, and Implementing Organizations late afternoon. The ECMG socio-economist drove from Kribi to Yaoundé, through Lolodorf and continued to visit local communities; then he attended the meeting with FEDEC in Yaoundé.

February 16 — The ECMG drove in the morning from Yaoundé to Douala and then departed from Cameroon to Chad. The team met with EEPCI management in N’Djaména.

February 17 — The ECMG flew from N’Djaména to Komé and attended a meeting with EEPCI EMP team, especially focusing on land issues. In the afternoon, two members of ECMG conducted visits of Komé Base, Komé Waste Management Facility, Komé 5, and other facilities in the OFDA. Two members of the ECMG, then, met with the CTNSC Executive Secretary in Komé 5.

February 18– Two ECMG members visited several locations in the OFDA, including well pads, borrow pits, etc. The ECMG socio-economist conducted visits of Project affected villages and communities. In the evening two members of the ECMG continued their meeting with the CTNSC Executive Secretary in Komé 5.

February 19 — Two ECMG members visited the Esso Driller Camp, the location of the air quality monitoring trailer near Miandoum Gathering Station, and the composting and recycling facility under construction in Bébédjia. The ECMG socio-economist continued his visits of Project affected villages and communities, met ORT and JMN in charge of improved agriculture and off-farm training programs.

February 20 — The entire team completed its visit of the OFDA and collected available information and data. The ECMG flew from Komé to N’Djaména.

February 21 —The ECMG met EEPCI Procurement Manager to be informed about the local business opportunity program. The Chad Export Project closeout meeting was held in N’Djaména in the afternoon, to present the ECMG review of the status of FEDEC and the Chad Export Project. Attendants included CTNSC, Consortium senior management and EMP management, representatives from the IFC. The three ECMG members departed from Chad at night.