Annual Safeguards & Social Monitoring Report Project Number: 48423-001 December 2016

Tiwi and MakBan Geothermal Power Green Bonds Project (Philippines) Prepared by AP Renewables, Inc. for the Asian Development Bank This report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

AnnualSafeguardsandSocialMonitoringReport

PartA.Environment

1. Changes to Project Status during the period (i) Significant changes to project activities (if any) (ii) Changes in Environment, Health and Safety (EHS) Teams (if any)

MAKBANEHSTEAM

TIWIEHSTEAM

(iii) Status of the Corrective Action Plan for Tiwi and MakBan based on the Environment Compliance Audit Report (ECAR) in 2015 (Please see updates on the status of compliance column in Table 3 below)

2. Environment Management (i) Confirmation of compliance with permitting requirements based on the Environmental

Compliance Certificate (ECC) related to power generation facilities specifically those with periodic renewal. Please provide copy of periodic renewed permits. Table 1 detailed the submitted requirements for the monitoring period.

a) Air emissions (e.g., Permit-to-Operate Air Pollution Sources and Control Installations under Clean air Act) (Please refer to the summary Table 1)

b) Water resources (e.g., Discharge Permit of Liquid Waste and Wastewater Effluents under the Clean Water Act) (Please refer to the summary Table 1)

c) Hazardous Wastes (e.g., Priority Chemical List, PCL Compliance Certificate for Cadmium acetate in Makban) (Please refer to the summary Table 1)

(ii) If information was provided to APRI, status of compliance with permitting requirements stated on the ECC in relation to steam field operations.

(iii) Summary of actions taken by APRI in relation to steam field well decommissioning and rehabilitation (if any)

Table1StatusoftheRequiredPermitsoftheRelatedPowerGenerationFacilitiesofMakBanandTiwi(Inthenextannualmonitoring,pleaseupdatethistable.)

Related Legal Requirements Particulars Code Issuing

Agency Issued

to Issued On Valid Until

Remarks

MAKBAN Air Emissions Section 1 Rule XIX Part VI, IRR of RA 8749 (Clean Air Act)

Permit-to-Operate Air Pollution Sources and Control Installations

Plant A Two (2) units 63 MW Turbines/ Generators provided with two (2) units condenser, cooling tower and steam ejector gas removal system

2015-POA-0434-346

DENR-EMB IV

APRI 27 April 2015

10 April 2020

File: PTO_2015-2020

Plant B Two (2) units 63 MW Turbines/ Generators provided with two (2) units condenser, cooling tower and steam ejector gas removal system

Plant C Two (2) units 55 MW Turbines/ Generators provided with two (2) units condenser, cooling tower and steam ejector gas removal system

Plant D Two (2) units 20 MW Turbines/ Generators provided with two (2) units condenser, cooling tower and vacuum pump

Plant E Two (2) units 20 MW

Related Legal Requirements Particulars Code Issuing

Agency Issued

to Issued On Valid Until

Remarks

Turbines/ Generators provided with two (2) units condenser, cooling tower and vacuum pump. Two (2) units 3 MW each turbine (Blalo 45); two (2) units 3 MW each turbine (Bulalo 02); one (1) unit each (3 MW and 0.73 MW) turbine (Bulalo 51); three (3) units 250kW/313 kVA DMT Cummins diesel engine generator set and five (5) units 281 kVA Cummins diesel engine generator set (standby) provided with muffler.

Section 3(d) of DAO 2009-02

Designation of Makiling-Banahaw Geothermal Airshed

11 February 2009

For follow-up

Hazardous Waste

DAO 23-2007 PCL Compliance Certificate for cadmium acetate (Cadmium acetate dihydrate for analysis)

PCL-OL-2016-462

DENR-EMB Main

APRI 30 March 2016

30 March 2017

File: PCL certificate-Cadmium Acetate Mar 30 2016-2017

PCL Compliance Certificate for cadmium acetate (Cadmium acetate dihydrate for analysis emsure(R))

PCL-OL-2017-1140

DENR-EMB Main

APRI 30 March 2017

30 March 2018

File: PCL Certificate_Cadmium Acetate Mar 30, 2017-2018

Water Resources

Section 13 and 14 , IRR of RA 9275 (Clean Water Act)

Discharge Permit

Discharge Permit of Liquid Waste and Wastewater Effluents –Wastewater (maximum at 31.5 m3 per day)

DP-16b-016-02032

LLDA APRI 03 October 2016

18 September 2016

File: Discharge Permit 2016-2019

TIWI

Related Legal Requirements Particulars Code Issuing

Agency Issued

to Issued On Valid Until

Remarks

Air Emissions Section 1 Rule XIX Part VI, IRR of RA 8749 (Clean Air Act)

Permit-to-Operate Air Pollution Sources and Control Installations

Plant A 2 units 60MW single cylinder double flow reaction type condensing turbine and auxiliaries; NCG extraction system; 2 units Mechanical Induced Draft Cooling Tower and 2 units 55 MW 3-phase synchronous type Generator

POA-16B-05AL-029(A)

DENR-EMB V

APRI 29 February 2016

26 February 2017

File: TGPP RENEWED PERMITS_LICENSES

One (1) unit Diesel Engine Driven Fire Pump

POA-16H-05AL-029(F)

DENR-EMB V

APRI 11 August 2016

11 August 2017

File: TGPP RENEWED PERMITS_LICENSES

One (1) Unit 300KVA AKSA Power Generation Standby Generator Set

POA-16I-05AL-635

DENR-EMB V

APRI 18 October 2016

9 September 2017

File: TGPP RENEWED PERMITS_LICENSES

Plant C 2 units 57MW single cylinder double flow reaction type condensing turbine and auxiliaries; NCG extraction system; 2 units Mechanical Induced Draft Cooling Tower and 2 units 57 MW 3-phase synchronous type Generator

POA-14B-05AL-029(C)

DENR-EMB V

APRI 19 February 2016

26 February 2017

File: TGPP RENEWED PERMITS_LICENSES

One (1) unit Diesel Engine Driven Fire Pump

POA-16H-05AL-029(E)

DENR-EMB V

APRI 11 August 2016

11 August 2017

File: TGPP RENEWED PERMITS_LICENSES

One (1) Unit 300KVA AKSA

POA-16I-

DENR-EMB V

APRI 18 October 2016

9 Septem

File: TGPP

Related Legal Requirements Particulars Code Issuing

Agency Issued

to Issued On Valid Until

Remarks

Power Generation Standby Generator Set

05AL-635

ber 2017

RENEWED PERMITS_LICENSES

Water Resources

Section 13 and 14 , IRR of RA 9275 (Clean Water Act)

Discharge Permit

Wastewater Discharge Permit (Plant A-A1)

WDP-16H-05AL-095

DENR-EMB V

APRI 26 September 2016

26 August 2017

File: TGPP RENEWED PERMITS_LICENSES

Wastewater Discharge Permit (Plant A-A2) – Wastewater from 1 unit septic tank into Visitant Naga River

WDP-16H-05AL-096

DENR-EMB V

APRI 26 September 2016

26 August 2017

File: TGPP RENEWED PERMITS_LICENSES

Wastewater Discharge Permit (Plant C-C) – Wastewater from 1 unit septic tank to Ayubi River

WDP-16H-05AL-098

DENR-EMB V

APRI 26 September 2016

26 August 2017

File: TGPP RENEWED PERMITS_LICENSES

3. Environmental Monitoring

(i) For the power generation facilities, a) Semi-annual Compliance Monitoring Report (CMR) as stipulated in the ECC - for

environmental monitoring of the projects (Please refer to the summary Table 2) b) Quarterly Self-Monitoring Report (SMR) - for the detailed compliance to environmental

standards specific to environmental laws submit (Please refer to the summary Table 2) c) Semi-annual Compliance Monitoring and Validation Report (CMVR) for Multi-partite

Monitoring Teams (MMTs) (Please refer to the summary Table 2)

(ii) For the steam field (as submitted by the steam field operator, PGPC) (if made available to APRI)

a) Semi-annual CMR [consolidated CMR with APRI] (please refer to the summary Table 2) b) Quarterly SMR [requested from PGPC] (please refer to the summary Table 2)

Belowisthesummaryofsubmittedenvironmentalmonitoringreports:

Table2.StatusofECCComplianceMonitoring(Inthenextannualmonitoring,pleaseupdatethistable.)

ECC Issued to Assigned to

Status/ compliance of reports Remarks/ Issues CMR SMR MMT-CMVR

MakBan ECC 9206-041-203C

NPC + PGI

APRI Files submitted:

- CMR 2H15

- CMR 1H16

- CMR 2H16

Files submitted: - SMR Q116 - SMR Q216 - SMR Q316 - SMR Q416 - SMR Q117

Ambient noise level standard of 75dBA is beyond the WHO standard of 70dBA in industrial area

Files submitted: - CMVR 2H15 - CMVR 1H16

ECC 0112-871-203

NPC + PGI

APRI

ECC 9112-037-203

NPC APRI

ECC 4A-2003-529-120

PGI Remained in the name

of PGPC

Tiwi ECC 0109-642-203

NPC + PGI

APRI _ Files submitted: - SMR Q1 (6 April

2016) - TGP_SMR_1QTR2016

- SMR Q2 (14 July 2016) - TGP_SMR_2QTR2016

- SMR Q3 (12 October 2016) - TGP_SMR_3QTR2016

- SMR Q4 (11 January 2017) - TGP_SMR_4QTR2016

Ambient noise level standard of 75dBA is beyond the WHO standard of 70dBA in industrial area

Files submitted January to June 2016 (6 September 2016) TGP_CMVR_1H2016 page 41 - TGP_CMVR_1H2016

No submission of CMRs

ECC 0602-038-9200

UPI PGPC _ _ _ Only if made available to APRI Only if made available to APRI Only if made

ECC 0407-162-5012

PGI PGPC _ _ _

ECC-0402-044-4220

NPC + PGI

PGPC _ _ _

ECC Issued to Assigned to

Status/ compliance of reports Remarks/ Issues CMR SMR MMT-CMVR

available to APRI

Table3.StatusofcomplianceoftheCorrectiveActionPlanforTiwiandMakBan

Measuresand/orCorrectiveActions

Deliverable Timelines ResponsibleAgency

Budget StatusofCompliance

MAKBAN

(a) PursuetheapplicationofAPRIforECCintegrationandsplittingintotwoECCsSteamGatheringSystemandPowerGeneratingPlantstoDENRCentralOffice.Theobjectiveofwhicharetosimplifyreporting,toaddressconditionsthatarenolongerapplicabletooperationsphaseoftheproject,alignwithGRSCstructureandtoconsolidateconditionsthatarecommontothethreeECCsandthusenhancingtheenvironmentalmanagementsystems(EMS).PreparationofdocumentaryrequirementsforthisECCscreening(i.e.,EnvironmentalPerformanceReportand

(a)RevisedandupdatedtwonewECCsforSteamGatheringSystemandPowerGeneratingPlantinMakBan

2015-2018 APRI,PGPC,DENRandotherstakeholders

UnderAPRI’sEHSBudget

(a)MOAandReviewFundwithUPPLANADESwasestablishedtosupportthetechnicalreviewoftheEPRMPforgeneratingFacilitieslastJanuary16,2017.ReviewCommitteeandscheduleistobefinalizedbyDENR-EIACentralOffice.

(b)ContinuedsubmissionofComplianceMonitoringReport(CMR)forBinaryPlants.

Measuresand/orCorrectiveActions

Deliverable Timelines ResponsibleAgency

Budget StatusofCompliance

ManagementPlan,EPRMP)andcontinuouscoordinationmeetingwithPGPC,projectpreparersandDENRison-going.

(b)Asindicatedinthe2009environmentalreports,giventhat15.75MWMakBanBinaryCycleGeothermalPowerGeneratingPlantisnotoperationalsinceitsturnoverinlate2006,verificationofthevalidityofitsECCtoDENR-EMBisnecessarytoensurefuturecomplianceofthisplanttoenvironmentalstipulationintheECCaswellastoADB’srequirementsasitwillpartofthisProject.

(b)ValidationreportfromDENR-EMB

SinceAPRIisfullyaccountableforthecompliancetoECCstransferredunderitsname,delineationoftherolesandresponsibilitiesofAPRIandPGPCundertheGRSCprovisions(Section6.8onGovernmentApprovals)andconditionsstipulatedinECC0109-642-203

RevisedandupdatedtwonewECCsforSteamGatheringSystemandPowerGeneratingPlantinTiwi.

2015-2018 APRIandPGPC UnderAPRI’sEHSBudget

StillsharedresponsibilitybetweenAPRIandPGPC

Measuresand/orCorrectiveActions

Deliverable Timelines ResponsibleAgency

Budget StatusofCompliance

shouldbeundertaken.AspertheGRSC,compliancewithECCconditionshavebeena“sharedresponsibilities”betweenAPRI(astheOwner)andPGPC(astheContractor)byimplementingactivitiesandprojectsforGeneratingandGeothermalfacilities,respectively.

TIWI

(a) InTiwi,whileAPRI’sEHSteamanditsEnvironmentalOfficerisdesignatedandresponsibleforcomplyingallregulatoryrequirements,toensureimplementationofEMPandmonitoringplans,thearrangementonthedelineationoftherolesandresponsibilitiesofAPRIandPGPCshouldbecompletedfirst.APRIandPGPCarecurrentlydevelopingaJointOperationalGuideline(JOG)(APRI5May2015,pers.comm.).

(b)Theissueofdecommissioning,

JointOperationalGuideline(JOG)betweenAPRIandPGPC

2015-2018 APRIandPGPC UnderAPRI’sEHSBudget

AbandonmentobligationsandtermsarebeingnegotiatedaspartofthecurrentGRSCdiscussions.OnlyoncethecontractualtermsarefinalizedcantheJOGdevelopmentmoveforward.

Measuresand/orCorrectiveActions

Deliverable Timelines ResponsibleAgency

Budget StatusofCompliance

abandonmentandsurfacerehabilitationshouldbeincludedintheJOGthatiscurrentlybeingdevelopedbyAPRIandPGPC.

StrengthenthereviewprocessandupdatingoftheexistingIncidentandAccidentReportingProcedure,CorrectiveActionandPreventiveActionFormandWorkOrderProcedure.Trendanalysisofthemostfrequentlyoccurringincidentsintheplantwillshowthepriorityincidentstobeaddressedbythemanagement.Rootcauseanalysisuponsettingupofthetrendshouldbedonetopreventtherecurrenceoftheincidents.

RevisedIncidentandAccidentReportingProcedure,CorrectiveActionandPreventiveActionFormandWorkOrderProceduretoensureeffectiveimplementation

TBD APRI UnderAPRI’sEHSBudget

APG-IMS-SOP-001IncidentReportingRev.03wasmadeeffectivelastJanuary4,2016forimplementationofthewholeAPGenbusinessunits.

CollaboratewiththeUPLBMakilingCenterforMountainEcosystems(MCME)throughtheMMTregardingtheirenvironmentalprogramsattheMt.MakilingForestReserve(MMFR)thatwasdeclaredasaheritageparkbytheASEANandwiththeNPCWatershed

Collaborationactivitieswithconcernedstakeholders

TBD APRIandotherstakeholders

UnderAPRI’sEHSBudget

APRI-MGP’sPCOparticipatedintheMCME&ForestryDevelopmentCenter’sFocusGroupDiscussionlastJuly15,2016.MOAwithNPCforthe

Measuresand/orCorrectiveActions

Deliverable Timelines ResponsibleAgency

Budget StatusofCompliance

ManagementUnitastheMakBanGeothermalReservationswasdeclaredasawatershedreservationin1987.

managementofwatershedareasandtreecuttingactivitieswithinMakbanComplexisinprogresswithlatestreviewDec.29,2016.

Sincesubsidenceisanemergingissue,anyupdateinthesubsidenceshouldbereportedtoDENRaspartofECCcompliance.

Subsidencereports

TBD APRI UnderAPRI’sEHSBudget

Latestreportwasthe2014BulaloFieldwidePrecisionlevelingsurveysubmittedtoDENRJanuary22,2015.

Nextsubsidencemonitoringwillbedoneon2017.

PartB.Social

1. Landacquisition

(i)Informationonnewlandrequirementsfortheproject(ifany).

(ii)UpdateLandTitleGrid(pleaseseesampletableattached)

2. InformalDwellers

(i)Describeproject-relatedactivitiesaffectinginformaldwellersand/ortitle-holdersintheprojectarea(ifany)

(ii)Updatedsummarytableofinformaldwellersresidingorusingprojectland.(Pleaseseesampletableattachedtothistemplate.)

3. LaborandSocialProtection

(i)CompliancewithADBSocialProtectionRequirements

SocialProtectionRequirements APRIConfirmationofCompliance

(Complied/Didnotcomply)

(providedetailsifneeded)

(a)Carryoutitsactivitiesconsistentwiththeintentofensuringlegallypermissibleequalopportunity,fairtreatmentandnon-discriminationinrelationtorecruitmentandhiring,compensation,workingconditionsandtermsofemploymentforitsworkers(includingprohibitinganyformofdiscriminationagainstwomenduringhiringandprovidingequalworkforequalpayformenandwomenengagedbytheBorrower);

(b)Notrestrictitsworkersfromdevelopingalegallypermissiblemeansofexpressingtheirgrievancesandprotectingtheirrightsregardingworkingconditionsandtermsofemployment;

(c)Engagecontractorsandotherprovidersofgoodsandservices:

i.Whodonotemploychildlabororforcedlabor;

ii.Whohaveappropriatemanagementsystemsthatwillallowthemtooperateinamannerwhichisconsistentwiththeintentof(A)ensuringlegally

permissibleequalopportunityandfairtreatmentandnon-discriminationfortheirworkers,and(B)notrestrictingtheirworkersfromdevelopingalegallypermissiblemeansofexpressingtheirgrievancesandprotectingtheirrightsregardingworkingconditionsandtermsofemployment;and

iii.Whosesubcontractscontainprovisionswhichareconsistentwithparagraphs(i)and(ii)above.

(ii)SignificantchangesregardingWorkersAssociations(formalandinformal)atMGPPandTGPP(ifany).

(iii)Informationonsignificantlabor-relatedactivitiesorconcerns(ifany).

4. StakeholdersEngagementandGrievanceRedressMechanism

(i)MultipartiteMonitoringTeamActivities[Attachsummaryofminutesofmeetingsifthereareany][includedinthesharedfiles]

(ii)Informationonstakeholderconsultations,anysurveysandprograms(ifany)

(iii)StatusofapprovaloftheGRMpolicy(attachGrievancePolicywhenapproved)

(iv)CommunityRelatedandEmployees/WorkersRelatedIssuesandConcerns

Listanyissuesorconcernsorgrievancesfromthecommunity,employeesandotherTGPPandMGPPinternalandexternalstakeholdersasidentifiedinthestakeholderengagementframeworkduringthereportingperiodandinformationonhowthesewereresolved

SummarylistofcasesfiledbyoragainstAPRIbycategory(ifany),withparticularnoteofanyrelatedtoenvironment,landclaims,informaldwellers,orlaborissues(Pleaseseesampletableattachedtothistemplate)

5. BenefitSharing

(i)CorporateSocialResponsibilityactivitiesundertakenduringreportingperiod

(ii)NationWealthTaxpaidduringthemonitoringperiod

(iii)DetailsincompliancewithEnergyregulationNo.1-94

Tiwi MakBan Total

StatusofTitle No.ofLots

TotalArea

%ofTotalLeasedArea

No.ofLots

TotalArea

%ofTotalLeasedArea

No.ofLots

TotalArea

%ofTotalLeasedArea

RegisteredinthenameofNPC/PSALM

48

1,372,676

25.2103%

116

706,082

12.9678%

164

2,078,758

38.1780%

Registeredinthe 3 35 6.504 4 15 2.879 7 51 9.38

nameof3rdParties 4 4,166

5% 0 6,779

4% 4 0,945

39%

Unregistered 475

1,957,024

35.9423%

298

898,179

16.4958%

773

2,855,203

52.4381%

557

3,683,866

454

1,761,040

1011

5,444,906

Tiwi MakBan Total

StatusofTitle No.ofLots

TotalArea

%ofTotalLeasedArea

No.ofLots

TotalArea

%ofTotalLeasedArea

No.ofLots

TotalArea

%ofTotalLeasedArea

TitlesbearingevidenceoftransfertoorinterestofNPC

18

227,372

4.1759%

17

70,333

1.2917%

35

297,705

5.4676%

Titlesbearingnoevidenceoftransfer

16

126,7

2.3287%

23

86,44

1.5876%

39

213,2

3.9163%

toorinterestofNPC 94 6 40

34

354,166

40

156,779

74

510,945

AnnextoAnnualSafeguardsandSocialMonitoringReportTemplate

SampleTableforB.1(ii)(LandAcquisition):SummaryofTitlingStatusofLeasedLotsasof[3]

Tiwi MakBan Total

StatusofTitle No.

TotalAr

%ofTotalLease

No.

TotalAr

%ofTotalLease

No.

TotalAr

%ofTotalLeas

ofLots

ea dArea ofLots

ea dArea ofLots

ea edArea

UnregisteredlotstheproceedingsofwhichhavebeendecidedinfavorofNPC/PSALM

89

393,073

7.219%

134

442,578

8.128%

223

835,651

15.347%

Unregisteredlotstheproceedingsofwhichhavenotbeendecided

165

697,134

12.803%

90

269,992

4.959%

255

967,126

17.762%

Unregisteredlotsnotcurrentlysubjectofanypendingproceedings

221

866,817

15.920%

74

185,609

3.409%

295

1,052,426

19.329%

Source:YellowstoneLexPresentationdated6January2015

773

2,855,203

SampleTableforB.2(ii)(InformalDwellers)onnumberofInformalDwellers[4]

InformalDwellers(IDs)

Period Makban Tiwi Total

Asof[___]

Source:APRIPresentationdated6January2015

SampleTableforB.4.v.(CasesfiledbyoragainstAPRI)SummaryofotherCourtActionsasof [5]

Type Number Description Status

Civil Claimforpaymentonland

Criminal Theftcases

ERC Rateapprovalcases

Labor Intra-uniondisputes

SpecialProceedings Expropriation,Arbitration,PriceSpikecase*

Appeals Linerentals,MRRcase

Tax RetroactiveRPTAssessment

Total

[1]APRItoprovidecopyoftheCMRandSMRReportssubmittedtoDENR.

[2]Multi-partiteMonitoringTeams(MMTs)areorganizedtoencouragepublicparticipation,topromotegreaterstakeholders’vigilanceandtoprovideappropriatecheckandbalancemechanismsintheprojectimplementation.

[3]FormatoftablesfromAPRI.Figuresneedtobeupdatedannually.

[4]FormatofAPRI

[5]FormatofAPRI