GOVERNMENTOFTHEREPUBLICOFVANUATU

DEPARTMENTOFENERGY

PRIVATEMAILBAG9067,

POMPIDOUROAD,PORTVILA

TEL:(678)25201/5333840,

E-GOVPH:3900,FAX:(678)22324

EnvironmentalCodeofPracticeforSolarHomeSystemsandSolarMicro-GridSystems(UsedBatteryDisposal,HealthandSafetyandLandPermission)

ForVanuatuRuralElectrificationProject,Vanuatu

August2017

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ContentsOverview

DEPARTMENTOFENERGY...........................................................................................................................................1Introduction.....................................................................................................................................................................4EnvironmentalandSocialImpacts...................................................................................................................................5

SocialImpacts..............................................................................................................................................................5EnvironmentalImpacts................................................................................................................................................5

VanuatuLegislation.........................................................................................................................................................7ThePollutionControlAct.............................................................................................................................................7TheWasteManagementAct.......................................................................................................................................7

WorldBankOP4.01-EnvironmentalAssessment..........................................................................................................7Batteriesandpotentialenvironmentalimpacts..............................................................................................................8BatteryManagementApproach......................................................................................................................................8

Communityanduserawareness.................................................................................................................................8Directmanagementofusednickel-cadmium(Ni-cad)andleadacidbatteries(LAB)bythesystemsuppliers...........9

OccupationalandBystanderHealthandSafety............................................................................................................10Permissiontouseland...................................................................................................................................................10Beforeworkingwithabattery.......................................................................................................................................11Traininginproperhandlingproceduresisveryimportant.Keyaspectsinclude:..........................................................11Chemicalhazardsposedbybatteries............................................................................................................................11SafeBatteryMovement.................................................................................................................................................11BatteryDisposal.............................................................................................................................................................12

Recycling....................................................................................................................................................................12LandfillDisposal(HazardousWasteFacility).............................................................................................................12

Permissionofland.........................................................................................................................................................13Capacity-BuildingandMonitoringofECOPImplementation........................................................................................13Disclosure......................................................................................................................................................................13

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ListofAcronyms

DoE-VanuatuDepartmentofEnergyECOP-EnvironmentalCodesofPracticeEIA-EnvironmentalImpactAssessmentGoV–GovernmentofVanuatuIPP-IndigenousPeoplesPlanISDS-IntegratedSafeguardsDataSheetLAB–LeadAcidBatteryNi-Cad–NickelCadmiumBatteryNERM–NationalEnergyRoadmapOP–OperationalPolicyPOM–ProjectOperationsManualPV–PhotovoltaicVERD–VanuatuElectricityforRuralDevelopmentVREP–VanuatuRuralElectrificationProject

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Overview

IntroductionTheprojectdevelopmentobjective(PDO)oftheVanuatuRuralElectrificationProject(VREP)istoscaleupaccesstoelectricityservicesandsupportincreasedpenetrationofrenewableenergyindispersedoff-gridareasofVanuatu.Ofthe50,740totalhouseholdsinVanuatu,anestimated21,500areingrid-concessionareasorinadjacentareasfeasibleforgrid-extensionandtheremainderareinremoteareaswhereconnectiontoagridisnotpossibleintheshorttomediumterm.TheGoVandthetwoincumbentconcessionairesUnionElectriquedu Vanuatu Ltd (UNELCO) and Vanuatu Utilities and Infrastructure Ltd (VUI) are implementing theImproved Electricity Access (IEA) Project, funded through the Global Partnership for Output-Based Aid(GPOBA)/WorldBank,whichprovidesassistancetolow-incomeconsumerswhoarestillnotconnectedorcurrentlyshareaconnection,withintheexistinggridserviceareas.Theremaining29,240householdsareinareastermed“off-grid”.Approximately10,000ofthesehouseholdsarerelativelyconcentratedandaremorelikelytobenefitfromamicro-ormini-gridconfiguration,poweredbylocalresources,suchashydroandotherrenewableenergytechnologieswhereavailable,dieselgensets,orhybrids. Fortheremaining20,000households,accesstomodernenergyinthenearorimmediatefutureisdependentuponoff-gridpower.TheVREPassiststheGovernmentofVanuatuinprovidingelectricitythroughthefollowing:

VREP I is the provision of subsidised ‘plug and play’ solar home systems to 17,500 households, 2,000community halls and 230 aid posts in dispersed rural areas where grid connection is unlikely to beeconomicalandfeasiblewithinthenextfewyears.ThisPhase iscurrentlyunderwayandexpectedtobecompletedattheendof2019.

VREPIIhastwo(2)components:-Component1istheprovisionofsubsidisedSolarHomeSystems(SHS)andsolarmicro-gridsto37publicinstitutionsand8,400ruralhouseholds.TheseSHSandsolarmicro-gridsof varying kilowatt capacity will be available to rural consumers to purchase for their households andcommunityfacilitiessuchashealthcentres,churchesorschools.Solarmicro-gridsmayconnectmorethanonebuilding toasetofpanels. TheseSHSandmicro-gridswillbe required tomeetapproved technicalstandards, installed by accredited technicians and used batteries are required to be safely disposed.Component2willbe installing initially five (5)mini-grids in five (5) locations throughoutVanuatu. Itwilltarget 550 households, 10-12 public institutions (schools and health centres) and somebusiness/commercialoperations.Thesystemsinstalledwillbesolarphotovoltaics(PV)withbatterystoragewithbiodieselgeneratorsasbackup.ProjectdescriptionandimplementationarrangementsareincludedinAnnex1.

ThisECOPisthesafeguardsinstrumentapplicabletoVREPIandComponent1ofVREPIIandiscompliantwithWorldBanksafeguardspolicies.EnvironmentalandsocialsafeguardsforComponent2ofVREPIIwillbedocumentedandseparatelymanagedwithsupportfromtheOwner’sEngineer.

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EnvironmentalandSocialImpacts

SocialImpactsTheimpactsareoverwhelminglybeneficial.Theincreasedaccesstoelectricityservicesthattheproposedprojectwillprovidetoruralhouseholds,communityfacilities,publicinstitutionsandbusinesseslocatedindispersedoff-gridareasandforVREPI,itwillbuildontheachievementsofthecompletedLightingVanuatuProject by providing improved functionality and enhanced benefits. For VREP II, it will build onachievementsandlessonslearnedfromVREPI.TherewillbenolandacquisitionsincetheinstallationofPVswilltakeplacewithinexistinghouseholdsandpublic facilities. There is the potential that micro-grid wiring may traverse third party land, and thebeneficiarymustsecurepermissiontoenablethispriortoworkstarting.World Bank Indigenous Peoples Policy, OP 4.10, was triggered for VREP 1 due to the potential for thepresence of indigenous people (IPs) in the rural areas of the outer islands. However, since theoverwhelming majority of the beneficiaries are IPs, the Project has integrated the elements of anIndigenousPeople’sPlan(IPP)inthedesignoftheProject,includingconsultationsforbroadercommunitysupportoftheProject,provisionofculturallyappropriateprojectbenefitsintheinstallationofPVpanelsinhouseholds, and gender-related considerations (e.g., specific consultations with women’s groups anduptakeofprojectservicesbyfemale-headedhouseholds).ConsultationsundertakenduringthedesignofVanuatuElectricityforRuralDevelopment(VERD),onwhichVREPIandVREPIIarebased,indicatedstrongcommunity support. Further, consultations during the preparation of NERM established affordableelectrificationofruralhouseholdsasakeypriority.Therefore,therequirementsofOP4.10havebeenmetinprojectdesign.

EnvironmentalImpactsSolar panels will be either installed on rooftops or mounted on poles, where roof orientation is notsuitable.Assuch,therewillbenoconstructionrelatedimpactsforVREPIandComponent1ofVREPII.ThemainenvironmentalissuesassociatedwiththeProjectwillbetherecycling/disposalofspentstoragebatteriesattheendoftheirusefullives(3-5years).TheWorldBankEnvironmentalAssessmentPolicyOP4.01istriggeredtoensureproperdisposal/recyclingoflithium,lead-acidorlead-gelbatteries,whereused.Sincelegislationandregulationsondisposalofsolidwastes,suchasleadacidbatteries,isinearlystageofdevelopment, this project-specific ECOP has been developed for the collection, transport, storage anddisposalofusedbatteries.Itisanticipatedthatthisproject-specificECOPwillsupplementandaccompanymoredetailednational legislationand regulations fordisposalof solidwastes, includingbatteriesduringthe Project period. No products will be “qualified” for, and included in, the product catalogue untilprocessesforthecollection,transport,storageanddisposalofthebatteriesassociatedwiththeproductsareestablishedinaccordancewiththisECOP.Theregisteredvendorswillneedtoensurethattheyhaveproceduresinplacetomeettherequirementsofthis ECOP whether they are through central or industry established processes or vendor and productspecificprocesses.TheProjectwilladoptthenationallegislativeandregulatoryframeworkoncetheyareestablished.

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EnvironmentalCodeofPractice-Objectives

ThisECOPhasbeendevelopedspecificallyforallequipmenttobefinancedundertheVREP,namelysolarPV systems of generally in the range of 5 Watts up to the capacity of a micro-grid system. The keyenvironmentalissueassociatedwiththeprojectistheappropriatemanagementanddisposal/recyclingofusedNi-CadandLeadAcidBatteries. TheECOPalsocovershealthandsafetyduringinstallationandtheavoidanceoflandconflictsbyrequiringlandownerapprovalsforanyuseofthirdpartyland.To ensure effective application of theWorld Bank’s environmental and social safeguard policies and tosupportthenationalregulatoryrequirements,theECOPprovidesguidanceontheapproachtobetakentothe collection, transport, storageanddisposalof these typesofbatteries at theendof theiruseful life.Importantly,theECOPaddressesmanagementofspent/usedbatteriesforaperiodoftimeuntilVanuatu’swaste management legislation and regulations and capacity is improved to a point where the ECOPbecomesobsolete.Tothisend,theECOPseekstoinformdiscussionandbuildawarenessaroundbatterymanagementtoassistcontinual improvement inbatterymanagementforthecountry. It is likelythatbythetimethefirstbatteriesundertheProjectneedtobedisposedof(3-5years),thatVanuatuwillhaveaneffective regulatory framework (which is already well progressed) and the institutional capacity toeffectivelymanagethesebatteries.

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LegalandPolicyFramework

VanuatuLegislationEnvironmental legislation is at anearly stageofdevelopment inVanuatu. ThePollutionControlBillwaspassedinDecember2013andtheWasteManagementBillwaspassedbyParliamentinApril2014.

ThePollutionControlActThePollutionControlActisdesignedtocontrolthedischargeandemissionofpollution(‘theintroductionbypersons,directlyorindirectly,ofsubstancesorthingsintotheenvironmentwhichmayresultinharmtotheenvironment,andhazardoustohumanhealth).

TheWasteManagementActThe Waste Management Act is designed to provide for the protection of the environment throughencouragementofeffectivewasteservicesandoperations.TheAct focusesmainlyonsolidwastewhichincludesthe following:garbage,householdrefuse, rubbish,scraps,electronicwaste, tradeand industrialwaste, in solid form;oranyothermatteror thingdetermined in theAct tobewaste.TheActdoesnotincludehumanwasteexceptintheformofsludgeoranyotherformintendedforfinaldisposalasawasteproduct. TheActdefineswasteas ‘solidwaste;orbulkwaste;oranyothermatteror thingdeterminedfrom time to time to be waste in accordance with the Act. The Act also specifies the roles andresponsibilities of DEPC as a regulator and the designated wastemanagement operators as operators,which includes theMunicipalitiesorProvincialGovernmentCouncils.TheActalsoallows for licensingofprivatewasteoperators(eitheranindividualorcompany)whowishestooperatealandfillsite;orawastedump;orwastefacility.These pieces of legislation represent the beginning of a legal framework to address the environmentaldegradation impacts of poor pollution control and waste management. Substantive additional work isrequiredtoprepareregulationstoaddmoredetailtothelegislationandtostrengthenthecapacityoftheinstitutions responsible for effective implementation of the legislation. Some progress is underway indevelopinganappropriateregulationundertheWasteManagementActtomanagebatteries.

WorldBankOP4.01-EnvironmentalAssessment.Thisoperationalpolicy (OP) requires anEnvironmental ImpactAssessment (EIA) tobe conductedof theprojectsproposedforBankfinancingtohelpensurethattheyareenvironmentallysoundandsustainablewithanobjectivetoimprovedecision-makingprocess.TheOPalsoclassifiestheprojectonthebasisofthetype, location, sensitivity, and scale of the project and the nature and magnitude of its potentialenvironmentalimpacts.TherequirementtocarryoutanEIAaspartofprojectpreparationcanbewaivedbut, for projects with potential adverse impacts, an appropriated level of environmental and socialassessmentwillbecarriedoutbeforetheprojectimplementation.Itisexpectedthatbythetimethefirsttrancheofbatteriesneedsreplacement(atleast3yearsafterimplementationbegins),theenvironmentalframeworks will be much stronger. Adopting the precautionary approach however, this ECOP definesminimumrequirements.

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EnvironmentalCodeofPracticeRequirements

BatteriesandpotentialenvironmentalimpactsAcentralcomponentofanyremotesolarpowersystemsuchasthoseusedin‘plugandplay’systemsandproposedunderComponentIofVREPIIoftheProjectistheuseofrechargeablebatteries.Thesebatteriesstorethepowergeneratedduringthedaylighthoursforlateruse.Rechargeablebatteriesincludelithium-ion(Li-ion),nickelmetalhydride(NiMH),nickelcadmium(Ni-Cad)andleadacidbatteries(LAB).Lithiumionandnickelmetalhydridebatteries(aswellasstandardAA,AAA,C-cellandD-celletc.drycellbatteries) are suitable for disposal in standard landfill and therefore are not covered by this ECOP.Accordingly, this ECOP applies specifically to LAB and Ni-Cad batteries. These batteries, if improperlytransported,storedanddisassembled/recycled,cancreatelonglastingenvironmentalimpactsduelargelyto the chemical and heavy metals such as mercury, lead, cadmium and nickel which are centralcomponents of these batteries. If released into the environment (via incineration and/or leakage andleeching etc.) these chemicals and heavy metals can create a number of health impacts includingheadaches,abdominaldiscomfort,seizuresandcomas.Themaincomponentsofa lead-acidbatteryare lead(Pb)electrodesand leaddioxide(PbO2)electrodesimmersedinasolutionofwaterandsulphuricacid.Thesearegenerallycontainedinaplasticcasemadefrompolypropylene. Inaddition to leadwhichcancreate toawiderangeofbiologicaleffects (includinguponthekidneys,gastrointestinaltract,reproductivesystemandthenervoussystem)andisarecognizeddevelopmental and reproductive toxicant1, lead acid batteries also contain sulfuric acid which is highlycorrosive and can cause burns and damage to skin, eyes or the respiratory system. Both nickel andcadmiumwhicharethecentralcomponentstoNickel-Cadmium(Ni-Cad)batterieshavepotentialnegativeimpacts on both the environment and on human health.While the effects of nickel are generally lesssevere (in the absence of long term exposure to airborne nickel dust) and limited to skin irritations,cadmiumisacarcinogen,whichcanleadtorenaldysfunctionandbonedefects.EffectivemanagementofbatteriescanensurethatthesepotentialnegativeimpactsarenotrealizedasaresultofthisProject.Indeed,throughtheincreasedawarenessactivitiesproposed,itisexpectedthattheproject,guidedbythisECOP,willhavethepotential tohave long-termpositive impactsoncommunitiesandpublichealthsincemanybatteriesofthistypeareusedbythesecommunitiesoutsidethisproject.

BatteryManagementApproachThe approach adopted seeks to avoid the potential environmental impacts created by impropermanagement of LAB and Ni-Cad batteries. Mitigation measures proposed comprise two fundamentalstagesorapproachesnamely(i)Communityanduserawarenessand(ii)Directmanagementofusednickel-cadmium(Ni-cad)andleadacidbatteries(LABs)bythesystemsuppliers.

CommunityanduserawarenessAspartofaninitiativeofinformingthecommunityoftherisksassociatedwithbatteriesunderthisProject,theDoEwillcarryoutabroadbatteryawarenesscampaign.Thiscampaignwillnotonlyfocusonprojectparticipantsandbeneficiaries. Instead,thecampaignwilltargetallcommunitymembersandassuchwillresult in improvedknowledgeoftheenvironmental issuesassociatedwithspentbatteries,whethertheyarefrompeople’scars,boats,orotherpowersuppliesetc.Importantly,thecommunicationcampaignwill1IBID

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include informationonall themainbatterytypes, irrespectiveofwhethertheyarehightoxicity (suchasNiCadandLAB)orlowertoxicitybatteries(suchasAA,orAAAbatteriesetc).ThetypeofinformationtobeincludedintheinformationcampaignisincludedinAnnex2.AcampaignwillbedesignedbytheDoE,howeveritisexpectedthatitwillincludeinitiativessuchas:

- InformationontheDoEwebsiteondisposalofallbatterytypes;

- Appropriate local informationcampaigns includingdistributionofflyersandinformationsheets inlocalcommunities,awarenessraisingatcommunitymeetingsandnoticesatshopssellingbatteries;and

- Amediacampaignincludingadvertisementsandawarenesspiecesinlocalnewspapers.

ThiscampaignwillrunforthelifeofVREPIandVREPIIandwilladdressissuessuchas:

- Thedifferencesbetweenthebatterytypesintermsofbatterylifeandreliability;

- Thesafehandlingofbatteriesincludinginstallation,removal,transport,storageanddisposal;

- Theenvironmentalandhealthaspectsofpoorbatterydisposal;and

- Focusedinformationontheenvironmentalandhealthissuesassociatedwithhightoxicitybatteriesandexplanationastowhytheymustbestored, transportedanddisposedof incertainwaysandthereforewhyitisintheinterestsofindividuals,thecommunity,theenvironment(andthereforefuturegenerationsincommunities)thatthemethodsoutlinedinthisECOPbefollowed.

Directmanagementofusednickel-cadmium(Ni-cad)and leadacidbatteries(LAB)bythesystemsuppliersThe disposal andmanagement of used batteries from solar PV systems will follow the Government ofVanuatuWasteManagementActandtheprovisionsofthisECOP,whichistorequirethevendorsofthesystemstomakearrangementstocollectusedNi-CadandLABbatteriesandtoproperlydisposeofthem.Notwithstandingthis,thedirectmanagementprocessoutlinedbelowisfocusedonLi-ion,nickel-cadmium(Ni-cad) and lead acid batteries (LABs) as these batteries represent the greatest risk to human andenvironmentalhealthifincorrectlymanaged.The vendors will provide a Battery Management Plan which details arrangements for the collection,transport,storageanddisposalofbatteriesforthosesystemsproposedtobeeligibleundertheProjectaspart of the product registration process. The DoE will assess these processes for compliance with theguidelinessetoutinthisECOPandmayrefusetoregistervendors’productsiftheydonotcomplywiththeguidelines.AvendormayberefusedregistrationbytheDoEunderthevendorregistrationprogramifthevendor fails to provide evidence on the arrangements for collecting/recycling batteries and redundantsolarsystems,orfailuretocompliancewiththisECOP.TheSubsidy ImplementationAgreement(LegalAgreement)betweenthevendortheDoEwillrequirethevendors to complywith this ECOP as a conditionof participationof theprogram. TheDoEwillmonitorcompliancewiththeECOPinaccordancewiththeprocessesdetailedinthePOM.The Department of Environmental Protection and Conservation (DEPC) has a Waste Management andPollutionControlUnitwhichisresponsibleforwasteandpollutioncontrolinVanuatu.

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TheDoE,inconjunctionwiththeWasteManagementandPollutionControlUnitoftheDEPC,willconductchecksonthevendors’compliancewiththeECOP.TheWorldBankTeam,aspartofitssupervisionmissionof the Project, will conduct random checks on the Project’s compliance to battery disposal andmanagementconsistentwiththenationalregulations.TheDepartmentofEnergy,inconsultationwiththeDEPCisfinalizingtheregulationsforthecollectionanddisposal of hazardous wastes, including LABs which is expected to be in place by the time batteriessupplied under this Project require disposal. This ECOPmay be superseded by national legislation anddetailedregulationsonthedisposalofbatteries,iftherequirementsofthelegislationandregulationmeetorexceedtherequirementsofthisECOP.

OccupationalandBystanderHealthandSafetyThe systemsmustbe installedbyqualified andexperienced tradespeople inorder to avoidorminimizeelectrocution and other health and safety issues such as keeping bystanders away from work areas,workingatheightandworkingwithhazardousmaterialssuchasbatteries.TheprojectoperationsmanualsetsouttheminimumrequirementsforVendorqualificationsandproductstandardsforworkonthisProject.

PermissiontouselandMostsystemswillbeinstalledonthelandowneroroccupier’sproperty(rooftoporpole),andtherewillbeno land related issues. Micro-gridsmay need to distribute electricity betweenbuildings andmay crossthirdpartyland.Beneficiarieswillberequiredtoseekandconfirmpermissionbeforeworksbegin.

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SpecificRequirementsunderthisECOPBeforeworkingwithabatteryTraininginproperhandlingproceduresisveryimportant.Keyaspectsinclude:

- Consultbatteryowners’manualsforinstructionsonbatteryhandlingandhazardidentification

- Wearpersonalprotectiveequipment(PPE)suchaschemicalsplashgogglesandafaceshield

- Wearacid-resistantequipmentsuchasgauntletstylegloves,anapron,andboots

- Donottuckpantlegsintobootsbecausespilledacidcanpoolinthebottomofyourbootsandburnyourfeet

- Placeprotectiverubberbootsonbatterycableconnectionstopreventsparkingonimpactifatooldoesaccidentallyhitaterminal

- Cleanthebatteryterminalswithaplasticbrushbecausewirebrushescouldcreatestaticandsparks

- Alwaysremoveyourwatchesandjewelrybeforeworkingonabattery.Ashort-circuitcurrentcanweldaringorstraptometalandcausesevereburns

- Covermaintenancetoolswithseverallayersofelectricaltapetoavoidsparking

ChemicalhazardsposedbybatteriesSulfuricacid(electrolyte) inbatteriesishighlycorrosiveandacidexposurecanleadtoskinirritation,eyedamage, respiratory irritation,and toothenamelerosion.Following the followingprincipleswill assist inmanagingthisrisk:

- Neverleanoverabatterywhileboosting,testingorchargingit

- Ifacidsplashesonyourskinoreyes,immediatelyfloodtheareawithcoolrunningwaterforatleast15minutesandseekmedicalattentionimmediately

- Alwayspracticegoodhygieneandwashyourhandsafterhandlingabatteryandbeforeeating. Ifyouhandletheleadplatesinabatteryanddonotwashyourhandsproperly,youcouldbeexposedto lead. Signs of lead exposure includemood swings, loss of appetite, abdominal pain, difficultysleeping,fatigue,headachesandlossofmotorcoordination.

- Thechemicalreactionby-productsfromabatteryincludeoxygenandhydrogengas.Thesecanbeexplosiveathighlevels.Overchargingbatteriescanalsocreateflammablegases.Forthisreason,itis very important to store and maintain batteries in a well-ventilated work area away from allignitionsourcesand incompatiblematerials.Cigarettes, flamesorsparkscouldcauseabatterytoexplode.

- Beforeworkingonabattery,disconnect thebatterycables.Toavoidsparking,alwaysdisconnectthenegativebatterycablefirstandreconnectitlast.Becarefulwithflammablefluidswhenworkingon a battery-powered system. The electrical voltage created by batteries can ignite flammablematerials and cause severeburns.Workers havebeen injured and killedwhen looseor sparkingbatteryconnectionsignitedgasolineandsolventfumesduringsystemmaintenance.

SafeBatteryMovement

Liftingandmovingbatteriesneedstobeundertakenwithcaresoastoavoidpersonalandenvironmentalharm.Keyprinciplesinclude:

- Useproperliftingtechniquestoavoidbackinjuries

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- Batterycasingscanbebrittleandbreakeasily; theyshouldbehandledcarefully toavoidanacidspill

- Makesurethatabatteryisproperlysecuredanduprightinthevehicleorequipment

- Ifabatteryshowssignsofdamagetotheterminals,caseorcover,replaceitwithanewone

BatteryDisposal

ForLeadAcidandNiCadbatteries,thesupplierwillensurethatasystemisinplacetoobtainandproperlydisposeofthesebatteriesatthetimeofbatteryreplacement.

RecyclingLead recycling operations require a high degree of control because of the potential hazards from airemissions andwastewaterdischarges. There is currentlyonebattery recycler (Recyclecorp) inPortVilawhohasbeen recycling leadacidbatteries.Recyclecorphascollectionpoints inPortVilaandSantoandpaysforexpiredleadacidbatteriesandothermetalsreceivedfromanyisland.Batteriesarecollectedandstoredseparatelyuntil there isenough fora full container tobe shippedoverseas. In thepastbatterieswereshippedtoFijiandSouthKoreaforrecyclingbutnowRecyclecorphasstoppedafterbeingadvisedthatVanuatuhasnotsignedtheBasalConvention.ItisunderstoodtheprocessisunderwayforVanuatutosign theBasalConventionandonce signed,Recyclecorpwill commenceexportingusedbatteries again..Approximately90tonnesor3-4containersofusedbatteriesareexportedonceeveryyear.Itisenvisagedthatthebatteriesthatarecollectedforrecyclingwillbethroughthisrecycler.RecycleCorphasexpressedinterest in theVREPprojectand iswilling tobuy thebatteries if theyare transported to theircollectionpointsinSantoandVila.Asapreference,LABbatteriesare tobe recycledat this recycleras it removes therisksassociatedwithfurther shipmentand/ordisposal. Forbatteriesheld in the islands, it is envisaged thatGovernmentwilldeveloptherequiredregulationsinorderfortheusedbatteriestobecollected,storedandshippedtoPortVilaorLuganvillewheretheycanbeexportedexternally.

LandfillDisposal(HazardousWasteFacility)

Ifrecyclingofbatteriesisnotchosenorpossible,disposalinasecurelandfillisthenextpreferredoption.Theacid shouldbe removed from the casingandneutralized. Emptybattery casesmustbedisposedofcarefullybecausetheycanstill containsignificantamountsof lead.Batteriesshouldthenbewrapped inheavydutyplasticorencapsulatedwithconcrete.Theconcreteandplasticservesthepurposeofensuringthatleadwillnotleachoutandbecomemobileinlandfillleachate,thusreducingtheenvironmentalrisk.

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ThemaincenterssuchasPortVila,Luganville,TannaandMalekulahavelandfillsitesoperatedbythelocalprovincialcouncilsthatcouldbeusedforthedisposalforbatteriesafterobtainingapprovalfromtheDEPC.

PermissionoflandIfdistributionlinesneedtotransversethirdpartyproperties,theVendorwillverifythatthebeneficiaryhasobtained written permission from the respective land owner(s). The permission statement(s) will beenclosedwith the required subsidy documentswhen submitted to DoE for subsidy. DoEwill verify thestatementaspartofverificationbeforesubsidypaymentsaremade.

Capacity-BuildingandMonitoringofECOPImplementationAs part of the capacity building to be provided for implementation of the proposed operations, thevendors andDoE staffwill receive training in the ECOP’s application. TheWorld Bankwillmonitor andprovideguidanceintheimplementationoftheECOP.DoEwillberesponsible,besidesotherfunctions,tomonitorandsupervisetheimplementationoftheECOPbyVendors.Forthispurpose,DoEhasestablishedamonitoringmechanismaspartoftheprojectmanagementsystemaspartof itsPOM.Inaddition,DoEmay also engage the support of the DEPC for the implementation of the ECOP and compliance withnationallegislationandregulations.

DisclosureThis ECOP will be shared with all relevant stakeholders, relevant line departments, concerned non-governmental organizations, and development partners. Subsequently, it will be disclosed in English byDoE,andmadeavailableontheirwebsites.Copieswillalsobeheldatpublicbuildings,suchaslibrariesandofficesofProvincialCouncils,fortheruralcommunitiestoaccess.CopiesoftheECOPrequiringtranslationinto Bislama will be shared vendors during the vendor registration program to ensure they are fullyinformedoftheirobligations.ItwillalsobemadeavailableattheWorldBankofficeinPortVilaandontheWorldBankwebsite.

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ANNEXONE–PROJECTDESCRIPTIONANDIMPLEMENTATIONARRANGEMENTS

ProjectDescription

The Vanuatu Rural Electrification Project (VREP) is comprised VREP I and VREP II and targets dispersedhouseholds,communityhalls,public facilitiesandbusiness inruralareaswhereextensionof thecurrentgridconnectionisunlikelytobeeconomicalandfeasible.

VREPIisafive(5)yearprogramwhichcommencedin2014andtarget17,500households,2,000not-for-profit(communityfacilities)and230aidpoststhatarepresentlyunelectrifiedandarelocatedbeyondtheeconomicandfeasiblegridextensionareaandaretoodispersedacrosstheoff-gridareatobeconsideredinfutureprojectsforisolatedmicro-ormini-gridconfigurations.VREPIhastwo(2)components:

ComponentOne:Electrificationofoff-gridhouseholds,aidpostsandcommunityhalls.TheProjectissubsidisingtheretailcostsolarphotovoltaic(PV)systemsby50percent.InitiallytheProjectisfocusingonsolarPVsystemsofbetween5Wattsto30Wattspeakcapacitythatareof“plugandplay”type,installedeasilybytheconsumer,requirelittletonomaintenanceotherthanreplacingbatteries,andprovidelightingandphonechargingcapabilities.“Plugandplay”systemsofhighercapacitysuchasupto100WattshavebeenencouragedprovidedtheymeettheproductregistrationcriteriaforthisProject.TheProject is not funding smaller systems such as solar lanterns as such systems were funded under theLightingVanuatuproject.Todate,VREPIhastwoapprovedvendorsandover2,200productssoldtomorethan2,000households,158communitiesand3AidPostsacross45islandsofVanuatu.

ComponentTwo:Technicalassistanceandprojectmanagement.The Project requires significant work on ensuring the integrity of the vendor supply chain, and of theproducts that are supplied to consumers/retailed, consumer awareness and training, collection anddisposalofanyhazardousortoxicmaterials,projectmanagementandindependentverificationtoensurethefundsallocatedunderthisProjectareeffectivelydirectedtowardsachievingthePDOofthisProject.Thefollowingkeyactivitiesarefinancedtoaddresstheabove:(i) Vendor and product registration arrangements, communications andmicrofinance products. ThefollowingactivitiesarefinancedunderthiscomponenttosupportthepreparationandimplementationoftheinvestmentactivitiesunderComponentOne:(i)establishmentofvendorregistrationarrangements;(ii)developmentofproductregistrationarrangements(foraproductcatalogue);(iii)developmentofprogramand product awareness, safety and product care trainingmaterial for communities, and end users; (iv)establishmentofagrievancemechanismforend-userandcommunities;(v)supportwiththedevelopmentof microfinance products to encourage lending in rural areas; and, (vi) development of legislation,regulations and amendments this Environmental Code of Practice (ECOP) for collection, transport anddisposaloflithiumandlead-acidbatteriesforruralelectrificationproductsundertheProject.(ii) Project management and support. The following activities are to be financed for effectiveimplementation, monitoring and reporting under the Project: (i) capacity building and implementationsupport to theDoE through technicalexpertsandadvisors; (ii)workshopsand training for theDoEstaff(andotherGovernmentaldepartments,suchastheMinistryofInfrastructureandPublicUtilities)involvedwithoff-gridelectrification;(iii)executionofawarenessprogramstoruralcommunitiesandconsumersinVanuatu;(iv)independentverificationofsubsidyclaimspriortopayments;and,(v)monitoring,evaluationandannualreviewsoftheProject.The delivery of the ‘plug and play’ solar systems under VREP I is through registered vendors supplyingproducts on an approved Product Catalogue in accordance with the procedures set out in the ProjectOperationsManual(POM):Vendor Registration Program. In order for vendors to participate in the program and be eligible forclaiming reimbursements of subsidies, the Project establishes a registration program for vendors. Theprogram,ataminimum,assessthevendorsontheir:(i)financialcapacityofthebusinesstoensurecashflows are sufficient; (ii) technical ability in providing after sales services to the consumer, such as

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maintenance and information on the systems and batteries; (iii) range of products stocked and supplychannels and chains; (iv) number of staff and agents and communication links between them; (v)arrangements for collecting/recycling batteries and redundant solar systems, with particular focus oncompliancewiththisECOPand/orregulations; (vii) trainingprograms inplaceforstaffdevelopmentandcapacitybuilding;and,(viii)geographicreachandexistingnetworksinruralcommunitiesandouterislandstoensure thatall the targetbeneficiariescanaccess theproducts.TheProjectencouragescollaborationbetweenthemaincenter-basedvendorsand localcommunities forthedistributionoftheproducts.Thevendorregistrationprogramisdevelopedaspartofprojectimplementation.EachregisteredvendorentersintoaSubsidy ImplementationAgreementwithDoE,whichamongstotherthingsrequirethevendorstocomplywiththisECOP.ProductCatalogue.TopromotecompetitionbetweenthevendorsinVanuatu,acrossallregionsandislandgroups,alleligibleproductssuppliedbythevendorsarelistedinaProductCatalogue.Thepurposeofthecatalogueistopresent,transparently,totheconsumerstherangeofproductsavailableintheirareaandinthemaincenters.Avendormustberegisteredunderthevendorregistrationprogram(seeabove)beforeaproduct can be listed in the catalogue. Participating vendors are allowed to market any solar systemproducts in the catalogue and procure them from any source in accordance with standard businesspractice.However,fortheproducttobeeligibleunderthisVREPI, itmustbea“plugandplay”systems,initially inthecapacityrangeof5to30Wp.Onceconsumerawarenessandcompliancewithsafeguardshas increased, the capacity rangewas reviewed and adjusted to 100Watts. Theproduct “qualification”criteria was established during project implementation, covering technical specifications, systemperformance,productandbattery life,warranty, serviceability,product informationand recyclingneedsandarrangements,etc.,toenablevendorstoregistertheirproducts.AnIndependentVerificationAgentasbeenengagedbytheDoEtoverifytheclaimsfromthevendors,assetoutinthePOM.

VREPIIisalsoafive(5)yearProjectcommencingin2017.VREPIIisanextensionofVREPIandhasthree(3)components.

Component1issupportingexpansionofaccesstoreliableelectricityserviceinruralVanuatuthroughSHSandmicro grid configurationswheremini grid configurations areunlikely tobeeconomically viable andwhicharenotearmarkedforminigridsunderthisorotherdonororgovernmentprojectsoraretheleastcost solution. SHS and micro grids will be available to rural households and public institutions. Thiscomponentwilltargetapproximately37public institutionsand8,400ruralhouseholds,whichequatestoapproximately42,000people.2

SHS and micro grids may include systems for household use (of varying capabilities and costs as perdemand)andwillbeavailableforpurchasetoallruralconsumers,acommunityapplication,forexample,forachurch,electrificationofahealthcenterbasedonitsneeds,andmayincludesolarwaterpumpsorothersimilarapplications.Toensuretheprojectisreachingthetargetedbeneficiaries,dataonhouseholdincome will be collected during either the application or verification process. The project will partlysubsidizetheretailcostofSHSandmicrogrids.Anamountwillbeestablished(initially33percentofretailcost) and thenmaybevariedover timedependingon the takeup rateand the sizeof the system.Theconsumerwillarrangehis/herportionofthefundsforthepurchase(initially67percentoftheretailcost),eitherbymeansofcashormicrofinancecredit(eitherviaamicrofinanceproviderorthroughthevendor).

Under this market-based mechanism, consumers will purchase systems from competing vendors atsubsidizedprices. Informationonproductswillbedisseminated throughvendorsandcommunitiesviaaProductCatalogue,whichwill list all products the vendors are sellingand that areeligible for a subsidyunder the project. The technical standards (international standards) and the type of products available2Onaverage4.9(orfive)peopleusuallylivetogetherinonehousehold…Urbanhouseholdswereonaverageslightlylargerthanruraloneswithanaverageof5.2people.VanuatuHouseholdIncomeandExpenditureSurvey2010,15,VanuatuNationalStatisticsOffice,2012.

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underthiscomponentwillbesetoutinthecataloguewhichwillbereviewedfromtimetotime,orinthecaseofmicrogridsitmaybesourcedthroughtenderwhichwillsetoutthespecifications,standardsandoperationsandmaintenancearrangements.Vendorsmayalsoundertakedirectmarketingandroadshowssuch as those done for VREP I and drawing on the experience from the Sustainable Energy FinancingProject inFiji. Theconsumerwill informthevendorofhis/her intendedpurchase,eitherbyvisiting theshoporthroughpost/phone/emailcommunication,andarrangepayment.

ComponentTwo:ConstructionofminigridsinruralareasofVanuatu(US$6.8million).Thiscomponentwillsupporttheexpansionofaccesstoreliableelectricityservicesforruralcommunitiesthroughsupportforthe design, supply, installation and commissioning of mini grid systems. The project will finance theconstructionof5minigrids,basedoninitialcostestimates.Thecriteriaforselectionofsiteswithpotentialtosupportaminigridis:(i)communityhouseholdnumbersgreaterthan75households;and(ii)businessand public institutions load greater than 50 percent of the total load. This component will supportelectricityserviceprovisiontoapproximately550ruralhouseholds,whichequatestoaround2,750people,andpublicinstitutionsandbusinesses.

Component Three: Technical Assistance and Project management (US$2.0 million). This componentaddresses three key areas of the project, the first focusing on the vendor registration model forComponentone,thesecondfocusingonOwners’EngineerforComponenttwoandthethirdfocusingonprojectmanagement. Inaddition, there isanallowanceforGovernmentcontribution (US$1.5million“inkind”)thatwillcovertheGovernmentofVanuatu’sdirectprojectrelatedcosts,suchasarrangementsforvoluntary landdonationandother inter-departmentalsupport.Themainareasandkeyactivitiesfundedundertheprojectaresetoutbelow:

a. Vendor and product registration arrangements, communications and implementation

arrangements. Building on the established implementation arrangements under VREP I, thefollowing activities will be financed to support the implementation of the investment activitiesunderComponent1:(a)hireatechnicalconsultanttopreparetechnicalstandards;(b)amendmentof the vendor registration arrangements to incorporate SHS andmicro grids; (c) amendment ofproductregistrationarrangements(foraproductcatalogue)toincorporateSHSandmicrogrids;(d)development of program and product awareness, safety and product care training material forcommunities, and end users; (e) establishment of a grievance mechanism for end-user andcommunities; (f) explore opportunities for the development of a microfinance product toencourage lending in rural areas; and (g) support for adoption of legislation, regulations and/orfurther refinementof theVREP IEnvironmentalCodeofPractice (ECOP) fordisposalofbatteriesandsolidwastesforproductsundertheproject.

b. Owners’ Engineer. The following activities will be financed to support the preparation andimplementation of the investment activities under Component 2: (i) site selection; (ii) technicaldesignofeachmicroandminigrid; (iii)preparetheenvironmentalandsocial impactassessmentandmanagementplans;(iv)preparationofbiddocumentsandcontractsfortheconstructionofthemicro and mini grids and assist with the bidding and award process; (v) supervision of theconstructionandcommissioningworks;and(vi)complianceandreportingontheimplementationoftheenvironmentalandsocialimpactassessmentsandmanagementplans.

c. Project management and support. The following activities will be financed for effectiveimplementation,monitoringandreportingundertheproject:(i)executionofawarenessprogramsto rural communities and consumers inVanuatu, in particular consultationwith communities onthelonglisttorequesttheirexpressionof interesttoreceiveamicroorminigrid;(ii)verificationagenttocertifytheretailssalesofSHSandmicrogridsunderComponent1;(iii)capacitybuildingandimplementationsupporttotheDoEthroughtheOwners’Engineer;(iv)monitoring,evaluationandannualreviewsoftheproject;and(v)operatingcostsassociatedwiththisprojectasprovidedforinthelegalagreement.

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ImplementationArrangements:

The Recipient and Executing Agency for the VREP I and II is the Ministry of Finance and EconomicManagement(MoFEM),whoenteredintoaFinancingAgreementwiththeWorldBank.TheImplementingAgency is theDepartmentofEnergy (DoE),within theMinistryofClimateChangeandNaturalDisasters(MCCND).TheDoEiscurrentlyimplementingtheGlobalPartnershipforOutputBasedAid(GPOBA)project,anotherWorldBankmanagedProject.TheDoEhascontractedaProgramManagertosupportfortheimplementationoftheVREPIandIIunderthedirectionoftheDirector,DoE,includingtheoversightofthisECOP.

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ANNEX2–InformationforBatteryAwarenessCampaign

Introduction

1. Most homes and businesses contain many pieces of equipment such as portable computers, cellphones,powertools,standbyorbackuppowersystems,cameras,securityequipment,radios,torches,etc. that depend on batteries to operate. As a result, batteries have become integral to thefunctioning of our economy and supportmany aspects ofmodern lifestyles. These households andbusinessesuseanumberofdifferenttypesofbatterieswhichhavedifferentchemistries.

2. Non-rechargeable,single-usebatteriesusedinclocks,toys,camerasandremotecontrolscanbeeitheralkaline and zinc-carbon (AA, AAA, D, C, 9-volt dry cell), mercuric-oxide (button, cylindrical andrectangular)orlithium(AA,C,button,9-volt).Thesebatteriesarealsoknownas“primary”orsingle-usebatteriesbecausetheyarenormallynotrecycledandaredisposedofafteruse.

3. Rechargeablebatteries(alsoreferredtoas“secondary”batteries)uselithium-ion(Li-ion),nickelmetalhydride (NiMH) or nickel cadmium (NiCd) chemistry. These are found in such products high endproducts as camcorders, mobile phones, laptops and cordless power tools, shavers, and electrictoothbrushes.

4. Lead-acid batteries are the oldest type of secondary batteries. They are used to supply electricalpowertocars,trucks,tractors,motorcycles,andboats.Smallsealedlead-acidbatteriesareusedforemergencylightinganduninterruptiblepowersupplies.

5. Usedbatteries,whetherprimaryorsecondary,arepotentiallyhazardous,sotheyneedtobestoredand handled carefully. Some of thematerials inside a battery are toxic andmay damage skin andclothesifthebatteryisdamagedorleaking.Usedbatteriesrequirecarefulhandlingtominimizesafetyhazardsuchasexplosionandfireandgoodmanagementtoavoidpollutionofsoil,surfacewaterandgroundwaterbystoringthemundercoverandinabundedarea.Thethreemaintypesofbatteriesincommonuseinsolarenergysystemsaredescribedbelow:LithiumBatteries

6. There are two types of lithium batteries in common use: (i) primary (non-rechargeable) metalliclithium(Li)batteries,whicharesmallinsizeandhavealonglifeandareusedtopowertoysandsmallelectronicdevices;and(ii)secondary(rechargeable)lithiumion(Li-ion)batteries,whichareoneofthelightest rechargeable batteries available and which are found in more expensive products such aslaptops,cameras,mobilephones,powertoolsandnowincreasingly insolarpowereddevices.Largelithiumbatteriesarefoundinotherapplicationssuchasbackuppower,electriccarsandsomenewerair planes. Lithium batteries use lithium in its puremetallic formwhile Li-ion batteries use lithiumcompoundswhicharemuchmorestablethantheelementallithiumusedinlithiumbatteries.

7. Both types of lithium batteries can be recycled. During collection, they can be mixed with otherbattery types in the collection container as long as certainpackaging requirements aremet. Largerlithium batteries (>500g) batteries can be collected but require separate storage from smallerhandheldbatteries.Therisksassociatedwithlithiumbatteryrecyclingincludethepotentialforafireorexplosionifbatteriesbecomeover-heatedfromsunorforexample,iftheyshort-circuit.NickelCadmium/Nickel-MetalHydrideBatteries

8. Nickel-Cadmium (NiCd) batterieswere the first reasonably priced rechargeable consumer batteries.TheyarebeingsupersededbynewrechargeablesNickel-MetalHydride(NiMH)batteries.Nickel-metal

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Hydride batteries are related to sealed nickel-cadmiumbatteries and only differ from them in thatinsteadofcadmium,hydrogenisusedastheactiveelementattheanode.TheenergydensityofNiMHismorethandoublethatofLeadacidbatteriesand40%higherthanthatofNiCd.LikeNiCdbatteries,Nickel-metalHydridebatteriesaresusceptibletoa"memoryeffect"althoughtoalesserextent.Theyare more expensive thanLead-acidandNiCd batteries, but they are considered better for theenvironment.Lead-AcidBatteries(LAB)

9. The main components of a lead-acid battery are lead (Pb) electrodes and lead dioxide (PbO2)electrodes immersed in a solution of water and sulphuric acid. These are generally contained in aplastic casemade frompolypropylene.WhileLABhasahistoryof reliability, isavailableworldwide,andiswidelyrecycled, it isalsobulkyandheavy,pronetogassing,andsulphation.Theheavymetalelement(lead)ofthebatterymakesthebatterytoxicandimproperhandlinganddisposaloftheacidandleadcanbehazardoustohealthandtheenvironment.WhyRecycle?

10. Batteries pose a risk to human health and the environment if disposed of inappropriately. Theycontainheavymetalsthataretoxictohumanhealthand/orhaveeco-toxicityimpactsiftheyexceedcertain minimum concentrations in the natural environment. Lead, mercury and cadmium areparticularlytoxic,butothermetalssuchasnickelcanalsobeofconcerniftheyleachintosurfaceorgroundwater.Batteriesalsocontainvaluablemetalssuchascadmium,lead,zinc,manganese,cobaltandrareearthmetalsthatcanberecoveredtominimizetheuseofnaturalresourcesandtoreduceimpactsontheenvironmentwhichoccurintheproduction,distributionandend-of-lifephasesofthebatterylife-cycle.

11. Single-use batteries have significant environmental impacts at every stage of their life cycle. Themanufactureofbatteriesrequireuseofchemicalstopurifymetals,extractionofresourcesbymining(withpotentialdestructionofwildlifehabitat)andproductionofpowerbyburningfossilfuels;whichin turn contribute to global warming, and creation of air and water pollution. The importation /transportofbatteriesrequireyetmoreinfrastructuredevelopmentandenergyusage.Inlandfills,thechemicals inside batteries can leach from their casings and pollute soil andwaterwith toxic heavymetalsifthebatteriesarenotproperlyrecycled.

12. Thetechnologyforrecyclingsecondary(rechargeable)batteriesarewellknownandwidelydeployedin developed and some developing countries. Used LABs arewidely collected and recycled (almost96%collectioninNorthAmerica).NiCadandLithiumbatteriesareonlynowbeingrecycled.However,in most developing countries, the economics of battery recycling is not sustainable. The cost ofhandlingbatteries(collection,storage,packaging),andtransport,especiallyinruralareas,farexceedthecostofrecyclingthebatteries.Asaresult,inmostdevelopingcountries,lackingrecyclingfacilities,used batteries are invariably discarded to the environment. Sometimes used LABs are collected,packagedandexportedoverseasforrecycling,theeconomicsdependingonthepriceofleadandcostoftransportation.

13. Thetechnologyforrecyclingprimary(singleuse)batteriesthoughavailableisnotwidelyused,largelybecauseofcostofrecyclingandbecauseofbatterycollection(supply)problems.ItisonlynowbeingdeployedinNorthAmerica,Europeandotherdevelopedcountries.

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14. Although recyclingmay not be a near termoption, batteries – primary and secondary – should becollected and safely stored for transport to an environmentally safe and secure location for futureprocessingortoarecyclingfacility.