stiglich summary audit report · summary audit report _stiglich transportes, s.a_ _ _...

SUMMARY AUDIT REPORT

_Stiglich Transportes, S.A_ __________ ____________ __April 22-23, 2013_

Name of Facility Signature of Lead Auditor Date

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Submitted to:

International Cyanide Management Institute (ICMI) 1400 I Street, NW – Suite 550 Washington, DC 20005, USA

2013 Three year Cycled Audit

Geosoluciones Panamá, S.A. ISOSURE, S.A.C. P.O. Box 0923-00340 Av. Los Paracas 429 Salamanca Santiago, Panamá Lima, Peru

ICMI Cyanide Code Principle 2 SUMMARY AUDIT REPORT

Stiglich Transportes, S.A. Cyanide Transportation Recertification Audit

Callao - Perú




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TABLE OF CONTENTS

A- GENERAL SUMMARY

A.1 Information of the Audited Operation A.2 Overall Auditor´s Finding

B- STIGLICH ROLE AS CYANIDE TRANSPORTATION

1. TRANSPORT: Transport cyanide in a manner that minimizes the potential for accidents and releases.

Transport Practice 1.1: Select cyanide transport routes to minimize the potential for accidents and releases. Transport Practice 1.2: Ensure that personnel operating cyanide handling and transport equipment can perform their jobs with minimum risk to communities and the environment. Transport Practice 1.3: Ensure that transport equipment is suitable for the cyanide shipment. Transport Practice 1.4: Develop and implement a safety program for transport of cyanide. Transport Practice 1.5: Follow international standards for transportation of cyanide by sea and air. Transport Practice 1.6: Track cyanide shipments to prevent losses during transport. 2. INTERIM STORAGE: Design, construct and operate cyanide trans-shipping

depots and interim storage sites to prevent releases and exposures.

Transport Practice 2.1: Store cyanide in a manner that minimizes the potential for accidental releases.




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3. EMERGENCY RESPONSE: Protect communities and the environmental

through the development of emergency response strategies and capabilities.

Transport Practice 3.1: Prepared detailed emergency response plans for potential cyanide releases. Transport Practice 3.2: Designate appropriate response personnel and commit necessary resources for emergency response. Transport Practice 3.3: Develop procedures for internal and external emergency notification and reporting.

Transport Practice 3.4: Develop procedures for remediation of releases that recognize the additional hazards of cyanide treatment chemicals.

Transport Practice 3.5: Periodically evaluate response procedure and capabilities and revise them as needed.




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A- GENERAL SUMMARY

A.1 Information of the Audited Operation Name of CyanideTransportation Facility: Stiglich Transportes, S.A. Name of Facility Owner: Stiglich Transportes, S.A. Name of Facility Operator: Stiglich Transportes, S.A. Name of Responsible Manager: César Silva Lan Address: Avenida Argentina, 3398 - El Callao State/Province: Country: Lima / Perú Telephone: (511) 465-7200 Fax: (511) 464-4488 E-Mail: [email protected]

(RECERTIFICATION AUDIT)

Location detail and description of operation:

Stiglich Transportes, S.A. (Stiglich) certify in ISO-9001-2008, is a company specializes in the transport of oversized loads and hazardous materials from Orica and Mercantil, to different gold and other mineral mines.

Stiglich Transportes, S.A. was certified on May 27, 2010 under the International Cyanide Management Institute, for Cyanide Transportation operations.

Stiglich receives the cyanide directly from the port facilities or other storage sites. It can be transported in iso-tanks or standard containers. Stiglich does not have storage facilities and does not remove product from the tanks or containers.

Stiglich been operating five routes, supplying to the following companies:

• Compañía Minera Antamina

• Barrick Misquichilca “Pierina” • Barrick Misquichilca “Lagunas Norte”

• Minera Goldfields “Cerro Corona”

• Compañía Minera Ares

There is a special instruction to the road while passing the Minera Goldfield route, crossing the dam "Gallito Ciego", which in coordination with Stiglich´s customer protect both sides of the crossing by specific procedure, when giving cyanide transport at this site.




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The scope of this audit includes the operation of ground transportation from Port Authority or storage facility located in Lurin and Callao, where cyanide is released, to delivery at the customer's installation

Cyanide is received from the manufacturer or consigner in either of the following packaging presentation:

- Interior Poly-propylene super-sack filled up to 1 ton and placed inside a Polyethylene bag and wooden box

- Tuff-pack of 48 Kg, 20 of these packs are placed inside a wooden box - Iso-Tank

No less than 20 boxes or 165 drum are placed in standard 20-feet shipping containers; boxes and drums are placed way to prevent lateral movement within the container; when drums are transported, these are fastened using belt.

In addition to normal anchoring the container to the chassis of trucks, containers are secured with chains, for double safety tie. The containers are received locked and tagged. These tags are only removed at the user site.




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A.2 Overall Auditor´s Finding

This operation is

� In full compliance � In substantial compliance * (see below) � Not in compliance

With the International Cyanide Management Code. * For cyanide transportation operations seeking Code certification, the Corrective

Action Plan to bring an operation in substantial compliance into full compliance must be enclosed with this Summary Audit Report. The plan must be fully implemented within one year of the date of this audit.

Audit Company: Geosoluciones Panamá, S.A. Audit Team Leader: Jorge Efrén Chong Pérez Email: [email protected] Names and Signatures of Other Auditors: Carlo Brando Bolivar Vargas Date(s) of Audit: April 22-23, 2013 I attest that I meet the criteria for knowledge, experience and conflict of interest for Code Verification Audit Team Leader, established by the International Cyanided Management Institute and that all members of the audit team meet the applicable criteria established by the International Cyanide Management Institute for Code Verification Auditors. I attest that this Summary Audit Report accurately describe the findings of the verification audit. I further attest that the verification audit was conducted in a professional manner in accordance with the International Cyanide Management Code Verification Protocol for Cyanide Transportation Operations and using standard and accepted practices for health, safety and environmental audits. This operation has not experienced compliance problems whether any significant cyanide incidents during the previous three-year.




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B- STIGLICH ROLE AS CYANIDE TRANSPORTATION

1. TRANSPORT: Transport cyanide in a manner that minimizes the potencial for accidents and releases.

Transport Practice 1.1: Select cyanide transport routes to minimize the potencial for accidents and releases.

This operation is

� In full compliance � In substantial compliance Transport Practice 1.1 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Stiglich Transportes, S.A. updated the route evaluation procedure now identified as PC-07-02 (dated on July 12, 2012). This procedure replaced the version of June 6, 2005, rev.1.0 (or Procedure IC-0413). On January 28, 2013, annual review of the criteria used for evaluating the route for: traffic density, towns, bridges, waterways, road conditions, route design (curves, berms, number of lanes), altitude, intersections, detours, weather conditions and socio-political conditions. The updated route assessment report includes: Performing the shipment in convoy modality of 1 to 3 units with one escort vehicle, more than 3 units and up to 9 units with two escort vehicles. No convoys of more than 9 units are allowed. The revised assessment procedure specifies that the route will be revised prior to making the first transport to a customer or in annual basis by the Safety Manager or another person designated to do so. The contingency plan has been updated for all Stiglich routes involving Cyanide transportation, on May, July, October and November, 2012. Also the "Ministerio de Transportes y Comunicaciones" (MTC), issue "Resolución Directorial # 3525-2009”,




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remains valid until November 14, 2014, authorizing Stiglich for transporting hazardous materials. The evaluation of route is updated periodically by Stiglich to find new danger or significative dangerous risk in the trip report that must be presented at the end for each customer services. Stiglich has provided information (MSDS, emergency and product information) to support emergency centers (health centers and Fire Companies) along the mentioned routes, and a signed and received letter with such information. This activity is carried out so that they could be prepared for emergencies. Additionally, comments are requested to manage risk as a way to query and obtain feedback. When Stiglich transports hazardous materials (including Sodium Cyanide), the control room at its Stiglich base in Callao, with geocells system continuously provides positioning of each of the vehicles all the time, as well as continuous monitoring of the speeds at each point in the route. In the latest audit ICMI of May 27, 2010, there was pending the integration of specific contingency plan for Minera Corona Goldfield. It was confirmed that the Contingency Plan for the transportation of sodium cyanide by Stiglich Transportes, S.A. for Minera Gold Fields "Cerro Corona" was issued on October 31, 2011 (rev.7). Were checked the existence of letters sent firefighters and medical centers to communicate roles in event of any emergency. Stiglich has created and maintained a Master List of 32 procedures for Safety issues, updated to February 20, 2013. Furthermore, it has adopted and compiled three master records: For Safety (March 19, 2012), Maintenance (January 31, 2012) and Operation (February 1, 2013). Stiglich does not subcontract other companies to transport Sodium Cyanide.




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Transport Practice 1.2: Ensure that personnel operating cyanide handling and transport equipment can perform their jobs with minimum risk to communities and the environment. This operation is � In full compliance � In substantial compliance Transport Practice 1.2 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified:

The Stiglich procedure establishes a minimum requirements for drivers: health, legal, defensive driving training, emergency response training with sodium cyanide (Spill and poisoning prevention) and be less than 60 years old (last audit on May, 2010 were 65 y.o.). In the internal audit on January 28, 2013, there is no evidence of cyanide transportation driver training record. This situation was corrected. According with our records, Stiglich have exclusive operators and trucks only for cyanide transportation. According to the transportation procedures, drivers must rest once a week and drive up to 8 hours a day, with breaks of 2 hours. Sleep at least 8 hours before each trip, and must not drive for more than 12 hours per day. Maintenance and operation employees were interviewed and their supervisors to confirm implementation procedures and proper training in Cyanide transportation practices. Also, the auditors participated in a safety briefing provided to workers. Stiglich does not subcontract other companies to transport Sodium Cyanide.




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Transport Practice 1.3: Ensure that transport equipment is suitable for the cyanide shipment. This operation is � In full compliance � In substantial compliance Transport Practice 1.3 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Stiglich Transportes, S.A. establishes maintenance requirements for units carrying cyanide in the transport process; these comply with the provisions under Peruvian law. Also, the units are registered with the “Ministerio de Transportes y Comunicaciones (MTC) for transporting of hazardous materials. Stiglich still use Kenwork trucks. Additionally, all shipments are performed in low-bed trailers acquired from “Fabricaciones Metálicas Carranza, S.A.C.” (FAMECA). With a maximum load capacity of 27 Tons (the maximum weight of a full container is 23 Tons, including the net weight, packaging material and the container itself). After the load is fixed, Stiglich made a register for weights and measures to record the weight of the load and verify that this does not exceed the maximum stated in the Peruvian legislation by type of vehicle configuration. Additionally, there are in all the routes used, controls weight and size by the “Ministerio de Transportes y Comunicaciones” (MTC), that gives substantial sanctions in case of violations. Before their departure is given to the transporter a Referral Guide which records the quantity transported, the registry of Weights and Measures and Cyanide safety information.

On January 31, 2012 some preventive maintenance plans were created and updated, as follow: - FC-06-1 Preventive Maintenance Program status Rev 0. - FC-06-3 Tracking Preventive Maintenance Program of PMS Rev 02.




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- FC-06-4 Preventive Maintenance Program: follow-up Rev 04. - FC-06-6 Daily Work Report Rev 02. - FC-06-07 Inspection Report - Driver Rev 02. - FC-06-10 Instrument calibration Program Rev 05. - FC-06-11 Preventive Maintenance Schedule for trailers PM Rev 02. - FC-06-13 Tires Control Rev. 0 - FC-06-30 Check List PM1 level Maintenance Activities Rev.01. - FC-06-31 Check List PM2 level Maintenance Activities (roads) Rev 01. - FC-06-32 Tires Annual Inspection Program-Hydraulic Lowboy Rev.01 - FC-06-37 Pre-Trip Inspection Maintenance department serves among 6 to 8 vehicles on a weekly basis. Inspection Record FC-06-07 was found in compliance with Stiglich procedure, which was evidenced by interviewing maintenance personnel. The check lists form, check list inspection report samples and observations of vehicle on field were revised, adjusted to reality. Stiglich does not subcontract other companies to transport Sodium Cyanide.

Transport Practice 1.4: Develop and implement a safety program for transport of cyanide.

This operation is � In full compliance � In substantial compliance Transport Practice 1.4 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Stiglich Transportes, S.A. established a method of transportation avoiding disturbances during movement. Prior to the trip, three visible sides of the containers are placed UN Number, NFPA and DOT diamond. The warehouse was checked to verify sufficient amounts of placards.




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The safety transport process provides: • Pre-trip inspections and documentation of units.

• Review information from the unit to give approval for the trip. • Drivers must rest at least 8 hours prior to a trip and not to drive more than 12 hours a

day.

• The driving schedule is only in daytime. • The cyanide load traveling within 20 feet containers, making arrangements to prevent

movement.

• The trip will take place in convoy mode. • The convoy leader is responsible for assessing the climatic conditions and is enabled for

the suspension of the convoy of transport operation.

• It prohibited the consumption of alcohol, drugs or any substance that may impair or diminish the operation of the driver or a member of the convoy.

• At the end of the trip the leader of the operation and drivers must submit a report that details the same route incidents, advance information, sensitive areas found and relevant information to ensure safety and security on future trips. A random trip report was checked to verify procedure.

Stiglich has a maintenance procedure (FC-06-07), that replaced the (PC-06). Maintenance records were reviewed and the practice was confirmed during vehicle observation and interview with maintenance supervisor, maintenance supervisor (relief) and vehicle operators.

Stiglich does not subcontract other companies to transport Sodium Cyanide.




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Transport Practice 1.5: Follow international standards for transportation of cyanide by sea and air. This operation is � In full compliance � In substantial compliance Transport Practice 1.5 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Stiglich Transportes, S.A. does not transport by sea or air, the scope of transport is from Callao or Lurín District, to the mines of Peru.

Transport Practice 1.6: Track cyanide shipments to prevent losses during transport. This operation is � In full compliance � In substantial compliance Transport Practice 1.6 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Stiglich Transportes, S.A. uses a GPS system. Additionally have cellular service, radio and satellite phone which ensures full coverage during movement. The phone lines were functioning at the time when the internal audit was conducted on January 28, 2013 by Carlos Vargas, and a filed inspection was also performed to correct the operation of mobile equipment. Were checked samples records from escort inspection check list “INSPECCIÓN DE VEHÍCULOS ESCOLTAS” or Escort Check List, which indicate that the radios and satellite phone communications were present. As well samples of attached vouchers from satellite phone services.




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Stiglich has identified areas without cell and radio coverage; to those specified areas the convoy makes use of satellite equipment. The GPS system updates location in real time, in areas without GPS coverage saves the information which is then transmitted, after passing vehicles. The bill of lading and reference guide is part of shipping records of amount transported; Material Safety Data Sheet (rev. 2009), is revised before each trip and available during all transport. By regulations in Peru, the MSDS must be reviewed every five years. Stiglich does not subcontract other companies to transport Sodium Cyanide.

2. INTERIM STORAGE: Design, construct and operate cyanide trans-shipping

depots and interim storage sites to prevent releases and exposures.

Transport Practice 2.1: Store cyanide in a manner that minimizes the potential for accidental releases. This operation is: THIS PRACTICE DOES NOT APPLY TO THE STIGLICH OPERATION. � In full compliance � In substantial compliance Transport Practice 2.1 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: The Stiglich transportation operations do not involved the use of interim storage facilities. As the route driver time is from 6 a.m. to 6 p.m., when it take two or more days, the route assessment identifies the specific places where vehicle may stay overnight and the driver also have sleeping facilities; also was observed one of these properties were completely fenced with security guards. The containers are only open at the mine and have placards indicating that they contain Cyanide.




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3. EMERGENCY RESPONSE: Protect communities and the environmental

through the development of emergency response strategies and capabilities.

Transport Practice 3.1: Prepared detailed emergency response plans for potential cyanide releases. This operation is � In full compliance � In substantial compliance Transport Practice 3.1 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified:

Stiglich Transportes, S.A. operates in five (5) active routes which are covered by its contingency plan that have gone through a risk assessment:

• Contingency Plan for Hazardous Materials Transportation for Compañia Minera Antamina Rev. 8, March 15, 2012.

• Contingency Plan for Hazardous Materials Transportation for Barrick Misquichilca "Pierina" Rev. 07, October 5, 2012.

• Contingency Plan for Hazardous Materials Transportation for Barrick Misquichilca "Lagunas Norte" Rev. 08, November 20, 2012.

• Contingency Plan for Hazardous Materials Transportation to Compañía Minera Ares Rev. 05, July 17, 2012.

• Contingency Plan for Hazardous Materials Transportation for Minera Gold Fields "Cerro Corona" Rev 07, October 31, 2011.

The contingency plan considers the physical and chemical form of the cyanide, and is designed to measure potential accident scenarios during transport. For this evaluation were performed two (2) drills in 2012: DATE PLACE CLIENT September 29, 2012 Km 188 “Panamericana Sur” Chincha ORICA

October 25, 2012 Lima MERCANTIL




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In the contingency measures plan were taken according to the physical and chemical characteristics of cyanide during transport, also indicating the actions to take if cyanide change of state or react with any product. Stiglich Transportes, S.A. identified and described steps to be followed in case of possible incidents scenarios during transportation, road condition, port, and the necessary controls have been implemented to reduce the risk of these and roles of responders. Sections 2.5 of each contingency plan, described responsibilities before, during and after an incident / accident or an emergency. Section 3.5 of each contingency plan shows the development of Measures and Actions in an Emergency, based on a detailed risk analysis in Section 3.4 Section 5.5 of each contingency plan Entitled Communications Program describes emergency levels, based on their criticality, and indicates the roles of outside responders. The contingency plan has a list of health centers and Fire Companies major cities along the used routes (ANNEX B).

Transport Practice 3.2: Designate appropriate response personnel and commit necessary resources for emergency response. This operation is � In full compliance � In substantial compliance Transport Practice 3.2 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: During the audit was evidenced (certifies), that drivers and supervisors received from Stiglich training on safe handling of cyanide (spill and intoxication).

Each contingency plans, Section 3.5, describes the functions and responsibilities during an emergency staff in both the first (by Stiglich trained personnel) and using the second response:




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3.5.1 Spill And / Or Fall Of HAZMAT 3.5.2 Injuries During The Handling 3.5.3 Impact With Forklifts 3.5.4 Fire (cargo fire) 3.5.5 Fire (In vehicle) 3.5.6 Suffocation 3.5.7 poisoning 3.5.8 Vehicles breakdowns 3.5.9 Traffic Accident 3.5.10 Accident with injuries accident 3.5.11 Pollution of air, soil and / or water. 3.5.12 Disease of personnel 3.5.13 Responsible notification procedure 3.5.14 Final Disposition procedure

Each truck has the necessary emergency response and safety/healthy equipment such as: Spill response kit and poisoning (antidote kit), and personal protective equipment, which is checked before the trip; as well as initial and periodic refresher training in emergency response training.

The Contingency plan considered that the transporter will have emergency response team, vehicular protective equipment and personal protective equipment. It ‘shall be periodically reviewed through the check list, this activity will be made by the operator of each vehicle, including convoy supervisors.

Were checked samples of emergency response, and health and safety equipment, including personal protective equipment records. Check list request verify: Hard hat Dark safety glasses Clear safety glasses Safety boots Leather gloves Neoprene or Nitrile Gloves PVC boots Fluorescent Safety Vest Nivel C, Tyvex Level C, Coveral Respirator protector




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Vehicle operators received initial and periodic training in Emergency Response. With basis on annual training plan, and “Incident Control Seminar”.

According with form FC-04-07 and reviewed samples records, for each trip all drivers including the convoy supervisor received: First aid, fire response, defensive driver, and hazmat training.

The Stiglich Contingency Plan. Trip check list, request that all emergency response equipment, vehicle protection equipment, and personnel protection equipment, should be review with a check list. Emergency response equipment including the radios and satellite phone communications.

Stiglich does not subcontract other companies to transport Sodium Cyanide, but in case of emergency second response, contractually Stiglich will ensure that their customers: consignor, producer or the mine, have second emergency response.

Transport Practice 3.3: Develop procedures for internal and external emergency notification and reporting. This operation is � In full compliance � In substantial compliance Transport Practice 3.3 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: The contingency plan includes a communication internal and external diagrams which specifies the call flow by the safety staff, the General Manager of Transportation Stiglich; and the receiver, regulatory agencies, outside response providers, medical facilities, firemen, and potentially affected communities of an emergency. On 2011 and 2013 have been sent informative letters about risk of cyanide and relevant information to health care centers and police stations in communities.




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The emergency commands notifications are included in the contingency plan, available for each of the five active routes indicated in Transport Practice 3.1. Reporting procedure is part of the contingency safety plan, which is periodically reviewed or updated in case of an event occurs and /or opening or closing a transport route. Section 5 on Contingency Safety Plan, established system to ensure that internal and external notification; and reporting procedure are kept current, through plan annual review. Before each trip main aspect of the contingency plan are revised. All emergency procedures and telephones were periodically verify.

Transport Practice 3.4: Develop procedures for remediation of releases that recognize the additional hazards of cyanide treatment chemicals. This operation is � In full compliance � In substantial compliance Transport Practice 3.4 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Section 2.5 page 17-18 and 5.7.4, page 72 of the Contingency Plan, established convoy supervisor procedures and responsibilities before and during an emergency. The convoy supervisor must have knowledge of the technical characteristics, risk of each product and needs to have a MSDS copy and Contingency Plan. Section 3.5 page 33-46, of the Contingency Plan, established steps for remediation, such as recovery or neutralization of solution in different scenarios, basically drivers start the first response, until the arrival of specialized personnel, if applicable: -Park the transport unit in a safe place off the road and away of village, factory, river, bridge and / or body of water. - Set parking brake.




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- In case of spillage shall ensure that the spill does not contact with people and / or body of water. - Isolate the area around the spilled product (sand, soil or absorbent blankets) - Use the first response kit protecting bodies of water and / or sewer and drainage systems. - Use your personal protective equipment. - Communicate by radio, telephone, cellular or other means available with your supervisor to receive instructions for their support. - Do not touch or walk through spilled material. Annex A, sodium cyanide MSDS, page 127 (rev. January, 2009) established decontamination procedure only to artificial reservoirs through expert persons (use of sodium hypochlorite, hydrogen peroxide and iron sulfate). These chemical products will only be used for contaminated soil and artificial water reservoirs remediation. Contingency plan section 3.5 prohibit the use of chemicals such as sodium hypochlorite, ferrous sulfate and hydrogen peroxide to treat cyanide that has been released into surface water.

Transport Practice 3.5: Periodically evaluate response procedure and capabilities and revise them as needed. This operation is � In full compliance � In substantial compliance Transport Practice 3.5 � Not in compliance

Summarize the basis for this Finding/Deficiencies Identified: Contingency plan, Section 3.6.4, state that the contingency plans are reviewed annually,

every new route after the first trip, every time you need a change, after any emergency or drills.




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Section 2.5 and 5.1, establishes that drills or “simulacros” must be performed. Two drills were being performed in 2012, simulating a spill incident:

DATE PLACE CLIENT

September 29, 2012 Km 188 “Panamericana Sur” Chincha ORICA

October 25, 2012 Lima MERCANTIL

Contingengy plan section 5, indicates that Stiglich must evaluate the performance of the contingency plan through drills, in order to obtain continuous improvement.

Each new or proposed amendments to Contingency Plan is delivered to mines or clients, as uncontrolled copy for review, if does exist any comments and / or suggestions, it´s will be modified by the STIGLICH safety department with the General Manager approval. Subsequently, the Plan will be submitted to the (DGASA) “Dirección General de Asuntos Socio Ambientales del Ministerio de Transportes y Comunicaciones” – MTC (Peruvian Government), for final approval.

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