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Motor Vehicle Assembly-EN PDF
Motor Vehicle Assembly-EN PDF
Introduction
This guideline is designed to be used by EBRD Financial Intermediaries (FIs) to understand the nature of
environmental and social (E&S) risks associated with existing operations in this sector and suggested actions for
businesses to take to manage these E&S risks. It also provides guidance for FIs on potential due diligence questions
to raise with management to understand how their business is managing these E&S risks. This guideline focuses on
material E&S risks; it is not an exhaustive list of E&S risks. In managing E&S risks, all businesses should be compliant
with relevant E&S laws and regulations. Where applicable, these include European Union legislation, which may also
be taken as a benchmark for good practice.
This guideline covers the manufacture and assembly of motor vehicle from a number of metallic, plastic and electrical
components.
Material risks
Below is an overview of the material risks present in the motor vehicle assembly industry.
E&S Risk Category Environment Health and safety Labour Community Page
no.
Air Emissions 4
Hazardous Materials 5
Solid Waste 6
Energy Consumption 6
Labour Rights 8
3. Financial implications 9
4. Suggested due diligence questions 9
5. References and additional sources 13
Specific legislation that may apply to the motor Below are the material E&S risks associated with
vehicle assembly sector may include, but is not this sector and key measures to manage them.
limited to, the following: Where gaps are found in the management of key
E&S risks, the E&S risk management measures
European Emission Standards which define the should form part of a corrective E&S action plan
limit on the emissions of pollutants of new agreed with your customer.
vehicles sold in the European Union. They are
typically referred as Euro 1 to 6. This will impact Air emissions
design requirements but not the manufacturing
process itself.
Some large energy consumers in the sector
may be captured by emissions trading schemes The majority of the emissions to air generated
(ETS), such as the EU ETS, which requires during motor vehicle assembly are volatile organic
members to purchase sufficient carbon compounds (VOCs) emitted from painting and
allowances to cover their emissions. finishing operations (paint storage, mixing,
applications, and drying). The emissions are
Vehicle painting and coating operations will be primarily organic solvents, which are used as
subject to the requirements of the Directive on carriers for the paint and solvents used for cleaning
Industrial emissions (2010/75/EU) which sets equipment between colour changes and to clean
strict limits on the emission of waste gases in spray booths. Other emissions to air include:
vehicle painting and coating operations.
VOC emissions - use of solvent based
Legal entities in the EU that are manufacturing,
adhesives during Soft Trim;
importing or using certain chemical substances
may be subject to EU regulation called the Isocyanates - Spray booths/ovens & paint
Registration, Evaluation and Authorisation of mixing area during use of paint containing
Chemicals (REACH) (1907/2006). This isocyanates;
regulation places requirements on users/
Particulates - Paint particulates from spray
manufacturers to evaluate and control the
booths, dust from sanding. Spent filter material;
health and environmental risks associated with
certain substances. Carbon dioxide and oxides of nitrogen where
thermal or catalytic incinerators are used;
The End of Life Vehicles (ELV) Directive
2000/53/EC required that the average weight of Ozone may be released through the use of
material per vehicle/per year reused or ultraviolet light curing lamps.
recovered by each member state since 2006 is
It should be noted that motor vehicle assembly
85% and this will increase to 95% by 2015. In
generates indirect greenhouse gas emissions
the same time frame reuse and recycling figures
through the use of its final products, and
currently at 80% must increase to 90%. This specifically through the combustion of fossil fuels.
legislation also limits the use of certain The transport of products by road can also be a
hazardous substances. significant issue and generate GHG emissions
Member States must ensure that producers use through traffic congestion.
material coding standards which allow
identification of the various materials during Many of these emissions may be harmful to the
dismantling in accordance with decision environment as well as health.
2003/138/EC and that the vehicles
manufactured can meet the minimum recycling Dust created in the process can be inhaled and
targets. This has impacts for motor vehicle cause respiratory diseases including asthma in
manufacturers that import into the EU. employees. Dust, vented fumes, smog caused by
particulates, and odours can be a nuisance to
Companies operating within the European neighbouring residential communities and industrial
Union (either as a manufacturer or as a supplier activities.
into European Union countries) will be subject to
Hazardous materials
Water management and wastewater
Machinery
Train staff in correct selection, use and
maintenance of PPE. Labour standards are rules that govern working
Train workers in correct use of machinery and conditions and industrial relations. They may be
safety devices. formal, such as national level regulation and
international agreements, or informal, expressed
Avoid direct handling of sharp edged items through norms and values.
and/or remove sharp edges by machining.
Worker dissent and unrest can manifest if workers
Engineer out sharp edges and access to feel unfairly treated, overworked or unable to raise
dangerous parts of machinery through a concerns regarding the work environment to
hierarchy of controls (permanently fixed physical management, particularly in a unionised sector
barrier, interlocked physical barrier, physical such as the motor vehicle assembly sector.
barrier, presence sensing system).
Investment
Where are the organisations main markets? Are
they manufacturing in, or exporting to, the EU?
Are product standard regulations such as
REACH relevant?
Review budgets for capital expenditure and
operational expenditure to cover EHS matters.
Does the business plan have line items for
Environment, Health and Safety improvements
as well as asset management and
maintenance?
If investment or refinancing will lead to
restructuring of the organisation what will be the
potential impacts on health and safety at the
operation and wider community? Have these
been considered and assessed by the
company?
If the company plans to invest in new
technology, what will be the impacts and
benefits for human resources?
Labour
Check that labour standards, contracting and
remuneration are in line with national law and
are consistent with the average for the sector.
Check that hours worked, including overtime,
are recorded. Staff should receive written details
of hours worked and payment received.
Check that wages and working hours are
consistent with the average for the sector and
national standards.
Has the company received inspections from the
local labour inspectorate in the previous three
years? Have these resulted in any penalties,
fines, major recommendations or corrective
action plans?
Does the organisation have a grievance
mechanism, which allows employees to raise
workplace concerns?
Are employees free to form, or join, a worker’s
organisation of their choosing?
European Bank for Reconstruction and Development (EBRD). Environmental and Social Policy 2014.
Performance Requirement 2: Labour and Working Conditions.
http://www.ebrd.com/pages/about/principles/sustainability/requirements.shtml
UNEP Finance Initiative 2011, Human Rights Guidance Tool for the Financial Sector, Human Rights Issues by
Sector, Mining And Metals, http://www.unepfi.org/humanrightstoolkit/mining.php
European Union 1994, European Parliament and Council Directive 94/62/EC of 20 December 1994 on
packaging and packaging waste , http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:31994L0062&qid=1407941073859
European Union 2000, Directive 2000/53/EC of the European Parliament and of the Council of 18 September
2000 on end-of life vehicles - Commission Statements, http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0053:EN:HTML
European Union, 2003, Commission Decision of 27 February 2003 establishing component and material coding
standards for vehicles pursuant to Directive 2000/53/EC of the European Parliament and of the Council on end-
of-life vehicles, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:053:0058:0059:EN:PDF
European Union 2006, Regulation (EC) No 1907/2006 of the European Parliament and of the council
concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:136:0003:0280:EN:PDF
European Union 2010, Directive 2010/75/EU of the European Parliament and of the Council of 24 November
2010 on industrial emissions (integrated pollution prevention and control),
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32010L0075&qid=1407851054861
Galitsky C, Worrell E 2008, Energy Efficiency Improvement and Cost Saving Opportunities for the Vehicle
Assembly Industry: An ENERGY STAR® Guide for Energy and Plant Managers, Environmental Energy
Technologies Division, Ernest Orlando Lawrence Berkeley National Laboratory, Sponsored by the U.S.
Environmental Protection Agency, March 2008, http://www.energystar.gov/ia/business/industry/LBNL-
50939.pdf
Irish Environmental Protection Agency 2007, Best Practice Guidelines for Vehicle Coating & Refinishing,
United Nations 2013, Globally Harmonized System of Classification and Labelling of chemicals (GHS), Fifth
Revised Edition, http://www.unece.org/trans/danger/publi/ghs/ghs_rev05/05files_e.html
United States Environmental Protection Agency (EPA) 1995, Sector Notebook Project Profile of the Motor
Vehicle Assembly Industry, September 1995,
http://www.epa.gov/compliance/resources/publications/assistance/sectors/notebooks/motvehsn.pdf