Contents

Executive summary

1                      Introduction

1.1                   Purpose of the Report

1.2                   Key Contact Information

2                      Environmental Status

2.1                   Project Area

2.2                   Environmental Sensitive Receivers

2.3                   Major Construction Activities

2.4                   Monitoring Schedule of The Reporting Period

2.5                   Status of Environmental Approval Documents

2.6                   Community Liaison Group Meeting

2.7                   Summary of non-compliance with the environmental
quality performance limits

3                      Environmental Issues and Actions

3.1                   Previous Environmental Deficiencies and Follow-up
Actions

3.2                   Description of Actions Taken in Event of
Non-Compliance and Deficiency Reporting

3.3                   Implementation Status on Environmental Protection
Requirements

4                      Environmental Monitoring

5                      Future Key Issues and Conclusion

5.1                   Key Issues for the Next Reporting Period

5.2                   Impact Prediction for the Next Reporting Period

5.3                   Works and Monitoring Schedule for the Next Reporting
Period

5.4                   Conclusion

LIST OF TABLES

Table 1.1        Contact
Information

Table 2.1        Summary
of Works Undertaken During the Reporting Period

Table 2.2        Summary
of Environmental Licensing, Notification and Permit Status

Table 3.1        Environmental
Deficiencies (Observations) from Site Inspections during Reporting Period

Table 4.6        Dolphin
Sighting Records during the Reporting Period

LIST OF ANNEXES

Annex A      Project Location

Annex B      Water Quality
Monitoring Stations, Water Quality and Ecological Sensitive Receivers

Annex C     Monitoring Schedule for
the Reporting Period and Next Month

Annex D     Cumulative Complaints
Statistics

Annex E      Implementation
Programme of Mitigation Measures

Annex F      QA/QC Results of
Laboratory Testing for Suspended Solids

Annex G     Impact Water Quality
Monitoring Results

EXECUTIVE SUMMARY

The construction works for the Permanent Aviation
Fuel Facility resumed on 9th July 2007.  This fourth quarterly Environmental Monitoring and Audit (EM&A)
report presents the EM&A works carried out during the period from 1st October to 31st December 2007 in
accordance with the EM&A Manual.

Breaches of all Action and Limit Levels

Daily exceedance of Action Levels of Turbidity and
occasional exceedance of Action Limit Levels of Suspended Solids were found on
21st, 24th, 25th, 27th, 29th
and 30th December 2007.
Following review of data in accordance with the procedures specified in
the EM&A Manual, these exceedances were considered due to natural
fluctuation from the Pearl River discharge
rather than the Project Works.

Complaint Log

No environmental complaint
was received during the reporting period.

Notifications of any Summons
and Successful Prosecutions

No environmental summon or prosecutions was received in this reporting
period.

Reporting Changes

There were no reporting changes in the reporting period.

Future Key Issues

·
Dust
release and suppression;

·
Dredging
activities; and

·
Water
quality monitoring and dolphin monitoring during the dredging activities.

1
Introduction

Leighton
Contractors (Asia) Limited (LCAL) has appointed
ERM-Hong Kong, Limited (ERM) as the Environmental Team (ET) to implement the
Environmental Monitoring and Audit (EM&A) programme for the Permanent
Aviation Fuel Facility (the Project) during construction works.

The construction works for PAFF commenced in November
2005 based upon the previous EIA (EIAO Register Number AEIAR-062-2002)
conducted and the Environmental Permit EP-139/2002 granted on the 28th
August 2002.  Due to minor changes
to the detailed layout of the site and the site boundary, application for
Variation to the Environmental Permit (VEP) (VEP-133/2004) was submitted to the
Director of Environmental Protection (DEP) for approval.  The variation to the EP (EP-139/2002/A)
was granted by EPD in February 2004.

However, the
decision by EPD to grant the above Environmental Permit was subject to a
Judicial Review.  The Judicial
Review sided in the favour of the DEP, as did the subsequent Judgement from the
Court of Appeal from the High Court for Judicial Review in March 2005.  However, the DEP’s decision to
grant the EP was quashed by the Judgement of the Court of Final Appeal of July
2006.

The construction
works were stopped following the Judgement of the Court of Final Appeal of July
2006.  As such, in order to continue
with the construction of the project, the project went through the statutory
procedures under the EIAO again with a new design in order to obtain an
environmental permit.  The revised
EIA was submitted in 2007 and the environmental permit (EP-262/2007) was
granted in May 2007. EP-262/2007 has
been amended to EP262/2007/A and
issued by the EPD on 30 November 2007

The construction works and EM&A requirements
resumed on 9th July 2007 following the latest requirements of the
EP-262/2007 and EM&A Manual.
Details regarding the EM&A requirements and changes should refer to
the updated EM&A Manual.  For
the marine works, all piling activities were completed before the previous
suspension of construction works in 2006.

1.1
Purpose of the
Report

This is the fourth
EM&A Report which summarizes the monitoring results and audit findings for
the EM&A programme during the reporting period from 1st October to 31st December 2007.

1.2
Key Contact
Information

Key contact
information of the Project is presented in Table 1.1.

Table 1.1        Contact
Information

Name

Position

Telephone

Facsimile

E-mail

Airport
Authority Hong Kong – Environmental
Permit Holder

Mr Amin
Ebrahim

Assistant
General Manager Aviation Logistics

2183 3108

2824 2786

[email-masked]

Contractor
– Leighton (Asia) Construction Limited

Brian
Gillon

Project
Director

2823 1111

2529 8784

[email-masked]

Franchisee’s
Site Representative – ECO Aviation Fuel Development Limited

Philip Siu

Franchisee’s
Site Representative

2963 2820

2563 6311

[email-masked]

Environmental
Team – ERM-Hong Kong Limited

Craig Reid

Environmental
Team Leader

2271 3000

2723 5660

[email-masked]

Independent
Environmental Checker – Hyder Consulting Limited

Dr Guiyi Li

Independent
Environmental Checker

2911 2233

2805 5028

[email-masked]

2
Environmental
Status

2.1
Project Area

The project area
is in Area 38 of Tuen Mun and the pipelines are located in Urmston Road between Tuen Mun Area 38 and
Sha Chau.  The site is illustrated
in Annex
A.

2.2
Environmental
Sensitive Receivers

No air and noise
sensitive receivers were identified close to the project area.  However, water sensitive receivers and
ecological sensitive receivers were identified in the EIA study, and are shown
in Annex
B.

2.3
Major
Construction Activities

A summary of the major
works undertaken in this reporting period is shown in Table 2.1.

Table 2.1        Summary
of Works Undertaken During the Reporting Period

Area

Works
undertaken

Tuen Mun Area 38

Tank Farm and Bund Wall Construction

Permanent Drainage Construction

Operational & Fire Services Buildings
Construction

Minor Jetty Works (Non-piling)

Site Investigation

Submarine Pipeline Route

Dredging Operations

2.4
Monitoring Schedule
of The Reporting Period

Daily water quality monitoring during dredging
activities was commenced on 17 December 2007.  The monitoring schedule for December
2007 and January 2008 is presented in Annex C.

2.5
Status of
Environmental Approval Documents

A summary of the
relevant permits, licences, and/or notifications on environmental protection
for this Project since July 2007 is presented in Table 2.2.

Table 2.2        Summary
of Environmental Licensing, Notification and Permit Status

Permit/
Licenses/ Notification

Reference

Validity Period

Remarks

Environmental
Permit

EP-262/2007/A

Throughout
Project

Issued
on 30 November 2007 (EP-262/2007
issued on 31 May 2007, EP-139/2002 originally
granted on 28 August 2002 and EP-139/2002/A
granted on 24 February 2004 were superseded)

Chemical
Waste Producer Registration

WPN 5111-421-L2174-25

Throughout
Project

Issued
on 10 November 2005

Notification
of Construction Works under Air Pollution Control (Construction Dust)
Regulation

H2104/U1D/5542/DG/DH/PL

Throughout
Project

Notification
on 6 July 2007

Construction
Noise Permit

GW-RW0676-07

21
December 2007 to 19 June 2008

For
land-based works including air compressors, breakers, excavators, wheeled
loaders, mobile cranes, concrete lorry mixers, hand-held pokers, bar
benders/cutters, wood saws, grinders, submarine water pump, lorries with
crane, dump trucks, rollers, ventilation fans and generators

GW-RW0677-07

21
December 2007 to 29 February 2008

For
marine dredging operation including grab dredger, tug boat, split hopper
barge and motor sampan

GW-RW0678-07

21
December 2007 to 18 June 2008

For
marine jetty works including concrete pump derrick barges, hand-held
grinders, generators, air compressors, boring machines, water pumps, tug
boat, grout mixers and grout pumps

Marine
Dumping Permit

EP/MD/08-064

13
December 2007 to 29 February 2008

For
Type 1 marine disposal

EP/MD/08-065

13
December 2007 to 12 January 2008

For
Type 1d & Type 2 marine disposal

EP/MD/08-071

13
January 2008 to 12 February 2008

For
Type 1d & Type 2 marine disposal

Wastewater
Discharge License

EP760/421/011399/l

15 March 2006 to 31 March 2011

Issued
on 15 March 2006

2.6
Community Liaison
Group Meeting

According to the EP requirements, a Community Liaison
Group (CLG) shall be established within three months after commencement of
construction of the Project.  The
major duty of CLG is to advise on and monitor the proper design, construction
and operation of the Project.  The
CLG comprises representatives from Airport Authority, members of Tuen Mun
community and academics.  During the
reporting period, the CLG held a meeting cum site visit on 5 October and 7
December 2007.

The details of
PAFF CLG (including Membership and its Terms of Reference) and the meeting
minutes can be found on the Project website (http://www.paffhk.com).

2.7
Summary of
non-compliance with the environmental quality performance limits

Summary of Environmental Non-compliance

Water quality monitoring during dredging activities
recorded daily exceedance of Action Levels of Depth-averaged Turbidity.  There was exceedance of the Action
Levels of Depth-averaged Suspended Solids (SS) on the 21, 24, 25, 27, 29 and 30
December, and exceedance of the SS Limit Levels on the 27, 29 and 30
December.  A description of the
actions taken following these non-compliances is discussed in Section 3.2.

Summary of Environmental Complaints

No environmental complaint was received during the reporting
period.  A statistical summary of
environmental complaints since project commencement is presented in Annex D.

Summary of Environmental Summons

No summons was
received in this reporting period.
A statistical summary of legal proceeding since project commencement is
presented in Annex D.

3
Environmental
Issues and Actions

3.1
Previous
Environmental Deficiencies and Follow-up Actions

As no
environmental complaint was received over the last reporting period, no follow-up
action was required.

Weekly
site inspections were carried out by the ET on 5th, 11th,
18th and 26th October 2007, 1st, 8th,
15th, 22nd and 30th November, 5th,
13th, 17th and 28th December 2007.  Overall, the site was in good orderly
manner and no non-compliance was found.
Environmental deficiencies and follow-up actions/mitigation measures
were identified during the inspections and summarised in Table 3.1.

Table 3.1        Environmental
Deficiencies (Observations) from Site Inspections during Reporting Period

Reporting Month

Observation

Follow-up Action

October 2007

Excavated
materials near Tank 3 were not properly covered with tarpaulin sheets to
avoid dust generation.

The sand pile was
covered accordingly.

Ponding of
rainwater was observed along the hoarding near the site entrance.

Rainwater was
pumped offsite via the temporary drainage system.

General refuse
was observed to be scattering around the smoking area near Tank 6.

General refuse
was cleared.

Disposal of
stockpiled construction waste to public fill bank was not undertaken.

Disposal of
stockpiled construction was undertaken

November 2007

General refuse was
observed to be full outside the site office and operation building.

General refuse
was cleared.

Disposal of
stockpiled construction waste to public fill bank was not undertaken.

Disposal of
stockpiled construction was undertaken.

Construction
material at the stockpile area was observed to be loaded without spraying
with water.

The excavated
materials at the stockpiling area were regularly sprayed with water to avoid
dust generation.

December 2007

The stockpiles of excavated materials
near the site entrance were not covered properly with tarpaulin sheets.

The sand pile
was covered accordingly.

Ponding of
rainwater was observed at areas around site
entrance.

Rainwater was
pumped offsite via the temporary drainage system.

Overall, the site
was in a good orderly manner.  The
ET will keep track on the EM&A programme to ensure compliance of
environmental requirements and the proper implementation of all necessary
mitigation measures.

3.2
Description of
Actions Taken in Event of Non-Compliance and Deficiency Reporting

Water quality
monitoring during dredging activities recorded daily exceedance of Action
Levels of Depth-averaged Turbidity.
There was exceedance of the Action Levels of Depth-averaged Suspended
Solids (SS) on the 21, 24, 25, 27, 29 and 30 December, and exceedance of the SS
Limit Levels on the 27, 29 and 30 December.  There was both mid-ebb and mid-flood
exceedance for SS on the 24, 25 and 30 of December.  Details of exceedance were presented in
the monitoring results Annex G.  A description of the actions taken
followng identification of a non-compliance are discussed in Section 3.

Although dredging
operations were undertaken during the reporting period, the exceedances were
unlikely to be caused by the Project and were considered to be an isolated case
due to the following reasons:

·
Exceedance
of Action Level of depth-averaged Turbidity was found on 17, 21, 22, 31
December (when no dredging was undertaken), whose values were comparable to
those of days with dredging operations

·
Depth-averaged
DO, bottom DO and depth-averaged SS did not show the same trend of exceedance

As per the
requirements of the EM&A Manual, incidents were notified to the
Franchisee’s Site Representative, the Contractor and the Independent
Environmental Checker upon identification of an exceedance.

The temporal and
spatial trend of the results collected during the impact monitoring have
been plotted against those collected during the baseline monitoring and are
discussed below.  Results are
illustrated in Figure G3 in Annex G.

Ebb Tide

During impact
monitoring on the ebb tide, turbidity and SS levels at all stations, with the
exception of Impact Station MP, are generally comparable with those levels
recorded during the baseline monitoring.
It is noted that there appears to be an increasing trend in both
turbidity and SS levels at Station MP between 22 and 30 December (maximum of
40.2 NTU and 37.2 mg/L respectively), however, as this station was located over
1.5 km upstream from the dredging operation, it is considered unlikely that
these levels are attributable to Project works.  It is more likely that the waters
upstream of the works site are influenced by other factors, such as natural
fluctuations of turbidity and SS observed in the Pearl River Estuary.

Flood Tide

During impact
monitoring on the flood tide, both turbidity and SS levels at all stations, are
generally comparable with those recorded during the baseline monitoring.  An exception was noted for 27 December
where maximum levels were higher than those recorded during other monitoring
events.  As levels returned to
levels comparable with other monitoring events the following day, such
fluctuations are not considered to be of a concern.

It is also
important to note that the construction works were not carried out continuously
over the weeks during the impact monitoring period.  On some occasions, there were no marine
works undertaken on site during the monitoring period.

Whilst it is
noted that there were no apparent spatial trends in the monitoring data, there
does appear to be an overall temporal increase in concentrations of monitoring
parameters.  As this increase is
noted to be generally consistent over all monitoring stations, it is considered
that this change is likely to be reflective of natural conditions.  Nevertheless, such patterns will be
examined over the remaining monitoring period to verify whether the trend
continues.

3.2.2
Follow-up Action following Non-Compliance

In accordance
with the required procedures specified in the EM&A Manual to be taken
following the trigger of an Action Level, discussions between the Environmental
Team and the Independent Environmental Checker (IEC) have resulted in a
recommendation of an amendment to be made to the Action Level for the
monitoring of Turbidity for the Project.

3.2.3
Recommendation following Non-Compliance

It is noted that
for Dissolved Oxygen (DO) and Suspended Solids (SS) a set Action and Limit
Levels have been established taking into consideration both the baseline data
as well as the Environmental Protection Departments (EPD) routine water quality
monitoring data collected between 1998 and 2006.  This value thus takes into account
historical fluctuations in ambient conditions and thereby could be considered
to be more representative of natural change.  Presently, monitoring for Turbidity does
not take into account natural spatial and temporal patterns, but is rather
restricted to Action Levels that are determined by the water quality data
collected at upstream control station on the day of monitoring.  It is therefore recommended that the
Action Level of Turbidity be amended to follow the same principle as that
currently applied to DO and SS.

Steps to
potentially amend the Action Level of Turbidity are currently in discussion
with the IEC and the EPD and will be presented in the revised Baseline Water Quality Monitoring Report.  The progress of these recommendations
will be document in the next Monthly
Monitoring Report.

3.3
Implementation
Status on Environmental Protection Requirements

The
implementation status of environmental mitigation measures and requirements as
stated in the EIA Report, Environmental Permits and EM&A Manual during the
reporting period is summarized in Annex
E.

4
Environmental
Monitoring

4.1.1
Air and Noise

Air and Noise monitoring
was not required for the project.

4.1.2
Water Quality

In accordance to
the EM&A Manual, during dredging activities, water quality monitoring
commenced on 17 December 2007.  QA/QC reports for Suspended Solids
testing are presented in Annex F.  Monitoring data and graphical
presentations of the results are included in Annex G.

Results of the monitoring demonstrated that all
measured dissolved oxygen levels of all Impact Stations were compliant with the
Action and Limit (AL) Levels specified in the EM&A Manual.  Concentrations of Suspended Solids (SS)
were generally below AL Levels, however, exceedances were noted for 21st,
24th, 25th, 27th, 29th and 30th
December 2007.  Turbidity levels
were, however, above Action Levels on a daily basis during the reporting
month.  A review of the above
exceedances concluded that these were not attributable to Project works and
were likely due to natural variation (see Section
3.2 for further details).

At the time of this report, laboratory analysis of POPs was still in progress.  Results of POPs monitoring will be
presented in the next Monthly Monitoring
Report once they become available.

4.1.3
Waste Management

The
Contractor’s revised Waste Management Plan (Revision 4) (WMP) was
submitted to EPD on 20th September 2007.

4.1.4
Cultural Heritage

Since dredging
activity has not reached the sediment removal of 3km (for SS) and 2km (SS2)
level during the reporting period, marine archaeological monitoring was not
required.

4.1.5
Landscape and Visual

According to the
EIA report and EM&A Manual, mitigation measures and site inspection are
required during the landscaping/planting works.  The berm/landscaping bund was dominated
by vegetation which was grown during the project suspension period.  The transplanted trees were in good and
healthy conditions.

The weekly site
inspections included audits on landscape and visual issues to ensure that the
site was in orderly acceptable manner.

4.1.6
Land Contamination, Hazard to Life and
Fuel Spill Risk

According to the
EIA report and EM&A Manual, mitigation measures and design phase audit are
required to minimise the risk of fuel spill and hazards. The Contractor will
submit the updated design audit plan according to the EP requirements.

Pursuant to Condition 3.5 of the EP, the Contractor
submitted two design drawings entitled Fencing and Security Wall Layout Plan
(PAFF/LC/02/DWG/C/0176 Revision A) and Fencing and Security Wall Section
(PAFF/LC/02/DWG/C/0177 Revision A) to the ET for certification on 30th
July 2007.  The ET reviewed the
drawings and offered comment on the design of the security walls and bund
walls, taking into account of Condition 3.5a of the EP, to the Contractor on 31st
August 2007.  Response to comment
(RTC) from the Contractor was received by the ET on 19th September
2007.  A review of the RTC is now in
progress.

Weekly site
inspection covered the waste management aspects which included measures to
prevent land contamination by chemical wastes.

4.1.7
Ecology

Dolphin Visual Monitoring

In accordance to
EM&A Manual, dolphin monitoring has been undertaken during dredging
activities since 17 December 2007.

During the reporting
period, two dolphin sightings were recorded outside the exclusion zone on 25
December and 28 December, with only one dolphin sighting recorded within the
exclusion zone on 21 December.
Appropriate action was taken in accordance with the EM&A Manual.  The sighting results were presented in Table
4.1.

Table 4.1        Dolphin
Sighting Records during the Reporting Period

Date

Time

Sighting Distance from Dredger (m)

Group Size

Beaufort

Boat Association

Observer’s Name

21/12/2007

14:55

90

3

1

None

Richard Huang

25/12/2007

14:00

600

3

1

None

Richard Huang

28/12/2007

09:28

620

1

1

Shrimp trawler

Anton Tsang

4.1.8
EM&A Manual

The EM&A Manual for the Project has been
updated by the ET to include the detailed arrangements of setting up a
Community Liaison Group, carrying out design audit, and monitoring of
Persistent Organic Pollutants during construction of the Project.  The updated EM&A Manual was revised
accordingly to the comments received from the EPD on 6th December
2007 and was submitted to the EPD on 10th December 2007.  The ET will keep track on comments
received from the EPD, if any, and update the EM&A Manual accordingly.

4.1.9
Baseline Water Quality Monitoring

Baseline water quality monitoring was conducted
between 24 October and 30 October 2007 at six designated monitoring stations
(three impact stations and three control stations) established for the Project
in accordance with the EM&A Manual.  The Final Baseline Monitoring Report was submitted to the EPD on 21 November and comments were received from
the EPD on 6th December. A revised Final Baseline Monitoring Report will be submitted to the EPD
within the next reporting period.

5
Future Key Issues and Conclusion

5.1
Key Issues for
the Next Reporting Period

Key issues to be
considered in the next report period will include:

·
Dust
release and suppression;

·
Operation
of dredging activities; and

·
Water
quality monitoring and dolphin monitoring during the dredging activities.

5.2
Impact Prediction
for the Next Reporting Period

Provided that
environmental mitigation measures including good on-site practises are properly
implemented, it is not expected that unacceptable adverse impact will arise.

Based on the
water quality monitoring results recorded to date, it may be expected that
further exceedances in Turbidity and possibly Suspended Solids may be
recorded.  However, as with those
recorded so far, it is not expected that such exceedances would be attributable
to Project Works.  It is noted that
actions are underway to potentially revised the Action Limit Levels for
Turbidity and progress on these revisions will be summarised in the next Monthly Monitoring Report.

5.3
Works
and Monitoring Schedule for the Next Reporting Period

Work programme
for the next reporting period includes jetty platform works (non-piling), site
works (construction works for tank farm, operational and fire services
buildings, drainages, bund wall, security wall etc) and dredging
operation.  Weekly site inspections
will be undertaken.  Water quality,
dolphin monitoring and marine archaeological monitoring will be undertaken in
accordance with the EM&A Manual.

5.4
Conclusion

The EM&A
works were conducted throughout the construction period and the relevant
monitoring was conducted in accordance with the EP’s requirements.  Mitigation measures were used to minimise
the environmental impacts, where appropriate.  Some environmental deficiencies were
observed during the site inspections and the Contractor implemented corrective
action to mitigate the issues.
Overall, the site was in an orderly manner.