Contents

Executive
summary                                                            I

1                      Introduction                                                                       1

1.1                   Purpose of the Report                                                    1

1.2                   Key Contact Information                                             2

2                      Environmental Status                                                    3

2.1                   Project Area                                                                         3

2.2                   Environmental Sensitive Receivers                          3

2.3                   Major Construction Activities                                  3

2.4                   Monitoring Schedule of The Reporting Period      3

2.5                   Status of Environmental Approval Documents      3

2.6                   Community Liaison Group Meeting                          4

2.7                   Summary of non-compliance with the environmental
quality performance limits                                                          5

3                      Environmental Issues and Actions                          6

3.1                   Previous Environmental Deficiencies and Follow-up
Actions   6

3.2                   Implementation Status on Environmental Protection
Requirements     7

3.3                   Environmental Monitoring                                        7

4                      Future
Key Issues and Conclusion                            9

4.1                   Key Issues for the Next Reporting Period            9

4.2                   Impact Prediction for the Next Reporting Period         9

4.3                   Works and Monitoring Schedule for the Next Reporting
Period     9

4.4                   Conclusion                                                                            9

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 3.2    Results
of Water Discharge Sampling

LIST
OF ANNEXES

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

Annex B     Project Location

Annex C    Implementation Programme of
Mitigation Measures

Annex D    Cumulative Complaints
Statistics

EXECUTIVE SUMMARY

The construction works for the Permanent
Aviation Fuel Facility resumed on 9th July 2007.  This third quarterly Environmental Monitoring and Audit (EM&A)
report presents the EM&A works carried out during the period from 9th July to 30th September 2007 in
accordance with the EM&A Manual.

Breaches
of all Action and Limit Levels

No breaches of action or limit levels
occurred during the reporting period as no monitoring was undertaken.

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

·
Arrangements for Baseline Water
Quality Monitoring for the commencement of dredging works;

·
Capability of temporary
drainage system to properly collect, treat and dispose of site runoff;

·
Dust release and suppression.

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.

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 third EM&A Report which summarizes the monitoring results and
audit findings for the EM&A programme during the reporting period from 9th July to 30th September 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 B.

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 A.

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

2.4
Monitoring Schedule of The Reporting Period

No
monitoring was conducted during the reporting period.  Water monitoring is expected to commence
towards October 2007.

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

Throughout
Project

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-RW0372-07

25 July 2007 to

24 January 2008

For 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-RW0427-07

28 August 2007
to 27 February 2008

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

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.  The first CLG meeting cum site visit was
held on 27 July 2007.

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

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

Summary of Environmental
Non-compliance

No environmental non-compliance was found
during the reporting period.

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 12th, 19th and 25th July, 2nd,
8th, 15th, 22nd and 29th August and
6th, 13th, 19th and 24th September 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

July 2007

An air compressor at the Workshop was operated
without noise label.

Noise label was provided.

Labels were not provided on several drums
in the Chemical Waste Store.

Labels were provided.

August 2007

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

Site workers were deployed to spray water
on the construction material during loading and unloading.

Excessive exhaust fumes were emitted from
the drilling rig near the site entrance.

The drilling rig was replaced.

Sediment plume was observed at the
outfall of the temporary drainage system after a rainstorm.

The temporary drainage system was
upgraded with the installation geo-textile on the sediment tank.

Ponding of rainwater was observed at
areas around tank 1 and tank 3 and outside the site office.

Rainwater was pumped offsite via the
temporary drainage system.

September 2007

The sand pile outside the site office was not properly
covered with tarpaulin sheets.

The sand pile was covered accordingly.

One of the chemical waste stores was observed to be full.

The chemical waste was disposed of via
licence chemical waste collector.

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
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 C.

3.3
Environmental Monitoring

3.3.1
Air and Noise

Air and Noise monitoring was not required
for the project.

3.3.2
Water Quality

Water quality monitoring at the monitoring
stations was not required as no dredging activity was taken place.

According to the Wastewater Discharge License
(Industrial Trade Effluent) issued by the EPD on 15th March 2006,
the Contractor is required to conduct grab sampling/analysis on total suspended
solids at the designated discharge point(s) quarterly to ensure the quality of
treated effluent at the designated discharge point(s) complies with the
requirements of discharge license.
One water sample at Discharge Point 2, the outfall near the operation
building, was conducted on 28 September 2007.  Table
3.2 shows that the effluent discharged from the Project was in compliance
with the discharge limit stipulated in the Water Discharge License.

Table 3.2         Results
of Water Discharge Sampling

Sampling
Location

Parameter

Test
Result

mg/L

Discharge
Limit

mg/L

Discharge Point 2

Total Suspended Solids dried at 103°C –
105°C mg/L

7

30

3.3.3
Waste Management

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

3.3.4
Cultural Heritage

As no dredging activity was conducted along
the pipe trench during the reporting period, marine archaeological monitoring
was not required.

3.3.5
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.

3.3.6
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.

3.3.7
Ecology

Dolphin Visual
Monitoring

No dolphin monitoring was conducted as there
were no dredging activities during the reporting period.

3.3.8
EM&A Manual

The EM&A Manual for the Project is
being 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 water quality monitoring may have to
be revised as a result of the proposed change on the dredging programme.  The EM&A Manual is expected to be
submitted to EPD by early October 2007.

4
Future Key Issues and Conclusion

4.1
Key Issues for the Next Reporting Period

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

·
Arrangements for baseline water
quality monitoring for the commencement of dredging works;

·
Capability of temporary
drainage system to properly collect, treat and dispose of site runoff;

·
Dust release and suppression.

4.2
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.

4.3
Works and Monitoring Schedule for the Next Reporting Period

Work programme for the next reporting
period includes jetty platform works (non-piling) and site works (construction
works for tank farm, operational and fire services buildings, drainages, bund
wall, security wall etc).  Weekly
site inspections will be undertaken.

4.4
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.