MEMORANDUM TO THE FILE

Date: May 17, 2017

From: Maura Patterson, Contracting Officer’s Representative (COR)

Through: Khuong Tran Chinh, Mission Environmental Officer (MEO)Andrei Barannik, Regional Environmental Adviser/Central and South Asia and Office of Afghanistan and Pakistan Affairs (REA/SCA & OAPA)

To: Will Gibson, Asia Bureau Environmental Officer (BEO/Asia)

Subject: Management of Lower Concentration Excess Volume for the Environmental Remediation of Dioxin Contamination at Danang Airport Project

Purpose The purpose of this Memorandum to the File (MTF) is to document the government-to-government solution for management of excess volume discovered during implementation of the Environmental Remediation of Dioxin Contamination at Danang Airport Project (the “Project”). This MTF is in accordance with requirements in Initial Environmental Examination (IEE) Amendment No. 3 (Asia 16-068), namely: “Changes in project activities…will necessitate amending the IEE or issuing a Memorandum to the File.”

Overview In 2009, USAID launched the Project with the initiation of an Environmental Assessment (EA), required by USAID pursuant to 22 CFR 216, for the Danang Airbase. Concluded in June 2010, the EA identified a number of remediation strategies and found that the thermal treatment alternative had the highest treatment effectiveness, the highest feasibility, the lowest potential environmental impact, and a cost in roughly the same range as the other alternatives for the Danang cleanup. The Government of Vietnam (GVN) conducted an Environmental Impact Assessment of the thermal treatment alternative, which led to formal project approval by the Prime Minister of Vietnam in 2011. The “Project” was fully contracted in late 2012 at an estimated cost of about $84 million. Those contracts and estimates were based on soil/sediment sampling at the site in prior years, which had led to the technical conclusion that approximately 72,900 cubic meters (m3) of contaminated soil and sediment required remediation to reach the different standards applicable to soil (1,000 parts per trillion or ppt) and sediment (150 ppt). The remediation structure was designed to fit site parameters (e.g., limited appropriate space) and accommodate extra soil/sediment over two phases of treatment, which with complementary measures such as compaction provides for a total capacity of about 90,000 m3.

Through implementation of the Project, approximately 163,000 m3 of contaminated soil and sediment was discovered and excavated and about 95,000 m3 of the highest concentration material (i.e., all contaminated soil and sediment greater than 1,000 ppt) has been thermally treated in two phases. The first of two treatment phases was successfully completed in 2015; the second phase is

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undergoing confirmatory sampling at present. USAID and MND agreed that the remaining approximately 68,000 m3 of sediment excavated from the Project site with dioxin concentrations less than 1,000 ppt (and that could not fit within the second and final thermal treatment phase) do not require treatment. That material will instead be transported and stockpiled in a commercial/industrial area located in the southwest corner of the Danang Airbase property near the Pacer Ivy Storage Area per the Excess Volume Stockpile Area (EVSA) design recommended by the Project’s Construction Management Contractor (CMC) and approved by the GVN in February 2017. The EVSA construction is an in-scope activity under the Dig & Haul mechanism and is within that award’s fully funded cost ceiling, as documented in USAID/Vietnam’s latest Activity Approval Design (AAD) Amendment No. 5 for the Project (approved by the Mission in December 2016) and in the Determination & Findings and Justification & Approval for Other Than Full and Open Competition package for the Project (approved by the Agency Administrator in March 2016). Finally, the scope of work and increased level of funding for the EVSA construction are included in IEE Amendment No. 3 for the Project (No: Asia 16-068) and supporting Final Environmental Mitigation & Monitoring Plan–Phase 2 and Site Restoration (EMMP).

The IEE Amendment No. 3 (Asia 16-068, dated May 31, 2016) evolved from the original Asia Bureau Environmental Officer (BEO/Asia)-approved IEE and subsequent Amendments as follows:

Original IEE, May 26, 2009: Asia 09-61 Record of Environmental Decision, January 28, 2011: Asia 11-44 IEE Amendment No. 1, April 13, 2012: Asia 12-77 IEE Amendment No. 2, March 28, 2013: Asia 13-47

The original Project EMMP was approved by the BEO/Asia on April 20, 2012. The Final/Phase 2 EMMP for the Project (included in IEE Amendment No. 3) reflects a full review of Phase 1 of the Project and applies lessons learned to Phase 2 thermal operations, as well as all mitigation and monitoring needs anticipated to project completion (inclusive of the now-named EVSA). Specifically, the Final/Phase 2 EMMP captures mitigation and monitoring of activities relevant to the EVSA such as material stockpiling, vehicle decontamination and refueling, erosion and runoff during storm events, and dust and ambient air monitoring during all earth moving, among others.

The IEE Amendment No. 3 further “reconfirm[s] that the scope and nature of all key activities remain the same…with duly approved fine-tuning…in view inter alia of…on-going discussions with the GVN authorities” and “reconfirm[s] the approach to the approved EMMP as a flexible process and a “living” document.” The excess volume excavations and EVSA construction are all in-scope activities within the $112 million cost ceiling of the latest approved IEE, captured in the Final/Phase 2 EMMP. Through discussions between the GVN and USAID since 2014, the two governments have reached agreement on the specific EVSA design, and USAID has approval from the GVN to proceed.

Chronological Background of Excess Volume IssueThe implementation plan for the “Project” estimated 72,900 cubic meters (m3) of contaminated soil and sediment for excavation and treatment to be completed in two phases. Excavations were to be completed in the 2013 and 2015 dry seasons with thermal treatment largely occurring in the 2014 and 2016 dry seasons. The first phase was estimated to treat approximately 34,800 m3 of largely

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soils from the topographically higher, southern portion of the site (Phase 1 area); the second phase was estimated to treat approximately 38,100 m3 of largely sediments from the lower lying, northern portion of the site, which consists of largely Sen Lake and the surrounding vegetated lowlands (Phase 2 area). The GVN national cleanup standards for dioxin of 1,000 ppt TEQ in soil and 150 ppt TEQ in sediment were applied at the Project per agreement with the GVN.

Starting in late 2012, the Dig & Haul contractor constructed the In-Pile Thermal Desorption (IPTD) treatment structure (105m x 70m x 6m internal dimensions) to be utilized for both phases and began preparations for the Phase 1 area excavations. The IPTD structure and thermal treatment system were designed to accommodate a 20% volume contingency in the case of excess volume, given that excess volumes are typical for soil/sediment remediation projects in the United States. A fifteen percent contingency was included in the Dig & Haul award as an anticipated risk mitigation measure so funding was readily available as needed during the excavation seasons.

During the Phase 1 area excavations in the 2013 dry season, an excess volume of dioxin-contaminated material was identified through confirmatory sampling of the design volume excavations identified in the implementation plan. All excavations were completed by the Project’s Dig & Haul contractor (TetraTech); all confirmatory samples were collected by the Project Construction Management Contractor or CMC (CDM Smith). The Vietnam Ministry of National Defense’s oversight agency for excavations on the Project – the Vietnam Russia Tropical Centre or VRTC – also collected confirmatory samples. The confirmatory sampling conducted by the CMC included sampling of the excavation floors and sidewalls (if applicable) and employed the multi-increment sampling (MIS) method, which is a systematic, statistically-based compositing methodology.

The excess volume discovered in the 2013 dry season peaked concerns for the Project Team (USAID Agent Orange Team and USAID prime contractors) regarding overall excess volume for the Project. As such, TetraTech remobilized in the 2014 dry season to begin Phase 2 excavations early (expedited from 2015 dry season) and to continue excavating Phase 1 excess volumes. The expedited Phase 2 excavations revealed that the original design volumes were again inadequate to achieve the Project excavation goals in the Phase 2 area but gave the Project Team and the Mission time to react to the excess volume (i.e., additional dry seasons for excavation, planning for additional thermal phases, exploring containment options with the GVN, etc.).

The majority of the excess volume was sediment with concentrations greater than the 150 ppt sediment excavation cleanup standard but below the 1,000 ppt soil excavation cleanup standard. A summary of the total excavated volume is broken out by calendar year in the Table 1 (next page). As shown in the table, the total contaminant volume was more than double the originally estimated 72,900 m3 and required four dry seasons (versus the planned two dry seasons) to complete.

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Table 1. Total excavated volume Calendar Year Excavation Volume

(cubic meters)2013 47,1452014 58,5872015 32,8522016 23,983

Total 162,567

The total volume requiring excavation and treatment exceeded the estimate due to dioxin being present to a much greater depth than expected in several locations, as well as having a greater lateral extent than originally anticipated in some areas. The vertical and lateral extent of contamination indicates that the original Conceptual Site Model for the Project, as presented in the Environmental Assessment of Dioxin Contamination at Danang Airport (USAID, June 2010), likely had faulty assumptions (i.e., that spillage in the mixing & loading and storage areas had passively migrated from these upland areas to the topographically lower Sen Lake via overland surface flow of dioxin-laden suspended solids). It is likely that more active dumping occurred in the former mixing & loading and storage areas during the Vietnam War and/or there was accidental mixing over time in an area called the Eastern Hotspot which has a now-known history of airbase dumping and mining (see Figure 1, below).

Figure 1. Project map highlighting relevant remediation areas

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Analysis and Negotiations with the Government of VietnamIn summer 2014, the Project Team began exploring options to manage the excess volume including: (a) additional thermal phases; (b) expansion of the pile structure; (c) reevaluation of soil/sediment delineations made during the EA and future land uses; and (d) containment of the lower concentration excess volume. The options had cost implications upwards of $25 million, leading to a Congressional funding request by USAID/Vietnam of $15 million in FY2016 and $10 million in FY2017.Also in summer 2014, USAID began working level discussions regarding the excess volume with various technical agencies within MND, including VRTC, Chemical Command, and Air Defense Air Force Command (ADAFC). USAID formally submitted a series of options to MND to mitigate the extent of the additional cost and schedule resulting from the excess volume in a proposal package dated November 7, 2014. The proposal included two major components: (1) reclassification of some sediments to soil based on actual field conditions and future land uses as updated from the EA to reduce the overall required excavation volume; and (2) containment of material less than 1,000 ppt. The proposed containment approach included backfilling the excess sediments (concentration greater than 150 ppt but less than 1,000 ppt) in the former storage area/drainage ditch excavation area, which was excavated to 1,000 ppt (see Figure 2 below). Further, USAID proposed utilizing solidification/stabilization technologies to improve the constructability and strength of the material to impart the beneficial future reuse of the area into an extended taxiway and airplane parking area (effectively capping the material and cutting off all exposure pathways to humans and the environment).

Figure 2. Sketch of containment proposal

At the technical-level, MND agreed that no additional thermal phases were necessary given the lower concentration of material (less than 1,000 ppt), but there was uncertainty on how to manage the material and general discomfort with placing it underground. USAID needed the GVN to respond quickly to facilitate planning and budgeting and to keep the project on track. As such, a two-prong approach was applied. The first involved a broader GVN-wide workshop, which was co-hosted by USAID and MND on December 19, 2014. Audience members included representatives from the

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Ministry of Natural Resources and Environment, Office 33, the Office of Government, the Ministry of Foreign Affairs, and the Ministry of Planning & Investment among others. Some in the meeting expressed a preference for comprehensive treatment; others conceded that no additional thermal treatment phases were required but questioned the backfilling and solidification/stabilization option. Some verbally acknowledged the logic of USAID’s proposal to contain the lower concentration sediments, but psychologically they did not like the idea of the material still being present at the Airport and the inability to access and treat the material with a cheaper technology in the future. They also expressed concern that future generations would be disappointed. Concurrently, at the political level, Senator Leahy sent a letter to President Sang (written by the Mission Director) dated December 12, 2014, urging the Vietnamese “government to consider [USAID] proposals from a broad perspective and to respond to them quickly” and that “doing so will sustain the quality of cooperation that is so important to the relationship and could be critically helpful as this added cost has not been obligated and may have to be offset by reductions in other assistance programs, including programs prioritized by our governments.”

Ultimately, in a letter dated June 10, 2015, the GVN largely accepted all of the material reclassifications to reduce the overall excavation volume and solidified agreement that no additional thermal treatment phases were required. However, the GVN did not approve the containment proposal to backfill and stabilize/solidify the lower concentration, excess sediments in the former storage area/drainage ditch excavation, and instead, requested the material be “manageably isolated at a specific area in the Airport” as designated by ADAFC. An initial location was identified by ADAFC north of the western runway in the letter.

The Project Team was not comfortable with this location for the untreated sediments as the area consists of several small lakes and vegetated lowlands, with characteristics similar to a wetland, which drains to Sen Lake. In addition, the location did not have the capacity for the excess volume, which at this time was understood to be approximately 50,000-70,000 cubic meters. For the remainder of 2015, ADAFC and USAID discussions on how to manage the excess volume shifted to proposals made by Chemical Command (MND) to construct a landfill in the north runway area and/or moving the stockpiles to the north runway area until MND could secure funding for alternative treatment technologies, but no solutions were identified. Following a U.S. study tour of dioxin remediation projects in October 2015 (provided by USAID), MND agreed that the north runway area was not a good location for placement of the material either temporarily or permanently. In late 2015, USAID requested ADAFC to identify a stockpile location that: 1) can fit the entire volume of soil/sediment with dioxin concentrations between 150 and 1,000 ppt; and 2) is in an upland, commercially/industrially-zoned area of the Danang Airport that does not contain low-lying wetlands or lakes. USAID also confirmed the agreement between USAID and ADAFC that no amendment or stabilization/solidification technology would be required for stockpiling the excess soil/sediment, particularly if it is placed in an area designated for industrial land use.

With the lead up to the May 2016 Phase 1 completion celebration event, the discussions accelerated to find a suitable, alternative location and determine a final stockpile design. ADAFC identified a location for the Excess Volume Stockpile Area (EVSA) in the southwest corner of the Danang Airport property near the former Pacer Ivy Storage Area. The area provided adequate space at an elevation above the groundwater table with no downstream water bodies and has a land use designation of

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industrial for up to 100 years. USAID’s CMC confirmed that the location is acceptable in February 2016. The location agreement was made in accordance with GVN regulation QCVN 45:2012/BTNMT that states commercial and industrial areas can contain soils with dioxin concentrations up to 1,200 ppt.

The CMC then conducted a risk assessment based upon the new location in order to determine the appropriate engineering controls for the EVSA. The findings show that both cancer and non-cancer risks are below levels of concern for all receptors (including potential future residents, trespassers, and construction workers) for the conceptual EVSA design for both dioxin and arsenic (there were no other contaminants of concern); and that while meaningful benefits could be shown by adding an HDPE liner to the stockpile cover, there is no meaningful additional benefit in terms of risk protection with the addition of a bottom liner and leachate collection system. (The additional bottom liner and leachate collection system was estimated to cost an additional $2 million USD.) The exposure point concentrations used for the risk assessment were 751 ppt for dioxin and 30 parts per million (ppm) for arsenic based on preliminary stockpile concentrations. These concentrations are well below the GVN hazardous waste thresholds for dioxin and arsenic of 100,000 ppt and 40 ppm, respectively, per GVN regulation QCVN 07:2009/BTNMT. The Vietnamese Ministry of National Defense approved the conceptual design (HDPE-capped stockpile with no bottom liner or leachate collection system) in a letter to USAID dated August 11, 2016 (Decision #2907/BTL-KHQS).

As the final 2016 dry season excavations closed and the IPTD treatment structure was filled with material known to be greater than 1,000 ppt, USAID’s CMC more formally characterized the remaining stockpiled material to verify and document the average dioxin concentration of the EVSA material, although all sediment material in the three stockpiles was known to have dioxin concentrations less than 1,000 ppt based on prior characterization/confirmation samples collected during excavation activities. This was conducted by collecting three multi-increment (MIS) samples (i.e. three samples collected and composited from a minimum of 30 points) for dioxin analysis from each of the three onsite, temporary stockpiles (i.e., DP-1, TSSA-1 and TSSA-2). The three, MIS samples meet or exceed the QCVN 07:2009 minimum requirement of three random samples to determine the mean concentration of waste material. All samples were below 1,000 ppt (see Table 2 below).

Table 2. Stockpile sampling to determine mean concentration of EVSATemporary Stockpile & Description Volume Concentration

DP-1 DP-1 contains primarily over-excavated material from the Eastern Wetland, Eastern Area, and hummocky areas.

~20,000 m3 321 ppt

TSSA-1 TSSA-1 contains primarily sediment placed as it was excavated from Sen Lake.

~24,000 m3 751 ppt

TSSA-2 TSSA-2 contains primarily sediment from the Eastern Wetland, Eastern Area, and Sen Lake.

~24,000 m3 794 ppt

The volume-weighted average of the three stockpiles, and therefore of the mean dioxin concentration of the EVSA material, is 650 ppt. This determination enabled finalization of the conceptual design and verified that the untreated, excess sediment was indeed less than the agreed

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upon 1,000 ppt threshold for the Project, as well as the 1,200 ppt industrial/commercial standard for dioxin in Vietnam (QCVN 45:2012/BTNMT). In addition, the actual mean concentration of 650 ppt is lower than the exposure point concentration of 751 ppt used for the risk assessment, further validating the recommendations of the risk assessment. USAID submitted the final detailed design for the EVSA in a letter dated September 8, 2016; this was approved by MND leadership in a letter dated February 13, 2017 (Decision #407/ BTL-KHQS). Please see Annexes A and B, for the conceptual and final detailed EVSA designs, respectively.

Internal Approvals and Implementation During the above negotiations with the GVN, USAID proceeded with internal sensitization to the excess volume, securing funds, and adjusting the procurement strategy for the Project: including hosting a site visit to the Danang site with both the Regional Environmental Advisor (REA) and the Bureau Environmental Officer (BEO) in October 2015; preparing an Activity Approval Design Amendment #5, approved by the Mission Director in December 2015; preparing a Determination & Findings and Justification & Approval for Other Than Full and Open Competition package, approved by the Agency Administrator in March 2016; working with the CMC to prepare the Final EMMP inclusive of activities relevant to the EVSA, approved by the REO and BEO in May 2016; preparing the IEE Amendment No. 3, approved by the REO and BEO in May 2016; and working with OAA to finalize modification of the Dig & Haul contractor’s award to include all excess volume excavations and related handling costs, as well as the EVSA construction activity, in June 2016.

DecisionWhile the GVN rejected USAID’s first (and preferred) proposal to backfill and stabilize/solidify the excess sediments onsite beneath the future taxiway extension, USAID and MND were able to reach a government-to-government solution to responsibly contain the lower concentration excess volume sediments. The EVSA design is a risk-based, practical solution to mitigate the excess volume found during implementation of the Danang Project that is still protective of human health and the environment and enables Project completion within final cost and timing constraints. The Dig & Haul contractor will construct the EVSA between May 2017 and October 2017 under the oversight of the CMC, which will monitor operations as prescribed by the Final Phase 2 EMMP.

References:USAID (2010). Environmental Assessment - Environmental Remediation at Danang Airport. Hanoi, Vietnam: U.S. Agency for International Development in Vietnam. Hanoi, Vietnam. June.

USAID (2011). Final Remediation Work Plan - Environmental Remediation at the Danang Airport. Hanoi, Vietnam. March 18.

USAID (2016). Final Project Environmental Mitigation and Monitoring Plan (EMMP) –Phase II and Site Restoration - - Environmental Remediation at the Danang Airport. Hanoi, Vietnam. May 20.

USAID (2016). Estimated Human Health and Ecological Risks Due to Arsenic and Dioxin in the Excess Volume Stockpile Area at the Danang Airport, Vietnam. Hanoi, Vietnam. June 24.

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Annex A: Conceptual Design Letter for Excess Volume Stockpile Area

Annex B: Detailed Design Information for Excess Volume Stockpile Area