11271 - NovaNam Limited III

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Environmental Review Summary

Project Number

11271

Company Name

Novanam Limited

Date ERS Disclosed

Apr 22, 2002

Country

Namibia

Region

Africa

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 28, 2002
Signed : Nov 25, 2002
Invested : Jan 3, 2003

Sector

Fishing

Industry

other

Department

Regional Industry - MAS Africa

Project Description

The projects consists of the acquisition and upgrade of additional trawlers and upgrading of the processing plant in NovaNam, a hake fishing and processing company in Lüderitz, Namibia. Total project cost is US$10 million, IFC would provide a US$5 million equivalent South African Rand loan to NovaNam Ltd. The loan would be guaranteed by NovaNam''s mother company Pescanova, Spain. Grupo Pescanova is the market leader in Spain with consolidated group sales of US$667 million and a net worth of US$ 171 million (end of 2000). The investment in trawlers will enhance the company''s ability to catch its full quota. Improving layout of the plant will improve processing capacity, efficiency, yields, quality and margins. The project follows a US$13.5 million expansion that the company undertook in 1994, partially financed with an IFC loan of US$6.5 million. In 1996 a further US$10 million expansion attracted a US$5 million IFC loan. Repayments of loans I and II have been timely.

Environmental and Social

Sustainability of hake fishery: Prior to independence (1991) the Namibian Hake fishery was poorly managed and over-exploited. Since 1991, the fishery has been actively and well managed by the Government and as stocks have recovered, Total Allowable Catch (TAC) has risen from 60,000 tons/annum to 200,000 t /annum. According to Government scientists this is a sustainable yield. Fishing practices (net mesh size, trawling locations, by-catch, discarded fish, etc) are controlled through the Fisheries Act (1992) which was updated in 2001 to reflect the changing nature of the fishery and practices. There is a nearly 100% presence of Government observers on trawlers (100% in all Novanam operations) and fisheries inspectors are also able to board vessels and inspect operations and catches. Observers are tasked with the monitoring of catch, fishing practices, by-catch and discards, dumping, gear and limited biological data (including seabird bycatch). This level of oversight and control is unusual in the fishing industry and is indicative of the generally well managed nature of the Namibian industry.

Novanam’s fleet is fitted with modern (often state of the art) fish finding equipment and is able to trawl with considerable precision. The company fishes with a mesh size of 118mm (compared with 110mm minimum legal requirement) to reduce the catch of small fish and maximize fishing efficiency and profit/catch incentives. The company has a good record in the industry and is seen as being one of the most responsible operators in Namibian waters.

Occupational heath and safety and safety at sea: Occupational health and safety issues are addressed appropriately at the Luderitz plant. Employees receive training and are issued (and wear) personal protective equipment as necessary (including ear plugs, footware, cold room clothing etc). Accident statistics are recorded and reported to the Ministry of Labor annually. There is also an appropriate level of safety training and management aboard the company’s fleet and all crew wear appropriate protective and life safety equipment. On board heading and gutting is largely automated and risk from knife/cutting injuries is minimal. In 1999, the company reported a single fatality at sea in ten years of operations (the result of negligence on the part of a seaman and the company was not held liable for the accident).

Water use, wastewater effluents and air emissions: Freshwater supplies for the processing plant are drawn from a nearby aquifer which is managed by the municipality/government departments. Freshwater (120m3/day for ice production,) at the processing plant is site for ice making, on-site laundry and domestic/kitchen. Waste waters are discharged to the municipal sewer which has a series of settling and treatment ponds before discharging effluents to the desert.

Seawater (150l/hr) is used to transport fish products during processing at Luderitz and all process waters are directed to the company’s feedmill where coarse screens are used to remove solid material, after which effluent is discharged directly to Luderitz Bay via a short sea outfall. As part of this investment, the company has upgraded the fish meal plant and will install a waste water treatment works. The investigation into the most cost effective waste water treatment plant is presently underway but the company has undertaken to complete this project within two and a half years, which will treat process effluents to IFC requirements prior to discharge (the corrective action plan describing the system and timetable for installation is attached at annex 1).

Electricity for the plant is provided by the Luderitz municipality and there is a back up generator. The feedmill had a small boiler which has been replaced by a new 3 tons steam/hr diesel fired boiler which will operate in compliance with WBG requirements. Boiler specifications and performance are subject to government permits.

Use of CFCs: With the exception of two skining machines (which use Freon 22 and which will be phased out in accordance with the Montreal Protocol), all shore based refrigeration systems are ammonia or glycol based and operate in compliance with WBG requirements. On board refrigeration systems for the company’s freezer vessels is Freon 22 based and will also be phased out in accordance with requirements of the Montreal Protocol.

Solid waste and hazardous materials: The processing plant does not generate solid organic waste (all excess fish material is used in fish meal) and solid waste comprises plastics, card and office materials – all of which are disposed of to a local land-fill. Chemicals (ammonia, chlorine, solvents and detergents) are all stored securely on site and Hazard Analysis Critical Control Point (HACCP) documentation is used to track use and management of chemicals. Ship fuel is stored in secure port facilities (Namport and the company’s own facilities) with secondary containment. Boat generated solid waste is managed in accordance with Namibian regulations (plastics and non biodegradable materials are returned to shore for disposal, biodegradable materials are disposed at sea).

Environmental management capacity: The company does not yet have a formal environmental management system or dedicated environment staff. The boats and processing facility are HACCP certified and the company has made a commitment to achieve ISO 9000 certification by 2002 and ISO 14000 (the international environmental standard) thereafter.

Employment and Community Issues: The company has grown to be the largest employer in Luderitz currently employing 1835 people on both permanent and temporary contracts and the largest fish processor in Namibia. The company operates a pension scheme which is available to all full time employees and provides loans for full time employees who qualify and who wish to purchase approved houses in Luderitz. Employees are drawn from throughout Namibia (but especially the far north) and spend much of the year in Luderitz. Largely as a result of the expansion in the fishing industry Luderitz has grown from c 2-3,000 people in 1990 to c 25,000 today. Over this period there has been a significant increase in HIV/AIDS. The company’s 3 nursing staff provide health care and advice and also treat employees and provide counseling on HIV and other health matters. They also provide advice on preventative and safety measures to all staff and work in the Luderitz community as part of the Luderitz AIDS Network.

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: [(i) the status of implementation of any measures contained in the Environmental [and Social] Action Plan[s] and (ii)] ongoing performance of project-specific environmental, health and safety [and social] activities [as reflected in the results of periodic and quantitative sampling and measuring programs.] Periodic site supervision visits will also be conducted.

Environmental and Social Documentation

File Name	Actions
Novanam-11271-CAP.doc

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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