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. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.
Farmland acquisition and conversion: Amaggi produces soy (and other agricultural products) from 12 farms in Matto Grosso (see table 1). These farms were developed on land that had largely (80%) been farmed by others previously, and acquisition by Amaggi did not result in involuntary resettlement or economic displacement. Neither did farm development take place on indigenous areas or sites that have been gazetted for conservation purposes. All arable farms in Mato Grosso are required to set-aside certain areas (legal reserves and permanent protected areas) for conservation. The specific details of this requirement are defined in the Unified Environmental Law - LAU (fema.mt.gov.br) and Amaggi has met, or is in the process of meeting, all state conservation set-aside requirements as described in Table 1. During appraisal of this investment, IFC found no evidence that the company has been directly involved in illegal land conversion or encroachment on indigenous reserves.
Agricultural practices and opportunities: Amaggi farms approximately 80,700ha in the State of Mato Grosso. Production systems include soy, corn and cattle. Ninety percent of the arable farmland (100% at the Company’s largest farm at Tunucare) utilizes no till /direct planting technology (which reduces soil erosion and run-off, as well improving the soil structure and nutrient status). There is heavy and highly mechanized agro-chemical use, and some chemicals that are used are rated as highly or moderately hazardous under the World Health Organization agrochemical classification system. However the use of these products is well managed and controlled and there is appropriate use of personal protective equipment, as well as appropriate levels of training and agrochemical management. Attempts to promote the use of integrated pest management are evident (crop rotation and soil management, use of biological controls). There is a limited amount of irrigation (applied on one farm to approximately 460 ha in the municipality of Itiquira) and for which the company has all relevant permits and permissions. There is no irrigation on any other company farms. There is no use of genetically modified materials on the company farms.
Logistics and transport: The company operates a barge and transshipment facility at Porto Velho (R Madeira) and Itacoitiaria (R Amazon) and have all appropriate environment licenses to operate these facilities. Development and operation of these facilities does not require channel or dredging work and the company has not modified the course or structure of either river. Monitoring of environmental and occupational health and safety is undertaken and there is regular reporting to the National Council for the Environment (Conselho Nacional de Meio Ambiente - CONAMA). The company is in compliance with Brazilian and IFC requirements with the exception of some minor occupational health and safety improvements that the company will undertake. Details of such improvements and a timetable for their implementation over the course of the investment will be a condition of disbursement (CoD) for IFC investment.
Processing facilities and issues: The company operates a soy crushing plant at Cuiaba and has recently (April 2002) inaugurated similar facilities at Itacoatiara. At the Cuiaba facility there is minimal use of water at the site and domestic waste effluents are discharged to the municipal sewer. Process waste effluents are re-cycled or used for irrigation in a nearby orchard. Solid wastes are disposed of to landfill or recycled. Solvent (hexane) use achieves industry standards and IFC requirements. The boiler uses a combination of dust, rice husks and diesel oil for fuel. Monitoring of stack emissions is not currently undertaken and the Company will initiate monitoring of air emissions and will implement improvements if air emissions fail to comply with IFC requirements. Details of such improvements and a timetable for implementation will be CoD for IFC investment. Ambient dust levels are high and a number of improvements in other occupational health and safety features will be developed. Details of such improvements and a timetable for their implementation over the course of the investment will be a condition of disbursement (CoD) for IFC investment.
The Itacoitiara facility comprises an existing grain silo and transshipment facility (plus associated facilities – including power generation) and a soy crusher covering a total 26ha. Land for the silo and crusher was purchased through willing seller willing buyer processes and there has been no economic displacement or resettlement. Neither has there been a significant impact on natural habitats. The site has a dedicated waste water treatment works (designed to achieve Brazilian and IFC waste water quality requirements) which will treat all process and domestic effluents. Amaggi will provide design specifications and confirmation that the waste water treatment works will achieve these standards as a CoD for IFC investment. The site has a solid waste disposal plan which has been approved by the municipality and recycling (of glass etc) is undertaken where possible. Expansion of the thermoelectric generators will be required to service the crusher and these will be fueled by a combination of biomass and other solid fuels (including tires). The sponsor will provide details, design specifications and – as necessary guarantees that the generators will be able to operate in compliance with IFC requirements as a CoD for IFC investment. Fuel wood supplies for generators are currently obtained from the legal sale of wood sourced from cleared land authorized by a government run agricultural colonization program for previously landless farmers. The sponsor plans to develop its own plantation (800ha on degraded land) to service wood supply demand and aims to be self sufficient in 5 yrs. The Instituto de Protecao Ambiental do Amazonas (IPAAM) confirms that the company is operating in compliance with Brazilian laws and regulations and local municipality environment staff indicated that the company was in compliance with Brazilian requirements. There is regular environmental reporting to CONAMA and IPAAM.
The silo and trans-shipment facilities are in compliance with IFC requirements – barring some minor occupational health and safety improvements (ambient particulates, designated walkways, machine guards). Details of such improvements and a timetable for their implementation over the course of the investment will be a condition of disbursement (CoD) for IFC investment.
Soy drying and seed warehouses: There are few environmental and social issues at these sites. Grain dryers are fired by wood and the company plans to develop its own plantations to service this need (currently wood is procured in a similar manner as for the Itacoatiara facility). There are no process waste effluents and domestic effluents are discharged to sewer or septic tanks. Solid waste is disposed of to municipal land-fill or spread on fields as a soil conditioner (ash from dryers).
Occupational health and safety(OHS) issues: The sponsor has developed occupational health and safety plans for each of its operational sites and has a formal health and safety management program (Comissao Interna de Prevencao de Accidentes -CIPA) in place. The program has been developed in accordance with Brazilain health and safety legislation and requirements and the company employs technical engineers and medical staff to implement and monitor OHS perfomance. A number of minor improvements in OHS are required to ensure that the project achieves compliance with IFC’s requirements (relating to use of personal protective equipment, ambient air quality, noise and use of compressed air). Details of such improvements and a timetable for their implementation over the course of the investment will be a condition of disbursement (CoD) for IFC investment.
Environmental and social issues associated with pre-financing activities: Currently Amaggi pre-finances approximately 900 farms in Mato Grosso centered on Sapezal, but extending north east to Sorisso/Chapada dos Parecies and north-west to Rondonia. To ensure that IFC environmental and social requirements for this type of pre-financing support are met, the sponsor will develop an environmental management system and recruit full time qualified staff to “screen” each application, assess environmental and social risk and monitor performance. Specifically, the pre-financing contracts (Cedula de Produtor Rural – CPR) that is developed for each pre-financing agreement includes a special clause that requires farms to confirm that they have no involvement with child labor, do not finance farms with land conflicts, and that farming activities will not affect indigenous peoples or conservation units (Unidade de Conservacao).
Corporate Capacity in Environmental and Social Areas: In order to improve and formalize Amaggi’s capacity to manage environmental and social issues in their operations and in pre-financing operations, the company will develop an environmental management system (EMS) as a CoD for IFC investment. The EMS will address environmental, occupational health and safety and social issues of Amaggi’s direct farming, transport, and processing operations. The EMS will also be designed to monitor key environmental and social issues (described in section 14 above) in relation to indirect (pre-financing) activities. Components of the EMS will relate to external relations, communications and disclosure, roles and responsibilities for environmental issues, community development and social initiatives, and documentation of information and training /capacity building for employees.
Community Relations and Development Initiatives: The company has undertaken and supported a range of activities to benefit both their employees and the local communities where their operations are located. Initiatives are strongest in the centers of Amaggi operations (Itacoatiara and Sapezal). The majority of company employees are drawn from local communities. In Itacoatiara, the company is both the largest local employer (with 332 full time employees) and the most active local corporate citizen. The same is also true for Sapezal where the company has 350 employees. Programs for workers include: salaries at least 10% above wages paid for similar work in the area, health care coverage for workers and dependents, support for workers to own/build their own homes (and improve sanitary conditions), support for workers to continue their education, to cover transport costs, canteen meals supervised by nutritionists, and arrangements with local supermarkets and pharmacies that allow workers to only pay at the end of the month. Community support and development activities include: support for local municipalities including assistance with construction and equipping hospital, schools, and community church, road and infrastructure construction, donation of vehicles and supporting fuel needs for local groups (including the local police force), and providing food donations to child care facilities for poor children. In Itacoatiara, the company also generates employment by local outsourcing for food preparation and adding company emblems to uniforms. Since 2000, Amaggi has developed collaborative activities with a local environmental NGO (ARPA- Associacao Rondonopolitana de Protecao Ambiental).
