IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a category B project according to IFC's environmental and social review procedure. Environmental, social, health and safety issues, that were reviewed during appraisal, included the following. - Site selection and acquisition; - Management systems for quality, environmental and social affairs; - Occupational health and safety and working conditions; - Social issues and corporate social responsibility; - Control of pests species and technical assistance programs for fruit product out growers; - Air emissions from steam and heat generation; - Sustainability and quality of potable water supply used in food manufacturing; and - Management of liquid, solid and hazardous wastes. The review of this project comprised an evaluation of technical and environmental/social information submitted by the project sponsor and an on-site assessment by the IFC environment and social specialist.

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. - Site selection and acquisition. North Andre’s operations are located in industrial/development zones acquired by the government in accordance with Chinese law. Parts of the land were previously farmed and, as listed below, the average incomes of the former farmers have doubled due to the employment opportunities arising from the establishment of the zones. The average annual incomes for farmers, both before and after and listed by site, are: Muping Andre from 3,000RMB to ~7,800RMB; Longkou Andre from ~3,000RMB to 7,500RMB; Xuzhou Andre ~2,500RMB to ~7,000RMB; and Baishui Andre from ~2,500RMB to ~7,800RMB. The government continues to compensate retired farmers each year who are no longer farming in the order of ~1,000RMB for Muping Andre, ~1,000RMB for Longkou Andre, ~850 RMB for Xuzhou Andre, and ~800 RMB for Baishui Andre. - Management systems for quality, environmental and social affairs. North Andre has a quality management system in place that is certified to ISO 9002 and a certified HACCP food safety program for raw apple and pear processing and juice production. These systems are employed to effectively control: the use of raw materials including energy (a heat exchanger recovers waste heat) and water (an average of 1,200 m3 of water is consumed per day, part of which is re-circulated for apple cleaning and as condensate); the efficient operation and maintenance of plant facilities and equipment; the reuse and/or disposal process wastes; and the use of approved pesticides by independent apple farmers. Biannual audits of each operation are conducted with annual management review meetings chaired by the Chief Executive Officer. The company manages its activities that have potential environmental impacts however they are not part of a formalized management system. North Andre will prepare environmental management procedures required to comprehensively manage these issues and incorporate these environmental procedures into the existing ISO 9001 and HACCP systems to ensure that boiler emissions, wastewater treatment, chemical handling and refrigeration processes are in compliance with Chinese regulatory and IFC guideline requirements. - Occupational health and safety. Working conditions in North Andre facilities are generally good; manufacturing facilities are well operated and maintained, fire protection measures are in place and the company has had a zero incident accident rate for the past 3 years. The company provides induction training for new employees and annual re-training for all employees and temporary workers prior to each apple season to ensure awareness of the company’s procedures, requirements and appropriate equipment operation. While conditions are generally acceptable, the company will strengthen several areas in compliance with the Corrective Action Plan (CAP). Specifically the following improvements are required: the regular use of ear protection in apple processing and production areas (i.e. fruit reception and evaporation areas) and boiler facilities; the use of respiratory protection in the boiler rooms; and the addition of guard rails around troughs in the boiler rooms. - Social issues and corporate social responsibly. North Andre provides employment for around 470 employees as well as 450 temporary workers each season. The company’s minimum wage is 600 RMB per month, well above the national average of 380 RMB per month, and working hours average 8 hours per day/40 per week and a maximum of 3 hours overtime per day and 36 hours per week is allowed. North Andre provides a regular source of income to thousands of apple and pear farmers. In addition, the company provided financial assistance to the local government during the severe acute respiratory syndrome (SARS) outbreak; regularly assists poor communities and provides food assistance each winter; and aids the government and NGOs to help people go to school as well as employees under special circumstances (e.g. if a family member is sick). Technical assistance programs for fruit product out growers including control of pests. North Andre purchases its apples and pears from thousands of farmers in Shandong, Shaanxi and Jiangsu provinces who deliver the fruit directly to the company’s facilities. As a significant buyer of apples and pears, North Andre provides an ongoing source of income for a large number of local farmers. The company has specific requirements regarding the types of pesticides that are acceptable for use and provides training to the farmers, as well as educational materials, on how to use the pesticides. IFC will investigate the feasibility of providing technical assistance to the company to enhance its capacity building program (e.g. Farmer Field Days) for farmers to improve their pesticide storage, handling and use practices. Sustainability and quality of potable water supply used in food manufacturing. Water supply for the company’s operations is provided by the local municipal water system. North Andre conducts regular monitoring of the water supply to ensure its potability and quality for use in the production of AJC. Air emissions from steam and heat generation. Air emissions generated from coal-fired boilers at all of North Andre’s facilities meet Chinese regulatory requirements as well as the majority of the WB/IFC parameters. The company will reduce particulate emissions from the boiler at the Yantai North Andre Muping facility to comply with WB/IFC guideline limits in accordance with the attached CAP. - Liquid wastes management. Wastewater treatment systems are installed at all of North Andre operations except for the Yantai North Andre Muping facility which discharges its wastewater directly to the municipal sewerage system. Monitoring data show that the treated effluents are in compliance with Chinese regulatory limits as well as the majority of WB/IFC parameters. In compliance with the CAP, the company will optimize the Yantai North Andre Muping and the Longkou Andre facilities to bring the Total Suspended Solids into compliance with WB/IFC guideline limits for discharge to surface waters. - Solid and hazardous waste management. North Andre’s principal solid wastes include fermentation solids that is treated in the wastewater system, scrap metals that are sold for recycling and waste apples that are processed into animal feed; unused organic residuals are collected for disposal by the local authorities. Other solid wastes, including coal ash, are sent for disposal by the local authorities. No pectin is produced as a by-product of the operations. Bags used by the farmers to transport the apples to North Andre are reused and when they are no longer usable they are disposed of as solid waste. Caustic soda and nitric acid is collected and managed as hazardous waste by the local authorities.

This ERS and the attached Corrective Action Plan contain the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures in the Corrective Action Plan.

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: - the status of implementation of any measures contained in the Corrective Action Plan and - 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.