The sponsor has plans to address identified impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements, host country laws and regulations, World Bank/IFC environment and social policies, and applicable environmental, health and safety guidelines. Detailed information about how these potential impacts will be addressed by the sponsor during the course of the proposed IFC project is summarized in the paragraphs that follow. Further information is provided in the attached Corrective Action Plan (CAP).
- Belje d.d. Farming and Production Operations
Existing and planned management systems for food safety, quality, environmental and social affairs; and occupational health and safety. Belje has diverse operations dedicated to animal husbandry (swine, beef and dairy cattle), agricultural production, and industrial food operations distributed within a 114.000 ha area in the Baranja province. Belje’s current industrial sector activities include production of processed meat products, milk, cheese, flour, swine and cattle livestock feed, and seed production. Belje d.d. Darda is responsible for production of cereals, beans, sugar beet, alfalfa and vegetables on ~20,000 ha of croplands in the farms of Kneževo, Širine, Karanac, Brestovac and Mirkovac.
Agronomic activities are oriented to scientific farming. Emphasis is placed on understanding chemical constituents of the soils, essential fertilizer and organic input needs as well as the potential for subsurface water contamination and associated protection activity given local climatic, hydrological, agro ecological conditions.
Animal husbandry operations include a total of fourteen farms in Baranja province. Principal activities in food industry operations include: Baranjka long life sausages and bacon, situated in Beli Manastir; Mesna Industria operations include a defunct meat packing operation; flour and other milled products; and Belje Dairy Products Factory (cheese). A modern, integrated slaughterhouse will be constructed in the offing for Belje’s Mesna Industria operations.
For these diverse operations, Belje has no integrated, coordinated management system in place for quality, food safety or environmental and social affairs. Requirements for operational permits are well established by Croatian law and existing regulations are harmonizing with the European Union’s. Many of Belje’s existing operations are vertically integrated from primary agriculture to intermediary and finish food products but an integrated system does not exist to best coordinate operations or to ensure compliance with laws and regulations. Accordingly, Belje will develop and implement appropriate management systems in accordance with the attached Corrective Action Plan (CAP).
Agricultural operations on Kopački rit nature preserve. Some 1000 ha of agricultural fields and beef cattle feed lot operations are situated in the protected area Kopački rit nature preserve. Kopački rit is a 17,770-ha Montreux Record site in Croatia that was designated as a Wetland of International Importance on 3 February 1993. Beginning in 2003 inspections of ecological plant production in the vicinity of Kopački rit are carried out by authorized state institutions to verify compliance with Croatian law. On the basis the original and continuing, periodic inspections, Belje Agriculture is registered for ecological production of agriculture and food products in the Ministry of Agriculture, Forestry and Water Management according to the Resolution UP/I 320-07/03-01/155, Reg. No. 525-2-03-2, Zagreb, December 18, 2003. Belje has no plans for expansion in the area. Belje carries out its existing activities such as operation of the beef cattle feed lot at Eblin farm in a sustainable fashion. Concentrated straw and cattle manure wastes from animal husbandry are returned to agricultural fields. Belje’s former aquaculture operation was closed shortly after acquisition of the company by Agrokor.
Emissions to the environment (air, wastewater and solid waste, odors, and noise) from agriculture and food processing operations. Belje’s diverse operations utilize electric power from the electrical grid and when available local, municipal utilities for water supply and wastewater management.
Belje’s defunct slaughterhouse and meat packaging operations will be demolished and replaced with a new, modern facility. An existing wastewater system that previously serviced meat processing operations consists of three lagoons and discharge of treated effluent to the Drava River that flows shortly thereafter into the Danube. The wastewater treatment lagoons are in an area that was mined during the war and that has not yet been demilitarized. The wastewater treatment system along with other aspects of the new slaughterhouse will be evaluated in an environmental assessment under preparation by professionals preparing the design of the new slaughterhouse. Treated effluent from the new operation will comply with not only IFC guideline limits but also with more stringent Croatian limits for industrial wastewater discharges to surface water.
Rural operations utilize electric power from the national grid and water from local wells and provide their own wastewater management systems. Wastewater management for the pig farms includes stabilization lagoons and discharge of treated effluent to an agricultural canal under permit from the government. Belje has an extensive network of piezometers and lysimeters installed to monitor potential impacts to local ground water and has demonstrated successfully to government authorities that there is no impact from current wastewater management practices.
Belje’s dairy farms at Cheminac and Popovac have similar installations but do not monitor potential impacts to ground water nor do they utilize surface water discharges for beneficial purposes. Methane generation from liquid waste emanating from both dairy farm and pig farm waste management systems can be used to generate useable fuel (methane biogas) for heating, electric power generation and other applications thereby reducing uncontrolled emissions of greenhouse gases. Additionally, Belje could use clean development mechanism (CDM) funds to assist in financing retrofits of these systems to take advantage of the biogas methane fuel resource. Belje’s existing liquid waste systems, especially those serving dairy farms, require maintenance and optimization to function properly even in the absence of methane collection and utilization.
Solid wastes from all Belje’s operations are, in general, returned to agricultural operations, collected by state licensed entities for recycling, collected by a state owned entity that takes full responsibility for rendering organic wastes from these operations, or land filled locally. Animal feed lot wastes are rich in manure and are returned to agricultural fields along with the straw component of the bedding. Dairy cow bedding wastes, however, consist of a high concentration of straw and a reduced manure concentration and are in general rejected by farming operations. Bedding materials are currently stored on site informally and allowed to collect rainwater and produce leachate that drains to the liquid waste management system. This system must be modified to utilize the waste effectively and eliminate supplemental wastewater discharge to an already overburdened wastewater management system. Belje will design and implement an optimal solution for these solid wastes in accordance with the CAP.
Emissions to the environment (air, wastewater and solid waste, odors, and noise) from flour and animal feed production. Belje’s Beli Manastir Flour Mill produces wheat flour, rye flour and cattle-meal. Seed silos are located on the same site. Flour is dispatched from the site in bulk transport trucks or packaged in bags of various sizes. Field products are transported to the mill and if necessary dried prior to silo storage. Diesel fuel is used for drying. Existing milling capacity is 120 tons/day with the expansion objective for Belje of 250 tons/day. The local community is concerned and has protested about the mill’s production of dust and associated impacts on local residents and housing. There are dust problems within the mill that need to be rectified as this is a problem for the adjacent village and also poses safety concerns if a cloud of dust gathers around a source of ignition.
Similarly Belje’s Darda Animal Feed Mill, which produces ~100,000 tons/year of mixed animal feed, has received complaints from neighbors about the amount of dust emanating from facility operations especially related to the loading of bulk transport vehicles with sunflower seeds. The loading technique is uncovered and dust intensive. Belje will design and implement dust management measures to solve internal and external dust problems with these two facilities in accordance with the CAP.
Sustainability and quality of potable water supply used for animal husbandry and farming operations and food manufacturing. Belje’s municipal operations utilize potable water supplied by the host city. Many of Belje’s operations utilize local ground water for potable water and animal husbandry needs. Several water distribution systems have suffered negative impacts from the presence of high iron concentrations in raw water and iron reducing bacteria growth impeded flow in the distribution pipelines, which must be replaced. Other operations adequately treat the ground water to prevent similar problems. Belje will upgrade its water monitoring program to ensure that potable water is provided for all animal husbandry operations and food manufacturing activities in accordance with the CAP.
- Animal welfare and biosecurity.
Legacy practices on selected Belje dairy farms appear not to meet all of the basic needs of animals, encapsulated in the Five Freedoms that form the basis of international animal welfare standards and guidelines for best practice. Belje will implement the changes needed to eradicate existing inconsistent animal welfare practices on its dairy farms. Indicated ameliorative programs will be implemented in accordance with the attached CAP.
- Occupational health and safety in agriculture, animal husbandry and allied facilities.
Belje operations reportedly comply with the extensive requirements of the Republic of Croatia’s Occupational Health and Safety Act of 1996. However, Belje’s operations do not have palpable occupational health and safety management programs in place either in agriculture or food processing, nor are statistics routinely collected that could be used to pinpoint causes of lost time accidents and fatalities. Consistent with the CAP and IFC’s occupational health and safety guideline, the company will implement a professional program with the objective of bringing integrated agricultural and industrial operations into compliance with the requirements of Croatian law and the IFC occupational health and safety guideline. Through this program Belje will promote adequate facility design to reduce employment hazards, continuous employee training and orientation to job hazards, collection and monitoring of accident statistics to ensure that a robust program is designed, implemented and improved continuously for all Belje operations.
- Management of hazardous materials and hazardous wastes.
Both in agricultural production and in industrial activities, Belje experiences some infestations of dangerous and destructive organisms, such as insects, mice, and rodents. Belje’s approach to control of these pests includes physical destruction of habitats, application of insecticides or carrying out rodent elimination programs. For the purposes of plant production in Belje d.d. uses various pesticides principally herbicides to achieve protection from harmful weeds. Belje will, in compliance with the attached CAP, enhance existing operations with planning and implementation of an integrated pest management program aimed at reducing the cost of control programs, avoiding contamination resulting from chemical pesticides, and ensuring that if chemical pesticides are required that they are chosen in a manner consistent with IFC/World Bank and internationally recognized integrated pest management principles, Croatian law and regulations, and emerging requirements associated with Croatian accession to the European Union.
- Food safety.
Belje does not have an organized food safety program either on its farms or in industrial food production. Institutionalization of food safety programs on farms and in industrial production and its associated ability to trace products released into commerce will enable the company to ensure food safety from farm to consumer. Additionally, implementation of a recognized food safety program will allow the company to protect itself from the negative consequences of potential food recalls. Belje will integrate food safety into agricultural and food production activities in accordance with the attached CAP.
- PIK Vrbovec – Slaughterhouse and Meat Products
Existing and planned management systems for food safety, quality, environmental and social affairs; and occupational health and safety. Pik Vrbovec is an animal slaughtering and meat product manufacturing operation dating from 1962. The facility is situated roughly 40 kilometers southwest of Zagreb in the industrial part of Vrbovac, near the Zagreb-Bjelovar road. At present the facility processes ~3000 pigs, ~60 cows, ~160 veal, and 300-400 bulls/week to produce canned meats, frozen meat, semi-durable sausages, and durable sausages. The operation has a number of strengths including high product quality, large capacities, controlled origin of raw materials, and strong product brands. At the same time there are a number of weaknesses that need to be overcome: older facilities design, inadequate packaging space, a history of limited investment and outdated technology. It is surrounded by undeveloped land and industrial operations. The facility has achieved Hazard Analysis and Critical Control Point (HACCP) certification of its food safety system and can utilize this management system to systematically manage other issues including quality, occupational health and safety and environmental and social affairs. Pik will expand the existing management system to encompass other activities and issues in accordance with the attached Corrective Action Plan (CAP).
Emissions to the environment (air, wastewater and solid waste, odors, and noise). The facility’s aging gas-fired boilers are not equipped with economizers or other energy savings devices to reduce the amount of gas required. However, they do return ~60% of condensate to the boilers. Heavy fuel oil is the standby fuel for the boilers. Water supply for the boilers is provided from a small, nearby lake created in a depression made from clay mining for brick manufacturing that was the previous land use for the Pik facility prior to commencement of operations in 1962.
Electric energy for facility operations is provided by the national grid. Refrigerants used include ammonia for all refrigeration needs except for the new system used to refrigerate finished goods storage prior to shipment and this facility uses R404A refrigerant.
Solid and liquid wastes such as oil and lubricants are collected by a third party contractor to Pik and are used beneficially for fuel under state license; carton is collected for recycle; edible oils are shipped to Austria for biodiesel production; fluorescent lamps are collected for handover to a third party contractor that exports them for appropriate treatment; and general organic animal waste is segregated into dangerous tissues (e.g. brain, spinal cord, and spleens) and other wastes suitable for rendering. Pik’s on-site rendering plant was closed after the appearance of BSE and variant Creutzfeldt-Jakob disease in Europe.
Two principal sewers provide wastewater collection at the Pik site (Trunk A and B). Each trunk main is permitted by the Hrvatske Voda state entity that requires pretreatment and adherence to maximum flow and concentration parameters. Pik’s pretreatment consists of gross screening and floating fats and oils removal at several locations on the Pik industrial site. At present these two trunks comply with the volume and organic characteristics (pH 5.0-9.5; BOD5 250 mg/l; COD 750 mg/l; oil and grease 100 mg/l; and P 10 mg/l) for their permitted discharge to the municipal sewer. The company pays for this service and is subject to fines for exceeding volume or organic strength limits. Pik’s wastewater discharge permit is temporary because after on site pretreatment the wastewater is discharged to surface water. The discharge exceeds Croatian and IFC limits for discharges to surface water. The allowed discharge is temporary until the local municipality manages to construct a wastewater treatment facility for not only Pik but also the municipal and industrial entities in the local area. Croatian national standards for discharge to surface water are more strict than IFC’s maximum values (pH 6.5-8.0; BOD5 25 mg/l; COD 125 mg/l; oil and grease 25 mg/l; N 21 mg/l; and P 1 mg/l).
In compliance with the CAP, Pik will undertake clean production studies to reduce wastewater flow and strength, segregate non contaminated wastewaters (e.g. storm, condensate, and other clean streams) and associated activities to reduce the volume and strength of industrial wastewater to be treated. Additionally, Pik will implement indicated clean production measures defined in engineering evaluations and these measures will be implemented prior to final design and construction of adequate wastewater management facilities that will produce a treated effluent in compliance with Croatian regulatory and IFC/World Bank guideline limits.
- Sustainability and quality of potable water supply for food manufacturing.
Potable water is supplied by the local municipality and tested frequently. The veterinary inspectors collect samples once a month and send the water out to independent laboratories for chemical and microbiological analyses. Pik personnel collect samples once/day for microbiological analyses and once a week for chemical testing in the on site laboratory at the facility. Microbiological testing includes fecal coliform, total plate count, and fecal streptococci. Water quality data examined show consistently high quality water with no indication of microbiological contamination. A system to add NaOCl (sodium hypochlorite) disinfectant to the water supply is available and can be started up in the event of need. Water supply for the boilers emanates from a nearby small lake created in a depression made from clay mining for brick manufacturing that was the previous land use for the Pik facility prior to commencement of operations in 1962. The pond is state-owned and operated charges Pik per m3 of raw water, which Pik treats for use in the boiler.
- Occupational health and safety in processing and food manufacturing.
Pik operations ostensibly comply with the extensive requirements of the Republic of Croatia’s Occupational Health and Safety Act of 1996. However, existing operations do not have palpable occupational health and safety management programs in place nor are accident statistics routinely collected and analyzed. Consistent with the CAP and the requirements of IFC’s occupational health and safety guideline, the company will implement a professional occupational health and safety program with the objective of bringing industrial operations into compliance with Croatian law and IFC guideline requirements. Pik’s program will promote adequate facility design to reduce employment hazards, continuous employee training and orientation to job hazards, collection and monitoring of accident statistics to ensure that a robust program is designed, implemented and improved continuously for all Pik operations.
- Management of hazardous materials and hazardous wastes.
Refrigerants used include ammonia for all refrigeration needs except for the new system used to refrigerate finished goods storage prior to shipment, which employs R404A refrigerant. For personnel potentially affected by ammonia, use of personal protective equipment (PPE) is mandatory. The facility is equipped with numerous safety features and ventilation required to comply with Croatian regulations for working with ammonia including posting of graphic signage in work areas as well as emergency response actions and emergency contact numbers. The facility has an emergency response plan and a trained emergency response unit for ammonia emergencies. Rodent and other infestation controls are carried out only by institutions or companies authorized by law; valid certificates are issued by the Ministry of Agriculture and Forestry and the Health Ministry. Active rodent poisoning and infestation reduction programs are carried out with the aim of preventing infectious diseases and protection of products and raw material from possible contamination and damage caused by rodent invasion. Rodent and pest extermination at Pik is carried out with biocides permitted by Croatian law and that are appropriate for the meat industry, Pik’s approved HACCP food safety program and customer specifications.
- Food safety.
Pik has achieved HACCP food safety certification for its operations. American inspections confirmed that Pik''s HACCP entirely fulfils certification requirements. After inspections for food safety activities at Pik the USFDA assigned PIK a license for export to the American market which in itself is synonymous with product quality and safety for foreign produced foods that will be imported into the USA. At present PIK Vrbovec is the exclusive supplier for McDonald’s operations in Croatia.
