9247 - Inter Sea Farms de Venezuela, C.A.

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Environmental Review Summary

Project Number

9247

Company Name

Intersea Farms de Venezuela, C.A.

Date ERS Disclosed

Feb 9, 2005

Country

Venezuela, Republica Bolivariana de

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 5, 2000
Signed : Nov 9, 2001
Invested : Jan 15, 2002

Sector

Animal Aquaculture

Industry

Infrastructure

Department

Regional Industry MAS LAC & EUR

Project Description

The proposed Inter Sea Farms Venezuela (ISFV, comprising a joint venture company – Sea Farms International (SFI) and Interaqua) project consists of an integrated shrimp-farming operation near Maracaibo, that includes a shrimp hatchery, production ponds (2,500 ha) and a processing plant. The project is composed of two phases with phase one involving the expansion of the existing hatchery, the construction of about 1,000 ha of ponds, and all farm infrastructure and equipment. Phase two is to be implemented two-three years after phase one and consists mainly of the processing facilities and an additional 1,500 has of ponds. At full capacity, the project will generate employment for approximately 274 farm staff, 80 hatchery staff, and 500 processing plant staff. IFC financing will be based only in phase one assuming shrimp processing will be undertaken by third parties however, environmental and social appraisal has addressed both phases. As part of the development proposal, the sponsor has prepared and submitted an EIA for the project, which has been approved by Venezuelan authorities. At the end of 2004, the project consists of 600 ha of ponds.

Environmental and Social

This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor as well as site visits and discussions with the sponsor, national NGO''s and government agencies. The following potential environmental, social, health and safety impacts of the project were analyzed:

- Habitat loss and other ecological impacts arising from development of production areas,
hatchery and other facilities;
- Farm management and production issues;
- Water use and waste water management from production and processing activities;
- Solid waste management and disposal;
- Environmental Management Systems;
- Employment and (occupational health and safety issues;
- Land acquisition process and possible impacts related to physical and/or economic displacement.

The information provided about how these issues and potential impacts have been addressed in the development of the project is summarized in the paragraphs that follow.

- Habitat loss and other impacts arising from development of production areas, hatchery and other facilities:

The farm site (8,000 ha) comprises an extensive clay alluvial plain that lies behind the main coastal sand dunes on the Gulf of Venezuela. The area is flat (except for one line of residual dunes that will be retained in the development) and approximately 80% of the site is devoid of vegetation or supports coarse grass during infrequent periods of rain. The remaining 20% of the site comprises xerophytic vegetation (Acacia and cactus), which is widely distributed throughout the states of Zulia and Falcon. The site does not support significant fauna or areas of standing water that might act as sources of food/security for migratory or other birds or fauna. The loss of these areas of natural habitat will not have a significant impact on the ecology of the area. There are no significant habitat issues associated with the siting or development of the hatcheries or packing plant.

To the West of the site lies the 24,203ha Olivitos Wildlife Management Reserve whose boundaries were defined by the Government of Venezuela with support and collaboration from the shrimp aquaculture sector and others. The primary objective of the reserve is to protect birds and other animals and the site supports one of the most important flamingo colonies in the southern Caribbean. A salt producing company - Produsal - is partially located within the reserve area (382ha out of a total area of 3,982ha located along the Southeastern edge of the reserve) and has been abstracting saline waters from the Reserve''s lagoon since 1999. Produsal provides a physical barrier to the movement of freshwater from the South and the Southeast into the wetland (although the road built in the 1980s to join Los Puertos de Alta Gracia and Quisiro is actually the main barrier), which was mitigated by the construction of canals that direct runoff water to the wetland. There has been no evidence of ecological change within the wetland as a result of Produsal''s activities and potential impacts arising from the proposed project (through salinization or changes in hydrology) are not considered likely. The sponsor partially funded a study of bird populations realized in 2000-2001 by a scientific team of the University of Zulia and the University Rafael Maria Baralt. The sponsor also conducts an on-going monitoring of the biological and chemical conditions of the water of the wetland, in collaboration with Produsal.

- Farm management and production issues:

A semi-intensive production system is proposed (15-20 shrimp/m2) and postlarvae (PLs) will be provided by two 60 million PLs per month hatcheries which will be located at nearby sites on the Gulf of Venezuela and the eastern coast of the Paraguaná peninsula in the State of Falcon. There will be no capture of wild PLs. The non-native shrimp species Penaeus vannamei is the culture species of choice for the project and the sponsor uses grills and other control measures to reduce the risk of shrimp escape. P. vannamei is widely used in shrimp aquaculture operations throughout the Caribbean region and its introduction in Venezuela was authorized by Resolutions of the Ministry of Agriculture and Husbandry.

Chemical use on the farm will be limited to organic and inorganic fertilizers used to reduce feed use through the promotion of phytoplankton growth, liming material eventually applied on the soil after harvest to promote bacterial activity, chlorine (used to treat residual ponds following shrimp harvesting and drawdown, and also to wash shrimp during harvest), and sodium metabisulfite for dip treatment of shrimp to be commercialized head-on (to avoid melanization of the product). Use of these materials will be controlled and the sponsor has demonstrated adequate management capacity at other sites to ensure that use will conform to WBG requirements. No other chemicals are applied to ponds.

- Water use and waste water management from production and processing activities:

Pond water at the farm will be exchanged at the rate of approx. 3 to 5 % of volume per day, (0,75 to 1.25 million m3 per day at full project development) to maintain good dissolved oxygen levels and salinity conditions in the ponds. There is an adequate and sustainable supply of water (which will be drawn from the Gulf of Venezuela) and abstraction will not have a significant impact on other users of the Gulf or the wider environment. At the proposed stocking densities, wastewater effluents are in compliance with most Venezuelan and WBG requirements (Table 1), however, in addition, the project will incorporate a 140 ha. settling pond, providing a greater than 24 hr. retention time before discharge water is returned to the Gulf of Venezuela. The inclusion of the settling pond is to buffer any temporary peak concentration of the regulated parameters, and to provide flexibility should higher stocking densities be selected in the future. Surface runoff will be directed to canals and then diverted around the site to discharge directly to the sea and Los Olivitos without mixing with farm waters. It is not anticipated that this will cause significant ecological impacts.

The soils at the site are predominantly clay and will form an effective barrier against the seepage of saline waters into the ground. There are no people or agricultural activities within or adjacent to the site that could be affected by changes in salinity. Similarly, given the physical barrier between the site and the Olivitos Reserve, the risk of impacts to the wetland are not significant. The sponsor will be required to monitor groundwater quality as part of the project.

Wastewaterr from the (third party owned and operated) packing plant that theproject will use during phase I is discharged to Lake Maracaibo and data provided by the owner demonstrates compliance with Venezuelan standards and requirements. The new packing plant will be built in 2005-2006 in the industrial area of Maracaibo on a 4-ha lot purchased by the sponsor in 2004, and will be designed to comply with WBG effluent requirements. Wastewater will be treated by the sewage municipal system after pre-treatment at the packing plant to comply with regulations.

- Solid waste management and disposal:

The principal waste materials generated by the farm and packing plant will be: sanitary wastes of employees, materials from the office, warehouse and cafeteria, repair shop discards including used motor oil and filters, feed sacks, and shrimp heads. The sponsor will recycle and re-use material where possible and will dispose of remaining farm waste (20 tons per year) at the Punta de Leiva landfill which has sufficient capacity. Waste collection is organized by the municipality.

- Hazardous Materials Use and Management:

Hazardous materials that are used include: fuels, sodium metabisulfite, chlorine, fertilizers and lime. (Table 2). Diesel fuel is stored in secure tanks with secondary containment. Hazardous wastes, mainly lubricants, are collected and disposed by authorized waste management companies. Applications of chemicals are done by trained operators, and chemicals are stored in a secure location. The existing packing plant uses ammonia as refrigerant and there are no significant emissions from other sources. The new plant will use ammonia as refrigerant and will be designed to comply with Venezuelan and WBG requirements.

- Environmental Management System (EMS):

An EMS is under development and in house monitoring of key parameters is being undertaken. An independent environmental consultant monitors the sponsor’s activities and its findings are submitted to the Ministry of Environment on a quarterly basis. The Ministry of Environment grants an annual operation permit based on evidences of compliance with Venezuelan requirements, as reviewed in quarterly reports and verified during an annual field inspection. Responsibility for implementing and supervising the EMS will be assigned at the senior technical level, reporting directly to the project''s General Manager. The packing plant has implemented a HACCP plan and the ISFV operation will develop and implement similar quality management and health and safety requirements when it develops its packing plant. The project will also be designed to comply with the Global Aquaculture Alliance''s codes of practice for responsible shrimp farming Global Aquaculture alliance (1999) Codes of practice for responsible shrimp farming GAA St Louis MO (http://www.gaalliance.org/).

- Occupational health and safety issues:

The sponsor will provide a full support and benefit package as required under Venezuelan law (social security and insurance, minimum wage + 10%, vacations and productivity bonus). As per the Venezuelan Labor Code, an Occupational Health and Safety (OHS) plan is being implemented as part of the project. The sponsor employs an OHS specialist and a medical doctor, who provides free medical attention to all employees.

- Land acquisition process and possible impacts related to physical and/or economic displacement:

The farm will be developed on approximately 8,000 hectares whose southernmost boundary is located approximately 2 km to the north of the village of Quisiro. The entire site was acquired by Interaqua in two lots from a single family in the early 1990s and there has been no physical resettlement or economic displacement. The project will not affect public access to the beach or interfere with traditional fishing and recreational activities carried out there. There are no recorded archaeological or cultural remains or sites within the development area. The sponsor has appointed a senior manager and allocated resources to develop social programs. Monthly meetings with representatives of official organizations present in surrounding communities are organized to discuss issues and agree on common actions. The sponsor supports local schools and local health centers, as well as other initiatives in education and health, primarily. The sponsor also collaborates with local NGOs and other groups on cultural and sport activities.

Conclusion & Monitoring

- IFC monitoring:

IFC will monitor ongoing compliance with World Bank Group environmental, social, health and safety policies and guidelines over the course of the investment and Inter Sea Farms provide annual details/confirmation:
- of compliance with Venezuelan EIA review requirements (relating to compliance with Venezuelan norms and standards, construction practices, mitigation and monitoring practices);
- of chemical use and management practices as well as details of pests controlled;
- that the company is achieving WBG requirements for waste water quality from all its sites and Venezuelan effluent standards from the Maracaibo packing plant that is owned by third parties;
- that the development and operation of the Punta de Leiva landfill complies with WBG requirements; and of the progress in implementing the company''s EMS.

The most recent annual report (covering 2003) received from the company indicates that the company is addressing environmental and social issues in a structured and proactive fashion. Information provided includes details of waste water quality, pest control, environmental management systems, solid waste management, community interactions, accidents, and training. The company is in compliance with WBG requirements with the exception of two farm wastewater values (total suspended solids (TSS) and coliform bacteria). The company indicates that the cause of high TSS levels is due to the permanent strong trade winds from the Northeast eroding pond levees and driving solids into the lagoons. The origin of the coliforms still is a mystery. The company has previously (2002) improved the septic tank functioning, which was thought to be a possible source of coliforms. However the levels of coliforms, although less than those reported in 2002, still exceed WB requirements. In order to correct high TSS values the company tried planting mangrove trees however survival was initially low and new planting techniques will be tested. TSS and total coliform concentrations in the open sea is almost as high as the farm effluent, and thus also exceed WBG limits. Upstream of the farm intake TSS value is of 342 mg/L and total coliform is of 811/100ml compared to 338mg/L and 987/100ml downstream of the intake. The source of TSS is probably due again to the strong trade winds which maintain solids in suspension along the coastline and the reason why coliforms are so high is probably due to either runoff, suspended soil particles, or raw sewerage discharge into the ocean.

Table 1 Waste water quality from existing ISFV farm (2003 average values).
Parameter
Measurement
World Bank Guideline

pH
8.0
6-9

BOD-5 (mg/L)
16.4
50

COD (mg/L)
88
250

Oil and grease (mg/L)
8.9
10

Total phosphorus (mg/L)
1.0
2

Total ammonia nitrogen (mg/L)
0.24
10

Total suspended solids (mg/L)
352
50

Total coliform bacteria (MPN/100mL)
971
400

Temperature increase (ºC)
0.7
3

Table 2 Chemical use at the ISFV farm.
Diesel fuel
300,000 gallons/year for pumps, vehicles, and generators.

Gasoline
32,000 gallons/year for vehicles.

Fertilizers
Approx 800,000 lb/year of urea, ammonium nitrate, triple superphosphate, sodium metasilicate, and others depending on availability, to fertilize pond water.

Sodium metabisulfite
Approx 13,000 lb/year for treating harvested shrimp to be sold head-on, and when required by customers.

Chlorine
Approx. 8,000 lb/year, for disinfecting harvested shrimp and handling containers.

Lime
Approx 100,000 lb/year, for pond bottom preparation

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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