The project sponsors have presented plans to address the potential impacts to ensure that the project will, upon implementation of the specific measures described below and in the Environmental and Social Action Plan (ESAP), comply with the environmental and social requirements of Brazil’s laws and regulations and the World Bank/IFC environment and social policies and environmental, health and safety guidelines. Information on how these potential impacts will be addressed by the company is summarized in the following sections.
- Systematic management of quality, environmental and social affairs
Environmental and social management of a large enterprise such as this requires the establishment of effective management systems for this purpose. IFC requires that operations in which it invests develop and implement appropriate systems, ideally fully integrated, to address environmental, social, occupational health and safety (OHS), food safety and quality considerations.
Unialco will develop and implement such a management system for Vale do Parana operations according to the schedule agreed in the attached Environmental and Social Action Plan (ESAP). This will be based on a mission and vision statement avowing their responsibility for the health and safety of their employees, conservation of the natural environment, and establishment of proactive relationships with the communities surrounding their operations. This integrated management system will be based upon international best practice designs and will include the following elements:
- social and environmental assessment;
- management program:
- organizational capacity;
- training;
- community engagement;
- internal auditing and monitoring; and
- reporting.
The management system also will define desired outcomes as measurable events to the extent possible, with elements such as performance indicators, targets, or acceptance criteria that can be tracked over defined time periods, and with estimates of the resources and responsibilities for implementation. Environmental and OHS managers will be appointed to lead the implementation of the management systems.
IFC recommended that Unialco implement an appropriate integrated management system at the corporate level (the Unialco Group) as well as in the sponsor’s other operations (Unialco and Alcoolvale), to ensure a consistent approach to these matters across all of their operations. Unialco accepted IFC’s recommendation.
- Operational Best Practices:
Vale do Parana will operate its agricultural holdings and mills in a manner consistent with the requirements of Brazilian and São Paulo State laws and regulations. Unialco works closely with the São Paulo Sugarcane Agro-industry Union (UNICA), a Brazilian operational benchmarking source. Vale do Parana operations will follow good manufacturing sector practices. Vale do Parana expects to operate at an efficiency of 90.6 percent, above IFC’s proposed 90 percent benchmark. The Vale do Parana mill will use diffuser technology with lower maintenance costs and lower energy consumption than traditional mechanical extraction.
As part of the project, Vale do Parana will draft a comprehensive monitoring plan, contingency plans (including a risk map), and environmental guidelines and procedures for site construction, operation, and closure activities. These plans will be based on international best practice standards. Management will ensure that requirements for appropriate environmental and OHS measures be incorporated into all construction contracts and that sub-contractors be required to meet these requirements.
- Environmental Programs:
The following sections describe the main environmental issues associated with the project and the actions needed to minimize and/or mitigate the issues.
- Land Use:
Vale do Parana received the environmental license for the project in April 2006 and the construction license in July 2006. Soon after the construction license is issued, site preparation and construction will commence. The area where the mill will be located is all modified habitat and is currently used for agricultural purposes. The EIA did not identify any endangered or critically-endangered species of flora or fauna within the vicinity of the project. Also, the assessment did not identify any archeological or cultural heritage sites within the project area. The only possible significant land use issue related to the project is that there are some forest reserves throughout the area of influence of the mill. These forest reserves will not be directly affected by the project, as buffer zones between the crops and any sensitive habitats and bodies of water will be implemented. There will be no encroachment of sugar cane on any forest land.
- Sustainability of water resource:
The mill will source its water through a deep artesian well from the Guarani aquifer, South America’s largest underground water body. The mill has been granted a perforation license, which allows them to extract up to 460 m3/hr. The mill is expecting to consume approximately 395 m3 of water per hour (including make-up water), well below the allotted amount. The mill will manage water in a closed circuit system, including cooling waters and condensates through cooling towers and ash waters through settling ponds. The proposed ash water recycling system is labor/machinery intensive, and as part of this project the company will conduct a cost-benefit analysis of more efficient handling and recycling technologies. Based on the results, the company will implement the most efficient process. It is expected that the mill will operate well below IFC’s water load target of 0.9 m3 per ton of cane processed.
- Liquid effluents:
The mill will generate approximately 1.43 million cubic meters of effluent per zafra by the time the mill reaches full capacity (1.19 million m3 of vinasse and 240,000 m3 of residual waters). This amounts to around 250 m3/hr of vinasse, taking into consideration a zafra of 210 days. The company is planning to store the vinasse in a lined pond, commingle it with the cleaning water, and discharge it to the fields. As part of this project, the company will conduct a cost-benefit analysis to determine the feasibility of digesting the vinasse and cleaning waters, capturing the methane and generating energy for mill use, and discharging the remaining effluent to the fields. Vinasse/cleaning waters digestion is a proven technology that is widely available. If the assessment proves this technology to be feasible and cost effective, Vale do Parana will install it and generate energy for mill operation.
- Air quality and noise emissions:
The mill will be installed with one boiler, with a capacity of 175 tons of steam per hour, using bagasse as the fuel. The boiler will feed a 15 MW turbo generator. The mill will be fully automated and, at least initially, all energy will be consumed internally. The boiler manufacturer will guarantee an emission of 150 mg/Nm3 of particulate matter (PM), as per State regulations. The boiler will be installed with a wet scrubber to achieve these PM levels. The EIA conducted airshed modeling based on a higher PM stack emission of 210 mg/Nm3 and showed that the highest ambient air concentration of PM within the mill’s boundary was predicted to be 35.6 μg/Nm3 and outside of the mill to 59.7 μg/Nm3, well below IFC’s maximum 24-hour average standard of 70μg/Nm3.
Burning of cane at harvest is the major air quality issue in the region. São Paulo State has instituted a cane burning minimization program and is phasing in requirements for mechanical harvesting which do not require burning. By 2008, when the mill is expected to commence operations, 50% of the cane sourcing the mill will be mechanically harvested; by 2031, 100 percent of all cane will need to be mechanically harvested. Limitation of open burning will dramatically improve ambient air quality throughout the affected regions.
Vale do Parana’s workplace air quality is expected to comply with IFC standards. Vale do Parana will install dust barriers around the bagasse pile to prevent dust particles from dispersing throughout the mill. Ambient and workplace noise levels generated by the mill are expected to be normal for the industry. Where required, noise abatement systems will be installed to minimize any possible exceedances of São Paulo State or IFC standards.
- Hazardous and non-hazardous waste management:
As part of its integrated management system, Vale do Parana will develop and implement procedures to manage industrial waste. All wastes will need to be segregated and either disposed of in certified landfills or sold for recycling. With regards to hazardous materials, such as agrochemicals and petroleum products, these will be managed according to São Paulo State and IFC’s hazardous material management guidelines, including proper storage, handling, and disposal practices. As mentioned above, the company will determine the most effective treatment/disposal for the vinasse. The vinasse, whether treated or untreated, will be used for crop irrigation following São Paulo State’s regulatory requirements. All tanks and primary distribution canals will be lined to prevent groundwater contamination. Cleaning waters will be commingled with vinasse and either digested or applied to the crops. The filter cake and ash will be composted together with left over bagasse. As part of this project, the company will implement all the necessary technology to achieve composting successfully. These practices will reduce the use of fertilizer considerably, significantly adding to soil carbon and thereby enhancing sustainability of raw material production.
- Control of Pest Species in Cane Rearing Operations:
The Vale do Parana agriculture team will be comprised of in-house agriculture engineers and technicians. Their overall role will be to supervise field operations, following guidelines established by Unialco in their existing operations. The crop land will be either owned by company shareholders, leased, or owned by third parties. They will oblige third parties to hire experienced cane growers that now supply cane to Unialco. The agriculture team will continue their ongoing technical cooperation agreement with “Centro de Technologia Cañaveira” or CTC, a well respected sugar technology institution. This institution, together with a pool of external specialists, will give technical support to the company.
Unialco has implemented limited biological controls for the most significant sugar cane pests and it is expected that Vale do Parana will follow the same procedures. The main pests affecting Unialco’s crops are the broca (Diatraea saccharalis) or cane borers, nematodes, a root parasite (termites) which destroy cane roots and rhizomes, and Migdolus frianus, a whose larvae destroy cane roots and rhizomes. Unialco releases a wasp, Cotesia flavipes, whose larvae feed on broca. This biological control mechanism serves to reduce chemical pesticide consumption.
Vale do Parana will utilize commonly available herbicides, and use and management will be consistent with IFC’s Plantation and Pesticides Handling and Application Guidelines. Also, Vale do Parana will follows the strict São Paulo State agrochemical management regulations, including triple washing the product containers and returning the containers to the suppliers. The herbicides and insecticides used will be sourced from major agrochemical suppliers such as DuPont, Syngenta, Bayer, Monsanto, etc. Vale do Parana will also use chemical cane ripening agents, which have very low toxicities and half-lives. For crop nutrients, Vale do Parana will use some common chemical fertilizers, together with the vinasse effluent and the composted filter cake and ash from the mill. As part of this project, Vale do Parana will develop an integrated pest management (IPM) system consistent with international best practices.
- Indigenous peoples:
Unialco Group has previously hired indigenous peoples for planting cane, under 70-day contracts, supervised by Procuradoria Regional do Trabalho (Public Attorney for Labor Issues). Documents provided by Unialco were examined and the contracts are in conformity with Brazilian legislation and the IFC performance standard. As part of this project, Vale do Parana will ensure that indigenous people’s rights are respected in conformity with Brazilian legislation and IFC performance standards.
- Grievance Mechanism:
To date, all internal and external procedures for communication between the company and employees and local communities have been informal, based on personal relationships. As part of this project and according to the attached ESAP, Vale do Parana will develop a grievance mechanism to ensure that the company can address communities’ concerns related to the project in a more formal way.
- Labor practices:
Unialco’s existing operations follow practices common to the sugar cane sector in the State of São Paulo: the mills have both permanent personnel and seasonal workers hired during the harvest period (usually from April to December each year) known as “safristas” or harvesters. Unialco policy is to hire, whenever possible, its workforce from the regions where the mills are located. For the 2006 harvest, the Group decided to contract directly with the workers, without using third parties or labor suppliers. According to the Group’s Human Resources department, the workers hired for a certain period have the same labor rights as permanent ones, under the current labor laws. The contract establishes working conditions including working days and shifts. Also, in São Paulo State, there is strong control of labor conditions by the Comissão Pastoral da Terra – CPT and Ministério Publico do Trabalho. The government has recently implemented regulation NR-31 regarding rural labor conditions, including sugar cane cutting conditions. Visits made to three cane cutting work fronts within farms in the Guararapes region, supplying to the Unialco mill, confirmed full compliance with NR-31. Unialco will ensure that labor practices at Vale do Parana comply with IFC Performance Standard 2.
- Migrant workers:
In the case of the migrant workers, the Group’s policy is to provide rented houses in urban areas, where workers live during the harvest. In such cases, Unialco is fully responsible for the rental and maintenance of the houses. Each worker is provided with three meals a day. Vale do Parana will ensure that living conditions and safety of the accommodation for its workers complies with relevant national legislation.
- Freedom of Association:
Brazilian labor legislation regulates the organization of unions. In the case of Unialco, the rights to be a union member are guaranteed by the hiring of workers under the CLT – Consolidation of Labor Laws. All salary negotiations are mediated by the pertinent union organization on a yearly basis following CLT guidelines.
- Wages and Benefits:
Wages and benefits are provided in accordance with Brazilian legislation. Unialco pays the minimum wage agreed with the labor union (Sindicato dos Trabalhadores da Indústria Açucareira) plus a payment related to the productivity (number of tons cut) of each individual. To avoid health problems related to excessive work in sugar cane cutting, the policy of the company is to avoid stimulating competition among groups, and establishes limits on daily production by delimiting lines to be cut and avoiding long journeys to work. Also, the admission medical exam is strict.
- Child and Forced Labor:
Unialco Group policy states that no minors under 18 years of age are hired for any job connected to agriculture or industry. In the future it may hire apprentices under 18 years of age, for educational purposes and according to the apprentiship legislation. Unialco Group does not use forced labor in any of its operations.
- Retrenchment:
As required for contracts covered by the CLT, labor rights in cases of retrenchment are guaranteed and respected. Seasonal labor is also contracted according to CLT rules. When the period of the contract expires, temporary workers are dismissed, having rights to vacation pay, 13th month wages and insurance fund, all in proportion to the time worked.
