25113 - Detroit Investments

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Environmental & Social Review Summary

Project Number

25113

Company Name

Detroit Investments

Date ESRS Disclosed

Jul 21, 2006

Country

Eastern Europe Subregion

Region

Europe

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Oct 30, 2006
Signed : Nov 8, 2006
Invested : Mar 7, 2007

Sector

Soft Drink

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Detroit Investments Ltd. (DI or the company), a Cyprus-based entity, is the main investment vehicle of the Detroit Group which is involved in the production and distribution of beverages (beer, mineral water, fruit juices) in Belarus and Russia. DI is also the sponsor of two IFC projects: DBBC and PIP-Vladpivo.

Detroit Investments requested further IFC support as the Company expands into the juice sector in Belarus and software sector in Russia. IFC’s investment and participation in this transaction will facilitate the establishment of the first commercial juice company in Belarus via the privatization of underperforming assets; and support the development of a fast-growing IT services company in Russia.

(Project Description has been amended on November 2, 2007 to reflect changes in the original project proposed by the sponsor.)

Overview of IFC's Scope of Review

The review of this project consisted of appraising technical and environmental/social information and plans submitted by the project sponsor and a physical review of proposed operations by an IFC environmental and social specialist.

The ESRS has been amended on November 2, 2007 to reflect changes in the original project proposed by the sponsor.

E & S Project Categorization and Applicable Standard

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The following potential environment, health and safety and social impacts of the projects were analyzed.

For juice plant:

- Systematic management of quality and environmental affairs;
- Sustainability of water supply;
- Air emissions;
- Process water and storm water management;
- Hazardous materials management;
- Occupational health and safety;
- Work place monitoring;
- Land acquisition; and
- Employment and retrenchment.

Environmental and Social Mitigation Measures

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.

The juice plant will be established by the company on the site of a state-owned vegetable canning plant in Bobruisk. The company will purchase the plant in a privatization transaction with the administration of the Mogilev region. The old vegetable canning plant was built in the early 1990s and had never started functioning to its full capacity due to the economic decline associated with the economic transition in the 1990s. In January 2006 the plant effectively stopped its operations, with the result that about 60 of the remaining workers are currently on forced leave and 2/3 of their salaries having been paid until the end of Summer 2006. The brownfield site (5.4 Ha) currently contains several production facilities with infrastructure, several unfinished constructions and dilapidated equipment in the production areas. According to the investment agreement with the regional administration, the administration will conduct cleaning of the site, removal of old equipment and unfinished construction before transferring it to the company.

The company will take over the brownfield site with the plant and infrastructure, upgrade the infrastructure and install new equipment for juice production. The Company plans to purchase a modern producing and packing line for its juice plant from a leading equipment manufacturer. As part of the transaction the Company will receive detailed information about the equipment’s energy and water use, the volume and chemical content of the liquid emissions and will design its infrastructure upgrades in line with these technical specifications. Therefore, some environmental considerations and mitigation measures are subject to technical specifications that are to be provided by the equipment manufacturer.

- Systematic management of quality and environmental affairs:

The company has a demonstrated track record in implementing successful management of quality and environmental affairs in its other IFC-sponsored projects. Upon initiation of the project, the company is expected to implement and integrate in its management systems the necessary procedures and provide resources and staff for ensuring the quality of its environmental management systems and compliance with local regulations and IFC requirements.

- Sustainability of water supply:

The company plans to use three wells in close proximity to its site which are owned by “Brewery Dednovo” for the supply of drinking water. The wells that are 130 meters deep have a capacity of 36-40 m3 of water per hour. Allowed extraction of drinking water from all three wells is 730 thousand m3 per year. The current extraction (in 2005) is 9.6% of the allowed amount and is used by another lessee of the well (CJZC Brewing Company Syabar). The company may in future considering building its own wells in close proximity to its site.

- Air emissions:

The national power grid provided power for all operations of the old vegetable canning plant and is expected to do so for the new juice plant as well. The canning plant had previously purchased steam and hot water from a nearby boiler associated with another industrial facility in Bobruisk and the company will continue to do so for the time being. During the latter stage of the project the Company may consider building its own boiler fueled by natural gas.

- Process water and storm water management:

The existing vegetable canning plant discharges storm and process water into the municipal sewer system and has infrastructure that includes two water pre-treatment ponds (separate ponds for process and storm water). The company will continue to discharge into the municipal sewer and will upgrade the existing infrastructure to accommodate the volume and chemical content of the new production equipment and to comply with local regulations and IFC guidelines.

- Hazardous materials management:

As a part of juice production process the company will install a clean in place (CIP) system in the plant that will be provided by the equipment manufacturer and that may use hazardous materials. The system is expected to meet local regulations and be operated in accordance with international good practices and IFC requirements. The company will implement the necessary infrastructure upgrades and procedures for operating CIP upon receiving its technical specifications from the equipment manufacturer.

- Occupational health and safety.

The company will develop and implement a comprehensive system for occupational health and safety on the plant that will meet local requirements and international good practices. The details of such policy will be developed upon receiving the technical specification from the equipment manufacturer.

- Work place monitoring:

As part of the production process the company will implement a work place monitoring program that will be compliant with local regulations and international best practices.

Land acquisition:

The privatization transaction with the local administration will also include transfer of land leasing rights for the land under and around the vegetable canning plant. The land that will be leased from the state by the company in industrial land that is located in the industrial part of the city of Bobruisk. No land will be acquired and no resettlement is expected.
- Employment and retrenchment:

As part of the vegetable canning plant privatization agreement with the regional government, the company will provide preferential opportunities for employment to the workers of the plant in new juice production opportunities or assist them in finding alternative employment. The company will develop a retrenchment plan to satisfy this commitment.

(The Environmental and Social Issues and Mitigation section has been amended on November 2, 2007 to reflect changes in the original project proposed by the sponsor).

Stakeholder Engagement

The company has a successful track record in engaging with the community and in contributing to local development in its other investment in Belarus. It is expected to maintain high level of engagement in its new projects.

As part of its presence in the Bobruisk region the company has financed a variety of cultural events and festivals and is engaged with the local government on extending its contribution to regional development and employment. The development impact of existing company operations in the Bobruisk region is widely recognized by the local authorities, who have expressed their interest in having the company as a partner for revitalization of the non-functioning and outdated vegetable canning plant. As part of this process the company has engaged with the workers of the vegetable canning plant and informed them of the opportunities for employment at the new juice production plant.

As both the juice plant and discount store chain will imply the transfer of ownership for existing industrial or retail facilities no significant new impacts are expected to arise from company’s involvement. The company will release project documents for public review according to the IFC Policy on Disclosure of Information and will address possible community’s concerns.

(The ESRS has been amended and re-released on November 2, 2007 to reflect changes in the original project proposed by the sponsor).

Client Documentation

File Name	Actions
Detroit Investments CAP_07_24.pdf
Detroit Investments CAP_02_11_2007.pdf

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

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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Environmental & Social Review Summary

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Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

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