25232 - Sandora II

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Environmental & Social Review Summary

Project Number

25232

Company Name

Sandora, TOV

Date ESRS Disclosed

Jul 18, 2006

Country

Ukraine

Region

Europe

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Sep 25, 2006
Signed : Sep 28, 2006
Invested : Oct 23, 2006

Sector

Soft Drink

Industry

Agribusiness and Forestry

Department

Regional Industry MAS LAC & EUR

Project Description

The proposed project is a program of corporate-wide investments at Sandora (Sandora or the company), a leading Ukrainian juice and nectars producer and an existing IFC client. The proposal primarily increases Sandora''s productive and distributive capacity, mainly to expand its juice and juice drinks business (Tetra carton, PET and glass) with the addition of baby food. Ancillary investments will also strengthen fruit processing and concentrate production. The company’s corporate investment program is estimated at $99 million over 2006-2007.

Overview of IFC's Scope of Review

The review of this project consisted of appraising Sandora’s performance in meeting IFC requirements and the corrective action plan agreed for the existing investment in this company; analysis of the environmental and social information submitted by the client in the 2005 Annual Monitoring Report; and telephone interviews with appropriate company specialists.

The following social, environmental, health and safety issues were analyzed:

-development and implementation of environmental, health and safety management systems across all operations;
-food safety;
-air emissions, effluent discharges and solid waste issues; and,
-occupational health and safety of workers.

E & S Project Categorization and Applicable Standard

Performance standards that are applicable for this investment include:

- Performance Standard 1: Social and Environmental Assessment and Management Systems
- Performance Standard 2: Labor and Working Conditions
- Performance Standard 3: Pollution Prevention and Abatement
- Performance Standard 4: Community Health, Safety and Security
- Performance Standard 5: Land Acquisition and Involuntary Resettlement

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 that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

IFC’s practice is to categorize corporate investments of this type as Category B, particularly in cases such as this where an existing investment has assessed the physical facilities and the company is up-to-date in meeting its commitments under that investment.

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.

- Management of Existing Operations

The existing processing operations were previously assessed as part of the appraisal for the earlier investment in Sandora. These operations were expected to be carried out according to IFC policies and guidelines, and subsequent monitoring has confirmed that this is so. Sandora has provided monitoring reports and is current with tasks designated in the earlier Corrective Action Plan.

Additional points are as follows:

- Air emissions:

In 2005 the Crimean operations converted from high sulphur fuel to sweet gas and thus significantly reduced the concentration of air contaminants emitted from boiler operations. Both Mikolayiv and the Crimean operations are currently in compliance with IFC guideline limits.

- Water and wastewater management:

Water for production operations is supplied by groundwater wells under a permit from the government. Groundwater is treated before use to meet product quality requirements. Collected wastewater from operations is discharged to the sewer system for treatment in the Mikolayiv wastewater treatment facility. Wastewater is adequately managed at both the Mikolayiv and Crimean operations.

- Waste management:

Solid organic waste from fruit and vegetable processing is transported offsite for use as animal food. Solid waste is managed effectively, with all organic waste sold as a byproduct either for animal consumption or for the manufacture of byproducts including essential oils and activated carbon. Other solid waste, which is limited, is transported to a municipal disposal site for disposal.

- Occupational health and safety:

Occupational health and safety performance is acceptable with only one lost time accident in 2005. Appropriate actions were taken in response to the accident. With the on-going integration of OH&S procedures into the existing ISO 9001 quality management system, the Company is taking appropriate steps to avoid accidents and ensure employee safety.

- Labor and Working Conditions:

Sandora employs about 3,400 workers at all its facilities in the Ukraine. It has a robust human resources policy and labor laws which are in compliance with Ukrainian national law and consistent with IFC policies and guidelines. Employees are provided orientation on various issues such as collective bargaining, code of conduct, workspace conditions, etc. Training is obligatory for all employees at Sandora on OH&S, sanitary and hygienic safety, as part of the quality management program.

Integrated Systems for Management of Quality, Food Safety, Environment and Occupational Health and Safety:

Sandora management is strongly committed to institutionalizing a systematic approach to management of critical business processes, social, environmental, health and safety issues. For all of its corporate investments, IFC requires the establishment of appropriate management systems to handle these issues.

In accordance with the corrective action plan agreed for the existing investment in the company, in 2004 Sandora obtained ISO 9001 certification. Their quality management system will form the organizing structure for integrating food safety, environmental, and health and safety aspects. At the moment, Sandora is engaged in an ongoing effort to integrate Hazard Analysis and Critical Control Point (HACCP) program into the ISO 9001 foundation. The existing Mikolayiv plant is now ready for formal certification, and Sandora will obtain HACCP certification for both this existing and the new Mikolayiv plants by December 2007. In parallel, OH&S and environmental management programs and procedures are also being integrated into the quality management system. This integrated system will be fully developed by July 2008, and Sandora will obtain ISO 14001 and OHSAS 18001 certifications for these aspects by that time. The resulting integrated management system will form the basis for assessing any future expansions and acquisitions by Sandora. Sandora will implement similar management and relevant certification systems, as in the existing operations, to ensure quality and compliance at the new facilities. As new facilities are constructed or acquired, Sandora will ensure that appropriate environmental assessment or environmental site audits are carried out according to relevant IFC performance standards and guidelines, and that appropriate local consultation and disclosure is provided.

Stakeholder Engagement

Sandora''s two plants in Mikolayiv district are located in a rural area near two major villages of Mikolayivskoe with a population of about 1000 people and Gorokhovka with about 500 people. Sandora hires locally and currently employs 200 people from Mikolayivskoe and 100 people from Gorokhovka and other small villages.

Sandora participates in regular meetings with the local communities which are organized by the Regional Council. Sandora has an Agreement on Social Partnership with the administration of Mikolayivskoye which includes financial support for a local clinic, purchasing of computers for a local school, road maintenance, and financial aid to Second World War veterans, and others. Sandora is in the process of developing a similar agreement with Gorokhovka''s administration. Sandora is also supporting a regional hospital for children and a regional theater. Sandora''s 2006 budget for social partnership is $30,000.

Client Documentation

File Name	Actions
25232_Environmental and Social Action Plan final draft.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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