26099 - Sabo Industria e Comercio de Autopecas Ltda

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Environmental & Social Review Summary

Project Number

26099

Company Name

SABO INDUSTRIA E COMERCIO DE AUTOPECAS S/A.

Date ESRS Disclosed

May 11, 2007

Country

Brazil

Region

Latin America and the Caribbean

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jul 11, 2007
Signed : Aug 22, 2007
Invested : Apr 7, 2008

Sector

Motor Vehicle Parts

Industry

Manufacturing

Department

Regional Industry MAS LAC & EUR

Project Description

Sabó Industria e Comercio de Autopecas Ltda (Sabo or the company), a mid-sized family-owned Brazilian company based in San Paulo, produces sealing and connecting devices for automobiles, such as oil seals, gaskets, and hoses. The company has three sites in Brazil, two of them in São Paulo, Santa Marina (will be closed by July 2007) and Mateo Forte, and Mogi Mirim, which was built in 2005, 160 Km distant from São Paulo. The Mateo Forte plant is located in a mixed area (urban and industrial) while Mogi Mirim plant is located in an industrial condominium.

The company has a corporate capital expenditure program for the next five years which includes debt refinancing, capacity upgrading and expansion, and Research and development activities. IFC has been requested to provide a 10-year corporate loan of up to $40 million to support the Investment Program.

Overview of IFC's Scope of Review

IFC’s Environmental and Social review of this Category B project consisted of:

Initial Review:

- Preparation of a preliminary environmental and social questionnaire (AIS) answering to IFC’s main points for concern, which guided the client in the organization presentation and documents to be submitted during appraisal mission.

Appraisal:
- Presentation by the company of the proposed investment;
- Interview with the company on the Human Resources policy and Social assistance/responsibility area;
- Interview with the company on Environmental and on Occupational Health and Safety issues;
- Site visits to both plants by IFC’s environmental specialist to evaluate both social and environmental issues.
- The company submitted data regarding Environmental Issues, Policies, Certificates, Statistics and other documents.

E & S Project Categorization and Applicable Standard

- PS1. Social and Environmental Assessment and Management Systems
- PS2. Labor and Working Conditions.
- PS3. Pollution Prevention and Abatement.

Applicable guidelines:

- General Environmental Guidelines (July 1998)
- General Occupational Health and Safety Guidelines (June 24, 2003)
- Life and Fire Safety Guidelines (December 2002)
- Hazardous Materials Management Guidelines (December 2001)

Environmental and Social Mitigation Measures

- PS 1: Social and Environmental Assessment and Management System:

Both Mateo Forte and Mogi Mirim plants are certified ISO 14001:2004. Both plants were in a certification maintenance process during the appraisal. All plants are certified TS 16949:2002, which is the certification necessary to provide parts to the automotive industry in Latin America, in the United States and in Europe.

The Company intends to reassess the current social investment program to obtain measurable and better benefits, including the scholarships offered to its employees focusing more in technical courses than in formal education.

- PS 2: Labor and Working Conditions:

- Union Relations. Sabó employs 3239 workers in Brazil. The company negotiates with 2 different syndicates separately, one from metallurgy products and a second one from rubber products, which resulted in differences between wages paid, vacations, retirement and stability. Bonuses and benefits are negotiated together.

- Workload – The workload of Sabo’s plants (41,5 hours per week in Mateo Forte, and 44 hour/week in Mogi Mirim) are compliant with local laws. On both units there is clear policy regarding extra hours.

- Outsourced Companies - There is a standard contract to deal with outsourced companies, which includes previous audits of the outsourced company’s financial capacity, labor qualifications, training, taxes situation and quality of services.
- Grievance mechanism - The company has an active mechanism to attend comments and complaints from the public that can be reached through a free hot line (0800), a website and a form available in every plant. The most relevant complaints were regarding the heavy traffic due to loading operations of trucks in the region. The company, in accordance with traffic authority (CET-SP) changed the loading entrance to a side gate.

- Local Inspections In the last 5 years, the company has been receiving state routine inspections on labor but no major issues had been found. All inspections are registered.

- Non discrimination and equal opportunities policies – Sabo’s is issuing a Manual de Conduta or a Best Behavior Practices Manual based on “the Great Place to Work’ methodology.

- Retrenchment – Although Santa Marina plant will be shut down in July, Sabó implemented a transference policy to Mateo Forte plant (which is 1.5 Km distant) instead of dismissing the current workforce.

- Occupational Health and Safety - Sabó has adequate occupational health and safety procedures and a well trained fire brigade for emergency preparedness and response.

- Workers with special needs - The company employs 100 people with special needs, according to the law, mainly people with hearing problems. Sabó plans to reach 160 employees with special needs until the end of 2007.

- Scholarships policy –. The scholarship program for employees was initially launched 20 years ago. Currently Sabó sponsors 60 undergraduate students.

According to the documents analyzed, the sites visited and interviews made, Sabó is compliant with PS2 – Labor and Working Conditions.

PS 3: Pollution Prevention and Abatement:

- Liquid Effluents
Mateo Forte - The only plant which has an effluent treatment station (physical/chemical) is Mateo Forte for industrial liquid effluent only. All industrial effluents are related to hoses produced only in Mateo Forte plant. The sludge generated by the effluent treatment station was classified as Class IIa (not hazardous but reactive) and is co-disposed in an Industrial licensed landfill.

Mogi Mirim – All the effluent generated by Mogi Mirim plant is removed by a specialized company and disposed in an industrial licensed landfill.

The analysis of the effluent, made by Ecolabor, an accredited laboratory, indicates that it is fully compliant with local standards and partially compliant with IFC General Environmental guidelines.

-Air Emissions
Hazardous Compounds Emissions:
Sabó had requested (2006) a study to an accredited Laboratory of the main organic contaminants that may be present due to the nature of the adhesive used to join metal and rubber. The results showed that Sabó complies with both American and Brazilian standards for the contaminants tested.
PM, NOx and SO2.

There are two boilers using Natural Gas to generate steam mainly to hoses vulcanization, heat water for Effluent treatment station and oil heating for the internal mixers. There is no monitoring of air emissions (PM, NOx and SO2) from the boilers. A periodical monitoring is needed to verify compliance.

- Solid Waste
The company manages its solid waste (hazardous or not) in a centralized manner. All solid waste is concentrated in an appropriate site located in Mateo Forte plant named “Central de Resíduos” or Solid Waste Management Center, controlled by a computer based system, where it can be properly stored until the final disposal. Sabó recycles 58% of its solid waste and it is material compliance with IFC guidelines for solid waste.

- Ambient Noise
Two annual monitoring measurements are performed – daytime and nighttime.
Measurements for Mateo Forte are compliant with both local standards and IFC guidelines for Industry and commercial areas, but not compliant with residential areas (they are located in a mixed zone). However there are no complaints about ambient noise.

- Sustainability opportunities
During the appraisal a number of opportunities to improve sustainability performance of the company were identified, including; reuse of scrap metal, heat recovery from the process; wastewater minimization and abatement; and more efficient water usage. The company will develop and implement programs for resource conservation and energy efficiency as per the attached ESAP.

- Occupational Health and Safety
Sabó has an Occupational Health and Safety plan and Emergency response plans prepared following government procedures. Emergency action plans cover the main internal major issues and are compliant with General Occupational Health and Safety Guidelines (June 24, 2003). The company will assure that IPE (Individual Protection Equipment) are used as appropriate throughout the plants.

Conclusion:
The company is currently in material compliance with Performance Standards and IFC guidelines. The attached Environmental and Social Action Plan (ESAP) contains a number of actions that the company has agreed to implement to reach full compliance with IFC requirements and to enhance its sustainability performance.

Stakeholder Engagement

Social responsibility - Sabó is reformulating its Social Responsibility policies and actions. In the past the programs had a broader scope with an internal school for adults for about 18 years, reaching 2800 employees and an external school and an institute for 12 years, reaching 200 children.
Choral - The company sponsors an employee choral ensemble.
Children - The company helps Unibes which is an assistance institution from Jewish community to help poor children.
Sabó Institute – Sabó sponsors a school in Louveira. The company is reformulating its policies to be able to cater a greater number of students.

Mr. Braulio de Carvalho, Corporate Director
Rua Matteo Forte, 216 – Lapa
Sao Paulo – SP – Brazil

Telephone: (55 11) 2174 5885
Fax: (55 11) 2174 5101
E-mail: bcarvalho@sabo.com.br
Website: www.sabo.com.br

Environmental documents are available at the address above.

Client Documentation

File Name	Actions
Sabó Environmental and Social Action Plan _ESAP_.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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