26297 - Bostavan

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Environmental & Social Review Summary

Project Number

26297

Company Name

BOSTAVAN WINERIES LTD

Date ESRS Disclosed

Nov 2, 2007

Country

Moldova

Region

Europe

Last Updated Date

Jun 3, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Feb 7, 2008
Signed : Mar 24, 2008
Invested : Jun 6, 2008

Sector

Wineries

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Bostovan Wineries Limited (BWL or the company) is a leading Moldovan wine producer headquartered in Chisinau, Moldova. The company’s main business operation is production of wines in Moldova and Romania.

The company’s Moldovan operations suffered significantly from the ban in March 2006 on exports to Russia, which accounted for 75-80% of the company’ sales. The company is undertaking an investment program to upgrade and expand its wineries as part of its strategic plans to diversify its markets and reduce reliance on the Russian market.

Overview of IFC's Scope of Review

The review of this project consisted of appraising technical, environmental, health, safety and social information submitted by the project sponsor, and field visit by IFC Social and Environmental Specialist in July 2007. The environmental and social (E&S) appraisal team visited Bostavan’s vineyards and production facilities. Meetings were held with the management team of and its plant teams as well as with representatives of the local communities.

E & S Project Categorization and Applicable Standard

While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

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

The findings of the project review indicate that there are no impacts related to PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples, PS8: Cultural Heritage.

This is a Category B project according to IFC’s Environmental and Social Review procedures because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to performance standards, guidelines and the environmental and social action plan (ESAP).

Environmental and social issues associated with this project include:

- environmental, health and safety management systems;
- labor and working conditions;
- land acquisition;
- cultivation and harvesting practices and potential environmental and occupational health and safety impacts arising from use of chemical inputs and pesticides;
- occupational health and safety management;
- management of hazardous materials and wastes;
- sustainability and quality of potable water;
- air emissions from production processes;
- use, treatment and discharge of process wastewater;
- sustainable management of solid waste.

Mitigation measures for the potential environmental and social impacts have been identified and are incorporated into an attached Environmental and Social Action Plan (ESAP). The company has committed the resources to implement comprehensive environmental, health, safety and quality management systems consistent with IFC environmental and social performance standards.

Environmental and Social Mitigation Measures

The company 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 IFC Environment and Social Performance Standards and the World Bank Group (WBG) environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the company is summarized in the paragraphs that follow. Further information is provided in the attached ESAP, which is agreed upon by IFC and the company and will address the compliance gaps with IFC’s requirements.

- Social and Environmental Assessment and Management Systems:

The facilities of the Bostavan group include its main office in Chisinau, two wineries (Etulia, Onesti), and vineyards of both wineries. Quality and environmental affairs are currently managed by the Chief Production Engineer at each winery, with the Director General of the company personally providing group-wide management. The company’s operations are currently certified to ISO 9001 and are in the process of obtaining international certification for environmental management (ISO 14001 or ISO 22001) in 2007-2008. The production engineer or environmental engineer at each winery is responsible for environmental monitoring, obtaining emissions, discharges and water use permits as well as for reporting to the local environmental oversight authorities and monitoring of compliance with local environmental regulations, preparing and maintaining environmental international certifications and work with technical consultants for preparing ESIA and other environmental documentation.

The Head of each winery oversees social aspects of operation including employment, community consultations and social assistance to the communities nearby company’s operations. The General Director provides guidance to community engagement in the communities around Etulia and Onesti vineries, in Chisinau and in other locations in Moldova. In order to streamline the management of environmental and social issues, appointment of a Manager or a Chief Engineer that will have full responsibility for managing the environmental aspects of Bostavan’s operations across the Group is needed.

- Labor and Working Conditions:

The company’s staff is about 300 people and includes clerical and management staff in Chisinau, technical specialists and workers in the wineries, and agricultural labor on the vineyards. Terms of employment are in accordance with the local labor regulations and in material compliance with IFC requirements. Salaries of administrative and technical staff are competitive for the local labor market. Salaries of workers in the vineries and agricultural labor are significantly higher than alternative income opportunities in the rural areas. In addition to its regular staff, the company employs seasonal agricultural workers during harvesting and planting seasons that also receive very attractive compensation.

Recruitment decisions for agricultural, seasonal and winery workers are made in each of the wineries while recruitment of technical staff is undertaken by the main group’s office in Chisinau. As a part of enhancement of quality processes it the vineyards, the group is implementing a system for individual responsibility for vineyards to promote flexibility and quality of agricultural works. Seasonal workers are mostly local farmers that combine hired employment with the company with their own agricultural activities. As a part of their employment all workers are subject to a basic OHS training in the respective areas of the production process.

- Pollution Prevention and Abatement:

The wineries of the Bostavan group extract water for wine production operations from ground wells under their ownership. Limits of water extraction are regulated by the government and permits are issued for yearly limits. The company indicated that sources of water are sufficient and reliable. Pre-treatment of water to achieve the necessary mineral content is undertaken in the company’s water pre-treatment facilities, before using it for wine production. The company’s vineyards are usually not irrigated. Limited irrigation is used only for newly planted vineyards (up to 1 year old) and during grape planting works. Water for irrigation usually comes from the discharged water from the wineries’ wastewater treatment facilities.

Process water from wine production as well as storm water and domestic waste water are usually treated in the company’s own waste water treatment facilities before release to ground water. Semi-anaerobic or aerobic processes are used for digesting the contaminants and bringing the water content to the level acceptable for agricultural use or ground discharge. Treated water discharge to the surface water is regulated by the environmental authorities and the routine monitoring of the discharge water is undertaken.

The main sources of solid wastes are wasted are grape residuals, packaging material (plastic, carton, broken glass bottles) and used yeast. All grape residuals after pressing are sold or given for free to the local farmers who use them for cattle feed, land fertilization or as fuel (branches). Waste from packaging materials is usually sent to suppliers of materials (for carton or glass bottles) or sold to third parties for recycling (plastic). Used yeast is dewatered, pressed into bricks and removed to municipal landfills by licensed waste removal contractors.

A small number of hazardous materials are used in the process of vine production, as cleaning solvents and as chemical nutrients for grape plants. The removal of hazardous materials and wastes is undertaken by qualified third party contractors.

The company does not generate its own electricity and receives it from the grid.

- Community Health, Safety, and Security:

A small number of pesticides are used in agricultural works by the company. The supply, application and removal of pesticides is undertaken by a qualified and internationally-reputable pesticides supplier (a local distributor of BASF). Pesticides are supplied on a just-in-time basis and the company does not store any pesticides in its facilities. The company’s workers that participate in handling of the pesticides are undergoing special training and are equipped with appropriate personal protective equipment. Development of a documented Pesticides Management Plan (PMP) is requested from the company as a part of the corrective action plan for this investment.

The company employs a small number of guards in its vineyards and vineries. All security personnel are acting in according to the operation procedures and no incident involving local communities were registered.

- Land Acquisition and Involuntary Resettlement:

Currently the company leases all its agricultural lands in Moldova from Victoriavin. Victoriavin has acquired land from private owners in willing-buyer and willing-seller transaction using market prices. All acquired land has agricultural use and there is no resettlement of individuals or economic displacement due to land acquisition. Currently, land purchases are on an ad-hoc basis reflecting Victoriavins’s and the company’s strategic direction towards increasing the size of its vineyards and pursuing opportunities for land acquisition in proximity to the wineries. In order to better plan for costs of land acquisition and more effective management of vineyard planting, a Land Acquisition Plan needs to be developed for all wineries.

Stakeholder Engagement

The company’s engagement with the local communities is an ongoing process and usually related to land acquisition, employment generation for surrounding rural communities, and social assistance projects for nearby communities. The company undertakes a number of social assistance projects that usually include investment in local infrastructure, health, education, cultural and faith facilities following requests from the local communities.

Etulia winery is located in the area of a local ethnic minority, the Gagauz (Christianized descendants of Ottoman Turks). Etulia winery employs local residents regardless of their ethnicity without discrimination and contributes equally to community development projects in Gagauz, Moldovan, and Bulgarian villages around its operations.

General information on the company’s environmental, health and safety performance, including ESIAs for the various components of the project, as well as the copy of the Environmental and Social Review Summary and the Environmental and Social Action Plan in the Moldovan language are available and can be obtained for review from:

Mr. Victor Bostan, Director General
Bostavan Vineries
202 Stefan cel Mare blvd
Chisinau
MD-2004, Moldova

Telephone: +373 227 45 838
Fax: +373 227 54 451

Client Documentation

File Name	Actions
Bostavan - ESAP - 10-29-07 ENG.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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