26530 - Kamani Oils

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Environmental & Social Review Summary

Project Number

26530

Company Name

AAK KAMANI PRIVATE LIMITED

Date ESRS Disclosed

Apr 8, 2008

Country

India

Region

South Asia

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 23, 2008
Signed : Jun 25, 2008
Invested : Oct 15, 2008

Sector

Vegetable Fats and Oils

Industry

Agribusiness and Forestry

Department

Regional Industry - MAS Asia & Pac

Project Description

Kamani Oil Industries Private Limited (the company) is an edible oil refinery based in Mumbai, India. It was demerged from Chawla Brothers Private Limited in April 2008 and as a result inherited the latter’s edible oil business, which has been operating for decades. The company produces various vegetable oils and fats for food industry use and consumers and is the first such producer that has obtained HACCP certification in India. The company has installed capacity of 225 tons per day (tpd) and plans to expand to 500 tpd by constructing a new plant in Khopoli, Khalapur District, Maharashtra.

Overview of IFC's Scope of Review

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 review of this project consisted of appraising technical, environmental and social information submitted by the project sponsor including a visit by IFC’s appraisal team to the company’s production facilities in Mumbai, discussions with the company’s senior management team regarding their current operations as well as future plans, including a visit to the new project site in District Khalapur near Mumbai.

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 that must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement and
- PS4: Community Health, Safety and Security

The company has already purchased the land required for the project on a willing buyer, willing seller basis from another industrial group. For this reason, PS5 (Land Acquisition and Involuntary Resettlement) does not apply for this project. A condition of IFC’s investment will be that company’s operations shall consider all relevant social and environmental risks and impacts, including issues covered in all IFC Performance Standards.

The company’s operations may result in a limited number of specific environmental and social impacts. However, these can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The company has confirmed that it is planning to adopt the latest technology at the new processing plant, which will be both more efficient and less polluting. Moreover, the basic management systems and documentation for managing the environmental and social aspects of its operations are in place, and the company is planning to implement ISO 22000:2005 (Food Safety Management Systems) in the new plant right from the beginning, which will also improve and extend the company’s control of operational parameters. For all of these reasons, the project is categorized as a Category B project.

Environmental and Social Mitigation Measures

The company has presented plans to address the issues and impacts to ensure that the proposed project will - upon implementation of the specific agreed measures - comply with the environmental and social requirements, including the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines.

- Social and Environmental Assessment and Management Systems:

The company has indicated that, Kamani Oil Industries was the first vegetable oil refinery in India to receive Hazard Analysis and Critical Control Point (HACCP) certification, in 2002. For the new project, the company has plans to obtain ISO 22000:2005 certification. Further, the company has confirmed that it has a quality policy and management system in place for its existing operations, although the written documentation for the system is limited. The company has therefore agreed to implement an extensive and well-documented Environmental and Social Management System for its new project in Khalapur within a timeframe agreed with IFC.

The day-to-day operational issues related to environmental management are under the purview of the General Manager (Technical). These responsibilities include, for example, oversight of all boilers, air conditioning plant, wastewater treatment plant. The company has submitted information related to monitoring of air emissions and wastewater discharges (such as stack emissions, ambient air quality, and wastewater characteristics), noise level data and other parameters. Based on the limited information provided by the company, the company is in compliance with all relevant national regulations. However, compliance with IFC guidelines for certain parameters (total nitrogen and total phosphorus and total coliform bacteria) could not be assessed. For the new plant, the company has agreed to develop and implement a comprehensive environmental monitoring program covering all the necessary parameters so that it will ensure compliance with both Government and IFC limits.

- Labor and Working Conditions:

The company has in place stringent policies and procedures for ensuring that both workplace hygiene and occupational health and safety (OHS) conditions in facilities meet recognized international standards. However, since part of the company’s existing plant in Mumbai is more than 40 years old and has grown organically, hence there are some shortcomings which will be addressed in the new plant. The company is, thus, confident about greatly improving the health and safety aspects for its workforce. There have been no lost-time incidents at the existing plant in the year 2006-07.

The tin machining operation is outsourced to a contractor whose workers fabricate the tin boxes for bulk packaging of oil. There were some shortcomings of the contractor related to safety, for which the company has agreed to impart training on safety and strictly enforce the use of PPE to avoid any possibility of accident or mishap due to carelessness. The company plans to have a strict safety program for the new plant, with well-documented steps with all its suppliers/contractors as safety is of paramount concern.

The company follows a strict no-child labor policy in its own operations, and requires adherence to the same policy for all contractors working at the plant. Kamani will include specific clauses on this aspect in the contract documents for all contractors to be employed for the construction and commissioning of the new project (notably construction, fabrication, fleet management etc.), in accordance with a schedule agreed with IFC and documented in the attached Environmental and Social Action Plan (ESAP).

With the commissioning of new plant in Khalapur, the existing permanent workers will be offered employment at the new plant, and Kamani will make necessary arrangements for transportation / accommodation of those workers. Alternatively, staff who do not wish to take positions at the new plant will be offered a fair retrenchment compensation in compliance with all the relevant laws and regulations. The company has reviewed IFC’s PS2 and guidance note on retrenchment and agreed to develop and implement its retrenchment/voluntary retirement program in line with the provisions set out in these documents.

- Pollution Prevention and Abatement:

The company plans to use groundwater (three bore wells) for its operations in the new plant. Two wells are already excavated which supply sufficient water for the plant operations. In addition to the process water, the company has made a provision to store 300-350,000 liters of water for fire fighting.

The company’s existing facility in Mumbai is equipped with an effluent treatment plant (ETP). Process effluent is pre-treated to meet limits set by Maharashtra Pollution Control Board (MPCB) before discharging it to the municipal sewerage system. The company has planned for an appropriate ETP of the adequate capacity (110 cubic meters (m3)/day) for the new plant so as to meet all Government and IFC discharge limits. As the company intends to use all the treated wastewater for gardening on site, it will strictly ensure the compliance with the discharge limits as stipulated in the IFCs Environmental, Health, and Safety Guidelines for Vegetable Oil Processing.

As soon as the company receives appropriate permissions (i.e. Consent to establish, Consent to Operate, etc.), the copies of these will be provided to IFC within 30 days of receipt.

The company plans to establish SOPs for the disposal of solid and hazardous wastes to ensure conformance to all Indian laws and regulations, as well as WBG guidelines. The company has agreed to maintain records of waste volumes generated and methods of disposal in accordance with its SOPs which would be available for inspection by regulatory authorities and IFC as necessary.

The company plans to obtain electricity from the grid with a dedicated feeder from a sub-station. The authorities guarantee an uninterrupted power supply for the company, but a backup supply from high diesel generators (DGs) is planned. Emissions from the DG sets will be tested annually. The new facility will also house a 16T coal-fired boiler and the company has agreed to monitor emissions and ensure compliance with IFC’s guidelines.

- Community Health, Safety and Security

The nature of the company’s operations does not present significant safety and security risks to nearby communities - either industrial or residential. Nonetheless the company has agreed to work with neighboring industries on joint response for emergencies such as fire or explosion. The company has also agreed to establish a documented procedure and a mechanism to address the queries from the community about the project activities (e.g. sign boards with contact details for community inquiries etc.)

Significant impacts are likely to occur during construction, especially related to the movement of vehicles on the approach road to the new site, which has the potential to impact on the safety and security of both industrial and residential neighbors to the new plant. To manage and monitor these impacts, the company has agreed to establish a documented training procedure for all drivers, including contractors’ employees. Training and performance records will be maintained, and accident rates will be monitored regularly and communicated to contractors.

Stakeholder Engagement

The company has been working with the local community through the village level administration (i.e. gram panchayat) for the village of Honad, Dist. Khalapur. The company has procured the necessary permissions from the village administration and is in the process of procuring necessary approvals from the district administration.

The company has plans to engage with the neighborhood community by hiring several local workers as well as contractors, thus creating opportunities for better livelihood for them.

The company has also agreed to disclose the relevant project information to the community and establish a documented procedure and a mechanism to address the queries from the community about the project activities.

Client Documentation

File Name	Actions
ESAP_Kamani_Final_7Apr.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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