26959 - Timbues Soybean Crushing Plant

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Environmental & Social Review Summary

Project Number

26959

Company Name

NOBLE ARGENTINA S.A.

Date ESRS Disclosed

Dec 23, 2008

Country

Argentina

Region

Latin America and the Caribbean

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 25, 2009
Signed : Jun 30, 2009
Invested : Nov 20, 2009

Sector

Vegetable Fats and Oils

Industry

Agribusiness and Forestry

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

In 2006, IFC provided Noble Argentina, a subsidiary of Noble Group Limited (“The Company”, “Noble” or “Noble Group”) with a $18 million A and $18 million B loan for the creation of a $51.2 million greenfield grain port terminal and storage complex in Timbues, Santa Fe Province, Argentina. The Timbues Port has a storage capacity of 250,000mt and can accommodate a throughput of about 5 million tons of grain per year, consisting mainly of exports of wheat, corn and soybeans.

The company is now expanding the grain operations in the same location with the construction of:

- a 8,500 metric tonne (mt) per day soybean crushing plant,
- a soybean dehulling facility,
- a steam and 17MW electrical energy cogeneration unit,
- meal storage capacity of 110,000mt,
- oil tanks with 45,000mt capacity, and
- storage facility for 300,000mt soybean and
- handling facilities.

The project cost is estimated at $230 million plus $100 million working capital. Construction is expected to start in mid-2009. IFC has been requested to consider providing a $40 million A loan to partially finance the crushing plant expansion.

Overview of IFC's Scope of Review

IFC’s environmental and social review included review of project information and documents provided by the sponsor, interviews to Noble staff in Argentina, and a field visit to the site of the future operations in Timbues, Argentina. The appraisal was conducted as a joint effort with the InterAmerican Development Bank (IADB/BID).

E & S Project Categorization and Applicable Standard

While all Performance Standards 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 System
- 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
- PS 6: Biodiversity Conservation and Sustainable Natural Resource Management

PS 7 and PS 8 will not apply. Neither indigenous populations or heritage sites are found in the project area.

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 professional staff performed a physical evaluation of the project and environs, and reviewed relevant company and government documentation.

Environmental and Social Mitigation Measures

In order to expand the grain operations, the sponsor has developed a construction design and operational procedures for the future plant. Noble has also presented an Environmental and Social Impact Assessment (ESIA) where potential impacts have been identified. The Environmental and Social Action Plan (ESAP) attached to this document indicates how the proposed project design and future process procedures will address the mitigative measures for potential impacts and ensure compliance with host country environmental regulatory and IFC guideline limits.

1.0 Environmental, Health and Safety, and Social (ESHS) Assessment and Management Systems

The appraisal mission found that Noble is generally an ESHS conscious organization. The company plans to maintain full compliance with the law and regulations of Argentina and IFC performance standards and guideline requirements. The company agrees that it needs to upgrade its management system to formalize and include social and environmental affairs, quality, human resources, and occupational health and safety issues associated with their supply chain, transport, and processing operations. In accordance with the attached ESAP, Noble will implement an integrated environmental and social management system (ESMS) covering all relevant aspects of IFC’s performance standards. It will also include comprehensive yearly evaluations to verify whether the project expectations have been met, and determine corrective measures that Noble will apply. The Company will establish an Environmental and Social Unit, reporting to senior management, will appoint an environmental manager, and will undertake all activities required to implement the environmental and social policy at all levels of operations. Noble will implement a training programme on Environmental and Social issues for its employees, and as part of the content of the induction process for new employees. The company will implement a formal system for monitoring and reporting environmental and social issues to senior management and for reporting back to IFC.

Supply chain policy: Only 1 percent of the soybean supply will be company’s own farms. Approximately fifty percent of the supply of soybeans will be purchased on the spot market. The bulk of soybeans will be purchased from the provinces of Santa Fe, Cordova, and Buenos Aires. Soybeans will be also bought in Paraguay and delivered through the Parana-Paraguay waterway. Less than 2 percent of the soybeans will originate from Chaco and Salta. As part of the ESMS, Noble will develop and implemented a policy to ensure responsible soy purchasing procedures. As part of the policy, Noble will join the Round Table for Responsible Soy (RTRS) based in Argentina. Noble will also develop a pilot supplier database for Argentine Chaco. For this purpose, (i) Noble will update a data base system to collect information on farmer suppliers in the Charata area in the Chaco region and any other collection centers (acopios) in the Chaco region. The new data collection should include information on compliance with national environmental legislation (illegal land clearing); (ii) following additional data collection, Noble will identify any changes in the company''s management of suppliers in the Chaco acopios/collection centers to reduce any detected risk from illegal land clearing in the Chaco supply chain. This shall include informing Chaco farmers with whom the company has soy purchase contracts that Noble expects them to comply with Argentine legislation related to new land clearing.

Construction phase: Noble will specify operating policy requirements as well as procedures that must be in place for quality control and compliance with all social (including Occupational Health & Safety issues) and environmental issues during the construction phase (pollution loads, solid waste, etc.).

2.0 Labor and Working Conditions

The project expects to generate 800 direct jobs during the construction phase, and workers will be housed within Noble’s premises. During the operational phase, Noble expects to employ 65 individuals. Noble will have a staffed emergency medical facility during the operational phase.

Revise Human Resources Policy/Procedures: Noble will modify existing procedures to fully comply with the requirements of IFC’s Performance Standard 2 Labor and Working Conditions. It will include reference to child labour, non-discrimination, freedom of association and collective bargaining, and will submit the policy to IFC for review. Noble will also develop and implement a formal employee grievance redress mechanism and will further disseminate the grievance process as part of their ESMS.

Protecting the Workforce: During the construction and operational phases, Noble will ensure that child labor is not used and that ILO Conventions 138 on Minimum Age, and 182 on Worst Forms of Child Labour are fully observed in all its operations. Noble will ensure that contractors and suppliers are in compliance with a) workers legal benefits; b) wages paid on time, c) safety regulations, and d) ILO Conventions 138 and 182 are fully observed.

Occupational Health & Safety Plan (OHS): Noble will upgrade its Occupational Health and Safety plan consistent with an internationally recognized certification (e.g. OHSAS 18000) for the occupational health and safety management system, to ensure the correct use of personal protection equipment, proper protection from heat, dust, hazardous materials, etc., and working procedures to reduce the risk of injuries and/or accidents. Such OHS plan will be also enforced during the construction phase. Noble will perform at least three fire drills per annum.

Operational Safety Plan for site infrastructure: This plan will include the implementation of pavement markings, traffic signals, regulatory signs, vehicle speed limits, and warning signs, according to international standards, to ensure safety of the workforce.

3.0 Pollution Prevention and Abatement

The planned design and future operational procedures presented by the company in their ESIA shows that emissions to the environment (air and water) will be out of compliance with IFC/WB guidelines.

Air emissions: The operation will be connected to national electric energy grids, yet the energy will be self-generated by two boilers (using diesel or natural gas) and one turbine. One of the boilers could be also operated burning wood chips. Projected air emissions in the ESIA indicate that the expected NOx of the Nebraska boiler will exceed IFC limits of 460 mg/Nm3. Projected hexane emissions (140 mg/Nm3) will exceed the IFC limits of (100 mg/Nm3). The study also indicates that, when burning chips, the Vyncke boiler will exceed the limit of 150 mg/Nm3 for particulate matter. Noble will provide design and equipment assurances that the operational procedures will comply with regulatory limits of Argentina and IFC guideline requirements for ambient air concentrations during the operational phase.

Dust generated during the preparation process of grains will be controlled by a dust vacuum and filter devices, etc., to reduce the risk of explosion.

Effluent: Emissions will include effluents from the crushing facility, stormwater, and sanitary wastewater. The effluent from the extraction process is estimated in 480m3/day (projected levels of BOD ranging from 500-1000 mg/l; COD = 1000-2000 mg/l; TSS = 20 mg/l; Ph = 5.0). Effluent from sanitary wastewater will be mixed with effluent from the cooling tower (projected BOD = 550 mg/l; COD = 730 mg/l; TSS = 400 mg/l; Ph = 7.5, Temperature = 20 oC). Projected solid wastes from operations will include 1800 metric tons of sludge per month. Noble will provide design and equipment assurances that the operational procedures will ensure effluents are in compliance with regulatory limits of Argentina and IFC guidelines during the operational phase.

Pesticide management: Noble will outsource pest control for minimizing populations of rodents and insects within the premises. Noble will review and eliminate as feasible WHO Class 1a and 1b chemical formulations for pesticides. Noble will ensure that contractors and suppliers are in compliance with providing adequate personal protection equipment, will provide to IFC the protocol used for cholinesterase testing of workers applying pesticides, and will inform if there is any rotation policy of these workers.

Hexane management: Noble estimates the use of 1675 metric tons of hexane per annum. Operational procedures include compliance with National Fire Protection Association (NFPA) codes and standards to prevent fire and explosions during the operation phase (NFPA36 - commercial scale extraction processing of vegetable oils and fats by the use of solvents, and applying to the unloading, storage, and handling of solvents). The Company will report the results of quarterly samples of hexane concentration in the air.

Hazardous and Non-hazardous Waste Management Programme: As part of the expected operational procedures Noble plans to implement a waste management programme, segregating all wastes for either disposal in a landfill or sale to authorized recycling groups.

4.0 Community Health, Safety and Security

Community Engagement Plan: Noble does not have any communities living in close proximity to its operations. The community of Timbues is the closest to the project area. Noble lacks a formal community grievance system and will implement a formal plan for community engagement and grievance mechanism, including a monitoring system and the ability to express concerns. The Company will ensure it is clearly communicated by posting on the company website and included in relevant written public communications.

Transport of hexane and raw materials: Noble will develop clear safety guidelines to be enforced on all contracted transport of hexane and raw materials. The Company has agreed to avoid passing through Timbues, and to use exclusively the access from the north end. Such Company policy is listed in Noble’s website (www.noblegrain.com.ar/nobleinfraestructura.html).

5.0 Land Acquisition

There is no involuntary resettlement associated with this project. Land acquisition of the project site was done strictly one of willing buyer- willing seller, following Noble procurement policies.

6.0 Biodiversity Conservation and Sustainable Natural Resource Management

Natural or critical habitat or endangered species: There are no legally protected areas in the vicinity of Noble’s operations. The Company operations do not involve modification, conversion, or degradation of any critical habitats.

Sustainable Water Resource Use: According to the ESIA, projected water requirements for the plant are 20,000 m3/second. Water will be obtained from Rio Parana, and treated before sent to the crushing plant. Given the geographical location of the plant, the ESIA has not identified any hydrological linkages with other areas (extended area of influence), nor any potential negative environmental impacts on the downstream uses by populations, such as farming, livestock, watering, washing, etc.

Stakeholder Engagement

Noble expects to further develop their links with the population of Timbues. The ESIA for this project was delivered to the Major of Timbues on October 16, 2008, who has already granted approval of the project. During the construction of the grain port terminal and storage complex, Noble contributed to the financing of access roads, natural gas pipes, and electricity transmission lines. All these have translated into gains for the community of Timbues. During 2008, Noble has contributed with USD 25,000 to help cover expenses of the elementary school and the technical school at Timbues. In 2005, Noble organized free training courses on grain handling for the population of Timbues. Those with higher grades were hired by Noble.

The project’s environmental documents will be accessible at the following locations:

NASA office in Rosario:
Noble Argentina SA.
Paraguay 727 - 6° - "4"
Rosario, Santa Fe

Timbues Public Library:
Public library
Mitre 540, Timbues, Santa Fe

Pablo Freire
Noble Argentina S.A.
Avda Carlos Pellegrini 1163 - 9°
5411 4131 - 7100
pfreire@noblegrain.com

- Noble Argentina Website (www.noblegrain.com.ar)

Client Documentation

File Name	Actions
Noble 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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