27031 - Latapack

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Environmental & Social Review Summary

Project Number

27031

Company Name

Latapack-Ball Embalagens Ltda.

Date ESRS Disclosed

Jun 18, 2008

Country

Brazil

Region

Latin America and the Caribbean

Last Updated Date

Nov 30, 2016

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Aug 27, 2008
Signed : Oct 3, 2008
Invested : Nov 12, 2008

Sector

Metal Can and Other Metal Container (Including Aluminum Beverage Cans)

Industry

Manufacturing

Department

Gbl Ind, Manufact, Agribus & Services

Project Description

Latapack is an established Brazilian manufacturer of aluminum beverage cans, with the Main Office in São Paulo. Latapack has two production facilities: one in Jacareí, São Paulo, and the other in Simões Filho, state of Bahia. The Jacareí facility is located close to the company’s main clients and produces can bodies, which are bulky and costly to transport. The Bahia facility makes much more easily transportable can ends. The company employs approximately 300 people and has the capacity to produce 2.6 billion cans per year.

The company is implementing a number of corporate initiatives, which include:
- a can making capacity increase at the São Paulo plant and a corresponding increase in the can-end-manufacturing capacity at the Bahia facility, as well as
- the construction of a new plant in the southeast of Brazil (the “Investment Program”). The Investment Program will be implemented during the 2008-2010 period at a total cost of approximately $135 million equivalent.

Overview of IFC's Scope of Review

The environmental and social review consisted of appraising technical, environmental, health and safety and social/community information submitted by Latapack – Ball Embalagens Ltda (Latapack or the company). The appraisal included an interview with the environmental manager for both plants and the corporate HR manager. The appraisal also included a visit to company’s two industrial sites located in Jacareí, state of São Paulo and Simões Filho, state of Bahia and the site of the new plant located in BR 040 highway, in Três Rios, state of Rio de Janeiro. The site visits covered production areas and environment related areas and systems, including effluent treatment stations, solid waste storage areas and fire prevention systems and considered the Company’s compliance with IFC’s Performance Standards and Environmental Health and Safety Guidelines; local Environmental Health and Safety requirements; and social and communities issues.

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:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
- PS5: Land Acquisition and Involuntary Resettlement

Following review it was determined that issues covered by PS6: Biodiversity Conservation and Sustainable Natural Resource Management, PS7: Indigenous Peoples, and PS8: Cultural Heritage are not associated with this project, because the expansion project will take place on an unoccupied and highly modified habitat purchased from a brickmaking company.

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.

Key environment, health and safety and social aspect of the project which were analyzed during IFC’s review were:

- Environmental, social, and health and safety management systems;
- Labor and working conditions;
- Pollution prevention and abatement, including, wastewater disposal, solid and hazardous waste management, other utility usage and energy use management;
- Community health, safety and security, including life and fire safety of nearby communities and interaction with local communities;
- Land acquisition, site location, planning, and permitting.

Environmental and Social Mitigation Measures

Latapack 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 Performance Standards and Environmental, Health and Safety Guidelines. The information about how these potential impacts will be addressed by Latapack is described in the paragraphs that follow and summarized in the attached Environmental and Social Action Plan (ESAP).

- PS1: Social and Environmental Assessment and Management Systems:

- Management Systems

Latapack has detailed Environmental and Social Management Systems (ESMSs) for the Jacareí site, based upon environmental policies committing the Company to environmentally-conscious product development and manufacturing operations. The Jacareí site’s quality assurance, environmental management and occupational health and safety (OHS) management systems were certified compliant with the requirements of ISO 9001:2000, ISO 14001 and OHSAS 18000 respectively, in response to client demands. Latapack’s main clients no longer require these certifications and therefore the certifications have been allowed to lapse, although the management systems are still operational.

The Bahia site, which is a low risk operation without painting processes also has a safety management system, similar to that at Jacareí, following the same corporate procedures. Environmental management is in place but less well developed than at Jacareí, reflecting the reduced risk.

Environmental and OHS management within Latapack has been the responsibility of the Engineering and Human Resources Departments respectively. The current status of environmental and OHS management will be reviewed, and where necessary upgraded such that the management systems are capable of certification to ISO 14001 and OHSAS 18000 respectively. Management systems similar to those used at Jacareí will be developed for the Três Rios factory.

At least once a year the company is subject to routine inspection by local work authorities. The company is compliant with local work laws and has an OH&S management system in place (SGSSO) to monitor health and safety risks monthly. One other program implemented which is a state requirement is the PPRA or program to prevent environmental risks. There are routine state environmental inspections at least once per semester, which have not identified non-compliances.

Social and Environmental Assessment:

Latapack commissioned an external consultancy company to perform an environmental situation report of the new plant area in Três Rios. The key recommendations of the study were to develop a program of recovery of native vegetation of some areas of the site with Mata Atlântica native species, the revitalization of the water body (Rio Paraíba do Sul) together with SERLA - Fundação Superintendência de Rios e Lagos, the environmental authority for water bodies, and to follow strictly the technical and legal conditions of the project, mainly the preservation of the APP (Permanent Protection Area) of Paraíba do Sul River. These were incorporated into project design. Management systems at Três Rios will be similar to those already in place at Jacareí. In consequence, on completion the Três Rios facility is expected to be fully compliant with local social and environmental requirements and IFC’s Performance Standards.

- PS2: Labor and Working Conditions:

Latapack has 215 full time permanent and 49 temporary employees in Jacareí, and 122 full time permanent and 30 temporary in Bahia. Temporary workers are employed in response to seasonal variations in product demand. Latapack has a well developed Human Resources policies and procedures, which are compliant with local regulatory requirements although there are some minor gaps compared with IFC’s PS2 requirements.

Terms of the working relationship:

Terms of the working relationship are communicated to workers in writing during the induction period, when the company explains all working rules described in the company''s Social management system.

Working Conditions and Terms of Employment:

The admission terms are formal and available to all employees, and are compliant with the local labor legislation. Minimum wages paid by the company is exceed by 87% and 120% respectively the minimum salaries paid in comparable industries in São Paulo and Bahia at R$ 605/month and R$470/month respectively. There are special shifts duly negotiated with the union and compliant with labor legislation of four 10-hour days followed immediately by four days off. The company offers Medical Assistance, Dental Treatment, Transportation, Meals Private Welfare, Pharmacy Agreement, Group Life Insurance. Variable Pay (PLR) is also paid: this is an employee profit-sharing scheme which operates according to goals and values set by prior negotiation between business, employees and Union of Metalworkers. The Disciplinary policy follows the local country standards and the company ethics policy.

Workers’ Organizations:

The company has a formal relationship with the metallurgic union syndicate, which are led by different organizations in Jacareí and Bahia, which require different negotiations with both organizations.

Equal Opportunity:

There is a formal and recently developed policy for non-discrimination and equal opportunities in the group: the Company does not discriminate in employment or advancement on grounds unrelated to a person’s ability to perform the work required.

Grievance Mechanism:

The company does have a formal employee grievance mechanism, which follows the Ball Corporation procedures and which is designed to facilitate communication with employees over any issue of concern. This includes a telephone hotline which employees may use to express concerns.

Occupational Health and Safety:

Each employee has an annually routine medical examination. OHS management procedures are documented in the “ISODOC” system, which also includes a BBS program (Behavior-Based Safety), training of the Emergency Brigade, monthly meetings of security, "minutes of security," audits of CIPA (Internal Commission for Accident Prevention) and prevention campaigns - SIPAT. The human resource department is in charge of planning the trainings for the whole company. Specific trainings such as fire brigade and chemicals brigade are also provided for specific staff. Training system is based on Ball BBL–T leadership team. There is also a daily five-minute chat on safety issues, and once a year the company organizes a SIPAT which is a week of work accident prevention.

Workplace noise:

High levels of workplace noise are experienced throughout the factories. In consequence, all employees are provided double hearing protection (ear plugs plus external protection); this reduces noise by around 20 dB(A) to within safe limits.

Workplace monitoring:

There is a policy of carrying out workplaces noise assessments once a year and air quality assessment twice a year. In case there is need to work in confined space, all the requirements necessary for running of the service will be conducted according to specific law (NR33).

Fire detection:

Latapack Jacareí Fire detection system is composed by manual alarm buttons, each of them installed close to a hydrant totalizing 32 buttons inside the plant and 13 outside. There are also have 2 covered sites with smoke detectors, the new warehouse and archives area; These systems are interconnected with the central alarm at the main gate, in redundancy with the tooling area with presence of people 24 hours a day, 7 days a week. Latapack Bahia Fire detection system is composed of sixteen automatic smoke detectors located in strategic areas and also four manual alarm buttons at strategic areas. The Latapack’s fire brigade is composed by employees from all shifts and has been trained bimonthly.

Non-employee workers:

The outsourced workers are located in the security services assets, occupational health, meals, cleaning and conservation, handling of materials are payroll. The contract clause of these services is the responsibility of the contracted obligation to care about the labor laws and the collection and proof of payment of costs when making the accounting of services performed during the period.

- PS3: Pollution Prevention and Abatement:

Liquid Effluents:

At Jacareí, process effluent arises from can washing and cleaning after the draw and iron can making process, and may contain oils, and other organic compounds. Effluents are treated in an on-site treatment facility before discharge to surface water (Guatinga stream). Current effluent flow (320 m3/day) is slightly below the capacity of the treatment system. Effluent quality is measured monthly and monitoring shows that COD and Oils and Greases in Jacareí are not in compliance with IFC Environmental, Health, and Safety Guidelines for Metal, Plastic, and Rubber Products Manufacturing while fluoride monitoring indicates compliance IFC guidelines. The waste water treatment system will be expanded to treat the increased effluent flow expected after factory expansion to IFC and local guideline requirements for discharge to surface waters.

Sanitary waste waters (16m ³ / day) are treated by an aerated activated sludge system. This treatment plant is of sufficient capacity to deal with factory expansion. Monitoring shows that the treated water is compliant for pH, suspended solids and Oil and Grease. However BOD and COD are well above the limits indicated in the IFC Environmental, Health, and Safety
General Guidelines. Treatment will be upgraded to IFC guideline values.

Bahia has an essentially dry process and produces very little liquid effluents. This is mixed with sanitary waste water, treated using an ascending flow anaerobic system and treated effluent is used for irrigation of gardened areas.

At Três Rios, process and sanitary waste waters shall be treated to meet all relevant IFC and local standards.

Air Emissions:

Emissions to air arise from can lacquer and paint drying ovens at Jacareí. No recent monitoring data exists for either factory. In Jacareí, combustion equipment is relatively low temperature and fired by natural gas, so emission of combustion products is not cause for concern. Emissions of solvents from the ovens (8 discharge points at Jacareí) will be measured and if these emissions exceed IFC or local requirements then corrective measures will be defined. Três Rios plant will be designed such that air emissions from the drying ovens meet IFC and local requirements.

Resource Efficiency:

The company has control of water consumption with both plants supplied by artesian wells. There is also an internal campaign to highlight the importance of avoiding water waste and to reduce energy consumption in both plants. Latapack has implemented many energy efficiency initiatives such as the reduction of the compressed air by mapping and fixing the existent leaks in the compressed air network, elimination of blowers from the process, optimization of the can transport system, replacement of air compressors and installation of variable frequency devices. The Company is assessing a project to recover waste heat from chimneys to heat water, the reduction of thermal loss in the ovens by reducing uncontrolled air intake and a possible cogeneration project.

Solid Waste:

In both plants there is a recycling policy for paper, wood, cardboard plastic and metal. The organic waste is landfilled. The generated waste is properly stored and disposed. All companies that deal with Latapack’s waste of both plants have authorization by the environmental agency, as described in their licenses.

Hazardous Waste:

At Jacareí, waste water treatment plant sludge (about 30 tonnes monthly) is disposed in an authorized hazardous waste landfill. Domestic effluent sludge is disposed to a treatment facility operated by Sabesp. Varnish sludge, waste oil, ink-contaminated materials and old oil filters are sent to co-processing by an authorized company. Fluorescent lamps are sent for decontamination and recycling.

In Bahia, waste lubricants / oils are refined by a specialized company. Fluorescent lamps are sent to a company authorized for chemical treatment. All companies that receive the waste of both plants have authorization by the environmental agency, as described in their licenses.

Solid and hazardous wastes arising from the Três Rios operation will similarly be disposed of by authorized contractors.

Emergency Response:

Contingency plans have been formalized deal with emergency situations, and include site evacuation planning, and documented in the computerized quality manual. In order to improve the emergency preparedness there are also regular meetings and training of security people, CIPA and Emergency Brigade. The fire brigade is trained bimonthly with theory and practice, using all available resources in the plant as hoses, extinguishers, hydrants, emergency kit for chemical and others.

- PS4: Community Health, Safety and Security

Both sites have a formal emergency response plans which include appropriate communication with external parties.
The sites are located in a low density area and have no complaints from the surrounding communities.

- PS5: Land Acquisition and Involuntary Resettlement

Land for the proposed Três Rios factory was acquired from a brick-making company on a willing buyer-willing seller basis. Before acquisition the land was unoccupied, nor did it support economic activity. The land acquired amounts to 16 hectares, and is locate adjacent to BR 040 highway between km 19 and 20.

Stakeholder Engagement

The company developed a few Social Projects in Jacareí/Bahia such as:

- Collection of Food; Collection of clothing
- Blood Donation Campaing and
- Toys donation campaign.

Latapack-Ball is helping elementary schools to conduct the Selective Collection In 2007 the company promoted social actions in Salvador, Bahia such as the reordering of electrical installation in nursery school Tia Maria and the cleaning of School Hall Itacaranha. The company invests R$ 10.000 (U$ 6000) for Jacareí and half of it for Bahia’s plant. The main project supported by Latapack ball is the “Projeto Integração” or integration project. The project is supported by other partners such as SESI (service from industries federation) and Sabajal, and aims to help Décio Moreira’s School which is close to the plant, to become a recycling center. This project was transferred to Jardim Maria Luíza, which is also close to the plant and attends around 5.000 people.

Publication of this ESRS represents the first public disclosure of social and environmental information related to the proposed expansion project.

Environmental documentation will be made available at the following locations:

Latapack’s Main Office
Rua do Rocio, 199 – 7º andar
Sao Paulo, SP – Brazil
04552-000

Jacareí Plant
Rodovia Geraldo Scavone, n.º 2400 - Jardim Califórnia
CEP.: 12305-490 - Jacareí SP

Bahia Plant
Via Ipitanga n.º 468 - Cia Sul
CEP.: 43780-000 - Simões Filho - BA

Três Rios City Hall
Praça Sebastião, 81 – Centro
Três Rios – RJ
25804-080

Client Documentation

File Name	Actions
ESAP Final.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.
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