Mriya has presented plans to address environmental and social impacts to ensure that the proposed Project will, upon implementation of the specific agreed measures included in the Environmental and Social Action Plan (the “ESAP”) attached to this summary, comply with the environmental and social requirements, host country laws and regulations, and IFC’s Policy, Performance Standards and Guidelines. The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow.
PS1: Social and Environmental Assessment and Management Systems:
— Social and Environmental Assessment:
Ukrainian legislation requires all new developments and green-field projects to carry out an environmental impact assessment (EIA) study and evaluate potential negative impacts on environmental and social conditions. Based on this the company should develop and implement corrective actions to avoid, minimize, mitigate or compensate identified adverse impacts. Based on these steps an approval for the implementation of a project can be applied for and obtained from the authorities.
The EIA studies have been completed and the permits received for the new grain storage facilities currently being constructed. Moreover, prior to launching the formal EIA procedure, the Company carried out internal environmental and social screening of potential sites for the new operations including vicinity to water bodies and villages.
The Company is committed to strict enforcement of the national requirements in the frame of its expansion. To this effect the Company will implement all corrective actions identified in the EIA procedure to mitigate negative environmental and social impacts and risks associated with its operations.
— Environmental, Health, Safety and Social Management System, Organizational Capacity and Reporting:
The current environmental, health and safety (EHS) management systems rely on the adherence to regulatory requirements, particularly, on availability of appropriate permits and licenses; reporting on EHS performance parameters to relevant authorities. As a result Mriya’s current EHS systems focus on addressing specific issues arising from local operations but are rather scarce in stipulating continuous improvement programs since it has limited internal capacity.
The management of operational environmental issues is the responsibility of Mriya’s local operational staff, as a part of their direct responsibilities. Occupational Health and Safety (OHS) issues are managed through appointment of managers either combining production and OHS duties or full time OHS engineers those activities in both cases are coordinated by a Mriya’s OHS manager. The Company’s social programs are driven by a manager designated for community engagement and communications, his activity is supported by resident directors located at each land cluster.
The external reporting is carried out in accordance with legal EHS requirements. Internal reporting about EHS issues is provided to the Company management regularly.
— Training:
The Company has carried out training needs analysis and developed a comprehensive management and professional training program for all target groups to ensure up-to-date skills needed for their specific work responsibilities. The program is based on principles of equal opportunity to learn and continual training opportunities including external and internal corporate training by reliable training providers. Mriya has also established an agribusiness school, which serves as an effective tool to develop students and new employees into qualified professionals. Further, a new training module for line operational managers to acquire essential management knowledge is planned to be launched soon.
The Company management is committed to further strengthening of the EHS management system consistent with national, international and IFC’s standards and will appoint a suitably qualified EHS manager at corporate level to manage the current and future EHS issues that might arise from the rapid grow of operations. Going forward, Mriya will provide relevant training for management representatives to ensure in-house expertise in developing, implementation and auditing of the EHS management systems consistent with the international ISO 14001 and OHSAS 18001 standards.
— Land acquisition and planning procedures:
Potential expansion areas suitable for Mriya’s grain production were analyzed for soil quality, infrastructure in the form of access to the railways and appropriate quality local roads, availability of workforce and services, and infrastructure for specialized, like harvester operators, workforce accommodation . Agricultural land is leased from individuals and local land owners. Lease duration ranges from five to fifteen years. The Company regularly renews individual leases, preferably as early as when they approaches half-term of lease to give long term continuity and incentives to continue soil improvement activities.
Mriya’s industrial land plots have been acquired through willing seller/willing buyer purchases or leased on long term contracts.
Neither involuntary resettlement nor economic displacement has been associated with any of Mriya''s industrial and agricultural land acquisition/leasing.
PS2: Labor and Working Conditions:
— Human Resources Policy, Non-Discrimination and Equal Opportunity:
Currently, Agro Holding Mriya has approximately 670 permanent employees, of which 75% are operational personnel; and 490 seasonal workers. Upon implementation of the proposed project the Company will expand with approximately 140 local jobs. Further, around 360 employees are continuously engaged in the sugar plant operation (low season is December - April) with the employment surging to approximately 2600 workers in high season. Therefore, Mriya is considered a major employer within the rural regions of Western Ukraine. Recognizing this responsibility, the Company management developed and maintains a progressive human resource policy to maintain a loyal and motivated workforce under a corporate culture based on ‘the company is a family’ principles and values. Discrimination in employment based on gender, race, age, ethnic and religious association, or nationality principles is prohibited by the HR policy, and this is important for Western Ukraine where a multinational population professes various religions.
— Working conditions and terms of employment
Mriya has collective bargaining agreements with workers’ representatives at its operations. Working conditions covered by these agreements comply with national law and IFC’s performance standard. Collective agreements, supporting regulations and contracts with employees set up comprehensive terms of employment including hours of work, wages and benefits, leave for illness, maternity, vacation or holiday, employees’ rights for labor protection, including right /freedom for professional associations, trade unions. Mriya offers a social package to employees including onetime payment in specific circumstances; financial aid and social benefits. Further motivation schemes, performance evaluation programs, comprehensive training programs, and other benefits complement to the Company’s reputation as a good employer.
— Grievance Mechanism
Availability of a grievance mechanism is declared in the HR policy but, although the Company actively encourages employees and managers to openly discuss and resolve internal conflicts, there are no written formal mechanisms at this time. Mriya will therefore create and implement a formal internal grievance process which allows grievances to be presented without the risk of oppression consistent with IFC’s Performance Standard 2. The grievance procedure will be made available to all employees.
— Occupational health and safety
The Company carries out medical examination of employees at the time of entry on job and after that repeats the health examinations on a regular basis scheduled according to specific working conditions.
Occupational health and safety (OHS) risks associated with pesticide and fertilizer handling; dust from product handling; heavy machinery operations and physical strain are reduced by adherence to safety rules and procedures developed by the Company. However, one accident was reported in the grain production business in 2007 and one fatality in 2008. This is equivalent to an accident frequency of 1.34 LDA/MMH (Lost-Day-Accident/Million-Man-Hours) in 2007, and 0.67 LDA/MMH in 2008. That is low, but the accident in 2008 was a fatality and the Company has provided to IFC additional information on the fatality and actions that have been undertaken to prevent repetition in the future. The Company did not have any reportable accidents in the sugar mills during the last three years.
Employees involved in the operation or maintenance and repair of sugar plants are exposed to specific OHS risks including high temperatures, vibration and noise, dust, work in confined spaces and risks associated with being in old premises and operating outdated equipment. The Company will on a high priority basis improve working conditions by: (i) improvement of sanitary and hygiene conditions of accommodation spaces/ workers'' locker rooms consistent with good international practices; (ii) identification of need for and provision of appropriate personal protective equipment and its proper handling.
Going forward, the Company will arrange regular internal EHS audits of compliance with international standards and IFC’s Environmental, Health and Safety Guidelines; develop corrective action plans to ensure safe work of all facilities under Mriya’s operation and control and will report on the progress of its implementation to IFC annually.
PS3: Pollution Prevention and Abatement:
— Pollution prevention, Resource Conservation and Energy Efficiency
The grain silos visited are fully automated and designed with modern energy efficient control system. Closed water loops are implemented at the sugar plants. Mriya develops logistic schemes, uses GPS for monitoring vehicle and agricultural machinery movement, and equips trucks with fuel flow rate control sensors to control and minimize fuel consumption.
The Company is considering options for the use of straw remains as renewable bio-fuel either internally for heat and electricity co-generation at the grain storage facilities and power stations of sugar plants, or for selling electricity to the national grid at an increased ‘green rate’ secured by state authorities. Beet remains from the sugar mills are considered for use in biogas production and/or combined feed production.
However, there are a number of challenges to improve including water and energy use and liquid effluent discharging at sugar plants, green house gas emissions and waste management.
— Power, water and energy use:
Power used for the grain storage facilities is limited and is sourced from the national grid, while the sugar plants are significant water and energy consuming operations. Power for sugar plants is sourced from own gas, diesel, coal fired power stations; while water is supplied from water bodies or own water wells.
The Company has agreed to arrange an independent audit of sugar plants to identify potential cost beneficially measures to improve energy and water use efficiency. IFC’s advisory service will be available to support this activity.
— Air emissions:
Organic dust emitted from grain elevators is captured in cyclones, installed at grain refiners and dryers. Monitoring of point source air emissions and its compliance with national limits are undertaken by supervisory authorities on a regular basis.
— Liquid effluents:
Sugar plant wastewater discharges constitute the main environmental issue for Mriya’s associated operations. The liquid effluents are discharged to ponds through on-site wastewater treatment plant. Mriya will monitor the quality of liquid effluents of sugar plants while facilities are operated and undertake corrective actions, if needed, to meet the World Bank/ IFC guidelines. The Company will update IFC on the progress in annual monitoring reports.
— Waste management:
As discussed above, Mriya’s research and development department is considering alternative ways for recycling of straw and beet bagasse generated by its operations. Currently straw is chopped and plowed into the soil as a natural fertilizer, while bagasse is sold to local farmers as animal feed.
Waste from grain elevators consists of three fractions; the first fraction containing 30-50% of grain and the second fraction with 2-10% of grain are sold as components for animal feed. The third fraction with less than 2% of grain is taken to the Company’s landfills where waste is converted by composting and later used as natural fertilizer for field cultivation.
The Company is committed to implement a comprehensive waste management system. To achieve this, the Company will develop a Waste Management Program that will cover inventories of all waste sources and types; collection methods; the most appropriate disposal ways; management responsibilities and proper staff training, including disposal of empty pesticide containers in a manner consistent with IFC’s EHS Guidelines and International Code of Conduct on the Distribution and Use of Pesticides.
— Emergency Preparedness and Response:
The visited grain storage facilities are equipped with life and fire (L&FS) means including fire extinguishers and detached fire water tanks. L&FS drills are carried out by the state fire service at grain storage facilities jointly with the Company staff.
— Greenhouse Gas Emissions (GHG):
Estimated carbon dioxide emissions from fuel and electricity consumption, wastewater discharges and crop production of all facilities under Mriya’s operation and control average about 103,000 tonns annually. To reduce greenhouse gas (GHG) emissions the Company will consider feasible actions and develop a program for reduction of GHG emissions by improving energy and water use and liquid effluent reduction and will report annually on the progress to IFC.
— Pesticide and Fertilizer Application Management:
The company uses fertilizers and pesticides certified and approved by Ukrainian authorities. Further Mriya quality check pesticide samples of each batch in specialized laboratories.
Fertilizer types used range from pure Nitrogen and blends of Nitrogen, Phosphate and Potassium (NPK-fertilizers) to trace elements such as Boron. The need for fertilizer application is evaluated by considering the crop to be planted and soil sampling results including acidity and NPK levels. To minimize overdosing of fertilizers and losses due to for example leaching and run off with rain water the Company uses multiple small applications rather than a single large application; considers weather conditions prior to application; does application in accordance with manufacturer instructions; and keeps buffer zones around water courses to avoid contamination of surface water.
Application rates and land cultivation methods’ development is outsourced to a British consulting company, which has rendered services in farm management for 40 years across much of Europe. Mriya actively works to improve pest management and minimize the use of chemical pesticides. Handling, storage and use of personal protective equipment for agricultural chemicals and herbicides complies with national regulations.
The company is committed to develop a formal documented Pesticide and Fertilizer application Management Plan, which will cover the areas of pesticide and fertilizer selection and handling, application and storage, staff training, safety requirements, and disposal, consistent with national regulations and IFC guidelines.
PS4: Community Health, Safety and Security
All Mriya’s agricultural lands are surrounded by small, agricultural communities. Grain storage facilities, as well as the seed and sugar plants are located in industrial zones of the towns/settlements. Risks associated with cultivation relate mainly to spraying of crop protection products (pesticides), fertilizer application and associated risks for runoff, and the traffic of heavy vehicles and machinery. As mentioned above, the company uses certified pesticides. Also, the company notifies communities located close to areas in which pesticide spraying is carried out, so they can take precautions to protect, for instance, beehives.
Response actions should an emergency occurs are coordinated with appropriate authorities and communities by resident directors allocated at each land cluster. Operations visited have evacuation plans.
Security to Mriya’s offices and facilities is provided by a private security agency which is licensed and has staff trained according to the relevant national legal requirements. Moreover, security guards are trained to act in case of emergency and in aiding and do not wear fire arms.
PS6 Biodiversity Conservation and Management of Sustainable Natural Resources
Mriya cultivates already converted land with modified habitats typical for agricultural areas. Good agricultural management is developed and applied by the Company for all crops. To ensure sustainable operations in future potential expansion areas suitable for Mriya’s grain production the Company will amend and document the existing internal E&S screening procedure in compliance with IFC guidelines, PS1 and PS6. If risks to biodiversity are identified through this screening, more detailed assessment and analysis in compliance with PS1 will be undertaken.
Genetically-modified organisms are considered alien species and are not used.
