ECOM will implement managerial and operational measures to address environmental and social impacts and to ensure that the project will, upon implementation of the specific agreed measures, comply with all environmental and social requirements (national laws and regulations and the IFC’s Performance Standards and relevant World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines). Information about how these potential impacts will be addressed by ECOM is summarized below and in the Environmental and Social Action Plan (ESAP) agreed with the client.
The ECOM group’s diverse operations worldwide involve trading in coffee, cotton, and cocoa. Other traded products are grains, cotton seed, rape, sunseed, and hogs. Ensuring volumes of quality and timely supply, in compliance with environmental and social criteria from various certification schemes, has resulted in ECOM moving closer to the production sites (smallholders) along the supply chain, and into a level of control of the production phase, procurement at the farm gate, and of primary processing. Trading operations worldwide place ECOM in the leading group on each main commodity. ECOM has long-established relationships with top multinational buyers. ECOM owns and operates facilities worldwide where the Company will implement activities as described in the ESAP.
PS1: Social and Environmental Assessment and Management Systems
Social and Environmental Management System (SEMS)
ECOM's operations are largely decentralized with strong corporate oversight of commercial transactions. The Company places environmental and social issues at the forefront of its global sustainability agenda and its operations based on its corporate environmental, agriculture and risk assessment policies, as a business opportunity for promoting responsible commodities and to respond to manufacturers and consumer needs.
To provide consistency in the overall risk assessment of their operations at their global subsidiaries, ECOM will develop and implement an integrated corporate management system (SEMS) for social and environmental affairs, quality, and occupational health and safety management. The corporate management system will address environmental, labour, social, and occupational health and safety issues associated with the overall Company operations. ECOM will design the SEMS to comply with IFC Performance Standard 1 requirements. The corporate SEMS will have a supply chain component.
Corporate Environmental Managerial Responsibilities and Organogramme: the Company agrees to appoint a corporate social and environmental resource-person with managerial responsibilities for environmental and social issues. This person will report to ECOM’s CEO. ECOM will conform social and environmental managerial duties at each country of operation, and undertake the activities required to implement environmental and social policy and procedures at all levels of operations, complying with host country laws and regulations, and WBG’s EHS Guidelines.
Supply Chain and Risk Monitoring
Origin managers at ECOM are focused on the physical commodity and on country origination. All country managers are aware of the requirements from the various certification schemes, of ECOM’s overall sustainable agriculture strategy and best practices, and are sensitive to issues that could cause business interruption or reputational concerns for ECOM and its manufacturer clients in the supply chain.
ECOM’s objective is to simplify its supply chain and increase traceability of products. Given the growing markets for certified sustainable produced commodities, ECOM focuses on certification in origins (such as AAA (Nespresso), Starbucks, Cafe Practices, Fair Trade, Organic, Rain Forest Alliance, and UTZ Kapeh), and participates in strategic discussions and industry platforms that drive change in standards for sustainability, traceability and certification. Building direct relationships with smallholders and suppliers in countries of origination allows ECOM to improve quality and quantity of produced commodity, and have a positive effect on the livelihoods of farmers.
Purchase Policy: as part of the supply chain component of the SEMS, ECOM will upgrade its purchase policy (the “ECOM Policy”) to promote sustainable purchasing practices and ensure the policy promotes compliance with national environmental legislation (e.g. illegal land clearing) and IFC Performance Standards, including among others, avoidance of child labor, forced labour, land acquisition, deforestation and biodiversity protection, natural forest conversion, and water and energy use.
Monitoring: ECOM will develop procedures for monitoring of key PSs requirements in its supply chain at the local level and track information in a database. Suppliers will be classified in categories based on E&S risk, depending on their level of compliance with IFC PSs and the reliability of ECOM’s information on their sourcing and compliance. The categories will reflect the level of knowledge available to ECOM regarding E&S standards and risk assessment under which the crop was produced (e.g. Certified, Traceable Not Certified, Traceable within a Region, Non-Traceable). ECOM will proactively seek opportunities to foster E&S best practices in its supply chain over time and develop mitigation measures, in order to upgrade suppliers to a lower E&S risk category. ECOM’s senior management agrees to identify any needed changes in the Company's SEMS for the management of suppliers to reduce risks in the supply chain.
Supplier’s Data Base: in an integrated fashion, the supply chain component of the SEMS will collect information and categorize suppliers according to identified social and environmental impacts and risks and knowledge of suppliers’ practices. The supplier’s data base will be a tool to monitor the dynamics of certified suppliers, and will be expanded to incorporate broader country supply chain data and allow aggregation. ECOM will proactively seek opportunities to collect information over time on “non-certified purchasing” where some informal information is available.
Training
As part of their staff capacity building, ECOM will implement a training programme for their field staff to ensure knowledge of ECOM’s risk assessment, and its social and environmental Policies; build in-house capacity to collect accurate E&S information on suppliers at origin; and reliably input data into the supply chain component of the SEMS to allow senior management to assess the risks of environmental and social issues in any given location.
Where commercially viable and based on opportunity to influence the implementation of best practices, the training shall include training for suppliers with whom the Company has purchase contracts to inform them that ECOM expects them to comply with country legislation related to social and environmental issues, and relevant IFC E&S requirements.
Monitoring and Reporting: Frequent management visits to all origins allow for review and discussion of local data and to identify corrective actions. The Company will implement a process for periodic reporting and monitoring of Supply Chain environmental and social information to senior management, to allow monitoring of progress (i.e. increased volumes of operations in the lower E&S risk suppliers categories), a proactive response and periodical realignment of ECOM’s sustainability project priorities and mitigation of potential ECOM exposure to commodity business risks in the short and long term.
Coffee: ECOM is well experienced in producing certified coffee. The geographic range of projects and the expansion of certified products into mainstream coffee retailing is the largest evidence of the work done by ECOM to improve producer practices. ECOM procures the largest volume of certified coffee from Nicaragua.
Cocoa: ECOM has six years of experience in traceability and quality program for cocoa in Ivory Coast. To address the sustainability issues in cocoa, the major buyers and the worldwide cocoa industry have increased their interest to develop and purchase certified cocoa products from West Africa in line with internationally accepted labour and environmental standards. Certification and traceability to origins of cocoa in West Africa is hindered by the dispersion of smallholder producers over large areas, small number of farmer association/cooperatives, limited monitoring at the smallholder level, and occasional social unrest that brings intermediaries back into the field. A full-fledged certification programme is underway with mainstream certification groups, such as Rain Forest Alliance. The client will engage in activities for a strategic plan for certified cocoa as described in the ESAP.
Cotton
In cotton the supply chain is more complex because of the many steps between producer and finished goods in the store and ECOM will extend the certification concepts of coffee to cotton. ECOM joined the Better Cotton Initiative (BCI) and are represented on the Governing Council and its Executive Committee. The client will engage in activities to promote sustainable cotton as described in the ESAP.
PS2: Human resources and working conditions
Human Resource (HR) Policy and Management: Human resources are managed at the local country offices with limited corporate oversight from ECOM. All human resources policies and procedures are reported to be consistent with local regulatory requirements. The HR policy is included in employment contracts, and addresses working conditions, terms of employment, and wages and benefits. Employment relationships recognize the principals of non-discrimination and equal opportunity which is included in individual labor contracts. The minimum employment age at ECOM is 18 years. Benefits generally include at a minimum medical insurance, pension, leave, and transport allowance. ECOM will ensure that contractors follow the provisions of IFC Performance Standard 2 and will monitor its compliance.
Protection of the Workforce: Child labor or forced labor is not employed directly at ECOM operations. The Company relies on certification programs for consistency with acceptable labor practices in the supply chain. ECOM will monitor these two issues as part of the supply chain’s component in its ESMS.
Occupational Health & Safety (OHS): OHS aspects are managed at different levels throughout ECOM operations. ECOM will conduct a gap analysis of its OHS policies and procedures at all their facilities, against applicable WBG’s EHS Guidelines and present an Action Plan detailing corrective measures and budget. ECOM will implement the corrective actions accordingly. Field visits to Beneficio Atlantic in Nicaragua indicated a need for upgraded practices in the use of safety of personal protection equipment by the workforce. The Company will conduct an internal audit of OHS at the Beneficio Atlantico in Nicaragua, to identify fire prevention and control needs, housekeeping, physical hazards, and use of PPE. The Company will present to IFC a plan and schedule for addressing deficiencies.
Grievance Mechanism: ECOM will develop a grievance policy for employees and suppliers, to include steps to be taken, mediation process, responsible persons, publicize the procedure, response time, record keeping, and how feedback will be given. ECOM will implement the grievance policy at the corporate level and at each country operation.
PS3: Pollution Prevention and Abatement
Wastewater treatment: effluents from ECOM’s operations include process wastewater where cocoa or coffee is subject to wet processing operations, sanitary wastewater and storm water. Sanitary wastewater is treated in septic tanks and discharged to soil. Storm water is discharged directly to public sewers where available. No public wastewater treatment systems are available in several rural areas where ECOM has its operations. ECOM will review wastewater treatment at the Company owned and operated wet milling facilities globally and compare against local regulatory standards and applicable WBG EHS Guidelines. The Company will address gaps and develop a plan to comply with country regulatory limits and WBG EHS guidelines for pH, BOD, COD, Total Suspended Solids (TSS), Total Nitrogen and Total Phosphorus. This plan will include specific actions and timeline.
Waste management: solid waste generated from coffee or cocoa processing activities includes organic and inorganic wastes. Organic material is typically reused as natural soil amendments and inorganic materials such as plastics; sacks etc. are sold to vendors for recycling or disposed in authorized landfills.
Pest Management: ECOM is piloting Integrated Pest and Disease Management (IPM/IDM) practices at the coffee plantations in Nicaragua. The “Broca Trap” is part of ECOM’s tools to control pests reducing the use of pesticides. Extension officers provide technical assistance in selection and use of fertilizers and pesticides. Products for export may be fumigated for pest control with Methyl Bromide, which is subject to phase out as ozone depleting substance. Fumigation is carried out in the warehouses or in the holds of ships by licensed vendors and in compliance with local regulatory requirements for such activity. ECOM will present a phase out plan and schedule in order to restrict use of Methyl Bromide for applications not included in allowable exceptions under the Montreal protocol
PS-6 Biodiversity Conservation and Sustainable Natural Resource Management
Natural or critical habitat or endangered species: ECOM operations in Nicaragua do not trigger modification, conversion, or degradation of any critical habitats. Natural resources, such as water and land, are managed sustainably.
Sustainable agricultural practices and training of suppliers
ECOM has implemented farmer training centers. In Paraguay the training provides skills and “Agricultural Technician” Certifications. These centers provide technical assistance to local farmers to support them in both improving productivity and obtaining relevant standards certification with a focus on: promoting sustainable coffee and cocoa production; assisting farmers to achieve certified environmental/social production standards, and supporting development and production of other crops that are local to the region.
