PS1: Social and Environmental Assessment and Management Systems
Assessment: Zambeef, with the technical and financial assistance of DEG, have engaged into an exhaustive Action Plan in November 2009 for the development and implementation of a Group wide environmental and social management system. This comprehensive ESMS will encompass, among others, the mitigation/enhancement measures identified in the Environmental Project Briefs which Zambeef has been producing and submitting to ECZ, for acquired, new and expansion projects. This latter requirement is in accordance with Zambia’s Environmental Protection and Pollution Control Act (EPPCA) and the EIA Regulations. Potential environmental and social impacts of all the operations undertaken by Zambeef are therefore identified, assessed and tabulated, and for each impact, a series of mitigation and/or recommended actions are detailed and explained. As part of the ESMS development, a Group wide environmental policy has already been drafted and is currently undergoing internal review. The target completion date for the ESMS, as stated in the Environmental and Social Action Plan (ESAP) agreed upon between DEG and Zambeef in July 2009, is 24 months after the first disbursement of DEG loan.
In the context of its rapid expansion, Zambeef has had significant challenges in achieving the implementation of these actions at the different operations due to lack of human capacity and focus of the Group to EHSS issues. As such, the technical support of DEG arrives at a critical point. Zambeef has already agreed, adopted and implemented an Environmental Team structure since the engagement with DEG. DEG will play a key role in Phase 2 of the Environmental Action Plan , by among other activities, undertaking EHSS performance audits at Zambeef’s operations and co-financing direct investment of mitigation measures and the establishment of a Quality Management System. The IFC will also require that the Environmental Action Plan is fully implemented.
Organizational Capacity: For the past three years, Zambeef has had an internal E&S consultant overseeing the EHSS issues associated with Zambeef’s operations, particularly in relation to environmental health issues. Considering the geographic scope and the rapid expansion of Zambeef operations, it has been challenging for one individual to adequately cover EHSS issues. Going forward, the recently implemented Environment & Technical Services Department will assume responsibility over the EHSS issues for the Group.
Management Program: None defined currently for the Group wide operations. However, some subsidiaries do have well developed management programs, e.g. Zamanita. Zamanita is, by far, the most progressive with regards to EHS management within the Zambeef Group. Zamanita Limited has been incorporated into the Zambeef Group of companies as a separate 100% subsidiary with its primary focus being the production of edible oils, margarine and cake meal. They have a fully functional SHEQ department with a SHEQ Manager who is supported by a SHEQ Officer, clinic, and an Environmental Health Manager. The SHEQ Manager reports directly to the Operations Director.
Zamanita is currently working towards ISO 14001 certification by March 2010 and HACCP will follow immediately after the ISO 14001 certification. The subsidiary engaged NQFS Management Solutions of South Africa since July 2009 to help with the certification process. Zamanita has been working on their documentation in preparation of the certification. As a result, environmental incidents, quality and non conformity issues, OHS issues and others are recorded, investigated and closed off. The SHEQ team regularly undertakes internal audits.
According to the former Zamanita Technical Director who has recently been appointed Head of Environment & Technical Services, the plan is to complete systems development at Zamanita, adopt and roll out same to all the other Zambeef’s operations.
Training: According to the internal environmental consultant referred to above, HACCP training was initiated briefly and stopped after realizing that the education levels of some Zambeef employees were not adequate to comprehend the concept. The corrective plan is therefore to change the recruitment policy by increasing the educational requirements of new recruits. In the meantime, food hygiene training has been undertaken widely by the consultant. First aid and safety training is also undertaken at subsidiary level. IFC presented the Food Safety Training Program to Zambeef during appraisal.
Monitoring: Effluent discharge and air emissions are monitored regularly for the different operations, in compliance with Zambian regulatory requirements. Zambeef representatives reported that cases of non-compliance had taken place at some operations, particularly the flagship Huntley and fines had been implemented by ECZ. Monitoring results were not availed for review during appraisal. Zambeef reported that there have been problems with regards to the laboratory turnaround period of the results making it difficult to implement corrective action. Zambeef plans, as part of its Environmental Action Plan, to have an internal laboratory at their new premises in Lusaka where monitoring samples will be analyzed and the results will be captured for the entire Group, and corrective action taken.
Reporting: The internal environmental consultant referred to above has in the past produced a progress report on the action plan every three months and submitted same to the Executive Director.
In addition, Zambeef produces an environmental and social responsibility report. The report forms part of the annual report. The 2009 Annual Report focused on the engagement with DEG and the corrective Environmental Action Plan developed and approved by Zambeef Senior Management. The report also highlighted the completion of HIV/AIDS Policy and the teaming up with a UK based charity called Alive & Kicking, which aims to use the power of football to deliver health education, in particular, to raise HIV/AIDS awareness and malaria prevention.
Zambeef also reports to ECZ as follows:
Solid waste generated and disposed - every 6 months,
Air emissions - at least once every 12 months,
Hazardous waste - once in a year, and
Effluent emissions - every 6 months.
In future, Zambeef will report annually to IFC on the implementation of the Environmental Action Plan developed by DEG, including progress on the implementation of the SEMS, and cases of noncompliance, as part of the Annual Monitoring Report (AMR).
PS2: Labor and Working Conditions
Human Resources: Zambeef has 3718 employees inclusive of management and 1089 of these are female.
The Zambeef HR Department is currently undergoing reorganization and a group wide HR policy will be developed. The department is in the process of consolidating and formalizing different operations terms of employment.
It is important to note that Zamanita, already identified above as the leader within the Group with regards to EHSS management, has in place a Human Resources and Health Policy focusing on HIV/AIDS. One of the key mission statements of the policy is “to facilitate and promote a non-discriminatory occupational environment at the work place”. Zamanita also has a Human Resources Recruitment Policy document describing the recruitment procedure in detail.
Workers Organization: Zambeef recognizes unions at work place; a recognition agreement is signed by the Company, union leaders and Ministry of Labor representative.
Non-Discrimination and Equal Opportunity: Zambeef is an equal opportunity employer and does not discriminate employees on the basis of age, disability, race or sex. Zamanita recruitment policy referred to above clearly states that:
“Priority of employment shall be given to Zambians, however, where a suitable qualified Zambian is not available to fill a particular post, then, non-Zambian may be offered the job provided the policy complies with the relevant provisions of both the prevailing Zambian Labor and Immigration Legislature”.
Zambeef has been practicing the same principle across the entire Group and going forward will adopt the Zamanita Policy for Group wide operations.
National Registration Cards (NRCs) are used to verify age at the time of engagement.
Terms and Conditions of Service and Grievance Mechanism: Employees are issued with the terms and conditions on engagement and these comply with Zambia labor laws and are approved by the Ministry of Labor who keep a copy in their files. Zambia ratified the International Labor Organization’s Core Labor standard and thus, by meeting applicable national law; Zambeef will also be complying with the requirements of PS 2.
The HR department is in the process of consolidating a Disciplinary Grievance Handling Procedure for the entire Group. Currently, the grievance mechanism is incorporated in the terms and conditions of employment which the employee signs and keeps a copy.
Occupational Health and Safety: At the time of appraisal, Zambeef had not yet developed an integrated record of Occupational Health and Safety (OHS) incident reports as well as environmental incident reports. Apart from Zamanita, the rest of the visited operations did not keep such records. However, work place incidents/accidents are reported to the Ministry of Labor. Going forward, an integrated approach with regards to incident reporting and record keeping will be adopted, as per the Environmental Action Plan.
Zambeef will develop a Group wide OHS Policy which will be disclosed to the employees.
Supply Chain: Zambeef is a growing and highly integrated entity. This integrated structure makes it possible for Zambeef to be self sufficient in raw materials markets and minimizes possible external supply chain risks. As a result, no supply chain issues such as child and forced labor were identified during appraisal.
However, as part of the integrated management system which is presently under development, Zambeef will implement procedures to ensure compliance of suppliers and out-growers with IFC PS1, PS2, PS3 and PS6.
PS3: Pollution Prevention and Abatement
Wastes: Zambeef, in line with its large and varied operations, produces a wide range of wastes which mainly includes:
Solid waste:
Manure from feedlots
Carcasses (rare) from feedlots, abattoirs and ranches
Scrap metal from equipment/vehicle repair workshops
Bleaching earth from chemical refining of crude oil at Zamanita
Pesticide containers
Sewage from various operations
Sludge from water neutralization at Zamleather
Liquid waste:
Effluent from abattoirs
Effluent from leather processing at Zamleather
The effluent produced from abattoirs is generating pollution problems due to the high content of animal fat, manure, blood and any cleaning detergents. The effluent from the leather processing may have a significant organic content, biochemical oxygen demand (BOD), and chemical oxygen demand (COD).
Hazardous waste:
Used oil
Used batteries from equipment/vehicle repair workshops
Soap stock and spent acids from chemical refining of crude oil
At some operations, such as Chiawa farm, used oil is recycled via the oil suppliers. At Huntley, used batteries were piled on site and some used oil was observed in a water channel draining water from the workshop. The soap stock and spent acids from Zamanita is sold to soap making companies.
Air emissions:
Particulate matter (dust) from processing plants
VOC’s from Zamanita
Odor; sharp and pungent odor from Ammonia gas (NH3) produced from manure
Zamanita uses the hexane extraction process to produce oil.
The level of waste management varies from operation to operation. All waste generated at Chiawa farm, including pesticide containers, is collected by ECZ under license to their Chirundu facility. Zamanita and Zamleather were also observed to have well defined waste streams and collection and disposal channels. All new projects were reported to apply project specific pollution prevention and control and waste management techniques that are consistent with good international industry practice. At the time of appraisal, there was no Group wide independent monitoring of Zambeef’s implementation of waste management procedures and their effectiveness. DEG will monitor the implementation of their proposed plan.
Environmental management issues were observed to be more pronounced at Huntley. Huntley Farm is located 50km north of Lusaka, along the Great North Road. The farm has in the recent past evolved into Zambeef Products plc’s largest agro-processing complex. Jones C. Kayawe, then Zamanita Technical Director, produced an internal report in September 2009 titled “Huntley Farming & Agro-Processing Complex Environmental Issues”. The report identified all the current environmental issues at Huntley and developed an action plan for each issue identified. Jones Kayawe has since been appointed Head of Environment & Technical Services and has indicated that the priority will be to implement corrective measures as identified in his and DEG’s action plans. The process of consolidating the action plans is currently underway.
Resource Conservation: Zambeef’s crop production activities consume large volumes of water. Chiawa, for example, currently consumes an average of 12 000m3 of water per hour drawn from the Kafue River. The consumption is expected to peak at approximately 30 000 m3 of water per hour after the third expansion phase. A pipeline to draw more water from the Zambezi is nearing completion.
The new Head of Environment & Technical Services has highlighted a cleaner production audit for reducing water and energy consumption is one of the key priority areas in turning around the Company’s E & S performance. IFC will monitor the implementation of this audit and evaluate for the applicability and eligibility of Zambeef to obtain Technical Assistance and financial resources from the IFC’s Cleaner Production Lending Facility.
Chiawa practices precision farming and apply for water rights through a Water Board.
Soil erosion and eutrophication are also issues associated with Zambeef’s crop production activities as well as cattle ranching.
Energy Efficiency: The majority of Zambeef operations tap their power supply from the national grid and no energy efficiency implementation has yet taken place. Whilst it is often the environmental reasons rather than the digester´s electrical and thermal energy generation potential that motivate farmers to use bio-digester technology, Zambeef is considering using biogas to generate electricity for their own use. Further, Zambeef also intends to produce biodiesel at the palm plantation and the diesel will in turn be used in electricity generation.
Hazardous Materials: Related to the transportation, storage, and use of bulk quantities of acids, alkalis, solvents, and hydrogen during extraction and refining at Zamanita. Zamanita uses the hexane extraction process to produce oil. Zamanita has a license to import and store hazardous chemicals.
Zamleather stores and uses sulphuric acid in the leather tannery whilst the farms use pesticides which are licensed by ECZ. Please see hazardous waste above for more hazardous waste issues.
Emergency Preparedness and Response: Zamanita has in place a comprehensive emergency preparedness and response plan in compliance to the Zambian laws and regulations. . Zambeef will adopt and modify this plan for implementation at its other operations in line with potential risks at the different sites.
Greenhouse Gas Emissions: GHG emissions from the various Zambeef activities are currently not accounted for. IFC will require that Zambeef account for and report their GHG emissions annually.
Pesticide Use and Management: Though requested for by IFC during appraisal, a full list of all pesticides used by Zambeef was not received. It was understood that each business unit is responsible for purchasing pesticides for their use. It was also understood that the business units only handle pesticides that are registered with ECZ. At Chiawa farm, all pesticide containers are collected through ECZ under license to their Chirundu facility.
As part of the overall Environmental Action Plan and related preparation of the EMS, it is agreed that Zambeef shall carry out a gap analysis regarding pesticide use, handling and storage against IFC’s EHS Guidelines on Annual and Plantation Crop Production. Based on the results of the gap analysis, Zambeef will develop and implement a systematic and Group wide approach to identify and carryout measures to improve pesticide use, handling and storage. This will allow Zambeef to develop an Integrated Pesticide Management Plan (PMP) in line with IFC guidelines on crop production and WHO pesticide classification system to ensure that pesticides used comply with international requirements. Zambeef will immediately phase out purchased non-compliant pesticides, where necessary.
PS4: Community Health, Safety and Security
The three main identified hazards from Zambeef operations include those related to food safety issues, the spread of animal diseases and traffic related with regards to the large transport fleet with excess of 200 vehicles.
Food safety: Zambeef does not have in place a certifiable food safety system. However, Zambeef’s Environmental Health & Safety Consultant at some stage initiated HACCP implementation and stopped after realizing that the educational background of the employees could not absorb HACCP concepts. Instead, Good Manufacturing Practices including food hygiene were embarked upon with a plan to implement HACCP in the near future. In the meantime, minimum requirements on occupational health and safety are met before setting up outlets. DEG also came up with a series of corrective actions with regards to food safety which they identified as a high risk area during their appraisal. Zambeef has initiated the implementation of this action plan as highlighted above.
Bio-security: Bio-security is mainly breached by trucks, people, feed and pests. With some of the facilities being old, their original designs did not emphasize bio-security considerations. However, disinfectant barriers for vehicles and people were evident at the visited sites. Perimeter fencing to maintain separation is in place where required. Additionally, Zambeef is currently re-assessing bio-security measures, as part of the SEMS, in order to minimize the risk of disease infection and transmission at its production facilities. This include, among other things, keeping multi-site farming or separation, constructing security fencing to prevent unauthorized access, disinfecting vehicles entering production areas and constantly monitoring the health of livestock.
Fleet management: It could not be determined during appraisal how many, if any, transportation incidents and accidents involving communities had been recorded due to the movement of Zambeef’s 200 vehicles. Going forward, Zambeef will initiate a system to check, review and record incidents and accidents associated with their fleet, as per the Environmental Action Plan.
Security personnel: Zambeef employs about 200 security guards for their internal security. Of these, 140 fall directly under the Group Security Officer, whilst 60 are split between the general managers of Sinazongwe and Chiawa farms. The central command for the security is at Huntley. According to the head of internal security, 15 guards are recruited and trained every two/three months. The key requirements for recruitment are that one needs to have completed O’ level and should be aged between 25 – 35 years old. Some of the recruited guards are retired policemen. The guards undergo basic three week security training after which they are deployed and undergo three weeks deployment training which is specific to the point of deployment.
Some guards are armed in certain areas depending on risk and type of business. Background checks are carried out on individuals who will carry arms. The guns are licensed to Zambeef and are transferable. Zambeef had a fatal incident about 11 years ago when poachers attacked and killed a security guard at Huntley. It was after this incident that the Zambian Police Inspector General recommended Zambeef to apply for a license to have guns; maximum of five. The guns are controlled by the Group Security Officer who decides on which area and guard receives a gun based on identified risk and makes sure the licenses are renewed when due. No incidents have been recorded to date since the adoption of guns by Zambeef security.
Zambeef also has external security arrangements with Rapid response security.
PS5: Land Acquisition and Involuntary Resettlement
Two of Zambeef operations have triggered resettlement and relocation of the affected communities.
Chiawa farm: Due to Chiawa Farm’s expansion programme, three of their center pivots are encroaching on 21 families in the northern part of the farm. Chiawa, together with the local chief and the affected families, has agreed that the families can carry on with their activities until negotiations between Chiawa and the local chief are concluded. The negotiations are centered on either relocating and resettling the 21 families in the eastern part of the farm or leaving the families where they are and getting compensatory land from the chief instead.
Palm plantation: To pave way for the Muma Oil Palm Plantation in Mpika District, Northern Province, 45 families were compensated and relocated within the area. The compensation and relocation was undertaken amicably involving the local chief and government. In addition, Zamplam Limited signed a Social Responsibility Contribution Agreement with Kopa Community Development Trust and The Kabinga Development Trust. As part of the agreement, Zamplam will pay an annual fee to Kopa and Kabinga Trust for the purposes of social development of the respective communities. The annual fee will be payable as either the Land Concession Fee or an Oil Royalty Fee where:
The Land Concession Fee is calculated as US$1 per hectare of land in the Kopa/Kabinga Allocation, where Kopa Allocation equates to 7 390.07 hectares and Kabinga Allocation equates to 12 712 hectares.
The Land Concession Fee will be payable from the Effective Date to the date of the Trigger Date, where the Trigger Date is the date that the crops cultivated in the Kopa/Kabinga Allocation starts producing RBD Palm Oil.
From the Trigger Date, Zamplam will pay the Kopa/Kabinga Trust an Oil Royalty Fee instead of the Land Concession Fee.
The Oil Royalty Fee is calculated as US$1 per ton of RBD Oil produced from the Kopa/Kabinga Allocation or a portion thereof subject to review at Zampalm’s discretion.
After the Trigger Date the obligation of Zampalm to pay the Land Concession Fee will forever cease in respect of that portion of the Kopa/Kabinga Allocation that is generating the Oil Royalty Fee.
The project has already generated employment for more than 300 unskilled laborers from the local Kopa and Luchembe Chiefdoms.
In both cases, there is no conflict in the whole process. It is also important to note that, in Zambia, all land is on leasehold and is owned by the government and managed by Traditional Chiefs who decide how it is used. The cases referred to above have followed and respected this set up. Further, DEG’s Environmental Action Plan requires Zambeef to carry-out a detailed analysis of Zampalm impacts on livelihood of adjacent population (TOR and consultant satisfactory to DEG). IFC will require that Zambeef spread this analysis across its operations where resettlement and relocation are triggered.
PS6: Biodiversity Conservation & Sustainable Natural Resource Management
The following Zambeef operations were observed to have potential to trigger PS6 issues:
Chiawa - located on the confluence of Kafue and Zambezi
Zampalm – forms a boundary with the Bangweulu Game Management Area (BGMA)
Sinazongwe - located close to Lake Kariba – grain cropping farm; unlike Chiawa there have a feedlot, abattoir and butchery.
Chiawa will not develop the middle part of the farm and instead will preserve it as a corridor to allow wild animals to pass through to the Zambezi River. This corridor will help in the protection and conservation of biodiversity.
Whilst the Zampalm plantation is sited in a plain area and no trees were felled to make way for the plantation, there may however, be a possibility that trees will be chopped should the plantation expand in future. It is important for Zambeef to develop and implement a land development plan and a biodiversity management plan in order to ensure protection and conservation of biodiversity. This should also be supported by a robust Group wide policy on sustainable biodiversity conservation and natural resource management which Zambeef will develop.
DEG’s Environmental Action Plan requires that Zambeef carry out gap analysis against IFC Performance Standard 6 “Biodiversity Conservation and Sustainable Natural Resource Management) for Chiawa Farm and Zampalm. Based on the impact mitigation plan of the environmental impact assessment and the results of the gap-analysis Zambeef shall develop and implement (i) a land development plan and (ii) a biodiversity management plan in order to ensure protection and conservation of biodiversity in compliance with DEG’s requirements. IFC will require that Zambeef follows this process wherever biodiversity issues are identified in its projects.
