Belcorp has presented information and plans which show that the proposed project will comply with host countries environmental and social requirements as well as IFC’s Environmental and Social Performance Standards and applicable World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines, through continuation of existing management practices and implementation of the agreed additional measures summarized in the attached Environmental and Social Action Plan (ESAP).
Social and Environmental Assessment and Management System
Environmental & Social Management Systems: Belcorp has documented policies for Human Resources (HR), quality, environment, and safety. These corporate policies, together with the ethics code, guide the operational procedures. The company manages environmental and safety aspects of at its only production facility in Colombia, through a continual improvement cycle under structured management systems. The company has an environmental management team reporting to the Quality and Operations unit and an Occupational Health and Safety (OHS) team reporting to Human Resources. Belcorp plans to use the expertise of the existing teams to establish a corporate environmental unit with management teams at each of the new production plants to ensure compliance with relevant local laws and regulations and corporate policies.
Environmental & Social Assessment: Environmental & Social Assessment:The proposed expansion projects are in the early stages of development, therefore formal environmental and social impact assessments/studies have not yet been commissioned. However, the company has a well defined technical project team that includes environmental and OHS representatives and is in the process of selecting the technology and defining the layouts of the new production plants. Production processes are relatively simple, and involve raw material fractioning, mixing and emulsification processes, filling and final packing. In addition the facilities are supported by basic distribution warehouses for delivery of the products, The plants will be designed and constructed with appropriate environmental features and controls, and taking account of potential community impacts. Design features will include (i) optimization in the use of resources such as water and energy; (ii) solid waste reduction, classification and disposal; (iii) treatment of liquid effluents to WBG standards; (iv) management of hazardous materials; and (v) control of air emissions from boilers to WBG standards. The new production facilities will adopt best practices from the existing site at Tocancipa, where IFC’s due diligence showed only minor risk of adverse environmental or social impacts. Belcorp will further develop and detail the E&S management plans to mitigate potential environmental and social impacts during construction and operation of the Project. Belcorp will obtain and submit copies to IFC of the locally required environmental and social studies, permits and licenses for the construction and operation of the new production facilities previous to initiate the construction, installation and operation of the projects.
In the existing production plant in Tocancipa internal and external risk assessors are used to identify environmental impacts, safety hazards and mitigation measures which are implemented through continual improvement processes. The company works with different Third Party Manufacturers (TPM) throughout Colombia, Mexico, Peru, Ecuador and Brazil and it has 2 TPMs in France; a detailed screening is done on their quality capacity and some basic environmental elements are assessed. The company will define and implement a mechanism to assess the labor, environmental and occupational health and safety elements of the TPMs to ensure compliance with local legal requirements.
Monitoring & Reporting: Belcorp has managed its operations in the production plant of Tocancipa essentially in general compliance with Colombian legislative requirements. Monitoring of regulated environmental impacts is rigorous and includes solid wastes, use of hazardous materials, air emissions from boilers and discharged effluents. The company has an Occupational Health and Safety monitoring program that includes monitoring of workplace exposure, musculoskeletal disorders, and the reporting of injuries among others. These reports are aggregated into semi-annual summaries which are provided both internally to operations and human resources managers, as well as externally to relevant regulators.
Labor and Working Conditions
Belcorp has 8,920 employees worldwide, of those 3,903 are employed in Colombia, 1,729 in Peru, and the rest, mainly logistics and sales personnel, are located in the different countries where Belcorp operates. These figures do not include the third party manufacturers’ (TPMs) employees, but include temporary (seasonal employees) who correspond to almost 15% of the total workforce. Around 72% of all employees are female; this same proportion is maintained at managerial level. The Company expects to add almost 200 new employees in Colombia and 400 employees in Mexico once the production plants are operational.
Belcorp has a corporate office for Human Resources (HR). HR policies and initiatives developed at corporate level are applied across the company. The HR policy and ethics code have explicit references to wellbeing and safety, non-discrimination and equal opportunity, no child or abusive forms of labor, open communication and workplace ethics. The HR policy is supported by procedures, the induction manual, and the internal labor rules and regulations (reglamento interno de trabajo) which are distributed to all the employees so as to communicate working conditions. Documented procedures cover hiring, training and career development, shift assignment and authorized changes, performance review and promotion processes, grievance and communication mechanisms, and specific procedures for occupational health and safety, among others. Since 2007 the company has been a signatory of the Global Compact Initiative pledging to adhere to the ten principles in the areas of human rights, labor, environment and anti-corruption.
Belcorp has well defined communication mechanisms and has channels for employees’ grievances. The company uses HR as vehicle for grievances and direct contact to supervisors and directors is available to all employees. Grievances are documented and resolved according to defined action plans.
Belcorp employees in Colombia do not belong to workers organizations or unions, and there has been no such request among the employees. The company follows local legislation regarding workers associations in all the countries where it operates. The management team of Belcorp confirmed that they would not prevent employees to organize or participate in workers’ organizations.
The minimum age of employment is 18. Minimum salary in Belcorp is above the minimum salary of the countries where it operates. Belcorp has participated since 2007 in the initiative Best Place to Work (BPW) which surveys companies and identifies the best companies for employees. In 2010 the company ranked 13 among the best multinational employers in Latin America. Belcorp has demonstrated significant progress and continual improvement in the BPW criteria (e.g. communication, team work, career development and compensation) since the company first participated in the program.
Sales model and relationship of beauty consultants (consultoras) and Belcorp: Belcorp’s business model uses direct sales as its strategic distribution channel. The company has a network of almost 1,000,000 independent beauty consultants who, through catalogues and sample products sell Belcorp’s products. The company does not have labor relations with the beauty consultants as they purchase Belcorp’s products at a discount and then independently sell them to their customers: they do not receive a direct salary from the company, they are not under a fixed schedule, and there is no supervisory relationship between Belcorp and the consultants. The company will continue to maintain transparent communication with the consultants, reinforce its ethics code and policies and review its external grievance mechanism to guarantee that complaints regarding its sales model are addressed.
Occupational Health and Safety (OHS): Belcorp has a strong commitment to provide employees with a safe and healthy work environment and has in place policies and procedures for effective OHS management. The company has identified workplace hazards at its production plant in Colombia and has defined control measures in compliance with national laws on occupational health and safety. As per Colombian legal requirement there is Joint Committee on Occupational Health (COPASO - Comité Paritario de Salud Ocupacional) to be vigilant of OHS risk and controls. Belcorp regularly monitors workplace air quality and noise levels in addition to maintaining records of accidents and incidents within the plant. Belcorp keeps hard and soft copies of all relevant material safety data sheets (MSDS) and conducts detailed training for all workers who may be exposed to hazardous materials and wastes.
During the site visits, IFC identified certain areas where OHS improvement is required, including but not limited to management of change, housekeeping, and management of explosive atmosphere risk. With the expansion project in Colombia the company will gain extra space to facilitate the flow of materials and the manipulation of the products; therefore, reducing the OHS risks. The company will complete the implementation of the recommendations of the electrical risk program aligned with the expansion project of the new plant; an interim corrective action plan to address urgent aspects will be implemented. The company will undertake a risk assessment of the filling and packaging area for nail polishers at the Tocancipa plant considering fire safety and occupational exposure of employees to solvent, a corrective action plan will be agreed and implemented. Belcorp will identify and implement mechanisms to reinforce the workplace housekeeping program in the Tocancipa plant.
Belcorp will identify and implement a mechanism to assess OHS conditions within Third Party Manufacturers as described under the Environmental & Social Assessment section of this report. An independent OHS audit will be performed to the largest TPM in Peru and corrective actions implemented. Assessment in such facility must include at a minimum fire hazards, chemical hazards (including exposure to solvents and extraction systems), explosive atmospheres, machinery guarding, management of cranes and mobile equipment, and ergonomics.
Belcorp will implement mechanisms to ensure that contractors performing construction activities for the project maintain health and safety plans, train and provide their employees necessary safety protection, follow OHS procedures and overall comply with their labor and OHS obligations according to local law as well as IFC PS2 requirements. Once the new production plants are operational Belcorp will expand the current OHS program to the new facilities aligned with the systematic implementation of the E&S management system.
Pollution Prevention and Abatement
Resource Conservation and Energy Efficiency: The new production plants will use technology that allows efficient use of resources. In particular, the Company will explore alternatives to reduce the consumption of water and energy, specific measures will be determined as the project develops; currently the projects are at an early stage of design and such elements have not been defined. Belcorp will consider energy and water efficiency in the selection of the production equipment.
Emissions to Air: Belcorp’ existing combustion facilities in the Tocancipa plant are small, and below the size threshold at which IFC or local regulators require emissions monitoring. Manufacturing facilities are equipped with dust collection filters in order to prevent dust emissions to the environment; the company does not use pharmaceutical active ingredients in its processes. Belcorp will ensure that the new production plants complies with WBG and local air emissions requirements, when operating at normal conditions. Where indicated by process requirements monitoring of volatile organic compounds (VOCs) will be performed and if shown necessary by such monitoring action will be taken to reduce emissions.
Liquid effluents: Liquid effluents from the production plant in Tocancipa are treated on site by a chemical and biological treatment. Effluent monitoring undertaken shows compliance with local requirements; the discharge is to the municipal sewage system. The expansion projects will consider local and WBG requirements in its design, construction and operation. Belcorp will meet WBG and local effluent discharge requirements for the new production plants when operating at normal conditions.
Hazardous Materials: The company avoids the use of highly toxic solvents in the product manufacturing. Alcohol and other flammable materials are widely used and the company has installed basic safety measures to manage the flammability risk. Such controls include well-constructed facilities for alcohol, fire suppression systems and access control to the storage areas. Belcorp will review and upgrade the storage of flammable materials in the Tocancipa plant, providing adequate conditions of ventilation and fire and spill protection. The new facilities will consider the proper design for handling hazardous materials. Ozone depleting substances are avoided; current chiller system uses refrigerants such as R-407C a zero ozone depletion potential (ODP) refrigerant.
Solid Waste Management: Belcorp has a well documented waste management program; the company collects and separates the waste according to risk. Wastes are classified as recyclable, hazardous, special and domestic materials. Recycling is promoted, and as feasible materials such as empty drums and containers are returned to the manufacturers. The company has selected authorized vendors for the final disposal of the materials; Belcorp verifies the proper disposal of the materials and retains destruction records. Hazardous waste generated includes residuals from chemical and biological laboratories, solvents, off-specification or returned products, raw material containers, waste water sludge and used oil. The existing mechanisms to manage the waste will be applied on the new proposed projects considering approved vendors at each location.
Greenhouse Gas Emissions: Greenhouse emissions of the production plant in Tocancipa are associated with electricity consumption and the use of natural gas for the boilers. The annual greenhouse emissions of the current production plant in Tocancipa have been estimated around 1,200 tons of CO2 equivalent. A similar level of emissions is expected at each of the new production plants in Colombia and Mexico.
Community Health, Safety and Security
Current production plants are located in industrial areas with no residential neighbors and have appropriate fire protection and pollution controls on place. Impact to surrounding communities derived from vehicular movements and traffic is minimal and the company limits raw materials and products delivery to daylight time.
The existing production plant in Tocancipa has considered an emergency plan for responding to fires, chemical related explosions, natural disasters, and accidental releases of hazardous substances. The Company conducts drills according to the emergency plan on a regular basis, in collaboration with the local fire brigade. The company participates in joint emergency response drills with other plants located in the area on a regular basis. The new production plants will implement proper safety procedures, pollution controls and will address structural and safety issues in the design. The company will consider potential impacts to the local community in the selection of the sites and in the design of pollution and safety controls, in addition the company will evaluate and mitigate the risks and impacts to the health and safety of the affected communities (if any) during the design, construction and operation of the new plants.
Belcorp’ security system is sub-contracted to reputable and licensed security companies depending on the location. In the production plant in Tocancipa security includes armed guards and the use of guard dogs, which is common practice in Colombia. The guards are subjected to background checks and proper training: Belcorp will ensure that the companies contracted to provide security, both during construction and operation, maintain an appropriate conduct towards workers and local community. IFC has concluded that Belcorp’ security force is managed in compliance with the requirements of PS4.
