Key E&S impacts/issues of the project include the following: (i) Environmental and social impact assessment of new facilities; (ii) Capacity of the E&S management system to address potential E&S risks associated with further expansion of Mriya agricultural business including crop growing and operation of new and recently commissioned facilities; (iii) Compliance with national laws and regulations; (iv) Labour conditions and terms of employment of Mriya’s employees and occupational health and safety (OHS) at Mriya’s facilities and the Sponsors’ sugar plants that are key in the sugar business value chain; (v) Implementation of Integrated Pest and Disease Management Plans; (vi) Wastewater and waste management; and, (vii) Communications with local communities.
Mriya has presented policies, plans and procedures to address the E&S impacts and to ensure that the proposed Project will, upon implementation of the specific agreed measures included in the ESAP attached to this summary, comply with the E&S requirements of the Ukraine’s laws and regulations and IFC’s Policy, Performance Standards and WBG’s EHS 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 greenfield projects and new developments to carry out an environmental impact assessment (EIA) study and evaluate potential negative impacts on environmental and social conditions. Depending on the significance of the impact (e.g. scale, intensity and duration), a company has to develop and implement an Environmental and Social Management Plan (ESMP) which outline mitigation measures to avoid, mitigate or compensate identified adverse impacts. Relevant Ukrainian authorities review the project documentation, including EIA for compliance with national laws and regulations and issue construction and ultimately operating permits.
The Environmental Impact Assessment (EIA) studies for new silos being constructed (Khorostkiv, Kozova, Borschiv, Derenivka) and the seed plant of which first stage development is already under operation, have been completed. Design documentation and EIA are reviewed by Ukrainian relevant authorities including fire safety, sanitary, epidemiological and environmental issues. Operational approvals will be received prior to the commissioning of the facilities. In accordance with the attached ESAP, IFC will require evidence of compliance with the Ukrainian’s regulations following the review of design documentation by the relevant authorities.
The Company is committed to strict enforcement of the national and of IFC’s PS requirements. To this effect, the Company will develop and implement E&S Management Plans (ESMPs) of all new facilities. These plans will address the requirements of Ukrainian’s relevant authorities, IFC’s PS and WBG’s EHS Guidelines. Reports on the progress of ESMPs’ implementation will be provided to IFC annually.
Mriya grows crops on idle farmland plots with modified habitats typical for agricultural areas. Nevertheless, to mitigate and avoid potential impacts on natural resources, including natural habitats, water resources, soils and nearest settlements, Mriya has developed and implements an initial internal E&S screening of new potential sites for early identification of E&S risks and impacts and to establish a E&S baseline for assessing the effectiveness of the proposed mitigation measures, if needed, and to monitor E&S conditions.
— Environmental, Health and Safety Management System, Organizational Capacity and Reporting:
Mriya has implemented the required ESAP’s action items in its previous investment, including further establishing and implementing its environmental, health and safety (EHS) management system and improved underlying E&S performance which effectively meet the requirements of national laws and regulations, IFC’s Performance Standards and applicable WBG’s EHS guidelines.
Specifically, ongoing E&S measures includes following the key steps:
- Assignment of a corporate qualified EHS manager who has been trained by an internationally recognized agency for the implementation of ISO 14001 and OHSAS 18001. This measure ensures adequate in-house expertise for further development and improvement of the EHS management system under the proposed investment;
- Development of a corporate Environmental Policy and an EMS Manual consistent with ISO 14001 to establish a framework to identify resources, responsibilities and authorities throughout the Company’s units and functions; monitoring of E&S performance to measure achievements and develop adequate corrective and prevention measures; regular review of the management system by Mriya’s top management;
- Launch of the “Environmental page” on its website to disclose E&S information for broader public;
- Initial actions to design the occupational health and safety (OHS) management system consistent with OHSAS 18001, including primary screening of OHS conditions; development of risk assessment mechanism; inventory of current safety procedures, etc.
Going forward, the Company is committed to achieve the development, implementation and integration of EHS management system consistent with ISO 14001, OHSAS 18001, Ukrainian’s legal and regulatory requirements, and IFC’s Performance Standards in order to manage effectively its current and future EHS issues that might arise from the rapid grow of its operations.
Specifically, the additional actions agreed with IFC for further development of the EHS management system will include the following priority steps:
- Conduct an independent audit of the current EHS management system and related performance for all Mriya’s operations; the audit will identify current strengths, weaknesses and future opportunities, define key corrective actions to effectively address existing and potential E&S impacts and OHS risks to employees and communities and assure compliance with the IFC’s PSs and WBG’s EHS Guidelines;
- Based on the audit findings, develop a corporate E&S management program that will include objectives; key EHS performance indicators; responsibilities and timeframe for implementation.
The external reporting is carried out in accordance with national legal EHS requirements. Internal reporting about EHS issues is provided to the Company management on a regular basis. Reporting to IFC on continuous improvement of E&S performance and the EHS management system will be provided within the context of the Annual Monitoring Reports (AMR).
— Training and Monitoring:
The Company carries out training needs analysis and develops training program for target groups to ensure up-to-date skills needed for their specific work responsibilities. Induction programs are provided to new staff to support their integration . Mriya will refine its training programs through adding modules on EHS and OHS awareness for all groups of employees, including senior management.
Mriya has started improvement of current EHS monitoring through measurements of emissions and discharges. Workplace conditions are monitored by Ukrainian’ specialized agencies.
The Company will update IFC on the implementation progress of its ESMS and underlying ESMP in annual reports to IFC.
PS2: Labor and Working Conditions:
— Human Resources Policy, Non-Discrimination and Equal Opportunity:
Through its Code of Conduct and Human Resources policy, Mriya clearly communicates its corporate values and ethics standards based on “the company is a family” principles. The key elements found in the Labour and Human Resources (HR) policy is the appointment and retention of competent personnel and continuous career development. Discrimination in employment based on gender, race, age, ethnic and religious association, or nationality principles is prohibited by the Labour and HR policy; and this is important for Western Ukraine where there are multiple religious affiliations. Mriya enforces the implementation of its corporate HR standards based on equal opportunities principles and worker rights for labor protection, including right /freedom for professional associations and trade unions.
Upon appointment, the employee is given an initial induction that facilitates employee’s familiarization and awareness of responsibilities, disciplinary requirements and rights, working conditions, and opportunities for further promotion. In addition, the induction includes overview of the Mriya’s strategy, mission, manpower policy, training policy, labour and HR policy, environmental policy and commitments, and grievance mechanism.
— Working conditions and terms of employment
Agro Holding Mriya employs 1625 employees in total as per December 2010. Permanent personnel are about 1000 employees of whom 70% are operational staff; there are also an estimated 600 seasonal workers.
Written contracts with permanent staff set up terms of employment consistent with national labour laws including hours of work, wages and benefits, leave for illness, maternity, vacation or holiday, etc. To ensure protection of labour rights of seasonal workers that constitute about 40% of Mriya’s workforce, Mriya will revise contracts that will include working conditions and terms of employment consistent with PS2 and, inter alia, define responsibility of the employer to provide safe workplace conditions, personal protective equipment, leave for illness, and compensations in case of incidents.
Mriya renews collective bargaining agreements that cover working conditions as per national labour laws. Besides collective agreements, supporting regulations and contracts, Mriya offers social packages, including onetime payment in specific circumstances; financial aid and social benefits.
— Grievance Mechanism
Formal grievance mechanism consistent with PS2 was developed and implemented in 2010. It is available for all employees and communicated to new personnel during induction.
— Occupational health and safety
Occupational health and safety (OHS) risks associated with pesticide and fertilizer handling; dust from crop handling; heavy machinery operations and physical strain are reduced by adherence to safety rules and procedures developed by the Company. To prevent potential risks to personnel and material assets associated with grain unloading to receiving bunkers/ hoppers of silos, Mriya will install designed-in protection shields and devices to cover hoppers between operations.
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. To improve working conditions of personnel handling pesticides, Mriya will, on a high priority basis, take the following actions:
- complete a list of workers handling crop protection products (pesticides);
- revise and/or develop pest handling operational procedures for each workplace;
- arrange adequate training, product’s Material Safety Data Sheets-based technical education for any chemical formulation employed, in the use of adequate Personal Protection Equipment (PPE);
- inventory of available PPE and ensure availability of adequate PPE for employees exposed to contact with products;
- arrange regular cholinesterase testing of employees to define if specific employees should be allowed to continue such practices and what specific levels dictate when employees should cease participating in such activities;
- adopt and implement the policy for workers rotation to avoid chronic exposures to specific pesticides.
Two lost workdays accidents were reported in the grain production business in 2010; the Company has investigated incidents, analyzed causes and undertook corrective actions to prevent any repetition.
To address specific OHS risks of affiliated sugar plants’ operation, Mriya started to implement priority actions defined in the ESAP for the first investment: inventory and purchase of appropriate PPE and repair of workers'' locker rooms to ensure sanitary and hygiene conditions consistent with good international practices. To ensure safe workplace conditions and mitigate risks associated with high temperatures, vibration and noise, dust, work in confined spaces and risks associated with being in old premises and operating outdated equipment, the Company has developed a plan for upgrade of all sugar plants’ buildings and production facilities, including reconstruction and repair foundations, roofs, walls, windows, ventilation, water supply and sewerage, electrical installations, heating system, access roads and internal railways to be started in April 2011, six months before next production period.
Additionally, as it was agreed in the ESAP of the first investment, the Company will undertake regular EHS audits of compliance, including workplace conditions of all facilities under Mriya’s operation and control and will implement corrective actions, including revision of current operational and safety procedures, regular safety training, internal monitoring and reporting on workplace safety conditions and statistic.
PS3: Pollution Prevention and Abatement:
— Pollution prevention, Resource Conservation and Energy Efficiency
Mriya has recently completed an independent energy, water efficiency and cleaner production audit of two selected sugar plants with support of IFC’s Advisory Services. Upon implementation of the agreed actions, Mriya will be able to improve from 16% to 30% savings through measures related to automation of the boiler equipment and water supply systems, as well as the modernization of production processes. Mriya continues its commitment toward the reduction of fuel consumption for its own transport fleet through installation of GPS and fuel flow meters at each vehicle.
— Emissions and effluents:
Emissions from silos are limited to organic dust released from grain refiners and dryers and captured in cyclones. Monitoring of point source air emissions and its compliance with national limits are undertaken by supervisory authorities on a regular basis.
Sugar plant wastewater discharges remain the main environmental issue for Mriya’s associated operations. The liquid effluents are discharged to sedimentation ponds; after a period of settling (natural biological aeration), sludge is used for agricultural needs. To meet requirements of the WBG’s EHS guidelines, Mriya has arranged monitoring of sugar plants’ liquid effluents while facilities were operated; organized database of effluents’ composition and developed corrective action plans that will be completed in 2011 to achieve compliance with guideline limits for Biochemical Oxygen Demand (BOD5) and Coliform bacteria.
Mriya has recognized the need to make next steps for further improvement of sugar plants’ wastewater treatment systems and is committed to mobilize its in-house expertise in wastewater treatment and undertake thorough internal assessment of wastewater systems’ efficiency of all sugar plants. Based on the outcomes of the assessment and collected baseline information, Mriya will develop a long-term gradual improvement program that will include measures for reconstruction of sugar plants’ wastewater systems to prevent contamination of soils and groundwater, reduce areas occupied by sedimentation ponds and, going further, measures for remediation of areas used for wastewater treatment systems. To evaluate future savings of water resources, Mriya will, on priority basis, install water meters at water supply and water discharge systems before next operation period of sugar plants.
— Waste management:
Waste from grain elevators is divided for three fractions; two of it are used 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 developing a comprehensive waste management system. Ongoing process includes development of the Waste Management Program that covers 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 the FAO’s 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 safety (L&FS) means, including fire extinguishers and detached firewater tanks. Operation conditions of facilities including electrical installations, communication facilities and fire water supply system are inspected and maintained by the specialized and governmental agencies regularly and, specifically before harvesting. Additionally, temperature regime of grain processing is controlled automatically. L&FS drills are carried out by the state fire service at grain storage facilities jointly with the Company staff.
— Greenhouse Gas Emissions (GHG):
The Company analyzed feasible measures for GHG emissions reduction and developed a program that covers conservation of buffer zones along surface water sources, fertile soil maintenance, nutrient and manure management; integrated approach to energy efficiency and heat consumption. For instance, new agricultural machinery performs several operations during one pass across the field, such as preparing the soil while planting various crops, etc. All machineries are equipped with fuel flow rate control meters and GPS system, which allows reducing fuel consumption and decreasing engine emissions. Estimated carbon dioxide emissions from fuel, electricity consumption and crop production of Mriya’s facilities average about 169,000 tons annually.
— Pesticide and Fertilizer Application Management:
Mriya does not use agro-chemical products which fall in World Health Organization (WHO) classification classes Ia /Ib by hazard and actively works to improve its pest management practices to minimize use of chemical pesticides throughout development and implementation of a corporate pesticides and fertilizer application management plan based on Integrated Pest Management (IPM) principles. The plan is based on the provisions of the FAO’s International Code of Conduct on the Distribution and Use of Pesticides, the WHO’s recommended Classification of Pesticides by Hazard, WBG’s EHS Guidelines for Annual Crop Production; the EU Integrated Pollution Prevention and Control, reference Document on Best Available Techniques in the Food, Drink and Milk Industries. The Plan covers pesticide and fertilizer selection and handling, application and storage, staff training, safety requirements, and disposal of empty containers.
Ongoing process of IPM implementation includes the development of documented procedures for establishment of buffer zones/ strips along water sources (rivers, streams, ponds, lakes, and ditches); procedures for in-situ washing of machinery after use of pesticides and fertilizers; agreements with relevant organizations for disposal of empty containers; analysis of all pesticides against the WHO classification of pesticides by hazard and national legislation; measures to ensure that products fall in the WHO classification classes Ia /Ib by hazard are not used and that any stores of such chemicals are disposed of as hazardous waste by appropriate licensed contractors; measures to avoid the use of pesticides and fertilizers listed in the Stockholm Convention as Persistent Organic Pollutants; and, measures to ensure the use of class II pesticides by only personnel received proper training, equipment and facilities to handle, store, apply and dispose of these products properly.
Going forward, Mriya will develop and adopt a corporate IPM statement/policy to ensure continuous implementation of all above mentioned practices consistent with the international codes and WBG’s EHS Guidelines. Additionally, to improve hazardous materials handling, starting from initial purchase phase, Mriya will revise its procurement procedures and contracts with suppliers/distributors and include requirements related to a set of documents supplied with crop production products, including certificates, MSDSs, recommended PPEs, and terms and conditions for disposal of empty containers.
The need for fertilizer application is evaluated by considering the crop to be planted and soil sampling results, including acidity and NPK (Nitrogen, Phosphate, Potassium) levels. To minimize overdosing of fertilizers and losses due to leaching and run off with rainwater, 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 watercourses to avoid contamination of surface water.
Reporting to IFC on status of implementation of the corporate pesticides and fertilizer application management plan will be provided within the context of the Annual Monitoring Reports (AMR).
PS4: Community Health, Safety and Security
All Mriya’s agricultural lands are surrounded by small, agricultural communities. Grain storage facilities/silos, as well as the seed and sugar plants are located in industrial zones of 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 developed and implements an IPM plan to minimize use of chemical pesticides. Mriya applies advanced soil treatment and crop protection technologies, and uses modern agricultural equipment and machinery. Also, the Company notifies communities located close to areas in which pesticide spraying is carried out beforehand, so they can take precautions to protect, for instance, beehives.
Prevention of potential risks to community health and safety associated with crop/grain quality is provided by strict enforcement of proper handling, processing and storage of crops at silos. Crop quality is analyzed at different phases of grain processing and storage including protein, fiber, moisture, and before transportation for sale by the on-site laboratory and state specialized analytical centres. For instance, each lot before transportation to customers is analyzed for radionuclides (Cs-137, Sr-90), heavy metals (Cu, Pb, Cd, Hg), pesticide residue levels, mycotoxin, genetically-modified organisms, etc. Also, one of the sponsor-owned sugar plants has received the ISO 22 000 certificate that contributes to the product quality enhancement.
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.
Response actions should an emergency occurs are coordinated with appropriate authorities and communities by resident directors allocated at each land cluster.
