PS 1: Social and Environmental Assessment and Management Systems
Environmental and Social Assessment:
Assessment is undertaken by relevant functional areas, such as staff and management within the occupational health and safety and environmental department. Information on E&S performance is collected throughout the organization to allow the relevant departments to target areas for improvement in current operations. In the event of new operations (e.g. new equipment or processing operations in the industrial plant), a mock up of the new process is first made to facilitate a job hazards analyses to be undertaken, and to allow training to occur prior to such modifications being put into production. The Company will be required to expand its scope of its E&S assessment activities to include water consumption level; in conjunction with this enhanced approach, the Company will work to improve communications and coordination among those charged with E&S management and those focused on matters of production. These considerations are addressed in the attached ESAP.
Management Program and Organization:
Environmental and OH&S departments are staffed by experienced and qualified environmental and OHS professionals. These individuals have developed and continue to manage a comprehensive management system that continually assesses and manages environmental and OHS impacts. The system is also relied upon to determine the scope of improvements when such needs are identified. Beyond the core management structure, those employees charged with these duties that have associated impacts and risks are provided with training. The extension of the OHS management system to all employees and contractors/temporaries and seasonal workers (through the hazard awareness program) is a sign of a maturing system. Observations of working conditions in the plants and orchards provided evidence that the program has been universally adopted and is having the desired outcome (i.e. is protective of worker’s health and safety).
Monitoring and Reporting:
This function has grown over the years that IFC has been engaged with San Miguel. Ostensibly created to meet IFC’s needs, the program now has a maturity that is associated with systems that drive internal improvements and fulfill the needs of the owning organization as it strives to meets its own objectives and cultural values. The Company will continue to pursue such an approach and use the data to highlight areas and promote cross-functional dialogue to drive even greater E&S performance.
PS 2: Labor and Working Conditions
Human Resources Policy and Management
The Company has encapsulated its approach to management of HR in a booklet that is provided to all employees as part of their induction program. The booklet references national law, where applicable, and describes aspects of human resources, environmental management and occupational health and safety and also labor relations. Hours of work, pay, holiday entitlement, breaks, provision of work clothes and lockers, disciplinary measures and procedures are all described therein. Grievances are handled by the HR Supervisor; the Company has agreed to implement a more formal employee grievance mechanism that will be highlighted at induction, included in the 2012 edition of the HR booklet and its existence communicated to all those it applies to. The employee grievance mechanism is addressed in the ESAP.
Workers’ Organizations
Three unions represent various workers working for or on behalf of the organization: Alimentarios (Food Workers Union); Unión Argentina de Trabajadores Rurales y Estivadores (UATRE, representing those working in the orchards); and, a Commercial union. San Miguel employee committees have been established to provide for two-way communication among workers, labor representatives, and the company. Rights of workers in Argentina are negotiated through such union representation and are encapsulated in union agreements as well as in other contract law that meets the requirements of PS 2.
Non-Discrimination, Equal Opportunity and Retrenchment and Protecting the Workforce
The company practices non-discrimination in hiring that was well illustrated in a recruitment advertisement reviewed by IFC. No retrenchment is anticipated; to the contrary, the Company is expecting to hire more people this year than last due to a better predicted harvest. As noted elsewhere in this document, the Company utilizes fixed term and seasonal workers, in addition to permanent employees. This configuration is due to the seasonal nature of lemon growing and processing. Seasonal and temporaries are eligible for benefits, such as a day off a week, breaks during the day, etc. and are paid a rate greater than the national minimum wage. As a matter of policy, San Miguel does not employ anyone under the age of 18.
Occupational Health and Safety
Workers in the orchards (observed mechanically controlling weeds) were seen wearing appropriate personal protective equipment (PPE) as were those in the industrial and packing plants (e.g. hard hats, eye protection and hearing protection as well as overalls). Pickers are supplied with PPE and are trained in the correct use of supplied equipment, such as scissors used to harvest fruit for packing. Accident and incident statistics are kept on these workers who are largely temporary/seasonal and brought in for the harvest as they are for full-time employees including those in the industrial and packing plants. Statistics are used to target improvements, training, etc. in order to provide for a safe working environment throughout the Company; results compare favorably with those seen in the food processing sector. Job hazard assessments are used to ensure safe practices are in place; as noted above, new tasks that may include hazards are assessed during a dry run conducted prior to the job being fully operationalized in order to ensure workers are fully trained about safety hazards and accident avoidance. An awareness program whereby workers can identify and report on unsafe practices, equipment or procedures is in place. In addition, a 5S program (representing sorting, straightening, systematic cleaning, standardizing, and sustaining operations) that has been in operation at the industrial plant for approximately 18 months has recently been inaugurated at the fresh fruit packing plant.
PS 3: Pollution Prevention and Abatement
Pollution Prevention, Resource Conservation and Energy Efficiency
The Famailla industrial plant has a long history of initiatives successively put in place in order to reduce the environmental impact of its operations, such as improvement of the quality of industrial effluent discharges. The focus on improvement of effluent discharges, in particular, has been required over the years and has been addressed in previous ESAPs as effluent from the plant has a high organic content and is also highly acidic. Several engineering improvements have been implemented to render the effluent to an appropriate quality. Phase 1 of the treatment system (homogenization, stabilization, neutralization, coagulation, flocculation and dissolved air flotation) has been in place for several years. The effluent from Phase I becomes the influent to Phase II of the treatment process; the main component of Phase II is a 500 m3/hr capacity anaerobic bio-reactor, which went online in 2010. As yet, due to an atypical 2010 harvest, the quality of effluent coming from the bio-reactor has not been fully assessed. The Company has hired a wastewater treatment consulting firm to begin collecting and analyzing representative samples of Phase II treated effluent (from the anaerobic bio-reactor) for the 2011 production season. The results from this study will inform the options for Phase III of the treatment program so the final effluent can meet WBG’s effluents guideline value. As part of this analysis, the Company and its consultant will explore options for meeting the guideline value other than those solely based upon treatment, such as the re-use of the effluent as a source of irrigation in the orchards or possible re-use in other agriculture operations not owned by San Miguel (e.g. as sugar cane cultivation) which is the dominant crop in the region. These options will be discussed with Company’s agronomists to ensure the effluent that is produced from Phase II is fit for purpose. The Phase II treatment process was addressed through a prior IFC San Miguel investment (#26890); remaining items from that ESAP have been incorporated into the ESAP developed for this investment. Related to long-term, ongoing efforts to manage industrial wastewater are ongoing initiatives in Argentina and Uruguay to extract more valuable products out of current waste streams (e.g. from waste peels) and biowaste in the citrus industry in general.
Consumption rates for electricity are subject to measurement and reduction as part of a voluntary initiative. Started as a local program, the second iteration is national in overall scope (Programa Reconversion Industrial, PRI). Progress reports are submitted every two months. San Miguel uses the reported data to target opportunities to reduce consumption.
Some irrigation, using water from permitted ground water wells, is required in the orchards during the dry season. As part of the overall management of water, including possible re-use of effluent, the Company has committed to undertake a water audit of the industrial operations at La Famailla industrial .This assessment is needed because many areas in the production process have yet to analyze their exact water requirements; for example, pumps providing raw water from ground water wells to the plant are metered, which is a condition of the permit process, but are not adjustable to facilitate reduced water provision when it is not needed at full flow rates. Understanding the demand side for water will allow for more sustainable practices to be put in place on the supply side that meet production needs but reduce the impact on ground water sources. Reducing raw water demand will also help the Company to maintain flow at rates that are in accordance with effluent plant design limits while allowing for suitable production rates of pectin, oil and other products. The water audit requirement is addressed in the ESAP.
Wastes
Biosolids from Phase I of the treatment process consisting of both wet acid and dry alkali biosolids are combined for composting or bioremediation. Currently two sites are used for such purposes. Both are remote and are managed by a third party; both were visited by IFC as part of the appraisal mission. One site had been used to grow maize, which had been harvested prior to the site visit. Sites are fenced and are appropriately managed. Other solid wastes generated at the plant (plastic, paper, cardboard, etc.) are sorted and recycled by a Tucuman-based operator.
Hazardous Materials
The limited amounts and types of hazardous wastes (HW), such as used oil and medical wastes from San Miguel’s clinic, are collected and incinerated by a licensed contractor. HW stored at company purpose built sites awaiting disposal are provided with secondary containment. No permanent hazardous waste facility currently exists in Tucuman Province. The transport of HW across provincial borders requires a licence; the Company is exploring the costs and benefits of obtaining such a licence.
Emergency Preparedness and Response
Emergency planning and procedures are in place; the Company conducts two mock fire drills a year. The Company has a plant-wide audible alarm system in place and is upgrading this to provide for messages to be broadcast through the system to employees in the event of an emergency. Firefighting equipment (extinguishers, fire hoses, etc.) is in place and where inspections were required, equipment was marked and in compliance with re-inspection and/recharge requirements.
Greenhouse Gas Emissions
The Company has provided data that IFC used to estimate the Greenhouse Gas emissions from the operation. The estimated GHG (tonnes CO2 equivalents) is currently 108,659. The main contributor to this amount is wastewater which totals 69,974 tonnes of CO2 equivalent. The Company is committed to evaluate technically and financially feasible and cost-effective options to reduce or offset project-related GHG emissions during the design and operation of the project. For example, it is expected that results from water foot printing will provide opportunities to reduce electricity consumption and particularly water use and thereby reduce the amounts of waste water produced which will target the largest contributing source of GHG.
There are four Boilers at the industrial plant used in the production process (e.g. to dry peel), which are fired with natural gas. Boiler safety is ensured through regular government-required inspections. Air emissions are monitored and measured twice a year by a government–approved contractor and results provided to the appropriate regulatory authority.
Given that the Phase II effluent treatment bio-reactor produces methane gas, the Company has proposed using this gas in production in addition to current use for pre-heating the Phase II influent to assist in the treatment process. Excess gas is flared-off on site. Alternative uses of this gas may be employed to provide power to irrigation pumps if that proves to be an option for Phase III of the effluent management system. San Miguel has applied for a Clean Development Mechanism Project for the methane production and is awaiting the outcome, which is expected in June 2011.
Pesticide Use and Management
Minimal pesticides/herbicides/fungicides are used in the orchard. These include cupper hydroxide and Round-Up™ both of which are approved for use and are consistent with the limitations of the Company’s Global GAP certification. The Company uses mainly mechanical means to control weeds in the orchards. Waste orchard cuttings and other waste organics are returned to the orchards as a means to aid in soil conditioning. Sorghum is planted in between removal of old and planting of new trees as a means to condition the soil. Matters of OHS are well managed; application of pesticides, none of which are WHO Class Ia, Ib or II, are consistent with ICSC handling and application requirements of specific control materials.
PS 4: Community Health, Safety and Security
Community Health and Safety
Company plants and facilities have been designed, constructed and are operated to minimize potential for community impacts associated with the project. An example of this is the operation of trucks used to haul biosolids from the industrial plant. These trucks are fitted with GPS devices in the cabs; a web-based system is used to track the whereabouts of trucks (and how they are being operated, the speed they are driving, etc.) to ensure they deliver wastes to the correct sites in an appropriate manner and return to origin without unauthorized stops.
Emergency Preparedness and Response
Fire inspections conducted by local fire departments are not required under current regulations. Facilities are inspected by other relevant government departments, however. The two neighboring communities (Famailla and Lules) both have fire departments with adequate resources to meet company needs in the case of unplanned events. As noted elsewhere, the Company conducts its own emergency drills twice per year.
Security Personnel Arrangements
Security is managed as part of the overall OHS department. Those providing for protection of Company assets are not armed and receive training on how to apply appropriate intervention if needed which is managed through contract specification
PS 6: Biodiversity Conservation and Sustainable Natural Resource Management
Protection and Conservation of Biodiversity
IFC reviewed the nursery operations including the grafting procedure used to produce new trees for production. San Miguel uses a variety of rootstock; some is domestic in origin and some rootstock is imported from overseas. Regardless of origin, all rootstock has to be approved by the Instituto Nacional Technologica Agropecuria (INTA) prior to its introduction into the orchards. The Company is carefully selecting rootstock that will allow them to move to a denser planting regimen (up to 700 trees per hectare as opposed to 300 for older trees). Older trees (e.g., those approximately 25 years of age) are being replaced with smaller trees that bear more fruit. These new trees are producing greater yields through less dense interior tree space where the lemons do not grow or grow small and that are easier to harvest due to shorter stature trees. These new breeds offer opportunities to avoid OHS hazards through, for example, eliminating the need to use ladders during harvesting. Fruit destined for packing is harvested using scissors in order to retain a small branch/twig that continues to protect the fruit. Fruit destined for industrial processing is handpicked and the branch/twig is not required as processing occurs straight away.
