The Company has presented information which indicates that the proposed project will be developed to comply with host country laws and regulations and IFC’s Performance Standards on Social and Environmental Sustainability, and the applicable sections of IFC’s general and sector-specific EHS guidelines. Information about how any potential impacts will be addressed by the Company is summarized in the paragraphs below.
PS1: Social and Environmental (S&E) Assessment and Management Systems
E&S Assessment: National regulation in Paraguay does require a formal environmental and social impact assessment for plantations. The Company does a thorough technical, environmental and social assessment of all farms they are planning to acquire or lease. Criteria taken into consideration as part of the purchasing and lease procedure include: social and environmental assessment; land development needs; potential area for agriculture; meteorological data; logistics; land titling; environmental licenses; and, relationships with local communities. Land smallholders in some areas of Paraguay are strongly against the operation of large farming interests. In order to manage this risk in the San Pedro region, where the company has a concentration of farming activities, the Company assessed the socio-economical conditions of the communities near potential negatively affected areas which the Company wishes to acquire and/or lease. This assessment includes meetings with community leaders and members to discuss the project, employment needs and opportunities and seek to meet requests from local communities for Company’s technical assistance. The Company is also required to obtain and maintain environmental licenses for owned and leased properties. Twenty-four (24) of the 25 properties under operation have valid environmental licenses with the remaining properties’ license applications currently under review by the local regulatory agency.
Management Program: The Company has an E&S management program which has been developed based on an evaluation of environmental and social risks and impacts associated with its operations. The management program includes the identification of occupational, health, and safety (OHS) training needs of Company employees, management of storage and application of agrochemicals, and identification and management of social risks associated with smallholder farmers living in proximity to some of the Company’s farming operations. The Company is currently in the process of conducting a diagnostic assessment of one of its farming operations according to the Principles and Criteria of the Round Table for Responsible Soy (RTRS) with the ultimate objective of achieving certification against at least one internationally recognized sustainability standard at all of its soy production operations as previously agreed with IFC. Final RTRS certification of all farming operations will be achieved by September 2012. .
Organizational Capacity: Management of E&S matters lies with an Environmental and Social Manager, with direct reporting line to the CEO. The E&S Manager conducts on-going follow-up of the E&S assessment, policies and procedures to ensure they are constantly in effect, and controls the compliance of operations with country and local regulations. Day-to-day E&S management responsibilities are also assigned to farm operations managers at each of the farming operations who are responsible for ensuring that the Company policy is implemented, especially as it relates to OHS, environment, and relationships with subcontractors and local communities.
Training: Training is provided on an ongoing basis to the Company’s employees and contractors, the content of which covers both OHS issues and new farming practices to improve productivity and reduce inputs and soil erosion.
Monitoring: As part of the implementation of the E&S management program, the Company monitors a series of E&S performance indicators which include, among others: surface water quality in farming operations (specifically for the presence of organochlorine pesticides and inorganic nutrients at the end of soy harvest period); soil nutrients and agricultural pests as part of the implementation of integrated nutrient and pest management (IPM) programs respectively; pesticide and fertilizer consumption; fuel consumption (of own fleet and contractors); occupational health (consisting of admission and periodic (yearly) medical exams), including accidents of its own employees.
Going forward, and as set forth in the ESAP, the Company will complete a systematic analysis of key E&S indicators and will ensure that these are included as part of the Company monitoring program provided to the national authorities and IFC. Examples of additional key E&S indicators applicable to the Company’s operations include: OHS training plans and implementation; occupational accidents of subcontractors; community engagements (meetings) and recorded community grievances. As well, the Company will ensure that its own employees undergo medical exams every six months specifically the one related to cholinesterase levels. Records of such analysis will be maintained.
Reporting: The E&S Manager is responsible for the preparation of internal reports summarizing and documenting progress in implementation of the Company’s E&S management program. The reports focus on key business concerns, such as community relations, material impacts to Company operations (such as hazardous materials spills; transportation accidents of the Company or subcontractors; and fires threatening plantations). .
PS2: Labor and Working Conditions.
The Company has 84 direct employees, 28% of which are dedicated to managerial activities in headquarters and farm operations, including back-office services, with the remainder dedicated to farm operations. Additionally, the Company subcontracts approximately six (6) companies with a dedicated labor force of approximately 66 for all planting, spraying, and harvesting operations.
Human Resource Policy and Management: The Company has developed a human resources (HR) policy which outlines such aspects as the salary payment terms; holidays and other types of time off from work; general training requirements; and code of conduct (including disciplinary procedures). In line with the Paraguayan labor regulations and IFC’s Performance Standard 2, the HR policy includes provisions on codes of conduct at work and disciplinary practices; non-discrimination policy; performance management; working conditions; job descriptions; development and training; wages and benefits; and an employee grievance procedure. All direct employees have access to medical health and other related benefits. The Company complies with all relevant Paraguayan laws and international covenants signed by the Paraguayan Government, including provisions on non discrimination and equal opportunity and freedom of association. The Company’s HR policy is communicated to all new employees at the time of hire and has also been communicated to all employees through an announcement followed by the distribution of hard-copies. The Company verifies the age of its own employees at the time of hiring and requires contractors to do the same. .
Contractors and Sub-contractors: The Company sub-contracts to third parties all planting, spraying, and harvesting operations, as well as the transport of harvested product to storage or port facilities. Contractors of on-farm services provide dedicated teams and equipment (i.e. combine harvesters; sprayers; and support tractors). Contractor equipment is typically stored and mechanically maintained on the Company premises. The Company also provides on-farm housing to employees of sub-contractors in either individual housing for those accompanied by families or in well equipped dormitories. The Company has developed a Contractor Code of Conduct that outlines the labor and working conditions requirements that it requires contractors to meet in line with the Company’s human resources policy. This Code of Conduct is included in all contracts provided to contractors. The Company routinely monitors contractors’ payment of the social security benefits of its employees. Employees of subcontractors must show proof of valid identification to access Company property and the Company verifies the proof of age at this time as well as through random checks within Company property.
Occupational Health and Safety: Health and safety procedures at the Company include safety at work; handling and application of agrochemicals; safe driving and working with heavy machinery to ensure that impacts on the health of direct and contracted employees is reduced and avoided; accident prevention; and use of personal protective equipment (PPE) . As mentioned above, the Company conducts annual health tests for its employees. Health and safety inspections are conducted by the Farm Manager every week and internal audits are conducted by the E&S manager once a year. Corrective actions are identified and effective implementation is monitored by senior management through the action plan. Additional audits will be conducted in the context of the intitial and on-going RTRS certification process.
Going forward, and as set forth in the attached ESAP, the Company will further monitor its own and contractors’ compliance with applicable OHS requirements according to applicable local legislation and IFC Performance Standards.
PS3: Pollution Prevention and Abatement
Pollution Prevention - Resource Conservation and Energy Efficiency: The Company is an efficient and low-cost grower of soybean, corn and sunflower. Through the adoption of sustainable agricultural practices, including no-till, crop rotation, double cropping, intercropping, and site-specific farm management, the Company is able to reduce its operational costs, improve yields while conserving natural resources.
All the farms owned by the Company are managed under no-till practices and are rain-fed, which means no soil preparation before sowing and no irrigation is used for the field. Consequently, no fuel is consumed and no pollution is generated for field preparation and irrigation. Furthermore, more crops residues are returned to the soil due to no-till, resulting in increased soil fertility and reduced soil erosion. Soils are tested before sowing to determine their fertility. The application of crop fertilizers is based on this soil analysis data, and fertilization techniques for every crop are locally adjusted based on input from agronomists who are used as consultants by the Company for each farm. Most of the activities performed at the farms are conducted by contractors who receive detailed instructions from the Company on agricultural practices, including dosages of agrochemicals to be applied, type and method of application. Procedures for each activity are specified as part of their contract and monitoring data are collected at the farms by the Company’s Farm Manager. This information is then sent to headquarters and is monitored by the Operations Manager.
Waste management: Organic waste from agricultural production is either used as compost or left on the ground as crop residues to increase soil fertility. Paper, plastic and glass, and oil residue are collected for reuse or recycling The Company collects and disposes of empty agrochemical containers. Empty containers are rinsed and stored prior to collection by third parties who are duly licensed by the competent authorities.
Going forward, the Company will develop and implement a waste management procedure for the storage and disposal of empty agrochemical containers that includes restricted access to a covered storage area and a chain-of-custody procedure to ensure its final, safe, destruction and disposal. The Company will periodically audit contractors’ container disposal operations.
Hazardous materials management: Hazardous materials from the Company’s operations are mainly pesticides and fuels. Pesticides are stored in locked warehouses controlled by the Company and pesticides are only delivered to Contractors based only on the dosage specifications defined by the Company’s Farm Manager. Pesticide application is done at the same time of seed sowing by direct drilling rigs and then periodically based on the results of on-going pest monitoring according to the Company’s documented IPM approach.
Spraying is done by contractors who specialize in spraying. Sprayer operators receive regular trainings from the Company and have to be certified by local regulatory bodies to receive operation permits. Pesticides are stored in dedicated locations with lock and clearly labeled signs. Log sheets are kept on pesticides inventory, usage and handling.
Pesticide Use and Management: the Company has some elements of an Integrated Pest Management strategy in place and relies on knowledge exchange from seed suppliers, observations of own experience, and recommendations from the Brazilian and Paraguayan government agricultural research institutes on approaches to the use of pesticides. Pesticide use is managed in order to avoid impacts on soil and on water streams. The Company provides training to the people responsible in deciding on pesticide use and application. Pesticide application is defined by the Company’s farm managers and is done through contractors, which are trained and supervised by the Company’s farm manager to reduce the likelihood of impacts on workers health, local communities and the environment. Dosage is well monitored at each plantation and records are kept for follow up.
The Company has developed and implemented a documented IPM program that focuses on the identification of economically significant thresholds of pest damage based on active monitoring of field conditions to make decisions on the need, type of frequency of pesticide applications based on a specific and targeted use of chemical controls. The Company has phased out the use of Paraquat (classified by the WHO as a Class II Moderately Hazardous Pesticide) and other pesticides that are classified by the World Health Organization as Class Ia and Ib, respectively extremely and highly hazardous. Moreover, the Company has agreed to eliminate stocks and use of WHO Class II moderately hazardous compounds, except when needed for specific and well documented circumstances.
Greenhouse Gas Emissions (GHGs): the Company outsources services from contractors for all its agricultural activities, including sowing, spraying, harvesting, transporting, processing and storage of goods. It doesn''t own any machinery. With no-till, less fuel is consumed on every acre planted, hence reducing GHG emissions. Furthermore, soil erosion is contained and, with more organic matters being left in the soil, the ability of soil to store or sequester carbon is increased, another contribution to reducing GHG emissions. The Company contracts directly with fuel service providers of the contractors’ operation of on-farm equipment. Current yearly fuel consumption totals approximately 1.7 million liters of diesel fuel and approximately 10,000 liters of gasoline which is equivalent to about 4,700 tons of CO2-equivalent emissions per year. GHG emissions from electricity consumption in Paraguay are negligible as the energy matrix is predominantly from renewable hydroelectric power sources.
Emergency Preparedness and Response: the Company has developed and is implementing an Emergency Preparedness and Response Procedure. Risks addressed by this procedure include transport and vehicle safety, emergency response while handling agrochemicals, and fire safety at offices and plantations (affecting worker health and safety) and spills of diesel and other type of fuel used for transport (affecting surface and groundwater quality). The Company has shown evidence of effective implementation of emergency procedures in response to an accidental spill in 2010 which was disclosed to local communities and competent authorities in a timely manner following immediate control of potential environmental impacts.
Going forward, the Company will complement the corporate emergency preparedness and response procedure with farm specific procedures posted in a visible location and identifying emergency call-in numbers and other relevant information to aid employees on the correct and expedient response to emergencies.
PS 4: Community Health, Safety and Security
Community Health, Safety and Security: potential impact and risk to local communities arise from crop spraying and transportation of agricultural goods and agrochemicals. Spraying is done by specialized spraying companies. The Company will ensure that these companies have the appropriate procedures to minimize impacts from pesticide application. In Paraguay, field spraying is the preferred method and air spraying is only conducted in special circumstances, such as wet fields, wide-spread disease, etc. Sprayers must observe legal requirements, such as distance to nearest residential areas when air spraying to be able to operate. The Company is currently planting “green fences” along the perimeters of the planting areas where these are abutting public roads and nearby communities in order to help control pesticide drift-off during application.
The Company provides regular training to its contractors on OHS issues. Trainings include managing fires; safe use of chemicals; defensive driving; safe use of machinery, and first aid .
Security Personnel Requirements: Access to farms is controlled by manned gates staffed with armed guards. Farm security is complemented by the presence of armed public forces (national police) which are housed within each of the farm operations according to agreement between the Company and the government.
Going forward, the Company will conduct an independent audit of the security arrangements in order to evaluate compliance with IFC’s requirements on the use of security personnel and implement the necessary corrective actions from the findings of such audit, if any.
PS6: Biodiversity Conservation and Sustainable Natural Resources Management
One of the Company’s main environmental policies includes biodiversity conservation and a commitment to zero deforestation or conversion of natural and critical habitat. Before buying and/or leasing land, the Company does a technical evaluation which includes environmental and social aspects as mentioned above in PS1 review. The E&S Manager conducts an environmental and social evaluation of each farm to ensure that they can comply with environmental licensing requirements, including compliance with conservation of riparian areas of permanent protection along surface water bodies (or future compliance following the implementation of reforestation programs).
In the event the Company’s future growth plans include a change in policy on the conversion of natural habitat or development of farming operations in the Chaco Region of Paraguay (where the Company currently has no farming or other operations), the Company will notify IFC of its intentions and will develop and implement a detailed procedure on the selection of new farm locations and assessment, prevention, and mitigation of impacts to biodiversity in accordance with IFC PS1 and PS6 requirements.
