The key environmental, social and occupational health & safety issues associated with this investment include: 1) Quality, environmental and OHS management systems and food safety programs; 2) Occupational health and safety risks for direct employees and contractors/third parties; 3) Grain Elevator safety and dust explosion risks; 4) Energy efficiency; air emissions with the dust and Hexane/VOCs (Volatile Organic Carbons) content; 5) Wastewater treatment and waste management, assessment of recycling and re-use of by-products; 6) Life, fire and traffic safety; 7) Labor transparency.
The information about how these potential impacts will be addressed is summarized in the following sections of this Environmental and Social Review Summary (ESRS) and in the attached Action Plan (ESAP) agreed upon with the Group.
PS1: Social and Environmental Assessment and Management System
Management Systems and Assessment: The Group has not undertaken an Environmental Impact Assessment (EIA) study for its facilities; however, each facility has a certificate from the State Ecological Inspectorate (SEI). The proposed site for the Trans Cargo Terminal is within 400m of the River Prut surface water protection area. According to Moldova Environmental Legislation, any proposed construction activity located within river beds and/or near protected zones of rivers and water bodies is required for undertaking an EIA. As such, there is a regulatory requirement for Trans Oil Cargo Terminal to prepare an EIA for its facilities. The facility will obtain written confirmation from the State Ecological Inspectorate as to the requirement for a project EIA and obtain written certification in relation to an Ecological Permit for this Operation.
Trans Oil facilities have not adopted consolidated EHS management system certificates, except for Floarea Soarelui which has obtained ISO 9001 certification. The Group facilities do not have any corporate environmental and social policies or procedures in place. In order to manage and mitigate the environmental and social risks of its business operations, the Group will establish an integrated Environmental and Occupational Health and Safety Management system for all its facilities in line with internationally recognized standards, (e.g. ISO 22000, ISO14001 and OHSAS18001 respectively) as per the attached Environmental and Social Action Plan (ESAP).
Organization: Although every facility has designated staff for OHS and Environment, the Group does not have an established organizational structure for the management of environmental and social responsibilities. As set forth in the ESAP, the Group will hire a Corporate Environment, Health and Safety (EHS) Manager/Coordinator who will oversee the environment, health and safety issues associated with its operations at all facilities and will define roles and responsibilities at each facility.
Training: The Group reported that training programs that comply with national legislations are available; specifically, all Group staff is provided with a general occupational health and safety training upon recruitment and prior to commencement of work activities. Staff also receive job specific training and orientation and attend quarterly health and safety courses at the Elevator Kelley Grains and Trans Cargo Terminal. For dangerous activities such as dangerous gas work, staff receives specific training and obtains a work permit.
Monitoring: currently the facilities do not monitor regularly effluent discharges, air emissions and lost time accidents. As set forth in the ESAP, the facilities will extend their monitoring program to cover wastewater quantity and quality, air emissions, energy and water consumption per ton production, and lost time accidents.
Reporting: reporting on EHS key performance indicators needs to be done internally as per the requirements of the corporate EHS management system and externally to the national regulatory agencies requiring EHS monitoring. The Group will regularly submit to IFC an Annual Monitoring Report on Environmental and Social Performance prepared in accordance with the IFC’s Performance Standards and WBG EHS guidelines.
PS2: Labor and Working Conditions
Human Resources Policy and Management: The Group operates in accordance with The Labor Code of the Republic of Moldova (2003) that covers workers’ conditions, worker and employer rights, retrenchment, leave, minimum wages, children and female workers, discipline, the relationships between workers, companies and unions, and other labor issues.
The Group currently employs approximately 1967 permanent staff in various administrative support and operational roles. Most of the workers are employed during harvesting and processing seasons. Approximately 279 persons are employed at Elevator Kelley Grains (permanent and seasonal), 127 at Aur Alb and Trans Oil Refinery (permanent and seasonal), 850 at Floarea Soarelui, 61 at Trans Cargo Terminal (permanent) and 30 temporary workers are employed by a contractor on the construction site for storage facilities in Giurgiulesti port. Two-thirds employed by a contractor there are from the local village of Giurgiulesti. Most of the operational workers at the port facility are also from Giurgiulesti. The Group states that there is no issue related to forced labor and child labor and the minimum age of employment is 18 at all farming operation and/or plants. However, as set forth in the ESAP, the Group will update its HR policy in order to reflect overall PS requirements, including this.
Workers’ Organization: The Labor Code of the Republic of Moldova (2003) states the right of workers to associate and join trade unions for the protection of their interests and the nondiscrimination of union members. The Group staff reported that at some of their sites there is a workers'' union and some workers pay 1% of their salary to that union. Going forward, as indicated in the ESAP, the Group will introduce the selection of worker representatives as an alternative mean to workers’ organizations for its employees to express their concerns and grievances regarding working conditions and terms of employment.
Non-Discrimination and Equal Opportunity: It is reported that the Group complies with The Labor Code of the Republic of Moldova (2003) that prohibits direct or indirect discrimination on the basis of gender, age, race, ethnicity, political opinion, social origin, residence, disability, status or trade union activity. As set forth in the ESAP, the Group will update its HR Policy to reflect it clearly.
Grievance Mechanism: There is no formal worker grievance mechanism for permanent, temporary or seasonal staff or contractor employees. If workers have a problem they tend to informally report it to their manager. The Group will place a number of suggestion boxes at locations throughout the existing and planned facilities, to allow employees submit suggestions or complaints. A grievance mechanism will be established and clearly mentioned in HR policy.
Retrenchment: There are no current plans for retrenchment, however if it becomes unavoidable, the Group will develop and implement retrenchment plan in accordance with PS2 and if applicable, in consultation with the union active at Group facilities.
Occupational Health and Safety: The Group facilities do not operate in accordance with an accredited occupational health and safety management system, such as OHSAS 18001, however is obliged to comply with the Law on Health Protection and Labor Safety no. 186-XVI (2008) which establishes the general principles relating to the prevention of occupational risks, protection of workers at the workplace, elimination of risk factors and occupational accidents, information, consultation, balanced participation, training of workers and their representatives, and general guidelines for the enforcement of these principles. The Group report annually on OHS to the Bureau of Statistics of the Government of Moldova for all facilities. Trans Oil group of companies maintains a Permit to Work System at its facilities, particularly relating to cleaning operations. There is no lock out/tag out (LOTO) mechanism at either facility and good industry practice is always to have a physical control mechanism as protection in place. The Group will establish LOTO system at its facilities. Confined space permit system will be also implemented for all facilities. As set forth in the ESAP, an OHS audit will be undertaken for FS, and Trans Oil Refinery and Aur Alb facilities by independent and internationally accepted third party.
The emergency response plan for Aur Alb/Trans Oil Refinery covers issues, such as risk of gas explosion, rules of shutdown in emergencies, PPE usage, fire safety, workplace noise and vibrations, workplace illuminations, sanitary and hygiene requirements, water supply, heating and ventilation requirements. The solvent extraction plant at Aur Alb/Trans Oil Refinery has a state-of-the-art fire detection and response system including gas analyzers, flame detectors, specially designed dust proof electric switches and foam dispensers. This and other facilities at this location are protected by internal fire hoses and a fire engine. Hazardous materials, such as Hexane and coolants for fighting fires are used at Aur Alb/Trans Oil Refinery. The coolant bottles are stored away from other buildings/facilities on site and are in a caged area.
None of the sites have recorded incidents or near-misses as they do not keep an accident log book. Going forward, and as set forth in the ESAP, the Group will start maintaining records of items, such as physical injuries and reporting of accidents to appropriate authorities and IFC as a requirement of the Annual Monitoring Report. The identified risks and lessons learned will be documented and corrective actions will be taken to prevent recurrence of accidents.
Dust Explosion Risks: Elevators at Trans Cargo Terminal and Elevator Kelley Grains facility has been audited against dust explosion risks by Mica Envrionmental Ltd experts. (Assessment of High Risk Dust Explosion Potential, May 2011) According to the audit, key findings are: physical lock out tag out system should be in place, use of only non-sparking hand tools at Trans Cargo Terminal, lighting should be improved at the stairs of Elevator Kelley Grains and evacuation plans should be posted in factory area as well as office areas. As set forth in the ESAP, both facilities will implement required these mitigation actions.
Construction Safety: Currently, Trans Oil is completing the construction of an 8,000 mt bulk vegetable oil terminal in the adjacent to its existing facility in the Port as well as the construction of boilers in FS facility. Poor PPE use and unsafe conditions of scaffolds were observed during site visits. The Group should establish contractor safety policies and implement internationally accepted standards for construction safety in line as spelled out in the ESAP.
Supply Chain: The Group produces grains on 12,000 hectares of farmland rented from local land owners. The Group has over 7000 land rent agreements; average rented land plot is 1.8 hectare. The Group will establish supply chain management system procedures to ensure compliance of suppliers with IFC PS1, PS2 and PS6. Also, as set forth in the ESAP, the Group will establish Global GAP program for all farmers in a planned schedule, and will implement an Integrated Pest Management plan. The Group will design its pesticide application regime to (i) avoid damage to natural enemies of the target pest, and where avoidance is not possible, minimize, and (ii) avoid the risks associated with the development of resistance in pests and vectors, and where avoidance is not possible minimize. In addition, pesticides will be handled, stored, applied, and disposed of in accordance with the Food and Agriculture Organization’s International Code of Conduct on the Distribution and Use of Pesticides or other GIIP. The Group will not purchase, store, use products that fall in WHO Recommended Classification of Pesticides by Hazard Class Ia (extremely hazardous); or Ib (highly hazardous). The Group will not purchase, store, use, manufacture or trade in Class II (moderately hazardous) pesticides, unless the project has appropriate controls on manufacture, procurement, or distribution and/or use of these chemicals. These chemicals should not be accessible to personnel without proper training, equipment, and facilities to handle, store, apply, and dispose of these products properly.
PS3: Pollution Prevention and Abatement
Resource Conservation and Energy Efficiency: The Group’s US$20.7 million investment program will cover (i) upgrade, modernization and improvement of efficiency of the FS crushing plant, which includes replacing the three existing boilers, one of which is husk fired with a single new boiler with a turbine generator and the installation of a toaster to improve solvent recovery from the meal after the oil extraction; (ii) crude oil terminal capital expenditure, and (iii) purchase of new agricultural equipment. The turbine generator fuelled by sunflower seed husks (partly built) is expected to cost Euro5 million. The turbine generator will have sufficient capacity to export electrical energy to the Balti city and is expected to reduce the facility energy cost by US$12 per mt of oil seeds processed. As set forth in the ESAP, the Group will improve monitoring of energy and water consumption measurements and assess whether the consumption figures are within industry benchmark limits and will submit data to IFC in line with ESAP. Where benchmarking data are available, the client will make a comparison to establish the relative level of efficiency. If required the Group will undertake a Cleaner Production audit and implement necessary actions resulted for water& energy consumption reduction purposes.
Air Emissions: The Group facilities has the authorization to emit atmospheric pollutants issued by the State Ecological Inspectorate which prescribe maximum permissible emissions and annual totals of certain pollutants (e.g. dust, carbon dioxide, methane)at each facility. All Group facilities will measure air emission parameters (NOx, SOx, PM, volatile organic compounds (VOCs), and greenhouse gases -namely CO and CO2) and will ensure that they comply with WBG air emissions parameters.
Water and Waste Water Management: The Group facilities generally obtain its water via an underground artesian well and the water use license/permits are in place from the State Environmental Inspectorates. As included in the Ecological Permit for its Operations, wastewater produced at Elevator Kelley Grains and Trans Cargo Terminal are collected in a tank and taken off site by a licensed contractor. At Aur Alb and Trans Oil Refinery, the wastewater produced on site is collected in a closed network of pipes and discharged off site to the Municipal wastewater treatment. Storm water run-off from the Trans Oil Refinery is collected into a network of pipes and treated in an onsite treatment plant consisting of a settlement tank. Following filtration, the storm water is discharged into the River Lunga. Newly acquired Floarea Soarelui crushing and refinery facilities treated its wastewater with DAF (Dissolved Air Flotation) System and discharge it to municipality treatment plant. The oil and fat sludge from DAF unit are sold to soap manufacturers. It was reported that analyses were done by local authorities, nevertheless the Group did not submit any analysis result. Discharge parameters of wastewater will be periodically measured for Aur Alb and Floarea Soarelui facilities against WBG’s wastewater effluents parameters and will be submitted to IFC in AMR. Necessary improvements will be undertaken if the parameters are not in line with WBG’s effluents guidelines, as spelled out in the ESAP.
Solid and Hazardous Waste Management: Aur Alb and Trans Oil Refinery have signed an agreement valid until 2013 with a contractor responsible for the Municipal city landfill which includes provisions on the details of the responsibilities for each party in terms of transportation, storage and disposal of waste from the facility and tariffs for the use of the landfill. The Group facilities will prepare the records of hazardous materials used and stored at its facilities, and also records of sanitary standards regarding the storage of those hazardous materials.
Pesticide Use and Management: The Group reports the use of insecticides/pesticides (stored on farmland within secure warehouses) on its crop production land. However, no details are available regarding the type of chemicals used, the quantities or, application method. Those details will be submitted in AMR as per attached ESAP.
PS4: Community Health, Safety and Security
The Aur Alb facility is in close proximity of residential properties with possible fire and explosion risk. As set forth in the ESAP, the facility will perform a risk assessment and will integrate required actions to its emergency plan, including the surrounding community representatives’ consultation. The other facilities are not located near residential areas
There is a considerably large number of heavy trucks (up to 60 trucks/day) accessing the facilities during peak season which is likely to present a road safety risk to community members. The Group will ensure that adequate internal controls are in place to ensure that vehicles and trucks entering and leaving Group facilities are well tracked and in good condition. The Group will ensure that traffic rules and vehicle maintenance periods are strictly followed by its outsourced distribution fleet.
The Group employs unlicensed and unarmed security personnel at all sites and there is an external security guard and system employed at the gate to the port, by Danube Logistics, the port management company.
The Group is advised to have a specific point of contact for community relations, such as a Community liaison officer (CLO). Assigning a responsible person will assist local communities to have better understanding of the Group’s operations and a good relationship with Trans Oil. An appropriate management of grievances, if and when they arise, will allow the Group to demonstrate their actions in accordance with local views and opinions.
