Description of key Environmental and Social Issues and Mitigation:
PS1 Social and Environmental Assessment and Management systems:
Toni has an certified E&S Management system in place (ISO 14000, ISO 9001, BMP and HACCP) which include a policy demonstrating high management commitment, including environmental impact assessment, GAP analysis, objectives and goals, training, monitoring and reporting and continuous performance review. Specifically, the food safety management system (HACCP) includes a comprehensive program (e.g. hazard analysis, identification of critical control points, establishment of critical limits for each critical control point, including monitoring requirements, definition of corrective actions and record keeping logs). Finally, Toni developed an OHS management System consistent with the OHSAS 18001 standard requirements..
Environmental and Social Assessment: Prior to the construction of the dairy and milk based soft drinks processing plant, Toni conducted an environmental impact assessment (EIA) consistent with local regulation requirements, including an environmental and social baseline and impact assessment, mitigation measures and time bound corrective action plan. As part of its existing integrated EHS management system, Toni identified and consolidated all the applicable environmental aspects/impacts, OHS hazards/risks and food safety critical points of control of its operations.
Management Program: Toni currently has EHS mandatory programs in place, such as OHS risk prevention, health management programs, solid waste management program as well as non mandatory programs, such as HACCP and resource use management program. Toni is further developing additional OHS program, including a hearing protection program and an ergonomic program. As part of the EIA for the new dairy plant project, Toni developed a range of specific EHS management programs for the construction phase of the project, including an emission control plan (combustion emissions, noise emissions, odors emissions, particulate matter emissions, odors emissions), solid wastes management plan, landscape management plan and OHS management plan.
Organization: Toni’s E&S organization includes an E&S manager, an OHS coordinator, an environmental coordinator, a Corporate Social Responsibility-(CSR) coordinator, environmental analysts, OHS technicians, a physician and nurses. Toni will appoint a full-time dedicated EHS specialist that will be exclusively assigned for managing the EHS aspects of the new plant construction.
Training: Toni provides a basic EHS training for all workers during their induction program. Other specific trainings are provided based on a need basis, such as training for working in confined spaces, in working at heights, working with electrical devices and for the boilers operator.
Monitoring: Toni monitors relevant E&S aspects/risks, such as wastewater quality, water consumption, energy consumption, bunker oil consumption, air emissions, wastes generation and accident rates. As part of the integrated EHS management system implementation. Toni also conducts frequent environmental audits as well as OHS audits and inspections. Toni will develop an auditing and monitoring program for the construction phase of the new dairy processing plant.
Reporting: Toni reports relevant mandatory E&S indicators to the competent authorities (e.g. solid wastes, hazardous wastes, air emissions, wastewater, and accident rates). Toni reports internally selective E&S performance indicators, such as production loss, energy efficiency, wastes, accidents rates auditing results and corrective actions completeness.
PS2 Labor and Working Conditions:
Human Resource Policy and Management: Toni has a formal written HR policy that includes relevant aspects of the legal requirements and terms of employments. The terms of employment, such as wages and benefits, hours of work, overtime arrangements and overtime compensation, annual and sick leave, maternity, vacation or holiday, are established by national labor regulations. All workers have to sign a formal contract with the terms of employment and retain a copy of that.
As set forth in the ESAP, Toni will enhance its HR policy, including a statement for non discrimination and equal opportunities, to stand against forced labor, child labor, sexual or other forms of harassment and respect of workers right to form and join workers organizations of their choice and to express their grievances and protect their rights regarding working conditions and terms of employment.
Worker’s Organizations: The client informed that there are no active unions or unionized workers representing the staff inside Toni’s business units. Nevertheless, they also informed that they do not restrict workers rights to form and join workers’ organizations of their choice. As described above, Toni will enhance its HR policy, including specific provisions ensuring workers rights of freedom of association.
Non-Discrimination and Equal Opportunity: Toni informed that the employment relationship is based on the principle of equal opportunity and fair treatment. Toni currently has 611 permanent workers, from which 70% are male and 30% female, which is consistent with the nature of the work and other industries benchmarking. During the field visit, no evidence of discrimination based on workers personal characteristics unrelated to the job requirements, such as race, gender, religion or region of birth was identified.
Retrenchment: The new dairy processing plant site development will be located in the municipality of Guayaquil, close to the existing factory, and no retrenchment is expected in this project.
Protecting the Work Force: Toni ensures that no forced or child labor is used at their operations by direct hiring all workers (no intermediaries) and following national laws, as described above, and the minimum worker’s age is 18. The working periods are divided in two shifts of twelve hours, five days of work with one day off, six days of work per week. Under this arrangement the Company pays overtime after 8 hours of work. Toni is currently assessing the possibilities to change working period arrangements to reduce the total hours of work to achieve compliance with Ecuadorian labor requirements. As part of this process, Toni will ensure proper up front communication and negotiation with workers about all possible changes in working period arrangements. Toni will assign an HR staff to develop and manage an internal grievance mechanism for workers, including the proper channels of communication, conflict resolution mechanism, record tracking, confidentially and un-disclosure of workers’ identity, and feedback response.
As agriculture production is, in most cases, structured on a family basis, especially when working with poor small holders in developing countries, child labor becomes a source of concern, since kids traditionally help their parents on the daily work. In Ecuador the main concerns of child labor rely on the banana plantations, flowers production, bricks production and gold mining. During appraisal visit to Toni’s suppliers it was identified kids working with their parents after school and the existence of public schools in rural areas, what is not considered harmful child labor. However, given the limitations of the sample taken during the field visit, Toni will map out its supply chain and monitor for the presence of harmful child labor. If found, Toni will apply commercial influence to modify behavior, or pair up with NGOs working on this issue.
Occupational Health and Safety: Toni manages OHS risks seeking compliance with national and local regulations. Toni has developed and implemented individual OHS mandatory risk prevention plans for each plant, identifying the work related risks, the workers exposure to hazards agents and the need for protection. Toni also has individual health monitoring program and specific procedures on the safe ways to do the job. Toni also has a workplace monitoring program with periodic audits and reporting of key performance indicators and corrective actions. Toni will enhance its OHS monitoring program implementing a daily workplace inspection to ensure adherence to existing prevention measures and PPEs use, especially during the working shifts at night and at the end of all working shifts. Toni will conduct a statistical assessment of the accidents and injuries to identify applicable preventive/protective measures to reduce accidents rates. Toni will conduct a specific assessment to enhance fall protection measures at existing plants and applicable procedures/protection for safe working at heights. As set forth in the ESAP, Toni will deploy emergency prevention equipment in the ammonia storage and refrigerating systems at the new plant, such as leak detectors (indoor areas), emergency tank, secondary contention, segregation, proper warning signs and emergency equipments. As set forth in the ESAP, Toni will conduct a field EHS due diligence at their milk collecting centers (acopios), to identify and fix all possible non compliances. According to the project design, the new plant construction will follow NFPA 1 and 101 standards for fire protection, and NFPA 70 (ref. Electrical Code). Toni has an emergency response and preparedness plan covering all emergency scenarios and risks.
The OHS team participated in the new plant development committee and actively provided inputs and suggestion to identify the opportunities to deploy engineering solutions to enhance OHS risk prevention and a safer workplace environment. As described above, Toni will develop an auditing and monitoring program for the construction phase of the new dairy processing plant to ensure that all management programs and mitigation measures defined in the EIA are being effectively implemented.
PS3 Pollution Prevention and Abatement:
Resource Conservation, Energy Efficiency: The new dairy processing building is being designed in order to optimize energy efficiency and better resource use, following the Leadership in Energy and Environmental Design (LEED) rating system and approach to green design. Up to now, Toni’s energy efficiency performance can be considered satisfactory according to the WBG’s Dairy Processing EHS guidelines. Similar situation is found for the water consumption (1.79 l/kg). Nonetheless, the Company will explore the opportunities to further enhance energy efficiency and resource conservation in the new dairy processing plant operations by conducting a resource efficiency assessment and defining specific measures and goals to increase the energy and water use efficiency.
Solid wastes – The solid wastes are mainly process organic waste, sludge from wastewater treatment facility, ashes, paper and paperboard, plastic material and metal scarps. The hazardous wastes are mainly empty chemical containers and used lubricant oil. All the wastes are properly segregated and disposed accordingly.
Air emissions – The main source of air emissions are the small boilers (0.82MW all together) that burn bunker oil to produce steam. Toni monitors Boilers’ air emissions that are consistent with WBG EHS guidelines. At the new plant, Toni will replace the smaller of the three existing boilers with 200 Hp thermal capacity (0,15 MW) to a new one with 600 Hp capacity (0,45 MW) and the total installed thermal capacity will be 1.12MW.
Wastewater – Toni treats its wastewaters using a combined system of equalization tank, flotation and anaerobic digestion. BOD is kept below 30 mg/l and wastewater is discharged to the municipality sewage system, which discharges it to river without any additional treatment. In the new dairy plant site Toni will deploy a new wastewater treatment plant consistent with local regulation requirements and WBG General EHS Guidelines. Toni will assess and control wastewater discharge from milk gallons washing, at all milk collecting centers, to ensure consistency with Ecuadorian requirements.
Hazardous Materials – Toni’s milk processing plant does not use large amounts of chemicals and the main hazardous products are Bunker oil for the boilers, Caustic Soda, Phosphoric Acid, Liquefied Petroleum Gas (LPG) for the forklifts, and HCFCs gas for the refrigeration system. At the new processing plant, Toni will use ammonia in the refrigerating system and will also deploy emergency prevention equipment in the ammonia storage and refrigerating system, such as leak detectors (indoor areas), emergency tank, secondary contention, proper warning signs and emergency equipments. Toni uses caustic soda and phosphoric acid to clean the pipes and production equipment. The acid and soda comes in drums that are kept contained and with warning signs. Toni will deploy emergency showers close to the storage acid and soda storage areas and will enhance secondary contention, segregation, warning signs and isolation, especially where the products are stored in a concentrated formulation.
The new site location is a peri-urban area, 14 km distant from Guayaquil. On the east side of the land and adjacent to the new site development, there is one group of houses, approximately 200, meanwhile on the west side, and 250m distant, there is a new housing development. It is expected that, during the construction phase of the project, the noise emissions, particulate matter and traffic of trucks could cause nuisance to the local population. Toni will take all mitigation measures to avoid or minimize these negative impacts and will develop an external grievance mechanism for affected communities to raise their questions, complaints and concerns.
Greenhouse Gas Emissions- Toni’s emissions are mainly related to the use of energy from the grid, steam production in the boilers, LPG consumption in the forklifts and diesel for the spare generators. As described above, Although Toni’s resource efficiency performance is considered satisfactory, it is expected to be improved with the development of the new factory as a result of the new, modern and more efficient equipment and better project design.
PS4 Community Health and Safety and Security:
Toni is a food manufacture company and, as such, food safety is a critical aspect related to the safety of its clients and communities. Toni has in place a certified and comprehensive food safety management system, based on HACCP and ISO 9001 framework, to prevent and address the chemical, physical and biological hazard to enhance food safety.
Emergency Preparedness and Response – Toni has an emergency response and preparedness plan including emergency scenarios and risks, communication procedures, trained emergency brigade and periodically conducts emergency drills. At existing site, it was observed the existence of signed emergency means of egress, fire alarm systems, smoke detectors, sprinklers, hydrants, and portable fire extinguishers. As described above, the new plant construction will follow NFPA 1 and 101 standards for fire protection, and NFPA 70 (ref. Electrical Code).
PS 6 Biodiversity Conservation and Sustainable Natural Resource Management:
Although Ecuador hosts some very important Ecoregions that has been threatened by the deforestation process, including the Napo Moist Forests, Cordllera Real Montane Forests and Andean Montane Forests, dairy production is a secondary activity within the farms and cannot be considered a driver for deforestation process. In addition, Toni’s supply chain activities are not taking place on the deforestation frontier and supply chain expansion strategy is to increase the source of milk from the coastal area, which is a consolidated area of agriculture. Therefore, Toni will develop a screening process to identify possible impacts from supply chain activities in environmental sensitive areas and propose applicable mitigation measures.
