The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements, the host country laws and regulations and the IFC Performance Standards on Social and Environment Sustainability and relevant IFC/World Bank EHS guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. Actions are summarized in the Attached Environmental and Social Action Plan (ESAP).
PS1: Social and Environmental Assessment and Management Systems:
IFC’s assessment considered Matco’s management of its HSE performance in the establishment and operation of its facilities; compliance with national and local permit requirements; and Matco’s engagement with local communities as well as its suppliers.
Environmental & Social Assessment
The facilities of Matco in Karachi (Matco 1 & 2) were constructed in 1998 and 2000 respectively; while Sadhoke plant construction started in 2010/2011. In accordance with Pakistan Environment Protection Act (1997) and Initial Environmental Examination (IEE)/ Environmental Impact Assessment (EIA) regulations (2000), Matco prepared an IEE impact assessment for Sadhoke plant and was granted approval on 07/14/2011 from Punjab Environmental Protection Agency. Matco 1 and Matco 2 were operational prior to the IEE/EIA regulations, the sponsor agreed to seek exemption from the Sindh Environmental Protection Agency and present letter to IFC within an agreed timeframe. Matco currently prepares monthly operations reports as per National Environment Quality Standards (NEQS) for its operations and reports to the Environmental Protection Agency (EPA) on air and water quality.
Management Systems
The Company adheres to international standards of quality management related to production processes and the product, which is evident from the various international certifications it has received over the course of its operations. Matco has implemented formal management systems since 1999, and the company has a quality assurance management system certified by Bureau Veritas (BV) against ISO 9001:2008. In addition to certifications in HACCP (Hazard Analysis and Critical Control Point) standards for food safety, BRC (British Retail Consortium), WQA (Woolworth’s Quality Assurance)Global standard for Food, KOSHER, and US FDA (Food and Drug Administration). The certificates were renewed in 2010 and 2011. Matco initiated an audit for ISO 14001:2004 (environmental management systems) and OHSAS 18001:2007 (occupational health and safety management systems) by Lloyd Register Quality Assurance (LRQA) that granted the company on 09/23/2011 recommendation for certification to all facilities. The company also initiated a risk assessment study in December 2010 for Sadhoke plant for Total Productive Maintenance (TPM) and shared self progress report across the facilities. Matco achieved 80% of the action plan at Sadhoke plant and started implementation in all premises.
The company has provided IFC with the HSE Policy and procedures. The HSE management system covers all aspects of environmental performance required by ISO 14001, as well as plans for crisis management, life and fire safety, emergency response, staff health and safety, and food safety (in conformance with HACCP standards). Match has agreed to expand the HSE system to include social issues to ensure full compliance with IFC Performance Standards (PSs) and relevant EHS Guidelines. Matco will amend the policy and procedures and submit a Social, Health, Safety, Environment (SHSE) system acceptable to IFC as per an agreed time line and included in the ESAP.
Organization
The Company has constituted an HSE Management Team at corporate level as part of the Administration and Policy unit, and in 2011 appointed 3 HSE managers in the respective premises. Plant managers from each facility are members of this corporate team, and have primary responsibility of managing HSE aspects at each facility. Matco has a full-time manager at Karachi to oversee the quality and food safety management systems across all facilities.
Supply Chain
Matco does not grow its own paddy, but purchases it either through the government managed auctions during the harvesting season or through middle men who aggregate the paddy from various farmers. The decision to purchase paddy depends upon the availability, quality and spot market price compared with the Company’s requirements. Hence, it is not possible to trace the origin of the purchased rice in the supply chain. Matco therefore has no control on the agricultural practices in the supply chain. The company is exploring the opportunity to work directly with some farmers to supply paddy and is planning to increase the network of direct purchase from farmers overtime. Matco has agreed to set in place a procedure to track child labor in their network and amend their purchase/supply contracts accordingly to manage child labor and agricultural practices in accordance with IFC PSs.
PS 2: Labor and Working Conditions:
At present, Matco employs 842 employees across all facilities, including 189 daily wage staff and about 310 contract/seasonal labors. Daily wage employees are assigned to lower grade support jobs requiring low skills and third parties provide cleaning staff, loading/off loading workers and security guards. The company’s HR department ensures contractors’ compliance with requirements of Pakistan Labor law.
Human Resource Policy and Management
Matco has a Human Resources (HR) division to manage all HR related activities at each facility. The HR division is responsible for ensuring compliance with relevant labor laws. The company has confirmed that it complies with all host country labor laws and shared latest inspection reports (dated 06/02/2011) from Occupational Safety & Health Centre, Government of Sindh. HR policies are posted on visible boards in all facilities.
Terms of Employment
As per Matco’s policies, newly-hired employees undergo a probation period of three months in accordance with the labor law requirements. Employee benefits include governmental social insurance for all staff (including part-time). Matco’s HR policies require induction training for all employees and contractors on site. In order to develop a better performance management system, the company has engaged a local consultant who reported to senior management on 10/28/2010 on enhancements to the system; implementation started the performance cycle for 2011 starting January. Grievance mechanism is through an informal “open-door” policy is in place at each plant, which enables concerns to be raised to both the plant-level Administrative staff as well as the Corporate HR manager. Turnover rate is less than 2%. Matco will amend HR manual, review policies and procedures, including a formalized employee grievance mechanism that conforms fully to all PS2 requirements
Freedom of Association
Pakistan’s Labor Law recognizes the right to form associations or unions both in the organized, and the unorganized sectors. While the Company does not prevent them, there are no labor unions at Matco’s facilities.
Non-discrimination, equal opportunity and retrenchment
Matco’s policies reflect equal opportunity and non-discrimination practices during the hiring process and the service life of the employees. The policies extend to third parties. The company is planning extension of its operations which is likely to result in xx number of new jobs in the Pakistan market. No retrenchment is expected.
Child Labor
The company’s policies and procedures ensure that no child labor is directly employed in any manner in its operations. During the visits to Matco facilities there was no evidence of child labor.
As noted above, Matco will formalize this requirement for its contractors by including specific clauses on this aspect in the contract documents for all its contractors (notably construction, packaging and transportation), in accordance with a schedule agreed with IFC and documented in the attached ESAP.
Occupational Health and Safety (OHS)
The company has in place policies and procedures for ensuring that both workplace hygiene and OHS conditions in facilities meet recognized international standards. These include access control in production areas, provision and use of PPE (caps, masks) in accordance with HACCP requirements and training. As noted above, each facility has a dedicated HSE manager as per the HSE Management system to oversee OHS performance. Matco has shared with IFC, training certificates for fire drills and first aid trainings offered by a consultant to all premises during March 2011. The HSE manager maintains the accident register, oversees the fire safety and ensures training to all staff on first aid and fire safety. There have been 5 minor incidents recorded at Matco facilities in the last 12 months with no lost-time.
The production process is fully closed, equipment with machine guards automated and requiring minimal human interventions. The infrastructure is designed with high safety standards. Selection of equipment for grain handling and storage has built-in safety devices to avoid dust explosions, including anti-explosion vent in elevators, roof vents and exhausters in silos and bins, grain moisture control, etc. Matco has in place a procedure for Prevention of Dust Explosion.
Matco’s facilities are equipped with fire alarm systems, fire extinguishers, and fire egress routes. The company conducts fire drill at least once a year. Fire extinguishers certifications were shared with IFC along with training certificates. Matco will conduct a fire/explosive atmospheres risk assessment, and develop mitigation measures on the basis of the assessment findings. The fire/explosive atmospheres risk assessment will be prepared by a suitably qualified professional acceptable to IFC.
As noted, Matco’s future expansion plans include installation of additional lines and erection of Silos in Sadhoke. The company will ensure that any construction activity carried out by contractors comply with IFC PSs and EHS guidelines while proper health and safety clauses are included in all contracts.
Emergency Response Plan
Matco has developed a procedure for hazard identification and risk assessment in order to handle incidents and emergencies and minimize the risk to the staff, workers and product contamination. An Emergency response team (ERT) is appointed by senior management of Matco and their details are properly communicated to staff using the bulletin boards on sites. Matco shared the procedures for Emergency Response Plan with IFC and it seems adequate to satisfy IFC requirements.
Throughout the facilities visited, adequate signage and labels were noted; and evacuation routes and assembly points designated and clearly marked. Regular fire drills are conducted to ensure the emergency preparedness.
PS 3: Pollution Prevention and Abatement:
IFC’s assessment considered the Company’s operations with regard to resources consumption (water, energy, fuel), efforts to optimize resource inputs, waste minimization and management practices.
The rice processing at Sadhoke facilities is a fairly simple operation which generates minimal wastes and emissions. The paddy procured in the market is stored in silos or warehouses. When it is ready for processing, it is transferred to the processing facility by trucks (in sacks) or bulk carriers. After unloading, it is pneumatically transferred to rice mill for processing. Raw Rice processing involves drying of paddy, followed by tempering (removing of husk) and milling (cleaning, destining, husking, polishing and whitening) followed by packing. Depending on the extent of polishing, the final product is brown rice or white rice.
Pollution Prevention and Resource Conservation
Matco has consciously made efforts for resource conservation and pollution prevention for its facilities and operations:
The rice processing is fully automated with computerized controls. This helps the Company in accurately controlling the process parameters to optimize the inputs.
The boilers have condensate recovery system, to reduce the fresh water consumption; and uses husk (surplus) to produce steam.
Matco initiated a feasibility study in 09/25/10 for the use of rice-husk based power production. Two options were reviewed (i) a 1.6 MW plant with Capex of US$ 4.1 million and payback period of 17.5 years, and (ii) a 2.7 MW plant with Capex of US$ 6.4 million dollars and payback period of 11.5 years. Since the net present value (NPV) was steeply negative, the project was proven uneconomically feasible and was dropped.
Energy Source, Water Supply and Effluent
Electricity and water in all plants are obtained from the respective municipalities and the grid. The rice husk boilers also meet process steam requirement. Currently diesel and gas generators are used as back-up power source, and very small quantities are required for boiler start-up. The gensets in Matco 1 (360 kW) & Matco 2 (1.36 MW) are gas fired while in Sadhoke (~650 kW) are diesel fired due to shortage of gas in the Punjab province. Matco’s monthly electricity consumption is 100,000 kWh, 150,000 kWh and 80,000 kWh for Matco 1, Matco 2 and Sadhoke plants respectively. Monthly gas consumption is 17,600 cubic meters and 40,000 cubic meters for Matco 1 and Matco 2, while diesel consumption in Sadhoke is 4,500 liters per month. The average daily water consumption for Sadhoke facility is approx. 40 cubic meters, including for steam generation, soaking, and washing/cleaning operation, while for Matco 1 and Matco 2 the consumption is 8 and 15 cubic meters respectively with no process water. Wastewater is discharged to the sewage systems of the respective provinces.
Matco regularly monitors the stack emissions and wastewater quality as per the regulatory requirements. Based on the information provided, the Company is generally in compliance with NEQS requirements. The test results dated 04/01/2011 for wastewater from production compressor at Matco 1 shows slight non compliance of Biochemical oxygen demand (BOD), Chemical oxygen demand (COD), total suspended solids (TSS), grease &oil. In order to ensure full compliance with IFC EHS guidelines, the company agreed to develop and implement a comprehensive environmental monitoring program covering all the necessary parameters, and upgrade/install necessary pollution abatement equipment if so required. Through the Annual Monitoring Reports (AMR), the company will regularly report to IFC the outcomes of the monitoring activities.
Based on available information, total Green House Gas (GHG) emission is estimated to be less than 25,000 tons CO2 eq/year.
Waste management
Waste from operation is about 64 metric tons per month and bran is at 256 metric tons per month. Matco’s waste is segregated by category (paper, cardboard, plastic, husk, etc) and stored in designated areas to be sold if possible or otherwise handled by third party licensed contractor for disposal practices.
Air Emissions
The main sources of air emissions are rice husk boilers. Adequate air pollution control equipment for controlling the air emissions from stacks (cyclone separators) have been provided for process emissions control, which meets the relevant regulatory requirements for particulate matter. Emissions from rice milling process are controlled by bag filters. Dust collected is used for landfilling within Company’s own premises, and the collected paddy husk is fed to the boilers and remaining is sold.
Matco will continue to regularly monitor the stack emissions for other parameters (such as SOx, NOx) to ensure compliance with local requirements, as well as the relevant IFC EHS guidelines and take any corrective actions, as needed.
Hazardous Material
Matco uses only a few hazardous materials, including cleaning fluids and diesel fuel. The company has installed secondary containment for all hazardous or flammable fluid containers, including diesel. In addition to ensuring that relevant Material Safety Data Sheets (MSDS) are made available to employees working with and in proximity to toxic and/or flammable materials, in accordance with its Hazard Communication Plan.
PS 4: Community Health, Safety and Security:
Significant impacts likely to occur relate to the movement of vehicles on the approach road to Matco facilities for raw materials and finished product. The peak vehicular movement (up to 30-40 trucks/day) happens during the 3 months of harvesting season, when the paddy is sourced for the entire year. However, Matco’s facilities are located in the outskirts of the cities with no communities in the immediate vicinity of 2-3 km. Hence, the impact of vehicular movement on surrounding communities is expected to be minimal.
Security Personnel
Given the current unrest in many parts of Pakistan, Matco has hired security personnel equipped with firearms to secure their premises. These security forces are limited to patrolling the perimeter of the plants. As part of IFC’s investment requirements, the company will ensure that third party security forces adhere to PS 4, and will establish a community grievance mechanism as part of its SHSE system.
On the basis of the above information, it is concluded that the Project has been designed and will be operated in compliance with IFC’s PS and relevant EHS guidelines.
