While all Performance Standards are applicable to this investment, IFC's environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards.

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement

If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards.

PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources - There are no natural and/or critical habitats in the vicinity of Montelimar. The Company works diligently to restore ecosystem services including watershed rehabilitation and water catchments. Montelimar has removed 2,250 ha of land from cane cultivation as these areas were poorly suited to cultivation, and the benefit of using them for cane cultivation is low. Numerous areas are being reforested with positive results on increasing catchments of water resources, reducing soil erosion and increasing resilience against natural disasters. 

One specific example is the Reserva Natura, a 430 ha recovery area situated between the communities of San Cayetano and Gutierrez Norte. In 2004, the Company found this micro watershed ecosystem totally dilapidated. Through an agreement with Fundenic SOS/Fondo Natura, some 1,750,000 trees (Source: El Azucar May-June 2012, pp 4-5), including 33 native species, have been planted in the area. Reforestation contributed to flora restoration, fauna habitat reestablishment, and played an integral role in reactivation of rain water capture and rehabilitation of two lakes with depths of water to 25 and 27 meters respectively providing total estimated water storage capacity of 3.6 million M3. 

In addition, Montelimar employs soil consultants in monitoring physical, chemical and microbiological aspects of agricultural soils to ensure optimum conditions for water uptake and growth. This scientific approach enhances tailor-made interventions for specific areas and associated deficiencies and soil types and thereby eliminates speculative use of fertilizers, water and pesticides; and helps to protect ecosystems both in the fields and nearby. 

Another example of Montelimar’s biodiversity conservation and enhancement of ecosystem services includes redevelopment and protection of recharge areas for the Borbollow spring whose watershed has been actively protected, reforested and securely guarded. This watershed, associated spring and a storage lagoon form a critically important potable water supply up to 8500 residents for the municipality of Villa el Carmen in Managua state. The project is maintained through a cooperative agreement between the state water utility and Montelimar, since their cane farming operations are adjacent to the watershed.

This proposed investment will be Category A according to IFC’s Environmental and Social (E&S) Sustainability Policy, because of risks associated with complex issues relating to legacy land tenure issues in the region. The Montelimar Project’s farms are located adjacent and surrounded by Government of Nicaragua lands, which have complex legacy land tenure issues, that raise the risk of social impacts and spillover effects on the project, and over which the project sponsor has little or no control in managing. Recent IFC experience on other large scale agribusiness projects have included issues with complex agrarian land reforms, potential conflicting land claims, challenging governance framework of natural resources (e.g. conflicts over land and water resource use), and conflicts between security forces and communities.

The activities of the proposed investment are expected to have a number of environmental and social risks and impacts which are anticipated to be site-specific, temporary, and largely avoided or mitigated by adhering to generally recognized performance standards, procedures, World Bank Group (WBG) General EHS Guidelines, and design criteria as described in the following sections. Environmental and social impacts are being addressed through the application of good international industry practice and implementation of an environmental and social and occupational health and safety management system. The main risks and impacts associated with the project are addressed below as part of the Performance Standards analysis. Corrective measures required of the client are addressed in the attached Environmental and Social Action Plan (ESAP).

The following Performance Standards are not applicable, namely PS6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources, is not applicable as there are no natural and/or critical habitats in the vicinity of Montelimar. The land has been used since the early 1900s for agriculture and for sugar processing. The Company works diligently to restore ecosystem services, including watershed restoration and water harvesting.
PS7 – Indigenous Peoples, is not applicable as there are no identified indigenous peoples in the project area.
PS8 – Cultural Heritage does not apply. The Company has been actively working to protect a nearby archeological site called “La Gallina Cave”.

In the event that these PS’s become applicable, Montelimar will promptly inform IFC. Screening of these issues and their assessment will be done through planned company’s environmental and social management system (ESMS).

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

During the 2011-2012 harvest, Montelimar cultivated sugar cane on its own and third party-owned land, for a total of 3,594 ha. No third party land was involved in Montelimar production before the 2010-2011 harvest. Sixty-six ha of third party land (contracted through independent suppliers) were used during the 2011-2012 harvest (or Zafra). This constitutes approximately 1.8% of the total area under cane cultivation. The strategy to crop in external lands was adopted by the Company to ensure an adequate volume of quality cane supplied in a timely manner; and control over cropping and harvesting operations managed by Montelimar technical staff. This strategy avoids supply chain issues and guarantees that the small number of external primary sugar cane suppliers are in compliance with national labor laws and good agricultural practices. A management system procedure will be formalized as part of the existing ESMS that will define monitoring of contractor and sugar cane suppliers to be certain that they are in compliance with a) workers’ legal benefits; b) wages paid on time, c) safety regulations, and d) ILO Convention 138 on Minimum Age, and, 182 on Worst Forms of Child Labour.



Montelimar has developed environmental, occupational health and safety (OHS) and social policy statements. These are being updated to ensure inclusion of IFC Performance Standards’ requirements and to ensure effective implementation through designating center of responsibility for conformance. The Company adopted ISO 9001 (quality control management system) as its foundation for further developing an Integrated EHS management system to manage Company processes and activities, including environmental, OHS and social risks.  To date, the Company has begun the following tasks: a) a baseline; b) review of environmental, labor, farming, and industrial processes to ensure compliance with applicable national legal and regulatory requirements; c) assessed OHS, social and community management; d) trained employees on the quality management system (ISO 9001); e) established EHS policies, procedures and programs; f) established an EHS implementation team and defined its roles and responsibilities; and, h) reviewed draft procedures prepared by process supervisors. An internal audit of quality control management system completeness will be carried out in February 2013 and a Certification Audit for ISO 9001 is planned for April 2013. The ISO 9001 procedures manual will include defined programs and activities to ensure monitoring and measurement of the effectiveness of the management system; stipulate the nature and schedule for periodic performance reviews and reporting to senior management; and, define senior management duties to ensure that all implementing procedures and plans are fully implemented and appropriate actions are taken to ensure continuing effectiveness.



In addition, the Company has achieved compliance with the Nicaraguan Food Safety Cycle (Ciclo de Inocuidad d
e Alimentos Nicaraguenses) that encompasses implementation of Good Agricultural Practices (GAP) in farming and field operations, Good Manufacturing Practices (in the Montelimar Sugar Mill), Sanitary Standard Operating Procedures (SSOPs) affecting production and packaging, and Hazard Analysis and Critical Control Point (HACCP) food safety program certification. Compliance with the Food Safety Cycle affords the Company not only the assurance of food safety but also traceability of products from the fields through commercial distribution.



The current quality control management system will be expanded and formalized and will include key social and environmental affairs, quality, human resources, and occupational health and safety issues associated with their direct plantations operations, as well as supply chain, transport, and processing operations. In accordance with the attached ESAP, Montelimar will implement an integrated EHS management system for its own operations and its supply chain, covering all aspects of IFC’s Performance Standard 1.



As described in the ESAP, Montelimar will provide IFC with a copy of the internal memorandum appointing a corporate social and environmental resource person with managerial responsibilities (EHS Manager) for environmental, OHS and social issues for all its operations. The Company has agreed that this person will report directly to Montelimar’s senior administrative manager (Gerente de Administracion). In addition, the Company will appoint a Community Liaison Officer, to report to the EHS Manager, and to carry out the actions outlined below regarding stakeholder mapping and community engagement as well as PS5 issues, concerning the development of a policy and framework for land acquisition and the continuing process of aiding households settled on non productive NAVINIC lands, to gain legal title for their plots. As further stipulated in the ESAP, the Company will implement management system procedures addressing: training of employees and contractors (field and mills) to ensure knowledge of its EHS policies, including community grievance procedures.



In addition, the Company will enhance its process for periodic monitoring and reporting to senior management of activities that have been identified to have potentially significant E&S risks and impacts during its normal operations and upset conditions. This will ensure continuing EHS performance review and realignment of Montelimar ’s sustainability priorities through adoption of Key Performance Indicators (KPIs) to mainstream Environmental, Occupational Health and Safety and social parameters, including a) Safety – Lost Time Incidence Frequency Rate (LTIFR - Number of injuries per million of hours worked); Accident Free Days ( Number of Days since last Lost Time Incident); b) Sustainability – Carbon (kg/ton - CO2 emitted / tons produced); Water Usage (M3/ton processed) and Efficiency; Energy Usage (kWh/ton processed) - Energy consumed/produced; W
astewater monitoring effluents and air emissions parameters; c) E&S Staff retention and number of training days provided to new and existing employees.



In order to provide the “Environmental License” for the Company to expand its sugar production and cane processing, the Ministerio del Ambiente y los Recursos Naturales (Ministry of Environment and Natural Resources - MARENA) requires an Environmental and Social Impact Assessment study (ESIA). Montelimar has prepared the study in line with Marena environmental laws and regulations, and those of IFC PS1 as described in paragraph 7 through 12 and Guidance Notes 23 through 26. During public disclosure, the ESIA will be disclosed at the World Bank InfoShop, and locally by Montelimar. The social issues described under PS5 and in the “Social Scoping Document” attached, will become part of the ESIA.



Montelimar has an existing Emergency Preparedness and Response Plan. Because of high volcanic and seismic activity in the area, the plan is being updated to include planned response to seismic, hurricane and tsunami events. Company production operations do not have significant adverse impacts on communities in its direct area of influence. The general public has no access to the mill and facilities, and the nearest small settlement outside of Montelimar property is 2 kilometers away from the Company mill. Nevertheless, there are a number of existing households located on land owned and operated by the Company, with whom the Company has been interacting over several years, helping them to establish legal title on their small plots of land. The Company will formalize these activities and, as set forth in the ESAP, will develop and implement a Stakeholder Engagement Plan (SEP) including resources for its timely implementation, scaled to the project risks and impacts and tailored to the various affected communities to ensure ongoing, effective communication and engagement with area residents. The draft Stakeholder Engagement Plan (SEP) will be reviewed by IFC prior to the project proceeding to the IFC Board of Directors for approval. The SEP will be disclosed locally by Montelimar, and at the World Bank InfoShop by IFC when completed. A community grievance mechanism will also be implemented as part of the EHS management system to ensure that stakeholders have a voice and a means of communicating concerns or issues to the Company about its operations and/or products. Finally, the Company will adopt management system procedure(s) for addressing and responding to these concerns.

Montelimar is a non-discriminatory and equal opportunity employer that has a total permanent labor force of 1,828 employees, of which 12% are women. The workforce grows to 2,750 people in peak harvest season. No identity documents of workers are ever deposited with the Company management during employment for any reason. The Human Resources (HR) unit is very professional, and has carried out a number of improvements to further advance HR management including hiring procedures, review of line of authority and job description, work ethics, improved communications, training needs, interdepartmental meetings, defining incentives to improve job attendance; and in general ensure a safe and respectful working environment.



The Company’s human resources policy adheres to Nicaragua labor law, and implementing procedures, which are an integral part of the ISO 9001 management system, are being revised to ensure full consistency with IFC PS2 Labor and Working Conditions. Drafts of the revised HR policy along with procedures developed for the management system will be submitted to management and will be fully deployed prior to the internal system audit scheduled during the first quarter of 2013.



Human resources procedures will include an employee grievance mechanism that has not previously been part of the policy; and, requirements to develop and deploy associated training to ensure that employees and contracted workers are fully aware of their rights under national law and the grievance mechanism; and, when changes to the HR policy take place. There is no evidence of forced and/or harmful child labor at the company’s operations, including in the supply chain. Montelimar’s HR policy prohibits employment of laborers less than 18 years of age in all its operations. Harvest of sugar cane is contracted to SEMURASA, a company which is directly managed by Montelimar, and this strategy guarantees that all contracted personnel are provided with all benefits, that child labour is not allowed in cane harvest operations, and overall compliance with national labor law and PS2 requirements.



Employees and family members have access to Company’s medical and dental treatment at no cost. Montelimar confirmed to IFC its compliance with freedom of association, a right that is guaranteed by Nicaragua labor law. The Company respects collective agreements, including those with the union SITRANAVINIC, which staff has freely joined. For the past years, NAVINIC enjoys a respectful and peaceful working environment.



Cane harvest is currently 100 percent manual and a total of 535 cane cutters are employed at peak of the season. Some of the labor required during the zafra (harvest) travels from a number of distant municipalities in the western area of the country. As agreed in the ESAP, Montelimar will construct a labor camp to accommodate 150 individuals at the Waterloo farm to reduce the cost and fatigue associated with distant travel and the harvest schedule that commenc
es very early each morning. Accommodations in the camp will include dormitories, bathing facilities, kitchen and dining areas, transport to work sites, and provision of electrolyte/hydrating solutions for field workers potentially at risk of chronic renal insufficiency (CRI). The Company will consider IFC’s Guidance on Worker Accommodations.



The Company is moving towards a mix of mechanical and manual harvest, but this year there will be the same number of workers hired despite 40% of the harvest been mechanical. If, in the future, the client has to decrease their direct or indirect employees significantly, they will inform IFC of their plans. If necessary, they will assess the impacts and propose mitigation measures that will address these issues, and complete a retrenchment plan as needed. In particular, the Company will consider some form of community development activity in neighboring communities to offset impacts on seasonal employment.



The due diligence review found that the OHS management at Montelimar has room for improvement, and as set forth in the ESAP, the Company will perform an OHS and Life and Fire Safety (L&FS) gap analysis and system design during the forthcoming zafra in the mills and in operations related to manual cane harvest. More emphasis will be placed in the future on follow up on implementation of OHS procedures, including training, in order to ensure that agreed tasks have been completed, and that use of PPE in the field and mills is stressed to employees. As agreed in the ESAP, Montelimar will evaluate available ambient lighting in the mill, and will present to IFC workplace ambient lighting studies to ensure that ambient lighting in daylight and evening hours is adequate for the work tasks performed. Required lighting levels should comply with National Institute of Occupational Safety and Health (NIOSH) recommendations. The Company conducts job hazard analyses; subsequently, employee training focuses on the demands and hazards associated with specific assignments as well as orientation to employee responsibilities with regard to wearing personal protection equipments and reporting accidents and near misses. Employees are trained and provided with PPE, as needed, to address issues that cannot be completely controlled or eliminated through engineering controls (e.g. noise in the mill, and any other specific issues).



At present reported accidents are investigated and summarized in accordance with a detailed flowchart that includes an analysis of the cause, cost and required mitigation measures for situations or conditions leading to the accident with specific timeline for remediation. The accident reporting format will be modified to include a summary of required preventive measures as well as the existing section on required corrective measures to prevent reoccurrence of observed accidents. Montelimar utilizes collected accident data to refocus training programs, ensure that the most up to date risk
information is passed on to employees, and, to implement remedial measures as needed to reduce or to eliminate the sources of accidents. Collected data associated with work and transport accidents have repeatedly implicated fatigue as a root cause of accidents. The shift modification is anticipated to reduce accident frequency and severity.



Montelimar has a well developed, robust program that includes monitoring workers for evidence of health impacts. Chronic renal insufficiency (CRI) is a known phenomenon in Nicaragua and elsewhere in Central America. Disease epidemiology and an alleged connection between sugar industries in general have previously been investigated through studies requested by the IFC Compliance Advisor Ombudsman (CAO). No direct relationship between the sugar sector and the disease has been established. However, recommended preventive measures include provision of potable cool water and electrolyte solutions to workers that not only aid in body fluid retention but also in electrolyte balance, ensuring that they are trained repeatedly about the importance of adequate hydration during field work and general training about the negative physical effects of alcohol consumption and associated dehydration. This is the preventive hydration approach taken by Montelimar in all its operations and supplier fields, and their occupational health and safety programs include that CRI education is provided for laborers employed by independent farmers.

The Montelimar sugar mill cogenerates 91.4% of the total energy used per annum, making use of only biomass fuel. The Company makes efficient use of sustainable biofuels for generation of steam and electric power for internal consumption. Bagasse is combusted in two existing boilers to generate steam and electric power for the mill. The Company saves bagasse from the previous season to start boilers, thus avoiding use of fossil fuel for start up. The mill employs a hot water diffuser system for extraction of sucrose from cane. The process uses 50% less energy than traditional mechanical crushing sugar mills employed by other regional producers. Current mill upgrades include modification of cane receipt and initial processing to facilitate management of green cane that will be available in the future from the fields; construction of a gravity clarifier to separate organic solids from concentrated sugar solution and to significantly reduce energy consumption in the cane laundry also employed for segregation of organic wastes from concentrated cane juice; construction of a new, high efficiency boiler with advanced combustion processes aimed at the reduction of fly and bottom ash; and high efficiency centrifuges replacing old, inefficient units used to separate sugar crystals from process liquids.



The mill uses 0.11 m3 of water per ton of cane processed, which is below the WBG EHS Industry Guideline for sugar manufacturing benchmark for fresh water consumption of 0.5-0.9 m3/ton cane. Montelimar sustainability concept for water saving is to recycle water and return it to the field for irrigation. Water during milling operations is all surface water and is recycled at the rate of 4,000 gallon per minute, and, in a 24 hour shift the milling generates and discharges to the field a net gain of 2,567 cubic meters, which is a positive balance of water resource use. Organic wastes from mill operations include solid plant residues from the clarifier and cane laundry (cachaza), molasses from sugar crystal separation; general processing wastewater; and waterborne ash from stack gas scrubbing operations in boilers. All liquid and solid wastes generated by the mill, with the exception of molasses, are employed for cane field irrigation and soil enrichment. There are no discharges to surface water sources. Of the total volume of molasses by-product generated, 10-15% is sold to the Nicaraguan cattle industry for animal feed and 85-90% is sold to an ethanol distillery in Costa Rica. Mill wastewater is well within the limits imposed by Nicaraguan regulations for direct application of sugar mill effluents for irrigation to growing cane fields.



The Company is implementing segregation programs to reduce the generation of waste and to maximize the separation of recyclable and reusable materials. For wastes that cannot be recycled or reused, the Company will design and build a modern sanitary landfill on its property. The design shall include a leachate collection
system and pond or other appropriate devices for collected leachate treatment, PVC Geo-membrane liners to protect ground water, and surface storm water management facilities to prevent the intrusion of storm water into the landfill, thereby reducing the potential leachate volume.



Few chemical compounds are used in the mill and fields. Lime and sulfur are used in the mill to adjust pH and facilitate flocculation of organic solids in cane juice. Lime is also used in field renovation as part of a general control scheme to eliminate insect eggs. Lime, sulfur, fertilizers, flocculants, pesticides, and miscellaneous compounds are currently stored in a central location at Montelimar and limited quantities of fertilizer, lime and pesticide are also stored in satellite warehouses in the fincas (farms). The existing central store is in need of renovation to improve lighting, ventilation, warning and hazards signs, proper storage of PPE, and a registry and database of material safety data sheets (MSDS), and/or international chemical safety cards (ICSCs). As set forth in the ESAP, Montelimar will construct a new materials store as part of this project. Petroleum, oil and lubricants storage and distribution operations are well designed, constructed, and operated. Waste oil is collected and delivered to a Nicaraguan government-permitted recycling facility for reuse.



Montelimar produces approximately 309,000 tons of sugar cane/annum in 155 days of cropping season, with a mean yield of 87 mt/ha. In 2012, sixty-six percent of the sugar production was sold in the local market. Traditional sugar cane cultivation and harvesting includes pre-harvest burning of fields. This activity contributes to air pollution with smoke and particulates. Montelimar will purchase cultivation machines (green harvesters) to cut green cane in the fields without burning the plants prior to harvest. For the 2012-2013 zafra, 20% of cane harvest will be in the form of green cane with projected, progressively higher percentages each subsequent year. Using this methodology, organic residues are left in the fields as fertilizer and soil amendment, and there is a concomitant reduction in the use of water and energy to deal with ash and other residue from burning. The limiting factor is field topography since fields with highly variable topography are not suited to this form of harvesting because lasers are used to guide the machines and the level at which cane plants are cut. Poor harvesting may result in reducing ratoon cycles from the current 4-5 cycles to less, which is undesirable. Thus, traditional harvesting for such fields will remain until these fields are abandoned or replanted after the end of potential growth cycles.



Air emissions from existing two boilers will be monitored during the 2012-2013 harvest season to determine actual stack emissions and CO2 Equivalents and the gaps between these emissions and parameter limits normally acceptable contained in WBG General an
d sector specific EHS guidelines. If corrective action for actual stack emissions is required, as per the ESAP, Montelimar will develop a plan to reduce stack emissions to acceptable levels considering actual and potential impacts to public health based upon the findings of the monitoring program. Nicaraguan regulations do not stipulate particulate or other emission limits for sugar mills; but, they do require stack gas scrubbing and Montelimar is currently in compliance with these requirements.



Montelimar has a sustainable approach to water saving for sugar cane growth. Cane field irrigation employs surface water (88% in 2011/12) for crop growth. The rest is obtained from groundwater sources. All wells (a mean of 60 m depth) are authorized by the Nicaraguan water authority (ANA) following detailed hydro-geological studies to ensure sustainability of water availability for the communities as well as for Montelimar operations. All wells have been fitted with groundwater abstraction monitoring meters. Rainfall in the area is usually 1400 mm per annum. Government permits have been also granted to Montelimar to access water from 9 water concessions and 10 rivers. Currently 96.7% of the total area of cane fields, including the Company’s own and independent suppliers is equipped with drip fertigation systems that use surface water for these systems; and cultivated areas are also rain fed with supplemental water and nutrients supplied by organic wastes from the mill. Water savings due to efficiency in field application is coupled with reforestation efforts for rain water capture in previously degraded/deforested lands, converted now into secondary forests with enhanced ecosystem services (1.75 million trees planted in 27 percent of the total lands owned by NAVINIC).



The Company has developed an integrated pest management (IPM) system to control pests that may have an economic impact on cane crops. Virtually all pests, with the exception of Aenolamia species, are controlled through the use and planting of highly resistant cane species. Aenolamia species, whose economic impact may be significant due to leaf destruction and defoliation, injects a toxic substance that blocks the vascular systems of sugar cane stems (fitotoxemia) leading to foliage necrosis and death. The pest control scheme includes physical, cultural and other non-chemical control means, such as adult insect trapping and monitoring. Sticky traps attract females and males. A trap population of 105 adults is deemed acceptable; however greater concentrations mandate more robust control measures. Biological controls in use include Metarhizium anisopliae, a beneficial fungus that grows naturally in soils and causes disease in various insects by acting as a parasitoid.



Montelimar’s biological treatment is effective but the drawback is that it takes some fifteen days to act effectively and is not the treatment of choice for cane lots with high levels of infestation. In such cases a
nd/or when environmental conditions prohibit application of the fungus, a fast acting agent is required to avoid widespread damage. Montelimar employs Cypermethrin, which is a synthetic pyrethroid used as an insecticide in large-scale commercial agricultural applications. It is a fast-acting neurotoxin in insects and quickly controls infestations. It is easily degraded on soil and plants. Exposure to sunlight, water and oxygen accelerates its decomposition. Cypermethrin is a WHO Class 2 pesticide and the Company employs appropriate precautions for application and protection of employees exposed to the material. After the harvest each year, staff employed in its use has follow-up physical examinations to ensure that there are no impacts due to exposure. Weed control in cane fields is an important part of the growth cycle. The Company employs mainly female workers for manual weed removal in young cane fields as well as in seed cane harvest, preparation and planting. As the crop grows, manual labor is used to cut grass growing between rows of cane until the plants form a canopy over the soils and prevents sunshine penetration and therefore the growth of weeds. Cane rats are controlled with mechanical traps.



As set forth in the ESAP, Montelimar will eliminate the use of WHO Class 1a and 1b and Class 2 chemical formulations in their premises and will provide to their employees adequate Personal Protection Equipment (PPE) based upon MSDS and/or ICSCs for the materials used. If applicable, Montelimar will modify pest management service contracts to ensure adequate PPE and training of their employees is provided. As stated in the ESAP, Montelimar will provide documentary evidence of the training of employees handling pesticides specifically in the use of adequate PPE, and will fully incorporate all pest and disease management procedures into the SEMS procedures manual. Montelimar will continue monitoring the cholinesterase levels in workers applying pesticides, and report annually in the AMR.

Montelimar’s operations have limited potential impacts on a sparsely populated area in the vicinity of cane growing and the Montelimar mill. During the harvest season, road traffic and movement of cane transport vehicles increases dramatically. The Company deploys female staff at intersections of farms and main roads leading to the mill to warn oncoming traffic of slow moving vehicles entering the main road; and use caution flags and other methods to reduce the hazards of farm machinery entering the principal roads. The principal transport road, constructed in the 1960s, is a high quality highway built of prefabricated, interlocking concrete blocks that is easily maintained and remains in good condition thus facilitating safe transport of cane from agricultural areas to the cane patio area of the mill.



Security personnel at Montelimar are armed. There is no formal Code of Conduct but there have not been any incidents reported. As set forth in the ESAP, the Company will develop specific management system procedures and will manage security forces in accordance with IFC PS4 requirements as described in paragraph 12 and 13. As indicated in the ESAP, Montelimar will develop and implement a Code of Conduct and Security Management System procedures for security personnel, including provisions that all security personnel must have a background check on file that shows they have no record of human rights abuse, and provisions on how to respond to threats guided by the principle of proportionality. As part of their community grievance mechanism required by the ESAP, Montelimar will provide a means for communities to channel complaints about the Company’s security arrangements or personnel.

The company’s previous community engagement activities, as outlined above in PS1 and PS5, have been somewhat informal and ad hoc. Going forward they will formalize the process and take the actions outlined above and in the ESAP to develop and implement a Stakeholder Engagement Plan as well as engagement with households that are affected by land acquisition, and those households on their farms they have been helping obtain title. As per the ESAP, the company will develop a community grievance mechanism that may be used by the community to express concerns about the company’s operations and impacts and also serve as a communications channel for consumers to advise the company of concerns about company products.

The Montelimar sugar mill management team is fully committed to protection of the cultural heritage in the areas in which it conducts agribusiness. Nicaragua is rich in natural resources and culture heritage. In Nicaragua, there are more than 500 known archaeological sites with petro glyphs. Montelimar Cave “La Gallina”, named after a painting of a bird found in the cave), is one of six that retain cave paintings and prints. At this site there are twenty different figures. All retain their original carvings into the rock ceiling of the vault. The rock art symbols include the following elements: an anthropomorphic figure (human) form, four zoomorphic (animal) shapes including snake, monkey, bird, and eight geometric shapes, three of which are abstract and one that is one unspecified and incomplete.

Montelimar Cave is particularly important to the history of Nicaragua due to the presence of three symbols that have been identified as part of an ancient dialect of the Nahuatl language. These symbols are recognized in the Nahuatl language today, which was a dialect used by the land inhabitants between the thirteenth and fifteenth century. In Nicaragua the people of this language disappeared but the language is still in use in some villages in Central America and Mexico.

The Company has provided active protection of the archeological site “La Gallina Cave” since 2004. Infrastructure includes a covered walkway and improved pathways to protect the resource from rain, wind and erosion. The cultural heritage site is open to students, tourists and the general public, and is a significant contribution to the conservation of Nicaraguan cultural heritage so that future generations may be familiar with their indigenous roots and the cultural heritage bequeathed by the country’s ancestors.

Community meetings and disclosure of information will take place at Montelimar’s sugar cane farms in zones 1-6 as they serve as central locations for activities and labor coordination for farming activities.

The ESRS and attached ESAP, the Environmental Impact Assessment (EIA), and the “Social Scoping” document, will be made available to the public via the World Bank Group’s InfoShop. Stakeholders in Nicaragua may also obtain the documentation from NAVINIC-Ingenio Montelimar, details of which are provided below. In addition, the Company will be requested to place an advertisement in a local newspaper to inform the public that results from IFC’s environmental and social review (ESRS) and ESAP and additional documents is available for access on its corporate website or provide a web- link to IFC’s disclosed ESRS and ESAP. Project Documentation will be made available locally at the San Rafael del Sur City Hall and Library, at the Montelimar Sugar Mill, and through community engagement meetings. Questions concerning these documents, the project and other issues should be directed to the following individuals:

Oscar Gutierrez – mailto:ogg@navinic.com.ni
Gerente Administrativo

José Luis López – mailto:jlopez@navinic.com.ni
Coordinador Gestión de la Calidad y Relaciones Públicas
NAVINIC-Ingenio Montelimar
Teléfonos: (505)2269-6516, (505)2269-6136 ; Fax : (505)2269-6546

San Rafael del Sur City Hall
Located on the West side
of the San Rafael del Sur Central Park
Tel: +505 2293 3284; +505 2293-3542

San Rafael del Sur Public Library
Located on the Southern side
of the San Rafael del Sur Central Park
Tel: +505 2293 3284

Broad Community Support is not applicable for this project

Title	Anticipated completion Date	Status	Comments	Completion Date
Enhance and implement the Company’s Environmental, Occupational Health and Safety and Social (EHS) Management System consistent with IFC Performance Standard 1, during construction and operational phases:	03/15/2013 12:00:00 AM	Completed	Completed	04/04/2014 12:00:00 AM
Enhance and implement the Company’s Environmental, Occupational Health and Safety and Social (EHS) Management System consistent with IFC Performance Standard 1, during construction and operational phases:	03/31/2014 12:00:00 AM	Completed	Completed	04/04/2014 12:00:00 AM
Enhance and implement the Company’s Environmental, Occupational Health and Safety and Social (EHS) Management System consistent with IFC Performance Standard 1, during construction and operational phases	12/31/2014 12:00:00 AM	Completed	Completed	04/04/2014 12:00:00 AM
Establish Stand-alone Environmental Management Unit	01/31/2013 12:00:00 AM	Completed	Completed	06/30/2013 12:00:00 AM
Senior Management Reporting and Monitoring.	03/31/2013 12:00:00 AM	Completed	Completed	03/31/2015 12:00:00 AM
Training in Environmental, OHS and social issues	03/15/2013 12:00:00 AM	Completed	Completed	03/30/2013 12:00:00 AM
Revise Human Resources (HR) Policy	03/31/2013 12:00:00 AM	Completed	Completed	03/31/2013 12:00:00 AM
Occupational Health & Safety Plan and Life and Fire Safety: Provide Occupational Health & Safety Plan and Physical Provisions for Fire Detection, Compartmentation, Extinguishing and Employee Egress:	06/30/2013 12:00:00 AM	Completed	Completed	07/15/2013 12:00:00 AM
Occupational Health & Safety Plan and Life and Fire Safety: Provide Occupational Health & Safety Plan and Physical Provisions for Fire Detection, Compartmentation, Extinguishing and Employee Egress:	07/15/2013 12:00:00 AM	Completed	Completed	07/25/2014 12:00:00 AM
Occupational Health & Safety Plan and Life and Fire Safety: Provide Occupational Health & Safety Plan and Physical Provisions for Fire Detection, Compartmentation, Extinguishing and Employee Egress:	11/30/2013 12:00:00 AM	Completed	Completed	07/15/2013 12:00:00 AM
Occupational Health & Safety Plan and Life and Fire Safety: Provide Occupational Health & Safety Plan and Physical Provisions for Fire Detection, Compartmentation, Extinguishing and Employee Egress:	11/30/2013 12:00:00 AM	Completed	Completed	07/15/2013 12:00:00 AM
CRI Monitoring and management:	05/31/2013 12:00:00 AM	Completed	Completed	05/31/2013 12:00:00 AM
Prepare Management System Procedure Addressing Employee and contracted worker Grievance Management	02/28/2013 12:00:00 AM	Completed	Completed	02/28/2013 12:00:00 AM
Formalize Management System Procedure for Contractors	06/30/2013 12:00:00 AM	Completed	Completed	06/30/2013 12:00:00 AM
Evaluate Available Ambient Lighting in Montelimar Mill:	06/30/2013 12:00:00 AM	Completed	Completed	06/17/2013 12:00:00 AM
Workers accommodations:	06/30/2013 12:00:00 AM	Completed	Completed	06/30/2013 12:00:00 AM
Conduct Boiler Stack Emissions Monitoring and collect stack emissions samples:	05/15/2013 12:00:00 AM	Completed	Completed	03/31/2013 12:00:00 AM
Develop Action Plan to Reduce Stack Emissions to a Level Protective of Public Health	06/30/2013 12:00:00 AM	Completed	Completed	03/31/2013 12:00:00 AM
Construct Sanitary Landfill	07/15/2013 12:00:00 AM	Completed	Completed	11/30/2014 12:00:00 AM
Construct Sanitary Landfill:	11/30/2013 12:00:00 AM	Completed	Completed	11/30/2013 12:00:00 AM
Construct Sanitary Landfill	11/30/2014 12:00:00 AM	Completed	Completed	11/30/2014 12:00:00 AM
Identify and Eliminate the use of WHO Class 1a and 1b and Class 2 chemical formulations in all operations.	12/31/2013 12:00:00 AM	Completed	Completed	05/30/2014 12:00:00 AM
Redesign and construct new materials warehouse:	12/31/2014 12:00:00 AM	Completed	Completed	06/17/2013 12:00:00 AM
Provide a copy of the Code of Conduct/Security Plan for security personnel:	07/31/2013 12:00:00 AM	Completed	Completed	07/31/2013 12:00:00 AM
Ex-Post Review and Document Physical Displacements Related to Land Acquisitions:	10/30/2013 12:00:00 AM	Completed	Completed	06/30/2013 12:00:00 AM