While all Performance Standards are applicable to this investment, IFCs 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. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the 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 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is category B project according to IFC’s Policy on Social and Environmental Sustainability because of a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, EHS general and sector-specific guidelines or design criteria as described in the following sections.

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.

Environmental and Social Assessment: ASA manages its environmental and social aspects seeking compliance with national and local laws and regulations. ASA has obtained all the valid environmental licenses for its existing operations, but existing plants were not required to undertake an ESIA process before the construction phase. Key environmental aspects of its operations, such as water use and wastewater management, solids and hazardous wastes management, underground water quality, environmental licensing and conditions of operation are managed following State level Environmental Authorities requirements.

ASA has conducted the OHS risk and worker’s health assessments, as described in PS2 section below. ASA follows local good manufacturing practices of food safety standard. As set forth in the ESAP, ASA will implement an integrated EHS Management system (ESMS) covering Environmental, Occupational Health and Safety consistent with IFC PS1 requirements as well as food safety/quality assurance, following the most relevant internationally recognized management system standards, such as ISO 14001 (Environmental Management System), OHSAS 18001 (OHS management system) and ISO 22001 (food safety management system). As part of ESMS implementation, ASA will define an overarching policy defining environmental and social objectives and principles that guide the company to achieve sound environmental and social performance, consistent with IFC environmental and Social Performance Standards objectives.

ASA has some good practices of animal welfare and piglets are grown under the deep-bedding system where pigs have enough space, shadow and water supply. Pig slaughterhouses were adapted to reduce the animal stress before slaughtering and animals are neutralized before killing. Integrated chicken growers provide adequate shadow, thermal comfort, water and food supply to minimize stress, as it is a key factor to reduce bird mortality and achieve high performances. Chickens are also neutralized before killing and under ESMS implementation ASA will monitor adherence to Brazilian requirements of animal welfare treatment at slaughterhouses.

Organizational Capacity: E&S organization at corporate level includes a HR manager, an environmental specialist, an OHS coordinator, a physiotherapist and a part time physician. Slaughterhouses have a team of OHS staff that includes OHS technicians and nurses. As set forth in the ESAP, ASA will hire a corporate sustainability manager that will integrate and manage environmental, OHS, stakeholder engagement and corporate sustainability areas on a higher/strategic level.

Management Programs: ASA currently has some E&S mandatory programs in place, such as OHS risk prevention and health management programs, solid waste management, food safety management. As part of the above mentioned integrated EHS management system implementation, ASA will further develop all necessary management procedures and programs (i.e. water efficie
ncy, air emissions monitoring, sustainable biomass supply, fall prevention) to deal with the possible gaps identified during the preparation of the EHS risk assessment, in order to meet the requirements of all the applicable PSes.

Training: ASA provides a basic EHS training for all workers during their induction program that includes specific EHS aspects. As part of the integrated EHS management system implementation mentioned above, ASA will further structure and consolidate a comprehensive training program for each business unit.

Monitoring: ASA already has a set of key performance indicators, such as wastewater quality, water consumption, energy consumption, wood/biomass and fuel consumption, wastes generation and accident rates consistent with World Bank Group EHS guidelines requirements. As a set forth in ESAP, ASA will start monitoring boilers’ emissions using quantitative methodologies following CONAMA 382/06 and 436/11 requirements. ASA Norte will also include Nitrogen and Phosphorous parameters in the wastewater monitoring of slaughterhouse following CONAMA 357/05 and 403/11 requirements. As part of the integrated EHS management system implementation mentioned above, ASA will further develop specific overall monitoring program covering all relevant E&S performance indicators (Key Performance Indicators). ASA will develop internal E&S auditing system covering all aspects of the ESMS (risk/impact assessment, gap analysis and management programs, organizational capacity, training programs, stakeholder engagement, monitoring and reporting) and ASA will also develop specific auditing protocols for key services providers, including environmental, labor and OHS aspects.

ASA monitors integrated eggs/broiler/piglet suppliers to be in accordance with Ministry of Agriculture’s sanitary requirements. As set forth in the ESAP, ASA will complete monitoring all integrated suppliers’ compliance with environmental requirements, such as environmental licenses, wastewater discharges and solid waste management.

Feed meals factories follow Brazilian Best Manufacturing Practices requirements that include a system of accreditation of suppliers and food traceability. As set forth in the ESAP, ASA Norte will include in its Standard Operational Procedures - SOP of grain suppliers accreditation provisions requiring grain suppliers to demonstrate compliance with environmental licensing requirements (that includes licenses or Enrollment in Rural Environmental Cadastre – CAR).

Reporting: ASA reports relevant mandatory E&S indicators to the competent authorities (e.g. solid wastes, hazardous wastes, wastewater, and accident rates). ASA reports internally selective E&S performance indicators, such as production loss, energy consumption, wastewater, injury rates and working days loss. As part of the integrated EHS management system implementation as mentioned above, ASA will further structure and develop a formal internal E&S monthly and annual reporting to the
corporate Sustainability Manager which will be discussed at ASA’s Board of Directors on a regular basis.

Human Resource Policy and Management: The Company has a written human resources policy and code of conduct. There is a corporate Human Resource Manager who takes charge of recruitment and professional development. Under the HR policy there are provisions on recruitment, professional development and enumeration. Benefits fall under enumeration, such as health insurance, subsidy meal and transport follow industry standards and country regulations.



There is a suggestion box and an open door policy but no real formal written employee grievance mechanism. If someone has a complaint, they go to their supervisor, if the problem is with a supervisor they go to their Manager or the HR Manager in that unit. If the complainant is known, HR can give some feedback but if it is anonymous grievance that is not possible. Internal grievances can also be raised through committees of rural employees’ villages and, and if not resolved, discussed with the HR management. (the company hosts 314 families). ASA will further develop and formalize an employee grievance mechanism procedure and communicate it to their employees and will be implemented in each of its operations, as set forth in the attached ESAP.

Worker’s Organizations: In Brazil, all workers must join a union, and contribute one day of wages per year as a mandatory fee. They can choose which union they belong to but in this case, most of their work force belongs to the Regulated Food Industry Union (“Sindicato da Industria Alimentícia”) or Meat Industry Union. There are collective bargaining agreements which set annual salaries, benefits and terms of employment. There is a national baseline well established by law for certain parameters, such as the minimum wage. There have been no plant closures by the Ministry of Labor or the Sanitary Authority for working condition or sanitary violations. During the course of appraisal, no evidences were found that could indicate that the Company restricts workers’ rights of association.

Non-Discrimination and Equal Opportunity: The Company has a Code of conduct which covers sexual harassment, and discrimination. It addresses the type of work an employee can do outside the corporation as long as it is not in conflict with their existing job. At least one case of harassment was identified and properly managed.

Retrenchment: The industry is prone to market fluctuations and the Company had to close a plant in 2010, which they are working to resume operations that is a subject of this investment. There is a legal framework for retrenchment in Brazil that the Company followed, which includes a mandatory lump sum payout to the workers, proportional leave and 13 salary payments. All retrenchment has to be negotiated with the unions. First, the Company attempts to avoid layoffs of staff and puts them on mandatory annual leave. They try to find places for some of their strategic workers that they don’t want to lose and also keep a skeleton crew on for maintenance and securi
ty purposes. Usually the staffs are hired back once the plant can start up again.

Protecting the Work Force: The Company has a policy on no slave, child labor or casual labor in its direct operations. All workers must be over the age of 18 and they are checked using their birth certificates during the employment screening. However, there is a mandatory young apprenticeship program for workers 16 to 22 years of age, who can only work 4 hours per day, do administrative work (no hazardous work) and must still attend school. This program is run through the Federal government and the Company strictly follows the regulations.

Occupational Health and Safety: ASA manages OHS risks seeking compliance with national and local regulations. ASA has developed and partially implemented individual OHS mandatory risk prevention plans for each plant in Brazil (PPRA), identifying the work related risks, the workers exposure to hazards agents and the need for protection. ASA also has individual health monitoring program, including periodic clinical exams. As set forth in the ESAP, and under the ESMS implementation, ASA will hire a qualified consulting firm to help them to enhance existing OHS practices and programs (PPRA and PCMSO) including quantitative monitoring of workers’ exposure to noise emissions, cold/heat temperatures, illumination and ergonomic conditions of work. ASA will develop a workplace monitoring program with periodic field inspections and reporting of key performance indicators and corrective actions. This program will cover relevant aspects of the Brazilian OHS Standard requirements, including moving parts and machinery protection (NR12), ergonomic conditions and aspects (NR17), working at heights (NR35), adequate use of PPEs, working with electrical devices (NR10), chemicals handling and storage. Accident rates vary significantly from one site to other. Under the ESMS implementation, ASA will further explore opportunities to enhance fall prevention and ergonomic mitigation measures at slaughterhouses. ASA will identify all possibilities to deploy safety belts (a.e.at and haggis take out), adjustable platforms for workers (a.e. at boning) and pallet’s lifter platforms at pallets loading / unloading areas, and adequate the layout and available space of deboning area at slaughterhouses. ASA will also review the layout of deboning area at slaughterhouses to provide adequate and safe space to workers handling knifes. ASA will also deploy safety equipment in the ammonia storage and refrigerating systems, such as leak detectors (indoor operational areas and compressors house), secondary containment, ventilation systems, proper warning signs and emergency response equipments consistent with Brazilian standard NBR 16069. Under the requested Integrated (EHS) Management system implementation, ASA will further develop specific management programs for all sites to achieve compliance with all Brazilian OHS Standards. At the Slaughterhouses ASA will devel
op a specific plan to achieve compliance with new Brazilian OHS standard for slaughterhouses (NR37) over time.

Supply chain: Concerning the supply chain and labor issues, there are not documented risks associated with harmful child and forced labor in the primary chicken/pork supply chain in both Brasilia and Tocantins states 2005, MTE, Ministério do Trabalho e Emprego. Mapa de Indicativos do Trabalho da Criança e Adolecente. Brasilia, DF.

. During site visits of suppliers, no child labor situation was identified and good labor practices are encouraged across integrated suppliers, as it is a key factor to achieve good production performances. Chicken and pork production are much mechanized resulting in low labor intensity, and labor practices follow Brazilian legal requirements.

Resource Efficiency: ASA’s slaughterhouses use small boilers (about 10 MWth) to burn wood to generate steam. Energy is purchased from the distribution grid and water extracted from rivers and wells. Water is used mainly on cleaning/washing in production areas at slaughterhouses and consumption is on average 4.6 M3/ton of pork and 4.2M3/ton of chicken, which is consistent with IFC EHS guideline benchmark for the sector. Energy average energy consumption is 182KWh/t of pork carcass which is also consistent with IFC EHS guideline benchmark for the sector. However, comparing ASA’s performance with other IFC clients, it is possible to conclude that there is a room for improvements in this area and ASA could significantly reduce water and energy consumption.

ASA uses deep-bedding technique at its own pork production farms that reduces significantly the use of water since pork placements are not washed daily, although pork conversion of energy from meal is less efficient under this system.

Greenhouse Gases: Main sources of GHG are the energy consumption from the grid, diesel/gasoline consumption by trucks/vehicles and emissions from wastewater treatment lagoons. Boiler’s emissions can be considered neutral due to the fact that they use renewable source of energy, such as planted wood and wastes from palm oil processing plants (husk from Babaçu palm fruit). ASA will conduct feasibility studies to assess the implementation of animal fat recovery system from pork slaughterhouses’ wastes to burn into boilers and generate electricity, as well as methane capture from wastewater lagoons to burn in small thermal power generator units.

Wastes: Chicken and pork bedding from production sites, broken eggs and one day chicks discard from hatching houses are delivered to composting and sold to farmers. ASA has its own composting site deployed with run-off from storm water collection and treatment. Operational solid wastes from slaughterhouses are managed according to organic wastes, hazard wastes (chemicals, wastes from maintenance shops and from ambulatories), office and sanitary wastes. Paperboard scraps and used package boxes, used lubricant oil and empty containers of chemicals are collected forrecycling.

Wastewater: Slaughterhouses generate significant amounts of wastewater, mainly resulting from cleaning and washing of operational areas. Typical wastewater treatment process in this sector in Brazil includes a strainer, flotation and physical separation of greases, tri-decanter (liquid, oil and solid separation) and a sequence of anaerobic, facultative and final clarification lagoons (lined) with bio-remediation. In the case of ASA, treatment is restricted to anaerobic lagoons due to the fact that wastewater is not discharged to rivers and used as ferti-irrigations in plantations or crops. Wastewater treatment efficiency is about 80% of removal of organic matter (main contaminant). Owned and integrated piglet farms also generate significant amounts of wast
ewater that are storage/treated in lined anaerobic lagoons and used in the fields as fertilizers.

The exception is ASA Norte chicken slaughterhouse (in Tocantins State) where the system was designed to discharge wastewater directly to Tocantins River. The treatment unit is based on a sequence of unlined anaerobic and facultative lagoons. A flotation unit was acquired but not deployed before plant shut down. As set forth in the ESAP, ASA will rehabilitate ASA’s North wastewater treatment unit before the start of operations, including the deployment of a strainer, flotation system, tri-decanter and further treatment to ensure removal of nitrogen and phosphorous consistent with WBG/IFC EHS guideline for meat processing requirements. All lagoons will be lined as well.

Air emissions: As described above, main sources of air emissions are from the boilers and wastewater ponds. Under the proposed ESMS implementation outlined in the ESAP, slaughterhouses will start monitoring air emissions from boilers and will deploy means of control to bring them into compliance with local legal requirements (CONAMA 382/06 and 436/11) and WBG guidelines. In addition, whenever the client considers replacing a boiler, they will deploy air emissions control systems with an operational capacity consistent with WBG EHS guidelines requirements.

Pesticide Use and Management: ASA uses small number of authorized herbicides for weed control at their spare farms in Belém before cattle is leaded on chips. ASA does not use pesticides that fall in WHO pesticides hazard classification system class I(a) or I(b).

ASA’s operations can potentially negatively affect communities’ health and safety in different ways: (i) impacts from wastewater discharge to community’s supply of fresh water; (ii) nuisance to adjacent communities due to induced trucks traffic, noise emissions or odours; (iii) ammonia leaks, explosions or fires.

Consumers of ASA’s products can be potentially affected due to food safety/sanitary issues. As already described in PS1 section, ASA’s feed mill plants follow Best Manufacturing Practices that also includes recall policy and procedures for supplier’s accreditation, traceability, pest control, cross contamination prevention, training and hygiene among others. Slaughterhouses follow Ministry of Agriculture’s guidelines of Good Manufacturing practices for meat processing industry, HACCP and Brazilian Standard NBR 14900. As set forth in the ESAP and under ESMS implementation, ASA will hire an independent consultant to conduct quality/food safety periodic audits at its slaughterhouses to access potential gaps with above mentioned standards and provide corrective action plans, if needed.

Hazardous materials management and safety: ASA’s slaughterhouses use and store significant amounts of ammonia used in the refrigeration systems. Storage tanks are identified and placed outdoor on naturally ventilated area. ASA has respiration cylinders and emergency gear with proper protection at all sites. Operators are trained end emergency drills are conducted annually. As set forth in the ESAP, and within the scope of the ESMS implementation, ASA will also deploy safety equipment in the ammonia storage and refrigerating systems, such as leak detectors (indoor operational areas and compressors house), secondary containment, ventilation systems, proper warning signs and emergency response equipments consistent with Brazilian standard NBR 16069. Diesel tanks have secondary containment to avoid spills at all plants.

Emergency preparedness and response: ASA has individual emergency response and preparedness plans for its slaughterhouses covering a description of the facilities, neighborhood, emergency equipment, emergency brigade and personnel, contact numbers, responsibilities and chain of authority, training, drills as well as the different scenarios of emergency such as fire and explosions, chemical leaks, confined spaces emergencies, car accidents, fall from heights, accidents with electrical and energized equipment, accidents with machinery and moving parts, accidents with vehicles, burns and rescue at heights. The emergency plan has specific procedures of action of above described scenarios and communication with authorities and community, if applicable.

Security Personnel: The Company have their own in-house security in Brazil, which is unarmed. Employees can be asked to open their bags but they cannot be searched physically say, for example, by a pat down.

Protection and Conservation of Biodiversity: There is no expected significant conversion of natural/critical habitats directly by the client’s direct operations during the course of this project.

Supply chain: ASA has one plant in Tocantins state that is located in the Amazon Region in a transition from forest assembles to savannah. The region is within the “arc of deforestation” and has been attracting in-migrants from other parts of the country to invest in annual crops production (mainly soy and corn). Just at the other side of Tocantins River, in Porto Franco Maranhão state, there is a railroad connection infrastructure dedicated to grain traders to support regional production flow to Itagui port.

Integrated chicken growers require small pieces of land, are all small holders and are not a driving force of deforestation. However, ASA relies on a net of local suppliers of grains for its feed meal factory that can be linked to unsustainable land use practices in the region. As set forth in the ESAP, ASA will map out its grain suppliers and will limit procurement, over time, to those that can demonstrate that they are not contributing to significant conversion of natural habitats.

The Company at present has fairly limited interaction with its surrounding communities, for example those in close proximity to their slaughterhouses, or with other indirect stakeholders, such as NGOs. The Company does not have a formal community grievance mechanism for monitoring and tracking complaints, although complaints are managed in an ad hoc way by the corporate HR Department, or the Plant-level Manager.
Based on the appraisal visit to ASA’s multiple facilities, it has been determined that there are no identified communities with potentially significant adverse impacts as a result of the slaughterhouses, feedlots or distribution centers. However, as set forth in the ESAP, the client will be asked to develop and implement a detailed Stakeholder Engagement Plan commensurate with the level of project risks and impacts, which are expected to be limited in scope, few in number and generally site specific, largely reversible and readily addressed through mitigation measures. Some of the potential impacts might include induced traffic and congestion around a site, noise or odors.

Asa Alimentos
SIA Trecho 03 – Lotes 385/395
71200-030 – Brasilia/DF – Brasil

Broad Community Support is not applicable for this project

#	Action	Due date
1	Implement an integrated EHS Management system (ESMS) covering Environmental, Occupational Health and Safety consistent with IFC PS1 requirements as well as food safety/quality assurance, following the most relevant internationally recognized management system standards, such as ISO 14001 (Environmental Management System), OHSAS 18001 (OHS management system) and ISO 22001 (food safety management system).	Feb-15
2	Develop and formalize an employee grievance mechanism and communicate it to employees.	Mar-14
3	ASA will conduct a water and energy efficiency assessment to benchmark themselves with other players in the sector and identify cost-effective opportunities to enhance efficiency	Jul-14
4	ASA will rehabilitate ASA’s North wastewater treatment unit before the start of operations including the deployment of a strainer, flotation system, tri-decanter and further treatment to ensure removal of Nitrogen and Phosphorous consistent with WBG/IFC EHS guideline for meat processing requirements. All lagoons will be lined as well.	Mar-14
5	Supply Chain Management: Define specific selection criteria for grain suppliers of feed mill in Tocantins State including an environmental license or CAR (“Cadastro Ambiental Rural”)	Mar-16