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

The project is categorized B according to IFC’s Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.
The key environmental, social, health and safety risks and issues associated with this proposed investment include: the Company’s management capacity to properly manage existing logistics operations, including how environmental and social consequences are incorporated into VIX management practices and systems; stakeholder engagement; fuels/hazardous materials storage and handling; emergency response planning and preparedness; labor and working conditions, including employee health and safety. VIX has demonstrated that their activities are already managed in a large extent consistent with IFC Performance Standards and, upon implementation of the some specific measures detailed below, the project is expected to be operated in accordance with Performance Standards objectives.
As VIX is a logistics service company that operates within its clients facilities, and consequently no land acquisition is expected for this project, no impacts on Biodiversity, indigenous lands, Indigenous Peoples (IP) areas and other adverse impacts on IPs, and impacts on cultural heritage are not expected to result from VIX direct activities, PS5: Land Acquisition and involuntary resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources, PS 7: Indigenous Peoples, and PS8: Cultural Heritage are not considered to be applicable to this investment.

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 – As a Logistics company, VIX operates inside industrial sites and existing ports, under the scope of the environmental licenses of their clients’ operations, and conditions to operate previously defined within respective ESIAs. VIX clients’ follow international EHS best practices and expect their contractors to have same level of performance. As such, VIX has developed an Integrated Management System (IMS) covering Quality Assurance, Environment and Occupational Health and Safety (OHS) and following internationally recognized standards (ISO 9000, ISO 14000 and OHSAS 18000). VIX has obtained certification (of above mentioned standards) for several sites, and their IMS is designed to follow these standard requirements at all sites. VIX takes E&S matters very seriously and consider it a strategic part of their business, since it gives them competitiveness advantage when compared with their peers, especially when bidding for new contracts. Most of VIX clients’ have a contractors’ scoring system to assess contractor’s performance, and commonly E&S has significant weight in assessing the overall performance of the company.

Following ISO/OHSAS standard requirements, VIX has in place specific procedures for environmental aspect/impact identification as well as OHS hazard/risk, covering every step of the processes of their operations. Information is consolidated, by project, in a matrix of impacts/risks. This assessment is followed by a gap analysis and prioritization exercise. VIX also rely on a specialized service provider to monitor legal compliance of their operations.

Management Program – At the corporate level, VIX has a well articulated environmental policy focusing on: compliance with applicable environmental regulations; application of the principle of continuous improvement in reducing the impacts from their businesses and the consumption of natural resources; prevention and control of air emissions; control and reduction of wastewater discharges and solid wastes within their operations; and definition and meeting of progressive E&S targets and objectives. VIX’s ESMS (Environmental and Social Management System) includes a series of SOPs (Standard Operating Procedures) such as EHS objectives and targets, environmental aspects/impacts and OHS hazard/risks Assessment, KPI (Key Performance Indicators), EHS Inspections, Internal Audits, Document Control, communication, non-Compliances and Corrective Actions, among others. Environmental management programs are mainly organized at the divisional level with the support of corporate sustainability staff that assists VIX’s field workers in the preparation of environmental management plans and procedures. Also at the divisional level, VIX has been repeatedly awarded by its clients for their E&S performance, including several annual awards from SAMARCO (almost every year), Acelor Mittal and a National award from Vale.

VIX’s Integrated ESMS (Policy, procedures and
programs) includes relevant recommendations to manage the following aspects of their business consistently with IFC PS3 and PS4, as described:

PS3 (Resource Efficiency and Pollution Prevention):

Office wastes generated at VIX operations (e.g., paper, cardboard, plastic bottles, organic waste, etc.) are segregated for recycling purposes and non-recycling wastes are disposed at licensed municipal/clients’ landfills. Records and reports documenting the production and disposal of such waste streams are maintained by VIX.

Hazardous wastes generated at vehicle maintenance shops (used filters, brake parts, sludge from vehicle wash etc…) are disposed at licensed controlled landfills (Class I: Hazardous materials). Dangerous hazardous wastes such as lubricant oil and fluorescent lamps are segregated for recycling.



VIX strictly controls the use of fleet tires, and all of them are individually marked/identified and monitored from supply to discard. Unexpected defects and underperforming pieces are assessed to identify root causes. When final quality conditions allow, tires are sold for remodeling and earnings are donated to VIX workers’ credit cooperative. Discard tires are incinerated in licensed cement kilns.

VIX monitors air emissions from buses and heavy machinery (wheel loaders, bulldozers, tractors and trucks) through the use of opacimeters and Ringelmenn scale. Vehicles and machines have to follow a strict schedule of maintenance to ensure the safe use of the equipment and efficient fuel consumption. VIX has 10 garages with maintenance shops, sometimes dedicated to their client operations, to support the vehicle maintenance program.

Garages have bus/car washers and VIX controls the water consumption by monitoring certain indexes and promoting awareness programs and local inspections. Through the use of wastewater treatment and water re-use systems at 4 garages, VIX reduces the environmental impact in the use of natural resources. All other washers are deployed with basic wastewater treatment system before discard (Oil/grasses traps, decantation tanks and sand filters).



VIX conducted an inventory of its GHG emissions following World Research Institute (WRI) framework and accounted direct emissions in 2012 were 15450 tCO2eq per year (2012).

PS4 (Community Health, Safety and Security):

Transport fleet average lifetime is five (5) years, and must follow a strict schedule of maintenance to ensure the safe use of the equipment. Drivers are trained/updated in traffic safety on an annual basis. Vehicle collisions are monitored by business lines and the average rate is 0.49 collisions per million km, what is considered a good performance for an urban transport company.

VIX has emergency plans for all garages, covering different possible scenarios, such as fires, chemical spills, medical emergency as well as emergency contact numbers and communication procedure, emergency equipment and execution of emergency response procedure. VIX conduct
s annual fire drills with support of local fire department and has all the fire permits (AVCB – Auto de Vistoria do Corpo de Bombeiros). When working within their client’s facilities (dedicated logistics) they must follow and adapt to clients’ emergency plans.

VIX garages use and store significant amounts of fuel used in the fleet and heavy equipment. Storage tanks are identified and placed outdoor on naturally ventilated area, with secondary containment, on a sealed floor and with restriction of access. Fuel stations follow Brazilian (ANP) safety requirements and the floor is sealed, deployed with contention channel and box. Electrical systems are intrinsically safe and no underground fuel storage tanks were reported. Small volumes of chemical substances and lubricating oil are stored in adequate storage areas at operating facilities. Operators are trained and emergency drills are conducted on an annual basis.

VIX transports compressed non-hazardous gases (a.e. nitrogen, argon, oxygen). All drivers must have special training and driving license, trucks must have emergency kits, PPEs (Personnel Protective Equipment) special warning signs and emergency datasheets “ficha de emergência” including product MSDS (Material Safety Data Sheet), emergency procedures, and contact number.

VIX relies on a small number of security personnel (armed) to protect their facilities. VIX doesn’t have a formal security forces management program and, as set forth in ESAP will hire a consultant to help them to develop a management program consistent with PS4 requirements.

Organization –EHS is coordinated at the corporate level by a manager reporting to administrative director. The company has an OHS supporting team at a corporate level that includes an OHS engineer, physician and a nurse. At the operational level VIX relies on a team of EHS technicians coordinated by an EHS leader.

- Training – Training programs framework is defined in a specific ESMS SOP (Training and people development), and organized by the Corporate Human Resources department based on yearly evaluations of staff training needs and on the job characteristics and associated risks of employees. Examples of training topics include induction program; ergonomic management; adequate use and care of personal protective equipment (PPE); fire prevention and response; and internal accident prevention training. All staff mandatory trainings for specific works (a.e. machine operators, working at heights, OHS technicians) are monitored and followed up. Company employees providing environmental services for major clients (such as SAMARCO and Petrobras) also undergo training under those clients’ EHS requirements. - Monitoring – VIX has a well-established monitoring program covering key environmental, health, safety and social indicators applicable to its operations. Environmental monitoring activities cover mainly solid wastes management, water and fuel consumption. VIX also has been monitoring GHG emissi
ons following WRI (World Research Institute) framework. Occupational health and safety (OHS) monitoring activities include workplace exposures to noise, vibration, heat and chemical agents consistent with Brazilian Regulatory Norms. Accident rates and vehicle collisions are also monitored. VIX has a workplace inspection program with periodic field inspections, in which minor misses and major non compliances are monitored, recorded and corrective actions followed up. Vix also has a schedule of internal and external ESMS audits. VIX has instituted a government required joint health and safety committees (CIPA) with representatives from the workers and management who supervise and report on health and safety issues encountered during work. CIPA committees are also responsible for investigating and analyzing occupational accidents, incidents, and health issues. - Reporting – The results of EHS monitoring activities are compiled into internal reports that are reviewed by the Operational Manager and Administrative Director who have ultimate operational responsibilities. VIX will enhance existing reporting procedures including more detailed information such as OHS accident rates, number of periodic inspections, key near-miss or major findings, status of corrective actions implementations. VIX also reports some key performance indicators to their clients, which sometimes have access to VIX online monitoring database. VIX has identified certain environmental Indicators to begin structuring an annual sustainability report.

- Working Conditions and Management of Worker Relationship:

VIX has developed and implemented a human resources policy that is based on sound procedures and is aligned with Brazilian labor laws. Brazil is a signatory to numerous international labor conventions and treaties including: the International Labor Organization (ILO) Convention 3 on Maternity protection; (ILO) Convention 138 on minimum age; (ILO) Convention 14 weekly rest; (ILO) Convention 26 on Minimum wage; (ILO) Convention 29 Forced Labor; (ILO) Convention 52 on Annual Leave; (ILO) Convention 96 on Fee-Charging employment agencies; (ILO) Convention 98 Right to Organize and collective bargaining; (ILO) Convention 100 on Equal Remuneration; (ILO) Convention 101 on Discrimination in Respect of Employment and Occupation; the International Covenant on Civil and Political Rights; the American Convention on Human Rights; and the International Covenant on Economic, Social and Cultural Rights.

The terms of employment, such as wages and benefits, hours of work, overtime arrangements and overtime compensation, annual and sick leave, maternity leave, vacation and holiday, are established by national labor regulations. Although Brazilian workers are generally familiar with the national terms of employment, during the recruiting phase, the Company also informs candidates and newly hired workers about the specific terms of their job positions. Additional Workers’ benefits include medical assistance, social security, meal and transportation vouchers, among others. During the period of appraisal visits, the Company had a total of 7,740 employees, 82% of whom were drivers or machine operators.

- Worker’s Organizations: In Brazil, all workers must be linked to an union, and contribute one day of wages per year as a mandatory fee. The union the workers are linked to depends on the professional activity and geographical place of work, pursuant to the registries before the Employment and Labor Ministry. There are representatives of the union working as active members of the union within the Company, although not in a large number. 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. The unions are very strong and VIX supports employees’ rights to freedom of association and collective bargaining in compliance with Brazilian law. Although VIX follows sector collective bargaining agreements they also negotiate directly with local unions more detailed agreements. They negotiate with 32 drivers’ Unions, which provide a more stable working environment that has resulted in no recent strikes.

- Grievance Mechanism – The company employees are currently able to lodge complaints internally through the Human Resources department and company management. Grievances can also be placed under a code of conduct “email” and at the company’s website. Going forward, VI
X will create and implement a formal corporate internal grievance procedure which will allow: (a) any employee grievance by individuals or groups (including anonymous complaints) to be presented verbally or on in writing, without the risk of reprisals; documented and reviewed by company management and subject to a timetable for formal response and resolution; (b) VIX will provide appropriate response to all complaints, taking in account labor related confidentiality issues. (c) VIX will also assess the possibility to provide additional means for lodging complains for remote workers that are less familiar with computers, such as a text message number and pre-paid mail forms. The company will make the grievance procedure available to all existing and new employees at the time of hire (as part of its Human Resource Policy or other document). - Protecting the Work Force – The company complies with legal minimum age of work requirements by requesting valid documentation of age in the employee contracting process. Following a federal mandatory program “Menor Aprendiz” VIX employ underage workers (16 years old) part time to do non hazardous work and under supervision. The participants must be attending classes at a regular school and minimum performance is required.

- Occupational Health and Safety – VIX has an OHS program which includes a set of operating objectives based on the identification and quantification of workplace risks coupled with applicable legal and other requirements. To prevent workplace accidents and promote the health of its employees, VIX implements Brazilian Regulatory Norms (NR) applicable to its operations including those related to the identification and monitoring of chemical and physical hazards through a Workplace Environmental Risk Prevention Program or PPRA (“Programa de Prevenção de Riscos Ambientais”), use of personal protective equipment (PPE), emergency preparedness and response, and medical surveillance (PCMSO or “Programa de Controle Médico de Saúde Ocupacional”) and ergonomic program.

For the drivers, VIX has developed The Sleep Medicine program to enhance drivers’ quality of sleep, and verify and improve their ability to drive, especially at night.

Occupational accident rates are monitored, and although it can vary from one business activity to other, the corporate accident (frequency rate) average is 1.6 accidents per million worked hours, which is remarkably good compared with US, UK and Australia sector transportation sector average rates. No fatalities were reported in the past 5 years.

As a logistics service company, VIX activities have limited adverse impact on local communities, however some of their garages are located within urban populated and residential areas and the flow of vehicles may result in some level of nuisance to nearby communities. Under the IMS umbrella, VIX has a communication procedure following requirements from the ISO 14000/9000 standard. Going forward, VIX will develop a stakeholder engagement procedure including appropriate provisions to adequately and actively engage with affected communities in accordance with IFC PS1 requirements.
The procedure will also include an external grievance mechanism, defining a process of documenting grievances received and, responses provided (such as the name of the individual or organization; the date and nature of the complaint; any follow up actions taken; the final decision on the complaint; how and when relevant project decision was communicated to the complainant; and whether management action has been taken to avoid recurrence of community concerns in the future), and reported back in an appropriate manner to the affected communities periodically. The company will structure a proper communication channel to which project-related views and concerns of the affected community can be addressed.

Mr. André Gaia, Chief Finance Officer
Av. Jerônimo Vervloet, 345
Goiabeiras, Vitória, State of Espírito Santo
CEP 29075-140
Brazil

Broad Community Support is not applicable for this project

Vix Logistica(33782) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
PS1 - Management Programs: Vix will develop and implement a formal security forces management program consistent with PS4 requirements - hire a consultant to help to develop a management program	31-Aug-2014	Completed	Completed	7/31/2022
PS1 - Management Programs: Vix will develop and implement a formal security forces management program consistent with PS4 requirements -Provide a copy of Security management Program agreed to IFC	30-Dec-2014	Completed	Completed	7/31/2019
Vix will enhance its EHS reporting procedure as described in ESRS	31-Aug-2014	Completed	Completed	11/30/2022
Stakeholder Engagement VIX will develop and implement a stakeholder engagement procedure in accordance with IFC PS1 requirements. -provide a copy of the procedure agreed to IFC	30-Dec-2014	Completed	Completed	7/31/2019
Internal Griavance Mechanism VIX will create and implement a formal corporate internal grievance procedure consistent with IFC PS2 requirements, as described in ESRS -Provide a copy of the procedure	30-Dec-2014	Completed	Completed	7/31/2019