Environmental and Social Policies. Aside from its Quality Assurance Policy developed during the ISO 9001 standard certification for Piti Pyae agro-chemical plant in October 2011, Awba is in the process of defining a comprehensive set of corporate policies outlining its intent to manage Quality, Environment, Occupational Health and Safety, and Social issues that apply to all its operations. Such policies would be expected to outline Awba’s core values, performance level commitment, how the company expect its staff to behave and how external stakeholders can expect the company to operate. As set forth in the attached ESAP, Awba will finalize and implement a comprehensive QEHS policies framework indicating that (i) the scope of the policies encompass all Awba’s operations (import, manufacturing, repacking, distribution and technical services to farmers), (ii) the QEHS performance-level requirements will include applicable Myanmar legal and regulatory requirements, IFC’s Performance Standards, WBG EHS General and Sector specific Guidelines (ref. pesticide manufacturing, formulation, and packaging), and FAO’s International Code of Conduct on the Distribution and Use of Pesticides, (iii) going forward, Awba will not purchase, store, use, manufacture, or trade in agro-chemicals products that fall in WHO Recommended Classification of Pesticides by Hazard Class Ia (extremely hazardous) or Ib (highly hazardous), aside from proposed exemptions indicated under PS3, (iv) Awba will not purchase, store, use, manufacture or trade in Class II (moderately hazardous) pesticides, unless it has appropriate controls on manufacture, procurement, or distribution and/or use of these chemicals. Awba has assigned a professional QEHS Director and Assistant Director at corporate level and assistant manager at each of its three main business lines (agro-chemical, fertilizer and distribution) to ensure effective and timely implementation of these policies. Mainstreaming of QEHS responsibilities shall also be reflected into operational (general and factory) managers’ job description. A documented process to review annually the implementation of the QEHS policies and to revise them every three years should be provided. Awba will ensure on-going communication of its QEHS policies to all employees, suppliers, contractors, farmers and stakeholders through awareness-raising during staff induction, board posting, training and its website (http://www.awba-group.com).
Environmental and Social Risk Assessment and Management System. Awba has not commissioned an Environmental Impact Assessment (EIA) study and/or screening report for its four agro-chemical (Piti Pyae plants and/or its three fertilizer plants on the basis that such studies were not required by local law for assets of this type at the time of their development. As per the new regulation under the Myanmar Environmental Law enacted in 2012, latest Hmawbi’s agro-chemical plant underwent such environmental assessment in 201
5. Technical design of Awba’s manufacturing/reformulation agro-chemical plants was done by an international company (Sahaikaset Company Limited, Thailand) while wastewater and air emissions treatment system were designed by independent service providers. In order to meet PS1 requirements, as set forth in the ESAP, Awba is in the process of establishing an EHS risk assessment process for proposed IFC’s financed agro-chemical formulation plant and fertilizer warehouses, commensurate with the level of its environmental and social risks and impacts, in order to ensure alignment and coherence with proposed QEHS policies, especially as they relate to potential (i) environmental impacts: raw materials characterization and risk assessment, energy and water consumption, wastewater quantity/quality, air emissions, solid and hazardous waste management, usage of chemicals and hazardous materials, noise, and emergency preparedness, and ii) OHS impacts: fire and explosion hazards, physical hazards (e.g. cuts, falls, rotating/moving equipment, vibration, electrical hazards, work zone noise level, workplace’s ambient air quality, temperature and humidity, ergonomic issues (e.g. lifting, repetitive work, work posture injuries), eye hazards, working at heights, industrial vehicle driving).
Applicable national legal and regulatory requirements applying to Awba’s operations encompass, among others, the Pesticide Law (1990), the Fertilizer Law (2002), the Seed Law (2011), the Environmental Conservation Law (2012), and the Environmental Regulation (2014). Imports of active agri-chemicals ingredients is under the responsibility of the Ministry of Trade through documentation support to the PPD and the PRB. Repacking licenses for pesticide and fertilizer are respectively obtained from PPD and Land Use Department. Other licenses and permits needed for Awba’s operations include storage, manufacturing and distribution license from Yangon City Development Committee for Piti Pyae Zone (agri-chemicals) and MAI (fertilizer). Copies of these licenses were shared during appraisal. Applicable national regulations and resulting licenses have fully integrated FAO’s International Code of Conduct on the Distribution and Use of Pesticides. In order to obtain these licenses, Awba’s agri-chemical and fertilizer senior management are required to successfully complete a training program provided by the Plant Protection Department, Ministry of Agriculture (MoA). The Pesticide Registration Board (PRC), consisting of 10 competent authorities (Ministries of Agriculture, Health, Forestry, Livestock, Breeding and Veterinary, and Trade), issued formulation repackaging, storage and distribution licenses.
EHS Management System & Programs. Awba has demonstrated management commitment to establish the foundation of a QEHS management system for its operations. For example, IFC’s appraisal findings revealed some tangible and measurable implementation progress on some elements (e.g. basic on-the-
job workers training, provision/enforcement of PPE (boot, helmet, glove, masks, ear plugs) at manufacturing and reformulating plants, fire hydrant systems and extinguishers, negative air aspiration systems in agro-chemical powder production area and dust collector, well designed wastewater treatment and epoxy coated pipeline and sedimentation ponds, air emissions pollution system, toxic sludge disposal through on-site incineration, bunds at agro-chemicals plant and warehouses in case of chemical spill).This being said, the progress achieved so far remains limited. As set forth in the ESAP, Awba is in the process of finalizing and implementing an Integrated QEHS management system, including policies, manual of procedures, management programs, annual action plans – consistent with the requirements of PS1 and those of other recognized management systems such as ISO 14001 and OHSAS 18001. Elements such as standards operating procedures (SOPs), custom management plans for all Awba’s operations, definition of accountability framework to performance based QEHS requirements, verification of implementation effectiveness, performance review of policy framework through internal and external audit requirements, and definition of quantifiable performance targets and indicators (KPIs) to demonstrate continuous improvement will be developed. As mentioned above, Piti Pyae (YIP 1) has successfully achieved ISO 9001 certification in October 2011. As such, IFC expects the company to successfully develop/enhance the necessary management system elements. Indeed, Awba has successfully completed ISO 9001 audit process (for MAI in 2016) and will complete 14001 certification at its Piti Pyae Zone plants (YIP 1, 2, 3) by 2016.
Organizational structure and capacity. Awba has adopted in its organigram a corporate QEHS function which is led by a QEHS Director and Assistant Director. For the agro-chemical and fertilizer business line, Quality Assurance (QA) and HSE Departments have been established since 2010. In addition, a QEHS Committee at corporate level has been established in November 2015. . Considering the risks and impacts associated with Awba’s on-going and planned operations, it is deemed important that the timely and effective development and implementation of QEHS policies, procedures and management programs be placed under the leadership of a Corporate QEHS Director supported by a QEHS team.
Training. Awba, in coordination with national entities (e.g. MoA/PPD, Occupational Health and Environmental Division, Ministry of Labor/Safety Working Group for industrial Zone, Ministry of Welfare/Fire Fighting Department, local fire brigades) and consultancy firms, provides staff training in relation to industrial safety, pesticide handling and use, the health effects of pesticide mis-use, human resources, life and fire safety, Integrated Pest Management (IPM), and agricultural best practices. Training reports for 2011, 2012 and 2014 have been provided during IF
C’s appraisal. Awba is in the process of l expanding upon its current training practices to ensure all commitments contained within its to-be-developed policies, manual of procedures and management programs are supported by a competent and well trained workforce. Among other subjects, training on environmental management, first aid and safety, emergency preparedness, use of fire extinguishers and fire drills, waste/air emissions management and safe disposal of CPP containers should be considered. For WHO Class II products, Awba will have to demonstrate that it has appropriate controls on manufacture, procurement, or distribution and/or use of these chemicals. In addition, it is particularly important that the company strengthen competency-based technical development programs for its 1,000 agronomists. Implementation of a “Technical Academy Program” to support technical skills of Awba’s agronomists is critical for maintaining Awba’s products branding and relationship with its Key Farmers, including pro-active implementation of IPM approach. Development of a structured Field Farmer Training Program and manuals for end-customers, consistent with IPM approach and requirements, including FAO’s International Code of Conduct on the Distribution and Use of Pesticides, and voluntary agro-commodities standards and requirements (e.g. Rainforest Alliance) is also deemed important for enhancing yield, minimizing operational costs and ensuring market access/success through certification.
Monitoring and Reporting. Awba has not yet established a structured QEHS monitoring/reporting system at corporate and/or operational level. Information such as energy and water consumption (agri-chemical and fertilizer manufacturing and processing being a dry process, water requirement is minimal), solid and hazardous waste characterization, volume and treatment, Lost Time Injury Frequency Rate (LFITR) at plants and warehouses) data were made available during IFC’s appraisal but documentation control system need to be further strengthened . Monitoring of well-established Key Performance Indicators (KPIs) on effectiveness of EHS management programs and overall EHS performance would be beneficial. Going forwards, as set forth in the ESAP, Awba is in the process of defining a comprehensive set of KPIs in order to monitor, among others, on a monthly/annual basis the following EHS parameters at all operations: a) Safety – Lost Time Incidence Frequency Rate (LTIFR), Accident Free Days; b) Sustainability – GHG footprint (MT CO2 eq./ton), Energy Usage (kWh/ton), and noise level; c) Staff – Retention/turnover and training days. In addition, Awba will define an integrated EHS report format based on critical EHS KPIs. The company will also report annually to relevant country-level authorities and IFC as part of the Annual Monitoring Report (AMR).
Emergency Preparedness and Response. Awba has adopted a procedure in case of fire and explosion. Evacuation plan at the agro-chemicals
plants has been observed during site visit and Notice Board of what to do in case of accident. The Managing Director, in cooperation with factory managers, is accountable for the effective implementation of this procedure. Posting of “no smoking” signs, availability of fire extinguishers at all critical points, positive verification of extinguishers maintenance, and first aid pharmacy were sighted at both sites. Bi-annual fire drill checklist has been provided. Insurance covers all building, machinery, inventory stock of active agro-chemical ingredients and fertilizers, diesel storage, and warehouses. Copies of certificate of insurance were available during IFC’s appraisal. As set forth in the ESAP, Awba will review and upgrade its Emergency Preparedness and Response Plan for all its operations, including facilities to be financed by IFC’s loan, to cover not only fire and explosion but also storms and transport (see Community Health and Safety, PS4). Awba will also develop warehouse safety guidelines (see OHS section) and sale depots’ fire safety guidelines, including availability of extinguishers (see L&F safety section).
Stakeholder Engagement Plan. Most of Awba’s existing operations visited during IFC’s appraisal were located in Industrial Zones (Yangon and Shwe Lin Ban); the location of the proposed Awba’s pesticide formulation plant and fertilizer warehouse financed by IFC’s loan is located in an industrial area. As such, there are no communities that may be adversely impacted by Awba’ manufacturing and warehouse operations. Awba’s sale depots are located in commercial/residential areas. Risk is limited because the products are packaged in small bags prior to sale. In accordance with municipal requirements, Awba is required to obtain agreement for the establishment of its sale depots by surrounding neighborhood. In addition, Awba’s sale depots ought to obtain authorization from Ministry of Health and Agriculture authorities. In order to formalize this process, Awba is in the process of developing a Community Grievance Mechanism to pro-actively manage any potential community grievances (ESAP).
